Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 10, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | EXP World Holdings, Inc. | ||
Entity Central Index Key | 0001495932 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 204,027,200 | ||
Entity Common Stock, Shares Outstanding | 60,978,604 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS: | ||
Cash and cash equivalents | $ 20,538,057 | $ 4,672,034 |
Restricted cash | 2,502,591 | 923,193 |
Accounts receivable, net of allowance $484,441 and $179,759, respectively | 17,428,091 | 6,912,657 |
Prepaids and other assets | 1,857,988 | 591,034 |
TOTAL CURRENT ASSETS | 42,326,727 | 13,098,918 |
FIXED ASSETS, NET | 2,739,525 | 1,538,213 |
INTANGIBLES ASSETS, NET | 2,531,669 | |
GOODWILL | 8,248,107 | |
TOTAL ASSETS | 55,846,028 | 14,637,131 |
CURRENT LIABILITIES | ||
Accounts payable | 1,758,377 | 635,087 |
Customer deposits | 2,502,591 | 923,193 |
Accrued expenses | 18,976,435 | 8,818,180 |
Current portion of long-term payable | 974,659 | |
TOTAL CURRENT LIABILITIES | 24,212,062 | 10,376,460 |
LONG-TERM PAYABLE, net of current portion | 1,654,337 | |
TOTAL LIABILITIES | 25,866,399 | 10,376,460 |
Commitments and Contingencies (Note 11) | ||
STOCKHOLDERS' EQUITY: | ||
Common Stock, $0.00001 par value 220,000,000 shares authorized; 60,609,102 and 54,962,535 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively | 606 | 550 |
Additional paid-in capital | 90,755,616 | 36,848,041 |
Accumulated deficit | (60,765,266) | (32,596,374) |
Accumulated other comprehensive (loss) | (11,327) | 8,454 |
TOTAL STOCKHOLDERS' EQUITY | 29,979,629 | 4,260,671 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 55,846,028 | $ 14,637,131 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 484,441 | $ 179,759 |
Common stock shares authorized | 220,000,000 | 220,000,000 |
Common stock par value | $ 0.00001 | $ 0.00001 |
Common stock shares issued | 60,609,102 | 54,962,535 |
Common stock shares outstanding | 60,609,102 | 54,962,535 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 500,147,681 | $ 156,104,544 |
Operating expenses | ||
Commission and other agent-related costs | 459,715,836 | 139,603,970 |
General and administrative | 57,618,506 | 35,685,512 |
Professional fees | 2,236,236 | 1,274,675 |
Sales and marketing | 2,961,618 | 1,572,041 |
Total expenses | 522,532,196 | 178,136,198 |
Net loss from operations | (22,384,515) | (22,031,654) |
Other income and (expenses) | ||
Interest income (expense) | 53,155 | (2,077) |
Other income (expense) | (21,196) | |
Total other income and (expenses) | 31,959 | (2,077) |
Loss before income tax expense | (22,352,556) | (22,033,731) |
Income tax expense | (77,800) | (97,234) |
Net loss | (22,430,356) | (22,130,965) |
Net loss attributable to common shareholders | $ (22,430,356) | $ (22,130,965) |
Net loss per share attributable to common sharesholders - Basic from continuing operations | $ (0.39) | $ (0.42) |
Net loss per share attributable to common sharesholders - Diluted from continuing operations | $ (0.39) | $ (0.42) |
Weighted average shares outstanding - basic | 57,689,920 | 53,194,928 |
Weighted average shares outstanding - diluted | 57,689,920 | 53,194,928 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (22,430,356) | $ (22,130,965) |
Other comprehensive loss: | ||
Foreign currency translation adjustments, net of tax | (19,781) | 4,249 |
Comprehensive loss | $ (22,450,137) | $ (22,126,716) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance, shares at Dec. 31, 2016 | 52,316,679 | ||||
Beginning balance, value at Dec. 31, 2016 | $ 523 | $ 12,987,707 | $ (10,465,409) | $ 4,205 | $ 2,527,026 |
Stock issued for cash, value | 142,158 | $ 142,158 | |||
Exercise of options, shares issued | 181,572 | 181,572 | |||
Exercise of options, value | $ 2 | 46,594 | $ 46,596 | ||
Stock compensation expense, shares | 1,000,594 | ||||
Stock compensation expense, value | $ 10 | 10,961,621 | 10,961,631 | ||
Stock option expense | 6,856,029 | 6,856,029 | |||
Agent equity program, shares | 1,464,997 | ||||
Agent equity program, value | $ 15 | 5,857,539 | $ 5,857,554 | ||
Repurchase and retirement of shares, shares | (1,307) | (1,307) | |||
Repurchase and retirement of shares, value | (3,607) | $ (3,607) | |||
Foreign currency translation gain | 4,249 | 4,249 | |||
Net loss | (22,130,965) | (22,130,965) | |||
Ending balance, shares at Dec. 31, 2017 | 54,962,535 | ||||
Ending balance, value at Dec. 31, 2017 | $ 550 | 36,848,041 | (32,596,374) | 8,454 | 4,260,671 |
Shares issued for acquisition, shares | 97,371 | ||||
Shares issued for acquisition, value | $ 1 | 999,999 | $ 1,000,000 | ||
Exercise of options, shares issued | 2,594,050 | 2,594,050 | |||
Exercise of options, value | $ 25 | 2,015,009 | $ 2,015,034 | ||
Stock compensation expense, shares | 1,270,545 | ||||
Stock compensation expense, value | $ 13 | 19,053,465 | 19,053,478 | ||
Stock option expense | 4,846,906 | 4,846,906 | |||
Agent equity program, shares | 1,684,601 | ||||
Agent equity program, value | $ 17 | 21,253,660 | 21,253,677 | ||
Foreign currency translation gain | (19,781) | (19,781) | |||
Net loss | (22,430,356) | (22,430,356) | |||
Ending balance, shares at Dec. 31, 2018 | 60,609,102 | ||||
Ending balance, value at Dec. 31, 2018 | $ 606 | 90,755,616 | (60,765,266) | $ (11,327) | $ 29,979,629 |
Cumulative effect adjustment upon the adoption of Accounting Standards Update 2018-07 | $ 5,738,536 | $ (5,738,536) |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) | Dec. 31, 2017$ / shares |
Statement of Stockholders' Equity [Abstract] | |
Stock issued for cash, net of issuance costs, per share price | $ 3.25 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net loss | $ (22,430,356) | $ (22,130,965) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation | 893,988 | 353,229 |
Stock compensation expense | 19,053,478 | 10,961,631 |
Stock option expense | 4,846,906 | 6,856,029 |
Agent equity program | 21,253,677 | 5,857,554 |
Amortization of debt discount | 21,196 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (10,520,725) | (3,884,982) |
Prepaids and other assets | (1,179,040) | (279,361) |
Customer deposits | 1,597,017 | 441,489 |
Accounts payable | 608,935 | 317,667 |
Accrued expenses | 10,165,643 | 6,076,062 |
CASH PROVIDED BY OPERATING ACTIVITIES | 24,310,719 | 4,568,353 |
INVESTMENT ACTIVITIES | ||
Purchase of fixed assets | (2,134,462) | (1,281,147) |
Payment for business acquisition and intangibles | (6,725,000) | |
CASH USED BY INVESTMENT ACTIVITIES | (8,859,462) | (1,281,147) |
FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock | 142,158 | |
Repurchase and retirement of subsidiary common stock | (3,607) | |
Proceeds from exercise of options | 2,015,034 | 46,596 |
Principal payments of notes payable | (35,778) | |
CASH PROVIDED BY FINANCING ACTIVITIES | 2,015,034 | 149,369 |
Effect of changes in exchange rates on cash and cash equivalents | (20,870) | (7,660) |
Net change in cash and cash equivalents | 17,445,421 | 3,428,915 |
Cash, cash equivalents and restricted cash, beginning of period | 5,595,227 | 2,166,312 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 23,040,648 | 5,595,227 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR: | ||
Cash paid for interest | 2,077 | |
Cash paid for income taxes | $ 72,682 | 97,234 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common stock issued for business acquisition | 1,000,000 | |
Liabilities incurred associated with business acquisition | $ 4,107,800 | |
Fixed asset purchases in accounts payable | $ 86,946 | $ 71,890 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESE NTATION eXp World Holdings, Inc. (the “Company” or “we” or “eXp”) was incorporated in the State of Delaware on July 30, 2008 . Through various operating subsidiaries, the Company operates a cloud-based real estate brokerage operating in all U.S. States, the District of Columbia and the provinces of Alberta, British Columbia 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. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is December 31. We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. The Company has evaluated events and transactions subsequent to the balance sheet date and has disclosed all events or transactions that occurred subsequent to the balance sheet date but prior to filing this Annual Report on Form 10-K that would require recognition or disclosure in the Consolidated Financial Statements. |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Principles [Abstract] | |
Summary of Significant Accounting Principles | 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES Principles of consolidation The accompanying audited condensed consolidated financial statements include the accounts of eXp World Holdings, Inc., and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation. Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 for doubtful accounts, legal contingencies, income taxes, revenue recognition, stock-based compensation, expense accruals, 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. Cash and cash equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. From time to time, the Company’s cash deposits exceed federally insured limits. The Company has not experienced any losses resulting from these excess deposits. Restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sums to the total of the same such amounts shown in the statement of cash flows. December 31, 2018 December 31, 2017 Cash and cash equivalents $ 20,538,057 $ 4,672,034 Restricted cash 2,502,591 923,193 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 23,040,648 $ 5,595,227 In November 2016, the FASB issued ASU No. 2016-18 – Statement of Cash Flows (Topic 240) which changed the classification and presentation of restricted cash on the statement of cash flows. The Company adopted the new standard on January 1, 2018. As a result, restricted cash was reclassified from cash provided from operating activities to cash, cash equivalents and restricted cash on the condensed consolidated statement of cash flows. For the year ended December 31, 2017, the change in restricted cash of $441,489 was reclassified from operating activities to cash, cash equivalents and restricted cash on the statement of cash flows. Restricted cash consists of cash held in escrow by the Company’s brokers and agents on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released . Fair value measurements ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a three-tiered fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: • 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 values its money market funds at fair value on a recurring basis. 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Cash $ 12,486,395 $ - $ - $ 12,486,395 $ 12,486,395 Level 1 Money market funds 8,051,662 - - 8,051,662 8,051,662 Subtotal 20,538,057 - - 20,538,057 20,538,057 Level 2 - - - - - Level 3 - - - - - Total $ 20,538,057 $ - $ - $ 20,538,057 $ 20,538,057 The Company did not have investments in money market funds for the year ended December 31, 2017. There have been no transfers between Levels 1 and 2 in the period presented. We did not have any Level 2 or Level 3 financial assets or liabilities in the period presented . Allowance for doubtful accounts The majority of the Company’s accounts receivable are derived from non-commission based technology fees. These accounts receivable are typically unsecured. The allowance for doubtful accounts is our estimate based on historical experience. We periodically perform detailed reviews to assess the adequacy of the allowance. We exercise significant judgment in estimating the timing, frequency and severity of losses. The Company typically does not experience material uncollectible accounts. Foreign currency translation The Company’s functional and reporting currency is the United States dollar and the functional currency of the Company’s foreign subsidiaries is the local currency of their country of domicile. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company does not employ any derivative or hedging strategy to offset the impact of foreign currency fluctuations. Fixed assets Fixed assets are stated at historical cost and are depreciated on the straight-line method over the estimated useful lives. Useful lives are: Computer hardware and software: 3 to 5 years Furniture, fixtures and equipment: 5 to 7 years Maintenance and repairs are expensed as incurred. Expenditures that substantially increase an asset’s useful life or improve an asset’s functionality are capitalized. The Company capitalizes the costs associated with developing its internal-use cloud-based residential real-estate transaction system. Capitalized costs are primarily related to costs incurred in relation to internally created software during the application development stage including costs for upgrades and enhancements that result in additional functionality. Goodwill and Intangible Assets We test goodwill for impairment at least annually or when a triggering event occurs. The first step of the goodwill impairment test compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of a reporting unit’s net assets exceeds its fair value, the second step would be applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill would be considered impaired and would be reduced to its implied fair value. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors. If current expectations of future growth rates are not met or market factors outside of our control, such as discount rates, change significantly, then our goodwill or intangible assets might become impaired in the future. Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to an impairment risk if business operating results or macroeconomic conditions deteriorate. Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited and are reviewed when appropriate for possible impairment. Impairment of long-lived assets The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. When assets are considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Stock based compensation The Company accounts for all stock ‑based compensation granted to employees and non ‑employees using a fair value method. Stock ‑based compensation awarded to employees is measured at the grant date fair value and is recognized over the requisite service period of the awards, usually the vesting period, on a straight ‑line basis, net of forfeitures. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition. Compensation cost is accrued if it is probable that the performance condition will be achieved and is not accrued if it is not probable that the performance condition will be achieved. Prior to the adoption of ASU 2018-07 on July 1, 2018 described below in "Recently Adopted Accounting Pronouncements", stock ‑based compensation awarded to non ‑employees under our Real Estate Agent Growth Program and Stock Option Awards Plan was subject to revaluation over its vesting term. Subsequent to the adoption of ASU 2018-07, non-employee share-based payment awards are measured on the date of grant, similar to share-based payment awards granted to employees. The Company reduces recorded stock ‑based compensation for forfeitures when they occur. The Company early adopted ASU 2018-07 on July 1, 2018, using the modified retrospective method. The reported results for 2018 reflect the application of ASC 718 guidance for non-employee share-based awards while the reported results for 2017 were prepared under the guidance of ASC 505 for non-employee stock-based compensation. The adoption of ASU 2018-07 for non-employee stock-based compensation represents a change in accounting principle that more closely aligns the accounting for stock-based compensation for employee and non-employee share-based payment awards. The cumulative effect of applying the new guidance to all non-employee share-based payment awards was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method upon the adoption of the new stock-based compensation guidance, an adjustment of $5.7 million was made to the opening balance of accumulated deficit and additional paid-in capital as of January 1, 2018. Revenue recognition Effective January 1, 2018, the Company adopted ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606) using the modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opening balance of retained earnings. Adoption of the new standard did not require the Company to make an adjustment to the opening balance. Real Estate Brokerage Services The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. The Company is contractually obligated to provide services for the fulfillment of transfers of residential real estate between buyers and sellers. The Company provides these services itself and controls the service necessary to legally transfer the residential real estate. Correspondingly, the Company is defined as the Principal. The Company, as Principal, satisfies its obligation upon the closing of a residential real estate transaction. As Principal, and upon satisfaction of our obligation, the Company recognized revenue in the gross amount of consideration to which we expect to be entitled to. Revenue is derived from assisting home buyers and sellers in listing, marketing, selling and finding residential real estate. Commissions earned on real estate transactions are recognized at a point in time upon the completion of a residential real estate transaction once we have satisfied our performance obligation. Advertising costs Advertising costs are generally expensed in the period incurred. Advertising expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of operations. For the years ended December 31, 2018 and 2017, the Company incurred advertising expenses of $2,403,941 and $1,258,334 . Income taxes Deferred tax assets and liabilities arise from the differences between the tax basis of an asset or liability and its reported amount in the financial statements as well as from net operating loss and tax credit carry forwards. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period adjusted for the change during the period in deferred tax assets and liabilities. For U.S. income tax returns, the open taxation years subject to examination range from 2012 to 2018 . Comprehensive income (loss) The Company’s only component of comprehensive income (loss) is foreign currency translation adjustments. Net income (loss) per share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding plus, if dilutive, potential common shares outstanding during the period. Recently issued accounting pronouncements In January 2017, the FASB issued ASU 2017-04 – Intangibles – Goodwill and Oher (Topic 350). This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, the entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Previously, if the fair value of a reporting unit was lower than its carrying amount (Step 1), an entity was required to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). Additionally, under the new standard, entities that have reporting units with zero or negative carrying amounts will no longer be required to perform the qualitative assessment to determine whether to perform Step 2 of the goodwill impairment test. As a result, reporting units with zero or negative carrying amounts will generally be expected to pass the simplified impairment test; however, additional disclosure will be required of those entities. This ASU will be effective beginning in the first quarter of our fiscal year 2020. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The new guidance must be adopted on a prospective basis. The Company is evaluating the timing of adoption. We currently do not expect this ASU to have a material impact on our financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842). Under the new guidance, a lessee is required to recognize lease liabilities and corresponding right-of-use assets, initially measured at the present value of lease payments, on the balance sheet for operating leases with terms greater than one year. Lessor accounting remains largely unchanged from existing lease accounting. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. If the lessee makes the election, the lessee would recognize lease expense on a straight-line basis over the lease term. This ASU is effective in annual reporting periods beginning after December 15, 2018 and the interim periods within that fiscal year. In July 2018, the FASB issued ASU No. 2018-11 – Leases (Topic 842) – Targeted Improvements . The amendments in this Update provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). An entity that elects this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. The amendments do not change the existing disclosure requirements in Topic 840 (for example, they do not create interim disclosure requirements that entities previously were not required to provide). ASU No. 2016-02 – Leases (Topic) 842 will be adopted under the transition method effective January 1, 2019. We currently do not expect this ASU to have a material impact on our financial statements and related disclosures. The most significant impact will be the recognition of right-of-use assets and lease obligations for operating leases. Recently adopted accounting pronouncements In June 2018, the FASB issued ASU No. 2018-07 – Compensation – Stock Compensation (Topic 718). The ASU was issued as part of its Simplification Initiative to reduce costs and complexities of financial reporting. ASU No. 2018-07 simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payments transactions to nonemployees are measured at fair value and remeasured at each reporting date through the date of final vesting. This ASU changes the guidance related to the determination of the measurement date. Under the new guidance, equity-classified awards would be measured at the grant date. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Early adoption is permitted if financial statements have not yet been issued. The Company elected to early-adopt ASU No. 2018-07 effective July 1, 2018 using the modified retrospective application with a cumulative-effect adjustment to the opening balance of accumulated deficit and additional paid-in-capital as of the beginning of the fiscal year. In May 2017, the FASB issued ASU No. 2017-09 - Compensation (Topic 718): Scope of Modification Accounting . The FASB issued guidance to clarify when to account for a change in the terms or conditions of share-based payments awards as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The general model for modifications of share-based payment awards is to record the incremental value arising from the change as additional compensation costs. Previously, judgments about whether certain changes to an award were substantive may have impacted whether or not modification accounting was applied in these situations. The Company adopted the new standard on January 1, 2018. The standard did not have an impact on the Company’s financial position, operational results or cash flows. In November 2016, the FASB issued ASU No. 2016-18 – Statement of Cash Flows (Topic 240). The FASB issued guidance to address the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows under Topic 230, Statement of Cash Flows . The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cashflows. The Company adopted the new standard on January 1, 2018. The standard did not have a material impact on the Company’s financial position, operational results or cash flows. In May 2014, the FASB issued ASU No. 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 core principle of the revenue standard is that revenue be recognized upon the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. Subsequent to the issuance of ASU 2014-09, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contacts with Customers: Principal Versus Agent Considerations , ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing , and ASU No. 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients . The additional ASU’s clarified certain provisions of ASU 2014-09 in response to recommendations from the Transition Resources Group established by the FASB. The new standard permits for two alternative implementation methods, the use of either (1) full retrospective application to each prior reporting presented or (2) modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opting balance of retained earnings in the period of adoption. This ASU is effective in annual reporting periods beginning after December 15, 2017 and the interim periods within that year. The Company adopted the new standard effective January 1, 2018 using the modified retrospective method. Since the Company currently recognizes revenue on a gross basis acting as a principal, upon completion of its performance obligations in the form of a completed residential real estate sale, adoption of the standard did not have a material effect on the Company’s financial position, operational results or cash flows. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions [Abstract] | |
Acquisitions | 3 . ACQUISITIONS VirBELA On November 29, 2018 , (the “Acquisition Date”), the Company and its newly formed subsidiary, eXp World Technologies, LLC (“Purchaser) acquired substantially all the assets of VirBELA, LLC , a California limited liability company. VirBELA provides a cloud-based environment focused on educational and innovative learning technologies to enhance global education experiences that empower individuals, teams, and organizations for clients in various industries. Its model allows for a level of engagement and participation that can typically only be achieved with face-to-face instruction. Its proprietary immersive 3D campus, which supports blended learning and big data assessment, is highly customizable to meet the branding and educational needs of clients. VirBELA developed the Company’s current cloud campus called eXp World, which provides 24/7 access to collaborative tools, training and socialization for the Company’s real estate agents and employees. The acquisition of VirBELA’s core group of products and services will allow eXp Realty to continue to accelerate its business in a sustainable and innovative way, which is consistent with eXp World Holdings’ vision to expand the product offering to agents, teams and others who could benefit from their own, always available environments for collaboration. The Company acquired the assets of VirBELA for a total purchase price of $10,607,800 , consisting of cash to be paid of $7,000,000 and shares of the Company’s common stock valued at $3,607,800 . A cash payment of $6,500,000 was paid at closing with $500,000 included in accounts payable being held by the Company to secure the Seller’s performance of certain post-close obligations and 97,371 shares of the Company restricted common stock having a value of $1,000,000 was issued at closing. The remaining shares of the Company’s common stock will be issued having a value of $1,000,000 on each of the first, second and third anniversaries of the Closing Date. The present value of future deliveries of eXp World Holdings, Inc. stock, calculated using a discount rate of 10% , is $2,607,800 , which represents fair value as of the Acquisition Date. The discount of $392,200 will be amortized over the reporting periods using the effective interest method during Fiscal years 2019, 2020 and 2021. The following table shows the preliminary allocation of the purchase price of VirBELA, LLC to the acquired identifiable assets, and goodwill: Accounts receivable $ 4,273 Inventory 968 Fixed assets 23,452 Intangible assets 2,331,000 Goodwill 8,248,107 Total purchase price $ 10,607,800 The Acquisition has been accounted for in accordance with ASC 805, Business Combinations , using the acquisition method of accounting. Under the acquisition method of accounting, the Company allocated the total purchase price to the tangible and identifiable intangible assets acquired based on their estimated fair values as of the acquisition date, as determined by management. The excess of the purchase price over the aggregate fair values of the identifiable assets was recorded as goodwill. Goodwill generated from the Acquisition is primarily attributable to an assembled workforce and planned expansion of VirBELA into new markets. The preliminary purchase price allocation to identifiable intangible assets acquired in the VirBELA acquisition was: Tradename $ 1,169,000 Existing Technology 297,000 Non-competition agreements 125,000 Customer contracts 740,000 Total intangible assets purchased $ 2,331,000 The allocation of the fair value of the acquired business was based on preliminary valuations of the estimated net fair value of the assets acquired. The fair value estimates of the assets acquired are subject to adjustment during the measurement period (up to one year from the Acquisition Date). The primary areas of accounting for the Acquisition that are not yet finalized relate to the fair value of certain intangible assets acquired and residual goodwill. For tax purposes, goodwill is amortized over 15 years and this amortization is tax deductible. The fair values of these net assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that such preliminary estimates provide a reasonable basis for estimating the fair value of assets acquired, we will evaluate any necessary information prior to finalization of the fair value. During the measurement period, we will adjust preliminary valuations assigned to assets and liabilities if new information is obtained about facts and circumstances that existed as of the Acquisition Date, if any, that, if known, would have resulted in revised values for these items as of that date. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings. The Company used carrying values as of the Acquisition Date to value trade receivables, inventory, and fixed assets, as we determined that they represented the fair value of those items at the Acquisition Date. The Company valued the VirBELA tradename using an Income Approach known as the Relief from Royalty method. We applied a royalty rate of 1.0% to the VirBELA tradename. Once the royalty savings were calculated, we converted to a value using a discounted cash flow technique using a discount rate of 14.0% , to arrive at the estimated fair value. The VirBELA tradename is new and is not a mature brand name. Tradenames are being amortized over its estimated useful life of 10 years. Similar to the valuation of tradenames, we valued existing technology using the Relief from Royalty method. We applied a royalty rate of 5.0% to the VirBELA technology. Once the royalty savings were calculated, we converted to a value using a discounted cash flow technique using a discount rate of 14.0% to arrive at the estimated fair value of existing technology. Existing technology is being amortized over its estimated useful life of five years. We estimated a useful life of five years since the software will continue to be modified and changed over the next several years making it significantly different than the software acquired today. The Company valued non-competition agreements using a Loss Profits method. We prepared two projections of net income for the business. One projection which assumed the non-competition agreements were in place and one projection which assumed that no non-competition agreements were in place. The difference in cash flows from these two projections over the life of the non-competition agreements was discounted to present value at a rate of 14.0% to arrive at the estimated fair value of the non-competition agreements. Non-competition agreements are being amortized over their useful lives of three years which is equal to the contractual life of the non-competition agreements. The Company valued customer contracts using the Multi-Period Excess Earnings Method (MPEEM). In the MPEEM, value is estimated as the present value of the benefits anticipated from ownership of the subject intangible asset in excess of the returns on the contributory assets required to realize those benefits. Taxes have been estimated based upon an effective total state and federal tax rate of 29.4% and the projected return on net assets was 14.0% . These inputs were used to determine an estimated fair value of customer contracts. Customer contracts are being amortized over their estimated useful lives of 10 years. During the year ended December 31, 2018, the Company incurred total acquisition costs of $141,498 . The acquisition costs were primarily related to legal, accounting and consulting services and were expensed as incurred through December 31, 2018 and are included in General and Administrative expenses in the Consolidated Statements of Operations. From the Acquisition date, the results of operations of VirBELA have been included in and are immaterial to our consolidated financial statements. Pro forma revenue and results of operations have not been presented, being the historical results of VirBELA are not material to our consolidated statements of operations in any period presented. |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid and Other Current Assets [Abstract] | |
Prepaid and Other Current Assets | 4 . PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: Year Ended December 31, 2018 2017 Prepaid expenses $ 1,070,064 $ 219,074 Prepaid insurance 706,435 287,244 Rent deposits 51,113 68,196 Other assets 30,376 16,520 $ 1,857,988 $ 591,034 |
Fixed Assets, Net
Fixed Assets, Net | 12 Months Ended |
Dec. 31, 2018 | |
Fixed Assets, Net [Abstract] | |
Fixed Assets, Net | 5 . FIXED ASSETS, NET Fixed assets, net consisted of the following: Year Ended December 31, 2018 2017 Computer hardware and software $ 3,925,129 $ 1,982,749 Furniture, fixture and equipment 5,910 5,910 Total depreciable property and equipment 3,931,039 1,988,659 Less: accumulated depreciation and amortization (1,320,103) (450,446) Depreciable property, net 2,610,936 1,538,213 Assets under development 128,589 – Fixed assets, net $ 2,739,525 $ 1,538,213 Depreciation expense for the years ended December 31, 2018 and 2017 was $869,658 , and $353,229 respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 6. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill were: Total Balance at December 31, 2016 and 2017 $ - Acquisitions 8,248,107 Balance at December 31, 2108 $ 8,248,107 Our goodwill was recently recorded in connection with the acquisition of VirBELA in November 2018 and represents preliminary fair value as of the acquisition date. We have a risk of future impairment to the extent that individual reporting unit performance does not meet our projections. Additionally, if our 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 our control change unfavorably, the estimated fair value of our goodwill could be adversely affected, leading to a potential impairment in the future. No events occurred that indicated it was more likely than not that our goodwill was impaired. Definite-Lived intangible assets at December 31, 2018 were: As of December 31, 2018 Gross Amount Accumulated Amortization Net Carrying Amount Trade name $ 1,169,000 $ (9,742) $ 1,159,258 Existing technology 297,000 (4,950) 292,050 Non-competition agreements 125,000 (3,472) 121,528 Customer contracts 740,000 (6,167) 733,833 Software 225,000 - 225,000 Total $ 2,556,000 $ (24,331) $ 2,531,669 There were no definite-lived intangible assets at December 31, 2017. Definite-lived intangible assets were recently recorded in connection with the acquisition of VirBELA in November 2018 and acquisition of the ShowMeNow mobile application in October 2018. Amortization expense for definite-lived intangible assets was $24,331 in 2018 and zero in 2017. We estimate expected amortization related to definite-lived intangible assets will be: Expected amortization 2019 $ 366,967 2020 366,967 2021 363,494 2022 250,300 2023 and thereafter 1,183,941 Total $ 2,531,669 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 7. ACCRUED EXPENSES Accrued expenses consisted of the following: Year Ended December 31, 2018 2017 Commissions payable $ 16,368,811 $ 7,565,357 Payroll payable 1,117,830 749,203 Vacation payable 690,587 283,077 Taxes payable 217,820 99,809 Other accrued expenses 581,387 120,734 $ 18,976,435 $ 8,818,180 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt [Abstract] | |
Debt | 8. DEBT We have a $1,000,000 line of credit with a variable interest rate computed on a 360-day year that expires on August 29, 2019 . The variable interest rate is the higher of either 1) the Prime Rate in effect on such day, 2) Daily One Month LIBOR plus one and one-half percent ( 1.5% ), or 3) the Federal Funds Rate plus one and one-half percent ( 1.5% ). The line of credit agreement requires us to comply with various financial covenants as well as customary affirmative and negative covenants that restrict our ability to, among other things, incur debt and liens, make significant investments, dispose of assets and make distributions without prior consent. The line of credit is secured by accounts receivable. The line of credit contains certain financial covenants, including a fixed charge coverage ratio and a tangible net worth. At December 31, 2018, we were in compliance with all of the financial covenants under the line of credit. As of December 31, 2018, we had no amount outstanding under the line of credit. On November 29, 2018, the Company acquired substantially all of the assets of VirBELA. As part of the purchase price, the Company is issuing shares of the Company’s restricted common stock having a value of $1,000,000 on each of the first, second and third anniversaries of the Closing Date. The present value of future deliveries of eXp World Holdings, Inc. stock, was calculated using a discount rate of 10% . The discount of $392,200 will be amortized over the reporting periods using the effective interest method during Fiscal years 2019, 2020 and 2021. As of December 31, 2018, long-term payables, net of current portion and current portion of long-term payable was $ 1,654,337 and $974,659 , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 9. STOCKHOLDERS’ EQUITY As of December 31, 2018, the Company had 60,609,102 shares of common stock issued and outstanding. The following provides a detailed description of the stock-based transactions completed during fiscal years 2018 and 2017: During the year ended December 31, 2018, the Company issued 97,371 shares of restricted common stock as consideration for the assets of VirBELA acquired having a value of $1,000,000 . During the year ended December 31, 2018, the Company issued 2,594,050 shares of common stock upon the exercise of stock options and received cash consideration totaling $2,015,034 upon payment of the exercise price for the options. During the year ended December 31, 2018, the Company issued 1,684,601 shares of common stock in exchange for services totaling $21,253,677 , which includes the expense activity in our 2015 Agent Equity Program. During the year ended December 31, 2018, the Company issued 1,270,545 shares of common stock in exchange for services totaling $19,053,478 , which included the expense activity for Real Estate Agent Growth and Other Incentive Programs. This amount includes expenses for performance based awards of $9,174,019 , for which performance conditions were met or considered probable during the year ended December 31, 2018. During the year ended December 31, 2017, the Company issued the remaining 49,231 shares of common stock to accredited investors following receipt of $160,000 of gross proceeds ( $142,158 net of issuance costs) from the Company’s December 2016 private placement. The Company received total gross cash proceeds from the private placement of $760,000 . During the year ended December 31, 2017, the Company issued 181,572 shares of common stock upon the exercise of stock options and received cash consideration totaling $46,596 upon payment of the exercise price for the options. During the year ended December 31, 2017, the Company repurchased and retired 1,307 shares of common stock for cash consideration totaling $3,607 . During the year ended December 31, 2017, the Company issued 1,464,997 shares of common stock in exchange for services totaling $5,857,554 , which includes the expense activity in our 2015 Agent Equity Program. During the year ended December 31, 2017, the Company issued 1,000,594 shares of common stock in exchange for services totaling $10,961,631 , which included the expense activity for Real Estate Agent Growth and Other Incentive Programs. This amount includes expenses for performance based awards of $7,177,854 , for which performance conditions were met or considered probable during the year ended December 31, 2017. 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 common stock. If agents and brokers elect to receive portions of their commissions in 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 shares are issued at a 20% discount to market on the date of issuance. We recognize this 20% discount as an additional cost of sales charge during the periods presented. All agents and brokers in good standing with the Company are eligible to participate in the Agent Equity Program. To be considered in good standing, agents and brokers must be current in their financial obligations, including all fees, to the Company. In addition, all required licenses, local, state and national dues and subscriptions which are required to conduct real estate business in their state must be current and in effect. During the years ended December 31, 2018 and 2017, the Company issued 1,684,601 and 1,464,997 shares, respectively, of common stock to agents and brokers for total consideration of $21,253,677 and, $5,857,554 respectively for the settlement of commissions payable. Real Estate Agent Growth Incentive 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 are awarded common stock based on achievement of performance milestones. Under this program, the Company awards common stock to our agents and brokers that become issuable upon the achievement of certain milestones for both the individual and the recruited agents. The following table illustrates the Company’s stock activity for the Real Estate Agent Growth Incentive Program for the following periods: Weighted Average Shares Fair Value Balance, December 31, 2016 3,057,879 4.05 Granted 2,024,498 7.60 Issued (1,457,538) 5.27 Forfeited (565,774) 4.76 Balance, December 31, 2017 3,059,065 7.60 Granted 2,380,100 11.59 Issued (889,769) 12.16 Forfeited (676,519) 4.05 Balance, December 31, 2018 3,872,877 11.63 The fair value of stock awards is based on the closing price of our common stock on the applicable grant date. As of December 31, 2018, the Company had 1,909,023 unvested stock awards and 3,872,877 expected to vest, respectively, with unrecognized compensation costs totaling $22,773,241 . Stock Option Awards During the year ended December 31, 2018, the Company granted 870,000 stock options with an estimated grant date fair value of $8,538,739 . The assumptions used to estimate the grant date fair value of the awards issued for the year ended December 31, 2018 include: expected volatility based on historical stock prices ranging from 129.2% to 153.7% ; an average expected term between 6.25 and 10 years; risk free rates based on U.S. Treasury instruments for the expected term of approximately 2.9% ; and no dividend payments. The assumptions used to estimate the grant date fair value of the awards issued for the year ended December 31, 2017 include: expected volatility based on historical stock prices ranging from 142% to 155% ; an average expected term between 6.25 and 10 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, the Company modified certain terms of previously outstanding option awards to purchase 500,000 shares of common stock, including accelerating portions of the award to vest prior to the original terms and the forfeiture of unvested options to purchase 275,000 shares of common stock. As a result of this modification, the Company recognized approximately $368,000 of additional stock option expense during the year ended December 31, 2017. The following table illustrates the Company’s stock option activity for the following periods: Weighted Average Weighted Remaining Average Contractual Term Options Exercise Price Intrinsic Value (Years) Balance, December 31, 2016 10,747,558 $ 0.67 $ 3.56 7.75 Granted 2,848,231 3.76 - 6.15 Exercised (181,572) 0.26 6.86 Forfeited (2,540,925) 2.31 3.20 Balance, December 31, 2017 10,873,292 $ 1.50 $ 5.08 6.65 Granted 870,000 10.86 (3.78) 9.34 Exercised (2,594,050) 0.78 11.90 Forfeited (451,629) 3.03 9.59 Balance, December 31, 2018 8,697,613 $ 2.08 $ 5.00 6.07 Exercisable at December 31, 2018 6,620,042 0.92 6.16 5.29 Vested at December 31, 2018 6,823,772 $ 1.00 $ 6.08 5.37 For the years ended December 31, 2018 and 2017, the Company recognized total stock-based compensation of $19,053,478 and $10,961,631 , respectively, associated with all equity and equity-linked awards. As of December 31, 2018, the total unrecognized compensation cost associated with options was approximately $11,972,694 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 10. INCOME TAXES The components of the provision for income tax expense are as follows: Year Ended December 31, 2018 2017 Current: Federal $ - $ - State 77,494 86,787 Foreign 306 10,447 77,800 97,234 Deferred Federal - - State - - - - Total provision (benefit) for income taxes $ 77,800 $ 97,234 The Company is subject to United States federal and state income taxes at an approximate rate of 25.02% . The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: Year Ended December 31, 2018 2017 Statutory tax rate 21.00 % 38.25 % State taxes 4.02 % (0.39) % Permanent differences (0.57) % (0.31) % Non-deductible share-based compensation (10.46) % (19.70) % Foreign tax rate differential (0.10) % (0.05) % Change in tax rate - % (6.33) % Valuation allowance (15.43) % (11.90) % Other net 1.19 % (0.01) % Total (0.35) % (0.44) % Deferred tax assets consist of the following at: Year Ended December 31, 2018 2017 Deferred tax assets: Net operating loss carryforward $ 6,186,379 $ 2,445,965 Temporary differences 598,732 241,649 Share-based compensation 228,989 430,614 Total gross deferred tax assets $ 7,014,100 $ 3,118,228 Deferred tax liabilities Property and equipment (439,388) (17,835) Valuation allowance (6,574,712) (3,100,394) Net deferred tax assets $ - $ - At December 31, 2018, the Company had federal net operating losses of approximately $24.7 million which could be subject to certain limitations under section 382 of the Internal Revenue Code. The Company has provided a valuation allowance at December 31, 2018 and 2017 of $6,574,712 and $3,100,394 , respectively, for its net deferred tax assets as it cannot conclude it is more likely than not all of the estimated net deferred tax assets will be realized. The valuation allowance increased by $3,474,318 and increased by $2,357,426 in 2018 and 2017, respectively. As of December 31, 2018, and 2017, the Company did no t have any unrecognized tax benefits. The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception. Our ability to utilize the domestic net operating losses (NOLs) and tax credit forwards may be limited due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. An “ownership change,” as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the NOL or tax credit carryforwards before utilization. The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), which became law on December 22, 2017, reduced the U.S. Federal corporate tax rate from 35% to 21% for tax years beginning in 2018. The Company remeasured its net deferred tax assets and liabilities as a result of the 2017 Tax Act along with the corresponding valuation allowance resulting in no net expense or benefit. The Company applied the reduced federal tax rate in its tax provision for the year ended December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES Operating leases At December 31, 2018, the Company was obligated under non-cancelable operating leases for office space. The following table illustrates the Company’s future obligations related to its non-cancellable operating leases: Year Ending December 31, 2019 $ 451,710 2020 420,518 2021 237,142 2022 42,532 2023 and thereafter 4,134 Total $ 1,156,036 Legal proceedings From time to time, we are 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 our business, reputation, results of operations or financial condition. Such litigation may include, but is not limited to, actions or claims relating to sensitive data, including our proprietary business information and intellectual property and that of our clients and personally identifiable information of our employees and contractors, cyber-attacks, data breaches and non-compliance with our contractual or other legal obligations. There are no matters pending or, to our knowledge, threatened that we expect to have a material adverse impact on our business, reputation, results of operations or financial condition. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION The Company primarily operates within the real estate brokerage markets in the United States and Canada. In November 2018, the Company acquired substantially all of the assets of VirBELA, LLC which operates in software subscription and professional services for use of our virtual reality software platform. The Company’s management generally does not rely on historical geographical results in making operational decisions and has not used financial information derived from subscription and professional services due to the insignificance of the operating activities of VirBLEA, LLC. While management may consider the newly acquired technology to be a reportable segment from our real estate brokerage activities in the future, as of December 31, 2018, there is not information currently being used by the chief operating decision maker to assess performance and make operational decisions. The Company has likewise concluded that only one reporting unit exists for the purposes of its annual goodwill impairment analysis. The Company’s management analyzes geographical locations on a forward-looking basis to identify growth opportunities. For the year ended December 31, 2018, approximately 1% of the Company’s total net revenue of $500,147,681 was generated in Canada. The Company did not possess material assets located outside of the United States as of December 31, 2018 and 2017. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. RELATED PARTY TRANSACTIONS As of December 31, 2018, the Company did not have transactions with related and certain other parties. In January 2017, and as part of her agreement to join the Company’s Board of Directors, Ms. Laurie Hawkes was granted an option to purchase a total of 350,000 shares of common stock from a significant stockholder at an exercise price of $4.22 per share. The Company estimated the grant date fair value of these options using a Black-Scholes model with the assumptions described in Note 9. The aggregate grant date fair value of this award was $1,333,501 . During the year ended December 31, 2017, the Company recognized compensation cost totaling $254,522 associated with this award. The transaction was accounted for as a deemed contribution from the significant stockholder. On August 7, 2017, Ms. Hawkes submitted to the Company her resignation as a member of the Board of Directors effective August 9, 2017. The options to purchase common stock from a significant stockholder were forfeited subsequent to her resignation. |
Defined Contribution Savings Pl
Defined Contribution Savings Plan | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Savings Plan [Abstract] | |
Defined Contribution Savings Plan | 14. DEFINED CONTRIBUTION SAVINGS PLAN During the year ended December 31, 2018, the Company established a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund. The Company sponsors the defined contribution savings plan. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS On December 27, 2018, the Company introduced its Sustainable Equity Plan for real estate agents and brokers at eXp realty. In addition, the Company announced that its Board of Directors authorized a stock repurchase program to offset equity issuances for up to $25 million of company common stock which began subsequent to year end In 2013, eXp Realty became a public company for the primary purpose of sharing equity with its agents. Shortly thereafter, the Company introduced the industry’s first Agent Equity Award program for agents and brokers who reach certain milestones. At the time, eXp Realty had approximately 400 agents and the plan defined equity incentives up to 16,000 agents. As we are quickly approaching 16,000 agents, the new Sustainable Equity Plan will pay agents a dollar value of shares rather than a stair-stepped number of shares for achieving certain goals. The repurchase program will help offset equity issuances that the Company awards to its agents for meeting certain milestones in the Sustainable Equity Plan. Purchases under the repurchase program will company with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and number of shares repurchased will depend upon market conditions. The repurchase program does not require the company to acquire a specific number of shares. As the Company continues to grow its cash balance, the cost of the shares repurchased will be funded from available working capital. Any shares repurchased under the program will be returned to the status of authorized but unissued shares of common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Principles [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying audited condensed consolidated financial statements include the accounts of eXp World Holdings, Inc., and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 for doubtful accounts, legal contingencies, income taxes, revenue recognition, stock-based compensation, expense accruals, 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. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. From time to time, the Company’s cash deposits exceed federally insured limits. The Company has not experienced any losses resulting from these excess deposits. |
Restricted cash | Restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sums to the total of the same such amounts shown in the statement of cash flows. December 31, 2018 December 31, 2017 Cash and cash equivalents $ 20,538,057 $ 4,672,034 Restricted cash 2,502,591 923,193 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 23,040,648 $ 5,595,227 In November 2016, the FASB issued ASU No. 2016-18 – Statement of Cash Flows (Topic 240) which changed the classification and presentation of restricted cash on the statement of cash flows. The Company adopted the new standard on January 1, 2018. As a result, restricted cash was reclassified from cash provided from operating activities to cash, cash equivalents and restricted cash on the condensed consolidated statement of cash flows. For the year ended December 31, 2017, the change in restricted cash of $441,489 was reclassified from operating activities to cash, cash equivalents and restricted cash on the statement of cash flows. Restricted cash consists of cash held in escrow by the Company’s brokers and agents on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released . |
Fair value measurements | Fair value measurements ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The methodology establishes consistency and comparability by providing a three-tiered fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: • 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 values its money market funds at fair value on a recurring basis. 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Cash $ 12,486,395 $ - $ - $ 12,486,395 $ 12,486,395 Level 1 Money market funds 8,051,662 - - 8,051,662 8,051,662 Subtotal 20,538,057 - - 20,538,057 20,538,057 Level 2 - - - - - Level 3 - - - - - Total $ 20,538,057 $ - $ - $ 20,538,057 $ 20,538,057 The Company did not have investments in money market funds for the year ended December 31, 2017. There have been no transfers between Levels 1 and 2 in the period presented. We did not have any Level 2 or Level 3 financial assets or liabilities in the period presented . |
Allowance for doubtful accounts | Allowance for doubtful accounts The majority of the Company’s accounts receivable are derived from non-commission based technology fees. These accounts receivable are typically unsecured. The allowance for doubtful accounts is our estimate based on historical experience. We periodically perform detailed reviews to assess the adequacy of the allowance. We exercise significant judgment in estimating the timing, frequency and severity of losses. The Company typically does not experience material uncollectible accounts. |
Foreign currency translation | Foreign currency translation The Company’s functional and reporting currency is the United States dollar and the functional currency of the Company’s foreign subsidiaries is the local currency of their country of domicile. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company does not employ any derivative or hedging strategy to offset the impact of foreign currency fluctuations. |
Fixed assets | Fixed assets Fixed assets are stated at historical cost and are depreciated on the straight-line method over the estimated useful lives. Useful lives are: Computer hardware and software: 3 to 5 years Furniture, fixtures and equipment: 5 to 7 years Maintenance and repairs are expensed as incurred. Expenditures that substantially increase an asset’s useful life or improve an asset’s functionality are capitalized. The Company capitalizes the costs associated with developing its internal-use cloud-based residential real-estate transaction system. Capitalized costs are primarily related to costs incurred in relation to internally created software during the application development stage including costs for upgrades and enhancements that result in additional functionality. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We test goodwill for impairment at least annually or when a triggering event occurs. The first step of the goodwill impairment test compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of a reporting unit’s net assets exceeds its fair value, the second step would be applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill would be considered impaired and would be reduced to its implied fair value. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors. If current expectations of future growth rates are not met or market factors outside of our control, such as discount rates, change significantly, then our goodwill or intangible assets might become impaired in the future. Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to an impairment risk if business operating results or macroeconomic conditions deteriorate. Definite-lived intangible assets are amortized on a straight-line basis over the estimated periods benefited and are reviewed when appropriate for possible impairment. |
Impairment of long-lived assets | Impairment of long-lived assets The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. When assets are considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. |
Stock-based compensation | Stock based compensation The Company accounts for all stock ‑based compensation granted to employees and non ‑employees using a fair value method. Stock ‑based compensation awarded to employees is measured at the grant date fair value and is recognized over the requisite service period of the awards, usually the vesting period, on a straight ‑line basis, net of forfeitures. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition. Compensation cost is accrued if it is probable that the performance condition will be achieved and is not accrued if it is not probable that the performance condition will be achieved. Prior to the adoption of ASU 2018-07 on July 1, 2018 described below in "Recently Adopted Accounting Pronouncements", stock ‑based compensation awarded to non ‑employees under our Real Estate Agent Growth Program and Stock Option Awards Plan was subject to revaluation over its vesting term. Subsequent to the adoption of ASU 2018-07, non-employee share-based payment awards are measured on the date of grant, similar to share-based payment awards granted to employees. The Company reduces recorded stock ‑based compensation for forfeitures when they occur. The Company early adopted ASU 2018-07 on July 1, 2018, using the modified retrospective method. The reported results for 2018 reflect the application of ASC 718 guidance for non-employee share-based awards while the reported results for 2017 were prepared under the guidance of ASC 505 for non-employee stock-based compensation. The adoption of ASU 2018-07 for non-employee stock-based compensation represents a change in accounting principle that more closely aligns the accounting for stock-based compensation for employee and non-employee share-based payment awards. The cumulative effect of applying the new guidance to all non-employee share-based payment awards was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method upon the adoption of the new stock-based compensation guidance, an adjustment of $5.7 million was made to the opening balance of accumulated deficit and additional paid-in capital as of January 1, 2018. |
Revenue recognition | Revenue recognition Effective January 1, 2018, the Company adopted ASU No. 2014-09 - Revenue from Contracts with Customers (Topic 606) using the modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opening balance of retained earnings. Adoption of the new standard did not require the Company to make an adjustment to the opening balance. |
Real Estate Brokerage Services | Real Estate Brokerage Services The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. The Company is contractually obligated to provide services for the fulfillment of transfers of residential real estate between buyers and sellers. The Company provides these services itself and controls the service necessary to legally transfer the residential real estate. Correspondingly, the Company is defined as the Principal. The Company, as Principal, satisfies its obligation upon the closing of a residential real estate transaction. As Principal, and upon satisfaction of our obligation, the Company recognized revenue in the gross amount of consideration to which we expect to be entitled to. Revenue is derived from assisting home buyers and sellers in listing, marketing, selling and finding residential real estate. Commissions earned on real estate transactions are recognized at a point in time upon the completion of a residential real estate transaction once we have satisfied our performance obligation. |
Advertising costs | Advertising costs Advertising costs are generally expensed in the period incurred. Advertising expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of operations. For the years ended December 31, 2018 and 2017, the Company incurred advertising expenses of $2,403,941 and $1,258,334 . |
Income taxes | Income taxes Deferred tax assets and liabilities arise from the differences between the tax basis of an asset or liability and its reported amount in the financial statements as well as from net operating loss and tax credit carry forwards. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period adjusted for the change during the period in deferred tax assets and liabilities. For U.S. income tax returns, the open taxation years subject to examination range from 2012 to 2018 . |
Comprehensive income (loss) | Comprehensive income (loss) The Company’s only component of comprehensive income (loss) is foreign currency translation adjustments. |
Net income (loss) per share | Net income (loss) per share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding plus, if dilutive, potential common shares outstanding during the period. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In January 2017, the FASB issued ASU 2017-04 – Intangibles – Goodwill and Oher (Topic 350). This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, the entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Previously, if the fair value of a reporting unit was lower than its carrying amount (Step 1), an entity was required to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). Additionally, under the new standard, entities that have reporting units with zero or negative carrying amounts will no longer be required to perform the qualitative assessment to determine whether to perform Step 2 of the goodwill impairment test. As a result, reporting units with zero or negative carrying amounts will generally be expected to pass the simplified impairment test; however, additional disclosure will be required of those entities. This ASU will be effective beginning in the first quarter of our fiscal year 2020. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The new guidance must be adopted on a prospective basis. The Company is evaluating the timing of adoption. We currently do not expect this ASU to have a material impact on our financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842). Under the new guidance, a lessee is required to recognize lease liabilities and corresponding right-of-use assets, initially measured at the present value of lease payments, on the balance sheet for operating leases with terms greater than one year. Lessor accounting remains largely unchanged from existing lease accounting. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. If the lessee makes the election, the lessee would recognize lease expense on a straight-line basis over the lease term. This ASU is effective in annual reporting periods beginning after December 15, 2018 and the interim periods within that fiscal year. In July 2018, the FASB issued ASU No. 2018-11 – Leases (Topic 842) – Targeted Improvements . The amendments in this Update provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). An entity that elects this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. The amendments do not change the existing disclosure requirements in Topic 840 (for example, they do not create interim disclosure requirements that entities previously were not required to provide). ASU No. 2016-02 – Leases (Topic) 842 will be adopted under the transition method effective January 1, 2019. We currently do not expect this ASU to have a material impact on our financial statements and related disclosures. The most significant impact will be the recognition of right-of-use assets and lease obligations for operating leases. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2018, the FASB issued ASU No. 2018-07 – Compensation – Stock Compensation (Topic 718). The ASU was issued as part of its Simplification Initiative to reduce costs and complexities of financial reporting. ASU No. 2018-07 simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payments transactions to nonemployees are measured at fair value and remeasured at each reporting date through the date of final vesting. This ASU changes the guidance related to the determination of the measurement date. Under the new guidance, equity-classified awards would be measured at the grant date. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Early adoption is permitted if financial statements have not yet been issued. The Company elected to early-adopt ASU No. 2018-07 effective July 1, 2018 using the modified retrospective application with a cumulative-effect adjustment to the opening balance of accumulated deficit and additional paid-in-capital as of the beginning of the fiscal year. In May 2017, the FASB issued ASU No. 2017-09 - Compensation (Topic 718): Scope of Modification Accounting . The FASB issued guidance to clarify when to account for a change in the terms or conditions of share-based payments awards as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The general model for modifications of share-based payment awards is to record the incremental value arising from the change as additional compensation costs. Previously, judgments about whether certain changes to an award were substantive may have impacted whether or not modification accounting was applied in these situations. The Company adopted the new standard on January 1, 2018. The standard did not have an impact on the Company’s financial position, operational results or cash flows. In November 2016, the FASB issued ASU No. 2016-18 – Statement of Cash Flows (Topic 240). The FASB issued guidance to address the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows under Topic 230, Statement of Cash Flows . The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cashflows. The Company adopted the new standard on January 1, 2018. The standard did not have a material impact on the Company’s financial position, operational results or cash flows. In May 2014, the FASB issued ASU No. 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 core principle of the revenue standard is that revenue be recognized upon the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to receive in exchange for those goods or services. Subsequent to the issuance of ASU 2014-09, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contacts with Customers: Principal Versus Agent Considerations , ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing , and ASU No. 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients . The additional ASU’s clarified certain provisions of ASU 2014-09 in response to recommendations from the Transition Resources Group established by the FASB. The new standard permits for two alternative implementation methods, the use of either (1) full retrospective application to each prior reporting presented or (2) modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opting balance of retained earnings in the period of adoption. This ASU is effective in annual reporting periods beginning after December 15, 2017 and the interim periods within that year. The Company adopted the new standard effective January 1, 2018 using the modified retrospective method. Since the Company currently recognizes revenue on a gross basis acting as a principal, upon completion of its performance obligations in the form of a completed residential real estate sale, adoption of the standard did not have a material effect on the Company’s financial position, operational results or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Principles [Abstract] | |
Schedule of Cash | December 31, 2018 December 31, 2017 Cash and cash equivalents $ 20,538,057 $ 4,672,034 Restricted cash 2,502,591 923,193 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 23,040,648 $ 5,595,227 |
Schedule of Fair Value on Recurring Basis | The Company values its money market funds at fair value on a recurring basis. 2018 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Cash $ 12,486,395 $ - $ - $ 12,486,395 $ 12,486,395 Level 1 Money market funds 8,051,662 - - 8,051,662 8,051,662 Subtotal 20,538,057 - - 20,538,057 20,538,057 Level 2 - - - - - Level 3 - - - - - Total $ 20,538,057 $ - $ - $ 20,538,057 $ 20,538,057 |
Acquisitions (Tables)
Acquisitions (Tables) - VirBela LLC [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Preliminary Allocation of the Purchase Price Related to Assets and Liabilties | The following table shows the preliminary allocation of the purchase price of VirBELA, LLC to the acquired identifiable assets, and goodwill: Accounts receivable $ 4,273 Inventory 968 Fixed assets 23,452 Intangible assets 2,331,000 Goodwill 8,248,107 Total purchase price $ 10,607,800 |
Schedule of Preliminary Allocation of the Purchase Price Related to Intangible Assets | The preliminary purchase price allocation to identifiable intangible assets acquired in the VirBELA acquisition was: Tradename $ 1,169,000 Existing Technology 297,000 Non-competition agreements 125,000 Customer contracts 740,000 Total intangible assets purchased $ 2,331,000 |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid and Other Current Assets [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid expenses and other current assets consisted of the following: Year Ended December 31, 2018 2017 Prepaid expenses $ 1,070,064 $ 219,074 Prepaid insurance 706,435 287,244 Rent deposits 51,113 68,196 Other assets 30,376 16,520 $ 1,857,988 $ 591,034 |
Fixed Assets, Net (Tables)
Fixed Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fixed Assets, Net [Abstract] | |
Schedule of fixed assets | Fixed assets, net consisted of the following: Year Ended December 31, 2018 2017 Computer hardware and software $ 3,925,129 $ 1,982,749 Furniture, fixture and equipment 5,910 5,910 Total depreciable property and equipment 3,931,039 1,988,659 Less: accumulated depreciation and amortization (1,320,103) (450,446) Depreciable property, net 2,610,936 1,538,213 Assets under development 128,589 – Fixed assets, net $ 2,739,525 $ 1,538,213 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill were: Total Balance at December 31, 2016 and 2017 $ - Acquisitions 8,248,107 Balance at December 31, 2108 $ 8,248,107 |
Schedule of Definite-Lived Assets | Definite-Lived intangible assets at December 31, 2018 were: As of December 31, 2018 Gross Amount Accumulated Amortization Net Carrying Amount Trade name $ 1,169,000 $ (9,742) $ 1,159,258 Existing technology 297,000 (4,950) 292,050 Non-competition agreements 125,000 (3,472) 121,528 Customer contracts 740,000 (6,167) 733,833 Software 225,000 - 225,000 Total $ 2,556,000 $ (24,331) $ 2,531,669 |
Schedule of Definite-Lived Furture Amortization Expense | We estimate expected amortization related to definite-lived intangible assets will be: Expected amortization 2019 $ 366,967 2020 366,967 2021 363,494 2022 250,300 2023 and thereafter 1,183,941 Total $ 2,531,669 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: Year Ended December 31, 2018 2017 Commissions payable $ 16,368,811 $ 7,565,357 Payroll payable 1,117,830 749,203 Vacation payable 690,587 283,077 Taxes payable 217,820 99,809 Other accrued expenses 581,387 120,734 $ 18,976,435 $ 8,818,180 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity [Abstract] | |
Restricted Stock Activity Table | The following table illustrates the Company’s stock activity for the Real Estate Agent Growth Incentive Program for the following periods: Weighted Average Shares Fair Value Balance, December 31, 2016 3,057,879 4.05 Granted 2,024,498 7.60 Issued (1,457,538) 5.27 Forfeited (565,774) 4.76 Balance, December 31, 2017 3,059,065 7.60 Granted 2,380,100 11.59 Issued (889,769) 12.16 Forfeited (676,519) 4.05 Balance, December 31, 2018 3,872,877 11.63 |
Stock Option Activity Table | The following table illustrates the Company’s stock option activity for the following periods: Weighted Average Weighted Remaining Average Contractual Term Options Exercise Price Intrinsic Value (Years) Balance, December 31, 2016 10,747,558 $ 0.67 $ 3.56 7.75 Granted 2,848,231 3.76 - 6.15 Exercised (181,572) 0.26 6.86 Forfeited (2,540,925) 2.31 3.20 Balance, December 31, 2017 10,873,292 $ 1.50 $ 5.08 6.65 Granted 870,000 10.86 (3.78) 9.34 Exercised (2,594,050) 0.78 11.90 Forfeited (451,629) 3.03 9.59 Balance, December 31, 2018 8,697,613 $ 2.08 $ 5.00 6.07 Exercisable at December 31, 2018 6,620,042 0.92 6.16 5.29 Vested at December 31, 2018 6,823,772 $ 1.00 $ 6.08 5.37 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of Income Tax Expense (Benefit) | The components of the provision for income tax expense are as follows: Year Ended December 31, 2018 2017 Current: Federal $ - $ - State 77,494 86,787 Foreign 306 10,447 77,800 97,234 Deferred Federal - - State - - - - Total provision (benefit) for income taxes $ 77,800 $ 97,234 |
Federal Statutory Rate Reconciliation | The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: Year Ended December 31, 2018 2017 Statutory tax rate 21.00 % 38.25 % State taxes 4.02 % (0.39) % Permanent differences (0.57) % (0.31) % Non-deductible share-based compensation (10.46) % (19.70) % Foreign tax rate differential (0.10) % (0.05) % Change in tax rate - % (6.33) % Valuation allowance (15.43) % (11.90) % Other net 1.19 % (0.01) % Total (0.35) % (0.44) % |
Schedule of Deferred Tax Assets | Deferred tax assets consist of the following at: Year Ended December 31, 2018 2017 Deferred tax assets: Net operating loss carryforward $ 6,186,379 $ 2,445,965 Temporary differences 598,732 241,649 Share-based compensation 228,989 430,614 Total gross deferred tax assets $ 7,014,100 $ 3,118,228 Deferred tax liabilities Property and equipment (439,388) (17,835) Valuation allowance (6,574,712) (3,100,394) Net deferred tax assets $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of future operating lease payments | The following table illustrates the Company’s future obligations related to its non-cancellable operating leases: Year Ending December 31, 2019 $ 451,710 2020 420,518 2021 237,142 2022 42,532 2023 and thereafter 4,134 Total $ 1,156,036 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation [Abstract] | |
Entity incorporation, state country name | State of Delaware |
Entity incorporation, date of incorporation | Jul. 30, 2008 |
Summar of Significant Accountin
Summar of Significant Accounting Principles (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and cash equivalents | $ 20,538,057 | $ 4,672,034 | |
Restricted cash | 2,502,591 | 923,193 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 23,040,648 | 5,595,227 | $ 2,166,312 |
Advertising expense | 2,403,941 | 1,258,334 | |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | $ 0 | ||
Accounting Standards Update 2016-18 [Member] | |||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 441,489 | ||
Maximum [Member] | |||
Open Tax Year | 2018 | ||
Maximum [Member] | Computer Equipment [Member] | |||
Property and equipment useful lives | P5Y | ||
Maximum [Member] | Furniture and Fixtures [Member] | |||
Property and equipment useful lives | P7Y | ||
Minimum [Member] | |||
Open Tax Year | 2012 | ||
Minimum [Member] | Computer Equipment [Member] | |||
Property and equipment useful lives | P3Y | ||
Minimum [Member] | Furniture and Fixtures [Member] | |||
Property and equipment useful lives | P5Y | ||
Additional Paid-In Capital [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 5,738,536 | ||
Accumulated Deficit [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (5,738,536) |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Schedule of Fair Value on Recurring Basis) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, at Carrying Value, Total | $ 20,538,057 | $ 4,672,034 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash | 12,486,395 | |
Cash and Cash Equivalents, at Carrying Value, Total | 20,538,057 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents, at Carrying Value | 8,051,662 | |
Cash and Cash Equivalents, at Carrying Value, Total | 20,538,057 | |
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, fair value | 12,486,395 | |
Assets, fair value disclosure, total | 20,538,057 | |
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds, fair value | 8,051,662 | |
Assets, fair value disclosure, total | 20,538,057 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, fair value | 12,486,395 | |
Assets, fair value disclosure, total | 20,538,057 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds, fair value | 8,051,662 | |
Assets, fair value disclosure, total | $ 20,538,057 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) | Nov. 29, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Acquisition cash paid amount | $ 6,725,000 | |
Goodwill acquired amortization schedule | 15 years | |
Closing Date Anniversary Remaining Payments via Shares [Member] | Common Stock [Member] | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 1,000,000 | |
VirBela LLC [Member] | ||
Business Acquisition [Line Items] | ||
Business acquisition, name of acquired entity | VirBELA, LLC | |
Business acquisition, description of acquired entity | a California limited liability company. VirBELA provides a cloud-based environment focused on educational and innovative learning technologies to enhance global education experiences that empower individuals, teams, and organizations for clients in various industries. Its model allows for a level of engagement and participation that can typically only be achieved with face-to-face instruction. Its proprietary immersive 3D campus, which supports blended learning and big data assessment, is highly customizable to meet the branding and educational needs of clients. VirBELA developed the Company's current cloud campus called eXp World, which provides 24/7 access to collaborative tools, training and socialization for the Company's real estate agents and employees. | |
Business combination, reason for business combination | The acquisition of VirBELA's core group of products and services will allow eXp Realty to continue to accelerate its business in a sustainable and innovative way, which is consistent with eXp World Holdings' vision to expand the product offering to agents, teams and others who could benefit from their own, always available environments for collaboration. | |
Business acquisition, effective date of acquisition | Nov. 29, 2018 | |
Purchase price | 10,607,800 | |
Acquisition cash paid amount | 7,000,000 | |
Business combination, consideration transferred, equity interests issued and issuable | 1,000,000 | |
Cash paid for acquisition | $ 6,500,000 | |
Fair value inputs, discount rate | 10.00% | |
Business acquisition, transaction costs | $ 141,498 | |
Business combinaion unamortized discount amount on equity payments | $ 392,200 | |
VirBela LLC [Member] | Common Stock [Member] | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 3,607,800 | |
Fair value inputs, discount rate | 10.00% | |
Present value of aggreated future stock issuance related to business combinations | $ 2,607,800 | |
VirBela LLC [Member] | Restricted Stock [Member] | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 1,000,000 | |
Business acquisition, equity interest issued or issuable, number of shares | 97,371 | |
VirBela LLC [Member] | Secure Seller's Performance Post Close Obligations [Member] | ||
Business Acquisition [Line Items] | ||
Cash paid for acquisition | $ 500,000 | |
Customer Contracts [Member] | VirBela LLC [Member] | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets, remaining amortization period | 10 years | |
Effective income tax rate reconciliation state and federal income taxes | 29.40% | |
Fair value inputs, expected return on net assets | 14.00% | |
Trade Names [Member] | VirBela LLC [Member] | ||
Business Acquisition [Line Items] | ||
Fair value inputs, discount rate | 14.00% | |
Fair value inputs, royalty rate | 1.00% | |
Finite-lived intangible assets, remaining amortization period | 10 years | |
Technology-Based Intangible Assets [Member] | VirBela LLC [Member] | ||
Business Acquisition [Line Items] | ||
Fair value inputs, discount rate | 14.00% | |
Fair value inputs, royalty rate | 5.00% | |
Finite-lived intangible assets, remaining amortization period | 5 years | |
Noncompete Agreements [Member] | VirBela LLC [Member] | ||
Business Acquisition [Line Items] | ||
Fair value inputs, discount rate | 14.00% | |
Finite-lived intangible assets, remaining amortization period | 3 years |
Acquisitions (Schedule of Preli
Acquisitions (Schedule of Preliminary Allocation of the Purchase Price Related to Assets and Liabilties) (Details) - USD ($) | Dec. 31, 2018 | Nov. 29, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 8,248,107 | ||
VirBela LLC [Member] | |||
Business Acquisition [Line Items] | |||
Account receivable | $ 4,273 | ||
Inventory | 968 | ||
Fixed assets | 23,452 | ||
Intangible assets | 2,331,000 | ||
Goodwill | 8,248,107 | ||
Total purchase price | $ 10,607,800 |
Acquisitions (Schedule of Pre_2
Acquisitions (Schedule of Preliminary Allocation of the Purchase Price Related to Intangible Assets) (Details) - VirBela LLC [Member] | Nov. 29, 2018USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 2,331,000 |
Customer Contracts [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | 740,000 |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | 1,169,000 |
Technology-Based Intangible Assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | 297,000 |
Noncompete Agreements [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 125,000 |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets (Schedule of Prepaid and Other Current Assets) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Prepaid and Other Current Assets [Abstract] | ||
Prepaid expenses | $ 1,070,064 | $ 219,074 |
Prepaid insurance | 706,435 | 287,244 |
Rent deposits | 51,113 | 68,196 |
Other assets | 30,376 | 16,520 |
Prepaid and other current assets | $ 1,857,988 | $ 591,034 |
Fixed Assets, Net (Narrative) (
Fixed Assets, Net (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fixed Assets, Net [Abstract] | ||
Depreciation and amortization | $ 869,658 | $ 353,229 |
Fixed Assets, Net (Details)
Fixed Assets, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment, gross | $ 3,931,039 | $ 1,988,659 |
Less: accumulated depreciation and amortization | (1,320,103) | (450,446) |
Depreciable property, net | 2,610,936 | 1,538,213 |
Assets under development | 128,589 | |
Property and equipment, net | 2,739,525 | 1,538,213 |
Computer Equipment [Member] | ||
Property and equipment, gross | 3,925,129 | 1,982,749 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | $ 5,910 | $ 5,910 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets [Abstract] | ||
Indefinite-lived intangible assets (excluding goodwill) | $ 0 | |
Amortization of intangible assets | $ 24,331 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Schedule of Goodwill) (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill, Beginning Balance | |
Acquisitions | 8,248,107 |
Goodwill, Ending Balance | $ 8,248,107 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule of Definite-Lived Assets) (Details) | Dec. 31, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | $ 2,556,000 |
Accumulated amortization | (24,331) |
Net carrying amount | 2,531,669 |
Customer Contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | 740,000 |
Accumulated amortization | (6,167) |
Net carrying amount | 733,833 |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | 1,169,000 |
Accumulated amortization | (9,742) |
Net carrying amount | 1,159,258 |
Technology-Based Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | 297,000 |
Accumulated amortization | (4,950) |
Net carrying amount | 292,050 |
Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | 225,000 |
Net carrying amount | 225,000 |
Noncompete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Gross amounts | 125,000 |
Accumulated amortization | (3,472) |
Net carrying amount | $ 121,528 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Schedule of Definite-Lived Furture Amortization Expense) (Details) | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets [Abstract] | |
2019 | $ 366,967 |
2020 | 366,967 |
2021 | 363,494 |
2022 | 250,300 |
2023 | 1,183,941 |
Net carrying amount | $ 2,531,669 |
Accrued Expenses (Schedule of A
Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Expenses [Abstract] | ||
Commissions payable | $ 16,368,811 | $ 7,565,357 |
Payroll payable | 1,117,830 | 749,203 |
Vacation payable | 690,587 | 283,077 |
Taxes payable | 217,820 | 99,809 |
Other accrued expenses | 581,387 | 120,734 |
Total accrued expenses | $ 18,976,435 | $ 8,818,180 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Nov. 29, 2018 | Dec. 31, 2018 |
Line of credit maximum amount | $ 1,000,000 | |
Line of credit amount outstanding | 0 | |
Long term payable, current | 974,659 | |
Long term payable, net of current | 1,654,337 | |
VirBela LLC [Member] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 1,000,000 | |
Fair value inputs, discount rate | 10.00% | |
Long term payable, current | 1,654,337 | |
Long term payable, net of current | $ 974,659 | |
Business combinaion unamortized discount amount on equity payments | $ 392,200 | |
Line of Credit [Member] | ||
Line of credit facility, expiration date | Aug. 29, 2019 | |
Debt instrument, covenant description | The line of credit agreement requires us to comply with various financial covenants as well as customary affirmative and negative covenants that restrict our ability to, among other things, incur debt and liens, make significant investments, dispose of assets and make distributions without prior consent. The line of credit is secured by accounts receivable. The line of credit contains certain financial covenants, including a fixed charge coverage ratio and a tangible net worth. | |
Debt instrument, collateral | The line of credit is secured by accounts receivable. | |
Debt instrument, covenant compliance | At December 31, 2018, we were in compliance with all of the financial covenants under the line of credit. | |
Prime Rate [Member] | Line of Credit [Member] | ||
Debt instrument, basis spread on variable rate | 1.50% | |
Federal Funds Effective Swap Rate [Member] | Line of Credit [Member] | ||
Debt instrument, basis spread on variable rate | 1.50% |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock shares issued | 60,609,102 | 54,962,535 | ||
Common stock shares outstanding | 60,609,102 | 54,962,535 | ||
Shares issued for acquisition, value | $ 1,000,000 | |||
Stock issued for options exercised, shares | 2,594,050 | 181,572 | ||
Proceeds from options exercised | $ 2,015,034 | $ 46,596 | ||
Stock issued for services, value | $ 21,253,677 | $ 5,857,554 | ||
Common stock repurchased and retired, shares | 1,307 | |||
Payment for common stock repurchased and retired | $ 3,607 | |||
Common stock issued | 60,609,102 | 54,962,535 | ||
Common stock outstanding | 60,609,102 | 54,962,535 | ||
Stock issued for compensation, value | $ 19,053,478 | $ 10,961,631 | ||
Stock based compensation | $ 19,053,478 | $ 10,961,631 | ||
2015 Agent Equity Program [Member] | ||||
Stock issued for services, shares | 1,684,601 | 1,464,997 | ||
Stock issued for services, value | $ 21,253,677 | $ 5,857,554 | ||
Percentage of commission potentially redeemed in common stock | 5.00% | |||
Percentage of discount of market price, date of issuance | 20.00% | |||
Share based compensation plan description | 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 common stock. If agents and brokers elect to receive portions of their commissions in 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 shares are issued at a 20% discount to market on the date of issuance. We recognize this 20% discount as an additional cost of sales charge during the periods presented. | |||
Stock based compensation | $ 21,253,677 | $ 5,857,554 | ||
Real Estate Agent Growth and Other Incentive Programs [Member] | ||||
Stock issued for services, shares | 1,270,545 | 1,000,594 | ||
Stock issued for services, value | $ 19,053,478 | $ 10,961,631 | ||
Accredited Investors [Member] | ||||
Stock issued new, shares | 49,231 | |||
Proceeds from private placement | $ 160,000 | 760,000 | ||
Payment of stock issuance costs | 142,158 | |||
Restricted Stock [Member] | ||||
Shares issued for acquisition, shares | 97,371 | |||
Shares issued for acquisition, value | $ 1,000,000 | |||
Stock based compensation | $ 9,174,019 | $ 7,177,854 | ||
Restricted Stock [Member] | Real Estate Agent Growth and Other Incentive Programs [Member] | ||||
Unvested shares, other than options | 1,909,023 | |||
Expected to vest, other than options | 3,872,877 | |||
Unrecognized compensation expense - stock awards | $ 22,773,241 | |||
Stock Options [Member] | ||||
Stock issued for options exercised, shares | 2,594,050 | 181,572 | ||
Unrecognized compensation expense - stock awards | $ 11,972,694 | |||
Stock options granted, shares | 870,000 | 2,848,231 | ||
Stock options granted fair value | $ 8,538,739 | |||
Options award, expected volatility, minimum | 129.20% | 142.00% | ||
Options award, expected volatility, maximum | 153.70% | 155.00% | ||
Options award, risk free rate | 2.90% | 2.20% | ||
Options award, dividend payments | $ 0 | $ 0 | ||
Plan modification, description and terms | In January 2017, the Company modified certain terms of previously outstanding option awards to purchase 500,000 shares of common stock, including accelerating portions of the award to vest prior to the original terms and the forfeiture of unvested options to purchase 275,000 shares of common stock. | |||
Plan modification, incremental additional cost | $ 368,000 | |||
Options outstanding | 500,000 | 8,697,613 | 10,873,292 | 10,747,558 |
Forfeited | 275,000 | 451,629 | 2,540,925 | |
Maximum [Member] | Stock Options [Member] | ||||
Options award, expected term | 10 years | 10 years | ||
Minimum [Member] | Stock Options [Member] | ||||
Options award, expected term | 6 years 3 months | 6 years 3 months |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Activity Table) (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted stock outstanding, beginning balance | 3,059,065 | 3,057,879 |
Restricted stock granted | 2,380,100 | 2,024,498 |
Restricted stock issued | (889,769) | (1,457,538) |
Restricted stock forfeited | (676,519) | (565,774) |
Restricted stock outstanding, ending balance | 3,872,877 | 3,059,065 |
Weighted average price - Restricted stock outstanding, beginning balance | $ 7.60 | $ 4.05 |
Weighted average price - Restricted stock granted | 11.59 | 7.60 |
Weighted average price - Restricted stock issued | 12.16 | 5.27 |
Weighted average price - Restricted stock forfeited | 4.05 | 4.76 |
Weighted average price - Restricted stock outstanding, ending balance | $ 11.63 | $ 7.60 |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Option Activity Table) (Details) - $ / shares | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options | ||||
Exercised | (2,594,050) | (181,572) | ||
Stock Options [Member] | ||||
Options | ||||
Beginning balance | 10,747,558 | 10,873,292 | 10,747,558 | |
Granted | 870,000 | 2,848,231 | ||
Exercised | (2,594,050) | (181,572) | ||
Forfeited | (275,000) | (451,629) | (2,540,925) | |
Ending balance | 500,000 | 8,697,613 | 10,873,292 | 10,747,558 |
Exercisable | 6,620,042 | |||
Vested | 6,823,772 | |||
Weighted Average Price | ||||
Beginning balance | $ 0.67 | $ 1.50 | $ 0.67 | |
Granted | 10.86 | 3.76 | ||
Exercised | 0.78 | 0.26 | ||
Forfeited | 3.03 | 2.31 | ||
Ending balance | 2.08 | 1.50 | $ 0.67 | |
Exercisable | 0.92 | |||
Vested | 1 | |||
Intrinsic Value | ||||
Beginning balance | $ 3.56 | 5.08 | 3.56 | |
Granted | (3.78) | |||
Exercised | 11.90 | 6.86 | ||
Forfeited | 9.59 | 3.20 | ||
Ending balance | 5 | $ 5.08 | $ 3.56 | |
Exercisable | 6.16 | |||
Vested | $ 6.08 | |||
Weighted average remaining contractual term | ||||
Weighted average contractual term | 6 years 26 days | 6 years 7 months 24 days | 7 years 9 months | |
Granted | 9 years 4 months 2 days | 6 years 1 month 24 days | ||
Exercisable | 5 years 3 months 15 days | |||
Vested | 5 years 4 months 13 days |
Stockholders' Equity (Stock O_2
Stockholders' Equity (Stock Options by Exercise Price Table) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options [Member] | |||
Options outstanding, nonvested, remaining contractual life in years | 6 years 26 days | 6 years 7 months 24 days | 7 years 9 months |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2017 | |
Income Taxes [Abstract] | ||||
Federal net operating loss | $ 24,700,000 | $ 24,700,000 | ||
Change in valuation allowance | 3,474,318 | $ 2,357,426 | ||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | |
Federal Statutory Tax Rate | 21.00% | 21.00% | 38.25% | 35.00% |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Tax Expense (Benefit)) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
State | $ 77,494 | $ 86,787 |
Foreign | 306 | 10,447 |
Total Current | 77,800 | 97,234 |
Deferred: | ||
Total provision (benefit) for income taxes | $ 77,800 | $ 97,234 |
Income Taxes (Federal Statutory
Income Taxes (Federal Statutory Rate Reconciliation) (Details) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2017 | |
Income Taxes [Abstract] | ||||
Federal Statutory Tax Rate | 21.00% | 21.00% | 38.25% | 35.00% |
State taxes | 4.02% | (0.39%) | ||
Permanent differences | (0.57%) | (0.31%) | ||
Non-deductible share-based compensation | (10.46%) | (19.70%) | ||
Foreign tax rate differential | (0.10%) | (0.05%) | ||
Change in tax rate | (6.33%) | |||
Valuation allowance | (15.43%) | (11.90%) | ||
Other net | 1.19% | (0.01%) | ||
Total tax rate reconciliation | (0.35%) | (0.44%) |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 6,186,379 | $ 2,445,965 |
Temporary differences | 598,732 | 241,649 |
Share-based compensation | 228,989 | 430,614 |
Gross deferred tax assets | 7,014,100 | 3,118,228 |
Deferred tax liabilities | ||
Property and equipment | (439,388) | (17,835) |
Less Valuation Allowance | (6,574,712) | (3,100,394) |
Net Deferred Tax Asset |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
Future operating lease expense 2019 | $ 451,710 |
Future operating lease expense 2020 | 420,518 |
Future operating lease expense 2021 | 237,142 |
Future operating lease expense 2022 | 42,532 |
Future operating lease expense 2023 and thereafter | 4,134 |
Operating lease expense | $ 1,156,036 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net revenues | $ 500,147,681 | $ 156,104,544 |
CANADA [Member] | Sales Revenue, Net [Member] | ||
Concentration risk percentage | 1.00% |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | Aug. 07, 2017 | Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Share based compensation expense | $ 19,053,478 | $ 10,961,631 | ||
Hawkes [Member] | ||||
Options granted | 350,000 | |||
Options granted, exercise price | $ 4.22 | |||
Fair value of options granted | $ 1,333,501 | |||
Share based compensation expense | $ 254,522 | |||
Options forfeited | 350,000 |
Defined Contribution Savings _2
Defined Contribution Savings Plan (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Savings Plan [Abstract] | |
Defined contribution plan, description | During the year ended December 31, 2018, the Company established a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund. The Company sponsors the defined contribution savings plan. |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018employee | Dec. 31, 2015employee | Dec. 27, 2018USD ($) | |
Stock repurchase program, authorized amount | $ | $ 25 | ||
2015 Agent Equity Program [Member] | |||
Approximate number of agents available to participate in plan | employee | 16,000 | 400 |