What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-24 compared with 2025-02-20 · 322 added, 451 removed, 76 unchanged (91% of the section changed)

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations in future periods.

The risks described below are not the only risks facing our Company.

Additional risks not currently known to us or that we currently deem to be immaterial may materially adversely affect our business, financial condition or results of operations in future periods.

You should carefully consider the risk factors described below, together with all of the other information in this Annual Report, including our consolidated financial statements and notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report.

In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could materially affect the Company’s business, financial condition or results of operations in future periods.

The risks described below are not the only risks facing the Company.

Additional risks not currently known to the Company or that it currently deems to be immaterial may materially adversely affect its business, financial condition or results of operations in future periods.

You should carefully consider the risk factors described below, together with all of the other information in this Annual Report, including the Company’s consolidated financial statements and notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report.

Certain statements in this Annual Report are forward-looking statements.

See the section of this Annual Report titled “Forward-Looking Statements.”

Risk Factor Summary

This risk factor summary contains a high-level summary of certain of the principal factors, events and uncertainties that make an investment in our securities risky, including risks related to our industries, risks related to our general business and operations, risks related to our real estate business, risks related to legal and regulatory matters and risks related to our shares of common stock.

The following summary is not complete and should be read together with the more detailed discussion of these and the other factors, events, and uncertainties set forth below before making an investment decision regarding our securities.

The principal factors, events, and uncertainties that make an investment in our securities risky include the following:

Risks Related to Our Industry

● Our profitability is tied to the strength of the residential real estate market, which is subject to a number of general business and macroeconomic conditions beyond our control.

● Monetary policies of the U.S.

federal government and its agencies may have a material adverse impact on our operations.

● Home inventory levels may result in excessive or insufficient supply, which could negatively impact home sale transaction growth.

● Material decreases in the average brokerage commission rate, due to conditions beyond our control, could materially adversely affect our financial results.

● The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harm.

● Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult.

● General changes in consumer attitudes and behaviors could negatively impact home sale transaction volume and our business model.

● Home sale transaction volume can be impacted by natural disasters and other climate-related interruptions.

Risks Related to our General Business and Operations

● We may be unable to attract and retain qualified personnel and agents.

● Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations.

● Loss of our current executive officers or other key management could significantly harm our business.

● We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which may adversely affect our profitability.

● We could be subject to changes in tax laws and regulations that may have a material adverse effect in our business.

● We may be unable to effectively and efficiently manage growth in our business.

● We may not realize the anticipated benefits from and may have to pay substantial costs related to, any acquisitions, mergers, joint ventures, or investments that we undertake.

● Our international operations are subject to risks not generally experienced by our U.S.

● Failure to protect intellectual property rights could adversely affect our business.

● We are actively, and intend to continue, developing new products and services complementary to our brokerage business and our failure to accurately predict their demand or growth could have an adverse effect on our business.

Risks Related to our Real Estate Business

● We may not achieve a positive agent growth rate or maintain current agent count, which would adversely affect our revenue growth and results of operations.

● The real estate market may be severely impacted by industry changes as the result of certain class action lawsuits, settlements, or government investigations.

● Negligence or willful misconduct of independent real estate professionals affiliated with our Company owned brokerages could materially and adversely affect our reputation and subject us to liability.

● Changes in laws, regulations, or industry standards may result in increased agent attrition and adversely affect our ability to attract and retain agents.

● Inflation and relatively high interest rates have and may continue to contribute to declining real estate transaction volumes, which have and may continue to materially impact operating results, profits and cash flows.

● Any reduction in the Company’s portion of the commission revenue from property sales transactions could harm our financial performance.

● If we fail to grow in the various local markets that we serve or are unsuccessful in identifying and pursuing new business opportunities, our long-term prospects and profitability will be harmed.

Risks Related to Legal and Regulatory Matters

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

● We face significant risk to our brand and revenue if we fail to maintain compliance with the law and regulations of federal, state, county and foreign governmental authorities, or private associations and governing boards.

● We offer our independent agents the opportunity to earn additional commissions through our revenue sharing plan, which pays under a multi-tiered compensation structure similar in some respects to network marketing.

Network marketing is subject to intense government scrutiny and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect our business.

● We may suffer significant financial harm and loss of reputation if we do not comply, cannot comply, or are alleged to have not complied with applicable laws, rules and regulations concerning our classification and compensation practices for the agents in our owned-and-operated brokerage.

● We are and may, in the future, be blocked from or limited in providing our agent compensation plans in certain jurisdictions and may be required to modify our business model in those jurisdictions as a result.

● If we fail to protect the privacy and personal information of our customers, agents or employees, we may be subject to legal claims, government action and damage to our reputation.

● Entering new business arrangements, joint ventures, or business lines may expose us to additional regulatory and compliance risks that could materially and adversely affect our business and financial condition.

Risks Related to our Stock

● Our Chairman and Chief Executive Officer and a significant stockholder own a significant percentage of our stock and have agreed to act as a group on any matter submitted to a vote of our stockholders.

As a result, the trading price for our shares may be depressed and they can significantly influence actions that may be adverse to the interests of our other stockholders.

● Because we can issue additional shares of common stock and because we issue stock under equity incentive plan, our stockholders may experience dilution in the future.

● Our share repurchase program could impact the trading price of our stock, reduce liquidity, and may not enhance stockholder value.

● The stock price of our common stock has been and likely will continue to be volatile and may decline in value regardless of our performance.

● Because there is no guarantee that we will continue to pay cash dividends on our shares of common stock in the future, our stockholders may not be able to receive a return on their shares unless they sell them.

● Delaware law and our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

Risks Related to Our Industries

Our profitability is tied to the strength of the residential real estate market, which is subject to a number of general business and macroeconomic conditions beyond our control.

Our profitability is closely related to the strength of the residential real estate market, which is cyclical in nature and typically is affected by changes in national, state and local economic conditions, which are beyond our control.

Macroeconomic conditions that could adversely impact the growth of the real estate market and have a material adverse effect on our business include, but are not limited to, economic slowdown or recession, increased unemployment, increased energy costs, reductions in the availability of credit or higher interest rates, increased costs of obtaining mortgages, an increase in foreclosure activity, inflation, disruptions in capital markets, declines in the stock market, adverse tax policies or changes in other regulations, lower consumer confidence, lower wage and salary levels, war, terrorist attacks or other geopolitical and security issues, including Russia’s ongoing war with Ukraine, the conflict between Israel and Palestine and rising tensions between China and Taiwan as well as between China and the U.S., natural disasters or adverse weather events, or the public perception that any of these events may occur.

Unfavorable general economic conditions, such as a recession or economic slowdown, in the U.S., Canada, or other markets we enter and operate within, could negatively affect the affordability of and consumer demand for, our services, which could have a material adverse effect on our business and profitability.

In addition, international, federal and state governments, agencies and government-sponsored entities such as Fannie Mae, Freddie Mac and Ginnie Mae could take actions that result in unforeseen consequences to the real estate market or that otherwise could negatively impact our business.

Risks Related to the Company’s Business and Industries

The Company’s business results are materially influenced by the strength of the U.S.

residential real estate sector and overall economic conditions.

The Company’s business results are closely related to the strength of the U.S.

residential real estate market, which is cyclical in nature, and general economic conditions, which are beyond its control.

Any of the risks identified below could reduce residential real estate transaction volumes, depress home prices, or otherwise negatively influence the industry and the Company’s results of operations:

● economic slowdown or recession in the U.S., Canada, or other markets within which the Company operates;

● increased unemployment or declines in wage and salary levels;

● increased energy costs;

● higher interest rates, such as the high interest rates during 2024 and 2025, and continuing inflationary pressures;

● increased costs of obtaining mortgages, reduced availability of mortgage financing, or increased down payment requirements;

● an increase in foreclosure activity;

● general changes in consumer attitudes and behaviors, such as declining marriage and birth rates;

● disruptions in capital markets, significant volatility in U.S.

and international equity markets, deterioration in global financial conditions, or declines in the stock market;

● changes to tax laws that eliminate, reduce, or limit deductions for mortgage interest or property taxes;

● changes in laws or regulations or actions taken by international, federal, and state governments, agencies and government-sponsored entities;

● lower consumer confidence in the national and global economy and/or real estate market;

● declining affordability of homes;

● slowdown in buyer demand for real estate and changing social attitudes toward home ownership;

● excessive or insufficient housing inventory;

● evolving federal policy under the current administration, including “Buy American” and protectionist trade or immigration measures, which could affect global supply chains, the cost of goods and labor, or foreign investment in real estate, each of which may influence housing demand or affordability;

● war, terrorist attacks or other geopolitical and security issues, including the ongoing conflict in Eastern Europe, rising tensions in the Middle East (including with Iran), and heightened strategic competition in the Asia-Pacific region (including between China and Taiwan), any of which could disrupt global economic conditions, supply chains, or the Company’s international operations;

● changes in trade policy including the imposition of new tariffs, and responses to such tariffs, that may indirectly affect the cost of homebuilding materials, consumer goods, or broader economic sentiment;

● natural disasters or adverse weather events, or the public perception that any of these events may occur.

Monetary policies of the U.S.

federal government and its agencies may have a material adverse impact on our operations.

federal government and its agencies, particularly those impacting mortgage interest rates and buyer affordability, may have a material adverse impact on the Company’s operations.

The Company generates a significant portion of its revenue from the U.S.

real estate market, which is heavily influenced by the monetary policies of the U.S.

federal government and its agencies.

real estate market is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S., which, in turn impacts interest rates.

Our business could be negatively impacted by any rising interest rate environment.

As mortgage rates rise, the number of home sale transactions may decrease as potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home.

Similarly, in higher interest rate environments, potential homebuyers may choose to rent rather than pay higher mortgage rates.

Changes in the interest rate environment and mortgage market are beyond our control and are difficult to predict and, as such, could have a material adverse effect on our business and profitability.

Home inventory levels may result in excessive or insufficient supply, which could negatively impact home sale transaction growth.

Home inventory levels have been meaningfully declining or increasing in certain markets and price points in recent years.

In both instances, homeowners are more likely to retain their homes for longer periods of time, resulting in a negative impact on home sale volume growth.

Insufficient home inventory levels can cause a reduction in housing affordability, which can result in potential homebuyers deferring entry or reentry into the residential real estate market.

Alternatively, excessive home inventory levels can contribute to a reduction in home values, which can result in some potential home sellers deferring entry into the residential real estate market.

These inventory trends are caused by many pressures outside of our control, including slow or accelerated new housing construction, macroeconomic conditions including rising interest rates and inflation, real estate industry models that purchase homes for long-term rental or corporate use, and other market conditions and behavioral trends discussed herein.

home inventory levels have been low throughout 2023 and 2022, with a moderate rebound in 2024.

Continuing or increasing constraints on home inventory levels may adversely impact the volume of home sale transactions closed by our brokers and agents and, as such, could have a material adverse effect on our business and profitability.

Material decreases in the average brokerage commission rate, due to conditions beyond our control, could materially adversely affect our financial results.

There are many factors that contribute to average broker commission rates that are beyond our control.

Factors that can contribute to a material decrease in brokerage commissions include regulation, litigation (including pending litigation and industry practice changes described elsewhere in this Annual Report), the rise of certain competitive brokerage or non-traditional competitor modes, an increase in the popularity of discount brokers and agents, increased adoption of flat fees, commission models with more competitive rates, rebates or lower commission rates on transactions, adverse outcomes of pending antitrust litigation across our industry, as well as other competitive factors.

The average broker commission rate for a real estate transaction is a key determinant of our profitability and a material decrease in brokerage commission rates could have a material adverse effect on our business and profitability.

The introduction and integration of emerging technologies into the real estate industry and any delay or inability to successfully integrate such technologies into our business or the businesses of our real estate professionals could result in competitive harm.

The real estate brokerage industry is susceptible to disruption by emerging technologies, particularly artificial intelligence (“AI”) and machine learning.

Integrating advancements like natural language processing, AI, and machine learning is vital for optimizing efficiency and reducing operational costs for real estate brokerages, professionals, and clients.

These tools have the potential to streamline operations, enhance client interactions, and provide insights derived from vast data sets.

These emerging technologies may also allow for new industry entrants and new industry platforms that compete with existing industry brokerages, including the Company, and agents and such new entrants and platforms could offer solutions that are more cost-effective, efficient, or user-friendly, and which may change broker, agent, and client expectations.

Delays in embracing and integrating these AI-driven technologies could adversely impact existing industry participants to compete or risk displacement of traditional real estate offerings and services.

If we and our affiliated real estate professionals are unable to provide enhancements and new features and efficiencies for our existing offerings or innovate quickly enough to keep pace with these rapid technological developments, our business could be harmed.

Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult.

Seasons and weather traditionally impact the real estate industry.

Continuous poor weather or natural disasters negatively impact listings and sales.

Spring and summer seasons historically reflect greater sales periods in comparison to fall and winter seasons.

We have historically experienced lower revenues during the fall and winter seasons, as well as during periods of unseasonable weather, which reduces our operating income, net income, operating margins and cash flow.

Real estate listings precede sales, and a period of poor listings activity will negatively impact revenue.

Past performance in similar seasons or during similar weather events can provide no assurance of future or current performance and macroeconomic shifts in the markets we serve can conceal the impact of poor weather or seasonality.

Home sales in successive quarters can fluctuate significantly due to a wide variety of factors, including holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, interest rate changes, speculation of pending interest rate changes, natural disasters, including hurricanes, flooding and wildfires, and the overall macroeconomic market.

Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters and macroeconomic market changes that may make it difficult to compare or analyze our financial performance effectively across successive quarters.

General changes in consumer attitudes and behaviors could negatively impact home sale transaction volume and our business model.

The real estate market is significantly influenced by changes in consumer attitudes and behaviors, including those related to homeownership and the role of real estate agents in home sale transactions.

Certain real estate markets have experienced or may experience a decline in homeownership due to evolving social behaviors, such as declining marriage and birth rates, as well as increased preferences for renting over purchasing homes.

These shifting preferences could reduce demand for home purchases, leading to a corresponding decrease in home sale transaction volume.

In addition, emerging trends in consumer sales models may adversely affect our business.

For example, direct-buyer companies (also known as iBuyers) purchase homes from sellers at below-market rates in exchange for speed and convenience, then resell those homes at market prices.

Similarly, discount brokerages and flat-fee models reduce the role of agents by offering sellers low commissions or providing rebates to buyers.

As these alternative models gain traction, they may disrupt the traditional agent-driven real estate transaction process, creating competitive pressures that could impact our brokers and agents.

Moreover, private sales of residential properties facilitated through the internet have proliferated as technological advancements and access to online platforms increase.

Although, as of 2023, the NAR estimated that nearly nine in ten home sellers worked with a real estate agent, any significant shift toward private sales and away from agent-facilitated transactions could materially reduce the volume of sales closed by our agents.

A decrease in agent-driven sales could have a material adverse effect on our business, prospects, and results of operations.

Ultimately, changing consumer attitudes toward homeownership, coupled with the adoption of alternative real estate sales models and the increasing volume of private sales, could materially and adversely affect our transaction volume, revenue, and profitability.

Home sale transaction volume can be impacted by natural disasters and other climate-related interruptions.

Natural disasters, such as hurricanes, flooding and wildfires, are occurring more frequently and/or with more intense effects and may impact general population trends.

Areas afflicted by natural disasters may experience a decline in home sale transaction volume due to home destruction and/or general population movement out of the afflicted area, and the risk of non-insurability against such disasters.

Such events can make it difficult or impossible for home owners and builders to sell their homes and result in slowdowns in home sale transaction volume.

Additionally, the risk of non-insurability may disqualify certain prospective homebuyers whether due to heightened mortgage underwriting requirements or the perceived risk of loss to the homebuyer.

Because the real estate industry relies on home sale transactions, climate crises can exacerbate negative financial results for real estate companies operating in particularly affected areas.

Risks Related to our General Business and Operations

We may be unable to attract and retain qualified personnel and agents.

To execute our business strategy, we must attract and retain highly qualified personnel and agents.

In particular, we compete with many other real estate brokerages for qualified brokers who manage our operations in each state and independent real estate agents who serve as the backbone of our revenue-generating activities.

The ability to recruit and retain a strong network of skilled agents is critical to sustaining our competitive position, market share, and overall business performance.

Increased competition from other brokerages, particularly those offering alternative compensation models, additional technology tools, or different support services, may adversely affect our ability to attract and retain top-producing agents.

We must also compete with technology companies for developers with high levels of experience in designing, developing and managing cloud-based software, as well as for skilled service and operations professionals and we may not be successful in attracting and retaining the highly skilled professionals and agents we need.

In addition, in making employment or affiliation decisions, candidates and agents often consider the value of the stock options or other equity incentives they are to receive in connection with their employment or affiliation.

If the price of our stock declines or experiences significant volatility, our ability to attract or retain key employees and agents may be adversely affected.

Additionally, in order to realize the potential benefits of acquisitions, we may need to retain employees from the acquired businesses or hire additional personnel to fully capitalize on the opportunities that such acquisitions may offer and we may not be successful in retaining or attracting such individuals following an acquisition.

From time to time in the past, we have experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications.

Many of the companies with which we compete for experienced personnel have greater resources than we do.

If we fail to attract and retain new personnel or agents or fail to retain and motivate our current personnel and agents, our growth prospects and financial performance could be severely harmed.

Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations.

The performance and reliability of our systems and operations are critical to our reputation and ability to attract agents, teams of agents and brokers into our company as well as our ability to service homebuyers and sellers.

Our systems and operations are vulnerable to security breaches, interruption or malfunction due to events beyond our control, including natural disasters, such as earthquakes, fires and floods, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events.

In addition, we rely on third-party vendors to provide key components of our cloud office platform and to provide additional systems and related support.

If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.

Any security breach, interruption, delay or failure in our systems and operations could substantially reduce the transaction volume that can be processed with our systems, impair quality of service, increase costs, prompt litigation and other consumer claims and damage our reputation, any of which could substantially harm our financial condition.

Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.

Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of clients, agents, or customers.

real estate market, which is heavily influenced by the Federal Reserve Board.

By regulating the supply of money and credit these policies directly impact mortgage interest rates – a primary driver of the U.S.

real estate market The Company’s business and profitability are negatively impacted by any rising interest rate environment, as higher mortgage rates typically lead to a decrease in the number of home sale transactions.

Elevated mortgage rates, combined with an increased overall cost of living and broader economic pressures, create significant affordability challenges that reduce the ability and willingness of prospective buyers to purchase a home.

Specifically:

Higher interest rates reduce purchasing power.

In addition, rising costs associated with student loan obligations, healthcare, insurance, and other essential living expenses have further constrained affordability for households considering homeownership.

These affordability pressures have contributed to longer decision timelines and, in some cases, delayed or deferred home purchases, particularly among first-time buyers.

As a result, the average age of first-time homebuyers has increased, which may reduce transaction activity earlier in the buyer lifecycle and negatively impact overall housing demand.

The mortgage market continues to rely heavily on government-sponsored enterprises such as Fannie Mae, Freddie Mac, and Ginnie Mae to provide liquidity.

While these programs remain in place, changes to their underwriting standards, loan programs, or pricing, as well as sustained higher interest rates, could further affect affordability and buyer demand.

In addition, the availability and cost of homeowners’ insurance particularly in regions subject to increased climate-related risks - can materially affect the cost of homeownership and a buyer’s ability to obtain financing.

If insurance coverage becomes more limited or more expensive, housing demand and transaction activity may decline.

If elevated interest rates, affordability challenges, or other economic pressures persist or worsen, the number of real estate transactions facilitated through the Company’s platform could continue to decline, which would adversely affect the Company’s revenues, operating results, and financial condition.

Fluctuations in housing inventory levels can negatively impact the Company’s business, which depends on the ability of its brokers and agents to facilitate home sales.

In certain markets, limited supply in recent years has reduced transaction activity.

Factors outside the Company’s control such as the pace of new housing construction, macroeconomic conditions, rising mortgage costs that discourage potential sellers from moving, and increased purchases of residential properties by institutional investors for long-term rental or corporate use have contributed to lower inventory and fewer completed transactions in recent years.

Conversely, periods of elevated inventory can also dampen demand and slow sales activity.

Sustained imbalances in housing supply, whether too low or too high, could materially and adversely affect the Company’s business, financial condition, and results of operations.

Material decreases in the average brokerage commission rate, due to conditions beyond the Company’s control, could materially adversely affect its financial results.

There are many factors that contribute to average broker commission rates that are beyond the Company’s control.

Factors that can contribute to a material decrease in brokerage commissions include changes in regulation, litigation (including pending litigation and industry practice changes described elsewhere in this Annual Report), the rise of certain competitive brokerage or non-traditional competitor models, an increase in the popularity of discount brokers and agents, increased adoption of flat fees, commission models with more competitive rates, rebates or lower commission rates on transactions, as well as other competitive factors.

For example, the Company competes with other brokerages that may have reduced operating margins and access to capital resources permitting them to prioritize market share over profits, as well as the growing popularity of non-traditional platforms such as listing aggregators, which may put additional pressure on the Company’s commissions and related costs.

The average broker commission rate for a real estate transaction is a key determinant of the Company’s profitability, and a material decrease in brokerage commission rates could have a material adverse effect on the Company’s business and profitability.

The introduction and integration of emerging technologies, including artificial intelligence, presents various operational, compliance, and reputational risks and could impact the Company’s competitive position and financial performance.

Emerging technologies, including artificial intelligence (“AI”) and machine learning, are reshaping the real estate brokerage industry and offer opportunities to enhance efficiency, productivity, and client experience;

however, the Company’s adoption of these tools—including agent support chatbots, document processing systems, employee digital twins, and agent-facing custom Generative Pre-trained Transfer, or GPTs—also creates risks related to reliability, accuracy, data privacy, bias, and regulatory compliance.

Failures or limitations in these technologies could disrupt operations, expose the Company to legal or reputational harm, and negatively affect agent productivity and its competitive position.

Additionally, AI algorithms and other emerging technologies may be flawed and datasets underlying such technologies may be insufficient or contain biased information.

If the new technologies integrated into the Company’s operations produce analyses or recommendations that are or are alleged to be deficient, inaccurate, or biased, the Company’s reputation, business, financial condition, and results of operations may be adversely affected.

The Company expects that there will continue to be new laws or regulations governing the use of AI technology, which might be burdensome for the Company to comply with and may limit the Company’s ability to offer or enhance its existing tools and features or new offerings using, incorporating, or relying on AI technology.

Further, the use of AI technology requires specialized expertise.

The Company may not be able to attract and retain top talent to support the Company’s AI technology initiatives.

If any of the operational, compliance or reputational risks were to materialize, the Company’s business and results of operations may be adversely affected.

The Company’s operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult.

Home sales in successive quarters can fluctuate significantly due to a wide variety of factors, including, but not limited to, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, interest rate changes or speculation of pending interest rate changes, natural disasters, including hurricanes, flooding and wildfires, and the overall macroeconomic market.

Additionally, seasons and weather traditionally impact the real estate industry.

The Company has historically experienced lower revenues during the fall and winter seasons in comparison to spring and summer seasons, as well as during periods of unseasonable weather, which reduces the Company’s operating income, net income, operating margins and cash flow.

Past performance in similar seasons or during similar weather events can provide no assurance of future or current performance and macroeconomic shifts in the markets the Company serves can conceal the impact of poor weather or seasonality.

The Company’s revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters and macroeconomic market changes that may make it difficult to compare or analyze the Company’s financial performance effectively across successive quarters.

Climate-related physical impacts, regulatory changes, and disclosure obligations could increase costs, reduce transaction activity, and expose the Company to liability or reputational harm.

Chronic and acute physical impacts of climate change, such as rising home insurance costs, home insurance unavailability, flooding, wildfires, hurricanes, and other severe weather events, may reduce property values, disrupt housing supply, and limit affordability for buyers.

These events can slow transaction volumes, shift population growth away from high-risk regions, negatively affect the geographic mix of the Company’s revenues, and pose direct risks to the safety of the Company’s agents, brokers, clients, and employees in affected markets.

Transition risks, including new building codes, retrofitting mandates, energy-efficiency standards, and climate-related taxes or insurance market interventions, may increase the cost of property ownership, alter buyer demand, and extend transaction timelines.

Liability risks may arise if the Company’s brokers or agents fail to comply with new climate-related disclosure requirements or misstate property-related risks, and the Company could also face regulatory penalties, litigation, or reputational harm if the Company fail s to comply with evolving climate-related laws and regulations applicable to the Company’s operations.

Any or all of these risks could materially and adversely impact the Company’s business, revenue, results of operations, and financial condition.

The Company may be unable to attract, retain, and incentivize qualified real estate professionals.

The Company’s success depends significantly on its ability to attract, retain, and engage qualified real estate agents and brokers, who are the foundation of the Company’s revenue-generating activities.

Competition for skilled agents and brokers is intense, as the Company faces pressure from other brokerages offering alternative compensation models, technology tools, or support services, as well as from technology companies seeking experienced professionals in software development and cloud-based solutions.

If the Company fails to recruit and retain a strong network of agents and brokers, the Company’s competitive position, market share, and overall business performance could be adversely affected.

Industry and regulatory changes, including recent revisions to National Association of Realtors (“NAR”) policies and standards, buyer-broker compensation practices, and the recent settlement resolving nationwide antitrust litigation against NAR and major brokerages, may increase compliance burdens for agents, raise operating costs, and impact the perceived value of the profession.

These developments could lead to higher attrition rates across the industry and at the Company, particularly among part-time agents or those with lower transaction volumes.

Broader shifts in compensation structures, licensing requirements, or competitive dynamics could further complicate the Company’s ability to recruit and retain agents, and if a significant number of agents leave the profession or fail to maintain active licenses, the Company’s agent base and market presence could be materially diminished.

Further, the Company’s value proposition for agents and brokers, which includes allowing them to participate in the revenue of the Company, is not typical in the real estate industry.

If agents and brokers do not understand or appreciate this unique model, including the Company’s revenue share program, equity incentives, and cloud-based platform, the Company may not be able to attract, retain, and incentivize agents effectively.

In addition, volatility in the value of the Company’s stock or changes to the perceived value of its programs could negatively impact recruitment and retention.

If the Company is unable to attract, retain qualified agents and brokers, or to maintain their engagement with its model and programs, the Company’s business, financial condition, results of operations, and growth prospects could be materially and adversely affected.

Loss of the Company’s current executive officers or other key management could significantly harm its business.

The Company depends on the industry experience and talent of its current executives.

The Company believes that its future results will depend in part upon its ability to retain and attract highly skilled and qualified management.

The loss of the Company’s executive officers could have a material adverse effect on its operations because other officers may not have the experience and expertise to readily replace these individuals.

To the extent that one or more of the Company’s top executives or other key management personnel depart from the Company, its operations and business prospects may be adversely affected.

In addition, changes in executives and key personnel could be disruptive to the Company’s business.

The Company’s business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in its systems and operations.

The performance and reliability of the Company’s systems and operations are critical to its reputation and ability to attract agents, teams of agents and brokers into the Company as well as its ability to service homebuyers and sellers.

The Company’s systems and operations are vulnerable to security breaches, interruption or malfunction due to events beyond its control, including natural disasters, such as earthquakes, fires and floods, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events.

In addition, the Company relies on third-party vendors to provide key components of the Company’s cloud office platform and to provide additional systems and related support.

If the Company cannot continue to retain these services on acceptable terms, its access to these systems and services could be interrupted.

Any security breach, interruption, delay or failure in the Company’s systems and operations could substantially reduce the transaction volume that can be processed with its systems, impair quality of service, increase costs, prompt litigation and other consumer claims and damage the Company’s reputation, any of which could substantially harm the Company’s results of operations and financial condition.

Cybersecurity incidents could disrupt the Company’s business operations, result in the loss of critical and confidential information, adversely impact the Company’s reputation and harm its business.

Cybersecurity threats and incidents directed at the Company could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of clients, agents, or customers.

Additionally, bad actors are increasingly using AI technology to launch more automated, targeted, and coordinated attacks, including deep-fake impersonations and other techniques that could facilitate wire fraud or other fraudulent activities.

In the ordinary course of our business, we and our agents and brokers collect and store sensitive data, including proprietary business information and personal information about our clients.

Our business and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems.

The secure processing, maintenance and transmission of information are critical to our operations, especially the processing and closing of real estate transactions, which are increasingly targeted by wire fraud schemes.

Although we employ measures designed to prevent, detect, address and mitigate these threats (including access controls, data encryption, vulnerability assessments and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our clients, agents, and customers) and the disruption of business operations.

Any such compromises to our security could cause harm to our reputation, which could cause clients, agents and customers to lose trust and confidence in us or could cause agents and brokers to unaffiliate with us.

In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage and compensation to clients, agents, customers and business partners.

We may also be subject to legal claims, government investigations and additional state and federal statutory requirements.

In the ordinary course of the Company’s business, the Company and its agents and brokers collect and store sensitive data, including proprietary business information and personal information about its clients.

The Company’s business, and particularly its cloud-based platform, is reliant on the uninterrupted functioning of its information technology systems.

The secure processing, maintenance and transmission of information are critical to the Company’s operations, especially the processing and closing of real estate transactions, which are increasingly targeted by wire fraud schemes.

Although the Company employs measures designed to prevent, detect, address and mitigate these threats (including access controls, data encryption, vulnerability assessments and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (the Company’s own or that of third parties, including potentially sensitive personal information of the Company’s clients, agents, and customers) and the disruption of business operations.

Any such compromises to the Company’s security could cause harm to its reputation, which could cause clients, agents and customers to lose trust and confidence in the Company or could cause agents and brokers to unaffiliate with us.

In addition, the Company may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage and compensation to clients, agents, customers and business partners.

The Company may also be subject to legal claims, government investigations and additional state and federal statutory requirements.

The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S.

and foreign privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.

Loss of our current executive officers or other key management could significantly harm our business.

We depend on the industry experience and talent of our current executives.

We believe that our future results will depend in part upon our ability to retain and attract highly skilled and qualified management.

The loss of our executive officers could have a material adverse effect on our operations because other officers may not have the experience and expertise to readily replace these individuals.

To the extent that one or more of our top executives or other key management personnel depart from the Company, our operations and business prospects may be adversely affected.

In addition, changes in executives and key personnel could be disruptive to our business.

We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which may adversely affect our profitability.

As of December 31, 2024, we had federal, state and foreign net operating losses carryforwards due to prior years’ losses.

and foreign privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in the Company’s exposure to material civil or criminal liability), diminution in the value of the services the Company provides to its customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on the Company’s competitiveness and results of operations.

The Company may not be able to utilize a portion of its net operating loss or research tax credit carryforwards, which may adversely affect the Company’s profitability.

As of December 31, 2025, the Company had federal, state and foreign net operating losses carryforwards due to prior years’ losses.

Certain pre-fiscal 2018 state net operating losses will carry forward for a limited number of years.

Federal, as well as some state and foreign net operating losses generated in and after fiscal 2018 do not expire and can be carried forward indefinitely.

We also have recorded federal research tax credits for the years 2019 to 2024 which will carry forward for 20 years and are expected to be fully utilized before expiration.

A nominal portion of our net operating loss may expire, increasing future income tax liabilities which may adversely affect our profitability.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize net operating loss carryforwards or other tax attributes, in any taxable year, may be limited if we experience an "ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

The Company also has recorded federal research tax credits for the years 2019 to 2025 which will carry forward for 20 years and are expected to be fully utilized before expiration.

A nominal portion of the Company’s net operating loss may expire, increasing future income tax liabilities which may adversely affect its profitability.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, the Company’s ability to utilize net operating loss carryforwards or other tax attributes, in any taxable year, may be limited if the Company experiences an "ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of the Company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

Similar rules may apply under state tax laws.

It is possible that an ownership change, or any future ownership change, could have a material effect on the use of our net operating loss carryforwards or other tax attributes, which could adversely affect our profitability.

We could be subject to changes in tax laws and regulations that may have a material adverse effect in our business.

We operate and are subject to taxes in the United States and numerous other jurisdictions throughout the world.

Changes to federal, state, local, or international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules or regulations may adversely affect our effective tax rate, operating results or cash flows.

Our effective tax rate could increase due to several factors, including:

changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) which requires research and experimental expenditures attributable to research conducted in the United States to be capitalized as of January 1, 2022 and amortized over a five-year period or expenditures attributable to research conducted outside the United States to be amortized over a fifteen-year period;

the Inflation Reduction Act of 2022 which imposes a one-percent non-deductible excise tax on repurchases of stock that are made by U.S publicly traded corporation after December 31, 2022;

changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

It is possible that an ownership change, or any future ownership change, could have a material effect on the use of the Company’s net operating loss carryforwards or other tax attributes, which could adversely affect its profitability.

The Company could be subject to changes in tax laws and regulations that may have a material adverse effect in its business.

The Company operates and is subject to taxes in the United States and numerous other jurisdictions throughout the world.

Changes to federal, state, local, or international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules or regulations may adversely affect the Company’s effective tax rate, operating results or cash flows.

The Company’s effective tax rate could increase due to several factors, including:

changes in the relative amounts of income before taxes in the various jurisdictions in which the Company operates that have differing statutory tax rates;

changes to the Company’s assessment about its ability to realize the Company’s deferred tax assets that are based on estimates of its future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which the Company does business;

the outcome of current and future tax audits, examinations or administrative appeals;

and limitations or adverse findings regarding our ability to do business in some jurisdictions.

In particular, new income, sales and use or other tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance.

and limitations or adverse findings regarding the Company’s ability to do business in some jurisdictions.

In particular, new income, sales and use or other tax laws or regulations could be enacted at any time, which could adversely affect the Company’s business operations and financial performance.

Further, existing tax laws and regulations could be interpreted, modified or applied adversely to us.

For example, the Tax Act enacted many significant changes to the U.S.

Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation.

In addition, it is uncertain if, and to what extent, various states will conform to the Tax Act or any newly enacted federal tax legislation.

Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets and could increase our future U.S.

We may be unable to effectively and efficiently manage growth in our business.

We may struggle to manage growth in our business efficiently.

Failing to scale our operations to meet the increasing demands of our real estate professionals could negatively impact our performance.

As we onboard more real estate professionals, the need to enhance our systems, integrate third-party systems, and maintain infrastructure becomes vital.

Any delay in these upgrades can lead to system issues and reduced satisfaction among our real estate professionals.

This could deter existing and potential professionals from associating with our Company.

Expanding our systems efficiently may be challenging and also poses inherent risks, and we cannot guarantee timely and effective implementation.

Such efforts might lead to decreased revenues and margins, impacting our financial results.

Our business could be adversely affected if we are unable to expand, maintain and improve the systems and technologies which we rely on to operate or fail to adopt and integrate new technologies.

As the number of agents and brokers in our company grows, our success will depend on our ability to expand, maintain and improve the technology that supports our business operations, including, but not limited to, our cloud office platform, as well as our ability to adopt and integrate new technologies, including, but not limited to, machine learning and AI solutions.

Loss of key personnel or the lack of adequate staffing with the requisite expertise and training could impede our efforts in this regard.

If we do not adopt and offer new in-demand technologies and/or if our systems and technologies lack capacity or quality sufficient to service agents and their clients, then the number of agents who wish to use our products could decrease, the level of client service and transaction volume afforded by our systems could suffer and our costs could increase.

In addition, our competitors or other third parties may incorporate AI and emerging technologies into their products or operations more quickly or more successfully than we do, which could impair our ability to compete effectively.

Additionally, AI algorithms and other emerging technologies may be flawed and datasets underlying such technologies may be insufficient or contain biased information.

If the new technologies integrated into our products or that we use in our operations produce analyses or recommendations that are or are alleged to be deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected.

We intend to evaluate acquisitions, mergers, joint ventures or investments in third-party technologies and businesses, but we may not realize the anticipated benefits from and may have to pay substantial costs related to, any acquisitions, mergers, joint ventures, or investments that we undertake.

As part of our business and growth strategy, we evaluate acquisitions of, or investments in, a wide array of potential strategic opportunities, including third-party technologies and businesses complimentary to our brokerage services.

If we are not able to effectively integrate acquired businesses and assets or successfully execute joint venture strategies, our operating results and prospects could be harmed.

Since 2019, we have acquired new technology and operations and entered into various joint venture arrangements.

We will continue to look for opportunities to acquire technologies or operations that we believe will contribute to our growth and development.

The success of our future acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions.

The success of our future joint venture strategies will depend on our ability to identify, negotiate, complete and successfully manage and grow joint ventures with other parties.

In addition, acquisitions and joint ventures could cause potentially dilutive issuances of equity securities or incurrence of debt.

Acquisitions and joint ventures are inherently risky and any we complete may not be successful.

Any acquisitions and joint ventures we pursue would involve numerous risks, including the following:

● difficulties in integrating and managing the operations and technologies of the companies we acquire, including higher than expected integration costs and longer integration periods;

● diversion of our management’s attention from normal daily operations of our business;

● our inability to maintain the customers, key employees, key business relationships and reputations of the businesses we acquire;

● our inability to generate sufficient revenue or business efficiencies from acquisitions or joint ventures to offset our increased expenses associated with acquisitions or joint ventures;

● our responsibility for the liabilities of the businesses we acquire or gain ownership in through joint ventures, including, without limitation, liabilities arising out of their failure to maintain effective data security, data integrity, disaster recovery and privacy controls prior to the acquisition, their infringement or alleged infringement of third-party intellectual property, contract or data access rights prior to the acquisition, or failure to comply with regulatory standards applicable to new business lines;

● difficulties in complying with new markets or regulatory standards to which we were not previously subject;

● delays in our ability to implement internal standards, controls, procedures and policies in the businesses we acquire or gain ownership in through joint ventures and increased risk that our internal controls will be ineffective;

● operations in a nascent state may depend directly on utilization by eXp Realty agents and brokers and new and existing customers;

● adverse effects of acquisition and joint venture activity on the key performance indicators we use to monitor our performance as a business;

● inability to fully realize intangible assets recognized through acquisitions or joint ventures and related non-cash impairment charges that may result if we are required to revalue such intangible assets.

Our failure to address these risks or any other challenges we encounter with our future acquisitions, joint ventures and investments could cause us to not realize all or any of the anticipated benefits of such acquisitions, mergers, joint ventures or investments, incur unanticipated liabilities and harm our business, which could negatively impact our operating results, financial condition and cash flows.

Our international operations are subject to risks not generally experienced by our U.S.

We have operations in Canada, the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland, and Dubai and expect to expand into Türkiye, Peru and Egypt, currently expected to be launched in 2025.

Our international operations are subject to risks not generally experienced by our U.S.

The risks involved in our international operations and relationships that could result in losses against which we are not insured and, therefore, affect our profitability include:

For example, the One Big Beautiful Bill Act (“OBBBA”) enacted many significant changes to the U.S.

Future guidance from the IRS and other tax authorities with respect to the OBBBA may affect us, and certain aspects of the OBBBA could be repealed or modified in future legislation.

In addition, it is uncertain if, and to what extent, various states will conform to the OBBBA or any newly enacted federal tax legislation.

Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to the Company’s operations, the taxation of foreign earnings, and the deductibility of expenses under the OBBBA or future reform legislation could have a material impact on the value of the Company’s deferred tax assets and could increase its future U.S.

Tax incentives tied to homeownership, such as the deductibility of mortgage interest and property taxes, influence the affordability and attractiveness of buying a home.

These benefits are subject to provincial, federal, and state limitations and could be eliminated, restricted, or otherwise reduced through changes in tax law.

Any reduction in these incentives would increase the after-tax cost of homeownership, which could decrease buyer demand, slow residential real estate activity, and, in turn, adversely affect the Company’s business, financial condition, and results of operations.

The Company may be unable to effectively and efficiently manage growth in its business.

The Company may struggle to manage growth in its business efficiently.

Failing to scale the Company’s operations to meet the increasing demands of its real estate professionals could negatively impact the Company’s performance.

As the Company onboards more real estate professionals, the need to enhance the Company’s systems, integrate third-party systems, and maintain infrastructure becomes vital.

Any delay in these upgrades can lead to system issues and reduced satisfaction among the Company’s real estate professionals.

This could deter existing and potential professionals from associating with the Company.

Expanding the Company’s systems efficiently may be challenging and also poses inherent risks, and the Company cannot guarantee timely and effective implementation.

Such efforts might lead to decreased revenues and margins, impacting the Company’s financial results.

The Company may not successfully complete or integrate acquisitions or joint ventures.

The Company regularly evaluates potential acquisitions, joint ventures, and other strategic opportunities as part of its growth strategy.

These activities involve risks, including the Company’s ability to identify and complete transactions on favorable terms, successfully integrate acquired businesses or joint ventures into its operations, and realize anticipated synergies or efficiencies within expected timeframes.

Such transactions may also divert management’s attention, increase costs, cause shareholder dilution, or expose the Company to unforeseen liabilities.

If the Company is unable to complete or effectively integrate acquisitions or joint ventures, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

The Company’s international operations are subject to risks not generally experienced by its U.S.

The Company has operations throughout the Americas, Europe, the Middle East, Asia-Pacific, and South Africa.

The Company’s international operations are subject to risks not generally experienced by its U.S.

The risks involved in the Company’s international operations and relationships that could result in losses against which it is not insured and, therefore, affect the Company’s profitability include:

● fluctuations in foreign currency exchange rates, foreign exchange controls, and limitations on the repatriation of funds;

1 unchanged sentence

● exposure to political, economic, legal, regulatory and social conditions, or instability, and economic and political tensions between governments;

● employment laws that are significantly different that U.S.

● diminished ability to legally enforce our contractual rights and use of our trademarks in foreign countries;

● employment laws that are significantly different than U.S.

employment laws;

● diminished ability to legally enforce the Company’s contractual rights and use of the Company’s trademarks in foreign countries;

● difficulties in registering, protecting or preserving trade names and trademarks in foreign countries;

9 unchanged sentences

are more difficult and more expensive to monitor and improper activities or mismanagement may be more difficult to detect.

Negligent or i mproper activities involving our agents and brokers may result in reputational damage to us and may lead to direct claims against us based on theories of vicarious liability, negligence, joint operations and joint employer liability which, if determined adversely, could increase costs and subject us to incremental liability for their actions.

Failure to protect intellectual property rights could adversely affect our business.

Our intellectual property rights, including existing and future trademarks, trade secrets, patents and copyrights, are important assets of the business.

We have taken measures to protect our intellectual property, but these measures may not be sufficient or effective.

We may bring lawsuits to protect against the potential infringement of our intellectual property rights and other companies, including our competitors, could make claims against us alleging our infringement of their intellectual property rights.

There can be no assurance that we would prevail in such lawsuits.

Any significant impairment of our intellectual property rights could harm our business.

We are actively, and intend to continue, developing new products and services complementary to our brokerage business and our failure to accurately predict their demand or growth could have an adverse effect on our business.

We are actively and intend in the future to continue, investing resources in developing new technology, services, products and other offerings complementary to our brokerage business.

New business initiatives are inherently risky and may involve unproven business strategies and markets with which we have limited or no prior development or operating experience.

Negligent or i mproper activities involving the Company’s agents and brokers may result in reputational damage to the Company and may lead to direct claims against the Company based on theories of vicarious liability, negligence, joint operations and joint employer liability which, if determined adversely, could increase costs and subject the Company to incremental liability for their actions.

The Company is actively developing, and intends to continue to develop, new products and services complementary to its brokerage business and the Company’s failure to accurately predict their demand or growth could have an adverse effect on its business.

The Company is actively investing and intends to continue to invest resources in developing new technology, services, products and other offerings complementary to the Company’s brokerage business.

New business initiatives are inherently risky and may involve unproven business strategies and markets with which the Company has limited or no prior development or operating experience.

Risks from these new initiatives include those associated with potential defects in the design, ongoing development and maintenance of technologies, reliance on data or user inputs that may prove inadequate or unavailable, failure to design products and services in a way that is more effective or affordable than competing third-party products and services and failure to scale businesses as they grow, among others.

As a result of these risks, we could experience increased legal claims, reputational damage, financial loss or other adverse effects, which could be material.

We can provide no assurance that we will be able to efficiently or effectively develop, commercialize and achieve market acceptance of new products and services.

As a result of these risks, the Company could experience increased legal claims, reputational damage, financial loss or other adverse effects, which could be material.

The Company can provide no assurance that it will be able to efficiently or effectively develop, commercialize and achieve market acceptance of new products and services.

Additionally, the human and financial capital committed to develop new products and services may either be insufficient or result in expenses that exceed the revenue actually originated from these new products and services.

In addition, our efforts to develop new products and services could distract management from current operations and could divert capital and other resources from our existing business, including our brokerage business.

Failure to achieve the expected benefits of our investments may occur and could harm our business.

Risks Related to our Real Estate Business

We may not achieve a positive agent growth rate or maintain current agent count, which would adversely affect our revenue growth and results of operations.

During the year ended December 31, 2024, our agent and broker base declined to 82,980 agents and brokers, or by (5)%, from 87,515 agents and brokers as of December 31, 2023.

Because we derive revenue from real estate transactions in which our brokers and agents receive commissions, the amount and rate of growth of our revenue typically correlate to the amount and rate of growth of our agent and broker base, respectively.

The rate of growth of our agent and broker base cannot be predicted and is

subject to many factors outside of our control, including actions taken by our competitors and macroeconomic factors affecting the real estate industry in general.

We cannot provide assurances that we will be able to maintain or increase our agent count or that our agent and broker base won’t continue to decline in future periods.

A material decline in our agent count would have a material adverse effect on revenue growth and could adversely affect our business, results of operations, financial condition and cash flows.

The real estate market may be severely impacted by industry changes as the result of certain class action lawsuits, settlements, or government investigations.

In addition, the Company’s efforts to develop new products and services could distract management from current operations and could divert capital and other resources from the Company’s existing business, including its brokerage business.

Failure to achieve the expected benefits of the Company’s investments may occur and could harm its business.

The real estate market may be severely impacted by industry changes as the result of certain class action lawsuits, settlements, or government investigations and the recent industry changes and/or any additional meaningful changes could have a materially adverse effect on the Company’s business, operations, financial condition and results of operations.

The real estate industry faces significant pressure from private lawsuits and investigations by the U.S.

4 unchanged sentences

Class action suits raising similar claims are already pending in this and other jurisdictions and the outcome of the NAR Class Action may result in additional such actions being filed.

The Company was named as one of several defendants in similar class action suits but entered into a settlement agreement on December 9, 2024 to resolve all U.S.

nationwide claims.

The Company was named as one of several defendants in similar class action suits.

See Note 13 – Commitments and Contingencies to the consolidated financial statements.

Defending against class action litigation is costly, may divert time and money away from our operations, and imposes a significant burden on management and employees.

Also, the results of any such litigation or investigation cannot be predicted with certainty, and any negative outcome could result in payments of substantial monetary damages or fines, and/or undesirable changes to our operations or business practices, and accordingly, our business, financial condition, or results of operations could be materially and adversely affected.

On December 9, 2024, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “Settlement”) with plaintiffs in the U.S.

antitrust lawsuit 1925 Hooper LLC, et al.

The National Association of Realtors et.

al., Case No.

1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other U.S.

brokerage defendants (the “Hooper Action”).

The Settlement resolves all claims set forth in the Hooper Action, as well as all similar claims on a nationwide basis against the Company (collectively, the “Claims”) and releases the Company, its subsidiaries and affiliates, and their independent contractor real estate agents in the United States from the Claims.

By the terms of the Settlement, the Company agreed to make certain changes to its business practices and to pay a total settlement amount of $34.0 million.

The Settlement received preliminary approval on May 23, 2025, but remains subject to final court approval and will become effective following an appeals process, if applicable.

Defending against class action litigation is costly, may divert time and money away from the Company’s operations, and imposes a significant burden on management and employees.

changes to the Company’s operations or business practices, and accordingly, its business, financial condition, or results of operations could be materially and adversely affected.

On March 15, 2024, NAR entered a settlement agreement to resolve on a class wide basis the claims against NAR in the NAR Class Action.

5 unchanged sentences

The NAR settlement received preliminary court approval on April 23, 2024.

These revised NAR rules and practices have caused and may require additional changes to our business model, including changes to agent and broker compensation and how we meet home buyers.

Without mandated commission sharing, for example, we may see the introduction of hourly or a la carte services.

Or, if buyers now compensate brokers, they may be more likely to contact listing agents directly, which could drive down dual agent broker commissions.

Home lending rules and norms do not currently allow buyers to include buyer’s agent compensation in the balance of a home loan, which may impair the ability of homebuyers to pay their agent fees when purchasing a home.

The amended rules and regulations also require us to get a buyer agreement signed before we take a home buyer on a first tour.

This requirement may dissuade buyers from hiring the Company, thereby reducing the fees we receive from our agents.

These and other shifts in the model for agent and broker compensation could significantly change the brokerage landscape overall and may adversely affect our financial condition and results of operations.

These revised NAR rules and practices have caused and may require additional changes to the Company’s business model, including changes to agent and broker compensation and how they meet home buyers.

For example, the Company may see the introduction of hourly or a la carte services.

Or, if buyers increasingly compensate brokers, they may be more likely to contact listing agents directly, which could reduce overall brokerage participation in buyer representation.

If sellers increasingly do not offer compensation to buyer agents, and because existing mortgage lending rules and market practices generally do not permit buyers to finance buyer-agent compensation as part of a home loan, some buyers may have limited ability to pay such fees at the time of purchase.

The amended rules and regulations also require the Company and its agents to get a buyer agreement signed before taking a home buyer on a first tour.

This requirement may dissuade buyers from hiring the Company, thereby reducing the fees the Company receives from its agents.

These and other shifts in the model for agent and broker compensation could significantly change the brokerage landscape overall and may adversely affect the Company’s financial condition and results of operations.

In addition to the NAR Class Action and various similar private actions already pending, beginning in 2018, the DOJ began investigating NAR for violations of the federal antitrust laws.

2 unchanged sentences

It is uncertain what effect, if any, the resumption of the DOJ’s investigation could have on the larger real estate industry, including any further settlement that may result therefrom.

Negligence or willful misconduct of independent real estate professionals affiliated with our Company owned brokerages could materially and adversely affect our reputation and subject us to liability.

Our Company-owned brokerage operations rely on the performance of independent real estate professionals.

If these independent professionals provide poor-quality services, engage in unlawful, negligent or willful misconduct, or otherwise fail to meet the high standards expected by our clients and stakeholders, our image and reputation could be materially and adversely affected.

mitigate these risks, we have executed contractual agreements with our real estate professionals that mandate compliance with applicable laws and adherence to our established policies and procedures, and stipulate potential liabilities for agents in the event of contractual breaches.

However, no mitigation efforts can eliminate all risk.

If independent real estate professionals engage in misconduct or violate the law, we could face litigation or regulatory actions.

If such claims are adversely determined, the resulting damages, fines, or other penalties could materially and adversely affect us, our operations, and our financial condition.

Additionally, negative publicity from such incidents could impair our ability to attract and retain agents or clients, further compounding these risks.

During 2023 and 2024, certain lawsuits were initiated against the Company and certain of its real estate agents including allegations of sexual harassment and other misconduct.

Such claims, regardless of merit, underscore the potential reputational and financial risks that misconduct by independent professionals can pose to brokerage operations.

Although these professionals are independent contractors and not employees of the Company, their actions can result in litigation, regulatory scrutiny, or reputational harm for the Company and brokerage entities with which they are affiliated.

Changes in laws, regulations, or industry standards, including recent changes resulting from the NAR settlement and the Settlement (as defined below), may result in increased agent attrition and adversely affect our ability to attract and retain agents.

Our success depends significantly on our ability to attract, retain, and engage real estate agents.

Recent industry changes, including, but not limited to, revisions to NAR policies and standards, changes to buyer-broker compensation practices and changes to the Company’s business practices resulting from the Settlement, may alter the economics of the real estate profession or increase the compliance burden for agents.

Such changes could lead to higher rates of agent attrition from the industry and our brokerage, particularly among part-time agents or those with lower transaction volumes, who may find the profession less viable.

Additionally, broader industry or regulatory shifts could affect agent compensation structures, licensing requirements, or the competitive dynamics of the real estate market, further complicating our ability to recruit and retain agents.

If a significant number of agents leave the real estate industry or fail to renew their licenses, our ability to maintain or grow our agent base and market presence could be negatively impacted, which could materially and adversely affect our financial condition, results of operations, and future growth prospects.

Inflation and relatively high interest rates have and may continue to contribute to declining real estate transaction volumes, which have and may continue to materially impact operating results, profits and cash flows.

Inflation and relatively high interest rates in recent years have generally impacted real estate transaction volumes in the U.S., Canada and other international markets.

In 2024 and 2023, the Company has experienced declining transaction volume, which has had an impact on operating results.

If we are not able to organically grow our market share, to offset declining transactions, our operating results, profits and cash flow may be materially impacted.

The Company believes that it continues to be well positioned for growth in the current economic climate, due to our strong base of agent support, and the superior agent value proposition enabled by our efficient operating model, with lower fixed costs and no brick-and-mortar locations, but we cannot provide assurances that our operating results or cash flows will not be materially impacted by macroeconomic factors such as inflation and interest rates.

Any reduction in the Company’s portion of the commission revenue from property sales transactions could harm our financial performance.

Our industry faces intense competition for real estate professionals, and our efforts to attract and retain real estate sales agents and brokers may continue to put upward pressure on our commissions and related costs.

If our brokerage has to pay a larger share of commissions to independent real estate professionals involved in property transactions, or if our commission earnings from these transactions decrease, it could materially harm the operating margins of our Company as well as our cash flows.

If we fail to grow in the various local markets that we serve or are unsuccessful in identifying and pursuing new business opportunities, our long-term prospects and profitability will be harmed.

To capture and retain market share in the various local markets that we serve, we must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring.

Our competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents.

Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts.

In addition, our competitors may be able to leverage local relationships, referral sources and strong local brand and name recognition that we have not established.

Our competitors could, as a result, have greater leverage in attracting new and established agents in the

market and in generating business among local consumers.

Our ability to grow in the local markets that we serve will depend on our ability to compete with these local brokerages.

We may implement changes to our business model and operations to improve revenues that cause a disproportionate increase in our expenses or reduce profit margins.

For example, we may allocate resources to acquiring lower margin brokerage models and have invested in the development of a mortgage servicing division, a commercial real estate division, title and escrow companies, a mortgage lending company, and a personal and continuing education company.

Expanding our service offerings could involve significant up-front costs that may only be recovered after lengthy periods of time.

The barrier to entering in new real estate markets is low given our cloud-based operating model;

however, attempts to pursue new business opportunities could result in a disproportionate increase in our expenses and in reduced profit margins.

In addition, expansion into new markets and business lines, including internationally, could expose us to additional compliance obligations and regulatory risks.

If we fail to continue to grow in the local markets we serve or if we fail to successfully identify and pursue new business opportunities, our long-term prospects, financial condition and results of operations may be harmed, and our stock price may decline.

Our value proposition for agents and brokers includes allowing them to participate in the revenues of our Company and is not typical in the real estate industry.

If agents and brokers do not understand our unique value propositions, we may not be able to attract, retain and incentivize agents.

Participation in our revenue sharing plan represents a key component of our agent and broker value proposition.

Agents and brokers may not understand or appreciate its value due to the intricacies of our programs or changes and iterations to such programs over time.

In addition, agents may not appreciate other components of our value proposition, including the cloud office platform, the mobility it affords, the systems and tools that we provide to agents and brokers and the professional development opportunities we create and deliver.

If agents and brokers do not understand the elements of our agent value proposition, or do not perceive it to be more valuable than the models used by most competitors, we may not be able to attract, retain and incentivize new and existing agents and brokers to grow our revenues.

More recently, litigation between other real estate industry participants has highlighted the risk of private litigation under the auspices of antitrust laws.

For example, in July 2025, Compass, Inc.

filed a lawsuit against Zillow Group, Inc.

claiming that Zillow had engaged in anti-competitive conduct.

The lawsuit included allegations that other industry participants, including the Company, had conspired with such anti-competitive conduct.

Although the Company is not named as a defendant in that action, these types of lawsuits reflect the risk of both private litigation and regulatory action to challenge business practices in the residential real estate sector.

Even when not directly targeted, the Company may face reputational, operational, or financial consequences as a result of broader industry litigation.

The Company may be required to further adjust its business practices, increase legal spend, or defend against claims, any of which could materially and adversely affect the Company’s business, financial condition, or results of operations.

Negligence or willful misconduct of independent real estate professionals affiliated with the Company owned brokerages could materially and adversely affect the Company’s reputation and subject it to liability.

The Company’s operations rely on the performance of real estate brokers and agents.

If the Company brokers and agents were to provide lower quality services to its customers or engage in negligent or intentional misconduct, the Company’s image and reputation could be materially adversely affected.

In addition, the Company has previously been subject to and could continue to be subject to public scrutiny as well as litigation and regulatory claims arising out of the Company’s brokers’ and agents’ performance of brokerage services or other conduct, which if adversely determined, could result in substantial financial or legal penalties.

If the Company fails to grow in the various local markets that it serves or are unsuccessful in identifying and pursuing new business opportunities, the Company’s long-term prospects and profitability will be harmed.

To capture and retain market share in the various local markets that the Company serves, it must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring.

The Company’s competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents.

The Company’s competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts.

In addition, the Company’s competitors may be able to leverage local relationships, referral sources and strong local brand and name recognition that the Company has not established.

The Company’s competitors could, as a result, have

greater leverage in attracting new and established agents in the market and in generating business among local consumers.

The Company’s ability to grow in the local markets that it serves will depend on its ability to compete with these local brokerages.

The Company may implement changes to its business model and operations to improve revenue that cause a disproportionate increase in the Company’s expenses or reduce profit margins.

For example, the Company may allocate resources to acquiring lower margin brokerage models and has invested in the development of a mortgage servicing division, a commercial real estate division, title and escrow companies, a mortgage lending company, and a personal and continuing education company.

Expanding the Company’s service offerings could involve significant up-front costs that may only be recovered after lengthy periods of time.

The barrier to entering in new real estate markets is low given the Company’s cloud-based operating model;

however, attempts to pursue new business opportunities could result in a disproportionate increase in the Company’s expenses and in reduced profit margins.

In addition, expansion into new markets and business lines, including internationally, could expose the Company to additional compliance obligations and regulatory risks.

If the Company fails to continue to grow in the local markets it serves or if it fails to successfully identify and pursue new business opportunities, the Company’s long-term prospects, financial condition and results of operations may be harmed, and its stock price may decline.

The Company’s growth depends in part on the success of its strategic relationships with third parties.

To support and expand the Company’s business, the Company relies on strategic relationships with a variety of third parties, including settlement service providers, mortgage lenders, title companies, referral sources, and other third parties that support the Company’s operations.

Building, negotiating, and maintaining these relationships requires significant time and resources, and there is no guarantee they will continue on favorable terms.

The Company also depends on access to MLSs in the Company’s markets, which serve as critical sources of property data and listing distribution.

Competitors may have similar or superior access to MLS data, and any changes to the Company’s rights of use, disruptions in access, or termination of agreements could impair its ability to provide accurate pricing, market listings efficiently, or support the Company’s agents’ businesses.

If the Company is unable to maintain or expand key third-party relationships, its competitive position, growth prospects, and financial performance could be materially and adversely affected.

Risks Related to Legal and Regulatory Matters

We are subject to certain risks related to legal proceedings filed by or against us and adverse results may harm our business and financial condition.

We are subject to risk of and are from time to time involved in, or may in the future be subject to, claims, suits, government investigations and proceedings arising from our business, including, but not limited to, actions with respect to securities, intellectual property, privacy, information security, data protection or law enforcement matters, tax matters, labor and employment, including claims challenging the classification of our agents and brokers as independent contractors and compliance with wage and hour regulations, and claims alleging violations of RESPA or state consumer fraud statutes and commercial arrangements.

We are also subject to risk related to stockholder derivative actions, standard brokerage disputes like the failure to disclose hidden defects in a property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including our agents, brokers, third-party service or product providers and purported class action lawsuits.

Such litigation and other proceedings may include, but are not limited to, the currently pending antitrust litigation as disclosed in Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report.

A substantial unsatisfied judgment against us or one of our subsidiaries could result in bankruptcy, which would materially and adversely affect our business and operating results.

We cannot predict with certainty the cost of defense, the cost of prosecution, insurance coverage or the ultimate outcome of litigation and other proceedings filed by or against us, including remedies or damage awards.

Adverse results in such litigation and other proceedings may harm our business and financial condition.

The Company is subject to certain risks related to legal proceedings filed by or against it and adverse results may harm its business and financial condition.

The Company is subject to risk of and are from time to time involved in, or may in the future be subject to or involved in, claims, suits, government investigations and proceedings arising from the Company’s business, including, but not limited to, actions with respect to securities, intellectual property, privacy, information security, data protection or law enforcement matters, tax matters, labor and employment, including claims challenging the classification of the Company’s agents and brokers as independent contractors and compliance with wage and hour regulations, and claims alleging violations of Real Estate Settlement Procedures Act (“RESPA”) (and similar state statutes) compliance or state consumer fraud statutes and commercial arrangements.

The Company is also subject to risk related to stockholder derivative actions, standard brokerage disputes, vicarious liability based upon conduct of individuals or entities outside of its control, including the Company’s agents, brokers, third-party service or product providers and purported class action lawsuits.

Such litigation and other proceedings may include, but are not limited to, the currently pending antitrust and derivative litigation as disclosed in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report.

A substantial unsatisfied judgment against the Company or one of its subsidiaries could result in bankruptcy, which would materially and adversely affect its business and operating results.

The Company cannot predict with certainty the cost of defense, the cost of prosecution, insurance coverage or the ultimate outcome of litigation and other proceedings filed by or against us, including remedies or damage awards and/or undesirable changes to the Company’s operations or business practices.

Adverse results in such litigation and other proceedings may harm the Company’s business and financial condition.

Class action lawsuits can often be particularly burdensome given the breadth of claims, large potential damages and significant costs of defense.

In the case of intellectual property litigation and proceedings, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in our business and injunctions prohibiting our use of business processes or technology that is subject to third-party patents or other third-party intellectual property rights.

In addition, we may be required to enter into licensing agreements (if available on acceptable terms) and be required to pay royalties.

In the case of securities litigation and proceedings, adverse outcomes could include the cancellation, invalidation, or modification of our existing equity incentive program.

From time to time, we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business.

Except as set forth in Note 14 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, we are not involved in any material pending legal proceedings and there are no known proceedings in which any of our directors, officers or affiliates is an adverse party or has a material interest adverse to our interest.

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

those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large.

Such matters may include, without limitation, RESPA, TCPA and state consumer protection law, antitrust and anticompetition, and worker classification claims.

Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agents which claims could result in significant liability and be adverse to our financial results if we or our brokers and agents are unable to distinguish or defend our business practices.

As an example, in the matter of Burnett v.

National Association of Realtors (U.S.

District Court for the Western District of Missouri), a federal jury found NAR and certain other brokerage defendants liable for $1.8 billion in damages;

all defendants have since settled, subject to ongoing appeals processes, which include both monetary and non-monetary settlement terms.

During 2024, the Company, along with other brokerage and non-brokerage defendants, have been named as defendants in putative class action lawsuits alleging similar fact patterns and antitrust violations.

On December 9, 2024, the Company and certain of its subsidiaries entered into a Settlement Agreement (the “Settlement”) with plaintiffs in the U.S.

antitrust lawsuit 1925 Hooper LLC, et al.

The National Association of Realtors et.

al., Case No.

1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division), which was filed on November 22, 2023 against the Company and other US brokerage defendants (the “Hooper Action”).

By the terms of the Settlement, the Company agreed to make certain changes to its business practices and to pay a total settlement amount of $34.0 million.

The Settlement remains subject to preliminary and final court approval and will become effective following an appeals process, if applicable.

Both the NAR and the Company’s settlement terms may materially impact business practices within the industry which could adversely impact the Company’s business, results of operations, and financial condition.

We face significant risk to our brand and revenue if we fail to maintain compliance with the law and regulations of federal, state, county and foreign governmental authorities, or private associations and governing boards.

We operate in a heavily regulated industry subject to complex, federal, state, provincial and local laws and regulations within the markets in which we operate and third-party organizations’ regulations, policies and bylaws governing the real estate business.

In general, the laws, rules and regulations that apply to our business practices include, without limitation, the RESPA, the federal Fair Housing Act, the Dodd-Frank Act, the Exchange Act and federal advertising and other laws, as well as comparable state statutes;

In the case of intellectual property litigation and proceedings, although the Company has taken measures to protect its intellectual property rights, including existing and future trademarks, trade secrets, patents and copyrights, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in the Company’s business or injunctions prohibiting its use of business processes or technology that is subject to third-party patents or other third-party intellectual property rights.

In addition, the Company may be required to enter into licensing agreements (if available on acceptable terms) and be required to pay royalties.

In the case of securities litigation and proceedings, adverse outcomes could include the cancellation, invalidation, or modification of the Company’s existing equity incentive program.

From time to time, the Company may become involved in lawsuits and legal proceedings which arise in the ordinary course of business.

Except as set forth in Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere within this Annual Report, the Company is not involved in any material pending legal proceedings and there are no known proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to its interest.

Adverse outcomes in litigation and regulatory actions against other companies and agents in the Company’s industry could adversely impact its financial results.

Adverse outcomes in legal and regulatory actions against other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact the financial condition of the Company and its real estate brokers and agents when those matters relate to business practices shared by the Company, its real estate brokers and agents, or its industry at large.

Such matters may include, without limitation, RESPA, Telephone Consumer Protection Act of 1991 and state consumer protection law, antitrust and anticompetition, and worker classification claims.

Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or its real estate brokers and agents which claims could result in significant liability and be adverse to its financial results if the Company or its brokers and agents are unable to distinguish or defend their business practices.

The Company faces significant risk to its brand and revenue if it fails to maintain compliance with the law and regulations of federal, state, county and foreign governmental authorities, or private associations and governing boards.

The Company operates in a heavily regulated industry subject to complex, federal, state, provincial and local laws and regulations within the markets in which the Company operates and third-party organizations’ regulations, policies and bylaws governing the real estate business.

In general, the laws, rules and regulations that apply to the Company’s business practices include, without limitation, RESPA, the federal Fair Housing Act of 1968, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the Exchange Act and federal advertising and other laws, as well as comparable state statutes;

rules of trade organizations such as NAR, local MLSs and state and local Association of Realtors;

licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services, including without limitation, our mortgage lending services;

privacy regulations relating to our use of personal information collected from the registered users of our websites;

licensing requirements and related obligations that could arise from the Company’s business practices relating to the provision of services other than real estate brokerage services, including without limitation, its mortgage lending services;

privacy regulations relating to the Company’s use of personal information collected from the registered users of its websites;

laws relating to the use and publication of information through the internet;

and state real estate brokerage and mortgage lending licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.

Recent regulatory scrutiny regarding the classification of real estate agents as independent contractors, particularly at the state level, could lead to increased compliance costs, potential reclassification, or penalties, which could materially impact our company-owned brokerage operations.

Additionally, the Dodd-Frank Act contains the Mortgage Reform and Anti-Predatory Lending Act (“Mortgage Act”), which imposes a number of additional requirements on lenders and servicers of residential mortgage loans, by amending certain existing provisions and adding new sections to RESPA and other federal laws.

1 unchanged sentence

The penalties for noncompliance with these laws are also significantly increased by the Mortgage Act, which could lead to an increase in lawsuits against mortgage lenders and servicers.

As we expand our business in international markets, including new and existing international markets, we are subject to additional foreign governmental regulation.

Ensuring compliance with these newly applicable laws could substantially increase our operating expenses.

In addition, entry into these new markets exposes us to increased risk and liability.

A violation of any of these applicable laws could have a material adverse effect on our business.

Maintaining legal compliance is challenging and increases our costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations and to monitor changes in the applicable laws themselves.

As the Company expands its business in international markets, including new and existing international markets, the Company is subject to additional foreign governmental regulation.

Ensuring compliance with these newly applicable laws could substantially increase its operating expenses.

In addition, entry into these new markets exposes the Company to increased risk and liability.

A violation of any of these applicable laws could have a material adverse effect on the Company’s business.

Maintaining legal compliance is challenging and increases the Company’s costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations and to monitor changes in the applicable laws themselves.

For example, the potential reclassification of agents under wage and hour laws could result in additional liabilities for minimum wage, overtime pay, and penalties for prior periods, creating significant operational disruptions.

We may not become aware of all the laws, rules and regulations that govern our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions and the difficulties in achieving both company-wide and region-specific knowledge and compliance.

If we fail, or we are alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings.

Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.

Our business licenses could be suspended or revoked, our business practices enjoined, or we could be required to modify our business practices, which could materially impair, or even prevent, our ability to conduct all or any portion of our business.

Any such events could also damage our reputation and impair our ability to attract and service homebuyers, home sellers, agents, clients and customers as well as our ability to attract brokerages, brokers, teams of agents and agents to our Company, without increasing our costs.

Further, if we lose our ability to obtain and maintain all of the regulatory approvals and licenses necessary to conduct business as we currently operate, our ability to conduct business may be harmed.

Lastly, any lobbying or related activities we undertake in response to mitigate liability of current or new regulations could substantially increase our operating expenses.

We offer our independent agents the opportunity to earn additional commissions through our revenue sharing plan, which pays under a multi-tiered compensation structure similar in some respects to network marketing.

Network marketing is subject to intense government scrutiny and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect our business.

The Company may not become aware of all the laws, rules and regulations that govern its business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions and the difficulties in achieving both company-wide and region-specific knowledge and compliance.

If the Company fails, or is alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, it could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings.

The Company’s noncompliance could result in significant defense costs, settlement costs, damages and penalties.

The Company’s business licenses could be suspended or revoked, its business practices enjoined, or the Company could be required to modify its business practices, which could materially impair, or even prevent, the Company’s ability to conduct all or any portion of its business.

Any such events could also damage the Company’s reputation and impair its ability to attract and service homebuyers, home sellers, agents, clients and customers as well as its ability to attract brokerages, brokers, teams of agents and agents to the Company, without increasing costs.

Further, if the Company loses its ability to obtain and maintain all of the regulatory approvals and licenses necessary to conduct business as it currently operates, the Company’s ability to conduct business may be harmed.

Lastly, any lobbying or related

activities the Company undertakes in response to mitigate liability of current or new regulations could substantially increase operating expenses.

The Company offers independent agents the opportunity to earn additional commissions through its revenue sharing plan, which pays under a multi-tiered compensation structure similar in some respects to network marketing.

Network marketing is subject to intense government scrutiny and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect the Company’s business.

Various laws and regulations in the United States and other countries regulate network marketing.

1 unchanged sentence

Network marketing regulations are inherently fact-based and often do not include "bright line" rules.

Additionally, we are subject to the risk that the regulations, or a regulator's interpretation and enforcement of the regulations, could change.

From time to time, we have received requests to supply information regarding our revenue sharing plan to regulatory agencies.

We could potentially in the future be required to modify our revenue sharing plan in certain jurisdictions in order to comply with the interpretation of the regulations by local authorities.

Additionally, the Company is subject to the risk that the regulations, or a regulator's interpretation and enforcement of the regulations, could change.

From time to time, the Company has received requests to supply information regarding its revenue sharing plan to regulatory agencies.

The Company could potentially in the future be required to modify its revenue sharing plan in certain jurisdictions in order to comply with the interpretation of the regulations by local authorities.

In the United States, the Federal Trade Commission (“FTC”) has entered into several highly publicized settlements with network marketing companies that required those companies to modify their compensation plans and business models.

3 unchanged sentences

Additionally, following the issuance of these consent decrees, the FTC issued non-binding guidance to the network marketing industry, suggesting it intended to reinforce the principles contained in the consent decrees and provide other operational guidance to the network marketing industry.

While we strive to ensure that our overall business model and revenue-sharing plan are regulatory compliant in each of our markets, we cannot assure you that a regulator, if it were to review our business, would agree with our assessment and would not require us to change one or more aspects of our operations.

Any action against us in the future by the FTC or another regulator could materially and adversely affect our operations.

We cannot predict the nature of any future law, regulation, or guidance, nor can we predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on our business.

Failure by us, or our independent agents, to comply with these laws, could adversely affect our business.

We may suffer significant financial harm and loss of reputation if we do not comply, cannot comply, or are alleged to have not complied with applicable laws, rules and regulations concerning our classification and compensation practices for the agents in our owned-and-operated brokerage.

Except for our employed state brokers, commission-only employees, and where otherwise dictated by local law, all other real estate agent professionals in our brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.

With respect to these independent contractors, like most brokerage firms, we are subject to the taxing authorities’ regulations and applicable laws regarding independent contractor classification.

These regulations and guidelines are subject to judicial and agency interpretation, and it might be determined that the independent contractor classification is inapplicable to any of our affiliated real estate professionals.

Further, if legal standards for classification of real estate professionals as independent contractors change or appear to be changing, it may be necessary to modify our compensation and benefits structure for our affiliated real estate professionals in some or all of our markets, including by paying additional compensation or reimbursing expenses.

In the future, we could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees, in defending future challenges by our affiliated real estate professionals to our employment classification or compensation practices.

We are and may, in the future, be blocked from or limited in providing our agent compensation plans in certain jurisdictions and may be required to modify our business model in those jurisdictions as a result .

Our agent compensation plans represent a key lever in our strategy to attract and retain independent agents and brokers and are subject to various international, federal, state, territorial and local laws, rules and regulations which differ in each of our existing and future markets.

As a result, we are, and may be in the future, blocked from or limited in providing each of our agent compensation plans in certain markets.

In addition, these laws, rules and regulations are subject to judicial and agency interpretation, and it might be determined that our agent compensation plans are not permitted to be offered to independent contractors.

In response to such limitations, we have, and may be in the future, required to modify our agent compensation practices in such markets.

Failure to comply with applicable law, rules and regulations or failure to subsequently modify our business model in certain jurisdictions to effectively attract and retain agents and brokers could negatively affect our business, results of operations or financial condition.

The costs attributable to developing compliant agent compensation plans can be significant and could adversely affect our financial condition.

If we fail to protect the privacy and personal information of our customers, agents or employees, we may be subject to legal claims, government action and damage to our reputation.

Hundreds of thousands of consumers, independent contractors and employees have shared personal information with us during the normal course of our business processing real estate transactions.

While the Company strives to ensure that its overall business model and revenue-sharing plan are compliant with applicable regulations in each of its markets, the Company cannot assure you that a regulator, if it were to review the Company’s business, would agree with the Company’s assessment and would not require the Company to change one or more aspects of its operations.

Any action against the Company in the future by the FTC or another regulator could materially and adversely affect the Company’s operations.

The Company cannot predict the nature of any future law, regulation, or guidance, nor can it predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on the Company’s business.

Failure by the Company, or its independent agents, to comply with these laws, could adversely affect its business.

The Company may suffer significant financial harm and loss of reputation if it does not comply, cannot comply, or is alleged to have not complied with applicable laws, rules and regulations concerning its classification and compensation practices for the agents in the Company’s brokerage operations.

Except for the Company’s employed state brokers, commission-only employees, and where otherwise dictated by local law, all real estate agent professionals in the Company’s brokerage operations have been retained as independent contractors, either directly or indirectly through third-party entities formed by these independent contractors for their business purposes.

With respect to these independent contractors, like most brokerage firms, the Company is subject to the taxing authorities’ regulations and applicable laws regarding independent contractor classification.

Further, if legal standards for classification of real estate professionals as independent contractors change or appear to be changing, it may be necessary to modify the Company’s compensation and benefits structure for its affiliated real estate professionals in some or all of its markets, including by paying additional compensation or reimbursing expenses.

In the future, the Company could incur substantial costs, penalties and damages, including back pay, unpaid benefits, taxes, expense reimbursement and attorneys’ fees, in defending future challenges by the Company’s affiliated real estate professionals to the Company’s employment classification or compensation practices.

The Company is, and may in the future be, blocked from or limited in providing its agent compensation plans in certain jurisdictions and may be required to modify its business model in those jurisdictions as a result .

The Company’s agent compensation plans represent a key lever in its strategy to attract and retain independent agents and brokers and are subject to various international, federal, state, territorial and local laws, rules and regulations which differ in each of the Company’s existing and future markets.

As a result, the Company is, and may in the future be, blocked from or limited in providing each of its agent compensation plans in certain markets.

In addition, these laws, rules and regulations are subject to

judicial and agency interpretation, and it might be determined that the Company’s agent compensation plans are not permitted to be offered to independent contractors.

In response to such limitations, the Company has, and may in the future be, required to modify its agent compensation practices in such markets.

Failure to comply with applicable law, rules and regulations or failure to subsequently modify the Company’s business model in certain jurisdictions to effectively attract and retain agents and brokers could negatively affect the Company’s business, results of operations or financial condition.

The costs attributable to developing compliant agent compensation plans can be significant and could adversely affect the Company’s financial condition.

If the Company fails to protect the privacy and personal information of its customers, agents or employees, it may be subject to legal claims, government action and damage to its reputation.

Hundreds of thousands of consumers, independent contractors and employees have shared personal information with the Company during the normal course of its business processing real estate transactions.

This includes, but is not limited to, Social Security numbers, annual income amounts and sources, consumer names, addresses, telephone and cell phone numbers and email addresses.

To run our business, it is essential for us to store and transmit this sensitive information in our systems and networks.

At the same time, we are subject to numerous laws, regulations and other requirements that require businesses like ours to protect the security of personal information, notify customers and other individuals about our privacy practices and limit the use, disclosure, or transfer of personal data across country borders.

To run the Company’s business, it is essential for the Company to store and transmit this sensitive information in its systems and networks.

At the same time, the Company is subject to numerous laws, regulations and other requirements that require businesses like the Company’s to protect the security of personal information, notify customers and other individuals about its privacy practices and limit the use, disclosure, or transfer of personal data across country borders.

Regulators in the U.S.

and abroad continue to enact comprehensive new laws or legislative reforms imposing significant privacy and cybersecurity restrictions.

The result is that we are subject to increased regulatory scrutiny, additional contractual requirements from corporate customers and heightened compliance costs.

These ongoing changes to privacy and cybersecurity laws also may make it more difficult for us to operate our business and may have a material adverse effect on our operations.

The result is that the Company is subject to increased regulatory scrutiny, additional contractual requirements from corporate customers and heightened compliance costs.

These ongoing changes to privacy and cybersecurity laws also may make it more difficult for the Company to operate its business and may have a material adverse effect on its operations.

For example, the European Union’s GDPR conferred new and significant privacy rights on individuals (including employees and independent agents) and materially increased penalties for violations.

In the U.S., California enacted the California Consumer Privacy Act, which imposes comprehensive requirements on organizations that collect and disclose personal information about California residents.

Any significant violations of privacy, including as a result of cybersecurity breaches, could result in the loss of new or existing business, litigation, regulatory investigations, the payment of fines, damages and penalties and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operations.

We could also be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations or financial condition.

For example, we have and may continue to incorporate new technologies such as machine learning and AI—defined broadly as the use of computer systems to simulate human intelligence, including decision-making, pattern recognition, and predictive analysis—into our processes and systems, which are under increased regulatory scrutiny.

We may be required to change our platforms and services due to new laws and/or decisions related to emerging technologies which may decrease our operational efficiency and/or hinder our ability to improve our services.

In addition, while we disclose our information collection and dissemination practices in the published privacy statements on our various websites, which we may modify from time to time, we may be subject to legal claims, government action and damage to our reputation if we act or are perceived to be acting inconsistently with the terms of our privacy statement, customer expectations or state, national and international regulations.

Our policies and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information.

The occurrence of a significant claim in excess of our insurance coverage or which is not covered by our insurance in any given period could have a material adverse effect on our financial condition and results of operations during the period.

In the event we or the vendors with which we contract to provide services on behalf of our customers were to suffer a breach of personal information, our customers and independent agents could terminate their business with us.

Further, we may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to Company policies and practices and such actions jeopardize any personal information.

Our legal liability could include significant defense costs, settlement costs, damages and penalties, plus, damage to our reputation with consumers, which could significantly damage our ability to attract customers.

Any or all of these consequences would result in a meaningful unfavorable impact on our brand, business model, revenue, expenses, income and margins.

In addition, concern among potential homebuyers or sellers about our privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR.

Additionally, concern among potential homebuyers or sellers could keep

them from using our services or require us to incur significant expense to alter our business practices or educate them about how we use personal information.

Entering into new business arrangements, joint ventures, or business lines may expose us to additional regulatory and compliance risks that could materially and adversely affect our business and financial condition.

Our strategy includes pursuing new business initiatives, entering into joint ventures, and expanding into complementary business lines.

These efforts often require us to navigate complex and evolving regulatory environments that may differ significantly from those governing our core operations.

If we are unable to timely and effectively address these regulatory and compliance requirements, or if risks arise beyond our reasonable ability to mitigate, our business and financial condition may be materially and adversely affected.

For example, SUCCESS Lending, our joint venture mortgage business launched in 2021, operates in the highly regulated mortgage lending industry, which involves stringent licensing requirements, state and federal oversight, and compliance with consumer protection laws.

Similarly, SUCCESS Space, our franchising initiative also launched in 2021, involves compliance with franchising regulations, zoning laws, and other local, state, and federal requirements applicable to its operations.

Both initiatives face inherent risks, including but not limited to, operational challenges, legal and regulatory scrutiny, and unforeseen compliance costs.

Any significant violations of privacy, including as a result of cybersecurity breaches, could result in the loss of new or existing business, litigation, regulatory investigations, the payment of fines, damages and penalties and damage to the Company’s reputation, which could have a material adverse effect on its business, financial condition and results of operations.

The Company could also be adversely affected if legislation or regulations are expanded to require changes in the Company’s business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect its business, results of operations or financial condition.

For example, the Company has and may continue to incorporate new technologies such as machine learning and AI—defined broadly as the use of computer systems to simulate human intelligence, including decision-making, pattern recognition, and predictive analysis—into the Company’s processes and systems, which are under increased regulatory scrutiny.

The Company may be required to change its platforms and services due to new laws and/or decisions related to emerging technologies which may decrease the Company’s operational efficiency and/or hinder its ability to improve its services.

In addition, while the Company discloses information collection and dissemination practices in the published privacy statements on its various websites, which it may modify from time to time, the Company may be subject to legal claims, government action and damage to its reputation if it acts or is perceived to be acting inconsistently with the terms of the Company’s privacy statement, customer expectations or state, national and international regulations.

The Company’s policies and safeguards could be deemed insufficient if third parties with whom the Company has shared personal information fail to protect the privacy of that information.

The occurrence of a significant claim in excess of the Company’s insurance coverage or which is not covered by its insurance in any given period could have a material adverse effect on the Company’s financial condition and results of operations during the period.

In the event the Company or the vendors with which it contracts to provide services on behalf of its customers were to suffer a breach of personal information, its customers and independent agents could terminate their business with the Company.

Further, the Company may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to Company policies and practices and such actions jeopardize any personal information.

The Company’s legal liability could include significant defense costs, settlement costs, damages and penalties, plus damage to the Company’s reputation with consumers, which could significantly damage its ability to attract customers.

Any or all of these consequences would result in a meaningful unfavorable impact on the Company’s brand, business model, revenue, expenses, income and margins.

In addition, concern among potential homebuyers or sellers about the Company’s privacy practices could result in regulatory investigations, especially in the European Union as related to the GDPR.

Additionally, concern among potential homebuyers or sellers could keep them from using the Company’s services or require it to incur significant expense to alter its business practices or educate them about how the Company uses personal information.

Entering into new business arrangements, joint ventures, or business lines may expose the Company to additional regulatory and compliance risks that could materially and adversely affect the Company’s business and financial condition.

The Company’s strategy includes pursuing new business initiatives, entering into joint ventures, and expanding into complementary business lines.

These efforts often require the Company to navigate complex and evolving regulatory environments that may differ significantly from those governing the Company’s core operations.

If the Company is unable to timely and effectively address these regulatory and compliance requirements, or if risks arise beyond the Company’s reasonable ability to mitigate, its business and financial condition may be materially and adversely affected.

For example, SUCCESS ® Lending, the Company’s joint venture mortgage business launched in 2021, operates in the highly regulated mortgage lending industry, which involves stringent licensing requirements, state and federal oversight, and compliance with consumer protection laws.

The mortgage lending business faces inherent risks, including but not limited to, operational challenges, legal and regulatory scrutiny, and unforeseen compliance costs.

These new business lines also require significant investments in infrastructure, personnel, and systems to ensure compliance.

Failure to meet these obligations could result in legal or regulatory penalties, reputational damage, or the inability to scale these operations as planned.

Moreover, the financial success of these ventures is uncertain given their limited operating histories, making it difficult to predict their long-term contribution to our overall financial performance.

While we aim to mitigate these risks through robust compliance frameworks and strategic partnerships, no mitigation effort can fully eliminate all risk.

Unanticipated challenges in these or other future ventures could materially and adversely affect our operations, reputation, and financial condition.

Risks Related to Our Stock

Glenn Sanford, our Chairman and Chief Executive Officer, together with Penny Sanford, a significant stockholder, own a significant percentage of our stock and have agreed to act as a group on any matter submitted to a vote of our stockholders.

As a result, the trading price for our shares may be depressed and they can significantly influence actions that may be adverse to the interests of our other stockholders .

On February 19, 2025, Glenn Sanford and Penny Sanford filed an amended Schedule 13D with the Securities and Exchange Commission, which disclosed that they beneficially owned approximately 44.77% of our outstanding common stock as of December 31, 2024 and that they had agreed to vote their shares as a group with respect to the election of directors and any other matter on which our shares of common stock are entitled to vote.

This significant concentration of share ownership may adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company with a stockholder group holding a significant number of our shares.

The group can significantly influence all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets.

In addition, due to his significant ownership stake and his service as our Chief Executive Officer and Chairman of our Board of Directors, Mr.

Sanford significantly influences the management of our business and affairs.

This concentration of ownership and influence could have the effect of delaying, deferring, or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to our other stockholders.

Because we can issue additional shares of common stock and because we issue stock under equity incentive plan, our stockholders may experience dilution in the future.

We are authorized to issue up to 900,000,000 shares of common stock, of which 195,028,207 shares were issued and 154,133,385 shares were outstanding as of December 31, 2024.

Moreover, the financial success of these ventures is uncertain given their limited operating histories, making it difficult to predict their long-term contribution to the Company’s overall financial performance.

While the Company aims to mitigate these risks through robust compliance frameworks and strategic partnerships, no mitigation effort can fully eliminate all risk.

Unanticipated challenges in these or other future ventures could materially and adversely affect the Company’s operations, reputation, and financial condition.

Risks Related to the Company’s Common Stock

Glenn Sanford, the Company’s Chairman and Chief Executive Officer, together with Penny L Sanford TTEE Gratitude 2022 Trust, own a significant percentage of the Company’s common stock.

As a result, the trading price for the Company’s shares of common stock may be depressed and they can significantly influence actions that may be adverse to the interests of the Company’s other stockholders.

As of January 31, 2026, Glenn Sanford beneficially owns approximately 25.7% and the Penny L Sanford TTEE Gratitude 2022 Trust owns approximately 16.5% of the Company’s outstanding common stock.

Sanford and the Penny L Sanford TTEE Gratitude 2022 Trust do not have voting group, this significant concentration of share ownership may adversely affect the trading price of the Company’s common stock because investors may perceive disadvantages in owning stock in a company with two stockholders holding a significant number of the Company’s shares.

Sanford and Penny L Sanford TTEE Gratitude 2022 Trust can significantly influence all matters requiring approval by the Company’s stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of the Company’s assets.

In addition, due to his significant ownership stake and his service as the Company’s Chief Executive Officer and Chairman of the Company’s Board of Directors (“Board”), Mr.

Sanford significantly influences the management of the Company’s business and affairs.

Because the Company can issue additional shares of common stock and because it issues stock under an equity incentive plan, its stockholders may experience dilution in the future.

The Company is authorized to issue up to 900,000,000 shares of common stock, of which 207,785,762 shares were issued and 161,049,979 shares were outstanding as of December 31, 2025.

Additionally, the Company maintains an active 2024 Equity Incentive Plan from which employees, agents, brokers and certain service providers of the Company and its affiliates can receive awards of the Company’s common stock.

1 unchanged sentence

The Company ceased issuing shares under the 2015 Equity Incentive Plan when it began issuing shares under the 2024 Equity Incentive Plan in September 2024.

Our Board of Directors has the authority to cause us to issue additional shares of common stock without consent of any of our stockholders, subject to applicable Nasdaq listing rules.

Consequently, current stockholders may experience more dilution in their ownership of our common stock in the future.

Our share repurchase program could impact the trading price of our stock, reduce liquidity, and may not enhance stockholder value.

Our share repurchase program does not obligate us to repurchase any shares of our common stock, and the timing, amount, and manner of any repurchases are subject to various factors.

These factors include, but are not limited to, market conditions, business conditions, statutory and contractual restrictions, the trading price of our common stock, and the availability of alternative

investment opportunities.

Repurchases of our common stock may impact the market price of our stock, potentially causing it to be higher than it would be absent the program, and could also increase stock price volatility.

The existence of a share repurchase program may reduce market liquidity for our stock, which could adversely affect investors who wish to buy or sell our shares.

Additionally, the use of our cash or other resources to repurchase shares could diminish our cash reserves, which may impact our ability to finance growth initiatives, pursue strategic opportunities, discharge liabilities, or respond to other operational needs.

There can be no assurance that our share repurchase program will enhance stockholder value.

For example, the market price of our common stock may decline below the prices at which we repurchased shares, and fluctuations in the stock price could reduce the overall effectiveness of the program.

If we do not manage our repurchase program effectively, it could have a material adverse effect on our financial condition, liquidity, or ability to meet our strategic objectives.

The stock price of our common stock has been and likely will continue to be volatile and may decline in value regardless of our performance.

The market price for our common stock could fluctuate significantly for various reasons, many of which are outside our control, including those described above and the following:

● our operating and financial performance and prospects;

● future sales of substantial amounts of our common stock in the public market, including but not limited to shares we may issue as consideration for acquisitions or investments;

● housing and mortgage finance markets;

● our quarterly or annual earnings or those of other companies in our industry;

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

● changes in or cessation of recommendations or analysis of our prospects by securities analysts who track our common stock;

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

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

● actual or potential changes in laws, regulations and regulatory interpretations;

● changes in interest rates;

● changes in demographics relating to housing such as household formation or other consumer preferences toward home ownership;

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

● arrival and departure of key personnel;

● the filing of and/or adverse resolution of new or pending litigation or regulatory proceedings against us;

● changes in general market, economic and political conditions in the United States and global economies.

In addition, the stock markets have experienced periods of high price and volume fluctuations that have affected and continue to affect the market prices of the equity securities of many companies, including technology companies and real estate brokerages.

Such price fluctuations can be unrelated or disproportionate to the operating performance of those companies.

In the past, stockholders have instituted securities class action litigation following periods of market volatility.

If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and harm our business.

Because there is no guarantee that we will continue to pay cash dividends on our shares of common stock in the future, our stockholders may not be able to receive a return on their shares unless they sell them.

On August 4, 2021, the Company’s Board of Directors declared and subsequently paid its first cash dividend.

Since then, the Company has declared and paid quarterly dividends through the fiscal year ended December 31, 2024.

However, there is no assurance that future dividends will be declared or paid, and if dividends are paid, there is no assurance as to the amount or frequency of any such dividends.

The declaration, payment, and amount of any future dividends will be made at the discretion of

the Board of Directors and will depend upon, among other things, the Company’s results of operations, cash flows, financial condition, operating and capital requirements, and other factors deemed relevant by the Board of Directors.

If we cease to pay dividends or reduce the amount of dividends paid, stockholders seeking a return on their investment may need to sell their shares to realize such a return.

Fluctuations in our stock price and market conditions may affect the ability of stockholders to realize a return, making it uncertain whether they will achieve their investment goals.

Delaware law and our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders.

In addition, provisions of our restated certificate of incorporation and restated bylaws may make it more difficult for, or prevent a third party from, acquiring control of us without the approval of our Board of Directors.

The Board has the authority to cause the Company to issue additional shares of common stock without consent of any of its stockholders, subject to applicable Nasdaq listing rules.

Consequently, current stockholders may experience more dilution in their ownership of the Company’s common stock in the future.

The price of the Company’s common stock is subject to volatility.

The Company’s common stock has experienced substantial price volatility in the past and may continue to do so in the future.

Additionally, the Company, the real estate brokerage industry and technology industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies’ operating performance which may occur again in the future.

Additionally, future dividends are subject to declaration by the Board, and the Company’s share repurchase program does not obligate it to acquire any specific number of shares.

If the Company fails to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, the price of the Company’s common stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.

D elaware law and the Company’s organizational documents may impede or discourage a takeover, which could deprive the Company’s investors of the opportunity to receive a premium for their shares.

The Company is a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of the Company, even if a change of control would be beneficial to its existing stockholders.

In addition, provisions of the Company’s restated certificate of incorporation and restated bylaws may make it more difficult for, or prevent a third party from, acquiring control of the Company without the approval of its Board of Directors.

Among other things, these provisions:

1 unchanged sentence

● delegate the sole power to a majority of the Board of Directors to fix the number of directors;

● provide the power to our Board of Directors to fill any vacancy on our Board of Directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

● provide the power to the Board to fill any vacancy on the Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

● eliminate the ability of stockholders to call special meetings of stockholders;

● establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

The foregoing factors could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for our common stock which, under certain circumstances, could reduce the market value of our common stock and our investors’ ability to realize any potential change-in-control premium.

● establish advance notice requirements for nominations for election to the Board or for proposing matters that can be acted on by stockholders at stockholder meetings.

The foregoing factors could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for the Company’s common stock which, under certain circumstances, could reduce the market value of the Company’s common stock and its investors’ ability to realize any potential change-in-control premium.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors