What changed in this filing

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Item 9A. Controls and Procedures

2022-02-25 compared with 2021-03-11 · 24 added, 45 removed, 167 unchanged (29% of the section changed)

8 unchanged sentences

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting, except as follows.

Material Weakness Remediation

As previously reported, management identified that the Company had a material weakness in its internal control over financial reporting as of December 31, 2019, related to its general information technology controls (“GITC”) in certain areas related to user access and program change-management over information technology (“IT”) systems utilized by the Company.

Since some of our business process controls (automated and manual) were dependent on the affected GITCs, they too were deemed ineffective because they could have been adversely impacted.

We believe that these control deficiencies were a result of:

IT control processes lacking sufficient documentation;

insufficient testing of changes;

lack of training for our personnel on the importance of GITCs;

and a lack of access control considerations in the design of the systems that could impact internal control over financial reporting.

The Company also identified that it did not fully implement key components of the COSO framework, including control and monitoring activities relating to:

(i) providing oversight over the system of internal control, (ii) overseeing the nature and scope of monitoring activities and management's evaluation and remediation of deficiencies, (iii) using appropriate processes and technology to assign responsibility and segregate duties as necessary, (iv) maintaining quality through processing, and (v) attracting, developing, and retaining sufficient and competent personnel to support the achievement of internal control objectives.

Management determined that the deficiencies, evaluated in the aggregate, could have potentially resulted in a material misstatement of the consolidated financial statements in a future annual or interim period that would not be prevented or detected.

Therefore, the deficiencies constituted material weaknesses in internal control.

In response to these deficiencies, management implemented measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively.

The remediation actions included:

(i) establishing an internal audit team to support the Company’s entire control environment and its ongoing internal controls development and monitoring;

(ii) creating and filling an IT compliance oversight function;

(iii) educating control owners concerning the principles and requirements of each control, with a focus on those related to user access and change-management over IT systems impacting financial reporting;

(iv) developing and maintaining documentation underlying GITCs to promote knowledge transfer upon personnel and function changes;

(v) developing enhanced controls and reviews related to changes in IT systems;

and (vi) performing an in-depth analysis of who should have access to perform key functions within the system that impact financial reporting and redesigning aspects of the system to better allow the access rights to be implemented.

As a result of these efforts, the Company determined that the material weaknesses were remediated, and our internal control over financial reporting was effective as of December 31, 2020.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Our management, including our Chief Executive Officer and Chief Financial

Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020.

Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making its evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013).

17 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated March 11, 2021, expressed an unqualified opinion on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

16 unchanged sentences

San Francisco, California

March 11, 2021

February 25, 2022

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

20 unchanged sentences

Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes certain information regarding our equity compensation plan as at December 31, 2020:

The following table summarizes certain information regarding our equity compensation plan as of December 31, 2021:

Number of securities

38 unchanged sentences

Amended and Restated Certificate of Incorporation (incorporated by reference from Appendix A to the Company’s Definitive Information Statement on Schedule 14C filed on October 9, 2018)

Amended and Restated Bylaws (incorporated by reference from Appendix B to the Company’ Definitive Information Statement on Schedule 14C filed on October 9, 2018)

Certificate of Correction to the Amended and Restated Certificate of Incorporation (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 24, 2020)

Amended and Restated Bylaws (incorporated by reference from Appendix B to the Company’ Definitive Information Statement on Schedule 14C filed on October 9, 2018)

Description of Securities

2013 Stock Option Plan (incorporated by reference from Exhibit 10.5 to the Company's Current Report on Form 8 ‑ K filed on October 2, 2013)

2013 Stock Option Plan (incorporated by reference from Form 8 ‑ K, filed on October 2, 2013)

eXp Realty International Corporation 2015 Equity Incentive Plan (incorporated by reference to the Company’s Definitive Information Statement on Schedule 14C filed on April 2, 2015)

3 unchanged sentences

eXp World Holdings, Inc Stock Repurchase Program (incorporated by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on December 27, 2018)

First Amendment to eXp World Holdings, Inc Stock Repurchase Program (incorporated by reference from the Company's Current Report on Form 8-K filed on November 27, 2019)

First Amendment, eXp World Holdings, Inc Stock Repurchase Program (incorporated by reference from the Company’s Current Report on Form 8-K filed on November 27, 2019)

Second Amendment to eXp World Holdings, Inc Stock Repurchase Program, Board Resolution approved December 17, 2020

2020 Independent Contractor Agreement and Agent Equity Enrollment Form (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2020)

Code of Ethics (incorporated by reference from Exhibit 14.1 to the Company's Annual Report on Form 10-K filed on March 12, 2020)

Annual Report on Form 10-K dated March 12, 2020

Code of Ethics

Subsidiaries of the Registrant

Consent of Independent Registered Public Accounting Firm (Deloitte & Touche LLP)

Consent of Independent Registered Public Accounting Firm (BDO USA, LLP)

Consent of Independent Registered Public Accounting Firm

Certification of the Chief Executive pursuant to Rule 13a ‑ 14(a) or Rule 15d ‑ 14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

10 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase Document

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

Form 10-K Summary

1 unchanged sentence

eXp World Holdings, Inc.

March 11, 2021

February 25, 2022

/s/ Glenn Sanford

1 unchanged sentence

Chief Executive Officer (Principal Executive Officer)

March 11, 2021

February 25, 2022

/s/ Jeff Whiteside

4 unchanged sentences

Chief Executive Officer and Chairman of the Board

March 11, 2021

February 25, 2022

Glenn Sanford

2 unchanged sentences

Chief Financial Officer

March 11, 2021

February 25, 2022

Jeff Whiteside

2 unchanged sentences

Global Controller

March 11, 2021

February 25, 2022

(Principal Accounting Officer)

1 unchanged sentence

General Counsel and Corporate Secretary

March 11, 2021

February 25, 2022

James Bramble

/s/ JASON GESING

March 11, 2021

February 25, 2022

/s/ EUGENE FREDERICK

March 11, 2021

February 25, 2022

Eugene Frederick

/s/ RANDALL MILES

March 11, 2021

February 25, 2022

Randall Miles

/s/ DARREN JACKLIN

March 11, 2021

February 25, 2022

Darren Jacklin

/s/ FELICIA GENTRY

March 11, 2021

February 25, 2022

Felicia Gentry

/s/ DAN CAHIR

March 11, 2021

February 25, 2022

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 9A. Controls and Procedures