What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2021-11-03 · 106 added, 122 removed, 293 unchanged (44% of the section changed)

3 unchanged sentences

(In thousands, except share amounts)

September 30, 2021

March 31, 2022

December 31, 2021

15 unchanged sentences

Accrued expenses

Current portion of long-term payable

Current portion of lease obligation - operating lease

TOTAL CURRENT LIABILITIES

Long-term payable, net of current portion

Long-term payable

Long-term lease obligation - operating lease, net of current portion

6 unchanged sentences

7,883,740 and 6,751,692 shares held, respectively

Accumulated earnings (deficit)

Accumulated earnings

Accumulated other comprehensive income

7 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses

4 unchanged sentences

Operating income

Other expense

Other expense, net

Other (income) expense

Other (income) expense, net

Equity in losses of unconsolidated affiliates

2 unchanged sentences

Income tax (benefit) expense

Net loss attributable to noncontrolling interest

Net income attributable to noncontrolling interest

Net income attributable to eXp World Holdings, Inc.

5 unchanged sentences

Other comprehensive income:

Foreign currency translation (loss) gain, net of tax

Foreign currency translation gain, net of tax

Comprehensive income attributable to eXp World Holdings, Inc.

3 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Common stock:

Balance, beginning of period

Balance, end of period

Balance, beginning of quarter

Agent equity stock compensation

Balance, end of quarter

Treasury stock:

Balance, beginning of period

Balance, beginning of quarter

Repurchases of common stock

Balance, end of period

Balance, end of quarter

Additional paid-in capital:

Balance, beginning of period

Balance, beginning of quarter

Shares issued for stock options exercised

2 unchanged sentences

Stock option compensation

Balance, end of period

Balance, end of quarter

Accumulated earnings (deficit):

Balance, beginning of period

Balance, beginning of quarter

Dividends declared and paid

Balance, end of period

Balance, end of quarter

Accumulated other comprehensive income:

Balance, beginning of period

Balance, beginning of quarter

Foreign currency translation loss

Balance, end of period

Balance, end of quarter

Noncontrolling interest:

Balance, beginning of period

Contributions by noncontrolling interests

Balance, end of period

Balance, beginning of quarter

Transactions with noncontrolling interests

Balance, end of quarter

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

2 unchanged sentences

Amortization expense - intangible assets

Amortization expense - long-term payable

Allowance for credit losses on receivables

Loss on dissolution of consolidated affiliates

Allowance for credit losses on receivables/bad debt on receivables

Equity in loss of unconsolidated affiliates

2 unchanged sentences

Agent equity stock compensation expense

Deferred income taxes

Deferred income taxes, net

Changes in operating assets and liabilities:

10 unchanged sentences

Acquisition of businesses

Intangible assets acquired

Investments in unconsolidated affiliates

NET CASH (USED IN) INVESTING ACTIVITIES

12 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Termination of lease liabilities

Lease liabilities arising from obtaining right-of-use assets

Property, plant and equipment purchases in accounts payable

Liabilities incurred associated with a business acquisition

Liabilities assumed in business acquisition

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

4 unchanged sentences

eXp World Holdings, Inc.

(collectively with its subsidiaries, the “Company” or “eXp”) was incorporated in the State of Delaware on July 30, 2008.

Through various operating subsidiaries, the Company primarily operates a cloud-based real estate brokerage operating throughout the United States and most of the Canadian provinces.

Since the fourth quarter of 2019, the Company expanded operations into the United Kingdom (U.K.), Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Germany and Panama.

Our real estate brokerage is now one of the largest and fastest growing real estate brokerage companies in the United States by agent count, and is continuing to expand internationally.

The Company focuses on a number of cloud-based technologies in order to grow a global brokerage without the burden of physical bricks and mortar or redundant staffing costs.

(“eXp,” or, collectively with its subsidiaries, the “Company,” “we,” “us,” or “our”) owns and operates a cloud-based real estate brokerage and a technology platform business that enables a variety of businesses to operate remotely.

Our real estate brokerage is now one of the largest and fastest-growing real estate brokerage companies in the United States and is rapidly expanding internationally.

Our technology platform business develops and uses immersive technologies that enable and support virtual workplaces.

This unique enabling platform helps businesses increase their effectiveness and reduce costs from operating in traditional “brick and mortar” office spaces.

Through various operating subsidiaries, the Company primarily operates a cloud-based real estate brokerage operating throughout the United States, most of the Canadian provinces, the United Kingdom (U.K.), Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, Greece, and the Dominican Republic.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

2 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

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

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 25, 2022 (“2021 Annual Report”).

In our opinion, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation.

On January 15, 2021, the Company’s Board of Directors approved a two -for-one stock split in the form of a stock dividend to stockholders of record as of January 29, 2021 (the “Stock Split”).

The Stock Split was effected on February 12, 2021.

All shares, restricted stock units (“RSU”), stock options, and per share information have been retroactively adjusted to reflect the stock split.

Operating results for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of eXp World Holdings, Inc., its wholly-owned subsidiaries, and including those entities in which we have a variable interest of which we are the primary beneficiary.

The accompanying condensed consolidated financial statements include the accounts of eXp World Holdings, Inc., its wholly-owned subsidiaries, and including those entities in which we have a variable interest of which we are the primary beneficiary.

If the Company has a variable interest in an entity but it is not the primary beneficiary of the entity or exercises control over the operations and has less than 50% ownership, it will use the equity method or the cost method of accounting for investments.

10 unchanged sentences

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, goodwill, and deferred income tax asset valuation allowances.

The Company regularly evaluates estimates and assumptions related to allowance for credit losses, legal contingencies, income taxes, revenue recognition, stock-based compensation,

goodwill, and deferred income tax asset valuation allowances.

The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

3 unchanged sentences

When necessary, the Company will reclassify certain amounts in prior-period financial statements to conform to the current period’s presentation.

No material reclassifications occurred during the current period.

No reclassifications occurred during the current period.

Restricted cash

6 unchanged sentences

Balance, December 31, 2020

Balance, September 30, 2020

Balance, March 31, 2021

Balance, December 31, 2021

Balance, September 30, 2021

Balance, March 31, 2022

Recently Adopted Accounting Principles and Change in Accounting Principle

5 unchanged sentences

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

This guidance is optional for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting.

This guidance is effective from March 12, 2020 through December 31, 2022.

Entities may elect to adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.

In January 2021, the FASB amended this Update to clarify certain optional expedients and exceptions for contract modifications and hedge accounting that apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.

The Company does not have any material contracts, hedging or other transactions that reference LIBOR, and we do not expect to utilize the expedients and exceptions provided in this guidance.

In November 2021, the FASB issued ASU 2021-08 – Business Combinations (Topic 805) (“ASU 2021-08”).

ASU 2021-08 addresses diversity and inconsistencies related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination.

The amendments in this update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers.

This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company has reviewed the amendments of ASU 2021-08 and will apply the guidance upon its effective date should the Company have future business combinations.

EXPECTED CREDIT LOSSES

4 unchanged sentences

The three categories include agent non-commission based fees, agent short-term advances, and commissions receivable for real estate property settlements.

The Company analyzed uncollectible accounts for the three categories of receivables and concluded that only agent non-commission based fees receivables and agent short-term advances carry any risk of expected credit losses.

Current economic conditions and forecasts of future economic conditions do not affect expected credit losses of uncollectable real estate property settlements.

The collection of these payments is in-substance guaranteed because they represent commission payments on closed transactions, and the Company has no historical experience or expectation of losses related to these receivables.

Receivables from real estate property settlements totaled $ 125,490 and $ 73,838 as of September 30, 2021 and December 31, 2020 respectively.

As of September 30, 2021 and December 31, 2020 agent non-commission based fees receivable and short-term advances totaled $ 6,254 and $ 4,992 , of which the Company recognized expected credit losses of $ 1,901 and $ 1,879 , respectively.

As of the first quarter of 2022, the Company provided an allowance for potential credit losses of real estate transactions.

The Company analyzed uncollectible accounts for the three categories of receivables.

Receivables from real estate property settlements totaled $ 138,187 and $ 128,499 of which the Company recognized expected credit losses of $ 904 and nil , respectively as of March 31, 2022 and December 31, 2021.

As of March 31, 2022 and December 31, 2021 agent non-commission based fees receivable and short-term advances totaled $ 7,193 and $ 7,188 , of which the Company recognized expected credit losses of $ 1,513 and $ 2,198 , respectively.

The Company increases the allowance for expected credits losses when the Company determines all or a portion of a receivable is uncollectable.

The Company recognizes recoveries as a decrease to the allowance for expected credit losses.

Changes in the allowance were not material for the three and nine months ended September 30, 2021.

Changes in the allowance were not material for the three months ended March 31, 2022 and the year ended December 31, 2021.

PLANT, PROPERTY AND EQUIPMENT, NET

Plant, property and equipment, net consisted of the following:

September 30, 2021

March 31, 2022

December 31, 2021

6 unchanged sentences

Property, plant, and equipment, net

For the three months ended September 30, 2021 and 2020, depreciation expense was $ 1,376 and $ 852 , respectively.

For the nine months ended September 30, 2021 and 2020, depreciation expense was $ 3,572 and $ 2,403 , respectively.

For the three months ended March 31, 2022 and 2021, depreciation expense was $ 1,616 and $ 1,007 , respectively.

GOODWILL AND INTANGIBLE ASSETS

Goodwill was $ 12,945 and $ 12,945 as of September 30, 2021 and December 31, 2020.

Goodwill was $ 12,945 and $ 12,945 as of March 31, 2022 and December 31, 2021.

The Company has a risk of future impairment to the extent that individual reporting unit performance does not meet projections.

Additionally, if current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of the Company’s control change unfavorably, the estimated fair value of goodwill could be adversely affected, leading to a potential impairment in the future.

For the three and nine months ended September 30, 2021, no events occurred that indicated it was more likely than not that goodwill was impaired.

For the three months ended March 31, 2022, no events occurred that indicated it was more likely than not that goodwill was impaired.

Definite-lived intangible assets were as follows:

September 30, 2021

March 31, 2022

December 31, 2021

6 unchanged sentences

Definite-lived intangible assets are amortized using the straight-line method over an asset’s estimated useful life.

Amortization expense for definite-lived intangible assets for the three months ended September 30, 2021 and 2020 was $ 318 and $ 152 , respectively.

Amortization expense for definite-lived intangible assets for the nine months ended September 30, 2021 and 2020 was $ 939 and $ 382 , respectively.

Amortization expense for definite-lived intangible assets for the three months ended March 31, 2022 and 2021 was $ 342 and $ 303 , respectively.

The Company has no indefinite-lived assets.

4 unchanged sentences

Included below is other information regarding leases for the periods presented:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Other information

6 unchanged sentences

Additionally, the Company considered any historical and economic factors in determining if a lease renewal or termination option would be exercised.

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

As of March 31, 2022, expirations of lease obligations by fiscal year were as follows:

Period Ending December 31,

3 unchanged sentences

Total operating lease liabilities

The Company issued unsecured promissory notes in the aggregate principal amount of $ 1.5 million in connection with the acquisition of Showcase Web Sites, L.L.C.

(“Showcase”) in July 2020.

The promissory notes accrue interest of 8 % per annum, and interest is payable monthly beginning six months after the closing date.

On March 2, 2021, the Company repaid all outstanding promissory notes issued to the previous owners of Showcase and notes payable assumed as part of the acquisition.

The repayments totaled approximately $ 1.7 million representing the principal balance plus accrued interest and unpaid fees.

The repayments of the notes payable did no t result in a gain or loss on early extinguishment.

STOCKHOLDERS’ EQUITY

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(Shares of Common Stock)

12 unchanged sentences

The Company recognizes a 10 % discount on these issuances as an additional cost of sales charge during the periods presented.

During the three months ended September 30, 2021 and 2020, the Company issued 1,075,500 and 1,241,594 shares of common stock, respectively, to agents and brokers with a value of $ 41,838 and $ 19,929 , respectively, inclusive of discount.

During the nine months ended September 30, 2021 and 2020, the Company issued 2,574,766 and 4,933,540 shares of common stock, respectively, to agents and brokers with a value of $ 101,691 and $ 39,226 , respectively, inclusive of discount.

During the three months ended March 31, 2022 and 2021, the Company issued 1,550,455 and 424,084 shares of common stock, respectively, to agents and brokers with a value of $ 38,500 and $ 21,402 , respectively, inclusive of discount.

Agent Growth Incentive Program

4 unchanged sentences

As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved.

For the three months ended September 30, 2021, the Company’s stock compensation attributable to the Agent Growth Incentive Program was $ 6,817 of which the total amount of stock compensation attributable to liability classified awards was $ 1,830 .

For the nine months ended September 30, 2021, the Company’s stock compensation attributable to the Agent Growth Incentive Program was $ 18,129 of which the total amount of stock compensation attributable to liability classified awards was $ 4,453 .

Stock compensation expense related to the Agent Growth Incentive Program is included in general and administrative expense in the condensed consolidated statements of comprehensive income (loss).

For the three months ended March 31, 2022, the Company’s stock compensation attributable to the Agent Growth Incentive Program was $ 7,798 of which the total amount of stock compensation attributable to liability classified awards was $ 1,906 .

Stock compensation expense related to the Agent Growth Incentive Program is included in general and administrative expense in the condensed consolidated statements of comprehensive income.

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

Balance, December 31, 2020

Stock grant liability increase at March 31, 2021

Stock grant liability increase at June 30, 2021

Stock grants reclassified from liability to equity at September 30, 2021

Stock grant liability increase at September 30, 2021

Balance, September 30, 2021

Stock grant liability increase year to date

Balance, March 31, 2021

Stock grant liability increase at December 31, 2021

Stock grant liability increase year to date

Stock grants reclassified from liability to equity year to date

Balance, March 31, 2022

Stock Option Awards

During the three months ended September 30, 2021, and 2020, the Company granted 176,263 and 2,255,416 stock options, respectively, to employees with an estimated grant date fair value of $ 23.26 and $ 9.07 per share, respectively.

For the nine months ended September 30, 2021, and 2020, the Company granted 370,594 and 3,441,772 stock options, respectively, to employees with an estimated grant date fair value of $ 24.05 and $ 10.67 per share, respectively.

During the three months ended March 31, 2022, and 2021, the Company granted 484,378 and 127,265 stock options, respectively, to employees with an estimated grant date fair value of $ 26.04 and $ 26.01 per share, respectively.

The fair value was calculated using a Black Scholes-Merton option pricing model.

6 unchanged sentences

The cost of the shares that are repurchased is funded from cash and cash equivalents on hand.

For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade.

For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the transaction date of the applicable trade.

Such repurchased shares are held in treasury and are presented using the cost method.

1 unchanged sentence

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(Shares of Treasury Stock)

7 unchanged sentences

The Company uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company uses the if-converted method to reflect the potential dilutive effect of a $ 1.0 million payment obligation relating to the November 2018 acquisition of Virbela, LLC, that may be paid in cash or common stock in November 2021.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net income attributable to common stock

2 unchanged sentences

Weighted average shares - diluted

Earnings (loss) per share:

Earnings per share:

Earnings per share attributable to common stock- basic

Earnings per share attributable to common stock- diluted

For the three months ended September 30, 2021 and 2020 total outstanding shares of common stock excluded 132,704 and 154,870 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

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

For the three months ended March 31, 2022 and 2021 total outstanding shares of common stock excluded 392,483 and 6,506 shares, respectively, from the computation of diluted earnings per share because their effect would have been anti-dilutive.

Our quarterly tax provision is computed by applying the estimated annual effective tax rate to the year-to-date pre-tax income or loss and adjust for discrete tax items in the period.

Our provision for (benefit from) income taxes amounted to ($ 12.9 ) million and $ 0.2 million for the three months ended September 30, 2021 and 2020, respectively, and ($ 33.3 ) million and $ 0.3 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase in income tax benefit was primarily attributable to the release of the valuation allowance and higher deductible stock-based compensation.

We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative.

The realization of the net deferred tax assets is dependent on our ability to generate sufficient future taxable income during the periods prior to the expiration of tax attributes to fully utilize these assets.

As of June 30, 2021, based on our assessment of the realizability of our net deferred tax assets, we reached the conclusion that our valuation allowance on our US federal and state net deferred tax assets was no longer needed and therefore we recorded a valuation allowance release of $ 13 million, as a discrete item.

As of September 30, 2021, the valuation allowance release discrete item amounted to $ 22 million due to the change in the annual forecast of the pre-tax income.

Our provision for (benefit from) income taxes amounted to ( $ 5.15 ) million and $ 0.21 million for the three months ended March 31, 2022 and 2021, respectively, which represented effective tax rates of negative 137.97 % and positive 4.17 % , respectively.

The increase in income tax benefit was primarily attributable to the deductible stock-based compensation windfalls

FAIR VALUE MEASUREMENT

10 unchanged sentences

The Company values its money market funds at fair value on a recurring basis.

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

As of March 31, 2022 and December 31, 2021, the fair value of the Company’s money market funds was $ 43,387 and $ 43,386 , respectively.

There have been no transfers between Level 1, Level 2 and Level 3 in the period presented.

The Company did not have any Level 2 or Level 3 financial assets or liabilities in the period presented .

COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to potential liability under laws and government regulations and various claims and legal actions that may be asserted against us that could have a material adverse effect on the business, reputation, results of operations or financial condition.

Such litigation may include, but is not limited to, actions or claims relating to sensitive data, including proprietary business information and intellectual property and that of clients and personally identifiable information of employees and contractors, cyber-attacks, data breaches and non-compliance with contractual or other legal obligations.

On November 19, 2021, the Company agreed to settle a class action lawsuit filed against the Company in 2018 alleging violations under the Telephone Consumer Protection Act.

Pursuant to the proposed settlement agreement terms, the Company will grant certain monetary and non-monetary settlements.

The Company decided to set aside provisions at the amount of $ 10.0 million to cover current estimated settlement fees and costs.

The settlement agreement terms remain subject to judicial review and approval.

There are no matters pending or, to the Company’s knowledge, threatened that are expected to have a material adverse impact on the business, reputation, results of operations, or financial condition.

There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial stockholder is an adverse party or has a material interest adverse to the Company’s interest.

In March and April 2022, an indirect subsidiary and unconsolidated joint venture of the Company, SUCCESS Lending, entered into Mortgage Warehouse Agreements and related ancillary agreements (the “Credit Agreements”) with Flagstar Bank FSB and Texas Capital Bank, which each provide SUCCESS Lending with a revolving warehouse credit line of up to $25 million.

It is customary for mortgage businesses like SUCCESS Lending to obtain warehouse credit lines in order to enable them to close and fund residential mortgage loans for subsequent sale to investors.

SUCCESS Lending will use the borrowing capacity under the Credit Agreements exclusively for such purposes and borrowings will generally be repaid with the proceeds received from the sale of mortgage loans.

In connection with the Credit Agreements, the Company has entered into Capital Maintenance Agreements with each of Flagstar Bank FSB and Texas Capital Bank whereby the Company agrees to provide certain funds necessary to ensure that SUCCESS Lending is at all times in compliance with its financial covenants under the Credit Agreements.

The Company’s capital commitment liability under the Capital Maintenance Agreement with Flagstar Bank FSB is limited to $2.0 million.

The Company’s capital commitment liability under the Capital Maintenance Agreement with Texas Capital Bank is limited to $1.25 million.

The Credit Agreements represent off-balance sheet arrangements for the Company.

SEGMENT INFORMATION

4 unchanged sentences

The Company primarily operates as a cloud-based real estate brokerage.

The real estate brokerage business represents 99.2 % and 99.6 % of the total revenue of the Company for the three months ended September 30, 2021 and 2020, respectively.

The real estate brokerage business represents 99.3 % and 99.7 % of the total revenue of the Company for the nine months ended September 30, 2021 and 2020, respectively.

The real estate brokerage business represents 99.2 % and 98.9 % of the total assets of the Company as of September 30, 2021 and December 31, 2020, respectively.

The real estate brokerage business represents 99.2 % and 99.3 % of the total revenue of the Company for the three months ended March 31, 2022 and 2021, respectively.

The real estate brokerage business represents 99.1 % and 99.0 % of the total assets of the Company as of March 31, 2022 and December 31, 2021, respectively.

The Company offers software subscriptions to customers to access its virtual reality software platform.

1 unchanged sentence

However, the operations and assets of the technology segment are not managed by the Company’s chief operating decision-maker as a separate reportable segment.

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

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

1 unchanged sentence

The Company primarily operates within the real estate brokerage markets in the United States and Canada.

During the previous two years, the Company expanded operations into the U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama and Germany.

During the previous two years, the Company expanded operations into the United Kingdom, Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, Greece, and the Dominican Republic.

The Company’s management analyzes geographical locations on a forward-looking basis to identify growth opportunities.

For the three months ended September 30, 2021 and 2020, approximately 8 % and 6 %, respectively, of the Company’s total revenue was generated outside of the U.S.

For the nine months ended September 30, 2021 and 2020, approximately 8 % and 5 %, respectively, of the Company’s total revenue was generated outside of the U.S.

For the three months ended March 31, 2022 and 2021, approximately 8 % and 7 %, respectively, of the Company’s total revenue was generated outside of the U.S.

Assets held outside of the U.S.

were 9 % and 7 % as of September 30, 2021 and December 31, 2020

were 11 % and 8 % as of March 31, 2022 and December 31, 2021

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

SUBSEQUENT EVENTS

On October 26, 2021 , the Company’s Board of Directors declared a dividend of $ 0.04 per share which is expected to be payable on November 29, 2021 , to stockholders of record as of the close of business on November 15, 2021 .

The ex-dividend date is November 12, 2021.

Quarterly Cash Dividend

On April 29, 2022 , the Company’s Board of Directors declared a dividend of $ 0.04 per share which is expected to be payable on May 31, 2022 , to stockholders of record as of the close of business on May 31, 2022 .

The ex-dividend date is expected to be May 13, 2022.

The dividend will be paid in cash.

Repurchase Plan Amendment

On May 3, 2022, the Board authorized an increase to the Company’s stock repurchase program from $400 million of its common stock up to $500 million and approved a form of amendment to its Issuer Repurchase Plan, dated January 10, 2022, by and between the Company and Stephens Inc., to increase monthly repurchases from $10 million of its common stock per month up to $20 million which amendment is expected to be signed May 6, 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-Q

Item 1. Financial Statements