What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-28 compared with 2022-02-25 · 194 added, 267 removed, 582 unchanged (44% of the section changed)

1 unchanged sentence

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firms (PCAOB ID No.

Reports of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of eXp World Holdings, Inc.

and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income (loss), equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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The Company has a revenue sharing plan where agents and brokers may receive a commission from real estate transactions consummated by agents and brokers they have attracted to the Company.

Agents and brokers are eligible for revenue share based on the number of Front-Line Qualifying Active agents they have attracted to the Company.

A Front-Line Qualifying Active agent is an agent or broker that an agent or broker has personally attracted to the Company who has met specific sales transaction volume requirements.

Agents and brokers are eligible for revenue share based on the number of Front-Line Qualifying Active (FLQA) agents they have attracted to the Company.

An FLQA agent is an agent or broker that an agent or broker has personally attracted to the Company who has met specific sales transaction volume requirements.

These additional commissions are earned on a multitiered basis by FLQA agents and brokers for real estate transactions within their downstream brokerage network.

For the year ended December 31, 2022, the Company incurred $4.2 billion of commissions and other agent-related costs, which includes commissions paid to agents and brokers under the revenue sharing plan.

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Our audit procedures performed related to the testing of the accuracy of expenses under the revenue sharing plan included the following, among others:

● We tested the effectiveness of controls over the revenue share expenses, including management’s controls over the calculation of commission under the revenue sharing plan.

● We tested the effectiveness of controls over the revenue share expenses, including management’s controls over the calculation of commissions under the revenue sharing plan.

● With the assistance of our IT specialists, we:

o Identified the significant system used to process revenue share transactions and tested the general IT controls over the system, including testing of user access controls, change management controls, and IT operations controls.

o Performed testing of automated controls for the system calculation of revenue share and the system determination of number of Front-Line Qualifying Active agents.

o Performed testing of automated controls for the system calculation of revenue share and the system determination of number of FLQA agents.

● We selected samples of commissions paid to agents and brokers under the revenue sharing plan and recalculated the commissions amount based on the terms of the respective independent contractor agreements.

● For the samples selected:

o We tested the mathematical accuracy of the recorded commission by recalculating the revenue sharing allocation in accordance with the independent contractor agreements and traced the underlying transactions to third party documents including settlement statements, purchase agreements and bank statements.

o We tested the accuracy of the Front-Line Qualifying Agent count for agents and brokers by reading independent contractor agreements and obtained evidence of agents and brokers reaching the required sales transaction volume, including settlement statements.

o We tested the mathematical accuracy of the recorded commissions by recalculating the revenue sharing allocation in accordance with the independent contractor agreements and traced the underlying transactions to third party documents including settlement statements, purchase agreements and bank statements.

o We tested the accuracy of the FLQA count for agents and brokers by reading independent contractor agreements and obtained evidence of agents and brokers reaching the required sales transaction volume, including settlement statements.

/s/ Deloitte & Touche LLP

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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

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Common Stock, $ 0.00001 par value 900,000,000 shares authorized;

155,516,284 issued and 148,764,592 outstanding in 2021;

146,677,786 issued and 144,143,292 outstanding in 2020

171,656,030 issued and 152,839,239 outstanding at December 31, 2022;

155,516,284 issued and 148,764,592 outstanding at December 31, 2021

Additional paid-in capital

1 unchanged sentence

18,816,791 and 6,751,692 shares held, respectively

Accumulated earnings (deficit)

Accumulated earnings

Accumulated other comprehensive income

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EXP WORLD HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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Total operating expenses

Operating income (loss)

Other expense

Other expense, net

Operating income

Other (income) expense

Other (income) expense, net

Equity in losses of unconsolidated affiliates

Total other expense, net

Income (loss) before income tax expense

Income before income tax expense

Income tax (benefit) expense

Net income (loss)

Net loss attributable to noncontrolling interest

Net income (loss) attributable to eXp World Holdings, Inc.

Net income attributable to noncontrolling interest

Net income attributable to eXp World Holdings, Inc.

Earnings per share

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Comprehensive income:

Net income (loss)

Comprehensive loss attributable to noncontrolling interests

Net income (loss) attributable to eXp World Holdings, Inc.

Net income attributable to eXp World Holdings, Inc.

Other comprehensive income:

Foreign currency translation (loss) gain, net of tax

Comprehensive income (loss) attributable to eXp World Holdings, Inc.

(1) All applicable period amounts have been adjusted to reflect the two -for-one stock split effected in the form of a stock dividend in February 2021.

See Note 1 – Description of Business and Basis of Presentation for details.

Foreign currency translation gain (loss), net of tax

Comprehensive income attributable to eXp World Holdings, Inc.

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

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Common stock:

Balance, beginning of year

Balance, beginning of period

Agent equity stock compensation

Balance, end of period

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Repurchases of common stock

Retirement of treasury stock

Issuance of treasury stock

Balance, end of period

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Stock option compensation

Retirement of treasury stock

Balance, end of period

1 unchanged sentence

Balance, beginning of period

Net income (loss)

Dividends declared and paid

2 unchanged sentences

Balance, beginning of period

Foreign currency translation loss

Foreign currency translation gain (loss)

Balance, end of period

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Stock compensation

Contributions by noncontrolling interests

Transactions with noncontrolling interests

Balance, end of period

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OPERATING ACTIVITIES

Net income (loss)

Reconciliation of net income to net cash provided by operating activities:

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Asset impairments

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

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Agent equity stock compensation expense

Deferred income taxes

Deferred income taxes, net

Changes in operating assets and liabilities:

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Purchases of property, plant and equipment

Acquisition of businesses

Intangible assets acquired

Acquisition of businesses, net of cash acquired

Investments in unconsolidated affiliates

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Termination of lease liabilities

Retirement of treasury stock

Issuance of treasury stock

Lease liabilities arising from obtaining right-of-use assets

Intangible assets in accounts payable

Property, plant and equipment purchases in accounts payable

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(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.

The Company expanded its business into Australia and the United Kingdom in 2019, and into South Africa, India, Mexico, Portugal and France, during 2020 and into Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama and Germany in 2021.

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

eXp owns and operates a diversified portfolio of service-based businesses whose operations benefit substantially from utilizing our enabling technology platform.

Specifically, we operate a cloud-based real estate brokerage (in North America and other international locations), a Virbela business and related affiliated services that support the development and success of agents, entrepreneurs and businesses by leveraging innovative technologies and integrated services.

Our North American and international real estate brokerage is now one of the largest and fastest-growing real estate brokerage companies, 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, the Dominican Republic, Greece, New Zealand, Chile and Poland.

In addition, in late 2022, we announced operations in Dubai, which is expected to be fully operational in 2023.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles and are expressed in U.S.

The Company’s fiscal year end is December 31.

Common stock split

On January 19, 2021, the Company declared a two -for-one stock split of the Company’s common stock effected in the form of a stock dividend (the “Stock Split”) on each share of the Company’s outstanding Common Stock.

The stock dividend was issued on February 12, 2021 to holders of record of the Company’s Common Stock at the close of business on January 29, 2021.

All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split.

Impact of the Stock Split

The impacts of the Stock Split were applied retroactively for all periods presented in accordance with applicable guidance.

Therefore, prior period amounts are different from those previously reported.

Certain amounts within the following tables may not foot due to rounding.

The following table illustrates changes in earnings (loss) per share and weighted average shares outstanding as previously reported prior to, and as adjusted subsequent to, the impact of the Stock Split retroactively adjusted for the years ended 2019:

Year ended December 31,

As Previously Reported

Impact of Stock Split

Weighted average shares outstanding

Earnings (loss) per share

The following table illustrates changes in equity as previously reported prior to, and as adjusted subsequent to, the impact of the Stock Split retroactively adjusted for the years ended 2019:

Year ended December 31,

As Previously Reported

Impact of Stock Split

Common stock:

Balance, beginning of year

Retirement of common stock

( 1,818,273 )

( 3,636,546 )

Shares issued for acquisition

Shares issued for stock options exercised

Agent growth incentive stock compensation

Agent equity stock compensation

Balance, end of year

Common stock, par value (1)

(1) The par value of common stock changed by less than one thousand dollars and shows no impact due to rounding.

Stock awards under the Company’s equity incentive program for agents were adjusted retroactively to give effect to the Stock Split retroactively adjusted for the following periods:

Weighted Average Grant Date Fair Value

As Previously Reported

Impact of Stock Split

As Previously Reported

Impact of Stock Split

Balance, December 31, 2018

Vested and issued

( 1,494,633 )

( 2,989,266 )

( 1,355,184 )

Balance, December 31, 2019

The Company’s stock options were adjusted retroactively to give effect to the Stock Split for the following periods:

Weighted Average Exercise Price

As Previously Reported

Impact of Stock Split

As Previously Reported

Impact of Stock Split

Balance, December 31, 2018

( 2,261,122 )

( 4,522,244 )

Balance, December 31, 2019

Effective in December 2022, the Company revised the presentation of segment information to reflect changes in the way the Company manages and evaluates the business.

As such, we now report operating results through four reportable segments:

North American Realty, International Realty, Virbela and Other Affiliated Services, as further discussed in Note 14 – Segment Information .

Accordingly, certain amounts in the prior years’ consolidated financial statements have been revised to conform to the current year presentation.

See additional information in Note 14 –Segment Information .

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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A company is deemed to be the primary beneficiary of a VIE and must consolidate the entity if the company has both:

(i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

(i) the power to direct a VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In 2019, the Company made capital contributions in consideration for an ownership interest in First Cloud Investment Group, LLC (“First Cloud”), a Nevada limited liability company providing mortgage origination for end-consumers, with the remaining ownership interests held by certain independent agents and brokers.

Under the terms of the operating agreement, the Company maintains at least a 50 % equity ownership interest in First Cloud.

The Company determined that First Cloud is a VIE, as the Company is the primary beneficiary that has both the power to direct the activities that most significantly impact the VIE and a variable interest that potentially could be significant to the VIE.

The Company determined that First Cloud is a variable interest entity (“VIE”), as the Company is the primary beneficiary that has both the power to direct the activities that most significantly impact the VIE and a variable interest that potentially could be significant to the VIE.

The Company treats the interest in First Cloud that it does not own as a noncontrolling interest.

The noncontrolling interest balance is adjusted each period to reflect the allocation of net income (loss) and other comprehensive income (loss) attributable to the noncontrolling interest, as shown in the consolidated statements of comprehensive income (loss).

The noncontrolling interest balance is adjusted each period to reflect the allocation of net income and other comprehensive income attributable to the noncontrolling interest, as shown in the consolidated statements of comprehensive income.

The noncontrolling interest balance in the consolidated balance sheets represents the proportional share of the equity of the joint venture entity, which is attributable to the noncontrolling shareholders.

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A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity through a jointly controlled entity.

Joint control exists when strategic, financial, and operating policy decisions relating to the activities require the

unanimous consent of the parties sharing control.

Joint control exists when strategic, financial and operating policy decisions relating to the activities

require the unanimous consent of the parties sharing control.

Joint ventures are accounted for using the equity method and are recognized initially at cost.

Joint ventures are typically included in the Other Affiliated Services, unless the joint venture specifically supports one of the reportable segments.

The Company has investments in a joint venture, Silverline Title & Escrow, LLC (“Silverline”), which operates and manages a title agency that performs, among other functions, core title agent services (for which liabilities arises), including the evaluation of searches to determine the insurability of title, the clearance of underwriting objections, the actual issuance of policies on behalf of insurance companies and, where customary, the issuance of title commitments and the conducting of title searchers.

As of December 31, 2022, Silverline’s operations were wound down in preparation for dissolution in 2023.

In July 2021, the Company entered into a joint venture with Kind Partners, LLC, a subsidiary of Kind Lending, LLC, forming SUCCESS Lending, LLC (“SUCCESS Lending”), a residential mortgage service company.

Neither of these joint venture investments are consolidated and the Company recognizes its share of income and expenses and equity movement in the joint ventures in proportion to their percentage of ownership.

None of these joint venture investments are consolidated and the Company recognizes its share of income and expenses and equity movement in the joint ventures in proportion to their percentage of ownership.

As of December 31, 2022, Silverline and SUCCESS Lending’s operations are not material to the Company’s financial position or results of operations.

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Accounts receivable and allowance for expected credit losses

The majority of the Company’s accounts receivable consists of commissions receivable on real estate property settlements, which are in-substance guaranteed because they represent commission payments on closed transactions.

The remaining accounts receivable is derived from non-commission based technology fees and short-term advances to agents and brokers.

These accounts receivable are typically unsecured.

The allowance for expected credit losses is our estimate based on historical experience.

The Company periodically performs detailed reviews to assess the adequacy of the allowance.

The Company exercises significant judgment in estimating the timing, frequency and severity of losses.

The Company is exposed to credit losses primarily through trade and other financing receivables arising from revenue transactions.

The Company uses the aging schedule method to estimate current expected credit losses (“CECL”) based on days of delinquency, including information about past events and current economic conditions.

The Company’s accounts receivable is separated into the three categories above to evaluate allowance under the CECL impairment model.

The receivables in each category share similar risk characteristics.

The Company analyzes uncollectable accounts for the three categories of receivables.

Based on historical information and future expectations, 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 on 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.

The Company’s accounts receivable is separated into three categories to evaluate an allowance under the CECL impairment model.

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

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

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

As of December 31, 2021 and 2020, receivables from real estate property settlements totaled $ 128,499 and $ 73,838 , respectively.

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

As of December 31, 2020, agent non-commission based fees receivable and short-term advances totaled $ 4,992 , of which the Company recognized allowance for doubtful accounts of $ 1,879 .

During 2022, given the changes in the real estate markets, the Company increased its allowances for expected credit losses, for real estate transactions, to better reflect the collection rates on certain of the aging receivable balances in 2022.

As of December 31, 2022 and 2021, receivables from real estate property settlements totaled $ 79,135 and $ 128,499 , respectively, of which the Company recognized expected credit losses of $ 3,127 and $ 0 as of December 31, 2022 and 2021, respectively.

As of December 31, 2022 and 2021 agent non-commission based fees receivable and short-term advances totaled $ 12,141 and $ 7,188 , respectively of which the Company recognized expected credit losses of $ 887 and $ 2,198 , respectively.

Foreign currency translation

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The Company recognizes right-of-use (“ROU”) assets at the commencement date of the lease.

ROU assets are measured at cost, less accumulated depreciation and impairment losses, and are adjusted concurrent with the remeasurement of corresponding lease liabilities resulting from a change in future lease payments or a change in the assessment of whether any purchase, extension, or termination options will be exercised.

ROU assets are measured at cost, less accumulated depreciation and impairment losses and are adjusted concurrently with the remeasurement of corresponding lease liabilities resulting from a change in future lease payments or a change in the assessment of whether any purchase, extension, or termination options will be exercised.

The cost of ROU assets includes the amount of lease liabilities recognized, initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received, if any.

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At the commencement date of a lease, the Company recognizes a lease liability measured at the present value of the lease payments to be made over the lease term.

Variable lease payments are recognized as expense in the period in which the event or condition that triggers the payment occurs.

Variable lease payments are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the implicit interest rate in the lease is not readily determinable.

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The Company does not capitalize leases with a present value of below its minimum capitalization threshold as it would not materially affect the Company’s financial position or results of operations.

Lease payments on short-term leases and low-value leases are recognized as expense on a straight-line basis over the lease term.

Lease payments on short-term leases and low-value leases are recognized as expenses on a straight-line basis over the lease term.

Refer to Note 10 – Leases for more information.

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The Company evaluates its intangible assets for recoverability and potential impairment, or as events or changes in circumstances indicate the carrying value may be impaired.

The Company recognized no impairment for the year ended December 31, 2021.

The Company recognized and impairment of $ 225 for the year ended December 31, 2020.

The Company recognized no impairment for the year ended December 31, 2022 and 2021.

Software development costs

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Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors.

Estimating the fair value of individual reporting units requires the Company to make assumptions and estimates regarding significant changes or planned changes in the use of the assets, as well as industry and economic conditions.

These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates and other market factors.

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Stock-based compensation

Our stock-based compensation is comprised of agent growth incentive programs, agent equity program, and stock option awards.

Our stock-based compensation is comprised of employee equity incentives, agent growth incentive programs, agent equity program and stock option awards.

Stock-based compensation is more fully disclosed in Note 10 – Stockholders’ Equity.

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Revenue recognition

The Company generates substantially all of its revenue from real estate brokerage services and generates a de minimis portion of its revenues from software subscription and professional services.

The Company generates substantially all of its revenue from North American Realty and International Realty segments and generates a de minimis portion of its revenues from software subscription (Virbela segment) and professional services.

The Company does not have contracts with customers that provide variable consideration.

Real Estate Brokerage Services

North American Realty and International Realty

The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions.

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Professional services revenue is typically recognized over time as the services are rendered, using an efforts-expended (labor hours) input method.

The Company does not currently collect sales and use taxes on fees from agents and brokers and assumes responsibility to pay these costs to the appropriate taxing authorities.

Disaggregated revenue

The Company primarily operates as a real estate brokerage firm.

The vast majority of the Company’s revenue is derived from providing a single service, real estate brokerage services, to purchasers and sellers of homes in the U.S.

The Company primarily operates as a real estate brokerage firm and discloses disaggregated revenue from services to customers across its four reportable segments to provide additional insight into the future recognition of revenue and cash flows.

The vast majority of the Company’s revenue is derived from providing real estate brokerage services, to purchasers and sellers of homes in the U.S., Canada and internationally.

See Note 14 – Segment Information for details regarding segment and geographic information.

Management believes that no disaggregation of revenue from services to customers currently exists that would provide additional insight into the future recognition of revenue and cash flows.

Management provides disaggregation of revenue from its services to customers to provide additional insight into the future recognition of revenue and cash flows.

Revenue share expenses

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These additional commissions are earned on a multitiered basis by FLQA agents and brokers for real estate transactions within their downstream brokerage network.

Commissions to agents and brokers under the revenue sharing plan are included as part of commissions and other agent-related costs in the consolidated statements of comprehensive income (loss).

Commissions to agents and brokers under the revenue sharing plan are included as part of commissions and other agent-related costs in the consolidated statements of comprehensive income.

Advertising and marketing costs

Advertising and marketing costs are generally expensed in the period incurred.

Advertising and marketing expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of comprehensive income (loss).

Advertising and marketing expenses are included in the sales and marketing expense line item on the accompanying consolidated statements of comprehensive income.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred advertising and marketing expenses of $ 15,359 , $ 12,180 and $ 5,223 , respectively.

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(i) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Comprehensive income (loss)

The Company’s only components of comprehensive income (loss) are net income (losses) and foreign currency translation adjustments.

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net income (loss) for the

period by the weighted average number of shares of common stock outstanding plus, if potentially dilutive common shares outstanding during the period.

The Company does not pay dividends or have participating shares outstanding.

Prior period results have been adjusted to reflect the effect of the Stock Split.

Refer to Note 11 – Earnings (Loss) Per Share for details related to the calculations of basic and diluted earnings per share.

Recently adopted accounting principles

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12 – Income Taxes (Topic 740) (“ASU 2019-12”).

ASU 2019-12 removes certain exceptions for investments, intraperiod allocations and interim calculations and adds guidance to reduce complexity in accounting for income taxes.

ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020;

early adoption is permitted.

The adoption of ASU 2019-12 had no material impact on the Company’s condensed consolidated financial statements and related disclosures.

Recently issued accounting pronouncements

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

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 as needed.

No business combinations were executed during the year ended December 31, 2021.

Comprehensive income

The Company’s only components of comprehensive income are net income and foreign currency translation adjustments.

Earnings per share

Basic earnings (loss) per share is computed by dividing the net income for the period by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net income for the period by the weighted average number of shares of common stock outstanding plus, if potentially dilutive common

shares outstanding during the period.

The Company has paid dividends in 2022 and 2021.

The Company does not have participating shares outstanding.

Accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position and results of operations.

The following discussion relates to acquisitions completed during the year ended December 31, 2022.

Neither of these business combinations were deemed material to the Company’s financial condition, results of operations, or cash flows.

Showcase Web Sites, L.L.C.

On July 31, 2020 , the Company acquired the equity ownership interests in Showcase Web Sites, L.L.C.

(“Showcase”) for cash consideration of $ 1.5 million using cash on hand and two-year promissory notes totaling $ 1.5 million (the “Showcase Acquisition”).

Showcase is a technology company focused on agent website and consumer real estate portal technology.

With this acquisition, the Company will be able to strategically focus on creating consumer home-search technology for utilization by independent agents and brokers, as well as continued services offerings to third party clients of Showcase.

The following table outlines the fair value of the acquired assets and liabilities from the Showcase Acquisition:

There were no acquisitions completed during the fiscal year ended December 31, 2021.

None of these business combinations were deemed material to the Company’s financial condition, results of operations, or cash flows.

Zoocasa Realty, Inc.

On July 1, 2022, the Company acquired Zoocasa Realty Inc.

in a stock purchase transaction.

The total consideration paid was $ 17,155 including net cash of $ 9,910 (net of cash acquired of $ 2,772 ), stock issued from treasury of $ 4,554 and the working capital adjustment.

The Zoocasa acquisition has been accounted for using the acquisition method of accounting.

Under the acquisition method of accounting, the Company allocated the total purchase price to the tangible and identifiable intangible assets acquired and assumed liabilities based on their estimated fair values as of the acquisition date, as determined by management.

The excess of the purchase price over the aggregate fair values of the identifiable assets was recorded as goodwill of $ 14,156 , which is not deductible for tax purposes.

Goodwill generated from the acquisition includes an assembled workforce.

Zoocasa is a consumer real estate research portal that offers proprietary home search tools, market insights and a connection to local real estate experts and has been included in the North American Realty segment.

The following table outlines the fair value of the acquired assets and liabilities assumed from the Zoocasa acquisition:

Identifiable assets acquired and goodwill

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Fixed assets, net

Showcase tradename

Zoocasa tradename

Existing technology

Customer relationships

Liabilities assumed

1 unchanged sentence

Total purchase price

SUCCESS Enterprises, LLC

On December 4, 2020 , the Company acquired the equity ownership interests in SUCCESS Enterprises LLC (“SUCCESS”) and its related media properties, including SUCCESS ® print magazine, SUCCESS.com, SUCCESS ® newsletters, podcasts, digital training courses and affiliated social media accounts across platforms (the “SUCCESS Acquisition”).

On November 4, 2020, Sanford Enterprises, LLC (“Sanford Enterprises”), a wholly-owned entity of Mr.

Glenn Sanford, Chief Executive Officer and Chairman of the Board of the Company, purchased all of the membership equity interests in SUCCESS from Success Partners Holding Co, a third party media vendor to the Company, for $ 8.0 million in cash.

On December 4, 2020 , the Company

completed the acquisition of SUCCESS from Sanford Enterprises, LLC for cash consideration of $ 8.0 million using cash on hand.

Refer to Note 15 – Related Party Transactions .

The following table outlines the fair value of the acquired assets and liabilities from the SUCCESS Acquisition:

Identifiable assets acquired and goodwill

Accounts receivable, net

Prepaid & other current assets

Fixed assets, net

Success tradename

Domains and social media

Customer relationships

Total purchase price

FAIR VALUE MEASUREMENT

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December 31,2021

Currency translation impact

Total goodwill

Goodwill was recorded in connection with the acquisitions of Showcase in July 2020 and SUCCESS in December 2020 and represents fair value as of the acquisition dates.

Goodwill was recorded in connection with the acquisitions of Zoocasa in July 2022, Showcase in July 2020 and SUCCESS in December 2020 and represents fair value as of the acquisition dates.

Each acquisition was accounted for using the acquisition method of accounting.

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Operating leases

The Company’s lease portfolio consists of office leases with lease terms ranging from less than one year to six years , with the weighted average lease term being six years .

The Company’s lease portfolio consists of office leases with lease terms ranging from less than one year to seven years , with the weighted average lease term being seven years .

Certain leases provide for increases in future lease payments once the term of the lease has expired, as defined in the lease agreements.

These leases generally also include real estate taxes.

Information as lessee under ASC 842

The Company reassessed all of leases to determine whether any expired or existing contracts were or contained a lease under ASC 842.

Expired or existing contracts previously considered leases under ASC 840 no longer meet the definition of a lease under ASC 842 and therefore, have been excluded from future lease payments.

The Company still maintains these agreements, along with other short-term leases that are not capitalized, and the expenses are recognized in the period incurred.

As of December 31, 2022, maturities of the operating lease liabilities by fiscal year were as follows:

Year Ending December 31,

Period Ending December 31,

2028 and thereafter

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

Rent expense is recorded in general and administrative expense in the consolidated statements of comprehensive income (loss).

Rent expense is recorded in general and administrative expense in the consolidated statements of comprehensive income.

STOCKHOLDERS’ EQUITY

Common Stock – As of December 31, 2021, our amended and restated certificate of incorporation authorized us to issue 900,000,000 shares of common stock with a par value of $ 0.00001 per share.

The following table represents a reconciliation of the Company’s common stock for the periods presented, adjusted to give effect to the Stock Split:

Common Stock – As of December 31, 2022, our restated certificate of incorporation authorized us to issue 900,000,000 shares of common stock with a par value of $ 0.00001 per share.

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

Year Ended December 31,

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Balance, beginning of year

Retirement of common stock

( 3,636,546 )

Shares issued for stock options exercised

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Balance, end of year

The Company’s shareholder approved equity plans described below are administered under the 2013 Stock Option Plan and the 2015 Equity Incentive Plan.

Although a limited number of awards under the plan remain outstanding, no awards have been granted under the 2013 Stock Option Plan since 2015.

The purpose of the equity plans is to retain the services of valued employees, directors, officers, agents, and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.

The Company’s shareholder approved equity programs described below are administered under the 2015 Equity Incentive Plan.

The purpose of the equity plan is to retain the services of valued employees, directors, officers, agents and consultants and to incentivize such persons to make contributions to the Company and motivate excellent performance.

Agent Equity Program

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The total amount of stock compensation attributable to liability classified awards was $ 2,056 , $ 4,977 and $ 3,246 for the years ended December 31, 2022, 2021 and 2020, respectively.

Stock compensation expense related to the AGIP is included in general and administrative expense in the consolidated statements of comprehensive income (loss).

Stock compensation expense related to the AGIP is included in general and administrative expense in the consolidated statements of comprehensive income.

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

Balance, December 31, 2019

Stock grant liability balance at December 31, 2020

Stock grant liability increase year to date

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The cost is expected to be recognized over a weighted average period of 2.08 years.

The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods, adjusted to give effect to the Stock Split:

The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods:

Weighted Average

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( 2,062,212 )

( 1,022,852 )

Balance, December 31,2021

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Stock options are granted to directors, officers, certain employees and consultants with an exercise price equal to the fair market value of common stock on the grant date and the stock options expire 10 years from the date of grant.

These options have time-based restrictions with equal and quarterly graded vesting over a three-year period.

These options have time-based restrictions with equal and periodically graded vesting over a three-year period.

The fair value of the options issued was calculated using a Black-Scholes-Merton option-pricing model with the following assumptions:

Expected term

5 - 6.25 years

Expected volatility

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Dividend yield

The following table illustrates the Company’s stock option activity for the following periods, adjusted to give effect to the Stock Split:

0.53 % - 1.48 %

0.00 % - 0.00 %

The following table illustrates the Company’s stock option activity for the following periods:

Contractual Term

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As of December 31, 2022, unrecognized compensation cost associated with the Company’s outstanding stock options was $ 23,676 , which is expected to be recognized over a weighted-average period of approximately 1.13 years.

Stock Repurchase Plan

In December 2018, the Company’s board of directors (“the Board”) approved a stock repurchase program authorizing the Company to purchase up to $ 25.0 million of its common stock, which was later amended in November 2019 and again in June 2020 increasing the authorized repurchase amount to $ 75.0 million.

Stock Repurchase Program

In December 2018, the Company’s board of directors (“the Board”) approved a stock repurchase program authorizing the Company to purchase up to $ 25.0 million of its common stock, which was later amended in November 2019 increasing the authorized repurchase amount to $ 75.0 million.

In December 2020, the Board approved another amendment to the repurchase plan, increasing the total amount authorized to be purchased from $ 75.0 million to $ 400.0 million.

Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

In May 2022, the Board approved an increase to the total amount of its buyback program from $ 400.0 million to $ 500.0 million.

Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Exchange Act, as amended.

The timing and number of shares repurchased depends upon market conditions.

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

In December 2019, the Board approved the retirement of the Company’s common stock related to repurchases made during 2019.

On December 31, 2019, the Company retired 1,818,273 shares of common stock available in treasury valued at $ 18,433 .

10b 5-1 Repurchase Plan

The Company maintains an internal stock repurchase program with program changes subject to Board consent.

From time to time, the Company adopts written trading plans pursuant to Rule 10b5-1 of the Exchange Act to conduct repurchases on the open market.

On January 10, 2022, the Company and Stephens Inc.

entered into a form of Issuer Repurchase Plan (“Issuer Repurchase Plan”) which authorized Stephens to repurchase up to $ 10.0 million of its common stock per month.

On May 3, 2022, the Board approved a form of first amendment to the Issuer Repurchase Plan to increase monthly repurchases from $ 10.0 million of its common stock per month up to $ 20.0 million, which amendment was signed May 6, 2022.

On September 27, 2022, the Board approved and the Company entered into, a form of second amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $ 20.0 million of its common stock per month to $ 13.3 million, in anticipation of volume decreases in connection with the contraction in the real estate market.

On December 27, 2022, the Board approved and the Company entered into, a form of third amendment to the Issuer Repurchase Plan, to decrease the monthly repurchases from $ 13.3 million of its common stock per month to $ 10.0 million, in connection with ongoing contractions in the real estate market.

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

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

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

These shares are considered issued but not outstanding.

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Repurchases of common stock

Retirement of treasury stock

( 1,818,273 )

Issuance of treasury stock

Balance, end of year

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed based on net income (loss) attributable to eXp shareholders divided by the basic weighted-average shares outstanding during the period.

EARNINGS PER SHARE

Basic earnings per share is computed based on net income attributable to eXp shareholders divided by the basic weighted-average shares outstanding during the period.

Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period.

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

The 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 was paid 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, adjusted to give effect to the Stock Split:

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

Year Ended December 31,

Net income (loss) attributable to common stock

Net income attributable to common stock

Weighted average shares - basic

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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 years ended December 31, 2021, 2020 and 2019, total outstanding shares of common stock excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive were 102,880 , 283,842 , and nil , respectively.

The following table provides the components of income (loss) before provision for income taxes by domestic and foreign subsidiaries:

For the years ended December 31, 2022, 2021 and 2020, total outstanding shares of common stock excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive were 1,000,421 , 102,880 and 283,842 , respectively.

The following table provides the components of income before provision for income taxes by domestic and foreign subsidiaries:

Year Ended December 31,

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Net operating loss carryforward

Accruals and Reserves

Intangibles & Research and Experimental Costs

Research and Development Credit

Temporary differences

Lease liability

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Right of use lease asset

Unrealized FX Gain/Loss

Valuation allowance

Net deferred tax assets

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The weight given to the evidence is commensurate with the extent to which it can be objectively verified.

As of December 31, 2021, based on its assessment of the realizability of its net deferred tax assets, we reached the conclusion that our US federal and State net deferred tax assets more-likely-than-not will be fully realized and therefore we recorded a valuation allowance release of $ 22.1 million resulting in the recognition of the deferred tax assets and income tax benefit for the period.

The company has provided a valuation allowance as of December 31, 2021 and 2020 of $ 0 and $ 22.1 million, respectively.

As December 31, 2021, the Company had federal, state and foreign net operating losses of approximately $ 153.6 million, $ 79.1 million, and $ 7.7 million, respectively.

As of December 31, 2022, based on its assessment of the realizability of its net deferred tax assets, we reached the conclusion that our US federal, US State and foreign net deferred tax assets more-likely-than-not will be fully realized and therefore no valuation allowance was recorded.

As of December 31, 2022, the Company had federal, state and foreign net operating losses of approximately $ 158.2 million, $ 85.3 million and $ 9.9 million, respectively.

Out of the federal net operating loss, approximately $ 8.7 million will carry forward for 20 years and can offset 100% of future taxable income;

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As of December 31, 2022, the Company conducted an IRC Section 382 analysis with respect to its net operating loss carryforward and determined there was an immaterial limitation.

As of December 31, 2022, the Company had federal and California Research and Development credits of approximately $ 4.6 million and $ 0.6 million, respectively.

Federal credits can be carried forward for 20 years and will begin expiring in 2039.

The California credit can be carried forward indefinitely.

Undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested and accordingly, no provision for applicable income taxes has been provided thereon.

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Gross increase for tax positions of prior years

Gross decrease for federal tax rate change for tax positions of prior years

Gross increase for tax positions of current year

Lapse of statute of limitations

Unrecognized tax benefits - end of year

The unrecognized tax benefits relate primarily Federal and California research and development credit in 2021 and to state taxes in 2020.

As of December 31, 2021, the total amount of unrecognized tax benefits that would affect the Company effective tax rate, if

recognized, is $ 0 .

The unrecognized tax benefits relate to Federal and California research and development credits in 2022 and 2021 and to state taxes in 2020.

As of December 31, 2022, the total amount of unrecognized tax benefits that would affect the Company effective tax rate, if recognized, is $ 0 .

The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense.

As of December 31, 2022, the Company accrued interest or penalties related to uncertain tax positions in the amount of $ 0 .

The Company is currently under federal examination for 2019 and no state tax examinations in progress nor has it had any state tax examinations since its inception.

Because the Company has net operating loss carryforwards, there are open statues of limitations in which federal taxing authorities may examine the Company's tax returns for all years from December 31, 2011 through the current period.

State Taxing authorities may examine the Company’s tax returns for all years from December 31, 2015 through the current period and foreign tax authorities may examine the Company’s tax returns for all years from December 31, 2019 through the current period.

The Company does not expect any of the uncertain tax positions to reverse during the next 12 months.

During 2022, the Company completed its federal examination for 2019 with no change to the original filing.

There are no state tax examinations in progress nor has it had any state tax examinations since its inception.

Because the Company has net operating loss carryforwards, there are open statutes of limitations in which federal taxing authorities may examine the Company's tax returns for all years from December 31, 2011 through the current period.

US State taxing authorities may examine the Company's tax return for all years from December 31, 2014 through the current period and foreign tax authorities may examine the Company’s tax return for all years from December 31, 2019 through the current period.

COMMITMENTS AND CONTINGENCIES

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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 $ 10,000,000 to cover current estimated settlement fees and costs.

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

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.

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.

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SEGMENT INFORMATION

Historically, management has not made operating decisions and assessed performance based on geographic locations.

Rather, the chief operating decision maker makes operating decisions and assesses performance based on the products and services of the identified operating segments.

While management does consider real estate and brokerage services, the acquired technology and affiliate and media services provided to be identified operating segments, the profits and losses and assets of the acquired technology and affiliated series are not material.

Operating Segments

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

The real estate brokerage business represented 99.3 % and 99.6 % of the total revenue of the Company for the years ended December 31, 2021 and 2020, respectively.

The real estate brokerage business represents 99.0 % and 98.9 % of the total assets of the Company as of December 31, 2021 and 2020, respectively.

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

Additionally, the Company offers professional services for implementation and consulting services.

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.

In 2021, the Company completed the Showcase and the SUCCESS acquisitions.

These are not material to the Company’s total revenue, total net income (loss), or total assets as of December 31, 2021.

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

In prior years, management made operating decisions and assessed performance based on product lines, with three operating segments and one single reportable segment.

In December of 2022, as a result of the growth in international operations and changes in the North American markets, the Company revised the presentation of segment information to align with changes to how the Chief Operating Decision Maker (“CODM”), Glenn Sanford, Chief Executive Officer of eXp World Holdings and eXp Realty, manages the business and allocates resources as four operating segments.

The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information and is (iii) regularly reviewed by the CODM.

Once operating segments are identified, the Company performs a quantitative analysis of the current and historic revenues and profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics.

In December 2022, we determined that we have the four operating segments and four reportable segments.

The CODM uses revenues and Adjusted Segment EBITDA as key metrics to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions.

Adjusted Segment EBITDA for the reportable segments is defined as operating profit (loss) plus depreciation and amortization and stock-based compensation expenses.

The Company’s four reportable segments as follows:

● North American Realty:

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

● International Realty:

includes real estate brokerage operations in all other international locations.

includes Virbela enterprise metaverse technology and the support services offered by eXp World Technologies.

● Other Affiliated Services which includes our SUCCESS ® Magazine and other smaller ventures.

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

All segments follow the same basis of presentation and accounting policies as those described throughout the Notes to the Audited Consolidated Financial Statements included herein.

The following table provides information about the Company’s reportable segments and a reconciliation of the total segment Revenues to consolidated Revenues and Adjusted Segment

EBITDA to the consolidated operating profit (in thousands).

Financial information for the comparable prior periods presented have been revised to conform with the current year presentation.

Year Ended December 31,

North American Realty

International Realty

Other Affiliated Services

Revenues reconciliation:

Segment eliminations

Consolidated revenues

Year Ended December 31,

North American Realty

International Realty

Other Affiliated Services

Corporate expenses and other

Consolidated Adjusted EBITDA

Operating Profit Reconciliation:

Depreciation and amortization expense

Stock compensation expense

Stock option expense

Consolidated operating profit

Geographical information

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 United Kingdom, Australia, South Africa, India, Mexico, Portugal, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama and Germany.

The Company continues to expand real estate brokerage services internationally.

For the years ended December 31, 2022, 2021 and 2020 approximately 9 %, 8 % and 5 % , respectively, of the Company’s total revenue was generated outside of the U.S.

Assets held outside of the U.S.

were 8 % and 7 % as of December 31, 2021 and 2020.

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

RELATED PARTY TRANSACTIONS

On November 4, 2020, Sanford Enterprises , a wholly-owned entity of Mr.

Glenn Sanford, Chief Executive Officer and Chairman of the Board of the Company, purchased all of the membership equity interests in SUCCESS from Success Partners Holding Co, an unaffiliated third party, for cash consideration of $ 8.0 million.

In order to facilitate the SUCCESS Acquisition, the Company purchased all equity interests of SUCCESS from Sanford Enterprises for equal cash consideration of $ 8.0 million on December 4, 2020 .

Prior to the acquisition, the Company was the largest customer of SUCCESS.

Long-lived assets held outside of the U.S.

were 6 % and 8 % as of December 31, 2022 and 2021, respectively.

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

DEFINED CONTRIBUTION SAVINGS PLAN

During 2018, the Company established a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund.

The Company offers a defined contribution savings plan to provide eligible employees with a retirement benefit that permits eligible employees the opportunity to actively participate in the process of building a personal retirement fund.

The Company sponsors the defined contribution savings plan.

In 2019, the Company began matching a portion of contributions made by participating employees.

The Company matches a portion of contributions made by participating employees.

For the years ended December 31, 2022, 2021 and 2020, the Company's costs for contributions to this plan were $ 4,720 , $ 3,196 and $ 1,189 , respectively.

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Quarterly Cash Dividend

On February 17, 2022 , our Board of Directors approved a cash dividend of $ 0.04 per common share to be paid on March 31, 2022 to shareholders of record on March 11, 2022 .The ex-dividend date is March 8, 2022.

On February 9, 2023 , our Board of Directors approved a cash dividend of $ 0.045 per common share to be paid on March 31, 2023 to shareholders of record on March 13, 2023 .The ex-dividend date is expected to be March 10, 2023.

The dividend will be paid in cash.

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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 8. Financial Statements and Supplementary Data