AGNT, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 41 Consolidated Balance Sheets 44 Consolidated Statements of Comprehensive (Loss) Income 45 Consolidated Statements of Stockholders’ Equity 46 Consolidated Statements of Cash Flows 47 Notes to Consolidated Financial Statements 48 ​ ​ ​ 40 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of eXp World Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of eXp World Holdings, Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of comprehensive (loss) income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Commissions and Other Agent-Related Costs – Revenue share expenses – Refer to Note 2 to the financial statements Critical Audit Matter Description 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 (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, 2023, the Company incurred $4.0 billion of commissions and other agent-related costs, which includes commissions paid to agents and brokers under the revenue sharing plan. We identified the revenue sharing plan as a critical audit matter because the plan has a complex multi-tiered compensation structure involving highly automated system calculations to determine the commissions paid to agents and brokers. This required an increased extent of audit effort to audit and evaluate the accuracy of commissions paid under the revenue share plan. 41 How the Critical Audit Matter Was Addressed in the Audit 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 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 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 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. Commitments and Contingencies — Refer to Note 13 to the financial statements. Critical Audit Matter Description The Company is among several defendants in numerous putative class action lawsuits alleging that the Company participated in a system that resulted in sellers of residential property paying inflated buyer broker commissions in violation of U.S. federal and state antitrust laws, as well as a case brought in Canada (“antitrust litigation”). The Company reviews loss contingencies to determine the likelihood of loss and to assess whether a reasonable estimate of the loss or range of loss can be made. The Company recognizes expenses for legal claims when a loss is considered probable and reasonably estimable. If it is reasonably possible that a loss may have been incurred and the effect on the financial statements could be material, the Company discloses an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made within the notes to the financial statements. The Company has determined that it is reasonably possible that a loss associated with the antitrust litigation has occurred; however, the loss or range of loss is not reasonably estimable and no provision for loss was recorded as of December 31, 2023. We identified the antitrust litigation as a critical audit matter because of the challenges in auditing management's judgments applied in determining the likelihood of loss related to the resolution of such litigation, as well as the judgment in determining whether potential loss associated with the antitrust litigation is reasonably estimable. Specifically, auditing management's determination of whether any contingent loss arising from the antitrust litigation is probable, reasonably possible, or remote, and the related disclosures, is subjective and requires significant judgment due to the uncertainties involved, together with the novelty and complexity of the issues. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures performed related to antitrust litigation and claims included the following, among others: ● We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s evaluation of the antitrust litigation, including controls related to the Company's assessment of the accounting and related disclosures based on the most recent facts and circumstances. ● We inquired of the Company's internal and external legal counsel, as well as executives and other members of management, to understand the basis for the Company's accounting conclusions related to the antitrust litigation. ● We requested and received written responses from internal and external legal counsel. ● We evaluated management's analysis of antitrust litigation. ● We examined Board of Directors meeting minutes, including relevant sub-committee meeting minutes, and compared to written responses received from internal and external counsel. 42 ● We made inquiries of management and the audit committee to evaluate and corroborate our understanding obtained through inquiries of internal and external legal counsel. We also performed public domain searches for evidence contrary to management's analysis. ● We compared the Company's assessment of this matter to relevant history of similar legal contingencies that have been settled or otherwise resolved to evaluate the consistency of the Company's assessment of antitrust litigation. ● We consulted with our accounting experts to assist in our evaluation of the case facts and the Company's related accounting treatment for the antitrust litigation. ● We obtained written representations from executives of the Company. ● We obtained and reviewed the class action complaints, relevant court rulings, and terms related to other settlements of similar or related antitrust litigation. ● We evaluated the Company's financial statement disclosure for consistency with the audit evidence obtained on the antitrust litigation matter. ● We evaluated events subsequent to December 31, 2023, that might impact our evaluation of the antitrust litigation, including any related accrual or disclosure. ​ /s/ Deloitte & Touche LLP ​ San Francisco, California February 22, 2024 We have served as the Company's auditor since 2019. ​ ​ ​ ​ ​ ​ ​ ​ ​ 43 EXP WORLD HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ASSETS ​ ​ ​ ​ CURRENT ASSETS ​ ​ ​ ​ Cash and cash equivalents ​ $ 126,864 ​ $ 121,594 Restricted cash ​ 44,020 ​ 37,789 Accounts receivable, net of allowance for credit losses of $ 2,303 and $ 4,014 , respectively ​ 85,969 ​ 87,262 Prepaids and other assets ​ 9,622 ​ 8,468 TOTAL CURRENT ASSETS ​ 266,475 ​ 255,113 Property, plant, and equipment, net ​ 12,978 ​ 18,151 Operating lease right-of-use assets ​ 10 ​ 2,127 Other noncurrent assets ​ 7,400 ​ 1,703 Intangible assets, net ​ 10,481 ​ 8,700 Deferred tax assets ​ 71,342 ​ 68,676 Goodwill ​ 16,982 ​ 27,212 TOTAL ASSETS ​ $ 385,668 ​ $ 381,682 ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ ​ ​ ​ CURRENT LIABILITIES ​ ​ ​ ​ Accounts payable ​ $ 8,898 ​ $ 10,391 Customer deposits ​ 44,550 ​ 37,789 Accrued expenses ​ 88,182 ​ 78,944 Current portion of lease obligation - operating lease ​ 10 ​ 175 TOTAL CURRENT LIABILITIES ​ 141,640 ​ 127,299 Long-term payable ​ 20 ​ 4,697 Long-term lease obligation - operating lease, net of current portion ​ - ​ 694 TOTAL LIABILITIES ​ 141,660 ​ 132,690 ​ ​ ​ ​ ​ EQUITY ​ ​ ​ ​ Common Stock, $ 0.00001 par value 900,000,000 shares authorized; 183,606,708 issued and 154,669,037 outstanding at December 31, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022 ​ 2 ​ 2 Additional paid-in capital ​ 804,833 ​ 611,872 Treasury stock, at cost: 28,937,671 and 18,816,791 shares held, respectively ​ ( 545,559 ) ​ ( 385,010 ) Accumulated earnings ​ ( 16,769 ) ​ 20,723 Accumulated other comprehensive income ​ 332 ​ 236 Total eXp World Holdings, Inc. stockholders' equity ​ 242,839 ​ 247,823 Equity attributable to noncontrolling interest ​ 1,169 ​ 1,169 TOTAL EQUITY ​ 244,008 ​ 248,992 TOTAL LIABILITIES AND EQUITY ​ $ 385,668 ​ $ 381,682 ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 44 EXP WORLD HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (In thousands, except share amounts and per share data) ​ ​ ​ ​ ​ ​ ​ ​ 　 ​ ​ ​ Year Ended December 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 Revenues ​ ​ $ 4,281,105 ​ $ 4,598,161 ​ $ 3,771,170 Operating expenses ​ ​ ​ ​ ​ ​ ​ Commissions and other agent-related costs ​ ​ 3,957,054 ​ 4,231,262 ​ 3,475,139 General and administrative expenses ​ ​ 319,153 ​ 346,132 ​ 249,699 Sales and marketing expenses ​ ​ 12,156 ​ 15,359 ​ 12,180 Impairment expense ​ ​ 9,203 ​ - ​ - Total operating expenses ​ ​ 4,297,566 ​ 4,592,753 ​ 3,737,018 Operating (loss) income ​ ​ ( 16,461 ) ​ 5,408 ​ 34,152 Other (income) expense ​ ​ ​ ​ ​ ​ ​ Other (income) expense, net ​ ​ ( 4,414 ) ​ ( 804 ) ​ 292 Equity in losses of unconsolidated affiliates ​ ​ 1,388 ​ 1,624 ​ 188 Total other (income) expense, net ​ ​ ( 3,026 ) ​ 820 ​ 480 Income (loss) before income tax expense ​ ​ ( 13,435 ) ​ 4,588 ​ 33,672 Income tax (benefit) expense ​ ​ ( 4,462 ) ​ ( 10,836 ) ​ ( 47,487 ) Net (loss) income ​ ​ ( 8,973 ) ​ 15,424 ​ 81,159 Net (loss) income attributable to noncontrolling interest ​ ​ - ​ 18 ​ 61 Net (loss) income attributable to eXp World Holdings, Inc. ​ ​ ($ 8,973 ) ​ $ 15,442 ​ $ 81,220 ​ ​ ​ ​ ​ ​ ​ ​ (Loss) earnings per share ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ ($ 0.06 ) ​ $ 0.10 ​ $ 0.56 Diluted ​ ​ ($ 0.06 ) ​ $ 0.10 ​ $ 0.51 Weighted average shares outstanding ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 153,232,129 ​ 151,036,110 ​ 146,170,871 Diluted ​ ​ 153,232,129 ​ 156,220,165 ​ 157,729,374 Comprehensive (loss) income: ​ ​ ​ ​ ​ ​ ​ Net (loss) income ​ ​ ($ 8,973 ) ​ $ 15,424 ​ $ 81,159 Comprehensive (loss) income attributable to noncontrolling interests ​ ​ - ​ 18 ​ 61 Net (loss) income attributable to eXp World Holdings, Inc. ​ ​ ( 8,973 ) ​ 15,442 ​ 81,220 Other comprehensive (loss) income: ​ ​ ​ ​ ​ ​ ​ Foreign currency translation gain (loss), net of tax ​ ​ 96 ​ 48 ​ ( 59 ) Comprehensive (loss) income attributable to eXp World Holdings, Inc. ​ ​ ($ 8,877 ) ​ $ 15,490 ​ $ 81,161 ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 45 EXP WORLD HOLDINGS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ 　 ​ ​ ​ Year Ended December 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 Common stock: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ $ 2 ​ $ 1 ​ $ 1 Agent equity stock compensation ​ ​ - ​ 1 ​ - Balance, end of period ​ ​ 2 ​ 2 ​ 1 Treasury stock: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ ( 385,010 ) ​ ( 210,009 ) ​ ( 37,994 ) Repurchases of common stock ​ ​ ( 160,549 ) ​ ( 179,473 ) ​ ( 172,015 ) Issuance of treasury stock, for acquisition ​ ​ - ​ 4,472 ​ - Balance, end of period ​ ​ ( 545,559 ) ​ ( 385,010 ) ​ ( 210,009 ) Additional paid-in capital: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ 611,872 ​ 401,479 ​ 218,492 Shares issued for stock options exercised ​ ​ 4,980 ​ 612 ​ 3,620 Agent growth incentive stock compensation ​ ​ 41,995 ​ 31,235 ​ 21,828 Agent equity stock compensation ​ ​ 135,226 ​ 164,104 ​ 144,437 Stock option compensation ​ ​ 10,760 ​ 14,442 ​ 13,102 Balance, end of period ​ ​ 804,833 ​ 611,872 ​ 401,479 Accumulated earnings: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ 20,723 ​ 30,510 ​ ( 39,162 ) Net (loss) income attributable to eXp World Holdings, Inc. ​ ​ ( 8,973 ) ​ 15,442 ​ 81,220 Dividends declared and paid ( $ 0.05 , $ 0.045 and $ 0.04 per share of common stock beginning with Q3 2023, Q3 2022 and Q4 2021, respectively) ​ ​ ( 28,519 ) ​ ( 25,229 ) ​ ( 11,548 ) Balance, end of period ​ ​ ( 16,769 ) ​ 20,723 ​ 30,510 Accumulated other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ 236 ​ 188 ​ 247 Foreign currency translation gain (loss) ​ ​ 96 ​ 48 ​ ( 59 ) Balance, end of period ​ ​ 332 ​ 236 ​ 188 Noncontrolling interest: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ ​ 1,169 ​ 1,364 ​ 1,003 Net loss ​ ​ - ​ ( 18 ) ​ ( 61 ) Stock compensation ​ ​ - ​ - ​ 403 Transactions with noncontrolling interests ​ ​ - ​ ( 177 ) ​ 19 Balance, end of period ​ ​ 1,169 ​ 1,169 ​ 1,364 Total equity ​ ​ $ 244,008 ​ $ 248,992 ​ $ 223,533 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ 46 EXP WORLD HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 OPERATING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ Net (loss) income ​ ​ ($ 8,973 ) ​ $ 15,424 ​ $ 81,159 Reconciliation of net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation expense ​ ​ 8,352 ​ 7,934 ​ 4,974 Amortization expense - intangible assets ​ ​ 2,540 ​ 1,904 ​ 1,274 Amortization expense - long-term payable ​ ​ - ​ - ​ 94 Impairment expense ​ ​ 9,203 ​ - ​ - Loss on disposition of business ​ ​ 472 ​ 361 ​ - Allowance for credit losses on receivables/bad debt on receivables ​ ​ ( 1,711 ) ​ 1,816 ​ 319 Equity in loss of unconsolidated affiliates ​ ​ 1,388 ​ 1,624 ​ 188 Agent growth incentive stock compensation expense ​ ​ 43,178 ​ 30,861 ​ 24,493 Stock option compensation ​ ​ 10,736 ​ 14,442 ​ 13,102 Agent equity stock compensation expense ​ ​ 135,226 ​ 164,104 ​ 144,437 Deferred income taxes, net ​ ​ ( 2,666 ) ​ ( 15,848 ) ​ ( 52,827 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 3,474 ​ 44,935 ​ ( 56,857 ) Prepaids and other assets ​ ​ ( 1,263 ) ​ 1,652 ​ ( 2,623 ) Customer deposits ​ ​ 6,761 ​ ( 30,998 ) ​ 39,892 Accounts payable ​ ​ ( 1,491 ) ​ 2,432 ​ 3,173 Accrued expenses ​ ​ 8,424 ​ ( 32,239 ) ​ 46,673 Long term payable ​ ​ ( 4,677 ) ​ 1,983 ​ 828 Other operating activities ​ ​ 158 ​ 148 ​ ( 1,407 ) NET CASH PROVIDED BY OPERATING ACTIVITIES ​ ​ 209,131 ​ 210,535 ​ 246,892 INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ Purchases of property, plant, equipment ​ ​ ( 5,363 ) ​ ( 12,051 ) ​ ( 13,423 ) Proceeds from sale of business ​ ​ 330 ​ - ​ - Acquisition of business, net of cash acquired ​ ​ - ​ ( 9,910 ) ​ ( 2,500 ) Investments in unconsolidated affiliates ​ ​ ( 5,876 ) ​ ( 500 ) ​ ( 3,000 ) Capitalized software development costs in intangible assets ​ ​ ( 2,594 ) ​ - ​ - NET CASH USED IN INVESTING ACTIVITIES ​ ​ ( 13,503 ) ​ ( 22,461 ) ​ ( 18,923 ) FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ Repurchase of common stock ​ ​ ( 160,550 ) ​ ( 179,473 ) ​ ( 172,015 ) Proceeds from exercise of options ​ ​ 4,980 ​ 612 ​ 3,620 Transactions with noncontrolling interests ​ ​ - ​ ( 424 ) ​ 19 Dividends declared and paid ​ ​ ( 28,519 ) ​ ( 25,229 ) ​ ( 11,548 ) NET CASH USED IN FINANCING ACTIVITIES ​ ​ ( 184,089 ) ​ ( 204,514 ) ​ ( 179,924 ) Effect of changes in exchange rates on cash, cash equivalents and restricted cash ​ ​ ( 38 ) ​ ( 87 ) ​ ( 59 ) Net change in cash, cash equivalents and restricted cash ​ ​ 11,501 ​ ( 16,527 ) ​ 47,986 Cash, cash equivalents and restricted cash, beginning balance ​ ​ 159,383 ​ 175,910 ​ 127,924 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE ​ ​ $ 170,884 ​ $ 159,383 ​ $ 175,910 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: ​ ​ ​ ​ ​ ​ ​ Cash paid for income taxes ​ ​ $ 2,731 ​ $ 3,406 ​ $ 1,331 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Termination of lease obligation - operating lease ​ ​ 859 ​ - ​ 375 Issuance of treasury stock, for acquisition ​ ​ - ​ 4,554 ​ - Lease liabilities arising from obtaining right-of-use assets ​ ​ - ​ - ​ 2,370 Contingent consideration for disposition of business ​ ​ 1,209 ​ - ​ - Property, plant and equipment increase due to transfer of right-of-use lease asset ​ ​ 1,100 ​ - ​ - Property, plant and equipment purchases in accounts payable ​ ​ 63 ​ 63 ​ 174 47 The accompanying notes are an integral part of these consolidated financial statements. ​ eXp World Holdings, Inc. Notes to Consolidated Financial Statements (Amounts in thousands, except share and per share amounts, unless otherwise noted) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION eXp World Holdings, Inc. (collectively with its subsidiaries, the “Company” or “eXp”) was incorporated in the State of Delaware on July 30, 2008. 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 U.K., Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, the Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is December 31. We report operating results through four reportable segments: North American Realty, International Realty, Virbela and Other Affiliated Services, as further discussed in Note 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report. ​ 2. 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 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 or cost method of accounting for investments. Entities in which the Company has less than a 20% investment and where the Company does not exercise significant influence are accounted for under the cost method. Intercompany transactions and balances are eliminated upon consolidation. Variable interest entities (“VIEs”) 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 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. Joint ventures 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 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 several joint venture investments. As of December 31, 2023, the operations of these joint ventures are not material to the Company’s financial position or results of operations. Use of estimates 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 bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company 48 may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Reclassifications When necessary, the Company will reclassify certain amounts in prior period financial statements to conform to the current period’s presentation. In 2023, the Company reclassified certain amounts in the reconciliation of the provision for income taxes and deferred tax assets in Note 12 – Income Taxes . These reclassifications had no effect on the provision for tax or deferred tax assets that were previously reported. No other reclassifications occurred during the current period. Cash and cash equivalents Cash and cash equivalents include cash on hand, money market instruments and all other highly liquid investments purchased with an original or remaining maturity of three months or less at the date of acquisition. Restricted cash Restricted cash consists of cash held in escrow by the Company’s brokers and agents on behalf of real estate buyers. The Company recognizes a corresponding customer deposit liability until the funds are released. Once the cash is transferred from escrow, the Company reduces the respective customers’ deposit liability. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet that sum to the total of the same amounts shown on the statement of cash flows. ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Cash and cash equivalents ​ $ 126,864 ​ $ 121,594 Restricted cash ​ 44,020 ​ 37,789 Total cash, cash equivalents, and restricted cash, ending balance ​ $ 170,884 ​ $ 159,383 ​ Fair value measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: ​ Input Level Definitions Level 1 ​ Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). Level 2 ​ Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or prices that vary substantially). Level 3 ​ Inputs are unobservable inputs that reflect the entity's own assumptions in pricing the asset or liability (used when little or no market data is available). The Company holds funds in a money market account. The Company values its money market funds at fair value on a recurring basis. Accounts receivable and allowance for expected credit 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 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. In 2023, the Company has decreased its allowances for expected credit losses, for real estate transactions, due to a decrease of the aging receivable balances, as a result of improvement in accounts receivable management. ​ 49 As of December 31, 2023 and 2022, receivables from real estate property settlements totaled $ 81,004 and $ 79,135 , respectively, of which the Company recognized expected credit losses of $- and $ 3,127 as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022 agent non-commission based fees receivable and short-term advances totaled $ 7,268 and $ 12,141 , respectively of which the Company recognized expected credit losses of $ 2,303 and $ 887 , respectively. ​ Foreign currency translation The Company’s functional and reporting currency is the United States dollar and the functional currency of the Company’s foreign subsidiaries is the local currency of their country of domicile. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the consolidated statements of operations in other (income) expense, net. The Company does not employ a hedging strategy to manage the impact of foreign currency fluctuations. Fixed assets Fixed assets are stated at historical cost and are depreciated on the straight-line method over the estimated useful lives. Useful lives are: Computer hardware and software: 3 to 5 years Furniture, fixtures and equipment: 5 to 7 years Maintenance and repairs are expensed as incurred. Expenditures that substantially increase an asset’s useful life or improve an asset’s functionality are capitalized. The Company capitalizes the costs associated with developing its internal-use cloud-based residential real-estate transaction system. Capitalized costs are primarily related to costs incurred in relation to internally created software during the application development stage including costs for upgrades and enhancements that result in additional functionality. Leases Leases are agreements, or terms within agreements, that convey the right to control the use of and receive substantially all of the economic benefit from an identified asset for a period of time in exchange for consideration. The Company currently only possesses office space leases . Right-of-use assets 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 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. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the ROU assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Lease liabilities 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 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. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced by the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, or a change in the assessment to purchase the underlying asset. Short-term leases and leases of low-value assets The Company applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the commencement date and which do not contain a purchase option. 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 expenses on a straight-line basis over the lease term. 50 Goodwill Goodwill represents the excess of the consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business combination. The Company evaluates goodwill for impairment on an annual basis in the fiscal fourth quarter or on an interim basis if an event occurs or circumstances change that would more likely than not indicate that the fair value of the reporting unit is less than its carrying amount. Generally, this evaluation begins with a qualitative assessment to determine if the fair value of the reporting unit is more likely than not less than its carrying value. The test for impairment requires management to make judgments relating to future cash flows, growth rates and economic and market conditions. In addition to the annual impairment evaluation, the Company evaluates at least quarterly whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is more likely than not an impairment loss has occurred. The Company recognized goodwill impairment of $ 8,248 for the year ended December 31, 2023 related to Virbela. The Company did no t recognize any impairment of goodwill for the years ended December 31, 2022 and 2021. Intangible assets The Company’s intangible assets are finite lived and consist primarily of trade name, technology and customer relationships. Each intangible asset is amortized on a straight-line basis over its useful life, ranging from 3 to 10 years . 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 impairment related to the trade name and customer relationships of $ 955 for the year ended December 31, 2023, related to Virbela. The Company did no t recognize any impairment of intangible assets for the years ended December 31, 2022 and 2021. Software development costs The Company capitalizes software development costs related to products to be sold, leased, or marketed to external users and internal-use software. Business combinations The Company accounts for business combinations using the acquisition method of accounting, under which the consideration for the acquisition is allocated to the assets acquired and liabilities assumed. The Company recognizes identifiable assets acquired and liabilities assumed at the acquisition date fair values as determined by management as of the acquisition date. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates and other market factors. If current expectations of future growth rates are not met or market factors outside of the Company’s control change significantly, then goodwill or intangible assets may become impaired. Additionally, as goodwill and intangible assets associated with recently acquired businesses are recorded on the balance sheet at their estimated acquisition date fair values, those amounts are more susceptible to impairment risk if business operating results or macroeconomic conditions deteriorate. Acquisition-related costs, such as due diligence, legal and accounting fees, are expensed as incurred and not considered in determining the fair value of the acquired assets. Impairment of long-lived assets The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is less than its carrying value. When assets are considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Stock-based compensation 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 9 – Stockholders’ Equity to the consolidated financial statements included elsewhere in this Annual Report. The Company accounts for stock-based compensation granted to employees and non-employees using a fair value method. Stock-based compensation awards are measured at the grant date fair value and are recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of forfeitures. The Company reduces stock-based compensation for forfeitures when they occur. Recognition of compensation cost for an award with a performance condition is based on the probable outcome of that performance condition being met. 51 Revenue recognition 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. 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. The Company is contractually obligated to provide services for the fulfillment of transfers of residential real estate between buyers and sellers. The Company provides these services itself and controls the services necessary to legally transfer residential real estate. Correspondingly, the Company is defined as the principal. The Company, as principal, satisfies its obligation upon the closing of a residential real estate transaction. As principal and upon satisfaction of the performance obligation, the Company recognizes revenue in the gross amount of consideration to which the Company expects to be entitled. The Company estimates and accrues revenue to which it is entitled to for closed transactions but has yet to receive all the necessary closing documents. The accrual for estimated revenue was immaterial for the years ended December 31, 2023 and 2022. Revenue is derived from assisting homebuyers and sellers in listing, marketing, selling and finding residential real estate. Commissions earned on real estate transactions are recognized at the completion of a residential real estate transaction once the Company has satisfied the performance obligation. Agent-related fees charged by the Company are recorded as a reduction to commissions and other agent-related costs. Software Subscription and Professional Services Subscription revenue is derived from fees from customers to access the Company’s virtual reality software platform. The terms of subscriptions do not provide customers the right to take possession of the software. Subscription revenue is generally recognized ratably over the contract term. Professional services revenue is derived from implementation and consulting services. Professional services revenue is typically recognized over time as the services are rendered, using an efforts-expended (labor hours) input method. Disaggregated revenue 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 10 – Segment Information to the consolidated financial statements included elsewhere in this Annual Report for details regarding segment and geographic information. Management provides disaggregation of revenue from its services to customers to provide additional insight into the future recognition of revenue and cash flows. Sustainable Revenue Share Plan expenses The Company’s costs incurred under the Revenue Share Plan are included as 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. For the years ended December 31, 2023, 2022 and 2021, the Company incurred advertising and marketing expenses of $ 12,156 , $ 15,359 and $ 12,180 , respectively. 52 Income taxes The Company records income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the financial statement and income tax basis of existing assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. The Company recognizes the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby: (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 (loss) income The Company’s only components of comprehensive (loss) income are net (loss) income and foreign currency translation adjustments. Earnings per share Basic earnings (loss) per share is computed by dividing the net (loss) 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 (loss) 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 2023, 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. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 – Segment Reporting (Topic 280) (“ASU 2023-07”). ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The amendments in this update require, among other things, that a public company disclose on an annual and interim basis significant segment expense, as well as other segment expenses, that are regularly provided to the CODM. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, early adoption is permitted. The Company is currently evaluating the effect the amendments in ASU 2023-07 will have on its segment disclosures. In December 2023, the FASB issued ASU 2023-09 – Income Taxes (Topic 740) (“ASU 2023-09”). ASU 2023-09 improves reporting for income taxes, primarily by requiring disclosure of specific categories in the tax rate reconciliation and providing additional annual information for reconciling items that meet a quantitative threshold. The amendments in ASU 2023-09 also require additional annual information regarding income taxes paid, as well as other additional disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, early adoption is permitted. The Company is currently evaluating the effect the amendments in ASU 2023-09 will have on its tax disclosures. 3. ACQUISITIONS The Company did not complete any acquisitions during the year ended December 31, 2023. 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 a working capital adjustment. The Zoocasa acquisition has been accounted for using the acquisition method of accounting. 4. FAIR VALUE MEASUREMENT The Company holds funds in a money market account, which are considered Level 1 assets. The Company values its money market funds at fair value on a recurring basis. 53 As of December 31, 2023 and 2022, the fair value of the Company’s money market funds was $ 46,268 and $ 44,062 , respectively. There have been no transfers between Level 1, Level 2 and Level 3 in the periods presented. The Company did not have any Level 2 or Level 3 financial assets or liabilities in the periods presented. 5. PREPAIDS AND OTHER ASSETS Prepaids and other assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Prepaid expenses ​ $ 5,726 ​ $ 5,580 Prepaid insurance ​ 2,471 ​ 2,293 Rent deposits ​ - ​ 15 Other assets (includes inventory) ​ 1,425 ​ 580 Total prepaid expenses ​ $ 9,622 ​ $ 8,468 ​ ​ 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 Computer hardware and software ​ $ 37,444 ​ $ 34,206 Furniture, fixture, and equipment ​ 2,254 ​ 20 Total depreciable property and equipment ​ 39,698 ​ 34,226 Less: accumulated depreciation ​ ( 27,733 ) ​ ( 19,282 ) Depreciable property, net ​ 11,965 ​ 14,944 Assets under development ​ 1,013 ​ 3,207 Property, plant, and equipment, net ​ $ 12,978 ​ $ 18,151 ​ ​ ​ ​ ​ ​ For the years ended December 31, 2023, 2022 and 2021, depreciation expense was $ 8,352 , $ 7,934 and $ 4,974 , respectively. 7. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill were: ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Goodwill ​ $ 27,212 ​ $ 12,945 Acquisitions ​ - ​ 14,156 Impairments ​ ( 8,248 ) ​ - Disposition ​ ( 2,310 ) ​ - Currency translation impact ​ 328 ​ 111 Total goodwill ​ $ 16,982 ​ $ 27,212 ​ During the fourth quarter of 2023, as part of the Company’s annual goodwill impairment assessment, the Company determined that the goodwill associated with Virbela, the Company’s technology segment was impaired. During the impairment evaluation, the Company determined that the projection for future cash flows associated with Virbela had declined significantly resulting from the post-COVID 19 work environment of return to the office and hybrid work initiatives globally, as well as the increase in the demand for artificial intelligence solutions. The Company determined the estimated fair value of Virbela using the market approach, which measures value based on what other purchasers in the market have paid for assets or business interests that can be considered reasonably similar to Virbela. Based on that approach, the estimated fair value was significantly lower than the book value of Virbela and the goodwill associated with Virbela was impaired. The Company recognized an impairment charge of $ 8,248 for the year ended December 31, 2023. During 2023, the Company disposed of its Showcase Web Sites LLC business, which resulted in a reduction of goodwill of $ 2,310 , this business was included in the North American Realty segment. Goodwill was recorded in connection with the acquisition of Zoocasa in July 2022 and represents fair value as of the acquisition date. The acquisition was 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. 54 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. Definite-lived intangible assets were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ ​ Gross ​ Accumulated ​ ​ ​ Net Carrying ​ Gross ​ Accumulated ​ Net Carrying ​ Amount Amortization Impairment ​ Amount ​ Amount Amortization Amount Trade name $ 3,257 ($ 1,030 ) $ ( 585 ) ​ $ 1,642 ​ $ 3,459 ($ 841 ) $ 2,618 Existing technology ​ 9,410 ​ ( 3,800 ) ​ - ​ 5,610 ​ 3,995 ​ ( 2,458 ) ​ 1,537 Non-competition agreements ​ 468 ​ ( 125 ) ​ - ​ 343 ​ 461 ​ ( 125 ) ​ 336 Customer relationships ​ 1,655 ​ ( 652 ) ​ ( 370 ) ​ 633 ​ 1,895 ​ ( 551 ) ​ 1,344 Licensing agreement ​ 210 ​ ( 210 ) ​ - ​ 0 ​ 210 ​ ( 181 ) ​ 29 Intellectual property ​ 2,836 ​ ( 583 ) ​ - ​ 2,253 ​ 2,836 ​ - ​ 2,836 Total intangible assets $ 17,836 ($ 6,400 ) ($ 955 ) ​ $ 10,481 ​ $ 12,856 ($ 4,156 ) $ 8,700 ​ For the years ended December 31, 2023, 2022 and 2021, amortization expense for definite-lived intangible assets was $ 2,540 , $ 1,904 and $ 1,274 , respectively. As part of the Company’s annual assessment, the Company also reviews the useful lives of its amortizable intangible assets and determines if there should be any change to the amortization period. For the amortizable assets related to the Virbela segment, the Company determined that the trade name and the customer relationships that were recognized as part of the acquisition, should be fully amortized as of December 31, 2023. This assessment was made based on the future negative operating cash flows and the decline in the estimated fair value of Virbela. As a result, the Company recognized an impairment loss related the net book value of the trade name of $ 585 and customer relationships $ 370 . 55 As of December 31, 2023, expected amortization related to definite-lived intangible assets will be: ​ ​ ​ Expected amortization 2024 ​ $ 2,702 2025 2,299 2026 ​ 1,275 2027 ​ 608 2028 and thereafter ​ 3,597 Total $ 10,481 8. ​ ​ 8. ACCRUED EXPENSES Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 Commissions payable ​ $ 60,010 ​ $ 56,786 Payroll payable ​ 8,866 ​ 6,236 Taxes payable ​ 1,225 ​ 2,124 Stock liability awards ​ 4,999 ​ 3,885 Other accrued expenses ​ 13,082 ​ 9,913 ​ ​ $ 88,182 ​ $ 78,944 ​ 9. STOCKHOLDERS’ EQUITY Common Stock – As of December 31, 2023, 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 shares for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ 　 ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Common stock: ​ ​ ​ ​ ​ ​ Balance, beginning of year ​ 171,656,030 ​ 155,516,284 ​ 146,677,786 Shares issued for stock options exercised ​ 832,993 ​ 2,105,237 ​ 3,155,170 Agent growth incentive stock compensation ​ 2,219,881 ​ 2,571,569 ​ 2,037,942 Agent equity stock compensation ​ 8,897,804 ​ 11,462,940 ​ 3,645,386 Balance, end of year ​ 183,606,708 ​ 171,656,030 ​ 155,516,284 ​ The Company’s stockholder 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 The Company provides agents and brokers the opportunity to elect to receive 5 % of commissions earned from each completed residential real estate transaction in the form of common stock (the “Agent Equity Program” or “AEP”) at a 10 % discount recognized by the Company. If agents and brokers elect to receive portions of their commissions in common stock, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. For the years ended December 31, 2023, 2022 and 2021, the Company issued 8,897,804 , 11,462,940 and 3,645,386 shares of common stock, respectively, to agents and brokers for $ 135,226 , $ 164,104 and $ 144,437 , respectively, net of discount. Agent Growth Incentive Program The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks (the “Agent Growth Incentive Program” or “AGIP”). The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of performance metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the performance metric is achieved. 56 For the years ended December 31, 2023, 2022 and 2021, the Company’s stock compensation attributable to the AGIP was $ 43,178 , $ 30,861 and $ 24,493 , respectively. The total amount of stock compensation attributable to liability classified awards was $ 3,832 , $ 2,056 and $ 4,977 for the years ended December 31, 2023, 2022 and 2021, respectively. The following table illustrates changes in the Company’s stock compensation liability for the periods presented: ​ ​ ​ ​ ​ Amount Stock grant liability balance at December 31, 2021 ​ $ 4,341 Stock grant liability increase year to date ​ 2,056 Stock grants reclassified from liability to equity year to date ​ ( 2,512 ) Balance, December 31, 2022 ​ $ 3,885 Stock grant liability increase year to date ​ 3,832 Stock grants reclassified from liability to equity year to date ​ ( 2,717 ) Balance, December 31, 2023 ​ $ 5,000 ​ As of December 31, 2023, the Company had 6,706,280 unvested common stock awards and unrecognized compensation costs totaling $ 65,989 attributable to stock awards where the performance metric has been achieved and the number of shares awarded are fixed. The cost is expected to be recognized over a weighted average period of 1.92 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Grant Date ​ Shares Fair Value Balance, December 31, 2021 ​ 5,174,654 ​ $ 13.92 Granted ​ 3,829,990 ​ 15.29 Vested and issued ​ ( 2,542,696 ) ​ 6.28 Forfeited ​ ( 762,951 ) ​ 18.80 Balance, December 31, 2022 ​ 5,698,997 ​ $ 17.68 Granted ​ 4,642,035 ​ 15.04 Vested and issued ​ ( 2,219,881 ) ​ 11.73 Forfeited ​ ( 1,245,862 ) ​ 17.35 Balance, December 31, 2023 ​ 6,875,289 ​ $ 17.80 ​ ​ ​ ​ ​ ​ Agent Thrive Program Announced in October 2023, the Thrive program provides a stock incentive to the individual team leaders of teams of culturally aligned teams that join the Company as part of the program. After affiliating with the Company, the team leader becomes eligible to receive an award of the Company’s common stock through team performance benchmarks. Awards typically vest after production benchmarks are reached and three years of subsequent service is provided to the Company. Share-based performance awards are based on a fixed-dollar amount of shares based on the achievement of production metrics. As such, the awards are classified as liabilities until the number of share awards becomes fixed once the production metric is achieved. Stock Option Awards 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 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 Expected term ​ 5 - 6 years ​ 5 - 6 years ​ 5 - 6 years Expected volatility ​ 73.64 % - 76.78 % ​ 72.84 % - 76.49 % ​ 68.85 % - 86.33 % Risk-free interest rate ​ 3.28 % - 4.86 % ​ 1.49 % - 4.10 % ​ 0.44 % - 1.33 % Dividend yield ​ 0.72 % - 1.64 % ​ 0.53 % - 1.48 % ​ 0.00 % - 0.00 % ​ ​ ​ ​ ​ ​ ​ 57 ​ The following table illustrates the Company’s stock option activity for the following periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Weighted ​ ​ ​ Remaining ​ ​ ​ ​ Average ​ ​ ​ Contractual Term ​ Options Exercise Price Intrinsic Value (Years) Balance December 31, 2021 ​ 7,038,660 ​ $ 8.70 ​ $ 25.45 ​ 6.26 Granted ​ 1,234,847 ​ 19.25 ​ - ​ 9.37 Exercised ​ ( 2,083,016 ) ​ 0.68 ​ 18.10 ​ — Forfeited ​ ( 415,969 ) ​ 13.68 ​ 8.74 ​ — Balance at December 31, 2022 ​ 5,774,522 ​ $ 13.56 ​ $ 2.21 ​ 7.63 Granted ​ 2,468,299 ​ 14.81 ​ - ​ 8.46 Exercised ​ ( 832,993 ) ​ 5.90 ​ 14.97 ​ — Forfeited ​ ( 1,198,706 ) ​ 17.77 ​ 2.27 ​ — Expired ​ ( 12,578 ) ​ 35.54 ​ 0.29 ​ — Balance at December 31, 2023 ​ 6,198,544 ​ $ 14.23 ​ $ 3.62 ​ 7.29 Exercisable at December 31, 2023 ​ 3,623,819 ​ $ 12.30 ​ $ 5.31 ​ 6.11 Vested at December 31, 2023 ​ 3,623,819 ​ $ 12.30 ​ $ 5.31 ​ 6.11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ Options Exercise Price ​ ​ ​ ​ Range of stock option exercise prices at December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ $ 0.01 - $ 10.00 (average remaining life - 6.12 years) ​ 2,573,627 ​ $ 8.18 ​ ​ ​ ​ $ 10.01 - $ 30.00 (average remaining life - 8.20 years) ​ 3,315,284 ​ $ 16.59 ​ ​ ​ ​ $ 30.01 - $ 60.00 (average remaining life - 7.42 years) ​ 309,633 ​ $ 39.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2023, unrecognized compensation cost associated with the Company’s outstanding stock options was $ 22,897 , which is expected to be recognized over a weighted-average period of approximately 1.32 years. 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. In May 2022, the Board approved an increase to the total amount of its buyback program from $ 400.0 million to $ 500.0 million. In June 2023, the Board approved an increase to the total amount of its buyback program from $ 500.0 million to $ 1.0 billion. 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. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from cash and cash equivalents on hand. 10b5-1 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 58 million, in connection with ongoing contractions in the real estate market. On May 10, 2023, the Board approved and, on May 11, 2023, the Company entered into, a form of fourth amendment to the Issuer Repurchase Plan, to increase the monthly repurchase amounts during 2023 due to actual and projected changes in the Company’s cash and cash equivalents; specifically, to permit purchases of up to: (i) $ 17.0 million during May 2023, (ii) $ 22.0 million during June 2023, (iii) $ 18.67 million during any calendar month commencing July 1, 2023 through and including September 30, 2023, and (iv) $ 12.0 million during any calendar month commencing October 1, 2023 through and including December 31, 2023. On June 26, 2023, the Board approved, and the Company entered into, a form of fifth amendment to the Issuer Repurchase Plan to increase the maximum aggregate buyback from $ 500.0 million to $ 1.0 billion in accordance with the repurchase program limit. On November 17, 2023, the Board approved, and the Company entered into, a form of sixth amendment to the Issuer Repurchase Plan to reduce the monthly repurchase from (i) $ 12.0 million to $ 8.0 million during November 2023, (ii) from $ 12.0 million to $ 6.0 million during any calendar month commencing December 1, 2023 through and including June 30, 2024. 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. These shares are considered issued but not outstanding. The following table shows the changes in treasury stock shares for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Treasury stock: ​ ​ ​ ​ ​ ​ Balance, beginning of year ​ 18,816,791 ​ 6,751,692 ​ 2,534,494 Repurchases of common stock ​ 10,110,152 ​ 12,408,430 ​ 4,217,198 Forfeiture to treasury stock for acquisition ​ 10,728 ​ - ​ - Issuance of treasury stock for acquisition ​ - ​ ( 343,331 ) ​ - Balance, end of year ​ 28,937,671 ​ 18,816,791 ​ 6,751,692 ​ 10. SEGMENT INFORMATION Segment information aligns with how the Chief Operating Decision Maker (“CODM”), Glenn Sanford, Chief Executive Officer of eXp World Holdings, Inc. and eXp Realty, LLC, a wholly owned subsidiary of the Company (“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. We have 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. ● Virbela: includes the enterprise application-based Virbela platform and web-based Frame platform and the support services offered by eXp World Technologies. ● Other Affiliated Services: 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. ​ 59 ​ ​ ​ ​ ​ ​ 　 ​ Revenues ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 North American Realty $ 4,220,063 ​ $ 4,552,938 ​ $ 3,745,354 International Realty 53,931 ​ 35,924 ​ 17,804 Virbela 7,284 ​ 8,485 ​ 8,615 Other Affiliated Services 4,802 ​ 5,084 ​ 2,896 Revenues reconciliation: ​ ​ ​ ​ ​ Segment eliminations ( 4,975 ) ​ ( 4,270 ) ​ ( 3,499 ) Consolidated revenues $ 4,281,105 ​ $ 4,598,161 ​ $ 3,771,170 ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 North American Realty $ 91,101 ​ $ 103,255 ​ $ 116,800 International Realty ( 13,657 ) ​ ( 13,708 ) ​ ( 9,138 ) Virbela ( 5,725 ) ​ ( 9,642 ) ​ ( 12,637 ) Other Affiliated Services ( 3,795 ) ​ ( 2,600 ) ​ ( 3,322 ) Corporate expenses and other ( 10,376 ) ​ ( 16,756 ) ​ ( 13,708 ) Consolidated Adjusted EBITDA $ 57,548 ​ $ 60,549 ​ $ 77,995 ​ ​ ​ ​ ​ ​ Operating (Loss) Profit Reconciliation: ​ ​ ​ ​ ​ Depreciation and amortization expense 10,892 ​ 9,838 ​ 6,248 Impairment expense 9,203 ​ - ​ - Stock compensation expense 43,178 ​ 30,861 ​ 24,493 Stock option expense 10,736 ​ 14,442 ​ 13,102 Consolidated operating (loss) profit ($ 16,461 ) ​ $ 5,408 ​ $ 34,152 ​ ​ ​ ​ ​ ​ Goodwill ​ December 31, 2023 ​ December 31, 2022 North American Realty $ 14,595 ​ $ 16,577 International Realty - ​ - Virbela - ​ 8,248 Other Affiliated Services 2,387 ​ 2,387 Segment total 16,982 ​ 27,212 Corporate and other - ​ - Consolidated total $ 16,982 ​ $ 27,212 ​ Geographical information For the years ended December 31, 2023, 2022 and 2021 approximately 9 % , 9 % and 8 % , respectively, of the Company’s total revenue was generated outside of the U.S. Long-lived assets held outside of the U.S. were 14 % and 6 % as of December 31, 2023 and 2022, 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. ​ ​ ​ 11. EARNINGS PER SHARE Basic earnings per share is computed based on net income attributable to eXp stockholders 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. 60 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, ​ ​ 2023 ​ 2022 ​ 2021 Numerator: ​ ​ ​ ​ ​ ​ Net (loss) income attributable to eXp World Holdings, Inc. ​ ($ 8,973 ) ​ $ 15,442 ​ $ 81,220 Denominator: ​ ​ ​ ​ ​ ​ Weighted average shares - basic ​ 153,232,129 ​ 151,036,110 ​ 146,170,871 Dilutive effect of common stock equivalents ​ - ​ 5,184,055 ​ 11,558,503 Weighted average shares - diluted ​ 153,232,129 ​ 156,220,165 ​ 157,729,374 Earnings per share: ​ ​ ​ ​ ​ ​ (Loss) earnings per share attributable to common stock- basic ​ ($ 0.06 ) ​ $ 0.10 ​ $ 0.56 (Loss) earnings per share attributable to common stock- diluted ​ ($ 0.06 ) ​ $ 0.10 ​ $ 0.51 ​ For the years ended December 31, 2023, 2022 and 2021, total outstanding shares of common stock excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive were 4,361,775 , 1,000,421 and 102,880 , respectively. ​ 12. INCOME TAXES The following table provides the components of income before provision for income taxes by domestic and foreign subsidiaries: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Domestic ​ ($ 16,522 ) ​ $ 1,029 ​ $ 32,804 Foreign ​ 3,087 ​ 3,559 ​ 929 Total ​ ($ 13,435 ) ​ $ 4,588 ​ $ 33,733 ​ The components of the provision for (benefit from) income tax expense are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 Current: ​ ​ ​ ​ ​ ​ Federal ​ $ 305 ​ $ - ​ $ - State ​ 795 ​ 737 ​ 456 Foreign ​ 1,788 ​ 2,312 ​ 1,650 Total current income tax provision ​ 2,888 ​ 3,049 ​ 2,106 Deferred ​ ​ ​ ​ ​ ​ Federal ​ ( 4,995 ) ​ ( 11,444 ) ​ ( 41,599 ) State ​ ( 1,494 ) ​ ( 1,674 ) ​ ( 6,574 ) Foreign ​ ( 861 ) ​ ( 767 ) ​ ( 1,420 ) Total deferred income tax benefit ​ ( 7,350 ) ​ ( 13,885 ) ​ ( 49,593 ) Total provision (benefit) for income taxes ​ ($ 4,462 ) ​ ($ 10,836 ) ​ ($ 47,487 ) ​ ​ 61 The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 Statutory tax rate ​ 21.00 % ​ 21.00 % ​ 21.00 % State taxes ​ 0.60 % ​ 17.52 % ​ 5.22 % Permanent differences ​ 1.03 % ​ ( 0.40 )% ​ ( 0.08 )% Research & Development Credit ​ 15.48 % ​ ( 49.64 )% ​ ( 6.04 )% Unrecognized tax benefit ​ ( 3.87 )% ​ 12.41 % ​ 1.51 % Share-based compensation ​ 24.64 % ​ ( 265.42 )% ​ ( 107.20 )% Sec. 162m compensation limitation ​ ( 21.23 )% ​ 47.85 % ​ 8.12 % Foreign tax rate differential ​ ( 1.02 )% ​ ( 1.65 )% ​ 0.27 % Valuation allowance ​ -% ​ -% ​ ( 65.54 )% Prior year true up items ​ ( 3.29 )% ​ ( 19.99 )% ​ ( 0.63 )% Other net ​ ( 0.13 )% ​ 2.13 % ​ 2.65 % Total ​ 33.21 % ​ ( 236.19 )% ​ ( 140.72 )% ​ The Company has made certain prior year reclassifications to research and development credit, unrecognized tax benefit, share-based compensation and other categories to ensure consistency with current year presentation. These reclassifications had no effect on total effective tax rate. Deferred tax assets and liabilities consist of the following for the periods presented: ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 Deferred tax assets: ​ ​ ​ ​ Net operating loss carryforward ​ $ 34,028 ​ $ 41,192 Accruals and Reserves ​ 3,127 ​ 3,129 Goodwill and Intangibles ​ 1,782 ​ 257 Research and Experimental Costs ​ 14,757 ​ 8,401 Research and Development Credit ​ 4,632 ​ 3,826 Share-based compensation ​ 15,872 ​ 11,871 Total gross deferred tax assets ​ 74,198 ​ 68,676 Deferred tax liabilities: ​ ​ ​ ​ Property and equipment ​ ( 2,779 ) ​ ( 3,467 ) Intangibles/Goodwill ​ - ​ ( 656 ) Right of use lease asset ​ ( 3 ) ​ ( 519 ) Other ​ ( 94 ) ​ ( 55 ) Net deferred tax assets ​ $ 71,322 ​ $ 63,979 ​ Certain prior year deferred asset amounts have been reclassified for consistency with the current year presentation. In prior year the Company reported nominal deferred tax asset balances for partnership basis difference, lease liability and legal settlement accruals, these balances were reported as part of accruals and reserves in 2023. Further, in prior year research and experimental costs were reported combined with intangible assets, these costs were stated separately in 2023. These reclassifications had no effect on gross and net deferred tax assets. The Company accounts for deferred taxes under ASC Topic 740 – Income Taxes (“ASC 740”), which requires a reduction of the carrying amount of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that the Company weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As of December 31, 2023, 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, 2023, the Company had federal, state and foreign net operating losses of approximately $ 125.8 million, $ 74.1 million and $ 12.9 million, respectively. The full amount of $ 125.8 million of federal net operating loss can be carried forward 62 indefinitely and can offset 80% of future taxable income. Certain state and foreign net operating losses will carry forward for limited number of years and, if not utilized, will begin to expire in 2024. As of December 31, 2023, the Company conducted an IRC Section 382 analysis with respect to its net operating loss carryforward and determined there was an immaterial limitation. 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. Upon distribution of those earnings, the Company would be subject to withholding taxes payable to various foreign countries. As of December 31, 2023 the undistributed earnings of the Company's foreign subsidiaries could result in withholding taxes of approximately $ 0.8 million, if repatriated. As of December 31, 2023, the Company had federal and California Research and Development credits of approximately $ 5.8 million and $ 0.9 million, respectively. Federal credit can be carried forward 20 years and will begin to expire in 2039. California credit can be carried forward indefinitely. The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. A reconciliation of the beginning and ending amount of gross unrecognized benefits is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 Unrecognized tax benefits - beginning of year ​ $ 1,309 ​ $ 530 ​ $ - Gross increase for tax positions of prior years ​ 63 ​ 199 ​ 325 Gross increase for tax positions of current year ​ 532 ​ 580 ​ 205 Unrecognized tax benefits - end of year ​ $ 1,904 ​ $ 1,309 ​ $ 530 ​ The unrecognized tax benefits relate to Federal and California research and development credits in 2023, 2022, and 2021. As of December 31, 2023, the total amount of unrecognized tax benefits that would affect the Company effective tax rate, if recognized, is $ 1,904 . The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2023, the Company accrued interest or penalties related to uncertain tax positions in the amount of $ 0 . The company does not expect of the uncertain tax position to reverse during the next 12 month. During 2022 the Company completed its federal examination for 2019 with no change to the original filing. There are no federal or 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. The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. The Company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods. 13. COMMITMENTS AND CONTINGENCIES 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. Litigation and other legal matters are inherently unpredictable and subject to substantial uncertainties and adverse resolutions could occur. In addition, litigation and other legal matters, including class-action lawsuits, government investigations and regulatory proceedings can be costly to defend and, depending on the class size and claims, could be costly to settle. The Company believes that its defenses and assertions in pending legal proceedings have merit and the Company believes that it has adequately and appropriately accrued for legal matters that are estimable. However, substantial unanticipated judgments, penalties, sanctions, and fines do occur. As a result, the Company could from time to time incur judgments, enter into settlements, or revise its expectations regarding the outcome of certain matters, and such developments could have a material 63 adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid. For the cases described below, management is currently unable to reasonably estimate the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in preliminary stages, (ii) specific damage amounts have not been sought, (iii) damages sought are, in our opinion, unsupported and/or exaggerated, (iv) there is uncertainty as to the outcome of pending appeals or motions in these and similar lawsuits affecting the industry, (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories presented. For the matters described below, we have not recorded any accruals as of December 31, 2023. However, the Company has determined that a material loss is reasonably possible in the near term, and facts could emerge through the course of the lawsuits that lead the Company to determine that a loss is estimable, resulting in an accrued liability that could be material. Since October 31, 2023, the Company and/or its subsidiaries have been named as defendants in numerous putative class action complaints brought in various U.S. district courts and the Federal Court of Canada relating to antitrust matters, which lawsuits are described below. The following lawsuits, brought by putative classes of residential property sellers, allege that defendants participated in a system that resulted in sellers of residential property purportedly paying inflated buyer broker commissions in violation of federal and state antitrust laws, as applicable: Gibson et. al. v. National Association of Realtors et. al., Case No. 4:23-cv-00788-FJG (filed in the United States District Court for the Western District of Missouri, Western Division); 1925 Hooper LLC, et al. v. The National Association of Realtors et. al., Case No. 1:23-cv-05392- SEG (United States District Court for the Northern District of Georgia, Atlanta Division); Grace v. The National Association of Realtors, et al. , Case No. 3:23-cv-06352 (United States District Court for the Northern District of California, San Francisco Division); Umpa, et al. v. The National Association of Realtors et. al. , Case No. 4:23-cv-00945 (United States District Court for the Western District of Missouri, Western Division); Gael Fierro et al. v. The National Association of Realtors, et al. , Case No. 2:24-cv-00449 (United States District Court for the Central District of California); Willsim Latham, LLC, et al. v. MetroList Services, Inc., et al. , Case No. 2:24-at-00067 (United States District Court for the Eastern District of California, Sacramento Division); Kevin McFall v. Canadian Real Estate Association, et al. , Case No. T-119-24-ID 1 (Federal Court of Canada); and Nathaniel Whaley et al. v. The National Association of Realtors, et al. , Case No. 2:24-cv-00105 (United States District Court for the District of Nevada). The following lawsuit, brought by a putative class of residential property buyers, alleges that defendants participated in a system that resulted in buyers of residential property purportedly paying inflated home prices as a result of sellers purportedly paying inflated buyer broker commissions in violation of federal and Illinois antitrust laws: Batton v. Compass, Inc., et. al ., Case No. 1:23-cv-15618 (United States District Court for the Northern District of Illinois, Eastern Division). The plaintiffs in these lawsuits seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer-broker commissions or from otherwise restricting competition among brokers, an award of declaratory relief and damages or restitution on behalf of certain home sellers or buyers, as applicable, in those states or provinces, as applicable, as well as attorneys’ fees and costs of suit. Plaintiffs allege joint and several liability and seek treble or other multiple damages. Each antitrust lawsuit is in the pleadings phase and the Company intends to vigorously defend against all claims. The Company may become involved in additional litigation or other legal proceedings concerning the same or similar claims. Commitments 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. ​ 14. DEFINED CONTRIBUTION SAVINGS PLAN 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. The Company matches a portion of contributions made by participating employees. For the 64 years ended December 31, 2023, 2022 and 2021, the Company's costs for contributions to this plan were $ 4,763 , $ 4,720 , and $ 3,196 , respectively. 15. SUBSEQUENT EVENTS Quarterly Cash Dividend On February 14, 2024 , our Board of Directors approved a cash dividend of $ 0.05 per common share to be paid on March 29, 2024 to stockholders of record on March 8, 2024 .The ex-dividend date is expected to be on or around March 7, 2024. The dividend will be paid in cash. Antitrust Litigation The Company and certain of its subsidiaries were named in additional antitrust litigation after December 31, 2023; specifically, the Fierro Litigation, the McFall Litigation, the Latham Litigation, the Whaley Litigation, and the Boykin Litigation. The Boykin litigation was filed on February 16, 2024 as a putative class action complaint under the caption Boykin v. The National Association of Realtors, et al. (Case No. 2:24-cv-00340) in the United States District Court for the District of Nevada, naming as defendants the National Association of Realtors, certain regional Realtor associations, certain regional multiple listing services, certain real estate brokerages, and certain real estate brokerage owners, including eXp World Holdings, Inc. The Boykin Litigation complaint alleges that defendants conspired to restrain trade by causing certain home sellers to pay buyer broker fees and inflated commissions on the sale of homes all in violation of federal antitrust laws and Nevada unfair trade practices laws. The putative class representative seeks to represent a class of persons who paid a commission to a buyer’s broker in connection with the sale of a home from February 16, 2020, through the present. Plaintiff, on behalf of herself and the putative class, seeks a permanent injunction enjoining the defendants from engaging in the alleged unlawful acts described in the Boykin Litigation complaint. Plaintiff, on behalf of herself and the putative class, also seeks an award of declaratory relief, damages in an amount to be determined at trial, statutory interest and penalties, and attorneys’ fees, expenses and costs of suit. See Note 13 – Commitments and Contingencies to the consolidated financial statements included elsewhere in this Annual Report for additional information about such litigation and other proceedings. Agent Equity Program Beginning March 1, 2024, agents and brokers may receive 5 % of commissions earned from each completed residential real estate transaction in the form of common stock at a 5 % discount recognized by the Company (which was previously 10 % discount on all AEP purchases before March 1, 2024). Under the AEP, agents and brokers that have elected to receive portions of their commissions in common stock are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. ​ 65 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None