展览99.2
| 中期未经审核总合基本报表: | |
| 中期总合资产负债表录: | 2 |
| 中期损失及其他综合损益总合账目表: | 3 |
| 中期权益变动总合账目表: | 4 |
| 中期总合现金流量表 | 5 |
| 中期简明合并财务报表附注 | 6-23 |
| 1 |
真实券商 公司
中期 简明综合财务状况表
(以美元千元表达)
未经审核
| 截至日期 | ||||||||
| 2024年9月30日 | 2023年12月31日 | |||||||
| 资产 | ||||||||
| 流动资产 | ||||||||
| 现金及现金等价物 | $ | $ | ||||||
| 限制性现金 | ||||||||
| 资金存放在受限的托管账户 | ||||||||
| 金融资产投资 | ||||||||
| 应收贸易款项 | ||||||||
| 其他应收款项 | ||||||||
| 预付费用和存款 | ||||||||
| 总流动资产 | ||||||||
| 非流动资产 | ||||||||
| 无形资产 | ||||||||
| 商誉 | ||||||||
| 财产和设备 | ||||||||
| 总非流动资产 | ||||||||
| 总资产 | ||||||||
| 负债和权益 | ||||||||
| 流动负债 | ||||||||
| 应付账款 | ||||||||
| 应付负债 | ||||||||
| 客户存款。 | ||||||||
| 其他应付款 | ||||||||
| 流动负债总额 | ||||||||
| 非流动负债 | ||||||||
| 持有中认股权证 | ||||||||
| 非流动负债总额 | ||||||||
| 负债合计 | ||||||||
| 股东权益 | ||||||||
| 归属于业主的股权 | ||||||||
| 股份溢价 | ||||||||
| 股份报酬准备 | ||||||||
| 赤字累计 | ( | ) | ( | ) | ||||
| 其他储备 | ( | ) | ||||||
| 库藏股票，成本 | ( | ) | ( | ) | ||||
| 归属于业主的权益 | ||||||||
| 非控制股权 | ||||||||
| 总股本 | ||||||||
| 总负债及股东权益 | ||||||||
The accompanying notes form an integral part of the condensed consolidated financial statements.
| 2 |
THE REAL BROKERAGE INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in thousands of U.S. dollars, except for per share amounts)
UNAUDITED
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Commissions and other agent-related costs | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Marketing expenses | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Settlement of litigation | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income attributable to noncontrolling interests | ||||||||||||||||
| Net Loss Attributable to the Owners of the Company | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income/(loss): | ||||||||||||||||
| Cumulative (gain)/loss on investments in debt instruments classified as FVTOCI reclassified to profit or loss | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Total Comprehensive Loss Attributable to Owners of the Company | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Comprehensive Income Attributable to NCI | ||||||||||||||||
| Total Comprehensive Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share | ||||||||||||||||
| Basic and diluted loss per share | ) | ) | ) | ) | ||||||||||||
| Weighted-average shares, basic and diluted | ||||||||||||||||
The accompanying notes form an integral part of the condensed consolidated financial statements.
| 3 |
THE REAL BROKERAGE INC.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(U.S. dollar in thousands)
UNAUDITED
Share Premium | Stock-Based Compensation Reserve | Foreign Exchange Reserve Reserve | Investments Revaluations Reserve | Deficit | Treasury Stock | Equity Attributable to Owners | Non- Controlling Interests | Total Equity | ||||||||||||||||||||||||||||
| Balance at, January 1, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total loss and income | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total other comprehensive income | ||||||||||||||||||||||||||||||||||||
| Member Draws | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Acquisition of commons shares for Restricted Share Unit (RSU) Plan | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Release of treasury shares | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of Restricted Share Units | ( | ) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | ( | ) | ||||||||||||||||||||||||||||||||||
| Exercise of warrants | ( | ) | ||||||||||||||||||||||||||||||||||
| Shares withheld for taxes | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Equity-settled share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at, September 30, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at, January 1, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total loss and income | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total other comprehensive income | ||||||||||||||||||||||||||||||||||||
| Member Draws | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Acquisition of commons shares for Restricted Share Unit (RSU) Plan | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Release of treasury shares | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of Restricted Share Units | ( | ) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | ( | ) | ||||||||||||||||||||||||||||||||||
| Equity-settled share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at, September 30, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
The accompanying notes form an integral part of the condensed consolidated financial statements.
| 4 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Adjustments for: | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Equity-settled share-based payment | ||||||||||||||||
| Finance costs | ( | ) | ( | ) | ||||||||||||
| Changes in operating asset and liabilities: | ||||||||||||||||
| Funds Held in Restricted Escrow Account | ( | ) | ||||||||||||||
| Trade receivables | ( | ) | ( | ) | ( | ) | ||||||||||
| Other receivables | ( | ) | ( | ) | ||||||||||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||||||||||
| Accrued liabilities | ( | ) | ||||||||||||||
| Customer deposits | ( | ) | ( | ) | ||||||||||||
| Other payables | ||||||||||||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | ( | ) | ||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Investment Deposits in Debt Instruments held at FVTOCI | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Investment Withdrawals in Debt Instruments held at FVTOCI | ||||||||||||||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | ( | ) | ( | ) | ( | ) | ||||||||||
| FINANCING ACTIVITIES | ||||||||||||||||
| Purchase of common shares for Restricted Share Unit (RSU) Plan | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Shares withheld for taxes | ( | ) | ( | ) | ||||||||||||
| Proceeds from exercise of stock options | ||||||||||||||||
| Payment of lease liabilities | ( | ) | ||||||||||||||
| Payment of contingent consideration | ( | ) | ||||||||||||||
| Cash disbursements for non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET CASH USED IN FINANCING ACTIVITIES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||||
| Fluctuations in foreign currency | ( | ) | ||||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE | $ | $ | $ | $ | ||||||||||||
| SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITIES | ||||||||||||||||
| Cashless exercise of warrants | ||||||||||||||||
The accompanying notes form an integral part of the condensed consolidated financial statements.
| 5 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
1. GENERAL INFORMATION
The Real Brokerage Inc. (“Real” or the “Company”) is a growing real estate technology company located in the United States and Canada. As a licensed real estate brokerage, the Company’s revenue is generated primarily by processing real estate transactions which entitle us to commissions. The Company pays a portion of its commission revenue to real estate agents who are affiliated with the Company. The Company is taking a first principles approach to redefining the role of a real estate brokerage in the lives of agents and within the broader housing ecosystem. The Company focuses on developing technology to enhance real estate agent performance, while aiming to build a scalable, efficient brokerage operation that allows for technologically supported brokerage oversight that is not dependent on a cost-heavy brick and mortar presence in the markets in which the Company operates. The Company’s goal is to establish itself as the destination brokerage for agents, by offering a combination of technology, support, and financial incentives. The Company’s vision is to transform home buying under the guidance of an agent through an integrated consumer technology product, while growing its ancillary services, including mortgage broker and title services. In addition, the Company plans to expand its suite of tools and products tailored for agents, including Company-branded financial products.
The consolidated operations of Real include the subsidiaries of Real, including those involved in the brokerage, title and mortgage broker operations.
On May 19, 2022, the Company announced that it renewed its normal course issuer bid (“NCIB”) to be transacted through the facilities of the NASDAQ Capital Market (“NASDAQ”) and other stock exchanges and/or alternative trading systems in the United States and/or Canada. Pursuant to the NCIB, Real was able to purchase up to million common shares of the Company (“Common Shares”), representing approximately % of the total million Common Shares issued and outstanding as of May 19, 2022. On May 24, 2023, the Company announced that it renewed its NCIB pursuant to which Real may purchase up to approximately million Common Shares, representing approximately % of the total million Common Shares issued and outstanding as of May 18, 2023. On May 14, 2024, the Company announced that it renewed its NCIB again pursuant to which Real may purchase up to approximately million Common Shares, representing approximately % of the total million Common Shares issued and outstanding as of May 1, 2024. Purchases are made at prevailing market prices and may be conducted during the twelve-month period ended May 28, 2025.
The NCIB is being conducted to acquire Common Shares for the purposes of satisfying restricted share unit (each, an “RSU”) obligations. The Company appointed CWB Trust Services (the “Trustee”) as the trustee for the purposes of arranging the acquisition of Common Shares and to hold the Common Shares in trust for the purposes of satisfying RSU payments as well as to manage other administrative matters. RBC Capital Markets was engaged to undertake purchases under the NCIB.
2. SUMMARY OF MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2023.
| A. | Basis of preparation |
The unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting as issued by the International Accounting Standards Board (IASB). The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Company’s annual audited consolidated financial statements for the period ended December 31, 2023. These unaudited interim condensed consolidated financial statements were authorized for issuance by the Company’s Board of Directors on November 4, 2024.
All dollar amounts are in U.S. dollars unless otherwise stated.
| 6 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| B. | Recent Accounting Pronouncements |
In April 2024, the IASB issued IFRS 18 “Presentation and Disclosure in Financial Statements” (“IFRS 18”). IFRS 18 mainly introduces three sets of requirements to give investors more transparent and comparable information about companies’ financial performance: additional subtotals with newly defined categories for classifying income and expenses in the statement of profit or loss, disclosures about management-defined performance measures, and enhanced requirements for more useful grouping of information in the financial statements.
IFRS 18 will replace IAS 1 and will be effective for annual periods beginning on or after January 1, 2027. The impact of IFRS 18 on Real’s consolidated financial statements is being evaluated.
3. REVENUE
In the following table, revenue (in thousands) from contracts with customers is disaggregated by major service lines.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Main revenue streams | ||||||||||||||||
| Commissions | ||||||||||||||||
| Title | ||||||||||||||||
| Mortgage Income | ||||||||||||||||
| Total Revenue | ||||||||||||||||
| Timing of Revenue Recognition | ||||||||||||||||
| Products and Services Transferred at a Point in Time | ||||||||||||||||
| Revenue from Contracts with Customers | ||||||||||||||||
| 7 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
4. EXPENSES BY NATURE
In the following table, cost of sales represents real estate commissions paid to the Company’s agents, as well as to outside brokerages in Canada, and Title Fee Expenses (in thousands).
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Commissions and other agent-related costs | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| General and Administrative Expenses | ||||||||||||||||
| Salaries and Benefits | ||||||||||||||||
| Stock Based Compensation | ||||||||||||||||
| Administrative Expenses | ||||||||||||||||
| Professional Fees | ||||||||||||||||
| Depreciation and Amortization Expense | ||||||||||||||||
| Other General and Administrative Expenses | ||||||||||||||||
| Marketing Expenses | ||||||||||||||||
| Salaries and Benefits | ||||||||||||||||
| Stock Based Compensation for Employees | ||||||||||||||||
| Stock Based Compensation for Agents | ||||||||||||||||
| Revenue Share | ||||||||||||||||
| Other Marketing and Advertising Cost | ||||||||||||||||
| Research and Development Expenses | ||||||||||||||||
| Salaries and Benefits | ||||||||||||||||
| Stock Based Compensation | ||||||||||||||||
| Other Research and Development | ||||||||||||||||
| Settlement of Litigation | ||||||||||||||||
| Total Cost of Sales and Operating Expenses | ||||||||||||||||
Finance Expenses
The following table provides a detailed breakdown of finance costs (in thousands) as reported in the Condensed Consolidated Statement of Income (Loss):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| Description | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Change in Fair Value of Warrants Outstanding | ( | ) | ||||||||||||||
| Realized Losses (Gains) | ||||||||||||||||
| Bank Fees | ||||||||||||||||
| Finance Costs | ( | ) | ( | ) | ||||||||||||
| Total Finance Expenses | ||||||||||||||||
| 8 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
5. OPERATING SEGMENTS DISCLOSURES
The businesses of the Company are divided operationally into three identified operating segments: North American Brokerage, One Real Title and One Real Mortgage. North American Brokerage generates revenue by processing real estate transactions which entitles the Company to commissions. One Real Title generates revenue by offering title insurance and closing services for residential and/or commercial transactions. One Real Mortgage derives revenue from premiums associated with facilitating mortgage transactions between borrowers and lenders.
The Company has identified one reportable segment, North American Brokerage which comprises more than 90% of total revenue and net loss. The other two segments, One Real Title and One Real Mortgage are not considered reporting segments as their revenue and net loss do not meet the quantitative threshold set for reporting segments. These two segments are disclosed in an ‘other segments’ category below.
The Company uses judgement in determining its operating segments by taking into consideration the Chief Operating Decision Maker’s (“CODM”) assessment of overall performance and decisions such as resource allocations and delegation of authority. The CODM is the Company’s Chief Executive Officer.
The presentation in this note for prior periods has been restated based on the current segment reporting.
Segment performance is evaluated based on income (loss) from operations and is measured consistently with income or loss in the consolidated financial statements.
The following tables present significant information about the Company’s reportable operating segments as reported to the Company’s CODM:
| For the Three Months Ended September 30, 2024 | ||||||||||||
North American Brokerage | Other Segments | Total | ||||||||||
| Revenues | ||||||||||||
| Commissions and other agent-related costs | ||||||||||||
| Gross Profit | ||||||||||||
| General and administrative expenses | ||||||||||||
| Marketing expenses | ||||||||||||
| Research and development expenses | ||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expenses), net | ||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ||||||
| 9 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| For the Nine Months Ended September 30, 2024 | ||||||||||||
North American
Brokerage | Other Segments | Total | ||||||||||
| Revenues | ||||||||||||
| Commissions and other agent-related costs | ||||||||||||
| Gross Profit | ||||||||||||
| General and administrative expenses | ||||||||||||
| Marketing expenses | ||||||||||||
| Research and development expenses | ||||||||||||
| Litigation expenses | ||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expenses), net | ||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ||||||
| For the Three Months Ended September 30, 2023 | ||||||||||||
North American
Brokerage | Other Segments | Total | ||||||||||
| Revenues | ||||||||||||
| Commissions and other agent-related costs | ||||||||||||
| Gross Profit | ||||||||||||
| General and administrative expenses | ||||||||||||
| Marketing expenses | ||||||||||||
| Research and development expenses | ||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expenses), net | ||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ||||||
| For the Nine Months Ended September 30, 2023 | ||||||||||||
North American
Brokerage | Other Segments | Total | ||||||||||
| Revenues | ||||||||||||
| Commissions and other agent-related costs | ||||||||||||
| Gross Profit | ||||||||||||
| General and administrative expenses | ||||||||||||
| Marketing expenses | ||||||||||||
| Research and development expenses | ||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expenses), net | ||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ||||||
| 10 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
Segment revenue reported above represents revenue generated from external customers. There were no intersegment sales in the current and in the prior year.
The assets and liabilities of each segment are not reported to the CODM on a regular basis therefore they are not disclosed in these condensed consolidated financial statements.
The amount of revenue from external customers, by geography, is shown in the table below:
| For the Three Months Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| United States | ||||||||
| Canada | ||||||||
| Total revenue by region | ||||||||
| For the Nine Months Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| United States | ||||||||
| Canada | ||||||||
| Total revenue by region | ||||||||
Basic loss per share is computed by dividing the loss for the period by the weighted average number of Common Shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) less any preferred dividends for the period by the weighted average number of Common Shares outstanding plus any potentially dilutive Common Shares outstanding during the period. The Company does not pay dividends or have participating shares outstanding.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Issued Common Shares at the beginning of the period | ||||||||||||||||
| Effect of Treasury Purchases | ( | ) | ( | ) | ||||||||||||
| Release of Shares | ||||||||||||||||
| Effect of Warrant Exercise | ||||||||||||||||
| Effect of Treasury Issuance | ||||||||||||||||
| Effect of Share Options Exercise | ||||||||||||||||
| Weighted-average numbers of Common Shares | ||||||||||||||||
| Loss per share | ||||||||||||||||
| Basic and diluted loss per share | ) | ) | ) | ) | ||||||||||||
| For the Period Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Options | ||||||||
| RSU | ||||||||
| Total | ||||||||
| 11 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| A. | Description of share-based payment arrangements |
Stock option plan (equity-settled)
On January 20, 2016, the Company established a stock option plan (the “Stock Option Plan”) that entitles key management personnel and employees to acquire Common Shares upon the exercise of Company options (“Options”). Under the Stock Option Plan, holders of vested Options are entitled to purchase Common Shares for the exercise price as determined at the grant date.
On
February 26, 2022, the Company established an omnibus incentive plan providing for up to
The
Company amended its Omnibus Incentive Plan (the “A&R Plan”) on July 13, 2022, and the Company’s shareholders
approved the A&R Plan on June 9, 2023. Pursuant to the A&R Plan, the maximum number of Common Shares issuable pursuant to outstanding
Options at any time shall be limited to
| Grant Date | Number of Options | Vesting Conditions | Contractual Life of Options | |||||
| Balance January 1, 2023 | ||||||||
| On March, 2023 | years | |||||||
| On March, 2023 | years | |||||||
| On June, 2023 | years | |||||||
| On August, 2023 | years | |||||||
| On November, 2023 | years | |||||||
| Balance December 31, 2023 | ||||||||
| Balance January 1, 2024 | ||||||||
| On April, 2024 | years | |||||||
| On August, 2024 | years | |||||||
| Balance September 30, 2024 | ||||||||
| 12 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| B. | Measurement of fair value |
| September 30, 2024 | September 30, 2023 | |||||||
| Share price | $ | to $ | $ | to $ | ||||
| Expected volatility (weighted-average) | % to | % | % | |||||
| Expected life (weighted-average) | to years | years | ||||||
| Expected dividends | % | % | ||||||
| Risk-free interest rate (based on US government bonds) | - | % | - | % | ||||
Expected volatility has been based on an evaluation of historical volatility of the company’s share price.
| C. | Reconciliation of outstanding stock-options |
| September 30, 2024 | December 31, 2023 | |||||||||||||||
Number of Options | Weighted- Average Exercise Price | Number of Options | Weighted- Average Exercise Price | |||||||||||||
| Outstanding at beginning of year | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Forfeited/ Expired | ( | ) | ( | ) | ||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||||||
| Outstanding at end of period | $ | $ | ||||||||||||||
| Exercisable at end of period | ||||||||||||||||
The Options outstanding as of September 30, 2024 had a weighted average exercise price of $ (December 31, 2023: $) and a weighted-average remaining contractual life of years (December 31, 2023: years).
| D. | Restricted share unit plan |
Restricted share unit plan
Under the Company’s agent performance grant program, the Company issues RSUs to agents based on an agent meeting certain performance metrics, and successfully attracting other performing agents to the Company. or the equivalent cash value, as determined in the Company’s discretion. The Company recognizes expense from the issuance of these RSUs during the applicable vesting period based upon the best available estimate of the number RSUs expected to vest with a corresponding increase in stock-based compensation reserve. The expense recognized from the issuance of RSU awards for the period ended September 30, 2024 was $ million, and was classified as marketing expense.
Under the Company’s agent stock purchase program, agents purchase RSUs, which vest immediately but have a one year restriction period, using a percentage of the agent’s commission that is withheld by the Company. Each RSU entitles the holder to one Common Share or the equivalent cash value, as determined in the Company’s sole discretion. The RSUs are expensed in the period in which they are issued with a corresponding increase in equity. Each agent pays the Company 15% of commissions until the commission paid to the Company totals that agent’s “cap” amount (the “Cap”). As an incentive to participate in the program,
| 13 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
Stock compensation awards granted to full time employees (“FTEs”) are classified as a general and administrative, research and development, or marketing expense based on the appropriate department within the Consolidated Statements of Loss and Other Comprehensive Loss.
The following table illustrates the Company’s stock activity (in thousands of units) for the restricted share units under its equity plan.
Restricted Share Units | ||||
| Balance at, December 31, 2022 | ||||
| Granted | ||||
| Vested and Issued | ( | ) | ||
| Forfeited | ( | ) | ||
| Balance at, December 31, 2023 | ||||
| Granted | ||||
| Vested and Issued | ( | ) | ||
| Forfeited | ( | ) | ||
| Balance at, September 30, 2024 | ||||
Stock Based Compensation Expense
| For the Period Ended | ||||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||
Options Expense | RSU Expense | Total | Options Expense | RSU
Expense | Total | |||||||||||||||||||
| COGS – Agent Stock Based Compensation | ||||||||||||||||||||||||
| Marketing Expenses – Agent Stock Based Compensation | ||||||||||||||||||||||||
| Marketing Expenses – FTE Stock Based Compensation | ||||||||||||||||||||||||
| Research and Development – FTE Stock Based Compensation | ||||||||||||||||||||||||
| General and Administrative – FTE Stock Based Compensation | ||||||||||||||||||||||||
| Total Stock Based Compensation | ||||||||||||||||||||||||
| 14 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
8. INVESTMENTS IN AVAILABLE FOR SALE SECURITIES AT FAIR VALUE
The following table provides a detailed breakdown of short-term investments (in thousands) as reported in the Condensed Consolidated Statements of Financial Positions:
| Description | Estimated Fair Value December 31, 2023 | Deposit / (Withdraw) | Dividends, Interest & Income | Gross Unrealized Gains / (Losses) | Estimated Fair Value September 30, 2024 | |||||||||||||||
| Cash Investments | ( | ) | ||||||||||||||||||
| Fixed Income | ||||||||||||||||||||
| Investment Certificate | ( | ) | ||||||||||||||||||
| Total | ( | ) | ||||||||||||||||||
Investment
securities are recorded at fair value. The Company’s investment securities portfolio consists primarily of cash investments, debt
securities issued by U.S. government agencies, local municipalities and certain corporate entities. The products in the Company’s
investment portfolio have maturity dates ranging from less than one year to over
The fair value of investment securities is impacted by interest rates, credit spreads, market volatility, and liquidity conditions. Net unrealized gains and losses in the portfolio are included in Other Comprehensive Income (Loss).
| 15 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
9. PROPERTY AND EQUIPMENT
Reconciliation of Carrying Amounts (in thousands)
Computer Equipment | Software | Furniture and Equipment | Total | |||||||||||||
| Cost | ||||||||||||||||
| Balance at December 31, 2022 | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ||||||||||||
| Additions | ||||||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ||||||||||||
| Additions | ||||||||||||||||
| Balance at September 30, 2024 | ||||||||||||||||
| Accumulated Depreciation | ||||||||||||||||
| Balance at December 31, 2022 | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ||||||||||||
| Depreciation | ||||||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ||||||||||||
| Depreciation | ||||||||||||||||
| Balance at September 30, 2024 | ||||||||||||||||
| Carrying Amounts | ||||||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||
| Balance at September 30, 2024 | ||||||||||||||||
| 16 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
10. INTANGIBLE ASSETS
The
Company’s intangible assets are finite lived and consist primarily of customer relationships which is amortized on a straight-line
basis over its useful life of
Reconciliation of Carrying Amounts (in thousands)
| Intangible Assets | ||||
| Cost | ||||
| Balance at December 31, 2022 | ||||
| Purchase Price Allocation Adjustment | ||||
| Balance at December 31, 2023 | ||||
| Additions | ||||
| Balance at September 30, 2024 | ||||
| Accumulated Depreciation | ||||
| Balance at December 31, 2022 | ||||
| Depreciation | ||||
| Balance at December 31, 2023 | ||||
| Depreciation | ||||
| Balance at September 30, 2024 | ||||
| Carrying Amounts | ||||
| Balance at December 31, 2023 | ||||
| Balance at September 30, 2024 | ||||
11. GOODWILL
We record goodwill associated with acquisitions of businesses when the purchase price of the business exceeds the fair value of the net tangible and intangible assets acquired. We review 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 indicate goodwill may be impaired.
| Realty Crunch | Expetitle | LemonBrew | Total | |||||||||||||
| Cost | ||||||||||||||||
| Balance at December 31, 2022 | ||||||||||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Adjustments | ( | ) | ( | ) | ||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||
| Additions | ||||||||||||||||
| Balance at September 30, 2024 | ||||||||||||||||
| Carrying Amounts | ||||||||||||||||
| Balance at December 31, 2023 | ||||||||||||||||
| Balance at September 30, 2024 | ||||||||||||||||
| 17 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
Share capital and share premium
All Common Shares rank equally with regards to the Company’s residual assets. The following table is presented in thousands:
| Authorized | Issued and Paid | |||||||||||||||||
| September 30, 2024 | December 31, 2023 | September 30, 2024 | December 31, 2023 | |||||||||||||||
| Ordinary shares no-par value | ||||||||||||||||||
During the nine-month period ended September 30, 2024, the Company issued million shares due to exercise of stock options, exercise of warrants, and release of restricted stock units granted to agents and employees.
During the quarter ended September 30, 2024, the Company repurchased million Common Shares for a total of $ million. During the quarter ended September 30, 2023, the Company repurchased $ million Common Shares for a total of $ million.
Total number of shares held by our trustee in the NCIB is thousand and thousand as of September 30, 2024 and December 31, 2023, respectively.
13. LIQUIDITY AND CAPITAL RESOURCES
Real defines capital as its equity. It is comprised of share premium, stock-based compensation reserves, deficit, other reserves, treasury stock, and non-controlling interests. The Company’s capital management framework is designed to maintain a level of capital that funds the operations and business strategies and builds long-term shareholder value.
The Company’s objective is to manage its capital structure in such a way as to diversify its funding sources, while minimizing its funding costs and risks. The Company sets the amount of capital in proportion to the risk and adjusts by considering changes in economic conditions and the characteristic risk of underlying assets. To maintain or adjust the capital structure, the Company may repurchase shares, return capital to shareholders, issue new shares or sell assets to reduce debt.
Real’s objective is met by retaining adequate liquidity to provide the possibility that cash flows from its assets will not be sufficient to meet operational, investing and financing requirements. There have been no changes to the Company’s capital management policies during the periods ended September 30, 2024, and December 31, 2023.
The following table presents the Company’s liquidity (in thousands):
| For the Period Ended | ||||||||
| September 30, 2024 | December 31, 2023 | |||||||
| Cash | ||||||||
| Other Receivables | ||||||||
| Investments in Financial Assets | ||||||||
| Total | ||||||||
| 18 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
14. FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
Accounting classifications and fair value (in thousands)
| For the Period Ended September 30, 2024 | ||||||||||||||||||||||||
| Carrying Amount | Fair Value | |||||||||||||||||||||||
| Financial Assets at Amortized Cost | Other Financial Liabilities | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
| Financial Assets Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Investments in Financial Assets | - | - | - | |||||||||||||||||||||
| Total Financial Assets Measured at Fair Value (FV) | - | - | - | - | ||||||||||||||||||||
| Financial Assets Not Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Cash and Cash Equivalents | - | |||||||||||||||||||||||
| Restricted Cash | - | |||||||||||||||||||||||
| Funds Held in Restricted Escrow Account | - | |||||||||||||||||||||||
| Trade Receivables | - | |||||||||||||||||||||||
| Other Receivables | - | |||||||||||||||||||||||
| Total Financial Assets Not Measured at Fair Value (FV) | - | |||||||||||||||||||||||
| Financial Liabilities Not Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Accounts Payable | - | - | - | - | ||||||||||||||||||||
| Accrued Liabilities | - | - | - | - | ||||||||||||||||||||
| Customer Deposits | - | - | - | - | ||||||||||||||||||||
| Other Payables | - | - | - | - | ||||||||||||||||||||
| Total Financial Liabilities Not Measured at Fair Value (FV) | - | - | - | - | ||||||||||||||||||||
| For the Year Ended December 31, 2023 | ||||||||||||||||||||||||
| Carrying Amount | Fair Value | |||||||||||||||||||||||
| Financial Assets at Amortized Cost | Other Financial Liabilities | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
| Financial Assets Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Investments in Financial Assets | - | - | - | |||||||||||||||||||||
| Total Financial Assets Measured at Fair Value (FV) | - | - | - | - | ||||||||||||||||||||
| Financial Liabilities Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Warrants | - | - | - | - | ||||||||||||||||||||
| Total Financial Liabilities Measured at Fair Value (FV) | - | - | - | - | ||||||||||||||||||||
| Financial Assets Not Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Cash and Cash Equivalents | - | |||||||||||||||||||||||
| Restricted Cash | - | |||||||||||||||||||||||
| Trade Receivables | - | |||||||||||||||||||||||
| Other Receivables | - | |||||||||||||||||||||||
| Total Financial Assets Not Measured at Fair Value (FV) | - | |||||||||||||||||||||||
| Financial Liabilities Not Measured at Fair Value (FV) | ||||||||||||||||||||||||
| Accounts Payable | - | - | - | - | ||||||||||||||||||||
| Accrued Liabilities | - | - | - | - | ||||||||||||||||||||
| Customer Deposits | - | - | - | - | ||||||||||||||||||||
| Other Payables | - | - | - | - | ||||||||||||||||||||
| Total Financial Liabilities Not Measured at Fair Value (FV) | - | - | - | - | ||||||||||||||||||||
| 19 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
| A. | Transfers between levels |
During the periods ended September 30, 2024, and December 31, 2023, there have been no transfers between Level 1, Level 2 and Level 3.
| B. | Valuation techniques and inputs for level 2 instruments |
The warrants were initially recorded at fair value on date of grant using the Black-Scholes model and net of issuance costs, and are subsequently re-measured to fair value at each subsequent balance sheet date.
| C. | Financial risk management |
The Company has exposure to the following risks arising from financial instruments:
| – | credit risk (see (ii)); |
| – | liquidity risk (see (iii)); |
| – | market risk (see (iv)); and |
| – | investment risk (see (v)). |
| i. | Risk management framework |
The Company’s activity exposes it to a variety of financial risks, including credit risk, liquidity risk, market risk and investment risk. These financial risks are managed by the Company under policies approved by the Board of Directors. The principal financial risks are actively managed by the Company’s finance department, within the policies and guidelines.
On an ongoing basis, the finance department actively monitors the market conditions, with a view of minimizing exposure of the Company to changing market factors, while at the same time limiting the funding costs of the Company.
The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
| ii. | Credit risk |
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers. The receivables are processed through an intermediary trustee, as part of the structure of every deal, which ensures collection on the close of a successful transaction. In order to mitigate the residual risk, the Company contracts exclusively with reputable and credit-worthy partners.
The carrying amount of financial assets represents the maximum credit exposure.
Trade receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers other factors may influence the credit risk of the customer base, including the default risk associated with the industry and the country in which the customers operate.
The Company does not require collateral in respect to trade and other receivables. The Company does not have trade receivables for which no loss allowance is recognized because of collateral.
| 20 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through successive stages of delinquency to write-off. Roll rates are calculated separately for exposures in different Cash Generating Units based on the following common credit risk characteristics – geographic region, credit information about the customer and the type of home purchased.
Loss rates are based on actual credit loss experience. These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which the historical data has been collected, compared to current conditions of the Company’s view of economic conditions over the expected lives of the receivables.
As of September 30, 2024, the exposure to credit risk for trade receivables (in thousands) by geographic region was as follows:
| September 30, 2024 | December 31, 2023 | |||||||
| US | ||||||||
| Other Regions | ||||||||
| Trade Receivables | ||||||||
| iii. | Liquidity risk |
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to maintaining liquidity is to ensure, as far as possible, that it will have sufficient cash and cash equivalents and other liquid assets to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
| iv. | Market risk |
Market risk is the risk that changes in market prices – e.g. foreign exchange rates, interest rates and equity prices – will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Currency risk
The Company is exposed to transactional foreign currency risk to the extent there is a mismatch between currencies in which purchases and receivables are denominated and the respective functional currencies of the Company. The currencies in which transactions are primarily denominated are US dollars, Israeli shekel and Canadian dollars.
| 21 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
Sensitivity analysis
A reasonably possible strengthening (weakening) of the U.S. dollar (USD), Israeli shekel (ILS), or Canadian Dollar (CAD) against all other currencies in which the Company operates as of September 30, 2024 and December 31, 2023 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The following table is presented in thousands:
| Average Rate | Period-end Spot Rate | |||||||||||||||
| Strengthening | Weakening | Strengthening | Weakening | |||||||||||||
| Balance at, September 30, 2024 | ||||||||||||||||
| CAD (-5% movement) | ( | ) | ( | ) | ||||||||||||
| ILS (-5% movement) | ( | ) | ( | ) | ||||||||||||
| Balance at, December 31, 2023 | ||||||||||||||||
| CAD (-5% movement) | ( | ) | ( | ) | ||||||||||||
| ILS (-5% movement) | ( | ) | ( | ) | ||||||||||||
Foreign Currency Risk Management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign exchange contracts.
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities (in thousands) at the reporting date are as follows:
| Liabilities | Assets | |||||||||||||||
| September 30, 2024 | December 31, 2023 | September 30, 2024 | December 31, 2023 | |||||||||||||
| CAD | ( | ) | ( | ) | ||||||||||||
| ILS | ( | ) | ( | ) | ||||||||||||
| Total Exposure | ( | ) | ( | ) | ||||||||||||
| v. | Investment risk |
The Company invested into a managed investment portfolio, exposing it to risk of losses based on market fluctuations. Securities are purchased on behalf of the Company and are actively managed through multiple investment accounts. Funds apportioned for investment are allocated accordingly to the investment guidelines set forth by Management. Investments are made in U.S. currency.
The Company follows a conservative investment approach with limited risk for investment activities and has allocated the funds in Level 1 assets to reduce market risk exposure.
Information about the Company’s investment activity is included in Note 8.
| 22 |
THE REAL BROKERAGE INC.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2024 AND 2023
UNAUDITED
15. COMMITMENTS AND CONTINGENCIES
In
December 2023, the Company was named as a defendant in a putative class action lawsuit, captioned Umpa v. The National Association
of Realtors, et al., which was filed in the United States District Court for the Western District of Missouri (the “Umpa
Matter”). The Umpa Matter alleges that certain real estate brokerages, including the Company, participated in practices that
resulted in inflated buyer broker commissions, in violation of federal antitrust laws. On April 7, 2024, the Company entered into a settlement
agreement to resolve the Umpa Matter on a nationwide basis. This settlement conclusively addresses all claims asserted against the Company
in the Umpa Matter, releasing the Company, its subsidiaries, and affiliated agents from these claims. The settlement does not constitute
an admission of liability by the Company, nor does it concede or validate any of the claims asserted in the litigation. Pursuant to the
terms of the settlement agreement, the Company paid $
Additionally, the Company agreed to implement specific changes to its business practices. These changes include clarifications about the negotiability of commissions, prohibitions on claims that buyer agent services are free, and the inclusion of listing broker compensation offers in communications with clients. The Company also agreed to develop training materials to support these practice changes. The settlement agreement received final court approval on October 31, 2024, and will take effect following any appeals process, if applicable. There were no changes to the settlement agreement between preliminary and final approval. The Company does not foresee the settlement terms having a material impact on its future operations.
On June 14, 2024, the Company was named as a defendant in a putative class action lawsuit, captioned Kyle Miholich v. The Real Brokerage Inc., et al., which was filed in the United States District Court for the Southern District of California (“Class Action”). The Class Action alleges that real estate agents acting as independent contractors to the Company under an Independent Contractor Agreement sent text messages that violated the federal Telephone Consumer Protection Act. The Company’s policies require the independent contractor real estate agents to comply with the Telephone Consumer Protection Act. The plaintiffs are seeking certification of the Class Action, injunctive relief prohibiting future violations of the Telephone Consumer Protection Act, monetary damages for each alleged statutory violation and reimbursement of their litigation costs and attorneys’ fees. The Company will vigorously defend against the claims asserted in the Class Action, and the Company is unable to predict the outcome of the Class Action or whether an outcome unfavorable to the Company would have a material adverse effect on its results of operations or financial condition.
16. RELATED PARTY TRANSACTIONS
Balances and transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The Company’s key management personnel are comprised of its Chief Executive Officer, Chief Financial Officer, President, Chief Technology Officer, and Chief Marketing Officer, and other members of the executive team. Executive officers participate in the A&R Plan (see Note 7.A). Directors and officers of the Company control approximately % of the voting shares of the Company. The remuneration of key management personnel and directors of the Company who are part of related parties is set out below (in thousands):
| For the Period Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Salaries and Benefits | ||||||||
| Stock-Based Compensation | ||||||||
| Compensation Expenses for Related Parties | ||||||||
| 23 |