●
|
Part II - Item 6 – Exhibits
|
The restatement disclosed in our Current Report on
Form 8-K that was filed on April 3, 2018, resulted from accounting errors in the treatment of equity instruments granted to non-employees
in 2012 and 2013 which materially impacted our financial statements for the fiscal year ended December 31, 2016 (“Fiscal
2016”) and the first three fiscal quarters of the fiscal year ended December 31, 2017 (“Fiscal 2017”). The restatement
disclosed on Form 8-K that was filed on April 16, 2018 resulted from accounting errors in the treatment of equity instruments
granted to employees in 2012 and 2013 which materially impacted our financial statements for the fiscal year ended December 31,
2015, Fiscal 2016, and the first three quarters of Fiscal 2017.
The accounting errors had no effect on cash and no
impact on the Company’s assets, liabilities, or net cash flows from operating, investing, and financing activities on the
statement of cash flows during the six months ended June 30, 2017 or the comparable period in Fiscal 2016. The combined non-cash
effect of the accounting errors lead to a net increase in previously recognized stock-based compensation expense of approximately
$0.1 million and $0.3 million for six months ended June 30, 2017 and the comparable period in Fiscal 2016, respectively and an
increase in previously recognized stock-option compensation expense of approximately of $8.1 million and a reduction of $5.9 million
for six months ended June 30, 2017 and the comparable period in Fiscal 2016, respectively.
We previously did not recognize costs associated with
a 20% discount to the fair value determined each month when issuing shares under our Agent Equity Program. The restated financial
statements now include these additional charges as cost of sales expense in the restated periods.
In addition, the Company made a correction of certain
immaterial errors in revenue and cost of revenue, which decreases previously reported revenues and cost of revenues by approximately
$1.1 million for six months ended June 30, 2017 and by approximately $0.4 million for the six months ended June 30, 2016. These
errors had no impact on the previously reported net loss.
As disclosed in the Company’s Annual Report
on Form 10-K, the Company restated its additional paid in capital and accumulated deficit at December 31, 2015 and December 31,
2014. As such, 2016 additional paid in capital and accumulated deficit reflect the cumulative adjustments made in prior years.
These errors were discovered by management during
the course of its preparation of the Annual Report on Form 10-K for Fiscal 2017, and the audit of the financial results for Fiscal
2017. None of the errors involve misconduct with respect to the Company or its management or employees.
Except as described above, no other changes have
been made to the Original Filing and this Form 10-Q/A does not reflect subsequent events that may have occurred since the date
of the Original Filing or amend, update or change the financial statements or any other items or disclosures in the Original Filing.
In accordance with Rule 12b-5 under the Securities
Exchange Act of 1934, as amended, we have included new certifications from our Chief Executive Officer and Chief Financial Officer
dated the date of this Form 10-Q/A.
For the convenience of the reader, this Form 10-Q/A
sets forth the information in the Original Filing in its entirety, as such information as modified and superseded where necessary
to reflect the restatement and related revisions.
Statement Regarding Forward-Looking
Statements
Certain statements contained in this report on Form
10-Q are forward-looking statements which are intended to be covered by the safe harbors created thereby. All statements, other
than statements of historical facts, are forward-looking statements. The words “believe,” “expect,” “anticipate,”
“estimate,” “project,” “plan,” “should,” “intend,” “may,”
“will,” “would,” “potential” and similar expressions identify forward-looking statements, but
are not the exclusive means of doing so. Forward-looking statements may include statements about matters such as: future revenues;
future industry market conditions; future changes in our capacity and operations; future operating and overhead costs; operational
and management restructuring activities (including implementation of methodologies and changes in the board of directors); future
employment and contributions of personnel; tax and interest rates; capital expenditures and their impact on us; nature and timing
of restructuring charges and the impact thereof; productivity, business process, rationalization, investment, acquisition, consulting,
operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory
environment; and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings and
growth.
These statements are based on assumptions and assessments
made by our management in light of their experience and their perception of historical and current trends, current conditions,
possible future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations
or warranties and are subject to risks and uncertainties that could cause actual results, developments and business decisions to
differ materially from those contemplated by such forward-looking statements. Some of those risks and uncertainties include the
risk factors set forth in this report and our Annual Report on Form 10-K for our prior fiscal year ended December 31, 2016, and
the following: current global economic and capital market uncertainties; potential dilution to our stockholders from our recapitalization
and balance sheet restructuring activities; potential inability to continue to comply with government regulations; adoption of,
or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays, business opportunities
that may be presented to, or pursued by, us; changes in the United States or other monetary or fiscal policies or regulations;
changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies;
potential inability to grow revenues organically; potential inability to attract and retain key personnel; assertion of claims,
lawsuits and proceedings against us; potential inability to maintain an effective system of internal controls over financial reporting;
potential inability or failure to timely file periodic reports with the SEC; and potential inability to list our securities on
any securities exchange or market. Occurrence of such events or circumstances could have a material adverse effect on our business,
financial condition, results of operations or cash flows or the market price of our securities. All subsequent written and oral
forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by
these factors. We undertake no obligation to publicly update or revise any forward-looking statement.
PART I – FINANCIAL INFORMATION
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The following discussion should be read together with
our condensed consolidated financial statements and related notes appearing elsewhere in this report. This discussion contains
forward-looking statements based upon current expectations that involve numerous risks, uncertainties and assumptions. Our actual
results could differ materially from those anticipated in these forward-looking statements for many reasons. Those reasons include,
without limitation, those described at the beginning of this report under “Statement regarding forward-looking statements,”
as well as those that may be set forth elsewhere in this report. Except as otherwise required by law, we do not intend to update
any information contained in these forward-looking statements. The following discussion also addresses matters we consider important
for an understanding of our financial position as of June 30, 2017, and the results of operations for the three and six months
ended June 30, 2017, which may not be indicative of our future results through the year ended December 31, 2017 or beyond.
Overview of Restatement
eXp World Holdings, Inc. is filing this Amendment
No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q, as originally filed with the Securities and Exchange Commission on
August 14, 2017 (the “Original Filing”) to restate our unaudited condensed consolidated financial statements for the
quarter ended June 30, 2017 and to make related revisions to certain other disclosures in the Original Filing. The restatement
of our financial statements in this Form 10-Q/A reflects the correction of certain identified accounting errors related to the
treatment of equity instruments granted to both employees and non-employees in 2012 and 2013. Further explanation regarding the
restatement is set forth in Note 6 to the unaudited condensed consolidated financial statements included in this Form 10-Q/A.
All financial statement sections in the Original
Filing are revised in this Form 10-Q/A.
The restatement disclosed in our Current Report on
Form 8-K that was filed on April 3, 2018, resulted from accounting errors in the treatment of equity instruments granted to non-employees
in 2012 and 2013, which materially impacted our financial statements for the fiscal year ended December 31, 2016 (“Fiscal
2016”) and the first three fiscal quarters of the fiscal year ended December 31, 2017 (“Fiscal 2017”). The restatement
disclosed in our Current Report on Form 8-K that was filed on April 12, 2018 resulted from accounting errors in the treatment
of equity instruments granted to employees in 2012 and 2013 which materially impacted our financial statements for the fiscal
year ended December 31, 2015, Fiscal 2016, and the first three quarters of Fiscal 2017.
The accounting errors had no effect on cash and no
impact on the Company’s assets, liabilities, or net cash flows from operating, investing, and financing activities on the
statement of cash flows during the six months ended June 30, 2017 or the comparable period in Fiscal 2016. The combined non-cash
effect of the accounting errors lead to a net increase in previously recognized stock-based compensation expense of approximately
$0.1 million and $0.3 million for six months ended June 30, 2017 and the comparable period in Fiscal 2016, respectively and an
increase in previously recognized stock-option compensation expense of approximately of $8.1 million and a reduction of $5.9 million
for six months ended June 30, 2017 and the comparable period in Fiscal 2016, respectively.
In addition, the Company made a correction of certain
immaterial errors in revenue and cost of revenue, which decreases previously reported revenues and cost of revenues by approximately
$1.1 million for six months ended June 30, 2017 and by approximately $0.4 million for the six months ended June 30, 2016. These
errors had no impact on the previously reported net loss.
These errors were discovered by management during
the course of its preparation of the Annual Report on Form 10-K for Fiscal 2017, and the audit of the financial results for Fiscal
2017. None of the errors involve misconduct with respect to the Company or its management or employees.
Except as described above, no other changes have
been made to the Original Filing and this Form 10-Q/A does not reflect subsequent events that may have occurred since the date
of the Original Filing or amend, update or change the financial statements or any other items or disclosures in the Original Filing.
In accordance with Rule 12b-5 under the Securities
Exchange Act of 1934, as amended, we have included new certifications from our Chief Executive Officer and Chief Financial Officer
dated the date of this Form 10-Q/A.
For the convenience of the reader, this Form 10-Q/A
sets forth the information in the Original Filing in its entirety, as such information as modified and superseded where necessary
to reflect the restatement and related revisions.
OVERVIEW
eXp World Holdings, Inc., (the “Company”,
“eXp”, “we”, “us”, “our”), is a cloud-based residential real estate brokerage.
Our operations are focused on the use of cloud-based technologies in order to grow an international brokerage without the burden
of physical bricks and mortar or redundant staffing costs. Our technology focus includes the development of a proprietary cloud
based real estate transactional platform.
Continued Accelerated Growth
– During the
six-month period ended June 30, 2017, we increased our net real estate brokerage agent and broker base by 58%, from approximately
2,400 as of December 31, 2016 to over 3,800. These increases were incurred in both new and existing geographical markets and contributed
to revenue increases of 202% and 198% as compared to the six months and three months ended June 30, 2016, respectively.
RECENT BUSINESS DEVELOPMENTS
Advancements during the three months ended June 30
th
,
2017 centered on the addition of scaling the corporate operations of the company to match current and ongoing growth of the business.
In April 2017, industry veterans from companies including Zillow and DocuSign joined eXp to head up areas including technology,
agent services and marketing/communications. These new members of the leadership team focused on quick improvements in a variety
of operational areas for a growing agent base and planning for ongoing growth of new agents and teams.
The Company launched eXp Enterprise
(“Enterprise”) during the three months ended June 30
th
, 2017. Enterprise is a new proprietary platform
that manages all of the Company’s critical processes and information, including agent details, transactions,
commissions and revenue share. It allows for a flow of real time information to eXp agents, while also providing a singular
platform for eXp staff to perform a variety of back office functions in a scalable and efficient manner. The platform has
already led to improvements in the areas of agent onboarding, transaction processing, and financial oversight. This platform
will lend- itself to constantly enhance and build out capabilities that meet the needs of company stakeholders into the
future.
The Company also committed to initiate agent commission
payments on 90 percent of core transactions within one business day of closing. The Company created a new, internal project team
focused on driving velocity of payments by improving the settlement and disbursement authorization processes. Through an internal
audit and improvement of processes along with additional resources, the project was successful.
To provide additional support to eXp agents in 43 states,
the Company redefined the role of the State Administrative Broker and created a new role: Regional Development Leader (“RDL”).
The RDL role is designed to deal with the multitude of request from agents considering moving to eXp, allowing the State Administrative
Broker to work more closely with a growing base of current agents.
During the three months ended June 30
th
, 2017,
the Company also created a variety of new marketing and communications assets, allowing stakeholders to have more transparency
into the organization while providing more ways to provide feedback. Assets provided to agents included tools to assist with social
media, public relations, and a variety of internal communication pieces to help agents be more productive and in-the-know.
The Company expects to continue to add staff and make
strategic additions to its executive team in future periods.
MARKET CONDITIONS AND TRENDS
According to the National Association of REALTORS (“NAR”),
home sale transaction volume increased 8% in the second quarter of 2017 as compared to the same period in 2016 as a result of both
an increase in the number of home sale transactions, combined with average home sale price growth. Also according to NAR,
the
housing affordability index has continued to be at historically favorable levels. When the index is above 100, it indicates that
a family earning the median income has sufficient income to purchase a median-priced home, assuming a 20 percent down payment and
ability to qualify for a mortgage. The composite housing affordability index was
153 for May (preliminary) 2017 and
161
for 2016.
The housing affordability index remains significantly higher than the average of 127 for the period from 1970
through 2016.
The favorable housing affordability index is due in part
to favorable mortgage rate conditions. Mortgage rates increased approximately 45 basis points from September 30, 2016 to June 30,
2017, but continue to be at historically low levels. While any increase to mortgage rates can adversely impact housing affordability,
we believe that rising wages, improving consumer confidence and continued low inventory levels will result in favorable demand
conditions and existing home sale volume growth.
According to Freddie Mac, mortgage rates on commitments
for 30-year, conventional, fixed-rate first mortgages averaged 3.7% for 2016 and the rate at June 30, 2017 was 3.9%. To the extent
that mortgage rates increase further, consumers continue to have financing alternatives such as adjustable rate mortgages or shorter
term mortgages which can be utilized to obtain a mortgage rate that is lower than a comparable 30-year fixed-rate mortgage.
Partially offsetting the positive impact of low mortgage
rates are low housing inventory levels. According to NAR, the inventory of existing homes for sale in the U.S. was 1.96 million
and 2.11 million at the end of June (preliminary) 2017 and June 2016, respectively. The June (preliminary) 2017 inventory represents
a national average supply of 4.3 months at the current home sales pace which is below the 6.1 month 25-year average.
Additional factors offsetting the positive impact of
low mortgage rates include the ongoing rise in home prices,
less than favorable mortgage underwriting
standards and some would-be home sellers having limited or negative equity in homes.
Mortgage credit conditions tightened
significantly during the recent housing downturn, with banks limiting credit availability to more creditworthy borrowers and requiring
larger down payments, stricter appraisal standards, and more extensive mortgage documentation. Although mortgage credit conditions
appear to be easing, mortgages remain less available to some borrowers and it frequently takes longer to close a residential transaction
due to current mortgage and underwriting requirements.
Existing Home Sales
According to NAR, for the year ended December 31, 2016,
existing home sale transactions increased to 5.5 million homes or up 4% compared to 2015. In the first six months of 2017, NAR
existing home sale transactions increased to 2.69 million homes, or up 3.3%, compared to the same period of 2016. During the same
period, eXp Realty home sale transactions increased 186% compared to the same period in 2016. Our home sale transactions were impacted
by the growth of our agent base which grew from approximately 2,400 at the end of 2016 to over 3,800 by the end of the second quarter
of 2017.
As of their most recent releases, NAR is forecasting
existing home sales to increase 3% in 2017 and another 2% in 2018.
Existing Home Sale Price
We believe primary drivers to the long-term demand for
housing and the growth of our company to support that demand are housing affordability, the general economic health of the U.S.
economy, demographic trends such as population growth, the increase in household formation, mortgage rate levels and mortgage availability,
job growth, the inherent benefits of owning a home versus renting and the influence of local housing
dynamics of supply versus demand.
As of June 30, 2017, we believe that these factors are generally favorable.
However,
significant changes to one or more of these drivers could cause the demand for housing to slow, negatively affecting all real estate
brokerage firms, including eXp Realty.
Regardless of whether the housing market continues to grow or slows, eXp Realty expects
to adhere to its low-cost, high-engagement model, affording a growing number of agents and brokers increased income and ownership
opportunities while offering a scalable solution to brokerage owners looking to survive and thrive in a wide range of economic
conditions.
Results of Operations
Comparison of the Three Months Ended June 30, 2017
to the Three Months ended June 30, 2016
Revenues
During the three-month period ended June 30, 2017
revenues increased $25.9 million to $39.0 million as compared to the three-month period ended June 30, 2016 when we generated
$13.1 million. The increase as compared to the prior period is a direct result of the increases in sales agent base by over
171% to over 3,800.
Operating Expenses
|
|
Three Months Ended
June
30,
|
|
|
|
|
|
|
2017
(As
Restated)
|
|
|
2016
(As
Restated)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
$
|
34,740,874
|
|
|
$
|
11,345,050
|
|
|
$
|
23,395,824
|
|
General and administrative
|
|
|
5,692,647
|
|
|
|
2,005,679
|
|
|
|
3,686,968
|
|
Professional fees
|
|
|
318,383
|
|
|
|
130,018
|
|
|
|
188,365
|
|
Sales and marketing
|
|
|
348,823
|
|
|
|
122,285
|
|
|
|
226,538
|
|
Total operating expenses
|
|
$
|
41,100,727
|
|
|
$
|
13,603,032
|
|
|
$
|
27,497,695
|
|
Cost of revenues includes costs related to sales agent
commissions and revenue sharing. These costs are highly correlated with recognized revenues. As such, the increase of $23.4 million
in the current three-month period ended June 30, 2017 as compared to the three-month period ended June 30, 2016 was driven by the
higher amount of revenues and agent commission rates.
General and administrative includes costs related to
wages, stock compensation, dues, operating leases, utilities, travel, and other general overhead expenses. The increase of
$3.7 million in general and administrative costs in the three-month period ended June 30, 2017 as compared to the three-month
period ended June 30, 2016 was driven primarily from an increase in both stock option and stock compensation expense in addition
to our increases in our employee headcount to support the 202% growth in the number of agents and brokers.
Professional fees include costs related to legal, accounting,
and other consultants. Costs increased $0.19 million during the three-month period ended June 30, 2017 as compared to the three-month
period ended June 30, 2016. Professional fees were higher due to higher audit costs as compared to the same period last year in
addition to other non-recurring transactions, specifically as it relates to performing diligence and contract review and preparation
to support the growth of new agent and broker bases as well as entry into new geographical markets.
Sales and marketing includes costs related to lead capture,
digital and print media, and trade shows, in addition to other promotional materials. The cost increase of approximately $0.23
million was due to increased cost in lead capture and other internet marketing related to our growth in agent and broker headcount
for the three-month period ended June 30, 2017 as compared to the three-month period ended June 30, 2016.
Results of Operations
Comparison of the Six Months Ended June 30, 2017 to
the Six Months Ended June 30, 2016
Revenues
During the six-month period ended June 30, 2017 revenues
increased $40.4 million to $60.5 million as compared to the six-month period ended June 30, 2016 when we generated $20.1 million.
The increase as compared to the prior period is a direct result of the increases in sales agent base by over 171% to over
3,800.
Operating Expenses
|
|
Six Months Ended
June
30,
|
|
|
|
|
|
|
2017
(As
Restated)
|
|
|
2016
(As
Restated)
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
$
|
53,701,009
|
|
|
$
|
17,334,974
|
|
|
$
|
36,366,035
|
|
General and administrative
|
|
|
10,468,528
|
|
|
|
3,295,691
|
|
|
|
7,172,837
|
|
Professional fees
|
|
|
682,843
|
|
|
|
273,393
|
|
|
|
409,450
|
|
Sales and marketing
|
|
|
650,045
|
|
|
|
199,428
|
|
|
|
450,617
|
|
Total operating expenses
|
|
$
|
65,502,425
|
|
|
$
|
21,103,486
|
|
|
$
|
44,398,939
|
|
Cost of revenues includes costs related to sales agent
commissions and revenue sharing. These costs are highly correlated with recognized revenues. As such, the increase of $36.4
million in the current six-month period ended June 30, 2017 as compared to the six-month period ended June 30, 2016 was driven
by the higher amount of revenues and agent commission rates.
General and administrative includes costs related to
wages, stock compensation, dues, operating leases, utilities, travel, and other general overhead expenses. The increase of
$7.2 million in general and administrative costs in the six-month period ended June 30, 2017 as compared to the six-month period
ended June 30, 2016 was driven primarily from an increase in both stock option and stock compensation expense in addition to our
increases in our employee headcount to support the 202% growth in the number of agents and brokers.
Professional fees include costs related to legal, accounting,
and other consultants. Costs increased $0.41 million during the six-month period ended June 30, 2017 as compared to the six-month
period ended June 30, 2016. Professional fees were higher due to higher audit costs as compared to the same period last year in
addition to other non-recurring transactions, specifically as it relates to performing diligence and contract review and preparation
to support the growth of new agent and broker bases as well as entry to new geographical markets.
Sales and marketing includes costs related to lead capture,
digital and print media, and trade shows, in addition to other promotional materials. The cost increase of approximately $0.45
million was due to increased cost in lead capture and other internet marketing related to our growth in agent and broker headcount
for the six-month period ended June 30, 2017 as compared to the six-month period ended June 30, 2016.
LIQUIDITY AND CAPITAL RESOURCES
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
11,557,051
|
|
|
$
|
5,565,642
|
|
Current liabilities
|
|
|
(8,762,466
|
)
|
|
|
(3,577,021
|
)
|
Net working capital
|
|
$
|
2,794,585
|
|
|
$
|
1,988,621
|
|
Our working capital as of June 30, 2017 increased as
compared to December 31, 2016. Our increased sales volumes, resulting in increased receivables and restricted cash were off-set
by corresponding increases in accrued expenses related commissions payable.
The following table presents our cash flows for the six
months ended June 30, 2017 and 2016:
|
|
Six Months ended
June 30,
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
$
|
302,480
|
|
|
$
|
459,618
|
|
|
$
|
(157,138
|
)
|
Cash (used in) investment activities
|
|
|
(548,758
|
)
|
|
|
(150,328
|
)
|
|
|
(398,430
|
)
|
Cash provided by (used in) financing activities
|
|
|
130,639
|
|
|
|
–
|
|
|
|
130,639
|
|
Net cash provided by operating activities for the six
months ended June 30, 2017 primarily resulted from the increased volume in our sales transactions and higher commission receivable.
As a result of the increased sales volume, we also incurred higher accrued expenses, specifically commission payable. If we are
successful in our growth plans, which would result in further increases in sales volumes, we expect to generate positive operating
cash flows for the next twelve months.
During the six months ended June 30, 2017, our investing
activities consisted of additional expenditures related to the on-going development of our internal use software. As we continue
to develop and refine our cloud-based platforms, we expect to continue to use our existing cash resources on similar expenditures
for the next twelve months.
We generated approximately $0.13 million in cash flows
from financing activities primarily related to the completion of our December 31, 2016 private placement and the exercise of 25,000
options to purchase 25,000 shares of common stock.
Our future capital requirements will depend on many factors,
including our level of investment in technology and our rate of growth into new markets. Our capital requirements may be affected
by factors which we cannot control such as the residential real estate market, interest rates, and other monetary and fiscal policy
changes to the manner in which we currently operate. We anticipate that between our current cash position and cash flow from ongoing
operations we have the necessary resources to continue operating our business over the next 12 months. In order to support and
achieve our future growth plans, however, we may need or seek advantageously to obtain additional funding through equity or debt
financing.
We currently have no bank debt or line of credit facilities.
In the event that additional financing is required in the future, we may not be able to raise it on terms acceptable to us or at
all. If we are unable to raise additional capital when desired, our business and results of operations will likely suffer.
CRITICAL ACCOUNTING ESTIMATES
There has been no change in our critical accounting estimates
as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
As detailed in a Current Report on Form 8-K filed on
August 2, 2017, on July 27, 2017 we entered into a separation agreement and release with Mr. Russell Cofano our former President
and General Counsel who resigned on July 28
th
, 2017. A summary of that agreement is contained in the aforementioned
Form 8-K, and the agreement is filed as Exhibit 10.1 to the Form 8-K.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.