Item 2.01 Completion of Acquisition or Disposition of Assets.

Closing of Merger Agreement

On August 15, 2013, we entered into a merger agreement with eXp Realty International, Inc., a Washington corporation, and eXp Acquisition Corp., a Washington corporation and a wholly-owned subsidiary of our company, pursuant to which we acquired all of the issued and outstanding shares of eXp Realty International, Inc.’s common stock in exchange for the issuance of 37,482,965 post-split shares of our common stock to eXp Realty International, Inc.’s stockholders on a pro-rata basis. We also agreed that each outstanding option to purchase shares of eXp Realty International, Inc. would be converted into options entitling the holder to purchase such number of shares of our common stock that is equal to 7.5 times the number of shares of eXp Realty International, Inc. that would have been issuable on exercise of the eXp Realty International, Inc. options, with a proportionate decrease in any exercise price such that the total exercise price of each cancelled eXp Realty International, Inc. options will equal the total exercise price of the replacement options to purchase shares of our common stock.

To facilitate the transaction, eXp Realty International, Inc. agreed to merge with our wholly-owned subsidiary, eXp Acquisition Corp., with our subsidiary remaining as the surviving corporation and the separate existence of eXp Realty International, Inc. ceasing at the effective time of the merger. The merger of eXp Realty International, Inc. and eXp Acquisition Corp. was completed on September 27, 2013.

In connection with the closing of the merger agreement, we issued an aggregate of 37,482,965 post-split shares of our common stock to eXp Realty International, Inc. stockholders. 31 of these stockholders were U.S. persons and we issued these shares relying on Section 4(a)(2) of the Securities Act of 1933. Two of these stockholders were non-U.S. persons and we issued these shares in offshore transactions relying on Regulation S and/or Section 4(a)(2) of the Securities Act of 1933.

In connection with the closing of the merger agreement, we also adopted a stock option plan which provides for the grant of stock options to acquire an aggregate of 10,000,000 shares of our common stock, and granted an aggregate of 7,673,994 stock options under such plan effective September 27, 2013. We granted these stock options relying on Section 4(a)(2) of the Securities Act of 1933.

Name Change and Forward Stock Split

In connection with and prior to the closing of the merger agreement, effective September 9, 2013, we changed our name from “Desert Canadians Ltd.” to “eXp Realty International Corporation” and effected a 35 new for one old forward stock split of our authorized and issued and outstanding shares of common stock. As a result, our authorized capital was increased from 220,000,000 shares of common stock to 7,700,000,000 shares of common stock and our issued and outstanding shares of common stock was increased on the basis of 35 new shares for one old share.

3

Share Cancellation

In connection with the closing of the merger agreement, Glenn Sanford, a director and officer of our company, returned 1,393,350,000 shares (39,810,000 pre-split shares) of our common stock to the treasury of our company for cancellation without consideration. The share cancellations became effective on September 16, 2013.

Change of Officers and Directors

Upon the closing of the merger agreement, on September 27, 2013, our board of directors appointed Jason Gesing and Steve Alamin, two nominees of eXp Realty International, Inc., as directors of our company. As a result, our board of directors consists of Glenn Sanford, Jason Gesing and Steve Alamin.

Effective as of the closing of the merger agreement, Glenn Sanford resigned as the President of eXp Realty International Corporation and our board of directors appointed Jason Gesing as President of eXp Realty International Corporation and Steve Alamin as Chief Operating Officer of eXp Realty International Corporation. Glenn Sanford continues to be Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a director of eXp Realty International Corporation. In addition, our board of directors appointed Glenn Sanford as Chairman of eXp Realty International Corporation.

General Matters

Glenn Sanford, a director, officer and stockholder of our company, was a director, officer and stockholder of eXp Realty International, Inc.

The securities of our company that were issued to the stockholders and option holders of eXp Realty International, Inc. upon the closing of the merger agreement have not been and will not be registered under the Securities Act of 1933, or under the securities laws of any state in the United States, and were issued in reliance upon an exemption from registration under the Securities Act of 1933. The securities may not be offered or sold in the United States absent registration under the Securities Act of 1933, or an applicable exemption from such registration requirements.

FORM 10 INFORMATION

BUSINESS

Corporate Overview

We were incorporated in the State of Delaware on July 30, 2008.

In connection with and prior to the closing of the merger agreement, effective September 9, 2013, we changed our name from “Desert Canadians Ltd.” to “eXp Realty International Corporation” and effected a 35 new for one old forward stock split of our authorized and issued and outstanding shares of common stock. As a result, our authorized capital was increased from 220,000,000 shares of common stock to 7,700,000,000 shares of common stock and our issued and outstanding shares of common stock was increased on the basis of 35 new shares for one old share.

eXp Realty, LLC (formerly known as Buyer Tours Realty, LLC) was organized in the State of Washington on January 30, 2007. On December 31, 2012, substantially all of the member interests in eXp Realty, LLC were exchanged for shares in eXp Realty International, Inc. which was incorporated in the State of Washington on October 1, 2012. From its inception, eXp Realty, LLC has been engaged in the marketing and sale of residential real estate with the goal of being the first truly cloud-based, full service, global real estate brokerage company delivering around-the-clock access to collaborative tools and professional development for managing real estate brokers and agents. The business model was created in order to increase brokers’ and agents’ listings and sales and reduce their overhead and capital requirements.

4

As described above, on August 15, 2013, we and eXp Acquisition Corp., a Washington corporation and wholly-owned subsidiary of our company, entered into a merger agreement with eXp Realty International, Inc., and as a result of the closing of this agreement, eXp Realty International, Inc. merged into eXp Acquisition Corp. with eXp Acquisition Corp. remaining as the surviving corporation and the separate existence of eXp Realty International, Inc. ceasing at the effective time of the merger. Consequently, after the closing of this agreement, the subsidiaries of eXp Realty International, Inc. became the subsidiaries of eXp Acquisition Corp. These subsidiaries are:

(i) eXp Realty, LLC (formerly known as Buyer Tours Realty, LLC), a Washington limited liability company organized on January 30, 2007 and 99% owned by eXp Acquisition Corp. and less than 1% owned by three other members;

(ii) eXp Realty of Connecticut, LLC, a Connecticut limited liability company and 49% owned by eXp Realty, LLC and 51% owned by Dan Liese;

(iii) eXp Realty Washington, Inc., a Washington corporation and 100% owned by eXp Realty, LLC; and

(iv) eXp Realty of Canada, Inc., a Canadian corporation and 100% owned by eXp Realty, LLC.

The organization and ownership structure of our company subsequent to the closing of the merger agreement as summarized in the paragraphs above is as follows:

Description of Business

Overview

eXp Realty, LLC is a cloud-based real estate brokerage operating in 29 states. As a cloud-based real estate brokerage for the residential real estate market, eXp Realty, LLC has embraced and adopted a number of cloud-based technologies in order to grow an international brokerage without the burden of physical bricks and mortar or redundant staffing costs. Following the closing of the merger agreement with eXp Realty International, Inc., the business of eXp Realty, LLC became our principal business.

5

Operations

We launched our operation in October 2009 with a handful of agents in Washington and Arizona, and as of June 30, 2013, have grown to a team of over 300 real estate professionals, and operate in various geographic markets as discussed in detail below.

We operate over the internet through our website, http://exprealty.com and rely on a cloud-based platform to provide our residential real estate brokerage services. Through our website, buyers can search real-time property listings, and sellers list their properties and gain exposure across the various markets we operate within. We also provide buyers and sellers access to a network of professional, consumer-centric agents and brokers.

Internally, we use our technology to provide agents, teams of agents, and brokerage owners with opportunities for increased profitability, reduced risk, and greater levels of professional development while fostering an organizational culture that values collaboration, strength of community, and commitment to serving the consumer’s best interests. We provide agents, teams of agents, and brokerage-owners with the systems, support, professional development and infrastructure to survive and then thrive in unpredictable and, at times, challenging economic conditions. This includes delivering 24/7 access to collaborative tools and training for real estate brokers and agents.

We have adopted a number of cloud-based technologies. Among the technologies we use to operate our business, is our 3D, fully-immersive, cloud office complex which has conference rooms, training centers, individual offices, outdoor spaces, and in which our management, staff, agents and brokers all work on a daily basis learning from, sharing with, transacting business with, and socializing with their colleagues from different geographic regions by utilizing avatars and USB headsets. In these virtual spaces agents and brokers meet for state-based sales meetings, attend live interactive training and classes, go over commission disbursement authorization forms, build websites and online branding materials, and work on purchase and sales agreements. Moreover, in these virtual spaces new managing brokers are evaluated and approved, our management meets to discuss strategy and vision, and personnel interviews occur. These are the only spaces where our senior management and our entire team report to work, manage projects and functional teams, attend classes, strategize, collaborate, and innovate. Furthermore, our cloud office has a fully-staffed transaction and administration office, a fully-staffed web development, search engine optimization and technical support office. Thus, our cloud office provides agents, teams of agents and brokers with training, education, coaching, mentoring, transaction support, broker support, and technical support. Consequently, our cloud office is our company office for brokers, agents, management and staff, and the cloud office has also eliminated redundant staffing costs. The utilization of this cloud office platform permits us to serve our entire geographic reach.

We also serve real estate agents, which are independent contractors affiliated with our company, teams of agents, and real estate brokers by providing a full suite of back office functions ranging from paperless file sharing and transaction management, web design, social media, digital campaigns, customer relationship management platforms, business coaching, tech support, and live training that places a premium on engagement, discussion and collaboration.

Furthermore, we allow our brokers, who are former real estate brokerage owners, to leverage our infrastructure to reduce their fixed costs and be empowered to build scalable teams of agents in any of the markets that we serve while preserving and enhancing the broker’s personal brand. In this way our brokers can attract agents and build a co-brand in any of markets currently served by the company without any additional capital requirements.

Fee Structure

Our fee structure resulting directly from the cloud office and its impact on profitability has enabled us to offer our agents and brokers a relatively high minimum split of 80% of the gross commission generated from transactions.

We retain 20% of the gross commission generated from the same transactions. At the point (should it arrive) in the agent’s or broker’s anniversary year with our company that the 20% we retain adds up to $16,000 (effectively when the agent or broker closes transactions resulting in $80,000 in gross commission income) the agent’s or broker’s split graduates to 100% of gross commission for the balance of the agent’s or broker’s anniversary year less adjusted fees.

On transactions resulting from company-generated consumer leads, the split is less because the agent pays us a referral fee as consideration for our efforts in generating and then distributing the company-generated consumer lead.

6

Unlike agents and brokers at most of our national competitors, our agents and brokers do not pay a royalty or franchise fee. Because we do not house agents in physical brick and mortar offices our agents and brokers also do not pay desk or office fees that are commonplace among competitors. Our agents pay a small monthly technology fee, a modest tuition fee for eXp University (curriculum of professional development classes and real estate vision and training), a transaction processing fee and a liability insurance fee. Our fee structure is favorable in relation to our competitors.

Revenue Sharing Plan

Our cloud office and its impact on profitability has enabled us to introduce and maintain a 7-level gross revenue sharing plan which each of our agents and brokers can participate in and from which they can realize significant monthly and annual residual overrides on the gross commission income resulting from transactions consummated by agents and brokers who they have attracted to our company, effectively contributing to our growth.

A number of our competitors have introduced residual income plans to their agents and brokers in an effort to incentivize growth but those companies’ cost structures, many of which are brick and mortar-intensive, have led to plans where the residual income is either calculated on net profit, which is unpredictable or unattainable and over which the agent has no control, is capped or structurally offers lower opportunity for payout.

Our gross revenue sharing program has the potential to pay out tens and hundreds of thousands of dollars monthly to our individual agents and brokers. Our gross revenue sharing plan also unties one of the industry’s longstanding Gordian Knots by providing a vehicle with which agents and brokers can truly, and comfortably, reduce their sales activity in the future and ultimately potentially retire with a vested monthly revenue share plan distribution.

Consistent with our commitment to enabling and empowering agents and brokers in pursuit of building a scalable business and organization, our revenue sharing plan allows brokers and agents a financial mechanism to build teams across borders without incurring any expense, oversight responsibility, or liability.

Our Markets

Our primary market is the United States. Currently, we operate in the following markets in the United States under the name of eXp Realty LLC: Arizona; Arkansas; California; Colorado; Connecticut; Florida; Georgia; Idaho; Illinois; Indiana; Kentucky; Maine; Maryland; Massachusetts; Michigan; Nevada; New Hampshire; New Mexico; New Jersey; New York; North Carolina; Oklahoma; Oregon; Pennsylvania; Rhode Island; South Carolina; Texas; Virginia; and Washington. We are qualified to do business and operate in California, through a wholly-owned subsidiary, eXp Realty Washington, Inc.

We also have a wholly owned subsidiary, eXp Realty Canada, Inc. which is in the process of getting licensed to do business in Toronto, Ontario, Canada.

Competition

We compete with local, regional and national and international residential real estate brokerages to attract agents, teams of agents, brokers and consumers. We compete primarily on the basis of our culture, collaboration, utilization of systems and technologies, including our cloud office platform to reduce costs, provide relevant and substantial professional development opportunities, and provide our agents and brokers with an opportunity to generate more business and participate in the growth of our company. We believe that we are the only national real estate brokerage in the United States presently using a 3D immersive office environment in place of physical brick and mortar locations and as such, we believe that we are well-positioned in our competitive landscape.

Our competitors include Realogy (est. 13,600 offices, 239,000 agents, includes Coldwell Banker, Century 21, Better Homes, ERA, Sotheby’s), Leading Real Estate Companies of the World (est.500 brokerages, 4,000 offices, 120,000 agents), RE/MAX, LLC (est. 92,000 real estate agents), Keller Williams Realty Inc. (est. 700 offices, 80,000 associates), Berkshire Hathaway’s Home Services of America (est. 55,000 agents, 1,800 locations, includes Prudential Real Estate, Real Living Real Estate), ZipRealty, Inc. (est. 2,000 associates) and For Sale By Owners (FSBO, properties sold by owners).

7

Intellectual Property

“eXp Realty” is one of our registered trademarks in the United States. We have also placed the marks “3D MLS” and “3D Listing Service” on the United States Patent and Trademark Office’s Supplemental Register. We also own the rights to the domain name “http://exprealty.com”.

We intend to aggressively assert our rights under trade secret, unfair competition, trademark and copyright laws to protect our intellectual property, including product design, product research and concepts and recognized trademarks. These rights are protected through the acquisition of patents and trademark registrations, the maintenance of trade secrets, the development of trade dress, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.

While there can be no assurance that registered trademarks will protect our proprietary information, we intend to assert our intellectual property rights against any infringer. Although any assertion of our rights could result in a substantial cost to, and diversion of effort by, our company, management believes that the protection of our intellectual property rights will be a key component of our operating strategy.

Seasonality of Business

Seasons and weather while seemingly predictable, traditionally impact the real estate industry. Continuous poor weather or natural disasters negatively impact listings and sales. Spring and summer seasons historically reflect greater sales periods in comparison to fall and winter seasons. Seasonal or weather related lower revenue also reduces our operating income, net income, operating margins and cash flow.

Real estate listings precede sales and a period of poor listings activity will negatively impact revenue. Past performance be it weather, seasons, prior month or prior quarter is no assurance of the following month’s or quarter’s revenue and macroeconomic shifts in the markets served could conceal the impact of poor weather and/or seasonality.

Home sales in successive quarters can fluctuate widely due to holidays, national or international emergencies, the school year calendar’s impact on relocation and/or interest rates changes or speculation of pending interest rate changes. Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters, combined with macroeconomic market changes may make it difficult to compare or analyze our financial performance effectively across successive quarters.

Furthermore, the residential real estate market and the real estate industry in general has a cyclical nature often defined by a protracted period of depressed revenues, values, and demand, inflated rates of foreclosure, and then economic relief. Consequently, our business is affected by such cycles.

Research and Development Costs During the Last Two Years

We spent less than $50,000 during each of the years ended December 31, 2012 and 2011 on research and development costs for our company.

Government Regulation

We serve the residential real estate industry which is regulated by federal, state and local authorities as well as private associations or state sponsored associations or organizations. We are required to comply with each state, province, county or country’s laws and as well as private governing bodies’ regulations, which combined results in a highly regulated industry.

We are also subject to federal and state regulations relating to employment, contractor, and compensation practices. All of our company’s agents and brokers are classified as independent contractors, which are subject to Internal Revenue Service and state law guidelines as they apply to this classification. The only exception is our managing brokers (one per each state where we are registered to conduct business) that are classified as part-time employees to fulfill state or local real estate business requirements.

8

Real Estate Regulation - Federal

The Real Estate Settlement Procedures Act of 1974 ( “RESPA” ) became effective on June 20, 1975. The RESPA requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The RESPA also protects borrowers against certain abusive practices, such as kickbacks, and places limitations upon the use of escrow accounts.

The Department of Housing and Urban Development promulgated Regulation X, which implements RESPA.

The National Affordable Housing Act of 1990 amended RESPA to require detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing. It also requires disclosures for mortgage escrow accounts at closing and annually thereafter, itemizing the charges to be paid by the borrower and what is paid out of the account by the servicer.

The Dodd-Frank Act bestowed the administration of RESPA from the Department of Housing and Urban Development to the new Consumer Financial Protection Bureau ( “CFPB” ). The CFPB has proposed new rules that can potentially adversely impact the lending and residential real estate industries with new regulatory risk.

In addition, federal fair housing laws generally make it illegal to discriminate against protected classes of individuals in housing or brokerage services. Other federal regulations protect the privacy rights of consumers, which affects our opportunities to solicit new clients.

Real Estate Regulation - State and Local Level

States licensing laws and/or requirements vary from state to state. In general, all individuals and entities lawfully conducting businesses as real estate brokers, agents or sales associates must be licensed in the state in which they carry on business and at all times be in compliance.

States will require a real estate broker to be employed by the brokerage firm or permit an independent contractor classification, and the broker may work for another broker conducting business on behalf of the sponsoring broker.

States may require a person licensed as a real estate agent, sales associate or salesperson, be affiliated with a broker in order to engage in licensed real estate brokerage activities or allow the agent, sales associate or salesperson to work for another agent, sales associate or salesperson conducting business on behalf of the sponsoring agent, sales associate or salesperson. Agents, sales associates or salespersons are generally classified as independent contractors; however, real estate firms can offer employment.

Generally, a limited liability company such as eXp Realty, LLC engaged in the real estate brokerage business must obtain an entity real estate broker license (although in some states the licenses are personal to individual brokers). In order to obtain this license, most jurisdictions require that a member or manager of the limited liability company be licensed individually as a real estate broker in that jurisdiction. If applicable, this member or manager is responsible for supervising the licensees and the entity’s real estate brokerage activities within the state.

Real estate licensees, whether they are brokers, salespersons, individuals, agents or entities, must follow the state’s real estate licensing laws and regulations. These laws and regulations generally specify minimum duties and obligations of these licensees to their clients and the public, as well as standards for the conduct of business, including contract and disclosure requirements, record keeping requirements, requirements for local offices, escrow trust fund management, agency representation, advertising regulations and fair housing requirements.

In each of state where we have operations, we assign appropriate personnel to manage and comply with laws and regulations be it equal to, or greater than federal law.

9

Most states have local regulations (city or county government) that govern the conduct of the real estate brokerage business. Local regulations generally require additional disclosures by the parties to a real estate transaction or their agents or brokers, or the receipt of reports or certifications, often from the local governmental authority, prior to the closing or settlement of a real estate transaction as well as prescribed review and approval periods for documentation and broker conditions for review and approval.

Third-Party Rules

Beyond federal, state and local governmental regulations, the real estate industry is subject to rules established by private real estate groups and/or trade organizations, including, among others, state Associations of REALTORS® (AOR), and local Associations of REALTORS® (AOR), the National Association of Realtors® (NAR), and local Multiple Listing Services (MLSs). “REALTOR” and “REALTORS” are registered trademarks of the National Association of REALTORS®.

Each third party organization generally has prescribed policies, bylaws, codes of ethics or conduct, and fees and rules governing the actions of members in dealings with other members, clients and the public, as well as how the third party organization’s brand and services may or may not be deployed or displayed.

We assign appropriate personnel to manage and comply with third party organization policies and bylaws.

Employees

We presently have approximately 20 full-time employees, five of whom oversee and manage all of our company’s transactions globally, and approximately 40 part-time employees.

All of our agents and brokers are classified as independent contractors. The only exceptions are our managing brokers (one per each state where we are registered to conduct business) that are classified as part-time employees to fulfill state or local real estate business requirements. Currently, we have more than 300 agents and brokers.

Our operations are overseen directly by management that engages our employees to carry on our business. Our management oversees all responsibilities in the areas of corporate administration, business development, and research. We intend to expand our current management to retain skilled directors, officers, and employees with experience relevant to our business focus. Our management’s relationships with agents, brokers, technology providers, and customers will provide the foundation through which we expect to grow our business in the future. We believe that the skill-set of our management team will be a primary asset in the development of our brands and trademarks.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations in future periods. The risks described below are not the only risks facing our company. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods.

Risks Related to Our Business and Industry

We have experienced net losses in recent years, and because we have a limited operating history, our ability to fully and successfully develop our business is unknown.

eXp Realty International, Inc. has a history of net losses from its inception in October 2009 through June 2013 and does not have a significant operating history with which investors can evaluate our business. Our ability to successfully develop our services, and to realize consistent, meaningful revenues and profit has not been established and cannot be assured.

10

For us to achieve success, our services must receive broad market acceptance by consumers. Without this market acceptance, we will not be able to generate sufficient revenue to continue our business operation. If our services are not widely accepted by the market, our business may fail.

Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors.

Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the development, marketing, and provision of our services. As a result, we may not generate significant net income from operations in the future. Failure to generate significant net income from operations in the near future may cause us to reduce or cease activities.

Our profitability is tied to the strength of the residential real estate market, which is subject to a number of macroeconomic conditions beyond our control.

Our profitability is closely related to the strength of the residential real estate market which traditionally follows economic cycles and which can be impacted by national, state and local production, distribution, and consumption of goods and services from the economy. Macroeconomic conditions that could adversely impact our business include, but are not limited to, economic slowdown or recession, increased unemployment, increased energy costs, reductions in the availability of credit, increased costs of obtaining mortgages, an increase in foreclosure activity, rising interest rates, inflation, disruptions in capital markets, declines in the stock market, adverse tax policies or changes in other regulations, lower consumer confidence, lower wage and salary levels, war or terrorist attacks, natural disasters, or actions taken by the Federal Reserve Board to regulate the supply of money, or the public perception that any of these events may occur. In addition, federal and state governments, agencies and government-sponsored entities such as Fannie Mae and Freddie Mac could take actions that result in unforeseen consequences or that otherwise could negatively impact our business.

We cannot guarantee that we will be able to grow in the various local markets that we serve.

To capture and retain market share in the various local markets that we serve, we must compete successfully against other brokerages for agents and brokers and for the consumer relationships that they bring. Our competitors could lower the fees that they charge to agents and brokers or could raise the compensation structure for those agents. Our competitors may have access to greater financial resources than us, allowing them to undertake expensive local advertising or marketing efforts. In addition, our competitors may be able to leverage local relationships, referral sources, strong local brand and name recognition that we have not established. Our competitors could, as a result, have greater leverage in attracting new and established agents in the market and in generating business among local consumers. Our ability to grow in the local markets that we serve will depend on our ability to compete with these brokerages local brokerages.

The utilization of a 3D cloud based immersive office as a suitable substitute for a physical brick and mortar location is a new and unproven strategy and we cannot guarantee that we will be able to operate and grow within its confines.

Currently, our cloud office adequately supports the needs of our agent population located across 29 states and Ontario, Canada. We cannot guarantee that our cloud office platform will continue to support our agent population and meet our business needs as we grow. The effectiveness of our cloud office platform is tied to a number of variables at any given time including server capacity and concurrent users. In addition, the use of the cloud office platform, and the use generally of 3D immersive office environments as an acceptable substitute among agents and brokers for physical office locations is unproven. We cannot guarantee that industry rank and file will adopt or accept cloud-based 3D office environments as a substitute for a physical office environment.

11

Improvement in the health of the real estate market could alleviate the need among brokerage owners for alternatives to traditional brick and mortar models in order to achieve profitability.

Sustained growth in the economy generally and accelerated and sustained improvement in the residential real estate industry could cause sufficient levels of sales activity and generate revenues that would support traditional brick and mortar models reducing the demand for cloud-based alternatives which could adversely impact our profit margins.

Significant risk to brand and revenue if we fail to meet federal, state, foreign, county, or private associations and governing boards laws and regulations.

We operate in a heavily regulated industry with regulated labor classifications which present significant risk in general for each potential instance where we fail to maintain compliance.

Our brokers can be classified as an employee or independent contractor and we could potentially misclassify or fail to consistently achieve compliance. Classifications and compliance are subject to the Internal Revenue Service regulations and applicable state law guidelines and penalties.

Our agents are only classified as independent contractors and we could potentially misclassify or fail to consistently achieve compliance. Classifications and compliance are subject to the Internal Revenue Service regulations and applicable state law guidelines and penalties.

Classifications, regulations and guidelines for brokers and agents are subject to judicial and agency interpretation as well as periodic changes. Changes or any indication of changes, may adversely impact our workforce classifications, expenses, compensation, commission structure, roles and responsibilities and broker organization.

Beyond workforce regulations and classifications, there exist complex, heavily regulated federal, state, foreign, local authority laws and regulations and national, state, foreign and local third party organization’s regulations, policies and bylaws governing our real estate business.

In general, the laws, rules and regulations that apply to our business practices include the federal Real Estate Settlement Procedures Act, the federal Fair Housing Act, the Dodd-Frank Act, and federal advertising and other laws, as well as comparable state statutes; rules of trade organization such as NAR, local MLSs, and state and local AORs; licensing requirements and related obligations that could arise from our business practices relating to the provision of services other than real estate brokerage services; privacy regulations relating to our use of personal information collected from the registered users of our websites; laws relating to the use and publication of information through the Internet; and state real estate brokerage licensing requirements, as well as statutory due diligence, disclosure, record keeping and standard-of-care obligations relating to these licenses.

Maintaining legal compliance is challenging and increases our costs due to resources required to continually monitor business practices for compliance with applicable laws, rules and regulations.

We may not become aware of all the laws, rules and regulations that govern our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions, and the difficulties in achieving both company-wide and region-specific knowledge and compliance.

If we fail, or we have alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings. Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.

Our business licenses could be suspended or revoked, our business practices enjoined, or we could be required to modify our business practices, which could materially impair, or even prevent, our ability to conduct all or any portion of our business. Any such events could also damage our reputation and impair our ability to attract and service home buyers, home sellers and agents, as well our ability to attract brokerages, brokers, teams of agents and agents to our company, without increasing our costs.

12

We do carry general liability insurance; however, insurance may not cover all claims or claims of these types or may be inadequate to protect us from all liability.

Further, if we lose our ability to obtain and maintain all of the regulatory approvals and licenses necessary to conduct business as we currently operate, our ability to conduct business may be harmed. Lastly, any lobbying or related activities we undertake in response to mitigate liability or current or new regulations could substantially increase our operating expenses.

If we do not remain an innovation leader in the real estate industry, we may not be able to grow our business and leverage our costs to achieve profitability.

Innovation has been critical to our ability to compete against other brokerages for clients and agents. For example, we have pioneered the utilization of a 3D immersive online office environment which reduces our need for office space and facilitates the transaction of business away from an office. As others follow our practices or develop innovative practices, our ability to achieve profitability may diminish or erode. For example, certain other brokerages could develop or license cloud-based office platforms that are equal to or superior to our company’s. If we do not remain on the forefront of innovation we may not be able to achieve or sustain profitability.

Our value proposition for agents and brokers includes allowing them to participate aggressively in the gross revenues of our company and is not typical in the real estate industry. If agents and brokers do not understand our value proposition or value its attributes, we may not be able to attract, retain and incentivize agents.

Participation in our gross revenue sharing plan represents a key component of our agent and broker value proposition. Agents and brokers may not understand or appreciate its value. In addition, agents may not appreciate other components of our value proposition including the cloud office platform, the mobility it affords, the systems and tools that we provide to agents and brokers, and the professional development opportunities we create and deliver. If agents and brokers do not understand the elements of our agent value proposition, or do not perceive it to be more valuable than the models used by most competitors, we may not be able to attract, retain and incentivize new and existing agent’s and broker’s to grow our revenues.

As we pursue opportunities to increase revenues, our profit margins may decline sharply.

We may implement changes to the business model and operations to improve revenues that cause a disproportionate increase in our expenses and cost of goods sold, or reduce profit margins. For example, we may allocate resources to acquiring lower margin brokerage models, the development of a mortgage servicing division, a commercial real estate division, a title and escrow company or a continuing education division. These decisions could involve significant start-up costs that may only be recovered after lengthy periods of time. Any of these attempts to improve our revenues could result in a disproportionate increase in our expenses and in reduced profit margins.

Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult.

Seasons and weather, while seemingly predictable, traditionally impact the real estate industry. Continuous poor weather or natural disasters negatively impact listings and sales. Spring and summer seasons historically reflect greater sales periods in comparison to fall and winter seasons. Seasonal or weather related lower revenue also reduces our operating income, net income, operating margins and cash flow.

Real estate listings precede sales and a period of poor listings activity will negatively impact revenue. Past performance be it weather, seasons, prior month or prior quarter is no assurance or predictor of the following month’s or quarter’s revenue and macroeconomic shifts in the markets served could conceal the impact of poor weather or seasonality.

Home sales in successive quarters can fluctuate widely due to holidays, national or international emergencies, the school year calendar’s impact on relocation and/or interest rates changes or speculation of pending interest rate changes. Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, poor weather and natural disasters, combined with macroeconomic market changes may make it difficult to compare or analyze our financial performance effectively across successive quarters.

13

If we fail to protect the privacy of employees, independent contractors, or consumers or personal information that they share with us, our reputation and business could be significantly harmed.

Tens of thousands of consumers have shared personal information with us during the normal course of business of residential real estate transactions, plus hundreds of independent contractors and employees combined have entrusted us with personal information. This includes, but is not limited to, social security numbers, annual income amounts and sources, consumer names, addresses, telephone and cell phone numbers, and email addresses.

Our application, disclosure and safeguard of the information is regulated by federal and state privacy laws. To comply with privacy laws, we invested resources and adopted a privacy policy outlining the use and care as well as how and with whom we may share personal information. This policy includes informing consumers, independent contractors and employees that we will not share their personal information with third parties without their consent unless required by law.

Privacy policies and compliance with federal and state privacy laws presents risk and could incur legal liability for failing to maintain compliance. We may not become aware of all privacy laws, changes to privacy laws, or third party privacy regulations governing the real estate business, or be unable to comply with all of these regulations, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions, and the difficulties in achieving both company-wide and region-specific knowledge and compliance.

Our policy and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information. Our legal liability could include significant defense costs, settlement costs, damages and penalties, plus, damage our reputation with consumers, which could significantly damage our ability to attract and maintain customers. Any or all of these consequences would result in meaningful unfavorable impact on our brand, business model, revenue, expenses, income and margins.

Our business could be adversely affected if we are unable to expand, maintain and improve the systems and technologies upon which we rely on to operate.

As the number of agents and brokers in our company grows, our success will depend on our ability to expand, maintain and improve the technology that supports our business operations, including, but not limited to, our cloud office platform. Loss of key personnel or the lack of adequate staffing with the requisite expertise and training could impede our efforts in this regard. If our systems and technologies lack capacity or quality sufficient to service agents and their clients, then the number of agents who wish to use our products could decrease, the level of client service and transaction volume afforded by our systems could suffer, and our costs could increase. In addition, if our systems, procedures or controls are not adequate to provide reliable, accurate and timely financial and other reporting, we may not be able to satisfy regulatory scrutiny or contractual obligations with third parties and may suffer a loss of reputation. Any of these events could negatively affect our financial position.

Our business, financial condition and reputation may be substantially harmed by security breaches, interruptions, delays and failures in our systems and operations.

The performance and reliability of our systems and operations are critical to our reputation and ability to attract agents, teams of agents and brokers into our company as well as our ability to service home buyers and sellers. Our systems and operations are vulnerable to security breaches, interruption or malfunction due to certain events beyond our control, including natural disasters, such as earthquakes, fire and flood, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events. In addition, we rely on third party vendors to provide the cloud office platform and to provide additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted. Any security breach, interruption, delay or failure in our systems and operations could substantially reduce the transaction volume that can be processed with our systems, impair quality of service, increase costs, prompt litigation and other consumer claims, and damage our reputation, any of which could substantially harm our financial condition.

14

Failure to protect intellectual property rights could adversely negatively affect our business.

Our intellectual property rights, including existing and future trademarks, trade secrets, patents and copyrights, are important assets of the business. We have taken measures to protect our intellectual property, but these measures may not be sufficient or effective. We may bring lawsuits to protect against the potential infringement of our intellectual property rights; other companies, including our competitors, could make claims against us alleging our infringement of their intellectual property rights. Any significant impairment of our intellectual property rights could harm our business.

We intend to evaluate other brokerages for acquisition in order to accelerate growth and may not succeed in identifying suitable candidates or may acquire brokerages that negatively impact us.

As part of our growth strategy, we plan to evaluate the potential acquisitions of other real estate brokerages. We may be unable to identify brokerages that we deem to be suitable acquisition candidates. If we do complete an acquisition, our evaluation may prove faulty and the acquisition may prove unsuccessful. In addition, an acquisition may prove unsuccessful to us because of our inability to effectively execute post-acquisition strategy. We may be unable to successfully integrate acquired brokerages’ agents, systems and personnel. An acquisition could negatively impact our culture or undermine its core values. Acquisitions could disrupt our existing operations or cause management to neglect to focus adequately on our core business. Acquisition agents and brokers may reject our systems and technologies. An acquisition could cause potentially dilutive issuances of equity securities, incurrence of debt, contingent liabilities, or could cause us to assume or incur unknown or unforeseen liabilities.

Unfavorable general economic conditions in the United States and other markets that we enter and operate within could negatively impact our financial performance.

Unfavorable general economic conditions, such as a recession or economic slowdown, in the United States and other markets we enter and operate within could negatively affect the affordability of, and consumer demand for, our services in the United States. Under difficult economic conditions, consumers may seek to reduce spending by forgoing real estate purchases. Lower consumer demand for our services the United States and other markets could reduce our profitability.

We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition.

We cannot predict with certainty the cost of defense, the cost of prosecution, insurance coverage or the ultimate outcome of litigation and other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation and other proceedings, including treble damages, may harm our business and financial condition. Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, franchising arrangements, negligence and fiduciary duty claims arising from franchising arrangements or company owned brokerage operations, actions against our title company alleging it knew or should have known others were committing mortgage fraud, standard brokerage disputes like the failure to disclose hidden defects in the property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including our agents, brokers, third-party service or product provides, antitrust claims, general fraud claims and employment law claims, including claims challenging the classification of our employees as independent contractors and compliance with wage and hour regulations, and claims alleging violations of RESPA or state consumer fraud statutes. In addition, class action lawsuits can often be particularly vexatious litigation given the breadth of claims, the large potential damages claimed and the significant costs of defense. The risks of litigation become magnified, and the costs of settlement increase, in class actions in which the courts grant partial or full certification of a large class. In the case of intellectual property litigation and proceedings, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in our business and injunctions prohibiting our use of business processes or technology that is subject to third party patents or other third party intellectual property rights. In addition, we may be required to enter into licensing agreements (if available on acceptable terms) and be required to pay royalties.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently aware of one such legal proceeding in the State of California and our errors and omissions insurance carrier is vigorously defending our position. Our deductible is $2,500 and exposure to the claim has limited potential to materially adverse effect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters, may arise from time to time that may harm our business.

15

Risk Related to Our Stock

Glenn Sanford, our executive officer and director, owns a significant percentage of our stock, and as a result, the trading price for our shares may be depressed and he can take actions that may be adverse to your interests.

Glenn Sanford, our executive officer and director, beneficially owns approximately 44.9% of our outstanding common stock as of October 1, 2013. This significant concentration of share ownership may adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with a controlling stockholder. Mr. Sanford may have the ability to influence significantly all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. In addition, Mr. Sanford could dictate the management of our business and affairs. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to our other stockholders.

Because we can issue additional shares of common stock, our stockholders may experience dilution in the future.

We are authorized to issue up to 7,700,000,000 shares of common stock, of which 47,278,800 shares are issued and outstanding. Our board of directors has the authority to cause us to issue additional shares of common stock without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTCQB operated by the OTC Markets Group, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors not to choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

16

Because we do not intend to pay any cash dividends on our shares of common stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

Trading of our stock is restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (known as “FINRA” ) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

17

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Overview

On September 27, 2013, we completed the acquisition of eXp Realty International, Inc. pursuant to the merger agreement with eXp Realty International, Inc. As a result of the acquisition of eXp Realty International, Inc., our company became engaged in the business of cloud-based real estate brokerage for the residential real estate market.

Because the operations and assets of eXp Realty International, Inc. represent a significant portion of our business and operations from the closing date of the merger agreement, our management’s discussion and analysis is based on eXp Realty International, Inc.’s audited financial statements for the years ended December 31, 2012 and 2011 and unaudited financial statements for the six month periods ended June 30, 2013 and 2012. The following discussion of the financial condition and results of operations should be read together with the mentioned financial statements and the notes to those financial statements included in this report on Form 8-K.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report, particularly in the section entitled “Risk Factors”.

The financial statements and dollar amounts included herein are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

Results of Operations

Years Ended December 31, 2012 and 2011

Our operating results for the years ended December 31, 2012 and 2011 are summarized as follows:

Net Revenues

We derive the majority of our revenue from commissions earned as agents in residential real estate transactions. Other commission revenue is generated from company leads, referrals and other related fees. Non-commission revenues are derived primarily from agent and broker training fees, known as “eXp University tuition” and technology fees.

The increase in our net revenues during the year ended December 31, 2012 as compared to during the year ended December 31, 2011 is mostly attributable to a combination of hiring more agents, establishing offices in more states, conducting more sales transactions, having more internet based qualified leads and emerging economic recovery.

18

Cost of Revenues

Cost of revenues consists of agent and broker commissions and related costs.

The increase in our cost of revenues during the year ended December 31, 2012 as compared to the year ended December 31, 2011 is mostly attributable to the increase in commissions and fees associated with the increased revenues, gross revenue sharing, lead generation, professional development services and state start-up costs.

Sales and Marketing

The increase in our sales and marketing expense during the year ended December 31, 2012 as compared to the year ended December 31, 2011 is mostly attributable to the increase in commissions and fees associated with revenue, gross revenue sharing, lead generation, professional development services and state start-up costs.

General and Administrative

The increase in our general administrative expense during the year ended December 31, 2012 as compared to the year ended December 31, 2011 is mostly attributable to the increase in commissions and fees associated with revenue, gross revenue sharing, lead generation, professional development services and state start-up costs.

Professional Fees

The increase in our professional fees during the year ended December 31, 2012 as compared to the year ended December 31, 2011 is mostly attributable to the increase in commissions and fees associated with revenue, gross revenue sharing, lead generation, professional development services and state start-up costs.

Six Month Periods Ended June 30, 2013 and 2012

Our unaudited operating results for the six month periods ended June 30, 2013 and 2012 are summarized as follows:

Net Revenues

We derive the majority of our revenue from commissions earned as agents in residential real estate transactions. Other commission revenue is generated from company leads, referrals and other related fees. Non-commission revenues are derived primarily from agent and broker training fees, known as “eXp University tuition” and technology fees.

19

The increase in our net revenues during the six month period ended June 30, 2013 as compared to during the six month period ended June 30, 2012 is mostly attributable to combination of hiring more agents, conducting more sales transactions, higher home value transactions, having more internet based qualified leads, gradual rise in interest rates and emerging economic recovery.

Cost of Revenues

Cost of revenues consists of agent and broker commissions and related costs.

The increase in our cost of revenues during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 is mostly attributable to the increase in commissions and fees associated with revenue, gross revenue sharing, lead generation, and professional development services.

Sales and Marketing

The decrease in our sales and marketing expense during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 is mostly attributable to efficiency from activities, some calendar timing, and ongoing market development and professional development services.

General and Administrative

The increase in our general administrative expense during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 is mostly attributable to the increase in pay-roll, incentives, training, costs associated with processing and/or generating transactions.

Professional Fees

The increase in our professional fees during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 is mostly attributable to the increase in association fees.

Three Month Periods Ended June 30, 2013 and 2012

Our unaudited operating results for the three month periods ended June 30, 2013 and 2012 are summarized as follows:

Net Revenues

20

We derive the majority of our revenue from commissions earned as agents in residential real estate transactions. Other commission revenue is generated from company leads, referrals and other related fees. Non-commission revenues are derived primarily from agent and broker training fees, known as “eXp University tuition” and technology fees.

The increase in our net revenues during the three month period ended June 30, 2013 as compared to during the three month period ended June 30, 2012 is mostly attributable to combination of hiring more agents, conducting more sales transactions, higher home value transactions, having more internet based qualified leads, gradual rise in interest rates and emerging economic recovery.

Cost of Revenues

Cost of revenues consists of agent and broker commissions and related costs.

The increase in our cost of revenues during the three month period ended June 30, 2013 as compared to the three month period ended June 30, 2012 is mostly attributable to the increase in commissions and fees associated with revenue, gross revenue sharing, lead generation, and professional development services.

Sales and Marketing

The decrease in our sales and marketing expense during the three month period ended June 30, 2013 as compared to the three month period ended June 30, 2012 is mostly attributable to efficiency from activities, some calendar timing, and ongoing market development and professional development services.

General and Administrative

The increase in our general administrative expense during the three month period ended June 30, 2013 as compared to the three month period ended June 30, 2012 is mostly attributable to the increase in pay-roll, incentives, training, costs associated with processing and/or generating transactions.

Professional Fees

The increase in our professional fees the three month period ended June 30, 2013 as compared to during the three month period ended June 30, 2012 is mostly attributable to the increase in association fees.

21

Current Assets

The increase in our current assets as of June 30, 2013 as compared to December 31, 2012 was primarily due to greater cash and cash equivalents, including restricted cash, from additional sales and timing differences.

The increase in our current assets as of December 31, 2012 as compared to December 31, 2011 was primarily due to increase in restricted cash and account receivables.

Current Liabilities

The increase in our current liabilities as of June 30, 2013 as compared to December 31, 2012 was primarily due to the increase in customer deposits and accrued expenses.

The increase in our current liabilities as of December 31, 2012 as compared to December 31, 2011 was primarily due to the increases in accounts payable, customer deposits, accrued expenses, accrued interest, and current portion of notes payable.

Cash Used by Operating Activities

The decrease in our cash used by operating activities during the year ended December 31, 2012 as compared to the year ended December 31, 2011 was primarily due to timing, pre-paid, accrued expenses, account payable and account receivable.

Cash Used by Investment Activities

The decrease in our cash used by investment activities during the year ended December 31, 2012 as compared to the year ended December 31, 2011 was primarily due to fewer activities and fewer capital assets purchases.

22

Cash (Used)/Provided by Financing Activities

The change in our cash (used)/provided by financing activities during the year ended December 31, 2012 as compared to the year ended December 31, 2011 was primarily due to fewer activities and principal payments to notes payable.

Cash Used by Operating Activities

The increase in our cash provided by operating activities during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 was primarily due to recognition of stock option expense.

Cash Used by Investment Activities

There was no significant difference between our cash used by investment activities during the six month period ended June 30, 2013 and our cash used by investment activities during the six month period ended June 30, 2012.

Cash (Used)/Provided by Financing Activities

The change in our cash provided by financing activities during the six month period ended June 30, 2013 as compared to the six month period ended June 30, 2012 was primarily due to proceeds from the issuance of common stock.

Future Financing

As of June 30, 2013, eXp Realty International, Inc. had an accumulated deficit of ($469,285) and we may incur further losses during the fiscal year ending December 31, 2013. We intend to raise the majority of our cash requirements for the next 12 months through equity or debt financings, including additional stock issuances.

The financial requirements of our company for the next twelve months will depend on our ability to raise the money we require through equity or debt financing. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed or, if available, that it can be obtained on reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

PROPERTIES

Our principal corporate office has approximately 1,000 square feet and is located at 1325 Lincoln Street, Suite 1, Bellingham, WA 98229 in a leased facility. The lease expires on November 1, 2013. This facility accommodates our principal administrative and finance operations. We occupy very minimal leased office spaces in a number of the US states that we operate strictly in order to comply with state regulatory and licensing requirements and, in certain instances, to provide office space to our managing state brokers. In certain of these instances, the state managing brokers are financially responsible for a significant portion of the rental expense associated with a leased office space. In certain instances, we make a financial contribution to a state managing broker’s leased office space rental obligation for which we are not legally responsible. We generally do not provide office space for the agent workforce. We do not own any real property. We believe that leased facilities are adequate to meet current needs and that additional facilities will be available for lease to meet future needs.

23

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal Stockholders and Management

The following table provides certain information regarding the ownership of our common stock, as of October 1, 2013 by:

• each of our executive officers;
• each of our directors;
• each person known to us to own more than 5% of our outstanding common stock; and
• all of our executive officers and directors and as a group.

Notes

⁽¹⁾ Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

⁽²⁾ Percentage of ownership is based on 47,278,800 shares of our common stock issued and outstanding as of October 1, 2013.

⁽³⁾ Includes 17,066,475 shares of our common stock and stock options to acquire 1,617,000 shares of our common stock issued upon the closing of the merger agreement with eXp Realty International, Inc. See “Item 2.01 Completion of Acquisition or Disposition of Assets”.

24

⁽⁴⁾ Consists of 127,995 shares of our common stock and stock options to acquire 674,131 shares of our common stock issued upon the closing of the merger agreement with eXp Realty International, Inc. See “Item 2.01 Completion of Acquisition or Disposition of Assets”.

⁽⁵⁾ Includes 272,685 shares of our common stock and stock options to acquire 656,250 shares of our common stock issued upon the closing of the merger agreement with eXp Realty International, Inc. See “Item 2.01 Completion of Acquisition or Disposition of Assets”.

⁽⁶⁾ Consists of 17,066,475 shares of our common stock issued upon the closing of the merger agreement with eXp Realty International, Inc. See “Item 2.01 Completion of Acquisition or Disposition of Assets”.

⁽⁷⁾ Includes 17,467,155 shares of our common stock and stock options to acquire 2,947,381 shares of our common stock issued upon the closing of the merger agreement with eXp Realty International, Inc. See “Item 2.01 Completion of Acquisition or Disposition of Assets”.

Changes in Control

We are unaware of any arrangement the operation of which may at a subsequent date result in a change of control of our company.