Form 8-K/A - Current report: [Amend]

Share Name	Share Symbol	Market	Type
Compass Inc	NYSE:COMP	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	7.36				0	01:00:00

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 28, 2025 (January 13, 2025)

Compass, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware

001-40291

30-0751604

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)


110 Fifth Avenue, 4th Floor New York, New York						10011
(Address of Principal Executive Offices)						(Zip Code)

Registrant’s Telephone Number, Including Area Code: (212) 913-9058

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Class A Common Stock, $0.00001 par value per share

COMP

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Introductory Note

On January 13, 2025 (the “Closing Date”), Compass, Inc. (“Compass” or the “Company”) closed its previously announced merger transaction (the “Transaction”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate”), At World Properties Principals Blocker, Inc. (“Principals Blocker”), At World Properties IX Blocker, Inc. (“IX Blocker”), Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative. Pursuant to the Merger Agreement, on the Closing Date, the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and Christie’s International Real Estate and each of Principals Blocker, IX Blocker and Christie’s International Real Estate became a wholly-owned subsidiary of the Company.

This amendment is being filed to amend and supplement Item 9.01 of the Current Report on Form 8-K filed by the Company on January 13, 2025 (the "Original Report"), to include the historical financial statements of At World Properties Holdings, LLC and the unaudited pro forma condensed combined financial information required pursuant to Article 11 of Regulation S-X. The accounts of At World Properties Holdings, LLC and its consolidated subsidiaries represent substantially all of the assets and liabilities acquired as a part of the Transaction. Except as otherwise provided herein, the disclosures made in the Original Report remain unchanged.


Item 9.01			Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The audited consolidated financial statements of At World Properties Holdings, LLC, as of and for the year ended December 31, 2023, are included as Exhibit 99.1 to this Form 8-K/A. The unaudited condensed consolidated financial statements of At World Properties Holdings, LLC, as of and for the nine months ended September 30, 2024, are included as Exhibit 99.2 to this Form 8-K/A.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet for Compass, Inc. and At World Properties Holdings, LLC, as of September 30, 2024, and unaudited pro forma condensed combined statements of operations for Compass, Inc. and At World Properties Holdings, LLC for the nine months ended September 30, 2024 and the year ended December 31, 2023 are included as Exhibit 99.3 to this Form 8-K/A.

(d) Exhibits.


Exhibit Number						Exhibit Title or Description

23.1						Consent of PricewaterhouseCoopers LLP, Independent Accountant s.

99.1						Audited c onsolidated f inancial s tatements and r elated n otes of At World Properties Ho ldings , LLC , as of December 31, 202 3 and for the y ear e nded December 31, 202 3 .

99.2						Un a udited c on densed co nsolidated f inancial s tatements and r elated n otes of At World Properties Holdings, LLC , as of September 30 , 202 4 and for the n ine m onths e nded September 30, 2024 .

99.3						Unaudited pro forma condensed combined balance sheet for Compass, Inc. and At World Properties Holdings, LLC , as of September 30, 2024 , and unaudited pro forma condensed combined statements of operations for Compass, Inc. and At World Properties Holdings, LLC for the nine months ended September 30, 2024 and the year ended December 31, 2023.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COMPASS, INC.

Date: March 28, 2025

By:

/s/ Kalani Reelitz

Kalani Reelitz

Chief Financial Officer

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-254976, 333-263115, 333-270154, 333-277435 and 333-285224) of Compass, Inc. of our report dated March 27, 2025 relating to the financial statements of At World Properties Holdings, LLC, which appears in this Current Report on Form 8-K/A.



/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

March 28, 2025

Exhibit 99.1

At World Properties Holdings, LLC

Consolidated Financial Statements

December 31, 2023

Index


			Page
Report of Independent Auditors			2
Consolidated Balance Sheet as of December 31, 2023			4
Consolidated Statement of Operations for the year ended December 31, 2023			5
Consolidated Statement of Member s ' Equity for the year ended December 31, 2023			6
Consolidated Statement of Cash Flows for the year ended December 31, 2023			7
Notes to Consolidated Financial Statements			8

Report of Independent Auditors

To the Management and Board of Directors of At World Properties Holdings, LLC,

Opinion

We have audited the accompanying consolidated financial statements of At World Properties Holdings, LLC and its subsidiaries (the “Company”), which comprise the consolidated balance sheet as of December 31, 2023, and the related consolidated statements of operations, of members’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with US GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

March 27, 2025

At World Properties Holdings, LLC

Consolidated Balance Sheet

(In millions, except unit and per unit data)


	December 31, 2023
Assets
Current Assets
Cash	$	20.6
Accounts receivable, net of allowance of $0.9	13.1
Prepaid expenses and other current assets	11.8
Affiliate contract assets	0.8
Due from related parties	0.3
Total current assets	46.6
Property and equipment, net (Note 6)	16.3

Operating lease right-of-use assets	36.1
Investment in unconsolidated entities (Note 5)	8.5
Goodwill (Note 7)	164.4
Intangible assets, net (Note 7)	82.2
Affiliate contract assets, net of current portion	6.0
Other non-current assets	0.8

Total assets	$	360.9






Liabilities and members' equity
Current liabilities
Current maturities of long-term debt, net of unamortized debt issuance costs (Note 8)	$	8.8
Accounts payable	5.9
Accrued expenses	20.8

Deferred revenue	3.6
Current portion of operating lease liabilities	7.2
Total current liabilities	46.3
Long-term liabilities
Operating lease liabilities, net of current portion	29.4
Other liabilities	0.4
Long-term due to related parties	1.1

Deferred income taxes, net	3.7
Long-term debt, net of unamortized debt issuance costs, less current maturities (Note 8)	139.4
Total non-current liabilities	174.0
Total liabilities	220.3
Commitments and contingencies (Note 13)
Members' equity
Preferred Units, $1,000 per unit; 14,750 units authorized, 12,000 issued and outstanding at December 31, 2023	7.7
Common Units, $1,000 per unit; Unlimited units authorized, 110,463 issued and outstanding at December 31, 2023	91.6
Retained earnings	40.9
At World Properties Holdings, LLC members' equity	140.2
Non-controlling interest	0.4
Total members' equity	140.6
Total liabilities and members' equity	$	360.9

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

At World Properties Holdings, LLC

Consolidated Statement of Operations

(In millions)


	Year Ended December 31, 2023
Revenue
Commission income	$	505.2
Title agency revenues	21.8
Other revenues	42.8
Total revenue	569.8
Operating expenses
Commissions and other agent-related expense	425.5
Wages and benefits	62.5
Depreciation	5.5
Amortization of intangible assets	3.8
Advertising and marketing	11.2
Rent and occupancy	13.5
Recruiting and retention	7.3
Office expenses and supplies	4.7
Professional fees	3.0
Computer related	4.0
Title agency direct cost	1.0
Management fee (Note 11)	0.9
Other operating expenses	5.6
Total operating expenses	548.5
Income from operations	21.3
Other (expense) income
Interest expense	(17.8)
Interest income	1.8
Income from unconsolidated entities	1.1
Other income	1.5
Total other expense	(13.4)
Income before income taxes	7.9
Income tax benefit	0.2
Net income	8.1
Net loss attributable to non-controlling interests	0.1
Net income attributable to At World Properties Holdings, LLC	$	8.2

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

At World Properties Holdings, LLC

Consolidated Statement of Members' Equity

(In millions, except unit amounts)


	Preferred Equity			Common Equity			Retained Earnings		At World Properties Holdings, LLC Members' Equity		Non-controlling Interest		Total Members' Equity
	Units	Amount		Units	Amount
Balance at December 31, 2022	—	$	—	111,121	$	94.7	$	31.2	$	125.9	$	0.7	$	126.6
Net income (loss)	—	—		—	—		8.2		8.2		(0.1)		8.1
Issuance of units	12,000	9.5		3,177	2.5		—		12.0		—		12.0
Redemption of units	—	—		(3,835)	(3.9)		1.5		(2.4)		—		(2.4)
Distributions to members	—	(1.8)		—	(1.7)		—		(3.5)		(0.2)		(3.7)
Balance at December 31, 2023	12,000	$	7.7	110,463	$	91.6	$	40.9	$	140.2	$	0.4	$	140.6

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

At World Properties Holdings, LLC

Consolidated Statement of Cash Flows

(In millions)



	Year Ended December 31, 2023
Cash flows from operating activities
Net income	$	8.1
Reconciliation of net income to net cash provided by operating activities:
Depreciation	5.5
Loss on disposal of property and equipment	0.1
Bad debt expense	0.6
Amortization of debt issuance costs (Note 8)	0.8
Paid-in-Kind ("PIK") interest (Note 8)	1.6
Amortization of intangible assets (Note 7)	3.8
Change in fair value of earn-out liability	(2.2)
Income from equity-method investments	(1.1)
Divestiture of investment (Note 3, Note 5)	0.1
Effect of business divestiture (Note 3, Note 5)	0.2
Distributions from equity-method investments	0.8
Deferred income taxes	(1.2)
Changes in operating assets and liabilities:
Accounts receivable	(6.7)
Prepaid expenses and other current assets	(4.9)
Due to related parties	1.1
Affiliate contract assets	(0.1)
Other non-current assets	0.2
Accounts payable	0.3
Accrued expenses and deferred revenue	9.6
Operating lease right-of-use assets and operating lease liabilities	(1.7)
Other non-current liabilities	0.1
Net cash provided by operating activities	15.0
Cash flows from investing activities
Purchases of property and equipment	(2.3)

Net cash used in investing activities	(2.3)
Cash flows from financing activities
Repayments on Term Loan	(2.3)
Repayments of Revolver Facility	(13.5)

Distributions to members	(3.7)
Proceeds from issuance of preferred and common units	12.0
Net cash used in financing activities	(7.5)
Net increase in cash	5.2
Cash
Beginning of year	15.4
End of year	$	20.6
Supplemental disclosures of cash flow information:
Cash paid for interest	$	16.3

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

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

At World Properties Holdings, LLC and its subsidiaries, collectively referred to as the Company, operate as a real estate brokerage firm. As a real estate brokerage firm, the Company assists buyers, sellers, and renters in listing, marketing, selling, and leasing homes or commercial space. The Company also provides title insurance services for residential and commercial real estate transactions. In addition, the Company provides franchising, marketing, advisory, and brokerage services to residential real estate developers and the related properties. The Company’s sales are predominantly in the United States of America.

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries, which represent substantially all of the assets and liabilities acquired by Compass Brokerage, LLC, a wholly owned subsidiary of Compass, Inc. (Note 15).

The minority member’s interest in the majority-owned subsidiary is reflected as non-controlling interest in the accompanying consolidated financial statements.

All intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The accounting for the fair value of acquisitions is complex due to the significant judgements and estimates that are required to determine the values of the consideration transferred and the identification and measurement of the fair value of the assets acquired and liabilities assumed in business combinations. The accounting for goodwill impairment testing utilizes valuation analysis that also requires the use of estimates and judgment to predict the future profitability of the Company. Actual results could differ from those estimates.

Revenue Recognition

The Company earns revenue from real estate commissions, development brokerage services, title services, and related fees it collects from buyers and sellers, agents, and franchisees. Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services.

Commission income

Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue at a point in time, which is upon the closing of a real estate transaction (i.e., purchase or sale of a home). These revenues are included in commission income.

The Company has relationships with developers to provide marketing and brokerage services in new developments. Commissions earned by the Company’s developer business are recorded as revenue at a point in time, which is upon the closing of a real estate transaction. These revenues are included in commission income. The commissions the Company pays to real estate agents are recognized concurrently with associated revenues and are referred to as commission and other agent-related costs.

The Company earns referral commission revenue from third party real estate brokers for the closing of a referred real estate transaction. These revenues are recognized at a point in time when the underlying property closes. These revenues are included in commission income.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

Title agency revenues

The Company provides title and closing services, which include title search procedures for title insurance policies, home sale escrow and other closing services. Title revenues and title and closing service fees are recorded at a point in time, which occurs at the time a home sale transaction or refinancing closes. These revenues are included in title agency revenues.

Other revenues

The Company also earns revenue from various fees in conjunction with real estate closings. These fees are recorded as revenue at a point in time, which is upon the closing of a real estate transaction. These revenues are included in other revenues.

The Company provides franchisees, also referred to as affiliates, with a franchise right. Revenues from franchisees consist primarily of initial and renewal franchise fees, branding, administrative fees, strategy fees, affiliate onboarding fees, agent and affiliate monthly fees, service fees, software fees, transfer fees, and property management fees. Performance obligations for all franchising revenue streams are satisfied over time. The Company has elected the practical expedient for recognizing revenue when the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. This practical expedient has been applied to all franchisee related revenue streams, except initial, renewal, transfer, and additional office franchise fees, as the Company has the right to invoice for these revenues.

The initial, renewal, transfer, and additional office franchise fees include multiple performance obligations, including initial franchisee training, site selection, assistance with equipment, access to operations manual, and access to the Company’s proprietary trademarks for the duration of the contract. These performance obligations are highly interrelated to the promise to provide the franchise right. As such, these promises are not distinct and have been combined into a single performance obligation that is satisfied over the term of the franchise agreement. The Company’s revenue recognition policy for initial franchise fees is to begin recognizing revenue earned when the franchise is deemed as fully operational. Revenues associated with the franchise renewal fee, additional office fee, and transfer fee performance obligations are recognized over the term of the remaining period or new term. Initial, renewal, additional office, and transfer fees are collected at the inception or renewal of the franchise agreement, and as such, the portion of those fees paid by the franchisee that relates to performance obligations to be satisfied in future periods have been reflected as deferred revenue on the consolidated balance sheet.

Branding, administrative, and strategy fees are invoiced monthly based on a percentage of the gross commission income of

the franchisee. The Company has utilized an election that allows for recognition of revenue related to sales-based fees when the subsequent sale by the franchisee occurs and is reported to the Company. The amount is estimated throughout the month and is adjusted to actual at month end when invoicing occurs.

As part of the franchise agreements, the Company earns revenue from affiliate onboarding fees, agent and affiliate monthly fees, software and computer systems support fees, and various service fees that relate to operational support. These fees are provided and invoiced on a monthly basis and are included in other revenues on the consolidated statements of operations.

In certain instances, the Company will include in the franchise agreement an allowance payable to the franchisee for re-branding expenses. When the re-branding allowance is paid to the franchisee, the Company recognizes a contract asset and amortizes it over the life of the franchise agreement, typically 10 years. From time to time, the Company may also extend a loan to franchisees to help them with their initial start-up costs and expansion. The loans are forgivable, upon the franchisee meeting the terms of its franchise agreement for the duration of the arrangement. When the loan is made to the franchisee, the Company recognizes an asset and amortizes it over the life of the arrangement, which is typically the life of the franchise agreement.

Contract assets include rebranding allowances and affiliate loans receivable. Contract assets, current portion, are included in affiliate contract assets, and contract assets, long-term portion, are included in affiliate contract assets, net of current portion on the consolidated balance sheet. Contract assets were $6.8 million and $6.7 million at December 31, 2023 and January 1, 2023, respectively.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

Contract liabilities consist of deferred fees. Deferred fees of $3.6 million and $3.5 million were included in deferred revenue at December 31, 2023 and January 1, 2023, respectively. Deferred fees of $3.1 million that were deferred as of January 1, 2023 were recognized in other revenue on the consolidated income statement for the year ended December 31, 2023.

Accounts Receivable

Accounts receivable represent commission revenue owed from other brokerage firms for closed deals, licenses services and fees earned but not yet billed, and amounts billed to the Company’s agents for reimbursement of certain expenses paid by the Company on the agent’s behalf. The timing and frequency of invoicing depends on each individual licensing agreement. Interest is not accrued on outstanding balances.

Accounts receivables are stated at the amounts owed by the agents and/or other brokerage firms. Accounts receivable were $13.1 million and $7.1 million at December 31, 2023 and January 1, 2023, respectively.

The Company provides an allowance for credit losses against accounts receivable for the current expected credit losses inherent in the asset over its expected life. The Company determines the allowance by considering a number of factors, including historical experience and customers' current ability to pay their obligations. As of December 31, 2023, the allowance for credit losses was $0.9 million.

Property and Equipment

Property and equipment acquired in a business combination are recorded at fair value based on third-party valuations. All other property and equipment are recorded at cost for new additions. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. Construction in process is not depreciated until the asset is placed in service. When the asset is placed in service, it is reclassified to the appropriate asset class and depreciation, or amortization is initiated. Expenditures for repairs and maintenance are charged to operations.

The Company also incurs costs related to the development of an internal-use software platform used to aid in the document management portion of the closing process. Costs of development include purchased software and internally developed software. Costs incurred in the planning and evaluation stage of internally developed software are expensed as incurred. For the year ended December 31, 2023, the Company capitalized $1.1 million in internally developed capitalized software.

Capitalized internally developed software costs are amortized over their expected economic life of three years using the straight-line method and are reviewed for impairment upon a triggering event. Management evaluates the internally developed software costs for impairment when significant events occur related to the software platform that indicate the carrying amount may not be recoverable. No indicators of impairment were noted for the year ended December 31, 2023.

The estimated lives used for the computation of depreciation and amortization are as follows:


						Useful Life (Years)
Furniture, fixtures and equipment						7
Computer equipment						5
Leasehold improvements						2-15
Internally-developed software						3
Vehicles						5

Leasehold improvements are amortized over the lesser of its useful life or term of the lease.

Investments in Unconsolidated Entities

Equity Method Investments

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

income or loss in the Company’s consolidated statements of operations and added or subtracted from the investment account. Distributions received from the entities are treated as a reduction of the investment account.

Goodwill

Goodwill represents the excess of the purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of business acquired. Goodwill is not subject to amortization but is subject to impairment testing annually during the fourth quarter or whenever events and circumstances indicate that the carrying value of the reporting unit may be in excess of the reporting unit’s fair value. The Company has one reporting unit and tests goodwill for impairment at the reporting unit level. As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the Company’s reporting unit is less than its carrying amount, a two-step impairment test is required.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded. There were no impairment charges recognized for the year ended December 31, 2023 and no cumulative impairment on goodwill has been recorded.

Intangible assets

Intangible assets acquired in a business combination are recorded at fair value based on third-party valuations. The costs are amortized over the estimated remaining lives using the straight-line method, which represents the estimated economic useful life of the assets. The Company reviews these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. No indicators of impairment were identified by the Company for the year ended December 31, 2023.

The Company’s intangible assets that have indefinite lives are not amortized but rather reviewed annually for impairment. There were no impairment charges recognized for the year ended December 31, 2023.

Advertising and Marketing

The Company expenses advertising costs as incurred. Advertising costs are recorded in the Advertising and marketing account within the consolidated statement of operations.

Income Taxes

The Company was formed as a limited liability company. Accordingly, federal income taxes are not payable by the Company. Income or loss is allocated to the members and is included in the members' income tax returns. Therefore, no liability or provision for income taxes is included in the consolidated financial statements except for taxes related to the operations of certain subsidiaries, as described below. The Company may be subject to certain state taxes.

As a result of business acquisitions, the Company has subsidiaries which are individually taxed as corporations: @properties UK Holdings Ltd. and Christie’s International Real Estate Europe Ltd., which are individually taxed as corporations in the UK; SGI Holdings, Inc., Sereno Group, Inc. and Dwell Realtors, Inc. which are individually taxed as corporations in the U.S.

Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the results of operations in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the assets will not be realized.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants on the measurement date. The accounting standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs when measuring fair value.

There are three levels of inputs that may be used to measure fair value:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 Unobservable inputs that are supported by little or no market activity, requiring the Company to develop its own assumptions.

The Company’s material financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses, contingent considerations and long-term debt. The carrying amounts of cash, trade receivables, trade payables and accrued expenses approximate fair value because of the short-term nature of these instruments.

It is the Company's policy, in general, to measure nonfinancial assets and liabilities at fair value on a nonrecurring basis, including earn-outs on recent acquisitions. These items are subject to fair value adjustments in certain circumstances (such as evidence of impairment) which, if material, are disclosed in the accompanying notes to the consolidated financial statements.

Earn-outs associated with business combinations were valued using Level 3 inputs. Earn-out liabilities are measured using internally developed assumptions; therefore, they are classified as Level 3. The fair value of the earn-out liabilities is measured using probability-weighted analysis and are discounted using a rate that appropriately captures the risk associated with the obligation. During 2023, the fair value of the earn-out liabilities was adjusted down to zero to reflect the contingent criteria not having been met (Note 2). There were no remaining earn-out liabilities at December 31, 2023.

The fair value of the Company's indebtedness is categorized as Level 2 (Note 8).

Personal Assets and Liabilities and Allocations to Members

In accordance with the generally accepted method of presenting limited liability company financial statements, the consolidated financial statements do not include the personal assets and liabilities of the members, including its obligations for an income tax liability.

As the Company is organized as a limited liability company, its members are not liable for any act, debt, obligation, or liability of the Company, except to the extent that the members personally guarantee any liability of the Company.

Allocations of income and distributions to the members are based on the provisions of the Company’s Limited Liability Company Agreement dated February 24, 2023.

Deferred Financing Fees

Consistent with debt discounts, the Company accounts for debt issuance costs by including those costs as a direct deduction from the carrying amount of the debt liability (Note 8).

Significant Accounting Standard Applicable in Current Year

Financial Instruments – Credit Losses

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326"). This standard replaced the incurred loss

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost. Financial assets measured at amortized cost are presented at the net amount expected to be collected by using an allowance for credit losses.

The Company adopted ASC 326 and all related subsequent amendments effective January 1, 2023, using the modified retrospective approach for all contract assets measured at amortized cost. For the year ended December 31, 2023, there was no transition adjustment recognized as a result of the adoption of CECL.

Reference Rate Reform

In 2023, the Company adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the Board included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate ("LIBOR") would cease being published. In 2021, the UK Financial Conduct Authority ("FCA") delayed the intended cessation date of certain tenors of USO LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the amendments in the proposed ASU deferred the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. On February 27, 2023, the Company amended its debt agreement that references LIBOR, to apply the Secured Overnight Financing Rate ("SOFR"). The guidance has not had a material impact on the consolidated financial statements.

Recent Accounting Pronouncements Not Yet Effective

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of additional categories of information about federal, state, and foreign income taxes in the rate reconciliation table and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively. The ASU is effective for the Company for fiscal years beginning after December 15, 2024. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted, and the disclosure requirements are to be applied retrospectively to any prior periods presented in the financial statements. The Company is currently evaluating the impact that the ASU will have on its consolidated financial statements. This ASU will result in expanded disclosures related to expenses but will have no impact on the Company’s financial position or results of operations.

2. Business Combinations

SGI Holdings, Inc.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

On March 1, 2022, the Company purchased 100% of the equity interests of SGI Holdings, Inc. (d/b/a Christie’s International Real Estate Sereno), a full-service brokerage firm operating in Northern California, for $20.8 million.

The securities purchase agreement provides for a total cash earn-out up to $8.0 million, which is based on the achievement of net commission income targets for the years ending December 31, 2023 and 2022 (“earn-out periods”), as defined in the agreement. The maximum earn-out amount for each of the two earn-out periods was $4.0 million. Based on various calculations and assumptions from a third-party valuation, the Company recorded an initial expected liability of $2.2 million, which was considered the fair value at the acquisition date. As of December 31, 2023, the net commission income targets were not achieved; therefore, there were no amounts paid out for the 2023 or 2022 earn-out periods. During the year ended December 31, 2023, the Company recognized a $2.2 million gain on the change in fair value of its earn-out liability which is presented in other operating expenses within the consolidated statement of operations.

3. Divestitures

On February 27, 2023, the Company entered into a Sale and Purchase Agreement, effective January 1, 2023, wherein the purchaser, JKJ Holdco, LLC, a Virginia limited liability company, purchased membership rights of Nest Holding Group LLC, a Delaware limited liability company, and its subsidiaries (collectively referred to as “Nest”). The Company agreed to transfer all rights, title and interest in and to Nest. Per the terms of the agreement, the purchaser had the right to retain cash held by the Nest entities in excess of $0.7 million. With the divestiture of Nest, the Company also divested its investment in Red Fox Title, LLC, effective January 1, 2023. In exchange for the sale of Nest, the Company redeemed its Common Units previously held by JKJ Holdco, LLC. The Company recorded non-cash effects from the divestiture of $0.3 million within the Company's statement of operations for the year ended December 31, 2023.

4. Leases

The Company leases certain office space and office equipment and determines if an arrangement is a lease at inception. Operating lease ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the respective lease term.

The Company’s operating lease costs for the year ended December 31, 2023 consisted of the following (in millions):



	Year Ended December 31, 2023
Operating lease costs	$	10.4
Variable lease costs	2.7
Sublease income	(0.6)
Total	$	12.5

The following table provides supplemental cash flow information related to operating leases (in millions):



	Year Ended December 31, 2023
Cash payments related to operating leases	$	9.3
ROU assets obtained in exchange for lease obligations	$	7.7

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

The table below shows a weighted-average analysis for lease terms and discount rates for all operating leases:



	December 31, 2023
Weighted average remaining lease term	5.52 years
Weighted average discount rate	1.93	%

The Company has elected to use the observable risk-free interest rates to measure the ROU asset and lease liability for existing leases. The discount rate is based on the remaining lease term and lease payments as of the ASC 842 lease standard adoption date or lease commencement date for leases entered into post-adoption.

Future undiscounted lease payments for the Company’s operating lease liabilities are as follows as of December 31, 2023 (in millions):


Year Ended	Related Party (Note 11)		Unrelated Party		Total
2024	$	1.8	$	6.3	$	8.1
2025	1.5		7.0		8.5
2026	1.6		5.4		7.0
2027	1.5		4.3		5.8
2028	0.8		2.6		3.4
Thereafter	1.9		4.1		6.0
Total future minimum lease payments	9.1		29.7		38.8
Less: imputed interest					(2.2)
Present value of lease liabilities					$	36.6

5. Investments in Unconsolidated Entities

Capstone Title Services, LLC - Equity Method

The Company holds a 37.5% investment in Capstone Title Services, LLC ("Capstone"), which operates as a title services company in Georgia. The Company acquired its investment in Capstone as part of its acquisition of Ansley Atlanta Real Estate, LLC on March 15, 2019. The Company accounts for its investment in Capstone as an equity method investment.

For the year ended December 31, 2023, the Company received $0.8 million in distributions from Capstone and recorded income from equity investment of $0.8 million.

Proper Rate, LLC - Equity Method

The Company holds a 49.9% investment in Proper Rate, LLC (“Proper Rate”), a financial services provider that specializes in the origination and sales of residential mortgage loans throughout the United States. The Company accounts for its investment in Proper Rate as an equity method investment.

The Company recorded income from equity investment of $0.3 million for the year ended December 31, 2023. There were no distributions received from Proper Rate for the year ended December 31, 2023. There were no capital contributions made for the year ended December 31, 2023.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

6. Property and Equipment

Property and equipment, net consisted of the following (in millions):


	December 31, 2023
Furniture, fixtures and equipment	$	5.2
Computer equipment	2.5
Leasehold improvements	21.9
Internally developed software	53.9
Vehicles	0.4
Construction in process	0.1
	84.0
Less: Accumulated depreciation and amortization	(67.7)
Property and equipment, net	$	16.3

The Company recorded depreciation expense related to property and equipment of $5.5 million, for the year ended December 31, 2023.

The Company capitalized internally-developed software costs of $1.1 million during the year ended December 31, 2023.

7. Goodwill and Intangible Assets, net

The following table summarizes the changes in the carrying amount of goodwill (in millions):


	Amount
Balance at December 31, 2022	$	165.1
Divestitures	(0.7)
Balance at December 31, 2023	$	164.4

The carrying amount and accumulated amortization of separately identifiable intangible assets as of December 31, 2023 is as follows (in millions, except useful life information):


	December 31, 2023
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Value
Finite-lived intangible assets:
Trade name and trademarks	10 - 25 years	$	26.4	$	(5.1)	$	21.3
Affiliate agreements	17 years	20.0		(2.4)		17.6
Customer relationships	7 - 11 years	5.9		(3.7)		2.2
Other intangible assets	0 - 6 years	2.1		(2.0)		0.1
Indefinite-lived intangible assets:
At World Properties, LLC trade name and trademarks		41.0		—		41.0
Total		$	95.4	$	(13.2)	$	82.2

Amortization expense related to intangible assets for the year ended December 31, 2023 was $3.8 million.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

Estimated future amortization expense for finite-lived intangible assets as of December 31, 2023 is as follows (in millions):


2024	$	3.8
2025	3.4
2026	3.2
2027	3.2
2028	3.2
Thereafter	24.4
Total	$	41.2

8. Debt

As of December 31, 2023, the Company’s borrowing arrangements were as follows:


	Interest Rate		Expiration Date	Principal Amount		Unamortized Debt Issuance Costs		Net Amount (1)		Estimated Fair Value (2)

Term Loans	12.20	%	April 2025	92.4		(1.0)		91.4		91.4
Delayed Draw Term Loan	12.20	%	April 2025	56.8		—		56.8		56.8
Total				$	149.2	$	(1.0)	$	148.2	$	148.2

(1)As of December 31, 2023, $8.8 million of the outstanding debt was classified as current on the Company's balance sheet.

(2)The fair value of the Company’s indebtedness is categorized as Level 2 (Note 1, section “Fair Value of Financial Instruments”).

Term Loans and Delayed Draw Term Loan

In April 2018, the Company entered into an agreement with a financial institution for a term loan in the amount of $85.5 million. The Company entered into an amendment during 2020 under which it borrowed an additional $2.5 million. On April 22, 2021, the Company entered into a First Amendment to the Amended and Restated Credit Agreement under which it borrowed an additional $27.0 million to be used to pay in full the outstanding subordinated notes owed the Company. The amendment also extended the maturity date from April 24, 2023 to April 24, 2025. On November 16, 2021, the Company entered into a Second Amendment to the Amended and Restated Credit Agreement to establish a new Delayed Draw Term Loan (the "DDTL") commitment in the aggregate amount of $60.0 million. The Company drew $45.0 million against the DDTL for the acquisition of Christie's International Real Estate, LLC on November 30, 2021 and another $0.8 million from the outstanding DDTL commitment on December 10, 2021 for another permitted acquisition. On February 25, 2022, the Company drew $14.3 million against the DDTL for the SGI Holdings, Inc. acquisition (Note 2).

On February 27, 2023, the Company entered into the Third Amendment to the Amended and Restated Credit Agreement (the “Third Amendment”) under which certain terms were modified. Key changes included the following: (a) temporarily reduced the scheduled amortization of term loans through the period ending April 30, 2024, (b) increased the maximum Total Net Leverage Ratio covenant levels, (c) replaced the LIBOR interest rate benchmark with Adjusted Term SOFR, (d) introduced additional interest in the amount of 2.00% per annum payable in kind, and (e) required additional equity support from the Sponsor and management of the Credit Parties in the form of cash equity contributions made by Sponsor on February 27, 2023 to the Company (funded with proceeds of equity issued by Holdings other than Disqualified Equity Interests) in the aggregate amount of $12.0 million which was used in part to repay the outstanding Revolver Facility, discussed further below.

As a result of the additional borrowings, the term loans are payable in five principal payments of $0.3 million each during the period April 2023 through April 2024 and three principal payments of $1.8 million each in June, August and October 2024, with a balloon payment of the remaining principal due on April 24, 2025 (the maturity date). After February 27, 2023, interest is payable monthly at the lower of the Adjusted Term SOFR or the interest floor (1.00% at December 31,

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

2023) plus the applicable margin, as defined in the credit agreement. Prior to February 27, 2023, interest was payable monthly at the lower of one-month LIBOR or the interest floor plus the applicable margin, as defined in the credit agreement. Additionally, under the Third Amendment, the Company is eligible to elect Paid-in-Kind (“PIK”) interest up to 2.00% per annum of interest on the term loans; unless paid on the due date, the PIK interest rolls into the term loan balance. The interest on the term loans was 12.20% as of December 31, 2023. The term loans are collateralized by substantially all of the assets of the Company. The agreement provides for optional and mandatory prepayments based on certain requirements. For the year ended December 31, 2023, the Company made repayments on the term loans totaling $2.3 million.

Revolver Facility

In April 2018, the Company entered into a revolving loan (the "Revolver Facility") not to exceed $10.0 million with a financial institution which is subordinated to the term loan. During 2020, the Company entered into a First Amendment to the Amended and Restated Credit Agreement in which the borrowing capacity of the Revolver Facility was increased to $13.5 million. The amendment extended the maturity to April 24, 2025. In the Third Amendment, the borrowing capacity of the Revolver Facility was changed to $10.8 million and the outstanding must be less than $0.5 million for at least 90 consecutive days each year. Interest is payable monthly at the lower of the Adjusted Term SOFR or the interest floor (1.00% at December 31, 2023) plus the applicable margin, as defined in the credit agreement. The interest on the revolving loan was 12.20% as of December 31, 2023. The Revolver Facility is collateralized by substantially all of the assets of the Company. For the year ended December 31, 2023, the Company made repayments on the Revolver Facility totaling $13.5 million. There were no balances outstanding under the Revolver Facility as of December 31, 2023. The Company is subject to certain restrictive covenants. The Company was in compliance with all debt covenants during 2023.

The Company incurred no debt issuance costs during 2023. Debt issuance costs are amortized using the effective interest method over the term of the loan. The charge to interest expense was $0.8 million for the year ended December 31, 2023.

As of December 31, 2023, the annual amount of maturities for borrowings is as follows (in millions):


	Term Loan		Total Principal		Unamortized Debt Issuance Costs		Net Outstanding Long-Term Debt
2024	$	9.5	$	9.5	$	(0.7)	$	8.8
2025	139.7		139.7		(0.3)		139.4
Total	$	149.2	$	149.2	$	(1.0)	$	148.2

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

9. Preferred and Common Units

Preferred Units

On February 24, 2023, the Company adopted a Fourth Amended and Restated Limited Liability Company Agreement. This agreement authorized 14,750 Preferred A Units.

As of December 31, 2023, the Company’s convertible preferred units authorized, issued and outstanding were as follows (in millions, except unit and per unit amounts):


Preferred Units	Year Issued	Units Authorized	Units Issued & Outstanding	Issuance Price (Per Share)
A Units	2023	14,750	12,000	$	1,000

Common Units

The following table reflects the authorized, issued, and outstanding common units as of December 31, 2023:

Type of Units

Units Authorized

Units Issued

Unit Outstanding

Common Units

Unlimited

110,463

Rights

The rights of preferred and common units are as follows:

Voting

Holders of Common Units are entitled to one vote per unit on matters submitted to a vote or consent of the Members. Holders of Preferred and Management Incentive Units are not entitled to vote.

Distributions

Holders of Common Units are entitled to cash distributions at the sole discretion of the Management Committee in proportion to their common percentage interests.

Tax Distributions

Each calendar quarter of each Fiscal Year, to the extent the Company has distributable cash, tax distributions are made to each Member in accordance with the Fourth Amended and Restated Limited Liability Company Agreement. These distributions are treated as advances of distributions and shall be taken into account in determining the amount of future distributions to each such Member by reducing dollar for dollar the next succeeding distributions.

Conversion Rights

Upon the Company’s first issuance of equity securities with the principal purpose of raising capital that occurs following February 24, 2023, if lead investors require conversion of outstanding Preferred A Units, holders of a majority of these units will negotiate and determine the terms on behalf of all Preferred Members.

Conversion occurs immediately before the financing closes. Once converted, all rights associated with the Preferred A Units, including distribution rights, cease, and Preferred Members become holders of common units or the new unit class.

Adjustments to Conversion Price

Preferred A Units were issued with an initial per unit conversion price of $1,000, subject to certain adjustments to prevent dilution. If new Common Units are issued at a price below the current Conversion Price, the Conversion Price adjusts downward accordingly.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

The Company must notify Preferred Members before taking actions that impact conversion terms. Holders of a majority of Preferred A Units can waive price adjustments.

The following summarizes the impact of any newly issued Common Units on the outstanding Preferred A Units:

•Issuances for cash: Considered at gross proceeds before any applicable issuance fees;

•Issuances for non-cash consideration: Valued at fair market value;

•Options, rights, and convertible securities: Adjusted based on their potential conversion/exercise terms.

Liquidation

The Company has issued preferred units with a 3x liquidation preference, entitling holders to receive up to three times the original issue price per unit prior to any distributions to common unit holders in the event of a Liquidation Event, as defined in the Fourth Amended and Restated Limited Liability Company Agreement. The preferred units are also convertible into common units at a pro-rata basis in proportion to their preferred members interest, at the option of the holder.

The liquidation rights of the holders of Common units and Management Incentive units are subject to and qualified by the rights and preferences of the holders of Preferred A units.

10. Equity Incentive Plan

In April 2018, the Board of Directors approved the 2018 Incentive Unit program which will grant certain Management Incentive Units to employees (“Incentive Units”). These units are accounted for in accordance with ASC 710, Compensation, as the grantees cannot retain value in the Company if they voluntarily sever their relationship with the Company or are terminated for cause.

Each grant under the 2018 Incentive Unit Program has its own grant date and vesting commencement date. Under the 2018 Incentive Unit Program, 14,636 Incentive Units were reserved for issuance and awards can be granted as time-based incentive units (“Time-Based Awards” or “TBA”) or performance-based incentive units (“Performance-Based Awards” or “PBA”). The Company’s TBAs vest 40% on the second anniversary of the vesting commencement date, as defined in the respective incentive unit agreement, and 20% therefore on each of the three subsequent anniversary dates. The PBAs vest based on a performance measure with market conditions. The vested Incentive Units receive distributions in the event of a sale of the business or an Initial Public Offering.

There was no compensation expense or liability related to the Incentive Units recognized during the year ended, or as of, December 31, 2023 because management determined that any distribution to the Incentive Unit grantees was not probable of occurring.

Activity related to the Incentive Units is as follows for the year ended December 31, 2023:


ASC 710 - Incentive Units	Time Based Awards	Performance Based Awards
Incentive Units outstanding as of December 31, 2022	7,555	8,646
Granted	150	150
Forfeited	(634)	(1,948)
Incentive Units outstanding as of December 31, 2023	7,071	6,848

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

11. Related-Party Transactions

The Company is managed by an entity under common control, At World Management, LLC, and partially by an entity that has a membership interest in the Company. These entities charged the Company approximately $0.9 million related to management fees for management services performed in 2023. As of December 31, 2023, management fees totaling $1.1 million had not been paid due to certain limitations included in the Third Amendment to the Amended and Restated Credit Agreement dated February 27, 2023 (Note 8). The management fees are recorded as a long-term liability in the consolidated balance sheet as of December 31, 2023 as they were paid in 2025.

The Company also leases certain office space from At World Management, LLC. The related party lease expense was $1.2 million in 2023. There were no other transactions between these entities and the Company. The Company has determined that these entities do not require consolidation.

From time to time, the Company has monies due to and due from various related parties. These balances are unsecured, due on demand, and non-interest bearing. The balance due from related parties of $0.3 million has been classified as current on the accompanying consolidated balance sheet as of December 31, 2023.

12. Concentration of Risk

Uninsured Cash

Cash represents amounts on deposit with financial institutions. The Company maintains funds on deposit at banks, which at times may exceed federally insured limits. The Company has not experienced any losses on such deposits.

The Company acts as escrow agent for numerous buyers. As an escrow agent, the Company receives money from buyers to hold until certain conditions are satisfied. This money is deposited with various financial institutions in the United States. Upon the satisfaction of those conditions, the Company releases the money to the appropriate party. The banks may hold these deposits in excess of the FDIC limit. If any of the depository banks were to become unable to honor any portion of the Company’s deposits, buyers could seek to hold the Company responsible for such amounts and, if the buyers prevailed in their claims, the Company could be subject to losses. These escrow deposits totaled $47.8 million as of December 31, 2023. These escrow deposits are not assets of the Company and, therefore, are excluded from cash and liability balances on the accompanying consolidated balance sheet. However, the Company remains contingently liable for the disposition of these deposits.

Global Brand License Agreement

On November 16, 2021, the Company entered into a long-term global brand license agreement with Christie, Manson, & Woods Limited ("CMW"), an affiliated entity of Christie’s International Plc, that grants the right to use the Christie’s trademarks. Pursuant to the terms of the license agreement, the Company is required to pay CMW a royalty equal to a combination of a fixed amount and/or a stated percentage of affiliate revenues and owned office revenues, as defined in the agreement. The agreement requires a minimum of $2.0 million of royalty fees per year to be paid for the first five years, which is the initial royalty period. For the five years following the initial royalty period, the Company is required to pay a minimum of $3.0 million of royalty fees per year. The Company incurred $2.0 million of royalty fees for the year ended December 31, 2023 pursuant to the terms of the license agreement.

The license agreement also includes a marketing commitment under which the Company is required to invest a minimum of $5.0 million in out-of-pocket expenses prior to the twenty-four month anniversary of the license agreement, inclusive of marketing, advertising, technology, professional fees, and any other expenses reasonably necessary to grow the business. During the year ended December 31, 2023, the Company invested $1.4 million to fully meet the marketing commitment within the twenty-four month time period.

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

13. Commitments and Contingencies

A number of cases are currently being tried in multiple states claiming the National Association of Realtors (“NAR”) and the nation’s largest brokerage firms conspired to violate anti-trust laws by colluding to fix commissions. One central argument of these lawsuits is that the practice of requiring a seller to pay a buyer agent’s commission is unfair and collusive.

On or about March 15, 2024, NAR agreed to settle the primary case (Burnett v. National Association of Realtors), along with a sister litigation, by agreeing to pay a specified dollar amount and changing certain of its rules surrounding agent commissions. NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers' agents. The settlement was approved by the court in April 2024, and the new policy changes were effective August 17, 2024. The Company made the appropriate changes to its policies and procedures to meet the new policy requirements in the requisite timeframe.

On April 23, 2024, the Company signed a settlement agreement as part of the class action settlement in the amount of $6.5 million which was paid on May 29, 2024. On June 3, 2024, the Company received insurance proceeds of $4.5 million, and on March 4, 2025, the Company received additional insurance proceeds of $1.3 million. In 2023, the Company recognized $0.7 million in other operating expenses on the consolidated statement of operations and recorded $5.8 million in prepaid expenses and other current assets and $6.5 million in accrued expenses on the consolidated balance sheet.

The Company, from time-to-time, is a named respondent in various legal proceedings and actions, all arising in the ordinary course of business. Although it is impossible to predict the outcome of any legal proceeding, Management believes that any liability that may finally be determined with respect to such legal proceedings should not have a material adverse effect on the Company’s consolidated balance sheet, statement of operations, or statement of cash flows.

14. Income Taxes

The Company was formed as a limited liability company that is taxed as a partnership. As a partnership, the Company is generally not subject to U.S. federal and certain state and local income taxes. Therefore, no liability or provision for income taxes is included in the consolidated financial statements except for taxes related to the operations of certain subsidiaries, as described below.

As a result of business acquisitions, the Company has subsidiaries which are individually taxed as corporations including: @properties UK Holdings Ltd. and Christie's International Real Estate Europe Ltd., which are individually taxed as corporations in the UK; SGI Holding, Inc., Sereno Group, Inc. and Dwell Realtors, Inc. which are individually taxed as corporations in the U.S.

The Company's income before income taxes consisted of (in millions):


	Year Ended December 31, 2023

Domestic	$	5.7
Foreign	2.2
Income before income taxes	$	7.9

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

The components of the Company’s income tax benefit consisted of (in millions):



	Year Ended December 31, 2023
Current:


Foreign	$	(0.6)
Current income tax expense	(0.6)
Deferred:
U.S. Federal	0.3
State	0.3
Foreign	0.2
Total deferred tax benefit	0.8
Total income tax benefit	$	0.2

The Company's annual effective tax rate for the year ended December 31, 2023 differs from the statutory rate of 21% primarily because the Company is not liable for income taxes on a majority of its income. The effective income tax rate differed from the statutory federal income tax rate as follows:


	Year Ended December 31, 2023




Expected U.S. federal income taxes at statutory rate	21.0	%
State and local income taxes, net of federal benefit	(10.6)
LLC flow-through structure	(6.6)
Foreign rate differences	1.3
Nondeductible differences	(10.7)
Income tax benefit	(5.6)	%

The significant components of deferred tax assets and liabilities as of December 31, 2023 are as follows (in millions):



	December 31, 2023
Deferred tax assets:
Net operating loss carryforwards	$	0.8
Accruals and reserves	0.1
Operating lease liabilities	3.2

Deferred tax assets	$	4.1
Deferred tax liabilities:
Operating lease right-of-use assets	$	(3.3)
Intangible assets & goodwill	(4.5)

Deferred tax liabilities	(7.8)
Deferred tax liabilities, net	$	(3.7)

As of December 31, 2023, the Company had gross U.S. federal and state net operating loss carryforwards of $2.9 million. As a result of changes from the Tax Cuts and Jobs Act, the federal net operating losses generated in tax years after 2017 will carryforward indefinitely but are limited to 80% of taxable income in the year used. The state net operating losses begin to expire in 2041.

Management has analyzed the tax positions taken by the Company and has concluded that for the year ended December 31, 2023, there are no uncertain positions taken or expected to be taken that would require recognition of a liability in the consolidated financial statements. The Company is subject to routine audits by taxing jurisdictions; however, there are

At World Properties Holdings, LLC

Notes to Consolidated Financial Statements

currently no audits for any tax periods in progress. Management does not believe that the Company is subject to U.S. federal or state and local income tax examinations by tax authorities for years prior to 2020. The Company's UK subsidiary's 2023 and 2022 tax periods have open statute of limitations.

15. Subsequent Events

On November 25, 2024, the Company entered into an agreement and plan of merger (the "Merger Agreement"), effective January 13, 2025 (the "Closing Date"), by and among At World Properties Holdings, LLC, At World Properties IX Blocker, Inc., (“IX Blocker”), At World Properties Principals Blocker, Inc., (“Principals Blocker”), Quad-C, LLC, as seller representative, Compass, Inc., (“Buyer Parent”), Compass Brokerage, LLC, (the “Buyer”), Apple Principals Blocker Merger Sub, Inc., a direct, wholly owned subsidiary of Buyer (“Principals Blocker Merger Sub”), Apple IX Blocker Merger Sub, Inc., a direct, wholly owned subsidiary of Buyer (“IX Blocker Merger Sub”), and Apple Merger Sub, LLC, a direct, wholly owned subsidiary of Buyer (“Company Merger Sub”). Pursuant to the Merger Agreement, on January 13, 2025, the Buyer acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and At World Properties Holdings, LLC and each of Principals Blocker, IX Blocker and At World Properties Holdings, LLC became a wholly-owned subsidiary of the Buyer Parent.

The aggregate consideration payable pursuant to the Merger Agreement consisted of (i) $150 million, subject to certain customary purchase price adjustments and (ii) 44.1 million shares of the Buyer Parent’s Class A common stock (the “Share Consideration”). The Share Consideration is subject to further adjustment if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Buyer Parent’s Class A common stock for the 10-trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), is (i) greater than $344 million, in which case the Share Consideration will be reduced by a number of shares in an aggregate amount of up to $50 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares, or (ii) less than $344 million, in which case the Share Consideration will be increased by a number of shares in an aggregate amount of up to $50 million (determined using the greater of $6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares.

On November 26, 2024, the Company’s subsidiary, At Properties Developer Services, LLC, a Delaware limited liability company, executed its Fourth Amended and Restated Operating Agreement which modified the member list to remove the non-controlling interest members, leaving At World Properties, LLC, a wholly owned subsidiary of the Company, as the sole member.

On November 27, 2024, the Company entered into a Sale and Purchase Agreement (the "Agreement"), effective January 13, 2025, wherein the Purchaser, Ryan Iwanaga and Christopher A. Trapani, collectively, purchased all shares of SGI Acquisition Holdings, Inc. ("SGIH"), the parent company of Christie’s International Real Estate Sereno, for $1.00. The Company agreed to transfer all rights, title and interest in and to the SGIH shares. This entity was sold immediately prior to the effectiveness of the Merger Agreement and resulted in the Company's divestiture of its Northern California brokerage business (Note 2). Per the terms of the Agreement, the Purchaser shall receive the financial benefit (and burden) of its ownership of SGIH.

On January 13, 2025, in conjunction with the executed Merger Agreement, the Company paid all outstanding debt and interest due (Note 8) and all outstanding management fees (Note 11). In addition, the Merger Agreement triggered a Liquidation Event, and all equity incentive plan units and outstanding units were vested and paid out in accordance with the Merger Agreement (Note 10).

Management has evaluated subsequent events through March 28, 2025, the date that these consolidated financial statements were available to be issued. Management has determined that no events or transactions, other than the events described above, have occurred subsequent to the consolidated balance sheet date that require disclosure in the consolidated financial statements.

Exhibit 99.2

At World Properties Holdings, LLC

Condensed Consolidated Financial Statements

September 30, 2024

(Unaudited)

Index


			Page
Conde nsed C on solidated Balance Sheet as of September 30, 2024			2
Condensed Consolidated Statement of Operations for the nine months ended September 30, 2024			3
Condensed Consolidated Statement of Member s ' Equity for the nine months ended September 30, 2024			4
Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2024			5
Notes to Condensed Consolidated Financial Statements			6

At World Properties Holdings, LLC

Condensed Consolidated Balance Sheet

(In millions, except unit and per unit data, unaudited)


	September 30, 2024
Assets
Current Assets
Cash	$	27.9
Accounts receivable, net of allowance of $1.0	14.2
Prepaid expenses and other current assets	7.4
Affiliate contract assets	0.8
Due from related parties	0.2
Total current assets	50.5
Property and equipment, net	15.8
Operating lease right-of-use assets	32.7
Investment in unconsolidated entities	8.4
Goodwill	164.4
Intangible assets, net	79.4
Affiliate contract assets, net of current portion	5.4
Other non-current assets	0.8

Total assets	$	357.4
Liabilities and members' equity
Current liabilities
Current maturities of long-term debt, net of unamortized debt issuance costs (Note 2)	$	6.0
Accounts payable	7.7
Accrued expenses	18.8
Deferred revenue	3.0
Current portion of operating lease liabilities	8.9
Due to related parties	1.7
Total current liabilities	46.1
Long-term liabilities
Operating lease liabilities, net of current portion	25.8
Other liabilities	0.6

Deferred income taxes, net	3.7
Long-term debt, net of unamortized debt issuance costs, less current maturities (Note 6)	125.5
Total non-current liabilities	155.6
Total liabilities	201.7
Commitments and contingencies (Note 7)
Members' equity
Preferred Units, $1,000 per unit; 14,750 units authorized, 12,000 issued and outstanding at September 30, 2024	4.7
Common Units, $1,000 per unit; Unlimited units authorized, 110,463 issued and outstanding at September 30, 2024	88.9
Retained earnings	61.6
At World Properties Holdings, LLC members' equity	155.2
Non-controlling interest	0.5
Total members' equity	155.7
Total liabilities and members' equity	$	357.4

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

At World Properties Holdings, LLC

Condensed Consolidated Statement of Operations

(In millions, unaudited)


	Nine months ended September 30, 2024
Revenue
Commission income	$	431.2
Title agency revenues	18.0
Other revenues	37.8
Total revenue	487.0
Operating expenses
Commissions and other agent-related expense	361.5
Wages and benefits	46.6
Depreciation	3.6
Amortization of intangible assets	2.9
Advertising and marketing	6.8
Rent and occupancy	9.9
Recruiting and retention	6.7
Office expenses and supplies	3.4
Professional fees	1.9
Computer related	3.2
Title agency direct cost	1.0
Management fee (Note 5)	0.7
Other operating expenses	7.8
Total operating expenses	456.0
Income from operations	31.0
Other (expense) income
Interest expense	(13.8)
Interest income	2.2
Income from unconsolidated entities	0.6
Other income	1.4
Total other expense	(9.6)
Income before income taxes	21.4
Income tax expense	(0.6)
Net income	20.8
Net income attributable to non-controlling interests	(0.1)
Net income attributable to At World Properties Holdings, LLC	$	20.7

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

At World Properties Holdings, LLC

Condensed Consolidated Statement of Members' Equity

(In millions, except unit amounts, unaudited)


	Preferred Equity			Common Equity			Retained Earnings		At World Properties Holdings, LLC Members' Equity		Non-controlling Interest		Total Members' Equity
	Units	Amount		Units	Amount

Balance at December 31, 2023	12,000	$	7.7	110,463	$	91.6	$	40.9	$	140.2	$	0.4	$	140.6
Net income	—	—		—	—		20.7		20.7		0.1		20.8
Distributions to members	—	(3.0)		—	(2.7)		—		(5.7)		—		(5.7)
Balance at September 30, 2024	12,000	$	4.7	110,463	$	88.9	$	61.6	$	155.2	$	0.5	$	155.7

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

At World Properties Holdings, LLC

Condensed Consolidated Statement of Cash Flows

(In millions, unaudited)


	Nine Months Ended September 30, 2024
Cash flows from operating activities
Net income	$	20.8
Reconciliation of net income to net cash provided by operating activities:
Depreciation	3.6
Bad debt expense	0.1
Amortization of debt issuance costs	0.5
Paid-in-Kind ("PIK") interest (Note 2)	1.5
Amortization of intangible assets	2.9
Income from equity-method investments	(0.6)
Distributions from equity-method investments	0.8

Changes in operating assets and liabilities:
Accounts receivable	(1.2)
Prepaid expenses and other current assets	4.4
Due to related parties	0.7
Affiliate contract assets	0.6
Other non-current assets	(0.1)
Accounts payable	1.8
Accrued expenses and deferred revenue	(2.7)
Operating lease right-of-use assets and operating lease liabilities	1.6
Other non-current liabilities	0.2
Net cash provided by operating activities	34.9
Cash flows from investing activities
Purchases of property and equipment	(3.1)




Net cash used in investing activities	(3.1)
Cash flows from financing activities
Repayments on Term Loan	(17.9)
Debt issuance costs	(0.9)


Distributions to members	(5.7)

Net cash used in financing activities	(24.5)
Net increase in cash	7.3
Cash
Beginning of year	20.6
End of year	$	27.9
Supplemental disclosures of cash flow information
Cash paid for interest	$	11.6

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

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, which represent substantially all of the assets and liabilities acquired by Compass Brokerage, LLC, a wholly owned subsidiary of Compass, Inc. (Note 9).

The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2024, and its results of operations for the nine months ended September 30, 2024, and cash flows for the nine months ended September 30, 2024. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2023.

The minority member’s interest in the majority-owned subsidiary is reflected as non-controlling interest in the accompanying condensed consolidated financial statements.

All intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates

In preparing the condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The accounting for the fair value of acquisitions is complex due to the significant judgements and estimates that are required to determine the values of the consideration transferred and the identification and measurement of the fair value of the assets acquired and liabilities assumed in business combinations. The accounting for goodwill impairment testing utilizes valuation analysis that also requires the use of estimates and judgment to predict the future profitability of the Company. Actual results could differ from those estimates.

Revenue Recognition

Commission income

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

Title agency revenues

Other revenues

The Company also earns revenue from various fees in conjunction with the real estate closings. These fees are recorded as revenue at a point in time, which is upon the closing of a real estate transaction. These revenues are included in other revenues.

The initial, renewal, transfer and additional office franchise fees include multiple performance obligations, including initial franchisee training, site selection, assistance with equipment, access to operations manual, and access to the Company’s proprietary trademarks for the duration of the contract. These performance obligations are highly interrelated to the promise to provide the franchise right. As such, these promises are not distinct and have been combined into a single performance obligation that is satisfied over the term of the franchise agreement. The Company’s revenue recognition policy for initial franchise fees is to begin recognizing revenue earned when the franchise is deemed as fully operational. Revenues associated with the franchise renewal fee, additional office fee, and transfer fee performance obligations are recognized over the term of the remaining period or new term. Initial, renewal, additional office, and transfer fees are collected at the inception or renewal of the franchise agreement, and as such, the portion of those fees paid by the franchisee that relates to performance obligations to be satisfied in future periods have been reflected as deferred revenue on the condensed consolidated balance sheets.

Branding, administrative, and strategy fees are invoiced monthly based on a percentage of the gross commission income of the franchisee. The Company has utilized an election that allows for recognition of revenue related to sales-based fees when the subsequent sale by the franchisee occurs and is reported to the Company. The amount is estimated throughout the month and is adjusted to actual at month end when invoicing occurs.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

Contract assets include rebranding allowances and affiliate loans receivable. Contract assets, current portion, are included in prepaid expenses and other current assets, and contract assets, long-term portion, are included in affiliate contract assets, net of current portion on the condensed consolidated balance sheets. Contracts assets were $6.2 million and $6.8 million as of September 30, 2024 and December 31, 2023, respectively.

Contract liabilities consist of deferred fees. Deferred fees of $3.0 million and $3.6 million were included in deferred revenue at September 30, 2024 and December 31, 2023, respectively. Deferred fees of $3.0 million that were deferred as of December 31, 2023 were recognized in other revenue on the condensed consolidated income statement for the nine months ended September 30, 2024.

Accounts Receivable

Accounts receivables are stated at the amounts owed by the agents and/or other brokerage firms. Accounts receivable were $14.2 million and $13.1 million at September 30, 2024 and December 31, 2023, respectively.

The Company provides an allowance for credit losses against accounts receivable for the current expected credit losses inherent in the asset over its expected life. The Company determines the allowance by considering a number of factors, including historical experience and customers' current ability to pay their obligations. As of September 30, 2024, the allowance for credit losses was $1.0 million.

Property and Equipment

The Company also incurs costs related to the development of an internal-use software platform used to aid in the document management portion of the closing process. Costs of development include purchased software and internally developed software. Costs incurred in the planning and evaluation stage of internally developed software are expensed as incurred. For the nine months ended September 30, 2024, the Company capitalized $1.6 million in internally developed capitalized software.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

The estimated lives used for the computation of depreciation and amortization are as follows:


						Years
Furniture, fixtures and equipment						7
Computer equipment						5
Leasehold improvements						2-15
Internally-developed software						3
Vehicles						5

Leasehold improvements are amortized over the lesser of its useful life or term of the lease.

Investments in Unconsolidated Entities

The Company accounts for its investments in Proper Rate, LLC and Capstone Title Services, LLC under the equity method of accounting. Under the equity method, the Company’s share of the net income or loss of the investment is recognized as income or loss in the Company’s condensed consolidated statements of operations and added or subtracted from the investment account. Distributions received from the entities are treated as a reduction of the investment account. For the nine months ended September 30, 2024, the Company recognized $0.6 million in income from its equity method investments.

Goodwill

Goodwill represents the excess of the purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of business acquired. Goodwill is not subject to amortization but is subject to impairment testing on an annual basis or whenever events and circumstances indicate that the carrying value of the reporting unit may be in excess of the reporting unit’s fair value. The Company has one reporting unit and tests goodwill for impairment at the reporting unit level. As part of the goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of the Company’s reporting unit is less than its carrying amount, a two-step impairment test is required.

If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded. There were no impairment charges recognized for the nine months ended September 30, 2024 and no cumulative impairment on goodwill has been recorded.

Intangible Assets

The Company’s intangible assets that have indefinite lives are not amortized but rather reviewed annually for impairment. There were no impairment charges recognized for the nine months ended September 30, 2024.

Advertising and Marketing

The Company expenses advertising costs as incurred. Advertising costs are recorded in the Advertising and marketing account within the condensed consolidated statement of operations.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

Income Taxes

The Company was formed as a limited liability company. Accordingly, federal income taxes are not payable by the Company. Income or loss is allocated to the members and is included in the member’s income tax returns. Therefore, no liability or provision for income taxes is included in the condensed consolidated financial statements except for taxes related to the operations of certain subsidiaries, as described below. The Company may be subject to certain state taxes.

Fair Value of Financial Instruments

There are three levels of inputs that may be used to measure fair value:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity, requiring the Company to develop its own assumptions.

The Company’s material financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and long-term debt. The carrying amounts of cash, trade receivables, trade payables and accrued expenses approximate fair value because of the short-term nature of these instruments.

It is the Company's policy, in general, to measure nonfinancial assets and liabilities at fair value on a nonrecurring basis. These items are subject to fair value adjustments in certain circumstances (such as evidence of impairment) which, if material, are disclosed in the accompanying notes to the condensed consolidated financial statements.

The fair value of the Company's indebtedness is categorized as Level 2 (Note 2).

Personal Assets and Liabilities and Allocations to Members

In accordance with the generally accepted method of presenting limited liability company financial statements, the condensed consolidated financial statements do not include the personal assets and liabilities of the members, including its obligations for an income tax liability.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

Allocations of income and distributions to the members are based on the provisions of the Company’s Limited Liability Company Agreement dated February 24, 2023.

Deferred Financing Fees

Consistent with debt discounts, the Company accounts for debt issuance costs by including those costs as a direct deduction from the carrying amount of the debt liability (Note 2).

Recent Accounting Pronouncements Not Yet Effective

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of additional categories of information about federal, state and foreign income taxes in the rate reconciliation table and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively. The ASU is effective for the Company for fiscal years beginning after December 15, 2024. The Company is currently assessing the impact that adopting this new accounting standard will have on its condensed consolidated financial statements.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted, and the disclosure requirements are to be applied retrospectively to any prior periods presented in the financial statements. The Company is currently evaluating the impact that the ASU will have on its condensed consolidated financial statements. This ASU will result in expanded disclosures related to expenses but will have no impact on the Company’s financial position or results of operations.

2. Debt

Term Loans and Delayed Draw Term Loan

In April 2018, the Company entered into an agreement with a financial institution for a term loan in the amount of $85.5 million. The Company entered into an amendment during 2020 under which it borrowed an additional $2.5 million. On April 22, 2021, the Company entered into a First Amendment to the Amended and Restated Credit Agreement under which it borrowed an additional $27.0 million to be used to pay in full the outstanding subordinated notes owed the Company. The amendment also extended the maturity date from April 24, 2023 to April 24, 2025. On November 16, 2021, the Company entered into a Second Amendment to the Amended and Restated Credit Agreement to establish a new Delayed Draw Term Loan (the "DDTL") commitment in the aggregate amount of $60.0 million. The Company drew $45.0 million against the DDTL for the acquisition of Christie’s International Real Estate, LLC on November 30, 2021 and another $0.8 million from the outstanding DDTL commitment on December 10, 2021 for another permitted acquisition. On February 25, 2022, the Company drew $14.3 million against the DDTL for the SGI Holdings, Inc. acquisition completed during the year ended December 31, 2022.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

from the Sponsor and management of the Credit Parties in the form of cash equity contributions made by Sponsor on February 27, 2023 to the Company (funded with proceeds of equity issued by Holdings other than Disqualified Equity Interests) in the aggregate amount of $12.0 million which was used in part to repay the outstanding Revolver Facility, discussed further below.

On July 25, 2024, the Company entered into the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”) under which certain terms were modified. Key changes included the following: (a) the maturity date was changed to October 25, 2026, (b) all Paid-in-Kind (“PIK”) interest was repaid, (c) all deferred amortization was paid in full, (d) cash flow reporting is due quarterly vs. weekly, (e) the maximum net leverage ratio adjusts down one quarter point each year for 2024 through 2026, and (f) the fixed charge coverage ratio was reinstated.

Under the Third Amendment, as a result of the additional borrowings, the term loans were payable in five principal payments of $0.3 million each during the period April 2023 through April 2024 and three principal payments of $2.0 million each in June, August and October 2024, with a balloon payment of the remaining principal due on April 24, 2025 (the maturity date). Under the Fourth Amendment, the Company prepaid the August and October 2024 payments of $2.0 million each in July 2024, and the remaining term loan balance is payable in seven principal payments of $2.0 million each in April, June, August and October 2025 and April, June and August 2026, with a balloon payment of the remaining principal due on October 25, 2026 (maturity date). After February 27, 2023, interest is payable monthly at the lower of the Adjusted Term SOFR or the interest floor plus the applicable margin, as defined in the credit agreement. Prior to February 27, 2023, interest was payable monthly at the lower of one-month LIBOR or the interest floor plus the applicable margin, as defined in the credit agreement. Under the Third Amendment, the Company was eligible to elect PIK interest up to 2.00% per annum of interest on the term loans; unless paid on the due date, the PIK interest rolled into the term loan balance. In conjunction with the Fourth Amendment, the PIK interest was fully paid and eliminated.

The term loans are collateralized by substantially all of the assets of the Company. The agreement provides for optional and mandatory prepayments based on certain requirements. For the nine months ended September 30, 2024, the Company made term loan repayments totaling $17.9 million.

As of September 30, 2024, the aggregate fair value of the Company's outstanding Term Loans was $131.5 million.

Revolver Facility

In April 2018, the Company entered into a revolving loan (the "Revolver Facility") not to exceed $10.0 million with a financial institution which is subordinated to the term loan. During 2020, the Company entered into a First Amendment to the Amended and Restated Credit Agreement in which the borrowing capacity of the Revolver Facility was increased to $13.5 million. The amendment extended the maturity to April 24, 2025. In the Third Amendment, the borrowing capacity of the Revolver Facility was changed to $10.8 million and the outstanding must be less than $0.5 million for at least 90 consecutive days each year. There were no changes to the Revolver Facility in the Fourth Amendment. Interest is payable monthly at the lower of the Adjusted Term SOFR or the interest floor plus the applicable margin, as defined in the credit agreement. The Revolver Facility is collateralized by substantially all of the assets of the Company. As of September 30, 2024, there were no borrowings outstanding under the Revolver Facility. The Company is subject to certain restrictive covenants. As of September 30, 2024, the Company was in compliance with all debt covenants.

The Company incurred debt issuance costs of $0.9 million during the nine months ended September 30, 2024. Debt issuance costs are amortized using the effective interest method over the term of the loan. The charge to interest expense was $0.5 million for the nine months ended September 30, 2024.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

3. Preferred and Common Units

Preferred Units

On February 24, 2023, the Company adopted a fourth amended and restated Limited Liability Company Agreement (the "LLC Agreement"). This agreement authorized 14,750 Preferred A Units.

As of September 30, 2024, the Company’s convertible preferred units authorized, issued and outstanding were as follows (in millions, except unit and per unit amounts):


Preferred Units	Year Issued	Units Authorized	Units Issued & Outstanding	Issuance Price (Per Share)
A Units	2023	14,750	12,000	$	1,000

Common Units

The following table reflects the authorized, issued and outstanding common units as of September 30, 2024:

Type of Units

Units Authorized

Units Issued

Units Outstanding

Common Units

Unlimited

110,463

The rights of preferred and common units are as follows:

Voting

Holders of Common Units are entitled to one vote per unit on matters submitted to a vote or consent of the Members. Holders of Preferred and Management Incentive Units are not entitled to vote.

Distributions

Holders of Common Units are entitled to cash distributions at the sole discretion of the Management Committee in proportion to their common percentage interests.

Tax Distributions

Conversion Rights

Adjustments to Conversion Price

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company must notify Preferred Members before taking actions that impact conversion terms. Holders of a majority of Preferred A Units can waive price adjustments.

The following summarizes the impact of any newly issued Common Units on the outstanding Preferred A Units:

•Issuances for cash: Considered at gross proceeds before any applicable issuance fees;

•Issuances for non-cash consideration: Valued at fair market value;

•Options, rights, and convertible securities: Adjusted based on their potential conversion/exercise terms.

Liquidation

The liquidation rights of the holders of Common units and Management Incentive units are subject to and qualified by the rights and preferences of the holders of Preferred A units.

4. Equity Incentive Plan

There was no compensation expense or liability related to the Incentive Units recognized during the nine months ended September 30, 2024 because management determined that any distribution to the Incentive Unit grantees is not probable of occurring.

Activity related to the Incentive Units for the nine months ended September 30, 2024 is as follows:


ASC 710 - Incentive Units	Time Based Awards	Performance Based Awards



Incentive Units outstanding as of December 31, 2023	7,071	6,848
Granted	275	275
Forfeited	(146)	(233)
Incentive Units outstanding as of September 30, 2024	7,200	6,890

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

5. Related-Party Transactions

The Company is managed by an entity under common control, At World Management, LLC, and partially by an entity that has a membership interest in the holding entity of the Company. These entities charged the Company approximately $0.6 million related to management fees for management services performed during the nine months ended September 30, 2024. There were no other transactions between these entities and the Company. The Company has determined that these entities do not require consolidation. As of September 30, 2024, management fees totaling $1.7 million had not been paid due to certain limitations included in the Third Amendment to the Amended and Restated Credit Agreement dated February 27, 2023 (Note 2). The payment of these fees occurred in 2025; therefore, they are recorded as a short-term liability in the condensed consolidated balance sheet as of September 30, 2024.

From time to time, the Company has monies due to and due from various related parties. These balances are unsecured, due on demand, and non-interest bearing. The balance due from related parties of $0.2 million have been classified as current and is presented net with the amounts due to related parties on the accompanying condensed consolidated balance sheet as of September 30, 2024.

6. Concentration of Risk

Uninsured Cash

The Company acts as escrow agent for numerous buyers. As an escrow agent, the Company receives money from buyers to hold until certain conditions are satisfied. This money is deposited with various financial institutions in the United States. Upon the satisfaction of those conditions, the Company releases the money to the appropriate party. The banks may hold these deposits in excess of the FDIC limit. If any of the depository banks were to become unable to honor any portion of the Company’s deposits, buyers could seek to hold the Company responsible for such amounts and, if the buyers prevailed in their claims, the Company could be subject to losses. These escrow deposits totaled $53.6 million as of September 30, 2024. These escrow deposits are not assets of the Company and, therefore, are excluded from cash and liability balances on the accompanying condensed consolidated balance sheet. However, the Company remains contingently liable for the disposition of these deposits.

7. Commitments and Contingencies

On April 23, 2024, the Company signed a settlement agreement as part of the class action settlement in the amount of $6.5 million which was paid on May 29, 2024. On June 3, 2024, the Company received insurance proceeds of $4.5 million, and on March 4, 2025, the Company received additional insurance proceeds of $1.3 million. In 2023, the Company recognized $0.7 million in other operating expenses on the condensed consolidated statement of operations and recorded $5.8 million in prepaid expenses and other current assets and $6.5 million in accrued expenses on the condensed consolidated balance sheet.

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company, from time-to-time, is a named respondent in various legal proceedings and actions, all arising in the ordinary course of business. Although it is impossible to predict the outcome of any legal proceeding, Management believes that any liability that may finally be determined with respect to such legal proceedings should not have a material adverse effect on the Company’s condensed consolidated balance sheet, statement of operations, or statement of cash flows.

8. Income Taxes

The Company was formed as a limited liability company that is taxed as a partnership. As a partnership, the Company is generally not subject to U.S. federal and certain state and local income taxes. Therefore, no liability or provision for income taxes is included in the condensed consolidated financial statements except for taxes related to the operations of certain subsidiaries, as described below.

The income tax expense for the nine months ended September 30, 2024 differs from the expected benefit from income taxes (computed by applying the U.S. federal corporate rate of 21% to the U.S. taxable subsidiaries’ income before income taxes for the nine months ended September 30, 2024) primarily because the Company is not liable for income taxes on a majority of its income.

Management has analyzed the tax positions taken by the Company and has concluded that for the nine months ended September 30, 2024 there are no uncertain positions taken or expected to be taken that would require recognition of a liability in the condensed consolidated financial statements. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Company’s management does not believe that the Company is subject to U.S. federal or state and local income tax examinations by tax authorities for years prior to 2020. The Company’s UK subsidiary’s 2023 and 2022 tax periods have open statute of limitations.

9. Subsequent Events

At World Properties Holdings, LLC

Notes to Condensed Consolidated Financial Statements

(unaudited)

increased by a number of shares in an aggregate amount of up to $50 million (determined using the greater of $6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares.

On November 27, 2024, the Company entered into a Sale and Purchase Agreement (the "Agreement"), effective January 13, 2025, wherein the Purchaser, Ryan Iwanaga and Christopher A. Trapani, collectively, purchased all shares of SGI Acquisition Holdings, Inc. ("SGIH"), the parent company of Christie’s International Real Estate Sereno, for $1.00. The Company agreed to transfer all rights, title and interest in and to the SGIH shares. This entity was sold immediately prior to the effectiveness of the Merger Agreement and resulted in the Company's divestiture of its Northern California brokerage business. Per the terms of the Agreement, the Purchaser shall receive the financial benefit (and burden) of its ownership of SGIH.

On January 13, 2025, in conjunction with the executed Merger Agreement, the Company paid all outstanding debt and interest due (Note 2) and all outstanding management fees (Note 5). In addition, the Merger Agreement triggered a Liquidation Event, and all equity incentive plan units and outstanding units were vested and paid out in accordance with the Merger Agreement (Note 4).

Management has evaluated subsequent events through March 28, 2025, the date that these condensed consolidated financial statements were available to be issued. Management has determined that no events or transactions, other than the events described above, have occurred subsequent to the condensed consolidated balance sheet date that require disclosure in the consolidated financial statements.

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On January 13, 2025 (the “Closing Date”), Compass, Inc. (“Compass” or the “Company”) closed its merger transaction (the “Acquisition”) contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate” or “AWPH, LLC”), At World Properties Principals Blocker, Inc. (“Principals Blocker”), At World Properties IX Blocker, Inc. (“IX Blocker”), Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative. Pursuant to the Merger Agreement, on the Closing Date, the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and Christie’s International Real Estate and each of Principals Blocker, IX Blocker and Christie’s International Real Estate became a wholly-owned subsidiary of the Company. Immediately prior to the Closing of the Acquisition, Christie’s International Real Estate settled its outstanding debt and divested its subsidiary, SGI Acquisition Holdings, Inc. (d/b/a Christie’s International Real Estate Sereno), which maintained brokerage operations in the Northern California market. In addition, the Company drew down $50.0 million from its Revolving Credit Facility to partially fund the Acquisition. The remaining consideration for the Acquisition was funded by the Company’s cash on hand and shares to be issued on the 366th day after the Closing Date.

The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X using the assumptions set forth in the notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information has been adjusted to include adjustments, which reflect the application of the accounting required by generally accepted accounting principles in the United States (“GAAP”) and rules of the Securities and Exchange Commission (the "SEC"), and reflecting the effects of the Acquisition to the historical combined financial statements (“Acquisition Adjustments”).

The unaudited pro forma condensed combined financial information is for illustrative and informational purposes only and is not necessarily indicative of the operating results that would have occurred if the Acquisition had been completed as of the dates indicated in each pro forma presentation, nor is it indicative of the future combined results of operations or financial position of the Company. Further, Acquisition Adjustments represent Management’s best estimates based on information available as of the date of this filing and are subject to change as additional information becomes available.

Acquisition Adjustments

The pro forma adjustments reflecting the completion of the Acquisition in this unaudited pro forma condensed combined financial information have been prepared using the acquisition method of accounting under Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The unaudited pro forma condensed combined financial information is based on the assumptions and adjustments that are described in the accompanying notes. The application of the acquisition method of accounting is dependent upon certain valuations that have yet to be completed. Accordingly, the acquisition adjustments included in the pro forma information are preliminary, subject to further revision as additional information becomes available and additional analyses are performed and have been made solely for the purpose of providing unaudited pro forma combined financial information. There can be no assurances that the final valuations will not result in material changes to the preliminary estimated purchase price allocation. The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the Acquisition or any integration costs. The actual results reported in periods following the Acquisition may differ significantly from those reflected in this pro forma financial information presented herein for a number of reasons, including, but not limited to, differences between the assumptions used to prepare this pro forma financial information and actual results. In addition, the pro forma adjustments also reflect the disposition of SGI Acquisition Holdings, Inc. and the Company’s draw down of the Revolving Credit Facility to partially fund the Acquisition.

The assumptions and estimates underlying the unaudited adjustments to the pro forma combined financial statements are described in the accompanying notes, which should be read together with the unaudited pro forma condensed combined financial statements.

The following unaudited pro forma condensed combined financial information and accompanying notes are based on and should be read in conjunction with (i) Compass’ Annual Report on Form 10-K for the year ended December 31, 2023, (ii) Compass’ Quarterly Report on Form 10-Q for the nine months ended September 30, 2024, (iii) the historical audited consolidated financial statements of At World Properties Holdings, LLC as of and for the year ended December 31, 2023, which are included in Exhibit 99.1 to this Current Report on Form 8-K/A, and (iv) the historical unaudited condensed consolidated financial statements of AWPH, LLC for the nine months ended September 30, 2024, which are included in Exhibit 99.2 to this Current Report on Form 8-K/A. For the purposes of preparing the unaudited pro forma condensed combined financial information contained herein, the Company utilized the accounts of AWPH, LLC and its consolidated subsidiaries as they represent substantially all of the assets and liabilities acquired in the Acquisition.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2024

(In millions)


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 6)			Pro Forma Combined
Assets
Current assets
Cash and cash equivalents	$	211.2	$	27.9	$	—	$	—	$	(128.6)	(a)	$	110.5
Accounts receivable, net of allowance	45.8		14.2		(0.3)		0.7		(0.2)		(b)	60.2
Compass Concierge receivables, net of allowance	34.8		—		—		—		—			34.8
Other current assets	38.7		7.4		(1.2)		1.1		(0.8)		(b)	45.2
Affiliate contract assets	—		0.8		—		(0.8)		—			—
Due from related parties	—		0.2		—		—		(0.2)		(h)	—
Total current assets	330.5		50.5		(1.5)		1.0		(129.8)			250.7
Property and equipment, net	132.4		15.8		(1.1)		—		(3.0)		(c)	144.1
Operating lease right-of-use assets	392.4		32.7		(11.4)		—		(0.9)		(b)	412.8
Investment in unconsolidated entities	—		8.4		(0.1)		(8.3)		—			—
Intangible assets, net	82.7		79.4		(14.1)		—		98.8		(d)	246.8
Goodwill	234.1		164.4		(6.5)		—		66.8		(d)	458.8
Affiliate contract assets	—		5.4		—		(5.4)		—			—
Other non-current assets	27.7		0.8		(0.3)		13.7		(0.5)		(b)	41.4
Total assets	$	1,199.8	$	357.4	$	(35.0)	$	1.0	$	31.4		$	1,554.6
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	14.3	$	7.7	$	(0.6)	$	(5.3)	$	—		$	16.1
Commissions payable	85.4		—		—		9.8		(3.5)		(b)	91.7
Accrued expenses and other current liabilities	132.4		18.8		(1.9)		(0.9)		9.9		(e)	158.3
Deferred revenue	—		3.0		(0.4)		(2.6)		—			—
Current lease liabilities	98.7		8.9		(2.9)		—		(1.1)		(b)	103.6
Concierge credit facility	27.5		—		—		—		—			27.5
Current portion of long-term debt, net of unamortized debt issuance costs	—		6.0		—		—		(6.0)		(f)	—
Revolving credit facility	—		—		—		—		50.0		(g)	50.0
Due to related party	—		1.7		—		—		(1.7)		(h)	—
Total current liabilities	358.3		46.1		(5.8)		1.0		47.6			447.2
Non-current lease liabilities	382.3		25.8		(9.1)		—		0.2		(b)	399.2
Other non-current liabilities	28.1		0.6		—		0.2		3.4		(b)	32.3
Deferred income taxes, net	—		3.7		(3.5)		(0.2)		—			—
Long-term debt, net of unamortized debt issuance costs, less current maturities	—		125.5		—		—		(125.5)		(f)	—
Total liabilities	768.7		201.7		(18.4)		1.0		(74.3)			878.7


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 6)			Pro Forma Combined
Stockholders’ equity / members’ equity
Common stock	—		—		—		—		—			—
Additional paid-in capital	3,059.7		—		—		—		250.1		(i)	3,309.8
Preferred units	—		4.7		—		—		(4.7)		(i)	—
Common units	—		88.9		—		—		(88.9)		(i)	—
(Accumulated deficit) retained earnings	(2,631.7)		61.6		(16.6)		—		(50.3)		(i)	(2,637.0)
Total Compass, Inc. stockholders' equity / At World Properties Holdings, LLC members' equity	428.0		155.2		(16.6)		—		106.2			672.8
Non-controlling interest	3.1		0.5		—		—		(0.5)		(i)	3.1
Total stockholders' equity / members' equity	431.1		155.7		(16.6)		—		105.7			675.9
Total liabilities and stockholders' equity / members' equity	$	1,199.8	$	357.4	$	(35.0)	$	1.0	$	31.4		$	1,554.6

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2024

(In millions, except share and per share data)


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 7)			Pro Forma Combined
Revenue:
Revenue	$	4,248.7	$	—	$	—	$	396.7	$	—		$	4,645.4
Commission income	—		431.2		(92.6)		(338.6)		—			—
Title agency revenues	—		18.0		—		(18.0)		—			—
Other revenues	—		37.8		(3.2)		(34.6)		—			—
Total revenue	4,248.7		487.0		(95.8)		5.5		—			4,645.4
Operating expenses:
Commissions and other related expense	3,495.3		361.5		(82.2)		7.2		—			3,781.8
Sales and marketing	276.5		—		—		23.1		0.1		(i)	299.7
Operations and support	246.5		—		—		36.2		1.0		(i)	283.7
Research and development	141.9		—		—		7.5		0.2		(i)	149.6
General and administrative	132.5		—		—		5.6		(1.8)		(i) / (ii)	136.3
Restructuring costs	7.5		—		—		—		—			7.5
Depreciation and amortization	62.7		—		—		5.3		26.8		(iii)	94.8
Wages and benefits	—		46.6		(5.2)		(41.4)		—			—
Depreciation	—		3.6		(0.3)		(3.3)		—			—
Amortization of intangible assets	—		2.9		(0.9)		(2.0)		—			—
Advertising and marketing	—		6.8		(0.4)		(6.4)		—			—
Rent and occupancy	—		9.9		(2.9)		(7.0)		—			—
Recruiting and retention	—		6.7		(1.1)		(5.6)		—			—
Office expenses and supplies	—		3.4		(0.8)		(2.6)		—			—
Professional fees	—		1.9		(0.6)		(1.3)		—			—
Computer related	—		3.2		(0.6)		(2.6)		—			—
Title agency direct cost	—		1.0		—		(1.0)		—			—
Management fee	—		0.7		—		—		(0.7)		(iv)	—
Other operating expenses	—		7.8		(0.5)		(7.3)		—			—
Total operating expenses	4,362.9		456.0		(95.5)		4.4		25.6			4,753.4
(Loss) income from operations	(114.2)		31.0		(0.3)		1.1		(25.6)			(108.0)
Investment income, net	4.7		—		—		2.2		(3.0)		(v)	3.9
Interest income	—		2.2		—		(2.2)		—			—
Interest expense	(4.6)		(13.8)		—		—		11.6		(vi)	(6.8)
Other income	—		1.4		(0.3)		(1.1)		—			—
(Loss) income before income taxes and equity in (loss) income of unconsolidated entity	(114.1)		20.8		(0.6)		—		(17.0)			(110.9)
Income tax benefit (expense)	0.7		(0.6)		0.2		—		—		(vii)	0.3


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 7)			Pro Forma Combined
Equity in (loss) income of unconsolidated entity	(0.7)		0.6		—		—		—			(0.1)
Net (loss) income	(114.1)		20.8		(0.4)		—		(17.0)			(110.7)
Net loss (income) attributable to non-controlling interests	0.2		(0.1)		—		—		—			0.1
Net (loss) income attributable to Compass, Inc. / At World Properties Holdings, LLC	$	(113.9)	$	20.7	$	(0.4)	$	—	$	(17.0)		$	(110.6)
Net loss per share attributable to Compass, Inc., basic and diluted	$	(0.23)										$	(0.21)
Weighted-average shares used in computing net loss per share attributable to Compass, Inc., basic and diluted	498,247,783								38,967,350		(viii)	537,215,133

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2023

(In millions, except share and per share data)


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 7)			Pro Forma Combined
Revenue:
Revenue	$	4,885.0	$	—	$	—	$	464.5	$	—		$	5,349.5
Commission income	—		505.2		(108.9)		(396.3)		—			—
Title agency revenues	—		21.8		—		(21.8)		—			—
Other revenues	—		42.8		(3.2)		(39.6)		—			—
Total revenue	4,885.0		569.8		(112.1)		6.8		—			5,349.5
Operating expenses:
Commissions and other related expense	4,007.0		425.5		(96.1)		5.4		—			4,341.8
Sales and marketing	435.4		—		—		31.2		0.1		(i)	466.7
Operations and support	326.9		—		—		48.5		1.3		(i)	376.7
Research and development	184.5		—		—		9.3		0.2		(i)	194.0
General and administrative	125.7		—		—		8.7		7.6		(i) / (ii)	142.0
Restructuring costs	30.4		—		—		—		—			30.4
Depreciation and amortization	90.0		—		—		7.7		35.5		(iii)	133.2
Wages and benefits	—		62.5		(7.8)		(54.7)		—			—
Depreciation	—		5.5		(0.5)		(5.0)		—			—
Amortization of intangible assets	—		3.8		(1.1)		(2.7)		—			—
Advertising and marketing	—		11.2		(1.0)		(10.2)		—			—
Rent and occupancy	—		13.5		(4.0)		(9.5)		—			—
Recruiting and retention	—		7.3		(1.3)		(6.0)		—			—
Office expenses and supplies	—		4.7		(1.2)		(3.5)		—			—
Professional fees	—		3.0		(0.4)		(2.6)		—			—
Computer related	—		4.0		(0.8)		(3.2)		—			—
Title agency direct cost	—		1.0		—		(1.0)		—			—
Management fee	—		0.9		—		—		(0.9)		(iv)	—
Other operating expenses	—		5.6		1.5		(7.1)		—			—
Total operating expenses	5,199.9		548.5		(112.7)		5.3		43.8			5,684.8
(Loss) income from operations	(314.9)		21.3		0.6		1.5		(43.8)			(335.3)
Investment income, net	8.5		—		—		1.8		(4.0)		(v)	6.3
Interest income	—		1.8		—		(1.8)		—			—
Interest expense	(10.8)		(17.8)		—		—		14.9		(vi)	(13.7)
Other income	—		1.5		—		(1.5)		—			—
(Loss) income before income taxes and equity in (loss) income of unconsolidated entity	(317.2)		6.8		0.6		—		(32.9)			(342.7)
Income tax benefit	0.4		0.2		(0.7)		—		3.5		(vii)	3.4
Equity in (loss) income of unconsolidated entity	(3.3)		1.1		—		—		—			(2.2)


	Compass, Inc. (Historical)		At World Properties Holdings, LLC (Historical)		Divestiture of Subsidiary (Note 3)		Reclassification Adjustments (Note 4)		Acquisition Adjustments (Note 7)			Pro Forma Combined
Net (loss) income	(320.1)		8.1		(0.1)		—		(29.4)			(341.5)
Net (income) loss attributable to non-controlling interests	(1.2)		0.1		—		—		—			(1.1)
Net (loss) income attributable to Compass, Inc. / At World Properties Holdings, LLC	$	(321.3)	$	8.2	$	(0.1)	$	—	$	(29.4)		$	(342.6)
Net loss per share attributable to Compass, Inc., basic and diluted	$	(0.69)										$	(0.68)
Weighted-average shares used in computing net loss per share attributable to Compass, Inc., basic and diluted	466,522,935								38,692,785		(viii)	505,215,720

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

1. Basis of Presentation and Description of the Acquisition

The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X and presents the pro forma financial condition and results of operations based upon the historical financial information after giving effect to the Acquisition and related adjustments set forth in the notes to the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024, gives pro forma effect to the Acquisition as if it had been completed on September 30, 2024. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024, and for the year ended December 31, 2023, give pro forma effect to the Acquisition as if it had been completed on January 1, 2023. The historical financial statements of Compass and AWPH, LLC have been adjusted to give pro forma effect to events that are directly attributable to the Acquisition and where Management believes there is a reasonable and supportable basis for the adjustment.

Description of the Acquisition

On January 13, 2025, the Company closed its merger transaction contemplated by the Agreement and Plan of Merger, dated November 25, 2024, by and among the Company, Compass Brokerage, LLC, Company Merger Sub, LLC, At World Properties Holdings, LLC, known as @properties Christie’s International Real Estate (“Christie’s International Real Estate” or “AWPH, LLC”), At World Properties Principals Blocker, Inc., At World Properties IX Blocker, Inc., Apple IX Blocker Merger Sub, Inc., Apple Principals Blocker Merger Sub, Inc., and Quad-C LLC, as seller representative. Pursuant to the Merger Agreement, on January 13, 2025, the Company acquired all of the issued and outstanding equity securities of each of Principals Blocker, IX Blocker and Christie’s International Real Estate and each of Principals Blocker, IX Blocker and Christie’s International Real Estate became a wholly-owned subsidiary of the Company. Immediately prior to the Closing of the Acquisition, Christie’s International Real Estate settled its outstanding debt and divested its subsidiary, SGI Acquisition Holdings, Inc. (d/b/a Christie’s International Real Estate Sereno), which maintained brokerage operations in the Northern California market. In addition, the Company drew down $50.0 million from its Revolving Credit Facility to partially fund the Acquisition. The remaining consideration for the Acquisition was funded by the Company’s cash on hand and shares to be issued on the 366th day after the Closing Date.

The aggregate consideration (“Purchase Consideration”) payable pursuant to the Merger Agreement consisted of (i) $155.1 million (the “Cash Consideration”), subject to certain customary purchase price adjustments; and (ii) 44.1 million shares of the Company’s Class A common stock (the “Share Consideration”). The Share Consideration is subject to further adjustment (the “Share Consideration Adjustment”) if the value of the Share Consideration on the 366th day following the Closing Date, determined using the price per share equal to the volume-weighted average price of the Company’s Class A common stock for the 10-trading day period ending on the 366th day following the Closing Date (the “Post-Closing Share Price”), is (i) greater than $344.0 million, in which case the Share Consideration will be reduced by a number of shares in an aggregate amount of up to $50.0 million (determined using the Post-Closing Share Price), up to a maximum of 5.6 million shares, or (ii) less than $344.0 million, in which case the Share Consideration will be increased by a number of shares in an aggregate amount of up to $50.0 million (determined using the greater of $6.6612 and the Post-Closing Share Price), up to a maximum of 7.5 million shares. The fair value of the Share Consideration was estimated using a Monte Carlo simulation model. Key inputs used in the simulation included the term of the Share Consideration Adjustment period, the Company’s historical equity volatility, as well as the target price. The final settlement amount is based on the future price of the associated shares which is not directly observable and may have a significant impact on the fair value of the Share Consideration.

The Acquisition was accounted for under the acquisition method in accordance with ASC 805. In accordance with ASC 805, the assets acquired, and liabilities assumed have been measured at fair value based on various estimates and methodologies, including the income and market approaches. The excess of the fair value of purchase consideration over the values of the identifiable assets and liabilities is recorded as goodwill. Under the acquisition method, acquisition-related transaction costs (e.g., advisory, legal, valuation and other professional fees) are not included as consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. In accordance with ASC 805, the Company will recognize the fair value equity consideration, valued as described above, as part of the consideration transferred in exchange for the acquired business. The Company has not yet finalized its valuation analysis of the fair market value of the Share Consideration. As a result, a preliminary fair market value was used in the calculation of the preliminary purchase consideration for the Acquisition. The final fair market value of the Share Consideration could differ materially from the preliminary fair market value used to prepare the preliminary purchase consideration. There were no material fair value adjustments to other assets acquired and liabilities assumed.

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

When determining the fair value of assets acquired, liabilities assumed and the Share Consideration, the Company makes significant estimates and assumptions, especially with respect to the fair value of intangible assets and the Share Consideration. These estimates are based on key assumptions related to the Acquisition, including reviews of publicly disclosed information for other acquisitions in the industry, the historical experience of the Company, data that was available through the public domain and unobservable inputs, such as historical financial information of the acquired business.

The Company has not yet finalized its valuation analysis of the fair market value of assets to be acquired and liabilities to be assumed, including identifiable intangible assets. Using the estimated total consideration for the Acquisition, the Company has estimated the allocations to such assets and liabilities. This preliminary purchase price allocation has been used to prepare the Acquisition Adjustments in the unaudited pro forma condensed combined balance sheet. The final purchase price allocation will be determined when Compass has determined the final consideration and completed the detailed valuations and necessary calculations. The final purchase price allocation could differ materially from the preliminary purchase price allocation used to prepare the Acquisition Adjustments seen herein. The final purchase price allocation may include (i) changes in allocations to intangible assets or goodwill based on the results of certain valuations that have yet to be finalized, (ii) other changes to assets and liabilities, (iii) assessment of tax positions and tax rates, and (iv) final working capital adjustments.

The pro forma adjustments are based on preliminary estimates that Management believes are reasonable under the circumstances. Management’s purchase price allocation is preliminary and subject to change pending finalization of the valuation, including finalization of tax attributes and forecast assumptions. The actual purchase price and purchase price allocation will be subject to the completion of the valuation of the assets acquired and liabilities assumed as of the close of the Acquisition.

For purposes of measuring the estimated fair value of the tangible and intangible assets acquired and the liabilities assumed, the Company has applied the guidance in Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), which establishes a framework for measuring fair value. ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”.

Note 2. Significant Accounting Policies

The accounting policies used in the preparation of this unaudited pro forma condensed combined financial information are those set out in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2023. Management has determined that certain reclassifications and adjustments, including those described in the Notes herein, are necessary to conform the acquired entity’s historical financial statements to the Company’s accounting policies in the preparation of the unaudited pro forma condensed combined financial information. The adjustment amounts are subject to change as further assessment is performed and finalized for purchase accounting. These reclassifications and adjustments have no effect on the Company’s previously reported total assets, liabilities or equity, or results of operations.

As part of the application of ASC 805, Compass will continue conducting a detailed review of AWPH, LLC’s accounting policies to determine if differences in accounting policies require further reclassification or adjustment of AWPH, LLC’s results of operations, assets or liabilities to conform to the Company’s accounting policies and classifications. Therefore, the Company may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial information.

Note 3. Divestiture of Subsidiary

Adjustments have been made to the unaudited pro forma condensed combined financial information to reflect the divestiture of SGI Acquisition Holdings, Inc., a subsidiary of AWPH, LLC, prior to the completion of the Acquisition.

Note 4. Reclassification Adjustments

Certain reclassification adjustments have been made to the unaudited pro forma condensed combined financial information to conform AWPH, LLC’s historical condensed consolidated balance sheet and condensed combined statements of operations to

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

the Company’s financial statement presentation. There were no material adjustments required to conform the accounting policies of AWPH, LLC to the Company.

The unaudited pro forma condensed combined financial information may not reflect all reclassifications necessary to conform AWPH, LLC’s financial statement presentation to that of Compass due to limitations on the availability of information as of the date of this Form 8-K/A. Additional reclassification adjustments may be identified as more information becomes available and could be material to the financial statements.

The following are material reclassification adjustments which were made to align the presentation of AWPH, LLC to the Company:

Unaudited Pro Forma Condensed Combined Balance Sheet

1.Reclassified $0.8 million in current affiliate contract assets and $5.4 million in non-current affiliate contract assets to other current assets and other non-current assets, respectively. Additionally, $8.3 million in investment in unconsolidated entities was reclassified to other non-current assets.

2.Reclassified $5.1 million from accounts payable and $4.7 million from accrued expenses and other current liabilities, respectively, to commissions payable.

Unaudited Pro Forma Condensed Combined Statements of Operations

1.Reclassified commission income, title agency revenue, and other revenues to revenue.

2.Reclassified amounts from various line items to align with the Company’s presentation of operating expenses as follows (in millions):


	For the Nine Months Ended September 30, 2024
	Commissions and other related expense		Sales and marketing		Operations and support		Research and development		General and administrative		Depreciation and amortization		Total
Commission income	$	11.3	$	—	$	—	$	—	$	—	$	—	$	11.3
Other revenues	(5.8)		—		—		—		—		—		(5.8)
Wages and benefits	—		6.0		29.0		3.2		3.2		—		41.4
Depreciation	—		—		—		—		—		3.3		3.3
Amortization of intangible assets	—		—		—		—		—		2.0		2.0
Advertising and marketing	—		5.3		1.1		—		—		—		6.4
Rent and occupancy	—		7.0		—		—		—		—		7.0
Recruiting and retention	—		4.6		1.0		—		—		—		5.6
Office expenses and supplies	—		0.2		2.4		—		—		—		2.6
Professional fees	—		—		0.3		—		1.0		—		1.3
Computer related	—		—		0.1		2.5		—		—		2.6
Title agency direct cost	—		—		1.0		—		—		—		1.0
Other operating expenses	1.7		—		1.3		2.9		1.4		—		7.3
Other income	—		—		—		(1.1)		—		—		(1.1)
Total Reclassification Adjustments	$	7.2	$	23.1	$	36.2	$	7.5	$	5.6	$	5.3	$	84.9

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements


	For the Year Ended December 31, 2023
	Commissions and other related expense		Sales and marketing		Operations and support		Research and development		General and administrative		Depreciation and amortization		Total
Commission income	$	13.5	$	—	$	—	$	—	$	—	$	—	$	13.5
Other revenues	(6.7)		—		—		—		—		—		(6.7)
Commissions and other related expense	(3.5)		—		—		3.5		—		—		—
Wages and benefits	—		6.9		39.8		4.3		3.7		—		54.7
Depreciation	—		—		—		—		—		5.0		5.0
Amortization of intangible assets	—		—		—		—		—		2.7		2.7
Advertising and marketing	—		9.2		1.0		—		—		—		10.2
Rent and occupancy	—		9.5		—		—		—		—		9.5
Recruiting and retention	—		5.3		0.7		—		—		—		6.0
Office expenses and supplies	—		0.3		3.2		—		—		—		3.5
Professional fees	—		—		0.7		—		1.9		—		2.6
Computer related	—		—		0.2		3.0		—		—		3.2
Title agency direct cost	—		—		1.0		—		—		—		1.0
Other operating expenses	2.1		—		1.9		—		3.1		—		7.1
Other income	—		—		—		(1.5)		—		—		(1.5)
Total Reclassification Adjustments	$	5.4	$	31.2	$	48.5	$	9.3	$	8.7	$	7.7	$	110.8

3.Reclassified interest income to investment income, net.

Note 5. Preliminary Purchase Price Allocation

Preliminary Purchase Consideration

The total preliminary Purchase Consideration included $155.1 million paid in cash at closing, which included an escrow payment of $3.0 million for indemnity holdback and is subject to potential adjustments resulting from final cash and net working capital adjustments. In addition, the fair value of the Share Consideration was included in the purchase consideration. The Company preliminarily estimated the fair value of the Share Consideration to be $250.1 million as of the date of the Acquisition. The final number of shares to be issued is dependent on the Company’s share price on the 366th day following the Closing Date. As a result, the Company used a Monte-Carlo simulation methodology to estimate the fair value of the Share Consideration as of the Closing Date.

The preliminary purchase consideration was comprised of the following (in millions):


	Amount
Cash Consideration	$	155.1
Share Consideration	250.1
Total preliminary consideration transferred	$	405.2

Preliminary Purchase Price Allocation

The Company performed a preliminary valuation analysis of the estimated fair market value of the assets acquired and liabilities assumed in connection with the Acquisition. The following table summarizes the allocation of the preliminary purchase price (in millions):


	Amount
Cash and cash equivalents	$	4.4
Accounts receivable	14.4

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements


Other current assets	6.5
Property and equipment	11.7
Operating lease right-of-use assets	20.4
Other non-current assets	13.7
Goodwill	224.7
Intangible assets	164.1
Total assets	459.9
Accounts payable	(1.8)
Commissions payable	(6.3)
Accrued expenses and other current liabilities	(20.6)
Current lease liabilities	(4.9)
Non-current lease liabilities	(16.9)
Other non-current liabilities	(4.2)
Total liabilities	(54.7)
Net assets	$	405.2

This estimated preliminary purchase price allocation has been used to prepare pro forma adjustments in the unaudited pro forma condensed combined balance sheet and statements of operations. The final purchase price will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary calculation used in the pro forma adjustments. The final allocation may include (i) changes in allocations to intangible assets including goodwill, (ii) other changes to assets and liabilities, and (iii) changes to the assessment of tax positions and tax rates.

Intangible Assets

Preliminary identifiable intangible assets in the unaudited pro forma condensed combined financial information consist of the following (in millions, excluding estimated useful lives):

Approximate
Fair Value

Estimated
Useful Lives

Trademarks

20.3

2 - 6 years

Acquired technology

29.2

2 years

Agent networks

72.3

7 years

Affiliate network

42.3

6 years

Total

164.1

The amortization related to the identifiable intangible assets is reflected as an Acquisition Adjustment in the unaudited pro forma condensed combined statements of operations based on the estimated useful lives above as further described in Note 7. The fair values of the identifiable intangible assets are preliminary and are based on Management’s estimates as of the Closing Date. The preliminary fair values of the agent networks and the affiliate network were determined using the Excess Earnings Method (“EEM”). The EEM isolates the earnings attributable to these relationships by deducting returns on other assets. The Company applied judgement in estimating the fair value of these intangibles which involved the use of significant assumptions with respect to revenue forecast, agent and/or affiliate attrition rates, royalty rates and economic lives. The preliminary fair values of trademarks and the acquired technology were determined using the Relief-from-Royalty Method (“RRM”). The RRM estimates the value based on the hypothetical royalties saved by owning the trademark instead of licensing it or licensing the technology from a third party. The Company applied judgement in estimating the fair value of these intangibles which involved the use of significant assumptions with respect to revenue growth, royalty rates, annual obsolescence and discount rates.

As discussed above, the amounts that will ultimately be allocated to identifiable intangible assets may differ materially from this preliminary allocation. In addition, the amortization impacts will ultimately be based upon the periods in which the associated economic benefits or detriments are expected to be derived. Therefore, the amount of amortization following the

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

Acquisition may differ significantly between periods based upon the final value and useful life assigned and amortization methodology used for each identifiable intangible asset.

Note 6. Notes to Unaudited Pro Forma Condensed Combined Balance Sheet

Acquisition Adjustments include the following adjustments, which are based on the Company’s preliminary estimates and assumptions, related to the unaudited pro forma condensed combined balance sheet as of September 30, 2024, adjusted for changes in assets acquired and liabilities assumed between September 30, 2024 and the Closing Date.

a.Represents the recognition of preliminary purchase consideration transferred and the adjustment to reflect the preliminary purchase price allocation as follows (in millions):


	Amount
Cash Consideration	$	(155.1)
Adjustment to reflect the preliminary purchase price allocation	(23.5)
Draw down of Revolving Credit Facility (Note 6g)	50.0
Total Acquisition Adjustments	$	(128.6)

b.Adjustment to reflect changes in assets acquired and liabilities assumed as of September 30, 2024 to the preliminary purchase price allocation presented in Note 5.

c.Reflects the elimination of internally developed software of the acquired entity since these are included as part of the fair value of the acquired technology.

d.Reflects the elimination of historical goodwill and intangible assets recognized by AWPH, LLC in Note 3 and the recognition of intangible assets and goodwill as described in Note 5 as follows (in millions):


	Intangible Assets		Goodwill
Elimination of historical balances	$	(65.3)	$	(157.9)
Recognition from purchase accounting (Note 5)	164.1		224.7
Total Acquisition Adjustments	$	98.8	$	66.8

e.Reflects the accrual of transaction expenses of approximately $5.3 million and the adjustment to reflect the preliminary purchase price allocation as follows (in millions):


	Amount
Accrual of transaction expenses	$	5.3
Adjustment to reflect the preliminary purchase price allocation	4.6
Total Acquisition Adjustments	$	9.9

f.Reflects the settlement of AWPH, LLC’s debt by the sellers in conjunction with the Acquisition.

g.Reflects the draw on the Company’s Revolving Credit Facility made in connection with the Acquisition.

h.Reflects the settlement of related party balances in conjunction with the Acquisition.

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

i.The following summarizes the adjustments related to stockholders’ equity, including the elimination of AWPH, LLC’s historical equity (in millions):


	Share Consideration Transferred (Note 6a)		Compass Transaction Costs (Note 5e)		Elimination of AWPH, LLC’s Members’ Equity		Total Acquisition Adjustments
Additional paid-in capital	$	250.1	$	—	$	—	$	250.1
Preferred units	—		—		(4.7)		(4.7)
Common units	—		—		(88.9)		(88.9)
Accumulated deficit	—		(5.3)		(45.0)		(50.3)
Non-controlling interest	—		—		(0.5)		(0.5)
Total	$	250.1	$	(5.3)	$	(139.1)	$	105.7

Note 7. Notes to Unaudited Pro Forma Condensed Combined Statements of Operations

Acquisition Adjustments include the following adjustments, which are based on the Company’s preliminary estimates and assumptions, related to the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023.

i.Reflects the expense impact of RSUs issued to employees of AWPH, LLC for services to be provided subsequent to the Acquisition. Expense amounts were attributed to the sales and marketing, operations and support, research and development, and general and administrative line items to align the presentation of activity with the Company’s methodology for presenting similar expenses within the statements of operations.

ii.Adjustments to general and administrative expenses were summarized as follows (in millions):


	Nine Months Ended September 30, 2024		Year Ended December 31, 2023
Stock-based compensation expense (Note 7i)	$	0.2	$	0.3
Non-recurring transaction costs(1)	(2.0)		7.3
Total Acquisition Adjustments	$	(1.8)	$	7.6

(1)These non-recurring transaction-related costs are reflected as if they were incurred on January 1, 2023, the date of the Acquisition for purposes of the unaudited pro forma condensed combined statements of operations, as well as the associated impact for any costs which were accrued in subsequent periods that would have been reflected on or as of the acquisition date. These costs have been allocated to the general and administrative line to align with the Company’s historical presentation of similar transaction-related expenses.

iii.Reflects incremental amortization expense recognized related to finite-lived intangible assets acquired in connection with the Acquisition.

iv.Reflects the elimination of management fees paid by AWPH, LLC to related parties for management services. These services and fees will not continue subsequent to the Acquisition.

v.Reflects the reduction of the Company’s investment income due to less cash available for investment in cash equivalents and money market funds as a result of the payment of the Cash Consideration.

vi.Reflects the interest expense associated with the Company’s draw down of its Revolving Credit Facility in connection with the Acquisition and the elimination of interest associated with AWPH, LLC’s historical debt which was settled in conjunction with the Acquisition.

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements


	Nine Months Ended September 30, 2024		Year Ended December 31, 2023
Interest expense for Revolving Credit Facility	$	(2.2)	$	(2.9)
Elimination of interest associated with AWPH LLC’s debt	13.8		17.8
Total Acquisition Adjustments	$	11.6	$	14.9

vii.Reflects the income tax benefit for the year ended December 31, 2023 resulting from a partial reduction in the valuation allowance related to the carryover tax basis in deferred tax liabilities assumed as a part of the Acquisition.

Any additional pro forma tax impacts that may result from the Acquisition Adjustments noted in this Note 7 were assessed to be immaterial for the nine months ended September 30, 2024 and year ended December 31, 2023 due to the Company’s full valuation allowance.

viii.The Company’s basic net loss per share is computed by dividing the net loss attributable to Compass, Inc. by the weighted average number of common shares outstanding during the period. Since the Company was in a net loss position for all periods presented, net loss per share attributable to common stockholders was the same on a basic and diluted basis. The following table presents the adjustment to the denominator of the pro forma basic and diluted net loss per share attributable to Compass, Inc.:


	Nine Months Ended September 30, 2024	Year Ended December 31, 2023
Historical weighted-average number of shares used in computing net loss per share attributable to Compass, Inc., basic and diluted	498,247,783	466,522,935
Pro forma adjustment for the Share Consideration(1)	38,535,152	38,535,152
Pro forma adjustment to reflect the issuance of Compass, Inc. common stock for the vesting of RSUs issued to AWPH, LLC’s employees	432,198	157,633
Pro forma weighted-average number of shares used in computing net loss per share attributable to Compass, Inc., basic and diluted	537,215,133	505,215,720

(1)The amount shown in the table above represents the minimum number of shares to be issued in connection with the Share Consideration. If the maximum number of shares were issued, the Share Consideration would increase to 51.6 million shares and the basic and diluted net loss per share attributable to Compass, Inc. would be $0.20 for the nine months ended September 30, 2024 and $0.66 for the year ended December 31, 2023.

Cover	Jan. 13, 2025
Cover [Abstract]
Document Type	8-K/A
Document Period End Date	Jan. 13, 2025
Entity Registrant Name	Compass, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40291
Entity Tax Identification Number	30-0751604
Entity Address, Address Line One	110 Fifth Avenue, 4th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10011
City Area Code	(212)
Local Phone Number	913-9058
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock, $0.00001 par value per share
Trading Symbol	COMP
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001563190
Amendment Flag	true
Amendment Description	This amendment is being filed to amend and supplement Item 9.01 of the Current Report on Form 8-K filed by the Company on January 13, 2025 (the "Original Report"), to include the historical financial statements of At World Properties Holdings, LLC and the unaudited pro forma condensed combined financial information required pursuant to Article 11 of Regulation S-X. The accounts of At World Properties Holdings, LLC and its consolidated subsidiaries represent substantially all of the assets and liabilities acquired as a part of the Transaction. Except as otherwise provided herein, the disclosures made in the Original Report remain unchanged.

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COMP Compass Inc