reAlpha Tech Corp. (“reAlpha,” the “Company,” “us,” “we” or
“our”) (Nasdaq: AIRE), a real estate technology company focused on
developing, utilizing and commercializing real estate-focused
artificial intelligence (“AI”) technologies, today reports
financial results for the first quarter ended March 31, 2024.
“reAlpha made significant strides in the first quarter of 2024
with the commercial launch of our AI-powered platform, GENA,” said
Giri Devanur, Chief Executive Officer of reAlpha. “This launch
demonstrates our commitment to leveraging innovative AI technology
to drive change in the real estate industry. We remain focused on
executing our strategic initiatives, commercializing our
technologies, and pursuing growth opportunities in the fragmented
proptech space, which is ripe for innovation. We are excited about
the path ahead and look forward to sharing our progress and
developments in the coming quarters as we continue to capitalize on
these opportunities,” concluded Mr. Devanur.
Financial Results
Revenues were $20,426 for the three months ended March 31, 2024,
compared to $111,451 for the three months ended March 31, 2023. Our
revenues consist of both the short-term rental revenue that we
receive from our listed properties, if any, and platform services
income that we receive directly from, or services related to, our
technologies. The decrease in revenues during the period was
attributable to lower rental revenue due to the disposal of our
rental properties during and subsequent to fiscal year 2023 as a
result of our business strategy shift to focus on the
commercialization of our AI technologies, as well as lower platform
services revenue as a result of the sale of myAlphie.
We had cash and cash equivalents of approximately $4.84 million
as of March 31, 2024, and approximately $6.46 million as of
December 31, 2023.
Net loss was $1,419,045 for the three months ended March 31,
2024, compared to $864,913 for the three months ended March 31,
2023. The increase in net loss during the period was mainly
attributable to increases in wages, professional and legal fees,
and amortization of a commitment fee in the form of equity.
Adjusted EBITDA was $(1,336,790) for the three months ended
March 31, 2024, compared to $(775,098) for the three months ended
March 31, 2023. The full reconciliation to Adjusted EBITDA is set
forth below.
Explanatory Notes on Use of Non-GAAP Financial
Measures
To supplement our financial information presented in accordance
with U.S. GAAP (“GAAP”), we believe “Adjusted EBITDA,” a “non-GAAP
financial measure,” as such term is defined under the rules of the
U.S. Securities and Exchange Commission (the “ SEC”), is useful in
evaluating our operating performance. We use Adjusted EBITDA to
evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe that Adjusted EBITDA may be
helpful to investors because it provides consistency and
comparability with past financial performance. However, Adjusted
EBITDA is presented for supplemental informational purposes only,
has limitations as an analytical tool, and should not be considered
in isolation or as a substitute for financial information presented
in accordance with GAAP. In addition, other companies, including
companies in our industry, may calculate similarly titled non-GAAP
measures differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison. A
reconciliation is provided below for each non-GAAP financial
measure to the most directly comparable financial measure stated in
accordance with GAAP. Investors are encouraged to review the
related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP
financial measures, and not to rely on any single financial measure
to evaluate our business.
We reconcile our non-GAAP financial measure of Adjusted EBITDA
to our net income, adjusted to exclude interest expense, provision
for (benefit from) income taxes, depreciation and amortization and
certain charges or gains resulting from non-recurring events, if
any. For the three months ended March 31, 2024 and March 31, 2023,
we did not have any non-recurring events.
About reAlpha
reAlpha is a real estate technology company with a mission to
shape the property technology, or “proptech,” market landscape
through the commercialization of artificial intelligence
technologies and strategic synergistic acquisitions that complement
our business model. For more information about reAlpha, visit
www.realpha.com.
Forward-Looking Statements
The information in this press release includes “forward-looking
statements”. Any statements other than statements of historical
fact contained herein, including statements as to future results of
operations and financial position, planned acquisitions, business
strategy and plans, objectives of management for future operations
of reAlpha, market size and growth opportunities, competitive
position and technological and market trends, are forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as “may”, “should”, “could”,
“might”, “plan”, “possible”, “project”, “strive”, “budget”,
“forecast”, “expect”, “intend”, “will”, “estimate”, “anticipate”,
“believe”, “predict”, “potential” or “continue”, or the negatives
of these terms or variations of them or similar terminology.
Factors that may cause actual results to differ materially from
current expectations include, but are not limited to: whether
reAlpha’s recent business strategy shift will be successful;
reAlpha’s ability to pay contractual obligations; reAlpha’s
liquidity, operating performance, cash flow and ability to secure
adequate financing; reAlpha’s limited operating history and that
reAlpha has not yet fully developed its AI-based technologies;
whether reAlpha’s technology and products will be accepted and
adopted by its customers and intended users; reAlpha’s ability to
satisfy closing conditions for the acquisitions of Naamche, Inc.
and Naamche, Inc. Pvt. Ltd. (collectively, “Naamche”); reAlpha’s
ability to integrate the business of Naamche into its existing
business and the anticipated demand for Naamche’s services;
reAlpha’s ability to commercialize its developing AI-based
technologies; the inability to maintain and strengthen reAlpha’s
brand and reputation; any accidents or incidents involving
cybersecurity breaches and incidents; the inability to accurately
forecast demand for short-term rentals and AI-based real
estate-focused products; the inability to execute business
objectives and growth strategies successfully or sustain reAlpha’s
growth; the inability of reAlpha’s customers to pay for reAlpha’s
services; the inability of reAlpha to obtain additional financing
or access the capital markets to fund its ongoing operations on
acceptable terms and conditions; the outcome of any legal
proceedings that might be instituted against reAlpha; changes in
applicable laws or regulations, and the impact of the regulatory
environment and complexities with compliance related to such
environment; and other risks and uncertainties indicated in our SEC
filings. Forward-looking statements are based on the opinions and
estimates of management at the date the statements are made and are
subject to a variety of risks and uncertainties and other factors
that could cause actual events or results to differ materially from
those anticipated in the forward-looking statements. Although
reAlpha believes that the expectations reflected in the
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct.
reAlpha’s future results, level of activity, performance or
achievements may differ materially from those contemplated,
expressed or implied by the forward-looking statements, and there
is no representation that the actual results achieved will be the
same, in whole or in part, as those set out in the forward-looking
statements. For more information about the factors that could cause
such differences, please refer to reAlpha’s filings with the SEC.
Readers are cautioned not to put undue reliance on forward-looking
statements, and reAlpha does not undertake any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law.
REALPHA TECH CORP.
Condensed Consolidated Balance
Sheet
March 31, 2024 (unaudited) and
December 31, 2023
March 31, 2024
December 31, 2023
ASSETS
(Unaudited)
Current Assets
Cash
$
4,838,146
$
6,456,370
Accounts receivable
12,167
30,630
Prepaid expenses
217,303
242,795
Other current assets
672,287
670,499
Total current assets
5,739,903
7,400,294
Property and equipment, net
27,894
328,539
Other Assets
Investments
115,000
115,000
Other long-term assets
281,250
406,250
Intangible assets, net
933,532
997,962
Goodwill
17,337,739
17,337,739
Capitalized software development - work in
progress
936,785
839,085
TOTAL ASSETS
$
25,372,103
$
27,424,869
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities
Accounts payable
$
433,612
$
461,875
Related party payable
9,800
-
Other loans
118,809
190,095
Accrued expenses
520,142
817,114
Total current liabilities
1,082,363
1,469,084
Long-Term Liabilities
Deferred liabilities
1,000,000
1,000,000
Mortgage loans
-
247,000
Total liabilities
2,082,363
2,716,084
Stockholders' Equity (Deficit)
Preferred stock, $0.001 par value;
5,000,000 shares authorized, 0 shares issued and outstanding as of
March 31, 2024 and December 31, 2023
-
-
Common stock ($0.001 par value;
200,000,000 shares authorized, 44,122,091 shares outstanding as of
March 31, 2024; 200,000,000 shares authorized, 44,122,091 shares
outstanding as of December 31, 2023)
44,123
44,123
Additional paid-in capital
36,899,497
36,899,497
Accumulated deficit
(13,656,865
)
(12,237,885
)
Total stockholders' equity (deficit) of
reAlpha Tech Corp.
23,286,755
24,705,735
Non-controlling interests in consolidated
entities
2,985
3,050
Total stockholders' equity (deficit)
23,289,740
24,708,785
TOTAL LIABILITIES AND STOCKOLDERS'
EQUITY
$
25,372,103
$
27,424,869
REALPHA TECH CORP.
Condensed Consolidated
Statements of Operations
For the Three Months Ended
March 31, 2024, and 2023
(unaudited)
For the Three Months
Ended
For the Three Months
Ended
March 31, 2024
(unaudited)
March 31, 2023
(unaudited)
Revenues
$
20,426
$
111,451
Cost of revenues
18,249
70,775
Gross Profit
2,177
40,676
Operating Expenses
Wages, benefits and payroll taxes
418,902
204,196
Repairs & maintenance
749
4,461
Utilities
1,663
5,173
Travel
46,964
41,961
Dues & subscriptions
12,360
20,038
Marketing & advertising
77,362
89,099
Professional & legal fees
468,725
325,161
Depreciation & amortization
71,453
48,003
Other operating expenses
211,497
96,476
Total operating expenses
1,309,675
834,568
Operating Loss
(1,307,498
)
(793,892
)
Other Income (Expense)
Interest income
357
544
Other income
31,392
90
Interest expense
(10,802
)
(41,812
)
Other expense
(132,494
)
(29,843
)
Total other income (expense)
(111,547
)
(71,021
)
Net Loss before income taxes
(1,419,045
)
(864,913
)
Income tax expense
-
-
Net Loss
$
(1,419,045
)
$
(864,913
)
Less: Net Loss Attributable to
Non-Controlling Interests
(65
)
(191
)
Net Loss Attributable to Controlling
Interests
$
(1,418,980
)
$
(864,722
)
Net loss per share — basic
$
(0.03
)
$
(0.02
)
Net loss per share — diluted
$
(0.03
)
$
(0.02
)
Weighted-average outstanding shares —
basic
44,122,091
40,839,051
Weighted-average outstanding shares —
diluted
44,122,091
40,839,051
REALPHA TECH CORP.
Condensed Consolidated
Statements of Cash Flows
For the Three Months Ended
March 31, 2024, and 2023 (unaudited)
For the Three Months
Ended
For the Three Months
Ended
March 31, 2024
(Unaudited)
March 31, 2023
(Unaudited)
Cash Flows from Operating
Activities:
Net loss
$
(1,419,045
)
$
(864,913
)
Adjustments to reconcile net loss to net
cash
used in operating activities:
Depreciation and amortization
71,453
48,003
Non cash commitment fee expenses
125,000
-
Gain on sale of properties
(31,378
)
-
Changes in operating assets and
liabilities:
Accounts receivable
18,463
(2,972
)
Payable to related parties
9,800
-
Prepaid expenses
25,492
23,563
Other current assets
(1,788
)
(155,410
)
Accounts payable
(28,263
)
(553,142
)
Accrued expenses
(296,972
)
(81,047
)
Total adjustments
(108,193
)
(721,005
)
Net cash used in operating activities
(1,527,238
)
(1,585,918
)
Cash Flows from Investing
Activities:
Additions to property, plant &
equipment
78,000
(12,926
)
Cash paid to acquire business
-
(25,000
)
Capitalized software development - work in
progress
(97,700
)
(101,047
)
Net cash provided by (used in) investing
activities
(19,700
)
(138,973
)
Cash Flows from Financing
Activities:
Payments of debt
(71,286
)
-
Proceeds from issuance of common stock
-
282,577
Net cash provided by (used in) financing
activities
(71,286
)
282,577
Net increase (decrease) in cash
(1,618,224
)
(1,442,314
)
Cash - Beginning of Period
6,456,370
2,989,782
Cash - End of Period
$
4,838,146
$
1,547,468
The following table provides a reconciliation of net income to
Adjusted EBITDA:
For the three Months Ended
March 31,
2024
2023
Net loss
(1,419,045
)
(864,913
)
Adjusted to exclude the
following:
-
-
Depreciation and amortization
71,453
48,003
Interest expense
10,802
41,812
Adjusted EBITDA
$
(1,336,790
)
$
(775,098
)
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version on businesswire.com: https://www.businesswire.com/news/home/20240419471017/en/
Investor Relations Contact
investorrelations@realpha.com
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