reAlpha Tech Corp. Announces Financial Results for the Year Ended December 31, 2024
DUBLIN, Ohio, April 02, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (the "Company" or "reAlpha"), a real estate technology company developing and commercializing artificial intelligence ("AI") technologies, today provides a business update and reports financial results for the fiscal year ended December 31, 2024.
"We have made great strides in 2024 in advancing reAlpha's goal to become a leader in the real estate technology industry through strategic innovation and impactful acquisitions," commented Piyush Phadke, Chief Financial Officer of reAlpha. "Our continued investment in AI-driven technologies and strategic acquisitions has translated into meaningful revenue growth, and we believe we are well-positioned to drive further expansion of our business and deliver value to our stockholders."
Business Highlights
Strategic and operational highlights during the period ended December 31, 2024, include:
-- Launched the reAlpha platform, an end-to-end, commission-free homebuying
platform, in April 2024, which was designed to reshape the homebuying
experience by eliminating traditional commission fees. The reAlpha
platform is powered by Claire, reAlpha's AI-real estate agent, which is
available 24/7.
-- Acquired a controlling interest in Hyperfast Title, LLC, in July 2024,
which enabled us to offer title services in 3 U.S. states.
-- Acquired an 85% stake in AiChat Pte. Ltd. ("AiChat") in July 2024, which
enhanced reAlpha's AI capabilities in conversational customer engagement
and expanded its presence in the Asia-Pacific region.
-- Introduced the reAlpha Super App in August 2024, which provided
homebuyers with the ability to use the reAlpha platform and its AI-driven
homebuying services directly in their mobile devices.
-- Completed the acquisition of Debt Does Deals, LLC ("Be My Neighbor"),
which allowed us to offer mortgage brokerage services in 27 U.S. states.
Later in the year, Be My Neighbor became licensed in an additional state,
for a total of 28 U.S. states.
Financial Results and Operational Update
In the beginning of 2024, reAlpha halted its short-term rental operations under its rental business segment due to macroeconomic conditions, such as high interest rates and inflationary pressures. As a result, in the twelve months ended December 31, 2024, reAlpha recognized a goodwill impairment of Roost Enterprises, Inc. ("Rhove") of $17,337,739, which reAlpha acquired to operate under its rental business segment. As such, reAlpha's financial statements and related financial notes thereto for the twelve months ended December 31, 2024, reflect the Rhove goodwill impairment as discontinued operations. Because macroeconomic conditions persisted during 2024, and in connection with Rhove's goodwill impairment, the board of directors of reAlpha approved to discontinue its short-term rental business operations entirely in the first quarter of 2025.
Revenue for the twelve months ended December 31, 2024 was $948,420, an increase of 270%, compared to $256,436 for the twelve months ended December 31, 2023. reAlpha's revenues consist of technology services income that it receives from its technologies and services provided by its subsidiaries. This increase in revenues is mainly attributed to the revenue derived from strategic acquisitions that reAlpha completed during 2024, such as AiChat and Be My Neighbor.
Cash and cash equivalents were $3,123,530 as of December 31, 2024 and $ 6,456,370 as of December 31, 2023.
Net loss was approximately $26.02 million for the twelve months ended December 31, 2024, compared to a net loss of approximately $2.46 million for the twelve months ended December 31, 2023. This increase in net loss is predominantly due to the goodwill impairment of Rhove during the twelve months ended December 31, 2024, and the one-time gain of $5,502,774 from the sale of myAlphie, a technology platform reAlpha previously developed and sold, that was recognized in the comparable 2023 period, which was not present in 2024. Loss from discontinued operations was approximately $18.3 million for the twelve months ended December 31, 2024, compared to $0.31 million for the comparable 2023 period, which is mainly due to Rhove's goodwill impairment and intangibles being presented as discontinued operations. Net loss from continuing operations was $7.68 million for the twelve months ended December 31, 2024, compared to $2.14 million for the comparable 2023 period. The increase in net loss from continuing operations was primarily due to the one-time gain from the sale of myAlphie that was not present in 2024.
Adjusted EBITDA was $(5,572,214) for the twelve months ended December 31, 2024, compared to $(7,387,223) for the twelve months ended December 31, 2023.
About reAlpha Tech Corp.
reAlpha Tech Corp. (Nasdaq: AIRE) is a real estate technology company developing an end-to-end commission-free homebuying platform. Utilizing the power of AI and an acquisition-led growth strategy, reAlpha's goal is to offer a more affordable, streamlined experience for those on the journey to homeownership. For more information, visit www.realpha.com.
Investor Relations Contact:
Adele Carey, VP of Investor Relations
investorrelations@realpha.com
Media Contact:
Fatema Bhabrawala, Director of Public Relations
fbhabrawala@allianceadvisors.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 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: 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 commercialize its developing AI-based technologies; reAlpha's ability to successfully enter new geographic markets; reAlpha's ability to integrate the business of its acquired companies into its existing business and the anticipated demand for such acquired companies' services; reAlpha's ability to scale its operational capabilities to expand into additional geographic markets and nationally; the potential loss of key employees of reAlpha and of its subsidiaries; the outcome of certain outstanding legal proceedings against reAlpha; reAlpha's ability to obtain, and maintain, the required licenses to operate in the U.S. states in which it, or its subsidiaries, operate in, or intend to operate in; reAlpha's ability to successfully identify and acquire companies that are complementary to its business model; 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 reAlpha's U.S. Securities and Exchange Commission ("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. and Subsidiaries
Consolidated Balance Sheet
December 31, 2024 and December 31, 2023
December 31, December 31,
2024 2023
------------ ------------
ASSETS
Current Assets
Cash $ 3,123,530 $ 6,456,370
Accounts receivable 182,425 30,630
Receivable from related parties 12,873 --
Prepaid expenses 180,158 242,795
Current assets of Discontinued
operations 56,931 88,036
Other current assets 487,181 582,463
----------- -----------
Total current assets $ 4,043,098 $ 7,400,294
Property and Equipment, at cost
Property and equipment, net $ 102,638 $ 328,539
Other Assets
Investments 215,000 115,000
Other long term assets 31,250 406,250
Intangible assets, net 3,285,406 --
Long term assets of discontinued
operations -- 18,335,701
Goodwill 4,211,166 --
Capitalized software development
-- work in progress 105,900 839,085
----------- -----------
TOTAL ASSETS $ 11,994,458 $ 27,424,869
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 655,765 $ 431,700
Related party payables 9,287 --
Short term loans -- related
parties -- current portion 115,086 --
Short term loans -- unrelated
parties -- current portion 666,053 190,095
Accrued expenses 1,164,813 799,624
Current liabilities of
Discontinued operations -- 47,665
Deferred liabilities, current
portion 1,534,433 593,750
----------- -----------
Total current liabilities $ 4,145,437 $ 2,062,834
Long-Term Liabilities
Deferred liabilities, net of
current portion -- 406,250
Mortgage and other long term
loans -- related parties -- net
of current portion 45,052 --
Mortgage and other long term
loans -- unrelated parties --
net of current portion 241,121 247,000
Note payable, net of discount 4,909,376 --
Other long term liabilities 1,086,000 --
----------- -----------
Total liabilities $ 10,426,986 $ 2,716,084
Stockholders' Equity (Deficit)
Preferred stock, $0.001 par
value; 5,000,000 shares
authorized, 0 shares issued and
outstanding as of December 31,
2024 and December 31, 2023 -- --
Common stock ($0.001 par value;
200,000,000 shares authorized,
45,864,503 shares outstanding as
of December 31, 2024;
200,000,000 shares authorized,
44,122,091 shares outstanding as
of December 31, 2023) 45,865 44,123
Additional paid-in capital 39,770,060 36,899,497
Accumulated deficit (38,260,913) (12,237,885)
Accumulated other comprehensive
income 5,011 --
----------- -----------
Total stockholders' equity
(deficit) of reAlpha Tech
Corp. 1,560,023 24,705,735
Non-controlling interests in
consolidated entities 7,449 3,050
----------- -----------
Total stockholders' equity
(deficit) 1,567,472 24,708,785
----------- -----------
TOTAL LIABILITIES AND STOCKOLDERS'
EQUITY $ 11,994,458 $ 27,424,869
=========== ===========
reAlpha Tech Corp. and Subsidiaries
Consolidated Statements of Operations and Comprehensive
Loss
For the Year Ended December 31, 2024 and Eight Months
Ended December 31, 2023 and Year Ended April 30, 2023
For the
Eight
For the Months For the
Year Ended Ended Year Ended
December 31, December April 30,
2024 31, 2023 2023
------------ ----------- -----------
Revenues $ 948,420 $ 121,690 $ 419,412
Cost of revenues 302,084 94,665 293,204
----------- ---------- ----------
Gross Profit 646,336 27,025 126,208
Operating Expenses
Wages, benefits
and payroll
taxes 2,841,591 710,737 1,114,403
Repairs &
maintenance 3,216 51,436 24,794
Utilities 11,545 12,321 32,456
Travel 259,661 46,476 --
Dues &
subscriptions 118,656 24,426 98,000
Marketing &
advertising 793,004 193,612 2,002,884
Professional &
legal fees 2,124,946 4,572,026 1,470,306
Depreciation &
amortization 282,095 30,029 157,802
Impairment of
intangible
assets 202,968 -- --
Other operating
expenses 911,268 418,697 159,166
----------- ---------- ----------
Total operating
expenses 7,548,950 6,059,760 5,059,811
----------- ---------- ----------
Operating Loss (6,902,614) (6,032,735) (4,933,603)
Other Income
(Expense)
Gain on sale of
myAlphie -- 5,502,774 --
Interest expense,
net (333,759) (70,119) (169,776)
Other expense, net (500,601) (144,764) (334,228)
----------- ---------- ----------
Total other
(expense)
income (834,360) 5,287,891 (504,004)
----------- ---------- ----------
Net Loss from
continuing
operations before
income taxes (7,736,974) (744,844) (5,437,607)
Income tax
(expense)
benefit 54,260 (204,286) --
Net Loss from
continuing
operations (7,682,714) (949,130) (5,437,607)
Discontinued
operations (Roost
and Rhove)
Loss from
operations of
discontinued
Operations (261,242) (302,129) (14,776)
Loss on
abandonment of
discontinued
Operations (18,078,393) -- --
Income tax
benefit --
----------- ---------- ----------
Loss on discontinued
operations $(18,339,635) $ (302,129) $ (14,776)
Net Loss after income
taxes $(26,022,349) $(1,251,259) $(5,452,383)
Less: Net (Loss)
Income Attributable
to Non-Controlling
Interests 679 464 726
Net Loss Income
Attributable to
Controlling
Interests $(26,023,028) $(1,251,723) $(5,453,109)
=========== ========== ==========
Other comprehensive
income
Foreign currency
translation
adjustments 5,011 -- --
----------- ---------- ----------
Total other
comprehensive
gain 5,011 -- --
Comprehensive Loss
Attributable to
Controlling
Interests $(26,018,017) $(1,251,723) $(5,453,109)
Basic and diluted
loss per share
Continuing
operations $ (0.17) $ (0.02) $ (0.13)
Discontinued
operations $ (0.41) $ (0.01) $ (0.00)
=========== ========== ==========
Net Loss per share
-- basic and
diluted $ (0.58) $ (0.03) $ (0.13)
Weighted-average
outstanding
shares -- basic 44,631,577 42,688,666 40,439,190
=========== ========== ==========
Weighted-average
outstanding
shares --
diluted 44,631,577 42,688,666 40,439,190
=========== ========== ==========
Consolidated Statements of Cash Flows
For the Year Ended December 31, 2024 and Eight Months
Ended December 31, 2023 and Year Ended April 30, 2023
For the
Eight
For the Months For the
Year Ended Ended Year Ended
December 31, December April 30,
2024 31, 2023 2023
------------ ----------- -----------
Cash Flows from
Operating
Activities:
Net (Loss) income $(26,022,349) $(1,251,259) $(5,452,383)
Adjustments to
reconcile net
(loss) income to
net cash used in
operating
activities:
Depreciation
and
amortization 466,691 289,067 157,802
Stock based
compensation
-- employees 207,453 -- --
Stock based
compensation
-- services 108,730 -- --
Legal &
professional
expenses -- 3,045,290
Amortization
of loan
discounts and
origination
fees 181,875
Write-off of
capitalized
software
costs 145,746 -- --
Impairment of
goodwill and
Intangible
assets 18,280,947 -- --
Commitment
fee expenses 500,000 -- --
Loss on sale
of
properties 301 (85,077) (22,817)
Gain on
previously
held equity (20,663) -- --
Gain on sale
of myAlphie -- (5,502,774) --
Changes in
operating assets
and
liabilities:
Accounts
receivable (16,437) 37,490 65,696
Receivable
from related
parties (12,873) 20,874 (20,874)
Payable to
related
parties (56,241) -- --
Prepaid
expenses 62,637 (226,889) 96,038
Other current
assets (19,773) (419,849) (81,689)
Accounts
payable 58,756 48,928 235,433
Accrued
expenses (185,118) 621,815 60,741
Deferred
liabilities 278,080 593,750 --
----------- ---------- ----------
Total adjustments 19,980,111 (1,577,375) 490,330
----------- ---------- ----------
Net cash used in
operating
activities (6,042,238) (2,828,634) (4,962,053)
Cash Flows from
Investing
Activities:
Proceeds from
sale of
properties 293,307 731,343 1,539,997
Additions to
property, plant
& equipment (12,533) (40,840) 19,721
Cash paid to
acquire
business (1,268,630) (50,000) (25,000)
Cash paid for
equity method
investment (50,000) -- --
Cash used for
additions to
capitalized
software
development and
intangibles (516,544) (134,400) (452,451)
----------- ---------- ----------
Net cash (used
in) provided by
investing
activities (1,554,400) 506,103 1,082,267
Cash Flows from
Financing
Activities:
Proceeds from
issuance of
debt 6,155,539 190,095 247,000
Payments of debt (1,164,241) -- (1,071,709)
Deferred
financing costs (727,500)
Proceeds from
issuance of
common stock 7,331,938 4,282,274
Settling
subscription
issuance of
common stock
contributions -- -- --
Offering costs
paid on issuance
of common stock -- -- (416,312)
----------- ---------- ----------
Net cash
provided by
financing
activities 4,263,798 7,522,033 3,041,253
Net Increase
(decrease)
in cash (3,332,840) 5,199,502 (838,533)
Cash -- Beginning of
Period 6,456,370 1,256,868 2,095,401
----------- ---------- ----------
Cash -- End of
Period $ 3,123,530 $ 6,456,370 $ 1,256,868
=========== ========== ==========
Cash $ 3,123,530 $ 6,456,370 $ 1,256,868
Restricted cash -- -- --
----------- ---------- ----------
Total cash $ 3,123,530 $ 6,456,370 $ 1,256,868
=========== ========== ==========
Supplemental
disclosure of cash
flow information
Interest expense $ (58,897) $ (70,119) $ (169,776)
Explanatory Notes on Use of Non-GAAP Financial Measures
To supplement reAlpha's financial information presented in accordance with U.S. GAAP ("GAAP"), reAlpha believes "Adjusted EBITDA," a "non-GAAP financial measure", as such term is defined under the rules of the SEC, is useful in evaluating reAlpha's operating performance. reAlpha uses Adjusted EBITDA to evaluate reAlpha's ongoing operations and for internal planning and forecasting purposes. reAlpha believes 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 reAlpha's 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 reAlpha's 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 reAlpha's business.
We use Adjusted EBITDA, a non-GAAP financial measure, to evaluate our operating performance and facilitate comparisons across periods and with peer companies. We reconcile our Adjusted EBITDA to our net income (loss) adjusted to exclude interest expense, depreciation and amortization, share-based compensation, and other non-cash, non-operating, or non-recurring items that we believe are not indicative of our core business operations. We believe this measure provides useful insight into our ongoing performance; however, it should not be considered a substitute for, or superior to, net income or other financial information prepared in accordance with U.S. GAAP.
The following table provides a reconciliation of net income to Adjusted EBITDA for the periods presented below:
2024 2023
------------ -----------
Net (Loss) Income $(26,022,349) $(2,462,407)
Adjusted to exclude the following
Depreciation & amortization 282,095 346,171
Gain on sale of myAlphie -- (5,502,774)
Interest Expense 333,759 128,268
Share-based Compensation (1) 316,183 --
GEM commitment fee (2) 500,000 --
Acquisition related expense (3) 517,251 103,519
Gain on previously held equity
(4) (20,663) --
Amortization of loan discounts
and origination fees (5) 181,875 --
Loss from discontinued
operations before tax (6) 18,339,635 --
----------- ----------
Adjusted EBITDA $ (5,572,214) $(7,387,223)
=========== ==========
(1) Reflects share-based compensation provided to
non-executive officer employees and certain members
of our board of directors for services rendered to
us, which is recognized as a non-cash expense.
(2) Reflects the commitment fee incurred in connection
with the equity facility we have in place with GEM
Global Yield LLC SCS and GEM Yield Bahamas Limited
(collectively, "GEM") pursuant to that certain Share
Purchase Agreement, among reAlpha and GEM, dated December
1, 2022.
(3) Reflects expenses related to acquisitions, including
professional and legal fees, which are excluded to
provide a clearer view of ongoing operational performance.
(4) Reflects the gain from the fair value measurement
of previously held equity interests, which is recognized
as a non-operational item and treated as a non-GAAP
measure.
(5) Reflects the amortized original issue discount
related to that certain secured promissory note, dated
as of August 14, 2024.
(6) Reflects the loss from the discontinuation of
our rental business segment operations, which consists
mainly of the goodwill impairment of Rhove operations.
(END) Dow Jones Newswires
April 02, 2025 17:00 ET (21:00 GMT)
