AIRE 8-K
reAlpha Tech Corp. (AIRE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (Commission File Number) |
| (I.R.S. Employer Identification Number) |
(Address of principal executive offices and zip code)
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(Registrant’s telephone number, including area code)
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:
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:
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| Trading symbol(s) |
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| The |
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.
Item 2.02 Results of Operations and Financial Condition.
On August 14, 2025, reAlpha Tech Corp. (the “Company”) issued a press release regarding its financial results and business highlights for the quarter ended June 30, 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Form 8-K”).
The Company is making reference to non-GAAP financial information in the press release. A reconciliation of GAAP to non-GAAP results is provided in the attached Exhibit 99.1 press release.
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
The information set forth in Item 2.02, including Exhibit 99.1, to this Form 8-K is incorporated herein by reference into this Item 7.01.
On August 14, 2025, the Company made available a corporate presentation on its website at ir.realpha.com containing information related to the Company’s strategic focus, business developments, and recent trends. Representatives of the Company intend to present some of or all of this presentation to investors at various conferences and meetings beginning on the date hereof. A copy of the presentation is furnished as Exhibit 99.2 to this Form 8-K. These materials should be read together with the information included in the Company’s other filings with the Securities and Exchange Commission, including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended on May 13, 2025, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025.
The information furnished with this Item 7.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number |
| Description |
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104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Furnished herewith.
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SIGNATURE
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 hereunto duly authorized.
Date: August 14, 2025 | reAlpha Tech Corp. |
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| By: | /s/ Michael J. Logozzo |
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| Michael J. Logozzo |
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| Chief Executive Officer |
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EXHIBIT 99.1
reAlpha Tech Corp. Announces 1,909% Year-over-Year Revenue Growth for Quarter Ended June 30, 2025
DUBLIN, Ohio, August 14, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (the “Company” or “reAlpha”), an AI-powered real estate technology company, today announced financial results and business highlights for the quarter ended June 30, 2025.
Financial Highlights
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| · | Revenue increased 1,909% to approximately $1.3 million in the second quarter of 2025, compared to $62,353 in the second quarter of 2024. |
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| · | Cash at the end of the second quarter of 2025 was $587,311 compared to approximately $3.7 million in the second quarter of 2024. |
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| · | Gross profit was $621,465 in the second quarter of 2025, compared to $44,103 in the second quarter of 2024. The increase was primarily driven by mortgage brokerage transactions provided by our subsidiaries, reAlpha Mortgage (f/k/a Be My Neighbor) and GTG Financial, Inc., which included loan origination fees, broker commissions, and processing fees. Gross profit margin declined from 71% to 50% year-over-year, reflecting higher cost of revenue from delivering loan brokerage services and technology solutions. |
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| · | Adjusted EBITDA was approximately $(3.5) million in the second quarter of 2025, compared to approximately $(1.1) million in the second quarter of 2024. |
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| · | Net loss was approximately $4.1 million in the second quarter of 2025, compared to approximately $1.5 million in the second quarter of 2024. |
Piyush Phadke, Chief Financial Officer of reAlpha, commented, “We believe that our second quarter’s performance demonstrates the scalability of our platform strategy and reflects the significant traction we are beginning to achieve across our real estate and mortgage operations.” He further added, “We remain focused on balancing our growth with fiscal discipline as we commercialize our AI infrastructure and position reAlpha for long-term value creation.”
| 1 |
Business Highlights
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| · | In June 2025, reAlpha appointed Mike Logozzo as Chief Executive Officer to lead the Company through its next phase of growth. Mr. Logozzo, who previously served in the President, Chief Operating Officer, and Chief Financial Officer roles, has been instrumental in expanding reAlpha’s national footprint, launching the Company’s proprietary AI platform Claire, and strengthening its real estate, mortgage, and title capabilities. He succeeded founder and former Chief Executive Officer Giri Devanur, who now serves as the Executive Chairman of the Company’s Board of Directors. |
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| · | reAlpha launched a proprietary AI-powered Loan Officer Assistant intended to streamline mortgage operations and reduce processing time. The internal tool automates key loan origination tasks such as document collection and borrower communication, helping loan officers manage higher volumes with greater efficiency. Early internal performance metrics1 show an approximately 60% reduction in the manual document preparation and reconciliation time at the loan processing stage of the loan intake process, resulting in a 20% reduction in time per loan file. The anticipated time savings through the use of the AI-powered Loan Officer Assistant are expected to support reAlpha’s broader strategy to scale mortgage operations while improving borrower experience. |
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| · | The Company fully repaid the approximately $4.47 million principal balance outstanding, including a 9% prepayment penalty, on its $5.45 million secured promissory note to Streeterville Capital prior to its scheduled maturity. The early repayment of the secured promissory note strengthens reAlpha’s balance sheet, simplifies its capital structure, and supports financial flexibility for future growth. |
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| · | reAlpha appointed Cristol Rippe as Chief Marketing Officer. In this role, Ms. Rippe directs the Company’s brand, marketing, and communications, including growth strategy, media partnerships, and go-to-market execution. She brings over 20 years of experience scaling high-growth fintech and real estate companies, most recently serving as Chief Marketing Officer and Chief Operations Officer at Landed and previously leading marketing at Root Insurance through its IPO. |
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| · | During the second quarter of 2025, the Company implemented a new internal organizational structure, driving further integration of Naamche, one of its subsidiaries. The Company transitioned to a functional model with dedicated leadership across key departments, including Strategy, Finance, Marketing, Operations, Technology, and the office of the Chief Executive Officer. This realignment is intended to enhance operational efficiency, improve cross-functional coordination, and support the Company’s continued platform growth. |
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| · | As part of the Company’s corporate development strategic initiatives, reAlpha expanded its AI-powered homebuying platform into Texas with the launch of real estate brokerage services through its REALTOR® affiliate, marking the first step in its national rollout strategy. The Company also entered the Utah mortgage market, which ranks among the fastest-growing states in the U.S., in terms of year-over-year population growth2. These expansions extend reAlpha’s realty, mortgage, and title platform, creating an integrated experience. |
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| · | reAlpha transitioned the Be My Neighbor brand to reAlpha Mortgage. As part of the rebrand, the Company strengthened its leadership with the appointment of Jamie Cavanaugh as Chief Executive Officer of reAlpha Mortgage and Rocky Billore as Chief Sales Officer of reAlpha Mortgage, and onboarded five high-performing loan officers to support reAlpha’s expansion in its key markets, such as Florida and Texas. The unified brand also strengthens brand cohesion and cultural consistency across the Company. |
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| · | reAlpha launched a redesigned website experience, better reflecting its development into an integrated AI-powered real estate company. The new website interface is intended to support reAlpha’s go-to-market strategy, strengthen brand positioning, and reinforce the Company’s commitment to transparency, design simplicity, and intuitive navigation. |
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| · | The Company fully integrated its customer relationship management (CRM) platform across real estate and mortgage operations, automating lead capture, pipeline management, task routing, and follow-ups, which is expected to reduce manual effort, improve data accuracy, and boost engagement. |
1 These early operational results are based on preliminary internal testing with a limited sample size and have not been independently verified.
2 Immigration drives nation’s population growth, Stateline, https://stateline.org/2024/12/20/immigration-drives-nations-population-growth/
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About reAlpha Tech Corp.
reAlpha Tech Corp. (Nasdaq: AIRE) is an AI-powered real estate technology company transforming the multi-trillion dollar U.S. real estate services market. reAlpha is developing an end-to-end platform that streamlines the homebuying journey, including real estate brokerage, mortgage and title services. With a strategic, acquisition-driven growth model and a proprietary AI infrastructure, reAlpha is building a vertically integrated ecosystem designed to deliver a streamlined and more affordable path to homeownership. For more information, 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 by reAlpha’s Chief Financial Officer, Piyush Phadke, 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; the inability to maintain and strengthen reAlpha’s brand and reputation; reAlpha’s ability to reduce its manual loan processing time and manual effort of its employees through the implementation of its Loan Officer Assistant and CRM platform across real estate and mortgage operations; reAlpha’s ability to improve data accuracy and boost engagement of its brand through its redesigned website and the integration of CRM platform across real estate and mortgage operations; reAlpha’s ability to enhance its operational efficiency, improve cross-functional coordination and support the reAlpha platform’s continued growth through the implementation of its new internal organizational structure; reAlpha’s ability to continue attracting loan officers and maintain its relationship with its REALTOR® affiliate to expand its operations nationally; any accidents or incidents involving cybersecurity breaches and incidents; the inability to accurately forecast demand for 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 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.
Media Contact:
Cristol Rippe, Chief Marketing Officer
Investor Relations Contact:
Adele Carey, VP of Investor Relations
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| reAlpha Tech Corp. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheet | ||||||||
| June 30, 2025 (Unaudited) and December 31, 2024 | ||||||||
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| June 30, 2025 |
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| December 31, 2024 |
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| ASSETS |
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| Current Assets |
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| Cash |
| $ | 587,311 |
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| $ | 3,123,530 |
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| Accounts receivable, net |
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| 197,158 |
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| 182,425 |
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| Receivable from related parties |
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| 2,259 |
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| 12,873 |
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| Prepaid expenses |
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| 3,849,221 |
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| 180,158 |
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| Current assets of discontinued operations |
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| 53,476 |
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| 56,931 |
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| Other current assets |
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| 372,182 |
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| 487,181 |
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| Total current assets |
| $ | 5,061,607 |
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| $ | 4,043,098 |
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| Property and Equipment, at cost |
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| Property and equipment, net |
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| 51,328 |
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| 102,638 |
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| Other Assets |
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| Investments |
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| 212,602 |
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| 215,000 |
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| Other long term assets |
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| 848,000 |
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| 31,250 |
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| Intangible assets, net |
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| 3,172,083 |
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| 3,285,406 |
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| Goodwill |
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| 6,171,918 |
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| 4,211,166 |
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| Capitalized software development - work in progress |
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| - |
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| 105,900 |
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| TOTAL ASSETS |
| $ | 15,517,538 |
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| $ | 11,994,458 |
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| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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| Current Liabilities |
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| Accounts payable |
| $ | 1,184,106 |
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| $ | 655,765 |
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| Related party payables |
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| 5,724 |
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| 9,287 |
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| Short term loans - related parties -current portion |
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| 258,239 |
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| 261,986 |
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| Short term loans - unrelated parties -current portion |
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| 324,656 |
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| 519,153 |
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| Note payable, current-net of discount |
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| 3,741,878 |
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| Accrued expenses |
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| 1,057,665 |
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| 1,164,813 |
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| Deferred liabilities, current portion |
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| 2,916,219 |
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| 1,534,433 |
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| Total current liabilities |
| $ | 9,488,487 |
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| $ | 4,145,437 |
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| Long-Term Liabilities |
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| Embedded derivative liability |
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| 4,745,634 |
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| - |
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| Preferred stock liability |
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| 249,458 |
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| - |
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| Other long term loans - related parties - net of current portion |
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| 22,514 |
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| 45,052 |
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| Other long term loans - unrelated parties - net of current portion |
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| 152,925 |
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| 241,121 |
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| Note payable, net of discount |
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| - |
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| 4,909,376 |
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| Other long term liabilities |
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| 1,959,000 |
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| 1,086,000 |
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| Total liabilities |
| $ | 16,618,018 |
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| $ | 10,426,986 |
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| Stockholders' (Deficit) Equity |
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| Series A Convertible Preferred Stock ($0.001 par value; 5,000,000 shares authorized) 1,000,000 shares designated; 264,063 and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively |
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| Common stock ($0.001 par value; 200,000,000 shares authorized, 52,364,654 shares outstanding as of June 30, 2025; 200,000,000 shares authorized, 45,864,503 shares outstanding as of December 31, 2024) |
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| 52,363 |
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| 45,865 |
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| Additional paid-in capital |
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| 44,174,344 |
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| 39,770,060 |
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| Accumulated deficit |
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| (45,222,909 | ) |
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| (38,260,913 | ) |
| Accumulated other comprehensive income |
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| (113,356 | ) |
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| 5,011 |
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| Total stockholders’ (deficit) equity of reAlpha Tech Corp |
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| (1,109,558 | ) |
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| 1,560,023 |
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| Non-controlling interests in consolidated entities |
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| 9,078 |
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| 7,449 |
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| Total stockholders’ (deficit) equity |
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| (1,100,480 | ) |
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| 1,567,472 |
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| TOTAL LIABILITIES AND STOCKOLDERS’ (DEFICIT) EQUITY |
| $ | 15,517,538 |
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| $ | 11,994,458 |
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| reAlpha Tech Corp. and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
| For the Three Ended March 31, 2025 and 2024 (unaudited) | ||||||||||||||||
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| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, 2025 |
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| June 30, 2024 |
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| June 30, 2025 |
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| June 30, 2024 |
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| Revenues |
| $ | 1,252,381 |
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| $ | 62,353 |
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| $ | 2,178,016 |
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| $ | 82,779 |
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| Cost of revenues |
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| 630,916 |
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| 18,250 |
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| 1,037,884 |
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| 36,499 |
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| Gross Profit |
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| 621,465 |
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| 44,103 |
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| 1,140,132 |
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| 46,280 |
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| Operating Expenses |
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| Wages, benefits and payroll taxes |
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| 1,576,421 |
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| 476,179 |
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| 2,636,525 |
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| 895,084 |
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| Repairs and maintenance |
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| 106 |
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| 846 |
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| 960 |
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| 1,595 |
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| Utilities |
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| 6,705 |
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| 979 |
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| 11,918 |
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| 2,641 |
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| Travel |
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| 23,393 |
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| 64,317 |
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| 84,384 |
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| 111,281 |
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| Dues and subscriptions |
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| 40,007 |
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| 24,385 |
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| 92,239 |
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| 36,743 |
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| Marketing and advertising |
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| 1,483,672 |
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| 130,378 |
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| 2,002,611 |
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| 207,740 |
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| Professional and legal fees |
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| 1,003,732 |
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| 311,792 |
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| 1,745,891 |
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| 780,517 |
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| Depreciation and amortization |
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| 131,045 |
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| 69,331 |
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| 310,194 |
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| 140,784 |
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| Impairment of capitalized software |
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| 105,900 |
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| - |
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| 105,900 |
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| - |
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| Other operating expenses |
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| 339,614 |
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| 175,291 |
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| 660,899 |
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| 312,319 |
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| Total operating expenses |
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| 4,710,595 |
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| 1,253,498 |
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| 7,651,521 |
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| 2,488,704 |
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| Operating Loss |
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| (4,089,130 | ) |
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| (1,209,395 | ) |
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| (6,511,389 | ) |
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| (2,442,424 | ) |
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| Other Expense (income) |
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| Changes in fair value of contingent consideration |
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| (174,000 | ) |
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| - |
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| (81,000 | ) |
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| - |
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| Interest expense, net |
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| 292,004 |
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| 678 |
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| 497,251 |
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| 11,12 | ) |
| Change in fair value of preferred stock liability and embedded derivative liability |
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| (339,378 | ) |
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| - |
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| (339,378 | ) |
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| - |
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| Other expense, net |
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| 242,260 |
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| (267,368 | ) |
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| 372,106 |
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| (442,100 | ) |
| Total other expense |
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| 20,886 |
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| (268,046 | ) |
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| 448,979 |
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| (453,223 | ) |
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| Net Loss from continuing operations before income taxes |
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| (4,110,016 | ) |
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| (1,477,441 | ) |
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| (6,960,368 | ) |
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| (2,895,647 | ) |
| Income tax (expense) benefit |
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| - |
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| - |
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| - |
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| - |
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| Net Loss from continuing operations |
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| (4,110,016 | ) |
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| (1,477,441 | ) |
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| (6,960,387 | ) |
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| (2,895,647 | ) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Discontinued operations (Roost and Rhove) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations of discontinued Operations |
|
| - |
|
|
| (871 | ) |
|
| - |
|
|
| (1,710 | ) |
| Income tax benefit |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| Loss on discontinued operations |
|
| - |
|
|
| (871 | ) |
|
| - |
|
|
| (1,710 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
| $ | (4,110,016 | ) |
| $ | (1,478,312 | ) |
| $ | (6,960,368 | ) |
| $ | (2,897,357 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Less: Net Loss Attributable to Non-Controlling Interests |
|
| 2,038 |
|
|
| 17 |
|
|
| 1,629 |
|
|
| (48 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss Attributable to Controlling Interests |
| $ | (4,112,054 | ) |
| $ | (1,478,329 | ) |
| $ | (6,961,997 | ) |
| $ | (2,897,309 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation adjustments |
|
| (106,436 | ) |
|
| - |
|
|
| (98,511 | ) |
|
| - |
|
| Total other comprehensive loss |
|
| (106,436 | ) |
|
| - |
|
|
| (98,511 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive Loss Attributable to Controlling Interests |
| $ | (4,218,490 | ) |
| $ | (1,478,329 | ) |
| $ | (7,060,508 | ) |
| $ | (2,897,309 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
| $ | (0.08 | ) |
| $ | (0.03 | ) |
| $ | (0.14 | ) |
| $ | (0.07 | ) |
| Discontinued operations |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Net Loss per share — basic |
| $ | (0.08 | ) |
| $ | (0.03 | ) |
| $ | (0.14 | ) |
| $ | (0.07 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
| $ | (0.08 | ) |
| $ | (0.03 | ) |
| $ | (0.14 | ) |
| $ | (0.07 | ) |
| Discontinued operations |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Net Loss per share — diluted |
| $ | (0.08 | ) |
| $ | (0.03 | ) |
| $ | (0.14 | ) |
| $ | (0.07 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted-average outstanding shares — basic |
|
| 51,289,445 |
|
|
| 44,224,893 |
|
|
| 48,663,950 |
|
|
| 44,173,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted-average outstanding shares — diluted |
|
| 51,289,445 |
|
|
| 44,224,893 |
|
|
| 48,663,950 |
|
|
| 44,173,208 |
|
| 5 |
| reAlpha Tech Corp. and Subsidiaries | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| For the Six Months Ended June 30, 2025, and 2024 (unaudited) | ||||||||
|
|
|
|
|
|
|
| ||
|
|
| For the Six Months Ended |
|
| For the Six Months Ended |
| ||
|
|
| June 30, 2025 |
|
| June 30, 2024 |
| ||
|
|
|
|
|
|
|
| ||
| Cash Flows from Operating Activities: |
|
|
|
|
|
| ||
| Net Loss |
| $ | (6,960,367 | ) |
| $ | (2,897,357 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
| 261,444 |
|
|
| 140,784 |
|
| Impairment of capitalized software |
|
| 105,900 |
|
|
| - |
|
| Amortization of loan discounts |
|
| 242,502 |
|
|
| - |
|
| Stock based compensation |
|
| 271,343 |
|
|
| 203,146 |
|
| Change in fair value of contingent consideration |
|
| (81,000 | ) |
|
| - |
|
| Loss on extinguishment of debt |
|
| 70,065 |
|
|
| - |
|
| Change in fair value of preferred stock liability and embedded derivative liability |
|
| (339,378 | ) |
|
| - |
|
| Non cash commitment fee expenses |
|
| 250,000 |
|
|
| 250,000 |
|
| Non cash marketing and advertising |
|
| 1,293,991 |
|
|
| - |
|
| Non cash compensation - GTG Financial |
|
| 106,000 |
|
|
| - |
|
| Non cash dividend payable Series A convertible preferred stock |
|
| 49,548 |
|
|
| - |
|
| Loss/(gain) on sale of property |
|
| 48,748 |
|
|
| (31,392 | ) |
| Loss/(gain) from equity method investment |
|
| 2,398 |
|
|
| (129,045 | ) |
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
| (14,733 | ) |
|
| 152,829 |
|
| Receivable from related parties |
|
| 10,614 |
|
|
| - |
|
| Payable to related parties |
|
| (3,563 | ) |
|
| - |
|
| Prepaid expenses |
|
| 61,946 |
|
|
| 111,883 |
|
| Other current assets |
|
| (225,920 | ) |
|
| (17,670 | ) |
| Accounts payable |
|
| 428,013 |
|
|
| 28,102 |
|
| Accrued expenses |
|
| (216,616 | ) |
|
| (362,159 | ) |
| Deferred liabilities |
|
| 37,036 |
|
|
| - |
|
| Total adjustments |
|
| 2,358,338 |
|
|
| 346,478 |
|
| Net cash used in operating activities |
|
| (4,602,029 | ) |
|
| (2,550,879 | ) |
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
| Additions to property and equipment |
|
| (27,114 | ) |
|
| (1,245 | ) |
| Loss from sale of property |
|
| - |
|
|
| 78,000 |
|
| Net cash paid to acquire business |
|
| 349,529 |
|
|
| 786 |
|
| Cash used for additions to intangible assets |
|
| (131,283 | ) |
|
| (156,964 | ) |
| Net cash provided by (used in) investing activities |
|
| 191,132 |
|
|
| (79,423 | ) |
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
| Proceeds from issuance of debt |
|
| 155,481 |
|
|
| - |
|
| Payments of debt |
|
| (1,554,456 | ) |
|
| (143,885 | ) |
| Proceeds from issuance of common stock |
|
| 3,508,490 |
|
|
| - |
|
| Equity issuance costs |
|
| (235,251 | ) |
|
| - |
|
| Net cash provided by (used in) financing activities |
|
| 1,874,264 |
|
|
| (143,885 | ) |
|
|
|
|
|
|
|
|
|
|
| Net decrease in cash |
|
| (2,536,633 | ) |
|
| (2,774,187 | ) |
|
|
|
|
|
|
|
|
|
|
| Effect of exchange rate changes on cash |
|
| - |
|
|
| 144 |
|
|
|
|
|
|
|
|
|
|
|
| Cash - Beginning of Period |
|
| 3,123,944 |
|
|
| 6,456,370 |
|
|
|
|
|
|
|
|
|
|
|
| Cash - End of Period |
| $ | 587,311 |
|
| $ | 3,682,327 |
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
| Cash paid for interest |
|
| 38,758 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| Non-cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
| Preferred stock issuance - MMC transaction |
|
| 5,000,000 |
|
|
| - |
|
| Preferred stock issuance - GTG Financial |
|
| 284,922 |
|
|
| - |
|
| Deferred cash payments - GTG Financial |
|
| 1,344,750 |
|
|
| - |
|
| Common stock issuance - GTG acquisition |
|
| 451,135 |
|
|
| - |
|
| Common stock issuance - Streeterville Capital, LLC |
|
| 370,065 |
|
|
| - |
|
| Common stock issuance - GTG Financial |
|
| 1,287,000 |
|
|
| - |
|
| 6 |
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with U.S. GAAP, we believe “Adjusted EBITDA,” a “non-U.S. GAAP financial measure,” as such term is defined under the rules of 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 this non-U.S. GAAP financial measures may be helpful to investors because it provides consistency and comparability with past financial performance. However, this non-U.S. GAAP financial measures is presented for supplemental informational purposes only, have limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In addition, other companies, including companies in our industry, may calculate a similarly titled non-U.S. GAAP measure differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-U.S. GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-U.S. GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measure and the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure, and not to rely on any single financial measure to evaluate our business.
We use Adjusted EBITDA, a non-U.S. 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, changes in fair value of contingent consideration and preferred stock, 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:
|
|
| For the Three Months Ended June 30, |
|
| For the Six Months Ended June 30 |
| ||||||||||
|
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
| ||||
| Net loss |
| $ | (4,110,016 | ) |
| $ | (1,478,312 | ) |
| $ | (6,960,367 | ) |
| $ | (2,897,357 | ) |
| Adjusted to exclude the following |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
| 131,045 |
|
|
| 69,331 |
|
|
| 261,444 |
|
|
| 140,784 |
|
| Amortization of loan discounts and origination fee |
|
| 121,251 |
|
|
| - |
|
|
| 242,502 |
|
|
| - |
|
| Impairment of capitalized software development - work in progress (1) |
|
| 105,900 |
|
|
| - |
|
|
| 105,900 |
|
|
| - |
|
| Changes in fair value of contingent consideration (2) |
|
| (174,000 | ) |
|
| - |
|
|
| (81,000 | ) |
|
| - |
|
| Change in fair value of Series A Preferred Stock (3) |
|
| (339,378 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
| Loss (gain) on equity method investments |
|
| 1,526 |
|
|
| (129,045 | ) |
|
| 2,456 |
|
|
| (129,045 | ) |
| Interest expense |
|
| 240,818 |
|
|
| 678 |
|
|
| 303,499 |
|
|
| 11,123 |
|
| GEM commitment fee (4) |
|
| 125,000 |
|
|
| 125,000 |
|
|
| 250,000 |
|
|
| 250,000 |
|
| Share based compensation (5) |
|
| 192,988 |
|
|
| 203,146 |
|
|
| 271,343 |
|
|
| 203,146 |
|
| Equity offering costs (6) |
|
| 230,774 |
|
|
| - |
|
|
| 230,774 |
|
|
| - |
|
| Acquisition-related expenses |
|
| - |
|
|
| 61,691 |
|
|
| 87,352 |
|
|
| 184,748 |
|
| Adjusted EBITDA |
| $ | (3,474,092 | ) |
| $ | (1,147,511 | ) |
| $ | (5,286,097 | ) |
| $ | (2,236,601 | ) |
(1) Represents the impairment of capitalized software due to discontinued development and the software becoming obsolete.
(2) Represents remeasurement gains or losses related to the contingent consideration of reAlpha Mortgage.
(3) Represents non-cash remeasurement gains or losses related to preferred stock issued in the Mercurius Media Capital LP and GTG Financial, Inc. transactions.
(4) Represents the commitment fee of $1,000,000 incurred in connection with the equity facility with GEM Yield Bahamas Limited and GEM Global Yield LLC SCS, which has been amortized over a period of 24 months beginning on October 23, 2023.
(5) Represents non-cash expenses related to shares of common stock issued to certain employees and restricted stock units granted to certain executive officers and certain employees.
(6) Represents legal and professional fees incurred in connection with the warrant inducement transaction and at-the-market offering with H.C. Wainwright & Co., LLC.
| 7 |
EXHIBIT 99.2
