reAlpha Tech Corp. Announces Financial Results for the Quarter Ended June 30, 2024

Dublin, Ohio--(Newsfile Corp. - August 14, 2024) - reAlpha Tech Corp. (NASDAQ: AIRE) ("reAlpha," the "Company," "us," "we" or "our"), a real estate technology company developing and commercializing artificial intelligence ("AI") technologies, today announced financial results for the quarter ended June 30, 2024.

Business Highlights

• Launched Claire, our generative AI-powered, commission-free home buying platform. Claire's introduction aligns with a major shift in the real estate sector, as the National Association of Realtors ("NAR") agreed to settle their lawsuit for $418 million after they were found to have violated antitrust laws, resulting in inflated fees paid to buy-side agents. This development will result in the standard six percent sales commission payable by sellers to be eliminated.

• We completed the acquisition of Naamche, Inc. and its Nepal counterpart (collectively, “Naamche”), on May 6, 2024. Naamche is a Nepal-based technology firm focused on developing AI-powered solutions for large industries, including real estate. This acquisition added a talented team of 43 engineers, developers and UI/UX designers, resulting in our full time employee count increasing from 15 to 57.

"We believe that the completion of the Naamche acquisition marked the second quarter of 2024 as the beginning of the ramp up of our acquisition-led growth strategy," said Giri Devanur, Chief Executive Officer of reAlpha. "We are continuously looking for strategic acquisition opportunities that will advance our mission of bringing innovative technologies to the real estate industry. Naamche's acquisition is one of the early steps in this process."

"We intend to capitalize on a significant industry shakeup created by the NAR lawsuit. We launched Claire after the settlement was announced on March 15, 2024. We are focused on continually improving the product and acquiring additional real estate service companies to unlock more potential sources of revenue. We look forward to sharing our growth and developments in the coming quarters, especially after the effects of the NAR settlement take effect on August 17, 2024," concluded Mr. Devanur.

reAlpha intends to continue investing in their technologies to commercialize them to the general public, and to target and acquire companies to fuel growth.

Second Quarter 2024 Financial Highlights:

• Revenue was $62,353 for the three months ended June 30, 2024, an increase of 205% from the quarter ended March 31, 2024, and 13.6% increase year-over-year ("YoY").

• Cash and cash equivalents of approximately $3.7 million as of June 30, 2024.

• Net loss was $(1,478,312) for the three months ended June 30, 2024.

• Adjusted EBITDA was $(1,147,148), a decrease of 5.4% from the quarter ended March 31, 2024, and 48% decrease YoY.

Outlook for Quarter Ending September 30, 2024

We expect to achieve the following for the quarter ending September 30, 2024:

• Revenue to grow 140% to 170% from the quarter ended June 30, 2024.

• Completion of integration of AiChat Pte. Ltd. ("AiChat") (acquired July 2024) and Hyperfast Title, LLC ("Hyperfast") (acquired August 2024) into our business.

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" and "Net income per share," both "non-GAAP financial measures", as such term is defined under the rules of the SEC, are useful in evaluating our operating performance. We use Adjusted EBITDA and Net income per share to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures may be helpful to investors because it provides consistency and comparability with past financial performance. However, these non-GAAP financial measures are 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 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, depreciation and amortization, share-based compensation and certain charges or gains resulting from non-recurring events.

We reconcile our non-GAAP financial measure of Net income per share to our net income, adjusted to exclude provision for depreciation and amortization of certain intangible assets, share-based compensation and certain charges or gains resulting from non-recurring events.

About reAlpha

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.

About Claire

Claire, announced on April 24, 2024, is reAlpha's generative AI-powered, zero-commission homebuying platform. The tagline: No fees. Just keys.TM - reflects reAlpha's dedication to eliminating traditional barriers and making homebuying more accessible and transparent.

Claire's introduction aligns with major shifts in the real estate sector after the National Association of Realtors ("NAR") agreed to settle certain lawsuits upon being found to have violated antitrust laws, resulting in inflated fees paid to buy-side agents. This development is expected to result in the end of the standard six percent sales commission, which equates to approximately $100 billion in realtor fees paid annually. Claire offers a cost-free alternative for homebuyers by utilizing an AI-driven workflow that assists them through the home buying process.

Homebuyers can use Claire's conversational interface to guide them through every step of their journeys, from property search to closing the deal. By offering support 24/7, Claire is poised to make the homebuying process more efficient, enjoyable and cost-efficient. Claire matches buyers with their dream homes using over 400 data attributes and provides insights into market trends and property values. Additionally, Claire can assist with questions, booking property tours, submitting offers, and negotiations.

Currently, Claire is under limited availability for homebuyers located in Palm Beach, Miami-Dade and Broward counties in South Florida, but reAlpha is actively seeking new MLS and brokerage licenses that will enable expansion into more U.S. states.

For more information on Claire, please 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: 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 integrate the business of Naamche Hyperfast and AiChat into its existing business and the anticipated demand for their 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
June 30, 2024 and December 31, 2023
(Unaudited)

REALPHA TECH CORP.
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2024 and 2023
(unaudited)

REALPHA TECH CORP.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2024, and 2023
(unaudited)

The following tables provide a reconciliation of net income to Adjusted EBITDA and Net income per share, respectively:

(1) Compensation provided to employees and board members through share-based awards, which is recognized as a non-cash expense.
(2) This relates to the commitment fee of $1 million related to the equity facility we have in place with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (collectively, "GEM").
(3) Expenses related to acquisitions, including professional and legal fees, which are excluded from GAAP financial measures to provide a clearer view of ongoing operational performance.
(4) Represents 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.

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