Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 15, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Information [Line Items] | ||
Entity Registrant Name | REALPHA TECH CORP. | |
Entity Central Index Key | 0001859199 | |
Entity File Number | 001-41839 | |
Entity Tax Identification Number | 86-3425507 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Contact Personnel [Line Items] | ||
Entity Address, Address Line One | 6515 Longshore Loop | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Dublin | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43017 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | (707) | |
Local Phone Number | 732-5742 | |
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | AIRE | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 44,122,091 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
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, at cost | ||
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 |
Current Liabilities | ||
Accounts payable | 433,612 | 461,875 |
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 December 31, 2023 and March 31, 2024 | ||
Common stock ($0.001 par value; 200,000,000 shares authorized, 44,122,091 shares outstanding as of December 31, 2023; 200,000,000 shares authorized, 44,122,091 shares outstanding as of March 31, 2024) | 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 |
Related Party | ||
Current Liabilities | ||
Related party payables | $ 9,800 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parentheticals) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 44,122,091 | 44,122,091 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
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 (in Dollars per share) | $ (0.03) | $ (0.02) |
Net loss per share — diluted (in Dollars per share) | $ (0.03) | $ (0.02) |
Weighted-average outstanding shares — basic (in Shares) | 44,122,091 | 40,839,051 |
Weighted-average outstanding shares — diluted (in Shares) | 44,122,091 | 40,839,051 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | ReAlpha Tech Corp. and Subsidiaries Equity | Non- Controlling Interests | Total |
Balance at Dec. 31, 2022 | $ 9,376 | $ 6,979,840 | $ (9,775,175) | $ (2,785,959) | $ 1,814 | $ (2,784,145) |
Balance (in Shares) at Dec. 31, 2022 | 9,376,400 | |||||
Net loss | (864,722) | (864,722) | (191) | (864,913) | ||
Shares issued through Reg A offering | $ 154 | 1,435,826 | 1,435,980 | 1,435,980 | ||
Shares issued through Reg A offering (in Shares) | 153,697 | |||||
Reg A offering costs | (79,379) | (79,379) | (79,379) | |||
Distribution to syndicate members | (13,375) | (13,375) | 3,292 | (10,083) | ||
Shares issued for acquisition of Rhove | $ 1,312 | 13,118,938 | 13,120,250 | 13,120,250 | ||
Shares issued for acquisition of Rhove (in Shares) | 1,312,025 | |||||
Shares issued for services | $ 305 | 3,044,985 | 3,045,290 | 3,045,290 | ||
Shares issued for services (in Shares) | 304,529 | |||||
Shares issued in former parent | $ 543 | 149,457 | 150,000 | 150,000 | ||
Shares issued in former parent (in Shares) | 543,420 | |||||
RTC India - Non controlling interest | 641 | 641 | ||||
Cancellation of shares in the former parent | $ (9,167) | (241,957) | (251,124) | (251,124) | ||
Cancellation of shares in the former parent (in Shares) | (9,167,630) | |||||
Recapitalization of shares | $ 40,000 | 410,000 | 450,000 | 450,000 | ||
Recapitalization of shares (in Shares) | 40,000,000 | |||||
Downstream merger transaction | (697,175) | (697,175) | (697,175) | |||
Balance at Mar. 31, 2023 | $ 42,523 | 24,107,160 | (10,639,897) | 13,509,786 | 5,556 | 13,515,342 |
Balance (in Shares) at Mar. 31, 2023 | 42,522,441 | |||||
Balance at Dec. 31, 2023 | $ 44,123 | 36,899,497 | (12,237,885) | 24,705,735 | 3,050 | 24,708,785 |
Balance (in Shares) at Dec. 31, 2023 | 44,122,091 | |||||
Net loss | (1,418,980) | (1,418,980) | (65) | (1,419,045) | ||
RTC India - Non controlling interest | ||||||
Balance at Mar. 31, 2024 | $ 44,123 | $ 36,899,497 | $ (13,656,865) | $ 23,286,755 | $ 2,985 | $ 23,289,740 |
Balance (in Shares) at Mar. 31, 2024 | 44,122,091 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
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 expense | 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 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization and Description of Business [Abstract] | |
Organization and Description of Business | Note 1 - Organization and Description of Business ReAlpha Tech Corp. and Subsidiaries (“we,” “us,” “our,” the “Company” or the “Registrant”) were initially incorporated with the name reAlpha Asset Management, Inc. in the State of Delaware on April 22, 2021. Initially, our asset-heavy operational model centered on using proprietary AI tools for real estate acquisition, converting properties into short-term rentals, and offering fractional interests to investors. However, due to current macroeconomic challenges like higher interest rates and inflated property prices, we’ve suspended real estate acquisition operations. Our new focus is on advancing and refining our AI technologies for commercial applications to generate revenue. Transactions between entities under common control are accounted for in a manner similar to the pooling of-interest method. Thus, the financial statements of the commonly controlled entities would be consolidated, retrospectively, as if the transaction had occurred at the beginning of the period. As a result, the assets and liabilities and the historical operations reflected in the Company’s financial statements are those of reAlpha Tech Corp and subsidiaries and reAlpha Asset Management, Inc. recorded at historical cost basis. The historical shareholders’ equity of the accounting acquirer prior to the merger is retroactively reclassified for the equivalent number of shares received in the merger after giving effect to any difference in par value of the company’s and the accounting acquirer’s stock by an offset in paid in capital. The Company’s head office is located at 6515 Longshore Loop, Suite 100 — Dublin, OH 43017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. The financial statements include the operations, assets, and liabilities of the Company. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying financial statements. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $4,838,146 and $6,456,370 as of March 31, 2024 and December 31, 2023, respectively. Concentration of Credit Risks Financial instruments that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, cash equivalents, and accounts receivable. As of March 31, 2024, the Company’s cash was held by financial institutions that management believes have acceptable credit. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. Accounts receivable are typically unsecured. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of related asset. Real estate assets are carried at cost. Depreciation is calculated on the straight-line method over the estimated lives of the assets (27.5 years for residential rental property, 5 years for furniture and fixtures and 3 years for furnishings). Major additions and betterments are capitalized and depreciated. Maintenance and repairs, which do not improve or extend the estimated useful lives, are expensed as incurred. Upon disposal of assets, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss resulting from the disposal is recorded in the period of disposition in the accompanying statement of operations. Investments The Company holds 25% of the equity in each of the two privately held entities, Naamche Inc. and Carthagos. Inc. However, the Company does not have any significant control or influence over the financial and operating policies. As these equity instruments do not have readily determinable fair values, they have been measured using the measurement alternative, cost-less impairment. The carrying amount for these instruments would be subsequently adjusted for observable price changes, or prices in orderly transactions for an identical investment or similar investment of the same issuer. In addition, these investments are periodically evaluated for impairment. The investments are classified as other assets on the Company’s condensed Consolidated Balance Sheet and the Company has not recorded any adjustments to the carrying value of investments in the period ended March 31, 2024. Capitalized Software Development Costs The Company follows Accounting Standards Codification (ASC) 350, “Internal-Use Software,” to assess the capitalization of software development costs, such as those incurred during the application development stage, including coding, testing, and development of software functionality which are eligible for capitalization. Such costs encompass direct labor, third-party services, and other directly attributable expenses. As of March 31, 2024, the software under development has not reached the stage of being substantially complete and ready for its intended use. Consequently, the Company continues to capitalize costs related to the application development stage in accordance with ASC 350. Amortization of capitalized software development costs commences when the software is placed in service and is available for its intended use. The capitalized costs are amortized over the software’s estimated useful life, which is determined based on factors such as expected future benefits and the rate of technological change. The fair value of software acquired in a business combination is determined using the discounted cash flow (DCF) method as per ASC 820 “Fair Value Measurements and Disclosures”, requiring the consideration of significant inputs and assumptions, such as projected cash flows, expected growth rates, discount rates, and other relevant market data. The Company exercises judgment in selecting appropriate inputs, taking into account historical performance, market conditions, and the technological characteristics of the software. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Accounting requirements provide that a reporting entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative assessment is not performed, a quantitative analysis is performed. The quantitative goodwill impairment test is performed by calculating the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded on the reporting unit. Definite-lived Intangible Assets ASC 350 on Intangibles – Goodwill and Other; Intangible assets; the valuation and classification of these intangible assets and determination of useful lives involves judgments and significant estimates. These Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are amortized over their estimated useful lives in a manner that best reflects the economic benefits of the intangible asset using the straight-line method and estimated useful lives ranging from 2 to 8 years. We periodically review the estimated useful lives of our definite-lived intangible assets and identify events or changes in circumstances that may indicate revised estimated useful lives. Credit Facilities In May 2022, reAlpha Acquisitions Churchill, LLC, a wholly-owned subsidiary of reAlpha Tech Corp., entered into a credit agreement with Churchill Finance I, LLC, securing a credit facility of $200 million. The primary purpose of this credit facility is to finance short-term rental acquisitions. The facility provides the Company with increased financial flexibility to pursue strategic opportunities in the real estate market. Management may utilize the credit facility to expand the Company’s portfolio of rental properties. By leveraging this credit facility, the Company aims to capitalize on attractive investment prospects while adhering to its prudent financial management principles. The terms and conditions of the credit agreement with Churchill Finance I, LLC have been evaluated by management, and the interest rates and repayment terms are considered competitive and favorable to the Company’s financial interests. Revenue Recognition Revenues consist of short-term rentals and technology platform booking income. Short-term rental revenues include revenues from the rental of properties via Airbnb, Vacasa, and such digital hospitality platforms. Technology Platform Revenue includes revenues from bookings made on our technology platform towards painting and cleaning of properties. As we are responsible for services rendered by the technology platform, fees charged to end-users are also included in revenue, while payments to vendors in exchange for their services are recognized in the cost of revenue, exclusive of depreciation and amortization. Revenues are recognized in accordance with Topic 606 of the Financial Accounting Standards Board (FASB) ASC for revenue recognition. The Company recognizes revenues in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when (or as) performance obligations are satisfied. Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes The deferred tax assets that we record each period depend primarily on our ability to generate future taxable income in the United States. Each period, we evaluate the need for a valuation allowance against our deferred tax assets and, if necessary, adjust the valuation allowance so that net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets will be realized. If our outlook for future taxable income changes significantly, our assessment of the need for, and the amount of, a valuation allowance may also change. We are also required to evaluate and quantify other sources of taxable income, such as the possible reversal of future deferred tax liabilities, should any arise, and the implementation of tax planning strategies. Evaluating and quantifying these amounts is difficult and involves significant judgment, based on all of the available evidence and assumptions about our future activities. Earnings (Loss) Per Share The Company presents basic earnings (loss) per share (“EPS”) and diluted EPS on the face of the condensed consolidated statements of operations. Basic earnings (loss) per share is computed as net earnings (loss) divided by the weighted average number of common shares outstanding for the period. For periods in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted EPS calculations. For the three months ended March 31, 2024, the GEM Warrants (as defined below) to purchase up to 1,700,884 of the Company’s shares of common stock were excluded. Fair Value of Financial Instruments When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. The Company has no financial assets or liabilities that are adjusted to fair value on a recurring basis. The Company’s balance sheet includes certain financial instruments. Certain assets and liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances. Recently Issued Accounting Pronouncements Consistent with the treatment for emerging growth companies under the Jumpstart Our Business Startups (JOBS) Act, the Company has elected to delay the implementation of new accounting standards to the extent such standards provide for delayed implementation by non-public business entities. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures, including jurisdictional information, by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements and related disclosures from the adoption of this guidance. Reclassification Presentation Certain amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2024 | |
Going Concern [Abstract] | |
Going Concern | Note 3 - Going Concern With the implementation of FASB standard on going concern, ASU No. 2014-15, we assessed going concern uncertainty in our condensed consolidated financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital, including available loans or lines of credit, if any, to operate for a period of at least 12 months from the date our condensed consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to us, we consider various scenarios, forecasts, projections, and estimates, and we make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and our ability to delay or curtail those expenditures or programs, if necessary, among other factors. Although we anticipate ongoing operating losses in the foreseeable future, we have assessed our ability to continue as a going concern for the next 12 months. Despite the current lack of sufficient revenue, we possess ample liquid capital to fund projected expenses over the next year based on our budgeted operating plans. As of March 31, 2024, the Company holds approximately $4.8 million in cash. With positive working capital and current assets adequately covering liabilities as of March 31, 2024, the Company believes it has sufficient cash to fund its operations for the next 12 months. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Income Taxes | Note 4 - Income Taxes The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefits for the periods presented are offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers the realization of such amounts to be more likely than not. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 5 - Property and Equipment 1. Investments in property and equipment consisted of the following as of March 31, 2024 a. Investments in property and equipment other than held for sale Accumulated Net Cost Depreciation Investment Computer $ 33,387 $ (18,739 ) $ 14,648 Furniture and fixtures 20,815 (7,569 ) 13,246 Total investment in property and equipment $ 54,202 $ (26,308 ) $ 27,894 2. Investments in property and equipment consisted of the following as of December 31, 2023 a. Investments in property and equipment other than held for sale Accumulated Net Cost Depreciation Investment Computer $ 33,401 $ (11,856 ) $ 21,545 Furniture and fixtures 20,853 (7,467 ) 13,386 Total investment in property and equipment $ 54,254 $ (19,323 ) $ 34,931 b. Investments in property and equipment held for sale Accumulated Net Cost Depreciation Investment Land $ 19,690 $ - $ 19,690 Buildings and building improvements 267,117 (6,172 ) 260,945 Furniture and fixtures 16,090 (3,117 ) 12,973 Total investment in real estate $ 302,897 $ (9,289 ) $ 293,608 The Company recorded depreciation expenses of $7,022 and $26,551 for the three months ended March 31, 2024 and March 31, 2023, respectively. |
Capitalized Software Developmen
Capitalized Software Development Costs, Work in Progress | 3 Months Ended |
Mar. 31, 2024 | |
Capitalized Software Development Costs, Work in Progress [Abstract] | |
Capitalized Software Development costs, work in progress | Note 6 - Capitalized Software Development costs, work in progress Qualifying internal-use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services, and purchased software license costs are capitalized. As of March 31, 2024 and December 31, 2023, the balance of capitalized software costs, work in progress amounted to $911,485 and $839,085, respectively. The Company assesses the carrying amount of capitalized software costs for impairment regularly and considers the recoverability of capitalized costs based on expected future benefits and cash flows. Any impairment loss, if identified, is recognized in the statement of operations. |
Other Loans
Other Loans | 3 Months Ended |
Mar. 31, 2024 | |
Other Loans [Abstract] | |
Other loans | Note 7 - Other loans Mortgage and other loans consisted of the following as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 First Insurance Loan 118,809 190,095 Total Short-term debt, net $ 118,809 $ 190,095 |
Mortgage Loans
Mortgage Loans | 3 Months Ended |
Mar. 31, 2024 | |
Mortgage Loans [Abstract] | |
Mortgage Loans | Note 8 - Mortgage Loans Long-term liabilities consisted of the following as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 Mortgage note with a bank. The note bears interest at a rate of 7.5% and provides for monthly interest payments. The note matures on January 1, 2053 at which time there is a balloon payment of remaining principal and interest due, and is secured by the property as well as guaranteed by a shareholder of the Company. $ - $ 247,000 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders’ Equity (Deficit) [Abstract] | |
Stockholders’ Equity (Deficit) | Note 9 - Stockholders’ Equity (Deficit) The total number of shares of capital stock that the Company has the authority to issue is up to 205,000,000 shares, consisting of: (i) 200,000,000 shares of common stock, having a par value of $0.001 per share (the “Common Stock”); and (ii) 5,000,000 shares of preferred stock, having a par value of $0.001 per share (the “Preferred Stock”). As of March 31, 2024 and December 31, 2023, there were 44,122,091 shares of Common Stock issued and outstanding, and 0 shares of Preferred Stock issued and outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Pursuant to the terms of that certain Share Purchase Agreement between the Company and GEM Global Yield LLC SCS (“GEM Yield”) and GEM Yield Bahamas Limited (“GYBL,” and collectively, “GEM”), dated December 1, 2022 (the “GEM Agreement”), we are required to indemnify GEM for any losses it incurs as a result of a breach by us or of our representations and warranties and covenants under the GEM Agreement or for any misstatement or omission of a material fact in a registration statement registering those shares pursuant to the GEM Agreement. Also, GEM is entitled to be reimbursed for legal or other costs or expenses reasonably incurred in investigating, preparing, or defending against any such loss. To date, we have not raised any capital pursuant to the GEM Agreement and we may not raise any capital pursuant to it prior to its expiration. Restrictions pursuant to terms of our future financings may also affect our ability to use the GEM Agreement. Legal Matters India Proceeding Involving Giri Devanur In 2006, Mr. Devanur became the CEO of an India-based company named Gandhi City Research Park, Private Limited (“Gandhi City Research Park”). Gandhi City Research Park was liquidated as a result of the Lehman Brothers collapse in 2009. In 2010, an investor in Gandhi City Research Park filed a fraud complaint with the Cubbon Park Police Station in Bengaluru, India, against, among others, Mr. Devanur. In 2014, the Cubbon Park Police dismissed all claims. Subsequently, in 2015 the investor appealed the Cubbon Park Police’s decision before the Lower Court. In November 2018, the Lower Court issued a criminal summons against, among others, Mr. Devanur. Mr. Devanur petitioned the High Court to quash the summons. By order dated March 27, 2023, the High Court granted Mr. Devanur’s petition and ordered the Lower Court to reconsider the investor’s appeal. On August 3, 2023, the Lower Court decided to uphold the Cubbon Park Police’s decision and close the criminal case against Mr. Devanur. On December 4, 2023, Mr. Devanur received a petition to challenge the Lower Court’s order to uphold the Cubbon Park Police’s decision and close Mr. Devanur’s criminal case. Mr. Devanur is vigorously contesting this petition. Malpractice Lawsuit On May 8, 2023, the Company filed a malpractice lawsuit with the United States District Court for the Southern District of Ohio, Eastern Division, against Buchanan, Ingersoll & Rooney, PC (“Buchanan”), Rajiv Khanna (“Khanna”) and Brian S. North (“North,” together with Buchanan and Khanna, the “Buchanan Legal Counsel”). The complaint alleges that the Buchanan Legal Counsel failed to provide proper and timely legal advice during the Company’s Tier 2 Regulation A offering, resulting in late Blue Sky notice filings with all required states prior to the Company offering and selling securities in those states. As a result, the Company was subject to a number of inquiries, investigations, and subpoenas by the various states, incurring significant legal fees and fines, lost opportunity due to pausing its Regulation A campaign, in addition to the loss of a $20 million institutional investment. The Company is seeking the forfeit of all legal fees associated with this matter, the award of legal fees to bring this matter to action, and further legal and equitable relief as the Court deems just and proper. The Company cannot predict the eventual scope, duration, or outcome at this time. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 11 - Segment Reporting ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has two reportable segments based on the business unit, Rental business and Platform service business. Due to current market conditions, we expect to pause the Rental business segment until the first quarter of 2025 in accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, in which the entity holds material assets and reports revenue. The table below presents a reconciliation of revenue by reportable segment to consolidated revenue and a reconciliation of consolidated segment operating profit to consolidated loss before income taxes for the three months ended March 31, 2024 and 2023. Three months Ended 2024 2023 Revenue by segment Platform services $ 20,426 $ 62,810 Rental services - 48,641 Consolidated revenue 20,426 111,451 Segment cost of revenue Platform services (18,249 ) (62,528 ) Rental services - (8,247 ) Consolidated segment cost of revenue (18,249 ) (70,775 ) Consolidated segment gross margin 2,177 40,676 Segment operating expense Platform services - - Rental services (39,135 ) (62,567 ) Consolidated segment operating expenses (39,135 ) (62,567 ) Total consolidated segment operating loss (36,958 ) (21,891 ) Segment other income (loss) Platform services - - Rental services 20,590 (55,532 ) Total consolidated segment operating loss (16,368 ) (77,423 ) Corporate expenses Operating expenses (1,270,540 ) (772,001 ) Other income (expenses), net (132,137 ) (15,489 ) (1,402,677 ) (787,490 ) Total consolidated loss before income taxes $ (1,419,045 ) $ (864,913 ) |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2024 | |
Warrants [Abstract] | |
Warrants | Note 12 - Warrants Warrant accounting We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The warrants issued upon the follow-on offering and private placements meet the criteria for equity classification under ASC 480 and ASC 815, therefore, the warrants are classified as equity. On October 23, 2023, pursuant to the terms of the GEM Agreement (as defined above), we issued GYBL warrants to purchase up to 1,700,884 shares of the Company’s common stock (the “GEM Warrants”). The GEM Warrants are exercisable, for cash, at an original exercise price of $406.67 per share, which exercise price was subsequently adjusted to $371.90 after the Company’s most recent public offering, and the exercise price of the GEM Warrants are subject to further adjustments specified therein. We believe the likelihood that any warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our common stock. If the trading price for our common stock is less than $371.90 per share, in the case of the GEM Warrants, we believe holders of the GEM Warrants will be unlikely to exercise them. While current conditions influencing the exercise of the GEM Warrants make such exercise unlikely, further adjustments to its exercise price may make the GEM Warrants more attractive for investors to exercise. Our analysis is based on the trading price of our common stock as of the date of this report, with a threshold set at $371.90 per share for the GEM warrants. On November 24, 2023, we conducted a follow-on offering by issuing 1,600,000 units priced at $5.00 per unit. This offering generated total gross proceeds of $8.0 million, and after deducting associated expenses, the net proceeds amounted to $7.16 million. Each unit consisted of one share and one and a half warrants, allowing warrant holders to exercise their rights over a five-year period at a price of $5.00. The factors considered in the Black Scholes option valuation model are as below: Rhove acquisition Follow-on Underlying stock price $ 10 $ 4 Exercise price $ 10 $ 5 Volatility 76.60 % 90.00 % Risk free interest rate 3.69 % 4.43 % Maturity 2 years 5 years Warrant activity for the period ended March 31, 2024 follows: Warrants Weighted Average Outstanding Exercise Price Life (Years) Warrants outstanding on April 30, 2022 — $ — 0.00 Warrant activity — — — Warrants outstanding on April 30, 2023 0.00 $ 0.00 0.00 Warrants Issued on October 23, 2023 1,700,884 371.90 4.56 Warrants Issued on November 21, 2023 1,600,000 5.00 4.64 Warrants outstanding on March 31, 2024 3,300,884 $ 194.06 4.60 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 - Subsequent Events Management has evaluated all subsequent events through April 19, 2024, the date the condensed consolidated financial statements were available to be issued. Based on this evaluation, nothing was identified which require disclosure in these condensed consolidated financial statements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (1,418,980) | $ (864,722) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule10b51ArrModifiedFlag | false |
NonRule10b51ArrModifiedFlag | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. The financial statements include the operations, assets, and liabilities of the Company. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $4,838,146 and $6,456,370 as of March 31, 2024 and December 31, 2023, respectively. |
Concentration of Credit Risks | Concentration of Credit Risks Financial instruments that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, cash equivalents, and accounts receivable. As of March 31, 2024, the Company’s cash was held by financial institutions that management believes have acceptable credit. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. Accounts receivable are typically unsecured. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of related asset. Real estate assets are carried at cost. Depreciation is calculated on the straight-line method over the estimated lives of the assets (27.5 years for residential rental property, 5 years for furniture and fixtures and 3 years for furnishings). Major additions and betterments are capitalized and depreciated. Maintenance and repairs, which do not improve or extend the estimated useful lives, are expensed as incurred. Upon disposal of assets, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss resulting from the disposal is recorded in the period of disposition in the accompanying statement of operations. |
Investments | Investments The Company holds 25% of the equity in each of the two privately held entities, Naamche Inc. and Carthagos. Inc. However, the Company does not have any significant control or influence over the financial and operating policies. As these equity instruments do not have readily determinable fair values, they have been measured using the measurement alternative, cost-less impairment. The carrying amount for these instruments would be subsequently adjusted for observable price changes, or prices in orderly transactions for an identical investment or similar investment of the same issuer. In addition, these investments are periodically evaluated for impairment. The investments are classified as other assets on the Company’s condensed Consolidated Balance Sheet and the Company has not recorded any adjustments to the carrying value of investments in the period ended March 31, 2024. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company follows Accounting Standards Codification (ASC) 350, “Internal-Use Software,” to assess the capitalization of software development costs, such as those incurred during the application development stage, including coding, testing, and development of software functionality which are eligible for capitalization. Such costs encompass direct labor, third-party services, and other directly attributable expenses. As of March 31, 2024, the software under development has not reached the stage of being substantially complete and ready for its intended use. Consequently, the Company continues to capitalize costs related to the application development stage in accordance with ASC 350. Amortization of capitalized software development costs commences when the software is placed in service and is available for its intended use. The capitalized costs are amortized over the software’s estimated useful life, which is determined based on factors such as expected future benefits and the rate of technological change. The fair value of software acquired in a business combination is determined using the discounted cash flow (DCF) method as per ASC 820 “Fair Value Measurements and Disclosures”, requiring the consideration of significant inputs and assumptions, such as projected cash flows, expected growth rates, discount rates, and other relevant market data. The Company exercises judgment in selecting appropriate inputs, taking into account historical performance, market conditions, and the technological characteristics of the software. |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Accounting requirements provide that a reporting entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative assessment is not performed, a quantitative analysis is performed. The quantitative goodwill impairment test is performed by calculating the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded on the reporting unit. |
Definite-lived Intangible Assets | Definite-lived Intangible Assets ASC 350 on Intangibles – Goodwill and Other; Intangible assets; the valuation and classification of these intangible assets and determination of useful lives involves judgments and significant estimates. These Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are amortized over their estimated useful lives in a manner that best reflects the economic benefits of the intangible asset using the straight-line method and estimated useful lives ranging from 2 to 8 years. We periodically review the estimated useful lives of our definite-lived intangible assets and identify events or changes in circumstances that may indicate revised estimated useful lives. |
Credit Facilities | Credit Facilities In May 2022, reAlpha Acquisitions Churchill, LLC, a wholly-owned subsidiary of reAlpha Tech Corp., entered into a credit agreement with Churchill Finance I, LLC, securing a credit facility of $200 million. The primary purpose of this credit facility is to finance short-term rental acquisitions. The facility provides the Company with increased financial flexibility to pursue strategic opportunities in the real estate market. Management may utilize the credit facility to expand the Company’s portfolio of rental properties. By leveraging this credit facility, the Company aims to capitalize on attractive investment prospects while adhering to its prudent financial management principles. The terms and conditions of the credit agreement with Churchill Finance I, LLC have been evaluated by management, and the interest rates and repayment terms are considered competitive and favorable to the Company’s financial interests. |
Revenue Recognition | Revenue Recognition Revenues consist of short-term rentals and technology platform booking income. Short-term rental revenues include revenues from the rental of properties via Airbnb, Vacasa, and such digital hospitality platforms. Technology Platform Revenue includes revenues from bookings made on our technology platform towards painting and cleaning of properties. As we are responsible for services rendered by the technology platform, fees charged to end-users are also included in revenue, while payments to vendors in exchange for their services are recognized in the cost of revenue, exclusive of depreciation and amortization. Revenues are recognized in accordance with Topic 606 of the Financial Accounting Standards Board (FASB) ASC for revenue recognition. The Company recognizes revenues in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when (or as) performance obligations are satisfied. |
Income Taxes | Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes The deferred tax assets that we record each period depend primarily on our ability to generate future taxable income in the United States. Each period, we evaluate the need for a valuation allowance against our deferred tax assets and, if necessary, adjust the valuation allowance so that net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets will be realized. If our outlook for future taxable income changes significantly, our assessment of the need for, and the amount of, a valuation allowance may also change. We are also required to evaluate and quantify other sources of taxable income, such as the possible reversal of future deferred tax liabilities, should any arise, and the implementation of tax planning strategies. Evaluating and quantifying these amounts is difficult and involves significant judgment, based on all of the available evidence and assumptions about our future activities. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company presents basic earnings (loss) per share (“EPS”) and diluted EPS on the face of the condensed consolidated statements of operations. Basic earnings (loss) per share is computed as net earnings (loss) divided by the weighted average number of common shares outstanding for the period. For periods in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted EPS calculations. For the three months ended March 31, 2024, the GEM Warrants (as defined below) to purchase up to 1,700,884 of the Company’s shares of common stock were excluded. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. The Company has no financial assets or liabilities that are adjusted to fair value on a recurring basis. The Company’s balance sheet includes certain financial instruments. Certain assets and liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Consistent with the treatment for emerging growth companies under the Jumpstart Our Business Startups (JOBS) Act, the Company has elected to delay the implementation of new accounting standards to the extent such standards provide for delayed implementation by non-public business entities. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures, including jurisdictional information, by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements and related disclosures from the adoption of this guidance. |
Reclassification Presentation | Reclassification Presentation Certain amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment [Abstract] | |
Schedule of Investments in Property and Equipment | Investments in property and equipment other than held for sale Accumulated Net Cost Depreciation Investment Computer $ 33,387 $ (18,739 ) $ 14,648 Furniture and fixtures 20,815 (7,569 ) 13,246 Total investment in property and equipment $ 54,202 $ (26,308 ) $ 27,894 Accumulated Net Cost Depreciation Investment Computer $ 33,401 $ (11,856 ) $ 21,545 Furniture and fixtures 20,853 (7,467 ) 13,386 Total investment in property and equipment $ 54,254 $ (19,323 ) $ 34,931 Accumulated Net Cost Depreciation Investment Land $ 19,690 $ - $ 19,690 Buildings and building improvements 267,117 (6,172 ) 260,945 Furniture and fixtures 16,090 (3,117 ) 12,973 Total investment in real estate $ 302,897 $ (9,289 ) $ 293,608 |
Other Loans (Tables)
Other Loans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Loans [Abstract] | |
Schedule of Mortgage and Other Loans | Mortgage and other loans consisted of the following as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 First Insurance Loan 118,809 190,095 Total Short-term debt, net $ 118,809 $ 190,095 |
Mortgage Loans (Tables)
Mortgage Loans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Mortgage Loans [Abstract] | |
Schedule of Long-Term Liabilities | Long-term liabilities consisted of the following as of March 31, 2024 and December 31, 2023: March 31, December 31, 2024 2023 Mortgage note with a bank. The note bears interest at a rate of 7.5% and provides for monthly interest payments. The note matures on January 1, 2053 at which time there is a balloon payment of remaining principal and interest due, and is secured by the property as well as guaranteed by a shareholder of the Company. $ - $ 247,000 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Revenue by Reportable Segment to Consolidated Revenue | The table below presents a reconciliation of revenue by reportable segment to consolidated revenue and a reconciliation of consolidated segment operating profit to consolidated loss before income taxes for the three months ended March 31, 2024 and 2023. Three months Ended 2024 2023 Revenue by segment Platform services $ 20,426 $ 62,810 Rental services - 48,641 Consolidated revenue 20,426 111,451 Segment cost of revenue Platform services (18,249 ) (62,528 ) Rental services - (8,247 ) Consolidated segment cost of revenue (18,249 ) (70,775 ) Consolidated segment gross margin 2,177 40,676 Segment operating expense Platform services - - Rental services (39,135 ) (62,567 ) Consolidated segment operating expenses (39,135 ) (62,567 ) Total consolidated segment operating loss (36,958 ) (21,891 ) Segment other income (loss) Platform services - - Rental services 20,590 (55,532 ) Total consolidated segment operating loss (16,368 ) (77,423 ) Corporate expenses Operating expenses (1,270,540 ) (772,001 ) Other income (expenses), net (132,137 ) (15,489 ) (1,402,677 ) (787,490 ) Total consolidated loss before income taxes $ (1,419,045 ) $ (864,913 ) |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Warrants [Abstract] | |
Schedule of Black Scholes Option Valuation Model | The factors considered in the Black Scholes option valuation model are as below: Rhove acquisition Follow-on Underlying stock price $ 10 $ 4 Exercise price $ 10 $ 5 Volatility 76.60 % 90.00 % Risk free interest rate 3.69 % 4.43 % Maturity 2 years 5 years |
Schedule of Warrant Activity | Warrant activity for the period ended March 31, 2024 follows: Warrants Weighted Average Outstanding Exercise Price Life (Years) Warrants outstanding on April 30, 2022 — $ — 0.00 Warrant activity — — — Warrants outstanding on April 30, 2023 0.00 $ 0.00 0.00 Warrants Issued on October 23, 2023 1,700,884 371.90 4.56 Warrants Issued on November 21, 2023 1,600,000 5.00 4.64 Warrants outstanding on March 31, 2024 3,300,884 $ 194.06 4.60 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
May 31, 2022 | Mar. 31, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Line Items] | |||
Cash (in Dollars) | $ 4,838,146 | $ 6,456,370 | |
Federal deposit insurance corporation (in Dollars) | $ 250,000 | ||
Percentage of equity privately held entities | 25% | ||
Credit facility (in Dollars) | $ 200,000,000 | ||
Minimum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Intangible asset useful lives | 2 years | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Intangible asset useful lives | 8 years | ||
Warrants [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Purchase of warrants (in Shares) | 1,700,884 | ||
Residential Rental Property [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property and equipment estimated lives assets | 27 years 6 months | ||
Furniture and Fixtures [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property and equipment estimated lives assets | 5 years | ||
Furnishings [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property and equipment estimated lives assets | 3 years |
Going Concern (Details)
Going Concern (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Going Concern [Abstract] | |
Cash | $ 4.8 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property and Equipment [Abstract] | ||
Depreciation expenses | $ 7,022 | $ 26,551 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of Investments in Property and Equipment - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | $ 54,202 | $ 54,254 |
Accumulated Depreciation | (26,308) | (19,323) |
Net Investment | 27,894 | 34,931 |
Property, Plant and Equipment [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 302,897 | |
Accumulated Depreciation | (9,289) | |
Net Investment | 293,608 | |
Computer [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 33,387 | 33,401 |
Accumulated Depreciation | (18,739) | (11,856) |
Net Investment | 14,648 | 21,545 |
Furniture and fixtures [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 20,815 | 20,853 |
Accumulated Depreciation | (7,569) | (7,467) |
Net Investment | 13,246 | $ 13,386 |
Furniture and fixtures [Member] | Property, Plant and Equipment [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 16,090 | |
Accumulated Depreciation | (3,117) | |
Net Investment | 12,973 | |
Land [Member] | Property, Plant and Equipment [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 19,690 | |
Accumulated Depreciation | ||
Net Investment | 19,690 | |
Buildings and building improvements [Member] | Property, Plant and Equipment [Member] | ||
Schedule of Investments in Property and Equipment [Line Items] | ||
Cost | 267,117 | |
Accumulated Depreciation | (6,172) | |
Net Investment | $ 260,945 |
Capitalized Software Developm_2
Capitalized Software Development Costs, Work in Progress (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Capitalized Software Development Costs, Work in Progress [Abstract] | ||
Capitalized software costs | $ 911,485 | $ 839,085 |
Other Loans (Details) - Schedul
Other Loans (Details) - Schedule of Mortgage and Other Loans - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Mortgage and Other Loans [Abstract] | ||
First Insurance Loan | $ 118,809 | $ 190,095 |
Total Short-term debt, net | $ 118,809 | $ 190,095 |
Mortgage Loans (Details) - Sche
Mortgage Loans (Details) - Schedule of Long-Term Liabilities - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Mortgage Note [Member] | Notes Payable to Banks [Member] | ||
Schedule of Long-Term Liabilities [Line Items] | ||
Mortgage note with a bank. The note bears interest at a rate of 7.5% and provides for monthly interest payments. The note matures on January 1, 2053 at which time there is a balloon payment of remaining principal and interest due, and is secured by the property as well as guaranteed by a shareholder of the Company. | $ 247,000 |
Mortgage Loans (Details) - Sc_2
Mortgage Loans (Details) - Schedule of Long-Term Liabilities (Parentheticals) - Mortgage Note [Member] - Notes Payable to Banks [Member] | Mar. 31, 2024 |
Schedule of Long-Term Liabilities [Line Items] | |
Note bears interest rate | 7.50% |
Maturity date | Jan. 01, 2053 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Stockholders’ Equity (Deficit) [Abstract] | ||
Shares issued | 205,000,000 | |
Shares of common stock | 200,000,000 | 200,000,000 |
Par value of common stock (in Dollars per share) | $ 0.001 | $ 0.001 |
Shares of preferred stock | 5,000,000 | 5,000,000 |
Par value of preferred stock (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock issued | 44,122,091 | 44,122,091 |
Common stock outstanding | 44,122,091 | 44,122,091 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | May 08, 2023 USD ($) |
Commitments and Contingencies [Abstract] | |
Loss of institutional investment | $ 20 |
Segment Reporting (Details)
Segment Reporting (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Reportable segments | 2 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of Reconciliation of Revenue by Reportable Segment to Consolidated Revenue - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue by segment | ||
Consolidated revenue | $ 20,426 | $ 111,451 |
Segment cost of revenue | ||
Consolidated segment cost of revenue | (18,249) | (70,775) |
Consolidated segment gross margin | 2,177 | 40,676 |
Segment operating expense | ||
Consolidated segment operating expenses | (39,135) | (62,567) |
Total consolidated segment operating loss | 1,307,498 | 793,892 |
Segment other income (loss) | ||
Total consolidated segment operating loss | (16,368) | (77,423) |
Corporate expenses | ||
Operating expenses | (1,309,675) | (834,568) |
Other income (expenses), net | (132,137) | (15,489) |
Total Corporate expenses | (1,402,677) | (787,490) |
Total consolidated loss before income taxes | (1,419,045) | (864,913) |
Platform services [Member] | ||
Revenue by segment | ||
Consolidated revenue | 20,426 | 62,810 |
Segment cost of revenue | ||
Consolidated segment cost of revenue | (18,249) | (62,528) |
Segment operating expense | ||
Consolidated segment operating expenses | ||
Segment other income (loss) | ||
Total consolidated segment operating loss | ||
Rental Services [Member] | ||
Revenue by segment | ||
Consolidated revenue | 48,641 | |
Segment cost of revenue | ||
Consolidated segment cost of revenue | (8,247) | |
Segment operating expense | ||
Consolidated segment operating expenses | (39,135) | (62,567) |
Segment other income (loss) | ||
Total consolidated segment operating loss | 20,590 | (55,532) |
Segment Operating Expense [Member] | ||
Segment operating expense | ||
Total consolidated segment operating loss | (36,958) | (21,891) |
Corporate Expenses [Member] | ||
Corporate expenses | ||
Operating expenses | $ (1,270,540) | $ (772,001) |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Nov. 24, 2023 | Mar. 31, 2023 | Mar. 31, 2024 | Oct. 23, 2023 | Apr. 30, 2023 | Apr. 30, 2022 | |
Warrants [Line Items] | ||||||
Warrants outstanding (in Shares) | 3,300,884 | 0 | ||||
Warrant exercise price | $ 5 | $ 194.06 | $ 0 | |||
Total gross proceeds (in Dollars) | $ 8,000 | |||||
Net proceeds from warrants (in Dollars) | $ 7,160 | |||||
Warrant [Member] | ||||||
Warrants [Line Items] | ||||||
Warrant exercise price | $ 5 | |||||
Common Stock [Member] | ||||||
Warrants [Line Items] | ||||||
Shares issuing (in Shares) | 153,697 | |||||
Warrant [Member] | ||||||
Warrants [Line Items] | ||||||
Warrants outstanding (in Shares) | 1,700,884 | |||||
Warrant exercise price | $ 371.9 | |||||
Shares issuing (in Shares) | 1,600,000 | |||||
Warrant [Member] | Common Stock [Member] | ||||||
Warrants [Line Items] | ||||||
Warrant exercise price | $ 406.67 | |||||
Warrant [Member] | Minimum [Member] | ||||||
Warrants [Line Items] | ||||||
Warrant exercise price | 371.9 | |||||
Warrant [Member] | Common Stock [Member] | ||||||
Warrants [Line Items] | ||||||
Warrant exercise price | $ 371.9 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of Black Scholes Option Valuation Model | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
Rhove acquisition [Member] | |
Schedule of Black Scholes Option Valuation Model [Line Items] | |
Underlying stock price | $ 10 |
Exercise price | $ 10 |
Volatility | 76.60% |
Risk free interest rate | 3.69% |
Maturity | 2 years |
Follow-on [Member] | |
Schedule of Black Scholes Option Valuation Model [Line Items] | |
Underlying stock price | $ 4 |
Exercise price | $ 5 |
Volatility | 90% |
Risk free interest rate | 4.43% |
Maturity | 5 years |
Warrants (Details) - Schedule_2
Warrants (Details) - Schedule of Warrant Activity - $ / shares | 12 Months Ended | |||
Apr. 30, 2023 | Mar. 31, 2024 | Nov. 21, 2023 | Oct. 23, 2023 | |
Schedule of Warrant Activity [Abstract] | ||||
Warrants Outstanding, beginning balance | ||||
Weighted Average Exercise Price, beginning balance | ||||
Average Remaining Contractual Life (Years), beginning balance | 0 years | 4 years 7 months 6 days | ||
Warrants Outstanding, Warrant activity | ||||
Weighted Average Exercise Price, Warrant activity | ||||
Average Remaining Contractual Life (Years), Warrant activity | ||||
Warrants Outstanding, ending balance | 0 | |||
Weighted Average Exercise Price, ending balance | $ 0 | |||
Average Remaining Contractual Life (Years), ending balance | 0 years | 4 years 7 months 6 days | ||
Warrants Outstanding, Warrants Issued | 1,600,000 | 1,700,884 | ||
Weighted Average Exercise Price, Warrants Issued | $ 5 | $ 371.9 | ||
Average Remaining Contractual Life (Years), Warrants Issued | 4 years 7 months 20 days | 4 years 6 months 21 days |