reAlpha Tech Corp.

Good afternoon, everyone. Thank you for joining us. My name is Paul Cecil. I'm the Vice President of Strategy here at Realpha, and I will be your moderator for today's live video call on X-Spaces. And I've got Mike here with me right now. So today is a big moment. We're here to discuss our third quarter results and do it in a way that reflects who we are, open, transparent, and connected directly with our community. Instead of a closed-door analyst call, we're hosting this conversation live on X-Spaces with all of you here with us, and that's something we're very proud of. Joining us today is our Chief Executive Officer, Mike Lagozzo. Many of you know Mike, but for anyone who's newer to the Riafa community, Mike has been with this company since day one. He served as CFO, COO, President, and now CEO. And throughout that journey, he's been instrumental in shaping the company's strategy, operations, and culture. Before Rialfa, he spent nearly two decades at BMW Financial Services, ultimately overseeing a $32 billion portfolio across the Americas, and later led innovation programs at L. Marks. His background in scaling complex operations and driving innovation has played a major role in getting Rialfa to where it is today and where we're headed next. Mike is going to walk through the quarter, talk about some key business highlights, and then we'll jump straight into questions from all of you. please feel free to submit your questions at any time below in the comments section. And we'll pin relevant items in the NEST, which is on the top of our page right now, including our quarterly filing, press release, latest corporate presentation, and shareholder letter. So before we begin, a couple of small housekeeping items. We want to get through as many investor questions as possible. So we've already had a lot of engagement. And if you do have multiple questions, we'll take two or three per person so others can have the chance to participate as well. We love the engagement. We just want to make sure we can hear from as many voices and investors as possible. And one last thing is I need to remind everyone that certain statements made today may contain forward-looking information, as defined under applicable securities laws. These may include expectations, forecasts, goals, patterns, plans, projections, or assumptions that are based on our current views and are not historical facts. These statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. For complete information, please refer to our filings with the SEC, including our most recent Form 10-Q. We will also not be commenting or answering questions on stock price or stock predictions, valuation targets, nonpublic or unannounced financial activity, anything restricted under SEC and Reg FD guidelines. So if any question touches on these areas, we'll move past it. With that, thank you again very much for joining us, and we'll turn it over to our CEO, Mike Lagozzo, to kick things off.

Hi, everybody. Really looking forward to today. This is something that's been a long time in the making, and really looking forward, again, to spending the time with you, sharing our vision, our mission, our results, and then getting the opportunity to answer your questions as well. So I'll turn it over to Paul. Let's get started. Awesome.

Thanks, Mike. Can you tell us why you joined Realpha?

Absolutely. So as Paul mentioned, I joined Realpha back in early 2021. I was employee number one. And I would say the reason why I joined, it was twofold. First and foremost was I believed in the vision of Gary Devinor. And Gary, if you're online, we miss you, buddy. But what I wanted to let you know is that Gary is a true visionary. He is somebody who had this great vision to bring the real estate into the digital era. And what I mean by that is real estate historically has been behind the times when it comes to technology. The reason for that is because it's very complex. There's a lot of fees. There's a lot of different players involved. And it's just worked over time, and people dealt with it. And it is really ripe for disruption. The second thing is that the TAM – or the total addressable market for real estate is huge. It's the largest asset class in the world. So combining those two things together, along with Gary's track record of being a successful serial entrepreneur who's taken a previous company in the NASDAQ, it was a great opportunity to come in and try to build another company that we could also bring public and serve a purpose and a mission to try to get homeowners or people to become homebuyers again.

Awesome. Thanks, Mike. Can you tell us a little bit more about your approach to leadership and communication?

Yes. I would say that I'm a guy who doesn't do a lot of hype. I try to come in. I set a strategy. I build a good team around me to execute that strategy. I don't micromanage them, but I hold them accountable. And ultimately, at the end of the day, if we all work together towards a common goal, a common strategy, giving them the flexibility to even adapt, right? As long as we have a common North Star that we're all aiming towards and you have faith in the leaders who are strong in their particular areas and you all work together and align, you're going to hit it. Ultimately, I believe we will.

So what's your vision and why are you excited about what we're doing here at Rialto?

Well, what we want to do is we want people to obviously become homeowners. And what I mean by that is that we all know the home prices are as high as they've ever been. We know interest rates are sky high as well. And it's very difficult for people to become homebuyers. I just saw that I think the median age of a first-time homebuyer now is 40 years old. When I was younger and I bought a house, it was 28. So it's really, really tough for people nowadays, you know, given the cost of homes and the current interest rates to be one. And we wanted to build a platform that really enabled homebuyers through technology to live the American dream. And that excites me.

Awesome. And now moving on to kind of the Q3 earnings highlights. Could you give us some highlights about Q3?

Sure. So in our Q3, I'll kind of stick to obviously what we disclosed, but we've had three consecutive quarters of revenue growth. And our Q1 of this year was more of all of last year combined. Our Q2 surpassed that and our Q3 surpassed that. So if you're into patterns or trends, I would say that it's heading in the right direction. We improved our balance sheet. What I mean by that is we raised $7.5 million in equity offerings. We had 8.3 million warrants exercised as of October 20th. And we used a lot of that to repay our debt in full. So we are now a debt-free company. We regained compliance with NASDAQ with our $35 million minimum market value. And many of you have probably saw that we obtained a six-month extension to meet the $1.00. um i feel very confident about that again we have six months to do it but things as i mentioned are heading in the right direction there we've expanded our service availability so in this past quarter uh realty we expanded into georgia mortgage into utah and nevada our technologies uh feel really proud about what we've done there um he took claire and we've turned claire who is our ai agent into a true concierge that will take a home buyer prospect through the process so answering questions that they have and trying to guide them all the way through the pre-approval we launched a our ai loan officer assistant And what this does is this is really more for internal facing, but it ultimately, I would say, will benefit the customer just due to the less friction and faster turnaround times by helping our loan officers do their work more efficiently. And then we also did an AI-powered engagement agent. And what that does is that actually helps create leads into our platform and allows for the humans to focus on the ones that are, I guess, the highest probability leads. And what we've seen is a 90% increase in lead engagement, a 200% increase in the appointments for people to view a home, and a 140% increase in the loan applications. So I believe what we're doing is really making sense. These are statistically significant numbers that we are sharing with you. And as we go on and scale with these types of improvements, we feel really good about where we're headed and the types of things that we could do with the staff that we currently have. We've also done a lot of, I would say, integrations internally. So one of our first acquisitions was an AI company in Nepal called Namche. And we've fully integrated them into Realpha. They are our true tech team now. We have basically a one Realpha mindset that I'll talk a little about as we go through today. But Namche is fully integrated. They are all Realpha. Everything that they have is all on the same platform as ours. And we're starting to do that now with our unified messaging with our other acquisitions. So whether it be realty, mortgage, title, to have, again, a unified experience for the customer.

Awesome. Thanks, Mike. And with that, we'll start to move on to questions. I'm going to take the ones first that we've kind of received ahead of time. And then if there are any additional questions that we have not answered, I will ask Mike those questions as well. So first, Mike, we have a question from the OG Stocks ticker. Can you tell us more about the overall plan of expansions of Real to have an overview of which services will be rolled out to which states in the next months?

Sure. Those of you who have seen our latest investor deck, there's a map on there which shows all of the states in which we're operating. We have three different dots on there. One represents the realty, one mortgage, and one title. And you'll very quickly realize that the dots are not in sync. They're out of whack. They're heavily weighted towards mortgage. In mortgage, we're in 32 states. For example, in title, we're in three. So what we're trying to do is to sync those up and focusing, I would say we're focusing primarily on the top 10 states when it comes to residential real estate volume or transactions. Just to put that in perspective, the top 10 states represent over 60% of the real estate transactions. So if you're a company that's trying to scale, instead of trying to be everywhere, why not try to be in the areas that have the largest transaction volume? So what I mean by that would be if you think about it, it's obviously Florida, Texas, California, North Carolina. I think Ohio is in there as number nine. But we can't explicitly say where we're going, but like I said, top 10 states is kind of where I believe we need to be. And it's about really syncing up the realty, mortgage, and title because that ultimately benefits the customer. That's our true service offering to the customer, truly where the value proposition lies, is utilizing all three of those services, giving them an opportunity to get a rebate back, and then also giving them the flexibility as to where they want to use that rebate. They could use it as cash at closing. They could use it as a portion of their down payment to get into their home. Or they could use it to buy down their interest rate. And we all know in today's environment that's a really important thing too. But that only happens when we have all three lined up. And that's our goal right now is to try to, at a minimum, try to get in the top ten states where we can do that.

So we also have we have several questions from that man, Billy. First of all, the Q3 results mentioned several strategic developments. Which of those does management believe has the greatest strategic importance right now?

I would say the, you know, the capital that we've raised had the most strategic importance. And what I mean by that is, is that, you know, we are a company now that has runway. And now that we have runway, you know, we're focused on growth. And so I would say that that was the most important. I think that they all were important in their own way. But, you know, having capital solves a lot of problems. And it allows us, again, to focus on growth, which is what you guys want to hear.

Absolutely. And additionally, are there areas of the business where you believe that additional automation, partnerships, or technology investment could accelerate scaling?

I do. And it's multifold here. So, you know, we'll continue to look at acquisitions, accretive acquisitions that align with our core product and allow us to scale faster. We're also looking at kind of adding on to our core as well. So, you know, our core product right now, it's a home buying product, right? It has a realty component, a mortgage component, and a title component. But if you think beyond that, beyond the closing of the transaction, there's other things as well that we can be one-stop shopping for. Think about moving services. Think about utility setup services. Why not be that one-stop shopping for all of that? And I would say for some of those types of things, we may not want to acquire, but maybe that there's an opportunity for partnerships, you know, with a moving company or maybe an insurance company. There's plenty of opportunities out there, but right now we're focusing on the core because, you know, we think that that is where, you know, focus needs to be, right? And we have a lot of growing to do and a lot to prove to you.

Absolutely. And as a reminder to everyone, if you do have additional questions, please put them in the So I will not be adding additional speakers onto here, but I can take the comments below. Okay, so next question from that man, Billy. How is customer feedback shaping your product roadmap or service improvements, and are there themes emerging from those insights?

I would say that, well, the number one customer feedback is the fact that we're, you know, not synced up in all of the states. You know, customers want to be able to get that rebate and, you know, benefit from using all three services. We're not there and we need to be there. So that's number one, customer feedback. Number two, I think, is really more about this, you know, one real thing that I mentioned earlier about, you know, what we don't want to do is have realty mortgage and title operating in different verticals or vacuums. Right. It needs to be a cohesive process. We don't want to just replicate how things are being done today. Like today what happens is a customer has to navigate the the realty process that realtors set up for them. Then they have to navigate the process that mortgage, you know, sets up for them. And then they have to navigate the process the title sets up for them. They're all typically, usually different companies. There's handoffs. And it's just, it's a gauntlet if you think about it from that perspective. What we've done is we're putting the customer in the center of the process and we're building the process around the customer. So, you know, not having to enter in information more than one time, trying to remove the friction and make it seamless. So, yes, I mean, we're still kind of building that out because we've grown through some acquisitions. These are companies that have been standalone, and now they're becoming part of a, you know, a greater product. So, you know, we're trying to reduce the amount of friction and all of the handoffs that go on to make this as seamless and frictionless as possible.

Definitely. Okay, we have a question from Sakiv Savi, 85909. Why are investors now interested in investing in Realpha stock? What will you guys do next for the company and investors?

I would say this is a pretty important point for me. I want to make sure I drive this home. Realpha historically has attracted what I'll refer to as traders. What I mean by that is, you know, because of our volatility in our stock and because of the size of the transactions, which are really big for a company of our size, it attracts a lot of day traders or people who are coming in to get in and get out. What we're starting to find now, and I think this is due to the quarter-on-quarter growth that we're seeing, is people who are interested in more fundamentals are and more of a longer game who are willing to come in with bigger check sizes and, you know, kind of they believe in the vision, they believe in the mission, they're starting to see the fundamentals come into place. That's when this company starts to attract what I refer to as investors. So, you know, kind of transitioning from attracting traders to investors is really what we're trying to get to, you know, as a company because that brings a little bit more stability and then ultimately will help us, you know, continue to grow on that path.

Definitely. So we have a question from Nate0987. So the quiet period is now over. We've released quarterly earnings. What innovations are planned for Realpha in 2026?

We're going to continue to bring out the AI. So, you know, we have the loan assistant phase two. We'll continue to build on that on the mortgage front. We'll continue to build it on the real estate front as well. And eventually, I would want to start seeing on the title front as well. But, you know, I would say the realty and the mortgage are our primary focus areas there. We're going to continue to, as we acquire companies, right, we're going to continue to have to integrate those companies, you know, into our product. So we'll have to focus on that. Post-M&A integration, I'm finding, is probably one of the most crucial things of a company that relies on inorganic growth. If you don't do it correctly, it can hurt you or it can even kill you. And what we're learning is how to pick the right companies and how to integrate them in a way to where it becomes truly part of one product.

Absolutely. Thanks, Mike. So we have several questions now from NotADeadCat1. What specific problem does the business solve for its customers?

Very similar to what I said earlier. You know, the problem is now is that home buying is really expensive. Between the high home prices and the interest rates, it's tough for people. You know, again, the median age, and I was 40 years old for a first-time home buyer when it was, I think it was 28 when I was, you know, back in the day, in the 90s when I bought mine. So, you know, the fact of the matter is, is that, you know, if we could bring a product to the table that allows you to go through the same process as you would with independent, you know, realtors and mortgage and title, do it all in one place and then offer you a rebate on top of it to which you have the opportunity to choose how you want to use it, whether it's cash down payment or buy down your interest rate. I think that solves a lot of problems for a lot of people.

Agreed. So who are the main competitors and what makes the business unique in comparison to its competitors?

I truly believe what we're building is really a new category. Yeah, there's tons of realtors out there and there's tons of mortgage players out there and tons of title companies out there. And there's some really good ones that do very well, make a lot of money. This is a home buying platform that has the ingredients of realty, of mortgage, of title, I really don't know of one out there that really does all three with the rebate facilitated by AI. However, I would be remiss to say that, you know, seeing Rocket doing what they're doing with the acquisitions of Redfin, Mr. Cooper, you know, trying to move further up in the process, clearly would make them a competitor. And then also seeing Zillow trying to move back in the process as well, I would say that those are two, you know, two very large ones that exist. And obviously, we're probably not even a blip on the radar right now. But, you know, my goal is to make sure that they know about us here soon.

Absolutely. And who are the primary customers and what is the retention, the customer retention rate?

Yeah. You know, with respect to the customers, I would say that when we initially, you know, started, you know, going down this path, we thought that we were going to cater more towards, you know, the millennials, thinking that millennials were more first-time homebuyers, thinking that they're more tech-forward. You know, people are buying cars on their phone now, so why wouldn't they, you know, want to try to buy a house on their phone? But what we're finding is we're appealing to people who have also bought, you know, a home before. You know, maybe they're on their second home or maybe they're on their third home. And they see the value that we could provide. And they also realize that, you know, they don't need to have their hand held, you know, throughout the entire process, you know, with a realtor like many first-time home buyers. So I'm seeing a little bit more appeal there. with people who have already bought a home before. They say, I don't need to go through the old way. I'll do it through the new way and I'll save some money. The other thing is this is because of the acquisition that we made with Be My Neighbor Mortgage is that we cater a lot towards the veteran community. Because VA loans are very complex. And, you know, that mortgage brokerage, when we acquired them, I think 70% of their, you know, mortgage deals were VA loans. So, you know, we continue to do that. We're very proud of being able to serve the veteran community. And that's another customer base that we want to continue to serve there. As far as retention rate, we're really too new, given the fact that home buying doesn't happen often, or you buy maybe two, three homes in your lifetime. We really don't have a retention rate yet. We would love to have a high one, obviously, and obviously through referrals and stuff like that, but the retention rate's not quite there at this point.

Very good. And so this is just more of a general question because I've seen a lot of questions come through about the potential reverse stock split and meeting NASDAQ standards. Is there anything you want to touch on here?

Yes. Again, I can't talk too much about the stock other than the fact that, you know, we meet all of the NASDAQ requirements other than the $1. We got the 180-day extension. So essentially we have six months to correct it. And I am giving you everything that I got to ensure that we get there. You know, we are focused on basically growing this business. And we believe that if we focus on the things that we could control, right, which is scaling, building our revenues, things will take care of itself. You know, there are things that we just can't control in the external environment. We have to learn to adapt to those things when they come. But if you focus on the things that you can control and be willing to adapt to the things that you can't, we'll end up being successful in the end here, I assure you. But, you know, it takes a little bit of time. You know, one of the things that, you know, I want to say is that I know the retail community, particularly some people in the retail community, you know, they want to see things happen faster. Believe me, I want to make things happen as fast as possible. As a matter of fact, we talk about it all the time. How fast could we go? But, you know, at the end of the day, there are financial complexities, there are legal complexities, there are regulatory compliance complexities that we have to navigate being a public company. Sometimes it takes a little bit longer, you know, to kind of navigate through the process, to be quite honest with you. But it doesn't mean that we're not, you know, we're not busting our ass every day, ensuring that we can move as fast as we can and build this. The second thing I want to talk about is that I'm going to regress for a little bit because it will come back around. But two weeks ago we had a board meeting in New York. And we were in Manhattan, and I happened to look out, and we saw the new J.P. Morgan building there. And for those of you who have seen it in person, you know how impressive it is if not looking up online. But it is really, really cool. And, you know, I looked it up, and I saw that it took like 4.4 years to build that thing. But I also learned that it took like one and a half of those 4.4 years putting the foundation in place. And what I mean by this is that I want real estate to be a skyscraper. I really do. However, we need to have the foundation in place and it has to be solid in order for us to build on it. And that sometimes means it's not the sexy stuff and it's not the stuff that, you know, you guys are going to see day in and day out. But what we are doing is, you know, is we're putting a very solid foundation in place so we can build a very tall skyscraper for our shareholders. And, you know, I know that trust, you know, means that I have to earn that over time. But, you know, it also takes time to get some of this stuff done as well. So I want to be very transparent and very clear with you that we will communicate whatever we can as frequent as we can. But, you know, I also, you know, want you to understand what we're dealing with here and what we're trying to build.

Love it. All right, so digging into the comments section now, we have a comment from Al3Othman. Apologies if the pronunciation was off there, but is there any expansion plan outside of the USA?

I think ultimately we would love to be outside of the U.S., but, I mean, the U.S. is a really big market. Just to put it in perspective, I believe, given the TAM, if we had 1% or less than 1% of that, we'd be a multi-billion dollar company. That's how big the TAM is, just in the U.S. So, yes, I would love to be outside of the U.S., but we have some growing to do here on our own home soil right now.

And we actually have a comment from another Mike. So Mike Skibius, I think I'm pronouncing that correct. Are we going to be the next Carvana CBNA, but for homes? And also good work, Mike. We believe in you.

Well, thank you. You know, Carvana was a company that we studied. You know, we saw that, you know, the traditional way of buying a car was disrupted through them. And for those of you know, right, I mean, coming from the car industry and, you know, the whole used car dealer experience. I kind of gravitated towards what Carvana was doing. We studied it. And, yes, there's a lot of similarities there. And, you know, you're kind of combining in the financing and the title, you know, along with the purchase. And so, yeah, we're learning a lot. from those guys. Home buying is still a little bit more complex. It's very fragmented when it comes to not just state by state, but county by county. You know, we're having to learn how to how to kind of navigate through this. And yeah, I wish it was as easy as buying a car, but it's not. But we're going to solve it.

Awesome. We've got time, I think, for one more question. We do have a comment that I appreciate from Billy here. That man, Billy, how do you eat an elephant? One bite at a time, 80-20 rule. Yes, sir. We appreciate it, Billy. Very good. Awesome. So I don't think there was any other questions that we can. Oh, here we go. There's one coming in. Ah, so we have one from Scott Buck. Mike, what is the outlook on hiring additional mortgage brokers, and do you have a target in how many mortgage brokers you would like to add?

Yeah, thanks, Scott. We do plan on bringing in more mortgage brokers. As a matter of fact, that is a great way for us to continue to grow organically. We don't just want any mortgage brokers. We want to bring in ones who can continue to contribute to the team that we currently have. And I think that focusing more honestly, actually, Scott, I'm going to kind of address my or change my answer a little bit. Mortgage brokerages, maybe not. Loan officers, yes. So I think that we have a solid mortgage brokerage in place already. We're already in 32 states. But what we need to do is we need to expand kind of the staff within the mortgage brokerage that we have. And, you know, the types of loan officers, just to give you guys an example, like for every loan officer that we're targeting right now, they bring in $250,000 of revenue, let's say, based on their books, you know, that they manage. So, you know, bringing, you know, four of those in is a great way to build our revenues. And that's just, you know, while not even – To be quite honest with you, that's just keeping the business as is. That's not even expanding it, you know, like we continue to. So I look at it as kind of fuel, you know, that we can continue to throw on the fire here as we're moving forward.

Absolutely. All right. Since it is 1230, we are going to go ahead and wrap up. But thanks to everyone so much for joining today. And thanks for all the questions that were submitted either during or prior to the meeting. And if we didn't happen to get to your question for whatever reason, please feel free to email us at investorrelations at realta.com and our team will get back to you. And as a reminder, we would encourage everyone to subscribe to the investor updates and follow Mike, Gary, myself on Twitter, X, sorry, sorry, Elon. And you can also subscribe to our investor updates, which can be found at ir.realpha.com. And the recording will also be available on there shortly, probably within about 48 hours. We appreciate everyone hopping on. Thank you so much.

Thanks everybody. Talk to you next time.