reAlpha Tech Corp. — financial distress indicators
Financial-health summary
reAlpha Tech Corp.'s reported numbers place it in the 'Watch' financial-health band (distress score 49/100). The main indicators are cash runway under 12 months, losses in each of the last 3 years and operations consume cash. In its favour: revenue still growing (+376% yoy).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
At the current free-cash-flow burn, cash covers ~5 months.
Going-concern standard: management must assess ability to continue for 12 months (ASC 205-40). Runway below that horizon forces dilution, asset sales or default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -96% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
0 severe and 1 moderate distress-related headlines in the last 6 months.
Headlines are corroborating evidence only; they are weighted lightly and never drive a flag alone.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Revenue still growing (+376% YoY).
📰 Recent news scan
- restructurreAlpha Reduces Workforce by Approximately 25% and Consolidates Vendor Spend, Targeting $2 Million in Annualized Savings as AI Advancements Drive Organizational EfficiencyYahoo Finance · 2026-05-06
- reAlpha (AIRE) Closed the InstaMortgage Deal with Two State Approvals Outstanding. Is Early Integration Worth the Risk?Yahoo Finance · 2026-08-27
- reAlpha (Nasdaq: AIRE) Reports Second-Quarter 2026 Financial ResultsYahoo Finance · 2026-08-14
- reAlpha Mortgage Enhances AI-Assisted Borrower Engagement and Lead Management Platform for Loan OfficersYahoo Finance · 2026-07-21
- reAlpha (NASDAQ: AIRE) to Host “AIRE Time With Mike” Fireside Chat Moderated by Benchmark Analyst Daniel KurnosYahoo Finance · 2026-06-01
- reAlpha (NASDAQ: AIRE) Announces 1-for-25 Reverse Stock Split to be Effective on April 30, 2026Yahoo Finance · 2026-04-28
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do reAlpha Tech Corp.'s financial-health indicators show?
As of 2026-10-08, reAlpha Tech Corp.'s public financial data places it in the 'Watch' band with a distress score of 49/100, driven by cash runway under 12 months, losses in each of the last 3 years and operations consume cash. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is reAlpha Tech Corp.'s financial distress score?
49/100 ('Watch').
What works in reAlpha Tech Corp.'s favour?
Revenue still growing (+376% YoY).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.