Caliber(CWD) - 2024 Q3 - Quarterly Report

Asset Management and Revenue - Caliber has grown to manage over $2.9 billion in assets under management (AUM) and assets under development (AUD) over the past 15 years[189]. - The company has successfully raised approximately$710.5 million in total capital through September 30, 2024, indicating strong investor interest in alternative assets[204]. - The company generates revenue primarily from asset management fees, which are typically between 1.0% to 1.5% of unreturned capital contributions, and performance allocations ranging from 15.0% to 35.0% of cash distributions[192][196]. - Total revenue is significantly impacted by the performance of consolidated variable interest entities (VIEs), which are included in the company's consolidated results[215]. - Total revenues for Q3 2024 were $11.3 million, down 33.6$17.0 million in Q3 2023, primarily due to a decrease in consolidated fund revenues following the deconsolidation of Caliber Hospitality, LP and Caliber Hospitality Trust[219]. - Asset management revenues increased to $6.5 million in Q3 2024 from$2.3 million in Q3 2023, representing a 182.0% increase[219]. - For the nine months ended September 30, 2024, total revenues were $42.4 million, down 36.7$67.0 million in the same period of 2023, largely due to a decline in hospitality revenues[230]. - Asset management revenues for the nine months ended September 30, 2024, were $12.9 million, up 106.9$6.2 million in the same period of 2023[230]. - Total revenues for the nine months ended September 30, 2024, were $42.4 million, a decrease of 36.7$67.0 million in 2023, primarily due to the deconsolidation of Caliber Hospitality, LP and Caliber Hospitality Trust[231]. Expenses and Net Income - Total expenses decreased by 63.3% to $10.4 million in Q3 2024 from$28.4 million in Q3 2023, mainly due to reduced consolidated fund expenses[220]. - Net income attributable to CaliberCos Inc. was $146,000 in Q3 2024, a significant recovery from a net loss of$3.4 million in Q3 2023, marking a 104.3% improvement[219]. - The company reported a net loss of $10.6 million for the nine months ended September 30, 2024, an improvement from a net loss of$23.5 million in the same period of 2023, reflecting a 55.0% reduction in losses[230]. - Total expenses for the same period were $50.4 million, down 43.3$88.8 million in 2023, mainly due to the deconsolidation of the same entities[232]. - The company reported a net loss of $10,577 for the nine months ended September 30, 2024, compared to a net loss of$23,507 for the same period in 2023, showing a reduction in losses[280]. Capital and Investments - Managed capital increased from $437.6 million as of December 31, 2023, to$485.3 million as of September 30, 2024, an increase of approximately 10.9%[252]. - Fair Value AUM as of September 30, 2024, was approximately $807.0 million, indicating the aggregate fair value of managed real estate assets[250]. - The total real estate managed capital increased from$343.6 million as of December 31, 2023, to $405.1 million as of September 30, 2024, an increase of approximately 17.9$2.1 billion[266]. - The company deployed $13.5 million into various real estate investments during the nine months ended September 30, 2024, offset by$20.0 million of repayments of outstanding notes receivable[258]. Financial Position and Liabilities - Total assets as of September 30, 2023, were approximately $71.2 million, a decrease from$75.9 million in June 2023, reflecting a decline of about 6.5%[244]. - Total liabilities as of September 30, 2023, were approximately $63.2 million, down from$73.1 million in March 2023, representing a decrease of about 13.5%[244]. - The company’s total liabilities and stockholders' equity as of September 30, 2023, were approximately $64.3 million, down from$72.9 million in March 2023, a decrease of about 11.8%[244]. - The accumulated deficit increased from $(19.4) million in March 2023 to$(24.9) million in June 2023, reflecting a decline of approximately 28.4%[244]. - The company reported a total revenue of $23,945,000 for the three months ended December 31, 2023, compared to$20,445,000 in the same period of the previous year[290]. Cash Flow and Liquidity - The company reported a net cash used in operating activities of $(199) thousand for the nine months ended September 30, 2024, an improvement of$10.943 million compared to $(11,142) thousand for the same period in 2023[324]. - Net cash provided by investing activities increased to$6.628 million for the nine months ended September 30, 2024, compared to a net cash used of $(19,880) thousand in the same period in 2023, reflecting a$26.508 million change[325]. - The company experienced a net change in cash and cash equivalents of $(13.537) million for the nine months ended September 30, 2024, compared to a positive change of$2.483 million in the same period in 2023, a difference of $(16.020) million[324]. - The company does not have sufficient cash on hand to satisfy the total of the notes maturing within the next 12 months, raising substantial doubt about its ability to continue as a going concern[313]. - The company collected$8.2 million in notes receivable and $2.7 million in accounts receivable during the nine months ended September 30, 2024[317]. Market and Economic Conditions - The annual inflation rate in the U.S. decreased to 2.4% in September 2024, following a peak of 9.1% in June 2022, which may influence investment behaviors and capital formation[213]. - The Federal Reserve increased the federal funds rate by 525 basis points from January 1, 2022, to September 18, 2024, before decreasing it by 50 basis points on September 19, 2024, affecting the overall economic environment[213]. - The advancement of proptech and artificial intelligence technologies is expected to enhance Caliber's project execution and investment management strategies[210]. Risk Management - The company mitigates credit risk by diversifying investments across various real estate asset types, including hospitality, commercial, and multi-family properties[354]. - Interest rate risk management includes entering into hedge contracts to limit the impact of interest rate changes on earnings and cash flows[351]. - The company maintains financing relationships with a diversified mix of lenders, including large national banks and private equity lenders, to mitigate financial risk[354].