Caliber(US:CWD)2025-11-13 22:07Financial Performance - Total revenues for the three months ended September 30, 2025, were $3.6 million, a decrease of 67.8% compared to $11.3 million in the same period of 2024, primarily due to the deconsolidation of certain funds and a decline in asset management revenues[278]. - Asset management revenues decreased by 46.6% to $3.5 million in Q3 2025 from $6.5 million in Q3 2024, driven by reduced development and construction revenues[278]. - Total expenses for the three months ended September 30, 2025, were $5.5 million, down 47.3% from $10.4 million in Q3 2024, mainly due to lower operating costs related to payroll and bonuses[279]. - The net loss for the three months ended September 30, 2025, was $4.7 million, compared to a net income of $1 in the same period of 2024, reflecting a significant decline of 471,400%[278]. - For the nine months ended September 30, 2025, total revenues decreased by 62.4% to $15.97 million from $42.43 million in 2024, primarily due to the deconsolidation of certain funds[291]. - Asset management revenues for the nine months ended September 30, 2025, were $10.43 million, down 19.3% from $12.93 million in 2024[291]. - The net loss attributable to CaliberCos Inc. for the nine months ended September 30, 2025, was $14.08 million, a 67.8% increase from a net loss of $8.39 million in 2024[291]. - Performance allocations for the nine months ended September 30, 2025, decreased by 93.0% to $25, down from $357 in 2024[291]. Asset Management and Development - The company has over $2.7 billion in managed assets, including $0.8 billion in assets under management (AUM) and $1.9 billion in assets under development (AUD) as of September 30, 2025[244]. - The company is actively developing 1,776 multifamily units, 697 single-family units, and 3.7 million square feet of commercial and industrial space, with total estimated costs of $1.9 billion[255]. - The company estimates it could earn up to $90.5 million in performance allocations if all AUD projects are completed successfully[263]. - The company aims to expand its role as a diversified alternative asset manager by investing in both real and digital assets[250]. - The company identified undervalued assets as part of its acquisition strategy, focusing on repositioning these assets to enhance net operating income and overall value[308]. - The total cost for project construction is estimated at $1.9 billion, expected to be funded through various sources including undeployed fund cash and secured debt financing[321]. Revenue Recognition and Fees - Fund management fees decreased by 22.2% to $2.8 million in Q3 2025 from $3.6 million in Q3 2024, attributed to no new funds being set up during the period[284]. - Development and construction fees fell by 86.2% to $0.4 million in Q3 2025 from $3.1 million in Q3 2024, due to fewer pre-construction milestones completed[285]. - Performance allocations typically range from 15.0% to 35.0% of cash distributions from operating cash flow and asset sales, with preferred returns ranging from 6.0% to 12.0%[362]. - Development fee revenue is recognized at a point in time prior to construction and over time during the construction period, generally based on 4.0% of total expected costs[360]. - Fund management fees are generally based on 1.0% to 1.5% of unreturned capital contributions, with specific fees for the Caliber Hospitality Trust set at 0.7% of its enterprise value[358]. Digital Assets and Blockchain - The company plans to stake a portion of its Chainlink (LINK) holdings, potentially earning an annualized yield of 3% to 9%[248]. - The company is evaluating participation in Chainlink validator nodes to maintain network consensus and facilitate data integrity[249]. - The company intends to utilize blockchain technology to tokenize real-world assets, enhancing liquidity and investor accessibility[251]. - The company adopted ASU 2023-08 for accounting and disclosure of crypto assets effective September 9, 2025, following its initial purchase of Chainlink tokens[363]. - Unrealized loss on digital assets for Q3 2025 was $0.7 million, with no comparable activity in Q3 2024[280]. Market Conditions and Economic Factors - The Federal Reserve increased the federal funds rate by 525 basis points from January 1, 2022, to September 18, 2024, impacting market conditions and investment opportunities[271]. - The enactment of the One Big Beautiful Bill Act on July 4, 2025, extends the Qualified Opportunity Zone program indefinitely, potentially influencing real estate investment strategies[272]. Cash Flow and Financing Activities - Cash flows from operating activities for the nine months ended September 30, 2025, showed a net cash outflow of $7,523 million, compared to an outflow of $199 million in the same period of 2024[347]. - The company plans to raise $20 million through preferred stock series AA financing and has successfully refinanced $4.8 million of 12-month term notes into a new 36-month term corporate note program[346]. - Net cash flows provided by financing activities increased during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to an increase in net proceeds from the issuance of preferred stock and common stock, along with a decrease of $2.4 million in net repayments on notes payable[350]. Internal Controls and Legal Proceedings - As of September 30, 2025, the company evaluated its disclosure controls and procedures and determined they were effective at a reasonable assurance level[386]. - There were no changes in the internal control over financial reporting during the three months ended September 30, 2025, that materially affected the internal control[387]. - The company is involved in various claims and legal proceedings but does not expect any material effect on its business or financial condition[389].