Rise Companies' Losses Widen to $1.2M Amid Capital Adjustments

TL;DR

**Rise Companies is bleeding cash, with losses widening to $1.2 million, making it a risky bet for any investor.**

AI Summary

Rise Companies Corp. reported a net loss of $1.2 million for the six months ended June 30, 2025, a significant increase from the $0.8 million net loss in the prior year period. The company's total common stock for Class A shares increased from 1,000 shares at December 31, 2024, to 1,000 shares at June 30, 2025, with a par value of $0.001 per share. Class B common stock also remained stable at 1,000 shares over the same period. Additional paid-in capital decreased from $10.0 million at December 31, 2024, to $9.8 million at June 30, 2025, reflecting capital adjustments. Retained earnings showed a deficit of $2.0 million as of June 30, 2025, compared to a deficit of $0.8 million at December 31, 2024, indicating continued unprofitability. Noncontrolling interest decreased from $0.2 million to $0.1 million during the first six months of 2025. The company's strategic outlook remains focused on real estate investment trusts, but persistent losses highlight operational challenges.

Why It Matters

Rise Companies Corp.'s widening net loss to $1.2 million for the first half of 2025 signals ongoing operational challenges, which could impact investor confidence and future capital raising efforts. The decrease in additional paid-in capital by $0.2 million suggests a potential struggle to attract or retain investment, putting pressure on its competitive position within the real estate investment trust sector. For employees, sustained losses could lead to job insecurity or reduced growth opportunities. Customers might face uncertainty regarding the company's long-term stability, while the broader market will observe if Rise can reverse its negative financial trajectory in a competitive real estate landscape.

Risk Assessment

Risk Level: high — The company reported a net loss of $1.2 million for the six months ended June 30, 2025, a significant increase from the $0.8 million net loss in the prior year period. This widening loss, coupled with a retained earnings deficit of $2.0 million, indicates persistent unprofitability and a high risk of continued financial deterioration.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in Rise Companies Corp. The consistent and widening net losses, coupled with a declining additional paid-in capital, suggest a company struggling to achieve profitability and sustain growth.

Key Numbers

• $1.2M — Net Loss (Increased from $0.8M in prior year period, indicating worsening financial performance.)
• $9.8M — Additional Paid-in Capital (Decreased from $10.0M at December 31, 2024, reflecting capital adjustments.)
• $2.0M — Retained Earnings Deficit (Worsened from $0.8M deficit at December 31, 2024, showing accumulated losses.)
• 1,000 — Class A Common Shares (Remained stable, indicating no new equity issuance for this class.)
• 1,000 — Class B Common Shares (Remained stable, indicating no new equity issuance for this class.)
• $0.1M — Noncontrolling Interest (Decreased from $0.2M, suggesting a reduction in minority ownership.)

Key Players & Entities

• Rise Companies Corp. (company) — filer of the 10-Q
• $1.2 million (dollar_amount) — net loss for the six months ended June 30, 2025
• $0.8 million (dollar_amount) — net loss for the six months ended June 30, 2024
• $10.0 million (dollar_amount) — additional paid-in capital at December 31, 2024
• $9.8 million (dollar_amount) — additional paid-in capital at June 30, 2025
• $2.0 million (dollar_amount) — retained earnings deficit at June 30, 2025
• $0.2 million (dollar_amount) — noncontrolling interest at December 31, 2024
• $0.1 million (dollar_amount) — noncontrolling interest at June 30, 2025
• June 30, 2025 (date) — end of the reporting period
• December 31, 2024 (date) — previous fiscal year-end

FAQ

Industry Context

Rise Companies Corp. operates within the Real Estate Investment Trusts (REITs) sector. This industry is characterized by its reliance on real estate asset performance, interest rate sensitivity, and regulatory frameworks. REITs typically focus on generating income through rental properties or real estate investments, with a significant portion of income distributed to shareholders.

Regulatory Implications

As a REIT, Rise Companies Corp. is subject to specific tax regulations and reporting requirements. Changes in real estate laws, tax policies, or SEC regulations could impact the company's operational flexibility and financial performance. Compliance with these regulations is crucial for maintaining its REIT status and investor confidence.

What Investors Should Do

1. Monitor operational improvements and path to profitability.
2. Analyze the drivers behind the decrease in Additional Paid-in Capital.
3. Evaluate the strategic focus on REITs in the current market environment.

Glossary

Additional Paid-in Capital

The amount of money a company receives from selling stock above its par value. (A decrease from $10.0M to $9.8M suggests capital adjustments or potential buybacks, impacting the equity structure.)

Retained Earnings

The cumulative amount of net income that a company has retained over time, rather than distributing as dividends. (A growing deficit from $0.8M to $2.0M indicates persistent unprofitability and accumulated losses.)

Noncontrolling Interest

The portion of a subsidiary's equity that is not attributable to the parent company. (A decrease from $0.2M to $0.1M suggests a reduction in the ownership stake of minority shareholders in consolidated entities.)

Class A Common Shares

A class of common stock that may have different voting rights or dividend preferences compared to other classes. (Stability at 1,000 shares indicates no new issuance or retirement of this share class during the period.)

Class B Common Shares

Another class of common stock, often with different rights than Class A shares. (Stability at 1,000 shares indicates no new issuance or retirement of this share class during the period.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, Rise Companies Corp. reported a net loss of $1.2 million, an increase from the $0.8 million net loss in the prior year period, indicating a deterioration in profitability. The company's retained earnings deficit has also widened significantly from $0.8 million to $2.0 million, underscoring accumulated losses. Additionally, Additional Paid-in Capital saw a slight decrease from $10.0 million to $9.8 million, suggesting capital adjustments that warrant further scrutiny.

Filing Documents

• rc-20250630.htm (10-Q) — 956KB
• exhibit311.htm (EX-31.1) — 11KB
• exhibit312.htm (EX-31.2) — 11KB
• exhibit321.htm (EX-32.1) — 6KB
• exhibit322.htm (EX-32.2) — 6KB
• 0001628280-25-039176.txt ( ) — 5410KB
• rc-20250630.xsd (EX-101.SCH) — 40KB
• rc-20250630_cal.xml (EX-101.CAL) — 63KB
• rc-20250630_def.xml (EX-101.DEF) — 195KB
• rc-20250630_lab.xml (EX-101.LAB) — 525KB
• rc-20250630_pre.xml (EX-101.PRE) — 369KB
• rc-20250630_htm.xml (XML) — 572KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 30 Item 4.

Controls and Procedures

Controls and Procedures 30 PART II OTHER INFORMATION 32 Item 1.

Legal Proceedings

Legal Proceedings 32 Item 1A.

Risk Factors

Risk Factors 32 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32 Item 3. Defaults Upon Senior Securities 32 Item 4. Mine Safety Disclosures 33 Item 5. Other Information 33 Item 6. Exhibits 33

Signatures

Signatures 34 i Rise Companies Corp. ("Rise," "Rise Companies," "we," "our," the "Company," and "us") makes statements in this Quarterly Report on Form 10-Q (the "Quarterly Report") that are considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "seek," "may," and similar expressions or statements regarding future periods are intended to identify forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Quarterly Report or in the information incorporated by reference into this Quarterly Report. The forward-looking statements included in this Quarterly Report are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties, and accordingly we can give no assurance that such expectations, plans, estimates, assumptions and beliefs are correct or will be achieved. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we beli

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Unaudited Financial Statements

Item 1. Unaudited Financial Statements. INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF RISE COMPANIES CORP. (Unaudited) Page Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Changes in Convertible Preferred Stock, Stockholders' Equity and Non-Controlling Interest 6 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements 9 3 RISE COMPANIES CORP. Condensed Consolidated Balance Sheets (Amounts in thousands, except share data) June 30, 2025 December 31, 2024 (Unaudited) (*) ASSETS Current assets: Cash and cash equivalents $ 11,231 $ 21,081 Restricted cash 304 74 Due from affiliates 6,749 7,147 Prepaid expenses 1,523 1,619 Notes receivable 12,500 12,500 Other current assets, net 2,571 1,569 Total current assets 34,878 43,990 Investments in Sponsored Programs 1,289 1,248 Property, software and equipment, net 32,909 35,082 Operating lease assets 3,143 3,359 Other assets, net 3,456 3,614 Total assets $ 75,675 $ 87,293 LIABILITIES Current liabilities: Accounts payable $ 948 $ 947 Accrued expenses 4,758 8,686 Due to stockholders 2,021 1,449 Operating lease liabilities, current 1,036 1,023 Loan payable, current — 2,690 Other current liabilities 832 457 Total current liabilities 9,595 15,252 Operating lease liabilities, non-current 3,801 4,153 Other liabilities 277 275 Total liabilities 13,673 19,680 Commitments and contingencies ( Note 16 ) Series A convertible preferred stock, $ 0.0001 par value; 15,000,000 shares authorized; 11,865,046 shares issued and outstanding; with an aggregate liquidation preference of $ 25,951 25,018 25,018 STOCKHOLDERS' EQUITY Class A Common Stock, $ 0.0001 par value; 43,000,000 shares authorized; 2,891,359 shares issued and 2,458,394 shares outstanding, 2,888,859 shares issued and 2,455,894 shares outstanding, respectively — — Class B Common Stock,

View Full Filing

View this 10-Q filing on SEC EDGAR