Rentberry Inc.
09/30/2024 | Press release | Distributed by Public on 09/30/2024 10:17
Special Semiannual Financial Report under Regulation A Form 1 SA
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-SA
SEMIANNUAL REPORT PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933
For the semiannual period ended June 30, 2024
Rentberry, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 47-4933743 | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| 201 Spear Street, Suite 1100 | ||
| San Francisco, CA | 94105 | |
| (Address of principal executive offices) | (Zip Code) |
(415) 795-7171
Registrant's telephone number, including area code
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this report, the term "Rentberry," "we," "us," "our," or "the Company" refers to Rentberry, Inc. and our subsidiaries on a consolidated basis.
Forward-Looking Statements
The following information contains certain forward-looking statements. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may," "could," "expect," "estimate," "anticipate," "plan," "predict," "probable," "possible," "should," "continue," or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in Item 3 of this report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Unless otherwise indicated, the latest results discussed below are as of June 30, 2024. The financial statements included in this filing as of and for the six months ended June 30, 2024 are unaudited, and may not include adjustments necessary to make those financial statements comparable to audited results, although in the opinion of management all adjustments necessary to make these interim statements of operations not misleading have been included.
1
Overview
Rentberry Inc. (the "Company") was incorporated under the laws of the State of Delaware on August 28, 2015 with headquarters in San Francisco, California. Rentberry has developed a closed-loop home rental platform that makes the long-term leasing process transparent and efficient by eliminating the hassle of paper applications, paper credit reports, face-to-face negotiations and paper checks. Additionally, our platform automates all the standard rental tasks from submitting personal information, customer offers and eSigning the rental agreement. We are also developing other third-party services and products for our platform as we recently entered into an agreement with Sure Inc. to offer rental insurance. Our goal is to have a fully integrated platform with the third-party service providers within 24 months.
Over the past years Rentberry has concentrated on its brand recognition and user growth. At the same time, the Company successfully tested various monetization channels. Throughout 2024, Rentberry has continued rolling out various monetization functionality on the platform. To date, the Company has been primarily funded through offerings of securities.
The Company's operating expenses consist of general and administrative expenses and selling and marketing expenses. Our general and administrative expenses include team salaries, office rent, servers and other similar type of expenses. Our selling and marketing expenses include social media advertising, salaries and Google ads and other similar type of expenses.
Since Inception, the Company has relied on raising securities to fund its operations. As of June 30, 2024, the Company will likely incur losses prior to generating positive working capital. These matters raise substantial concern about the Company's ability to continue as a going concern. As of June 30, 2024, the Company is in expansion phase and plans to enter new business segments in real estate. Our ability to continue as a going concern is dependent on the Company's ability to grow its revenues and generate sufficient cash flows from operations to meet its obligations and/or obtaining additional short-term financing from its shareholders or other sources, as may be required.
These factors raise substantial doubt about our ability to continue as a going concern. We are dependent on additional capital resources for our planned principal operations and are subject to significant risks and uncertainties, including failing to secure funding to operationalize our planned operations or failing to profitably operate the business.
Results of Operations
Revenue
For the six-month period ended June 30, 2024 ("Interim 2024"), the Company had revenue from operations of $229,825 compared to revenue from operations of $83,859 for the six-month period ended June 30, 2023 ("Interim 2023"). The increase in revenue of $145,966 is primarily attributable to the services that were offered to the Company's customers. The Company's revenue to date has largely come from testing various monetization channels on the platform, and the increase represents wider usage of our platforms. Specifically, the Company generates revenues from applications and credit reports when booking a property on a transactional basis. The Company also generates revenue from partnering with other companies for leads and advertising revenue.
2
Operating Expenses
The Company's total operating expenses increased to $2,254,804 for Interim 2024 compared with $1,597,766 for Interim 2023, representing a $657,038 increase. The primary drivers of the increase were:
| ● | A $504,003 increase in selling and marketing expenses due to a substantial increase in social media ads, such as Facebook, Twitter and Google Ads related to our Website and capital raising campaigns. |
| ● | A $153,035 increase in general and administrative expenses occurred as a result of the business expansion into a modular homes and flexible living model. |
Overall, we experienced a net loss of $(2,024,979) for Interim 2024 compared to a net loss of $(1,513,732) for Interim 2023.
Seasonality
Unlike short-term rental markets, such as vacation rentals or Airbnb listings, the long-term home rental market in the United States experiences less pronounced seasonality. While factors like weather and holidays influence rental activity to some extent, the demand for long-term rentals is more stable throughout the year. However, certain regions see fluctuations in rental activity based on factors like school calendars, job relocations, and local economic conditions. For instance, rental demand in college towns may peak during the summer months as students move in and out, while cities with strong tourism industries may experience increased demand during peak travel seasons. Overall, while there may be some seasonal variations in rental activity, the long-term home rental market in the U.S. generally remains robust and resilient throughout the year.
Liquidity and Capital Resources
Cash and Cash Equivalents
As at June 30, 2024 and June 30, 2023, the Company had $2,451,053 and $2,505,358, respectively, in cash and cash equivalents. The decrease of $54,305 during Interim 2024 was due to normal day-to-day business activities and expenses combined with additional costs for capital raises during Interim 2024. We believe current capital will be able to fund operations for the next 18 months. The Company intends to use it for the salaries for current employees to cover engineering and business development, marketing, paying servers and to Google (for utilizing their Google Maps API). For the remainder of 2024, we anticipate our average burn rate will be between $150,000-$200,000 per month.
Current Assets - Accounts Receivable - shareholders
As at June 30, 2024, shareholders of Rentberry owed $524,553 to the Company. These amounts were lent to employees and will reduce the bonuses payable to those individuals. The Company expects to collect the full amount of these receivables from the related entities. These amounts due are carried on our balance sheet and discussed in Note 3 to the unaudited interim financial statements accompanying this report.
Sources of Liquidity
We have increased net cash used in operating activities to $(2,048,271) for Interim 2024 compared to $(1,420,402) for Interim 2023. The main driver of the increase in cash was the growth in revenue and additional capital raised through the sale of SAFE agreements.
To date the Company has been financed by the proceeds of its offerings of securities. In 2023, we conducted an offering of Crowd SAFEs in reliance on Regulation Crowdfunding which terminated on November 15, 2023 and raised net proceeds of $4,477,474, of which $2,018,432 was received by the Company in Interim 2024. Those proceeds were used for marketing, advertising, business development and salaries. The Company intends to engage in additional capital raises in the near future.
Indebtedness
The Company does not have any material terms of indebtedness.
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Trend Information
The long-term home rental trend in the United States has witnessed significant growth in recent years, driven by various factors reshaping housing preferences and lifestyles. Economic shifts, demographic changes, and evolving attitudes towards homeownership have all contributed to the increasing popularity of long-term rentals. Particularly among younger generations, the desire for flexibility, mobility, and financial freedom has led many to opt for renting over buying. Additionally, the aftermath of the 2008 financial crisis prompted a shift in attitudes towards homeownership, with many individuals and families preferring the stability and predictability offered by long-term rental agreements. Moreover, the rise of remote work and digital nomadism has further fueled demand for long-term rentals, as individuals seek the flexibility to live and work from anywhere without being tied down by the responsibilities of homeownership. As a result, the long-term home rental market in the US continues to expand, with landlords, property managers, and real estate developers adapting to meet the evolving needs and preferences of renters in this dynamic landscape.
Item 2. Other Information
None.
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ITEM 3. FINANCIAL STATEMENTS
RENTBERRY, INC.
(A Delaware Corporation)
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| Balance Sheet As at June 30, 2024 (Unaudited) and December 31, 2023 (Audited) | 6 | |
| Income Statement for the Six-Month Periods Ending June 30, 2024 and June 30, 2023 | 7 | |
| Statement of Shareholders Equity For the Six-Month Period Ending June 30, 2024 and the year ending December 31, 2023 | 8 | |
| Statement of Cash Flows For the Six-Month Periods Ending June 30, 2024 and June 30, 2023 | 9 | |
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RENTBERRY, INC.
BALANCE SHEET
UNAUDITED
As of June 30, 2024 and December 31, 2023
See Notes to the Financial Statements
|
June 30, 2024 |
December 31, 2023 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 2,451,053 | $ | 2,505,358 | ||||
| Accounts receivable | 304,631 | 304,631 | ||||||
| Accounts receivable - related parties | 524,553 | 524,553 | ||||||
| Investments | 811,054 | 811,054 | ||||||
| Other assets | 72,947 | 72,947 | ||||||
| Total current assets | 4,164,238 | 4,218,543 | ||||||
| Fixed assets, net of accumulated depreciation | 22,756 | 15,912 | ||||||
| Intangible assets, net of accumulated amortization | 127,750 | 116,025 | ||||||
| Security deposit | 26,666 | 26,666 | ||||||
| Total Assets | $ | 4,341,410 | $ | 4,377,146 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Credit cards | $ | 52,062 | $ | 75,354 | ||||
| Total current liabilities | 52,062 | 75,354 | ||||||
| SAFE instruments | 3,947,065 | 1,928,633 | ||||||
| Total Liabilities | 3,999,127 | 2,003,987 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common Stock | 5,380 | 5,380 | ||||||
| Additional paid-in capital | 19,667,087 | 19,667,087 | ||||||
| Retained deficit | (19,330,184 | ) | (17,299,308 | ) | ||||
| Accumulated Other Comprehensive Income | 0 | 0 | ||||||
| Total Stockholders' Equity | 342,283 | 2,373,159 | ||||||
| Non-controlling interest | 0 | 0 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 4,341,410 | $ | 4,377,146 |
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RENTBERRY, INC.
UNAUDITED
STATEMENT OF OPERATIONS
For the Six-Month Periods Ending June 30, 2024 and June 30, 2023
See Notes to the Financial Statements
|
Six-Month Period Ending June 30, 2024 |
Six-Month Period Ending June 30, 2023 |
|||||||
| Revenues | $ | 229,825 | $ | 83,859 | ||||
| Operating expenses | ||||||||
| General and administrative | 1,344,139 | 1,191,104 | ||||||
| Selling and marketing | 910,665 | 406,662 | ||||||
| Total operating expenses | 2,254,804 | 1,597,766 | ||||||
| Net Operating Loss | (2,024,979 | ) | (1,513,907 | ) | ||||
| Interest income (expense), net | 0 | 1,174 | ||||||
| Depreciation and amortization (expense) | (5,897 | ) | 0 | |||||
| Other income (expense) | 0 | 0 | ||||||
| Tax (provision) benefit | 0 | 0 | ||||||
| Net Loss | $ | (2,030,876 | ) | $ | (1,512,732 | ) | ||
| Basic earnings per share | (0.19 | ) | (0.04 | ) | ||||
| Diluted earnings per share | (0.19 | ) | (0.04 | ) | ||||
| Total Comprehensive Loss | $ | (2,030,876 | ) | $ | (1,512,732 | ) |
In the opinion of management all adjustments necessary in order to make the interim financial statements not misleading have been included.
See the accompanying notes, which are an integral part of these unaudited financial statements.
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RENTBERRY, INC.
UNAUDITED
STATEMENT OF STOCKHOLDERS' EQUITY/DEFICIT
For the Six-Month Period Ending June 30, 2024 and the Year Ending December 31, 2023
| Common Stock |
Additional Paid-In |
Accumulated Other Comprehensive |
Retained | Total Stockholders' | ||||||||||||||||||||
| Shares | Value | Capital | Income (Loss) | Deficit | Equity | |||||||||||||||||||
| Balance as of December 31, 2022 | 53,613,868 | $ | 5,361 | $ | 19,426,530 | $ | 0 | $ | (12,495,970 | ) | $ | 6,935,921 | ||||||||||||
| Start Engine share issuance | 199,237 | 19 | 240,558 | 240,577 | ||||||||||||||||||||
| Net (loss) | (4,803,338 | ) | (4,803,338 | ) | ||||||||||||||||||||
| Balance as of December 31, 2023 | 53,813,105 | $ | 5,380 | $ | 19,667,087 | $ | 0 | $ | (17,299,308 | ) | $ | 2,373,159 | ||||||||||||
| Net (loss) | (2,030,876 | ) | (2,030,876 | ) | ||||||||||||||||||||
| Balance as of June 30, 2024 | 53,813,105 | $ | 5,380 | $ | 19,667,087 | $ | 0 | $ | (19,330,184 | ) | $ | 342,283 |
See the accompanying notes, which are an integral part of these unaudited financial statements.
8
RENTBERRY, INC.
UNAUDITED
STATEMENT OF CASH FLOWS
For the Six-Months Ending June 30, 2024 and 2023
See Accompanying Notes to the Financial Statements
|
June 30, 2024 |
June 30, 2023 |
|||||||
| Cash Flows from Operating Activities | ||||||||
| Comprehensive Income (Loss) | $ | (2,030,876 | ) | $ | (1,512,732 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operations: | ||||||||
| Add depreciation and amortization | 5,897 | 0 | ||||||
| Changes to operating assets and liabilities | ||||||||
| (Increase) Decrease in accounts receivable | 0 | 0 | ||||||
| (Increase) Decrease in prepaid expenses and other assets | 0 | 0 | ||||||
| Increase (Decrease) in accounts payable | (23,292 | ) | (16,586 | ) | ||||
| Increase (Decrease) in credit cards | 0 | 108,916 | ||||||
| Net cash used in operating activities | (2,048,271 | ) | (1,420,402 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| (Acquisition) of fixed and intangible assets | (24,466 | ) | 0 | |||||
| (Increase) Decrease in investments | 0 | 65,751 | ||||||
| Cash loaned to shareholders | 0 | (27,345 | ) | |||||
| Net cash provided by investing activities | (24,466 | ) | 38,406 | |||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from SAFE instruments | 2,018,432 | 0 | ||||||
| Proceeds from the issuance of stock, net | 0 | (318,893 | ) | |||||
| Net cash provided by financing activities | 2,018,432 | (318,893 | ) | |||||
| Net change in cash and cash equivalents | (54,305 | ) | (1,700,890 | ) | ||||
| Cash and cash equivalents at beginning of period | 2,505,358 | 5,381,095 | ||||||
| Cash and cash equivalents at end of period | $ | 2,451,053 | $ | 3,680,205 |
See the accompanying notes, which are an integral part of these unaudited financial statements.
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RENTBERRY, INC.
UNAUDITED
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE PERIODS ENDED JUNE 30, 2024 AND JUNE 30, 2023
1. Summary of Significant Accounting Policies
The Company
Rentberry, Inc. (the "Company") was incorporated in the State of Delaware on August 28, 2015 and has offices in San Fransisco, California and Ukraine. The Company is a home rental platform offering decentralized, global, long-term rental solutions for tenants and landlords. The platforms offers a transparent application process, a crowd sourced security deposit network, instant rent payments, e-signing of rental agreements and credit reports. The Company is still in the testing phases and its activities are subject to significant risks and uncertainties, including the ability to secure additional funding to continue to develop the platform that will attract users.
Going Concern
Since Inception, the Company has relied on raising securities to fund its operations. As of June 30, 2024, the Company will likely incur losses prior to generating positive working capital. These matters raise substantial concern about the Company's ability to continue as a going concern. As of June 30, 2024, the Company is still mostly in the developmental process, with very limited revenue. The Company's ability to continue as a going concern is dependent on the Company's ability to raise short term capital, as well as the Company's ability to generate funds through revenue producing activities.
Fiscal Year
The Company operates on a December 31st year-end.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP) requires the use of management's estimates. In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the period presented have been included.
Use of Estimates
The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the use of management's estimates. These estimates are subjective in nature and involve judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the six-month semiannual period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid financial instruments purchased with maturities of three months or less to be cash equivalents. As of June 30, 2024, the Company held no cash equivalents.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
1. Summary of Significant Accounting Policies (continued)
Risks and Uncertainties
The Company has a limited operating history. The Company's business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company's control could cause fluctuations in these conditions.
Accounts Receivable
The Company's trade receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying value of the Company's receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value.
The Company evaluates the collectability of accounts receivable on a customer-by-customer basis. The Company records a reserve for bad debts against amounts due to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The reserve is a discretionary amount determined from the analysis of the aging of the accounts receivables, historical experience and knowledge of specific customers. As of June 30, 2024, the Company believes all amounts in accounts receivable are collectable.
Software Development Costs
In compliance with ASC 350-50, Accounting for Costs of Computer Software Development and ASC 985-20, Costs of Software to be Sold, Leased or Marketed, in the future, the Company will capitalize and carry forward as assets, the costs to develop the Rentberry platform. Research is the planned efforts of a company to discover new information that will help create a new product or service. Such costs are expensed. Development takes the findings generated by research and formulates a plan to create the desired platform. The Company applies the GAAP capitalization requirements of the "waterfall" approach which includes a specific sequential order of Plan, Design, Coding/development, Testing and Software release.
The Company monetizes and forecasts the revenues from the internally developed software and amortize the aggregate costs of the developmental software asset over the forecasted revenue stream; a matching of the revenue and costs, using the straight-line method, based on estimated useful lives of the asset. Maintenance of the platform will be expensed. The Company recorded $5,897 in amortization expense during the period ending June 30, 2024.
The Company reviews the carrying value of intangible personal property for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there was no impairment for the period ending June 30, 2024.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
1. Summary of Significant Accounting Policies (continued)
Intangible Assets
The Company accounts for intangible assets (including patents and website) in accordance with ASC 350 "Intangibles-Goodwill and Other" ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.
The Company amortizes the cost of their intangible assets over the 15-year estimated useful life on a straight-line basis.
Income Taxes
The Company complies with FASB ASC 740 for accounting for uncertainty in income taxes recognized in a company's financial statements, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. FASB ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements. The Company believes that its income tax positions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.
The Company is subject to tax filing requirements as a corporation in the federal jurisdiction of the United States. The Company sustained net operating losses since inception. Net operating losses will be carried forward to reduce taxable income in future years. Due to management's uncertainty as to the timing and valuation of any benefits associated with the net operating loss carryforwards, the Company has elected to recognize an allowance to account for them in the financial statements but has fully reserved it. Under current law, net operating losses may be carried forward indefinitely.
The Company is subject to franchise and income tax filing requirements in the States of Delaware and California.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
1. Summary of Significant Accounting Policies (continued)
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.
Level 3 - Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of Inception. Fair values were assumed to approximate carrying values because of their short term in nature or they are payable on demand.
Concentrations of Credit Risk
From time-to-time cash balances, held at a major financial institution may exceed federally insured limits of $250,000. Management believes that the financial institution is financially sound, and the risk of loss is low.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
1. Summary of Significant Accounting Policies (continued)
Revenue Recognition
Effective January 1, 2019, the Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Prior to the adoption of ASC 606, the Company recognized revenue when persuasive evidence of an arrangement existed, delivery of products had occurred, the sales price was fixed or determinable and collectability was reasonably assured. The Company generates revenues from applications and credit reports when booking a property on a transactional basis. The Company also generates revenue from partnering with other companies for leads and advertising revenue. The Company's payments are generally collected upfront. For the six-month period ending June 30, 2024, the Company recognized $229,825 in revenue.
Research and Development
In compliance with ASC 730-10-25, all research and development costs are expensed as incurred.
Advertising Expenses
The Company expenses advertising costs as they are incurred.
Organizational Costs
In accordance with FASB ASC 720, organizational costs, including accounting fees, legal fee, and costs of incorporation, are expensed as incurred.
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), or ASU 2016-02, which supersedes the guidance in ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. This guidance is effective for annual reporting periods beginning after December 15, 2021 for non-public entities. The Company is still evaluating the impact of ASU 2016-02 on their financial statements and related disclosures.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
1. Summary of Significant Accounting Policies (continued)
New Accounting Pronouncements (continued)
In August 2018, amendments to existing accounting guidance were issued through Accounting Standards Update 2018-15 to clarify the accounting for implementation costs for cloud computing arrangements. The amendments specify that existing guidance for capitalizing implementation costs incurred to develop or obtain internal-use software also applies to implementation costs incurred in a hosting arrangement that is a service contract. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, and early application is permitted. The Company is still evaluating the impact of ASU 2018-15 on their financial statements and related disclosures.
2. Commitments and Contingencies
The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or its shareholders.
3. Account Receivable - Related Party
Accounts receivable related parties consists of amounts due to the Company from other Companies under common ownership of the Company. As of June 30, 2024, this amounted to $524,553. The Company expects to collect the full amount of this from the related entities.
4. Equity
Treasury Stock
During 2024, the Company didn't conduct any transactions related to its treasury stock.
Common Stock
Under the Company's articles of incorporation, the total number of shares of common stock that the Company has authority to issue is 70,000,000 shares, at $0.0001 par value per share. As of June 30, 2024, 53,813,105 shares have been issued and 54,286,890 are outstanding.
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RENTBERRY, INC.
NOTES TO THE FINANCIAL STATEMENT JUNE 30, 2024
(unaudited)
4. Equity (continued)
Preferred Stock
Under the Company's articles of incorporation, the total number of shares of preferred stock that the Company has authority to issue is 10,000,000 shares, at $0.0001 par value per share. As of June 30, 2024, no shares have been issued and none are outstanding.
5. Going Concern
These financial statements are prepared on a going concern basis. The Company was incorporated on August 28, 2015 and has established a presence and operations in the United States. The Company's ability to continue is dependent upon management's plan to raise additional funds and achieve and sustain profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.
6. Subsequent Events
Managements Evaluation
The Company has evaluated subsequent events through September 25, 2024, the date through which the financial statements were available to be issued. It has been determined that no events require additional disclosure.
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ITEM 4. EXHIBITS
The documents listed in the Exhibit Index of this report are incorporated by reference or are filed with this report, in each case as indicated below.
| # | Filed herewith. |
| * | Previously filed with the Company's Offering Statement on Form 1-A (Commission File No. 024-11437). |
| ** | Previously filed with the Company's Form C, dated May 24, 2023, as Exhibit B (Commission File No. 024-11437). |
| *** | Previously filed with the Company's Annual Report on Form 1-K, dated April 30, 2024 (Commission File No. 024-11437). |
| + | Portions of this exhibit have been omitted pursuant to the instructions to Item 17 of Form 1-A. |
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SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, California, on September 30, 2024.
| RENTBERRY, INC. | ||
| By: | /s/ Oleksiy Lyubynskyy | |
| Name: | Oleksiy Lyubynskyy | |
| Title: | CEO | |
| Date: | September 30, 2024 |
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons in the capacities and on the dates indicated.
| By: | /s/ Oleksiy Lyubynskyy | |
| Name: | Oleksiy Lyubynskyy | |
| Title: | CEO, Principal Financial Officer, Principal Accounting Officer & Director | |
| Date: | September 30, 2024 | |
| By: | /s/ Alex Svitiashchuk | |
| Name: | Alex Svitiashchuk | |
| Title: | Director | |
| Date: | September 30, 2024 | |
| By: | /s/ Oleksandr Kotovskov | |
| Name: | Oleksandr Kotovskov | |
| Title: | Director | |
| Date: | September 30, 2024 |
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