The Real Brokerage Inc., the Canada-based holding company of brokerage Real, will be coming to the Nasdaq during the second quarter of 2021, according to a news brief on Thursday. The company already lists common shares on the Canada-based TSX Venture Exchange under the ticker REAX.
The Real Brokerage also offers common shares on the QTC Markets Group (OTCQX) under the ticker REAXF, which will be changed once their Nasdaq application is approved by the U.S. Securities and Exchange Commission (SEC).
“In advance of an anticipated listing on Nasdaq, Real will file a Form 40-F Registration Statement with the United States Securities and Exchange Commission,” the brief read. “The listing of Real’s shares on Nasdaq remains subject to the approval of Nasdaq and the satisfaction of all applicable listing and regulatory requirements, including meeting the necessary share price requirements and the SEC declaring the Form 40-F Registration Statement effective.”
The Form 40-F Registration Statement is specifically for Canadian companies that want to begin trading in the United States and provides U.S. investors with standard information about the security and the company, and the domestic and Canadian contact information for the securities issuer. After going live on the Nasdaq, The Real Brokerage will continue to use that form to file annual reports.
A Real spokesperson told Inman the company “has no price target for a capital raise” as they’re already public on the Canadian markets and are not “planning a public offering concurrently with the Nasdaq listing.”
The Real Brokerage’s price per share on the OTCQX has fluctuated between $0.78 and $2.85 since going live in January 2021 with a market cap of $257.68 million USD. On the TSX Venture Exchange, the price per share has fluctuated between $0.15 to $3.66 since going live in January 2020 with a market cap of $325.15M CAD.
In December, Real raised $20 million through an equity investment deal with Insight Partners to bolster its agent mobile app and expand the brokerage’s footprint, which currently includes 27 states and the District of Columbia.
In addition to a virtual business model, Real offers an 85-15 commission split, which converts to a 100 percent split after individual agents reach a $12,000 annual cap. Team leaders have a $21,000 annual cap with a $6,000 annual cap for each of their team members. Agents and team leaders also pay transaction and lease fees after reaching the cap, and can take advantage of the brokerage’s revenue share and stock option programs.
The brokerage has taken a slow and steady approach to growth, nearing the 2,000 agent mark at the end of Q1 2021 (1,895 agents) after years of flat growth.
“We approached those agents that we saw had no engagement and no interactions with us and no transactions, and we just asked them, ‘Are you serious about practicing real estate?’” Real founder Tamir Poleg said in 2018 of his recruiting and retention tactics. “And whoever wasn’t, we kindly asked that they leave.”
Despite that, Real increased its revenue 217 percent to $9.3 million during Q1 2021, according to its unaudited earnings results released on April 15. The company is also profitable, according to its latest audited earnings results for Q4 2020.
“These preliminary results reflect the extraordinary momentum Real has experienced since we began trading on the TSX Venture Exchange in June 2020 and the OTCQX in August 2020,” Poleg said of the company’s stock market performance.
“An increasing number of agents and teams are joining Real to enjoy better commission splits, innovative technology, revenue sharing, flexibility and an attractive agent stock incentive plan.”
“Agent growth, in turn, is driving the accelerated growth of our business,” he added.