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Item 1. Financial Statements

2024-08-14 compared with 2024-04-19 · 510 added, 425 removed, 223 unchanged (81% of the section changed)

FINANCIAL STATEMENTS

REALPHA TECH CORP.

Condensed Consolidated Balance Sheet

March 31, 2024 and December 31, 2023

Condensed Consolidated

Balance Sheet

As of June 30, 2024 and

December 31, 2023

Current Assets

11 unchanged sentences

Accounts payable

Related party payables

Accrued expenses

Other current liabilities

Total current liabilities

Long-Term Liabilities

Deferred liabilities

Deferred liabilities, net of current portion

Mortgage loans

Other long term liabilities

Total liabilities

1 unchanged sentence

Preferred stock, $ 0.001 par value;

5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2023 and March 31, 2024

5,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023

Common stock ($ 0.001 par value;

200,000,000 shares authorized, 44,323,226 shares outstanding as of June 30, 2024;

200,000,000 shares authorized, 44,122,091 shares outstanding as of December 31, 2023)

200,000,000 shares authorized, 44,122,091 shares outstanding as of March 31, 2024)

Additional paid-in capital

6 unchanged sentences

TOTAL LIABILITIES AND STOCKOLDERS’ EQUITY

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

REALPHA TECH CORP.

Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2024, and 2023 (unaudited)

For the Three Months Ended

Condensed Consolidated

Statements of Operations

For the Three and Six

Months Ended June 30, 2024 and 2023

For the Three Months Ended

For the Six Months Ended

Cost of Revenues

10 unchanged sentences

( 1,210,266 )

( 2,444,134 )

( 1,547,580 )

Other Income (Expense)

Interest income

Gain on sale of myAlphie

Interest expense

1 unchanged sentence

Total other income (expense)

Net Loss before income taxes

( 1,419,045 )

Income tax expense

Net (Loss) Income

( 1,478,312 )

( 2,897,357 )

Net Loss Attributable to Non-Controlling Interests

Net Loss Attributable to Controlling Interests

Net Income (Loss) Attributable to Non-Controlling Interests

Net (Loss) Income Attributable to Controlling Interests

$ ( 1,478,329 )

$ ( 2,897,309 )

Net loss per share — basic

Net loss per share — diluted

Net (loss) income per share — basic

Net (loss) income per share — diluted

Weighted-average outstanding shares — basic

Weighted-average outstanding shares — diluted

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

REALPHA TECH CORP.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2024, and 2023 (unaudited)

Unaudited Condensed Consolidated Statements of Changes in Stockholders’

Equity (Deficit)

for the Three and Six Months Ended June 30,

2024 and 2023

Stockholders’

4 unchanged sentences

( 1,419,045 )

RTC India - Non controlling interest

Balance at March 31, 2024

$ ( 13,656,865 )

( 1,478,329 )

( 1,478,312 )

Shares issued to employees & directors

Shares issue - Naamche acquisition

RTC India - non controlling interest

Balance at June 30, 2024

$ ( 15,135,194 )

Stockholders’

16 unchanged sentences

$ ( 10,639,897 )

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

Cancellation of shares

Distribution to syndicate members

RTC India - Non Controlling Interest

Balance at June 30, 2023

$ ( 5,985,673 )

REALPHA TECH CORP.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2024, and 2023 (unaudited)

For the Six Months

Ended June 30, 2024, and 2023

Six Months Ended

Cash Flows from Operating Activities:

$ ( 1,419,045 )

Net income (loss)

$ ( 2,897,357 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

Non cash commitment fee expense

Stock based compensation

Commitment fee expenses

Gain on sale of properties

Gain on previously held equity

Gain on sale of myAlphie

( 5,502,774 )

Changes in operating assets and liabilities:

Accounts receivable

Payable to related parties

Prepaid expenses

3 unchanged sentences

Total adjustments

( 6,147,902 )

Net cash used in operating activities

2 unchanged sentences

Cash Flows from Investing Activities:

Proceeds from sale of properties

Additions to property, plant & equipment

Cash paid to acquire business

Cash acquired through business combination

Capitalized software development - work in progress

Net cash provided by (used in) investing activities

Net cash (used in) provided in investing activities

Cash Flows from Financing Activities:

1 unchanged sentence

Proceeds from issuance of common stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Net cash used in financing activities

Net decrease in cash

( 2,774,187 )

( 2,163,458 )

Effect of exchange rate changes on cash

Cash - Beginning of Period

Cash - End of Period

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements .

Reconciliation of Cash

reAlpha Tech Corp.

Notes to Condensed Consolidated Financial Statements

Notes to Condensed Consolidated

Financial Statements

Note 1 - Organization and Description of Business

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in the State of Delaware on April 22, 2021.

Initially, our asset-heavy

operational model centered on using proprietary AI tools for real estate acquisition, converting properties into short-term rentals, and

offering fractional interests to investors.

However, due to current macroeconomic challenges like higher interest rates and inflated property

prices, we’ve suspended real estate acquisition operations.

Our new focus is on advancing and refining our AI technologies for commercial

applications to generate revenue.

Transactions between entities under common control

are accounted for in a manner similar to the pooling of-interest method.

Thus, the financial statements of the commonly controlled entities

would be consolidated, retrospectively, as if the transaction had occurred at the beginning of the period.

As a result, the assets and

liabilities and the historical operations reflected in the Company’s financial statements are those of reAlpha Tech Corp and subsidiaries

and reAlpha Asset Management, Inc.

recorded at historical cost basis.

The historical shareholders’ equity of the accounting acquirer

prior to the merger is retroactively reclassified for the equivalent number of shares received in the merger after giving effect to any

difference in par value of the company’s and the accounting acquirer’s stock by an offset in paid in capital.

Initially, our asset-heavy operational model centered

on using proprietary artificial intelligence (“AI”) tools for real estate acquisition, converting properties into short-term

rentals, and offering fractional interests to investors.

However, due to current macroeconomic challenges like higher interest rates and

inflated property prices, we’ve suspended real estate acquisition operations.

Our new focus is on enhancing our AI technologies

to continuously improve our commission-free, AI-powered end-to-end homebuying platform, driven by a growth strategy centered on strategic

acquisitions.

The Company’s head office is located at

6515 Longshore Loop, Suite 100 — Dublin, OH 43017.

Note 2 - Summary of Significant Accounting

2 - Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial

statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

The accompanying unaudited condensed consolidated

financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

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Basis of Presentation

The accompanying unaudited condensed consolidated

financial statements have been prepared in accordance with the rules and regulations of the SEC for Quarterly Reports on Form 10-Q.

certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted

accounting principles have been condensed or omitted pursuant to such rules and regulations.

The condensed consolidated balance sheet

as of December 31, 2023 has been derived from the Company’s audited consolidated financial statements as of that date.

This summary of significant accounting policies

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These accounting policies conform to accounting principles,

generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

The financial statements include the operations, assets, and liabilities of the Company.

In the opinion of the Company’s management,

the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary

to fairly present the accompanying financial statements.

generally accepted in the U.S., and have been consistently applied in the preparation of the financial statements.

The financial statements

include the operations, assets, and liabilities of the Company.

In the opinion of the Company’s management, the accompanying condensed

consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying

financial statements.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated

financial statements included in the Company’s Transition Report on Form 10-KT for the eight month period ended December 31, 2023

(the “Form 10-KT”).

Operating results for interim periods are not necessarily indicative of operating results for an entire

fiscal year or any other future periods.

Use of Estimates

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Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments

with an original maturity of three months or less when purchased to be cash equivalents.

had cash of $ 4,838,146 and $ 6,456,370 as of March 31, 2024 and December 31, 2023, respectively.

Concentration of Credit Risks

Financial instruments that potentially subject

the Company to a significant concentration of credit risk primarily consist of cash, cash equivalents, and accounts receivable.

March 31, 2024, the Company’s cash was held by financial institutions that management believes have acceptable credit.

Deposit Insurance Corporation insures balances up to $ 250,000 .

At times, the Company may maintain balances in excess of the federally

insured limits.

Accounts receivable are typically unsecured.

The risk with respect to accounts receivable is mitigated by regular credit

evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances.

Property and Equipment

Property and equipment are stated at cost, less

accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives of related asset.

estate assets are carried at cost.

Depreciation is calculated on the straight-line method over the estimated lives of the assets ( 27.5

years for residential rental property, 5 years for furniture and fixtures and 3 years for furnishings).

Major additions and betterments

are capitalized and depreciated.

Maintenance and repairs, which do not improve or extend the estimated useful lives, are expensed as incurred.

Upon disposal of assets, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss resulting from

the disposal is recorded in the period of disposition in the accompanying statement of operations.

The Company holds 25 % of the equity in each of

the two privately held entities, Naamche Inc.

and Carthagos.

However, the Company does not have any significant control or influence

over the financial and operating policies.

As these equity instruments do not have readily determinable fair values, they have been measured

using the measurement alternative, cost-less impairment.

The carrying amount for these instruments would be subsequently adjusted for

observable price changes, or prices in orderly transactions for an identical investment or similar investment of the same issuer.

these investments are periodically evaluated for impairment.

The investments are classified as other assets on the Company’s condensed

Consolidated Balance Sheet and the Company has not recorded any adjustments to the carrying value of investments in the period ended March

Capitalized Software Development Costs

The Company follows Accounting Standards Codification

(ASC) 350, “Internal-Use Software,” to assess the capitalization of software development costs, such as those incurred during

the application development stage, including coding, testing, and development of software functionality which are eligible for capitalization.

Such costs encompass direct labor, third-party services, and other directly attributable expenses.

As of March 31, 2024, the software

under development has not reached the stage of being substantially complete and ready for its intended use.

Consequently, the Company

continues to capitalize costs related to the application development stage in accordance with ASC 350.

Amortization of capitalized software development

costs commences when the software is placed in service and is available for its intended use.

The capitalized costs are amortized over

the software’s estimated useful life, which is determined based on factors such as expected future benefits and the rate of technological

The fair value of software acquired in a business

combination is determined using the discounted cash flow (DCF) method as per ASC 820 “Fair Value Measurements and Disclosures”,

requiring the consideration of significant inputs and assumptions, such as projected cash flows, expected growth rates, discount rates,

and other relevant market data.

The Company exercises judgment in selecting appropriate inputs, taking into account historical performance,

market conditions, and the technological characteristics of the software.

Goodwill represents the excess of the cost of

an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed.

Goodwill is tested for impairment

at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would

more likely than not reduce the fair value of a reporting unit below its carrying amount.

Accounting requirements provide that a reporting

entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed

that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

If an initial qualitative assessment

identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative

assessment is not performed, a quantitative analysis is performed.

The quantitative goodwill impairment test is performed by calculating

the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount.

If the fair value of a reporting

unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

However, if the carrying amount of a reporting unit

exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded

on the reporting unit.

Definite-lived Intangible Assets

ASC 350 on Intangibles – Goodwill and Other;

Intangible assets;

the valuation and classification of these intangible assets and determination of useful lives involves judgments and

significant estimates.

These Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase

method of accounting are amortized over their estimated useful lives in a manner that best reflects the economic benefits of the intangible

asset using the straight-line method and estimated useful lives ranging from 2 to 8 years.

We periodically review the estimated useful

lives of our definite-lived intangible assets and identify events or changes in circumstances that may indicate revised estimated useful

Credit Facilities

In May 2022, reAlpha Acquisitions Churchill, LLC,

a wholly-owned subsidiary of reAlpha Tech Corp., entered into a credit agreement with Churchill Finance I, LLC, securing a credit facility

of $ 200 million.

The primary purpose of this credit facility is to finance short-term rental acquisitions.

The facility provides the Company

with increased financial flexibility to pursue strategic opportunities in the real estate market.

Management may utilize the credit facility to

expand the Company’s portfolio of rental properties.

By leveraging this credit facility, the Company aims to capitalize on attractive

investment prospects while adhering to its prudent financial management principles.

The terms and conditions of the credit agreement

with Churchill Finance I, LLC have been evaluated by management, and the interest rates and repayment terms are considered competitive

and favorable to the Company’s financial interests.

Revenue Recognition

Revenues consist of short-term rentals and technology

platform booking income.

Short-term rental revenues include revenues from the rental of properties via Airbnb, Vacasa, and such digital

hospitality platforms.

Technology Platform Revenue includes revenues from bookings made on our technology platform towards painting and

cleaning of properties.

As we are responsible for services rendered by

the technology platform, fees charged to end-users are also included in revenue, while payments to vendors in exchange for their services

are recognized in the cost of revenue, exclusive of depreciation and amortization.

Revenues are recognized in accordance with Topic

606 of the Financial Accounting Standards Board (FASB) ASC for revenue recognition.

The Company recognizes revenues in a manner to depict

the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those

goods or services.

The Company considers revenue realized or realizable and earned when all the five following criteria are met:

(1) identification

of the contract with a customer, (2) identification of the performance obligations in the contract, (3) determination of the transaction

price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when (or

as) performance obligations are satisfied.

We account for income taxes in accordance with

ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred tax assets and liabilities for

the expected tax consequences of our future financial and operating activities.

Under ASC 740, we determine deferred tax assets and liabilities

based on the temporary difference between the financial statement and tax bases of assets and liabilities using the tax rates in effect

for the year in which we expect such differences to reverse.

If we determine that it is more likely than not that we will not generate

sufficient taxable income to realize the value of some or all of our deferred tax assets (net of our deferred tax liabilities), we establish

a valuation allowance offsetting the amount we do not expect to realize.

We perform this analysis each reporting period and reduce our

measurement of deferred taxes if the likelihood we will realize them becomes uncertain.

The deferred tax assets that we record each period depend primarily on our ability to generate future taxable income in the United States.

Each period, we evaluate the need for a valuation allowance against our deferred tax assets and, if necessary, adjust the valuation allowance

so that net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets

will be realized.

If our outlook for future taxable income changes significantly, our assessment of the need for, and the amount of, a

valuation allowance may also change.

We are also required to evaluate and quantify other sources of taxable income, such as the possible reversal of future deferred tax liabilities,

should any arise, and the implementation of tax planning strategies.

Evaluating and quantifying these amounts is difficult and involves

significant judgment, based on all of the available evidence and assumptions about our future activities.

Earnings (Loss) Per Share

The Company presents basic earnings (loss) per

share (“EPS”) and diluted EPS on the face of the condensed consolidated statements of operations.

Basic earnings (loss) per

share is computed as net earnings (loss) divided by the weighted average number of common shares outstanding for the period.

in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from

diluted EPS calculations.

For the three months ended March 31, 2024, the GEM Warrants (as defined below) to purchase up to 1,700,884 of

the Company’s shares of common stock were excluded.

Fair Value of Financial Instruments

When required to measure assets or liabilities

at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used.

The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall.

The categorization

within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses

significant unobservable inputs.

The amount of the total gains or losses for the period are included in earnings that are attributable

to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

The Company has

no financial assets or liabilities that are adjusted to fair value on a recurring basis.

The Company’s balance sheet includes certain

financial instruments.

Certain assets and liabilities are measured at fair value on a non-recurring basis;

that is, the instruments are

not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances.

Significant Accounting Policies

There have been no material changes to our significant

accounting policies from our Form 10-KT.

Recently Issued Accounting Pronouncements:

Consistent with the treatment for emerging growth

companies under the Jumpstart Our Business Startups (JOBS) Act, the Company has elected to delay the implementation of new accounting

standards to the extent such standards provide for delayed implementation by non-public business entities.

In December 2023, the FASB issued ASU 2023-09,

“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness

of income tax disclosures, including jurisdictional information, by requiring consistent categories and greater disaggregation of information

in the rate reconciliation and income taxes paid disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15,

2024 and early adoption is permitted.

The Company is currently evaluating the impact this standard will have on its condensed consolidated

financial statements and related disclosures from the adoption of this guidance.

In November 2023, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

ASU 2023-07 requires expanded disclosures about reportable

segments including additional information on segment expenses, expanded interim period disclosures, and an explanation of how the chief

operating decision maker utilizes segment information in evaluating segment performance.

ASU 2023-07 is effective for fiscal years beginning

after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

We are currently assessing the impact

that the adoption of ASU 2023-07 will have on the disclosures in our consolidated financial statements.

Reclassification Presentation

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Note 3 - Going Concern

With the implementation of FASB standard on going

concern, ASU No.

2014-15, we assessed going concern uncertainty in our condensed consolidated financial statements to determine if we

have sufficient cash and cash equivalents on hand and working capital, including available loans or lines of credit, if any, to operate

for a period of at least 12 months from the date our condensed consolidated financial statements are issued, which is referred to as the

“look-forward period” as defined by ASU No.

As part of this assessment, based on conditions that are known and reasonably

knowable to us, we consider various scenarios, forecasts, projections, and estimates, and we make certain key assumptions, including the

timing and nature of projected cash expenditures or programs, and our ability to delay or curtail those expenditures or programs, if necessary,

among other factors.

Although we anticipate ongoing operating losses

in the foreseeable future, we have assessed our ability to continue as a going concern for the next 12 months.

Despite the current lack

of sufficient revenue, we possess ample liquid capital to fund projected expenses over the next year based on our budgeted operating plans.

As of March 31, 2024, the Company holds approximately

implementation of FASB standard on going concern, ASU No.

2014-15, we assessed going concern uncertainty in our condensed consolidated

financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital, including available loans

or lines of credit, if any, to operate for a period of at least 12 months from the date our condensed consolidated financial statements

are issued, which is referred to as the “look-forward period” as defined by ASU No.

As part of this assessment, based

on conditions that are known and reasonably knowable to us, we consider various scenarios, forecasts, projections, and estimates, and

we make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and our ability to delay

or curtail those expenditures or programs, if necessary, among other factors.

anticipate continued operating losses in the near future, and our cash position as of June 30, 2024 may not fully cover operations for

the 12-month period following the date of issuing the condensed consolidated financial statements included in this report, we are confident

in our strategy to continue investing in the commercialization of our products and technologies and our ability to continue operations.

If we are unable to cover our operating expenses for the next 12-month period through the commercialization of our technologies, or if

we are unable to raise sufficient capital through additional debt or equity arrangements, to the extent needed, there will be uncertainty

regarding our ability to maintain liquidity sufficient to operate the business effectively, which raises substantial doubt as to our ability

to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements.

believe we have alleviated the substantial doubt of our ability to continue operations by securing funding of approximately $ 5.45 million

in gross proceeds pursuant to the issuance of a secured note on August 14, 2024, pursuant to which we raised approximately $ 5.0 million

in net proceeds, after paying related expenses and fees (see “Note 13 – Subsequent Events” below for additional information).

The condensed consolidated financial statements

do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification

of liabilities that might be necessary should we be unable to continue as a going concern.

As of June 30, 2024, we had approximately $ 3.7

million in cash.

With positive working capital and current assets adequately covering liabilities as of March 31, 2024, the Company

believes it has sufficient cash to fund its operations for the next 12 months.

Note 4 - Income Taxes

The Company has not recognized an income tax benefit

for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods.

benefits for the periods presented are offset by a valuation allowance established against deferred tax assets arising from the net operating

losses, the realization of which could not be considered more likely than not.

In future periods, tax benefits and related deferred tax

assets will be recognized when management considers the realization of such amounts to be more likely than not.

The Company has not recognized an income tax

benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods.

The tax benefits for the periods presented are offset by a valuation allowance established against deferred tax assets arising from the

net operating losses, the realization of which could not be considered more likely than not.

In future periods, tax benefits and related

deferred tax assets will be recognized when management considers the realization of such amounts to be more likely than not.

Note 5 - Business Combinations

On May 6, 2024 , we completed our acquisitions

of Naamche, Inc.

Naamche”) and Naamche, Inc.

(“Nepal Naamche,” and together with U.S.

As a result, the Company now owns 100 % of the issued and outstanding shares of capital stock of Naamche, and

both entities are wholly-owned subsidiaries of the Company.

We acquired Naamche to assist the Company with the research and development

of its proprietary AI algorithms and other technologies.

The purchase price consisted of (i) a $ 50,000

cash payment, (ii) 225,000 restricted shares of the Company’s common stock to be issued within 9 months from the closing date of

the acquisitions, and (iii) $ 450,000 in cash, payable over a 3-year period following the closing date of the acquisitions based on the

achievement by Naamche of specified revenue-based targets.

Due to the limited amount of time since closing

the transaction, the preliminary allocation of the purchase price is not yet complete.

We expect most of the purchase price will be allocated

to goodwill and other identifiable intangible assets.

Naamche is included in our consolidated financial statements beginning on the date

of acquisition and reported as part of our Technology Services (formerly “Platform Services”) segment.

We estimated fair values on the acquisition date,

for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in connection

with the Naamche acquisition.

During the measurement period, not to exceed 12 months, we will continue to obtain information to assist

in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates.

If we determine any measurement period adjustments are material, we will apply those adjustments, including any related impacts to net

income, in the reporting period in which the adjustments are determined.

Accordingly, the fair value measurements noted below are preliminary

and subject to modification in the future.

The table below represents the preliminary purchase

price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date.

Purchase price allocation

Net Property Plant & Equipment

Other Current Assets

Cash & Cash Equivalents

Accounts Receivable

Accounts Payable

Accrued Expenses

Dividend Payable

Long Term Loans

Net assets acquired

Note 6 – Property and Equipment

Investments in property and equipment consisted of the following as of March 31, 2024

in property and equipment consisted of the following as of June 30, 2024

Investments in property and equipment other than held for sale

1 unchanged sentence

Total investment in property and equipment

Investments in property and equipment consisted of the following as of December 31, 2023

in property and equipment consisted of the following as of December 31, 2023

Investments in property and equipment other than held for sale

6 unchanged sentences

The Company recorded depreciation expenses of

$ 7,022 and $ 26,551 for the three months ended March 31, 2024 and March 31, 2023, respectively.

Note 6 - Capitalized Software Development costs,

work in progress

$ 69,331 and $ 22,107 for the three months ended June 30, 2024, and June 30, 2023, respectively.

The Company also recorded depreciation

expenses of $ 140,784 and $ 48,658 for the six months ended June 30, 2024, and June 30, 2023, respectively.

Note 7 – Capitalized Software Development

Costs, Work In Progress

Qualifying internal-use software costs incurred

1 unchanged sentence

software license costs are capitalized.

As of March 31, 2024 and December 31, 2023, the balance of capitalized software costs, work in

As of June 30, 2024 and December 31, 2023, the balance of capitalized software costs, work in

progress amounted to $ 996,049 and $ 839,085 , respectively.

3 unchanged sentences

Note 8 – Other Loans

Mortgage and other loans consisted of the following

as of March 31, 2024 and December 31, 2023:

Other loans consisted of the following as of

June 30, 2024, and December 31, 2023:

First Insurance Loan

Total Short-term debt, net

Note 8 - Mortgage Loans

Note 9 - Mortgage and Other Long-Term Loans

Long-term liabilities consisted of the following

as of March 31, 2024 and December 31, 2023:

as of June 30, 2024, and December 31, 2023:

June 30, December 31,

Mortgage note with a bank.

1 unchanged sentence

The note matures on January 1, 2053 at which time there is a balloon payment of remaining principal and interest due, and is secured by the property as well as guaranteed by a shareholder of the Company.

Note 9 - Stockholders’ Equity (Deficit)

Vehicle loan with a bank.

The loan bears interest at a rate of 11.17 % and provides for monthly interest and principal payments.

The loan tenure ends on October 20, 2029 .

Total Mortgage & other long-term loans $ 53,348 $ 247,000

- Stockholders’ Equity (Deficit)

The total number of shares of capital stock that

1 unchanged sentence

(i) 200,000,000 shares of common stock, having a par

value of $ 0.001 per share (the “Common Stock”);

and (ii) 5,000,000 shares of preferred stock, having a par value of $ 0.001

per share (the “Preferred Stock”).

As of March 31, 2024 and December 31, 2023, there were 44,122,091 shares of Common Stock

issued and outstanding, and 0 shares of Preferred Stock issued and outstanding.

value of $ 0.001 per share;

and (ii) 5,000,000 shares of preferred stock, having a par value of $ 0.001 per share.

As of June 30, 2024 there

were 44,323,226 shares of common stock issued and outstanding and as of December 31, 2023, there were 44,122,091 shares of common stock

issued and outstanding, and there were 0 shares of preferred stock outstanding as of June 30, 2024

and December 31, 2023.

Stock Based Compensation

We issued an aggregate of 201,135 shares

of common stock during and as of the quarter ended June 30, 2024, pursuant to reAlpha Tech Corp.’s 2022 Equity Incentive Plan (the

“2022 Plan”) described below.

Equity Incentive Plan

We maintain the 2022 Plan, under which we may

grant awards to our employees, officers and directors and certain other service providers.

The compensation committee of our board of

directors administers the 2022 Plan.

The 2022 Plan permits grants of awards to eligible employees, consultants and other service providers.

The aggregate number of shares of common stock that may be issued under the 2022 Plan may not exceed 4,000,000 shares of common stock.

All of our current employees, consultants and other service providers are eligible to be granted awards under the 2022 Plan.

for awards under the 2022 Plan is determined by the board of directors at its discretion.

The 2022 Plan permits the discretionary award

of incentive stock options (“ISOs”), non-statutory stock options (“NQSOs”), stock awards (which may have varying

vesting schedules and be subject to lock-up periods at the board of directors’ discretion) and other equity awards to selected participants.

Unless sooner terminated, no ISO may be granted under the 2022 Plan on or after the 10th anniversary of the Effective Date (as defined

in the 2022 Plan).

The compensation committee has the sole discretion

in setting the vesting period and, if applicable, exercise schedule of an award, determining that an award may not vest for a specified

period after it is granted and accelerating the vesting period of an award.

The plan administrator determines the exercise or purchase

price of each award, to the extent applicable.

The 2022 Plan does not allow for the assignment, transfer or exercise of awards other than

by will or the laws of descent and distribution.

Unless otherwise provided by the participant’s

Option Award Agreement or Stock Award Agreement (as both terms are defined in the 2022 Plan) issued pursuant to the 2022 Plan, upon the

participant’s termination for any reason, including but not limited to death, Disability (as defined in the 2022 Plan), voluntary

termination nor involuntary termination with or without Cause (as defined in the 2022 Plan), all unvested equity awards in the form of

options or shares shall be forfeited.

Vested options, unless otherwise provided, will remain exercisable for three (3) months following

termination of the participant if such termination is for any reason other than death, Disability or termination for Cause.

participant’s separation from service is due to death or Disability, then the vested options will be exercisable for a period of

twelve (12) months thereafter.

In case the participant’s termination is for Cause, the participant will immediately forfeit any

and all options issued to such participant under the 2022 Plan.

The 2022 Plan also provides the Company with a

right of repurchase all or portion of the shares awarded to the participant under the 2022 Plan, which may be exercised in case a participant

separates from service for any reason, at a price equal to the fair market value, as determined by the board of directors.

of a Change in Control (as defined in the 2022 Plan), the board of directors will have the sole discretion to address the treatment of

a participant’s unvested awards in connection with such Change in Control in the participant’s award agreement.

The board of directors may modify, amend or terminate

the plan at any time, provided that no such modification, amendment or termination of the 2022 Plan materially affects the rights of a

participant under a previously granted award without that participant’s consent.

Further, the board of directors cannot, without

the approval of the Company’s stockholders, amend this plan:

(i) increase the number of common stock with respect to the ISOs that

may be granted under the 2022 Plan;

(ii) make any changes in the class of employees eligible to receive the ISOs under the plan;

without stockholder approval if required by applicable law.

We account for warrants as either equity-classified

or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance

in FASB Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and

ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments

pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for

equity classification under ASC 815, including whether the warrants are indexed to our own ordinary shares and whether the warrant holders

could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions

for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of the warrant’s

issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all

of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded

as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair

value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The Warrants issued in connection with the follow-on

offering and in connection with the GEM Agreement meet the criteria for equity classification under ASC 480 and ASC 815, therefore, the

warrants are classified as equity.

On October 23, 2023, pursuant to the terms of

the GEM Agreement (as defined below), we issued GYBL warrants to purchase up to 1,700,884 shares of the Company’s common stock (the

“GEM Warrants”).

The GEM Warrants are exercisable, for cash, at an original exercise price of $ 406.67 per share, which exercise

price was subsequently adjusted to $ 371.90 after the Company’s most recent public offering and the exercise price of the GEM Warrants

is subject to further adjustments specified therein.

On November 24, 2023, we conducted a follow-on

offering by issuing 1,600,000 units priced at $ 5.00 per unit (the “follow-on offering”), each unit consisting

of one share of common stock and one and a half warrants to purchase common stock (the “Follow-On Warrants,” and together

with the GEM Warrants, the “Warrants”).

The Follow-On Warrants permit holders to exercise them over a five-year period at

an exercise price of $ 5.00 per share, subject to “full ratchet” anti-dilution provisions included therein.

ratchet” anti-dilution provisions provide that the Follow-On Warrants’ exercise price can be adjusted downward to a floor

price of $ 1.44 per share as a result of subsequent offerings, and the share amount issuable pursuant to such warrants would increase such

that the aggregate exercise price payable thereunder would equal the aggregate exercise price prior to such adjustment.

We believe the likelihood that any Warrant holders

will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of

our common stock.

If the trading price for our common stock is less than $ 371.90 per share, in the case of the GEM Warrants, and

less than $ 5.00 per share, in the case of the Follow-On Warrants, we believe holders of the Warrants will be unlikely to exercise them.

While current conditions influencing the exercise of the Warrants make such exercise unlikely, further adjustments to their exercise prices,

or an adjustment to the amount of shares issuable upon exercise thereof, as applicable, may make the Warrants more attractive for investors

Our analysis is based on the trading price of our common stock as of August 13, 2024, which was $ 1.21 per share.

On March 24, 2023, in connection with the acquisition

of Roost Enterprises, Inc.

(“Rhove”), we allocated rights to each seller and participating investors a right to purchase 1,263,000

additional shares of common stock (the “Rollover Stock”) at a fixed price of $ 10 per share within a two-year period following

the closing date of acquisition of Rhove and shall thereafter terminate if not exercised within in such two-year period with no modifications

to the exercise terms (the “Rights”).

These shares were issued without any restrictions.

For details on the factors used in the calculation

of the fair value of the Follow-On Warrants and Rights, refer to the audited consolidated financial statements included in the Form 10-KT.

As the Follow-On Warrants are classified as equity instruments, they are not subject to fair value remeasurement at the end of each reporting

Warrants and Rights activity as of June 30, 2024 were as follows:

Issue date Period

ended Contractual

life (years) Warrants

Outstanding Weighted

Exercise Price Average

Rhove Rights Issued on March 24, 2023 03/04/2023 06/30/2024 2 1,263,000 10.00 0.67

GEM Warrants Issued on October 23, 2023 10/23/2023 06/30/2024 5 1,700,884 371.9 4.31

Follow-on Warrants Issued on November 21, 2023 11/21/2023 06/30/2024 5 2,400,000 5.00 4.39

Warrants outstanding on June 30, 2024 5,363,884 122.52 3.49

Note 11 - Commitments and Contingencies

1 unchanged sentence

Agreement between the Company and GEM Global Yield LLC SCS (“GEM Yield”) and GEM Yield Bahamas Limited (“GYBL,”

and collectively, “GEM”), dated December 1, 2022 (the “GEM Agreement”), we are required to indemnify GEM for any

losses it incurs as a result of a breach by us or of our representations and warranties and covenants under the GEM Agreement or for any

misstatement or omission of a material fact in a registration statement registering those shares pursuant to the GEM Agreement.

GEM is entitled to be reimbursed for legal or other costs or expenses reasonably incurred in investigating, preparing, or defending against

any such loss.

To date, we have not raised any capital pursuant to the GEM Agreement and we may not raise any capital pursuant to it prior

to its expiration.

and collectively, “GEM”), dated December 1, 2022 (the “GEM Agreement”), we are required to indemnify GEM for

any losses it incurs as a result of a breach by us or of our representations and warranties and covenants under the GEM Agreement or

for any misstatement or omission of a material fact in a registration statement registering those shares pursuant to the GEM Agreement.

Also, GEM is entitled to be reimbursed for legal or other costs or expenses reasonably incurred in investigating, preparing, or defending

against any such loss.

To date, we have not raised any capital pursuant to the GEM Agreement and we may not raise any capital pursuant

to it prior to its expiration.

Restrictions pursuant to terms of our future financings may also affect our ability to use the GEM Agreement.

Legal Matters

India Proceeding Involving

Devanur became the CEO of an India-based company named Gandhi City Research Park, Private Limited (“Gandhi City Research

Gandhi City Research Park was liquidated as a result of the Lehman Brothers collapse in 2009.

In 2010, an investor in Gandhi

City Research Park filed a fraud complaint with the Cubbon Park Police Station in Bengaluru, India, against, among others, Mr.

The Company maintains indemnification agreements

with our directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason

of their status or service as directors or officers, except as prohibited by law.

India Proceeding Involving Giri Devanur

Devanur became the CEO of an India-based

company named Gandhi City Research Park, Private Limited (“Gandhi City Research Park”).

Gandhi City Research Park was liquidated

as a result of the Lehman Brothers collapse in 2009.

In 2010, an investor in Gandhi City Research Park filed a fraud complaint with the

Cubbon Park Police Station in Bengaluru, India, against, among others, Mr.

In 2014, the Cubbon Park Police dismissed all claims.

Subsequently, in 2015 the investor appealed the Cubbon Park Police’s decision

before the Lower Court.

In November 2018, the Lower Court issued a criminal summons against, among others, Mr.

Devanur petitioned

the High Court to quash the summons.

By order dated March 27, 2023, the High Court granted Mr.

Devanur’s petition and ordered the

Lower Court to reconsider the investor’s appeal.

On August 3, 2023, the Lower Court decided to uphold the Cubbon Park Police’s

decision and close the criminal case against Mr.

Subsequently, in 2015 the investor appealed the Cubbon Park Police’s decision before the Lower Court.

In November 2018, the Lower

Court issued a criminal summons against, among others, Mr.

Devanur petitioned the High Court to quash the summons.

dated March 27, 2023, the High Court granted Mr.

Devanur’s petition and ordered the Lower Court to reconsider the investor’s

On August 3, 2023, the Lower Court decided to uphold the Cubbon Park Police’s decision and close the criminal case against

On December 4, 2023, Mr.

Devanur received a petition to challenge the Lower

Court’s order to uphold the Cubbon Park Police’s decision and close Mr.

Devanur received a petition to challenge the Lower Court’s order to uphold the Cubbon Park

Police’s decision and close Mr.

Devanur’s criminal case.

Devanur is vigorously

contesting this petition.

Devanur is vigorously contesting this petition.

Malpractice Lawsuit

On May 8, 2023, the Company filed a malpractice

lawsuit with the United States District Court for the Southern District of Ohio, Eastern Division, against Buchanan, Ingersoll & Rooney,

PC (“Buchanan”), Rajiv Khanna (“Khanna”) and Brian S.

North (“North,” together with Buchanan and Khanna,

the “Buchanan Legal Counsel”).

The complaint alleges that the Buchanan Legal Counsel failed to provide proper and timely legal

advice during the Company’s Tier 2 Regulation A offering, resulting in late Blue Sky notice filings with all required states prior

to the Company offering and selling securities in those states.

As a result, the Company was subject to a number of inquiries, investigations,

and subpoenas by the various states, incurring significant legal fees and fines, lost opportunity due to pausing its Regulation A campaign,

in addition to the loss of a $ 20 million institutional investment.

The Company is seeking the forfeit of all legal fees associated with

this matter, the award of legal fees to bring this matter to action, and further legal and equitable relief as the Court deems just and

lawsuit with the United States District Court for the Southern District of Ohio, Eastern Division, against Buchanan, Ingersoll &

Rooney, PC (“Buchanan”), Rajiv Khanna (“Khanna”) and Brian S.

North (“North,” together with Buchanan

and Khanna, the “Buchanan Legal Counsel”).

The complaint alleges that the Buchanan Legal Counsel failed to provide proper

and timely legal advice during the Company’s Tier 2 Regulation A offering, resulting in late Blue Sky notice filings with all required

states prior to the Company offering and selling securities in those states.

As a result, the Company was subject to a number of inquiries,

investigations, and subpoenas by the various states, incurring significant legal fees and fines, lost opportunity due to pausing its

Regulation A campaign, in addition to the loss of a $ 20 million institutional investment.

The Company is seeking the forfeit of

all legal fees associated with this matter, the award of legal fees to bring this matter to action, and further legal and equitable relief

as the Court deems just and proper.

The Company cannot predict the eventual scope, duration, or outcome at this time.

Note 12 – Segment Reporting

ASC 280, “Segment Reporting” establishes

standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure

as well as information about services categories, business segments and major customers in financial statements.

The Company has two reportable

segments based on the business unit, Rental business and Platform service business.

Due to current market conditions, we expect to pause

the Rental business segment until the first quarter of 2025 in accordance with the “Segment Reporting” Topic of the ASC, the

Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating

results to make decisions about allocating resources and assessing performance for the entire Company.

Existing guidance, which is based

on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report

annually entity-wide disclosures about products and services, in which the entity holds material assets and reports revenue.

The table below presents a reconciliation of revenue

by reportable segment to consolidated revenue and a reconciliation of consolidated segment operating profit to consolidated loss before

income taxes for the three months ended March 31, 2024 and 2023.

In November 2023, FASB issued ASU 2023-07.

2023-07 requires expanded disclosures about reportable segments including additional information on segment expenses, expanded interim

period disclosures, and an explanation of how the chief operating decision maker utilizes segment information in evaluating segment performance.

We are currently assessing the impact that the adoption of ASU 2023-07 will have on the disclosures in our consolidated financial statements.

Existing guidance, which is based on a management

approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide

disclosures about products and services, in which the entity holds material assets and reports revenue.

We have two reportable segments

based on our business units:

(i) Technology Services (formerly “Platform Services”) and (ii) Rental Business.

Our chief operating

decision maker has been identified as the Chief Executive Officer and the President, each of which reviews operating results to make decisions

about allocating resources and assessing performance for the entire Company.

Three months Ended

Six months Ended

Revenue by segment

Platform services

Rental services

Technology (formerly “Platform”) services

Rental business

Consolidated revenue

Segment cost of revenue

Platform services

Rental services

Technology (formerly “Platform”) services

Rental business

Consolidated segment cost of revenue

1 unchanged sentence

Segment operating expense

Platform services

Rental services

Technology (formerly “Platform”) services

Rental business

Consolidated segment operating expenses

Total consolidated segment operating loss

Segment other income (loss)

Platform services

Rental services

Total consolidated segment operating loss

Segment other income (expenses)

Technology (formerly “Platform”) services

Rental business

Total consolidated segment operating profit

Corporate expenses

1 unchanged sentence

( 1,137,010 )

( 2,284,363 )

( 1,338,574 )

Other income (expenses), net

( 1,405,055 )

( 2,726,784 )

Total consolidated loss before income taxes

1 unchanged sentence

$ ( 2,897,357 )

Note 12 - Warrants

Warrant accounting

We account for warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability

pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether

the warrants are indexed to our own ordinary shares and whether the warrant holders could potentially require “net cash settlement”

in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment, which requires

the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while

the warrants are outstanding.

For issued or modified warrants that meet all

of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded

as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair

value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The warrants issued upon the follow-on offering

and private placements meet the criteria for equity classification under ASC 480 and ASC 815, therefore, the warrants are classified as

On October 23, 2023, pursuant to the terms of

the GEM Agreement (as defined above), we issued GYBL warrants to purchase up to 1,700,884 shares of the Company’s common stock (the

“GEM Warrants”).

The GEM Warrants are exercisable, for cash, at an original exercise price of $ 406.67 per share, which exercise

price was subsequently adjusted to $ 371.90 after the Company’s most recent public offering, and the exercise price of the GEM Warrants

are subject to further adjustments specified therein.

We believe the likelihood that any warrant holders

will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of

our common stock.

If the trading price for our common stock is less than $ 371.90 per share, in the case of the GEM Warrants, we believe

holders of the GEM Warrants will be unlikely to exercise them.

While current conditions influencing the exercise of the GEM Warrants make

such exercise unlikely, further adjustments to its exercise price may make the GEM Warrants more attractive for investors to exercise.

Our analysis is based on the trading price of our common stock as of the date of this report, with a threshold set at $ 371.90 per share

for the GEM warrants.

On November 24, 2023, we conducted a follow-on

offering by issuing 1,600,000 units priced at $ 5.00 per unit.

This offering generated total gross proceeds of $ 8.0 million, and after

deducting associated expenses, the net proceeds amounted to $ 7.16 million.

Each unit consisted of one share and one and a half warrants,

allowing warrant holders to exercise their rights over a five-year period at a price of $ 5.00 .

The factors considered in the Black Scholes option

valuation model are as below:

Rhove acquisition

Underlying stock price

Exercise price

Risk free interest rate

Warrant activity for the period ended March 31, 2024 follows:

Exercise Price

Warrants outstanding on April 30, 2022

Warrant activity

Warrants outstanding on April 30, 2023

Warrants Issued on October 23, 2023

Warrants Issued on November 21, 2023

Warrants outstanding on March 31, 2024

Note 13 - Subsequent Events

Management has evaluated all subsequent events

through April 19, 2024, the date the condensed consolidated financial statements were available to be issued.

Based on this evaluation,

nothing was identified which require disclosure in these condensed consolidated financial statements.

- Subsequent Events

The Company has evaluated subsequent events as

of the date of this report and has none to report, except as identified below.

Acquisition of AiChat Pte.

On July 12, 2024, the Company entered into a

Business Acquisition and Financing Agreement (the “Acquisition Agreement”) with AiChat Pte.

Ltd., a company incorporated

in the Republic of Singapore (“AiChat”), AiChat10X Pte.

Ltd., a Singaporean company (the “Seller”), and Kester

Poh Kah Yong (the “Founder”).

Under the agreement, the Company acquired 85 % of the outstanding ordinary shares of AiChat,

an AI-driven company specializing in conversational customer experience solutions, from the Seller.

The remaining 15 % of AiChat’s

shares will be acquired on June 30, 2025 (the “Acquisition”).

In exchange for the shares, the Company agreed

to pay the Seller a total purchase price of $ 1,140,000 , comprising of:

(i) $ 312,000 in restricted shares of the Company’s common

stock, priced at a 10 % discount to the 10-day volume weighted average price (VWAP) of the common stock on the Nasdaq Capital Market,

to be issued no later than January 1, 2025 (the “First Tranche Shares”);

(ii) $ 588,000 in restricted shares of common stock,

also priced at a 10 % discount to the VWAP, subject to any Base Case Adjustment (as defined in the Acquisition Agreement), to be issued

no later than April 1, 2025 (the “Second Tranche Shares”);

and (iii) $ 240,000 in restricted shares of common stock, calculated

at a 5 % discount to the VWAP, to be issued no later than December 1, 2025 (the “Third Tranche Shares,” collectively with

the First Tranche Shares and the Second Tranche Shares, the “Tranche Shares”).

Additionally, the Company agreed to subscribe

to and purchase from AiChat:

(i) 55,710 ordinary shares of AiChat at the closing of the Acquisition, for $ 60,000 ;

and (ii) 222,841 ordinary

shares of AiChat according to a disbursement schedule to be agreed upon by the Company, AiChat, and the Founder, for a total subscription

price of $ 240,000 .

The Tranche Shares will be subject to a 90-day

restrictive period (the “Restricted Period”) following issuance, during which the Seller cannot sell, transfer, or otherwise

dispose of the shares or request their registration under the Securities Act of 1933, as amended.

After the Restricted Period, the shares

will be deposited into the Seller’s designated account and then transferred to the Founder based on his beneficial ownership in

In order to comply with Nasdaq Listing Rule 5635(a), the total Tranche Shares issued cannot exceed 19.99 % of the Company’s

outstanding common stock immediately before the Acquisition Agreement, which equates to 8,860,213 shares (the “Cap Amount”).

Any shares issued in excess of this amount will be paid in cash to the Seller, as specified in the Acquisition Agreement.

Additionally, the Company agreed to guarantee

certain Singaporean bank loans from AiChat totaling approximately 862,092 Singapore Dollars (SGD).

The Acquisition Agreement also includes

the assignment of AiChat’s intellectual property rights from the Seller to the Company.

Post-acquisition, the Seller will indemnify

the Company and its affiliates against any liabilities, damages, losses, costs, or expenses arising from third-party claims related to

the Company and the Acquisition.

The Acquisition Agreement contains customary representations, warranties, covenants, and conditions

for transactions of this nature.

Acquisition of Controlling Interest of

Hyperfast Title LLC

On July 24, 2024, the Company entered into a Membership

Interest Purchase Agreement (the “Hyperfast Purchase Agreement”) with David R.

Breschi and Kristen Britton (the “Sellers”).

Under this agreement, the Company acquired 85 % of the outstanding membership interests in Hyperfast Title LLC (“Hyperfast”),

a Florida-based company specializing in real estate closings and title insurance.

Hyperfast was founded by the owners of Madison Settlement

Services, LLC, a national title agency (the “Hyperfast Acquisition”).

The Hyperfast Purchase Agreement includes standard representations,

warranties, and covenants typical for transactions of this nature.

In conjunction with the Hyperfast Acquisition,

the Company, the Sellers, and Hyperfast signed an Amended and Restated Operating Agreement (as amended from time to time, the “Operating

The Operating Agreement outlines several key provisions, including:

annual license fees to be paid to the Sellers,

contingent on their continued service with Hyperfast;

annual management fees based on Hyperfast’s operating margin;

first refusal for each Hyperfast member to purchase the interests of any member wishing to sell;

and various rights for the Company,

as the managing member, to acquire the Sellers’ membership interests, and for the Sellers to sell their respective interests in

Hyperfast, all in accordance with the terms specified in the Operating Agreement.

Streeterville Capital,

LLC Note Purchase Agreement and Secured Promissory Note

On August 14, 2024, the Company entered into a note purchase agreement

(the “Purchase Agreement”) with Streeterville Capital, LLC (“Lender”) pursuant to which the Company issued and

sold to the Lender a secured promissory note in the original principal amount of $ 5,455,000 (the “Note”).

The Note carries

an original issue discount of $435,000 and the Company agreed to pay $ 20,000 to the Lender to cover its legal fees, accounting costs,

due diligence, monitoring and other transaction costs, each of which were deducted from the proceeds of the Note received by the Company

resulting in a purchase price received by the Company of $ 5,000,000 .

Interest under the Note accrues at a rate of 8 % per annum, and the

unpaid amount of the Note, and any interest, fees, charges and late fees are due 18 months following the date of issuance.

Purchase Agreement include certain material terms, including the Lender’s ability to redeem a portion of the Note from time to time

beginning seven months after issuance, events of default and penalties associated therewith, restrictive covenants on our ability to issue

securities, subject to exceptions set forth therein, a “most favored nation” provision, among others.

In connection with the

Note and Purchase Agreement, the Company and Rhove also entered into security agreements and intellectual security agreements in favor

of the Lender, and the Company’s U.S.

subsidiaries entered into a guaranty in favor of the Lender.

The Company also entered

into a placement agency agreement (the “Placement Agency Agreement”) with Maxim Group LLC (“Maxim”), pursuant

to which Maxim agreed to serve as lead placement agent on a “reasonable best efforts basis” in connection with the sale of

the Note and any additional notes (the “Placement”).

Pursuant to the Placement Agency Agreement, the Company agreed to pay

Maxim a cash fee equal to 3.75 % of the gross proceeds received by the Company for the Note and any additional notes and to reimburse Maxim

for its reasonable accountable expenses, including legal fees, up to an aggregate amount of $ 10,000 .

In addition, if within nine months

of a closing of a sale of the Note or any additional notes, the Company completes any financing of equity or equity-linked capital-raising

activity with, or receives proceeds from, any of the investors that were introduced to the Company by Maxim in connection with the Placement,

then the Company will pay Maxim a cash fee of 3.75 % of the proceeds received from such financing.

“Part II – Item 5.

Other Information” of this report for more information on the Note, Purchase Agreement and related

SPECIAL NOTE REGARDING

FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION

CONTAINED IN THIS REPORT

FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT

Quarterly Report on Form 10-Q, or this “report,” contains forward-looking statements within the meaning of the federal

7 unchanged sentences

“could,” “may,” “will” or other similar expressions in this report.

In particular, these include statements

relating to future actions;

In particular, these include

statements relating to future actions;

prospective products, applications, customers and technologies;

future performance or results of any products;

future performance or results

of any products;

anticipated expenses;

and future financial results.

These forward-looking statements are subject to certain risks and uncertainties that

could cause actual results to differ materially from our historical experience and our present expectations or projections.

could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:

We are employing a business model with a limited track record, which makes our business difficult to evaluate;

Our technology that is currently being developed may not yield expected results or be delivered on time;

Our ability to integrate any acquisitions successfully;

We intend to utilize a significant amount of indebtedness and raise capital through public offerings for the operation of our business;

The implementation of artificial intelligence (“AI”) into our technologies may prove to be more difficult than anticipated;

The real estate technology industry in which we participate are highly competitive, and we may be unable to compete successfully with our current or future competitors;

Our ability to retain our executive officers and other key personnel;

If we fail to attract or retain customers and users of our technologies, or if we fail to provide high-quality real estate industry solutions, our business, results of operations, and financial condition would be materially adversely affected;

Our real estate investments are currently on hold, and there is no assurance we will resume our short-term rental operations.

We may restart these operations depending on macroeconomics factors, such as high interest rates, and general factors such as real estate investment demand, capital availability, investment yields, regulatory changes, competitive landscape and others;

The impact of laws and regulations regarding privacy, data protection, consumer protection, and other matters.

Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, or otherwise harm to our business.

These forward-looking statements are subject to certain risks and

uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections.

Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are

not limited to:

We are employing a business

model with a limited track record, which makes our business difficult to evaluate;

Our technology that is

currently being developed may not yield expected results or be delivered on time;

Our ability to integrate

any acquisitions successfully;

We intend to utilize a

significant amount of indebtedness and raise capital through public offerings for the operation of our business;

The implementation of artificial

intelligence (“AI”) into our technologies may prove to be more difficult than anticipated;

The real estate technology

industry in which we participate are highly competitive, and we may be unable to compete successfully with our current or future

Our ability to retain our

executive officers and other key personnel;

If we fail to attract or

retain customers and users of our technologies, or if we fail to provide high-quality real estate industry solutions, our business,

results of operations, and financial condition would be materially adversely affected;

Our real estate investments

are currently on hold, and there is no assurance we will resume our short-term rental operations.

We may restart these operations

depending on macroeconomics factors, such as high interest rates, and general factors such as real estate investment demand, capital

availability, investment yields, regulatory changes, competitive landscape and others;

The impact of laws and

regulations regarding privacy, data protection, consumer protection, and other matters.

Many of these laws and regulations are subject

to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, or otherwise

harm to our business.

Forward-looking

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What changed 10-Q

Item 1. Financial Statements