What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-14 · 534 added, 503 removed, 159 unchanged (87% of the section changed)

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited

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Business Overview

are a real estate technology company developing an end-to-end commission-free homebuying platform, which we have named Claire.

the power of AI and an acquisition-led growth strategy, our goal is to offer a more affordable, streamlined experience for those on the

journey to homeownership.

Claire integrates AI-driven tools to offer tailored property recommendations, an intuitive visual interface,

and included digital title and escrow services.

TM ” reflects our dedication to

eliminating traditional barriers and making homebuying more accessible and transparent.

are a real estate technology company developing an end-to-end commission-free homebuying platform, which we have named reAlpha, previously

called “Claire”.

Utilizing the power of AI and an acquisition-led growth strategy, our goal is to offer a more affordable,

streamlined experience for those on the journey to homeownership.

reAlpha integrates AI-driven tools to offer tailored property recommendations,

an intuitive visual interface, and included digital title and escrow services.

reflects our dedication to eliminating traditional barriers and making homebuying more accessible and transparent.

was announced on April 24, 2024, and it assists homebuyers with tasks such as mortgage pre-approval, booking tours, sending offer letters

and completing property acquisitions.

Claire also provides market insights, detailed property data, and uses large language models to

answer queries and facilitate the homebuying process via a user-friendly, 24/7 web platform.

Claire’s capabilities are complemented

and supported by reAlpha Realty, LLC, our in-house brokerage firm, on a no-obligation and commission free basis.

Although Claire is currently

only available for homebuyers in 20 counties in Florida, we intend to expand its capabilities nationwide by the end of 2026 depending

on numerous factors, including, among other things, our ability to scale the platform, obtain additional data and successfully market

the platform.

shifting our focus towards the development of our AI technologies, our operational model was asset-heavy and built on utilizing our proprietary

AI powered technology tools for the acquisition of real estate, converting them into short-term rentals, and enabling individual investors

to acquire fractional interests in these real estate properties, allowing such investors to receive distributions based on the property’s

performance as a short-term rental.

reAlpha also provides market insights, detailed property data, and uses large language models to

answer queries and facilitate the homebuying process via a user-friendly, 24/7 web platform and IOS application.

reAlpha’s capabilities

are complemented and supported by reAlpha Realty, LLC, our in-house brokerage firm, on a no-obligation and commission free basis.

reAlpha is currently only available for homebuyers in 20 counties in Florida, we intend to expand its capabilities nationwide by the end

of 2026 depending on numerous factors, including, among other things, our ability to scale the platform, obtain additional data and successfully

market the platform.

to current macroeconomic conditions, such as higher interest rates, inflation, and elevated property prices, our real estate acquisition

operations have been halted.

Instead, our current focus will be directed towards the continuous enhancement and refinement of Claire and

our AI technologies for commercial use to generate technology-derived revenue.

Further, as part of our growth strategy, we intend to continue

identifying target companies that may be complementary to our business, and we intend to generate revenue from integrating such acquisitions

that we may complete from time to time into our business.

For instance, in May 2024, we announced the completion of the acquisition of

Naamche (as defined below), and in July 2024, we announced the acquisition of AiChat (as defined below), both of which added additional

sources of potential technology services revenue.

Going forward, we expect to complete additional strategic acquisitions that we believe

will add additional sources of potential revenue and services to homebuyers using Claire, including, but not limited to, mortgage brokerages,

home insurance, title companies, AI product companies, and real estate brokerages.

may resume the complementary asset-heavy model from our rental business segment if the prevailing interest rates and other macroeconomic

factors align more favorably with such business model.

In the meantime, our growth strategy will encompass both organic and inorganic

methods through commercialization of our AI technologies that are in varying stages of development and acquisitions of complementary

businesses and technologies.

In particular, we intend to acquire companies that we believe will complement our business model and accelerate

our proposition to expand our technology offerings to customers by offering IT services, staffing and accounting services and others.

Instead, our current focus is being directed towards the continuous enhancement and refinement of reAlpha

and our AI technologies for commercial use to generate technology-derived revenue.

Further, as part of our growth strategy, we intend

to continue identifying target companies that are complementary to our business, and we intend to generate revenue from integrating such

acquisitions that we may complete from time to time into our business.

To advance such strategy, during the second and third quarters

of 2024 we announced the acquisitions of Naamche, Inc.

and its Nepal counterpart entity Naamche, Inc.

(collectively, “Naamche”),

Ltd (“AiChat”), Hyperfast Title LLC (“Hyperfast”) and Debt Does Deals, LLC (d/b/a Be My Neighbor)

(“Be My Neighbor”).

These acquisitions have added revenue, additional potential sources of revenue, technology services, and

additional capabilities to the reAlpha platform.

For instance, following the acquisition of Be My Neighbor, we now have an in-house mortgage

brokerage, which mortgage brokerage services are also directly offered through reAlpha.

Be My Neighbor is licensed to operate in 27 U.S.

Additionally, because of our acquisition of Hyperfast, we now can offer title, closing, and settlement services in 3 U.S.

Following the integration of these companies into our business, consumers using reAlpha have access to these services directly in the

platform, both through the web platform and IOS application.

We expect to continue seeking additional strategic acquisitions that we believe will add additional sources of

potential revenue and services to homebuyers using reAlpha, including, but not limited to, home insurance, AI product companies, and real

estate brokerages.

Additionally, we have already acquired a mortgage brokerage and a title company, but we may consider further acquisitions

in these verticals to add additional U.S.

state licenses and potential revenue opportunities.

shifting our focus towards the development of our AI technologies, our operational model was asset-heavy and built on utilizing our

proprietary AI powered technology tools for the acquisition of real estate, converting them into short-term rentals, and enabling

individual investors to acquire fractional interests in these real estate properties, allowing such investors to receive

distributions based on the property’s performance as a short-term rental.

We may resume the complementary asset-heavy model

from our rental business segment if the prevailing interest rates and other macroeconomic factors align more favorably with such

business model.

In the meantime, our growth strategy will encompass both organic and inorganic methods through commercialization of

our AI technologies that are in varying stages of development and acquisitions of complementary businesses and technologies.

particular, we intend to acquire companies that we believe will complement our business model and accelerate our proposition to

expand our technology offerings to customers by offering IT services, staffing and accounting services and others.

reportable segments consist of (i) technology services (formerly named “platform services”) and (ii) rental business.

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GENA, reAlpha BRAIN, reAlpha App and our main AI-powered

platform, Claire.

Our rental business segment, to the extent we resume operations, focuses on purchasing properties for syndication, which

process is powered by this segment’s technologies and products.

platform, reAlpha.

Our rental business segment, to the extent we resume operations, focuses on purchasing properties for syndication,

which process is powered by this segment’s technologies and products.

Technology Services

(formerly “Platform Services”)

We seek to differentiate

ourselves from competitors primarily through the integration of AI into our technologies for the real estate industry.

We expect that

our technology services segment will benefit from the current exponential growth of the AI industry, and we believe that we are well-positioned

to take advantage of these current trends due to our early adoption of AI for the development of our technologies.

We seek to differentiate ourselves

from competitors primarily through the integration of AI into our technologies for the real estate industry.

We expect that our technology

services segment will benefit from the current exponential growth of the AI industry, and we believe that we are well-positioned to take

advantage of these current trends due to our early adoption of AI for the development of our technologies.

current technology services segment technologies include:

(i) reAlpha BRAIN, (ii) reAlpha HUMINT, (iii) GENA, (iv) Claire and (v) reAlpha

myAlphie was a previously developed technology included in our technology

services segment that was sold on May 17, 2023, and it stopped contributing to our revenues as of such date, except for the revenue generated

for the ongoing technical support we are providing to the buyer of myAlphie, Turnit.

Although we have not yet generated revenues from our technologies,

we expect that once our technologies are fully operational and available for commercial use by customers, we will generate revenue through

subscriptions, licensing fees, pay-per-use basis or other fee arrangements.

To the extent we resume operations of our short-term rental

operations, we expect to receive fee-based revenues from customers that would utilize the reAlpha App for participating and investing

in our Syndications (as defined below).

(i) reAlpha, (ii) reAlpha BRAIN;

(iii) reAlpha HUMINT, (iv) GENA, (v) reAlpha

App and (vi) AiChat’s conversational platform.

was a previously developed technology included in our technology services segment that was sold on May 17, 2023, and it stopped contributing

to our revenues as of such date, except for the revenue generated for the ongoing technical support we are providing to the buyer of myAlphie,

revenue model revolves around our mortgage services, title services and services offered by our subsidiaries, such as AiChat.

to acquire more companies in the homebuying transactions vertical, including, but not limited to, insurance and others that are complementary

to our business, we expect to generate revenues by offering such services.

We also expect that our reAlpha platform will drive additional

customers to these acquired companies through users interacting and buying homes on reAlpha, which will expand their overall potential

customer base.

To the extent we resume operations of our short-term rental operations, we expect to receive fee-based revenues from customers

that would utilize the reAlpha App for participating and investing in our Syndications (as defined below).

Rental Business

rental business segment operations are currently on hold due to current macroeconomic conditions, such as escalating interest rates,

inflation, and elevated property prices.

We anticipate resuming operations within this segment through the acquisition of properties

and Syndications when the prevailing interest rates and other macroeconomic factors align more favorably with such business model.

rental business segment operations are currently on hold due to current macroeconomic conditions, such as escalating interest rates, inflation,

and elevated property prices.

We anticipate resuming operations within this segment through the acquisition of properties and Syndications

when the prevailing interest rates and other macroeconomic factors align more favorably with such business model.

the extent we resume these operations, we plan to utilize our AI-powered technologies to analyze and acquire short-term rental properties

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D, each as promulgated under the Securities Act of 1933, as amended (the “Securities Act”) (each, a “Syndication”).

We refer to such investors as “Syndicate Members.” To further facilitate the investment process in the Syndication

LLCs, our reAlpha App will work parallel with the Syndication process to allow investors to purchase membership interests in those properties

We refer to such investors as “Syndicate Members.” To further facilitate the investment process in the Syndication LLCs,

our reAlpha App will work parallel with the Syndication process to allow investors to purchase membership interests in those properties

and become Syndicate Members.

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on the specific terms and conditions agreed to in the offering documents pursuant to which the holder becomes a Syndicate Member.

becoming a Syndicate Member, the holder will not acquire any rights to the Company’s common stock and, therefore, will not be entitled

to vote, receive a dividend or exercise any other rights of a stockholder of the Company.

a Syndicate Member, the holder will not acquire any rights to the Company’s common stock and, therefore, will not be entitled to

vote, receive a dividend or exercise any other rights of a stockholder of the Company.

Likewise, acquiring shares of our common stock

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Members will hold up to 100% ownership of the Syndication LLC, and we would generate revenue through fees from the reAlpha App.

Acquisition of

Naamche, Inc.

and Naamche, Inc.

December 3, 2023, we entered into a Stock Purchase Agreement (the “First Purchase Agreement”), pursuant to which we agreed

to acquire from the selling shareholders (the “Sellers”) and representative of the Sellers named therein (the “Sellers’

Representative”) the issued and outstanding shares of capital stock of Naamche, Inc., a Delaware corporation (“U.S.

not already owned by us (the “First Acquisition”).

Concurrently with the First Purchase Agreement, we entered into a second

Stock Purchase Agreement, which was subsequently amended, restated and superseded on February 2, 2024 (the “Amended and Restated

Purchase Agreement,” together with the First Purchase Agreement, the “Purchase Agreements”), pursuant to which we agreed

to acquire all the issued and outstanding shares of capital stock of Naamche, Inc.

Ltd., a corporation formed in the country of

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

Naamche, “Naamche”) (the “Second Acquisition,” and together

with the First Acquisition, the “Acquisitions”).

The closing of the Acquisitions was subject to the satisfaction or waiver

of certain closing conditions set out in the Purchase Agreements, including the receipt of regulatory approval from the Department of

Industries of Nepal.

May 6, 2024, we completed the Acquisitions upon the satisfaction of the closing conditions set forth in the Purchase Agreements, including

the regulatory approval by the Department of Industries of Nepal, which was received on March 6, 2024, except for the closing conditions

requiring (i) the Sellers to deliver to us documentation issued by the appropriate authority in Nepal confirming contributions to the

social security fund accounts of Sellers’ current employees in full and (ii) the written confirmation from the Sellers to remove

the persons authorized to draw on or to have access to Nepal Naamche’s bank accounts and replace with the persons identified by

us, both of which closing conditions were waived by us.

As a result of the Acquisitions, we now own 100% of the issued and outstanding

shares of capital stock of Naamche, and both entities are our wholly-owned subsidiaries.

Recent Developments

Acquisition of AiChat Pte.

On July 12, 2024, we 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”).

Pursuant to the Acquisition Agreement, we 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,

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

(i) $312,000 in restricted shares of our 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 (“Nasdaq”),

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, we 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.

into a Business Acquisition and Financing Agreement (the “Acquisition Agreement”) with AiChat (as defined above), a company

incorporated in the Republic of Singapore, AiChat10X Pte.

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

(the “Founder”).

Under the Acquisition Agreement, we 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”).

exchange for all of the ordinary shares of AiChat outstanding immediately prior to the execution of the Acquisition Agreement, and pursuant

to the terms and subject to the conditions of the Acquisition Agreement, we agreed to pay the Seller an aggregate purchase price of $1,140,000,

consisting of:

(i) $312,000 in restricted shares of our common stock, based on a 10% discount to the 10 day volume weighted average price

(the “VWAP Share Price”) of our common stock as reported on the Nasdaq Capital Market (“Nasdaq”) and issuable to

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

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

based on a 10% discount to the VWAP Share Price, subject to any Base Case Adjustment (as defined in the Acquisition Agreement), issuable

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

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

stock, calculated at a 5% discount to the VWAP Share Price, issuable to the Seller no later than December 1, 2025 (the “Third Tranche

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

we agreed to subscribe for and purchase from AiChat:

(i) 55,710 ordinary shares of AiChat as of the Acquisition’s closing date,

for a subscription price of $60,000;

and (ii) 222,841 ordinary shares of AiChat in accordance with a disbursement scheduled to be determined

and agreed to by us, AiChat and the Founder, for a total subscription price of $240,000.

The Tranche Shares will be

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

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

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

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

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also includes the assignment of AiChat’s intellectual property rights from the Seller to us.

Post-acquisition, the Seller will

indemnify us and our affiliates against any liabilities, damages, losses, costs, or expenses arising from third-party claims related

to us 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, we entered into a Membership Interest Purchase Agreement

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

Breschi and Kristen Britton (the “Hyperfast Sellers”).

to this agreement, we 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.

Post-acquisition, the Seller will indemnify

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

The Acquisition Agreement contains customary representations, warranties, covenants, and conditions for transactions of this

Acquisition of Controlling Interest of Hyperfast

On July 24, 2024, we entered

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

Breschi and Kristen Britton

(the “Sellers”).

Under this agreement, we acquired 85% of the outstanding membership interests in Hyperfast (as defined above),

a Florida-based company specializing in real estate closings and title insurance (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, we, the Hyperfast Sellers, and Hyperfast signed an Amended and Restated Operating Agreement (as amended from time to time,

the “Operating Agreement”).

Acquisition, we, 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 Hyperfast Sellers, contingent on their continued service with Hyperfast;

annual management fees based on Hyperfast’s

operating margin;

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

rights for us, as the managing member, to acquire the Hyperfast Sellers’ membership interests, and for the Hyperfast Sellers to

sell their respective interests in Hyperfast, all in accordance with the terms specified in the Operating Agreement.

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;

a right of first

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

and various rights for us, 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, we entered into a note purchase agreement (the

“Purchase Agreement”) with Streeterville Capital, LLC (“Lender”) pursuant to which we 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 we 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 us resulting in a purchase price received

by us 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.

The Note and 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, we and Rhove

also entered into security agreements and intellectual security agreements in favor or the Lender, and our U.S.

subsidiaries entered into

a guaranty in favor of the Lender.

We 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, we agreed to pay Maxim a cash fee equal to 3.75% of the

gross proceeds received by us 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, we complete any financing of equity or equity-linked capital-raising activity with, or receives proceeds from, any of the investors

that were introduced to us by Maxim in connection with the Placement, then we will pay Maxim a cash fee of 3.75% of the proceeds received

from such financing.

See “Part II – Item 5.

Other Information” of this

report for more information on the Note, Purchase Agreement and related agreements.

August 14, 2024, we entered into a note purchase agreement (the “Purchase Agreement”) with Streeterville Capital, LLC (“Lender”)

pursuant to which we 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 we 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 us

resulting in a purchase price received by us 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.

The Note and 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, we, Rhove, and subsequently Be My Neighbor, also entered into security agreements and intellectual security agreements

in favor of the Lender, and our U.S.

subsidiaries entered into a guaranty in favor of the Lender.

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, we agreed to pay

Maxim a cash fee equal to 3.75% of the gross proceeds received by us 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, we complete any financing of equity or equity-linked capital-raising activity

with, or receive proceeds from, any of the investors that were introduced to us by Maxim in connection with the Placement, then we will

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

Acquisition of

Debt Does Deals, LLC (d/b/a Be My Neighbor)

On September 8, 2024 (the

“Closing Date”), we entered into a Membership Interest Purchase Agreement (the “BMN Acquisition Agreement”) with

Be My Neighbor (as defined above), a Texas limited liability company, along with Christopher Bradley Griffith and Isabel Williams (collectively,

the “BMN Sellers” and individually, a “BMN Seller”).

Under this agreement, we acquired 100% of the outstanding

membership interests in Be My Neighbor, a mortgage brokerage firm (the “BMN Acquisition”).

exchange for all of the membership interests of Be My Neighbor outstanding immediately prior to the execution of the BMN Acquisition Agreement,

and pursuant to the terms and subject to the conditions of the BMN Acquisition Agreement, we agreed to pay the BMN Sellers an aggregate

purchase price of up to $6,000,000, subject to the adjustments described below to each of the Earn-Out Payments (as defined below) provided

in the BMN Acquisition Agreement, consisting of:

(i) $1,500,000 in cash paid on the Closing Date, with each BMN Seller receiving a cash

amount in proportion to each of their membership interest percentage in Be My Neighbor;

(ii) $1,500,000 in restricted shares of our common

stock, or 1,146,837 shares of restricted common stock at a price of $1.31 per share, calculated based on the volume weighted average price

of the common stock as reported on Nasdaq for the seven consecutive trading days ending on the trading day immediately prior to the Closing

Date, to be issued within 90 days from the Closing Date and with each BMN Seller receiving an amount of shares of common stock in proportion

to each of their membership interest percentage in Be My Neighbor (the “Buyer Shares”);

and (iii) up to an aggregate of $3,000,000

in potential earn-out payments, payable in three tranches of up to $500,000, $1,000,000 and $1,500,000, respectively, in cash or restricted

shares of common stock, at our sole discretion, each of which is calculated based on a formula set forth in the BMN Acquisition Agreement

and subject to the achievement of certain financial metrics by Be My Neighbor for three successive measurement periods of 12 months, with

the first measurement period ending 12 months after the Closing Date (collectively, the “Earn-Out Payments,” and each, an

“Earn-Out Payment”).

Specifically, each Earn-Out Payment will be payable in full if Be My Neighbor achieves certain revenue

and earnings before interest, taxes, depreciation and amortization (“EBITDA”) thresholds for each of the measurement periods,

each of which is payable within 120 days of the end of a measurement period.

If Be My Neighbor does not meet the revenue and EBITDA threshold

in a measurement period, a pro-rated amount of the Earn-Out Payment for such measurement period will be paid to Be My Neighbor based on

the actual revenue and EBITDA achieved and in accordance with the formula set forth in the BMN Acquisition Agreement.

Further, if Be My

Neighbor exceeds such revenue and EBITDA thresholds during any measurement period, the Earn-Out Payment for such measurement period will

not be capped and will be increased accordingly based on the formula set forth in the BMN Acquisition Agreement.

The Buyer Shares and any Earn-Out

Payment shares (collectively, the “Shares”) will be restricted for 180 days from issuance, during which time the BMN Sellers

cannot sell, assign, or transfer them.

To comply with Nasdaq Listing Rule 5635(a), the total Shares issued cannot exceed 19.99% of our

outstanding common stock immediately before the BMN Acquisition, or 8,880,383 shares (the “Cap Amount”).

If the Shares exceed

this Cap Amount, we will compensate the BMN Sellers in cash for the excess, according to a formula in the BMN Acquisition Agreement.

Launch of reAlpha

AI Labs and Investment in Xmore AI

August 15, 2024, we announced the launch of reAlpha AI Labs (“AI Labs”), a research and development initiative to develop,

partner with and potentially invest in artificial intelligence (“AI”) startups.

We believe that this initiative will provide

a platform for early-stage companies, enabling them to accelerate their development and growth.

We expect that the products and technologies

developed from the partnership and collaboration with such early-stage companies will be used to enhance reAlpha, our generative-AI powered,

commission-free home buying platform.

Additionally, we plan to partner with universities through AI Labs to further enhance its research

and development capabilities.

to its launch, on September 30, 2024, we announced that AI Labs invested in Xmore AI (“Xmore AI”), a company that provides

AI-driven cybersecurity solutions that is developing a software that will consolidate multiple cybersecurity tools into one platform.

The aggregate investment amount was $125,000, consisting of $100,000 in cash and $25,000 in the form of in-kind services, as determined

by the parties.

We believe that this investment in Xmore AI will enhance the cybersecurity capabilities of reAlpha, as well as provide

Xmore AI additional funds to continue the development of its cybersecurity software, which will provide AI-driven cybersecurity solutions

to enterprises in multiple industries.

Recent Legal Challenges

to Sales Agents’ Commission Structure

developments in the real estate industry have seen increased scrutiny and legal challenges related to the structure of real estate agent

Legal actions and regulatory inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive

practices associated with the traditional commission model.

Courts and regulatory bodies may be increasingly focused on ensuring transparency

in commission structures, potentially leading to reforms that impact the earnings and business models of real estate professionals.

in legislation or legal precedents could impact the standard practices of commission-sharing between listing agents and buyer’s

agents and may adversely affect our business model and revenues.

On October 31, 2023, a federal jury in Missouri found that the National

Associations of Realtors (the “NAR”) and certain companies conspired to artificially inflate brokerage commissions, which

violates federal antitrust law.

The judgment was appealed on October 31, 2023, while these and other plaintiffs have filed similar lawsuits

against a number of other large real estate brokerage companies.

or about March 15, 2024, NAR agreed to settle these lawsuits, by agreeing to pay $418 million over approximately four years, and changing

certain of its rules surrounding agent commissions.

This settlement resolves claims against NAR and nearly every NAR member;

territorial and local REALTOR® associations;

all association-owned MLSs;

and all brokerages with an NAR member as principal whose

residential transaction volume in 2022 was $2 billion or below and is subject to court approval.

Due to this litigation, and effective

as of August 17, 2024, NAR has implemented a new rule that prohibits offers of compensation on MLS listings and requires written agreements

between buyers and buyer’s agents.

indications suggest that these changes are already prompting shifts in industry practices as a result of the NAR lawsuit.

For instance,

discussions are underway regarding potential changes to rules established by local or state real estate boards or multiple listing

These changes may necessitate adjustments in brokers’ business models, including alterations in agent and broker compensation

structures, as well as requiring buyers to sign separate agreements to compensate their agents .

We believe that we are well-positioned

to take advantage of some of these potential industry changes.

Given that reAlpha will serve as a zero-commission real estate buyer’s

agent, we believe that buyers that have access to the platform will choose our platform over seeking agents to conduct their property

search and acquisition to avoid paying additional buyer’s agents fees through these separate agreements.

Additionally, we expect

that our competitors will need to develop mechanisms and plans to enable buyers to negotiate commissions, which may add another layer

of complexity into real estate transactions.

We believe that reAlpha will remove such layer by offering all these services – including

negotiations of fees through our AI negotiation helper – in one platform, while providing buyers with zero-commission fees on all

homes purchased through the platform.

NAR litigation and its ramifications, however, remain uncertain and could cause unforeseen turmoil in our industry, the impacts of which

could have a negative effect on us as an industry participant.

Critical Accounting Policies

8 unchanged sentences

As a result, they are subject to an inherent degree of uncertainty.

applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination

of certain estimates.

applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of

certain estimates.

Those estimates are based on our historical operations, our future business plans and projected financial results,

15 unchanged sentences

(the “Former Parent”) and reAlpha Asset Management,

(the “Former Subsidiary”), our Former Parent merged with and into the Former Subsidiary, with the Company surviving

the Downstream Merger.

Because the Company acquired the Former Parent’s assets and liabilities upon consummation of the merger,

the Former Parent’s financials became a part of the consolidated financial statements of the Company.

As a result, the financial

statements included in this prospectus and discussed herein reflect the operating results of both our Former Parent and the

Company prior to March 21, 2023, which was the date on which the Downstream Merger closed, and our combined results, including those

of the Former Parent, following the Downstream Merger closing date.

months ended June 30, 2024 compared to three months ended June 30, 2023

For the Three Months Ended

Cost of revenues

Operating Expenses

Wages, benefits and payroll taxes

Repairs & maintenance

Dues & subscriptions

Marketing & advertising

Professional & legal fees

Depreciation & amortization

Other operating expenses

Total operating expenses

Operating Loss

Other Income (Expense)

Interest income

Gain on sale of myAlphie

Interest expense

Other expense

Total other income (expense)

(the “Former Subsidiary”), our Former Parent merged with and into the Former Subsidiary, with the Company surviving the

Downstream Merger.

Because the Company acquired the Former Parent’s assets and liabilities upon consummation of the merger, the

Former Parent’s financials became a part of the consolidated financial statements of the Company.

As a result, the financial statements

included in this prospectus and discussed herein reflect the operating results of both our Former Parent and the Company prior

to March 21, 2023, which was the date on which the Downstream Merger closed, and our combined results, including those of the Former Parent,

following the Downstream Merger closing date.

Summary Results of

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of Revenue

Operating expense

Operating (loss) income

Other (expense) Income

Net (loss) income

$ (1,478,312 )

For the three months ending June 30, 2024, revenue was $62,353, compared

to $54,827 for the same period in 2023.

Our revenues consist of the technology services segment income that we receive directly from,

or services related to, our technologies.

This increase in revenue is primarily due to revenue generated by Naamche, which we acquired

on May 6, 2024, from providing technology services to third-parties.

Cost of Revenues.

For the three months ending June 30, 2024, the cost of revenues was $18,250, compared to $30,442 for the same period in 2023.

decrease is mainly attributed to the elimination of property management fees associated with properties that we no longer own.

Repairs and Maintenance.

For the three months ending June 30, 2024, repair and maintenance costs

amounted to $846, a notable reduction from $24,645 for the same period in 2023.

This decrease is mainly attributed to us currently holding

no properties and having no repair and maintenance costs associated with properties during this period, while we had done repair work

on certain properties in the previous comparable period to get them ready for sale.

Marketing and Advertising.

For the three months ending June 30, 2024, marketing and advertising expenses totaled $130,378, up from $57,569 during the same period

This increase is mainly attributable to changes in certain cost classifications and higher marketing expenses related to Claire

Wages, Benefits and Payroll

For the three months ending June 30, 2024, wages, benefits, and payroll taxes totaled $476,179, compared to $296,186

for the same period in 2023.

This increase is primarily due to retroactive salary adjustments for our executive officers, and the appointment

of a new executive officer position and his associated salary.

Depreciation and Amortization.

For the three months ending June 30, 2024 depreciation and amortization

expenses were $69,331, compared to $23,242 for the same period in 2023.

The increase is attributable to the amortization of identifiable

intangible assets resulting from the purchase price allocation of the Rhove acquisition.

Other Operating Expenses.

For the three months ended June 30, 2024, other expenses amounted to

$176,162, up from $47,947 for the same period in 2023.

This increase is mainly attributed to directors’ and officers’ insurance

costs and changes in certain cost classifications.

For the three months ended June 30, 2024, other income was $129,388 compared to $2,140 for the three months ended June 30,

This increase is mainly attributed to fair value measurement of our previously held investment in Naamche, which was incurred in

connection with Naamche’s acquisition.

Gain on Sale of myAlphie.

the three months ended June 30, 2024, gain on the sale of myAlphie was $0, compared to $5,502,774 for the same period in 2023.

This decrease

is a result of the one-time gain from the sale of the myAlphie platform in the previous reporting period.

Interest Expense.

For the three months ended June 30, 2024, interest expense was $1,041, compared to $49,379 for the same period in 2023.

This reduction

in interest expense is attributable to the repayment of mortgage loans following the sale of our properties.

For the three months ended June 30, 2024 other non-operating expenses were $396,756,

compared to $16,179 for the same period in 2023.

This increase is mainly attributed to the amortization expenses of the commitment

fee incurred in connection with the equity facility we have in place with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited

(collectively, “GEM”) and stock-based compensation issued to employees and certain directors.

Analysis of Segment

following is an analysis of our results by reportable segment for the quarter ended June 30, 2024 compared to the quarter ended June

Three Months Ended

September 30, 2024 Compared with Three Months Ended September 30, 2023

Revenue was $339,227 during the three months ended September 30, 2024, an increase of $280,205, or 475%, from the comparable 2023 period,

which was primarily driven by the growth and integration of recent acquisitions in our technology services segment.

This technology service

segment growth was mainly due to the performance of our AI conversational platform and mortgage brokerage services, which were recently

acquired and integrated into our operations, and which generated $92,595 and $183,128, respectively, during the three months ended September

We have no revenue in our rental business segment.

The decrease in revenue compared to the same period in 2023 was due to the

sale of properties previously held for the segment’s operations, as a result of putting those operations on hold.

Cost of revenue was $113,361 for the three months ended September 30, 2024, an increase of $83,001, or 273%, from the

comparable 2023 period.

The increase was primarily due to the integration of the newly acquired businesses within the technology segment.

A significant portion of this increase is attributed to the costs associated with the delivery of our loan brokerage services and AI conversational

platform solutions that accounted for $60,145 and $34,967, respectively, for the three months ended September 30, 2024.

Operating expenses were $1,915,486 during the three months ended September 30, 2024, an increase of $1,157,985, or 153%,

from the comparable 2023 period.

The increase in operating expenses was primarily due to the integration of the newly acquired businesses

within the technology segment.

A significant portion of this increase is attributed to salaries of the new employees added as a result

of our recent acquisitions of $507,501, marketing, advertising expenses related to our advertising campaign for the reAlpha platform of

$212,386, and professional and legal services expenses of $210,670 incurred in connection with our recent acquisitions.

(Expenses) Income .

Other expenses were $408,954 during the three months ended September 30, 2024, an increase of $360,186, or 739%,

from the comparable 2023 period.

This increase was primarily attributable to the amortization of the commitment fee of $125,000 incurred

in connection with the equity facility we have in place with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (collectively, “GEM”),

pursuant to a Share Purchase Agreement between us and GEM, dated December 1, 2022 (the “GEM Agreement”), interest expense

of $83,861, and original issue discount of $36,250 which was related to the Note (see “Recent Developments – Streeterville

Capital, LLC Note Purchase Agreement and Secured Promissory Note” above for further information).

Nine Months Ended

September 30, 2024 Compared with Nine Months Ended September 30, 2023

Revenue was $422,006 for the nine months ended September 30, 2024, an increase of $196,706, or 87%, from the comparable 2023 period.

growth was driven by the expansion and integration of recent acquisitions within our technology services segment, offset by a decline

in revenues from the myAlphie platform following its sale and from the rental business following the sale of properties.

The technology

services segment’s growth was mainly driven by the contributions of our AI conversational platform and mortgage brokerage services,

which generated $92,595 and $183,128, respectively.

There was no revenue recorded in our rental business segment during the nine months

ended September 30, 2024, which was due to the sale of properties previously held for the segment’s operations as a result of putting

those operations on hold.

Cost of revenue was $139,687 for the nine months ended September 30, 2024, a decrease of $9,831, or 7%, from the comparable

A significant portion of the cost of revenue consists of the costs associated with the integration of newly acquired businesses

within the technology segment, including expenses for the loan brokerage services and AI conversational platform solutions, which amounted

to $60,145 and $34,967, respectively.

This increase was partially offset by significant reductions in expenses related to the sale of

the myAlphie platform and properties, which lowered related costs.

Operating expenses were $4,406,394 for the nine months ended September 30, 2024, an increase of $2,049,359, or 87%, from

the comparable 2023 period.

This increase was due to the integration of newly acquired businesses within the technology segment.

A significant

portion of this increase is attributed to salary expenses, including $920,144 for new employees and additional expenses from the salary

adjustments for executive officers, marketing and advertising expenses of $273,458 for the reAlpha platform campaign, and $340,889 in

professional and legal services associated with these acquisitions.

(Expense) Income .

Other expenses were $871,856 for the nine months ended September 30, 2024, a decrease of $6,165,045, or 707%, from

the comparable 2023 period.

This decrease was largely due to a one-time gain of $5,502,774 from the sale of the myAlphie platform during

the nine months ended September 30, 2023.

Additionally, increases in amortization of the commitment fee of $375,000 incurred in connection

with the equity facility we have in place with GEM, interest expenses of $95,473 and an original issue discount of $36,250 related to

the Note contributed to our other expenses.

These increases were partially offset by a decrease in mortgage interest following the sale

of our previously held properties.

Segment Results of

following is an analysis of our results by reportable segment for the quarter ended September 30, 2024 compared to the quarter ended September

For further information regarding our reportable business segments, refer to our unaudited condensed financial statements and

related notes included elsewhere in this report.

Technology (formerly

“Platform”) Services

Total revenue

Three Months Ended

September 30,

Nine Months Ended

September 30,

Technology Services

Rental Business

Cost of Revenue

Segment earnings (loss)

For the three months ended June 30, 2024, revenue for the technology services segment was $62,353, compared to $32,253

for the same period in2023.

This increase in revenue is mainly attributed to revenue generated by Naamche, which we acquired on May 6,

2024, from providing technology services to third-parties.

of revenues .

For the three months ended June 30, 2024, cost of revenues for the technology services segment was $18,250,

compared to $26,644 for the same period in 2023.

The cost of revenues consists of costs incurred in connection with the technical support

services provided to Turnit in connection with myAlphie’s sale.

The decrease in cost of revenues was attributed to the limited

technical support provided to Turnit.

Technology Services

Rental Business

Total revenue

Operating (Loss) Income

Technology Services

Rental Business

Three Months Ended

September 30, 2024 Compared with Three Months Ended September 30, 2023

Technology Services

$339,227 during the three months ended September 30, 2024, an increase of $291,753, or 615%, from the comparable 2023 period.

This increase

was primarily driven by revenue generated through the AiChat’s conversational platform solutions, the reAlpha platform and our real

estate offerings, including mortgage brokerage and title services, as a result of the integration of our recently acquired businesses.

The integration of these services into reAlpha has provided additional sources of potential revenue to this segment.

Cost of revenue .

Gross profit (loss)

For the three months ended June 30, 2024, revenue for the rental business segment was $0 compared to $22,574 for the same period

in 2023 as the decrease is attributable to sale of the properties we previously held for this segment’s operations as a result

of putting these operations on hold.

of revenues .

For the three months ended June 30, 2024, cost of revenue for the rental business segment was $0 compared

to $3,798 for the same period in 2023.

This decrease is mainly attributed to the sale of properties, which decreased the associated costs

of maintaining those properties.

Six months ended June 30, 2024, compared to

six months ended June 30, 2023

For the Six Months Ended

Cost of revenues

Operating Expenses

Wages, benefits and payroll taxes

Repairs & maintenance

Dues & subscriptions

Marketing & advertising

Professional & legal fees

Depreciation & amortization

Other operating expenses

Total operating expenses

revenue was $113,361 during the three months ended September 30, 2024, an increase of $83,001, or 273%, from the comparable 2023 period.

Cost of revenue primarily consists of the direct expenses associated with the delivery of our loan brokerage services and technology solutions.

This includes compensation-related expenses for roles directly supporting loan origination and customer interactions, along with other

direct costs necessary for fulfilling service transactions.

Operating Loss .

Other Income (Expense)

Interest income

Gain on sale of myAlphie

Interest expense

Other expense

Total other income (expense)

Net (Loss) Income

$ (2,897,357 )

For the six months ended June 30, 2024, revenue was $82,779 compared

to $166,278 for the same period in 2023.

Our revenues consist of the technology services segment income that we receive directly from,

or services related to, our technologies and revenue that we receive from short-term rental properties, if any.

This decrease in revenue

is mainly attributable due to the sale of our properties, and deriving no income from such rental segment during the six months ended

June 30, 2024, since we currently hold no properties, and the sale of myAlphie which was generating technology services revenue during

the six months ended June 30, 2023.

Cost of Revenues.

For the six months ended June 30, 2024, the cost of revenues were $36,499

compared to $119,158 for the same period in 2023.

The decrease in cost of revenues is mainly attributed due to the sale of myAlphie, since

we no longer incur any direct costs related to operating the myAlphie platform.

Repairs and Maintenance.

For the six months ended June 30, 2024, repair and maintenance costs

amounted to $1,595 compared to $29,106 for the same period in 2023.

This decrease is mainly attributable to us currently holding no properties

and having no repair and maintenance costs associated with any properties during this period, while we had done repair work on certain

properties in the previous comparable period to get them ready for sale.

Marketing and Advertising.

For the six months ended June 30, 2024, marketing and advertising expenses

were $207,740 compared to $146,669 for the same period in 2023.

This increase is mainly attributable to minor changes in certain cost

classifications and higher marketing expenses related to Claire promotions.

Wages, Benefits, and Payroll

For the six months ended June 30, 2024, wages, benefits, and payroll taxes were $895,084 compared to $482,443 for the same

period in 2023.

This increase is mainly attributable to the recent retroactive salary adjustments to our executive officers, in addition

to the creation of a new executive officer position and the associated salary therewith.

Depreciation and Amortization.

For the six months ended June 30, 2024, depreciation and amortization

were $140,784 compared to $71,245 for the same period in 2023.

The increase is attributable to the amortization of identifiable intangible

assets resulting from the purchase price allocation of the Rhove acquisition.

Other Operating Expenses.

For the six months ended June 30, 2024, other expenses were $314,029

compared to $113,582 for the same period in 2023.

This increase is primarily attributable to directors’ and officers’ insurance

costs and changes in certain cost classifications.

Other Income.

the six months ended June 30, 2024, other income was $129,388 compared to $2,140 for the same period in 2023.

This increase is mainly

attributed to fair value measurement of our previously held investment in Naamche, which was incurred in connection with Naamche’s

Gain on Sale of myAlphie.

For the six months ended June 30, 2024, gain on sale of myAlphie was $0 compared to $5,502,774 for the same period

in 2023, because this was a one-time gain from the sale of the myAlphie platform during such period.

Interest Expense.

For the six months ended June 30, 2024, interest expense was $11,843

compared to $91,191 for the same period in 2023.

This decrease in interest expense is attributable to repayments of mortgage loans upon

the sale of certain properties.

For the six months ended June 30, 2024, other non-operating expenses were $571,488 compared to $76,772 for

the same period in 2023.

This increase is mainly attributable to the amortization expenses of the commitment fee incurred in connection

with the equity facility we have in place with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (collectively, “GEM”)

and stock-based compensation issued to employees and certain directors.

Analysis of Segment

following is an analysis of our results by reportable segment for the six months ended June 30, 2024 compared to the six months ended

June 30, 2023.

For further information regarding our reportable business segments, refer to our unaudited condensed financial statements

and related notes included elsewhere in this report.

Technology (formerly

“Platform”) Services

Total revenue

Cost of revenue

Segment earnings (loss)

For the six months ended June 30, 2024, revenues for the technology services segment were $82,779 compared to $95,064 for the

same period in 2023.

This decrease in revenue is attributable to sale of myAlphie which was generating technology services income during

the six months ended June 30, 2023.

For the six months ended June 30, 2024, cost of revenues for the technology services segment was $36,499 compared to

$107,114 for the same period in 2023.

The cost of revenues consists of costs incurred in connection with the technical support services

provided to Turnit.

The decrease was attributable to the limited technical support provided to Turnit during the six months ended June

loss was $546,488 during the three months ended September 30, 2024, an increase of $515,437, or 1,660%, from the comparable 2023 period.

This increase was primarily due to higher salaries for employees from acquired companies and an increase in marketing and advertising

expenses associated with the marketing campaign for reAlpha platform.

Rental Business

Total revenue

Revenue was $0 during the three months ended September 30, 2024, compared to $11,548 for the comparable 2023 period.

Because we sold our

properties as a result of putting our short-term rental operations on hold, we do not expect to generate revenue within this segment until,

and if, we resume operations in this segment.

Operating loss was $64,430 during the three months ended September 30, 2024, compared to $27,447 for the comparable 2023 period.

This increase in operating loss is primarily due to amortization expenses associated with acquired intangible within this segment.

we are no longer generating revenue in this segment as a result of putting these operations on hold, we are still incurring costs related

to the amortization and related expenses resulting from the sale of our previously held properties.

Nine Months Ended

September 30, 2024 Compared with Nine Months Ended September 30, 2023

Technology Services

$422,006 for the nine months ended September 30, 2024, an increase of $279,468, or 196%, from the comparable 2023 period.

This increase

was driven by revenue from AiChat’s conversational platform solutions, reAlpha platform and real estate offerings, including mortgage

brokerage and title services, following the integration of our recently acquired businesses.

This increase in revenue was slightly offset

by a decrease in revenue from the myAlphie platform following its sale during the nine months ended September 30, 2023.

Cost of revenue .

Segment earnings (loss)

For the six months ended June 30, 2024, revenues for the rental

business segment was $0 compared to $71,214 for the same period in 2023.

This decrease is attributable to sale of the properties we previously

held for this segment’s operations as a result of putting these operations on hold.

of revenues .

For the six months ended June 30, 2024, cost of revenues for the

rental business segment was $0 compared to $12,045 for the same period in 2023.

This decrease is mainly attributed to the elimination

of property management fees and maintenance costs associated with properties we no longer own.

revenue was $139,687 for the nine months ended September 30, 2024, an increase of $2,214 or 2%, from the comparable 2023 period.

of revenue primarily consists of the direct expenses associated with the delivery of our loan brokerage services and technology solutions,

including compensation-related expenses for roles supporting loan origination and customer interactions, and other direct costs necessary

for fulfilling service transactions.

This increase was partially offset by significant reductions in expenses related to the sale of the

myAlphie platform, which lowered costs related to such platform.

Operating Loss .

loss was $661,046, during the nine months ended September 30, 2024, an increase of $620,442, or 1,528%, from the comparable 2023 period.

This increase was primarily due to higher salaries for employees from acquired companies, an increase in marketing and advertising expenses

associated with the marketing campaign for reAlpha platform and professional fees related to our recent acquisitions, which reflect the

necessary investments to support and integrate these new operations.

Rental Business

Revenue was $0 during the nine months ended September 30, 2024, compared to $82,762 for the comparable 2023 period.

Because we sold our

properties as a result of putting our short-term rental operations on hold, we do not expect to generate revenue within this segment until,

and if, we resume operations in this segment.

Operating loss was $193,324 during the nine months ended September 30, 2024, compared to $226,079 for the comparable 2023 period.

Although we are no longer generating revenue in this segment as a result of putting these operations on hold, we are still incurring costs

related to the amortization and related expenses resulting from the sale of our previously held properties.

Additionally, expenses related

to property management and maintenance, which were present in the previous reporting period, also contributed to the overall decline.

Non-GAAP Financial

To supplement our financial information presented in accordance with

GAAP (“GAAP”), we believe “Adjusted EBITDA” and “Net income per share,” both “non-GAAP

financial measures”, as such term is defined under the rules of the SEC, are useful in evaluating our operating performance.

use Adjusted EBITDA and Net income per share to evaluate our ongoing operations and for internal planning and forecasting purposes.

believe that these non-GAAP financial measures may be helpful to investors because it provides consistency and comparability with past

financial performance.

However, these non-GAAP financial measures are presented for supplemental informational purposes only, have limitations

as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance

In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently

or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as

tools for comparison.

A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial

measure stated in accordance with GAAP.

Investors are encouraged to review the related GAAP financial measures and the reconciliation

of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial

measure to evaluate our business.

reconcile our non-GAAP financial measure of Adjusted EBITDA to our net income, adjusted to exclude interest expense, provision for (benefit

from) income taxes, depreciation and amortization and certain charges or gains resulting from non-recurring events.

We reconcile our non-GAAP financial measure of Net income per share

to our net income, adjusted to exclude provision for depreciation and amortization of certain intangible assets, share-based compensation

and certain charges or gains resulting from non-recurring events.

The following tables provide a reconciliation of net income to Adjusted

EBITDA and Net income per share, respectively:

To supplement

our financial information presented in accordance with U.S.

GAAP (“GAAP”), we believe “Adjusted EBITDA” and “Net

income per share,” both “non-GAAP financial measures,” as such term is defined under the rules of the SEC, are useful

in evaluating our operating performance.

We use Adjusted EBITDA and Net income per share to evaluate our ongoing operations and for internal

planning and forecasting purposes.

We believe that these non-GAAP financial measures may be helpful to investors because it provides consistency

and comparability with past financial performance.

However, these non-GAAP financial measures are presented for supplemental informational

purposes only, have limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information

presented in accordance with GAAP.

In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP

measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP

financial measures as tools for comparison.

A reconciliation is provided below for each non-GAAP financial measure to the most directly

comparable financial measure stated in accordance with GAAP.

Investors are encouraged to review the related GAAP financial measures and

the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on

any single financial measure to evaluate our business.

reconcile our non-GAAP financial measure of Adjusted EBITDA to our net income, adjusted to exclude interest expense, depreciation and

amortization and certain charges or gains resulting from non-recurring events.

reconcile our non-GAAP financial measure of Net income per share to our net income, adjusted to exclude provision for depreciation and

amortization of certain intangible assets, share-based compensation and certain charges or gains resulting from non-recurring events.

following tables provide a reconciliation of net income to Adjusted EBITDA and Net income per share, respectively:

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Net (Loss) Income

$ (1,478,312 )

$ (2,897,357 )

Adjusted to exclude the following

6 unchanged sentences

Gain on previously held equity (4)

Original issue discount

Adjusted EBITDA

$ (1,147,148 )

$ (2,235,881 )

$ (1,447,276 )

Net income per share, diluted

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Net (Loss) Income

$ (2,098,574 )

$ (4,995,931 )

Adjusted to exclude the following

Amortization of acquired intangible assets

Amortization of intangible assets

Gain on sale of myAlphie

2 unchanged sentences

Acquisition related expense (3)

Gain on previously held equity (4)

Gain on previously

held equity (4)

Net income used to compute net income per share, diluted

$ (1,447,420 )

$ (3,815,797 )

$ (2,315,718 )

Weighted-average shares used to compute net income (loss) per share, diluted

Net income per share, diluted

1) Compensation

provided to employees and board members through share-based awards, which is recognized as

a non-cash expense.

pertains to the commitment fee of $1 million related to the equity facility we have in place

pursuant to the GEM Agreement.

related to acquisitions, including professional and legal fees, which are excluded from GAAP

financial measures to provide a clearer view of ongoing operational performance.

4) Represents

the gain from the fair value measurement of previously held equity interests, which is recognized

as a non-operational item and treated as a non-GAAP measure.

and Capital Resources

Liquidity describes the ability of a company to generate sufficient

cash flows to meet the cash requirements of its business operations, including working capital needs, debt services, acquisitions, contractual

obligations and other commitments.

Our liquidity and capital resources are critical to our ability to execute our business plan and achieve

our strategic objectives.

Accordingly, to the extent that collections from our short-term rentals, if any, and technologies cannot fund

our operations, we intend to utilize equity or debt offerings to raise these funds, although volatility in the capital markets may negatively

affect our ability to do so.

We cannot provide any assurance that we will be able to raise additional funds on acceptable terms, if at

Our ability to raise additional capital will depend on various factors, including market conditions, investor demand, and our financial

We had cash and cash equivalents of approximately $3.7 million as of

June 30, 2024 and approximately $6.5 million as of December 31, 2023.

Based on our estimates, we believe we do not have sufficient working

capital to meet our financial needs for the 12-month period following June 30, 2024.

Further, while we anticipate continued operating

losses in the near future, 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

We 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 3 – Going Concern” above and “Item

Other Information” below for additional information).

As of June 30, 2024, pursuant

to the Share Purchase Agreement entered into on December 1, 2022, between us and GEM (the “GEM Agreement”), we can issue

and sell to GEM up to an aggregate value of $100 million in shares of our common stock pursuant to draw down notices in accordance with

the GEM Agreement.

At this time, we do not intend to draw down on the GEM Agreement, but we will continuously evaluate our cash-on-hand

position and business operations needs going forward.

We, in our sole discretion, may draw down from the GEM Agreement in the future as

our business operations evolve and more working capital to fund operations is needed.

Compensation provided to employees and board members and for services

through share-based awards, which is recognized as a non-cash expense.

This pertains to the commitment fee of $1 million incurred in connection with the equity facility we have in place with GEM.

Expenses related to acquisitions, including professional and legal fees, which are excluded from GAAP financial measures to provide a clearer view of ongoing operational performance.

Represents the gain from the fair value measurement of previously held equity interests, which is recognized as a non-operational item and treated as a non-GAAP measure.

Liquidity and Capital

Liquidity describes the ability

of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs,

debt services, acquisitions, contractual obligations and other commitments.

Our liquidity and capital resources are critical to our ability

to execute our business plan and achieve our strategic objectives.

Accordingly, to the extent that collections from our short-term rentals,

if any, and technologies cannot fund our operations, we intend to utilize equity or debt offerings to raise these funds, although volatility

in the capital markets may negatively affect our ability to do so.

The cost of capital and historically high-interest rates can also have

a direct impact on our ability to raise capital through debt or equity offerings or to pursue acquisitions.

Economic environments yielding

higher interest rates with more stringent debt terms such as today’s market environment require larger equity commitments.

means that, as larger equity commitments are required, we will have less leverage and may have fewer acquisitions overall.

We cannot provide

any assurance that we will be able to raise additional funds on acceptable terms, if at all.

Our ability to raise additional capital will

depend on various factors, including market conditions, investor demand, and our financial performance.

We had cash and cash equivalents

of approximately $7.0 million as of September 30, 2024 and approximately $6.4 million as of December 31, 2023.

Based on our estimates,

we believe we do not have sufficient working capital to meet our financial needs for the 12-month period following September 30, 2024.

While we anticipate continued operating losses in the near future, we are confident in our strategy to continue investing in the commercialization

of our products and technologies and our ability to continue operations.

Additionally, we are contemplating to raise capital through an

offering of our securities, and we expect that, to the extent such offering is consummated, we will not need additional capital for a

period beyond the 12-month period following the offering consummation.

We may also receive proceeds from the cash exercises of the warrants

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is dependent upon the trading price of our common stock.

Unless the trading price for our common stock is less than $371.90 per share,

in the case of the GEM Warrants, or $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 price may make the Warrants more attractive for investors to exercise.

Further, the Follow-On Warrants contain “full

ratchet” anti-dilution provisions that provide for a downward adjustment to its exercise price, subject 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.

Our analysis is based on the reported

closing price of our common stock as August 13, 2024, which was $1.21 per share.

Further, the cost of capital

and historically high-interest rates can have a direct impact on our ability to raise capital through debt or equity offerings or to

pursue acquisitions.

Economic environments yielding higher interest rates with more stringent debt terms such as today’s market

environment require larger equity commitments.

This means that, as larger equity commitments are required, we will have less leverage

and may have fewer acquisitions overall.

We believe that if the trading price for our common stock is less than $371.90

per share, in the case of the GEM Warrants, or $5.00 per share in the case of the Follow-On Warrants, it is unlikely that the holders

of the Warrants will exercise them.

While current conditions influencing the exercise of the Warrants make such exercise unlikely, further

adjustments to their exercise price may make the Warrants more attractive for investors to exercise.

Due to an ongoing dispute with GYBL

regarding the GEM Warrants, pursuant to which we have claimed that the GEM Warrants are void and subject to rescission under Section 29(b)

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), there is uncertainty about the enforceability of

the GEM Warrants and its terms (see “Note 16 – Subsequent Events” for further information).

If the dispute is not resolved

through negotiations and the lawsuit is adversely determined against us, we may be required to adjust the GEM Warrants’ exercise

price downward significantly, and we may incur penalties under the GEM Agreement and/or other litigation expenses related to the dispute,

which could materially adversely impact our financial statements, cash flows and results of operations.

See “Note 16 – Subsequent

Events” for further information.

Further, the Follow-On Warrants contain “full ratchet” anti-dilution provisions that

provide for a downward adjustment to its exercise price, subject 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.

Our analysis is based on the reported closing price of our common stock as

November 11, 2024, which was $1.00 per share.

Our business model requires

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financing, and there can be no assurance that we will be able to obtain additional financing on terms acceptable to us, or at all.

we are unable to obtain additional financing when required, we may be forced to reduce the scope of our operations, delay the launch

of new products or services, or take other actions that could adversely affect our business, financial condition, and results of operations.

we are unable to obtain additional financing when required, we may be forced to reduce the scope of our operations, delay the launch of

new products or services, or take other actions that could adversely affect our business, financial condition, and results of operations.

We may also be required to seek additional financing on terms that are unfavorable to us, which could result in the dilution of our stockholders’

ownership interests or the imposition of burdensome terms and restrictions.

Contractual Commitments and Obligations

On August 14, 2024, we entered

into the Purchase Agreement with the Lender (each as defined above) to issue and sell a secured promissory note worth $5,455,000 (see

“Recent Developments – Streeterville Capital, LLC Note Purchase Agreement and Secured Promissory Note” for further information).

As of September 30, 2024, we have incurred $435,000 original issue discount expenses related to the Note.

Further, in accordance with

the Note and related Purchase Agreement, beginning seven months after issuance, the Lender may redeem up to $545,000 of the Note per month,

which amount will be due and payable in cash within three trading days of our receipt of a redemption notice from the Lender.

The redemption feature of

the Note may require us to make redemption payments at the request of the Lender, which redemptions may have a material adverse effect

on our cash flows, results of operations and ability to pay our debts as they come due, and we may not have the required funds to pay

such redemptions, which could result in an event of default under the Note.

The Note and related Purchase Agreement also contain restrictive

covenants on our ability to issue securities, which may further impact our ability to raise capital to meet our redemption payments or

other obligations and expenses as they are due.

The following table summarizes

our cash flows from operating, investing, and financing activities for the periods presented.

Six-month period

Nine-month period

September 30,

Net cash used in operating activities

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$ (2,825,315 )

Net cash (used) provided by investing activities

Net cash used in financing activities

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Cash Flows from Operating Activities

Net cash used in operating activities was $2,550,879 for the six months

ended June 30, 2024, compared to $2,358,359 for the six months ended June 30, 2023.

The difference in net cash flows from operating activities

was mainly attributable to increase in accounts payable and the decrease in prepaid expenses during the six months ended June 30, 2024.

For the nine months

ended September 30, 2024, net cash used in operating activities was $3,806,090, compared to $2,825,315 for the same period in 2023.

increase is primarily due to higher operating expenses, including salaries of $974,004 and professional and legal fees of $340,889, most

of which were acquisition-related costs.

Cash Flows from Investing Activities

For the six months ending June 30, 2024, net cash used in investing

activities was $79,423, whereas for the same period in 2023, net cash provided by investing activities was $228,254.

This change in cash

flows from investing activities is mainly attributable to increased capitalization of software development costs during the six months

ended June 30, 2024.

For the nine months

ended September 30, 2024, net cash used in investing activities was $368,269, whereas for the same period in 2023, net cash provided by

investing activities was $400,330.

This change in cash flows from investing activities is mainly attributable to increased capitalization

of software development costs during the nine months ended September 30, 2024.

Cash Flows from Financing Activities

Net cash used in financing activities was $143,885 for the six months

ended June 30, 2024, compared to $33,353 for the six months ended June 30, 2023.

The variation in cash flows from financing activities

is mainly attributed to reduction in debt payments compared to the previous six months ending June 30, 2023.

Additionally, there were

proceeds from common stock issuances during the period ending June 30, 2023, in connection with our Regulation A offering, which were

not present as of June 30, 2024.

For the nine months ended

September 30, 2024, net cash provided by financing activities was $4,794,866, compared to $105,083 for the same period in 2023.

This increase

was primarily in connection with the issuance of the Note (as defined above).

In contrast, during the nine months period ended September

30, 2023, proceeds from common stock issuances in connection with our Regulation A offering contributed to financing activities, which

issuances were not present in 2024.

Off-Balance Sheet Transactions

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What changed 10-Q

Item 2. Management’s Discussion and Analysis