reAlpha Tech Corp. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal accounting and financial officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, management conducted an evaluation, under the supervision and with the participation of our current Chief Executive Officer and then-Interim Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our current Chief Executive Officer and then-Interim Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Management’s Report on Internal Control over Financial Reporting Our current Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal accounting and financial officer) are responsible for establishing and maintaining internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (“2013 Framework”). Based on this assessment, our management, with the participation of our current Chief Executive Officer (principal executive officer) and our then-Interim Chief Financial Officer (and then-principal accounting and financial officer), concluded that, as of December 31, 2024, our internal control over financial reporting was effective based on those criteria. Changes in Internal Control over Financial Reporting There have been no changes in the Company’s internal control over financial reporting that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting during the quarter ended December 31, 2024. ITEM 9B. OTHER INFORMATION None of the Company’s directors or officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2024, as such terms are defined under Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 66 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive Officers and Directors The following table provides information regarding our executive officers and directors as of the date hereof. Name Age Position Term of Office Executive Officers Giri Devanur 56 Chief Executive Officer Chairman of the Board of Directors Since Inception Michael J. Logozzo 54 Chief Operating Officer and President Since Inception Piyush Phadke 46 Chief Financial Officer Since January 2025 Board of Directors Monaz Karkaria 52 Director Since January 2022 Brian Cole (1)(2)(3) 46 Independent Director Since Inception Dimitrios Angelis (1)(2)(3) 56 Independent Director Since April 2023 Balaji Swaminathan (1)(2)(3) 61 Independent Director Since April 2023 (1) Member of the audit committee of the board of directors (the “audit committee”). (2) Member of the compensation committee of the board of directors (the “compensation committee”). (3) Member of the nominating and corporate governance committee of the board of directors (the “governance committee”). Executive Officers Giri Devanur is the founder of the Company and has served as our Chief Executive Officer and member of the board of directors since inception in April 2021. Mr. Devanur was appointed Chairman of the board of directors in April 2023 and he also served as our President from inception until February 2024. Mr. Devanur is a business entrepreneur and an experienced chief executive officer who has been involved in capital planning and investor presentations as an executive officer for various companies. He has more than 25 years of experience in the information technology industry. Prior to founding the Company, Mr. Devanur co-founded Taazu, Inc. in March 2018, an artificial-intelligence business travel assistant company, which was subsequently sold in March 2021, and in December 2019, Mr. Devanur also co-founded GenDeep, Inc., an investment analysis company, which was eventually dissolved in October 2020 due to the COVID-19 pandemic. Additionally, Mr. Devanur was a member of the board of directors of Coffee Day Enterprises Ltd., a public company listed on the National Stock Exchange of India, from December 2020 until October 2024, and has been a member of the board of directors of Saara, Inc., an AI-based e-commerce solutions company, since October 2019. Mr. Devanur has a master’s degree in Technology Management from Columbia University and a bachelor’s degree in computer engineering from the University of Mysore, India. He has attended Executive Education programs at the Massachusetts Institute of Technology and Harvard Law School. The board of directors believes that Mr. Devanur’s decades-long experience in the information technology industry and in positions of leadership in other companies will enable him to bring a wealth of strategic and business acumen to the board of directors. Michael J. Logozzo has served as our Chief Operating Officer and President since February 2024. Mr. Logozzo also served our Chief Financial Officer until February 2024. Prior to his role at the Company, Mr. Logozzo was managing director for the Americas of L Marks, covering the U.S., Canada, and Latin America from May 2019 to March 2021. Prior to his employment with L Marks, he worked at BMW financial services (a $32 billion portfolio with 1.2 million customers) from 2001 to 2019 in multiple roles, including IT manager starting in February 2001, then process and quality manager, strategy manager, special project manager and general manager of financial services and operations in the Americas from May 2011 to April 2019. During his 18-year tenure, Mr. Logozzo was responsible for finance operations, innovation, and best practices integration at the automotive company’s Americas Regional Services Center in Columbus, Ohio and the headquarters in Munich, Germany. Mr. Logozzo holds a Management Information Systems Bachelor of Science (B.S.) from Youngstown State University, and a Business Administration, Management and Operations Masters of Business Administration (MBA) from Franklin University. 67 Piyush Phadke has served as our Chief Financial Officer since January 30, 2025. Mr. Phadke brings over 20 years of leadership and finance experience. Before joining the Company, Mr. Phadke served as Managing Director at BTIG, LLC, a global financial services firm, from January 2021 to September 2023, and as Director from May 2017 to January 2021, where he was part of the debt capital advisory group and executed multiple capital raise transactions across different products including term loans, high-yield bonds and mezzanine financings. Prior to his position at BTIG, LLC, Mr. Phadke served as Senior Vice President of the financial sponsors group at Jefferies LLC, an investment bank, from January 2016 until July 2016, and as Vice President of such group from July 2014 until January 2016, where he led and structured the underwriting and syndication of leveraged loans and high-yield bonds to support leveraged buyouts. Prior to Jefferies LLC, Mr. Phadke held positions at Bank of America from July 2008 until June 2014, where he executed leveraged buyouts, refinancings, dividend recapitalizations, equity offerings and merger and acquisitions for private equity firms and their portfolio companies. Mr. Phadke received a Master of Business Administration in Corporate Finance and Financial Analysis from The Fuqua School of Business at Duke University, and a B.A. in Economics from Tufts University. Non-Employee Directors Brian Cole has been a member of our board of directors since April 2021. Mr. Cole has also acted as the managing director of Baird’s Technology and Services Investment Banking Group since March 2010. In that role, Mr. Cole leads merger and acquisition and capital raising transactions, advising premier tech-enabled outsourcing companies. Prior to joining Baird’s Technology Services Investment Banking Group, Mr. Cole was a manager in PricewaterhouseCoopers’ Transaction Services practice where he led mergers and acquisitions advisory and financial due diligence engagements for private equity and corporate clients including leveraged buyouts, mergers, carve-out divestitures, take-privates, and joint ventures. Brian received his M.B.A. from Indiana University’s Kelley School of Business and a Bachelor’s of Science (B.S.) in business from the same institution with honors. The board of directors believes that Mr. Cole’s substantial experience in the financial services and investment banking industries will enable him to bring strategic insights to the board of directors. Monaz Karkaria has been a member of our board of directors since January 2022. Ms. Karkaria also served as our Chief Operating Officer from inception until January 2022. Ms. Karkaria has been investing in rental properties since 1999 and has been a part of over 100 real estate transactions. Ms. Karkaria is the owner and founder of Ben Zen Investments LLC and Ben Zen Properties LLC since 2013. Ms. Karkaria was also a social director at ZANT, a non-profit organization from 2015 to 2017. Further, Ms. Karkaria was a business consultant in Brazil from 2006 to 2008. Ms. Karkaria holds a Bachelor’s degree from the All India Institute of Physical Medicine and Rehabilitation. The board of directors believes that Ms. Karkaria’s substantial experience in the real estate industry will enable her to bring real estate business insights to the board of directors. Dimitrios Angelis has been a member of our board of directors since April 2023. Mr. Angelis is an accomplished business strategist who brings over two decades of experience as general counsel from several multinational companies. Since January 2017, he has been the managing partner of Pharma Tech Law LLC, a law firm that specializes in the life sciences field. Further, since June 2017, he has acted as the President, co-founder and chairman of the board of directors of Sparta Biomedical Inc., a privately-held developer of orthopedic solutions. Mr. Angelis has also been a member of the board of directors of The One Group (NASDAQ: STKS) since March 2018, and from March 2015 to March 2020, he served as Star Equity Holding, Inc. (f/k/a/ Digirad) (NASDAQ: STRR) board of directors’ chairperson of the compensation committee. Mr. Angelis has a Bachelor of Arts (B.A.) in Philosophy and English from Boston College, a Master of Arts (M.A.) in Behavioral Science from California State University and a Juris Doctor (J.D.) from NYU School of Law. Our board of directors believes that Mr. Angelis’ substantial experience as an accomplished attorney, negotiator and general counsel to public and private companies in the healthcare field will enable him to bring a wealth of strategic, legal and business acumen to the board of directors. Balaji Swaminathan has been a member of our board of directors since April 2023. Mr. Swaminathan is an accomplished business leader with extensive experience in financial services and entrepreneurship. Since 2018, Mr. Swaminathan has been the founder, chief executive officer and a member of the board of directors of SAIML Pte Ltd, a Singapore-based Capital Markets Services licensed company that provides personalized wealth management solutions for ultra-high net worth customers. Prior to his entrepreneurial pursuits, Mr. Swaminathan also held several key leadership roles in major financial institutions, including serving as President of Westpac International from 2012 to 2019. Mr. Swaminathan also holds multiple directorships with Singapore-based private companies in the finance industry, including S Cube Digilytics Venture Pte Ltd., Turbo Tech Ltd. and Allied Blenders and Distillers Limited since 2022; AT Holdings Pte Ltd. since 2019; and Vibgyor Realty & Investments Private Limited since 2018. Mr. Swaminathan has a Bachelor’s of Commerce (B.C.) in Finance from St. Xavier’s College, a Finance degree from The Institute of Chartered Accountants of India, a Finance Cost & Works degree from The Institute of Cost & Works Accountants of India and an Advanced Management Program from Harvard Business School. The board of directors believes that Mr. Swaminathan substantial experience in the financial services industry as well as in positions of leadership in other companies will enable him to bring a wealth of strategic and business insights to the board of directors. 68 Involvement in Certain Legal Proceedings With the exception of Giri Devanur – see “Legal Proceedings” and “India Proceeding Involving Giri Devanur” for further information on this matter – none of our directors or executive officers has, during the past ten years: ● been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); ● had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; ● been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; ● been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; ● been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or ● been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. CORPORATE GOVERNANCE Controlled Company A controlled company is a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. We are a controlled company because Mr. Giri Devanur, our Chief Executive Officer and Chairman, holds more than 50% of our voting power, and we expect we will continue to be a controlled company upon the completion of this offering. For so long as we remain a controlled company, we are exempt from the obligation to comply with certain Nasdaq corporate governance requirements, including: ● our board of directors is not required to be comprised of a majority of independent directors. ● our board of directors is not subject to the compensation committee requirement; and ● we are not subject to the requirements that director nominees be selected either by the independent directors or a nomination committee comprised solely of independent directors. The controlled company exemptions do not apply to the audit committee requirement or the requirement for executive sessions of independent directors. We are required to disclose in our annual report that we are a controlled company and the basis for that determination. Although we do not plan to take advantage of the exemptions provided to controlled companies, we may in the future take advantage of such exemptions. Director Independence Our common stock is listed on Nasdaq under the symbol “AIRE”. Subject to the controlled company exemption described above, the listing rules of Nasdaq generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and governance committees be independent subject to the controlled company exemptions described above, as applicable to the compensation and governance committees. 69 Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries. Our board of directors undertook a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each non-employee director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that none of our directors have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of Nasdaq and Rule 10A-3 and Rule 10C-1 under the Exchange Act. Only Monaz Karkaria and Giri Devanur are not independent under Nasdaq’s independence standards. Board of Directors and Committees The board of directors has three standing committees: the audit committee, compensation committee and the governance committee. All member of the committees of the board of directors are non-employee directors who are deemed independent. Each of the charters of the committees of the board of directors is posted on our website at ir.realpha.com. None of our directors or executive officers were selected as a result of an arrangement or understanding between him/her and any other person. Audit Committee Under Nasdaq’s listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Each of Messrs. Swaminathan, Cole and Angelis meet the independent director standard under Nasdaq’s listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Balaji Swaminathan serves as chairman of our audit committee. Each member of the audit committee is financially literate and our board of directors has determined that Balaji Swaminathan qualifies as an “audit committee financial expert” as defined in applicable SEC rules. Our audit committee charter, which details the purpose and principal functions of the audit committee, includes responsibilities such as to: ● appoint, compensate, and oversee the work of any registered public accounting firm employed by us; ● resolve any disagreements between management and the auditor regarding financial reporting; ● pre-approve all auditing and non-audit services; ● retain independent counsel, accountants, or others to advise the audit committee or assist in the conduct of an investigation; ● seek any information it requires from employees, all of whom are directed to cooperate with the audit committee’s requests-or external parties; ● oversee and report to the board of directors regarding the Company’s major financial risk exposures, as well as areas including cybersecurity, information technology and data security risks; ● meet with our officers, external auditors, or outside counsel, as necessary; and ● oversee that management has established and maintained processes to assure our compliance with all applicable laws, regulations and corporate policy. 70 Compensation Committee Balaji Swaminathan, Brian Cole and Dimitrios Angelis serve as members of our compensation committee. Under Nasdaq’s listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent, subject to certain phase-in provisions. Brian Cole serves as chairman of our compensation committee. Each of Messrs. Swaminathan, Cole and Angelis meet the independent director standard under Nasdaq’s listing standards applicable to members of the compensation committee. Our compensation committee charter, which details the purpose and principal functions of the compensation committee, includes responsibilities such as to: ● discharge the responsibilities relating to certain disclosures in public filings of the Company, including, but not limited to, in the Company’s proxy statement, and periodic reports, such as the Annual Report on Form 10-K and Quarterly Report on Form 10-Q; ● discharge the responsibilities of the board of directors relating to compensation of our directors, executive officers and other key employees; ● review and make recommendations to the board of directors in establishing appropriate incentive compensation and equity-based plans; ● oversee the annual process of evaluation of the performance of our management; and ● perform such other duties and responsibilities as enumerated in and consistent with the compensation committee’s charter. The compensation committee charter permits the committee to retain or receive advice from a compensation consultant and outlines certain requirements to ensure the consultants independence or certain circumstances under which the consultant need not be independent. We have not retained such a consultant. Nominating and Governance Committee Our board of directors has a standing nominating and governance committee of the board of directors that is composed of independent directors. Messrs. Swaminathan, Cole and Angelis serve as members of our nominating and governance committee. Dimitrios Angelis serves as the chairman of our nominating and governance committee. Our nominating and governance committee charter, which details the purpose and principal functions of the nominating and governance committee, includes responsibilities such as to: ● assist the board of directors by identifying qualified candidates for director nominees, including through search firms to assist in identifying qualified director nominees, and to recommend to the board of directors the director nominees for the next annual meeting of stockholders; ● establish procedures to be followed by stockholders in submitting recommendations for director candidates to the nominating and governance committee; ● lead the board of directors and board of directors committees in their annual review of their performance; ● recommend to the board director nominees for each committee of the board of directors; and ● develop and recommend to the board of directors corporate governance guidelines applicable to us. Compensation Committee Interlocks and Insider Participation None of the members of the compensation committee was at any time during the year ended December 31, 2024, an officer or employee of our Company. None of our executive officers serves as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our board of directors or compensation committee. Risk Oversight Our audit committee is responsible for overseeing our risk management process. Our audit committee focuses on our general risk management policies and strategy, the most significant risks facing us, including risks associated with our audit, financial reporting, internal control, disclosure control, regulatory compliance and cybersecurity matters, and oversees the implementation of risk mitigation strategies by management. Our board of directors is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions. 71 Director Qualifications and Diversity Our board of directors seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the board of director’s deliberations and decisions. Our board of directors is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in the real estate, technology and finance industries, and with real estate; finance and accounting; and entrepreneurship skills. There is no difference in the manner in which the board of directors evaluates nominees for directors based on whether the nominee is recommended by a stockholder. In evaluating nominations, the board of directors also looks for depth and breadth of experience within our industry and otherwise, outside time commitments, special areas of expertise, accounting and finance knowledge, business judgment, leadership ability, experience in developing and assessing business strategies, corporate governance expertise, and for incumbent members of the board of directors, the past performance of the incumbent director. Code of Business Conduct and Ethics Our board of directors adopted a code of business conduct and ethics, or the “Code of Conduct,” applicable to all directors, executive officers and employees. The Code of Conduct is available on the “Investor Relations” portion of our website at www.realpha.com. The nominating and corporate governance committee of our board of directors is responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. In addition, we intend to post on our website all disclosures that are required by law or Nasdaq’s listing standards concerning any amendments to, or waivers of, any provision of the Code of Conduct. Insider Trading Policy We maintain an insider trading policy that governs the purchase, sale and/or other dispositions of our securities by our directors, officers and employees, which we believe is reasonably designed to promote compliance with insider trading laws, rules, regulations and any applicable listing standards. Our insider trading policy prohibits all officers, directors and employees from engaging in insider trading, and establishes procedures for those covered under the policy to both report violations and pre-clearance procedures that employees must go through in order to clear any transactions involving our securities. Clearance of a transaction is valid only for a 48-hours period, and if such transaction is not placed in such 48-hour period, clearance of the transaction must be re-requested. Our insider trading policy also establishes certain trading windows and black-out periods, to facilitate compliance with such insider trading policy. Additionally, mandatory pre-clearance is required from all our executive officers and directors, even during trading windows. Family Relationships There are no family relationships among any of our executive officers or directors. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires that our directors, executive officers, and greater than 10% stockholders to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. To our knowledge, all Section 16(a) filing requirements applicable to its officers, directors, and greater than 10% stockholders for the year ended December 31, 2024, were complied with, except for the following inadvertent delinquent reports: Each of Mr. Swaminathan and Mr. Angelis inadvertently failed to timely disclose one transaction relating to a grant of shares of common stock on May 16, 2024, for services rendered during the year ended December 31, 2023. These transactions were disclosed on a Form 4 for each of Mr. Swaminathan and Mr. Angelis on June 14, 2024. Michael Frenz, our former Chief Financial Officer that served in such position from February 2024 to July 2024, inadvertently failed to timely disclose one transaction relating to a grant of shares of common stock on May 16, 2024, for services rendered as an independent contractor prior to his appointment as Chief Financial Officer. This transaction was disclosed on a Form 4 for Mr. Frenz on June 14, 2024. 72 ITEM 11. EXECUTIVE COMPENSATION Named Executive Officers Our named executive officers and their respective positions for the year ended December 31, 2024, were as follows: ● Giri Devanur, Chief Executive Officer; ● Michael J. Logozzo, President and Chief Operating Officer; and ● Jorge Aldecoa, former Chief Product Officer. Summary Compensation Table The following table contains information about the compensation paid to or earned by each of our named executive officers and their respective positions with the Company for the years ended December 31, 2024 and 2023. Piyush Phadke, our Chief Financial Officer, is not included since he was appointed to such position on January 30, 2025, succeeding Rakesh Prasad, who served as our Interim Chief Financial Officer from October 10, 2024, until such date. Name and Principal Position Year Ended Salary ($) All Other Compensation ($) Total Compensation ($) Giri Devanur December 31, 2024 250,000 25,000 (1) 275,000 Chief Executive Officer and Chairman of the Board of Directors December 31, 2023 150,000 25,000 (1) 175,000 Michael J. Logozzo December 31, 2024 250,000 - 250,000 President and Chief Operating Officer December 31, 2023 140,000 - 140,000 Jorge Aldecoa December 31, 2024 215,000 - 215,000 Former Chief Operating Officer (2) December 31, 2023 200,000 - 200,000 (1) “All other compensation” for Mr. Devanur is his compensation for services as a member of our board of directors for the years ended December 31, 2024 and 2023. (2) On February 27, 2025, we terminated the employment of Jorge Aldecoa as our Chief Product Officer, effective immediately. Employment Agreements with Executive Officers Employment Agreement with Giri Devanur We entered into an employment agreement with Giri Devanur on September 1, 2021. Pursuant to Mr. Devanur’s employment agreement, he will serve as the Company’s Chief Executive Officer until his agreement is terminated by either Mr. Devanur or the Company. By letter agreement, dated April 11, 2023, we entered into an updated employment agreement with Mr. Devanur, which provides for a base salary of $150,000. Mr. Devanur’s base salary was subsequently adjusted by the compensation committee on February 1, 2024 to $250,000, retroactive to January 1, 2024 pursuant to the terms of his employment agreement, which provides that his base salary would be adjusted following a successful public offering resulting in gross proceeds to the Company of $8,000,000 or more, subject to the compensation committee’s approval. 73 Moreover, pursuant to an amendment to his employment agreement dated February 1, 2024, Mr. Devanur is entitled to additional compensation in the form of a discretionary bonuses of up to 66.7% of his then base salary based on the achievement of certain performance targets to be established by the compensation committee, which will be payable no later than two and a half months after the fiscal year to which these performance targets relate to, and certain benefits such as unlimited vacation, health insurance and others. Pursuant to the February 1, 2024 amendment to his employment agreement, Mr. Devanur is also eligible to participate in the 2022 Plan (as defined below), and may receive equity awards pursuant to the 2022 Plan and in accordance to the Company’s long-term equity incentive awards program (the “LTI Awards”), which LTI Awards are subject to certain performance criteria and metrics that will be established by the compensation committee, including satisfying financial, operational and other metrics. Mr. Devanur or the Company may terminate the updated employment agreement at any time upon written notice to the other party. Devanur’s employment agreement has a confidentiality provision and a non-compete for a period 2 years following the termination of his employment. Employment Agreement with Michael J. Logozzo We entered into an employment agreement with Michael J. Logozzo on February 21, 2021. Pursuant to Mr. Logozzo’s employment agreement, he would serve as the Company’s Chief Financial Officer until his agreement is terminated by either Mr. Logozzo or us. By letter agreement, dated April 11, 2023, we entered into an updated employment agreement with Mr. Logozzo, which provides for a base salary of $140,000. Mr. Logozzo’s base salary was subsequently adjusted by the compensation committee on February 1, 2024 to $250,000, retroactive to January 1, 2024 pursuant to the terms of his employment agreement, which provides that his base salary would be adjusted following a successful public offering resulting in gross proceeds to the Company of $8,000,000 or more, subject to the compensation committee’s approval. Moreover, pursuant to an amendment to his employment agreement dated February 1, 2024, Mr. Logozzo is entitled to additional compensation in the form of a discretionary bonuses of up to 66.7% of his then base salary based on the achievement of certain performance targets to be established by the compensation committee, which will be payable no later than two and a half months after the fiscal year to which these performance targets relate to, and certain benefits such as unlimited vacation, health insurance and others. Pursuant to the February 1, 2024 amendment to his employment agreement, Mr. Logozzo is also eligible to participate in the 2022 Plan, and may receive equity awards pursuant to the 2022 Plan and in accordance to the Company’s LTI Awards, which LTI Awards are subject to certain performance criteria and metrics that will be established by the compensation committee, including satisfying financial, operational and other metrics. Mr. Logozzo or the Company may terminate the updated employment agreement at any time upon written notice to the other party. Mr. Logozzo’s employment agreement has a confidentiality provision and a non-compete for a period of 2 years following the termination of his employment. Employment Agreement with Piyush Phadke We entered into an employment offer letter with Mr. Phadke effective as of January 30, 2025. Pursuant to his employment offer letter, Mr. Phadke is entitled to receive (i) an annual base salary of $250,000, which will be reviewed annually by the compensation committee and may be increased by the compensation committee at any time for any reason, (ii) an annual cash incentive bonus in an amount equal to 66.7% of his then base salary based on the achievement of certain performance targets to be established by the compensation committee, which bonus will be payable no later than two and a half months after the fiscal year to which the performance targets relate to, and (iii) certain other benefits such as unlimited vacation, health insurance and others. Mr. Phadke is also eligible to participate in the Company’s 2022 Equity Incentive Plan (as amended from time to time, the “2022 Plan”), and may receive equity awards pursuant to the 2022 Plan, which equity awards may be subject to certain performance criteria and metrics that will be established by the compensation committee at such time, including financial, operational and other metrics. Mr. Phadke or the Company may terminate his employment offer letter at any time upon written notice to the other party, and it contains customary confidentiality provisions, intellectual property assignment provisions and a non-compete for a period of one year following the termination of his employment. 74 Employment Agreement with Jorge Aldecoa We entered into an employment agreement with Jorge Aldecoa on September 1, 2022. Pursuant to Mr. Aldecoa’s employment agreement, he served as our Chief Operating Officer until his termination, which was effective as of February 27, 2025. By letter agreement, dated April 11, 2023, we entered into an updated employment agreement with Mr. Aldecoa, which provided for a base salary of $200,000. Mr. Aldecoa’s base salary was subsequently adjusted by the compensation committee on February 1, 2024 to $215,000, retroactive to January 1, 2024 pursuant to the terms of his employment agreement, which provides that his base salary would be adjusted following a successful public offering resulting in gross proceeds to the Company of $8,000,000 or more, subject to the compensation committee’s approval. Moreover, pursuant to an amendment to his employment agreement dated February 1, 2024, Mr. Aldecoa was entitled to additional compensation in the form of a discretionary bonuses of up to 66.7% of his then base salary based on the achievement of certain performance targets established by the compensation committee, which was payable no later than two and a half months after the fiscal year to which these performance targets relate to, and certain benefits such as unlimited vacation, health insurance and others. Pursuant to the February 1, 2024, amendment to his employment agreement, Mr. Aldecoa was also eligible to participate in the 2022 Plan to receive equity awards pursuant to the 2022 Plan and in accordance to the Company’s LTI Awards, which LTI Awards are subject to certain performance criteria and metrics established by the compensation committee, including satisfying financial, operational and other metrics. Mr. Aldecoa’s updated employment agreement could be terminated by him or us at any time upon written notice to the other party. Mr. Aldecoa’s employment agreement had a confidentiality provision and a non-compete for a period of 2 years following the termination of his employment. In connection with his termination, the Company and Mr. Aldecoa entered into a separation agreement, dated March 27, 2025, which contained a general release of claims, customary confidentiality and non-disparagement provisions and provided for a severance cash payment in the amount of $36,667, subject to applicable payroll deductions, payable in two equal monthly installments beginning on April 4, 2025. Outstanding Equity Awards at December 31, 2024 We have no outstanding equity awards as of December 31, 2024. 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. Eligibility 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 10 th anniversary of the Effective Date (as defined in the 2022 Plan). 75 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. In case the 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. In the event 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; (iii) without stockholder approval if required by applicable law. 2025 Short Term Incentive Plan On February 4, 2025, the compensation committee approved our 2025 Short-Term Incentive Plan (the “STIP”), which provides for quarterly awards of performance-based restricted stock units (the “Awards”) granted under the 2022 Plan, a successor or replacement plan, or outside of an equity incentive plan, as determined by the compensation committee, in its discretion, to be granted to our executive officers and/or other participating employees and consultants selected by the compensation committee. The compensation committee established the STIP to drive revenue growth and profitability, help focus key employees on building stockholder value, provide significant award potential for achieving outstanding performance, and enhance our ability to attract and retain highly talented individuals. Under the STIP, participants may earn Awards based on our achievement of certain pre-determined quarterly performance targets for three different performance target categories for each fiscal quarter. These performance targets will be approved by the compensation committee at the beginning of each fiscal year but may be adjusted on a fiscal quarterly basis at the compensation committee’s sole discretion during the fiscal year depending on our results. The quarterly performance targets consist of (i) the amount of organic revenue for the quarter; (ii) the number of brokerage transactions consummated by our in-house brokerage firm for the fiscal quarter; and (iii) the quality of acquisitions we consummate during the fiscal quarter, which quality determination will be determined at the sole discretion of the compensation committee based on the compensation committee’s evaluation of the acquisitions’ fit with our business model. Each performance target category is weighted differently based on the participant’s position with the Company, and the achievement of the goals for each performance target category is determined independently of the others. The weight of each performance target category for each participant will be set by the compensation committee at the beginning of each fiscal year, subject to change by the compensation committee on a fiscal quarterly basis depending on our results. Further, the percentage of the participant’s base salary that will be used in determining the Awards, if any, will also be set by the compensation committee at the beginning of each fiscal year based on the participant’s position with the Company. 76 For each fiscal quarter, the Awards earned by each participant for each performance target category will be equal to the percentage of the goal for such performance target category that is achieved by us multiplied by the participant’s Target Award (as defined below) for such performance target category for the fiscal quarter, up to a maximum of 500% of the participant’s Target Award. For each participant, the “Target Award” for a particular performance target category for a given fiscal quarter will be equal to the applicable percentage of the participant’s base salary used to determine the Awards for such participant multiplied by (i) the weight of such performance target category and (ii) the participant’s base salary for the applicable fiscal quarter. The Awards earned in a fiscal quarter, if any, will vest as follows: (i) 50% will vest on the date that is 12 months from the date of grant, (ii) 12.5% will vest on the date that is 15 months from the date of grant, (iii) 12.5% will vest on the date that is 18 months from the date of grant, (iv) 12.5% will vest on the date that is 21 months from the date of grant and (v) 12.5% will vest on the date that is 24 months from the date of grant. The date of grant of the Awards for a given fiscal quarter will be 30 calendar days after the last calendar day of such fiscal quarter, on the terms and subject to the conditions of the STIP. The vesting of the Awards is subject to the participant’s compliance with the terms of the STIP, including, among other things, the participant’s continued service to the Company (or an affiliate) in accordance with the terms of the participant’s employment agreement through each applicable vesting date. We believe that the Awards will further align our executive officers’ and other participating employees’ interests with those of our stockholders, while serving as a key retention mechanism over the long-term. All Awards will be subject to our Clawback Policy (as defined below). Director Compensation The following table presents the total compensation earned and/or paid to non-employee and employee member directors of our board of directors during the year ended December 31, 2024. Our non-executive directors are entitled to an annual compensation of $25,000, payable in cash in quarterly installments of $6,250, plus reimbursements for reasonable travel expenses, and out-of-pocket costs incurred in attending meetings of our board of directors or events attended on our behalf. Additionally, Messrs. Angelis and Swaminathan each received $50,000 as additional compensation for services as a non-executive director during the fiscal year ended December 31, 2024. The amounts represented in the “Stock Awards” column reflects the grant date fair value of the shares of common stock issued to Messrs. Angelis and Swaminathan, were computed in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), and do not necessarily equate to the income that will ultimately be realized by such directors for such awards. Mr. Giri Devanur, our chief executive officer, president and member of the board of directors, received a total of $25,000 for his service as a member of our board of directors during the period presented below. Mr. Devanur’s total compensation for service as an employee and as a member of our board of directors is presented under the heading “Summary Compensation Table” above. Name Period Ended Fees Earned and Paid in Cash ($) Stock Awards ($) Total ($) Giri Devanur December 31, 2024 25,000 - 25,000 Monaz Karkaria December 31,2024 25,000 - 25,000 Brian Cole December 31,2024 25,000 - 25,000 Dimitrios Angelis December 31,2024 25,000 50,000 75,000 Balaji Swaminathan December 31, 2024 25,000 50,000 75,000 77 Clawback Policy We have adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules (the “Clawback Policy”). Under the Clawback Policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive-based compensation from our executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. The compensation committee has discretion to make certain exceptions to the clawback requirements (when permitted by Nasdaq rules) and ultimately determine whether any adjustment will be made under the Clawback Policy. Policies and Practices Related to the Grant of Certain Equity Awards We currently have no specific policy or practice on the timing of stock options, stock-appreciation rights or similar option-like instruments, in relation to the disclosure of material nonpublic information by us. During the years ended December 31, 2024 and 2023, we did not award any such equity instruments to our executive officers. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth information regarding the beneficial ownership of our common stock by (i) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and executive officers as a group. Unless otherwise indicated, the address of each executive officer and director is c/o reAlpha Tech Corp. at 6515 Longshore Loop, Suite 100, Dublin, OH 43017. Applicable percentage ownership is based on 46,230,934 shares of common stock outstanding at March 24, 2025. The number of shares of common stock beneficially owned by each stockholder is determined under rules issued by the SEC regarding the beneficial ownership of securities. This information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership of shares of our common stock includes (1) any shares as to which the person or entity has sole or shared voting power or investment power and (2) any shares as to which the person or entity has the right to acquire beneficial ownership within 60 days after the date hereof. Name of Beneficial Owner Number of Shares Beneficially Owned (1) Percentage of Shares Beneficially Owned Directors and Executive Officers Monaz Karkaria 2,947,991 6.38 % Brian Cole 368,499 * Dimitrios Angelis 49,505 * Balaji Swaminathan 49,505 * Giri Devanur 27,637,410 59.78 % Michael J. Logozzo 2,199,938 4.76 % Piyush Phadke - - Jorge Aldecoa 368,499 * All current executive officers and directors as a group (7 persons) (2) 33,252,848 71.93 % * Less than one percent of outstanding shares. (1) With the exception of the securities beneficially owned by our current executive officers and directors and their affiliates, the ownership of the shares of common stock listed above were determined using public records. These amounts are based upon information available to us as of the date of this filing. (2) Excludes Jorge Aldecoa, our former Chief Product Officer, and includes Piyush Phadke, our current Chief Financial Officer. 78 Securities Authorized for Issuance under Equity Compensation Plans The following table provides information as of December 31, 2024, regarding the 2022 Plan, our only active equity compensation plan, which was adopted by our board of directors and stockholders prior to our common stock being listed on Nasdaq. See “Item 11. Executive Compensation – Equity Incentive Plan” and “Note 14 – Stockholders’ Equity (Deficit)” for more information on the 2022 Plan. As of December 31, 2024, we have not issued any restricted stock awards, options, warrants or rights under the 2022 Plan. Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by stockholders — $ — 3,780,961 (1) Equity compensation plan not approved by stockholders — $ — — Total — $ — 3,780,961 (1) Consists of shares of common stock available for issuance under the 2022 Plan. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Related Party Transactions Except as disclosed herein, no director, executive officer, stockholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since January 1, 2022, in which the amount involved in the transaction exceeds the lesser of $120,000 or one percent (1%) of the average of our total assets at the year-end for the last two completed fiscal years. myAlphie LLC On December 31, 2022, the Company entered into that certain Membership Interest Purchase Agreement, dated as of December 31, 2022, which was amended pursuant to a First Side Letter Amendment on March 11, 2023 and subsequently a Second Side Letter Amendment, effective as of May 17, 2023 (as amended, the “myAlphie Agreement”), between us and Turnit Holdings, LLC, an Ohio limited liability company (the “Buyer”). The Buyer was an indirect subsidiary of Crawford Hoying, which is owned and partially controlled by Brent Crawford, former chairman of the Company’s board of directors and – at the time – more than 5% beneficial ownership of the Company’s common stock. The myAlphie Agreement provided for the Buyer’s acquisition of all the issued and outstanding membership interests of myAlphie, LLC, subsequent to its conversion from a Delaware corporation to a Delaware limited liability company. Prior to the execution of the myAlphie Agreement and pursuant to our short-form merger in accordance with Section 253 of the DGCL, we held myAlphie LLC as a subsidiary, along with (a) all its technology and intellectual property, and (b) two on-demand promissory notes in the amounts of $975,000 and $4,875,000 payable to CH REAlpha Investments, LLC, and CH REAlpha Investments II, LLC, respectively (together, the “Promissory Notes”). CH REAlpha Investments, LLC, and CH REAlpha Investments II, LLC are also managed by Mr. Crawford. Upon closing of the myAlphie Agreement (a) the Company sold all of its interests in myAlphie LLC, and (b) the Buyer assumed the Company’s remaining liabilities and outstanding obligations under the Promissory Notes. Policy for Approval of Related Party Transactions Our board of directors has adopted a related-person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification for the review of any transaction, arrangement or relationship in which we are a participant, the amount involved exceeds $120,000 and one of our executive officers, directors, director nominees or each person whom we know to beneficially own more than 5% of our outstanding shares of common stock (a “5% stockholder”) (or their immediate family members), each of whom we refer to as a “related person,” has a direct or indirect material interest. If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related-person transaction,” the related person must report the proposed related-person transaction to the Company’s general counsel. The policy calls for the proposed related-person transaction to be reviewed by and if deemed appropriate approved by, the audit committee of our board of directors after full disclosure of the related-person interest in the transaction. Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the audit committee will review and, in its discretion, may ratify the related-person transaction. The policy also permits the chair of the audit committee to review, and if deemed appropriate approve, proposed related-person transactions that arise between audit committee meetings, subject to ratification by the audit committee at its next meeting. Any related-person transactions that are ongoing in nature will be reviewed annually. 79 A related-person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the audit committee after full disclosure of the related person’s interest in the transaction. As appropriate for the circumstances, the committee will review and consider: ● the related person’s interest in the related-person transaction; ● the approximate dollar amount involved in the related-person transaction; ● the approximate dollar amount of the related person’s interest in the transaction without regard to the amount of any profit or loss; ● whether the transaction was undertaken in the ordinary course of our business; ● whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party; ● the purpose of, and the potential benefits to us of, the related-person transaction; and ● any other information regarding the related-person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. The audit committee may approve or ratify the transaction only if the audit committee determines that, under all of the circumstances, the transaction is not inconsistent with our best interests. The audit committee may impose any conditions on the related-person transaction that it deems appropriate. The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by the compensation committee of our board of directors in the manner specified in its charter. Director Independence Our common stock is listed on Nasdaq under the symbol “AIRE”. Subject to the controlled company exemption described above, the listing rules of Nasdaq generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and governance committees be independent subject to the controlled company exemptions described above, as applicable to the compensation and governance committees. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries. Our board of directors undertook a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each non-employee director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that none of our directors have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the rules of Nasdaq and Rule 10A-3 and Rule 10C-1 under the Exchange Act. Only Monaz Karkaria and Giri Devanur are not independent under Nasdaq’s independence standards. 80 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table presents aggregate fees for professional audit services rendered by GBQ Partners, LLC (“GBQ”) for the audit of our consolidated financial statements for the years ended December 31, 2024 and 2023, and fees billed for other services rendered by GBQ during those periods. Services Rendered Year ended December 31, 2024 December 31, 2023 Audit Fees (1) $ 116,300 $ 128,520 Tax Fees (2) 70,292 38,752 All Other Fees 43,022 97,926 Total $ 229,614 $ 265,198 (1) These amounts represent fees for professional services rendered for the audits of our consolidated financial statements included in this report, reviews of the quarterly consolidated financial statements included in our quarterly reports on Form 10-Q, annual reports on Form 10-K, statutory audits, and other SEC filings and accounting consultations on matters related to the annual audits or interim reviews. (2) This amount represents fees for tax consulting and compliance services in our U.S. and non-U.S. locations. Audit Committee Pre-Approval Policy Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (“PCAOB”) regarding auditor independence, the audit committee (i) appoints, retains and terminates; (ii) negotiates and sets the compensation of; and (iii) oversees the performance of the independent registered public accounting firm. In recognition of this responsibility, the audit committee has established a pre-approval policy for all audit and permitted non-audit services performed by our independent auditors to ensure that providing such services does not impair the auditors’ independence. The annual audit services engagement terms and fees will be subject to the specific pre-approval of the audit committee. In addition to the annual audit services engagement approved by the audit committee, the audit committee may grant general pre-approval to other audit services, which are those services that only the independent auditor reasonably can provide. These general pre-approved audit services include (a) audit services, such as statutory audits, services associated with SEC registration statements, periodic reports and other SEC filings; (b) audit-related services, such as due diligence pertaining to potential business acquisitions, financial statement audits of employee benefit plans and consultations; (c) tax-services; and (d) other services that are permissible and that would not impair the independence of our independent registered public accounting firm. Pre-approval for these general audit services last for 12 months from the pre-approval date, and must involve fees of less than $100,000. Any services that have not been generally pre-approved or that exceed the approved fee levels must be specifically pre-approved. Specific pre-approval must be obtained from the audit committee. The audit committee may also delegate the authority to the chairman of the audit committee, Mr. Swaminathan, to pre-approve audit and permitted non-audit services to be provided by our independent auditor so long as such services are subsequently reported to and approved by the full audit committee at its next scheduled meeting. The audit committee approved all services provided by, and all fees paid to, GBQ. The audit committee has considered the services provided by GBQ as described above and has determined that such services are compatible with maintaining GBQ’s independence. 81 PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES (a) (1) Consolidated Financial Statements The financial statements filed as part of this report are listed and indexed in the Index to Consolidated Financial Statements stating on page F-1 located in this Annual Report on Form 10-K. (a) (2) Financial Statement Schedules Financial statement schedules are omitted because they are not required, not applicable or because the required information is shown in the consolidated financial statements or notes thereto. (a) (3) Exhibits Required exhibits are incorporated by reference or are filed with this report. (b) The exhibits set forth in the following index of exhibits are filed or incorporated by reference as a part of this Annual Report on Form 10-K: Exhibit No. Description of Exhibit 1.1** At the Market Sales Agreement by and between reAlpha Tech Corp. and A.G.P./Alliance Global Partners, dated December 19, 2024 (previously filed as Exhibit 1.1 of Form 8-K filed with the SEC on December 19, 2024). 1.2** Amendment No. 1 to At the Market Sales Agreement, dated January 31, 2025, by and between reAlpha Tech Corp. and A.G.P./Alliance Global Partners (previously filed as Exhibit 1.1 of Form 8-K filed with the SEC on January 31, 2025). 1.3** Amendment No. 2 to At the Market Sales Agreement, dated January 31, 2025, by and between reAlpha Tech Corp. and A.G.P./Alliance Global Partners (previously filed as Exhibit 1.1 of Form 8-K filed with the SEC on February 27, 2025). 2.1** Membership Interest Purchase Agreement by and among reAlpha Tech Corp. and turnit Holdings, LLC, dated as of December 31, 2022 (previously filed as Exhibit 9.1 of Form 1-U filed with the SEC on May 23, 2023). 2.2** Membership Interest Purchase Agreement First Side Letter by and among reAlpha Tech Corp. and turnit Holdings, LLC, dated as of December 31, 2022 (previously filed as Exhibit 9.2 of Form 1-U filed with the SEC on May 23, 2023). 2.3** Membership Interest Purchase Agreement Second Side Letter by and among reAlpha Tech Corp. and turnit Holdings, LLC, dated as of December 31, 2022 (previously filed as Exhibit 9.3 of Form 1-U filed with the SEC on May 23, 2023). 2.4** Stock Purchase Agreement by and Among Roost Enterprises, Inc. dba Rhove, the Sellers and reAlpha Tech Corp., dated March 24, 2023 (previously filed as Exhibit 1.1 of Form 1-U filed with the SEC on March 27, 2023). 2.5** Restricted Stock Purchase Agreement by and between reAlpha Tech Corp. and Silicon Valley Bridge Bank, N.A., dated as of March 24, 2023 (previously filed as Exhibit 1.2 of Form 1-U filed with the SEC on March 27, 2023). 2.6** Certificate of Ownership and Merger, filed March 21, 2023 (previously filed as Exhibit 2.1 of Form 1-U filed with the SEC on March 24, 2023). 2.7#** Stock Purchase Agreement, dated as of December 3, 2023, among reAlpha Tech Corp., Naamche, Inc., the Sellers and the Sellers’ Representative (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on December 4, 2023). 2.8#** Amended and Restated Stock Purchase Agreement, dated as of February 2, 2024, among reAlpha Tech Corp., Naamche, Inc. Pvt. Ltd., the Sellers and the Sellers’ Representative (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC February 8, 2024). 82 2.7#** Business Acquisition and Financing Agreement, dated as of July 12, 2024, among reAlpha Tech Corp., AiChat Pte. Ltd., AiChat10X Pte. Ltd. and Kester Poh Kah Yong (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on July 15, 2024). 2.8#** Membership Interest Purchase Agreement, dated as of September 8, 2024, among reAlpha Tech Corp., Debt Does Deals, LLC (d/b/a Be My Neighbor), Christopher B. Griffith and Isabel Williams (previously filed as Exhibit 2.1 of Form 8-K filed with the SEC on September 9, 2024). 2.9#** Membership Interest Purchase Agreement, dated as of November 20, 2024, among reAlpha Tech Corp., USRealty Brokerage Solutions, LLC, Unreal Estate LLC and Unreal Estate Inc (previously filed as Exhibit 2.1 of Form 8-K filed with the SEC on November 21, 2024). 2.10#** Stock Purchase Agreement, dated as of February 20, 2025, among reAlpha Tech Corp., GTG Financial, Inc. and Glenn Groves (previously filed as Exhibit 2.1 of Form 8-K filed with the SEC on February 24, 2025). 3.1** Second Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.1 of Form S-11 filed with the SEC on August 8, 2023). 3.2** Second Amended and Restated Bylaws (previously filed as Exhibit 3.2 of Form S-11 filed with the SEC on August 8, 2023). 3.3** Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock filed with the Secretary of State of Delaware on February 20, 2025 (previously filed as Exhibit 3.1 of Form 8-K filed with the SEC on February 24, 2025). 4.1** Form of Warrant (previously filed as Exhibit 6.3 of Form 1-U filed with the SEC on December 5, 2022). 4.2** Form of Common Warrant (previously filed as Exhibit 4.1 of Form 8-K filed with the SEC on November 21, 2023). 4.3** Warrant Agency Agreement (previously filed as Exhibit 4.2 of Form 8-K filed with the SEC on November 21, 2023). 4.4** Secured Promissory Note, dated as of August 14, 2024 (previously filed as Exhibit 4.4 of Form 10-Q filed with the SEC on August 14, 2024). 4.5* Description of Securities of the Company. 10.1** Share Purchase by and among reAlpha Asset Management, Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated as of December 1, 2022 (previously filed as Exhibit 6.1 of Form 1-U filed with the SEC on December 5, 2022). 10.2** Registration Rights Agreement by and among reAlpha Asset Management, Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated as of December 1, 2022 (previously filed as Exhibit 6.2 of Form 1-U filed with the SEC on December 5, 2022). 10.3+** Employment Agreement of Giri Devanur, dated April 11, 2023 (previously filed as Exhibit 10.11 of Form S-11 filed with the SEC on August 8, 2023). 10.4+** Employment Agreement of Michael J. Logozzo, dated April 11, 2023 (previously filed as Exhibit 10.12 of Form S-11 filed with the SEC on August 8, 2023). 10.5+** Employment Agreement of Jorge Aldecoa, dated April 11, 2023 (previously filed as Exhibit 10.13 of Form S-11 filed with the SEC on August 8, 2023). 10.6+** reAlpha Tech Corp. 2022 Equity Incentive Plan (previously filed as Exhibit 10.14 of Form S-11 filed with the SEC on August 8, 2023). 10.7+** Form of 2022 Equity Incentive Plan Restricted Stock Award Agreement (previously filed as Exhibit 10.15 of Form S-11 filed with the SEC on August 8, 2023). 83 10.8+** Form of 2022 Equity Incentive Plan Stock Option Award Agreement (previously filed as Exhibit 10.16 of Form S-11 filed with the SEC on August 28, 2023). 10.9+** Form of Director and Officer Indemnification Agreement (previously filed as Exhibit 10.17 of Form S-11 filed with the SEC on August 28, 2023). 10.10** Ohio Division of Securities Cease and Desist Order with Consent Agreement (previously filed as Exhibit 6.10 of Form 1-U filed with the SEC on August 31, 2023). 10.11+** First Amendment to Employment Agreement of Giri Devanur, dated February 1, 2024 (previously filed as Exhibit 10.2 of Form 8-K filed with the SEC on February 1, 2024). 10.12+** First Amendment to Employment Agreement of Michael J. Logozzo, dated February 1, 2024 (previously filed as Exhibit 10.3 of Form 8-K filed with the SEC on February 1, 2024). 10.13+** First Amendment to Employment Agreement of Jorge Aldecoa, dated February 1, 2024 (previously filed as Exhibit 10.4 of Form 8-K filed with the SEC on February 1, 2024). 10.14** Note Purchase Agreement, dated as of August 14, 2024, by and between reAlpha Tech Corp. and Streeterville Capital, LLC (previously filed as Exhibit 10.1 of Form 10-Q filed with the SEC on August 14, 2024). 10.15** Security Agreement, dated August 14, 2024, by and between Roost Enterprises, Inc. and Streeterville Capital, LLC (previously filed as Exhibit 10.2 of Form 10-Q filed with the SEC on August 14, 2024). 10.16** Security Agreement, dated August 14, 2024, by and between reAlpha Tech Corp. and Streeterville Capital, LLC (previously filed as Exhibit 10.3 of Form 10-Q filed with the SEC on August 14, 2024). 10.17** Intellectual Property Security Agreement, dated August 14, 2024, by and between Roost Enterprises, Inc. and Streeterville Capital, LLC (previously filed as Exhibit 10.4 of Form 10-Q filed with the SEC on August 14, 2024). 10.18** Intellectual Property Security Agreement, dated August 14, 2024, by and between reAlpha Tech Corp. and Streeterville Capital, LLC (previously filed as Exhibit 10.5 of Form 10-Q filed with the SEC on August 14, 2024). 10.19** Guaranty, dated as of August 14, 2024, by Roost Enterprises, Inc., reAlpha Acquisitions, LLC, reAlpha Acquisitions Churchill, LLC, reAlpha Realty, LLC, Rhove Real Estate 1, LLC and Naamche Inc. for the benefit of Streeterville Capital, LLC (previously filed as Exhibit 10.6 of Form 10-Q filed with the SEC on August 14, 2024). 10.20** Placement Agency Agreement, dated as of August 14, 2024, by and between reAlpha Tech Corp. and Maxim Group LLC (previously filed as Exhibit 10.7 of Form 10-Q filed with the SEC on August 14, 2024). 10.21* Security Agreement, dated September 13, 2024, by and between Debt Does Deals, LLC and Streeterville Capital, LLC. 10.22* Intellectual Property Security Agreement, dated September 13 , 2024, by and between Debt Does Deals, LLC and Streeterville Capital, LLC. 10.23* Guaranty, dated as of September 13, 2024, by Debt Does Deals, LLC for the benefit of Streeterville Capital, LLC. 10.24** Letter Agreement, dated November 19, 2024, among reAlpha Tech Corp., Unreal Estate Inc. and Unreal Estate LLC (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on January 29, 2025). 10.25+** Piyush Phadke’s Offer Letter, effective as of January 30, 2025 (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on January 30, 2025). 84 10.26+** 2025 Short Term Incentive Plan (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on February 10, 2025). 10.27#** Advertising Agreement, dated March 7, 2025, between reAlpha Tech Corp. and Mercurius Media Capital LP (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on March 10, 2025). 10.28#** Investment Agreement, dated March 7, 2025, between reAlpha Tech Corp. and Mercurius Media Capital LP (previously filed as Exhibit 10.2 of Form 8-K filed with the SEC on March 10, 2025). 10.29** Mutual Settlement and Release Agreement, dated as of March 19, 2025, between reAlpha Tech Corp. and Unreal Estate Inc. (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on March 21, 2025). 10.30** Exchange Agreement, dated as of March 20, 2025, between reAlpha Tech Corp. and Streeterville Capital, LLC (previously filed as Exhibit 10.2 of Form 8-K filed with the SEC on March 21, 2025). 14.1** Code of Conduct and Ethics (previously filed as Exhibit 14.1 of Form S-11 filed with the SEC on August 8, 2023). 19* Insider Trading Policy. 21.1* Subsidiaries of the Registrant. 23.1* Consent of GBQ Partners, LLC, independent registered public accounting firm. 24.1* Power of Attorney (included on the signature page of this report). 31.1* Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1*** Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97** Clawback Policy (previously filed as Exhibit 97.1 of Form 10-KT filed with the SEC on March 12, 2024). 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). * Filed herewith. ** Previously filed. *** Furnished herewith. + Indicates management contract or compensatory plan or arrangement. # Schedules, exhibits and similar attachments to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. 85 REALPHA TECH CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page No. Report of Independent Registered Public Accounting Firm ( GBQ Partners LLC ) PCAOB ID No. 1808 F-2 Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023 F-3 Consolidated Statements of Operations for the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 F-4 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 F-5 Consolidated Statements of Cash Flows for the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders reAlpha Tech Corp. and Subsidiaries Dublin, Ohio Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of reAlpha Tech Corp. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2024, the eight-month period ended December 31, 2023 and the year ended April 30, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the year ended December 31, 2024, the eight-month period ended December 31, 2023 and the year ended April 30, 2023, in conformity with accounting principles generally accepted in the United States of America. Continuation as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the consolidated financial statements, the Company has experienced recurring losses from operations and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in the notes. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Other Matter – Discontinued Operations As described in Note 16 to the consolidated financial statements, during 2024 the Company suspended real estate acquisition operations of Roost Enterprises, Inc. (“Rhove”), and presented the related amounts as discontinued operations in the consolidated financial statements. Our opinion is not modified with respect to this matter. /s/ GBQ Partners LLC We have served as the Company’s auditor since 2021. Columbus, Ohio April 2, 2025 F- 2 reAlpha Tech Corp. and Subsidiaries Consolidated Balance Sheet December 31, 2024 and December 31, 2023 December 31, 2024 December 31, 2023 ASSETS Current Assets Cash $ 3,123,530 $ 6,456,370 Accounts receivable 182,425 30,630 Receivable from related parties 12,873 - Prepaid expenses 180,158 242,795 Current assets of discontinued operations 56,931 88,036 Other current assets 487,181 582,463 Total current assets $ 4,043,098 $ 7,400,294 Property and Equipment, at cost Property and equipment, net $ 102,638 $ 328,539 Other Assets Investments 215,000 115,000 Other long term assets 31,250 406,250 Intangible assets, net 3,285,406 - Long term assets of discontinued operations - 18,335,701 Goodwill 4,211,166 - Capitalized software development - work in progress 105,900 839,085 TOTAL ASSETS $ 11,994,458 $ 27,424,869 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accounts payable $ 655,765 $ 431,700 Related party payables 9,287 - Short term loans - related parties -current portion 115,086 - Short term loans - unrelated parties -current portion 666,053 190,095 Accrued expenses 1,164,813 799,624 Current liabilities of discontinued operations - 47,665 Deferred liabilities, current portion 1,534,433 593,750 Total current liabilities $ 4,145,437 $ 2,062,834 Long-Term Liabilities Deferred liabilities, net of current portion - 406,250 Mortgage and other long term loans - related parties - net of current portion 45,052 - Mortgage and other long term loans - unrelated parties - net of current portion 241,121 247,000 Note payable, net of discount 4,909,376 - Other long term liabilities 1,086,000 - Total liabilities $ 10,426,986 $ 2,716,084 Stockholders’ Equity (Deficit) Preferred stock, $ 0.001 par value; 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023 - - Common stock ($ 0.001 par value; 200,000,000 shares authorized, 45,864,503 shares outstanding as of December 31, 2024; 200,000,000 shares authorized, 44,122,091 shares outstanding as of December 31, 2023) 45,865 44,123 Additional paid-in capital 39,770,060 36,899,497 Accumulated deficit ( 38,260,913 ) ( 12,237,885 ) Accumulated other comprehensive income 5,011 - Total stockholders’ equity (deficit) of reAlpha Tech Corp. 1,560,023 24,705,735 Non-controlling interests in consolidated entities 7,449 3,050 Total stockholders’ equity (deficit) 1,567,472 24,708,785 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,994,458 $ 27,424,869 F- 3 reAlpha Tech Corp. and Subsidiaries Consolidated Statements of Operations and Comprehensive (Loss) Income For the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 For the Year Ended For the Eight Months Ended For the Year Ended December 31, 2024 December 31, 2023 April 30, 2023 Revenues $ 948,420 $ 121,690 $ 419,412 Cost of revenues 302,084 94,665 293,204 Gross Profit 646,336 27,025 126,208 Operating Expenses Wages, benefits and payroll taxes 2,841,591 710,737 1,114,403 Repairs & maintenance 3,216 51,436 24,794 Utilities 11,545 12,321 32,456 Travel 259,661 46,476 - Dues & subscriptions 118,656 24,426 97,999 Marketing & advertising 793,004 193,612 2,002,884 Professional & legal fees 2,124,946 4,572,026 1,470,306 Depreciation & amortization 282,095 30,029 157,802 Impairment of intangible assets 202,968 - - Other operating expenses 911,268 418,697 159,166 Total operating expenses 7,548,950 6,059,760 5,059,810 Operating Loss ( 6,902,614 ) ( 6,032,735 ) ( 4,933,602 ) Other Income (Expense) Gain on sale of myAlphie - 5,502,774 - Interest expense, net ( 333,759 ) ( 70,119 ) ( 169,776 ) Other expense, net ( 500,601 ) ( 144,764 ) ( 334,228 ) Total other (expense) income ( 834,360 ) 5,287,891 ( 504,004 ) Net Loss from continuing operations before income taxes ( 7,736,974 ) ( 744,844 ) ( 5,437,607 ) Income tax benefit (expense) 54,260 ( 204,286 ) - Net Loss from continuing operations ( 7,682,714 ) ( 949,130 ) ( 5,437,607 ) Discontinued operations (Rhove) Loss from operations of discontinued Operations ( 261,242 ) ( 302,129 ) ( 14,776 ) Impairment of goodwill and intangible assets of discontinued operations ( 18,078,393 ) - - Loss on discontinued operations $ ( 18,339,635 ) $ ( 302,129 ) $ ( 14,776 ) Net Loss after income taxes $ ( 26,022,349 ) $ ( 1,251,259 ) $ ( 5,452,383 ) Less: Net (Loss) Income Attributable to Non-Controlling Interests 679 464 726 Net Loss Attributable to Controlling Interests $ ( 26,023,028 ) $ ( 1,251,723 ) $ ( 5,453,109 ) Other comprehensive income Foreign currency translation adjustments 5,011 - - Total other comprehensive gain 5,011 - - Comprehensive Loss Attributable to Controlling Interests $ ( 26,018,017 ) $ ( 1,251,723 ) $ ( 5,453,108 ) Basic and diluted loss per share Continuing operations $ ( 0.17 ) $ ( 0.02 ) $ ( 0.13 ) Discontinued operations $ ( 0.41 ) $ ( 0.01 ) $ ( 0.00 ) Net Loss per share — basic and diluted $ ( 0.58 ) $ ( 0.03 ) $ ( 0.13 ) Weighted-average outstanding shares — basic 44,631,577 42,688,666 40,439,190 Weighted-average outstanding shares — diluted 44,631,577 42,688,666 40,439,190 F- 4 reAlpha Tech Corp. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity (Deficit) For the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 Accumulated ReAlpha Tech Corp. Additional Other and Non- Total Common Stock Paid-in Accumulated Comprehensive Subsidiaries Controlling Stockholders’ Shares Amount Capital Deficit Loss Equity Interests Equity Balance at April 30, 2022 8,634,210 $ 8,634 $ 192,490 $ ( 5,533,053 ) $ - $ ( 5,331,929 ) $ 13,597 $ ( 5,318,332 ) Net loss - - - ( 5,453,109 ) - ( 5,453,109 ) 726 ( 5,452,383 ) Shares issued through Reg A offering 895,537 896 8,954,474 - - 8,955,370 - 8,955,370 Reg A offering costs - - ( 777,466 ) - - ( 777,466 ) - ( 777,466 ) Distribution to syndicate members - ( 46,587 ) - - ( 46,587 ) ( 12,351 ) ( 58,938 ) Shares issued for acquisition of Rhove 1,312,025 1,312 13,118,938 - - 13,120,250 - 13,120,250 Shares issued for services 304,529 305 3,044,985 - - 3,045,290 - 3,045,290 Shares issued in former parent 543,420 543 149,457 - - 150,000 - 150,000 RTC India - Non controlling interest - - - - - - 641 641 Cancellation of shares in the former parent ( 9,167,630 ) ( 9,167 ) ( 241,957 ) - - ( 251,124 ) - ( 251,124 ) Recapitalization of shares 40,000,000 40,000 410,000 - - 450,000 - 450,000 Downstream merger transaction - - ( 697,175 ) - - ( 697,175 ) - ( 697,175 ) Balance at April 30, 2023 42,522,091 $ 42,523 $ 24,107,159 $ ( 10,986,162 ) $ - $ 13,163,520 $ 2,613 $ 13,166,133 Net loss - - - ( 1,251,723 ) - ( 1,251,723 ) 464 ( 1,251,259 ) Shares issued through follow on listing 1,600,000 1,600 3,898,898 - - 3,900,498 - 3,900,498 Issuance of warrants - 4,099,502 - - 4,099,502 - 4,099,502 Issuance of stock options for Rhove acquisition - - 5,462,000 - - 5,462,000 - 5,462,000 Reg A offering costs - - ( 562 ) - - ( 562 ) - ( 562 ) Follow on listing offering costs - - ( 667,500 ) - - ( 667,500 ) - ( 667,500 ) RTC India - Non controlling interest - - - - - - ( 27 ) ( 27 ) Balance at December 31, 2023 44,122,091 $ 44,123 $ 36,899,497 $ ( 12,237,885 ) $ - $ 24,705,735 $ 3,050 $ 24,708,785 Net loss - - - ( 26,023,028 ) - ( 26,023,028 ) 679 ( 26,022,349 ) Other Comprehensive gain - - - - 5,011 5,011 - 5,011 Shares issue - BMN acquisition 1,146,837 1,147 1,512,853 - - 1,514,000 - 1,514,000 Shares issue - AiChat10X Pte 293,536 293 1,022,682 - - 1,022,975 - 1,022,975 Shares issued for services 83,000 83 108,647 - - 108,730 - 108,730 Shares issued to employees & directors 204,423 204 207,249 - - 207,453 - 207,453 Share issued to AiChat employees 14,616 15 19,132 - - 19,147 - 19,147 Hyperfast - Non Controlling Interests - - - - - - 3,750 3,750 RTC India - Non Controlling Interest - - - - - - ( 30 ) ( 30 ) Balance at December 31, 2024 45,864,503 $ 45,865 $ 39,770,060 $ ( 38,260,913 ) $ 5,011 $ 1,560,023 $ 7,449 $ 1,567,472 F- 5 reAlpha Tech Corp. and Subsidiaries Consolidated Statements of Cash Flows For the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 For the Year Ended For the Eight Months Ended For the Year Ended December 31, 2024 December 31, 2023 April 30, 2023 Cash Flows from Operating Activities: Net (loss) income $ ( 26,022,349 ) $ ( 1,251,259 ) $ ( 5,452,383 ) Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 466,691 289,067 157,802 Stock based compensation - employees 207,453 - - Stock based compensation - services 108,730 - - Legal & professional expenses - 3,045,290 Amortization of loan discounts and origination fees 181,875 - - Write-off of capitalized software costs 145,746 - - Impairment of goodwill and intangible assets 18,280,947 - - Commitment fee expenses 500,000 - - Loss on sale of properties 301 ( 85,077 ) ( 22,817 ) Gain on previously held equity ( 20,663 ) - - Gain on sale of myAlphie - ( 5,502,774 ) - Changes in operating assets and liabilities: Accounts receivable ( 16,437 ) 37,490 65,696 Receivable from related parties ( 12,873 ) 20,874 ( 20,874 ) Payable to related parties ( 56,241 ) - - Prepaid expenses 62,637 ( 226,889 ) 96,038 Other current assets ( 19,773 ) ( 419,849 ) ( 81,689 ) Accounts payable 58,756 48,928 235,433 Accrued expenses ( 185,118 ) 621,815 60,741 Deferred liabilities 278,080 593,750 - Total adjustments 19,980,111 ( 1,577,375 ) 490,330 Net cash used in operating activities ( 6,042,238 ) ( 2,828,634 ) ( 4,962,053 ) Cash Flows from Investing Activities: Proceeds from sale of properties 293,307 731,343 1,539,997 Additions to property, plant & equipment ( 12,533 ) ( 40,840 ) 19,721 Cash paid to acquire business ( 1,268,630 ) ( 50,000 ) ( 25,000 ) Cash paid for equity method investment ( 50,000 ) - - Cash used for additions to capitalized software development and intangibles ( 516,544 ) ( 134,400 ) ( 452,451 ) Net cash (used in) provided by investing activities ( 1,554,400 ) 506,103 1,082,267 Cash Flows from Financing Activities: Proceeds from issuance of debt 6,155,539 190,095 247,000 Payments of debt ( 1,164,241 ) - ( 1,071,709 ) Deferred financing costs ( 727,500 ) - - Proceeds from issuance of common stock - 7,331,938 4,282,274 Offering costs paid on issuance of common stock - - ( 416,312 ) Net cash provided by financing activities 4,263,798 7,522,033 3,041,253 Net (decrease) increase in cash ( 3,332,840 ) 5,199,502 ( 838,533 ) Cash - Beginning of Period 6,456,370 1,256,868 2,095,401 Cash - End of Period $ 3,123,530 $ 6,456,370 $ 1,256,868 Supplemental disclosure of cash flow information Interest expense $ ( 58,897 ) $ ( 70,119 ) $ ( 169,776 ) F- 6 reAlpha Tech Corp. Notes to Consolidated Financial Statements Note 1 - Organization and Description of Business reAlpha Tech Corp. and Subsidiaries (“we,” “us,” “our,” the “Company,” “reAlpha” or the “Registrant”) were initially incorporated with the name reAlpha Asset Management, Inc. 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 macroeconomic challenges like higher interest rates and inflated property prices, we’ve discontinued our rental segment operations. We are now focused on developing an end-to-end commission-free homebuying platform. Utilizing the power of AI and an acquisition-led growth strategy, reAlpha’s goal is to offer a more affordable, streamlined experience for those on the journey to homeownership. reAlpha has transitioned into a technology-driven, integrated services company, leveraging AI to enhance the homebuying experience and streamline real estate transactions. At the core of its strategy is the reAlpha platform, an AI-powered solution designed to simplify the home purchase process while generating revenue through mortgage brokerage and title and escrow services. To strengthen its AI capabilities, reAlpha has acquired Naamche and AiChat (each as defined below), expanding its software development expertise and AI-driven engagement tools. Naamche enhances reAlpha platform functionality, while AiChat improves customer interaction of their clients through AI-powered automation. reAlpha operates through its key subsidiaries, including reAlpha Realty, AiChat, Be My Neighbor, Hyperfast, each playing a role in its vertically integrated ecosystem. These subsidiaries enable reAlpha to provide real estate brokerage, and closing services, which enables us to capture value across multiple stages of the transaction process. With its focus on AI technology and integrated real estate services, reAlpha is creating a scalable, end-to-end, tech-enabled model for customers to buy a home. Through strategic acquisitions and innovations in its platform, reAlpha is expanding its market presence and diversifying revenue streams across real estate, mortgage services, and AI-powered solutions. The Company’s head office is located at 6515 Longshore Loop, Suite 100, Dublin, OH 43017. Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. These financial statements include all adjustments, which consist of normal recurring accruals, deemed necessary by management for a fair presentation of the Company’s financial position and results of operations for the reported period. F- 7 This note on significant accounting policies is provided to aid in the understanding of the Company’s financial statements. The policies adhere to U.S. GAAP and have been consistently applied in the preparation of both the annual and interim financial statements. The financial statements reflect the operations, assets, and liabilities of the Company as a whole. The consolidated balance sheet as of December 31, 2024, has been derived from the Company’s audited consolidated financial statements for that date. It is essential that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s previous Annual Report on Form 10-KT for the year ended December 31, 2023. The results of operations for the fiscal year are not necessarily indicative of the results to be expected for any future periods. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. 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. 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. As of December 31, 2024, the Company’s cash was held by financial institutions that management believes have acceptable credit. The Federal 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. In accordance with Accounting Standards Codification (“ASC”) 326, Investments - Financial Instruments—Credit Losses, (“ASC 326”) the Company applies the Current Expected Credit Losses (“CECL”) model to estimate expected credit losses over the lifetime of financial assets measured at amortized cost. The Company has determined that accounts receivable (“AR”) is the only financial asset subject to CECL assessment, as it does not have any loan receivables, held-to-maturity debt securities, or other financial instruments requiring CECL evaluation. The Company’s CECL methodology incorporates historical loss experience, current economic conditions, and forward-looking adjustments to assess credit risk and expected loss reserves. As of December 31, 2024, the Company has experienced no historical credit losses on accounts receivable. A significant portion of the Company’s accounts receivable is attributable to AiChat, its Singapore subsidiary, as its customers are large multinational corporations with strong financial stability and a consistent payment history. However, given macroeconomic risks, including interest rate fluctuations and regulatory considerations, the Company has applied a 0.05 % CECL reserve to accounts receivable related to AiChat, our Singapore subsidiary. No additional forward-looking CECL reserve was deemed necessary due to continued government financial support, stable corporate tax incentives, and the strong creditworthiness of customers. F- 8 The Company will continue to monitor macroeconomic conditions and reassess the adequacy of its CECL reserve on a quarterly basis. Future adjustments may be made as economic conditions evolve and additional credit risk factors are identified. As of December 31, 2024, the Company’s assessment under ASC 326 confirms that its accounts receivable remains recoverable, with no material impairments beyond the CECL provision recorded. Accounts receivable Opening Balance, January 1, 2024 $ - Current-period provision for expected credit losses(1) 62 Release of allowance for expected credit losses - Ending Balance, December 31, 2024 $ 62 (1) Of the Company’s total accounts receivable balance of $ 182,425 , $ 123,704 relates to third-party receivables held by AiChat, the Company’s Singapore-based subsidiary. A 0.05 % reserve was applied to this amount in accordance with the CECL model under ASC 326. Equity Method Investment The Company accounts for investments in entities in which the Company has significant influence over the entity’s financial and operating policies, but does not control, using the equity method of accounting. The equity method investment is initially recorded at cost, and subsequently increased for capital contributions and allocations of net income, and decreased for capital distributions and allocations of net loss. Equity in net income (loss) from the equity method investment is allocated based on the Company’s economic interest. The equity method investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If it is determined that a loss in value of the equity method investment is other than temporary, an impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. We recorded the Xmore AI investment of $ 125,000 under the equity method as per ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Capitalized Software Development Costs The Company adheres to ASC 350-40 for the capitalization of software development costs. Under these standards, costs incurred during the application development stage—including coding, testing, and the development of software functionalities—are eligible for capitalization if they relate to significant improvements that substantially enhance the software’s functionality or extend its service capacity. These costs include direct labor, third-party services, and other expenses directly attributable to the software’s development. Conversely, expenditures for minor enhancements and routine software maintenance are expensed as incurred, consistent with specific US GAAP requirements. Amortization of capitalized software development costs begins when the software is ready for its intended use and placed in service. These costs are amortized over the software’s estimated useful life, which is assessed by considering factors such as the expected future benefits to the Company and the rate of technological change. F- 9 Goodwill 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. As of December 31, 2024, on our annual goodwill testing date, we conducted a quantitative impairment test for our reporting unit, Rhove. This evaluation was necessitated by operational challenges that led to prompting a re-evaluation of the fair value of the reporting units compared to their carrying amounts. The results of this impairment test indicated that the fair value of Rhove was less than its carrying amount, necessitating an impairment charge. This impairment reflects adjustments to the carrying values on our consolidated balance sheet as of December 31, 2024, and has been recognized in our financial results for the fiscal year to accurately reflect the reduced value of the reporting unit. These financial statements include all necessary adjustments, consisting of the noted impairment loss, to present fairly the financial position and results of operations of the company. Definite-lived Intangible Assets ASC 350 on Intangibles – Goodwill and Other; Intangible assets are definite-lived intangible assets such as technology, customer contracts and trademarks resulted from business acquisitions. 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. 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 lives. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 when control of services is transferred to the customer. On a standalone basis, reAlpha generates revenue by providing monthly support services to Turnit related to the myAlphie platform. Revenue is recognized over time as the services are performed and the customer benefits from them. reAlpha recognized rental revenue upon customer control of the asset and recorded deferred revenue for book sales until the delivery obligation was met, both in accordance with ASC 606. AiChat, which provides an AI conversational platform, adheres to the revenue recognition standards outlined in ASC 606. The license fee for platform access and consulting services are recognized as distinct performance obligations, reflecting their ability to provide value independently within our customer contracts. For the “right to access” license fee, revenue is recognized over the duration of the subscription period, as control and benefits are provided continuously to the customer. Consulting services are recognized based on the nature of the engagement. Revenue for one-time services, such as project setups, is recognized at the point in time of delivery. For ongoing consulting services, revenue is recognized over time, reflecting the continuous benefit transferred to the customer throughout the service period. This approach ensures that revenue recognition accurately matches the ongoing provision of access and the timing of consulting services, as per the guidelines of ASC 606. F- 10 Be My Neighbor, a mortgage brokerage company, complies with ASC 606 by recognizing revenue at the point of loan closing. This moment marks the transfer of control of the loan to the borrower, capturing the completion of Be My Neighbor’s primary service—successfully securing a loan. All services, including loan origination, application processing, and credit assessment, contribute to this culminating event. Revenue is therefore recognized only when the loan closes, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately reflecting the completion of all related performance obligations. Naamche, a company that provides services related to the development of technology, adheres to ASC 606 for revenue recognition, primarily from its service-based contracts. This approach involves detailed identification of contracts with customers, determination of distinct performance obligations within these contracts, and accurate allocation of transaction prices to these obligations. Revenue is recognized as Naamche satisfies each performance obligation, typically over time, reflecting the ongoing delivery and customer consumption of its tech-driven services. Income Taxes 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. Fair Value of Financial Instruments ASC 825, Disclosure about Fair Value of Financial Instruments, (“ASC 825”) requires certain disclosures regarding the fair value (“FV”) of financial instruments. The carrying amounts of accounts receivable, other current assets and prepaid expenses, accounts payable, other payables and accrued liabilities and due to Company affiliates approximate their FVs because of the short-term nature of the instruments. The management of the Company is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial statements. F- 11 Note 3 - Going Concern We assess going concern uncertainty in our 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 consolidated financial statements are issued. 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. Management has reviewed our financial condition, focusing on liquidity sources and upcoming financial obligations. This assessment shows that our short-term obligations exceed the resources available under current operational plans that raise a substantial doubt about our ability to continue as a going concern for the next 12 months after the date that these consolidated financial statements are issued. Additionally, while recent acquisitions are expected to increase operational expenses, we anticipate that they will increase revenue streams, contributing positively to our financial outlook. We believe these acquisitions will enhance product offerings and market reach, which we anticipate will drive higher revenue in the coming months. However, the revenue from our recent acquisitions and from our technology platforms do not yet offset our current obligations and expenses. Management anticipates continuing operating losses for the next 12 months due to growth initiatives, management expects to continue raising capital through additional debt and/or equity financings to fund its operations. Management believes that these actions will effectively mitigate the conditions that raise substantial doubt about our ability to continue as a going concern and to ultimately achieve profitability. However, management cannot provide assurance that their plans to add revenue streams, raise revenue or raise additional capital will be successful, and whether we will ultimately achieve profitability, become cash flow positive, or raise additional debt and/or equity capital. If we are unable to raise our revenues sufficiently to cover our obligations and expenses or raise additional capital in the near future, management expects that we will need to curtail operations, seek additional capital on less favorable terms, and/or pursue other remedial measures. As of December 31, 2024, the Company holds $ 3.1 million in cash. Note 4 - Income Taxes The Company generated a worldwide pre-tax loss of $ 26,045,861 , $ 1,046,973 and $ 5,452,383 for the periods ended December 31, 2024, December 31, 2023, and April 30, 2023 respectively. Pre-tax book income/(loss) has been recorded in the following jurisdictions: Tax Years Ended 12/31/24 12/31/23 4/30/23 US $ ( 6,861,229 ) $ ( 758,438 ) $ ( 5,450,265 ) Foreign ( 844,997 ) 13,945 12,657 From continuing operations ( 7,706,226 ) ( 744,493 ) ( 5,437,607 ) From discontinued operations (US) ( 18,339,635 ) ( 302,480 ) ( 14,776 ) Total pre-tax income/(loss) $ ( 26,045,861 ) $ ( 1,046,973 ) $ ( 5,452,383 ) F- 12 The Company recorded federal and state income tax expense for the period ended December 31, 2024 of ($ 29,699 ) and ($ 24,561 ), respectively. The Company recorded federal and state income tax expense for the period ended December 31, 2023 of $ 166,478 and $ 37,808 , respectively. The Company recorded no income tax expense for the period April 30, 2023. Tax Years Ended 12/31/24 12/31/23 4/30/23 Current: Federal $ ( 29,699 ) $ 166,478 $ - State ( 24,561 ) 37,808 - Foreign - - - ( 54,260 ) 204,286 - Deferred: Federal - - - State - - - Foreign - - - - Income tax expense (benefit) for continuing operations ( 54,260 ) 204,286 - Income tax expense (benefit) for discontinued operations Total $ ( 54,260 ) $ 204,286 $ - The Company follows the Financial Accounting Standards Board (“FASB”) ASC 740, for the computation and presentation of its tax provision. The following table presents a reconciliation of the income tax provision (benefit) computed at the statutory federal rate and the Company’s income tax provision (benefit) for the periods presented: Tax Years Ended 12/31/24 12/31/23 4/30/23 U.S. federal taxes at statutory rate $ ( 1,440,858 ) $ ( 159,346 ) $ ( 1,144,556 ) State tax ( 24,561 ) 37,808 - Foreign Taxes - - - Regulation-A Costs 12,985 24,556 368,830 Stock Registration Expenses 257,066 946,768 - Goodwill Impairment Non-Controlling Interest Other Permanent Differences 5,280 1,979 14,457 Other ( 29,699 ) - - Change in valuation allowance 1,165,527 ( 647,479 ) 761,269 Total $ ( 54,260 ) $ 204,286 $ - F- 13 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: Tax Years Ended 12/31/24 12/31/23 4/30/23 Deferred tax assets: Net operating loss carryforwards $ 5,309,474 $ 2,559,749 $ 3,238,595 Charitable Contributions - - 1,483 Section 174 Capitalization 430,891 418,028 406,010 Property and equipment - - - Gross deferred tax assets 5,740,365 2,977,777 3,646,088 Valuation allowance ( 4,951,573 ) ( 2,523,225 ) ( 1,592,835 ) Net deferred tax assets $ 788,792 $ 454,552 $ 2,053,252 Deferred tax liabilities Property and equipment ( 1,468 ) ( 6,285 ) ( 946 ) Intangibles ( 787,324 ) ( 448,267 ) ( 2,052,306 ) Gross deferred tax liabilities ( 788,792 ) ( 454,552 ) ( 2,053,252 ) Net deferred tax liabilities ( 788,792 ) ( 454,552 ) 0 Net deferred taxes $ - $ - $ - The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The valuation allowance changed by $ 2.4 million, during the year ended December 31, 2024. F- 14 For the period ended December 31, 2024, we had a total carryover of Federal Net Operating Losses (“NOLs”) of $ 22,085,100 . The Company’s NOLs were generated after the rules of the Tax Cuts and Jobs Act (“TCJA”) became effective on January 1, 2018. The NOLs do not expire but are subject to the 80 % limitation. The Company has a State and city Net Operating Loss carryover of $ 32,986,420 . These NOLs are subject to various limitations and expiration dates. The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses and tax credits may be limited as prescribed under Internal Revenue Code Section 382 and 383 (“IRC Section 382”). Events which may cause limitations in the amount of the net operating losses or tax credits that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50 % over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 rules and similar state provisions. In the event the Company has any changes in ownership, net operating losses and research and development credit carryovers could be limited and may expire unutilized. It is the Company’s policy to include penalties and interest expense in income tax expense. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2024. The Company’s major tax jurisdictions are the United States, India, Nepal and Singapore. All of the Company’s tax years will remain open for examination by the Federal and State tax authorities for three and four years, respectively, from the date of utilization of the net operating loss or research and development credit. The Company does not have any tax audits pending in the United States. ‘The Inflation Reduction Act of 2022 was signed into law August 16, 2022, and includes significant legislation addressing taxes, inflation, climate change and renewable energy incentives, and healthcare. Key tax provisions include a 15 % corporate minimum tax, clean energy incentives, and a 1 % excise tax on stock buybacks. The Company does not expect the provisions of such legislation to have any impact on the effective tax rate of the Company but will continue to evaluate the tax effects should any provisions become applicable to the Company. Change to Internal Revenue Code Section 174 under the 2017 Tax Cuts and Jobs Act went into effect during 2022. The revised code no longer permits a deduction for research and development expenditures in the tax year that such costs incurred. Instead, such costs must be capitalized and amortized over five or 15 years for U.S. and foreign costs, respectively. The Company capitalized such costs in its tax years ended December 31, 2023 and April 30, 2023 income tax provision and return, respectively. The Organization for Economic Co-operation and Development (the “OECD”) has issued various proposals that would change long-standing global tax principles. These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a global minimum tax rate. On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15 %, to be effective as of January 2024. Other countries are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals. The enactment of Pillar Two legislation is not anticipated to have a material adverse effect on the Company’s effective tax rate, financial position, results of operations, or cash flows. The Company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate. 12/31/24 12/31/23 A. Valuation Allowance Increase $ 2,428,348 $ - B. Federal NOL Carryforward 22,085,100 12,061,045 C. City of Dublin, OH NOL Carryforward 14,232,690 8,883,628 D. State of Ohio NOL Carryforward 18,753,731 11,749,252 F- 15 Note 5 - Business Combinations Acquisition of Naamche Inc. and Naamche Inc. Pvt Ltd. On May 6, 2024 , we completed our acquisitions of Naamche, Inc. (“U.S. Naamche”) and Naamche, Inc. Pvt Ltd. (“Nepal Naamche,” and together with U.S. Naamche, “Naamche”). As a result, we own 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 common stock to be issued within 9 months from the closing date of the acquisitions subject to terms and conditions specified herein, 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. The table below represents the final purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date. Initial Amounts Recognized as of the acquisition date Measurement Period Adjustment Final Purchase Price Allocation Cash & Cash Equivalents $ 50,786 $ - $ 50,786 Accounts Receivable 15,745 ( 15,745 ) - Other Current Assets 2,050 - 2,050 Net Property Plant & Equipment 76,350 - 76,350 Goodwill (1) 549,494 ( 459,517 ) 89,977 Intangible assets - 26,000 26,000 Accounts Payable ( 46,506 ) 46,506 - Accrued Expenses ( 36,480 ) - ( 36,480 ) Dividend Payable ( 31,381 ) - ( 31,381 ) Long Term Loans ( 54,662 ) - ( 54,662 ) Net assets acquired $ 525,396 $ ( 402,756 ) $ 122,640 (1) During the measurement period, the Company recorded a measurement period adjustment to the preliminary purchase price allocation (“PPA”). This adjustment reduced goodwill due to eliminating intercompany transactions affecting the PPA and removed previously recognized contingent consideration, which was recorded as compensation expense under ASC 805. F- 16 The determination of the fair value for the acquired business employed the income approach, specifically the discounted cash flow (“DCF”) method. This method involves assessing the present value of anticipated future cash flows from the acquired business. These cash flows are discounted at the weighted average cost of capital (“WACC”), which represents the necessary return on the combined entity’s equity and debt. The WACC is weighted by the respective proportions of equity and debt in the overall capital structure. For the fair valuation of trademarks and trade names, the relief from royalty method was applied. Customer and other relationships were valued through the multi-period excess earnings model (“MPEEM”), which calculates the present value of excess earnings attributed to these relationships over their estimated remaining useful life. Assembled workforce is not recognized separately from goodwill, as it lacks separability and contractual nature. The final purchase price allocation includes $ 26,000 of acquired identifiable intangible assets, all of which have finite lives. The intangible assets are being amortized over their estimated useful lives on a straight-line basis. The determination of useful lives is based upon various industry studies, historical acquisition experience, and economic factors. The purchase price allocation to identifiable intangible assets acquired subject to amortization consists of the following: Estimated Useful Life (in years) Gross Value Accumulated Amortization Net Book Value Definite Lived Intangible Assets: Trademarks and trade names 5 $ 8,500 $ 1,118 $ 7,382 Customer and other relationships 6 17,500 1,918 15,582 Balance, December 31, 2024 $ 26,000 $ 3,036 $ 22,964 We estimate amortization expense for the next five years and beyond will be as follows: Years Ending December 31: Amount 2025 4,617 2026 4,617 2027 4,617 2028 4,617 2029 3,499 Thereafter 999 Total $ 22,966 Acquisition of AiChat Pte. Ltd. On July 12, 2024, we entered into a Business Acquisition and Financing Agreement (the “Business Acquisition Agreement”) with AiChat Pte. Ltd. (“AiChat”), AiChat10X Pte. Ltd., and Kester Poh Kah Yong, pursuant to which we acquired 85 % of AiChat’s ordinary shares, with the remaining 15 % to be acquired by June 30, 2025. AiChat is an AI-powered company offering conversational customer experience solutions. The total purchase price to acquire 100 % of AiChat is $ 1,140,000 , which consists of: (i) $ 312,000 in restricted common stock, issuable by January 1, 2025; (ii) $ 588,000 in restricted common stock, issuable by April 1, 2025, subject to adjustments set forth in the Business Acquisition Agreement; and (iii) $ 240,000 in restricted common stock, issuable by December 1, 2025. The table below represents the final purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date. Final Purchase Price Allocation Cash & cash equivalents $ 1,911 Accounts receivable 42,536 Other current assets 7,895 Net property plant & equipment 3,715 Goodwill 1,708,915 Intangible assets 1,135,000 Accounts payable ( 160,815 ) Accrued expenses ( 231,197 ) Other current liabilities ( 65,675 ) Debt assumed ( 1,238,785 ) Net assets acquired $ 1,203,500 F- 17 The determination of the fair value for the acquired business employed the income approach, specifically the DCF method. This method involves assessing the present value of anticipated future cash flows from the acquired business. These cash flows are discounted at the WACC, which represents the necessary return on the combined entity’s equity and debt. The WACC is weighted by the respective proportions of equity and debt in the overall capital structure. For the fair valuation of developed technology, the relief from royalty method was applied. The estimation of the economic useful life of these assets took into account factors outlined in ASC 350. Trademarks and trade names fair value was determined using the relief from royalty method. Customer and other relationships were valued through MPEEM, which calculates the present value of excess earnings attributed to these relationships over their estimated remaining useful life. Assembled workforce is not recognized separately from goodwill, as it lacks separability and contractual nature. The final purchase price allocation includes $ 1,135,000 of acquired identifiable intangible assets, all of which have finite lives. The intangible assets are being amortized over their estimated useful lives on a straight-line basis. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of AiChat. Additionally, as part of the acquisition of AiChat, we committed to purchase 55,710 ordinary shares of AiChat at a cost of $ 60,000 , payable at the transaction’s closing. Furthermore, we also agreed to purchase an additional 222,841 ordinary shares of AiChat for $ 240,000 . The specific dates for these payments are outlined in the Business Acquisition Agreement. The purchase price allocation to identifiable intangible assets acquired subject to amortization consists of the following: Estimated Useful Life (in years) Gross Value Accumulated Amortization Net Book Value Definite Lived Intangible Assets: Developed technology 5 $ 800,000 $ 75,397 $ 724,603 Trademarks and trade names 9 272,000 14,242 257,758 Customer and other relationships 10 63,000 2,969 60,031 Balance, December 31, 2024 $ 1,135,000 $ 92,608 $ 1,042,392 We estimate amortization expense for the next five years and beyond will be as follows: Years Ending December 31: Amount 2025 196,522 2026 196,522 2027 196,522 2028 196,522 2029 121,125 Thereafter 135,179 Total $ 1,042,392 F- 18 Acquisition of Debt Does Deals, LLC (d/b/a Be My Neighbor) On September 8, 2024, we entered into a Membership Interest Purchase Agreement (the “MIPA”) with Debt Does Deals, LLC (d/b/a Be My Neighbor) (“Be My Neighbor” or “BMN”), a Texas-based mortgage brokerage, and its sellers, Christopher Bradley Griffith and Isabel Williams (collectively, the “Sellers”). In accordance with the MIPA, we acquired 100 % of the membership interests of Be My Neighbor that were outstanding prior to the consummation of the acquisition. The purchase price was $ 6,000,000 , consisting of: (i) $ 1,500,000 in cash to the Sellers based on their ownership percentages; (ii) $ 1,500,000 in restricted common stock, or 1,146,837 shares valued at $ 1.31 per share, to be issued within 90 days of closing, allocated proportionally to each of the Sellers’ membership interests in Be My Neighbor; and (iii) up to $ 3,000,000 in potential earn-out payments, subject to BMN’s achievement of certain financial metrics set forth in the MIPA. The table below represents the final purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date. Initial Amounts Recognized as of the acquisition date Measurement Period Adjustment Final Purchase Price Allocation Cash & cash equivalents $ 442,439 $ - $ 442,439 Accounts receivable 92,822 92,822 Goodwill (1) 2,248,782 138,438 2,387,220 Intangible assets 1,434,000 1,434,000 Accounts payable ( 3,794 ) ( 3,794 ) Other current liabilities ( 251,249 ) ( 251,249 ) Net assets acquired $ 3,963,000 $ 138,438 $ 4,101,438 (1) During the measurement period, adjustments were made to the recorded value of goodwill based on the newly available information regarding the fair values of the acquired assets and liabilities. The determination of the fair value for the acquired business employed the income approach, specifically the DCF method. This method involves assessing the present value of anticipated future cash flows from the acquired business. These cash flows are discounted at the WACC, which represents the necessary return on the combined entity’s equity and debt. The WACC is weighted by the respective proportions of equity and debt in the overall capital structure. For the fair valuation of trademarks and trade names the relief from royalty method was applied. Assembled workforce is not recognized separately from goodwill, as it lacks separability and contractual nature. The final purchase price allocation includes $ 1,434,000 of acquired identifiable intangible assets, all of which have finite lives. The intangible assets are being amortized over their estimated useful lives on a straight-line basis. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of Be My Neighbor. F- 19 The purchase price allocation to identifiable intangible assets acquired subject to amortization consists of the following: Estimated Useful Life (in years) Gross Value Accumulated Amortization Net Book Value Definite Lived Intangible Assets: Trademarks and trade names 15 $ 1,434,000 $ 29,859 $ 1,404,141 Balance, December 31, 2024 $ 1,434,000 $ 29,859 $ 1,404,141 We estimate amortization expense for the next five years and beyond will be as follows: Years Ending December 31: Amount 2025 95,600 2026 95,600 2027 95,600 2028 95,600 2029 95,600 Thereafter 926,141 Total $ 1,404,141 Acquisition of Hyperfast Title, LLC On July 24, 2024, we acquired 85 % of the membership interests of Hyperfast Title LLC (“Hyperfast”), a Florida-based title insurance provider, through a membership interest purchase agreement for an aggregate purchase price of $ 21,250 . This transaction resulted in an increase in goodwill of $ 25,054 . Acquisition of USRealty, LLC In November 2024, the Company entered into agreements related to the acquisition of USRealty Brokerage Solutions, LLC and an investment in Unreal Estate Inc. As part of these agreements the Company agreed to provide $ 250,000 in in-kind services as consideration for the acquisition of USRealty Brokerage Solutions, LLC. These services were to be delivered over a one-year period. The Company also entered into a Letter Agreement to purchase $ 600,000 in convertible promissory notes from Unreal Estate Inc., to be paid in six installments. Only the first installment of $ 60,000 was made at closing. On March 19, 2025, the Company entered into a Mutual Settlement and Release Agreement (the “Settlement Agreement”) with Unreal Estate Inc. (“Unreal Estate”), resolving certain claims and disputes related to the previously disclosed Membership Interest Purchase Agreement, Letter Agreement, and convertible promissory note (collectively, the “Agreements”). Pursuant to the Settlement Agreement, the Company agreed to pay Unreal Estate a one-time cash amount of $ 80,000 . In exchange, Unreal Estate released the Company from any further obligations under the Agreements, including the Company’s obligation to purchase additional convertible promissory notes. The Company retained full ownership and control of the membership interests in USRealty Brokerage Solutions, LLC previously acquired from Unreal Estate. As part of the Settlement Agreement, the outstanding $ 60,000 convertible promissory note was cancelled, and the Letter Agreement was terminated. The parties also executed a mutual release of claims, subject to limited exceptions, and the Settlement Agreement includes customary representations, warranties, and covenants. The $ 60,000 first installment and $ 80,000 one-time cash payment were expensed as of year-end as a type 1 subsequent event and recorded as operating expense in the consolidated statement of operations for the year ended December 31, 2024. F- 20 Note 6 - Property and equipment, net 1. Investments in property and equipment consisted of the following as of December 31, 2024. a. Accumulated Net Cost Depreciation Investment Computer $ 69,269 ( 50,648 ) $ 18,621 Furniture and fixtures 53,021 ( 24,380 ) 28,641 Vehicles 73,969 ( 18,593 ) 55,376 Total investment in property & equipment $ 196,259 $ ( 93,621 ) $ 102,638 2. Investments in property and equipment consisted of the following as of December 31, 2023 a. Investments in property and equipment other than held for sale Accumulated Net Cost Depreciation Investment Computer 33,401 ( 11,856 ) $ 21,545 Furniture and fixtures 20,853 ( 7,467 ) $ 13,386 Total investment in property & equipment $ 54,254 $ ( 19,323 ) $ 34,931 b. Investments in property and equipment held for sale Accumulated Net Cost Depreciation Investment Land $ 19,690 $ - $ 19,690 Buildings and building improvements 267,117 ( 6,172 ) $ 260,945 Furniture and fixtures 16,090 ( 3,117 ) $ 12,973 Total investment in real estate $ 302,897 $ ( 9,289 ) $ 293,608 The Company recorded depreciation expenses of $ 24,891 and $ 64,545 for the periods ended December 31, 2024 and December 31, 2023, respectively. F- 21 Note 7 - Capitalized Software Development costs, work in progress As of December 31, 2024, the Company continues to assess the carrying amount of capitalized software for impairment, considering expected future benefits and cash flows to determine recoverability. December 31, 2024 December 31, 2023 Gross carrying amount Additions Impaired(1) Reclassified to Intangibles & Expenses (2) Net carrying value Gross carrying amount Additions Net carrying value Capitalized Software Development costs, work in progress $ 839,085 $ 516,544 $ ( 202,968 ) $ ( 1,046,761 ) $ 105,900 $ 589,645 $ 249,440 $ 839,085 Total $ 839,085 $ 516,544 $ ( 202,968 ) $ ( 1,046,761 ) $ 105,900 $ 589,645 $ 249,440 $ 839,085 (1) During year-end 2024, the Company performed an assessment of capitalized software for impairment. As a result, the Company impaired Work-in-Progress (“WIP”) related to reAlpha HUMINT and our technology for completing Syndications due to no further development and lack of use cases. The impaired amount was removed from the carrying value of WIP and recorded as an impairment expense in the financial statements. (2) On August 20, 2024, the Company reclassified a portion of WIP to intangible assets, specifically: $ 156,800 to GENA, $ 593,843 to the reAlpha platform and also reclassified the additions made to Claire post reclassification of $ 150,372 . Both Claire and GENA began amortization over five years starting August 20, 2024, in accordance with ASC 350 and also includes reclassification of capitalized cost of $ 145,746 to expenses during the period ended December 31, 2024. Note 8 - Goodwill and Intangible Assets Goodwill and intangible assets are primarily the result of business acquisitions. 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. During the measurement period, the Company recorded an adjustment of $ 138,438 related to the Be My Neighbor acquisition, reflecting refinements in the fair value assessment of acquired liabilities. Additionally, the Company assessed the Rhove acquisition for impairment and determined that an impairment charge was necessary. The impairment evaluation considered factors such as changes in expected future cash flows and market conditions affecting the acquired assets. The impairment expense has been recognized in the financial statements accordingly. Changes in the carrying amount of goodwill were as follows: Technology Services Rental Business Total Balance at January 1, 2024 $ - $ 17,337,739 $ 17,337,739 Goodwill acquired, net of purchase price adjustments (1) 4,072,728 - 4,072,728 Goodwill impairment - ( 17,337,739 ) ( 17,337,739 ) Goodwill measurement period adjustment 138,438 - 138,438 Balance at December 31, 2024 $ 4,211,166 $ - $ 4,211,166 (1) Includes goodwill related to Naamche, AiChat, Be My Neighbor, and Hyperfast acquisitions. See “Note 5 – Business Combinations” for further information. F- 22 The components of intangible assets, all of which are finite-lived, are as follows: December 31, 2024 December 31, 2023 Gross carrying amount Additions Impaired Accumulated amortization Net carrying value Gross carrying amount Accumulated amortization Net carrying value Definite-life Intangibles: Developed technology $ 1,119,000 $ 1,701,015 $ ( 688,886 ) $ 590,619 $ 1,540,510 $ 1,119,000 $ 235,860 $ 883,140 Trademarks and trade names 34,000 1,714,500 - 71,333 1,669,283 34,000 13,134 20,866 Customer relationships 104,000 80,500 ( 77,885 ) 38,887 75,613 104,000 10,044 93,956 Total $ 1,257,000 $ 3,496,015 $ ( 766,771 ) $ 700,839 $ 3,285,406 $ 1,257,000 $ 259,038 $ 997,962 Following this reclassification, during the fourth quarter of 2024, the Company capitalized an additional $150,372 in significant platform improvements to the reAlpha platform (Claire). These improvements were enhancements without significant changes to the platform’s useful life, rather than costs incurred during the application development stage. The Company recorded amortization expenses of $ 441,800 and $ 259,038 for the year ended December 31, 2024, and December 31, 2023, respectively. The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2024: Years Ending December 31: Amount 2025 473,256 2026 473,256 2027 473,256 2028 473,256 2029 330,063 Thereafter 1,062,319 Total $ 3,285,406 Note 9 - Notes Payable On August 14, 2024, we entered into a note purchase agreement with Streeterville Capital, LLC (“Lender”) pursuant to which we issued and sold a secured promissory note in the original principal amount of $ 5,455,000 . The note carries an original issue discount of $ 435,000 , and we paid $ 20,000 to cover the Lender’s legal and transaction costs, reducing the purchase price received by us to $ 5,000,000 . Interest accrues at 8 % annually, and the unpaid amount, interest, fees, and late fees are due 18 months after issuance. The note and agreement include terms like the Lender’s ability to redeem a portion of the note, events of default, penalties, restrictive covenants on our ability to issue certain securities, a “most favored nation” provision. Additionally, Rhove, Be My Neighbor, and our U.S. subsidiaries signed security and intellectual property agreements in favor of the Lender, and our U.S. subsidiaries also guaranteed all of the Company’s obligations under the note and other transaction documents. The Company had the following outstanding notes payable as of December 31, 2024 and December 31, 2023: a. Summary of Notes payable: December 31, 2024 December 31, 2023 Secured promissory note to Streeterville Capital, LLC, $ 435,000 original issue discount $ 5,455,000 $ - Less: Unamortized debt issuance costs & Original issue discount ( 545,624 ) Total Notes payable $ 4,909,376 $ - As of December 31, 2024, accrued interest was $ 166,111 , compared to $ 0 as of December 31, 2023. As of December 31, 2024 and December 31, 2023, unamortized debt issuance and original issue discount were reflected within long term liabilities on the consolidated balance sheets, netted with the notes payable. The amortization of original issue discount and origination fee for the period ended December 31, 2024 was $ 181,875 . F- 23 Note 10 - Related Party Transactions Loans from Related Parties Related party transactions involve loans provided to AiChat, our subsidiary, by Kester Poh, a director of AiChat, and Balaji Swaminathan, a member of our board of directors. All transactions were conducted on terms consistent with those offered to unrelated third parties. As of December 31, 2024, the balance due to Kester Poh under the loans was $ 128,055 , divided as follows: short term loans of $ 73,174 and long-term loans of $ 54,881 . The notes issued in connection with these loans are structured to be repaid over a two-year period until September 2026 through monthly installments of $ 6,098 , bearing an interest rate of 6.9 % per annum. Similarly, as of December 31, 2024, the balance due to Balaji Swaminathan under the loans is $ 55,933 . The notes issued in connection with these loans are structured to be repaid over a one and a half year period through monthly installments of $ 1,750 until November 2025, bearing an interest rate of 6.9 % per annum. a. Summary of Short-Term Loans to Related Parties Average Interest Rate as of December 31, 2024 December 31, 2024 December 31, 2023 Term Loan Facilities 6.98 % $ 129,107 $ - Less: Interest Reserve ( 14,021 ) $ - Total Debt $ 115,086 $ - b. Summary of Long-Term Loans to Related Parties Maturity Year Average Interest Rate as of December 31, 2024 December 31, 2024 December 31, 2023 Term Loan Facilities 2026 6.9 % 54,881 - Less: Interest Reserve ( 9,829 ) - $ 45,052 $ - Note 11 - Short Term Loans to Unrelated Parties Short-Term Loans consisted of the following as of December 31, 2024, and December 31, 2023: a. Summary of Short-Term Loans to Unrelated Parties Average Interest Rate as of December 31, 2024 December 31, 2024 December 31, 2023 Term Loan Facilities 11 % $ 537,019 $ - D&O Insurance 150,688 Other Loans 190,095 Less: Interest Reserve ( 21,654 ) Total Debt $ 666,053 $ 190,095 F- 24 Note 12 - Deferred Liabilities, Current Portion The Company had the following deferred liabilities as of December 31, 2024 and December 31, 2023: Gross carrying amount Consideration Paid Net carrying value Balance as on December 31, 2023 $ 593,750 $ - $ 593,750 Deferred Consideration – AiChat 180,525 - 180,525 Deferred Revenue - AiChat 278,908 - 278,908 Deferred Liability - Commitment fee 406,250 - 406,250 Deferred Consideration - Xmore AI 75,000 - 75,000 Balance as on December 31, 2024 $ 1,534,433 $ - $ 1,534,433 Note 13 - Mortgage and Other Long-Term Loans Mortgage and Other Long-Term Loans consisted of the following as of December 31, 2024, and December 31, 2023: a. Summary of Mortgage and Other Long-Term Loans to Unrelated Parties Maturity Year Average Interest Rate as of December 31, 2024 December 31, 2024 December 31, 2023 Mortgage Loan 2053 7.5 % $ - $ 247,000 Term Loan Facilities 2024-2028 6.5 % 210,866 - Vehicle Loan 2029 11 % 48,188 - Less: Interest Reserve ( 17,933 ) - $ 241,121 $ 247,000 Note 14 - Stockholders’ Equity (Deficit) The total number of shares of capital stock that the Company has the authority to issue is up to 205,000,000 shares, consisting of: (i) 200,000,000 shares of common stock, having a par 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 December 31, 2024, there were 45,864,503 shares of common stock and 0 shares of preferred stock issued and outstanding. As of December 31, 2023, there were 44,122,091 shares of common stock and 0 shares of preferred stock issued and outstanding as of December 31, 2023. Stock Based Compensation We issued an aggregate of 219,039 shares of common stock during and as of the year ended December 31, 2024, pursuant to reAlpha Tech Corp.’s 2022 Equity Incentive Plan (as amended, 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 of which 3,780,961 remain available for issuance. All of our current employees, consultants and other service providers are eligible to be granted awards under the 2022 Plan. Eligibility for awards under the 2022 Plan is determined by the board of directors at its discretion. F- 25 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. In case the 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. In the event 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; (iii) without stockholder approval if required by applicable law. Warrants 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 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, we issued GEM Yield Bahamas Limited (“GYBL”) warrants to purchase up to 1,700,884 shares of our common stock (the “GEM Warrants”) at an original exercise price of $ 406.67 per share, subsequently adjusted to $ 371.90 following our most recent public offering. On November 1, 2024, we filed a lawsuit against GYBL seeking to void the GEM Warrants or obtain a declaratory judgment that the warrant terms govern exercise price adjustments. On March 14, 2025, the United States District Court for the Southern District of New York dismissed our complaint. We are evaluating the decision and potential appeal options. On March 19, 2025, GYBL filed a separate lawsuit against us in the same court, alleging breach of the GEM Warrants and seeking declaratory relief, monetary damages, specific performance, and attorneys’ fees. We intend to defend the action and pursue all available legal remedies. Due to the pending litigation, the classification of the GEM Warrants under ASC 480 and ASC 815 remains uncertain. If resolved adversely, we may be required to reclassify the warrants as liabilities, which could impact our financial statements. No adjustments have been made as of December 31, 2024, as these events occurred after the balance sheet date. We cannot predict the eventual scope, duration or outcome at this time. At this time, we do not have sufficient information to be able determine whether we will have to pay any damages related to this lawsuit. F- 26 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. The “full 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. On January 31, 2025, the Company entered into Amendment No. 1 to At the Market Sales Agreement, which amended the At the Market Sales Agreement, dated December 19, 2024, by and between the Company and A.G.P. (the “Original Agreement” and, as amended by the Amendment, the “Sales Agreement”) to reduce the floor price from $ 5.00 to $ 3.90 per Placement Share. As a result of this adjustment, the floor price of the Warrants reduced from $ 5.00 to $ 3.90 and the number of shares issuable upon exercise of the warrants increased to 3,076,923 . Subsequently, on February 27, 2025, in connection with Amendment No. 2 to the At-the-Market Sales Agreement, the floor price used for warrant adjustment purposes was further reduced from $ 3.90 to $ 1.44 , which is the minimum exercise price permitted under the terms of the warrants. As a result of this further adjustment, the number of shares issuable upon exercise of the warrants increased to 8,333,336 . We believe the likelihood that any Warrant holders will exercise their warrants, and the amount of cash proceeds we may receive, depends on the trading price of our common stock. As of the date of this filing, the exercise price of the GEM Warrants remains $ 371.90 , while the exercise price of the Follow-On Warrants has been reduced to $ 1.44 per share, the floor price permitted under their terms, following the February 27, 2025 amendment to the At-the-Market Sales Agreement. If the trading price of our common stock remains below these respective exercise prices, it is unlikely that the holders will exercise their warrants. While these market conditions currently make exercise of the GEM Warrants unlikely, the reduced exercise price of the Follow-On Warrants may increase the potential for those to be exercised. Additionally, following the March 14, 2025 dismissal of our lawsuit seeking to void the GEM Warrants, and the subsequent legal action filed by GYBL on March 19, 2025 alleging breach and seeking to enforce the GEM Warrants, there is continuing uncertainty regarding the enforceability of the GEM Warrants and the appropriate method for calculating any adjustment to their exercise price. As a result, and pending the outcome of the related litigation, no adjustments have been made to the GEM Warrants’ exercise price based on the one-year anniversary adjustment provision. See “Note 18 – Subsequent Events” for additional information. Our analysis is based on the trading price of our common stock as of March 28, 2024, which was $ 1.17 per share. Rights On March 24, 2023, in connection with the acquisition of 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 warrants issued in connection with the follow-on offering and GEM Agreement are classified as equity instruments, they are not subject to fair value remeasurement at the end of each reporting period. Warrants and Rights activity as of December 31, 2024 were as follows: Issue date Period ended Contractual life (years) Warrants/Options Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (Years) Rhove (rollover options) Issued on March 24, 2023 03/04/2023 12/31/2024 2 1,263,000 10.00 0.17 GEM Warrants Issued on October 23, 2023 10/23/2023 12/31/2024 5 1,700,884 371.9 3.81 Follow-on Warrants Issued on November 21, 2023 (1) 11/21/2023 12/31/2024 5 2,400,000 1.44 3.89 Warrants outstanding on December 31, 2024 5,363,884 120.93 2.99 (1) In accordance with the anti-dilution provisions of the Follow-On Warrants, the per share exercise price was reduced from $ 3.90 to $ 1.44 , while the number of shares issuable was increased to approximately 8,333,336 , thereby maintaining the aggregate exercise price. This adjustment was reflected in the Company’s filing on February 27, 2025. F- 27 Shelf Registration Statement on Form S-3 The Company filed a Form S-3 (File No. 333-283284) shelf registration statement with the SEC on November 15, 2024, that was declared effective on November 26, 2024 (the “Form S-3”). The Form S-3 allows us to offer common stock, preferred stock, warrants, subscription rights and units from time to time, as market conditions permit to fund, to the extent required beyond the 12 months from the date hereof, the ongoing operations of the Company. Until the growth of revenue increases to a level that covers operating expenses, the Company intends to continue to fund operations in this manner, although, the volatility in the capital markets and potential upcoming recession may negatively affect our ability to do so. As of December 31, 2024, the Company has an At-the-Market (“ATM”) program with A.G.P./Alliance Global Partners (“A.G.P.”), as sales agent, pursuant to an ATM Sales Agreement, dated December 19, 2024 (the “Sales Agreement”), under which it may sell shares of common stock with an aggregate offering price of up to $ 14,275,000 (see “Note 18 – Recent Developments” for more information on subsequent amendments to the Sales Agreement and related information). During the fiscal year ended December 31, 2024, the Company issued zero shares of its common stock from the ATM program. As of December 31, 2024, the Company is subject to the SEC’s “baby shelf rules,” which prohibits companies with a public float of less than $ 75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period. These rules may limit future issuances of shares by the Company under its Form S-3, the ATM program and related Sales Agreement or other securities offerings. Note 15 - Commitments and Contingencies Pursuant to the terms of that certain Share Purchase 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. 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 the GEM Agreement prior to its expiration. Restrictions pursuant to terms of our future financings may also affect our ability to raise capital pursuant to the GEM Agreement. 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. Contingent Consideration and Compensation Acquisition Agreement – Naamche The Company’s agreement with Naamche includes deferred payment provisions representing potential milestone payments for Naamche’s former owners. The provisions are made up of two general types of arrangements, contingent compensation and contingent consideration. The contingent compensation arrangement is contingent on the former owner’s future employment with the Company and the related amounts are recognized over the required employment period. The contingent consideration is not contingent on employment and was recorded as purchase consideration in other long-term liabilities on the consolidated balance sheets at the time of the initial acquisition based on the fair value of the estimated liability. The amounts are paid over a three-year period, contingent on the achievement of certain revenue milestones. Acquisition Agreement – Debt Does Deals, LLC (dba “Be My Neighbor”) The Company’s agreement with Be My Neighbor includes deferred payment provisions representing potential milestone payments for its former owners. The provisions are made up of contingent consideration. The contingent consideration is not contingent on employment and was recorded as purchase consideration in other long-term liabilities on the consolidated balance sheets at the time of the initial acquisition based on the fair value of the estimated liability. The amounts are paid over a three-year period, contingent on the achievement of certain revenue and EBITDA milestones. The Company primarily determines the contingent consideration liability based on the forecasted probability of achieving the respective milestones. The contingent consideration liability is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. As of December 31, 2024, the Company’s contingent consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy. Contingent consideration was valued at December 31, 2024 using unobservable inputs, primarily internal revenue forecasts. Contingent consideration was valued at the time of acquisitions and have included using the Monte Carlo simulation model. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of a third-party valuation specialist. F- 28 As of December 31, 2024, the Company’s contingent consideration liabilities, non-current balances were as follows: As of December 31, 2024 Contingent consideration at Purchase Date Consideration Paid Changes in Fair Value Fair Value Contingent Consideration Level 3: Contingent consideration, non-current - Naamche $ 137,000 $ - $ - $ 137,000 $ 137,000 Contingent consideration, non-current - BMN 949,000 - - 949,000 949,000 Total contingent consideration $ 1,086,000 $ - $ - $ 1,086,000 $ 1,086,000 Legal Matters India Proceeding Involving Giri Devanur In 2006, Mr. 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. Devanur. 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. 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. Devanur. 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’s criminal case. Mr. Devanur is vigorously contesting this petition. Malpractice Lawsuit On July 13, 2023, the Company filed a complaint in Franklin County, Ohio, 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. In response to the counterclaims filed by the Buchanan Legal Counsel on August 16, 2023, the Company has denied the allegations made therein, asserting that they lack merit and are either insufficiently supported or entirely untrue. The Company contends that any damages claimed by the defendants arise from their own negligence and failure to meet their contractual obligations. At this time, the Company cannot predict the eventual scope, duration, or outcome of the lawsuit. GEM Yield Bahamas Limited Litigation On November 1, 2024, we filed a lawsuit against GYBL in the United States District Court for the Southern District of New York (the “Court”) in which we have asserted two causes of action: (i) rescission of the GEM Warrants issued pursuant to the GEM Agreement, pursuant to Section 29(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) due to GYBL’s underlying violation of Section 15(a) of the Exchange Act for effecting the GEM Warrants as an unregistered dealer, and (ii) in the alternative, a declaratory judgment that the exercise price adjustment calculation of the GEM Warrants is governed by the terms provided in the GEM Warrants, rather than the terms of the GEM Agreement. On March 14, 2025, the Court granted GYBL’s motion to dismiss our complaint relating to the lawsuit against GYBL. We are currently evaluating the Court’s decision and all legal rights available to us, including, but not limited to, appealing the Court’s decision to the United States Court of Appeals for the Second Circuit. There is no assurance that any such appeal would be successful. F- 29 Note 16 - Discontinued Operations During the year ended December 31, 2024, the Company made a strategic decision to fully discontinue its Rhove operations, a component that previously operated under the rental business segment. This decision was based on the lack of future revenue potential and the absence of funding to further develop the platform. As a result, the Rhove operations have been classified as a discontinued operation in accordance with ASC 205-20. The following table rolls forward Rhove assets and liabilities from their carrying values prior to classification as discontinued operations to their values after such classification, and presents the impact of reclassifications, impairments, and write-offs: Rhove Related Assets Carrying Value Prior To Abandonment Asset and Liability Transfers Retained by reAlpha Asset Impairments and Liability Write-Offs Carrying Value as of 12/31/2024 Cash $ 3,456 $ ( 3,456 ) $ - $ - Other Current Assets (1) 88,036 ( 53,474 ) ( 34,562 ) - Intangibles, net 740,240 - ( 740,240 ) - Goodwill 17,337,739 - ( 17,337,739 ) - Total assets - Rhove $ 18,169,471 $ ( 56,930 ) $ ( 18,112,541 ) $ - Accounts Payable and Other Accrued Liabilities $ 24,147 $ - $ ( 24,147 ) $ - Other Current Liabilities 10,000 - ( 10,000 ) - Total Liabilities - Rhove $ 34,147 $ - $ ( 34,147 ) $ - Net Assets and Liabilities - Rhove $ 18,135,324 $ ( 56,930 ) $ ( 18,078,394 ) $ - (1) This relates to tax refunds from the Internal Revenue Service related to the Rhove acquisition. F- 30 The following table provides detail of the discontinued operations as of December 31, 2024 and 2023: Rhove Related Assets December 31, 2024 (transferred to reAlpha) December 31, 2023 Current Assets Cash $ 3,456 $ - Other current Assets 53,474 88,036 $ 56,930 $ 88,036 Long term Assets Intangibles, net - 997,962 Goodwill 17,337,739 $ - $ 18,335,701 Current Liabilities Accounts payable and other accrued liabilities 30,175 Other current liabilities 17,490 Total liabilities - Rhove $ - $ 47,665 F- 31 The following table represents the statement of operations for discontinued operations as of each reporting period: For the Year Ended For the Eight Months Ended For the Year Ended December 31, 2024 December 31, 2023 April 30, 2023 Revenues $ - $ - $ - Cost of revenues - - - Gross profit - - - Discontinued operating expenses Depreciation & amortization 257,722 259,038 - Professional & legal fees - 47,454 13,583 Other operating expense (income) 3,520 ( 605 ) 310 Total operating expenses 261,242 305,887 13,893 Discontinued Operating Loss ( 261,242 ) ( 305,887 ) ( 13,893 ) Discontinued other expense (income) Impairment of intangible assets 740,240 - - Goodwill impairment 17,337,739 - - Other expense (income) 414 ( 3,758 ) 883 Total other (expense) income 18,078,393 ( 3,758 ) 883 Net loss from discontinued operations before income taxes ( 18,339,635 ) ( 302,129 ) ( 14,776 ) Note 17 - Segment Reporting In November 2023, FASB issued Accounting Standards Update (“ASU”) 2023-07 (“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. 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 one reportable segment based on our business units: (i) Technology Services. 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. F- 32 Note 18 - Subsequent Events Exchange Agreement with Streeterville Capital, LLC On March 20, 2025, the Company entered into an Exchange Agreement with Streeterville Capital, LLC (the “Note Holder”), pursuant to which the Company issued 15,873 shares of its common stock in exchange for the cancellation of a $ 20,000 portion (the “Partitioned Note”) of an outstanding secured promissory note originally issued on August 14, 2024. The shares were issued at an effective price of $ 1.26 per share, representing the “Minimum Price” as defined in Nasdaq Listing Rule 5635(d). The Exchange was conducted pursuant to Section 3(a)(9) of the Securities Act of 1933 and did not involve any cash consideration or payment of commissions. GEM Yield Bahamas Limited Litigation On March 19, 2025, GYBL filed a complaint against the Company in the United States District Court for the Southern District of New York. The complaint relates to the GEM Warrants and asserts claims for breach of contract and declaratory relief regarding the validity and enforceability of the GEM Warrant. GYBL seeks unspecified monetary damages, specific performance of the GEM Warrant, and reimbursement of attorneys’ fees and costs. The Company believes the claims are without merit and intends to vigorously defend against the action. As of the date of this filing, the outcome of this matter is uncertain, and no loss contingency has been recorded in the financial statements. Series A Preferred Stock Designation On February 20, 2025, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock with the Delaware Secretary of State, establishing the terms of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”), designating 1,000,000 shares of the 5,000,000 shares authorized but unissued class of the Company’s stock. The Series A Preferred Stock has a stated value of $ 20 per share (the “Stated Value”), and a conversion price per share of $ 20 per share, subject to adjustments provided in the Certificate of Designation (the “Conversion Price”). Acquisition of GTG Financial, Inc. On February 20, 2025, the Company completed the acquisition of GTG Financial, Inc. (“GTG”), a California-based mortgage brokerage, acquired 100 % of its outstanding shares from the seller (the “Acquired Shares”), Glenn Groves (the “Seller”), pursuant to a Stock Purchase Agreement (the “GTG Purchase Agreement”). The total purchase consideration is up to $ 4.2 million, subject to certain adjustments, consisting of $ 281,250 in shares of Series A Preferred Stock, $ 1,287,000 in restricted common shares to be issued within 90 days of closing, $ 1,344,750 in deferred cash payments (the “Cash Portion”) payable in three installments post-closing, and up to $ 1,287,000 in performance-based earn-out payments payable in cash or stock, subject to GTG achieving certain revenue and EBITDA targets over three successive 12-month periods. Additionally, the GTG Purchase Agreement provides that, to the extent that, upon an Automatic Conversion (as defined in the Certificate of Designation), the aggregate value for the shares issuable upon conversion of the Series A Preferred Stock (the "Conversion Shares”) on the Automatic Conversion Date (as defined in the Certificate of Designation) is less than $ 281,250 , as determined based on the volume-weighted average price of such Conversion Shares on the Automatic Conversion Date, then the Company will pay for such difference in value in cash or in shares of Common Stock, at the Company’s sole discretion, payable or issuable to the holder, as applicable, no later than 30 calendar days after the Automatic Conversion Date. Further, to the extent that the Company does not pay the Cash Portion in full by the date that is 180 days of the closing date, then, beginning on the 181st day following the closing date, the outstanding amount of the Cash Portion will bear interest at a rate per annum equal to 4 % and the Seller will have the right, at the Seller’s sole discretion and to the extent permitted by law, to rescind the transactions contemplated under the GTG Purchase Agreement, in which case the Seller will return any and all consideration paid by the Company in exchange for all the Acquired Shares, and the Company will return the Acquired Shares to the Seller, in each case in accordance with and subject to the terms and conditions of the GTG Purchase Agreement. Amendments to the At the Market (ATM) Sales Agreement On January 31, 2025, the Company entered into Amendment No. 1 to its Sales Agreement with A.G.P., which amended the original Sales Agreement. Amendment No. 1 reduced the floor price for sales under the Sales Agreement from $ 5.00 to $ 3.90 per share. On February 27, 2025, the Company entered into Amendment No. 2 to the Sales Agreement, further reducing the floor price from $ 3.90 to $ 0.01 per share. On the same date, the Company filed a prospectus supplement to reflect this change and to reduce the aggregate offering amount under the Sales Agreement from $ 14,275,000 to $ 11,700,000 . Sales under the Sales Agreement may be made pursuant to our Form S-3 (as defined above), the related base prospectus, and applicable prospectus supplements. Under the terms of the Sales Agreement, the Company will pay A.G.P. a commission of 3.0 % of gross proceeds and will reimburse A.G.P. for certain expenses. The Sales Agreement may be terminated by either party upon five days’ notice and will expire upon the earlier of the 36-month anniversary of the original agreement, the sale of all Placement Shares, or earlier termination by either party. F- 33 Subsequent to the year ended December 31, 2024, the Company issued an aggregate of 160,879 shares of its common stock pursuant to its ATM Offering, at an average offering price of $ 1.37 per share, for total gross proceeds of approximately $ 231,236 . The shares were issued under the Form S-3 and related prospectus supplements. On March 24, 2025, the Company provided notice to A.G.P. of its election to terminate the Sales Agreement, which termination was effective on March 29, 2025 in accordance with the terms of the Sales Agreement. Warrant Adjustment on Follow On Offering On November 24, 2023, the Company issued the Follow-On Warrants (as defined above) to purchase up to 2,400,000 shares of common stock in connection with a best-efforts public offering, pursuant to a placement agency agreement with Maxim Group LLC and a securities purchase agreement with certain purchasers. Pursuant to the anti-dilution adjustment provisions of the Follow-On Warrants, In connection with the Company’s entering into Amendment No. 1 to the Sales Agreement, and in accordance with the anti-dilution adjustment provisions of the Follow-On Warrants, the exercise price was adjusted downwards from $ 5.00 to $ 3.90 . As a result thereof, the aggregate number of shares of common stock issuable upon exercise of the Follow-On Warrants increased to 3,076,924 . Subsequently, on February 27, 2025, in connection with the Company entering into Amendment No. 2 to the Sales Agreement, the exercise price for the Follow-On Warrants was further adjusted from $ 3.90 to $ 1.44 , which is the floor price set forth in the Follow-On Warrants. As a result of this adjustment, the aggregate number of shares issuable upon exercise of the warrants increased to 8,333,336 . Advertising Agreement and Investment Agreement with Mercurius Media Capital LP On March 7, 2025 (the “Closing Date”), the Company simultaneously entered into an Advertising Agreement and an Investment Agreement (collectively, the “Transaction Documents”) with Mercurius Media Capital LP (“MMC”). In accordance with the Transaction Documents, the Company agreed to issue and sell to MMC 250,000 shares of Series A Preferred Stock, for an aggregate purchase price of $ 5,000,000 (the “Consideration”). The Consideration will be paid to the Company in the form of a Credit (as defined in the Advertising Agreement) issued by MMC to the Company at the Closing Date in accordance with the terms and subject to the conditions set forth in the Advertising Agreement. Additionally, the Investment Agreement further provides that, to the extent that the aggregate value of the Conversion Shares issued upon the Automatic Conversion is less than the Consideration, as determined based on the closing price of our common stock, as reported on the Nasdaq Stock Market on the applicable Automatic Conversion Date, then the Company shall pay for such difference in cash or in shares of common stock, at the Company’s sole discretion, no later than 30 calendar days after the Automatic Conversion Date, on the terms and subject to the conditions set forth in the Investment Agreement. The Investment Agreement further provides that at any time during the 2-month period beginning on the Closing Date, MMC will have the right, but not the obligation, to reinvest up to an additional $ 5,000,000 in the aggregate in the Company on the same terms and conditions as those set forth in the Transaction Documents. Issuance of Restricted Stock Units Under the 2022 Equity Incentive Plan On February 4, 2025, the compensation committee of the board of directors approved the issuance of 550,000 restricted stock units (“RSUs”) were issued under the 2022 Plan. These RSUs are subject to a two-year vesting schedule as follows: (i) 50% will vest on the date that is 12 months from the date of grant, (ii) 12.5% will vest on the date that is 15 months from the date of grant, (iii) 12.5% will vest on the date that is 18 months from the date of grant, (iv) 12.5% will vest on the date that is 21 months from the date of grant and (v) 12.5% will vest on the date that is 24 months from the date of grant. F- 34 ITEM 16. FORM 10-K SUMMARY None. 86 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REALPHA TECH CORP. Date: April 2, 2025 By: /s/ Giri Devanur Giri Devanur Chief Executive Officer and Chairman Date: April 2, 2025 By: /s/ Piyush Phadke Piyush Phadke Chief Financial Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Giri Devanur and Piyush Phadke as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10- K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in- fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: April 2, 2025 /s/ Giri Devanur Giri Devanur Chief Executive Officer and Chairman (Principal Executive Officer) Date: April 2, 2025 /s/ Piyush Phadke Piyush Phadke Chief Financial Officer (Principal Financial and Accounting Officer) Date: April 2, 2025 /s/ Dimitrios Angelis Dimitrios Angelis, Director Date: April 2, 2025 /s/ Brian Cole Brian Cole, Director Date: April 2, 2025 /s/ Monaz Karkaria Monaz Karkaria, Director Date: April 2, 2025 /s/ Balaji Swaminathan Balaji Swaminathan, Director 87