What changed in this filing

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Item 1. Financial Statements

2025-05-16 compared with 2024-11-12 · 958 added, 851 removed, 263 unchanged (87% of the section changed)

1 unchanged sentence

reAlpha Tech Corp.

Condensed Consolidated Balance Sheet

September 30, 2024 and December 31, 2023

September 30,

Condensed Consolidated

Balance Sheet

March 31, 2025 (Unaudited) and December 31, 2024

Current Assets

Accounts receivable

Accounts receivable, net

Receivable from related parties

Prepaid expenses

Current assets of discontinued operations

Other current assets

Total current assets

Property and Equipment, at cost

Property and equipment, net

8 unchanged sentences

Short term loans - unrelated parties -current portion

Notes payable, net of discount -current portion

Note payable, current-net of discount

Accrued expenses

Deferred consideration - current portion

Deferred liabilities, current portion

Total current liabilities

Long-Term Liabilities

Deferred liabilities

Mortgage and other long term loans - related parties - net of current portion

Mortgage and other long term loans - unrelated parties - net of current portion

Note payable, net of discount and current portion

Embedded derivate liability

Preferred stock liability

Other long term loans - related parties - net of current portion

Other long term loans - unrelated parties - net of current portion

Note payable, net of discount

Other long term liabilities

1 unchanged sentence

Stockholders’ Equity (Deficit)

Preferred stock, $ 0.001 par value;

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

Series A Convertible Preferred Stock ($ 0.001 par value;

5,000,000 shares authorized) 1,000,000 shares designated;

264,063 and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock ($ 0.001 par value;

200,000,000 shares authorized, 45,570,967 shares outstanding as of September 30, 2024;

200,000,000 shares authorized, 46,230,934 shares outstanding as of March 31, 2025;

200,000,000 shares authorized, 45,864,503 shares outstanding as of December 31, 2024)

3 unchanged sentences

( 38,260,913 )

Accumulated other comprehensive loss

Total stockholders’ equity (deficit) of reAlpha Tech Corp.

Accumulated other comprehensive income

Total stockholders’ (deficit) equity of reAlpha Tech Corp.

Non-controlling interests in consolidated entities

Total stockholders’ equity (deficit)

TOTAL LIABILITIES AND STOCKOLDERS’ EQUITY

Total stockholders’ (deficit) equity

TOTAL LIABILITIES AND STOCKOLDERS’ (DEFICIT) EQUITY

reAlpha Tech Corp.

and Subsidiaries

Condensed Consolidated Statements of Operations

and Comprehensive (Loss) Income

For the Three and Nine

Months Ended September 30, 2024 and 2023 (unaudited)

and Comprehensive Loss

For the Three Ended March 31, 2025 and 2024

For the Three Months Ended

For the Nine Months Ended

September 30,

For the Three Months Ended

Cost of revenues

1 unchanged sentence

Wages, benefits and payroll taxes

Repairs & maintenance

Dues & subscriptions

Marketing & advertising

Professional & legal fees

Depreciation & amortization

Repairs and maintenance

Dues and subscriptions

Marketing and advertising

Professional and legal fees

Depreciation and amortization

Other operating expenses

3 unchanged sentences

( 1,306,658 )

( 2,281,253 )

Other Income (Expense)

Gain on sale of myAlphie

Other Expense (income)

Changes in fair value of contingent consideration

Interest expense, net

Other expense, net

Total other (expense) income

Net (Loss) Income

Total other expense

Net Loss from continuing operations before income taxes

( 2,850,351 )

( 1,418,206 )

Net (Loss) Income Attributable to Non-Controlling Interests

Net (Loss) Income Attributable to Controlling Interests

Net Loss from continuing operations

( 2,850,351 )

( 1,418,206 )

Discontinued operations (Roost and Rhove)

Loss from operations of discontinued Operations

Loss on discontinued operations

$ ( 2,850,351 )

Other comprehensive loss

$ ( 1,419,045 )

Net Loss Attributable to Non-Controlling Interests

Net Loss Attributable to Controlling Interests

$ ( 2,849,942 )

$ ( 1,418,980 )

Other comprehensive income

Foreign currency translation adjustments

Total other comprehensive loss

Comprehensive (Loss) Income Attributable to Controlling Interests

$ ( 2,132,465 )

Comprehensive Loss Attributable to Controlling Interests

$ ( 2,861,873 )

$ ( 1,418,980 )

Net (loss) income per share — basic

Net (loss) income per share — diluted

Basic loss per share

Continuing operations

Discontinued operations

Net Loss per share — basic

Diluted loss per share

Continuing operations

Discontinued operations

Net Loss per share — diluted

Weighted-average outstanding shares — basic

1 unchanged sentence

reAlpha Tech Corp.

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

for the Three and Nine Months Ended September 30, 2024 and 2023

Condensed Consolidated

Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Months

Ended March 31, 2025, and 2024 (unaudited)

Series A Convertible

Preferred Stock

Comprehensive

and Subsidiaries

Stockholders’

6 unchanged sentences

$ ( 13,656,865 )

( 1,478,329 )

( 1,478,312 )

Shares issued to employees & directors

Shares issue - Naamche acquisition

RTC India - Non Controlling Interest

Balance at June 30, 2024

$ ( 15,135,194 )

( 2,098,548 )

( 2,098,574 )

Other Comprehensive Loss

Shares issue - Naamche acquisition

Shares issue - BMN acquisition

Shares issue – AiChat acquisition

Shares issued for services

Shares issued to employees

Share issued to AiChat employees

Hyperfast - Non Controlling Interests

RTC India - Non Controlling Interest

Balance at September 30, 2024

$ ( 17,233,742 )

A Convertible

Comprehensive

and Subsidiaries

Stockholders’

Balance at December 31, 2022

at December 31, 2024

$ ( 38,260,913 )

1 unchanged sentence

( 2,849,942 )

Shares issued through Reg A offering

Reg A offering costs

Distribution to syndicate members

Shares issued for acquisition of Rhove

Shares issued for services

Shares issued in former parent

RTC India - Non controlling interest

Cancellation of shares in the former parent

( 2,850,351 )

Recapitalization of shares

Downstream merger transaction

Balance at March 31, 2023

Comprehensive loss

issue - AiChat10X Pte.

issue through ATM

issue to Streetville Capital, LLC

at March 31, 2025

$ ( 41,110,855 )

Cancellation of shares

Distribution to syndicate members

RTC India - Non Controlling Interest

Balance at June 30, 2023

$ ( 972,260 )

RTC India - Non Controlling Interest

Balance at September 30, 2023

$ ( 965,220 )

reAlpha Tech Corp.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2024, and 2023 (unaudited)

Nine Months Ended

September 30,

Nine Months Ended

September 30,

For the Three Months Ended March 31, 2025, and 2024 (unaudited)

For the Three Months Ended

Cash Flows from Operating Activities:

Net (loss) income

$ ( 2,850,351 )

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

Non-cash items

$ ( 1,419,045 )

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

Depreciation and amortization

Stock based compensation - employees

Stock based compensation - services

Write-off of capitalized software costs

Commitment fee expenses

Amortization of loan discounts

Stock based compensation

Change in fair value of contingent consideration

Non cash commitment fee expenses

Non cash dividend payable Series A Convertible Preferred Stock

Gain on sale of properties

Gain on previously held equity

Gain on sale of myAlphie

( 5,502,774 )

Loss from equity method investment

Changes in operating assets and liabilities

Accounts receivable

Receivable from related parties

Payable to related parties

Prepaid expenses

2 unchanged sentences

Accrued expenses

Deferred liabilities

Total adjustments

( 5,837,251 )

Net cash used in operating activities

2 unchanged sentences

Cash Flows from Investing Activities:

Additions to property and equipment

Proceeds from sale of properties

Additions to property, plant & equipment

Cash paid to acquire business

Capitalized software development - work in progress

Net cash (used in) provided by investing activities

Net Cash paid to acquire business

Cash used for additions to capitalized software

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities:

Proceeds from issuance of debt

Proceeds from issuance of debt – related parties

Payments of debt

Proceeds from issuance of common stock

Net cash provided by financing activities

Net increase (decrease) in cash

Net cash provided by (used in) financing activities

Net decrease in cash

( 1,919,544 )

( 1,618,224 )

Cash - Beginning of Period

Cash - End of Period

Supplemental Disclosure of Cash Flow Information

Interest expense

Noncash Investing and Financing Activities:

Additional Paid-In Capital for Agreed Share Issuance for AiChat Acquisition

Share Issuance for Be My Neighbor Acquisition

Deferred Consideration for Agreed Investment of Xmore AI

Shares Issued to Settle Notes Payable in myAlphie sale

Share Issuance for Rhove Acquisition

Series A Convertible Preferred Stock issuance - MMC

Series A Convertible Preferred Stock issuance - GTG Financial

Deferred cash payments - GTG Financial

Deferred issuance of common stock - GTG Financial

reAlpha Tech Corp.

2 unchanged sentences

reAlpha Tech Corp.

and Subsidiaries (“we,”

“us,” “our,” or the “Company”) were initially incorporated with the name reAlpha Asset Management,

in the State of Delaware on April 22, 2021 .

Initially, our asset-heavy operational model centered on using proprietary artificial

intelligence (“AI”) tools for real estate acquisition, converting properties into short-term rentals, and offering fractional

interests to investors.

However, due to current macroeconomic challenges like higher interest rates and inflated property prices, we’ve

suspended real estate acquisition operations.

Our new focus is on enhancing our AI technologies to continuously improve our commission-free,

AI-powered end-to-end homebuying platform, driven by a growth strategy centered on strategic acquisitions.

The Company’s head office is located at

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

was incorporated with the

name reAlpha Asset Management, Inc.

in the State of Delaware on April 22, 2021 , which was changed to reAlpha Tech Corp.

as a result of

the short-form merger with its former parent on March 21, 2023.

reAlpha Tech Corp.

and its subsidiaries are collectively referred to

as “we,” “us,” “our” or the “Company.”

Initially, our asset-heavy operational model

centered on using proprietary artificial intelligence (“AI”) tools for real estate acquisition, converting properties

into short-term rentals, and offering fractional interests to investors.

However, due to macroeconomic challenges like higher

interest rates and inflated property prices, we discontinued our rental segment operations.

We are now focused on developing an

end-to-end homebuying platform, named “reAlpha.” Utilizing the power of AI and an acquisition-led growth strategy, our

goal is to offer a more affordable, streamlined experience for those on the journey to homeownership.

The Company 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

the Company’s strategy is the reAlpha platform, an AI-powered solution designed to simplify the home purchase process while generating

revenue through realty services, mortgage brokering services, and digital title and escrow services.

strengthen its AI capabilities, the Company has acquired Naamche, Inc.

Naamche”) and Naamche, Inc.

Naamche” and together with U.S.

Naamche, “Naamche”) and AiChat Pte Ltd.

(“AiChat”),, expanding

its software development expertise and AI-driven engagement tools.

The Company operates through its subsidiaries,

including reAlpha Realty, LLC, AiChat, Debt Does Deals, LLC (d/b/a Be My Neighbor) (“Be My Neighbor” or “BMN”),

Hyperfast Title LLC (“Hyperfast”) and GTG Financial, Inc.

(“GTG” or “GTG Financial”) with each playing a role in the Company’s vertically integrated

These subsidiaries enable the Company 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, the Company is creating a scalable, end-to-end, tech-enabled model for customers to buy a home.

Through strategic

acquisitions and innovations in its platform, the Company is expanding its market presence and diversifying revenue streams across real

estate, mortgage services, and AI-powered solutions.

The Company’s principal executive office

is located at 6515 Longshore Loop, Suite 100, Dublin, OH 43017.

Note 2 - Summary of Significant Accounting

2 unchanged sentences

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

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

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

the Company holds a controlling financial interest of, and those in which it owns more than 50 % of the voting interest.

All significant

1 unchanged sentence

Basis of Presentation

The accompanying unaudited condensed consolidated

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

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

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

The condensed consolidated balance sheet

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

This summary of significant accounting policies

is presented to assist in understanding the Company’s financial statements.

These accounting policies conform to accounting principles,

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

The financial statements

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

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

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

financial statements.

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

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

(the “Form 10-KT”).

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

fiscal year or any other future periods.

The accompanying unaudited condensed

consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC for Quarterly Reports

on Form 10-Q.

Accordingly, certain information and footnote disclosures normally included in financial statements prepared in

accordance with U.S.

generally accepted accounting principles (“U.S.

GAAP”) have been condensed or omitted pursuant to

such rules and regulations.

The condensed consolidated balance sheet as of December 31, 2024 has been derived from the

Company’s audited consolidated financial statements as of that date.

summary of significant accounting policies is presented to assist in understanding the Company’s financial statements.

accounting policies conform to U.S.

GAAP and have been consistently applied in the preparation of the financial statements.

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

In the opinion of the Company’s

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

accruals, necessary to fairly present the accompanying financial statements.

These condensed consolidated financial statements

should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on

Form 10-K for the year ended December 31, 2024, filed with the SEC on April 2, 2025, as amended on May 13, 2025 (the “Form

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

or any other future periods.

Use of Estimates

The preparation of financial statements in conformity

generally accepted accounting principles 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.

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.

1 unchanged sentence

The Company accounts for related party transactions

in accordance with Accounting Standards Codification (“ASC”) 850 (“Related Party Disclosures”).

A related party

is generally defined as (i) any person that holds 10 % or more of the Company’s securities and their immediate families, (ii) the

Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company,

or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be

a related party transaction when there is a transfer of resources or obligations between related parties.

The Company conducts business

with its related parties in the ordinary course of business.

in accordance with Accounting Standards Codification (“ASC”) 850.

A related party is generally defined as (i) any person that

holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that

directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence

the financial and operating decisions of the Company.

A transaction is considered to be a related party transaction when there is a transfer

of resources or obligations between related parties.

The Company conducts business with its related parties in the ordinary course of

Transactions involving related parties cannot

2 unchanged sentences

on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Significant Accounting Policies

There have been no material changes to our significant

accounting policies from our Form 10-KT.

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 investments are 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.

Equity method investments are 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.

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.

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

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

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

insured limits.

Accounts receivable are typically unsecured.

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

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

In accordance with 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 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.

There were no changes in the Company’s credit

risk exposure, CECL methodology, or reserve assumptions during the three months ended March 31, 2025.

The Company continues to monitor

its financial assets in accordance with ASC 326.

As of March 31, 2025, the Company’s accounts receivable remains recoverable, and

no adjustments were made to the previously recorded CECL reserve of 0.05 % applied to receivables attributable to AiChat, its Singapore

No additional forward-looking credit loss provisions were deemed necessary based on current macroeconomic conditions and customer

credit profiles.

Opening Balance, January 1, 2025

Current-period provision for expected credit losses

Release of allowance for expected credit losses

Ending Balance, March 31, 2025

The condensed consolidated financial statements

included herein have been prepared in accordance with U.S.

GAAP and on a basis consistent with the accounting policies disclosed in the

There have been no material changes to the Company’s

significant accounting policies during the three months ended March 31, 2025.

Revenue Recognition

The AI conversational platform, AiChat (as

defined below), 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.

The Company recognizes revenue in accordance with

ASC 606, Revenue from Contracts with Customers (“ASC 606”) when control of services is transferred to the customer.

On a standalone

basis, the Company generates revenue by providing monthly support services to Turnit related to the myAlphie platform, a digital platform

we previously developed and sold on May 17, 2023.

Revenue is recognized over time as the services are performed and the customer benefits

We 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, a company specializing in AI conversational

customer experience solutions, 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.

Consulting services are recognized based on the nature of the

Revenue for one-time services, such as project setups, is recognized at the point in time of delivery.

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.

Be My Neighbor (as defined below), 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.

services, including loan origination, application processing, and credit assessment, contribute to this culminating event.

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 (as defined below), which leverages proprietary

AI and other advanced technologies, 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.

Note 3 - Earnings per Share

Basic earnings per share (“EPS”) is

computed based on the weighted average number of shares of common stock outstanding during the period.

Diluted EPS is computed based on

the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period.

Dilutive potential common shares include outstanding stock options and warrants.

and the shares that will be issued for the recent acquisitions.

to the net losses reported in the periods presented, the affect of dilutive potential common shares are anti-dilutive

Recently Issued Accounting Pronouncements:

In November 2023, the Financial Accounting Standards

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

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

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

ASU 2023-07 requires expanded disclosures about reportable segments

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

decision maker utilizes segment information in evaluating segment performance.

ASU 2023-07 is effective for fiscal years beginning after

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

We are currently assessing the impact that

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

Reclassification Presentation

Certain amounts have been reclassified for consistency

with the current period presentation.

These reclassifications had no effect on the reported results of operations.

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.

Be My Neighbor, a mortgage brokerage company,

complies with ASC 606 by recognizing revenue at the point of loan funding.

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.

GTG Financial, a mortgage brokerage company, complies

with ASC 606 by recognizing revenue at the point of loan funding.

This moment marks the transfer of control of the loan to the borrower,

capturing the completion of GTG Financial’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.

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.

Note 3 - Going Concern

3 unchanged sentences

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.

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 the condensed 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, which we expect to implement within the next

fiscal year, 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 September 30, 2024, the

Company had approximately $ 7.0 million in cash.

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 condensed 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

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 March 31, 2025 ,

the Company had approximately $ 1.20 million in cash.

Note 4 - Business Combinations

For comprehensive information regarding the acquisition

completed in the previous fiscal year, please refer to the Form 10-KT filed with the SEC for the transition period ended December 31,

Acquisition of Naamche Inc.

and Naamche Inc.

On May 6, 2024 , we completed our acquisitions

of Naamche, Inc.

Naamche”) and Naamche, Inc.

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

As a result, 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.

Naamche is included in our consolidated financial

statements beginning on the date of acquisition and reported as part of our Technology Services (formerly “Platform Services”)

For comprehensive information regarding acquisitions

completed in the fiscal year ended December 31, 2024, please refer to the Form 10-K.

Acquisition of GTG Financial, Inc.

On February 20, 2025, we entered into a Stock

Purchase Agreement (the “GTG Purchase Agreement”) with GTG Financial and Glenn Groves, an individual (the “Seller”),

pursuant to which the Company acquired from the Seller 100 % of the issued and outstanding shares of common stock of GTG (the “Acquired

Shares”), a mortgage brokerage company, the closing of which transaction (the “Closing” and the date of the Closing,

the “GTG Closing Date”) took place simultaneously with the execution of the GTG Purchase Agreement.

The total purchase consideration

under the GTG Purchase Agreement was up to $ 4.2 million, consisting of a combination of Series A Convertible Preferred Stock (the “Series

A Preferred Stock”), shares of common stock, deferred cash payments and contingent earn-out consideration based on the achievement

of certain financial metrics, as set forth in the GTG Purchase Agreement.

However, management has assessed that, because the earn-out

consideration arrangement is linked to the Seller’s continued employment, it is therefore treated as contingent compensation rather

than consideration transferred under ASC 805, Business Combinations (“ASC 805”).

As such, the earn-out consideration was

excluded from the purchase price allocation.

The total consideration transferred for the purpose

of applying the acquisition method was $ 2,916,672 , based on a preliminary valuation report prepared by an independent third party in accordance

with ASC 805 and ASC 820, Fair Value Measurement (“ASC 820”).

The Company is in the process of finalizing the allocation of

the purchase price to the assets acquired and liabilities assumed.

These fair value determinations remain preliminary and are subject

to adjustment within the one-year measurement period.

The components of the consideration and their accounting treatment

are as follows:

(i) 14,063 shares of Series A Preferred Stock with an aggregate stated value of $ 281,250 (the “Preferred Consideration”).

The Series A Preferred Stock is convertible into shares of common stock at a conversion price of $ 20 per share (the “Conversion

Price”), in accordance with the terms and conditions of and subject to the adjustments set forth in the Certificate of Designation

of Preferences, Rights and Limitations of Series A Voting Convertible Preferred Stock filed with the Secretary of State of the State of

Delaware (the “COD”), and the GTG Purchase Agreement includes a contingent shortfall settlement feature, which obligates the

Company to issue additional shares of common stock or cash if, upon the automatic conversion of the Series A Preferred Stock (an “Automatic

Conversion”), the fair value of the shares of common stock issued upon such automatic conversion is less than the consideration

paid for such shares of Series A Preferred Stock (the “shortfall feature”).

The shares of Series A Preferred Stock were valued

at $ 284,922 using the equity value method and recorded in additional paid-in capital.

Due to the shortfall feature, a derivative liability

was separately recognized under ASC 815, Derivatives and Hedging (“ASC 815”);

(ii) 700,055 shares of common stock, valued

at $ 1.84 per share based on the seven-day volume weighted average price of the common stock as reported on the Nasdaq Capital Market (“Nasdaq”)

(the “VWAP”) prior to the GTG Closing Date.

The total value of $ 1,287,000 was recorded to additional paid-in capital.

shares of common stock are expected to be issued within 90 days from the GTG Closing Date and are disclosed as “Common Stock to

be Issued;” and (iii) deferred cash payments totaling $ 1,344,750 (the “Cash Portion”), scheduled to be paid in three

tranches over 180 days following the GTG Closing Date.

As the payment period is within one year, the Company applied the practical expedient

under ASC 835-30, Interest – Imputation of Interest, and did not discount the liability.

The amount is reflected in accrued liabilities.

The Company will finalize the allocation of the purchase price and

related disclosures in subsequent reporting periods, within the measurement period allowed under ASC 805.

the Company does not pay the Cash Portion within 180 days after the GTG Closing Date, then, beginning on the 181st day following the GTG

Closing Date, the outstanding amount of the Cash Portion shall bear interest at a rate per annum equal to four percent ( 4.0 %);

Seller shall have the unilateral right (at Seller’s sole discretion), to the extent permitted by applicable law, to rescind

the transactions contemplated under the GTG Purchase Agreement, in which case the Seller would return any and all consideration paid by

the Company in exchange for all the Acquired Shares, and the Company would 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.

The Cash Portion outstanding at any time will also become

due and payable no later than 60 days after the Company’s consummation of a bona fide transaction or series of transactions with

the principal purpose of raising capital in the minimum amount of $ 10,000,000 , whether through loans provided to the Company or through

the sale of the Company’s equity securities, which includes sales of common stock through an “at the market” offering

of the Company.

Each share of Series A Preferred Stock shall be convertible into a

number of Conversion Shares equal to the liquidation amount of such shares of Series A Preferred Stock, as set forth in the COD, divided

by the Conversion Price, subject to the beneficial ownership limitation set forth in the COD;

provided, however , that in the event

that (i) the shares of Series A Preferred Stock are automatically converted in accordance with the terms of the COD and (ii) the aggregate

value for the Conversion Shares issued upon such Automatic Conversion is less than the Preferred Consideration, as determined based on

the VWAP of such Conversion Shares on the date of the Automatic Conversion (the “Automatic Conversion Date”), then the Company

shall make up for such shortfall feature payment in cash or in common stock in the Company’s sole discretion, no later than 30 calendar

days after the Automatic Conversion Date.

We estimated fair values on the acquisition date,

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

with the Naamche acquisition subject to measurement period adjustments.

During the measurement period, we obtained a purchase price allocation

report from a consulting firm to assist in finalizing the fair value of assets acquired and liabilities assumed.

Accordingly, the fair

value measurements and adjustments are noted below.

The table below represents the final purchase

with the GTG acquisition, subject to measurement period adjustments.

The table below represents the preliminary purchase

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

Cash & cash equivalents

Accounts receivable

Other current assets

Net property plant & equipment

Intangible assets

Accounts payable

Accrued expenses

Dividend payable

Long term loans

Other current liabilities

Net assets acquired

$ ( 292,733 )

The determination of the fair value for the acquired

5 unchanged sentences

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.

Purchase Price Allocation

The acquisition was accounted for as a business

combination in accordance with ASC Topic 805, Business Combinations.

The purchase price allocation above was allocated to the tangible

and intangible assets acquired and liabilities assumed based on management estimated fair values as of the acquisition date.

was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic

benefits arising from other assets acquired that could not be individually identified and separately recognized.

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 the useful lives is based upon various industry

studies, historical acquisition experience, economic factors.

The purchase price allocation to identifiable intangible assets acquired

subject to amortization consists of the following:

(in years) Gross Value Accumulated

Amortization Net Book

Definite Lived Intangible Assets:

Trademarks and trade names

For the fair valuation of domain name, the market

approach was applied.

The estimation of the economic useful life of these assets took into account factors outlined in ASC 350-30, Intangibles—Goodwill

Due to the immaterial value of these intangibles and based on management’s judgment, the Company elected to amortize

$ 716 immediately rather than assign a specific useful life based on future economic benefit.

The impact of this amortization is not material

to the consolidated financial statements.

Assembled workforce is not recognized separately from goodwill, as it lacks separability and

contractual nature.

Business combinations are accounted for using the acquisition method

of accounting in accordance with the ASC 805 .

The purchase price allocation above was allocated to the tangible and intangible

assets acquired and liabilities assumed based on management estimated fair values as of the acquisition date.

Goodwill was calculated

as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising

from other assets acquired that could not be individually identified and separately recognized.

Note 5 - Property and Equipment, Net

Investments in property and

equipment consisted of the following as of March 31, 2025.

Furniture and fixtures

Total investment in property and equipment

$ ( 103,866 )

Customer and other relationships 6 17,500 1,183 16,317

Balance, September 30, 2024 $ 26,000 $ 1,872 $ 24,128

We estimate amortization expense for the next

five years and beyond will be as follows:

Years Ending December 31:

2024 (excluding the 9 months ended 9/30/2024)

Acquisition of AiChat Pte.

On July 12, 2024, we entered into a Business Acquisition

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

(“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.

We estimated fair values on the acquisition date,

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

with the AiChat acquisition subject to measurement period adjustments.

We obtained a purchase price allocation report from a consulting

firm to assist in finalizing the fair value of assets acquired and liabilities assumed.

Accordingly, the fair value measurements and adjustments

are noted below.

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.

Cash & cash equivalents

Accounts receivable

Other current assets

Net property plant & equipment

Intangible assets

Accounts payable

Accrued expenses

Other current liabilities

Investments in property and

equipment consisted of the following as of December 31, 2024 .

Furniture and fixtures

Total investment in property and equipment

The Company recorded depreciation expenses of

$ 9,717 and $ 7,022 for the periods ended March 31, 2025 and March 31, 2024, respectively.

Note 6 - Capitalized Software Development Costs,

Work In Progress

The Company adheres to ASC 350-40, Intangibles

– Goodwill and Other, Internal-Use Software for the capitalization of software development costs.

As of March 31, 2025, the Company

continues to assess the carrying amount of capitalized software for impairment, considering expected future benefits and cash flows to

determine recoverability.

March 31, 2025

December 31, 2024

Reclassified to

carrying value

Capitalized software development costs, work in progress

$ ( 202,968 )

Net assets acquired

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 350-30-35-3.

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.

Purchase Price Allocation

The acquisition was accounted for as a business

combination in accordance with ASC Topic 805, Business Combinations.

The purchase price allocation above was allocated to the tangible

and intangible assets acquired and liabilities assumed based on management estimated fair values as of the acquisition date.

was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic

benefits arising from other assets acquired that could not be individually identified and separately recognized.

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:

(in years) Gross Value Accumulated

Amortization Net Book

Definite Lived Intangible Assets:

Developed technology 5 $ 800,000 $ 35,068 $ 764,932

Trademarks and trade names

$ ( 1,046,761 )

Customer and other relationships 10 63,000 1,381 61,619

Balance, September 30, 2024 $ 1,135,000 $ 43,073 $ 1,091,927

We estimate amortization expense for the next

five years and beyond will be as follows:

Years Ending December 31:

2024 (excluding the 9 months ended 9/30/2024)

Acquisition of Debt Does Deals, LLC (d/b/a

Be My Neighbor)

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

(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.

We estimated fair values on the acquisition date,

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

with the Be My Neighbor acquisition subject to measurement period adjustments.

We obtained a purchase price allocation report from a consulting

firm to assist in finalizing the fair value of assets acquired and liabilities assumed.

Accordingly, the fair value measurements and adjustments

are noted below.

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.

Cash & cash equivalents

Accounts receivable

Intangible assets

Accounts payable

Other current liabilities

Net assets acquired

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

Purchase Price Allocation

The acquisition was accounted for as a business

combination in accordance with ASC Topic 805, Business Combinations.

The purchase price allocation above was allocated to the tangible

and intangible assets acquired and liabilities assumed based on management estimated fair values as of the acquisition date.

was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic

benefits arising from other assets acquired that could not be individually identified and separately recognized.

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.

The purchase price allocation to identifiable intangible assets acquired

subject to amortization consists of the following:

(in years) Gross Value Accumulated

Amortization Net Book

Definite Lived Intangible Assets:

Trademarks and trade names

$ ( 202,968 )

Balance, September 30, 2024 $ 1,434,000 $ 5,762 $ 1,428,238

We estimate amortization expense for the next

five years and beyond will be as follows:

Years Ending December 31:

2024 (excluding the 9 months ended 9/30/2024)

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 .

Note 6 - Capitalized Software Development

Costs, Work In Progress

Qualifying internal-use software costs incurred during

the application development stage, which consist primarily of internal product development costs, outside services, and purchased software

license costs are capitalized.

As of September 30, 2024, the Company reclassified a portion of capitalized software costs of $ 750,642 from work-in-progress (“WIP”) to intangible assets following the release of the related product to the public, referred to as being placed “in service” under ASC 350.

The balance of work-in-progress capitalized software costs amounted to $ 359,720 as of September 30, 2024, compared to $ 839,085 as of December 31, 2023.

The Company assesses the carrying amount of capitalized

software costs for impairment regularly and considers the recoverability of capitalized costs based on expected future benefits and cash

Any impairment loss, if identified, is recognized in the statement of operations.

$ ( 1,046,761 )

As of March 31, 2025, there were no reclassifications

of capitalized software costs from work-in-progress (“WIP”) to intangible assets.

The WIP balance related to capitalized software

amounted to $ 105,900 as of March 31, 2025, compared to $ 105,900 as of December 31, 2024.

Note 7 - Goodwill and Intangible Assets

6 unchanged sentences

unit below its carrying amount.

At September 30, 2024, our consolidated balance sheet includes goodwill related to the acquisition of Roost Enterprises, Inc.

included in the rental business reporting unit of $17.3 million.

As the activity of the reporting unit is on pause, we will conduct an

assessment of potential asset impairments as part of our annual review process during the fourth quarter of 2024.

Although we believe

that the goodwill reflected in the Consolidated Balance Sheet is not impaired, goodwill may subsequently become impaired due to changes

in facts and circumstances affecting the valuation of the reporting unit.

A goodwill impairment charge could have a material effect on

periodic earnings.

Additionally, the Company assessed the acquisition

of Roost Enterprises, Inc.

(“Rhove”) 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

Balance at June 30, 2024

March 31, 2025

Balance at January 1, 2025

Goodwill acquired, GTG Financial

Goodwill impairment

Goodwill measurement period adjustment

Balance at March 31, 2025

December 31, 2024

Balance at January 1, 2024

Goodwill acquired, net of purchase price adjustments

Balance at September 30, 2024

(1) Includes goodwill of related to Naamche, AiChat, Be My Neighbor, and

Hyperfast acquisitions.

See “Note 5 – Business Combinations” for further information.

components of intangible assets, all of which are finite-lived, are as follows:

September 30, 2024

Goodwill impairment

Goodwill measurement period adjustment

Balance at December 31, 2024

The components of intangible assets, all of which

are finite-lived, are as follows:

March 31, 2025

December 31, 2024

1 unchanged sentence

Developed technology

$ ( 688,886 )

$ ( 590,619 )

Trademarks and trade names

Customer relationships

(1) Includes intangible assets related to Naamche, AiChat and Be My Neighbor

acquisitions.

See “Note 5 – Business Combinations” for further information and reclassified a portion of capitalized

software costs from work-in-progress (“WIP”) to intangible assets.

The Company recorded depreciation and amortization expenses of $ 163,439

and $ 14,628 for the three months ended September 30, 2024, and September 30, 2023, respectively.

$ ( 120,719 )

$ ( 766,771 )

$ ( 700,838 )

Following this reclassification, during the fourth

quarter of 2024, the Company capitalized an additional $150,372 in significant platform improvements to the reAlpha platform.

These improvements

were enhancements without significant changes to the platform’s useful life, rather than costs incurred during the application development

The Company recorded amortization expenses of

$ 120,717 and $ 0 for the period ended March 31, 2025 and March 31, 2024, respectively.

The following table outlines the estimated future

amortization expense related to intangible assets held as of September 30, 2024:

Years Ending December 31:

2024 (excluding the 9 months ended 9/30/2024)

amortization expense related to intangible assets held as of March 31, 2025:

Years Ending March 31:

2025 (remaining period)

Note 8 - Notes Payable

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,

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 September 30, 2024 and December 31, 2023:

Summary of non-current

notes payable:

Date Interest

Rate Original

Amount September 30,

2024 December 31,

Secured promissory note to Streeterville Capital, LLC, $ 435,000 original issue discount February 14, 2026 8 % $ 5,455,000 $ 5,455,000 $ -

Unamortized debt issuance costs & Original issue discount ( 181,875 )

Current portion ( 3,815,000 )

payable as of March 31, 2025 and December 31, 2024:

Summary of Notes payable:

Secured promissory note to Streeterville Capital, LLC, $ 435,000 original issue discount

Repayment (Issued shares)

Unamortized debt issuance costs and original issue discount

Total notes payable

Summary of current

Notes payable, current, net of discount

( 5,010,623 )

Total notes payable – current- net of discount

As of March 31, 2025, accrued interest under that certain outstanding

secured promissory note (the “Note”) issued to Streeterville Capital, LLC (“Streeterville”) on August 14, 2024

was $ 279,652 , compared to $ 166,111 as of December 31, 2024.

As of March 31, 2025 and December 31, 2024, unamortized debt issuance and

original issue discount were reflected within long term liabilities on the condensed consolidated balance sheets, netted with the

notes payable.

September 30,

Secured promissory note to Streeterville Capital, LLC, $ 435,000 original issue discount

Unamortized debt issuance costs & Original issue discount

Total notes payable - current

of September 30, 2024, accrued interest was $ 54,818 , compared to $ 0 as of September 30, 2023.

As of September 30, 2024 and December 31,

2023, unamortized debt issuance and original issue discount were reflected within long term liabilities on the condensed consolidated

balance sheets, netted with the notes payable.

On March 20, 2025, the Company and Streeterville, the holder of the

Note, entered into an exchange agreement (the “Exchange Agreement”), pursuant to which the Company and Streeterville agreed

to (i) partition a new secured promissory note in the form of the Note (the “Partitioned Note”) in the original principal

amount of $ 20,000 (the “Exchange Amount”) and then cause the outstanding balance of the Note to be reduced by the Exchange

and (ii) exchange the Partitioned Note for the delivery of 15,873 shares (the “Exchange Shares”) of our common stock

at an effective price per Exchange Share equal to $ 1.26 , which was equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d)

as of such date.

Note 9 - Related Party Transactions

from Related Parties

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.

of September 30, 2024, the balance due to Kester Poh under the loans was $ 137,939 , divided as follows:

short term loans of $ 75,240 and

long-term loans of $ 62,699 .

The notes issued in connection with these loans are structured to be repaid over a two-year period through

monthly installments of $ 9,626 , bearing an interest rate of 6.9 % per annum.

Similarly, as of September 30, 2024, the balance due

to Balaji Swaminathan under the loans made from December 2023 to August 2024 was $ 57,957 .

This amount includes short term loans of $ 52,985

and long-term loans of $ 4,972 .

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 $ 8,183 , bearing an interest rate of 6.9 % per annum.

Summary of Short-Term

Loans to Related Parties

Interest Rate

September 30,

Loans from Related Parties

During the three months ended March 31, 2025, related party transactions

involved loans provided to AiChat by Kester Poh, a director and the Chief Executive Officer of AiChat, Balaji Swaminathan, a member of

our board of directors, and Sea Easy Capital Ltd.

All transactions were conducted on terms consistent with those

offered to unrelated third parties.

AiChat has a financing arrangement with SEA, a Singapore-based entity

that the spouse of Balaji Swaminathan, a member of our board of directors, controls by virtue of her ownership or control of a majority

( 51 %) of the capital stock of SEA.

During the quarter ended March 31, 2025, AiChat financed an aggregate of $ 155,481 through the SEA financing

arrangements in the form of loans, and paid principal and interest of $ 146,900 .

Each loan bears interest at a rate of 16.5 % per annum

and are structured with an 89 to 120 -day repayment term.

During the three months ended March 31, 2025, the outstanding balance of the

loans as of December 31, 2024 of $ 146,900 was fully repaid.

As of March 31, 2025, the total outstanding balance under these loans was

approximately $ 155,481 , comprising $ 149,170 in principal and $ 6,311 in accrued interest.

Subsequent to the three months ended March 31,

2025, AiChat drew additional loans under the same SEA financing arrangement for $ 33,085 (see “Note 19 – Subsequent Events”

for more information).

In addition to the financing arrangement with SEA, as of March 31,

2025, AiChat also has loans outstanding to Mr.

Swaminathan personally.

The original loan amount was $ 55,933 in short-term loans, with

a remaining balance of $ 51,936 as of March 31, 2025.

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.

As of March 31, 2025, the balance on loans due to Kester Poh was $ 86,992 ,

divided as follows:

short-term loans of $ 54,942 and long-term loans of $ 32,050 .

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.

Summary of Short-Term Loans to Related Parties

Term Loan Facility

Interest Reserve

Total Short-Term Loans to Related Parties

Summary of Long-Term Loans to Related Parties

Interest Rate

September 30,

2024 September 30,

Summary of Other Long-Term Loans to Related

2025 March 31,

2025 December 31,

1 unchanged sentence

Interest Reserve ( 4,919 ) ( 9,829 )

Total Long-Term Loans to Related Parties $ 67,671 $ -

$ 27,131 $ 45,052

Note 10 – Short-Term Loans Unrelated parties

Short-Term Loans consisted of the following as of September 30, 2024,

and December 31, 2023:

Short-Term Loans consisted of the following as

of March 31, 2025, and December 31, 2024:

Summary of Short-Term Loans to Unrelated Parties

Average Interest Rate

as of September 30,

September 30,

First Insurance loan

Term Loan Facility

D&O Insurance

Interest Reserve

Total Short-Term Loans to Unrelated Parties

Note 11 - Deferred Consideration

The Company had the following deferred consideration

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

Consideration

Note 11 - Deferred Liabilities ,

Current Portion

The Company had the following deferred liabilities

as of March 31, 2025 and December 31, 2024:

Balance as on December 31, 2024

Deferred Consideration – AiChat

Deferred Consideration – BMN (1)

Deferred Consideration - Xmore AI

Balance as on September 30, 2024

(1) As part of the business combination with Be My Neighbor, which took place on September 8, 2024, and in accordance with the MIPA (as defined above), we agreed to pay as consideration an amount of $ 1.5 million in cash.

While the original due date for such payment was the closing date, the actual payment was made on October

Note 12 - Mortgage and Other Long-Term Loans

Mortgage and Other Long-Term Loans consisted of

the following as of September 30, 2024, and December 31, 2023:

Summary of Mortgage and Other Long-Term Loans to related Parties

Deferred Revenue - AiChat

Deferred Consideration – GTG Financial

Balance as on March 31, 2025

Note 12 – Embedded Derivative Liability

In connection with the issuance of Series A Preferred

Stock related to the GTG Financial acquisition and the media-for-equity transaction with Mercurius Media Capital LP (“MMC”),

the Company assessed the contractual terms under ASC 480 - Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815,

to evaluate whether any embedded features should be accounted for separately as derivative liabilities.

The Series A Preferred Stock is convertible into

a number of shares of common stock equal to the liquidation amount of such shares of Series A Preferred Stock, as set forth in the COD,

divided by the Conversion Price.

Under the terms of the agreements entered into in connection with the GTG Financial acquisition and MMC

transaction, if, upon Automatic Conversion (which occurs three years after issuance of each such share of Series A Preferred Stock), the

aggregate value of the Conversion Shares issuable in connection therewith, determined based on the fair market value of the Company’s

common stock at the Automatic Conversion Date based on the VWAP or closing price, as applicable, of the Company’s common stock on

such date, as reported on Nasdaq, is less than the paid consideration for such shares of Series A Preferred Stock, the Company is obligated

to settle the shortfall feature payment in cash or additional shares of common stock.

Although the Series A Preferred Stock is not mandatorily

converted, the shortfall feature represents a contingent obligation to transfer a variable number of shares or cash based on future market

As a result, the embedded feature does not meet the criteria for equity classification under ASC 815-40 and was bifurcated

from the host instrument and recorded as a separate derivative liability.

The Company bifurcated the fair value of the Series

A Preferred Stock between (i) the equity component, representing the initial value of the shares of Series A Preferred Stock, and (ii)

a liability component, representing the fair value of the shortfall feature.

The shortfall feature liability is measured at fair value

at inception and subsequently remeasured at each reporting period, with changes in fair value recorded within “Other income (expense)”

in the condensed consolidated statements of operations and comprehensive loss.

This bifurcation ensures the appropriate accounting

treatment under U.S.

GAAP and reflects the economic substance of the shortfall feature embedded in the agreements relating to the issuance

of the shares of Series A Preferred Stock to GTG Financial and MMC.

The derivative liability was initially measured

at fair value using the Black-Scholes option pricing model, incorporating assumptions such as stock price, expected volatility, risk-free

rate, and the expected term until automatic conversion.

For the GTG Financial acquisition, the derivative liability was recorded upon

issuance of 14,063 shares of Series A Preferred Stock with an aggregate stated value of $ 281,250 .

For the MMC transaction, 250,000 shares

of Series A Preferred Stock were issued in exchange for media credits valued at $ 5,000,000 .

The aggregate fair value of the derivative

liability as of the issuance date of such shares of Series A Preferred Stock was recorded within non-current liabilities on the condensed

consolidated balance sheet (see “Note 11 – Deferred Liabilities, Current Portion” for additional information).

As of March 31, 2025, the Company estimated the

fair value of the derivative liability using the Black-Scholes option pricing model with the following key assumptions:

stock price at issuance :

$ 1.84 at the closing date of the acquisition of GTG Financial;

and $ 1.42 at the closing date of the MMC

interest rate :

September 30,

2024 September 30,

The derivative liability was classified within

Level 3 of the fair value hierarchy due to the use of unobservable inputs.

The Company initially recorded a derivative liability of $ 4,327,930 ,

consisting of $ 225,430 for the GTG Financial acquisition and $ 4,102,500 for the MMC transaction measured at fair value of preferred

stock using the Black-Scholes option pricing model and the key assumptions outlined above.

As part of the valuation inputs, the Company used

its own historical stock price volatility, calculated on an annualized basis, as a key assumption to reflect expected price fluctuations

of its common stock over the term of the preferred stock.

The embedded derivative liability is remeasured

at fair value at each reporting period, with changes in fair value recognized in earnings as a component of other (income) expense.

fair value is determined using the most current inputs available, including the trading price of the Company’s common stock, remaining

term, dividend yield, and market volatility.

Change in fair value

Balance as on December 31, 2024

Embedded Derivative Liability – GTG acquisition

Embedded Derivative Liability – MMC deal

Balance as on March 31, 2025

Note 13 – Preferred Stock Liability

In connection with the acquisition of GTG Financial

and the transaction with MMC, the Company issued a total of 264,063 shares of Series A Preferred Stock with a stated value of $ 20 per

These shares are subject to conversion features that include shortfall feature, whereby the Company may be required to deliver

additional value in cash or common stock if the aggregate value of the conversion shares falls below the original consideration at the

time of automatic conversion.

In accordance with ASC 480 and ASC 815, the Company

bifurcated the value of the issued Series A Preferred Stock between (i) the liability component of the Series A Preferred Stock and (ii)

an embedded derivative liability representing the fair value of the shortfall feature.

The classification was based on the fact that the

instruments obligate the Company to potentially settle the conversion at a fixed monetary value through a variable number of common shares,

which does not meet the criteria for equity classification.

As of March 31, 2025, the bifurcated values are

Change in fair value

Balance as on December 31, 2024

Preferred stock liability – GTG Financial acquisition

Preferred stock liability – MMC deal

Accrued interest on preferred stock

Balance as on March 31, 2025

The derivative liability was initially measured at fair value using

the Black-Scholes option pricing model, incorporating assumptions such as stock price, expected volatility, risk-free rate, and the expected

term until automatic conversion.

For the GTG Financial acquisition, the derivative liability was recorded upon issuance of 14,063 shares

of Series A Preferred Stock with an aggregate stated value of $ 281,250 .

For the MMC transaction, 250,000 shares of Series A Preferred

Stock were issued in exchange for media credits valued at $ 5,000,000 , also subject to the same shortfall feature terms.

The aggregate

fair value of the derivative liability as of the issuance date was recorded within non-current liabilities on the condensed consolidated

balance sheet (see “Note 11 – Deferred Liabilities, Current Portion”) for additional information).

The embedded derivative liability is remeasured

at fair value at each reporting period, with changes in fair value recognized in earnings as a component of other (income) expense.

fair value is determined using the most current inputs available, including the trading price of the Company’s common stock, remaining

term, dividend yield, and market volatility.

The derivative liability is presented separately as “Derivative liability – embedded

feature” in the consolidated balance sheet.

Changes in fair value of the liability are presented as “Change in fair value

of derivative liability” in the condensed consolidated statements of operations.

Change in fair value

Balance as on December 31, 2024

Embedded Derivative Liability – GTG Financial acquisition

Embedded Derivative Liability – MMC transaction

Accrued interest on Series A Convertible Preferred Stock

Balance as on March 31, 2025

Note 14 - Other Long-Term Loans

Other Long-Term Loans consisted of the following

as of March 31, 2025, and December 31, 2024:

Summary of Other Long-Term Loans to

Unrelated Parties

Maturity Year Average

2025 March 31,

2025 December 31,

Term Loan Facility 2024-2028 6.5 % $ 186,837 $ 210,866

Interest Reserve ( 12,015 ) -

Summary of Mortgage and Other Long-Term Loans to Unrelated Parties

Interest Rate

September 30,

Mortgage Loan

Term Loan Facilities

Vehicle Loans

Vehicle Loan 2029 11 % 46,267 48,188

Interest Reserve ( 16,068 ) ( 17,933 )

$ 217,036 $ 241,121

Note 15 - Stockholders’ Equity (Deficit)

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

As of September 30, 2024, there were 45,570,967 shares of common stock issued and outstanding and as of December 31, 2023,

there were 44,122,091 shares of common stock issued and outstanding, and there were 0 shares of preferred stock outstanding as of September

30, 2024 and December 31, 2023.

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 March 31, 2025,

there were 46,230,934 shares of common stock and 264,043 shares of preferred stock issued and outstanding.

As of December 31, 2024, there

were 45,864,503 shares of common stock and 0 shares of preferred stock issued and outstanding.

Stock Based Compensation

issued an aggregate of 100,904 shares of common stock during and as of the quarter ended September 30, 2024, pursuant to reAlpha Tech

Corp.’s 2022 Equity Incentive Plan (the “2022 Plan”) described below.

Equity Incentive Plan

We maintain the 2022 Plan, under which we may grant

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

The compensation committee of our board of directors

administers the 2022 Plan.

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

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

3,697,961 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.

The 2022 Plan permits the discretionary award

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

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

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

in the 2022 Plan).

The compensation committee has the sole discretion

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

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

The plan administrator determines the exercise or purchase

price of each award, to the extent applicable.

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

by will or the laws of descent and distribution.

Unless otherwise provided by the participant’s

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

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

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

options or shares shall be forfeited.

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

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

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

twelve (12) months thereafter.

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

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

The 2022 Plan also provides the Company with a right of repurchase

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

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

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;

without stockholder approval if required by applicable law.

We account for warrants as either equity-classified

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

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

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

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

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

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

This assessment, which requires

the use of professional judgment, is conducted at the time of the warrant’s issuance and as of each subsequent quarterly period

end date while the warrants are outstanding.

For issued or modified warrants that meet all

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

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

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

Changes in the estimated fair

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

The Warrants issued in connection with the follow-on

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

warrants are classified as equity.

On October 23, 2023, pursuant to the terms of

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

common stock (the “GEM Warrants”).

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

share, which exercise price was subsequently adjusted to $ 371.90 after the Company’s most recent public offering and the exercise

price of the GEM Warrants is subject to further adjustments specified therein.

Due to an ongoing dispute with GYBL regarding the GEM Warrants,

there is uncertainty about the enforceability of the GEM Warrants and their classification under ASC 480 and ASC 815.

If the dispute is

not resolved through negotiations and is adversely determined against us, we may be required to reassess the classification of the GEM

Warrants, which could lead to them being recorded as liabilities instead of equity.

This reassessment could adversely impact our financial

statements and results of operations.

See “Note 16 - Subsequent Events” for further information.

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

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

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

with the GEM Warrants, the “Warrants”).

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

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

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

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

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

We believe the likelihood that any Warrant holders will exercise their

warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our common stock.

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

$ 5.00 per share, in the case of the Follow-On Warrants, it is unlikely that the holders of the Warrants will exercise their warrants.

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

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

Additionally, as noted above, due to the ongoing dispute with GYBL regarding the GEM Warrants, pursuant to which we are seeking

to void the GEM Warrants, there is uncertainty about the enforceability of the GEM Warrants and method of calculating its exercise price

adjustment, which may impact the exercisability thereof.

See “Note 16 - Subsequent Events” for further information.

Consequently,

no adjustments have been made on the exercise price of GEM Warrants based on the one-year anniversary adjustment of such warrants.

Our analysis is based on the trading price of our common stock as of November

11, 2024, which was $ 1.00 per share.

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

These shares were issued without any restrictions.

We maintain the reAlpha Tech Corp.

Incentive Plan (as amended, 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 3,230,961 remain available for issuance.

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.

Short-Term Incentive Plan

On February 4, 2025, the compensation committee

of the board of directors (the “Compensation Committee”) approved the Company’s 2025 Short-Term Incentive Plan (“STIP”),

providing for quarterly awards of performance-based restricted stock units (“RSUs”) under the 2022 Plan.

The STIP is designed

to reward key employees and executives based on the achievement of quarterly performance targets tied to organic revenue, brokerage transactions,

and the quality of acquisitions.

Restricted Stock Units

The Company measures compensation cost for all

stock-based awards granted to employees, directors, and consultants based on the grant-date fair value of the award in accordance with

ASC 718, Compensation – Stock Compensation (“ASC 718”).

The fair value of restricted RSUs is based on the closing market

price of the Company’s common stock on the date of grant.

The Company accounts for stock-based compensation in accordance with ASC

For awards with graded vesting features, the Company recognizes compensation expense on a straight-line basis over the requisite

service period for each separately vesting portion of the award, treating the award as, in-substance, multiple awards, in accordance with

This method results in a front-loaded expense pattern that aligns more closely with the vesting schedule of the award.

During the quarter ended March 31, 2025, the Company

granted 550,000 RSUs under the 2022 Plan to certain of its employees, 50,000 of which RSUs were forfeited in connection with the termination

of an employee of the Company.

These awards are subject to time-based vesting, with 100 % of the RSUs vesting over a two-year period from

the date of grant, subject to continued service and other terms and conditions.

For the quarter ended March 31, 2025, the weighted-average

grant-date fair value of RSUs granted during such period was $ 1.84 , based on the grant-date closing prices of the Company’s common

The weighted-average fair value was calculated by multiplying the number of RSU awards granted by their respective grant-date fair

values, divided by the total number of RSU awards granted during the period.

Summary of RSU activity for the three

months ended March 31, 2025 follows:

Balance as on December 31, 2024

RSUs forfeited

Balance as on March 31, 2025

Subject to the terms and conditions of the 2022

Plan and any related RSU award agreements, the RSUs will be scheduled to vest in accordance with the following schedule:

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.

Ending balances for the 2022 Plan as of March

31, 2025, is as follows:

Outstanding restricted stock units

Reserved but unissued shares under the 2022 Plan

Reserved but unissued shares at end of period

There were no changes to the classification of

the Warrants (as defined below) during the three months ended March 31, 2025.

Additional details regarding the initial classification

and terms of the Warrants are provided in Note 14 to the consolidated financial statements included in the Form 10-K.

The warrants issued in November 2023 to purchase

up to 2,400,000 shares of our common stock, as adjusted from time to time (the “Follow-On Warrants”), to certain holders in

connection with our follow-on public offering continue to meet the criteria for equity classification.

As of March 31, 2025, as a result

of anti-dilution adjustments in accordance with the terms of the Follow-On Warrants, the exercise price of the Follow-On Warrants was

reduced to $ 1.44 per share, and the number of shares issuable upon exercise increased to approximately 8,333,336 .

Subsequent to the quarter

ended March 31, 2025, the exercise price of the Follow-On Warrants was further reduced to $ 0.75 in connection with the Warrant Inducement

(as defined below) (see “Note 19 – Subsequent Events – Warrant Inducement Transaction” for more details).

The warrants issued to GEM Yield Bahamas Limited

(“GYBL”) in October 2023 (the “GEM Warrants,” and together with the Follow-On Warrants, the “Warrants”)

in connection with that certain Share Purchase Agreement, dated as of December 1, 2022 (the “GEM Agreement”), by and among

us, GYBL, and GEM Global Yield LLC SCS (“GEM Yield”, and together with GYBL, “GEM”), remain classified as equity

The Company is currently involved in litigation regarding the enforceability and adjustment provisions of the GEM Warrants.

As of March 31, 2025, no reclassification or adjustment to the exercise price of the GEM Warrants has been made.

In connection with the acquisition of Rhove on

March 24, 2023, the Company granted certain sellers and participating investors the right to purchase up to 1,263,000 shares of the Company’s

common stock (the “Rights”) at a fixed exercise price of $ 10.00 per share.

The Rights were exercisable for a period of two

years following the acquisition date and expired unexercised on March 24, 2025.

The terms of the Rights were fixed at issuance and not

modified during their contractual life.

At inception, the Rights were determined to meet

the criteria for equity classification under ASC 480 and ASC 815, and

were recorded as a component of additional paid-in capital.

In accordance with this classification, the Rights were not subject to remeasurement

at each reporting period.

The expiration of the Rights resulted in no impact to the Company’s condensed consolidated statements

of operations or cash flows for the three months ended March 31, 2025.

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.

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

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 September 30, 2024 were as follows:

Warrant activity as of March 31, 2025 were as

Issue date Period ended Contractual

1 unchanged sentence

Outstanding Weighted

Exercise Price Average

Rhove Rights issued on March 24, 2023 03/04/2023 09/30/2024 2 1,263,000 10.00 0.42

Price Average

GEM Warrants Issued on October 23, 2023 10/23/2023 03/31/2025 5 1,700,884 371.9 3.56

Follow-On Warrants Issued on November 21, 2023 11/21/2023 03/31/2025 5 8,333,336 1.44 3.64

Warrants outstanding on September 30, 2024 5,363,884 122.52 3.24

Warrants outstanding on March 31, 2025 10,034,220 64.24 3.63

Shelf Registration Statement on Form S-3

On November 26, 2024,

the Company’s shelf registration statement on Form S-3 (File No.

333-283284) was declared effective by the SEC.

This registration

statement allows the Company to offer and sell, from time to time, common stock, preferred stock, warrants, subscription rights, and units

in one or more offerings, subject to market conditions and applicable regulatory limitations.

The Company entered into an At the Market

Sales Agreement (the “AGP Sales Agreement”) with A.G.P.

as sales agent to establish an “at the market” offering

program (an “ATM”) on December 19, 2024, under which we were able to offer and sell shares of our common stock having an aggregate

offering price of up to $ 14,275,000 .

The AGP Sales Agreement was terminated effective March 29, 2025.

During the three months ended March 31, 2025,

the Company issued 160,879 shares of its common stock under its ATM program at a weighted-average price of $ 1.44 per share pursuant to

the AGP Sales Agreement, for total gross proceeds of approximately $ 231,235 .

The net proceeds, after deducting sales commissions and other

offering expenses, from such sales of our common stock under the AGP Sales Agreement was approximately $ 224,298 , which were used to fund

working capital and general corporate purposes.

In connection with the sale of the 160,789 shares of our common stock under the AGP Sales

Agreement during the three months ended March 31, 2025, we paid A.G.P.

a cash commission equal to $ 6,937 .

There were no issuances under

the ATM program during the fiscal year ended December 31, 2024.

As of March 31, 2025,

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 any related “at

the market” offering sales agreement or other securities offerings.

Note 16 - 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.

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.

Pursuant to the terms of 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

1 unchanged sentence

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

Acquisition of USRealty, LLC

On March 19, 2025, the Company entered into a

Mutual Settlement and Release Agreement (the “Settlement Agreement”) with Unreal Estate Inc.

(“Unreal Estate”)

to resolve certain claims and disputes between us and Unreal Estate related to their respective obligations under (i) the Membership Interest

Purchase Agreement, dated as of November 20, 2024 (the “MIPA”), with Unreal Estate LLC (“Unreal”), USRealty Brokerage

Solutions, LLC (“US Realty”) and Unreal Estate, and (ii) the Letter Agreement, dated as of November 20, 2024 (the “Letter

Agreement”), with Unreal and Unreal Estate, and the transactions contemplated thereby (the MIPA and Letter Agreement together, the

“Unreal Agreements”).

Pursuant to the Settlement Agreement, we agreed to pay Unreal Estate a total sum of $ 80,000 in cash

within one business day following Unreal Estate’s execution and delivery of the Settlement Agreement, and the parties agreed that

we will retain full ownership of and control over the membership interests of US Realty that we had acquired pursuant to the MIPA.

upon execution of the Settlement Agreement, the Letter Agreement was terminated and related promissory note issued thereunder to us in

the original principal amount of $ 60,000 was cancelled.

These amounts were expensed in full as of December

31, 2024, and no further accounting impact was recorded in the quarter ended March 31, 2025.

Acquisition Agreement – GTG Financial

As part of the GTG Financial, Inc.

the Company agreed to pay deferred cash consideration totaling $ 1,344,750 in three tranches:

30 % on the 120th day, 30 % on the 150th day,

and 40 % on the 180th day following the closing date.

Contingent Consideration and Compensation

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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”)

Acquisition Agreement – Be My Neighbor

The Company’s agreement with Be My Neighbor

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is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings.

As of September 30, 2024, the Company’s

contingent consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy.

During the period ended

March 31, 2025, the company performed fair value analysis for contingent consideration related to BMN acquisition and recorded $ 93,000

as loss from increase in fair value.

Acquisition Agreement – GTG Financial

On February 20, 2025, the Company completed the

acquisition of GTG Financial, a mortgage brokerage, for total consideration of up to $ 4.2 million, including preferred stock, restricted

common stock, deferred cash payments, and performance-based earn-out payments.

The earn-out payments, which are based on GTG’s achievement

of specified revenue and EBITDA targets over three annual periods, may be settled in cash or stock at the Company’s discretion.

As of March 31, 2025, the Company recorded the present value of the contingent consideration at $ 1,287,000 , classified as a Level 3 liability

in the fair value hierarchy.

As of March 31, 2025, the Company’s contingent

consideration liabilities related to acquisitions are categorized as Level 3 within the fair value hierarchy.

Contingent consideration

was valued at September 30, 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.

was valued at March 31, 2025 using unobservable inputs, primarily internal revenue forecasts.

Contingent consideration was valued at the

time of acquisitions and have included using the Scenario based simulation method.

The development and determination of the unobservable

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assistance of a third-party valuation specialist.

As of September 30, 2024, the Company’s

contingent consideration liabilities current and non-current balances were as follows:

As of September 30, 2024

As of March 31, 2025, the Company’s contingent

consideration liabilities, non-current balances were as follows:

As of March 31, 2025

consideration

2 unchanged sentences

Contingent consideration, non-current - Naamche

Contingent consideration, non-current - GTG Financial

Contingent consideration, non-current - BMN

Total contingent consideration, net of current portion

Total contingent consideration

Legal Matters

India Proceeding Involving Giri Devanur

Devanur became the CEO of an India-based

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

Gandhi City Research Park was liquidated

as a result of the Lehman Brothers collapse in 2009.

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

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

In 2014, the Cubbon Park Police dismissed all claims.

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

In November 2018, the Lower

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

Devanur petitioned the High Court to quash the summons.

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

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

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

On December 4, 2023, Mr.

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

Police’s decision and close Mr.

Devanur’s criminal case.

Devanur is vigorously contesting this petition.

Malpractice Lawsuit

On May 8, 2023, the Company filed a malpractice lawsuit

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

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

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

the “Buchanan Legal Counsel”).

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

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

to the Company offering and selling securities in those states.

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

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

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

The Company is seeking the forfeit of all legal fees associated

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

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.

Except as noted below, there have been no material

changes to the legal proceedings disclosed in the Form 10-K.

The Company continues to monitor the status of those proceedings, and developments

will be disclosed in future filings as necessary.

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”), claiming that GYBL

operated as an unregistered broker-dealer in violation of the Exchange Act.

We are seeking to void the GEM Warrants, or

alternatively, a declaratory judgment determining that the GEM Warrants’ terms govern the exercise price adjustment

calculation rather than the related GEM Agreement’s terms.

On January 17, 2025, GYBL moved to dismiss our complaint, and, on

March 14, 2025, the Court granted GYBL’s motion to dismiss our complaint relating to the lawsuit against GYBL.

2025, we filed an appeal of the Court’s decision dismissing our case to the United States Court of Appeals for the Second

Circuit (the “Second Circuit”).

The briefing schedule at the Second Circuit is being held in abeyance in order to allow two previously filed appeals,

filed by two other public companies on identical issues against other similar investors, be resolved first.

However, if and when the

appellate briefing moves forward, there is no assurance that it will be successful.

Following the lower Court’s dismissal of our complaint, on March

19, 2025, GYBL commenced a separate action against us in the Court (the “GYBL Action”).

The GYBL Action concerns the GEM Warrants,

and it asserts two causes of action against us:

(1) breach of the terms of the GEM Warrants, and (2) declaratory relief concerning the

validity and enforceability of the GEM Warrants.

In addition to the declaratory relief, GYBL is seeking monetary damages in an amount

to be determined at trial, specific performance of the GEM Warrants and attorneys’ fees and litigation costs.

Our time to respond

to the complaint has not yet expired and we continue to vigorously defend against GYBL’s claims and litigate our legal rights to

the fullest extent.”

Note 17 - Segment Reporting

In November 2023, FASB issued ASU 2023-07.

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

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

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

Existing guidance, which is based on a management

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

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

We have two reportable segments

based on our business units:

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

Our chief operating

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

about allocating resources and assessing performance for the entire Company.

Three months Ended

September 30,

Nine months Ended

September 30,

Revenue by segment

Technology services

Rental business

Consolidated revenue

Segment cost of revenue

In November 2023, the Financial Accounting Standards

Board issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment

Disclosures (“ASU 2023-07”), which requires additional disclosure of significant segment expenses included in the reported

measure of segment profit or loss and regularly provided to the Chief Operating Decision Maker (the “CODM”).

It also requires

disclosure and a description of the composition of other amounts by reportable segment, disclosure of a reportable segment’s profit

or loss and assets currently required by Topic 280 in interim periods and disclosure of the CODM’s title and process for assessing

a reportable segment’s profit or loss.

The new guidance was effective for fiscal years beginning after December 15, 2023 and interim

periods beginning after December 15, 2024.

The Company adopted ASU 2023-07 in the fourth quarter of 2024, noting no material impact on

its consolidated financial statements.

We have one reportable segment based on our business

technology services.

Rental business

Consolidated segment cost of revenue

Consolidated segment gross margin

Segment operating expense

Our CODM has been identified as the Chief Executive Officer and the Chief Operating Officer and President,

each of which reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.

The Company’s segment results are as follows:

Three months Ended

Technology services

Rental business

Consolidated segment operating expenses

Total consolidated segment operating loss

Segment other(expenses) income

Technology services

Rental business

Total consolidated segment operating loss

Corporate Expenses

Cost of revenues

Operating expenses

( 1,304,568 )

( 3,552,021 )

( 2,090,352 )

Other (expenses) income , net

( 1,679,354 )

( 4,367,849 )

Total consolidated loss before income taxes

$ ( 2,098,574 )

Wages, benefits and payroll taxes

Marketing and advertising

Professional and legal fees

All other segment items(1)

Total operating expenses

Income from operations

$ ( 2,422,258 )

$ ( 1,306,658 )

(1) All other segment items include depreciation and amortization

and other operating expenses.

Note 18 - Discontinued Operations

There have been no changes to the Company’s

discontinued operations since the filing of its Form 10-K.

As previously disclosed, during the year ended December 31, 2024, the Company

made a strategic decision to fully discontinue its Rhove operations, which previously operated under the rental business segment.

decision was made due to the lack of future revenue potential and the absence of funding to further develop the platform.

As of March 31, 2025, Rhove continues to be classified

as a discontinued operation in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations.

The following table provides detail of the discontinued

operations as of March 31, 2025 and December 31, 2024:

Rhove Related Assets

Current Assets

Other Current Assets

Current Liabilities

Accounts payable and other accrued liabilities

Other Current liabilities

Total liabilities - Rhove

The following table represents the statement of

operations for discontinued operations as of each reporting period:

For the Period Ended

Cost of revenues

Discontinued Operating Expenses

Dues and subscriptions

Professional and legal fees

Other operating expenses

Total operating expenses

Discontinued Operating Loss

Discontinued Other expense (income)

Other expense (income)

Total other (expense) income

Net Loss from discontinued operations before income taxes

Note 19 - Subsequent Events

The Company has evaluated subsequent events as

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

In connection with acquisition of Be My Neighbor

on September 8, 2024, the Company agreed to pay $ 1.5 million in cash as deferred consideration.

A cash payment of $ 1.5 million was made

on October 1, 2024, as part of the deferred consideration arrangement.

See “Note 11 – Deferred Consideration” for further

On November 1, 2024, the Company filed a

lawsuit against GYBL in the United States District Court for the Southern District of New York (the “Action”).

Action, the Company has asserted two causes of action against GYBL:

(1) rescission of the GEM Warrants 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 securities dealer, and (2) 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 in the GEM Agreement.

Warrant Inducement Transaction

On April 6, 2025, we entered into inducement offer

letter agreements (the “Inducement Letters”) with certain holders (the “Holders”) of the Follow-On Warrants.

to the Inducement Letters, the Holders agreed to exercise for cash their Follow-On Warrants at a reduced exercise price from the then-current

exercise price of $ 1.44 per share of $ 0.75 per share (the “Reduced Exercise Price”), which resulted in the issuance of 4,218,751

shares of common stock, in consideration for our agreement to issue in a private placement new common stock purchase warrants (the “New

Warrants”) to purchase an aggregate of 8,437,502 shares of common stock (the “New Warrant Shares”) (such transaction,

the “Warrant Inducement”).

In connection with the Warrant Inducement, we also agreed to reduce the exercise price of the Follow-On

Warrants to purchase an aggregate of 4,114,582 shares of common stock for all holders of the Follow-On Warrants not participating in the

Warrant Inducement to the Reduced Exercise Price for the remaining term of the Follow-On Warrants.

The exercise of the New Warrants and

issuance of the New Warrant Shares is subject to stockholder approval in accordance with Nasdaq Listing Rule 5635(d).

The closing of the Warrant Inducement occurred

on April 8, 2025, and we received aggregate gross proceeds of approximately $ 3.1 million from the exercise of the Existing Warrants, before

deducting related placement agent fees and other expenses payable by us.

These transactions occurred subsequent to the reporting period

and are not reflected in the accompanying condensed consolidated financial statements as of March 31, 2025.

Debt Redemption Payment – Streeterville

On April 7, 2025, the Company received a written

redemption notice (a “Redemption Notice”) under its outstanding Note issued pursuant to that certain Purchase Agreement, dated

as of August 14, 2024 (the “Purchase Agreement”), with Streeterville, which requested payment for a redemption amount of $ 525,000 .

The Company paid the full amount in cash on April 8, 2025 and April 9, 2025 .

Following this payment, the outstanding principal balance

under the Note was reduced to $ 5,202,328.25 as of April 7, 2025.

As the event occurred after the reporting period, no adjustments have

been made to the condensed consolidated financial statements as of March 31, 2025.

On May 1, 2025, the Company received a Redemption

Notice from Streeterville under its outstanding Note issued pursuant to the Purchase Agreement, which requested payment for a redemption

amount of $ 545,000 .

The Company paid $ 450,000 on May 2, 2025 and the remaining $ 95,000 on May 5, 2025.

Following these payments, the outstanding

principal balance under the Note was reduced to $ 4,665,104.98 as of May 1, 2025.

As this event occurred after the March 31, 2025 balance

sheet date, no adjustment was made to the condensed consolidated financial statements.

RSU Awards to Executive Officers and Certain

On April 30, 2025, the Company issued an aggregate

of 771,940 RSU awards for the quarter ended March 31, 2025 to certain of the Company’s employees, including its executive officers,

under the 2022 Plan.

These RSU awards were issued:

(i) as additional equity compensation to certain employees of the Company, in accordance

with the Compensation Committee approval of such additional equity compensation on April 28, 2025, and (ii) in connection with the Company’s

achieved results during the quarter ended March 31, 2025, for each of the performance metrics set forth in the STIP and in accordance

with the terms thereof.

Subject to the terms and conditions of the 2022

Plan, any related RSU award agreement and the STIP, as applicable, the RSUs will vest in accordance with the following schedule:

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.

Sea Easy Capital Financing Arrangement Loans

On April 20, 2025, AiChat drew additional loans under its financing

arrangement with SEA in an aggregate amount of $$ 33,085 , which are subject to the same terms and conditions of previous loans drawn under

such financing arrangement.

SPECIAL NOTE REGARDING

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

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

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

Our ability to integrate any acquisitions successfully;

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

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

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

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

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

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

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

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

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

● Our limited cash, history of

losses, and our expectation that we will continue to experience operating losses and negative cash flows in the near future;

● Our ability to raise capital

and to continue as a going concern;

● We are employing a business

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

● Our technology that is currently

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

● Failure to integrate any acquisitions

successfully;

● We intend to utilize a significant

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

● The implementation of artificial

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

● The real estate and real estate

technology industries in which we participate are highly competitive, and we may be unable to compete successfully with our current and/or

future competitors;

● Our business depends significantly

on the health of the U.S.

residential real estate industry and changes in general economic conditions;

● Our ability to retain our executive

officers and other key personnel;

● Our ability to attract or retain customers and users of our technologies;

● The laws and regulations regarding

privacy, data protection, consumer protection, and other matters are subject to change and uncertain interpretation, and could result

in claims, changes to our business practices, monetary penalties, or otherwise harm to our business.

Forward-looking

1 unchanged sentence

“Part I, Item 2.Management’s

Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A “Risk Factors.” The

Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A.

Risk Factors.” The

forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements