What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-16 compared with 2024-11-12 · 564 added, 610 removed, 83 unchanged (93% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

condensed consolidated financial statements and related notes included elsewhere in this report, as well as our audited financial statements

and related notes included in our most recent Transition Report on Form 10-KT for the eight months ended December 31, 2023 (the “Form

In addition to historical information, this discussion and analysis here and throughout this report contains forward-looking

statements that involve risks, uncertainties and assumptions.

Our actual results may differ materially from those anticipated in these

forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled “Risk

Factors” in our Form 10-KT.

and related notes included in our most recent Annual Report on Form 10-K for the twelve months ended December 31, 2024, as amended on

May 13, 2025 (the “Form 10-K”).

In addition to historical information, this discussion and analysis here and throughout this

report contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results may differ materially

from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described

in the section titled “Risk Factors” in our Form 10-K.

Business Overview

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

called “Claire”.

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

streamlined experience for those on the journey to homeownership.

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

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

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

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

and completing property acquisitions.

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

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

reAlpha’s capabilities

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

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

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

market the platform.

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

operations have been halted.

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

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

Further, as part of our growth strategy, we intend

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

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

To advance such strategy, during the second and third quarters

of 2024 we announced the acquisitions of Naamche, Inc.

are a real estate technology company developing an end-to-end homebuying platform, which we have named reAlpha (hereinafter referred to

as the “reAlpha platform”).

Our goal is to offer through our AI-powered platform a more affordable, streamlined experience

for those on the journey to homeownership.

The reAlpha platform integrates AI-driven tools to offer, among others, tailored property recommendations,

an intuitive visual interface, and certain homebuying services, including realty services, mortgage brokering services, and digital title

and escrow services within the platform.

We developed the reAlpha platform as a commitment to eliminate traditional barriers to home ownership

and make it more accessible and transparent.

reAlpha platform assists homebuyers with tasks such as mortgage pre-approval, booking tours, sending offer letters and completing property

acquisitions.

The reAlpha platform also provides market insights, detailed property data, and uses large language models to answer queries

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

The reAlpha platform’s capabilities

are complemented and supported by licensed real estate agents with reAlpha Realty, LLC, our in-house brokerage firm.

Although the reAlpha

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

end of 2026 depending on numerous factors, including, among other things, our ability to acquire and maintain real estate and mortgage

licenses in all 50 U.S.

states and the District of Columbia, obtain additional MLS data, create and run successful marketing campaigns

nationwide to gain brand recognition and increase our geographical reach and build a scalable technology infrastructure.

are continuously working to commercialize, enhance and refine our AI technologies and the reAlpha platform to continue generating technology-derived

Further, as part of our growth strategy, we intend to continue identifying and acquiring companies that are complementary to

our business, and we intend to generate revenue from integrating such acquired companies and their capabilities into our business and

our reAlpha platform.

To advance such strategy, since the beginning of 2024 we have announced the acquisitions of Naamche,

and its Nepal counterpart entity Naamche, Inc.

(collectively, “Naamche”),

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

(“Be My Neighbor”).

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

additional capabilities to the reAlpha platform.

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

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

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

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

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

platform, both through the web platform and IOS application.

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

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

estate brokerages.

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

in these verticals to add additional U.S.

state licenses and potential revenue opportunities.

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

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

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

(collectively, “Naamche”), AiChat Pte.

Ltd (“AiChat”),

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

(“GTG Financial”) .

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

services under our umbrella of product offerings, and, as further described below, additional operational and service-related capabilities

to the reAlpha platform.

instance, as a result of the acquisition of Be My Neighbor and GTG Financial, our in-house mortgage brokerage that operates through the

reAlpha platform is now licensed to operate in 30 U.S.

Additionally, because of our acquisition of Hyperfast, we now can offer

title, closing and settlement services in 3 U.S.

As a result of these acquisitions, consumers using the reAlpha platform have

access to these homebuying services directly in the platform, both through the web platform and iOS application.

We expect to continue

seeking additional strategic acquisitions that we believe will add additional sources of potential revenue and services to homebuyers

using the reAlpha platform, including, but not limited to, home-showing companies, wholesale mortgage lenders, companies providing services

for post-closing services (such as utility hookups, among others) and real estate brokerages.

Additionally, although we have already acquired

two mortgage brokerage firms and a title company, we may consider further acquisitions of companies providing such services to increase

the number of U.S.

states we are licensed to operate in and the potential revenue opportunities associated with expanding our geographical

markets and reach of the reAlpha platform.

shifting our focus towards the development of our AI technologies and the reAlpha platform, our operational model was asset-heavy and

built on utilizing our proprietary AI-powered technology tools for the acquisition of real estate, converting them into short-term rentals,

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

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

We may resume the complementary asset-heavy model

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

business model.

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

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

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

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

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

technology services segment offers and develops AI based products and services to customers in the real estate industry.

We are actively

developing four operating technologies that are in varying stages of development:

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

platform, reAlpha.

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

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

In the first quarter of 2024, we decided to halt these

operations due to macroeconomic conditions, such as higher interest rates, inflation, and elevated property prices, which conditions persisted

throughout the fiscal year 2024.

This led us to sell our last real property asset for such operations, and to recognize the impairment

of goodwill and intangible assets under the rental business segment.

As a result, in the first quarter of 2025, our board of directors

approved to discontinue our short-term rental business operations entirely.

The discontinuation of our rental business segment operations

meets the criteria to be reported as discontinued operations (see “Note 18 – Discontinued Operations” for more information)

technology services segment is currently our only reportable segment following the approval by our board of directors to discontinue our

rental business segment operations (see “Note 18 – Discontinued Operations” and “Note 17 – Segment Reporting”

for more information).

Our technology services segment offers and develops AI-based products and services to customers in various industries,

including, but not limited to, real estate, retail, hospitality and education industries.

Our technology development efforts are currently

focused on the development and enhancement of the reAlpha platform.

Technology Services

(formerly “Platform Services”)

We seek to differentiate ourselves

3 unchanged sentences

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

current technology services segment technologies include:

(i) reAlpha, (ii) reAlpha BRAIN;

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

App and (vi) AiChat’s conversational platform.

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

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

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

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

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

We also expect that our reAlpha platform will drive additional

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

customer base.

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

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

Rental Business

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

and elevated property prices.

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

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

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

that meet our internal investment criteria, or the “Investment Criteria,” which is analyzed and determined by our technologies,

for syndication purposes, which short-term rental properties are referred to as “Target Properties.” Once the Target Properties

are acquired, they are prepared for rent and listed on short-term rental sites, and, when warranted, disposed of for profits.

to make investing in our Target Properties available to investors via our subsidiary, Roost Enterprises, Inc.

along with Rhove Real Estate 1, LLC, reAlpha Acquisitions Churchill, LLC and future Syndication LLCs (the “Rhove SBU”), will

create and manage limited liability companies (each, a “Syndication LLC”) to syndicate one or more of the Target Properties

through exempt offerings.

Once the Syndication LLCs are in place, Rhove will launch exempted offerings to sell membership interests in

such properties to investors, through the purchase of membership interests in the Syndication LLCs, pursuant to Regulation A or Regulation

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

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

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

and become Syndicate Members.

We intend to generate revenue through our property Syndications on the reAlpha App to the extent we resume

these operations.

Members differ significantly to the holders of our common stock.

Rights among Syndicate Members may also vary among each other depending

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

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

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

Likewise, acquiring shares of our common stock

will not provide the stockholders the status of Syndicate Member.

Both Syndicate Members and our stockholders will receive the same quarterly

financial metric information of our listed properties through the reAlpha App and the reAlpha website, which will also be available to

the general public without a login, concurrently with our condensed consolidated quarterly results (as more fully described under “Segments

– Platform Services” above), to the extent we resume these operations.

Syndicate members that have access to the

reAlpha App will only receive personalized financial information respective to their individual holdings in each of our Syndications.

date, we have not developed a secondary trading market for equity interests in our Syndication LLCs.

While the potential establishment

of such a market may be considered in the future, we have not made any decisions to develop a secondary trading market at this time.

addition to managing the property operations, whether internally or through third-parties, we will also manage the financial performance

of the asset, such as evaluating if the after-repair value or appreciated value of the property is higher than the purchase price, or

whether the property is ready to generate the expected profitability.

Once our business model is fully implemented, we expect that Syndicate

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

revenue model revolves around our realty services (e.g., assisting a homebuyer with finding, touring, and closing on homes), mortgage

brokering services (e.g., finding and originating a mortgage for the homebuyer that fits their financial situation, needs, credit, and

location), and digital title and escrow services (e.g., title, closing and settlement fees), offered through the reAlpha platform, which

is currently under limited availability, and services offered by our subsidiaries, such as AiChat, Naamche, Be My Neighbor, Hyperfast

and GTG Financial.

currently offer a commission refund model through the reAlpha platform as part of our strategy to provide an integrated and customer-centric

homebuying experience.

Under this model, homebuyers may receive up to 75% of any buy-side brokerage commissions paid, which typically

range from 2.5% to 3% of a home’s sale price depending on the geographical market, in connection with the purchase of a home through

the reAlpha platform as a rebate or refund (hereinafter referred to as the “commission refund”).

This commission refund is

paid to the homebuyer by applying such commission refund towards closing costs or by adding the refund to a homebuyer’s down payment,

as applicable and subject to market-by-market minimums.

The percentage of the commission refund available to a homebuyer is determined

based on their use of eligible integrated homebuying services offered via the reAlpha platform, such as realty, mortgage brokering and

digital title and escrow services.

Currently, homebuyers can receive 25% commission refund when using one homebuying service, 50% when

using two homebuying services and 75% when using all three homebuying services.

The commission refund model for the reAlpha platform

is currently in a testing phase and remains subject to change as we evaluate customer adoption, expand into new geographical markets

and further develop our platform and/or expand the number of homebuying services provided thereunder.

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

by the end of 2026.

In order to expand the availability of the reAlpha platform, and services provided thereunder, nationwide, we will

need to obtain the relevant real estate and mortgage licenses in the U.S.

states we are not yet licensed in, and, until we obtain such

licenses, the reAlpha platform will remain under limited availability for homebuyers in 20 counties in Florida.

While the reAlpha platform

is under limited availability, we will continue offering standalone mortgage brokerage services through our subsidiaries, Be My Neighbor

and GTG Financial, in 30 U.S.

States and digital title and escrow services through our subsidiary, Hyperfast, in 3 U.S.

plan to continue acquiring companies in the real estate market that provide services relating to the homebuying process, including, but

not limited to, mortgage brokerage firms, title and escrow service providers, home insurance providers and others that are complementary

to our business, which we expect to generate revenues by offering such homebuying services through the reAlpha platform, or as standalone

offerings to customers.

We expect that our reAlpha platform will drive additional customers to these acquired companies through users

interacting and buying homes on the reAlpha platform, which will expand their overall potential customer base.

Recent Developments

Acquisition of AiChat Pte.

On July 12, 2024, we entered

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

incorporated in the Republic of Singapore, AiChat10X Pte.

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

(the “Founder”).

Under the Acquisition Agreement, we acquired 85% of the outstanding ordinary shares of AiChat, an AI-driven

company specializing in conversational customer experience solutions, from the Seller.

The remaining 15% of AiChat’s shares will

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

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

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

consisting of:

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

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

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

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

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

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

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

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

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

we agreed to subscribe for and purchase from AiChat:

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

for a subscription price of $60,000;

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

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

The Tranche Shares will be

subject to a 90-day restrictive period (the “Restricted Period”) following issuance, during which the Seller cannot sell,

transfer, or otherwise dispose of the shares or request their registration under the Securities Act.

After the Restricted Period, the

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

in the Seller.

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

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

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

Additionally, we agreed to

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

The Acquisition Agreement

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

Post-acquisition, the Seller will indemnify

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

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

Acquisition of Controlling Interest of Hyperfast

On July 24, 2024, we entered

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

Breschi and Kristen Britton

(the “Sellers”).

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

a Florida-based company specializing in real estate closings and title insurance (the “Hyperfast Acquisition”).

The Hyperfast

Purchase Agreement includes standard representations, warranties, and covenants typical for transactions of this nature.

In conjunction with the Hyperfast

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

The Operating Agreement outlines several key provisions, including:

annual license fees to be paid to the Sellers,

contingent on their continued service with Hyperfast;

annual management fees based on Hyperfast’s operating margin;

a right of first

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

and various rights for us, as the managing

member, to acquire the Sellers’ membership interests, and for the Sellers to sell their respective interests in Hyperfast, all in

accordance with the terms specified in the Operating Agreement.

Streeterville Capital,

LLC Note Purchase Agreement and Secured Promissory Note

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

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

The Note carries an original issue discount of $435,000 and we agreed to pay $20,000 to the Lender to cover its legal fees, accounting

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

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

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

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

The Note and Purchase

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

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

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

In connection with the Note and

Purchase Agreement, we, Rhove, and subsequently Be My Neighbor, also entered into security agreements and intellectual security agreements

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

subsidiaries entered into a guaranty in favor of the Lender.

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

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

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

Pursuant to the Placement Agency Agreement, we agreed to pay

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

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

In addition, if within nine months of

a closing of a sale of the Note or any additional notes, we complete any financing of equity or equity-linked capital-raising activity

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

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

ATM Program Termination

December 19, 2024, we entered into an At the Market Sales Agreement (as amended from time to time, the “Sales Agreement”)

with A.G.P./Alliance Global Partners (“A.G.P.”).

In accordance with the terms of the Sales Agreement, on March 24, 2025, we

provided notice to A.G.P.

of our election to terminate the Sales Agreement, which termination was effective on March 29, 2025.

March 24, 2025, the Company had sold an aggregate of 160,879 shares of common stock pursuant to the Sales Agreement, resulting in gross

proceeds of $231,235.

Designation of

Series A Convertible Preferred Stock

February 20, 2025, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred

Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware, designating 1,000,000 shares

of the 5,000,000 shares of the authorized but unissued class of the Company’s stock known as preferred stock as Series A Convertible

Preferred Stock (the “Series A Preferred Stock”).

Series A Preferred Stock has a stated value of $20 per share (the “Stated Value”), and a conversion price per share of $20

per share, subject to adjustments provided in the Certificate of Designation (the “Conversion Price”).

The holders of outstanding

shares of Series A Preferred Stock will be entitled to cast the number of votes equal to the number of whole shares of common stock into

which the shares of Series A Preferred Stock held by such holder are convertible at the Conversion Price as of the record date for determining

stockholders entitled to vote on any matter presented to the stockholders of the Company for their action or consideration at any meeting

of stockholders of the Company (or by written consent of stockholders in lieu of meeting).

Further, commencing on the issuance date of

a share of Series A Preferred Stock, each such share of Series A Preferred Stock outstanding and not converted into common stock will

accrue dividends on a daily basis at a per annum rate of 3.0% of the Stated Value, which dividends will be payable no later than 60 calendar

days after the end of each Dividend Period (as defined in the Certificate of Designation) in accordance with and subject to the terms

and conditions of the Certificate of Designation (the “Preferred Dividends”).

If any shares of Series A Preferred Stock are

converted in accordance with and subject to the terms and conditions of the Certificate of Designation on a Conversion Date (as defined

in the Certificate of Designation) during the period after the last day of a Dividend Period and prior to the close of business on the

corresponding Dividend Record Date (as defined in the Certificate of Designation) for such Dividend Period, and the Company has not paid

the entire amount of the Preferred Dividends payable for such corresponding Dividend Period, then the amount of Preferred Dividends with

respect to such shares of Series A Preferred Stock will be added to the Liquidation Amount (as defined below) for purposes of such conversion,

which Liquidation Amount is the amount, as of any date and with respect to any share of Series A Preferred Stock, equal to the sum of

(x) the Stated Value and (y) accrued but unpaid dividends, if any, on such share of Series A Preferred Stock (the “Liquidation Amount”).

If any shares of Series A Preferred Stock are instead converted in accordance with and subject to the terms and conditions of the Certificate

of Designation on a Conversion Date during the period after the close of business on any Dividend Record Date and prior to the close of

business on the corresponding Dividend Payment Date (as defined in the Certificate of Designation), then the amount of Preferred Dividends

with respect to such shares of Series A Preferred Stock (the “Residual Payments”), at the Company’s option, will either

(x) be paid in cash on or prior to the date of such conversion or (y) if not paid in cash, be added to the Liquidation Amount for purposes

of such conversion.

Series A Preferred Stock ranks:

(i) senior to all of the common stock, (ii) senior to any class or series of capital stock of the Company

hereafter created specifically ranking by its terms junior to any Series A Preferred Stock (“Junior Securities”), (iii) on

parity with any class or series of capital stock of the Company hereafter created specifically ranking by its terms on parity with the

Series A Preferred Stock (“Parity Securities”) and (iv) junior to any class or series of capital stock of the Company hereafter

created specifically ranking by its terms senior to any Series A Preferred Stock (“Senior Securities”), in each case, as to

distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

the event of the Company’s liquidation, dissolution or winding up, holders of the Series A Preferred Stock will be entitled to,

subject to the superior rights of the holders of any Senior Securities, (i) receive, in preference to any distributions of any of the

assets, whether capital or surplus, of the Company to the holders of the common stock and Junior Securities and pari passu with

any distribution to the holders of Parity Securities, (a) any Residual Payments and (b) the Liquidation Amount with respect to such shares

of Series A Preferred Stock, in each case, before any payments shall be made or any assets distributed to holders of any class of common

stock or Junior Securities;

and (ii) participate pari passu with the holders of common stock (on an as-converted to common stock

basis and disregarding for such purpose any Beneficial Ownership Limitation (as defined in the Certificate of Designation)) in the remaining

distribution of the net assets of the Company available for distribution.

Series A Preferred Stock is convertible at the option of the holder at any time during the period beginning on the date of issuance of

such Series A Preferred Stock and ending on the date that is 3 years following the respective issuance date thereof (the “Conversion

Period”) into a number of Conversion Shares (as defined below) equal to the Liquidation Amount of such share of Series A Preferred

Stock divided by the Conversion Price, subject to any Beneficial Ownership Limitation.

On the business day after the expiration of the

Conversion Period of a Series A Preferred Stock, each such share of Series A Preferred Stock will automatically convert into a number

of Conversion Shares equal to the Liquidation Amount of such shares of Series A Preferred Stock divided by the Conversion Price, subject

to any Beneficial Ownership Limitation.

Acquisition of

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

On September 8, 2024 (the

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

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

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

Under this agreement, we acquired 100% of the outstanding

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

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

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

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

in the BMN Acquisition Agreement, consisting of:

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

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

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

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

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

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

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

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

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

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

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

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

“Earn-Out Payment”).

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

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

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

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

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

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

Further, if Be My

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

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

The Buyer Shares and any Earn-Out

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

cannot sell, assign, or transfer them.

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

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

If the Shares exceed

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

Launch of reAlpha

AI Labs and Investment in Xmore AI

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

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

We believe that this initiative will provide

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

We expect that the products and technologies

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

commission-free home buying platform.

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

and development capabilities.

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

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

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

by the parties.

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

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

to enterprises in multiple industries.

GTG Financial, Inc.

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.

to and subject to the terms and conditions of the GTG Purchase Agreement, the Company agreed to pay to the Seller an aggregate purchase

price of up to $4,200,000 for the Acquired Shares, subject to the adjustments described below, consisting of:

(i) $281,250 (the “Preferred

Consideration”) in 14,063 shares of Series A Preferred Stock (as defined below) (the “Preferred Shares”), each of which

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

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

(ii) $1,287,000 in 700,055 restricted shares of common stock (the “Company Shares”), at a price per share of $1.84 calculated

based on the volume weighted average price of the common stock as reported on the Nasdaq Capital Market (the “VWAP”) for the

7 calendar days immediately prior to the GTG Closing Date and payable to the Seller within 90 days from the GTG Closing Date;

(iii) $1,344,750

payable in cash (the “Cash Portion”) to the Seller as follows:

(A) 30% of the Cash Portion payable on the 120-day anniversary

of the GTG Closing Date, (B) 30% of the Cash Portion payable on the 150-day anniversary of the GTG Closing Date and (C) 40% of the Cash

Portion payable on the 180-day anniversary of the GTG Closing Date;

and (iv) up to an aggregate of $1,287,000 in potential earn-out payments,

payable in three tranches of up to $429,000 in cash or restricted shares of common stock (the “Earn-Out Shares”), at the Company’s

sole discretion and subject to the adjustments described below, each of which is calculated based on a formula set forth in the GTG Purchase

Agreement and subject to the achievement of certain financial metrics by GTG for three successive measurement periods of 12 months, with

the first measurement period ending 12 months following the 1st of the month after the GTG Closing Date (collectively, the “GTG

Earn-Out Payments,” and each, an “GTG Earn-Out Payment”).

Specifically, each GTG Earn-Out Payment will be payable in

full if GTG achieves certain revenue and EBITDA thresholds for each of the measurement periods, each of which is payable within 120 days

after the end of a measurement period.

If GTG does not meet the revenue and EBITDA threshold for a measurement period, a pro-rated amount

of the GTG Earn-Out Payment for such measurement period will be paid to GTG based on the actual revenue and EBITDA achieved in accordance

with the formula set forth in the GTG Purchase Agreement.

Further, if GTG exceeds the revenue and EBITDA thresholds for any measurement

period, the GTG Earn-Out Payment for such measurement period will not be capped and will be increased accordingly based on the formula

set forth in the GTG Purchase Agreement.

Additionally,

the GTG Purchase Agreement provides that, to the extent that, upon an Automatic Conversion (as defined in the Certificate of Designation),

the aggregate value for the Conversion Shares on the Automatic Conversion Date (as defined in the Certificate of Designation) is less

than the Preferred Consideration, as determined based on the VWAP of such Conversion Shares on the Automatic Conversion Date, then the

Company will pay for such difference in value in cash or in shares of common stock (the “Shortfall Shares,” and together with

the Conversion Shares, Company Shares and Earn-Out Shares, the “GTG Shares”), at the Company’s sole discretion, payable

or issuable to the holder, as applicable, no later than 30 calendar days after the Automatic Conversion Date.

Further, to the extent that

the Company does not pay the Cash Portion in full by the date that is 180 days of the GTG Closing Date, then, beginning on the 181st day

following the GTG Closing Date, the outstanding amount of the Cash Portion will bear interest at a rate per annum equal to 4% and the

Seller will have the right, at the Seller’s sole discretion and to the extent permitted by law, to rescind the transactions contemplated

under the GTG Purchase Agreement, in which case the Seller will return any and all consideration paid by the Company in exchange for all

the Acquired Shares, and the Company will return the Acquired Shares to the Seller, in each case in accordance with and subject to the

terms and conditions of the GTG Purchase Agreement.

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.

aggregate amount of GTG Shares issuable under the GTG Purchase Agreement, for purposes of complying with Nasdaq Listing Rule 5635, may

in no case exceed 19.99% of our outstanding common stock (the “Cap Amount”) immediately prior to the execution of the GTG

Purchase Agreement, or 9,206,230 shares, without stockholder approval of any shares exceeding such amount.

In the event the GTG Shares

issuable pursuant to the GTG Purchase Agreement exceed the Cap Amount, the Company will pay the Seller cash in lieu of such excess shares

of common stock, based on a formula set forth in the GTG Purchase Agreement.

Advertising Agreement

and Investment Agreement with Mercurius Media Capital LP

March 7, 2025, we simultaneously entered into an Advertising Agreement (the “Advertising Agreement”) and an Investment Agreement

(the “Investment Agreement,” and together with the Advertising Agreement, the “Transaction Documents”) with Mercurius

Media Capital LP (“MMC”).

In accordance with the Transaction Documents, the Company agreed to issue and sell to MMC 250,000

shares of Series A Preferred Stock for an aggregate purchase price of $5,000,000 (the “Consideration”).

The Consideration

was paid to the Company in the form of a Credit (as defined in the Advertising Agreement) issued by MMC to the Company at the closing

date in accordance with the terms and subject to the conditions set forth in the Advertising Agreement.

the Advertising Agreement, the Company will have until December 31, 2025, or, if extended pursuant to the terms of the Advertising Agreement

at the request of the Company (the “Extension Period”), March 31, 2026 (such term, as extended pursuant to the terms of the

Advertising Agreement, the “Credit Term”), to utilize its Credit with MMC to purchase advertisements in the Media (as defined

in the Advertising Agreement) related to the Company’s products, services, brands and business, on the terms and subject to the

conditions set forth in the Advertising Agreement.

Any unused portion of the Credit at the expiration of the Credit Term will be forfeited

by the Company, subject to the compliance of MMC with the terms and obligations set forth in the Advertising Agreement.

To the extent

the original Credit Term is extended in accordance with the terms of the Advertising Agreement, the Company will only be able to utilize

a maximum of $1,000,000 of the remaining Credit during such Extension Period.

In order to purchase advertisements in the Media, the Company

will be required to submit Media Credit Orders (as defined in the Advertising Agreement) to MMC, and, upon receipt of those Media Credit

Orders by MMC, the Credit relating to those will be deemed used, provided that all advertisements relating to such Media Credit Order

run on the Media in accordance therewith no later than 90 days after the last date specified in the applicable Media Credit Order, and,

to the extent the advertisements do not run in the applicable Media, such Credit shall be re-added to the Company’s overall Credit

to be used during the Credit Term.

Each of MMC and the Company may terminate the Advertising Agreement at any time in the event of a Material

Breach (as defined in the Advertising Agreement) by the Company or MMC, provided that such Material Breach, if capable of cure or remedy,

has not been cured or remedied by such defaulting party within 60 days of the receipt of written notice of such Material Breach by the

defaulting party.

Additionally,

the Investment Agreement further provides that, to the extent that the aggregate value of the Conversion Shares issued upon the

Automatic Conversion is less than the Consideration, as determined based on the closing price of our common stock, as reported on

the Nasdaq Stock Market (“Nasdaq”) on the applicable Automatic Conversion Date, then the Company shall pay for such

difference in cash or in shares of common stock (the “MMC Shortfall Shares,” and together with the Conversion Shares

issuable to MMC, the “MMC Shares”), at the Company’s sole discretion, no later than 30 calendar days after the

Automatic Conversion Date, on the terms and subject to the conditions set forth in the Investment Agreement.

The Investment

Agreement further provides that at any time during the 2-month period beginning on the closing date of the transactions contemplated under the Transaction Documents, MMC had the right, but not the

obligation, to reinvest up to an additional $5,000,000 in the aggregate in the Company on the same terms and conditions as those set

forth in the Transaction Documents.

As of the date of this filing, MMC’s reinvestment right has expired unexercised.

aggregate amount of MMC Shares issuable under the Investment Agreement, for purposes of complying with Nasdaq Listing Rule 5635, may in

no case exceed the Cap Amount immediately prior to the execution of the Investment Agreement, or 9,228,411 shares, without stockholder

approval of any MMC Shares exceeding such amount.

In the event the MMC Shares issuable pursuant to the Investment Agreement exceed the

Cap Amount, the Company will pay MMC cash in lieu of such excess MMC Shares, based on a formula set forth in the Investment Agreement.

Mutual Settlement

and Release Agreement with Unreal Estate Inc.

November 29, 2024:

(i) we entered into a Membership Interest Purchase Agreement (the “MIPA”), with Unreal Estate LLC

(the “Unreal”), USRealty Brokerage Solutions, LLC (“US Realty”) and Unreal Estate Inc.

Estate”), pursuant to which, on November 20, 2024 we acquired from the Unreal 100% of the membership interests of US Realty

that were outstanding immediately prior to the execution of the MIPA;

(ii) we entered into a Letter Agreement (the “Letter

Agreement”), with Unreal and Unreal Estate, pursuant to which we agreed to purchase an aggregate amount of $600,000 of

convertible promissory notes from Unreal Estate in a series of six installments;

and (iii) Unreal Estate issued and sold to us,

pursuant to the terms of the Letter Agreement, a convertible promissory note in the original principal amount of $60,000 (the

“Unreal Note,” and together with the MIPA and the Letter Agreement, the “Agreements”).

March 19, 2025, we entered into a Mutual Settlement and Release Agreement (the “Settlement Agreement”), with Unreal Estate,

to resolve certain claims and disputes between us and Unreal Estate related to their respective obligations under the Agreements and the

transactions contemplated thereby.

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 Purchase

Settlement Agreement also includes a mutual release of claims whereby each of the Company and Unreal Estate agreed (on behalf of themselves

and their respective affiliates, successors and assigns) to release the other party of any known and unknown claims arising out of or

related to the Agreements and other specified agreements entered into in connection therewith, subject to certain exceptions only with

respect to the release of claims given by us.

to and as a result of the Settlement Agreement, the Unreal Note was cancelled and the parties confirmed the termination of the

Letter Agreement.

April 2, 2025, we entered into an At The Market Offering Agreement (the “Offering Agreement”) with H.C.

Wainwright & Co.,

LLC (“Wainwright.”).

In accordance with the terms of the Offering Agreement, we may offer and sell from time to time through

Wainwright, acting as sales agent, shares of our common stock having an aggregate offering price of up to $7,650,000 (the “Placement

The Placement Shares will be issued pursuant to our shelf registration statement on Form S-3 (File No.

333-283284) filed

with the SEC on November 15, 2024, and declared effective on November 26, 2024.

The Company filed a prospectus supplement dated April

2, 2025, with the SEC in connection with the offer and sale of the Placement Shares.

Warrant Inducement

April 6, 2025, we entered into inducement offer letter agreements (the “Inducement Letters”) with certain holders (the “Holders”)

of existing warrants of the Company to purchase up to an aggregate of 4,218,751 shares of our common stock having an original exercise

price of $5.00 per share, which was subsequently adjusted to $1.44 per share pursuant to the anti-dilution provision included in such

existing warrants, issued to the Holders on November 24, 2023, with a current expiration date of November 24, 2028 (the “Existing

to the Inducement Letters, the Holders agreed to exercise for cash their Existing Warrants at a reduced exercise price of $0.75 per share

(the “Reduced Exercised Price”) 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 Existing Warrants to purchase an aggregate of 4,114,582 shares of common stock for all holders of the Existing Warrants not

participating in the Warrant Inducement to the Reduced Exercise Price for the remaining term of the Existing Warrants.

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, resulting in net

proceeds of approximately $2.9 million.

exercise of the New Warrants and issuance of the New Warrant Shares is subject to stockholder approval (the “Stockholder Approval”)

in accordance with Nasdaq Listing Rule 5635(d).

On May 5, 2025, we filed a definitive information statement on Schedule 14C related to

the necessary Stockholder Approval, which approval will become effective on May 25, 2025, which is 20 calendar days after the mailing

of the definitive information statement on Schedule 14C to the holders of our capital stock as of April 14, 2025.

Recent Legal Challenges

to Sales Agents’ Commission Structure

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

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

practices associated with the traditional commission model.

Courts and regulatory bodies may be increasingly focused on ensuring transparency

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

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

agents and may adversely affect our business model and revenues.

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

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

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

agent commissions.

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

anticompetitive practices associated with the traditional commission model.

Courts and regulatory bodies may be increasingly focused

on ensuring transparency in commission structures, potentially leading to reforms that impact the earnings and business models of

real estate professionals.

Changes in legislation or legal precedents could impact the standard practices of commission-sharing

between listing agents and buyer’s agents and may adversely affect our business model and revenues.

On October 31, 2023, a

federal jury in Missouri found that the NAR and certain companies conspired to artificially inflate brokerage commissions, which

violates federal antitrust law.

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

against a number of other large real estate brokerage companies.

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

lawsuits against a number of other large real estate brokerage companies.

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

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For instance,

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

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

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

We believe that we are well-positioned

to take advantage of some of these potential industry changes.

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

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

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

Additionally, we expect

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

of complexity into real estate transactions.

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

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

homes purchased through the platform.

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

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

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

We believe that we are well-positioned to take advantage

of some of these potential industry changes.

Given that the reAlpha platform offers commission refunds tied to the use of integrated homebuying

services, we believe that homebuyers that have access to the reAlpha platform may choose our platform over seeking traditional agents

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

Additionally, we expect that our competitors will need to develop mechanisms and plans to enable buyers to negotiate commissions, which

may add another layer of complexity into real estate transactions.

We believe that the reAlpha platform will remove such layer by offering

all these services – including negotiations of fees through our AI negotiation helper – in one platform, while providing buyers

with a commission refund on all homes purchased through the reAlpha platform.

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

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Critical Accounting Policies

following discussion and analysis of financial condition and results of operations is based upon our financial statements, which have

been prepared in conformity with accounting principles generally accepted in the United States.

Certain accounting policies and estimates

are particularly important to the understanding of our financial position and results of operations.

These policies and estimates require

the application of significant judgment by management.

These estimates can be materially affected by changes from period to period as

economic factors and conditions outside of our control change.

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

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

certain estimates.

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

the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available

from other outside sources, as appropriate.

We believe the current assumptions and other considerations used to estimate amounts reflected

in the condensed consolidated financial statements included in this Form 10-Q are appropriate.

Form 10-Q and our Form 10-KT include discussions of our accounting policies, as well as methods and estimates used in the preparation

of our audited consolidated financial statements.

For further information on our critical accounting policies and estimates, see “Item

7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-KT, the notes

to our audited consolidated financial statements included in our Form 10-KT and “Note 2 – Summary of Significant Accounting

Policies” of our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Since the filing of

our Form 10-KT, we have not experienced a material change to our critical accounting policies or the methods and applications used to

develop our accounting estimates.

condensed consolidated financial statements included in this report have been prepared in accordance with U.S.

generally accepted accounting

principles (“U.S.

GAAP”) and reflect the application of estimates and assumptions that require significant judgment by management.

These estimates affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures and are based on a combination

of historical experience, current business conditions, and other factors available to management.

Actual results could differ materially

from those estimates due to the inherent uncertainty in assumptions and external conditions.

have been no material changes to the Company’s critical accounting policies or the methods used in applying those policies during

the three months ended March 31, 2025.

For a full description of our critical accounting policies and significant estimates, refer to

the condensed consolidated financial statements and accompanying notes included in our Form 10-K filed with the Securities and Exchange

Commission (the “SEC”), and “Note 2 – Summary of Significant Accounting Policies” to the condensed consolidated

financial statements included in this report.

Results of Operations

to the merger (the “Downstream Merger”) between reAlpha Tech Corp.

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

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

Downstream Merger.

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

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

As a result, the financial statements

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

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

following the Downstream Merger closing date.

Summary Results of

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of Revenue

Operating expense

Operating (loss) income

Other (expense) Income

Net (loss) income

Three Months Ended

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

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

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

This technology service

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

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

We have no revenue in our rental business segment.

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

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

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

comparable 2023 period.

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

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

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

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

from the comparable 2023 period.

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

within the technology segment.

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

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

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

(Expenses) Income .

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

from the comparable 2023 period.

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

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

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

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

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

Nine Months Ended

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

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

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

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

The technology

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

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

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

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

those operations on hold.

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

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

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

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

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

the myAlphie platform and properties, which lowered related costs.

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

the comparable 2023 period.

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

A significant

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

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

professional and legal services associated with these acquisitions.

(Expense) Income .

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

the comparable 2023 period.

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

the nine months ended September 30, 2023.

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

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

the Note contributed to our other expenses.

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

of our previously held properties.

Segment Results of

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

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

related notes included elsewhere in this report.

Three Months Ended

September 30,

Nine Months Ended

September 30,

Technology Services

Rental Business

Cost of Revenue

Technology Services

Rental Business

Operating (Loss) Income

Technology Services

Rental Business

March 31, 2025 Compared with Three Months Ended March 31, 2024

Three Months Ended

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

Technology Services

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

This increase

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

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

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

Cost of Revenue

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

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

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

direct costs necessary for fulfilling service transactions.

Operating Loss .

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

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

expenses associated with the marketing campaign for reAlpha platform.

Rental Business

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

Because we sold our

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

and if, we resume operations in this segment.

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

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

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

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

Nine Months Ended

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

Technology Services

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

This increase

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

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

This increase in revenue was slightly offset

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

Cost of revenue .

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

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

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

for fulfilling service transactions.

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

myAlphie platform, which lowered costs related to such platform.

Operating expense

Operating loss

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

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

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

necessary investments to support and integrate these new operations.

Rental Business

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

Because we sold our

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

and if, we resume operations in this segment.

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

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

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

Additionally, expenses related

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

Other expense

Loss from continuing operations before tax

Loss from discontinued operations before tax

Revenues were $925,635 for the three months ended March 31, 2025 compared to $20,426 for the three months ended March 31, 2024, an increase

of approximately 4,432%.

Our revenues currently consist of the revenues generated in our technology services segment that we receive directly

from, or from services related to, our technologies and acquired companies.

This increase in revenue was primarily driven by revenue generated

by Be My Neighbor and GTG Financial and AiChat’s conversational AI technology offered to enterprise clients.

Be My Neighbor and

GTG Financial generated $386,594 through mortgage brokerage transactions, which included loan origination fees, broker commissions, and

processing fees, while AiChat generated $109,552 from subscription fees for its AI conversational technologies.

Cost of revenue was $406,968 for the three months ended March 31, 2025, compared to $18,249 for the three months ended

March 31, 2024, an increase of approximately 2,130%.

This increase was primarily driven by the integration of GTG Financial into our operations

of $217,609, which primarily includes direct expenses associated with delivering our loan brokerage services and technology solutions,

such as compensation-related expenses for roles supporting loan origination and customer interactions.

Operating expenses were $2,940,925 during the three months ended March 31, 2025, compared to $1,308,835 for the three months

ended March 31, 2024, an increase of approximately 125%.

This increase in operating expenses was primarily driven by the integration of

the newly acquired businesses within the technology segment, including Be My Neighbor and GTG Financial.

A significant portion of this

increase is attributed to salaries of the employees from our recent acquisitions, which salary expenses amounted to $803,435, marketing

and advertising expenses related to our advertising campaign of $442,155 and professional and legal services expenses of $347,261 incurred

in connection with our recent acquisitions.

Other (expense) income.

Other expenses were $428,093 for the three months ended March 31, 2025, compared to $111,548 for the three months ended March 31,

2024, an increase of approximately 284%.

This increase was primarily driven by the interest accrued on that certain secured promissory

note (the “Note”), which was issued to Streeterville Capital, LLC (the “Lender”) pursuant to that certain Purchase

Agreement, dated August 14, 2024 (the “Purchase Agreement”), in the amount of $113,542, the amortization expense of the original

issue discount of the Note in the amount of $72,501 and the amortization expense of the commitment fee related to our equity facility

with GEM Yield Bahamas Limited (“GYBL”) and GEM Global Yield LLC SCS (“GEM Global,” and together with GYBL, “GEM”),

in the amount of $125,000.

Non-GAAP Financial

To supplement

our financial information presented in accordance with U.S.

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

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

in evaluating our operating performance.

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

planning and forecasting purposes.

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

and comparability with past financial performance.

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

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

presented in accordance with GAAP.

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

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

financial measures as tools for comparison.

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

comparable financial measure stated in accordance with GAAP.

Investors are encouraged to review the related GAAP financial measures and

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

any single financial measure to evaluate our business.

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

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

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

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

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

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Net (Loss) Income

To supplement our financial

information presented in accordance with U.S.

GAAP, we believe “Adjusted EBITDA,” a “non-U.S.

GAAP financial measure,”

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

We use Adjusted EBITDA to evaluate

our ongoing operations and for internal planning and forecasting purposes.

We believe that this non-U.S.

GAAP financial measures may be

helpful to investors because it provides consistency and comparability with past financial performance.

However, this non-U.S.

GAAP financial

measures is presented for supplemental informational purposes only, have limitations as an analytical tool, and should not be considered

in isolation or as a substitute for financial information presented in accordance with U.S.

In addition, other companies, including

companies in our industry, may calculate a similarly titled non-U.S.

GAAP measure differently or may use other measures to evaluate their

performance, all of which could reduce the usefulness of our non-U.S.

GAAP financial measure as a tool for comparison.

A reconciliation

is provided below for our non-U.S.

GAAP financial measure to the most directly comparable financial measure stated in accordance with

Investors are encouraged to review the related U.S.

GAAP financial measure and the reconciliation of this non-U.S.

GAAP financial

measure to its most directly comparable U.S.

GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

We use Adjusted EBITDA, a

GAAP financial measure, to evaluate our operating performance and facilitate comparisons across periods and with peer companies.

We reconcile our Adjusted EBITDA to our net income (loss) adjusted to exclude interest expense, depreciation and amortization, share-based

compensation, and other non-cash, non-operating, or non-recurring items that we believe are not indicative of our core business operations.

We believe this measure provides useful insight into our ongoing performance;

however, it should not be considered a substitute for, or

superior to, net income or other financial information prepared in accordance with U.S.

following table provides a reconciliation of net income to Adjusted EBITDA for the periods presented below:

For the Three Months Ended March 31,

$ (2,850,351 )

$ (1,419,045 )

Adjusted to exclude the following

Depreciation and amortization

Gain on sale of myAlphie

Changes in fair value of contingent consideration

Interest expense

Share-based compensation (1)

Amortization of loan discounts and origination fee(1)

GEM commitment fee (2)

Acquisition related expense (3)

Gain on previously held equity (4)

Original issue discount

Adjusted EBITDA

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Net (Loss) Income

$ (2,098,574 )

$ (4,995,931 )

Adjusted to exclude the following

Amortization of intangible assets

Gain on sale of myAlphie

Share based compensation (3)

GEM commitment fee (2)

Acquisition related expense (3)

Gain on previously

held equity (4)

Net income used to compute net income per share, diluted

$ (1,447,420 )

$ (3,815,797 )

$ (2,315,718 )

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

Net income per share, diluted

Compensation provided to employees and board members and for services

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

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

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

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

Liquidity and Capital

Acquisition-related expenses (4)

Adjusted EBITDA

Reflects the amortized original issue discount related to the Note (as defined above).

This pertains to the commitment fee of $1 million in connection with the GEM equity facility, which has been amortized over a period of 24 months.

Compensation provided to employees for services through share-based awards, which is recognized as a non-cash expense.

(4) Expenses related to acquisitions, including professional and legal

fees, which are excluded from U.S.

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

Liquidity and Capital Resources

Liquidity describes the ability

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

We had cash and cash equivalents

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

Based on our estimates,

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

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

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

Additionally, we are contemplating to raise capital through an

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

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

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

issued in connection with the GEM Agreement (the “GEM Warrants”) and the warrants issued in connection with our public offering

from November 2023 (the “Follow-On Warrants,” and together with the GEM Warrants, the “Warrants”).

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.

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

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

of the Warrants will exercise them.

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

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

Due to an ongoing dispute with GYBL

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

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

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

If the dispute is not resolved

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

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

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

See “Note 16 – Subsequent

Events” for further information.

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

provide for a downward adjustment to its exercise price, subject to a floor price of $1.44 per share, as a result of subsequent offerings,

and the share amount issuable pursuant to such warrants would increase such that the aggregate exercise price payable thereunder would

equal the aggregate exercise price prior to such adjustment.

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

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

We had cash and cash equivalents of approximately $1.2 million as of

March 31, 2025 and approximately $3.1 million as of December 31, 2024.

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

capital to meet our financial needs for the 12-month period following March 31, 2025.

Further, based on our current operating plans,

to the extent the Lender (as defined above) does not redeem additional portions of the Note (as further described below) and we do not

raise additional capital through any offering of our securities, we estimate that our cash and cash equivalents as of March 31, 2025,

will be sufficient to fund our operating expenses and capital expenditure requirements into the third quarter of 2025.

Accordingly, to

the extent that collections from our operations in the technology services segment cannot fund our operations, we intend to utilize equity

or debt offerings to raise additional funds, although volatility in the capital markets may negatively affect our ability to do so.

part of these efforts, we previously utilized our At the Market (“ATM”) program with A.G.P.

to raise working capital, and

as of the date of this report, we raised approximately $231,235 in gross proceeds through such ATM program prior to its termination (see

“Recent Developments – ATM Program Termination” and “Note 15 – Stockholders’ Equity (Deficit)”

for more information).

Further, on April 2, 2025, we entered into the Offering Agreement with Wainwright (each as defined above), pursuant

to which we are able to raise up to $7.65 million in gross proceeds through sales of our common stock with Wainwright acting as sales

agent, which we expect to utilize from time to time to fund our operations (see “Recent Developments – ATM Offering”

for more information).

We also recently completed the Warrant Inducement (as defined above) that resulted in gross proceeds to us of approximately

$3.1 million, which provided us with additional liquidity to meet our financial needs (see “Recent Developments – Warrant

Inducement Transaction” for more information).

While we anticipate continued operating losses in the near future, we expect to generate

more significant revenues as we continue investing in the commercialization of our products and technologies and acquiring complementary

businesses to fund our operating expenses and capital expenditure requirements.

We may also receive proceeds

from the cash exercises of the warrants in connection with our public offering from November 2023 (the “Follow-On Warrants”),

which currently have an exercise price of $0.75 per share.

We believe the likelihood that any Follow-On 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.

We believe that if the trading price for our common stock is less than $1.44 per share, it is unlikely that the holders of the Follow-On

Warrants will exercise them.

Further, due to the ongoing disputes with GYBL regarding the warrants issued to them on October 23, 2023

(the “GEM Warrants”), pursuant to that certain Share Purchase Agreement among us and GEM, dated December 1, 2022 (the “GEM

Agreement”), including our claims that the GEM Warrants are void and subject to rescission under Section 29(b) of the Securities

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

On January 17, 2025, GYBL moved to dismiss our complaint relating to this dispute, and, on March 14, 2025, such motion to dismiss

our complaint relating to our complaint was granted.

Further, on March 19, 2025, GYBL filed a lawsuit against us, which is asserting 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.

As of the date of this report, there has been no adjustment

to the exercise price of the GEM Warrants in connection with the dismissal of our complaint, and our position regarding the GEM Warrants,

including the exercise price and subsequent adjustments thereof, remains the same pending resolution of these disputes with GEM.

result, we do not expect that the GEM Warrants will be exercised while these disputes are pending, however, if these disputes are not

resolved through negotiations and these lawsuits are adversely determined against us, we may be required to adjust the GEM Warrants’

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

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

Our business model requires

4 unchanged sentences

additional equity or debt financing or strategic partnerships.

We currently do not have any commitments or arrangements for additional

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

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

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

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

ownership interests or the imposition of burdensome terms and restrictions.

If we are unable to obtain additional financing when required, we may be

forced to reduce the scope of our operations, delay the launch of new products or services, or take other actions that could adversely

affect our business, financial condition, and results of operations.

We may also be required to seek additional financing on terms that

are unfavorable to us, which could result in the dilution of our stockholders’ ownership interests or the imposition of burdensome

terms and restrictions.

Contractual Commitments and Obligations

On August 14, 2024, we entered

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

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

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

Further, in accordance with

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

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

August 14, 2024, we entered into the Purchase Agreement with the Lender (each as defined above) to issue and sell a secured promissory

note worth $5,455,000.

As of March 31, 2025, we have incurred $435,000 original issue discount expenses related to the Note.

in accordance with the Note and related Purchase Agreement, beginning seven months after issuance, the Lender may redeem up to $545,000

of the Note per month, which amount will be due and payable in cash within three trading days of our receipt of a written redemption notice

from the Lender.

The redemption feature of

2 unchanged sentences

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

The Note and related Purchase Agreement also contain restrictive

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

other obligations and expenses as they are due.

As of the date of this report, we have made redemption payments

in the aggregate amount of $1,090,000 pursuant to written redemption notices sent by the Lender.

The Note and related Purchase Agreement

also contain restrictive covenants on our ability to issue securities, which may further impact our ability to raise capital to meet our

redemption payments or other obligations and expenses as they are due.

Additionally,

as part of the GTG Financial acquisition, and pursuant to the GTG Purchase Agreement (as defined above), we are obligated to pay to the

Seller (as defined above) the Cash Portion (as defined above), which consist of cash payments in the aggregate amount of $1,344,750, which

are payable in three tranches as follows:

$403,425 on the 120th day after the GTG Closing Date (as defined above), $403,425 on the 150th

day after the GTG Closing Date and $537,900 on the 180th day following the GTG Closing Date.

Further, to the extent that we do not pay the Cash Portion in full by the date that is 180 days of the GTG Closing Date, then, beginning

on the 181st day following the GTG Closing Date, the outstanding amount of the Cash Portion will bear interest at a rate per annum equal

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.

The Cash Portion payments

may have a material adverse effect on our cash flows, results of operations and ability to pay our debts as they come due, and, to the

extent we do not have the required funds to pay for such Cash Portions in full by the 180 th day after the GTG Closing Date,

the Seller will be eligible to rescind the transactions contemplated under the GTG Purchase Agreement, which may further materially impact

our business, results of operations and cash flows.

The following table summarizes

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

Nine-month period

September 30,

Three-month period

Net cash used in operating activities

1 unchanged sentence

$ (1,527,238 )

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Cash Flows from Operating Activities

For the nine months

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

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

of which were acquisition-related costs.

For the three months

ended March 31, 2025, net cash used in operating activities was $2,267,102, compared to $1,527,238 for the three months ended March 31,

The increase is primarily due to higher operating expenses as a result of our recently acquired companies, including salaries of

$1,060,104 and professional and legal fees of $742,159.

Cash Flows from Investing Activities

For the nine months

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

investing activities was $400,330.

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

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

For the three months

ended March 31, 2025, net cash provided by investing activities was $244,554, compared to $19,700 of net cash used in investing activities

for the three months ended March 31, 2024.

This increase is primarily a result of the integration of GTG Financial into our business,

which resulted in an increase of $349,529 due to the addition of the cash held by GTG Financial during the three months ended March 31,

Cash Flows from Financing Activities

For the nine months ended

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

This increase

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

In contrast, during the nine months period ended September

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

issuances were not present in 2024.

For the three months ended

March 31, 2025, net cash provided by financing activities was $103,004, compared to net cash used in financing activities of $71,286 for

the three months ended March 31, 2024.

This increase was primarily due to the $231,235 of capital raised through our ATM program.

Off-Balance Sheet Transactions

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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 2. Management’s Discussion and Analysis