What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-14 · 912 added, 495 removed, 304 unchanged (82% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheet

June 30, 2025 (Unaudited) and December 31, 2024

December 31, 2024

September 30, 2025 (Unaudited) and December

September 30,

Current Assets

16 unchanged sentences

Short term loans - unrelated parties -current portion

Note payable, current-net of discount

Accrued expenses

12 unchanged sentences

5,000,000 shares authorized) 1,000,000 shares designated as Series A Convertible Preferred Stock;

264,063 and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

250,000 and 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Common stock ($ 0.001 par value;

200,000,000 shares authorized, 52,364,654 shares outstanding as of June 30, 2025;

200,000,000 shares authorized, 103,050,651 shares outstanding as of September 30, 2025;

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

Common stock to be issued

Additional paid-in capital

2 unchanged sentences

( 38,260,913 )

Accumulated other comprehensive income

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

( 1,109,558 )

Accumulated other comprehensive (loss) income

Total stockholders’ equity of reAlpha Tech Corp.

Non-controlling interests in consolidated entities

Total stockholders’ (deficit) equity

( 1,100,480 )

TOTAL LIABILITIES AND STOCKOLDERS’ (DEFICIT) EQUITY

Total stockholders’ equity

TOTAL LIABILITIES AND STOCK HOLDERS’ EQUITY

reAlpha Tech Corp.

and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Operations

and Comprehensive Loss

For the Three and Nine Months Ended September

30, 2025 and 2024 (unaudited)

For the Three Months Ended

For the Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Cost of revenues

Operating Expenses

For the Nine Months Ended

September 30,

Cost of revenue

Operating Expense

Wages, benefits and payroll taxes

5 unchanged sentences

Impairment of capitalized software

Other operating expenses

Total operating expenses

Other operating expense

Total operating expense

Operating Loss

20 unchanged sentences

( 4,792,265 )

Discontinued operations (Rhove)

Discontinued operations (Roost and Rhove)

Loss from operations of discontinued operations

5 unchanged sentences

$ ( 12,741,692 )

Net Loss Attributable to Non-Controlling Interests

$ ( 4,995,931 )

Net Income (Loss) Attributable to Non-Controlling Interests

Net Loss Attributable to Controlling Interests

3 unchanged sentences

$ ( 4,995,857 )

Other comprehensive income

Other comprehensive income (loss)

Foreign currency translation adjustments

Total other comprehensive loss

Total other comprehensive income (loss)

Comprehensive Loss Attributable to Controlling Interests

15 unchanged sentences

and Subsidiaries

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

For the Three and Six Months Ended June 30, 2025, and 2024 (unaudited)

Series A Convertible Preferred Stock

Additional Paid-in

Other Comprehensive

and Subsidiaries

Non- Controlling

Condensed Consolidated Statements of Changes

in Stockholders’ Equity (Deficit)

For the Three and Nine Months Ended September

30, 2025, and 2024 (unaudited)

Preferred Stock

Comprehensive

Stockholders’

10 unchanged sentences

Common stock issuance to employees & directors

Common stock issuance to Naamche acquisition

RTC India - non controlling interest

Common stock issuance for Naamche acquisition

RTC India - non- controlling interests

Balance at June 30, 2024

$ ( 15,135,194 )

Series A Convertible Preferred Stock

Additional Paid-in

Other Comprehensive

and Subsidiaries

Non- Controlling

( 2,098,548 )

( 2,098,574 )

Other comprehensive loss

Common stock issuance for Naamche acquisition

Common stock issuance for reAlpha Mortgage acquisition

Common stock issuance for AiChat acquisition

Common stock issuance for services

Common stock issuance for employees

Common stock issuance to AiChat employees

Hyperfast - Non-Controlling Interest

RTC India - Non-Controlling Interest

Balance at September 30, 2024

( 17,233,742 )

Preferred Stock

Comprehensive

Stockholders’

17 unchanged sentences

Other comprehensive loss

Common stock issuance for warrants exercised

Common stock issuance - Warrants exercised

Common stock issuance for GTG acquisition

2 unchanged sentences

Common stock issuance to Non- Employee

Common stock issuance through ATM

Shares issued through ATM

Stock-based compensation

3 unchanged sentences

$ ( 1,109,558 )

$ ( 1,100,480 )

( 5,782,641 )

( 5,781,324 )

Other comprehensive income

Common stock issuance - Public offering

Common stock issuance - RDO

Common stock issuance - Private Placement Warrants

Common stock issuance - Public offering Warrants exercised

Common stock cancellation for GTG rescission

Common stock issuance to Employees

Common stock issuance to Streeterville Capital, LLC

Common stock issuance to AiChat10X Pte.

Common stock issuance - ATM

Common stock issuance - RDO Placement Agent warrants exercised

Stock-based compensation

Common stock to be issued - Private Placement Warrants exercised

Balance at September 30, 2025

$ ( 51,008,326 )

$ 10,899,57 8

reAlpha Tech Corp.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2025, and 2024 (unaudited)

For the Six Months Ended

June 30, 2025

June 30, 2024

For the Nine Months Ended September 30, 2025,

and 2024 (unaudited)

For the Nine Months Ended

September 30, 2025

September 30, 2024

Cash Flows from Operating Activities:

5 unchanged sentences

Amortization of loan discounts

Stock based compensation

Stock-based compensation - employees

Stock-based compensation - services

Change in fair value of contingent consideration

3 unchanged sentences

Non-cash marketing and advertising

Non cash compensation - GTG Financial

Non cash dividend payable Series A convertible preferred stock

Loss/(gain) on sale of properties

Non-cash compensation expense - GTG Financial

Non-cash dividend payable on Series A convertible preferred stock

Gain on rescission of GTG acquisition

Loss/(gain) on sale of property and equipment

Loss/(gain) from equity method investment

14 unchanged sentences

Additions to property and equipment

Proceeds from sale of property

Net cash paid to acquire business

Cash used for additions to intangible assets

Net cash provided by (used in) investing activities

Proceeds from sale of properties

Net cash acquired in business combination

Deconsolidation of GTG cash

Cash used for additions to capitalized software

Net cash used in investing activities

Cash Flows from Financing Activities:

3 unchanged sentences

Proceeds from issuance of common stock

Equity issuance costs

Net cash provided by (used in) financing activities

Net decrease in cash

( 2,536,633 )

( 2,774,187 )

Debt extinguishment expenses

Equity issuance expenses

Net cash provided by financing activities

Net increase in cash

Effect of exchange rate changes on cash

3 unchanged sentences

Cash paid for interest

Non-Cash Investing and Financing Activities:

Noncash Investing and Financing Activities:

Preferred stock issuance - MMC transaction

Preferred stock issuance - GTG Financial

Deferred cash payments - GTG Financial

Common stock issuance for GTG Financial acquisition

Common stock issuance to Streeterville Capital, LLC

Common stock issuance - GTG Financial

Non-cash conversion of debt to equity – Streeterville Capital, LLC

Issuance of warrants to placement agents in connection with equity offerings

reAlpha Tech Corp.

3 unchanged sentences

reAlpha Tech Corp.

was incorporated with the name reAlpha Asset Management, Inc.

was incorporated with the name

reAlpha Asset Management, Inc.

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

as a result of the short-form merger with its former parent on March 21, 2023.

as a result of the

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

reAlpha Tech Corp.

and its subsidiaries are collectively referred to as “we,” “us,” “our” or the “Company.”

Initially, our asset-heavy operational model centered on using proprietary artificial intelligence (“AI”) tools for real estate acquisition, converting properties into short-term rentals, and offering fractional interests to investors.

However, due to macroeconomic challenges such as elevated interest rates and inflated property prices, we discontinued our rental segment operations effective December 31, 2024 (see “Note 18 – Discontinued Operations” for additional information).

We are now focused on developing an end-to-end homebuying platform, branded as “reAlpha.”

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

The Company has transitioned into a technology-driven, integrated services company, leveraging AI to enhance homebuying experience and streamline real estate transactions.

At the core of the Company’s strategy is the reAlpha platform, an AI-powered solution designed to simplify the home purchase process while generating revenue through realty services, mortgage brokering services, and digital title and escrow services.

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

Naamche”) and Naamche, Inc.

and its subsidiaries are collectively referred to as “we,”

“us,” “our” or the “Company.”

Utilizing the power of artificial intelligence

(“AI”) and an acquisition-led growth strategy, our goal is to offer a more affordable, streamlined experience for those on

the journey to homeownership.

The Company is a technology-driven, integrated

services company, leveraging AI to enhance the homebuying experience and streamline real estate transactions.

At the core of the Company’s

strategy is the reAlpha platform, an AI-powered solution designed to simplify the home purchase process while generating revenue through

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

The Company operates through its subsidiaries, Naamche, Inc.

Naamche”), Naamche, Inc.

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

Naamche, “Naamche”), and AiChat Pte Ltd.

(“AiChat”), expanding its software development expertise and AI-driven engagement tools.

The Company operates through its subsidiaries, including reAlpha Realty, LLC, AiChat, Debt Does Deals, LLC (f/k/a Be My Neighbor and d/b/a reAlpha Mortgage) (“reAlpha Mortgage”), Hyperfast Title LLC (“Hyperfast”) and GTG Financial, Inc.

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

These subsidiaries enable the Company to provide real estate brokerage and closing services, which enable us to capture value across multiple stages of the transaction process.

With its focus on AI technology and integrated real estate services, the Company is creating a scalable, end-to-end, tech-enabled model for customers to buy a home.

Through strategic acquisitions and innovations in its platform, the Company is expanding its market presence and diversifying revenue streams across real estate, mortgage services, and AI-powered solutions.

The Company’s principal executive office is located at 6515 Longshore Loop, Suite 100, Dublin, OH 43017.

Note 2 - Summary of Significant Accounting Policies

Naamche, “Naamche”), and AiChat

(“AiChat”) to expand its software development expertise and AI-driven engagement tools, and reAlpha Realty, LLC,

Debt Does Deals, LLC (f/k/a Be My Neighbor and d/b/a reAlpha Mortgage) (“reAlpha Mortgage”), and Hyperfast Title LLC (“Hyperfast”)

to provide real estate brokerage and closing services, which enable the Company to capture value across multiple stages of the transaction

During the three months ended September 30, 2025, the Company’s acquisition of GTG Financial, Inc.

“GTG Financial”) was rescinded pursuant to the terms of the Stock Purchase Agreement, by and among GTG Financial, Glenn Groves

(the “Seller”) and the Company, dated February 20, 2025 (the “SPA”).

As a result of the rescission of the SPA,

GTG is no longer a subsidiary of the Company as of August 21, 2025 (the “Rescission Date”) (see “Note 4 – Business

Combinations” for more information).

With its focus on AI technology and integrated

real estate services, the Company is creating a scalable, end-to-end, tech-enabled model for customers to buy a home.

Through strategic

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

estate, mortgage services, and AI-powered solutions.

The Company’s principal executive office

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

Note 2 - Summary of Significant Accounting

Principles of Consolidation

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

These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and entities that the Company holds a controlling financial interest of, and those in which it owns more than 50 % of the voting interest.

The accompanying unaudited condensed consolidated

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

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

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

All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial reporting on Form 10-Q.

The accompanying unaudited condensed consolidated

financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial reporting

on Form 10-Q.

Accordingly, they do not include all disclosures required by U.S.

1 unchanged sentence

GAAP”) for annual financial statements.

In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation have been included.

The condensed consolidated balance sheet as of December 31, 2024 has been derived from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 2, 2025, as amended on May 13, 2025 (the “Form 10-K”).

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

In the opinion of management, all adjustments (consisting only of normal recurring items)

necessary for a fair presentation have been included.

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

from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December

31, 2024, filed with the SEC on April 2, 2025, as amended on May 13, 2025 (the “Form 10-K”).

This summary of significant accounting policies

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

These accounting policies conform to U.S.

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

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

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Form 10-K.

Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year or any other future periods.

GAAP and have

been consistently applied in the preparation of the financial statements.

The financial statements include the operations, assets, and

liabilities of the Company.

In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial

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

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

included in the Form 10-K.

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

year or any other future periods.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included.

The preparation of financial statements in conformity

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period.

In the opinion of management, all adjustments necessary in order to make the financial statements not misleading

have been included.

Actual results could differ from those estimates.

Related Party Transactions

The Company accounts for related party transactions in accordance with Accounting Standards Codification (“ASC”) 850.

A related party is generally defined as (i) any person that holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

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

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

The Company accounts for related party transactions

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

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

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

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

the financial and operating decisions of the Company.

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

of resources or obligations between related parties.

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

Transactions involving related parties cannot

be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not

Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated

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

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company considers all highly liquid investments

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

Concentration of Credit Risks

Financial instruments that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, cash equivalents, and accounts receivable.

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

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

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

Financial instruments that potentially subject

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

September 30, 2025, the Company’s cash was held by financial institutions that management believes have acceptable credit.

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

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

insured limits.

Accounts receivable are typically unsecured.

The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances.

In accordance with ASC 326, Investments - Financial Instruments–Credit Losses (“ASC 326”) the Company applies the Current Expected Credit Losses (“CECL”) model to estimate expected credit losses over the lifetime of financial assets measured at amortized cost.

The Company has determined that accounts receivable is the only financial asset subject to CECL assessment, as it does not have any loan receivables, held-to-maturity debt securities, or other financial instruments requiring CECL evaluation.

The Company’s CECL methodology incorporates historical loss experience, current economic conditions, and forward-looking adjustments to assess credit risk and expected loss reserves.

As of June 30, 2025, the Company’s accounts receivable remains fully recoverable.

During the six months ended June 30, 2025, the Company collected all previously outstanding receivables attributable to AiChat, its Singapore subsidiary.

As a result, the previously recorded CECL reserve of 0.05 % was released.

However, a new CECL provision was recorded based on updated receivables and risk profiles as of June 30, 2025.

There were changes in the Company’s credit risk exposure, CECL methodology, and/or reserve assumptions during the six months ended June 30, 2025.

The updated values are as follows:

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

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

In accordance with ASC 326, Investments - Financial

Instruments-Credit Losses the Company applies the Current Expected Credit Losses (“CECL”) model to estimate expected credit

losses over the lifetime of financial assets measured at amortized cost.

The Company has determined that accounts receivable is the only

financial asset subject to CECL assessment, as it does not have any loan receivables, held-to-maturity debt securities, or other financial

instruments requiring CECL evaluation.

The Company’s CECL methodology incorporates

historical loss experience and current economic conditions to assess credit risk and expected loss reserves.

During the nine months ended September 30, 2025,

the Company collected all previously outstanding receivables attributable to AiChat, its Singapore subsidiary.

As a result, the previously

recorded CECL reserve of 0.05 % was released.

However, a new CECL provision for the three months ended September 30, 2025 was recorded

based on updated receivables and risk profiles as of September 30, 2025.

The CECL reserve is netted against accounts receivable, net on

the balance sheet.

There were no changes in the Company’s credit

risk exposure, CECL methodology, and/or reserve assumptions during the nine months ended September 30, 2025.

The updated values are as

Opening balance, January 1, 2025

Current-period provision for expected credit losses

Provision for expected credit losses

Release of allowance for expected credit losses

Ending balance, June 30, 2025

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2025.

Ending balance, September 30, 2025

There have been no material changes to the Company’s

significant accounting policies during the three and nine months ended September 30, 2025.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) when control of services is transferred to the customer.

On a standalone basis, the Company generates revenue by providing monthly support services to Turnit related to the myAlphie platform, a digital platform we previously developed and sold on May 17, 2023.

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

We recognized rental revenue upon customer control of the assets and recorded deferred revenue for book sales until the delivery obligation was met, both in accordance with ASC 606.

AiChat, a company specializing in AI conversational customer experience solutions, adheres to the revenue recognition standards outlined in ASC 606.

The license fee for platform access and consulting services are recognized as distinct performance obligations, reflecting their ability to provide value independently within our customer contracts.

For the “right to access” license fee, revenue is recognized over the duration of the subscription period, as control and benefits are provided continuously to the customer.

Consulting services are recognized based on the nature of the engagement.

The Company recognizes revenue in accordance with

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

On a standalone

basis, the Company generates revenue by providing monthly support services.

Revenue is recognized over time as the services are performed

and the customer benefits from them.

AiChat, a company specializing in AI conversational

customer experience solutions, adheres to the revenue recognition standards outlined in ASC 606.

The license fee for platform access and

consulting services are recognized as distinct performance obligations, reflecting their ability to provide value independently within

our customer contracts.

For the “right to access” license fee, revenue is recognized over the duration of the subscription

period, as control and benefits are provided continuously to the customer.

Consulting services are recognized based on the nature of the

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

For ongoing consulting services, revenue is recognized over time, reflecting the continuous benefit transferred to the customer throughout the service period.

This approach ensures that revenue recognition accurately matches the ongoing provision of access and the timing of consulting services, as per the guidelines of ASC 606.

reAlpha Mortgage, a mortgage brokerage company, complies with ASC 606 by recognizing revenue at the point of loan funding.

This moment marks the transfer of control of the loan to the borrower, capturing the completion of reAlpha Mortgage’s primary service successfully securing a loan.

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

Revenue is therefore recognized only when the loan is funded, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately reflecting the completion of all related performance obligations.

GTG Financial, a mortgage brokerage company, complies with ASC 606 by recognizing revenue at the point of loan funding.

This moment marks the transfer of control of the loan to the borrower, capturing the completion of GTG Financial’s primary service successfully securing a loan.

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

Naamche, a company that provides services related to the development of technology, adheres to ASC 606 for revenue recognition, primarily from its service-based contracts.

This approach involves detailed identification of contracts with customers, determination of distinct performance obligations within these contracts, and accurate allocation of transaction prices to these obligations.

Revenue is recognized as Naamche satisfies each performance obligation, typically over time, reflecting the ongoing delivery and customer consumption of its tech-driven services.

For ongoing consulting

services, revenue is recognized over time, reflecting the continuous benefit transferred to the customer throughout the service period.

This approach ensures that revenue recognition accurately matches the ongoing provision of access and the timing of consulting services,

as per the guidelines of ASC 606.

reAlpha Mortgage, a mortgage brokerage company,

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

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

borrower, capturing the completion of reAlpha Mortgage’s primary service successfully securing a loan.

All services, including loan

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

Revenue is therefore recognized only

when the loan is funded, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately

reflecting the completion of all related performance obligations.

GTG Financial, a mortgage brokerage company, complies

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

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

capturing the completion of GTG Financial’s primary service successfully securing a loan.

All services, including loan origination,

application processing, and credit assessment, contribute to this culminating event.

Revenue is therefore recognized only when the loan

is funded, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately reflecting

the completion of all related performance obligations.

Effective as of the Rescission Date, the Company’s acquisition of GTG Financial

was rescinded.

Accordingly, GTG Financial is no longer a subsidiary of the Company, and its results are not included in these unaudited

condensed consolidated financial statements for periods after that date (see “Note 4 – Business Combinations” for

more information).

Naamche, a subsidiary of the Company that provides

services related to the development of technology, adheres to ASC 606 for revenue recognition, primarily from its service-based contracts.

This approach involves detailed identification of contracts with customers, determination of distinct performance obligations within these

contracts, and accurate allocation of transaction prices to these obligations.

Revenue is recognized as Naamche satisfies each performance

obligation, typically over time, reflecting the ongoing delivery and customer consumption of its tech-driven services.

Recent Accounting Pronouncements

Accounting Pronouncements Issued But Not Yet Adopted

In April 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2025-04, Revenue from Contracts with Customers (Topic 606) and Compensation—Stock Compensation (Topic 718), which clarifies how to account for equity instruments (such as shares or RSUs) granted to customers as part of a revenue arrangement.

The update aims to help entities properly reflect such transactions and avoid misclassification between marketing expenses and revenue reductions.

ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those years, with early adoption permitted.

The Company is currently evaluating the impact this update may have on its financial statements and related disclosures.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topics 805 and 810) (“ASU 2025-03”), which provides guidance on identifying the acquirer in a business combination involving a variable-interest entity (“VIE”).

This amendment helps ensure accurate consolidation and goodwill recognition in complex acquisition structures.

ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, including interim periods within those years, with early adoption permitted.

The Company does not expect this update to have a material impact in the near term, but will reassess if new VIE-related transactions occur.

Proposed Accounting Standards Updates

In April 2025, the FASB released a proposed update to ASC 815, Derivatives and Hedging (“ASC 815”), which may revise the accounting treatment of derivatives and embedded features in financial instruments by clarifying when embedded features must be separated and measured at fair value.

No effective date has been announced;

the Company is monitoring developments.

In March 2025, the FASB proposed changes to ASC 326 to simplify the CECL model for trade receivables and contract assets, reducing volatility and easing application for non-financial entities.

This proposal is also not yet finalized;

the Company will evaluate its impact once finalized.

Accounting Pronouncements Issued and Adopted

In July 2025, the Financial Accounting Standards

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

2025-05, Financial Instruments—Credit Losses

(Topic 326) (“ASU 2025-05”), which introduces a practical expedient for all entities and an accounting policy election

for certain entities related to estimating expected credit losses for current accounts receivable and current contract assets arising

from transactions accounted for under ASC 606.

The amendments, developed in coordination with the Private Company Council, address stakeholder

concerns regarding the cost and complexity of applying the current expected credit loss model to such balances.

ASU 2025-05 is effective

for fiscal years beginning after December 15, 2025, including interim periods within those years, with early adoption permitted.

The Company elected to early adopt ASU 2025-05

during the quarter ended September 30, 2025.

The adoption did not have a material impact on the Company’s consolidated financial

statements or related disclosures.

There have been no material changes to the Company’s

significant accounting policies during the nine months ended September 30, 2025.

Note 3 - Going Concern

We assess going concern uncertainty in our unaudited condensed consolidated financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital, including available loans or lines of credit, if any, to operate for a period of at least 12 months from the date our condensed consolidated financial statements are issued.

As part of this assessment, based on conditions that are known and reasonably knowable to us, we consider various scenarios, forecasts, projections, and estimates, and we make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and our ability to delay or curtail those expenditures or programs, if necessary, among other factors.

Management has reviewed our financial condition, focusing on liquidity sources and upcoming financial obligations.

This assessment shows that our short-term obligations exceed the resources available under current operational plans that raise a substantial doubt about our ability to continue as a going concern for the next 12 months after the date that these unaudited condensed consolidated financial statements are issued.

Recent acquisitions are expected to increase operational expenses, we anticipate that they will increase revenue streams, contributing positively to our financial outlook.

We believe these acquisitions will enhance product offerings and market reach, which we anticipate will drive higher revenue in the coming months.

However, the revenue from our recent acquisitions and from our technology platforms do not yet offset our current obligations and expenses.

Management anticipates continuing operating losses for the next 12 months due to growth initiatives, management expects to continue raising capital through additional debt and/or equity financings to fund its operations.

We also recently raised $ 7 million in gross proceeds in July 2025 in connection with two offerings and a concurrent private placement of our securities (see “Note 19 – Subsequent Events” for more information).

While the majority of the proceeds raised in the July 2025 offerings were allocated to repaying the outstanding balance of the Note (as defined below) in full (see “Note 8 – Notes Payable” for more information), management believes that the recent capital raise and expectations that it will be able to continue to raise capital will effectively mitigate the conditions that raise substantial doubt about our ability to continue as a going concern.

As of June 30, 2025, the Company had approximately $ 0.58 million in cash.

During the quarter ended September 30, 2025, the

Company incurred a net loss and experienced negative operating cash flows.

These conditions raised substantial doubt about the Company’s

ability to continue as a going concern within one year after the issuance of these unaudited condensed consolidated financial statements.

Management has evaluated these conditions and developed plans intended

to alleviate the substantial doubt, including by raising capital through equity offerings.

As of September 30, 2025, the Company had cash

and cash equivalents of approximately $ 9.3 million, a significant portion of which consist of proceeds raised by the Company’s recent

equity offerings.

Management believes such cash and cash equivalents are sufficient to meet its obligations as they become due over the

next twelve months.

Based on these factors, management has determined that its plans are

likely to be successfully implemented and will mitigate the conditions that initially raised substantial doubt about the Company’s

ability to continue as a going concern.

While the proceeds of the recent equity offerings have alleviated this substantial doubt, the

financial statements for the quarter ended September 30, 2025, continue to be prepared on a going concern basis.

Note 4 - Business Combinations

For comprehensive information regarding acquisitions completed in the fiscal year ended December 31, 2024, please refer to “Note 5 – Business Combinations” included in the Form 10-K.

Acquisition of GTG Financial, Inc.

In connection with the acquisition of GTG Financial completed on February 20, 2025, the Company was contractually obligated under the Stock Purchase Agreement to issue shares of common stock valued at approximately $ 1.29 million.

The number of shares of common stock was determined based on the 7-day volume-weighted average price (“VWAP”) of the Company’s common stock as reported on Nasdaq prior to the closing date.

Based on a VWAP of $ 1.84 , the Company issued 700,055 shares on April 28, 2025, to satisfy this obligation.

In accordance with ASC 505 Equity, equity-classified instruments are recorded at fair value on the date of issuance.

As a result, the preliminary purchase price allocation, previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, was updated as of June 30, 2025, to reflect a measurement period adjustment of $ 835,866 , resulting in a corresponding reduction to goodwill.

For comprehensive information regarding acquisitions

completed in the fiscal year ended December 31, 2024, please refer to “Note 5 - Business Combinations” included in the Form

Rescission of GTG Financial, Inc.

In connection with the acquisition of GTG Financial, completed on February

20, 2025, the Company was contractually obligated under the SPA to issue shares of common stock valued at approximately $ 1.29 million.

The number of shares of common stock was determined based on the 7-day volume-weighted average price (“VWAP”) of the Company’s

common stock as reported on The Nasdaq Stock Market (“Nasdaq”) prior to the closing date.

Based on a VWAP of $ 1.84 , the Company

issued 700,055 shares on April 28, 2025, to satisfy this obligation.

In accordance with ASC 505, Equity, equity-classified instruments

are recorded at fair value on the date of issuance.

As a result, the preliminary purchase price allocation, previously reported in the

Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, was updated as of June 30, 2025, to reflect a measurement

period adjustment of $ 835,866 , resulting in a corresponding reduction to goodwill.

On the Rescission Date, GTG Financial exercised its right to rescind

the SPA originally executed on February 20, 2025.

As part of the rescission, the shares of the Company’s series A convertible preferred

stock (the “Series A Preferred Stock”) and common stock previously issued were returned and cancelled, and all obligations,

such as the deferred cash, and contingent consideration, were extinguished.

In accordance with ASC 810 Consolidation (“ASC

810”), the Company recognized gain on deconsolidation of $ 94,071 in the unaudited condensed consolidated statement of operations

and comprehensive loss.

The gain represents the difference between the carrying amounts of GTG Financial’s net assets derecognized

and the carrying amounts of the consideration cancelled.

No market transaction occurred at the Rescission Date.

Accordingly, amounts were

measured at carrying value.

In accordance with ASC 810, the rescission was

accounted for as a deconsolidation, with GTG Financial’s assets, liabilities, equity balances, and results of operations removed

from the Company’s unaudited condensed consolidated financial statements as of the Rescission Date.

No remeasurement was required,

as the Company did not retain any equity interest or other investment in GTG Financial following the rescission.

Because the rescission

involved the cancellation of shares and extinguishment of obligations without a market transaction, all amounts were measured at their

carrying values.

The transaction was not conducted with a related party, and GTG Financial is not considered a related party after the

Note 5 - Property and equipment, net

Property and equipment consisted of the following as of June 30, 2025.

Furniture and fixtures

Total investment in property and equipment

$ ( 112,246 )

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

Property and equipment, net consisted

of the following as of September 30, 2025 and December 31, 2024.

September 30,

Furniture and fixtures

Total investment in property and equipment

The Company recorded depreciation expense of $ 8,380 and $ 17,781 for the three and six months ended June 30, 2025, respectively, and $ 69,331 and $ 140,784 for the three and six months ended June 30, 2024, respectively.

Note 6 - Capitalized Software Development Costs, Work In Progress

The Company adheres to ASC 350-40, Intangibles – Goodwill and Other, Internal-Use Software (“ASC 350”) for the capitalization of software development costs.

During the six months ended June 30, 2025, the Company impaired the carrying amount of capitalized software due to the lack of further development thereof and such software becoming obsolete.

June 30, 2025

Gross carrying amount

Net carrying value

Gross carrying amount

Reclassified to intangibles and expenses

Net carrying value

Capitalized software development costs, work in progress

$ ( 105,900 )

$ ( 202,968 )

$ ( 1,046,761 )

$ ( 105,900 )

$ ( 1,046,761 )

Property and equipment at cost

accumulated depreciation

Property and equipment, net

The Company recorded depreciation expenses of

$ 5,420 and $ 22,259 for the three and nine months ended September 30, 2025, respectively, and $ 7,245 and $ 19,168 for the three and nine

months ended September 30, 2024, respectively.

Note 6 - Capitalized Software Development Costs,

Work In Progress

The Company adheres to ASC 350, Intangibles - Goodwill and Other, Internal-Use

Software for the capitalization of software development costs.

During the nine months ended September 30, 2025, the Company impaired the

carrying amount of capitalized software due to the discontinuation of further development and the software becoming obsolete.

During the three months ended and nine months

ended September 30, 2025, the Company recognized an impairment of approximately $ 0 and $ 105,000 , respectively, compared to $ 0 for

the same periods in 2024.

Note 7 - Goodwill and Intangible Assets

Goodwill and intangible assets are primarily the result of business acquisitions.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed.

Goodwill is tested for impairment at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Changes in the carrying amount of goodwill during the six months ended June 30, 2025, were as follows:

Goodwill and intangible assets are primarily the

result of business acquisitions.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable

assets acquired and liabilities assumed.

Goodwill is tested for impairment at the reporting unit level at least annually, as of December

31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting

unit below its carrying amount.

Changes in the carrying amount of goodwill during

the nine months ended September 30, 2025, were as follows:

Technology Services

Rental Business

Balance at January 1, 2025

Goodwill acquired, GTG Financial

Goodwill acquired in connection with the GTG Financial acquisition

Goodwill impairment

Goodwill measurement period adjustment (1)

Balance at June 30,2025

Goodwill derecognized due to rescission of the GTG Financial acquisition

( 1,960,752 )

Balance at September 30, 2025

(1) The goodwill measurement period adjustment includes (i) a reduction of $ 838,771 related to the GTG Financial acquisition primarily due to the finalizing of the equity issuance valuation, and (ii) a reduction of $ 2,905 related to the reAlpha Mortgage acquisition resulting from updated purchase price allocation estimates.

December 31, 2024

Balance at January 1, 2024

Goodwill acquired, net of purchase price adjustments

Goodwill impairment

(2) $ 1,960,752 of the goodwill initially recognized in connection with

the acquisition of GTG Financial was fully derecognized on the Rescission Date.

As a result, no goodwill related to GTG Financial remains

on the Company’s unaudited condensed consolidated balance sheet.

(i) The components of intangible assets as of

September 30, 2025, all of which are finite lived, are as follows:

Estimated Useful Life

Accumulated Amortization

Developed technology

$ ( 268,630 )

Trademarks and trade names

Customer relationships

Intangible assets, net

$ ( 371,188 )

Goodwill measurement period adjustment

Balance at December 31, 2024

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

June 30, 2025

Opening balance

Net carrying value

Definite-life Intangibles:

(ii) The components of intangible assets as of

December 31, 2024, all of which are finite lived, are as follows:

Estimated Useful Life

Accumulated Amortization

Developed technology

2 unchanged sentences

Customer relationships

Intangible assets, net

$ ( 700,839 )

The Company recorded amortization expense of $ 124,604 and $ 244,605 for the three and six months ended June 30, 2025, respectively, and $64,430 and $128,861 for the three and six months ended June 30, 2024, respectively.

The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2025:

The Company recorded amortization expenses of

$ 126,580 and $ 371,186 for the three and nine months ended September 30, 2025, respectively, and $ 131,818 and $ 260,679 for the three and

nine months ended September 30, 2024, respectively.

The following table outlines the estimated future

amortization expense related to intangible assets held as of September 30, 2025:

Years Ending December 31:

2025 (remaining period)

The Company performed an interim goodwill impairment test as of June 30, 2025, and determined that the carrying amount of goodwill did not exceed its fair value, indicating no impairment was present.

Note 8 - Notes Payable

The Company had the following outstanding notes payable as of June 30, 2025, and December 31, 2024:

Summary of Notes payable:

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

Repayment (cash and shares of common stock)

( 1,410,000 )

Unamortized debt issuance costs and original issue discount

Total notes payable

Notes payable, current, net of discount

Total notes payable – current- net of discount

As of June 30, 2025, accrued interest under that certain outstanding secured promissory note (the “Note”) issued to Streeterville Capital, LLC (“Streeterville”) on August 14, 2024, was $ 376,422, compared to $166,111 as of December 31, 2024.

As of June 30, 2025 and December 31, 2024, unamortized debt issuance and original issue discount were reflected within long-term liabilities on the condensed consolidated balance sheets, netted with the notes payable.

On June 9, 2025, the Company received a redemption notice from Streeterville for a redemption amount of $ 300,000 .

According to an exchange agreement entered into on the same date, the Company and Streeterville agreed to satisfy the redemption amount entirely through the issuance of 747,607 shares of common stock at an effective price of $ 0.4013 per share.

In connection with this exchange, the Company and Streeterville partitioned a new secured promissory note in the original principal amount of $ 300,000 and immediately exchanged the note for the shares of common stock.

Total repayments of $ 1,410,000 (including the $ 300,000 partitioned note) were made during the period from April 1, 2025 to June 30, 2025.

The outstanding balance remains classified as current and, net of unamortized debt issuance costs and original issue discount, totals $3,741,878 as of June 30, 2025.

On July 23, 2025, the Company repaid the outstanding balance under the Note in full using cash on hand, including proceeds from the Company’s recent equity offerings (see “Note 19 - Subsequent Events” for more information).

Such repayment was in the amount of approximately $ 4,466,202 (inclusive of a 9% prepayment penalty) and fully satisfied all amounts due under the Note.

As a result of this repayment in full, the Company has extinguished the financial obligation associated with the Note and the Note has been cancelled.

As of September 30, 2025, and December 31, 2024,

the Company had outstanding notes payable of $ 0 and $ 4,909,376 , respectively.

During the three and nine months ended September

30, 2025, the Company recognized interest expense of $ 26,010 and $ 236,321 , respectively, compared to $ 54,818 and $ 54,818 for

the same periods in 2024.

On July 2, 2025, the Company received a

redemption notice from Streeterville Capital, LLC (“Streeterville”) for a payment of $ 350,000 .

In connection with the

redemption notice, the Company entered into an Exchange Agreement with Streeterville, pursuant to which the Company agreed to fully

satisfy a redemption payment of $ 350,000 under the secured promissory note issued to Streeterville (the “Note”) by

issuing 1,267,656 shares of common stock at an effective price of $ 0.2761 per share, in lieu of cash.

In connection with the

Exchange Agreement, the Company and Streeterville agreed to (i) partition a new secured promissory note in the principal amount of

$ 350,000 (the “Partitioned Note”) and reduce the outstanding balance of the original note by the same amount, and (ii)

exchange the Partitioned Note for the delivery of the common stock (the “Exchange”).

Following the Exchange, the

remaining outstanding balance of the original note was reduced to approximately $ 4,080,171 .

On July 23, 2025, the Company fully repaid and

extinguished the remaining outstanding balance of the Note, which had an initial principal of $ 5,455,000 and a maturity date of February

The repayment amount, which totaled approximately $ 4,466,202 (inclusive of a 9 % prepayment penalty of $ 368,769 ), was satisfied

using cash on hand and proceeds from the Company’s July 2025 equity offerings.

In connection with this repayment, the Company received

a certificate from Streeterville confirming full repayment and release of obligations, and Streeterville has released the Company and

its subsidiaries from any further obligations or liabilities under the Note and the note purchase

agreement, dated August 14, 2024, with Streeterville (the “ Note Purchase Agreement”).

As a result, the Company no longer

has any outstanding notes payable to Streeterville as of September 30, 2025.

In connection with this repayment, total accrued

interest of $ 402,432 was settled, and the previously unamortized debt issuance costs of $ 121,875 and original issue discount of $ 181,247

were fully amortized.

Note 9 - Related Party Transactions

Loans from Related Parties

During the six months ended June 30, 2025, the Company entered into related party loan transactions with AiChat’s Chief Executive Officer and director, Kester Poh, board member Balaji Swaminathan, and Sea Easy Capital Ltd.

AiChat has a financing arrangement with SEA, a Singapore-based entity that the spouse of Balaji Swaminathan, a member of the Company’s board of directors, controls by virtue of her ownership or control of a majority ( 51 %) of the capital stock of SEA.

During the nine months ended September 30, 2025,

AiChat, a subsidiary of the Company, entered into related party loan transactions with (i) AiChat’s Chief Executive Officer and

director, Kester Poh, (ii) Balaji Swaminathan, a member of the Company’s board of directors (the “Board”), and (iii)

Sea Easy Capital Ltd.

(“SEA”), a Singapore-based entity that the spouse of Mr.

Swaminathan controls by virtue of her ownership

or control of a majority ( 51 %) of the capital stock of SEA.

Swaminathan also serves on the advisory board of SEA.

All loans were provided on terms consistent with those offered to unrelated third parties.

As of June 30, 2025, the Company had outstanding related party loans from three parties as described above.

All loans were provided

on terms consistent with those offered to unrelated third parties.

As of September 30, 2025, AiChat had outstanding related party loans

from three parties as described above.

The loan from Mr.

Poh to AiChat had an outstanding balance of approximately $ 104,028 , consisting of $ 86,562 in principal and $ 17,466 in accrued interest.

Poh to AiChat had an outstanding balance of approximately $ 97,313 , consisting

of $ 83,508 in principal and $ 13,805 in accrued interest.

The loan from Mr.

Swaminathan had an outstanding balance of approximately $ 49,113 , including $ 48,613 in principal and $ 500 in accrued interest.

The loans to AiChat from SEA’s financing arrangement had an outstanding balance of approximately $ 177,646 , comprised of $ 156,778 in principal and $ 20,868 in accrued interest.

Swaminathan to AiChat had an outstanding balance of approximately

$ 49,143 , including $ 48,643 in principal and $ 500 in accrued interest.

The loans to AiChat from SEA’s financing arrangement had an

outstanding balance of approximately $ 126,946 comprised of $ 121,693 in principal and $ 5,253 in accrued interest, which has been repaid

subsequent to the quarter ended September 30, 2025 (see “Note 18 - Subsequent Events” for more information).

Summary of Short-Term Loans to Related Parties

Average Interest Rate as of June 30, 2025

Average Interest

September 30, 2025

December 31, 2024

1 unchanged sentence

Interest Reserve

Summary of Other Long-Term Loans to Related Parties

Maturity Year

Average Interest Rate as of June 30, 2025

December 31, 2024

Summary of Other Long-Term Loans to Related

Maturity Year Average Interest

September 30, 2025 September 30, 2025 December 31, 2024

Term Loan Facility 2026 6.9 % $ 6,424 $ 54,881

Interest Reserve -

Note 10 – Short-Term Loans Unrelated parties

Short-term loans primarily consist of multiple term loan facilities obtained by AiChat, carrying an average interest rate of approximately 8.9 %.

These facilities were entered into to support AiChat’s operating and working capital requirements.

Additionally, short-term loans include a separate facility utilized by the Company to finance premiums related to directors’ and officers’ insurance coverage.

Short-term loan balances as of June 30, 2025, and December 31, 2024, are summarized as follows:

$ 6,424 $ 45,052

Note 10 - Loans to Unrelated parties

Summary of Short-Term Loans to Unrelated Parties

Short-term loans primarily consist of multiple

term loan facilities obtained by AiChat, carrying an average interest rate of approximately 8.9 %.

These facilities were entered into to

support AiChat’s operating and working capital requirements.

Additionally, short-term loans include a separate facility utilized

by the Company to finance premiums related to directors’ and officers’ insurance coverage.

Short-term loan balances as of September 30, 2025,

and December 31, 2024, are summarized as follows:

Average Interest

Rate as of June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Interest Reserve

Note 11 - Deferred Liabilities, Current Portion

Deferred liabilities primarily consist of deferred revenue related to AiChat and deferred consideration from the GTG Financial acquisition.

The deferred revenue reflects the net amount of revenue recognized and new deferrals during the period, representing the contract liabilities for amounts billed in advance of performance.

Summary of Long-Term Loans to Unrelated Parties

AiChat has obtained multiple long-term loans from

external lenders at an average interest rate of 6.5 %.

These loans support general operating needs and carry varying repayment terms.

balance also includes a vehicle loan related to a Naamche-owned vehicle, which was sold during the three months ended September 30, 2025,

resulting in a loss of $ 48,188 recognized in the statement of operations.

Long-term loan balances as of September 30, 2025,

and December 31, 2024, are summarized as follows:

Average Interest

September 30, 2025

September 30,

Term Loan Facility

Interest Reserve

Note 11 - Deferred Liabilities

Deferred liabilities primarily consist of deferred

revenue related to AiChat and deferred consideration from the GTG Financial acquisition.

The deferred revenue reflects the net amount

of revenue recognized and new deferrals during the period, representing contract liabilities for amounts billed in advance of performance.

These amounts are recognized as revenue over time as the related services are delivered in accordance with the terms of the customer agreements.

The deferred consideration represents the remaining obligation payable in connection with the Company’s acquisition of GTG Financial and is expected to be settled in future periods.

The Company’s deferred liabilities as of June 30, 2025, and December 31, 2024, are summarized as follows:

Gross carrying amount

Additions/(payments)

Net carrying value

Balance as on December 31, 2024

Deferred Revenue - AiChat

Deferred Consideration – GTG Financial.

Balance as on June 30, 2025

Deferred consideration represents obligations

payable in connection with the Company’s acquisitions.

The deferred consideration to be paid to GTG Financial was cancelled on the

Rescission Date, as part of the rescission of the GTG Financial acquisition (see “Note 4 – Business Combinations” for

more information).

As of September 30, 2025, the Company’s

deferred liabilities totaled approximately $ 1.1 million, compared to $ 1.5 million as of December 31, 2024.

Note 12 - Embedded Derivative Liability

As described in “Note 12 – Embedded Derivative Liability” to the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, the Company bifurcated and recorded embedded derivative liabilities in connection with the issuance of Series A Preferred Stock related to the GTG Financial acquisition and the Mercurius Media Capital LP (“MMC”) media-for-equity transaction.

These derivative liabilities represent the fair value of the shortfall settlement features embedded in the agreements relating to the issuance of Series A Preferred Stock to GTG Financial and MMC, pursuant to which the Company is required to settle in cash or additional shares of common stock if the value of conversion shares upon automatic conversion of the Series A Preferred Stock is less than the paid consideration for such shares of Series A Preferred Stock.

The derivative liabilities are classified as Level 3 within the fair value hierarchy and are measured at fair value using the Black-Scholes option pricing model.

The fair values of the derivative liabilities are remeasured at each reporting date, with changes in fair value recognized in earnings.

As of June 30, 2025, the derivative liabilities recorded in connection with the GTG Financial acquisition and the MMC transaction were approximately $ 253,134 and $ 4,492,500 , respectively, resulting in a combined fair value of $ 4,745,634 .

A total increase in fair value of $ 215,204 from the prior quarter was recognized in the condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2025, the Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model with the following key assumptions:

Common stock price

As described in “Note 12 - Embedded Derivative

Liability” to the unaudited condensed consolidated financial statements included in the Company’s Quarterly Report on Form

10-Q for the quarter ended March 31, 2025, the Company bifurcated and recorded embedded derivative liabilities in connection with the

issuance of Series A Preferred Stock related to the GTG Financial acquisition and the Mercurius Media Capital LP (“MMC”) media-for-equity

These derivative liabilities represent the fair value of the shortfall settlement features embedded in the agreements relating

to the issuance of Series A Preferred Stock to GTG Financial and MMC, pursuant to which the Company is required to settle in cash or additional

shares of common stock if the value of conversion shares upon automatic conversion of the Series A Preferred Stock is less than the paid

consideration for such shares of Series A Preferred Stock.

On the Rescission Date, GTG Financial rescinded

the SPA, thereby rescinding the GTG Financial acquisition.

As a result, the embedded derivative liability associated with the issuance

of Series A Preferred Stock to GTG was derecognized at book value of $ 253,134 in accordance with ASC 405, Liabilities—Extinguishments

of Liabilities, and the Company no longer has any derivative obligations in connection with GTG Financial as of September 30, 2025.

derivative liabilities were classified as Level 3 within the fair value hierarchy and are measured at fair value using the Black-Scholes

option pricing model.

The fair values of the derivative liabilities are re-measured at each reporting date, with changes in fair value

recognized in earnings.

As of September 30, 2025, the derivative liabilities

recorded in connection with the MMC transaction were approximately $ 4,480,000 .

During the three and nine months ended September 30, 2025,

the Company recognized an increase in fair value of approximately $ 12,500 and $ 405,204 , respectively, in the unaudited condensed consolidated

statements of operations and comprehensive loss, compared to $ 0 for the same periods in 2024.

As of September 30, 2025, the Company estimated

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

Common stock price as of September 30, 2025 $ 0.76

Risk-free interest rate 4 %

1 unchanged sentence

Dividend yield 3 %

Expected term

Change in fair value

Net Amount (as of June 30, 2025)

Balance as on December 31, 2024

Embedded Derivative Liability – GTG acquisition

Embedded Derivative Liability – MMC transaction

Balance as on June 30, 2025

Expected term 2 Years

Note 13 - Preferred Stock Liability

In connection with the acquisition of GTG Financial and the transaction with MMC, the Company issued a total of 264,063 shares of Series A Preferred Stock with a stated value of $ 20 per share.

The agreements pursuant to which these shares of Series A Preferred Stock were issued subject these shares to certain conversion features, including a shortfall settlement feature, whereby the Company may be required to pay cash or issue shares of common stock if the aggregate value of the conversion shares issuable upon the automatic conversion of the Series A Preferred Stock is less than the paid consideration for such shares of Series A Preferred Stock.

In accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, the Company bifurcated the value of the issued Series A Preferred Stock between (i) the liability component of the Series A Preferred Stock and (ii) an embedded derivative liability representing the fair value of the shortfall settlement feature.

The classification was based on the fact that the instruments obligate the Company to potentially settle the conversion at a fixed monetary value through a variable number of shares of common stock, which does not meet the criteria for equity classification.

As of June 30, 2025, the bifurcated values are as follows:

Change in fair value

Balance as on December 31, 2024

Preferred stock liability – GTG Financial acquisition

Preferred stock liability – MMC transaction

Accrued interest on preferred stock

Balance as on June 30, 2025

$ ( 707,719 )

These instruments are classified as liabilities under U.S.

GAAP due to redemption features and shortfall settlement provisions associated with the Series A Preferred Stock issued in connection with the acquisition of GTG Financial and the MMC transaction.

The liability classification reflects the presence of an embedded derivative feature under applicable accounting guidance and is therefore not included in the diluted earnings per share (“EPS”) calculation.

The Series A Preferred Stock and its embedded derivative liability were excluded from the diluted EPS calculation as their inclusion would have been anti-dilutive, consistent with ASC 260, Earnings per Share.

Note 14 - Other Long-Term Loans

Other Long-Term Loans consisted of the following as of June 30, 2025, and December 31, 2024:

Summary of Other Long-Term Loans to Unrelated Parties

AiChat has obtained multiple long-term loans from external lenders at an average interest rate of 6.5%.

These loans support general operating needs and carry varying repayment terms.

The balance also includes a vehicle loan related to a Naamche-owned vehicle that was sold during the period, resulting in a loss of $48,188 recognized in the statement of operations.

Maturity Year

Average Interest Rate as of June 30, 2025

June 30, 2025

Term Loan Facility

Interest Reserve

Note 15 - Stockholders’ Equity (Deficit)

The total number of shares of capital stock that the Company has the authority to issue is up to 205,000,000 shares, consisting of:

(i) 200,000,000 shares of common stock, having a par value of $ 0.001 per share;

and (ii) 5,000,000 shares of preferred stock, having a par value of $ 0.001 per share, of which 1,000,000 shares have been designated as Series A Preferred Stock.

As of June 30, 2025, there were 52,364,654 shares of common stock and 264,043 shares of Series A Preferred Stock issued and outstanding.

As of December 31, 2024, there were 45,864,503 shares of common stock and 0 shares of preferred stock issued and outstanding.

In connection with the acquisition of GTG Financial

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

The agreements pursuant to which these shares of Series A Preferred Stock were issued subject to certain conversion features, including

a shortfall settlement feature, whereby the Company may be required to pay cash or issue shares of common stock if the aggregate value

of the conversion shares issuable upon the automatic conversion of the Series A Preferred Stock is less than the paid consideration for

such shares of Series A Preferred Stock.

In accordance with ASC 480, Distinguishing Liabilities

from Equity (“ASC 480”), and ASC 815 Derivatives and Hedging (“ASC 815”), the Company bifurcated the value of

the issued Series A Preferred Stock between (i) the liability component of the Series A Preferred Stock and (ii) an embedded derivative

liability representing the fair value of the shortfall settlement feature.

The classification was based on the fact that the instruments

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

which does not meet the criteria for equity classification.

On the Rescission Date, GTG Financial rescinded

the SPA, thereby rescinding the GTG Financial acquisition.

In connection with the rescission, the Series A Preferred Stock liability associated

with the GTG Financial acquisition was terminated at its book value of $ 15,632 , together with accrued interest of $ 3,490 .

the Company no longer has any obligations related to the issuance of Series A Preferred Stock in connection with GTG Financial as of September

30, 2025 (see “Note 4 – Business Combinations” for more information).

These instruments are classified as liabilities

GAAP due to redemption features and shortfall settlement provisions associated with the Series A Preferred Stock issued in

connection with the acquisition of GTG Financial and the MMC transaction.

The liability classification reflects the presence of an embedded

derivative feature under applicable accounting guidance and is therefore not included in the diluted earnings per share (“EPS”)

The Series A Preferred Stock and its embedded derivative liability were excluded from the diluted EPS calculation as their

inclusion would have been anti-dilutive, consistent with ASC 260, Earnings per Share (“ASC 260”).

As of September 30, 2025, the liability component

of the Series A Preferred Stock recorded in connection with the MMC transaction was approximately $ 292,272 .

During the three and nine

months ended September 30, 2025, the Company recognized a loss of approximately $ 107,995 and a net gain of approximately $ 605,228 , respectively,

related to fair value remeasurement adjustments of the preferred stock liability, which were recorded in the condensed consolidated statements

of operations and comprehensive loss, compared to $ 0 for the same periods in 2024.

In addition, the Company accrued dividends of approximately $ 28,843

and $ 78,391 during the three and nine months ended September 30, 2025, respectively.

Because the Series A Preferred Stock is classified

as a liability under ASC 480, these dividends are recognized as interest expense in the condensed consolidated statements of operations

and increase the carrying amount of the preferred stock liability.

No dividends were accrued for the comparative three- and nine-month

periods ended September 30, 2024.

The preferred stock liability is re-measured at each reporting date,

with changes in fair value recognized in earnings in accordance with ASC 480 .

Note 14 - Stockholders’ Equity

The total number of shares of capital stock that

the Company has the authority to issue is up to 205,000,000 shares, consisting of:

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

value of $ 0.001 per share;

and (ii) 5,000,000 shares of preferred stock, having a par value of $ 0.001 per share, of which 1,000,000 shares

have been designated as Series A Preferred Stock.

As of September 30, 2025, there were 103,050,651 shares of common stock and 250,000

shares of Series A Preferred Stock issued and outstanding.

As of December 31, 2024, there were 45,864,503 shares of common stock and 0

shares of preferred stock issued and outstanding.

Stock Based Compensation

1 unchanged sentence

We maintain the reAlpha Tech Corp.

2022 Equity Incentive Plan (as amended, the “2022 Plan”), under which we may grant awards to our employees, officers and directors, and certain other service providers.

The compensation committee of our board of directors administers the 2022 Plan.

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

The aggregate number of shares of common stock that may be issued under the 2022 Plan may not exceed 4,000,000 shares of common stock, of which 2,891,118 remain available for issuance as of June 30, 2025.

During the three months ended June 30, 2025, we issued 99,100 shares of common stock to employees under the 2022 Plan.

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

The board of directors determines eligibility for awards under the 2022 Plan at its discretion.

2022 Equity Incentive Plan (as amended,

the “2022 Plan”), under which we may grant awards to our employees, officers and directors, and certain other service providers.

The compensation committee of our Board (the “Compensation Committee”) administers the 2022 Plan.

The 2022 Plan permits grants

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

The aggregate number of shares of common stock

that may be issued under the 2022 Plan may not exceed 4,000,000 shares of common stock, of which 669,318 remain available for issuance

as of September 30, 2025.

During the three months ended September 30, 2025, the Company granted 1,713,996 restricted stock units (“RSUs”)

and 76,607 shares of common stock pursuant to the 2022 Plan to its executive officers and certain employees, 50,000 of which RSUs were

forfeited in connection with the resignation of an employee.

These awards are subject to time-based vesting, with 100 % of the RSUs vesting

over a period ranging from 2 to 4 years from the date of grant, subject to continued service and other terms and conditions.

All of our current employees, officers, directors and certain other

service providers are eligible to be granted awards under the 2022 Plan.

The Compensation Committee determines eligibility for awards

at its discretion.

Ending balances for the 2022 Plan as of September 30, 2025 and December

31, 2024, are as follows:

Number of Shares

Balance as of December 31, 2024

Outstanding restricted stock units granted

( 2,935,936 )

Common stock issued during the nine months ended September 30, 2025

Balance as of September 30, 2025

The Company recorded stock-based compensation

expenses of $ 286,581 and $ 557,825 for the three and nine months ended September 30, 2025, respectively, and $ 113,037 and $ 207,454 for

the three and nine months ended September 30, 2024, respectively.

Short-Term Incentive Plan

On February 4, 2025, the compensation committee of the board of directors (the “Compensation Committee”) approved the Company’s 2025 Short-Term Incentive Plan (“STIP”), providing for quarterly awards of performance-based restricted stock units (“RSUs”) under the 2022 Plan.

The STIP is designed to reward key employees and executives based on the achievement of quarterly performance targets tied to organic revenue, brokerage transactions, and the quality of acquisitions.

On February 4, 2025, the Compensation Committee

approved the Company’s 2025 Short-Term Incentive Plan (“STIP”), providing for quarterly awards of performance-based RSUs under the 2022 Plan.

The STIP is designed to reward executive officers and key employees

based on the achievement of quarterly performance targets tied to organic revenue, brokerage transactions, and the quality of acquisitions

completed during such quarter.

Restricted Stock Units

The Company measures compensation cost for all stock-based awards granted to employees, directors, and certain other service providers based on the grant-date fair value of the award by ASC 718, Compensation – Stock Compensation (“ASC 718”).

The fair value of restricted RSUs is based on the closing market price of the Company’s common stock on the date of grant.

The Company accounts for stock-based compensation by ASC 718.

For awards with graded vesting features, the Company recognizes compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award, treating the award as, in substance, multiple awards, in accordance with ASC 718.

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

For each fiscal quarter of 2025, the Company’s executive officers will be granted RSUs with a value of $ 62,500 to each of the Company’s executive officers based on the closing price of the Company’s common stock 30 calendar days after the end of each quarter.

During the six months ended June 30, 2025, the Company granted 840,743 RSUs under the 2022 Plan to its executive officers and certain employees, 50,000 of which RSUs were forfeited in connection with the termination of an employee of the Company.

These awards are subject to time-based vesting, with 100 % of the RSUs vesting over a two-year period from the date of grant, subject to continued service and other terms and conditions.

Summary of RSU activity for the six months ended June 30, 2025 follows:

The Company measures compensation cost for all stock-based awards granted

to employees, directors, and certain other service providers based on the grant-date fair value of the award by ASC 718, Compensation

- Stock Compensation (“ASC 718”).

The fair value of RSUs is based on the closing market price of the Company’s common

stock on the date of grant.

The Company accounts for stock-based compensation in accordance with ASC 718.

For awards with graded vesting

features, the Company recognizes compensation expense on a straight-line basis over the requisite service period for each separately vesting

portion of the award, treating the award as, in substance, multiple awards, in accordance with ASC 718.

This method results in a front-loaded

expense pattern that aligns more closely with the vesting schedule of the award.

For each fiscal quarter of 2025, the Company’s

executive officers will be granted RSUs with a value of $ 62,500 to each of the Company’s executive officers based on the closing

price of the Company’s common stock 30 calendar days after the end of each quarter.

During the nine months ended September 30, 2025, the Company granted

3,035,936 RSUs under the 2022 Plan to its executive officers and certain employees, 100,000 of which RSUs were forfeited in connection

with the termination of one employee and resignation of another employee.

These awards are subject to time-based vesting, with 100 % of

the RSUs vesting over a period ranging from 2 to 4 years from the date of grant, subject to continued service and other terms and conditions.

Summary of RSU activity for the nine months ended

September 30, 2025 follows:

Number of RSUs

Weighted Average Grant Price

1 unchanged sentence

RSUs forfeited

Balance as on June 30, 2025

Ending balances for the 2022 Plan as of June 30, 2025 and December 31, 2024, is as follows:

December 31, 2024

Reserved but unissued shares under the 2022 Plan

Outstanding restricted stock units

Reserved but unissued shares at end of period

None of the RSUs granted under the 2022 Plan as of June 30, 2025 vested during the six months ended June 30, 2025.

The RSUs were excluded from the diluted earnings per share calculation for the period ended June 30, 2025, as their inclusion would have been anti-dilutive under ASC 260.

Additional details regarding the initial classification and terms of the Warrants (as defined below) are provided in Note 14 to the consolidated financial statements included in the Form 10-K.

On April 6, 2025, in connection with the Company’s warrant inducement transaction, the Company entered into inducement letter agreements with certain holders of its existing warrants dated November 21, 2023 (the “Follow-On Warrants”), under which those holders agreed to exercise their warrants for cash at a reduced exercise price of $ 0.75 per share.

In exchange, the Company agreed to issue new warrants to purchase 8,437,502 shares of common stock, which issuance of shares of common stock underlying such warrants was subject to stockholder approval thereof, and which stockholder approval was obtained.

The warrant inducement transaction resulted in the issuance of 4,218,751 shares of common stock and gross proceeds of approximately $ 3.1 million and closed on April 8, 2025.

In addition, the Company reduced the exercise price of Follow-On Warrants held by non-participating holders from $ 1.44 to $ 0.75 for the remainder of such warrants’ term.

The Company accounted for the warrant inducement transaction in accordance with ASC 815-40.

Under this guidance, the warrant inducement transaction was treated as a modification of equity-classified instruments, and the excess fair value of the new warrants issued, amounting to $ 515,307 , was charged to additional paid-in capital as an equity issuance cost.

The average market price of the Company’s common stock during the period from April 1, 2025 to June 30, 2025, as reported on Nasdaq, was approximately $0.57, which is below the $0.75 exercise price of the warrants .

As a result, the warrants were out-of-the-money and excluded from the diluted EPS calculation.

The warrants issued to GEM Yield Bahamas Limited (“GYBL”) in October 2023 (the “GEM Warrants,” and together with the Follow-On Warrants, the “Warrants”) in connection with that certain Share Purchase Agreement, dated as of December 1, 2022 (the “GEM Agreement”), by and among us, GYBL, and GEM Global Yield LLC SCS (“GEM Yield”, and together with GYBL, “GEM”), remain classified as equity instruments.

Balance as on September 30, 2025

As of September 30, 2025, a total of 2,935,936

RSUs remained outstanding, and none of the RSUs had vested.

The RSUs were excluded from the diluted EPS calculation for the period ended

September 30, 2025, as their inclusion would have been anti-dilutive under ASC 260.

Additional details regarding the initial classification and terms of

the Follow-On Warrants and GEM Warrants (each as defined below) are provided in Note 14 to the audited consolidated financial statements

included in the Form 10-K.

The warrants issued to GEM Yield Bahamas Limited (“GYBL”) in October 2023 (the “GEM Warrants”)

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

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

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

As of June 30, 2025, no reclassification or adjustment to the exercise price of the GEM Warrants has been made.

As part of a best-efforts public offering completed on July 18, 2025, the Company issued Series A-1 and Series A-2 warrants (one of each per share of common stock issued), each exercisable into up to 13,333,334 shares at $ 0.15 per share.

The Series A-1 warrants expire five years, and the Series A-2 warrants expire twenty-four months, after the effective date of stockholder approval for the issuance of the shares underlying such warrants.

In connection with this offering, the Company also issued warrants to the placement agent or its designees (the “Placement Agent Warrants”), H.C.

Wainwright & Co., LLC (“Wainwright”), to purchase up to 666,667 shares at $ 0.1875 per share.

These Placement Agent Warrants will become exercisable beginning on the effective date of stockholder approval for the issuance of the shares underlying such warrants (see “Note 19 – Subsequent Events”).

Additionally, on July 22, 2025, in a private placement concurrent with a registered direct offering, the Company issued unregistered warrants to purchase up to 14,285,718 shares at $ 0.35 per share which are immediately exercisable and have a term of five years from the effective date of registration statement registering the shares of common stock issuable upon exercise of such warrants.

In connection with the registered direct offering, the Company issued Placement Agent Warrants to Wainwright or its designees to purchase up to 714,286 shares of common stock at $ 0.4375 per share.

These Placement Agent Warrants are immediately exercisable upon issuance (see “Note 19 – Subsequent Events”).

Warrant activity, as of June 30, 2025 was as follows:

Contractual life (years)

Warrants Outstanding

Warrants Exercised

Warrants Outstanding

Weighted Average Exercise Price

Average Remaining Contractual Life (Years)

As of September 30, 2025, no reclassification or adjustment to the exercise price of the GEM Warrants has been made.

On April 6, 2025, in connection with the Company’s warrant inducement

transaction, the Company entered into inducement letter agreements with certain holders of its existing warrants dated November 21, 2023

(the “Follow-On Warrants”), under which those holders agreed to exercise their warrants for cash at a reduced exercise price

of $ 0.75 per share.

In exchange, the Company agreed to issue warrants (the “New Warrants”) to purchase 8,437,502 shares of

common stock (the “New Warrant Shares”).

The issuance of the New Warrant Shares was subject to stockholder approval thereof,

and such stockholder approval was obtained.

The warrant inducement transaction closed on April 8, 2025 and resulted in the issuance of

4,218,751 shares of common stock and gross proceeds of approximately $ 3.1 million.

In addition, the Company reduced the exercise price

of Follow-On Warrants held by non-participating holders from $ 1.44 to $ 0.75 for the remainder of such warrants’ term.

accounted for the warrant inducement transaction in accordance with ASC 815.

Under this guidance, the warrant inducement transaction was

treated as a modification of equity-classified instruments, and the excess fair value of the New Warrants issued, amounting to $ 515,307 ,

was charged to additional paid-in capital as an equity issuance cost.

The average market price of the Company’s common stock during

the period from July 1, 2025 to September 30, 2025, as reported on Nasdaq, was approximately $ 0.51 , which is below the $ 0.75 exercise

price of the warrants.

As a result, these warrants were out-of-the-money and excluded from the diluted EPS calculation.

On July 18, 2025, the Company completed a best

efforts public offering (the “2025 Public Offering”) of an aggregate of (i) 13,333,334 shares of our common stock (the “July

2025 Shares”), (ii) Series A-1 warrants (the “Series A-1 Warrants”) to purchase up to an aggregate of 13,333,334 shares

of common stock (the “Series A-1 Warrant Shares”) and (iii) Series A-2 warrants (the “Series A-2 Warrants,” and

together with the Series A-1 Warrants, the “July 2025 Warrants”) to purchase up to an aggregate of 13,333,334 shares of common

stock (the “Series A-2 Warrant Shares,” and together with the Series A-1 Warrant Shares, the “July 2025 Warrant Shares”).

Each of the July 2025 Shares was sold together with one Series A-1 Warrant to purchase one share of common stock and one Series A-2 Warrant

to purchase one share of common stock.

The combined public offering price for each of the July 2025 Shares and accompanying July 2025

Warrants was $ 0.15 .

Each July 2025 Warrant has an exercise price of $ 0.15 per share and became exercisable beginning on October 8, 2025,

the date stockholder approval for the issuance of the Series A-1 Warrant Shares and the Series A-2 Warrant Shares was received and became

effective (the “Stockholder Approval Date”).

The offering generated gross proceeds of approximately $ 2.0 million and net proceeds

of approximately $ 1.56 million, after deducting placement agent fees and other offering-related expenses.

In connection with the 2025 Public Offering, the Company also issued

warrants (the “Placement Agent Warrants”) to the placement agent, H.C.

Wainwright & Co., LLC (“Wainwright”),

or its designees, to purchase up to 666,667 shares of common stock, representing 5.0 % of the shares sold in the offering.

The Placement

Agent Warrants have an exercise price of $ 0.1875 per share and became exercisable on the Stockholder Approval Date for the issuance of

the shares underlying the Placement Agent Warrants was received and became effective.

The Placement Agent Warrants will expire five years

from the commencement of sales in such offering.

On July 22, 2025, the Company completed a registered direct offering

(the “Registered Offering”) of 14,285,718 shares of its common stock (the “RDO Shares”) and a concurrent private

placement (the “Private Placement”) of unregistered common stock warrants (the “Private Placement Warrants”) exercisable

into an equal number of shares of common stock with an exercise price of $ 0.35 per share.

The Private Placement Warrants are immediately

exercisable upon issuance and expire after the fifth anniversary of the effective date of the registration statement covering the resale

of shares of common stock issuable upon exercise of the Private Placement Warrants.

The Registered Offering and concurrent Private Placement

raised gross proceeds of approximately $ 5.0 million and net proceeds of approximately $ 4.5 million, after deducting placement agent fees

and offering-related expenses.

In connection with the concurrent Registered Offering and Private Placement, the Company also issued warrants

to Wainwright, or its designees, to purchase up to 714,286 shares of common stock, representing 5.0 % of the shares of common stock sold

in the Registered Offering (the “RDO Placement Agent Warrants”).

The RDO Placement Agent Warrants have an exercise price of

$ 0.4375 per share, are immediately exercisable upon issuance and will expire five years from the commencement of sales in the concurrent

Registered Offering and Private Placement.

During the three months ended September 30, 2025, (i) certain holders

of the New Warrants exercised their warrants for cash in full to purchase an aggregate of 7,521,668 shares of common stock, at an exercise

price per share of $ 0.75 , resulting in aggregate gross proceeds to us of approximately $ 5.6 million, (ii) holders of the Private Placement

Warrants exercised their warrants for cash to purchase an aggregate of 11,552,859 shares of common stock, at an exercise price per share

of $ 0.35 , resulting in aggregate gross proceeds of approximately $ 4.0 million and (iii) holders of the RDO Placement Agent Warrants exercised

their warrants for cash in full to purchase to an aggregate of 617,856 shares of our common stock, at an exercise price per share of $ 0.4375 ,

resulting in additional proceeds to us of approximately $ 270,000 .

Subsequent to the three months ended September 30, 2025, certain additional

warrants were exercised (see “Note 18 - Subsequent Events” for more information).

Warrant activity, for the nine months ended September

30, 2025, was as follows:

date Contractual

life (years) Warrants Outstanding Warrants Exercised Warrants Outstanding Weighted Average Exercise Price Average Remaining Contractual Life (Years)

GEM Warrants issued on October 23, 2023 10/23/2028 5 1,700,884 -

1,700,884 371.90 3.06

Follow-on Warrants issued on November 21, 2023 11/24/2028 5 8,333,333 ( 4,218,751 ) 4,114,582 0.75 3.14

New Warrants issued on April 6, 2025 11/24/2028 3.7 8,437,502 ( 7,521,668 ) 915,834 0.75 3.38

Series A-1 Warrants issued on July 18, 2025 8/10/2030 5 13,333,334 -

13,333,334 0.15 4.80

Additional Warrants Issued on April 6, 2025

Warrants outstanding on June 30, 2025

Series A-2 Warrants issued on July 18, 2025 8/10/2027 2 13,333,334 -

13,333,334 0.15 1.80

As previously disclosed, the Rights granted in connection with the Rhove acquisition expired unexercised on March 24, 2025, and are no longer outstanding as of June 30, 2025.

Placement Agent Warrants issued on July 18, 2025 8/10/2027 5 666,667 -

666,667 0.19 4.80

Private Placement Warrants issued on July 22, 2025 12/9/2030 5 14,285,718 ( 11,552,859 ) 2,732,859 0.35 4.81

RDO Placement Agent Warrants issued on July 22, 2025 12/9/2030 5 714,286 ( 617,857 ) 96,429 0.44 4.81

Warrants outstanding on September 30, 2025 60,805,058 ( 23,911,135 ) 36,893,923 11 3.67

As previously disclosed, the rights granted in

connection with the acquisition of Roost Enterprises, Inc.

(“Rhove”) expired unexercised on March 24, 2025, and are no longer

outstanding as of September 30, 2025.

Shelf Registration on Form S-3

On November 26, 2024, the Company’s shelf registration statement on Form S-3 (File No.

On November 26, 2024, the Company’s shelf

registration statement on Form S-3 (File No.

333-283284) was declared effective by the SEC (the “Form S-3”).

This registration statement permits the Company to offer and sell, from time to time, common stock, preferred stock, warrants, subscription rights, and units in one or more offerings, subject to market conditions and applicable regulatory requirements.

On December 19, 2024, the Company entered into an At the Market (“ATM”) Sales Agreement with A.G.P./Alliance Global Partners (“A.G.P.”) (the “AGP Sales Agreement”), allowing it to offer and sell common stock with an aggregate offering price of up to $ 14,275,000 .

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

During the six months ended June 30, 2025, the Company issued 160,879 shares under this program at a weighted-average price of $ 1.44 per share, for gross proceeds of approximately $ 231,235 .

After deducting sales commissions and offering expenses of $ 6,937 , net proceeds totaled approximately $ 224,298 , which were used to fund working capital and general corporate purposes.

This registration

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

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

On December 19, 2024, the Company entered into

an At the Market (“ATM”) Sales Agreement with A.G.P./Alliance Global Partners (“A.G.P.”) (the “AGP Sales

Agreement”), allowing it to offer and sell common stock with an aggregate offering price of up to $ 14,275,000 .

The AGP Sales Agreement

was terminated effective March 29, 2025.

During the nine months ended September 30, 2025, the Company issued 160,879 shares under this

program at a weighted-average price of $ 1.44 per share, for gross proceeds of approximately $ 231,235 .

After deducting sales commissions

and offering expenses of $ 6,937 , net proceeds totaled approximately $ 224,298 , which were used to fund working capital and general corporate

There were no issuances under the AGP Sales Agreement during the fiscal year ended December 31, 2024.

Following the termination of the ATM program with A.G.P.

and related AGP Sales Agreement, on April 2, 2025, the Company entered into an At-The-Market Offering Agreement with Wainwright, permitting the sale of shares of common stock having an aggregate offering price of up to $ 7,650,000 .

During the three months ended June 30, 2025, the Company issued 317,702 shares under this ATM program, generating net proceeds of $ 107,094 after deducting commissions and offering expenses of $ 6,099 .

AGP Sales Agreement, on April 2, 2025, the Company entered into an At-The-Market Offering Agreement with Wainwright, permitting the sale

of shares of common stock having an aggregate offering price of up to $ 7,650,000 .

During the three and nine months ended September 30,

2025, the Company issued 2,474,402 shares of our common stock and 2,792,104 shares of our common stock through the ATM program, generating

net proceeds of approximately $ 837,664 and $ 944,758 after deducting commissions and offering expenses of approximately $ 34,591 and $ 40,689 ,

respectively.

The ATM program was suspended on July 16, 2025, in connection with the 2025 Public Offering, and we have not yet recommenced

the ATM program.

Note 15 - Commitments and Contingencies

GEM Agreement

Pursuant to the terms of the GEM Agreement, we are required to indemnify GEM for any losses it incurs as a result of a breach by us or of our representations and warranties and covenants under the GEM Agreement or for any misstatement or omission of a material fact in a registration statement registering those shares pursuant to the GEM Agreement.

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

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

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

The Company cannot reasonably estimate the potential losses, if any, with respect to the GEM Agreement or the related litigation.

GTG Financial Acquisition Agreement

As part of the acquisition of GTG Financial, the Company agreed to pay deferred cash consideration totaling $ 1,344,750 in three tranches over a six-month period following the closing.

As of June 30, 2025, the first scheduled payment had not yet been made.

Under the terms of that certain Stock Purchase Agreement entered in connection with the acquisition of GTG Financial, dated as of February 20, 2025, Glenn Groves, the seller has the right to request payment, but no such demand or notice of breach has been issued.

The Company is in ongoing discussions with the seller and continues to assess the timing of the payment in accordance with the contractual terms.

Pursuant to the terms of the GEM Agreement, we are required to indemnify

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

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

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

against any such loss.

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

to the GEM Agreement prior to its expiration.

Restrictions arising under the terms of our future financings may also affect our ability

to raise capital pursuant to the GEM Agreement.

The Company cannot reasonably estimate the potential losses, if any, with respect to the

GEM Agreement or the related litigation.

Indemnification Agreements

The Company maintains indemnification agreements with our directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by law.

The Company maintains indemnification agreements with its directors

and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service

as directors or officers, except as prohibited by law.

Contingent Consideration and Compensation

The Company is party to acquisition-related agreements with former owners of Naamche and reAlpha Mortgage, which include contingent consideration arrangements based on the achievement of certain financial milestones.

The terms of these arrangements were previously disclosed on “Note 16 – Commitments and Contingencies” in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

and remains unchanged.

The contingent consideration liabilities are measured at fair value each reporting period, with changes recognized in earnings.

During the six months ended June 30, 2025, the Company recorded a $ 81,000 gain related to an increase in the fair value of the contingent consideration associated with the reAlpha Mortgage acquisition.

The Company is party to acquisition-related agreements

with former owners of Naamche and reAlpha Mortgage, which include contingent consideration arrangements based on the achievement of certain

financial milestones.

The terms of these arrangements were previously disclosed on “Note 15 - Commitments and Contingencies”

in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

In connection with the departure of the Naamche

co-founders from the Company, contingent consideration of $ 137,000 that had been initially recognized at the time of the acquisition was

settled in accordance with the terms of the separation agreements between the Company and each Naamche co-founder.

During the three months

ended September 30, 2025, separation payments in the amount of $ 50,000 were paid, and the remaining $ 87,000 was reclassified from contingent

consideration to accrued expenses.

The contingent consideration liabilities are measured

at fair value each reporting period, with changes recognized in earnings.

During the nine months ended September 30, 2025, the Company

recorded a $ 148,000 gain related to a decrease in the fair value of the contingent consideration associated with the reAlpha Mortgage

No payments were made under these arrangements during the period.

Acquisition Agreement - GTG Financial

On February 20, 2025, the Company completed the acquisition of GTG Financial, a mortgage brokerage, for total consideration of up to $ 4.2 million, which includes equity, deferred cash payments, and performance-based earn-out payments.

The earn-out is based on the achievement of specified revenue and EBITDA targets over three years and may be settled in cash or stock at the Company’s discretion.

As of June 30, 2025, the Company recorded the fair value of the contingent consideration at $ 1,959,000 , classified as a Level 3 liability under the fair value hierarchy.

The valuation was based on unobservable inputs, including internal revenue forecasts, and was developed using the scenario-based simulation method with support from a third-party valuation specialist.

As of June 30, 2025, the Company’s contingent consideration liabilities and non-current balances were as follows:

As of June 30, 2025

Contingent consideration at Purchase Date

Consideration Paid

Changes in Fair Value

Contingent Consideration

Contingent consideration, non-current - Naamche

Contingent consideration, non-current - GTG Financial

Contingent consideration, non-current - reAlpha Mortgage

Total contingent consideration

On February 20, 2025, the Company completed the

acquisition of GTG Financial, a mortgage brokerage, for total consideration of up to $ 4.2 million, which included equity, deferred cash

payments, and performance-based earn-out payments in accordance with the terms of the SPA.

On the Rescission Date, GTG Financial rescinded

As a result, the Company has derecognized the contingent consideration liability and has no further obligations related to this

GTG Financial is no longer a subsidiary of the Company, effective as of the Rescission Date (see “Note 4 – Business

Combinations” for more information).

Acquisitions of reAlpha Mortgage and Naamche

As of December 31, 2024, the Company’s contingent

consideration liability was approximately $ 1,086,000 , which included non-current liabilities related to the reAlpha Mortgage and Naamche

acquisitions.

During the three and nine months ended September

30, 2025, the Company recognized fair value gains of approximately $ 67,000 and $ 148,000 , respectively, primarily driven by changes in

projected earn-out performance related to the reAlpha Mortgage acquisition.

As of September 30, 2025, the fair value of the contingent

consideration liability was approximately $ 801,000 , all of which is classified as Level 3 within the fair-value hierarchy.

The contingent consideration related to the Naamche

acquisition included a payment of $ 50,000 and a reclassification of $ 87,000 to accrued expenses during the nine months ended September

The contingent consideration related to the GTG

Financial acquisition was canceled on the Rescission Date, following the rescission of the SPA (see “Note 4 – Business Combinations”

for more information).

Legal Matters

GEM Yield Bahamas Limited Litigation

On November 1, 2024, we filed a lawsuit against GYBL in the United States District Court for the Southern District of New York (the “Court”), under which we asserted two causes of action:

(i) rescission of the GEM Warrants issued to GYBL under the GEM Agreement, by and among us, GYBL and GEM Global Yield LLC SCS, under Section 29(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), due to GYBL’s underlying violation of Section 15(a) of the Exchange Act for effecting the GEM Warrants as an unregistered dealer, and (ii) in the alternative, a declaratory judgment that the exercise price adjustment calculation of the GEM Warrants is governed by the terms provided in the GEM Warrants, rather than the terms of the GEM Agreement.

Following a motion to dismiss filed by GYBL on January 17, 2025, the Court granted such motion to dismiss on March 14, 2025.

On April 15, 2025, we filed an appeal of the Court’s decision dismissing our case to the United States Court of Appeals for the Second Circuit (the “Second Circuit”).

The briefing schedule at the Second Circuit is being held in abeyance in order to allow two previously filed appeals, filed by two other public companies on identical issues against other similar investors, be resolved first.

However, if and when the appellate briefing moves forward, there is no assurance that it will be successful.

Additionally, following the Court’s grant of GYBL’s motion to dismiss our lawsuit, GYBL filed a separate lawsuit against us, in which GYBL 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.

On June 9, 2025, we filed a motion to dismiss this lawsuit from GYBL.

GYBL responded to our motion to dismiss on June 23, 2025 asserting that our motion to dismiss should be denied, or, in the alternative, GYBL should be given leave to further amend its complaint.

On June 30, 2025, the Company filed a reply in support of its motion to dismiss.

On November 1, 2024, we filed a lawsuit against

GYBL in the United States District Court for the Southern District of New York (the “Court”), under which we asserted two

causes of action:

(i) rescission of the GEM Warrants issued to GYBL under the GEM Agreement, by and among us, GYBL and GEM Global Yield

LLC SCS, under Section 29(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), due to GYBL’s

underlying violation of Section 15(a) of the Exchange Act for effecting the GEM Warrants as an unregistered dealer, and (ii) in the alternative,

a declaratory judgment that the exercise price adjustment calculation of the GEM Warrants is governed by the terms provided in the GEM

Warrants, rather than the terms of the GEM Agreement.

Following a motion to dismiss filed by GYBL on January 17, 2025, the Court granted

such motion to dismiss on March 14, 2025.

On April 15, 2025, we filed an appeal of the Court’s decision dismissing our case to the

United States Court of Appeals for the Second Circuit (the “Second Circuit”).

The briefing schedule at the Second Circuit

is being held in abeyance in order to allow two previously filed appeals, filed by two other public companies on identical issues against

other similar investors, to be resolved first.

However, if and when the appellate briefing moves forward, there is no assurance that it

will be successful.

Additionally, following the Court’s grant

of GYBL’s motion to dismiss our lawsuit, GYBL filed a separate lawsuit against us, in which GYBL is asserting two causes of action

(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.

On June 9, 2025, we filed a motion to dismiss this lawsuit

GYBL responded to our motion to dismiss on June 23, 2025, asserting that our motion to dismiss should be denied, or, in the

alternative, GYBL should be given leave to further amend its complaint.

On June 30, 2025, the Company filed a reply in support of its

motion to dismiss.

On August 21, 2025, the Court granted, in part, our motion to dismiss the amended complaint with respect to GYBL’s

claim for declaratory relief concerning the validity and enforceability of the GEM Warrants.

The Court denied our motion to dismiss

in all other respects.

Following the Court’s partial grant and partial dismissal of our motion to dismiss, we filed an answer to

GYBL’s amended complaint on September 4, 2025.

Note 16 - Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires additional disclosure of significant segment expenses included in the reported measure of segment profit or loss and regularly provided to the Chief Operating Decision Maker (the “CODM”).

It also requires disclosure and a description of the composition of other amounts by reportable segment, disclosure of a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods and disclosure of the CODM’s title and process for assessing a reportable segment’s profit or loss.

The new guidance was effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

The Company adopted ASU 2023-07 in the fourth quarter of 2024, noting no material impact on its consolidated financial statements.

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the CODM in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s Chief Executive Officer is the CODM.

The CODM reviews financial information presented at a consolidated level on a recurring basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

The Company’s operations are organized into one operating and one reportable segment, technology services.

This segment includes mortgage, real estate, and technology product lines that, although discussed separately and may exhibit counter-cyclical trends, are managed and reported together.

The CODM allocates resources and assesses performance of the Company based on net income (loss), as reported on the Consolidated Statement of Operations, which as the segment measure of profit and loss that is based on GAAP, is the required segment measure.

The CODM reviews these measures (i) to evaluate the Company's operating results and the effectiveness of business strategies, and (ii) internally as benchmarks to compare the Company's performance to its competitors.

Additionally, the Company believes these measures are important to evaluate the performance and profitability of our products, individually and in the aggregate.

The CODM does not review segment assets and segment expenses at a level different than what is reported in the Company’s consolidated balance sheet and consolidated statement of operations.

In November 2023, the FASB issued ASU 2023-07,

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which enhances segment reporting

requirements by requiring disclosure of significant segment expenses included in the reported measure of segment profit or loss and regularly

provided to the Chief Operating Decision Maker (“CODM”).

The guidance also requires disclosure of the composition of other

segment amounts, interim period segment profit or loss and asset information, and details regarding the CODM’s title and role in

assessing segment performance.

The new standard is effective for fiscal years

beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

The Company adopted ASU 2023-07 in the fourth

quarter of 2024, with no material impact on its consolidated financial statements upon adoption.

The Company defines operating segments as components

of the business for which discrete financial information is available and regularly reviewed by the CODM to allocate resources and assess

The Company’s Chief Executive Officer serves as the CODM and reviews financial information on a consolidated basis

for decision-making, resource allocation, and performance evaluation .

Accordingly, the Company operates as one operating and reportable

segment—technology services—which encompasses its mortgage, real estate, and technology product lines.

Although these product

lines may exhibit different cyclical trends, they are managed together and reported as a single segment.

The CODM evaluates performance based on net income

(loss), as presented in the Consolidated Statement of Operations, which represents the Company’s segment measure of profit or loss

in accordance with GAAP.

These measures are used to (i) assess operating results and the effectiveness of business strategies and (ii)

benchmark the Company’s performance against competitors.

The CODM does not review segment assets or expenses

at a level different from those presented in the Company’s consolidated balance sheet and statement of operations.

Note 17 - Discontinued Operations

There have been no changes to the Company’s discontinued operations since the filing of the Form 10-K.

As previously disclosed, during the year ended December 31, 2024, the Company made a strategic decision to fully discontinue the operations through its previously acquired subsidiary, Roost Enterprises, Inc.

(“Rhove”), which previously operated under the rental business segment.

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

As of June 30, 2025, the operations under which Rhove operated continues to be classified as a discontinued operation under ASC 205-20, Presentation of Financial Statements – Discontinued Operations.

The following table provides details of the discontinued operations as of June 30, 2025, and December 31, 2024:

There have been no changes to the Company’s

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

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

made a strategic decision to fully discontinue the operations through its previously acquired subsidiary, Rhove, which had previously

operated under the rental business segment.

This decision was made due to the lack of future revenue potential and the absence of funding

to further develop the platform.

As of September 30, 2025, the operations formerly conducted by Rhove

continue to be classified as a discontinued operation under ASC 205, Presentation of Financial Statements - Discontinued Operations.

The following table provides details of the discontinued operations

as of September 30, 2025, and December 31, 2024:

Rhove Related Assets

September 30,

(transferred to the Company)

Current Assets

4 unchanged sentences

Total liabilities - Rhove

The following table represents the statement of operations for discontinued operations as of each reporting period:

For the Period Ended

The following table represents the statement of

operations for discontinued operations as of each reporting period:

September 30,

Cost of revenues

Discontinued Operating Expenses

Dues and subscriptions

Professional and legal fees

Other operating expenses

Total operating expenses

Discontinued Operating Expense

Other operating expense

Total operating expense

Discontinued Operating Loss

1 unchanged sentence

Note 18 - Subsequent Events

Subsequent to June 30, 2025, we issued 2,474,402 shares of our common stock through the ATM program with Wainwright, resulting in net proceeds of approximately $ 837,664 .

On July 2, 2025, the Company received a redemption notice from Streeterville for a redemption payment in the amount of $350,000.

In connection therewith, the Company entered into an Exchange Agreement with Streeterville, under which the Company agreed to fully satisfy a redemption payment of $ 350,000 under the Note by issuing 1,267,656 shares of common stock at an effective price of $ 0.2761 per share, in lieu of cash.

In connection with the Exchange Agreement, the Company and Streeterville agreed to (i) partition a new secured promissory note in the principal amount of $ 350,000 (the “Partitioned Note”) and reduce the outstanding balance of the original note by the same amount, and (ii) exchange the Partitioned Note for the delivery of the common stock (the “Exchange”).

Following the Exchange, the remaining outstanding balance of the original note was reduced to approximately $ 4,080,171 .

On July 18, 2025, the Company completed a best-efforts public offering of 13,333,334 shares of common stock, together with Series A-1 and Series A-2 warrants (one of each issued per share of common stock sold), at a combined offering price of $ 0.15 per share and accompanying warrants.

The offering generated gross proceeds of approximately $ 2.0 million and net proceeds of approximately $ 1.56 million, after deducting placement agent fees and other offering-related expenses.

Each Series A-1 and Series A-2 warrant entitles the holder to purchase one share of common stock at an exercise price of $ 0.15 per share.

The warrants become exercisable upon the effectiveness of stockholder approval for the issuance of the underlying shares.

The Series A-1 warrants will expire five years after the stockholder approval date, while the Series A-2 warrants will expire twenty-four months after such date.

In connection with this offering, the Company also issued Placement Agent Warrants to the placement agent, Wainwright, or its designees, to purchase up to 666,667 shares of common stock representing 5.0 % of the shares sold in the offering.

The Placement Agent Warrants have an exercise price of $ 0.1875 per share, will become exercisable upon the effectiveness of stockholder approval for the issuance of the underlying shares and will expire five years from the commencement of sales in such offering.

On July 22, 2025, the Company completed a registered direct offering of 14,285,718 shares of its common stock, as well as a concurrent private placement of unregistered common stock warrants exercisable into an equal number of shares of common stock with an exercise price of $ 0.35 per share (the “RDO Warrants”).

The RDO Warrants are immediately exercisable upon issuance and expire after the fifth anniversary of the effective date of the registration statement covering the resale of shares of common stock issuable upon exercise of the RDO Warrants.

This registered direct offering and concurrent private placement raised gross proceeds of $ 5.0 million and net proceeds of $ 4.5 million, after deducting placement agent fees and offering-related expenses.

In connection with this offering, the Company also issued Placement Agent Warrants to Wainwright or its designees to purchase up to 714,286 shares of common stock, representing 5.0 % of the shares sold in the offering.

These Placement Agent Warrants have an exercise price of $ 0.4375 per share, are immediately exercisable upon issuance and will expire five years from the commencement of sales in such offering.

On July 23, 2025, the Company fully repaid and extinguished its secured promissory note issued to Streeterville, which had an initial principal of $ 5,455,000 and a maturity date of February 14, 2026.

The repayment amount, which totaled approximately $ 4,466,202 (inclusive of a 9 % prepayment penalty), was repaid using cash on hand and proceeds from the Company’s recent equity offerings described above.

In connection with the Company’s repayment of the Note in full, the Company received a certificate from Streeterville reflecting its full repayment and release of obligations confirming that the Company has satisfied all of its obligations under the Note and that Streeterville has released the Company and its subsidiaries from any further obligations or liabilities related to the Note and the Note Purchase Agreement.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORT

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

Forward-looking statements give our current expectations or forecasts of future events.

You can identify these statements by the fact that they do not relate strictly to historical or current facts.

You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this report.

Subsequent to the three months ended September 30, 2025, (i) holders

of the Private Placement Warrants exercised their warrants for cash to purchase an aggregate of 1,580,953 shares of common stock, at an

exercise price per share of $ 0.35 , resulting in additional proceeds to us of approximately $ 550,000 to date, (ii) certain holders of the

July 2025 Warrants exercised their warrants for cash to purchase an aggregate of 23,051,394 shares of our common stock at an exercise

price per share of $ 0.15 , resulting in aggregate gross proceeds to us of approximately $ 3.5 million, (iii) holders of the Placement

Agent Warrants exercised their warrants for cash to purchase an aggregate of 354,167 shares of our common stock, at an exercise price

per share of $ 0.1875 , resulting in additional proceeds to us of approximately $ 50,000 and (iv) a holder of the RDO Placement Agent Warrants exercised their warrants for cash to purchase an aggregate

of 7,143 shares of our common stock, at an exercise price per share of $ 0.4375 , resulting in additional proceeds to us of $ 2,500 .

On October 21, 2025, the Company fully repaid

the outstanding balance of loans to AiChat under SEA’s financing arrangement.

The total amount repaid was approximately $ 126,946 ,

which consisted of $ 121,693 in principal and $ 5,253 in accrued interest.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

AND OTHER INFORMATION CONTAINED IN THIS REPORT

This Quarterly Report on

Form 10-Q, or this “report,” contains forward-looking statements within the meaning of the federal securities laws.

Forward-looking

statements give our current expectations or forecasts of future events.

You can identify these statements by the fact that they do not

relate strictly to historical or current facts.

You can find many (but not all) of these statements by looking for words such as “approximates,”

“believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,”

“intends,” “plans,” “would,” “should,” “could,” “may,” “will”

or other similar expressions in this report.

In particular, these include statements relating to future actions;

prospective products, applications, customers and technologies;

prospective products,

applications, customers and technologies;

future performance or results of any products;

1 unchanged sentence

and future financial results.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections.

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

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

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from

our historical experience and our present expectations or projections.

Factors that could cause actual results to differ materially from

those discussed in the forward-looking statements include, but are not limited to:

● Our limited cash, history of losses, and our expectation

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

● Our ability to raise capital and to continue as a going concern;

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

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

● We are employing a business model with a limited track record,

which makes our business difficult to evaluate;

● Our technology that is currently being developed may not

yield expected results or be delivered on time;

● Failure to integrate any acquisitions successfully;

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

The implementation of AI into our technologies may prove to be more difficult than anticipated;

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

● We intend to utilize a significant amount of indebtedness

and raise capital through equity offerings for the operation of our business;

● The implementation of AI into our technologies may prove

to be more difficult than anticipated;

● The real estate and real estate technology industries in

which we participate are highly competitive, and we may be unable to compete successfully with our current and/or future competitors;

● Our business depends significantly on the health of the U.S.

residential real estate industry and changes in general economic conditions;

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

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

The laws and regulations regarding privacy, data protection, consumer protection, and other matters are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, or otherwise harm to our business.

Forward-looking statements may appear throughout this report, including without limitation, the following sections:

“Part I, Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A.

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

We undertake no obligation to publicly update or revise any forward-looking statements included in this report.

● Our ability to retain our executive officers and other key

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

technologies;

● The laws and regulations regarding privacy, data protection,

consumer protection, and other matters are subject to change and uncertain interpretation, and could result in claims, changes to our

business practices, monetary penalties, or otherwise harm to our business.

Forward-looking statements may appear throughout this report, including

without limitation, the following sections:

“Part I, Item 2.Management’s Discussion and Analysis of Financial Condition and

Results of Operations” and “Part II, Item 1A.

Risk Factors.” The forward-looking statements are based upon management’s

beliefs and assumptions and are made as of the date of this report.

We undertake no obligation to publicly update or revise any forward-looking

statements included in this report except as required by law.

You should not place undue reliance on these forward-looking statements.

Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” “our” and the “Company” refer to reAlpha Tech Corp.

Unless otherwise stated

or the context otherwise requires, the terms “we,” “us,” “our” and the “Company” refer

to reAlpha Tech Corp.

and its subsidiaries, as applicable.

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

What changed 10-Q

Item 1. Financial Statements