What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-04-28 · 582 added, 910 removed, 278 unchanged (84% of the section changed)

2 unchanged sentences

and Subsidiaries

Condensed Consolidated

Balance Sheet

March 31, 2026

(Unaudited) and December 31, 2025

Condensed Consolidated Balance Sheet

June 30, 2026 (unaudited) and December 31, 2025

Current Assets

Cash $ 2,230,607 $ 7,783,529

Accounts receivable, net 164,959 68,148

Pre-paid expenses

Prepaid expenses 299,977 961,411

Other current assets 286,439 362,293

1 unchanged sentence

Total current assets $ 3,481,982 $ 9,775,381

Property and Equipment, at cost

Property and Equipment

Property and equipment, net $ 105,970 $ 64,626

Investments 56,466 111,646

Intangible assets, net 4,031,464 4,306,553

Goodwill 7,459,125 7,459,125

TOTAL ASSETS $ 15,135,007 $ 21,717,331

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

7 unchanged sentences

Deferred revenue 256,713 396,227

Contingent consideration - current portion 60,184 -

Total current liabilities $ 3,397,641 $ 3,625,710

3 unchanged sentences

Deferred liabilities - net of current portion - 561,740

Contingent consideration

Contingent consideration - net of current portion 244,666 344,877

Total liabilities $ 8,457,191 $ 9,195,718

2 unchanged sentences

5,000,000 shares authorized, of which 1,000,000 shares are designated as Series A Convertible Preferred Stock;

256,125 and 250,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

256,125 and 250,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

1,096,133 1,020,377

Stockholders’ Equity

Common stock ($ 0.001 par value;

200,000,000 shares authorized, 134,118,789 and 131,740,675 shares outstanding as of March 31, 2026;

and December 31, 2025, respectively.

200,000,000 shares authorized, 5,374,302 shares outstanding as of June 30, 2026;

200,000,000 shares authorized, 5,269,799 shares outstanding as of December 31, 2025) 5,374 5,270

Additional paid-in capital 69,129,985 67,593,364

Accumulated deficit ( 63,444,056 ) ( 55,980,534 )

( 60,356,156 )

( 55,980,534 )

Accumulated other comprehensive (loss) ( 120,599 ) ( 127,889 )

Total stockholders’ equity of reAlpha Tech Corp.

5,570,704 11,490,211

Non-controlling interests in consolidated entities 10,979 11,025

4 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended March 31, 2026 and 2025 (Unaudited)

For the Three Months and Six Months Ended June 30, 2026 and 2025 (unaudited)

Three Months Ended

Six Months Ended

Revenues $ 1,110,343 $ 1,252,381 $ 1,951,406 $ 2,178,016

Cost of revenues 377,396 630,916 666,193 1,037,884

Gross Profit 732,947 621,465 1,285,213 1,140,132

Operating Expenses

3 unchanged sentences

Depreciation and amortization 170,680 131,045 332,739 310,194

Impairment of capitalized software - 105,900 - 105,900

Other operating expenses 598,702 409,825 1,149,680 850,400

1 unchanged sentence

Operating Loss ( 2,895,074 ) ( 4,089,130 ) ( 7,176,176 ) ( 6,511,389 )

( 4,280,658 )

( 2,422,258 )

Other Expense (income)

4 unchanged sentences

Total other expense 154,191 728,604 211,636 1,156,513

Net Loss from continuing operations before income taxes

( 4,338,495 )

( 2,850,167 )

Net Loss from operations before income taxes ( 3,049,265 ) ( 4,817,734 ) ( 7,387,812 ) ( 7,667,902 )

Income tax (expense) benefit - - - -

Net Loss from continuing operations

( 4,338,495 )

( 2,850,167 )

$ ( 4,338,495 )

$ ( 2,850,167 )

Net Income (Loss) Attributable to Non-Controlling Interests

Net Loss $ ( 3,049,265 ) $ ( 4,817,734 ) $ ( 7,387,812 ) $ ( 7,667,902 )

Net (Loss) income Attributable to Non-Controlling Interests ( 51 ) 2,038 ( 46 ) 1,629

Net Loss Attributable to Controlling Interests $ ( 3,049,214 ) $ ( 4,819,772 ) $ ( 7,387,766 ) $ ( 7,669,531 )

$ ( 4,338,500 )

$ ( 2,849,758 )

Preferred stock dividend 38,633 $ 49,365 75,756 $ 49,549

Net Loss Attributable to Common Stockholders $ ( 3,087,847 ) $ ( 4,869,137 ) $ ( 7,463,522 ) $ ( 7,719,080 )

$ ( 4,375,623 )

$ ( 2,849,942 )

Other comprehensive income

2 unchanged sentences

Comprehensive Loss Attributable to Common Stockholders $ ( 3,084,908 ) $ ( 4,975,573 ) $ ( 7,456,232 ) $ ( 7,817,591 )

$ ( 4,371,272 )

$ ( 2,861,873 )

Basic loss per share

Continuing operations

Net Loss per share — basic $ ( 0.57 ) $ ( 2.37 ) $ ( 1.40 ) $ ( 3.98 )

Diluted loss per share

Continuing operations

Net Loss per share — diluted $ ( 0.57 ) $ ( 2.37 ) $ ( 1.40 ) $ ( 3.98 )

3 unchanged sentences

and Subsidiaries

Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity (Deficit)

For the Three Months

Ended March 31, 2026, and 2025 (Unaudited)

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

For the Three and Six Months Ended June 30, 2026, and 2025 (unaudited)

Mezzanine Equity

Comprehensive

and Subsidiaries

Stockholders’

at December 31, 2024

$ ( 38,260,913 )

( 2,849,758 )

( 2,850,167 )

Balance at December 31, 2024 $ - $ - $ - 1,834,610 $ 1,835 $ 39,814,090 $ ( 38,260,913 ) $ 5,011 $ 1,560,023 $ 7,449 $ 1,567,472

Net loss - - - - - - ( 2,849,758 ) - ( 2,849,758 ) ( 409 ) ( 2,850,167 )

Other comprehensive loss - - - - - - - ( 11,931 ) ( 11,931 ) - ( 11,931 )

Series A convertible preferred stock

Series A convertible preferred stock issuance 264,063 5,281,260 5,281,260 - - - - - - - -

Preferred stock dividend - 184 184 - - - ( 184 ) - ( 184 ) - ( 184 )

Common stock issuance to AiChat10X

Common stock issuance through ATM

Common stock issuance to Streeterville

March 31, 2025

( 41,110,855 )

December 31, 2025

( 55,980,534 )

( 4,338,500 )

Common stock issuance to AiChat10X Pte.

- - - 7,588 8 ( 8 ) - - - - -

Common stock issuance through ATM - - - 6,436 6 231,229 - - 231,235 - 231,235

Common stock issuance to Streeterville Capital, LLC - - - 635 1 19,999 - - 20,000 - 20,000

Stock-based compensation - - - - - 78,355 - - 78,355 - 78,355

Balance at March 31, 2025 264,063 5,281,444 5,281,444 1,849,269 1,850 40,143,665 ( 41,110,855 ) ( 6,920 ) ( 972,260 ) 7,040 ( 965,220 )

Net loss - - - - - - ( 4,819,772 ) - ( 4,819,772 ) 2,038 ( 4,817,734 )

Other Comprehensive gain - - - - - - - ( 106,436 ) ( 106,436 ) - ( 106,436 )

Preferred stock dividend - ( 49,365 ) ( 49,365 ) - - - ( 49,365 ) - ( 49,365 ) - ( 49,365 )

Warrants exercised - - - 168,751 169 2,934,741 - - 2,934,910 - 2,934,910

Shares issuance - GTG acquisition - - - 28,002 28 451,107 - - 451,135 - 451,135

Common stock issuance to employees - - - 3,964 4 64,047 - - 64,051 - 64,051

Shares issuance to Streeterville Capital, LLC - - - 29,905 30 370,035 - - 370,065 - 370,065

Share issuance - Non-employee - - - 2,021 2 24,998 - - 25,000 - 25,000

Shares issuance through ATM - - - 12,708 12 106,776 - - 106,788 - 106,788

Stock-based compensation - - - - - 129,242 - - 129,242 - 129,242

Balance at June 30, 2025 264,063 5,330,809 5,330,809 2,094,620 2,095 44,224,611 ( 45,979,992 ) ( 113,356 ) ( 1,866,642 ) 9,078 ( 1,857,564 )

Balance at December 31, 2025 250,000 1,020,377 1,020,377 5,269,799 5,270 67,593,364 ( 55,980,534 ) ( 127,889 ) 11,490,211 11,025 11,501,236

Net loss - - - - - - ( 4,338,552 ) - ( 4,338,552 ) 5 ( 4,338,547 )

Other comprehensive loss - - - - - - - 4,351 4,351 - 4,351

Common stock issuance through ATM - - - 10,018 10 126,140 - - 126,150 - 126,150

Series A convertible preferred stock

Series A convertible preferred stock issuance 6,125 - - - - - - - - -

Preferred stock dividend - 37,123 37,123 - - - ( 37,123 ) - ( 37,123 ) ( 37,123 )

Stock-based compensation - - - - - 343,963 - - 343,963 - 343,963

Adjustment related to reverse stock split - - - ( 85 ) - - - - - - -

Common stock issuance to Prevu - - - 81,544 81 617,414 - - 617,495 - 617,495

issuance to employees

March 31, 2026

( 60,356,156 )

Common stock issuance – board compensation - - - 3,562 4 36,153 - - 36,157 - 36,157

Balance at March 31, 2026 256,125 1,057,500 1,057,500 5,364,838 5,365 68,717,034 ( 60,356,209 ) ( 123,538 ) 8,242,652 11,030 8,253,682

Net loss - - - - - - ( 3,049,214 ) - ( 3,049,214 ) ( 51 ) ( 3,049,265 )

Other comprehensive loss - - - - - - - 2,939 2,939 - 2,939

Preferred stock dividend - 38,633 38,633 - - - ( 38,633 ) - ( 38,633 ) - ( 38,633 )

Stock-based compensation - - - - - 368,377 - - 368,377 - 368,377

Common stock issuance – board compensation - - - 9,504 9 44,574 - - 44,583 - 44,583

Shares Cancelled - - - ( 40 ) - - - - - - -

Balance at June 30, 2026 256,125 1,096,133 1,096,133 5,374,302 5,374 69,129,985 ( 63,444,056 ) ( 120,599 ) 5,570,704 10,979 5,581,683

reAlpha Tech Corp.

and Subsidiaries

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2026, and 2025 (unaudited)

Three Months Ended

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2026, and 2025 (unaudited)

Cash Flows from Operating Activities:

$ ( 4,338,495 )

$ ( 2,850,167 )

Net Loss $ ( 7,387,812 ) $ ( 7,667,902 )

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

Depreciation and amortization 332,739 261,444

Impairment of capitalized software - 105,900

Impairment of intangible assets 16,039 -

Bad debt expense 5,503

Amortization of loan discounts and origination fees - 242,502

Common stock issued to non-employee

Stock based compensation - employees

Stock based compensation 712,342 271,644

Change in fair value of contingent consideration ( 40,027 ) ( 81,000 )

2 unchanged sentences

Non-cash marketing and advertising 593,429 1,293,991

Interest expense on deferred consideration

Non-cash compensation - GTG Financial - 106,000

Loss on extinguishment of debt - 70,065

Loss on sale of properties - 48,748

Loss from equity method investment 5,180 2,398

Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:

Changes in operating assets and liabilities

1 unchanged sentence

Receivable from related parties - 10,614

Pre-paid expenses

Payable to related parties ( 45 ) ( 3,563 )

Prepaid expenses 68,005 61,946

Other current assets 75,854 ( 225,920 )

Accounts payable 418,224 428,013

Payable to related parties

Accrued expenses ( 322,001 ) ( 216,917 )

3 unchanged sentences

Net cash used in operating activities ( 5,478,111 ) ( 4,602,029 )

( 3,123,752 )

( 2,267,103 )

Cash Flows from Investing Activities:

Additions to property and equipment ( 58,126 ) ( 27,114 )

Cash paid for acquisitions, net

Cash acquired in acquisitions, net - 349,529

Cash used for additions to capitalized software ( 58,736 ) ( 131,283 )

Net cash (used in) provided by investing

Net cash used in investing activities ( 116,862 ) 191,132

Cash Flows from Financing Activities:

3 unchanged sentences

Equity issuance expenses ( 5,191 ) ( 235,251 )

Net cash provided by financing

Net cash provided by financing activities 42,312 1,874,264

Net decrease in cash ( 5,552,661 ) ( 2,536,633 )

( 3,115,495 )

( 1,919,544 )

Effect of exchange rate changes on cash ( 261 ) -

2 unchanged sentences

Supplemental Disclosure of Cash Flow Information

Interest expense

Non-cash Investing and Financing Activities:

Interest paid $ 41,465 $ 38,758

Noncash Investing and Financing Activities:

Series A Convertible Preferred Stock issuance - MMC - 5,000,000

1 unchanged sentence

Deferred cash payments - GTG Financial - 1,344,750

Deferred issuance of common stock - GTG Financial

Common stock issuance for GTG Financial acquisition - 451,135

Common stock issuance to Streeterville Capital, LLC - 370,065

Common stock issuance - GTG Financial - 1,287,000

Deferred issuance of common stock - Prevu 617,495 -

Common stock issuance – Board Compensation 80,740

Paid in kind dividends 122,500 -

reAlpha Tech Corp.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

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.”

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 homebuying process while generating revenue through

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

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

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 homebuying process while generating revenue through realty services, mortgage brokering services, and digital title and escrow services.

The Company operates through its subsidiaries Naamche, Inc.

3 unchanged sentences

Naamche, “reAlpha Nepal”), and AiChat Pte.

(“AiChat”) to expand its software development expertise and AI-driven

engagement tools, and the reAlpha Realty, LLC entities, Debt Does Deals, LLC (f/k/a Be My Neighbor and d/b/a reAlpha Mortgage) (“reAlpha

Mortgage”), Hyperfast Title LLC (“Hyperfast”) and Prevu, Inc.

and its subsidiaries (collectively, “Prevu”)

to provide realty services, mortgage brokering and digital title and escrow services, which enable the Company to capture value across

multiple stages of the transaction process.

(“AiChat”) to expand its software development expertise and AI-driven engagement tools, and the reAlpha Realty, LLC entities, Debt Does Deals, LLC (f/k/a Be My Neighbor and d/b/a reAlpha Mortgage) (“reAlpha Mortgage”), Hyperfast Title LLC (“Hyperfast”) and Prevu, Inc.

and its subsidiaries (collectively, “Prevu”) to provide realty services, mortgage brokering and digital title and escrow services, which enable the Company to capture value across multiple stages of the transaction process.

Although the Company had previously acquired GTG Financial, Inc.

(“GTG” or “GTG

Financial”), during the year ended December 31, 2025, the Company’s acquisition of GTG 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 was no longer a subsidiary of the Company as of August 21,

2025 (the “Rescission Date”).

See “Note 5 – Business Combinations – Acquisition and Rescission of GTG Financial,

Inc.” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”),

filed on March 12, 2026, with the Securities and Exchange Commission (the “SEC”) for more information.

With its focus on AI technology and integrated

real estate services, the Company is developing an end-to-end homebuying platform named the “reAlpha platform.” The Company’s

goal is to offer through its AI-powered platform a more affordable, streamlined experience for those on the journey to homeownership.

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

and certain services, including realty services, mortgage brokering services, and digital title and escrow services within the platform.

The Company’s principal office is located

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

Note 2 - Summary of Significant Accounting

(“GTG” or “GTG Financial”), during the year ended December 31, 2025, the Company’s acquisition of GTG 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 was no longer a subsidiary of the Company as of August 21, 2025 (the “Rescission Date”).

See “Note 4 - Business Combinations - Acquisition and Rescission of GTG Financial, Inc.” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), filed on March 12, 2026, with the Securities and Exchange Commission (the “SEC”), for more information.

With its focus on AI technology and integrated real estate services, the Company is developing an end-to-end homebuying platform named the “reAlpha platform.” The Company’s goal is to offer through its AI-powered platform a more affordable, streamlined experience for those on the journey to homeownership.

The reAlpha platform integrates AI-driven tools to offer, among others, tailored property recommendations, an intuitive visual interface, and certain services, including realty services, mortgage brokering services, and digital title and escrow services within the platform.

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

During the three months ended June 30, 2026, the Company implemented restructuring plans (the “Plans”) to improve operating efficiency and streamline the Company’s operations as it continues to align its cost structure with its strategic objectives.

The Plans were designed to support the Company’s return-driven spending initiative by prioritizing capital deployment in areas with clear and measurable returns, while reducing personnel-related costs and rationalizing certain third-party vendor relationships.

The Plans included a reduction of approximately 25 % of the Company’s global workforce and were completed during the three months ended June 30, 2026.

In implementing the Plans, the Company incurred restructuring costs of $ 68,244 during the three and six months ended June 30, 2026, consisting primarily of severance and related termination benefits.

These costs are included in other operating expenses in the unaudited condensed consolidated statements of operations.

The Company paid $ 68,244 of these costs during the three months ended June 30, 2026, and no restructuring liability remained outstanding as of June 30, 2026.

Note 2 - Summary of Significant Accounting Policies

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 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.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of 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 accounting principles generally accepted in the United States of America (“U.S.

and 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.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and 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.

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 unaudited condensed consolidated balance sheet as of December

31, 2025, has been derived from the Company’s audited consolidated financial statements included in 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 necessary for a fair presentation have been included.

The unaudited condensed consolidated balance sheet as of December 31, 2025, has been derived from the Company’s audited consolidated financial statements included in 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.

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

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.

The results of operations for the interim period are not necessarily indicative of the results to be expected for any future periods.

During the preparation of the Form 10-K, the Company reevaluated the accounting classification of its Series A Convertible Preferred Stock, par value $ 0.001 per share (the “Series A Preferred Stock”) and concluded that the instrument should be classified as mezzanine equity rather than as a liability.

As a result, the comparative unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, have been revised to reflect the accounting treatment and presentation adopted in the Form 10-K, including the related impact on the statement of operations and earnings (loss) per share.

Refer to “Note 13 – Mezzanine Equity and Preferred Stock Embedded Derivative Liability” in the Form 10-K for more information regarding this accounting conclusion.

As a result of the revised accounting treatment, for the three months ended June 30, 2025, interest expense was revised from $ 292,004 to $ 242,639 , the previously reported gain of $ 339,378 from the change in fair value of the Series A Preferred Stock liability and embedded derivative liability was revised to an expense of $ 417,705 related solely to the derivative liability, preferred stock dividends of $ 49,365 were recognized, and net loss was revised from $ 4,110,016 to $ 4,817,734 .

After retrospectively adjusting the weighted-average shares outstanding for the Reverse Stock Split (as defined below), as further described below, and recalculating earnings per share using the revised loss attributable to common stockholders, basic and diluted net loss per share were revised from $ 2.00 to $ 2.37 .

For the six months ended June 30, 2025, interest expense was revised from $ 497,251 to $ 447,702 , the previously reported gain of $ 339,378 from the change in fair value of the Series A Preferred Stock liability and embedded derivative liability was revised to an expense of $ 417,705 related solely to the derivative liability, preferred stock dividends of $ 49,549 were recognized, and net loss was revised from $ 6,960,368 to $ 7,667,902 .

After retrospectively adjusting the weighted-average shares outstanding for the Reverse Stock Split and recalculating earnings per share using the revised loss attributable to common stockholders, basic and diluted net loss per share were revised from $ 3.58 to $ 3.98 .

Reverse Stock Split

On April 28, 2026, the Company filed a Certificate of Amendment (the “Charter Amendment”) to its Second Amended and Restated Certificate of Incorporation (the “certificate of incorporation”) with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of the Company’s issued and outstanding common stock (the “Reverse Stock Split”).

The Reverse Stock Split became effective at 12:01 a.m., Eastern Time, on April 30, 2026.

As a result, every 25 shares of issued and outstanding common stock were combined into one share of common stock, with no change in the $ 0.001 par value per share.

The Reverse Stock Split affected all stockholders uniformly and did not affect any stockholder’s percentage ownership interest in the Company, except for adjustments that may have resulted from the treatment of fractional shares.

No fractional shares were issued in connection with the Reverse Stock Split, and fractional interests were rounded up to the nearest whole share.

The Company’s common stock began trading on a post-split basis on April 30, 2026, under its existing trading symbol “AIRE” with a new CUSIP number 75607T204.

In connection with the Reverse Stock Split, the number of shares of common stock issuable upon exercise or conversion of the Company’s outstanding warrants, stock options and other equity awards, as well as shares reserved for issuance under the Company’s equity compensation plans, were proportionately adjusted, and the corresponding exercise prices were increased proportionately, such that the aggregate exercise price payable by the holder remains substantially unchanged.

Additionally, the conversion price and the number of shares of common stock issuable upon conversion of the Series A Preferred Stock were proportionately adjusted in accordance with the terms of the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (as amended, the “Certificate of Designation”), which was amended in connection with the Reverse Stock Split.

All share and per share amounts presented in the accompanying condensed consolidated financial statements and related notes have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented.

Use of Estimates

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 to make the financial statements not misleading have been

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 to make the financial statements not misleading have been included.

Actual results could differ from those estimates.

Business Promotion and Advertising Costs

The Company expenses advertising and marketing costs, including pre-paid

advertising arrangements, as they are incurred.

Advertising and marketing expenses were $ 1,261,980 and $ 518,939 for the three months ended

March 31, 2026, and 2025, respectively, of which $ 593,429 and $0 were related to the utilization of marketing credits obtained through

the issuance of Series A Convertible Preferred Stock, par value $ 0.001 per share (“Series A Preferred Stock”), respectively.

These costs are included in “Marketing and advertising” in the accompanying consolidated statements of operations and comprehensive

The Company expenses advertising and marketing costs, including pre-paid advertising arrangements, as they are incurred.

Advertising and marketing expenses were $ 178,076 and $ 1,440,059 for the three and six months ended June 30, 2026, respectively, and $ 1,483,672 and $ 2,002,611 for the three and six months ended June 30, 2025, respectively.

Of these amounts, none and $ 593,429 for the three and six months ended June 30, 2026, respectively, and $ 1,293,991 for both the three and six months ended June 30, 2025, were related to the utilization of marketing credits obtained through the issuance of shares of Series A Preferred Stock in connection with our media-for-equity transaction with Mercurius Media Capital LP (“MMC”) (see

“Note 10 – Mezzanine Equity and Preferred Stock Embedded Derivative Liability” for more information.

These marketing credits were fully utilized during the first quarter of 2026.

Accordingly, no related marketing credit expense was recognized during the three months ended June 30, 2026, and the six-month amount represents only the utilization recognized during the first quarter of 2026.

Related Party Transactions

The Company accounts for related party transactions in accordance with

ASC 850, Related Party Disclosures (“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 a related party transaction when there is a transfer of resources or obligations

between related parties.

The Company accounts for related party transactions in accordance with Accounting Standards Codification (“ASC”) 850, Related Party Disclosures (“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 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

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.

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.

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

During the year ended December 31, 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 March 31, 2026 was recorded based on updated receivables

and risk profiles as of March 31, 2026.

During the year ended December 31, 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 and six months ended June 30, 2026 was recorded based on updated receivables and risk profiles as of June 30, 2026.

The CECL reserve is netted against accounts receivable, net on the balance sheet.

The resulting

allowance for expected credit losses is not material to the unaudited condensed consolidated financial statements.

The resulting allowance for expected credit losses is not material to the unaudited condensed consolidated financial statements.

Foreign Currency Translation

The Company’s unaudited condensed consolidated financial statements

are presented in U.S.

The functional currency of each subsidiary is the local currency of its primary economic environment, which

in certain cases differs from the reporting currency.

The Company’s unaudited condensed consolidated financial statements are presented in U.S.

The functional currency of each subsidiary is the local currency of its primary economic environment, which in certain cases differs from the reporting currency.

Assets and liabilities of subsidiaries with non-U.S.

1 unchanged sentence

dollars at exchange rates in effect at the balance sheet date.

Equity transactions

are translated at historical exchange rates, and revenues and expenses, are translated at weighted-average exchange rates for the period.

Translation adjustments are recorded in other

comprehensive income (loss) and accumulated in accumulated other comprehensive income (loss) within stockholders’ equity.

Equity transactions are translated at historical exchange rates, and revenues and expenses, are translated at weighted-average exchange rates for the period.

Translation adjustments are recorded in other comprehensive income (loss) and accumulated in accumulated other comprehensive income (loss) within stockholders’ equity.

Equity Method Investment

The Company accounts for investments in entities

in which the Company has significant influence over the entity’s financial and operating policies, but does not control, using the

equity method of accounting.

The equity method investment is initially recorded at cost and subsequently increased for capital contributions

and allocations of net income and decreased for capital distributions and allocations of net loss.

Equity in net income (loss) from the

equity method investment is allocated based on the Company’s economic interest.

The equity method investment is reviewed for impairment

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If it is determined that a loss

in value of the equity method investment is other than temporary, an impairment loss is measured based on the excess of the carrying amount

of an investment over its estimated fair value.

In September 2024, reAlpha AI Labs Inc., a subsidiary of the Company,

entered into a subscription agreement with Xmore AI, Inc.

(“XMore”) to purchase 2,500,000 shares of common stock for total

consideration of $ 125,000 , consisting of $ 100,000 in cash and $ 25,000 in in-kind services.

In June 2025, the subscription agreement was

amended to reduce the Company’s investment to $ 75,000 , consisting of $ 50,000 in cash and $ 25,000 in in-kind services, and the amount

of shares purchased by the Company was reduced to 1,184,210 shares.

The Company recorded its investment in Xmore under the equity method

in accordance with ASC 323, Investments—Equity Method and Joint Ventures.

Goodwill represents the excess of the cost of

an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed.

Goodwill is tested for impairment

at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would

more likely than not reduce the fair value of a reporting unit below its carrying amount.

Accounting requirements provide that a reporting

entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed

that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

If an initial qualitative assessment

identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative

assessment is not performed, a quantitative analysis is performed.

The quantitative goodwill impairment test is performed by calculating

the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount.

If the fair value of a reporting

unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

However, if the carrying amount of a reporting unit

exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded

on the reporting unit.

No such indicators of impairment were identified as of March 31, 2026.

(See “Note 6 - Goodwill and Intangible Assets” in the Form 10-K for further discussion of the Company’s goodwill impairment

The Company accounts for investments in entities in which the Company has significant influence over the entity’s financial and operating policies, but does not control, using the equity method of accounting.

The equity method investment is initially recorded at cost and subsequently increased for capital contributions and allocations of net income and decreased for capital distributions and allocations of net loss.

Equity in net income (loss) from the equity method investment is allocated based on the Company’s economic interest.

The equity method investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If it is determined that a loss in value of the equity method investment is other than temporary, an impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value.

In September 2024, reAlpha AI Labs Inc., a subsidiary of the Company, entered into a subscription agreement with Xmore AI, Inc.

(“XMore”) to purchase 2,500,000 shares of common stock for total consideration of $ 125,000 , consisting of $ 100,000 in cash and $ 25,000 in in-kind services.

In June 2025, the subscription agreement was amended to reduce the Company’s investment to $ 75,000 , consisting of $ 50,000 in cash and $ 25,000 in in-kind services, and the amount of shares purchased by the Company was reduced to 1,184,210 shares.

The Company recorded its investment in Xmore under the equity method in accordance with ASC 323, Investments-Equity Method and Joint Ventures.

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

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

Accounting requirements provide that a reporting entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

If an initial qualitative assessment identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative assessment is not performed, a quantitative analysis is performed.

The quantitative goodwill impairment test is performed by calculating the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount.

If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

However, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded on the reporting unit.

No such indicators of impairment were identified as of June 30, 2026.

(See “Note 6 - Goodwill and Intangible Assets” in the Form 10-K for further discussion of the Company’s goodwill impairment assessment).

Definite-lived Intangible Assets

In accordance with ASC 350, definite-lived intangible assets include assets

such as developed technology, customer contracts, and trademarks that are acquired in business combinations.

The Company’s definite-lived

intangible assets primarily consist of developed technology, trademarks and trade names, and customer relationships, which are amortized

on a straight-line basis over estimated useful lives ranging from 5 to 10 years, 5 to 15 years, and 6 to 10 years, respectively.

The valuation

and classification of these intangible assets and determination of useful lives involves judgments and significant estimates.

These Identifiable

intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are amortized over

their estimated useful lives in a manner that best reflects the economic benefits of the intangible asset using the straight-line method

and estimated useful lives.

We periodically review the estimated useful lives of our definite-lived intangible assets and identify events

or changes in circumstances that may indicate revised estimated useful lives.

(See “Note 6 - Goodwill and Intangible Assets”

in the Form 10-K for further discussion of the Company’s goodwill impairment assessment).

In accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), definite-lived intangible assets include assets such as developed technology, customer contracts, and trademarks that are acquired in business combinations.

The Company’s definite-lived intangible assets primarily consist of developed technology, trademarks and trade names, and customer relationships, which are amortized on a straight-line basis over estimated useful lives ranging from 5 to 10 years, 5 to 15 years, and 6 to 10 years, respectively.

The valuation and classification of these intangible assets and determination of useful lives involves judgments and significant estimates.

These Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are amortized over their estimated useful lives in a manner that best reflects the economic benefits of the intangible asset using the straight-line method and estimated useful lives.

We periodically review the estimated useful lives of our definite-lived intangible assets and identify events or changes in circumstances that may indicate revised estimated useful lives.

(See “Note 6 - Goodwill and Intangible Assets” in the Form 10-K for further discussion of the Company’s goodwill impairment assessment).

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.

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

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 engagement.

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

For ongoing consulting

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

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

as per the guidelines of ASC 606.

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 which was deconsolidated

on August 21, 2025, complied 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 5–Business

Combinations–Acquisition and Rescission of GTG Financial, Inc.” included in the Form 10-K for more information).

reAlpha Nepal, a subsidiary of the Company that provides technology-related

services, recognizes revenue in accordance with ASC 606 from its service-based contracts.

reAlpha Nepal currently generates revenue exclusively

from providing monthly technology support services to third parties.

These arrangements include a single service-based performance obligation

that is satisfied over time, as these third parties simultaneously receive and consume the benefits of the services provided.

is recognized over time in a manner that reflects the continuous transfer of services to the customer.

Prevu is a digital real estate brokerage that

provides licensed brokerage services to homebuyers and home sellers across multiple states through its online platform.

revenue is primarily derived from brokerage commissions earned for services provided as both a buyer’s agent and a seller’s

agent upon the successful completion of real estate transactions.

In accordance with ASC 606, revenue is recognized when control of the

brokerage services transfers to the customer, which occurs upon the closing of a transaction, at which point the Company has satisfied

its performance obligations and is entitled to the commission.

Prevu offers commission rebate programs, including its Smart Buyer™

rebate, under which a portion of the gross brokerage commission is rebated to the buyer at closing.

The rebate amount is determined pursuant

to contractual rebate agreements and is based on a defined calculation methodology that may vary by transaction, commission structure,

service bundle, and market.

As the rebate amount is determinable at the time of closing, revenue is recognized net of rebates when the

related transaction closes.

Such rebates are treated as variable consideration and recorded as a reduction of the transaction price in

accordance with ASC 606.

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 which was deconsolidated on August 21, 2025, complied 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.

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 5 - Business Combinations - Acquisition of GTG Financial, Inc.” and “Note 5 - Business Combinations - Rescission of GTG Financial Acquisition” included in the Form 10-K for more information).

reAlpha Nepal, a subsidiary of the Company that provides technology-related services, recognizes revenue in accordance with ASC 606 from its service-based contracts.

reAlpha Nepal currently generates revenue exclusively from providing monthly technology support services to third parties.

These arrangements include a single service-based performance obligation that is satisfied over time, as these third parties simultaneously receive and consume the benefits of the services provided.

Revenue is recognized over time in a manner that reflects the continuous transfer of services to the customer.

Prevu is a digital real estate brokerage that provides licensed brokerage services to homebuyers and home sellers across multiple states through its online platform.

Prevu’s revenue is primarily derived from brokerage commissions earned for services provided as both a buyer’s agent and a seller’s agent upon the successful completion of real estate transactions.

In accordance with ASC 606, revenue is recognized when control of the brokerage services transfers to the customer, which occurs upon the closing of a transaction, at which point the Company has satisfied its performance obligations and is entitled to the commission.

Prevu offers commission rebate programs, including its Smart Buyer™ rebate, under which a portion of the gross brokerage commission is rebated to the buyer at closing.

The rebate amount is determined pursuant to contractual rebate agreements and is based on a defined calculation methodology that may vary by transaction, commission structure, service bundle, and market.

The rebate amount varies based on the applicable contractual formula and transaction-specific factors and is determined upon closing of the related transaction.

In accordance with ASC 606, the rebate is accounted for as a reduction of the transaction price, and brokerage commission revenue is recognized net of the applicable rebate when the transaction closes.

Business Combinations

Business combinations are accounted for using

the acquisition method of accounting in accordance with the ASC 805, Business Combinations (“ASC 805”).

The purchase price

is allocated to the assets acquired and liabilities assumed based on their estimated fair values.

Fair value of the acquired assets and

liabilities is measured in accordance with the guidance of ASC 820, Fair Value Measurements (“ASC 820”), using discounted

cash flows and other applicable valuation techniques.

To assist the Company in making these fair value determinations, the Company may

engage third-party valuation specialists or internal specialists who generally assist the Company in the fair value determination of identifiable

assets such as customer relationships, trademarks and any other significant asset or liabilities.

Any acquisition-related costs incurred

by the Company are expensed as incurred.

Any excess purchase price over the fair value of the net identifiable assets acquired is recorded

as goodwill if the definition of a business is met.

Operating results of an acquired business are included in our results of operations

from the date of acquisition.

This fair value assessment involves significant

inputs and assumptions, including projected cash flows, expected growth rates, discount rates, and other relevant market data.

exercises careful judgment in selecting these inputs, based on historical performance, market conditions, and the specific technological

characteristics of the software, to ensure that the valuation accurately reflects its economic potential.

Business combinations are accounted for using the acquisition method of accounting in accordance with the ASC 805, Business Combinations (“ASC 805”).

The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values.

Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 820, Fair Value Measurements (“ASC 820”), using discounted cash flows and other applicable valuation techniques.

To assist the Company in making these fair value determinations, the Company may engage third-party valuation specialists or internal specialists who generally assist the Company in the fair value determination of identifiable assets such as customer relationships, trademarks and any other significant asset or liabilities.

Any acquisition-related costs incurred by the Company are expensed as incurred.

Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is met.

Operating results of an acquired business are included in our results of operations from the date of acquisition.

This fair value assessment involves significant inputs and assumptions, including projected cash flows, expected growth rates, discount rates, and other relevant market data.

The Company exercises careful judgment in selecting these inputs, based on historical performance, market conditions, and the specific technological characteristics of the software, to ensure that the valuation accurately reflects its economic potential.

Fair Value Measurements

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying unaudited condensed consolidated balance sheet, primarily due to their short-term nature.

The Company applies to ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework.

ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date.

The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity.

Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

The fair value hierarchy consists of three broad levels:

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges.

Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

The Company’s financial instruments measured at fair value on a recurring basis consist of (i) the embedded derivative liability associated with the Series A Preferred Stock issued to MMC, classified as Level 3 and measured using the Black-Scholes option pricing model (see “Note 10 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability” for more information), and (ii) the contingent consideration liability arising from the acquisition of reAlpha Mortgage, classified as Level 3 and estimated using an income-based valuation approach (see “Note 12 - Commitments and Contingencies” for more information).

Both instruments incorporate significant unobservable inputs;

refer to the respective notes for a description of key assumptions and inputs used in each valuation.

There were no transfers between Level 1, Level 2, or Level 3 classifications during the three and six months ended June 30, 2026.

Recent Accounting Pronouncements

Accounting Pronouncements Issued and Not yet

In November 2024, the Financial Accounting Standards

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

2024-03, Income Statement – Reporting Comprehensive

Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Accounting Pronouncements Issued and Not yet Adopted

In November 2024, the FASB issued Accounting Standards Update (“ASU”) No.

2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 requires additional disclosures about the nature of expenses included in the income statement, such as purchases of inventory,

employee compensation and depreciation.

ASU 2024-03 is effective for public business entities for annual periods beginning after December

15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of ASU 2024-03

on its financial statements and related disclosures.

The Company does not expect the adoption of this standard to have a material impact

on its financial statements, but it will require additional disclosures.

ASU 2024-03 requires additional disclosures about the nature of expenses included in the income statement, such as purchases of inventory, employee compensation and depreciation.

ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of ASU 2024-03 on its financial statements and related disclosures.

The Company does not expect the adoption of this standard to have a material impact on its financial statements, but it will require additional disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill

and Other—Internal-Use Software (Subtopic 350-40):

2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

The amendments in ASU 2025-06 modernize the accounting for internal-use software development costs by removing references

to software development “stages” and instead requiring entities to begin capitalizing costs when management has authorized

and committed to funding the project and it is probable that the project will be completed and the software will be used as intended.

The amendments also provide guidance for evaluating significant development uncertainty, align the accounting for website development

costs with Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software, and require capitalized internal-use software

costs to be subject to certain disclosure requirements in ASC 360, Property, Plant, and Equipment.

The amendments do not affect software

costs accounted for under ASC 985-20, Software – Costs of Software to be Sold, Leased, or Marketed.

ASU 2025-06 is effective for

annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with

early adoption permitted.

The Company is currently evaluating the impact that adoption of ASU 2025-06 will have on its financial statements

and related disclosures.

The amendments in ASU 2025-06 modernize the accounting for internal-use software development costs by removing references to software development “stages” and instead requiring entities to begin capitalizing costs when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used as intended.

The amendments also provide guidance for evaluating significant development uncertainty, align the accounting for website development costs with Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software, and require capitalized internal-use software costs to be subject to certain disclosure requirements in ASC 360, Property, Plant, and Equipment.

The amendments do not affect software costs accounted for under ASC 985-20, Software - Costs of Software to be Sold, Leased, or Marketed.

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact that adoption of ASU 2025-06 will have on its financial statements and related disclosures.

In December 2025, the FASB issued ASU No.

1 unchanged sentence

Narrow-Scope Improvements (“ASU 2025-11”).

ASU 2025-11 clarifies and reorganizes certain aspects

of interim reporting guidance, including disclosure requirements related to events occurring since the end of the most recent annual reporting

period, and enhances the presentation and usability of interim financial statement disclosures.

ASU 2025-11 is effective for interim reporting

periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the

impact that adoption of ASU 2025-11 will have on its financial statements and related disclosures.

The Company does not expect the adoption

of this standard to have a material impact on its consolidated financial statements.

ASU 2025-11 clarifies and reorganizes certain aspects of interim reporting guidance, including disclosure requirements related to events occurring since the end of the most recent annual reporting period, and enhances the presentation and usability of interim financial statement disclosures.

ASU 2025-11 is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact that adoption of ASU 2025-11 will have on its financial statements and related disclosures.

The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Accounting Pronouncements Issued and Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic

Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures,

including jurisdictional information, by requiring consistent categories and greater disaggregation of information in the rate reconciliation

and income taxes paid disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and early adoption is

The Company adopted the disclosure requirements of this standard on its consolidated financial statements on a prospective

In July 2025, the FASB issued ASU No.

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 unaudited condensed consolidated financial statements

or related disclosures.

There have been no material changes to the Company’s critical

accounting policies or the methods used in applying those policies during the three months ended March 31, 2026.

For a full description

of the Company’s significant accounting policies and critical estimates, refer to the audited consolidated financial statements

and accompanying notes included in the Form 10-K.

3 - Going Concern

During the three months ended March 31, 2026, the Company incurred a net loss

of approximately $ 4,338,495 and used cash in operating activities of approximately $ 3,123,752 .

As of March 31, 2026, the Company had cash

and cash equivalents of approximately $ 4,667,612 and has experienced recurring operating losses and negative operating cash flows.

In accordance with ASC 205-40, Going Concern, management evaluated

whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a

going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

The Company’s

recurring losses, negative operating cash flows, limited cash resources relative to its projected cash requirements, and dependence on

access to external financing raise substantial doubt about its ability to continue as a going concern.

In addition, the Company has received a notice

from The Nasdaq Stock Market LLC (“Nasdaq”) indicating non-compliance with the minimum bid-price requirement for continued

listing on the Capital Market tier of Nasdaq.

Failure to regain compliance could result in the delisting of the Company’s common

stock, which could adversely affect the liquidity of the Company’s securities and its ability to access capital markets.

To address its liquidity needs, the Company intends to seek additional

capital through debt or equity financing transactions.

The Company may also receive proceeds from the potential exercise of outstanding

however, such exercises are outside the Company’s control and are dependent on the trading price of the Company’s

common stock and other market conditions.

The Company also has stockholder authorization to effect a reverse stock split in order to support

continued compliance with Nasdaq listing requirements and maintain access to capital markets.

These plans are subject to market conditions,

investor demand, and other factors outside the Company’s control, and there can be no assurance that any financing will be available

on acceptable terms, in the amounts needed, or at all.

As a result, management has concluded that substantial doubt exists

about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated

financial statements are issued.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that

the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

In April 2026, the FASB issued ASU No.

2026-01, Equity (Topic 505):

Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock (“ASU 2026-01”).

ASU 2026-01 requires paid-in-kind (“PIK”) dividends on equity-classified preferred stock, including preferred stock classified as temporary equity, to be initially measured on the basis of the PIK dividend rate stated in the Certificate of Designation.

During the period, the Company declared PIK dividends on its equity-classified preferred stock calculated as the stated PIK dividend rate applied to the dollar value of the outstanding Series A Preferred Stock , resulting in a dividend of $ 122,500 , which was settled through the issuance of additional Series A Preferred Stock at the conversion price of $ 500.00 per share, as specified in the Certificate of Designation.

Consistent with ASU 2026-01, the Company initially measured such PIK dividends using the contractually stated PIK dividend rate applied to the dollar value of the preferred stock, with the number of shares issued determined by reference to the conversion price.

ASU 2026-01 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company adopted ASU 2026-01 on a prospective basis, and the adoption of this standard did not have a material impact on its financial statements and related disclosures.

There have been no material changes to the Company’s critical accounting policies or the methods used in applying those policies during the six months ended June 30, 2026.

For a full description of the Company’s significant accounting policies and critical estimates, refer to the audited consolidated financial statements and accompanying notes included in the Form 10-K.

Note 3 - Going Concern

During the six months ended June 30, 2026, the Company incurred a net loss of approximately $ 7,387,812 and used cash in operating activities of approximately $ 5,478,111 .

As of June 30, 2026, the Company had cash and cash equivalents of approximately $ 2,230,607 and has experienced recurring operating losses and negative operating cash flows.

In accordance with ASC 205-40, Going Concern, management evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

The Company’s recurring losses, negative operating cash flows, limited cash resources relative to its projected cash requirements, and dependence on access to external financing raise substantial doubt about its ability to continue as a going concern.

On May 20, 2025, the Company received a deficiency letter from Nasdaq notifying the Company that its common stock had failed to maintain the minimum $ 1.00 closing bid price required for continued listing under Nasdaq Listing Rule 5550(a)(2).

On March 30, 2026, the Company’s board of directors (the “Board”) approved a 1-for-25 reverse stock split of its outstanding common stock, previously approved by its stockholders at the 2025 annual meeting of stockholders.

The reverse stock split became effective on April 30, 2026, following the filing of an amendment by the Company to its certificate of incorporation with the Secretary of State of Delaware.

The Company subsequently received written confirmation from Nasdaq notifying it that we have regained compliance with Nasdaq Listing Rule 5550(a)(2) (see “Note 2 – Summary of Significant Accounting Policies—Reverse Stock Split” for more information).

To address its liquidity needs, the Company intends to seek additional capital through debt or equity financing transactions.

The Company may also receive proceeds from the potential exercise of outstanding warrants;

however, such exercises are outside the Company’s control and are dependent on the trading price of the Company’s common stock and other market conditions.

These plans are subject to market conditions, investor demand, and other factors outside the Company’s control, and there can be no assurance that any financing will be available on acceptable terms, in the amounts needed, or at all.

As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 - Business Combinations

For comprehensive information regarding acquisitions completed in the fiscal

year ended December 31, 2025, please refer to “Note 5 - Business Combinations” included in the Form 10-K.

There were no acquisitions

completed during the three months ended March 31, 2026.

For comprehensive information regarding acquisitions completed in the fiscal year ended December 31, 2025, please refer to “Note 5 - Business Combinations” included in the Form 10-K.

There were no acquisitions completed during the six months ended June 30, 2026.

Acquisitions during the year ended December 31, 2025

Acquisition and Rescission of GTG Financial, Inc.

In February 2025, the Company acquired 100 % of the issued and outstanding

shares of common stock of GTG Financial, Inc.

In February 2025, the Company acquired 100 % of the issued and outstanding shares of common stock of GTG Financial, Inc.

(“GTG Financial”), a mortgage brokerage company.

The total purchase consideration

was up to $ 4,200,000 , consisting of Series A Preferred Stock, restricted shares of common stock, deferred cash consideration, and potential

earn-out payments subject to the achievement of certain financial metrics.

The Company recorded goodwill of approximately $ 1.96 million

following measurement period adjustments, primarily attributable to expected synergies and future growth opportunities.

Subsequently,

GTG Financial exercised its right to rescind the Securities Purchase Agreement.

In accordance with ASC 810, Consolidation, the rescission

was accounted for as a deconsolidation, and the Company recognized a gain on deconsolidation of $ 94,071 .

GTG Financial’s assets,

liabilities, equity balances, and results of operations were removed from the Company’s financial statements as of the Rescission

The total purchase consideration was up to $ 4,200,000 , consisting of Series A Preferred Stock, restricted shares of common stock, deferred cash consideration, and potential earn-out payments subject to the achievement of certain financial metrics.

The Company recorded goodwill of approximately $ 1.96 million following measurement period adjustments, primarily attributable to expected synergies and future growth opportunities.

Subsequently, GTG Financial exercised its right to rescind the Securities Purchase Agreement.

In accordance with ASC 810, Consolidation, the rescission was accounted for as a deconsolidation, and the Company recognized a gain on deconsolidation of $ 94,071 .

GTG Financial’s assets, liabilities, equity balances, and results of operations were removed from the Company’s financial statements as of the Rescission Date.

Acquisition of Prevu, Inc.

1 unchanged sentence

(“Prevu”), a Delaware corporation, pursuant to an Agreement and Plan of Merger (the “Prevu Merger Agreement”).

Pursuant to the terms of the Prevu Merger Agreement and related transition arrangements, the total consideration payable by the Company

of $ 4,500,000 consists of:

(i) $ 750,000 in cash paid at closing, net of applicable withholding taxes, (ii) approximately $ 1,250,000 in

shares of the Company’s common stock issued at closing and valued based on the arithmetic average of the closing price of the Company’s

common stock for the ten consecutive trading days ending on and including the trading day that is two trading days prior to the execution

of the Prevu Merger Agreement, which was $ 0.4998 , (iii) $ 2,500,000 in deferred payments payable in four equal tranches over an 18-month

period following the closing, payable, at the Company’s election, in cash or shares of the Company’s common stock, based on

the volume-weighted average price of the Company’s common stock at the time of issuance, and (iv) transition and severance consideration

payable to a former executive of Prevu, consisting of cash and equity awards The Company recorded goodwill of approximately $ 3.25 million,

primarily attributable to expected synergies and future growth opportunities.

The Company also recorded intangible assets of approximately

$ 1.47 million, consisting of developed technology and trademarks and trade names, each with a useful life of ten years .

Pursuant to the terms of the Prevu Merger Agreement and related transition arrangements, the total consideration payable by the Company of $ 4,500,000 consists of:

(i) $ 750,000 in cash paid at closing, net of applicable withholding taxes, (ii) approximately $ 1,250,000 in shares of the Company’s common stock issued at closing and valued based on the arithmetic average of the closing price of the Company’s common stock for the ten consecutive trading days ending on and including the trading day that is two trading days prior to the execution of the Prevu Merger Agreement, which was $ 0.4998 , (iii) $ 2,500,000 in deferred payments payable in four equal tranches over an 18-month period following the closing, payable, at the Company’s election, in cash or shares of the Company’s common stock, based on the volume-weighted average price of the Company’s common stock at the time of issuance, and (iv) transition and severance consideration payable to a former executive of Prevu, consisting of cash and equity awards The Company recorded goodwill of approximately $ 3.25 million, primarily attributable to expected synergies and future growth opportunities.

The Company also recorded intangible assets of approximately $ 1.47 million, consisting of developed technology and trademarks and trade names, each with a useful life of ten years .

Note 5 - Property and equipment, net

Property and equipment, net consisted of the following as of March 31, 2026.

Furniture and fixtures

Total investment in property & equipment

Property and equipment, net consisted of the following as of December 31, 2025.

Property and equipment, net consisted of the following as of June 30, 2026, and as of December 31,2025:

2026 December 31,

Computer $ 155,628 $ 143,584

Furniture and fixtures 18,550 28,438

Total investment in property & equipment

$ ( 107,396 )

The Company recorded depreciation expense of $ 7,008

for the three months ended March 31, 2026 and $ 9,717 for the three months ended March 31, 2025.

Property and equipment, gross 174,178 172,022

accumulated depreciation ( 68,207 ) ( 107,396 )

Property and equipment, net $ 105,970 $ 64,626

The Company recorded depreciation expense of $ 11,090 and $ 14,953 for the three and six months ended June 30, 2026, respectively, and $ 8,380 and $ 17,781 for the three and six months ended June 30, 2025, respectively.

Note 6 - 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.

As of March 31, 2026, the carrying amount of goodwill

was $ 7,459,125 , consisting of $ 1,798,892 attributable to the technology services segment and $ 5,660,233 attributable to the homebuying

services segment.

There were no additions, impairments, or other changes to the carrying amount of goodwill during the three months ended

March 31, 2026.

For a detailed discussion of goodwill activity, including acquisitions and measurement period adjustments recorded during

the year ended December 31, 2025, refer to “Note 8 - Goodwill and Intangible Assets” included in the Form 10-K.

The components of intangible assets as of March

31, 2026, all of which are finite-lived, are as follows:

March 31, 2026

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.

As of June 30, 2026, the carrying amount of goodwill was $ 7,459,125 , consisting of $ 1,798,892 attributable to the technology services segment and $ 5,660,233 attributable to the homebuying services segment.

There were no additions, impairments, or other changes to the carrying amount of goodwill during the three and six months ended June 30, 2026.

For a detailed discussion of goodwill activity, including acquisitions and measurement period adjustments recorded during the year ended December 31, 2025 (see “Note 6 - Goodwill and Intangible Assets” included in the Form 10-K more information).

The components of intangible assets as of June 30, 2026, all of which are finite-lived, are as follows:

2026 December 31,

Definite-life Intangibles:

Developed technology $ 2,132,239 $ 2,444,960

$ ( 108,214 )

$ ( 371,457 )

Trademarks and trade names 2,161,821 2,301,100

Customer relationships 55,190 75,613

$ ( 158,194 )

$ ( 515,120 )

The Company recorded amortization expenses of

$ 158,194 and $ 120,717 for the three months ended March 31, 2026, and three months ended March 31, 2025, respectively

The following table outlines the estimated future

amortization expense related to intangible assets held as of March 31, 2026:

Three Months Ending March 31:

Gross value 4,349,250 4,821,673

Less Amortization ( 317,786 ) ( 515,120 )

Net value $ 4,031,464 $ 4,306,553

The Company recorded amortization expenses of $ 159,590 and $ 317,786 for the three and six months ended June 30, 2026, respectively, and $ 124,604 and $ 244,605 for the three and six months ended June 30, 2025, respectively.

The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2026:

Years Ending December 31:

2026 (remaining period) 322,521

In accordance with ASC 350, the Company is required

to evaluate goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the fair

value of a reporting unit may be less than its carrying amount.

The Company performs its annual goodwill impairment

test as of December 31 each year.

During the three months ended March 31, 2026, the Company evaluated whether any events or changes in

circumstances had occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount, requiring

an interim goodwill impairment test.

Based on this evaluation, the Company determined that no such triggering events or changes in circumstances

existed as of March 31, 2026.

Accordingly, no interim goodwill impairment test was performed, and no goodwill impairment was recorded

during the three months ended March 31, 2026.

For further information regarding the Company’s

annual goodwill impairment test, including the methodology and key assumptions applied, refer to “Note 8 - Goodwill and Intangible

Assets” included in the Form 10-K.

Thereafter 1,650,160

Total $ 4,031,464

During the three months ended June 30, 2026, the Company identified changes in the manner in which certain finite-lived intangible assets associated with its Naamche operations were being used.

In April 2026, the external customer relationship and related revenue historically associated with Naamche were reassigned to reAlpha Tech Corp., while the underlying service arrangement and related development activities continued on substantially the same terms.

As a result, the Naamche customer relationship intangible asset no longer generated identifiable cash flows in the manner contemplated when the asset was initially recognized.

In addition, following the rebranding of Naamche as reAlpha Nepal, the Company discontinued use of the acquired Naamche trade name.

These changes indicated that the carrying amounts of the customer relationship and trade name intangible assets were not recoverable.

Accordingly, the Company recognized an impairment loss of $ 16,039 during the three months ended June 30, 2026, representing the remaining carrying amounts of the affected intangible assets.

The impairment loss was included in other operating expense in the condensed consolidated statements of operations and comprehensive loss and was attributable to the Technology Services segment.

In accordance with ASC 350, the Company is required to evaluate goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that the fair value of a reporting unit may be less than its carrying amount.

The Company performs its annual goodwill impairment test as of December 31 each year.

During the six months ended June 30, 2026, the Company evaluated whether any events or changes in circumstances had occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount, requiring an interim goodwill impairment test.

Based on this evaluation, the Company determined that no such triggering events or changes in circumstances existed as of June 30, 2026.

Accordingly, no interim goodwill impairment test was performed, and no goodwill impairment was recorded during the three and six months ended June 30, 2026.

For further information regarding the Company’s annual goodwill impairment test, including the methodology and key assumptions applied (see “Note 6 - Goodwill and Intangible Assets” for more information).

Note 7 - Related Party Transactions

Summary of Short-Term Loans - Related Parties

Short-term loans from related parties consist of unsecured loans obtained

from related parties to support the Company’s operating and working capital requirements.

These loans carry interest rates of approximately

12.07 % as of March 31, 2026.

As of March 31, 2026, short-term loans from related parties consisted of $ 38,542 due to Kester Poh, AiChat’s

Chief Executive Officer, and $ 40,406 due to Balaji Swaminathan, a member of the Company’s Board of Directors, resulting in total

short-term debt of $ 72,046 , net of an aggregate interest reserve of $ 6,902 ..As of December 31, 2025, short-term loans from related parties

totaled $ 96,997 , net of an interest reserve of $ 10,412 , resulting in total short-term debt of $ 86,585 .

On March 9, 2026, the Company hired Payton Cuddy, the son-in-law of

Short-term loans from related parties consist of unsecured loans obtained from related parties to support the Company’s operating and working capital requirements.

These loans carry interest rates of approximately 12.07 % as of June 30, 2026 As of June 30, 2026, short-term loans from related parties consisted of $ 25,635 due to Kester Poh, AiChat’s Chief Executive Officer, and $ 38,554 due to Balaji Swaminathan, a member of the Board, resulting in an aggregate gross principal balance of $ 64,189 .

After deducting an aggregate interest reserve of $ 3,443 , the net carrying amount of the short-term loans was $ 60,746 .

As of December 31, 2025, the aggregate gross principal balance of short-term loans from related parties was $ 96,997 .

After deducting an aggregate interest reserve of $ 10,412 , the net carrying amount was $ 86,585 .

On March 9, 2026, the Company hired Payton Cuddy, the son-in-law of Mr.

Swaminathan, as a Senior Marketing Manager.

Cuddy is employed on an at-will basis with an annual base salary of $ 125,000 plus

an annual cash bonus equal to 10 % of the base salary, plus eligibility for standard employee benefits and participation in the Company’s

2022 Equity Incentive Plan (as amended, the “2022 Plan”), on the same basis as other employees in similar positions.

three months ended March 31, 2026, the Company paid approximately $ 7,612 in salary and benefits to Mr.

Cuddy is employed on an at-will basis with an annual base salary of $ 125,000 plus an annual cash bonus equal to 10 % of the base salary, plus eligibility for standard employee benefits and participation in the Company’s 2022 Equity Incentive Plan (as amended, the “2022 Plan”), on the same basis as other employees in similar positions.

For the six months ended June 30, 2026, the Company paid approximately $ 40,000 in salary and benefits to Mr.

Cuddy under this arrangement.

Short-term loans from related parties as of March

31, 2026, and December 31, 2025, are summarized as follows:

Short-term loans from related parties as of June 30, 2026, and December 31, 2025, are summarized as follows:

Interest Rate

2026 June 30,

2026 December 31,

Term Loan Facility 12.07 % $ 64,189 $ 96,997

Interest Reserve ( 3,443 ) $ ( 10,412 )

Total Debt $ 60,746 $ 86,585

Note 8 - Loans from Unrelated Parties

Summary of Short-Term Loans - Unrelated Parties

Short-term loans primarily consist of multiple

term loan facilities obtained by AiChat, a subsidiary of the Company, carrying an average interest rate of approximately 8.9 % as of March

Short-term loans primarily consist of multiple term loan facilities obtained by AiChat, a subsidiary of the Company, carrying an average interest rate of approximately 8.9 % as of June 30, 2026.

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

As of March 31, 2026,

short-term loans from unrelated parties consisted of term loan facilities with an aggregate outstanding balance of $ 195,870 , net of an

interest reserve of $ 9,031 , resulting in total short-term debt of $ 186,839 .

As of December 31, 2025, short-term loans from unrelated parties

totaled $ 219,990 , net of an interest reserve of $ 10,389 .

Short-term loan balances as of March

31, 2026, and December 31, 2025, are summarized as follows:

As of June 30, 2026, short-term loans from unrelated parties consisted of term loan facilities with an aggregate gross principal balance of $ 192,828 .

After deducting an interest reserve of $ 7,687 , the net carrying amount of the short-term loans was $ 185,141 .

As of December 31, 2025, the aggregate gross principal balance of short-term loans from unrelated parties was $ 219,990 .

After deducting an interest reserve of $ 10,389 , the net carrying amount was $ 209,601 .

Short-term loan balances as of June 30, 2026, and December 31, 2025, are summarized as follows:

Interest Rate

2026 June 30,

2026 December 31,

Term Loan Facility 8.90 % $ 192,828 $ 219,990

Interest Reserve ( 7,687 ) $ ( 10,389 )

Total Debt $ 185,141 $ 209,601

Summary of Long-Term Loans - Unrelated Parties

AiChat has obtained multiple long-term loans from external lenders

to support general operating needs.

As of March 31, 2026, these loans bore an average interest rate of approximately 6.5 % and had contractual

maturities ranging from 2024 through 2028.

As of March 31, 2026, long-term loans from unrelated parties consisted of term loan facilities

with an aggregate outstanding balance of $ 75,425 , net of an interest reserve of $ 3,795 , resulting in total long-term debt of $ 71,630 .

As of December 31, 2025, long-term loans from unrelated parties totaled $ 93,997 , net of an interest reserve of $ 5,586 .

Long-term loan balances as of March 31, 2026,

and December 31, 2025, are summarized as follows:

Maturity Year

AiChat has obtained multiple long-term loans from external lenders to support general operating needs.

As of June 30, 2026, these loans bore an average interest rate of approximately 6.5 % and had contractual maturities ranging from 2024 through 2028.

As of June 30, 2026, long-term loans from unrelated parties consisted of term loan facilities with an aggregate gross principal balance of $ 57,241 .

After deducting an interest reserve of $ 2,369 , the net carrying amount of the long-term loans was $ 54,872 .

As of December 31, 2025, the aggregate gross principal balance of long-term loans from unrelated parties was $ 93,998 .

After deducting an interest reserve of $ 5,586 , the net carrying amount was $ 88,412 .

Long-term loan balances as of June 30, 2026, and December 31, 2025, are summarized as follows:

Maturity Year Average Interest Rate as of June 30, 2026 June 30,

2026 December 31,

Term Loan Facility 2024 - 2028 6.5 % $ 57,241 $ 93,998

Vehicle Loan 2029 11 % - -

Interest Reserve ( 2,369 ) ( 5,587 )

$ 54,872 $ 88,411

Note 9 - Deferred Liabilities

Deferred liabilities primarily consist of

deferred consideration arising from the Company’s business combinations.

Deferred consideration represents obligations payable

in connection with the Company’s acquisitions.

Deferred consideration related to the acquisition of GTG Financial was

cancelled on the rescission date as part of the rescission of the GTG Financial acquisition (see “Note 5–Business

Combinations–Acquisition and Rescission of GTG Financial, Inc.” included in the Form 10-K for additional information).

In addition, approximately $ 25,000 of the Company’s deferred liabilities relates to deferred consideration payable in

connection with the Company’s investment in Xmore.

In connection with the acquisition of Prevu on November 21, 2025, a

portion of the purchase consideration is payable on a deferred basis pursuant to the terms of the Prevu Merger Agreement.

31, 2026, approximately $ 1,217,466 of the Company’s deferred liabilities represents current deferred consideration related

to the Prevu acquisition and approximately $ 577,836 represents the non-current portion of such deferred consideration, which is included

within other long-term liabilities in the consolidated balance sheet.

The deferred consideration represents fixed payments that are payable

in cash and/or shares of the Company’s common stock at the Company’s election.

During the three months ended March 31, 2026,

the Company paid $ 100,000 of deferred compensation from amounts previously held in escrow, which reduced the Company’s escrow deposit

The deferred consideration was recorded at fair value as of the acquisition date in accordance with ASC 805, and is not subject

to subsequent remeasurement, as the payments are fixed and not contingent on future performance.

Note 10 - Mezzanine Equity and Preferred Stock

Embedded Derivative Liability

On March 7, 2025, the Company entered into a media-for-equity transaction

with Mercurius Media Capital LP (“MMC”) pursuant to those certain Advertising Agreement (the “Advertising Agreement”)

and Investment Agreement (the “Investment Agreement”), each dated as of March 7, 2025, pursuant to which the Company issued

250,000 shares of its Series A Preferred Stock, at a stated value of $ 20 per share, for an aggregate stated value of $ 5,000,000 , in exchange

for $ 5,000,000 of marketing credits.

The Series A Preferred Stock carries a 3.0% annual preferred dividend, is convertible into shares

of the Company’s common stock at the holder’s option and will automatically convert after three years from the date of issuance.

The Series A Preferred Stock is classified as temporary equity (mezzanine equity) in accordance with ASC 480, Distinguishing Liabilities

from Equity and the shortfall settlement provision embedded in the Investment Agreement was determined to be a freestanding derivative

liability under ASC 815, Derivatives and Hedging.

As of March 31, 2026, the pre-paid marketing credits under the Advertising Agreement

have been fully utilized.

The Advertising Agreement expired on March 31, 2026, and no further marketing credits are expected to be available

or utilized thereafter.

For a detailed discussion of the terms, initial recognition, and accounting treatment of the Series A Preferred

Stock and the associated derivative liability, refer to “Note 13 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability”

included in the Form 10-K.

During the three months ended March 31, 2026,

the Company recognized marketing expense of $ 593,429 related to the utilization of the pre-paid marketing credits.

On March 9, 2026, the Company issued 6,125 shares of Series A Preferred

Stock in satisfaction of its accrued annual dividend for the year ended December 31, 2025, representing an aggregate dividend payment

of $ 122,500 , in lieu of a cash payment.

During the three months ended March 31, 2026, the Company accrued dividends of $ 37,123 related

to the current dividend period.

As of March 31, 2026, the carrying value of the Series A Preferred Stock classified in mezzanine equity

was $ 1,057,500 .

The derivative liability is measured at fair value at each reporting

date using the Black-Scholes option pricing model, with changes in fair value recognized in the unaudited condensed consolidated statement

of operations and comprehensive loss.

As of March 31, 2026, the key level three inputs used were as follows:

Common stock price as of March 31, 2026 $ 0.24

Deferred liabilities primarily consist of deferred consideration arising from the Company’s business combinations.

Deferred consideration represents obligations payable in connection with the Company’s acquisitions.

Deferred consideration related to the acquisition of GTG Financial was cancelled on the rescission date as part of the rescission of the GTG Financial acquisition (see “Note 4 - Business Combinations - Acquisition and Rescission of GTG Financial, Inc.” included in the Form 10-K for more information).

In addition, approximately $ 25,000 of the Company’s deferred liabilities relates to deferred consideration payable in connection with the Company’s investment in Xmore.

In connection with the acquisition of Prevu on November 21, 2025, a portion of the purchase consideration is payable on a deferred basis pursuant to the terms of the Prevu Merger Agreement.

As of June 30, 2026, approximately $ 1,831,349 of the Company’s deferred liabilities represents current deferred consideration related to the Prevu acquisition and is included within current liabilities in the consolidated balance sheet.

The deferred consideration represents fixed payments that are payable in cash and/or shares of the Company’s common stock at the Company’s election.

During the three months ended March 31, 2026, the Company paid $ 100,000 of deferred compensation from amounts previously held in escrow, which reduced the Company’s escrow deposit balance.

The deferred consideration was recorded at fair value as of the acquisition date in accordance with ASC 805, and is not subject to subsequent remeasurement, as the payments are fixed and not contingent on future performance.

Note 10 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability

On March 7, 2025, the Company entered into a media-for-equity transaction with MMC, pursuant to that certain Advertising Agreement (the “Advertising Agreement”) and Investment Agreement (the “Investment Agreement”), each dated as of March 7, 2025, pursuant to which the Company issued 250,000 shares of its Series A Preferred Stock, at a stated value of $ 20 per share, for an aggregate stated value of $ 5,000,000 , in exchange for $ 5,000,000 of marketing credits.

The Series A Preferred Stock carries a 3.0 % annual preferred dividend, is convertible into shares of the Company’s common stock at the holder’s option and will automatically convert after three years from the date of issuance.

The Series A Preferred Stock is classified as temporary equity (mezzanine equity) in accordance with ASC 480, Distinguishing Liabilities from Equity and the shortfall settlement provision embedded in the Investment Agreement was determined to be a freestanding derivative liability under ASC 815, Derivatives and Hedging.

As of March 31, 2026, the pre-paid marketing credits under the Advertising Agreement have been fully utilized.

The Advertising Agreement expired on March 31, 2026, and no further marketing credits are expected to be available or utilized thereafter.

For a detailed discussion of the terms, initial recognition, and accounting treatment of the Series A Preferred Stock and the associated derivative liability (see “Note 13 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability” included in the Form 10-K for more information).

During the three and six months ended June 30, 2026, the Company recognized marketing expense of $ 0 and $ 593,429 , respectively, related to the utilization of the pre-paid marketing credits, as the Advertising Agreement expired on March 31, 2026.

On March 9, 2026, the Company issued 6,125 shares of Series A Preferred Stock in satisfaction of its accrued annual dividend for the year ended December 31, 2025, representing an aggregate dividend payment of $ 122,500 , in lieu of a cash payment.

During the three and six months ended June 30, 2026, the Company accrued dividends of $ 38,633 and $ 75,756 , respectively, related to the current dividend period.

As of June 30, 2026, the carrying value of the Series A Preferred Stock classified in mezzanine equity was $ 1,096,133 .

The derivative liability is measured at fair value at each reporting date using the Black-Scholes option pricing model, with changes in fair value recognized in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of June 30, 2026, the key Level 3 inputs used were as follows:

Common stock price as of June 30, 2026 $ 1.93

Risk-free interest rate 4.15 %

2 unchanged sentences

Expected term (years) 1.69

As of March 31, 2025, the key Level 3 inputs used were as follows:

Common stock price as of March 31, 2025 $ 1.42

As of December 31, 2025, the key Level 3 inputs used were as follows:

Common stock price as of December 31, 2025 $ 0.42

Risk-free interest rate 3.73 %

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Expected term (years) 2.18

As of March 31, 2026, the fair value of the derivative liability was

$ 4,602,480 .

During the three months ended March 31, 2026, the Company recognized a net increase in the fair value of the derivative liability

of $ 27,500 , recorded as a loss in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of June 30, 2026, the fair value of the derivative liability was $ 4,760,012 .

During the three and six months ended June 30, 2026, the Company recognized a net increase in the fair value of the derivative liability of $ 157,532 and $ 185,032 respectively, recorded as a loss in the unaudited condensed consolidated statement of operations and comprehensive loss.

Amendment to Series A Preferred Stock Certificate of Designation

On April 30, 2026, the Company effected th e Reverse Stock Split.

In connection with the Reverse Stock Split, the conversion price and the number of shares of common stock issuable upon conversion of the Series A Preferred Stock were proportionately adjusted in accordance with the terms of an amendment to the Certificate of Designation, which was filed with the Secretary of State of Delaware on April 28, 2026, and which became effective immediately upon filing.

Additionally, any share-based inputs used in the valuation of the embedded derivative liability, including the Company’s common stock price, have been adjusted to reflect the Reverse Stock Split.

The Reverse Stock Split did not impact the aggregate carrying value of the Series A Preferred Stock classified in mezzanine equity or the fair value measurement methodology of the embedded derivative liability.

Note 11 - 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 March 31, 2026, there were 134,118,789 shares of common stock and 256,125 shares

of Series A Preferred Stock issued and outstanding.

As of December 31, 2025, there were 131,740,675 shares of common stock and 250,000

shares of Series A Preferred Stock issued and outstanding.

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, 2026, there were 5,374,302 shares of common stock and 256,125 shares of Series A Preferred Stock issued and outstanding.

As of December 31, 2025, there were 5,269,799 shares of common stock and 250,000 shares of Series A Preferred Stock issued and outstanding.

As of June 30, 2026, 256,125 shares of Series A Preferred Stock were outstanding.

The Series A Preferred Stock was excluded from diluted earnings per share for the three and six months ended June 30, 2026, as the assumed conversion of such shares into common stock would have been anti-dilutive.

Stock Based Compensation

Equity Incentive Plan

We maintain the 2022 Plan, under which we may grant awards to employees,

officers, directors, and certain other service providers.

The compensation committee of the Board (the “Compensation Committee”)

administers the 2022 Plan.

Pursuant to the evergreen provision of the 2022

Plan, the number of shares authorized for issuance under the 2022 Plan increases automatically on an annual basis.

As a result of such

increases, which commenced on October 15, 2025, the aggregate number of shares of common stock authorized for issuance under the 2022

Plan was 15,957,189 shares as of December 31, 2025.

There were no changes to the number of shares authorized for issuance under the 2022

Plan during the three months ended March 31, 2026.

Ending balances for the 2022 Plan as of March

31, 2026 and December 31, 2025, are as follows:

Balance as of December 31, 2025

Net Restricted stock units granted

( 1,980,833 )

Common stock issued during the three months ended March 31, 2026

Balance as of March 31, 2026

Stock-based compensation expense for the three months ended March 31,

2026 and 2025 was $ 343,963 and $ 78,355 , respectively.

Short-Term Incentive Plan

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

We maintain the 2022 Plan, under which we may grant awards to employees, officers, directors, and certain other service providers.

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

Pursuant to the evergreen provision of the 2022 Plan, the number of shares authorized for issuance under the 2022 Plan increases automatically on an annual basis.

As a result of such increases, which commenced on October 15, 2025, the aggregate number of shares of common stock authorized for issuance under the 2022 Plan was 638,288 shares as of December 31, 2025.

There were no changes to the number of shares authorized for issuance under the 2022 Plan during the three and six months ended June 30, 2026.

Ending balances for the 2022 Plan for the six months ended June 30, 2026 are as follows:

Description Number of

Shares available for future issuance under the 2022 Plan as of December 31, 2025 430,123

Restricted stock units granted, net of forfeitures ( 110,027 )

Common stock issued ( 13,066 )

Shares available for future issuance under the 2022 Plan as of June 30, 2026 307,030

Stock-based compensation expense for the three and six months ended June 30, 2026, was $ 368,377 and $ 712,342 , respectively, and for the three and six months ended June 30, 2025, was $ 192,988 and $ 271,644 , respectively.

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

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

During the three months ended March 31, 2026,

the Company granted 3,006,233 RSUs and forfeited 1,025,400 RSUs.

The RSUs generally vest over periods ranging from two to four years from

the respective grant dates, subject to continued service and other customary terms and conditions.

A summary of RSU activity for the three months

ended March 31, 2026, is as follows:

The Company measures compensation cost for all stock-based awards granted to employees and certain other service providers based on the grant-date fair value of the award by ASC 718.

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

During the six months ended June 30, 2026, the Company granted 216,190 restricted stock units (“RSUs”) and forfeited 106,163 RSUs.

The RSUs generally vest over periods ranging from two to four years from the respective grant dates, subject to continued service and other customary terms and conditions, in accordance with the applicable award agreements and the 2022 Plan.

A summary of RSU activity for the six months ended June 30, 2026, is as follows:

RSUs Weighted

Balance as of December 31, 2025 191,687 16.25

RSUs granted 216,190 7.34

RSUs vested ( 32,728 ) 26.65

RSUs forfeited ( 106,163 ) 9.41

( 1,025,400 )

Balance as of March 31, 2026

As of March 31, 2026, a total of 6,772,435 restricted stock units

(“RSUs”) were outstanding, and none of the RSUs had vested.

The RSUs were excluded from diluted earnings per share for the

three months ended March 31, 2026, as their inclusion would have been anti-dilutive.

During the years ended December 31, 2025, and

2024, the Company issued warrants to purchase shares of its common stock in connection with financing transactions, warrant inducement

transactions, public offerings, registered direct offerings, and private placements.

The warrants generally have fixed exercise prices,

subject to adjustments set forth therein, are exercisable upon issuance or following stockholder approval, as applicable, and have contractual

terms ranging from two to five years from their respective issuance dates.

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 instruments.

The Company is currently involved in litigation regarding

the enforceability and adjustment provisions of the GEM Warrants.

As of March 31, 2026, no reclassification or adjustment to the exercise

price of the GEM Warrants has been made.

All warrants issued by the Company remain classified

as equity instruments and are recorded in additional paid-in capital.

During the three months ended March 31, 2026, there were no warrant

issuances, exercises, modifications, repricing, or reclassifications.

Balance as of December 31, 2025

Warrants issued

Warrants exercised

Warrants expired

Balance as of March 31, 2026

As of March 31, 2026, the Company had 10,900,266

warrants outstanding.

The outstanding warrants were excluded from diluted earnings per share for the three months ended March 31, 2026,

and 2025, as their inclusion would have been anti-dilutive in accordance with ASC 260.

Balance as of June 30, 2026 268,986 10.52

As of June 30, 2026, 268,986 RSUs remained outstanding and unvested.

In addition, 32,728 RSUs had vested but had not yet been settled through the issuance of common stock as of June 30, 2026.

Accordingly, a total of 301,714 RSUs remained outstanding or vested but unsettled as of June 30, 2026.

The RSUs were excluded from diluted earnings per share for the three and six months ended June 30, 2026, as their inclusion would have been anti-dilutive.

Short-Term Incentive Plan

On February 4, 2025, the Compensation Committee approved the Company’s 2025 Short-Term Incentive Plan, as amended and restated on April 23, 2026 (the “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.

The Compensation Committee has full power to administer and interpret the STIP and, in its sole discretion, may establish or amend the rules of general application for the administration of the STIP.

For the three and six months ended June 30, 2026, no quarterly awards were approved by the Compensation Committee under the STIP.

During the years ended December 31, 2025 and 2024, the Company issued warrants to purchase shares of its common stock in connection with financing transactions, warrant inducement transactions, public offerings, registered direct offerings, and private placements.

The warrants generally have fixed exercise prices, subject to adjustments set forth therein, are exercisable upon issuance or following stockholder approval, as applicable, and have contractual terms ranging from two to five years from their respective issuance dates.

All warrants issued by the Company remain classified as equity instruments and are recorded in additional paid-in capital.

During the six months ended June 30, 2026, there were no warrant issuances, exercises, modifications, repricing, or reclassifications.

The proportional adjustment to the number of shares issuable upon exercise of the warrants resulting from the Reverse Stock Split was an anti-dilution adjustment under the applicable warrant terms and was not accounted for as a warrant modification or repricing.

As of June 30, 2026, the Company had 436,022 shares of common stock issuable upon exercise of outstanding warrants.

The outstanding warrants were excluded from diluted earnings per share for the three and six months ended June 30, 2026 and 2025, as their inclusion would have been anti-dilutive in accordance with ASC 260.

The following table presents the securities that were excluded from the computation of diluted net loss per share because their inclusion would have been anti-dilutive:

Balance as of

Potential common shares excluded 2026 2025

Warrants 436,022 570,119

Restricted stock units 268,986 31,630

Series A Preferred Stock, if converted 256,125 264,063

Total 961,133 865,812

Shelf Registration Statement on Form S-3

On November 26, 2024,

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

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

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 “A.G.P.

Agreement”), under which the Company was able to offer and sell shares of its common stock from time to time.

Sales Agreement

was terminated effective March 29, 2025.

Following the termination of the ATM program with

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

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

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 “A.G.P.

Sales Agreement”), under which the Company was able to offer and sell shares of its common stock from time to time.

Sales Agreement was terminated effective March 29, 2025.

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

and the related A.G.P.

Sales Agreement, the Company entered into an At-The-Market Offering Agreement (the “HCW Sales Agreement”)

Wainwright & Co., LLC (“Wainwright”), on April 2, 2025, under which the Company was able to offer and sell shares

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

On December 23, 2025, the Company filed a prospectus

supplement to its Form S-3 to increase the aggregate offering price of shares of common stock available for issuance under the HCW Sales

Agreement to up to $ 20,000,000 .

During the quarter ended March 31, 2026, the Company issued an aggregate 250,456 shares of common stock

pursuant to its at-the-market (“ATM”) programs, with the last sale thereunder occurring on March 12, 2026, generating net

proceeds of approximately $ 126,150 after deducting commissions and offering-related expenses of approximately $ 5,192 .

Sales Agreement, the Company entered into an At-The-Market Offering Agreement (the “HCW Sales Agreement”) with H.C.

Wainwright & Co., LLC (“Wainwright”), on April 2, 2025, under which the Company was able to offer and sell shares of its common stock having an aggregate offering price of up to $ 7,650,000 .

On December 23, 2025, the Company filed a prospectus supplement to its Form S-3 to increase the aggregate offering price of shares of common stock available for issuance under the HCW Sales Agreement to up to $ 20,000,000 .

During the quarter ended March 31, 2026, the Company issued an aggregate 10,018 shares of common stock pursuant to its at-the-market (“ATM”) programs, with the last sale thereunder occurring on March 12, 2026, generating net proceeds of approximately $ 126,150 after deducting commissions and offering-related expenses of approximately $ 5,192 .

The amount and timing of future proceeds the Company may receive from the sale of shares of common stock pursuant to the HCW Sales Agreement, if any, will depend on a number of factors, including that the Company is eligible to use the Form S-3 to sell shares thereunder, the number of shares the Company may elect to sell, the timing of such sales and the future market price of the Company’s shares of common stock.

As of the date of this Form 10-Q, the Company is unable to sell shares pursuant to the HCW Sales Agreement due to restrictions on the use of its Form S-3.

Note 12 - 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 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.

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 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 the former owners of reAlpha Mortgage that include contingent consideration arrangements based on the achievement of specified revenue

and EBITDA targets over a three-year measurement period from October 1, 2024, through September 30, 2027.

The contingent consideration liability is measured

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

During the three months ended March 31, 2026,

and 2025, the Company recognized a gain of $ 18,350 and a loss of $ 93,000 , respectively, related to changes in the fair value of contingent

consideration.

As of March 31, 2026 and March 31, 2025, the fair value of the Company’s

contingent consideration liability relating to reAlpha Mortgage was approximately $ 326,527 , and $ 1,042,000 , respectively, all of which

was classified as Level 3 within the fair value hierarchy.

The fair value of the contingent consideration

liability was estimated using an income-based valuation approach.

The valuation incorporates significant unobservable inputs, including

projected revenue and EBITDA, the probability of achieving the specified earnout targets, the timing of expected payments, and a discount

rate that reflects the risk associated with the underlying performance metrics.

Observable inputs include market-based interest

rates, while unobservable inputs are based on management’s assumptions regarding future operating performance.

Due to the significance

of these unobservable inputs, the contingent consideration liability is classified as a Level 3 fair value measurement.

Valuation Inputs — March 31, 2026

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

The Company is party to acquisition-related agreements with the former owners of reAlpha Mortgage that include contingent consideration arrangements based on the achievement of specified revenue and EBITDA targets over a three-year measurement period from October 1, 2024, through September 30, 2027.

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

During the six months ended June 30, 2026, the Company recognized a gain of $ 40,027 , and during the six months ended June 30, 2025, the Company recognized a gain of $ 81,000 , related to changes in the fair value of contingent consideration.

As of June 30, 2026 and December 31, 2025, the fair value of the Company’s contingent consideration liability relating to reAlpha Mortgage was approximately $ 304,850 , and $ 344,877 , respectively, all of which was classified as Level 3 within the fair value hierarchy.

Of the June 30, 2026 balance, $ 60,184 was classified as a current liability and $ 244,666 was classified as a non-current liability in the consolidated balance sheet.

At December 31, 2025, the balance of $ 344,877 was classified entirely as a non-current liability.

The fair value of the contingent consideration liability was estimated using an income-based valuation approach.

The valuation incorporates significant unobservable inputs, including projected revenue and EBITDA, the probability of achieving the specified earnout targets, the timing of expected payments, and a discount rate that reflects the risk associated with the underlying performance metrics.

Observable inputs include market-based interest rates, while unobservable inputs are based on management’s assumptions regarding future operating performance.

Due to the significance of these unobservable inputs, the contingent consideration liability is classified as a Level 3 fair value measurement.

Valuation Inputs — June 30, 2026

Assumptions reAlpha

Required Metric Risk Premium (RMRPC, Continuous) 8.81 %

2 unchanged sentences

Valuation Inputs — December 31, 2025

reAlpha Mortgage

Assumptions reAlpha Mortgage

Required Metric Risk Premium (RMRPC, Continuous) 8 %

2 unchanged sentences

Legal Matters

Except as noted below, there have been no material

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

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

will be disclosed in future filings as necessary.

Except as noted below, there have been no material changes to the legal proceedings disclosed in the Form 10-K.

The Company continues to monitor the status of those proceedings, and developments will be disclosed in future filings as necessary.

GEM Yield Bahamas Limited Litigation

On November 1, 2024, we filed a lawsuit against

GYBL in the United States District Court for the Southern District of New York (the “Court”), 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 parties filed a stipulation to withdraw

the appeal pending in the Second Circuit on March 11, 2026.

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.

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 Second Circuit granted the parties’ stipulation to withdraw the appeal on March 12, 2026.

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 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 13 - Segment Reporting

1 unchanged sentence

homebuying services and technology services.

The homebuying services segment includes the Company’s residential real estate brokerage,

mortgage brokerage, and related settlement services operations.

The technology services segment includes the Company’s AI-powered

customer experience platform and software development and support services provided to third parties.

The Company’s Chief Executive Officer is

the chief operating decision maker (“CODM”).

The CODM evaluates segment performance and allocates resources based on segment

revenue and segment adjusted operating income.

There were no changes to the Company’s reportable segments or the basis of measurement

used by the CODM during the three months ended March 31, 2026.

The following table presents information about

the Company’s reportable segments for the three months ended March 31, 2026 and 2025, along with the items necessary to reconcile

segment information to the accompanying consolidated financial statements:

Three Months Ended

The homebuying services segment includes the Company’s residential real estate brokerage, mortgage brokerage, and related settlement services operations.

The technology services segment includes the Company’s AI-powered customer experience platform and software development and support services provided to third parties.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”).

The CODM evaluates segment performance and allocates resources based on segment revenue and segment adjusted operating income.

There were no changes to the Company’s reportable segments or the basis of measurement used by the CODM during the three and six months ended June 30, 2026.

The following table presents information about the Company’s reportable segments for the three and six months ended June 30, 2026, and 2025, along with the items necessary to reconcile segment information to the accompanying consolidated financial statements:

For the Three Months Ended

June 30, For the Six Months Ended

2026 2025 2026 2025

Revenue by segment

28 unchanged sentences

Non-operating other expense (income), net 154,191 728,604 211,636 1,156,513

Net Loss from continuing operations before income taxes

( 4,338,495 )

( 2,850,167 )

Net Loss from operations before income taxes ( 3,049,265 ) ( 4,817,734 ) ( 7,387,812 ) ( 7,667,902 )

Provision for income taxes — — — —

Net Loss from continuing operations

$ ( 4,338,495 )

$ ( 2,850,167 )

(1) Segment operating expenses

consist primarily of wages and employee benefits, payroll taxes, marketing and advertising costs, professional and legal fees, and other

direct operating expenses attributable to each reportable segment.

(2) Intangible amortization expense

primarily represents the amortization of definite-lived intangible assets recognized in connection with business combinations.

(3) Acquisition-related

costs include, among others, transaction, advisory, legal, and other professional fees incurred in connection with business combinations.

(4) Other operating expenses primarily

consist of general and administrative costs, including office and facility-related expenses, dues and subscriptions, travel and related

costs, and other miscellaneous expenses such as insurance, licensing and regulatory fees, bank charges, and technology-related expenses.

(5) Corporate expense includes

costs that are managed at the corporate level and are not allocated to the reportable segments.

These expenses consist primarily of executive

and functional compensation, deal-related costs, and administrative expenses associated with the corporate headquarters.

corporate expenses also include finance, human resources, legal, and other management-related costs that are not considered by the CODM

in evaluating segment performance.

The following table presents information about

the company’s reportable segment assets for the three months ended March 31, 2026, and the year ended December 31, 2025:

Net Loss $ ( 3,049,265 ) $ ( 4,817,734 ) $ ( 7,387,812 ) $ ( 7,667,902 )

(1) Segment operating expenses consist primarily of wages and employee benefits, payroll taxes, marketing and advertising costs, professional and legal fees, and other direct operating expenses attributable to each reportable segment.

(2) Intangible amortization expense primarily represents the amortization of definite-lived intangible assets recognized in connection with business combinations.

(3) Acquisition-related costs include, among others, transaction, advisory, legal, and other professional fees incurred in connection with business combinations.

(4) Other operating expenses primarily consist of general and administrative costs, including office and facility-related expenses, dues and subscriptions, travel and related costs, and other miscellaneous expenses such as insurance, licensing and regulatory fees, bank charges, and technology-related expenses.

(5) Corporate expense includes costs that are managed at the corporate level and are not allocated to the reportable segments.

These expenses consist primarily of executive and functional compensation, deal-related costs, and administrative expenses associated with the corporate headquarters.

Unallocated corporate expenses also include finance, human resources, legal, and other management-related costs that are not considered by the CODM in evaluating segment performance.

(6) Restructuring costs of $68,244 incurred during the three and six months ended June 30, 2026, are included within corporate expense in the Company’s segment expense disclosures.

These costs consist primarily of severance and related termination benefits associated with the Plans and are reflected within the operating results of the respective entities in which the costs were incurred.

The following table presents information about the company’s reportable segment assets as of June 30, 2026, and the year ended December 31, 2025:

June 30, As of

Total Assets by Segment

1 unchanged sentence

Homebuying Services 191,395 256,213

Corporate 14,784,100 21,071,207

$ 15,135,007 $ 21,717,331

Corporate assets include cash and cash equivalents of $ 2,230,607 , goodwill of $ 7,459,125 , intangible assets of $ 4,031,464 , and other corporate assets of $ 1,062,904 , consisting primarily of accounts receivable, prepaid expenses, other current assets, escrow deposits, property and equipment, net, and investments.

These assets are managed at the corporate level and are not allocated to or included in the measure of segment assets reviewed by the CODM in evaluating segment performance and allocating resources.

Accordingly, corporate assets totaling $ 14,784,100 are presented as Corporate in the reconciliation of reportable segment assets to consolidated total assets.

The attribution of goodwill and other assets to reporting units or asset groups for impairment testing purposes is performed under the applicable impairment guidance and does not represent the measure of segment assets reviewed by the CODM.

Note 14 - Revenue

Revenue is disaggregated by reportable segment,

consistent with how the Company manages its operations and evaluates performance.

See “Note 13 – Segment Reporting for additional

information regarding the Company’s reportable segments.”

Revenue is disaggregated by reportable segment, consistent with how the Company manages its operations and evaluates performance.

(see “Note 13 - Segment Reporting” for more information regarding the Company’s reportable segments).

Disaggregation of Revenue

Revenue from Contracts with Customers and Performance

The Company recognizes revenue in accordance with

ASC 606, by identifying the contract with a customer, determining the distinct performance obligations within the contract, allocating

the transaction price to those performance obligations, and recognizing revenue when (or as) control of the promised goods or services

transfers to the customer.

AiChat generates revenue from subscription-based

access to its AI conversational customer experience platform and related consulting and implementation services.

Subscription revenue

is recognized over time over the contractual term.

Consulting and implementation revenues are recognized either at a point in time or

over time depending on the nature of the services provided.

reAlpha Mortgage generates revenue from

mortgage brokerage commissions earned upon the successful funding of residential mortgage loans.

Revenue is recognized at a point in time

upon loan funding.

reAlpha Nepal generates revenue from technology

development and related support service contracts.

Revenue is recognized over time as services are performed.

Prevu generates revenue from brokerage

commissions earned upon the successful completion of residential real estate transactions.

Revenue is recognized at a point in time upon

Revenue from Contracts with Customers and Performance Obligations

The Company recognizes revenue in accordance with ASC 606, by identifying the contract with a customer, determining the distinct performance obligations within the contract, allocating the transaction price to those performance obligations, and recognizing revenue when (or as) control of the promised goods or services transfers to the customer.

AiChat generates revenue from subscription-based access to its AI conversational customer experience platform and related consulting and implementation services.

Subscription revenue is recognized over time over the contractual term.

Consulting and implementation revenues are recognized either at a point in time or over time depending on the nature of the services provided.

reAlpha Mortgage generates revenue from mortgage brokerage commissions earned upon the successful funding of residential mortgage loans.

Revenue is recognized at a point in time upon loan funding.

Prevu and reAlpha Realty generates revenue from brokerage commissions earned upon the successful completion of residential real estate transactions.

Revenue is recognized at a point in time upon closing.

Commission rebates provided to customers are recorded as a reduction of revenue at closing.

The following table presents our revenue disaggregated

by revenue type:

three months ended

The following table presents our revenue disaggregated by revenue type:

For the three months

ended June 30, 2026 For the Six months

ended June 30, 2026

transferred at a

Point in time Services

Over time Services

transferred at a

Point in time Services

Technology Services $ 87,302 $ 201,872 $ 162,150 $ 390,613

Homebuying Services 821,169 — 1,398,643 —

For the three months ended

March 31, 2026

For the three months ended

March 31, 2025

Total $ 908,471 $ 201,872 $ 1,560,793 $ 390,613

For the three months

ended June 30, 2025 For the Six months

ended June 30, 2025

transferred at a

Point in time

Point in time Services

Over time Services

transferred at a

Point in time

Point in time Services

Technology Services $ 147,877 $ 74,032 $ 305,865 $ 89,609

Homebuying Services 1,030,472 — 1,782,542 —

Transaction Price Allocated to the Remaining

Performance Obligations

As of March 31, 2026, the Company estimated that

$ 363,618 of revenue related to the technology services segment is expected to be recognized in future periods for performance obligations

that were unsatisfied (or partially unsatisfied) as of the end of the reporting period.

The Company expects to recognize the remaining

$ 352,816 of Technology Services performance obligations as revenue during the remainder of 2026.

Total $ 1,178,349 $ 74,032 $ 2,088,407 $ 89,609

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2026, the Company estimated that $ 256,713 of revenue related to the technology services segment is expected to be recognized in future periods for performance obligations that were yet to be satisfied (or partially unsatisfied) as of the end of the reporting period.

The Company expects to recognize $ 236,404 of Technology Services performance obligations as revenue during the remainder of 2026.

Contract liabilities

Contract liabilities related to the Company’s technology services

segment consist primarily of advance consideration received or advance billings for subscription and service arrangements for which revenue

has not yet been recognized.

These amounts are recorded as deferred liabilities in the unaudited condensed consolidated balance sheets

and are recognized as revenue as the related performance obligations are satisfied.

The following table provides information about

contract liabilities from contracts with customers:

Contract liabilities related to the Company’s technology services segment consist primarily of advance consideration received or advance billings for subscription and service arrangements for which revenue has not yet been recognized.

These amounts are recorded as deferred liabilities in the unaudited condensed consolidated balance sheets and are recognized as revenue as the related performance obligations are satisfied.

The following table provides information about contract liabilities from contracts with customers:

2026 December 31,

Deferred revenue $ 256,713 $ 396,227

During the three months ended March 31, 2026,

the Company recognized $ 156,094 of revenue that was included in contract liabilities on December 31, 2025.

During the six months ended June 30, 2026, the Company recognized $ 271,520 of revenue that was included in contract liabilities on December 31, 2025.

Note 15 - Subsequent Events

The Company evaluated subsequent events and transactions

that occurred after the balance sheet date through the date that these unaudited condensed consolidated financial statements were available

to be issued.

Based upon this review, except as noted below, the Company did not identify any other subsequent

events that would have required adjustment or disclosure in the financial statements.

Reverse Stock Split

On March 30, 2026, the Board approved a 1-for-25

reverse stock split of the Company’s outstanding common stock, which is expected to become effective on April 30, 2026, subject

to the filing and effectiveness of an amendment to the Company’s Second Amended and Restated Certificate of Incorporation with the

Secretary of State of Delaware.

The reverse stock split was previously approved by the Company’s stockholders at the 2025 annual

meeting of stockholders.

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.

On August 1, 2026, pursuant to the terms of the Prevu Merger Agreement, the Company issued an aggregate of 426,848 shares of its common stock, valued at approximately $ 1.4466 per share, to certain former stockholders of Prevu.

In addition, 5,184 shares of common stock remain issuable to one former Prevu stockholder upon completion of the documentation necessary to effect such issuance.

The aggregate value of approximately $ 624,977 includes both the shares issued on August 1, 2026 and the 5,184 shares remaining to be issued, with approximately $ 23 payable in cash in lieu of fractional shares pursuant to the Prevu Merger Agreement.

The issuance occurred subsequent to June 30, 2026 and, accordingly, is not reflected in the accompanying unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2026.

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:

● We have a limited operating

history, which may adversely affect us;

● We have a history of operating

losses, and we may not be able to generate sufficient revenue to achieve and sustain profitability;

● We may be unable to obtain

financing through the debt and equity capital markets, which would have a material adverse effect on our growth strategy and our financial

condition and results of operations;

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:

● We have a limited operating history, which may adversely affect us;

● We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve and sustain profitability;

● We may be unable to obtain financing through the debt and equity capital markets, which would have a material adverse effect on our growth strategy and our financial condition and results of operations;

● Our financial condition raises substantial doubt as to our ability to continue as a going concern;

● Our ability to maintain the listing of our common stock on Nasdaq;

● If we are unable to successfully

identify, consummate or integrate acquisitions into our operations, our business, results of operations, and financial condition could

be adversely affected;

● We have integrated, and intend

to continue to integrate, artificial intelligence (“AI”) in our operations and services which may result in operational challenges,

compliance challenges, reputational concerns, privacy risks and competitive risks, which could have material adverse effects on our financial

condition, results of operations, or reputation;

● We have experienced, and expect

to continue to experience, significant dilution of our common stock, which may adversely affect the market price of our common stock

and make it more difficult to raise capital in the future;

● Compliance with governmental

laws, regulations and covenants that are applicable to our business and industries or that may be passed in the future, including those

related to the operations of brokerages, title service companies, and other real estate services, may adversely affect our business operations

and financial condition;

● Our business depends significantly

on the health of the U.S.

● If we are unable to successfully identify, consummate or integrate acquisitions into our operations, our business, results of operations, and financial condition could be adversely affected;

● We have integrated, and intend to continue to integrate, artificial intelligence (“AI”) in our operations and services which may result in operational challenges, compliance challenges, reputational concerns, privacy risks and competitive risks, which could have material adverse effects on our financial condition, results of operations, or reputation;

● We have experienced, and expect to continue to experience, significant dilution of our common stock, which may adversely affect the market price of our common stock and make it more difficult to raise capital in the future;

● Compliance with governmental laws, regulations and covenants that are applicable to our business and industries or that may be passed in the future, including those related to the operations of brokerages, title service companies, and other real estate services, may adversely affect our business operations and financial condition;

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

residential real estate industry and changes in general economic conditions;

● The business and industry in

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

● The reAlpha platform and our

services are currently limited to certain geographic markets and if we are unable to successfully expand the reAlpha platform and our

services to new markets, our growth prospects, results of operations and financial condition may be adversely affected;

● Our technologies that are currently

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

● The market price and trading

volume of our common stock may continue to be highly volatile, which could lead to a loss of all or part of a stockholder’s investment.

Forward-looking

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

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

● The reAlpha platform and our services are currently limited to certain geographic markets and if we are unable to successfully expand the reAlpha platform and our services to new markets, our growth prospects, results of operations and financial condition may be adversely affected;

● Our technologies that are currently being developed may not yield expected results or be delivered on time;

● The market price and trading volume of our common stock may continue to be highly volatile, which could lead to a loss of all or part of a stockholder’s investment.

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

“Part I, Item 2.

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.

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

You should not place undue reliance

on these forward-looking statements.

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

refer to reAlpha Tech Corp.

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.

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.

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