Linkhome Holdings Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with those statements. You should read the following discussion in conjunction with “Selected Historical Financial and Other Data” and our audited consolidated financial statements and related notes which are included elsewhere in this prospectus. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, those described under “Risk Factors” and included in other portions of this prospectus. This prospectus includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our,” or the “Company” are to Linkhome Holdings Inc. and its subsidiary, except where the context requires otherwise. Overview Linkhome Holdings Inc. (“Linkhome,” “Linkhome Holdings,” the “Company,” or “We”) is a corporation incorporated under the laws of Nevada on November 6, 2023. Linkhome was incorporated as a holding company with no material operations of its own. Linkhome conducts substantially all of the operations through its subsidiary, Linkhome Realty Group, a California corporation (“Linkhome Realty”). Located in Irvine, California, Linkhome Realty is presently focused on serving the Southern California market, and, over time, intends to establish a nationwide marketing network covering multiple states. Linkhome Realty focuses on comprehensive real estate activities as a one-stop destination for a variety of real estate needs. By using Artificial Intelligence (“AI”) to streamline the property search and transaction process, we facilitate property transactions as a real estate agency and provide efficient property management services. We aim to offer comprehensive assistance to our clients in real estate investments by diversifying our services and providing clients with access to a wide range of real estate solutions. Further, we aim to provide personalized services to both buyers and sellers to meet their various real estate needs, and help our clients buy and sell property more efficiently. Additionally, where possible and when we have sufficient cash on hand to permit such a purchase, we purchase and sell real estate for our clients through our Cash Offer program. We developed the Cash Offer program with the intent of increasing the successful rate in our clients’ acquisition of their desired houses. We also use this service as a marketing tool to help us attract more clients. We use cash to purchase the target property first, and then sell it to our customer. This service is particularly effective in the competitive U.S. real estate market, where buyers often face competition and bidding for popular properties during the home purchase bid. Our ability to make all-cash offers helps our clients secure desired properties quickly, thereby enhancing their chances of success. Our ultimate strategic goal is to become the premier AI driven real estate technology company, utilizing artificial intelligence to transform the real estate industry, making property transactions more user-friendly, transparent, and efficient. Currently, our funding for the Cash Offer comes primarily from investments made by our CEO and shareholders. With the funds generated from this offering, we plan to expand our Cash Offer program. We believe and are confident that, over time, our revenue will continue to grow and we will become more profitable over time. Key Factors that Affect Our Results of Operations ● Market Conditions: Fluctuations in the real estate market, including changes in supply and demand dynamics, interest rate, economic conditions, and regulatory policies, can significantly impact on our business. We closely monitor market trends and adapt our strategies in order to mitigate risks and capitalize on opportunities. 9 ● Technology Integration: As we strive to become the premier AI real estate company, our ability to effectively integrate AI and other innovative technologies into our operations is crucial. ● Client Preferences and Demands: We continuously assess client feedback, market research and industry trends to improve our services. ● Competition: The real estate industry is highly competitive, with numerous companies competing for market share and client attention. We strive to differentiate ourselves through our comprehensive services, innovative solutions and exceptional customer service. Continuous assessment of competitor strategies and market positioning informs our efforts to maintain a competitive advantage. ● Economic Factors: We aim to continuously evaluate Macroeconomic factors, such as GDP growth, employment rates, inflation, which can influence real estate market dynamics and consumer behavior. When GDP growth and employment rates are strong, we typically see higher consumer confidence and spending power. On the other hand, rising inflation can lead to increased interest rates, potentially reducing consumer buying power and making it more expensive for consumers to purchase homes. ● Operational Efficiency: The process of real estate transaction includes multiple steps. We continuously optimize our processes, invest in staff training and development, and leverage technology to enhance productivity. Related Party Transactions Related Parties The following individuals are considered related parties due to their roles and shareholdings in the Company: ● Haiyan Ma: Shareholder with 12.41% ownership. ● Zhen Qin: Chairman of the Board, Chief Executive Officer (“CEO”), and shareholder with 52.74% ownership. Zhen Qin also serves as a licensed real estate agent acting on behalf of the Company. ● Na Li: Chief Financial Officer (“CFO”), Director, and shareholder with 1.72% ownership. Na Li is the spouse of Zhen Qin. For the Years Ended December 31, 2024 and 2023 Property Purchases and Sales Through Cash Offer For the year ended December 31, 2024, the Company purchased three properties in cash for $2,884,882 from unrelated parties and subsequently sold them to Haiyan Ma for $2,940,544. For the year ended December 31, 2023, the Company purchased one property in cash for $ 1,056,370 from an unrelated party and subsequently sold it to Haiyan Ma for $1,069,072. For the year ended December 31, 2024, the Company purchased a property in cash for $1,425,930 from Haiyan Ma, which included $1,420,000 paid to Haiyan Ma as the total consideration and $5,930 in title charges, escrow charges, and other related costs. The Company subsequently sold the property to Na Li for $1,670,000. Real Estate Agency Service For the year ended December 31, 2024, the Company provided real estate agency services to Haiyan Ma, assisting with the sale of two properties and the purchase of one property, for which the Company earned a total of $62,650 in real estate agency commission. For the year ended December 31, 2024, the Company provided real estate agency services to Zhen Qin and Na Li, assisting with the purchase of a property, for which the Company earned $50,000 in real estate agency commission. 10 For the year ended December 31, 2024, the Company provided real estate agency services to two minority shareholders, assisting one shareholder with selling a property and the other shareholder with purchasing a property, for which the Company earned a total of $15,550 in real estate agency commission. Property Management Service For the year ended December 31, 2024, the Company provided tenant placement services to a minority shareholder, assisting with securing a rental property, for which the Company earned $1,800 in property management service revenue. Home Renovation Service For the year ended December 31, 2024, the Company provided home renovation services to Haiyan Ma on three home renovation projects, for which the Company earned $53,012 in home renovation service revenue and incurred $43,332 in renovation costs. For the year ended December 31, 2024, the Company provided home renovation services to Na Li on four home renovation projects, for which the Company earned $64,500 in home renovation service revenue and incurred $56,769 in renovation costs. Commission Expense For the year ended December 31, 2023, the Company incurred commission expenses of $61,400, which were paid to Zhen Qin for real estate transactions conducted on behalf of the Company. This amount was recorded in cost of revenues. As of December 31, 2024 and 2023 Due to Related Party On May 1, 2024, Zhen Qin lent $530,000 to the Company to support its operational needs. As of December 31, 2024, the Company repaid $475,000 to Zhen Qin, and there was an outstanding balance of $55,000. Selected Income Statement Items Net Revenues We derive our net revenues from (i) real estate purchases and sales made through Cash Offer, and (ii) real estate services including acting as real estate agency for buying and selling properties, property management, home renovation and mortgage referral services. The following table presents our net revenues by revenue stream for the periods presented: Years Ended December 31, 2024 2023 Change Amount % Amount % Amount % Revenue from property purchases and sales through Cash Offer $ 6,568,404 86.25 % $ 1,069,072 78.04 % $ 5,499,332 514.40 % Real estate service revenue Real estate agency commission 781,351 10.26 % 261,705 19.10 % 519,646 198.56 % Property management service 16,276 0.21 % 17,225 1.26 % (949 ) (5.51 )% Home renovation service 245,226 3.22 % 8,353 0.61 % 236,873 2,835.78 % Mortgage referral fee 4,050 0.05 % 13,500 0.99 % (9,450 ) (70.00 )% Total real estate service revenue 1,046,903 13.75 % 300,783 21.96 % 746,120 248.06 % Total net revenues $ 7,615,307 100.00 % $ 1,369,855 100.00 % $ 6,245,452 455.92 % 11 Revenue from Property Purchases and Sales Through Cash Offer In a competitive real estate market, a buyer who pays in cash is more likely to secure a property. To give buyers an edge in competitive markets, we offer the Cash Offer program to enable buyers to make all-cash offers on properties, even if they require financing. Through our Cash Offer program, we provide the funds to make a cash offer once the client identifies a property. If the seller accepts the cash offer, we purchase the property in cash to secure its ownership and subsequently sell it to the client within a short period of time. Our property purchases and sales through Cash Offer focus primarily on residential and commercial properties. Revenue from property purchases and sales through our Cash Offer program accounted for 86.25% and 78.04% of net revenues for the years ended December 31, 2024 and 2023, respectively. Our revenue from this program increased by $5,499,332, or 514.40%, from $1,069,072 for the year ended December 31, 2023, to $6,568,404 for the year ended December 31, 2024. This significant increase was due to the expansion of our Cash Offer program, which commenced in late 2023. For the years ended December 31, 2024 and 2023, we purchased and sold six and one properties, respectively, through the Cash Offer program, with average transaction prices of $1.08 million and $1.05 million. Real Estate Service Revenue We offer comprehensive real estate services tailored to meet the diverse needs of our clients. Our real estate service revenue consists primarily of real estate agency commissions for buying and selling properties for clients, and revenue generated from property management, home renovation and mortgage referral services. Real estate service revenue accounted for 13.75% and 21.96% of net revenues for the years ended December 31, 2024 and 2023, respectively. Our real estate service revenue increased by $746,120, or 248.06%, from $300,783 for the year ended December 31, 2023, to $1,046,903 for the year ended December 31, 2024. This increase was primarily driven by growth in real estate agency commission and home renovation service revenue, partially offset by a decrease in mortgage referral fees and property management service revenue, as explained below. Real estate agency commission increased by $519,646, or 198.56%, from $261,705 for the year ended December 31, 2023, to $781,351 for the year ended December 31, 2024. This increase was primarily driven by a 214.58% increase in transaction volume, resulting from a 130.00% increase in the number of real estate transactions and a 36.78% increase in the average transaction price. For the year ended December 31, 2024, we achieved a total transaction volume of $48,566,719 by completing 46 real estate transactions at an average transaction price of $1.06 million, while we achieved a total transaction volume of $15,438,435 by completing 20 real estate transactions at an average transaction price of $0.77 million for the year ended December 31, 2023. The increase in real estate agency commission was partially offset by higher rebates, which we offered in order to attract more clients and expand our market share. Rebates increased by $167,617, or 413.79%, from $40,508 for the year ended December 31, 2023, to $208,125 for the year ended December 31, 2024, accounting for 21.03% and 13.40% of gross real estate agency commission for the years ended December 31, 2024 and 2023, respectively. Revenue from home renovation service increased by $236,873, or 2,835.78%, from $8,353 for the year ended December 31, 2023, to $245,226 for the year ended December 31, 2024. This increase was driven by our launch of home renovation service in late 2023 in response to a demand for home improvements aimed at enhancing living spaces and increasing home equity. We completed 15 home renovation projects for the year ended December 31, 2024, compared to one project for the year ended December 31, 2023. Revenue from mortgage referral service decreased by $9,450, or 70.00%, from $13,500 for the year ended December 31, 2023, to $4,050 for the year ended December 31, 2024. This decrease was primarily due to reduced client demand for mortgage referrals, reflecting higher interest rates during 2024. We assisted one client in securing a mortgage for the year ended December 31, 2024, compared to six clients for the year ended December 31, 2023. Revenue from property management service decreased by $949, or 5.51%, from $17,225 for the year ended December 31, 2023, to $16,276 for the year ended December 31, 2024. We had nine tenant placements for the year ended December 31, 2024, compared to eight for the year ended December 31, 2023. In addition to tenant placement services, we began providing ongoing property management services in 2024 and managed three properties by year-end. The decrease in revenue was primarily due to a lower average revenue per tenant placement in 2024 and the initial implementation of ongoing property management services, which are structured to generate recurring revenue over time rather than upfront payments. 12 Cost of Revenues Our cost of revenues consists primarily of (i) costs related to property purchases made under Linkhome Realty’s name, which properties are subsequently sold to customers, and (ii) costs associated with real estate services, including commission expenses for real estate agents working for the Company and renovation costs incurred for home renovation services. We derive our cost of revenues from two revenue streams: (i) property purchases and sales through Cash Offer and (ii) real estate services. The following table presents our cost of revenues by revenue stream for the periods presented: Years Ended December 31, 2024 2023 Change Amount % Amount % Amount % Cost of property purchases and sales through Cash Offer $ 5,928,865 96.48 % $ 1,056,370 94.51 % $ 4,872,495 461.25 % Cost of real estate services 216,061 3.52 % 61,400 5.49 % 154,661 251.89 % Total cost of revenues $ 6,144,926 100.00 % $ 1,117,770 100.00 % $ 5,027,156 449.75 % Cost of property purchases and sales through Cash Offer increased by $4,872,495, or 461.25%, from $1,056,370 for the year ended December 31, 2023, to $5,928,865 for the year ended December 31, 2024, as we launched this revenue stream in late 2023. The increase was primarily driven by a higher volume of transactions in 2024 compared to 2023. Cost of real estate services increased by $154,661, or 251.89%, from $61,400 for the year ended December 31, 2023, to $216,061 for the year ended December 31, 2024. The increase was primarily driven by higher renovation costs as we began providing home renovation services in late 2023. This was partially offset by a reduction in commission expenses paid to our real estate agents, particularly to our CEO, who devoted more time in 2024 to expanding into new markets. Selling, General and Administrative Expenses Our selling expenses primarily consist of staging, advertising and marketing costs, including online and offline marketing, photography and videography. We expect our selling expenses as a percentage of net revenues to modestly increase in the foreseeable future to achieve high-quality growth. Our general and administrative expenses primarily consist of professional service costs, payroll and payroll related costs, rent and other overhead costs. We anticipate our general and administrative expenses will increase in the short term as a result of increased costs associated with being a public company, which will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, attorneys, and accountants; however, we expect our general and administrative expenses as a percentage of net revenues to decrease over the long term as we continue to enhance overall cost control to improve operating margin. 13 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarized our consolidated results of operations for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 % of Revenues 2023 % of Revenues Change Percentage Change Net revenues $ 7,615,307 100.00 % $ 1,369,855 100.00 % $ 6,245,452 455.92 % Cost of revenues 6,144,926 80.69 % 1,117,770 81.60 % 5,027,156 449.75 % Gross profit 1,470,381 19.31 % 252,085 18.40 % 1,218,296 483.29 % Operating expenses Selling expenses 15,754 0.21 % 4,476 0.33 % 11,278 251.97 % General and administrative expenses 365,207 4.80 % 88,761 6.47 % 276,446 311.45 % Total operating expenses 380,961 5.01 % 93,237 6.80 % 287,724 308.59 % Operating income 1,089,420 14.30 % 158,848 11.60 % 930,572 585.83 % Other expenses, net (1,832 ) (0.02 )% (5,730 ) (0.42 )% 3,898 (68.03 )% Income before income taxes 1,087,588 14.28 % 153,118 11.18 % 934,470 610.29 % Income tax expenses 309,352 4.06 % 1,925 0.14 % 307,427 15,970.23 % Net income $ 778,236 10.22 % $ 151,193 11.04 % $ 627,043 414.73 % Net Revenues Net revenues for the years ended December 31, 2024 and 2023 were $7,615,307 and $1,369,855, respectively, representing an increase of $6,245,452, or 455.92%. This increase was primarily driven by a $5,499,332 increase in revenue from property purchases and sales through Cash Offer, along with a $746,120 increase in real estate service revenue. Cost of Revenues Years Ended December 31, 2024 2023 Change Percentage Change Cost of property purchases and sales through Cash Offer $ 5,928,865 $ 1,056,370 $ 4,872,495 461.25 % Cost of real estate services 216,061 61,400 154,661 251.89 % Total cost of revenues $ 6,144,926 $ 1,117,770 $ 5,027,156 449.75 % As a percentage of net revenues 80.69 % 81.60 % Cost of revenues for the years ended December 31, 2024 and 2023 was $6,144,926 and $1,117,770, respectively, representing an increase of $5,027,156, or 449.75%. This increase was primarily driven by higher costs associated with increased revenue from property purchases and sales through Cash Offer, as well as higher renovation costs related to the expansion of our home renovation services. Gross Profit and Gross Margin Years Ended December 31, 2024 2023 Gross Profit Gross Margin Gross Profit Gross Margin Property purchases and sales through Cash Offer $ 639,539 8.40 % $ 12,702 0.93 % Real estate services 830,842 10.91 % 239,383 17.47 % Total $ 1,470,381 19.31 % $ 252,085 18.40 % 14 Gross profit for the years ended December 31, 2024 and 2023 was $1,470,381 and $252,085, respectively, representing an increase of $1,218,296, or 483.29%. The blended gross margin was 19.31% for the year ended December 31, 2024, compared to 18.40% for the year ended December 31, 2023. Gross profit from property purchases and sales through Cash Offer as a percentage of revenue from property purchases and sales through Cash Offer was 9.74% for the year ended December 31, 2024, compared to 1.19% for the year ended December 31, 2023. This increase was primarily driven by improved pricing strategies and operational efficiencies as we scaled the Cash Offer program. Gross profit from real estate services as a percentage of real estate service revenue was 79.36% for the year ended December 31, 2024, compared to 79.59% for the year ended December 31, 2023. The slight decrease was primarily due to higher renovation costs, partially offset by lower commission expenses paid to our CEO. As part of our real estate services, we began providing home renovation services in late 2023. Gross profit from home renovation services as a percentage of home renovation service revenue was 18.03% for the year ended December 31, 2024. Selling Expenses Selling expenses primarily consisted of staging, advertising, and marketing costs. Selling expenses for the years ended December 31, 2024 and 2023 were $15,754 and $4,476, respectively, representing an increase of $11,278, or 251.97%. This increase was primarily driven by higher advertising and marketing expenditures aimed at attracting more clients and listings, as well as enhancing brand awareness. General and Administrative Expenses The following table summarized our general and administrative expenses for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Change Percentage Change Legal and accounting expenses $ 99,363 $ 12,267 $ 87,096 710.00 % Payroll expense 152,256 45,300 106,956 236.11 % Payroll tax expense 13,795 4,782 9,013 188.47 % Rent expense 46,572 15,114 31,458 208.13 % Depreciation expense 18,762 6,042 12,720 210.54 % Other general and administrative expenses 34,459 5,256 29,203 555.65 % Total general and administrative expenses $ 365,207 $ 88,761 $ 276,446 311.45 % As a percentage of net revenues 4.80 % 6.47 % General and administrative expenses for the years ended December 31, 2024 and 2023 were $365,207 and $88,761, respectively, representing an increase of $276,446, or 311.45%. This increase was primarily driven by higher payroll expense, legal and accounting expenses, rent expense, depreciation expense, and payroll tax expense, which increased by $106,956, $87,096, $31,458, $12,720, and $9,013, respectively. Payroll and payroll tax expenses increased primarily due to the hiring of new employees. Legal and accounting expenses increased primarily in connection with the Company’s preparation for its initial public offering. Rent expense increased following the commencement of the Company’s office lease in September 2023. Depreciation expenses increased due to the acquisition of a vehicle, furniture, and office equipment. Other Expenses, Net Other expenses were $1,832 for the year ended December 31, 2024, compared to $5,730 for the year ended December 31, 2023. For the year ended December 31, 2024, other expenses primarily consisted of interest expense of $3,115, bank fees of $456, and other miscellaneous expenses of $107, partially offset by credit card rebates of $1,166 and bank rewards of $680. For the year ended December 31, 2023, other expenses primarily consisted of interest expense of $967 and other miscellaneous expenses of $4,871, partially offset by credit card rebates of $108. 15 Income Tax Expenses Income tax expenses for the years ended December 31, 2024 and 2023 were $309,352 and $1,925, respectively, representing an increase of $307,427, or 15,970.23%. This significant increase was primarily due to higher taxable income and a change in Linkhome Realty’s tax filing status from an S-corporation to C-corporation, effective January 1, 2024. As a C-corporation, Linkhome Realty is subject to a federal income tax rate of 21% and a California state income tax rate of 8.84%. Net Income Net income for the years ended December 31, 2024 and 2023 was $778,236 and $151,193, respectively, representing an increase of $627,043, or 414.73%. This increase was primarily driven by the significant growth in net revenues, partially offset by higher operating expenses. Liquidity and Capital Resources In assessing liquidity, management monitors and analyzes the Company’s cash on-hand, ability to generate sufficient revenue sources in the future, and operating and capital expenditure commitments. Historically, we have funded our working capital, operations and other capital requirements primarily through equity contributions from stockholders and cash flow from operations. Our ability to meet our current expenses and obligations depends on the future realization of our current assets. Management has considered historical experience, current economic conditions, reasonable and supportable forecasts of future economic conditions, and trends in the real estate industry to evaluate the expected collectability of accounts receivable as of December 31, 2024 and 2023. Our liquidity may be affected by general economic, competitive, and other factors, many of which are beyond our control. We plan to expand our real estate business, develop our artificial intelligence real estate platform, and increase our own real estate investment. To accomplish such expansion plan, we estimate the total related capital investment and expenditures to be approximately $2 million over the next 12 months. We believe that our current cash and cash flows provided by operating activities will be sufficient to meet our working capital needs for existing business over the next 12 months from the issuance date of the financial statements. However, we plan to use part of the proceeds from this offering to support our business expansion described above. We may also seek additional financing, to the extent needed, and there can be no assurance that such financing will be available on favorable terms, or at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing stockholders. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may also seek to issue additional debt or obtain financial support from stockholders. The principal stockholders of the Company have made a commitment to provide financial support to the Company whenever necessary and will continue to provide support following the consummation of this offering. Cash Flows For the Years Ended December 31, 2024 and 2023 As of December 31, 2024, we had cash and cash equivalents of $1,670,949, other current assets of $1,652,699, current liabilities of $944,447, net working capital of $2,379,201, and a current ratio of 3.52:1. 16 The following table presented a summary of our cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 Year Ended December 31, 2023 Net cash (used in) provided by operating activities $ (4,844 ) $ 223,314 Net cash used in investing activities (3,513 ) (40,522 ) Net cash provided by financing activities 1,027,395 280,156 Net increase in cash and cash equivalents 1,019,038 462,948 Cash and cash equivalents, beginning of period 651,911 188,963 Cash and cash equivalents, end of period $ 1,670,949 $ 651,911 Net Cash (Used in) Provided by Operating Activities Net cash used in operating activities was $4,844 for the year ended December 31, 2024, primarily derived from (i) net income of $778,236, adjusted for noncash activities including lease expense of $45,347 and depreciation of $18,762, partially offset by a decrease in allowance for credit losses of $9,092; (ii) net changes in operating assets and liabilities as of December 31, 2024 compared to December 31, 2023, primarily consisting of (a) an increase in real estate held for sale of $907,061, (b) an increase in deferred IPO costs of $699,499, (c) a decrease in operating lease liabilities of $45,062, (d) an increase in accounts receivable of $8,676, and (e) an increase in prepaid expenses and other receivables of $2,971, partially offset by (a) an increase in other current liabilities of $820,575 and (b) an increase in accounts payable of $4,597. Net cash provided by operating activities was $223,314 for the year ended December 31, 2023, primarily derived from (i) net income of $151,193, adjusted for noncash activities including lease expense of $15,115 and depreciation of $6,042; (ii) net changes in operating assets and liabilities as of December 31, 2023 compared to December 31, 2022, primarily consisting of (a) a decrease in accounts receivable of $106,289 and (b) an increase in other current liabilities of $14,548, partially offset by (a) a decrease in accounts payable of $25,800, (b) an increase in prepaid expenses and other receivables of $25,008, (c) a decrease in operating lease liabilities of $14,830, and (d) an increase in security deposits of $4,235. Net cash used in operating activities was $4,844 for the year ended December 31, 2024, compared to net cash provided by operating activities of $223,314 for the year ended December 31, 2023, representing an increase in cash outflow of $228,158. This increase was primarily due to (i) an increase in cash outflow of $907,061 on real estate held for sale, (ii) an increase in cash outflow of $699,499 on deferred IPO costs, (iii) a decrease in cash inflow of $114,965 on accounts receivable, and (iv) an increase in cash outflow of $30,232 on operating lease liabilities, partially offset by (i) a decrease in cash outflow of $806,027 on other current liabilities, (ii) an increase in cash inflow of $660,903 on net income adjusted for noncash activities, (iii) a decrease in cash outflow of $30,397 on accounts payable, (iv) a decrease in cash outflow of $22,037 on prepaid expenses, and (v) a decrease in cash outflow of $4,235 on security deposits. Net Cash Used in Investing Activities Net cash used in investing activities was $3,513 for the year ended December 31, 2024, which primarily included purchases of office equipment for $1,082, furniture for $982, and trademarks for $1,449. Net cash used in investing activities was $40,522 for the year ended December 31, 2023, which primarily included purchases of a vehicle for $35,250, furniture for $4,343, and office equipment for $929. Net Cash Provided by Financing Activities Net cash provided by financing activities was $1,027,395 for the year ended December 31, 2024, which primarily consisted of proceeds from equity financing of $980,000 and related party advances of $880,000, partially offset by repayments of $825,000 to the related party and $7,605 on an auto loan. Net cash provided by financing activities was $280,156 for the year ended December 31, 2023, which primarily consisted of proceeds from capital contribution of $303,000, partially offset by dividend payments of $21,154 and repayments of $1,690 on an auto loan. 17 Contractual Obligations Our contractual obligations as of December 31, 2024 were as follows: 1 Year or Less More Than 1 Year Total Operating lease liabilities $ 29,980 $ — $ 29,980 Auto loan payable 8,102 35,381 43,483 Total $ 38,082 $ 35,381 $ 73,463 Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2024 and 2023. Trend Information Other than as disclosed elsewhere in this prospectus, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our revenue, income from operations, net income, liquidity, or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition. Inflation Inflation and rising interest rates have significantly influenced the economic environment, impacting our operations and financial performance. Monetary authorities, in response to heightened inflationary pressures, have raised interest rates, which has increased borrowing costs and reduced the availability of financing. These changes have directly affected the real estate market by making mortgages less affordable for potential homebuyers, leading to decreased demand for real estate. We continue to monitor inflation, monetary policy changes, and their potential adverse effects on our business. Despite these challenges, higher interest rates have reduced competition among buyers, creating opportunities for some to view this as an advantageous time to purchase real estate. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe that the critical accounting policies disclosed in this prospectus reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for emerging growth companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements contained in our subsequent filings with the SEC may not be comparable to other public companies. 18 The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements: Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates and judgments include, but are not limited to, revenue recognition, allowance for credit losses, income taxes, the useful lives of long-lived assets and assumptions used in assessing impairment of long-lived assets. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual amounts may differ from the estimated amounts, such differences are not likely to be material. Revenue Recognition In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identifies contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenues when (or as) it satisfies the performance obligation. The Company derives its revenues primarily from real estate services and real estate purchases and sales through Cash Offer. Real Estate Service Revenue The Company’s real estate service revenue consists primarily of real estate agency commission for buying and selling properties for clients, revenue generated from property management service, home renovation service, and mortgage referral service. The Company earns agency commission revenue, usually at a fixed percentage of property’s selling price, through facilitating the buy or sale of various types of properties, including residential, commercial, and land parcels. The Company is considered an agent for these services provided, and reports service revenue earned through these transactions on a net basis. Revenue is recognized when the agency service is provided, usually at the closing of the escrow. The Company’s CEO has owned his personal real estate salesperson license since 2020 and obtained a personal real estate broker license on August 8, 2023. Prior to obtaining the broker license, the Company performed real estate transactions as a sales agent under a real estate brokerage firm owned by an unrelated third party and earned sales commissions at fixed rate. On November 17, 2023, Linkhome Realty obtained a real estate broker license for the Company. Thus, the Company gradually transitioned from operating as a sales agent under a third-party real estate broker to a real estate broker independently. This transition marks a significant shift in the Company’s business model, as it no longer relies on other firms to conduct real estate transactions. The Company provides property management services, which include two primary activities: tenant placement and ongoing property management. Tenant placement services involve marketing the property, identifying suitable tenants, and facilitating the rental agreement. For these services, the Company acts as an agent and charges a rental commission, either as a percentage of the first year’s rent or a fixed fee. Revenue from tenant placement is recognized at a point in time when a tenant is secured, and the lease contract is executed. Additionally, the Company provides ongoing property management services, which may include collecting rent on behalf of the landlord, coordinating maintenance and repairs, and addressing tenant inquiries during the lease term. For these services, the Company also acts as an agent and charges a service fee. Revenue from ongoing property management is recognized over time as the services are rendered, as the landlord simultaneously receives and consumes the benefits of the Company’s efforts. The Company also offers a full range of home renovation services, from bathroom and kitchen renovations to customized home renovations and extensions, helping clients prepare their homes for sale or personalize newly purchased properties. The Company considers itself as a principal for this service as it has control of the specified service at any time before it is transferred to the customer, which is evidenced by (i) the Company is primarily responsible for fulfilling the promises to provide home renovation services meeting customer specifications, and assumes fulfilment risk (i.e., risk that the performance obligation will not be satisfied); and (ii) the Company has discretion in selecting third-party renovation contractors and establishing the price, and bears the risk for services that are not fully paid for by customers. The renovation period is usually within one to three months; the Company recognizes revenue when the renovation service is completed, on a gross basis with corresponding costs incurred. 19 In addition, the Company collaborates with lending institutions and mortgage brokers to assist clients in seeking and securing mortgage services, and aiding clients in the process of obtaining loans or financing for property purchases. The Company receives a referral fee as a percentage of the loan amount and recognizes revenue when the loan is approved. Revenue from Property Purchases and Sales through Cash Offer The Company’s revenue from purchases and sales through Cash Offer consists primarily of the Company’s purchasing a hot property in cash and then selling it to a customer. The Company purchases a property in cash with ownership transferred to Linkhome Realty. Subsequently, Linkhome Realty sells the property to the customer within a short period of time. Both purchase and sales transactions go through an escrow company. The Company is the principal of these transactions and recognizes revenue and cost when the property purchased is sold and escrow is closed. This type of revenue does not contain a financing component due to there being no difference between the amount of promised consideration and the cash selling price of the promised goods or services, and the length of time between when the Company transfers the promised goods or services to the customer and when the customer pays for those goods is very short, usually within a few weeks or a few months. Credit Losses On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC 326”). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The was no transition adjustment of the adoption of CECL. The Company’s accounts receivable and prepaid expense in the consolidated balance sheets are within the scope of ASC Topic 326. As the Company has limited customers and debtors, the Company uses the loss-rate method to evaluate the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment on various factors, including historical experience, creditworthiness of customers and debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses are recorded as an allowance for credit losses, which is netted against accounts receivable in the consolidated balance sheets, and are recognized as an expense in the consolidated statements of income. Receivables are written off against the allowance when all collection efforts have been exhausted and recovery is deemed remote. If the Company recovers amounts that were previously written off, the recovered amounts are recognized as a reduction to the provision for credit losses in the consolidated statements of income. 20 Accounts Receivable, Net Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the historical carrying amount net of allowance for credit losses. The Company maintains allowances for credit losses for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment pattens and creditworthiness, current economic conditions, and reasonable and supportable forecasts of future economic conditions. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and 2023, the Company had allowances for credit losses of $0 and $9,092, respectively. Impairment of Long-lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. The Company evaluates events and changes in circumstances that could indicate the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such a determination is made. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Based on the above analysis, no impairment loss was recognized related to these assets for the years ended December 31, 2024 and 2023. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior years’ net operating losses carried forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. The Company follows FASB ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of FASB ASC Topic 740, when tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. For the years ended December 31, 2024 and 2023, the Company did not take any uncertain positions that would necessitate recording a tax related liability. 21 Prior to January 1, 2024, Linkhome Realty filed its income tax return under Subchapter S of the Internal Revenue Code (“IRS”) as an S-corporation, and elected to be taxed as a pass-through entity, for which the income, losses, deductions, and credits flow through to the stockholders of the company for federal tax purposes. Effective January 1, 2024, Linkhome Realty’s tax status became C-corporation, and is subject to a federal income tax rate of 21% and California state income tax rate of 8.84%. As a parent holding company of Linkhome Realty, Linkhome Holdings was incorporated in the State of Nevada on November 6, 2023, and is only subject to a federal income tax rate of 21%. Effective for the tax year beginning January 1, 2024, and continuing thereafter unless revoked, Linkhome Holdings and Linkhome Realty have elected to file a consolidated federal income tax return. New Accounting Pronouncements The Company considers the applicability and impact of all ASUs and periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in the ASU are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 in the fourth quarter of 2024 and the adoption did not have a material impact on its consolidated financial statements and related disclosures. Recent Accounting Pronouncements Pending Adoption In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the impact that ASU 2023-09 will have on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted. These requirements should be applied on a prospective basis with an option to apply them retrospectively. The Company is evaluating the impact that ASU 2024-03 will have on its consolidated financial statements and related disclosures. The Company does not believe that any other recently issued but not yet effective authoritative guidance, if adopted currently, would have a material impact on its consolidated financial statements or related disclosures. 22 Item 7A. Quantitative and Qualitative Disclosures about Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. Item 8. Financial Statements and Supplementary Data. Attached. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.