reAlpha Tech Corp.

Note 1 - Organization and Description of Business

reAlpha Tech Corp. was incorporated with the name reAlpha Asset Management, Inc. in the State of Delaware on April 22, 2021, which was changed to reAlpha Tech Corp. as a result of the short-form merger with its former parent on March 21, 2023. reAlpha Tech Corp. and its subsidiaries are collectively referred to as “we,” “us,” “our” or the “Company.”

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

The Company is a technology-driven, integrated services company, leveraging AI to enhance the homebuying experience and streamline real estate transactions. At the core of the Company’s strategy is the reAlpha platform, an AI-powered solution designed to simplify the 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. (“U.S. Naamche”), Realpha Nepal Pvt. Ltd. (f/k/a Naamche, Inc. Pvt. Ltd.) (“reAlpha Nepal Pvt Limited” and together with U.S. Naamche, “reAlpha Nepal”), and AiChat Pte. Ltd. (“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Inc. (“GTG” or “GTG Financial”), during the year ended December 31 2025, the Company’s acquisition of GTG was rescinded pursuant to the terms of the Stock Purchase Agreement, by and among GTG Financial, Glenn Groves (the “Seller”) and the Company, dated February 20, 2025 (the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–Rescission of GTG Financial Acquisition” 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 Policies

Principles of Consolidation

The accompanying audited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These audited 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 audited 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 Securities and Exchange Commission applicable to annual reports on Form 10-K. These financial statements 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 consolidated balance sheet as of December 31, 2024 has been derived from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 2, 2025, as amended on May 13, 2025 (the “2024 Form 10-K”).

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements. The financial statements include the operations, assets, and liabilities of the Company. In the opinion of the Company’s management, the accompanying audited financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying financial statements. These audited 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 fiscal year are not necessarily indicative of the results to be expected for any future periods.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.

Business Promotion and Advertising Costs

The Company expenses advertising and marketing costs, including prepaid advertising arrangements, as they are incurred. Advertising and marketing expenses were $5,946,514 and $793,004 for the years ended December 31, 2025, and 2024, respectively, of which $4,406,571 and$0 were settled via issuance of Series A Preferred Stock, respectively. These costs are included in “Marketing and advertising” in the accompanying consolidated statements of operations and comprehensive loss.

Related Party Transactions

The Company accounts for related party transactions in accordance with Accounting Standards Codification (“ASC”) 850. A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Cash and Cash Equivalents

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

Concentration of Credit Risks

Financial instruments that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, cash equivalents, and accounts receivable. As of December 31, 2025 the Company’s cash was held by financial institutions that management believes have acceptable credit. The Federal Deposit Insurance Corporation insures balances up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. Accounts receivables are typically unsecured. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances.

In accordance with ASC 326, Investments - Financial Instruments-Credit Losses the Company applies the Current Expected Credit Losses (“CECL”) model to estimate expected credit losses over the lifetime of financial assets measured at amortized cost. The Company has determined that accounts receivable is the only financial asset subject to CECL assessment, as it does not have any loan receivables, held-to-maturity debt securities, or other financial instruments requiring CECL evaluation.

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

Stock Based Compensation

The Company accounts for share-based payments in accordance with the provisions of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the consolidated interim statements of operations and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period.

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.

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 year ended December 31, 2025 was recorded based on updated receivables and risk profiles as of December 31, 2025. The CECL reserve is netted against accounts receivable, net on the balance sheet.

There were no changes in the Company’s credit risk exposure, CECL methodology, and/or reserve assumptions during the year ended December 31, 2025. The updated values are as follows:

There have been no material changes to the Company’s significant accounting policies during the year ended December 31, 2025.

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.

We recorded the Xmore AI investment of $125,000 under the equity method as per ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Management performed an impairment assessment of the equity method investment as of December 31, 2025, and concluded that no indicators of impairment were present; accordingly, no impairment loss was recognized.

Equity Investment — Measurement Alternative (ASC 321)

The Company holds a 25% equity interest in Carthagos Inc., a privately held entity, which is accounted for under ASC 321 using the measurement alternative, as the investment does not have a readily determinable fair value. As of December 31, 2025, management evaluated the investment for impairment in accordance with ASC 321-10-35-2 through 35-4 and identified impairment indicators, including sustained operating challenges, liquidity constraints, and uncertainty regarding the recovery of invested capital. As a result, the Company recorded an impairment loss of $90,000 during the year ended December 31, 2025.

Foreign Currency Translation

The Company’s consolidated financial statements are presented in U.S. dollars. 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. dollar functional currencies are translated into U.S. 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. The consolidated statements of cash flows are presented in U.S. dollars, with foreign subsidiary cash flows translated at weighted-average exchange rates for the period.

Capitalized Software Development Costs

The Company adheres to ASC 350-40 for the capitalization of software development costs. Under these standards, costs incurred during the application development stage—including coding, testing, and the development of software functionalities—are eligible for capitalization if they relate to significant improvements that substantially enhance the software’s functionality or extend its service capacity. These costs include direct labor, third-party services, and other expenses directly attributable to the software’s development. Conversely, expenditures for minor enhancements and routine software maintenance are expensed as incurred, consistent with specific US GAAP requirements.

Amortization of capitalized software development costs begins when the software is ready for its intended use and placed in service. These costs are amortized over the software’s estimated useful life, which is assessed by considering factors such as the expected future benefits to the Company and the rate of technological change.

Goodwill

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.

The Company tests goodwill for impairment at least annually as of December 31, or more frequently if events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount, in accordance with ASC Topic 350, Intangibles—Goodwill and other (“ASC 350”). For the year ended December 31, 2025, the Company performed its annual goodwill impairment test and determined that the fair value of each reporting unit exceeded its respective carrying amount. Accordingly, no goodwill impairment was recognized (See Note 8 - Goodwill and Intangible Assets 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 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. During 2025, management reviewed the estimated useful life and recoverability of the developed technology intangible asset associated with GENA and concluded that the asset had become obsolete and should be impaired (See Note 8 – Goodwill and Intangible Assets for further information).

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 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, complies with ASC 606 by recognizing revenue at the point of loan funding. This moment marks the transfer of control of the loan to the borrower, capturing the completion of GTG Financial’s primary service successfully securing a loan. All services, including loan origination, application processing, and credit assessment, contribute to this culminating event. Revenue is therefore recognized only when the loan is funded, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately reflecting the completion of all related performance obligations. Effective as of the Rescission Date, the Company’s acquisition of GTG Financial was rescinded. Accordingly, GTG Financial is no longer a subsidiary of the Company, and its results are not included in these audited financial statements for periods after that date (see “Note 5–Business Combinations–Rescission of GTG Financial Acquisition” 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 receives and consumes 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 from Contracts with Customers, 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.

Discontinued Operations

A business is classified as discontinued when it meets the criteria in ASC 205-20, Presentation of Financial Statements - Discontinued Operations (“ASC 205”). Assets and liabilities of discontinued operations are presented separately in our consolidated balance sheets, and results are reported as a separate component of “consolidated net loss” in the consolidated statements of loss, for all periods presented.

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.

For software acquired in a business combination, capitalization occurs when its fair value is determined using the discounted cash flow (“DCF”) method, as per ASC 820. 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.

Series A Convertible Preferred Stock

Accounting for the Series A Convertible Preferred Stock requires an evaluation to determine if liability classification is required under ASC 480-10. Liability classification is required for freestanding financial instruments that are (1) subject to an unconditional obligation requiring the issuer to redeem the instrument by transferring assets, such as those that are mandatorily redeemable, (2) instruments other than equity shares that embody an obligation of the issuer to repurchase its equity shares, or (3) certain types of instruments that obligate the issuer to issue a variable number of equity shares.

Securities that do not meet the scoping criteria to be classified as a liability under ASC 480 are subject to redeemable equity guidance, which prescribes securities that may be subject to redemption upon an event not solely within the Company’s control to be classified as mezzanine equity. Securities classified in mezzanine equity are initially measured at the proceeds received, and excluding the fair value of bifurcated embedded derivatives, if any. Subsequent measurement of the carrying value of the Series A Convertible Preferred Stock is required as the instrument is probable of becoming redeemable. The Company accretes the Series A Convertible Preferred Stock to its redemption value. In certain circumstances, the redemption price may vary based on changes in stock price, in which case the Company will recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the then current maximum redemption value at the end of each reporting period.

Derivative Liability

The Company evaluates all of its financial instruments, including convertible notes and Series A convertible preferred stock, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company applies significant judgment to identify and evaluate complex terms and conditions in these contracts and agreements to determine whether embedded derivatives exist. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss at each reporting period end. Bifurcated embedded derivatives are classified as a separate asset or liability in the consolidated balance sheet.

The Company’s derivative liability is related to the conversion features embedded in the Series A Convertible Preferred Stock. See Note 13 “Mezzanine Equity and Preferred Stock Embedded Derivative Liability ” for more information.

Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value in accordance with ASC Topic 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 Inputs – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement. These inputs reflect management’s assumptions about the assumptions that market participants would use in pricing the asset or liability.

Financial instruments measured at fair value are classified within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

The carrying amounts of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to the short-term nature of these instruments.

The Company has certain liabilities that are measured at fair value on a recurring basis using Level 3 inputs, including the contingent consideration liability associated with business combinations and the derivative liability associated with the conversion features embedded in the Series A Convertible Preferred Stock. The derivative liability represents the embedded conversion feature in the Series A Convertible Preferred Stock and was initially measured at fair value upon issuance of the Series A Convertible Preferred Stock and is subsequently remeasured at each reporting period.

These liabilities are remeasured at fair value at each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. Significant changes in the unobservable inputs used in determining the fair value of these liabilities could result in significant changes to the fair value measurement.

The valuation methodologies and significant assumptions used in determining the fair value of these Level 3 liabilities are described in Note 13 – Mezzanine Equity and Preferred Stock Embedded Derivative Liability and Note 15 – Contingent Consideration and Compensation.

Except for the policies described above, there have been no significant changes to accounting policies during the three months ended March 31, 2024.Certain prior period amounts have been reclassified to conform to the current period presentation; such reclassifications had no impact on previously reported net loss.

Reclassification of prior period amounts Except for the policies described above, there have been no significant changes to accounting policies during the year ended December 31, 2025.Certain prior period amounts have been reclassified to conform to the current period presentation; such reclassifications had no impact on previously reported net loss.

Recent Accounting Pronouncements

Accounting Pronouncements Issued and Not yet Adopted

In November 2024, the FASB issued 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.

In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASC 350-40, which amends the guidance related to the capitalization and disclosure of internal-use software development costs. The amendments modernize the guidance by removing references to software development “stages” and instead require entities to apply a judgment-based assessment focused on whether management has authorized and committed to funding the project and whether it is probable that the software will be completed and used as intended. The ASU also provides guidance for evaluating significant development uncertainty, aligns the accounting for website development costs with ASC 350-40, and requires capitalized software costs to be subject to the disclosure requirements in ASC 360. The guidance does not amend the accounting for software to be sold, leased, or marketed externally under ASC 985-20. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual periods, with early adoption permitted. Entities may apply the guidance prospectively, retrospectively, or using a modified prospective transition approach. The Company is currently evaluating the impact this update may have on its financial statements and related disclosures. The Company has not yet determined the impact of adoption, as it is not reasonably estimable at this time.

Accounting Pronouncements Issued and Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): 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 permitted. The Company has adopted the disclosure requirements of this standard on its consolidated financial statements on a prospective basis.

In July 2025, the FASB issued ASU No. 2025-05,Financial Instruments—Credit Losses (Topic 326) (“ASU 2025-05”), which introduces a practical expedient for all entities and an accounting policy election for certain entities related to estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments, developed in coordination with the Private Company Council, address stakeholder concerns regarding the cost and complexity of applying the current expected credit loss model to such balances. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, including interim periods within those years, with early adoption permitted.

The Company elected to early adopt ASU 2025-05 during the quarter ended September 30, 2025. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures.

There have been no material changes to the Company’s significant accounting policies during the year ended December 31, 2025.

Note 3 - Going Concern

During the year ended December 31, 2025, the Company incurred a net loss of approximately $17,590,392 and used cash in operating activities of approximately $11,262,577. As of December 31, 2025, the Company had cash and cash equivalents of approximately $7,783,529 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 the 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 indicating non-compliance with the minimum bid-price requirement for continued listing on The Nasdaq Capital Market. 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 under its existing at-the-market equity offering agreement, through potential exercises of outstanding warrants, and through other debt or equity financing transactions. 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 such 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 consolidated financial statements are issued. The accompanying 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-Income Taxes

The Company generated a worldwide pre-tax loss of $17,590,392 and $26,076,609 and for the periods ended December 31, 2025 and December 31, 2024, respectively.

Pre-Tax book income/(loss) has been recorded in the following jurisdictions:

The Company recordedno federal, state, or foreign income tax expense for the period ended December 31, 2025. The Company recorded federal and state income tax expense for the period ended December 31, 2024 of ($29,699) and ($24,561), respectively.

Effective January 1, 2025, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 740”), on a prospective basis in accordance with the standard’s transition guidance. As required under ASU 2023-09, the rate reconciliation for the current year is presented using the new prescribed categories and enhanced disaggregation to provide greater transparency into the factors affecting the Company’s effective tax rate for continuing operations. The following table presents the Company’s income tax rate reconciliation on continuing operations for the year ended December 31, 2025, prepared in accordance with the disclosure requirements of ASU 2023-09.

As a result of the Company’s prospective adoption of ASU 740, the rate reconciliation table presented above for the year ended December 31, 2025 reflects the new prescribed categories and enhanced disaggregation required under the updated disclosure framework. In accordance with the transition guidance, the Company did not elect retrospective application; therefore, the comparative periods that follow are presented in the legacy ASC 740 format applicable to those historical periods. The Company continues to apply FASB ASC Topic 740, Income Taxes, in the computation and presentation of its income tax provision, and the enhanced ASU 740 disclosure requirements apply solely to the current year rate reconciliation. The following table presents the reconciliation of the income tax provision (benefit) for prior periods using the legacy ASC 740 disclosure format for continuing operations.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

Cash paid for incomes taxes (net of refunds) are as follows for the year ended December 31, 2025:

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The valuation allowance changed by $3.1 million, during the year ended December 31, 2025.

For the period ended December 31, 2025, reAlpha Tech Corp. has a total carryover of Federal Net Operating Losses (“NOLs”) of $36.2 million. The Company’s NOLs were generated after the rules of the Tax Cuts and Jobs Act (“TCJA”) became effective on January 1, 2018. The NOLs do not expire but are subject to the 80% limitation. The Company has a State NOL carryover of $36.4 million. These NOLs are subject to various limitations and expiration dates.

The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses and tax credits may be limited as prescribed under Internal Revenue Code Section 382 and 383 (“IRC Section 382”). Events which may cause limitations in the amount of the net operating losses or tax credits that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 rules and similar state provisions. In the event the Company has any changes in ownership, net operating losses and research and development credit carryovers could be limited and may expire unutilized.

It is the Company’s policy to include penalties and interest expense in income tax expense. There wasno interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2025.

The Company’s major tax jurisdictions are the United States, India, Nepal and Singapore. All of the Company’s tax years will remain open for examination by the Federal and state tax authorities for three and four years, respectively, from the date of utilization of the net operating loss or research and development credit. The Company does not have any tax audits pending in the United States.

The Inflation Reduction Act of 2022 was signed into law August 16, 2022, and includes significant legislation addressing taxes, inflation, climate change and renewable energy incentives, and healthcare. Key tax provisions include a 15% corporate minimum tax, clean energy incentives, and a 1% excise tax on stock buybacks. The Company does not expect the provisions of such legislation to have any impact on the effective tax rate of the Company but will continue to evaluate the tax effects should any provisions become applicable to the Company.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted as Public Law 119-21. The legislation implements several amendments to the Internal Revenue Code, including the permanent extension of 100 percent bonus depreciation for qualified property and research and development expenditures, as well as revisions to expensing rules applicable to certain structures. The Act also includes modifications affecting corporate tax administration, such as adjustments to the Employee Retention Credit (ERC), changes to Opportunity Zone related provisions, and the scheduled expiration or modification of certain business-related clean energy credits.

The Company has evaluated the corporate income tax effects of the OBBBA in the period of enactment. In connection with the Act’s modifications to business expensing and R&D cost recovery, the Company has accelerated amortization for its domestic research and experimental expenditures pursuant to Section 174, consistent with the Act’s statutory framework governing the timing and characterization of such costs. The resulting adjustments have been reflected in the Company’s measurement of current and deferred income tax assets and liabilities. Based on its analysis, the Company determined that the enactment of the OBBBA did not have a material impact on its consolidated financial statements for the year ended December 31, 2025. The Company will continue to monitor regulatory and administrative guidance issued under the Act.

The Organization for Economic Co-operation and Development (the “OECD”) has issued various proposals that would change long-standing global tax principles. These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a global minimum tax rate. On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, to be effective as of January 2024. Other countries are also actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals. The enactment of Pillar Two legislation is not anticipated to have a material adverse effect on the Company’s effective tax rate, financial position, results of operations, or cash flows. The Company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

The following table summarizes net operating loss carryforwards and the related valuation allowance as of December 31, 2025 and 2024.

Note 5 - Business Combinations

Acquisitions during the year ended December 31,2025

Acquisition of GTG Financial, Inc.

On February 20, 2025, we entered into a Stock Purchase Agreement (the “GTG Purchase Agreement”) with GTG Financial and Glenn Groves, an individual (the “Seller”), pursuant to which the Company acquired from the Seller 100% of the issued and outstanding shares of common stock of GTG (the “Acquired Shares”), a mortgage brokerage company, the closing of which transaction (the “Closing” and the date of the Closing, the “GTG Closing Date”) took place simultaneously with the execution of the GTG Purchase Agreement.

Pursuant to and subject to the terms and conditions of the GTG Purchase Agreement, the Company agreed to pay to the Seller an aggregate purchase price of up to $4,200,000 for the Acquired Shares, subject to the adjustments described below, consisting of: (i) $281,250 (the “Preferred Consideration”) in 14,063 shares of Series A Preferred Stock (as defined below) (the “Preferred Shares”), each of which is convertible into shares of our common stock at a conversion price of $20 per share of Series A Preferred Stock (the “Conversion Shares”), in accordance with the terms and conditions of and subject to the adjustments set forth in the Certificate of Designation; (ii) $1,287,000 in 700,055 restricted shares of Common Stock (the “Company Shares”), at a price per share of $1.84 calculated based on the volume weighted average price of the Common Stock as reported on the Nasdaq Capital Market (the “VWAP”) for the 7 calendar days immediately prior to the GTG Closing Date and payable to the Seller within 90 days from the GTG Closing Date; (iii) $1,344,750 payable in cash (the “Cash Portion”) to the Seller as follows: (A)30% of the Cash Portion payable on the 120-day anniversary of the GTG Closing Date, (B)30% of the Cash Portion payable on the 150-day anniversary of the GTG Closing Date and (C)40% of the Cash Portion payable on the 180-day anniversary of the GTG Closing Date; and (iv) up to an aggregate of $1,287,000 in potential earn-out payments, payable in three tranches of up to $429,000 in cash or restricted shares of Common Stock (the “Earn-Out Shares”), at the Company’s sole discretion and subject to the adjustments described below, each of which is calculated based on a formula set forth in the GTG Purchase Agreement and subject to the achievement of certain financial metrics by GTG for three successive measurement periods of 12 months, with the first measurement period ending 12 months following the 1st of the month after the GTG Closing Date (collectively, the “GTG Earn-Out Payments,” and each, an “GTG Earn-Out Payment”). Specifically, each GTG Earn-Out Payment will be payable in full if GTG achieves certain revenue and EBITDA thresholds for each of the measurement periods, each of which is payable within 120 days after the end of a measurement period. If GTG does not meet the revenue and EBITDA threshold for a measurement period, a pro-rated amount of the GTG Earn-Out Payment for such measurement period will be paid to GTG based on the actual revenue and EBITDA achieved in accordance with the formula set forth in the GTG Purchase Agreement. Further, if GTG exceeds the revenue and EBITDA thresholds for any measurement period, the GTG Earn-Out Payment for such measurement period will not be capped and will be increased accordingly based on the formula set forth in the GTG Purchase Agreement.

The table below represents the preliminary purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date.

As part of the acquisition completed on February 20, 2025, the Company recorded the deferred cash consideration of $1,344,750 at its present value in accordance with ASC 805, Business Combinations (“ASC 805”). The present value was calculated using the Company’s estimated cost of capital and is classified as a Level 3 liability within the fair value hierarchy.

Rescission of GTG Financial Acquisition

On the Rescission Date, GTG Financial exercised its right to rescind the Securities Purchase Agreement originally executed on February 20, 2025. As part of the rescission, the shares of the Company’s series A convertible preferred stock (the “Series A Preferred Stock”) and common stock previously issued were returned and cancelled, and all obligations, such as the deferred cash, and contingent consideration, were extinguished. In accordance with ASC 810 Consolidation (“ASC 810”), the Company recognized gain on deconsolidation of $94,071 in the unaudited condensed consolidated statement of operations and comprehensive loss. The gain represents the difference between the carrying amounts of GTG Financial’s net assets derecognized and the carrying amounts of the consideration cancelled. No market transaction occurred at the Rescission Date. Accordingly, amounts were measured at carrying value.

In accordance with ASC 810, the rescission was accounted for as a deconsolidation, with GTG Financial’s assets, liabilities, equity balances, and results of operations removed from the Company’s unaudited financial statements as of the Rescission Date. No remeasurement was required, as the Company did not retain any equity interest or other investment in GTG Financial following the rescission. As the rescission involved the cancellation of shares and extinguishment of obligations without a market transaction, all amounts were measured at their carrying values. The transaction was not conducted with a related party, and GTG Financial is not considered a related party after the rescission.

Acquisition of Prevu, Inc.

On November 21, 2025 (the “Closing Date”), the Company completed the acquisition of Prevu, Inc. (“Prevu”), a Delaware corporation, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, reAlpha Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), Prevu, and the stockholder representative. In accordance with the Merger Agreement, Merger Sub merged with and into Prevu, with Prevu surviving as a wholly owned subsidiary of the Company (the “Merger”). The transaction was accounted for as a business combination under ASC 805, with the Company identified as the accounting acquirer.

Pursuant to the terms of the Merger Agreement and related transition arrangements, the Company paid total purchase consideration of $4,500,000. The consideration consisted 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 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 Date, 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, which was accounted for as part of the purchase consideration in accordance with ASC 805.

We estimated fair values on the acquisition date, for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in connection with the Prevu acquisition subject to measurement period adjustments. We obtained a purchase price allocation report from a consulting firm to assist in finalizing the fair value of assets acquired and liabilities assumed.

The table below represents the preliminary purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date.

The determination of the fair value for the acquired business employed the income approach, specifically the discounted cash flow (“DCF”) method. This method involves assessing the present value of anticipated future cash flows from the acquired business. These cash flows are discounted at the weighted average cost of capital (“WACC”), which represents the necessary return on the combined entity’s equity and debt. The WACC is weighted by the respective proportions of equity and debt in the overall capital structure.

Purchase Price Allocation

The acquisition was accounted for as a business combination in accordance with ASC 805. The purchase price allocation above was allocated to the tangible and intangible assets acquired and liabilities assumed based on management estimated fair values as of the acquisition date. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Trademarks and trade names fair value was determined using the relief from royalty method. For the fair valuation of developed technology, the relief from royalty method was applied. The estimation of the economic useful life of these assets took into account factors outlined in ASC 350. Assembled workforce is not recognized separately from goodwill, as it lacks separability and contractual nature.

The preliminary purchase price allocation includes $1,474,241 of acquired identifiable intangible assets, all of which have finite lives. The intangible assets are being amortized over their estimated useful lives on a straight-line basis. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of Prevu.

We estimate amortization expense for the next five years and beyond will be as follows:

Pro-Forma Information (Unaudited)

The unaudited pro forma information for the periods presented below gives effect to (i) the acquisitions of Prevu, reAlpha Mortgage, AiChat, and reAlpha Nepal as if such acquisitions had occurred on January 1, 2024, the beginning of the earliest period presented, and (ii) the acquisition of Prevu as if it had occurred on January 1, 2025. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had these acquisitions been consummated on those dates. The unaudited pro forma financial information does not reflect potential cost savings, operating synergies, or integration costs that may result from the acquisitions.

Acquisitions during the year ended December 31,2024

Acquisition of Naamche Inc. and Naamche Inc. Pvt Ltd.

In May 2024, the Company acquired all outstanding equity interests of Naamche Inc. and Naamche Inc. Pvt Ltd. (collectively, “Naamche”), entities engaged in the development of artificial intelligence technologies. The total purchase consideration was $0.12 million, of which $0.05 million was paid in cash. The Company recorded goodwill of approximately $0.09 million, primarily attributable to expected synergies and future growth opportunities. The Company also recorded intangible assets of approximately $0.02 million, consisting of trademarks and trade names with a useful life offive years and customer relationships with a useful life ofsix years.

Acquisition of AiChat Pte. Ltd.

In July 2024, the Company acquired AiChat Pte. Ltd. (“AiChat”), an AI-powered conversational customer experience solutions provider. The total purchase consideration was approximately $1.14 million, of which no cash consideration was paid. The Company recorded goodwill of approximately $1.70 million, primarily attributable to expected synergies and the assembled workforce. The Company also recorded intangible assets of approximately $1.13 million, consisting of developed technology with a useful life offive years, trademarks and trade names with a useful life ofnine years, and customer relationships with a useful life often years.

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

In September 2024, the Company acquired 100% of the membership interests of Debt Does Deals, LLC, doing business as Be My Neighbor (“BMN”), a Texas-based mortgage brokerage company. The total purchase consideration was approximately $6.00 million, of which $1.5 million was paid in cash. The Company recorded goodwill of approximately $2.38 million, primarily attributable to expected synergies and expanded market opportunities. The Company also recorded intangible assets of approximately $1.43 million, consisting of trademarks and trade names with a useful life of fifteen years.

Acquisition of Hyperfast Title, LLC

In July 2024, the Company acquired 85% of the membership interests of Hyperfast Title LLC (“Hyperfast”), a Florida-based title insurance provider. The total purchase consideration was $0.02 million, all of which was paid in cash. The Company recorded goodwill of approximately $0.02 million, primarily attributable to expected operational synergies and expanded market opportunities. No significant identifiable intangible assets were recognized as part of the acquisition.

Note 6 - Property and equipment, net

The Company recorded depreciation expense of $28,050 for the year ended December 31, 2025, and $24,891 for the year ended 2024.

Note 7 - Capitalized Software Development Costs, Work In Progress

The Company adheres to ASC 350-40 for the capitalization of software development costs. During the year ended December 31, 2025, the Company impaired the carrying amount of capitalized software due to the discontinuation of further development and the software becoming obsolete.

The Company recognized impairment of $105,900 and $202,968 for the years ended December 31, 2025, and 2024, respectively.

Note 8 - Goodwill and Intangible Assets

Goodwill and intangible assets are primarily the result of business acquisitions. Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Changes in the carrying amount of goodwill during the year ended December 31, 2025, were as follows:

The components of intangible assets as of December 31, 2025, all of which are finite lived, are as follows:

During the year ended December 31, 2025, the Company recorded an impairment loss of $114,116 related to its developed technology intangible asset associated with GENA, an artificial intelligence platform, which became obsolete based on management’s assessment of its recoverability. The impairment loss is included in “Impairment of capitalized software” in the consolidated statements of operations. The Company recorded amortization expenses of $515,120 and $441,800 for the year ended December 31, 2025, and year ended December 31, 2024, respectively

The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2025:

In accordance with Accounting Standard Codification (“ASC”) 350, Intangibles—Goodwill and Other (“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. ASC 350 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that goodwill is impaired; however, an entity may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test. For the year ended December 31, 2025, the Company elected to forego the qualitative assessment and performed a quantitative goodwill impairment test in accordance with ASC 350-20.

The quantitative impairment test was performed using an income approach to estimate the fair value of each reporting unit. Under this approach, fair value was derived based on projected operating performance, with the terminal value estimated using a perpetual growth rate. Discounting was performed using each reporting unit’s weighted average cost of capital, which reflects the relative weighting of equity and debt financing and the risks associated with the reporting unit’s operations.

Key assumptions used in the impairment analysis included projected revenue growth, expected operating margins, terminal value assumptions derived using a perpetual growth rate, and discount rate inputs used in the determination of the weighted average cost of capital, including risk-free interest rates, equity risk premiums, beta, liquidity premiums, and credit risk considerations.

Based on the results of the quantitative impairment analysis, the estimated fair values of the Company’s reporting units, including reAlpha Nepal, AiChat, and reAlpha Mortgage, exceeded their respective carrying amounts as of December 31, 2025. Accordingly, no goodwill impairment was recorded for the year ended December 31, 2025.

Note 9 - Notes Payable

On June 9, 2025, the Company received a redemption notice from Streeterville for a redemption payment in the amount of $300,000. The Company and Streeterville agreed that the Company would satisfy the redemption in shares of its common stock in lieu of cash. Pursuant to an Exchange Agreement, the Company issued 747,607 shares of common stock at an effective price of $0.4013 per share in exchange for a partitioned secured promissory note in the original principal amount of $300,000, and the outstanding balance of the original Note was reduced accordingly.

On July 2, 2025, the Company received a redemption notice from Streeterville Capital, LLC (“Streeterville”) for $350,000 under the secured promissory note issued to Streeterville (the “Note”). The Company entered into an Exchange Agreement with Streeterville and satisfied the redemption by issuing 520,049 shares of common stock at an effective price of $0.2761 per share in lieu of cash. In connection therewith, the parties agreed to (i) partition a new secured promissory note in the principal amount of $350,000 (the “Partitioned Note”) and reduce the outstanding balance of the original Note by the same amount, and (ii) exchange the Partitioned Note for shares of common stock (the “Exchange”).

On July 23, 2025, the Company fully repaid and extinguished the remaining balance of the Note, which had an initial principal amount of $5,455,000. The total repayment was approximately $4,466,202, including a 9% prepayment penalty of $368,769, and was funded using cash on hand and proceeds from the Company’s July 2025 equity offerings. In connection with the repayment, $402,432 of accrued interest was settled and the remaining unamortized debt issuance costs of $121,875 and original issue discount of $181,247 were fully amortized The Company recognized a loss on debt extinguishment of approximately $438,834, which is included in other expense in the consolidated statements of operations. As of December 31, 2025, no amounts remained outstanding under the Note or the Note Purchase Agreement.

Note 10 - Related Party Transactions

a. Summary of Short-Term Loans - Related Parties

During the year ended December 31, 2025, AiChat borrowed an aggregate of $155,481 under SEA’s financing arrangement.

b. Summary of Other Long-Term Loans - Related Parties

Note 11 - 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 December 31, 2025. These facilities were entered into to support AiChat’s operating and working capital requirements. In addition, short-term loans previously included a separate facility utilized by the Company to finance premiums related to directors’ and officers’ insurance coverage.

As of December 31, 2025, short-term loans to unrelated parties consisted of term loan facilities with an aggregate outstanding balance of $219,990, net of an interest reserve of $10,389, resulting in total short-term debt of $209,601. As of December 31, 2024, short-term loans to unrelated parties totaled $519,153, net of an interest reserve of $20,354.

b. Summary of Long-Term Loans - Unrelated Parties

AiChat has obtained multiple long-term loans from external lenders to support general operating needs. As of December 31, 2025, these loans bore an average interest rate of approximately 6.5% and had contractual maturities ranging from 2024 through 2028.

As of December 31, 2025, long-term loans to unrelated parties consisted of term loan facilities with an aggregate outstanding balance of $93,997, net of an interest reserve of $5,586, resulting in total long-term debt of $88,411. As of December 31, 2024, long-term loans to unrelated parties totaled $241,121, net of an interest reserve of $17,933, and included a vehicle loan with a maturity date of 2029, which was repaid during 2025. Long-term loan balances as of December 31, 2025, and December 31, 2024, are summarized as follows

Note 12 - 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–Rescission of GTG Financial Acquisition for additional information).

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 merger agreement. As of December 31, 2025, approximately $1,785,850 of the Company’s deferred liabilities represents current deferred consideration related to the Prevu acquisition, and approximately $561,740 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. 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 13 - 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 which the Company issued 250,000 shares of its Series A Convertible Preferred Stock, $0.001 par value (the “Series A Preferred Stock”), at a stated value of $20 per share, for an aggregate stated value of $5,000,000. In exchange, the Company received $5,000,000 of marketing credits, which were recorded as a prepaid media asset and are amortized to marketing expense as the credits are utilized.

The Series A Preferred Stock carries a 3.0% annual preferred dividend on its $20.00 stated value, accruing daily on a non-compounding basis. Dividends are payable annually and are due 60 calendar days after the close of each December 31 dividend period. At the Company’s sole discretion, dividends may be paid in cash or in additional shares of Series A Preferred Stock.

The Series A Preferred Stock 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 governing agreements also include a shortfall settlement provision pursuant to which, upon conversion, if the value of the shares of common stock issuable upon conversion is less than the stated value (plus accrued dividends), the Company may be required to settle such shortfall in cash or by issuing additional shares of common stock.

Under the guidance in ASC 480, which provides guidance on the classification and measurement of redeemable equity instruments, equity instruments that are redeemable for cash or other assets upon the occurrence of events not solely within the control of the issuer are required to be classified outside of permanent equity as temporary equity (mezzanine equity).

The Company evaluated the terms of the Series A Preferred Stock and determined that while the instrument is not mandatorily redeemable at a fixed date or at the option of the holder, the governing agreements include provisions related to fundamental transactions, such as a change in control, merger, or sale of substantially all of the Company’s assets. Upon the occurrence of such events, the holders of the Series A Preferred Stock are entitled to receive the same form and amount of consideration as common shareholders upon conversion and benefit from a liquidation preference senior to common stock. Because these events are not solely within the control of the Company, the Series A Preferred Stock meets the criteria for classification as temporary equity in accordance with ASC 480. In accordance with ASC Topic 815, Derivatives and Hedging, the shortfall settlement provision was determined to be a freestanding derivative instrument and was accounted for separately as a derivative liability.

At issuance, the Company allocated the $5,000,000 fair value of the instrument between the derivative liability and the mezzanine equity component based on their relative fair values. The fair value of the derivative liability was determined using an option pricing model that incorporated assumptions regarding the Company’s stock price, expected volatility, risk-free interest rate, expected term, and dividend yield. The derivative liability was initially recorded at $4,102,500, and the residual amount of $897,500 was recorded as Series A Preferred Stock within mezzanine equity.

Thederivative liability is measured at fair value at each reporting date, with changes in fair value recognized in the consolidated statement of operations and comprehensive loss. As of December 31, 2025, the fair value of the derivative liability was $4,574,980.

As of December 31, 2025, the carrying value of the Series A Preferred Stock classified in mezzanine equity was $1,020,377, which includes the initial allocation and accrued dividends. During the year ended December 31, 2025, the Company accrued dividends of $122,877, which increased the carrying value of the Series A Preferred Stock.

During the year ended December 31, 2025, the Company recognized marketing expense of $4,406,571 related to the utilization of the prepaid marketing credits.

As of December 31, 2025, the Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model with the following key assumptions:

During the year ended December 31, 2025, the Company recognized a net increase in the fair value of the derivative liability of approximately $456,325.

In connection with the rescission of the GTG Financial acquisition, the stock purchase agreement was rescinded and the related Series A Preferred Stock issued in connection with that transaction was terminated in accordance with applicable accounting guidance. For additional information, see Note 5 – Business Combinations.

Note 14 - Stockholders’ Equity

The total number of shares of capital stock that the Company has the authority to issue is up to 205,000,000 shares, consisting of: (i)200,000,000 shares of common stock, having a par value of $0.001 per share; and (ii)5,000,000 shares of preferred stock, having a par value of $0.001 per share, of which 1,000,000 shares have been designated as Series A Preferred Stock. As of December 31, 2025, there were 131,740,675 shares of common stock and 250,000 shares of Series A Preferred Stock issued and outstanding as of December 31, 2025. As of December 31, 2024, there were 45,864,503 shares of common stock and 0 shares of preferred stock issued and outstanding.

Stock Based Compensation

Equity Incentive Plan

We maintain the reAlpha Tech Corp. 2022 Equity Incentive Plan (as amended and as may be further amended from time to time, the “2022 Plan”), under which we may grant awards to employees, officers, directors, and certain other service providers. The Compensation Committee of the Board 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.

In addition, during the year ended December 31, 2025, the Company issued 193,453 shares of common stock to employees, with an aggregate fair value of approximately $105,406 at the time of issuance.

As of December 31, 2025,4,791,602 restricted stock units (“RSUs”) were outstanding,412,492 shares of common stock had been issued under the 2022 Plan, and 10,753,095 shares remained available for future issuance.

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

Stock-based compensation expense for the year ended December 31, 2025 and December 31, 2024 was $859,950 and $207,453, 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 targets tied to organic revenue, brokerage transactions, and the quality of acquisitions completed during such quarter.

Restricted Stock Units

The Company measures compensation cost for all stock-based awards granted to employees, directors, and certain other service providers based on the grant-date fair value of the awards in accordance with ASC Topic 718, Compensation—Stock Compensation. The fair value of the RSUS granted is based on the closing market price of the Company’s common stock on the date of grant.

The Company recognizes stock-based compensation expense for awards with graded vesting features on a straight-line basis over the requisite service period for each separately vesting portion of the award, treating each vesting tranche as a separate award, which results in a front-loaded expense recognition pattern consistent with the vesting terms.

During the year ended December 31, 2025, the Company granted an aggregate of 4,941,602 RSUs under the 2022 Equity Incentive Plan to executive officers and certain employees. During the year,150,000 RSUs were forfeited in connection with employee terminations. The RSUs are subject to time-based vesting, withone hundred percent vesting over periods ranging fromtwo tofour years from the respective grant dates, subject to continued service and other customary terms and conditions.

Summary of RSU activity for the year ended December 31, 2025, follows:

As of December 31, 2025, a total of 4,791,602 RSUs remained outstanding, and none of the RSUs had vested. The RSUs were excluded from diluted earnings per share for the year ended December 31, 2025, as their inclusion would have been anti-dilutive under ASC 260.

Subsequently on January 30, 2026, the Company granted an aggregate of 3,006,233 RSUs and issued 86,871 shares of common stock to certain employees and executives pursuant to the 2022 Plan for the fiscal quarter ended December 31, 2025. The RSUs are subject to the terms and conditions of the 2022 Plan and the applicable award agreements, including vesting provisions.

Warrants

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, are exercisable upon issuance or following stockholder approval, as applicable, and have contractual terms ranging fromtwo tofive 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 December 31, 2025, no reclassification or adjustment to the exercise price of the GEM Warrants has been made.

On April 6, 2025, in connection with the Company’s warrant inducement transaction, the Company entered into inducement letter agreements with certain holders of its existing warrants dated November 21, 2023 (the “Follow-On Warrants”), under which those holders agreed to exercise their warrants for cash at a reduced exercise price of $0.75 per share. In exchange, the Company agreed to issue warrants (the “New Warrants”) to purchase 8,437,502 shares of common stock (the “New Warrant Shares”). The issuance of the New Warrant Shares was subject to stockholder approval thereof, and such stockholder approval was obtained. The warrant inducement transaction closed on April 8, 2025 and resulted in the issuance of 4,218,751 shares of common stock and gross proceeds of approximately $3.1 million. In addition, the Company reduced the exercise price of Follow-On Warrants held by non-participating holders from $1.44 to $0.75 for the remainder of such warrants’ term. The Company accounted for the warrant inducement transaction in accordance with ASC 815. Under this guidance, the warrant inducement transaction was treated as a modification of equity-classified instruments, and the excess fair value of the New Warrants issued, amounting to $515,307, was charged to additional paid-in capital as an equity issuance cost.4,218,751 Follow-On Warrants and 7,521,668 New Warrants issued were exercised during the year ended December 31, 2025, resulting in net proceeds to us of $2,934,911 and $5,641,251, respectively. As of December 31, 2025,4,114,582 Follow-On Warrants and 915,834 New Warrants remained outstanding.

On July 18, 2025, the Company completed a best efforts public offering (the “2025 Public Offering”) of an aggregate of (i)13,333,334 shares of our common stock (the “July 2025 Shares”), (ii) Series A-1 warrants (the “Series A-1 Warrants”) to purchase up to an aggregate of 13,333,334 shares of common stock (the “Series A-1 Warrant Shares”) and (iii) Series A-2 warrants (the “Series A-2 Warrants,” and together with the Series A-1 Warrants, the “July 2025 Warrants”) to purchase up to an aggregate of 13,333,334 shares of common stock (the “Series A-2 Warrant Shares,” and together with the Series A-1 Warrant Shares, the “July 2025 Warrant Shares”). Each of the July 2025 Shares was sold together with one Series A-1 Warrant to purchase one share of common stock and one Series A-2 Warrant to purchase one share of common stock. The July 2025 Warrants became exercisable on October 8, 2025 and the Series A-1 Warrants and Series A-2 Warrants expire on October 8, 2030 and October 8, 2027, respectively.

The combined public offering price for each of the July 2025 Shares and accompanying July 2025 Warrants was $0.15 and each July 2025 Warrant has an exercise price of $0.15 per share. The offering generated gross proceeds of approximately $2.0 million and net proceeds of approximately $1.56 million, after deducting placement agent fees and other offering-related expenses. During the year ended December 31, 2025, holders exercised 11,220,141 Series A-1 Warrants and 12,831,253 Series A-2 Warrants, generating net proceeds of $3,607,710. Following these exercises,2,113,193 Series A-1 Warrants and 502,081 Series A-2 Warrants remained outstanding as of December 31, 2025.

In connection with the 2025 Public Offering, the Company also issued warrants (the “Placement Agent Warrants”) to the placement agent, Wainwright, or its designees, to purchase up to 666,667 shares of common stock, representing 5.0% of the shares sold in the offering. The Placement Agent Warrants have an exercise price of $0.1875 per share and became exercisable on the Stockholder Approval Date for the issuance of the shares underlying the Placement Agent Warrants was received and became effective. The Placement Agent Warrants will expire five years from the commencement of sales in such offering. During the year ended December 31, 2025, holders exercised 354,167 of the Placement Agent Warrants, generating net proceeds of $66,406. As of December 31, 2025,312,500 Placement Agent Warrants remained outstanding.

On July 22, 2025, the Company completed a registered direct offering (the “Registered Offering”) of 14,285,718 shares of its common stock (the “RDO Shares”) and a concurrent private placement (the “Private Placement”) of unregistered common stock warrants (the “Private Placement Warrants”) exercisable into an equal number of shares of common stock with an exercise price of $0.35 per share. The Private Placement Warrants are immediately exercisable upon issuance and expire on September 12, 2030. The Registered Offering and concurrent Private Placement raised gross proceeds of approximately $5.0 million and net proceeds of approximately $4.5 million, after deducting placement agent fees and offering-related expenses. During the year ended December 31, 2025, holders exercised 13,133,812 of the Private Placement Warrants, generating net proceeds of $4,596,834. As of December 31, 2025,1,151,906 Private Placement Warrants remained outstanding.

In connection with the concurrent Registered Offering and Private Placement, the Company also issued warrants to Wainwright, or its designees, to purchase up to 714,286 shares of common stock, representing 5.0% of the shares of common stock sold in the Registered Offering (the “RDO Placement Agent Warrants”). The RDO Placement Agent Warrants have an exercise price of $0.4375 per share, are immediately exercisable upon issuance and will expire on September 12, 2030. During the year ended December 31, 2025,625,000 RDO Placement Agent Warrants were exercised, resulting in net proceeds of $273,437. As of December 31, 2025,89,286 RDO Placement Agent Warrants remained outstanding.

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

As of December 31, 2025, the Company had 10,900,266 warrants outstanding, with a weighted-average exercise price of approximately $58.46 per share and a weighted-average remaining contractual life of approximately 3.37 years. The outstanding warrants have expiration dates ranging from October 8, 2027, to October 8, 2030, depending on the warrant series.

The outstanding warrants were excluded from diluted earnings per share for the year ended December 31, 2025, as their inclusion would have been anti-dilutive in accordance with ASC 260.

Warrant activity, for the year ended December 31, 2025, was as follows:

Rights

As previously disclosed, the rights granted in connection with the acquisition of Roost Enterprises, Inc. (“Rhove”) expired unexercised on March 24, 2025, and are no longer outstanding as of December 31, 2025.

Shelf Registration 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 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 “AGP Sales Agreement”), allowing it to offer and sell common stock with an aggregate offering price of up to $14,275,000. The AGP Sales Agreement was terminated effective March 29, 2025. During the year ended December 31, 2025, the Company issued 160,879 shares under this program at a weighted-average price of $1.44 per share, for gross proceeds of approximately $231,235. After deducting sales commissions and offering expenses of $6,937, net proceeds totaled approximately $224,298, which were used to fund working capital and general corporate purposes. There were no issuances under the AGP Sales Agreement during the fiscal year ended December 31, 2024.

Following the termination of the ATM program with A.G.P. and the related A.G.P. Sales Agreement, which termination was effective as of March 29, 2025, 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 is able to offer and sell shares of its common stock having an aggregate offering price of up to $7,650,000. The ATM program with Wainwright was suspended on July 16, 2025 in connection with the Company’s 2025 Public Offering.

During the quarter ended December 31, 2025, 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 year ended December 31, 2025, the Company issued an aggregate of 2,952,983 shares of common stock pursuant to its at-the-market (“ATM”) programs, generating net proceeds of approximately $1,175,994 after deducting commissions and offering-related expenses.

Note 15 - Commitments and Contingencies

GEM Agreement

Pursuant to the terms of the GEM Agreement, we are required to indemnify GEM for any losses it incurs as a result of a breach by us 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 Nepal and 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 first measurement period ended on September 30, 2025, and no earnout payment was made as the applicable revenue and EBITDA targets were not achieved.

The contingent consideration liabilities are measured at fair value each reporting period, with changes recognized in earnings. During the year ended December 31, 2025, the Company recorded a $604,123 gain related to a decrease in the fair value of the contingent consideration.

reAlpha Nepal

During the year ended December 31, 2025, in connection with the departure of the reAlpha Nepal co-founders from the Company, contingent consideration of $137,000 that had been initially recognized at the time of the acquisition was settled in accordance with the terms of the separation agreements between the Company and each reAlpha Nepal co-founder.

GTG Financial

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

On the Rescission Date, GTG Financial rescinded the SPA. As a result, the Company has derecognized the contingent consideration liability and has no further obligations related to this acquisition. GTG Financial is no longer a subsidiary of the Company, effective as of the Rescission Date (see “Note 5 – Business Combinations” for more information).

reAlpha Mortgage

As of December 31, 2025, the fair value of the Company’s contingent consideration liability relating to reAlpha Mortgage was approximately $344,877, all of which is 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 considers both observable market inputs and significant unobservable inputs, including projected revenue and EBITDA, the probability of achieving 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.

Legal Matters

GEM Yield Bahamas Limited Litigation

On November 1, 2024, we filed a lawsuit against GYBL in the United States District Court for the Southern District of New York (the “Court”), under which we asserted two causes of action: (i) rescission of the GEM Warrants issued to GYBL under the GEM Agreement, by and among us, GYBL and GEM Global Yield LLC SCS, under Section 29(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), due to GYBL’s underlying violation of Section 15(a) of the Exchange Act for effecting the GEM Warrants as an unregistered dealer, and (ii) in the alternative, a declaratory judgment that the exercise price adjustment calculation of the GEM Warrants is governed by the terms provided in the GEM Warrants, rather than the terms of the GEM Agreement. Following a motion to dismiss filed by GYBL on January 17, 2025, the Court granted such motion to dismiss on March 14, 2025. On April 15, 2025, we filed an appeal of the Court’s decision dismissing our case to the United States Court of Appeals for the Second Circuit (the “Second Circuit”). The 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 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 16 - Segment Reporting

The Company determined its reportable segments based on the nature of its products and services and how management organizes and evaluates the business. The Company’s operations are structured around two primary revenue-generating activities: (i) homebuying services and (ii) technology services. These activities have distinct service offerings, operational structures, and performance metrics, and are managed separately for purposes of resource allocation and performance assessment by the Company’s chief operating decision maker (CODM).

The Homebuying Services segment includes the Company’s integrated real estate brokerage, mortgage brokerage, and digital title and escrow services provided primarily through the reAlpha platform. The Technology Services segment includes software development services provided to third parties and the AI-powered conversational customer experience platform offered by AiChat. Management reviews financial information for these two segments separately in making operating decisions, evaluating performance, and allocating capital and personnel. Accordingly, the Company has concluded that it hastwo reportable segments: Homebuying Services and Technology Services.

Segment Information

Technology Services

The Technology Services segment includes AiChat’s AI conversational customer experience solutions platform, which provides subscription-based platform access and related consulting and implementation services. This segment also includes reAlpha Nepal’s technology development and monthly support services for third parties, as well as corporate-level technology activities of the Company.

Homebuying Services

The Homebuying Services segment consists of the Company’s residential real estate brokerage, mortgage brokerage, and related settlement services operations. This includes Prevu and reAlpha Realty, which provide residential real estate brokerage services to buyers and sellers; reAlpha Mortgage and GTG Financial, which provide residential mortgage brokerage services, including loan origination support and facilitation of loan closings; and Hyperfast, which offers title and related real estate settlement services.

FASB ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer, who is its CODM, reviews segment revenue and Segment Adjusted Operating Income on a segment basis for purposes of making operating decisions and assessing financial performance. For each segment, the CODM uses segment revenue and Segment Adjusted Operating Income in the annual budget and forecasting process and considers budget-to-actual variances when making decisions about allocating capital and personnel.

The following table present information about the Company’s reportable segments for the years ended December 31, 2025 and 2024 along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. Prior period segment information is presented on a comparable basis to the basis on which current period segment information is presented and reviewed by the CODM.

The following table presents information about the company’s reportable segment assets for the years ended December 31, 2025 and 2024:

Note 17 - Discontinued Operations

During the year ended December 31, 2024, the Company made a strategic decision to fully discontinue the operations conducted through its previously acquired subsidiary, Rhove;, which had operated under the rental business segment. The decision was made due to the lack of future revenue potential and the absence of funding to further develop the platform.

As of December 31, 2025, the operations formerly conducted by Rhove continue to be classified as a discontinued operation under ASC 205, Presentation of Financial Statements - Discontinued Operations.

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

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

Note 18 - Revenue

Revenue is disaggregated by reportable segment, consistent with how the Company manages its operations and evaluates performance. See Note 16 – Segment Information for additional information regarding the Company’stwo reportable segments, Homebuying Services and Technology Services.

Disaggregation of Revenue

Revenue from Contracts with Customers and Performance Obligations

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, 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 its AI conversational customer experience solutions platform, which includes subscription-based platform access and related consulting services. Platform access represents a stand-ready performance obligation satisfied over time, and revenue is recognized ratably over the subscription term as customers simultaneously receive and consume the benefits of access to the platform. Consulting and implementation services are evaluated to determine whether they are distinct performance obligations. One-time services, such as project setup, are recognized at a point in time upon delivery, while ongoing consulting services are recognized over time as the services are performed. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the standalone selling price for separate performance obligations or a cost-plus margin approach when one is not available.

reAlpha Mortgage generates revenue from mortgage brokerage commissions earned upon the successful funding of residential mortgage loans. Contracts generally contain a single performance obligation to arrange and facilitate a mortgage loan. Revenue is recognized at a point in time upon loan funding, which represents the completion of the brokerage services and satisfaction of the performance obligation.

GTG Financial generated revenue from mortgage brokerage activities by earning commissions upon the successful funding of residential mortgage loans. Its services included loan origination support, borrower application processing, coordination with lenders, and facilitating the closing process. Revenue was recognized at a point in time upon loan funding, which represents the completion of the brokerage services and the point at which the commission became fixed and determinable. Effective as of the Rescission Date, the Company’s acquisition of GTG Financial was rescinded, and its results are not included in the consolidated financial statements for periods thereafter (see Note 5 – Business Combinations – Rescission of GTG Financial Acquisition).

reAlpha Nepal generates revenue primarily from technology development and related service contracts. The Company generates revenue by providing tech support services. These arrangements generally include service-based performance obligations that are satisfied over time, as customers 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 generates revenue from brokerage commissions earned upon the successful completion of residential real estate transactions. Contracts generally contain a single performance obligation to provide brokerage services in connection with the purchase or sale of residential properties. Revenue is recognized at a point in time upon closing, when the Company has satisfied its performance obligation and is entitled to the commission. Prevu offers commission rebate programs under which a portion of the gross commission is rebated to the buyer at closing. The rebate amount is determinable at closing based on contractual terms and is recorded as a reduction of the transaction price, with revenue recognized net of rebates at the time of closing.

The following table presents our revenue disaggregated by revenue type:

Transaction Price Allocated to the Remaining Performance Obligations

At December 31, 2025, we estimated that $396,227 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. We expect to recognize substantially all of these remaining Technology Services performance obligations as revenue during 2026.

Contract liabilities

Contract assets related to the Company’s Technology Services segment primarily represent the Company’s right to consideration for subscription-based platform access, consulting, and software development services performed but not yet billed as of the reporting date and are reclassified to accounts receivable when the right to consideration becomes unconditional; the Company did not have any such contract assets as of the reporting date. Contract liabilities related to the 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, are recorded in deferred liabilities in the consolidated balance sheets, and are recognized as revenue as the related performance obligations are satisfied.

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

The revenue recognized during 2025 and 2024 that was included in the contract liabilities at the beginning of the respective periods amounted to $278,908 and $0, respectively.

Note 19 - Subsequent Events

None.