reAlpha Tech Corp.

reAlpha Tech Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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.”

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Inc. (“GTG” or “GTG Financial”), during the year ended December 31, 2025, the Company’s acquisition of GTG was rescinded pursuant to the terms of the Stock Purchase Agreement, by and among GTG Financial, Glenn Groves (the “Seller”) and the Company, dated February 20, 2025 (the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 – Acquisition and Rescission of GTG Financial, Inc.” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), filed on March 12, 2026, with the Securities and Exchange Commission (the “SEC”) for more information.

With its focus on AI technology and integrated real estate services, the Company is developing an end-to-end homebuying platform named the “reAlpha platform.” The Company’s goal is to offer through its AI-powered platform a more affordable, streamlined experience for those on the journey to homeownership. The reAlpha platform integrates AI-driven tools to offer, among others, tailored property recommendations, an intuitive visual interface, and certain services, including realty services, mortgage brokering services, and digital title and escrow services within the platform.

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

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and entities that the Company holds a controlling financial interest of, and those in which it owns more than 50% of the voting interest. All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the SEC applicable to interim financial reporting on Form 10-Q. Accordingly, they do not include all disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring items) necessary for a fair presentation have been included. The unaudited condensed consolidated balance sheet as of December 31, 2025, has been derived from the Company’s audited consolidated financial statements included in the Form 10-K.

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements. The financial statements include the operations, assets, and liabilities of the Company. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Form 10-K. The results of operations for the interim period 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 to make the financial statements not misleading have been included. Actual results could differ from those estimates.

Business Promotion and Advertising Costs

The Company expenses advertising and marketing costs, including pre-paid advertising arrangements, as they are incurred. Advertising and marketing expenses were $1,261,980 and $518,939 for the three months ended March 31, 2026, and 2025, respectively, of which $593,429 and$0 were related to the utilization of marketing credits obtained through the issuance of Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), respectively. These costs are included in “Marketing and advertising” in the accompanying consolidated statements of operations and comprehensive loss.

Related Party Transactions

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

During the year ended December 31, 2025, the Company collected all previously outstanding receivables attributable to AiChat, its Singapore subsidiary. As a result, the previously recorded CECL reserve of 0.05% was released. However, a new CECL provision for the three months ended March 31, 2026 was recorded based on updated receivables and risk profiles as of March 31, 2026. The CECL reserve is netted against accounts receivable, net on the balance sheet. The resulting allowance for expected credit losses is not material to the unaudited condensed consolidated financial statements.

Foreign Currency Translation

The Company’s unaudited condensed 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.

Equity Method Investment

The Company accounts for investments in entities in which the Company has significant influence over the entity’s financial and operating policies, but does not control, using the equity method of accounting. The equity method investment is initially recorded at cost and subsequently increased for capital contributions and allocations of net income and decreased for capital distributions and allocations of net loss. Equity in net income (loss) from the equity method investment is allocated based on the Company’s economic interest. The equity method investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If it is determined that a loss in value of the equity method investment is other than temporary, an impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value.

In September 2024, reAlpha AI Labs Inc., a subsidiary of the Company, entered into a subscription agreement with Xmore AI, Inc. (“XMore”) to purchase 2,500,000 shares of common stock for total consideration of $125,000, consisting of $100,000 in cash and $25,000 in in-kind services. In June 2025, the subscription agreement was amended to reduce the Company’s investment to $75,000, consisting of $50,000 in cash and $25,000 in in-kind services, and the amount of shares purchased by the Company was reduced to 1,184,210 shares. The Company recorded its investment in Xmore under the equity method in accordance with ASC 323, Investments—Equity Method and Joint Ventures.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level at least annually, as of December 31, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Accounting requirements provide that a reporting entity may perform an optional qualitative assessment on an annual basis to determine whether events occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If an initial qualitative assessment identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the optional qualitative assessment is not performed, a quantitative analysis is performed. The quantitative goodwill impairment test is performed by calculating the fair value of the reporting unit and comparing it to the reporting unit’s carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. However, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded on the reporting unit.

No such indicators of impairment were identified as of March 31, 2026. (See “Note 6 - Goodwill and Intangible Assets” in the Form 10-K for further discussion of the Company’s goodwill impairment assessment).

Definite-lived Intangible Assets

In accordance with ASC 350, definite-lived intangible assets include assets such as developed technology, customer contracts, and trademarks that are acquired in business combinations. The Company’s definite-lived intangible assets primarily consist of developed technology, trademarks and trade names, and customer relationships, which are amortized on a straight-line basis over estimated useful lives ranging from 5 to 10 years,5 to 15 years, and 6 to 10 years, respectively. The valuation and classification of these intangible assets and determination of useful lives involves judgments and significant estimates. These Identifiable intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are amortized over their estimated useful lives in a manner that best reflects the economic benefits of the intangible asset using the straight-line method and estimated useful lives. We periodically review the estimated useful lives of our definite-lived intangible assets and identify events or changes in circumstances that may indicate revised estimated useful lives. (See “Note 6 - Goodwill and Intangible Assets” in the Form 10-K for further discussion of the Company’s goodwill impairment assessment).

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 which was deconsolidated on August 21, 2025, complied with ASC 606 by recognizing revenue at the point of loan funding. This moment marks the transfer of control of the loan to the borrower, capturing the completion of GTG Financial’s primary service successfully securing a loan. All services, including loan origination, application processing, and credit assessment, contribute to this culminating event. Revenue is therefore recognized only when the loan is funded, ensuring that the exact revenue amount is determinable based on the loan amount and agreed commission, accurately reflecting the completion of all related performance obligations. Effective as of the Rescission Date, the Company’s acquisition of GTG Financial was rescinded. Accordingly, GTG Financial is no longer a subsidiary of the Company, and its results are not included in these unaudited condensed consolidated financial statements for periods after that date (see “Note 5–Business Combinations–Acquisition and Rescission of GTG Financial, Inc.” included in the Form 10-K for more information).

reAlpha Nepal, a subsidiary of the Company that provides technology-related services, recognizes revenue in accordance with ASC 606 from its service-based contracts. reAlpha Nepal currently generates revenue exclusively from providing monthly technology support services to third parties. These arrangements include a single service-based performance obligation that is satisfied over time, as these third parties simultaneously receive and consume the benefits of the services provided. Revenue is recognized over time in a manner that reflects the continuous transfer of services to the customer.

Prevu is a digital real estate brokerage that provides licensed brokerage services to homebuyers and home sellers across multiple states through its online platform. Prevu’s revenue is primarily derived from brokerage commissions earned for services provided as both a buyer’s agent and a seller’s agent upon the successful completion of real estate transactions. In accordance with ASC 606, revenue is recognized when control of the brokerage services transfers to the customer, which occurs upon the closing of a transaction, at which point the Company has satisfied its performance obligations and is entitled to the commission. Prevu offers commission rebate programs, including its Smart Buyer™ rebate, under which a portion of the gross brokerage commission is rebated to the buyer at closing. The rebate amount is determined pursuant to contractual rebate agreements and is based on a defined calculation methodology that may vary by transaction, commission structure, service bundle, and market. 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.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting in accordance with the ASC 805, Business Combinations (“ASC 805”). The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 820, Fair Value Measurements (“ASC 820”), using discounted cash flows and other applicable valuation techniques. To assist the Company in making these fair value determinations, the Company may engage third-party valuation specialists or internal specialists who generally assist the Company in the fair value determination of identifiable assets such as customer relationships, trademarks and any other significant asset or liabilities. Any acquisition-related costs incurred by the Company are expensed as incurred. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is met. Operating results of an acquired business are included in our results of operations from the date of acquisition.

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

Recent Accounting Pronouncements

Accounting Pronouncements Issued and Not yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosures about the nature of expenses included in the income statement, such as purchases of inventory, employee compensation and depreciation. ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of ASU 2024-03 on its financial statements and related disclosures. The Company does not expect the adoption of this standard to have a material impact on its financial statements, but it will require additional disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in ASU 2025-06 modernize the accounting for internal-use software development costs by removing references to software development “stages” and instead requiring entities to begin capitalizing costs when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used as intended. The amendments also provide guidance for evaluating significant development uncertainty, align the accounting for website development costs with Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software, and require capitalized internal-use software costs to be subject to certain disclosure requirements in ASC 360, Property, Plant, and Equipment. The amendments do not affect software costs accounted for under ASC 985-20, Software – Costs of Software to be Sold, Leased, or Marketed. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2025-06 will have on its financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies and reorganizes certain aspects of interim reporting guidance, including disclosure requirements related to events occurring since the end of the most recent annual reporting period, and enhances the presentation and usability of interim financial statement disclosures. ASU 2025-11 is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2025-11 will have on its financial statements and related disclosures. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

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 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 unaudited condensed consolidated financial statements or related disclosures.

There have been no material changes to the Company’s critical accounting policies or the methods used in applying those policies during the three months ended March 31, 2026. For a full description of the Company’s significant accounting policies and critical estimates, refer to the audited consolidated financial statements and accompanying notes included in the Form 10-K.

Note 3 - Going Concern

During the three months ended March 31, 2026, the Company incurred a net loss of approximately $4,338,495 and used cash in operating activities of approximately $3,123,752. As of March 31, 2026, the Company had cash and cash equivalents of approximately $4,667,612 and has experienced recurring operating losses and negative operating cash flows.

In accordance with ASC 205-40, Going Concern, management evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. The Company’s recurring losses, negative operating cash flows, limited cash resources relative to its projected cash requirements, and dependence on access to external financing raise substantial doubt about its ability to continue as a going concern.

In addition, the Company has received a notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating non-compliance with the minimum bid-price requirement for continued listing on the Capital Market tier of Nasdaq. Failure to regain compliance could result in the delisting of the Company’s common stock, which could adversely affect the liquidity of the Company’s securities and its ability to access capital markets.

To address its liquidity needs, the Company intends to seek additional capital through debt or equity financing transactions. The Company may also receive proceeds from the potential exercise of outstanding warrants; however, such exercises are outside the Company’s control and are dependent on the trading price of the Company’s common stock and other market conditions. The Company also has stockholder authorization to effect a reverse stock split in order to support continued compliance with Nasdaq listing requirements and maintain access to capital markets. These plans are subject to market conditions, investor demand, and other factors outside the Company’s control, and there can be no assurance that any financing will be available on acceptable terms, in the amounts needed, or at all.

As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 - Business Combinations

For comprehensive information regarding acquisitions completed in the fiscal year ended December 31, 2025, please refer to “Note 5 - Business Combinations” included in the Form 10-K. There were no acquisitions completed during the three months ended March 31, 2026.

Acquisitions during the year ended December 31, 2025

Acquisition and Rescission of GTG Financial, Inc.

In February 2025, the Company acquired 100% of the issued and outstanding shares of common stock of GTG Financial, Inc. (“GTG Financial”), a mortgage brokerage company. The total purchase consideration was up to $4,200,000, consisting of Series A Preferred Stock, restricted shares of common stock, deferred cash consideration, and potential earn-out payments subject to the achievement of certain financial metrics. The Company recorded goodwill of approximately $1.96 million following measurement period adjustments, primarily attributable to expected synergies and future growth opportunities. Subsequently, GTG Financial exercised its right to rescind the Securities Purchase Agreement. In accordance with ASC 810, Consolidation, the rescission was accounted for as a deconsolidation, and the Company recognized a gain on deconsolidation of $94,071. GTG Financial’s assets, liabilities, equity balances, and results of operations were removed from the Company’s financial statements as of the Rescission Date.

Acquisition of Prevu, Inc.

In November 2025, the Company completed the acquisition of Prevu, Inc. (“Prevu”), a Delaware corporation, pursuant to an Agreement and Plan of Merger (the “Prevu Merger Agreement”). Pursuant to the terms of the Prevu Merger Agreement and related transition arrangements, the total consideration payable by the Company of $4,500,000 consists of: (i) $750,000 in cash paid at closing, net of applicable withholding taxes, (ii) approximately $1,250,000 in shares of the Company’s common stock issued at closing and valued based on the arithmetic average of the closing price of the Company’s common stock for the ten consecutive trading days ending on and including the trading day that is two trading days prior to the execution of the Prevu Merger Agreement, which was $0.4998, (iii) $2,500,000 in deferred payments payable in four equal tranches over an 18-month period following the closing, payable, at the Company’s election, in cash or shares of the Company’s common stock, based on the volume-weighted average price of the Company’s common stock at the time of issuance, and (iv) transition and severance consideration payable to a former executive of Prevu, consisting of cash and equity awards The Company recorded goodwill of approximately $3.25 million, primarily attributable to expected synergies and future growth opportunities. The Company also recorded intangible assets of approximately $1.47 million, consisting of developed technology and trademarks and trade names, each with a useful life often years.

Note 5 - Property and equipment, net

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

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

The Company recorded depreciation expense of $7,008 for the three months ended March 31, 2026 and $9,717 for the three months ended March 31, 2025.

Note 6 - Goodwill and Intangible Assets

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

As of March 31, 2026, the carrying amount of goodwill was $7,459,125, consisting of $1,798,892 attributable to the technology services segment and $5,660,233 attributable to the homebuying services segment. There were no additions, impairments, or other changes to the carrying amount of goodwill during the three months ended March 31, 2026. For a detailed discussion of goodwill activity, including acquisitions and measurement period adjustments recorded during the year ended December 31, 2025, refer to “Note 8 - Goodwill and Intangible Assets” included in the Form 10-K.

The components of intangible assets as of March 31, 2026, all of which are finite-lived, are as follows:

The Company recorded amortization expenses of $158,194 and $120,717 for the three months ended March 31, 2026, and three months ended March 31, 2025, respectively

The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2026:

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

The Company performs its annual goodwill impairment test as of December 31 each year. During the three months ended March 31, 2026, the Company evaluated whether any events or changes in circumstances had occurred that would more likely than not reduce the fair value of a reporting unit below its carrying amount, requiring an interim goodwill impairment test. Based on this evaluation, the Company determined that no such triggering events or changes in circumstances existed as of March 31, 2026. Accordingly, no interim goodwill impairment test was performed, and no goodwill impairment was recorded during the three months ended March 31, 2026.

For further information regarding the Company’s annual goodwill impairment test, including the methodology and key assumptions applied, refer to “Note 8 - Goodwill and Intangible Assets” included in the Form 10-K.

Note 7 - Related Party Transactions

a. Summary of Short-Term Loans - Related Parties

Short-term loans from related parties consist of unsecured loans obtained from related parties to support the Company’s operating and working capital requirements. These loans carry interest rates of approximately 12.07% as of March 31, 2026. As of March 31, 2026, short-term loans from related parties consisted of $38,542 due to Kester Poh, AiChat’s Chief Executive Officer, and $40,406 due to Balaji Swaminathan, a member of the Company’s Board of Directors, resulting in total short-term debt of $72,046, net of an aggregate interest reserve of $6,902..As of December 31, 2025, short-term loans from related parties totaled $96,997, net of an interest reserve of $10,412, resulting in total short-term debt of $86,585.

On March 9, 2026, the Company hired Payton Cuddy, the son-in-law of Mr. Swaminathan, as a Senior Marketing Manager. Mr. Cuddy is employed on an at-will basis with an annual base salary of $125,000 plus an annual cash bonus equal to 10% of the base salary, plus eligibility for standard employee benefits and participation in the Company’s 2022 Equity Incentive Plan (as amended, the “2022 Plan”), on the same basis as other employees in similar positions. For the three months ended March 31, 2026, the Company paid approximately $7,612 in salary and benefits to Mr. Cuddy under this arrangement.

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

Note 8 - Loans from Unrelated Parties

a. Summary of Short-Term Loans - Unrelated Parties

Short-term loans primarily consist of multiple term loan facilities obtained by AiChat, a subsidiary of the Company, carrying an average interest rate of approximately 8.9% as of March 31, 2026. These facilities were entered into to support AiChat’s operating and working capital requirements. As of March 31, 2026, short-term loans from unrelated parties consisted of term loan facilities with an aggregate outstanding balance of $195,870, net of an interest reserve of $9,031, resulting in total short-term debt of $186,839. As of December 31, 2025, short-term loans from unrelated parties totaled $219,990, net of an interest reserve of $10,389.

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

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 March 31, 2026, these loans bore an average interest rate of approximately 6.5% and had contractual maturities ranging from 2024 through 2028. As of March 31, 2026, long-term loans from unrelated parties consisted of term loan facilities with an aggregate outstanding balance of $75,425, net of an interest reserve of $3,795, resulting in total long-term debt of $71,630. As of December 31, 2025, long-term loans from unrelated parties totaled $93,997, net of an interest reserve of $5,586.

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

Note 9 - Deferred Liabilities

Deferred liabilities primarily consist of deferred consideration arising from the Company’s business combinations. Deferred consideration represents obligations payable in connection with the Company’s acquisitions. Deferred consideration related to the acquisition of GTG Financial was cancelled on the rescission date as part of the rescission of the GTG Financial acquisition (see “Note 5–Business Combinations–Acquisition and Rescission of GTG Financial, Inc.” included in the Form 10-K for additional information). In addition, approximately $25,000 of the Company’s deferred liabilities relates to deferred consideration payable in connection with the Company’s investment in Xmore.

In connection with the acquisition of Prevu on November 21, 2025, a portion of the purchase consideration is payable on a deferred basis pursuant to the terms of the Prevu Merger Agreement. As of March 31, 2026, approximately $1,217,466 of the Company’s deferred liabilities represents current deferred consideration related to the Prevu acquisition and approximately $577,836 represents the non-current portion of such deferred consideration, which is included within other long-term liabilities in the consolidated balance sheet. The deferred consideration represents fixed payments that are payable in cash and/or shares of the Company’s common stock at the Company’s election. During the three months ended March 31, 2026, the Company paid $100,000 of deferred compensation from amounts previously held in escrow, which reduced the Company’s escrow deposit balance. The deferred consideration was recorded at fair value as of the acquisition date in accordance with ASC 805, and is not subject to subsequent remeasurement, as the payments are fixed and not contingent on future performance.

Note 10 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability

On March 7, 2025, the Company entered into a media-for-equity transaction with Mercurius Media Capital LP (“MMC”) pursuant to those certain Advertising Agreement (the “Advertising Agreement”) and Investment Agreement (the “Investment Agreement”), each dated as of March 7, 2025, pursuant to which the Company issued 250,000 shares of its Series A Preferred Stock, at a stated value of $20 per share, for an aggregate stated value of $5,000,000, in exchange for $5,000,000 of marketing credits. The Series A Preferred Stock carries a 3.0% annual preferred dividend, is convertible into shares of the Company’s common stock at the holder’s option and will automatically convert after three years from the date of issuance. The Series A Preferred Stock is classified as temporary equity (mezzanine equity) in accordance with ASC 480, Distinguishing Liabilities from Equity and the shortfall settlement provision embedded in the Investment Agreement was determined to be a freestanding derivative liability under ASC 815, Derivatives and Hedging. As of March 31, 2026, the pre-paid marketing credits under the Advertising Agreement have been fully utilized. The Advertising Agreement expired on March 31, 2026, and no further marketing credits are expected to be available or utilized thereafter. For a detailed discussion of the terms, initial recognition, and accounting treatment of the Series A Preferred Stock and the associated derivative liability, refer to “Note 13 - Mezzanine Equity and Preferred Stock Embedded Derivative Liability” included in the Form 10-K.

During the three months ended March 31, 2026, the Company recognized marketing expense of $593,429 related to the utilization of the pre-paid marketing credits.

On March 9, 2026, the Company issued 6,125 shares of Series A Preferred Stock in satisfaction of its accrued annual dividend for the year ended December 31, 2025, representing an aggregate dividend payment of $122,500, in lieu of a cash payment. During the three months ended March 31, 2026, the Company accrued dividends of $37,123 related to the current dividend period. As of March 31, 2026, the carrying value of the Series A Preferred Stock classified in mezzanine equity was $1,057,500.

Thederivative liability is measured at fair value at each reporting date using the Black-Scholes option pricing model, with changes in fair value recognized in the unaudited condensed consolidated statement of operations and comprehensive loss. As of March 31, 2026, the key level three inputs used were as follows:

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

As of March 31, 2026, the fair value of the derivative liability was $4,602,480. During the three months ended March 31, 2026, the Company recognized a net increase in the fair value of the derivative liability of $27,500, recorded as a loss in the unaudited condensed consolidated statement of operations and comprehensive loss.

Note 11 - Stockholders’ Equity

The total number of shares of capital stock that the Company has the authority to issue is up to 205,000,000 shares, consisting of: (i)200,000,000 shares of common stock, having a par value of $0.001 per share; and (ii)5,000,000 shares of preferred stock, having a par value of $0.001 per share, of which 1,000,000 shares have been designated as Series A Preferred Stock. As of March 31, 2026, there were 134,118,789 shares of common stock and 256,125 shares of Series A Preferred Stock issued and outstanding. As of December 31, 2025, there were 131,740,675 shares of common stock and 250,000 shares of Series A Preferred Stock issued and outstanding.

Stock Based Compensation

Equity Incentive Plan

We maintain the 2022 Plan, under which we may grant awards to employees, officers, directors, and certain other service providers. The compensation committee of the Board (the “Compensation Committee”) administers the 2022 Plan.

Pursuant to the evergreen provision of the 2022 Plan, the number of shares authorized for issuance under the 2022 Plan increases automatically on an annual basis. As a result of such increases, which commenced on October 15, 2025, the aggregate number of shares of common stock authorized for issuance under the 2022 Plan was 15,957,189 shares as of December 31, 2025. There were no changes to the number of shares authorized for issuance under the 2022 Plan during the three months ended March 31, 2026.

Ending balances for the 2022 Plan as of March 31, 2026 and December 31, 2025, are as follows:

Stock-based compensation expense for the three months ended March 31, 2026 and 2025 was $343,963 and $78,355, respectively.

Short-Term Incentive Plan

On February 4, 2025, the Compensation Committee approved the Company’s 2025 Short-Term Incentive Plan (“STIP”), providing for quarterly awards of performance-based RSUs under the 2022 Plan. The STIP is designed to reward executive officers and key employees based on the achievement of quarterly performance targets.

Restricted Stock Units

The Company measures compensation cost for all stock-based awards granted to employees, directors, and certain other service providers based on the grant-date fair value of the award by ASC 718. The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the date of grant.

During the three months ended March 31, 2026, the Company granted 3,006,233 RSUs and forfeited 1,025,400 RSUs. The RSUs generally vest over periods ranging fromtwo tofour years from the respective grant dates, subject to continued service and other customary terms and conditions.

A summary of RSU activity for the three months ended March 31, 2026, is as follows:

As of March 31, 2026, a total of 6,772,435 restricted stock units (“RSUs”) were outstanding, andnone of the RSUs had vested. The RSUs were excluded from diluted earnings per share for the three months ended March 31, 2026, as their inclusion would have been anti-dilutive.

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, subject to adjustments set forth therein, 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 March 31, 2026, no reclassification or adjustment to the exercise price of the GEM Warrants has been made.

All warrants issued by the Company remain classified as equity instruments and are recorded in additional paid-in capital. During the three months ended March 31, 2026, there were no warrant issuances, exercises, modifications, repricing, or reclassifications.

As of March 31, 2026, the Company had 10,900,266 warrants outstanding. The outstanding warrants were excluded from diluted earnings per share for the three months ended March 31, 2026, and 2025, as their inclusion would have been anti-dilutive in accordance with ASC 260.

Shelf Registration Statement on Form S-3

On November 26, 2024, the Company’s shelf registration statement on Form S-3 (File No. 333-283284) (the “Form S-3”) was declared effective by the SEC. This registration statement permits the Company to offer and sell, from time to time, common stock, preferred stock, warrants, subscription rights, and units in one or more offerings, subject to market conditions and applicable regulatory requirements.

On December 19, 2024, the Company entered into an At the Market (“ATM”) Sales Agreement with A.G.P./Alliance Global Partners (“A.G.P.”) (the “A.G.P. Sales Agreement”), under which the Company was able to offer and sell shares of its common stock from time to time. The A.G.P. Sales Agreement was terminated effective March 29, 2025.

Following the termination of the ATM program with A.G.P. and the related A.G.P. Sales Agreement, the Company entered into an At-The-Market Offering Agreement (the “HCW Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), on April 2, 2025, under which the Company was able to offer and sell shares of its common stock having an aggregate offering price of up to $7,650,000.

On December 23, 2025, the Company filed a prospectus supplement to its Form S-3 to increase the aggregate offering price of shares of common stock available for issuance under the HCW Sales Agreement to up to $20,000,000. During the quarter ended March 31, 2026, the Company issued an aggregate 250,456 shares of common stock pursuant to its at-the-market (“ATM”) programs, with the last sale thereunder occurring on March 12, 2026, generating net proceeds of approximately $126,150 after deducting commissions and offering-related expenses of approximately $5,192.

Note 12 - Commitments and Contingencies

GEM Agreement

Pursuant to the terms of the GEM Agreement, we are required to indemnify GEM for any losses it incurs as a result of a breach by us of our representations and warranties and covenants under the GEM Agreement or for any misstatement or omission of a material fact in a registration statement registering those shares pursuant to the GEM Agreement. Also, GEM is entitled to be reimbursed for legal or other costs or expenses reasonably incurred in investigating, preparing, or defending against any such loss. To date, we have not raised any capital pursuant to the GEM Agreement, and we may not raise any capital pursuant to the GEM Agreement prior to its expiration. Restrictions arising under the terms of our future financings may also affect our ability to raise capital pursuant to the GEM Agreement. The Company cannot reasonably estimate the potential losses, if any, with respect to the GEM Agreement or the related litigation.

Indemnification Agreements

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

Contingent Consideration and Compensation

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

The contingent consideration liability is measured at fair value at each reporting period, with changes in fair value recognized in earnings. During the three months ended March 31, 2026, and 2025, the Company recognized a gain of $18,350 and a loss of $93,000, respectively, related to changes in the fair value of contingent consideration.

As of March 31, 2026 and March 31, 2025, the fair value of the Company’s contingent consideration liability relating to reAlpha Mortgage was approximately $326,527, and $1,042,000, respectively, all of which was classified as Level 3 within the fair value hierarchy.

The fair value of the contingent consideration liability was estimated using an income-based valuation approach. The valuation incorporates significant unobservable inputs, including projected revenue and EBITDA, the probability of achieving the specified earnout targets, the timing of expected payments, and a discount rate that reflects the risk associated with the underlying performance metrics.

Observable inputs include market-based interest rates, while unobservable inputs are based on management’s assumptions regarding future operating performance. Due to the significance of these unobservable inputs, the contingent consideration liability is classified as a Level 3 fair value measurement.

Valuation Inputs — March 31, 2026

Valuation Inputs — December 31, 2025

Legal Matters

Except as noted below, there have been no material changes to the legal proceedings disclosed in the Form 10-K. The Company continues to monitor the status of those proceedings, and developments will be disclosed in future filings as necessary.

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 13 - Segment Reporting

The Company operates throughtwo reportable segments: homebuying services and technology services. The homebuying services segment includes the Company’s residential real estate brokerage, mortgage brokerage, and related settlement services operations. The technology services segment includes the Company’s AI-powered customer experience platform and software development and support services provided to third parties.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM evaluates segment performance and allocates resources based on segment revenue and segment adjusted operating income. There were no changes to the Company’s reportable segments or the basis of measurement used by the CODM during the three months ended March 31, 2026.

The following table presents information about the Company’s reportable segments for the three months ended March 31, 2026 and 2025, along with the items necessary to reconcile segment information to the accompanying consolidated financial statements:

The following table presents information about the company’s reportable segment assets for the three months ended March 31, 2026, and the year ended December 31, 2025:

Note 14 - Revenue

Revenue is disaggregated by reportable segment, consistent with how the Company manages its operations and evaluates performance. See “Note 13 – Segment Reporting for additional information regarding the Company’s reportable segments.”

Disaggregation of Revenue

Revenue from Contracts with Customers and Performance Obligations

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

AiChatgenerates revenue from subscription-based access to its AI conversational customer experience platform and related consulting and implementation services. Subscription revenue is recognized over time over the contractual term. Consulting and implementation revenues are recognized either at a point in time or over time depending on the nature of the services provided.

reAlpha Mortgage generates revenue from mortgage brokerage commissions earned upon the successful funding of residential mortgage loans. Revenue is recognized at a point in time upon loan funding.

reAlpha Nepalgenerates revenue from technology development and related support service contracts. Revenue is recognized over time as services are performed.

Prevugenerates revenue from brokerage commissions earned upon the successful completion of residential real estate transactions. Revenue is recognized at a point in time upon closing. Commission rebates provided to customers are recorded as a reduction of revenue at closing.

The following table presents our revenue disaggregated by revenue type:

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2026, the Company estimated that $363,618 of revenue related to the technology services segment is expected to be recognized in future periods for performance obligations that were unsatisfied (or partially unsatisfied) as of the end of the reporting period. The Company expects to recognize the remaining $352,816 of Technology Services performance obligations as revenue during the remainder of 2026.

Contract liabilities

Contract liabilities related to the Company’s technology services segment consist primarily of advance consideration received or advance billings for subscription and service arrangements for which revenue has not yet been recognized. These amounts are recorded as deferred liabilities in the unaudited condensed consolidated balance sheets and are recognized as revenue as the related performance obligations are satisfied.

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

During the three months ended March 31, 2026, the Company recognized $156,094 of revenue that was included in contract liabilities on December 31, 2025.

Note 15 - Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that these unaudited condensed consolidated financial statements were available to be issued. Based upon this review, except as noted below, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.

Reverse Stock Split

On March 30, 2026, the Board approved a 1-for-25 reverse stock split of the Company’s outstanding common stock, which is expected to become effective on April 30, 2026, subject to the filing and effectiveness of an amendment to the Company’s Second Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware. The reverse stock split was previously approved by the Company’s stockholders at the 2025 annual meeting of stockholders.

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

This Quarterly Report on Form 10-Q, or this “report,” contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may,” “will” or other similar expressions in this report. In particular, these include statements relating to future actions; prospective products, applications, customers and technologies; future performance or results of any products; anticipated expenses; and future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:

Forward-looking statements may appear throughout this report, including without limitation, the following sections: “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors.” The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements included in this report. You should not place undue reliance on these forward-looking statements.

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