Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this report. In addition to historical information, this discussion and analysis here and throughout this report contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements due to a number of factors, including but not limited to, the risks described in the section titled "Risk Factors."

Overview

We are a real estate technology company developing an end-to-end homebuying platform, which we have named reAlpha. Our goal is to offer, through our 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.

Our revenue model revolves around: (i) our homebuying services, which include realty services (e.g., assisting a homebuyer with finding, touring, and closing on homes), mortgage brokering services (e.g., finding and originating a mortgage for the homebuyer that fits their financial situation, needs, credit, and location), and digital title and escrow services (e.g., title, closing and settlement fees) directly to customers, mainly through the reAlpha platform, and (ii) our technology services, including software development services provided by our subsidiaries U.S. Naamche and reAlpha Nepal Pvt Limited to businesses and the AI-powered conversational platform provided to customers by our subsidiary, AiChat.

We are continuously working to commercialize, enhance and refine our AI technologies to support our homebuying services and technology services and to continue generating revenue. As part of our growth strategy, we also plan to continue identifying and acquiring companies that are complementary to our business, and we intend to generate revenue from integrating such acquired companies and their capabilities into our business. To advance such strategy, we have, in recent years, announced the acquisitions of reAlpha Nepal, AiChat, Hyperfast, reAlpha Mortgage and Prevu, as well as the proposed acquisition of InstaMortgage, which would expand our mortgage operations by adding direct lending capabilities. Although we previously announced and completed the acquisition of GTG during the fiscal year ended December 31, 2025, GTG is no longer one of our subsidiaries as of August 21, 2025. For more information, see "Note 5-Business Combinations-Rescission of GTG Financial Acquisition" herein.

Before shifting our focus towards the development of our homebuying services and technology services, our operational model was asset-heavy and built on utilizing our proprietary AI-powered technology tools for the acquisition of real estate, converting them into short-term rentals, and enabling individual investors to acquire fractional interests in these real estate properties, allowing such investors to receive distributions based on the properties' performance as a short-term rental. In the first quarter of 2024, we decided to halt these operations due to macroeconomic conditions, such as higher interest rates, inflation, and elevated property prices, which conditions persisted throughout the fiscal year 2024. This led us to sell our last real property asset for such operations, and to recognize the impairment of goodwill and intangible assets under the rental business segment. As a result, in the first quarter of 2025, our Board approved the discontinuation of our short-term rental business operations entirely and this discontinuation meets the criteria for being reported as discontinued operations. We currently have two reportable segments: our homebuying services segment and our technology services segment.

Homebuying Services

Our homebuying services segment consists of our (i) realty services offered by reAlpha Realty and Prevu; (ii) mortgage brokering services offered by reAlpha Mortgage and (iii) digital title and escrow services offered by Hyperfast. These services are mainly provided through the reAlpha platform, which supports homebuyers with key tasks such as booking property tours, submitting offer letters, mortgage pre-approval and closing transactions. It also provides detailed market insights and comprehensive property data tailored to users' areas of interest.

We seek to differentiate ourselves from competitors primarily through the vertical integration of homebuying services (real estate brokerage, mortgage brokering, title and escrow services) within a single platform; the integration of AI into our homebuying services offerings and our rebate, which is further described below. We have integrated AI into our homebuying services offerings through our development of "Claire," a proprietary, customer-facing AI-powered agent acting as a digital homebuying concierge, and internal AI-powered tools for our loan officers. "Claire" is powered by large language models and provides real-time customer support by answering questions and guiding customers through each step of the homebuying journey through a user-friendly, 24/7 web and iOS interface. "Claire" is complemented by licensed professionals, namely real estate agents and loan officers, who step in when their expertise is needed.

In addition to "Claire," we use AI-powered internal tools, such as our proprietary AI-powered "Loan Officer Assistant," which is intended to reduce manual review time for our loan officers, and the AI-powered "Engagement Agent," which integrates with our customer relationship management system to automate certain intake and scheduling and other pre-application workflows for our loan officers. The "Loan Officer Assistant" automates key loan origination tasks, such as document collection and borrower communication and is designed to help loan officers manage higher volumes with greater efficiency while the "Engagement Agent" is designed to accelerate prospective borrower's connection to loan officers for personalized support, improve prospective borrower engagement and reduce repetitive administrative work related to the intake, follow-up and scheduling processes.

As part of our strategy to differentiate ourselves from competitors and provide a customer-centric homebuying experience, we offer a rebate to homebuyers using the reAlpha platform.

Pursuant to the terms of the current commission rebate, homebuyers can receive a rebate of up to 1.0% of the home purchase price when using our realty services and an additional rebate of up to 0.5% of the home purchase price when bundling the mortgage brokering services with our realty services, in each case subject to the limitations, terms and conditions described in the buyer agreement. The current commission rebate is paid to the homebuyer as a rebate towards closing costs, which is reflected on the settlement statement at closing.

Prior to the implementation of the current commission rebate in mid-January 2026, we offered the historic commission rebate, whereby eligible homebuyers could receive up to 75% of the buy-side brokerage commission paid in connection with the purchase of a home through the reAlpha platform as a rebate towards closing costs, subject to market-specific commissions and minimums. The buy-side brokerage commission was dependent on the geographical market of the home purchased and the percentage of the historic commission rebate available to a homebuyer was determined based on their use of eligible integrated services offered via the reAlpha platform, such as realty, mortgage brokering, and digital title and escrow services. Under this model, homebuyers could receive a 25% rebate when using only realty services, 50% when using two services and 75% when using all three services. The update to the current commission rebate in mid-January 2026 was designed to make the rebate easier for customers to understand.

Currently, all three services (realty, mortgage brokering, and title services) are only available on the reAlpha platform for homebuyers in Florida and Virginia. However, two of the three services are offered to homebuyers in eight additional U.S. states, and at least one service is available in an additional 25 U.S. states and the District of Columbia. While our homebuying services are currently offered in 35 U.S. states and the District of Columbia, we plan to offer our homebuying services (and expand the capabilities of the reAlpha platform) nationwide, subject to factors such as acquiring and maintaining necessary real estate and mortgage licenses in each U.S. state and the District of Columbia, securing additional multiple listing service data, executing effective national marketing campaigns and building scalable technology infrastructure.

Technology Services

Our technology services segment includes: (i) software development services provided by reAlpha Nepal to us and third parties and (ii) the AI-powered conversational platform provided to customers by AiChat. We expect that our technology services segment will benefit from the current growth of the AI industry, and we believe that we are well-positioned to take advantage of these current trends due to our early adoption of AI for the development of our technologies.

reAlpha Nepal's Software Development Services

reAlpha Nepal provides services related to the development of technology, AI and applications, as well as other technology support to the reAlpha platform and to third parties. For example, reAlpha Nepal developed the Company's AI-powered tools such as the proprietary, customer-facing "Claire" and our internal AI-powered "Loan Officer Assistant" and "Engagement Agent." reAlpha Nepal also provides monthly technology support services to third parties.

AiChat's Conversational Platform

AiChat provides AI-powered conversational customer experience platforms in the APAC region. AiChat's conversational platform enables businesses to automate and optimize customer service, marketing, and e-commerce processes through the integration of major messaging channels in the APAC region, including Facebook Messenger, WhatsApp, Instagram, LINE, and KakaoTalk. AiChat also offers customers the ability to integrate their e-commerce platforms with payment gateways, which is powered by Stripe's financial infrastructure, enabling them to sell products via messaging channels such as WhatsApp Pay directly to their customers. Through these capabilities, AiChat is able to offer customers a comprehensive array of customer service solutions, ranging from customer inquiry and AI-powered recommendations via its AI agents and chatbot capabilities, to completing the purchase through WhatsApp.

AiChat's technology is built on conversational and generative AI models, supporting over 270 languages, including regional languages like Singlish and Bahasa. The conversational platform incorporates features such as contextual memory, real-time analytics, and personalized messaging to facilitate customer interactions. Key functionalities of the platform include automated responses, lead qualification, and customer engagement automation. Further, its recently released next-generation AI agents, which include Voice AI and Agentic AI, can provide human-like interactions and personalize responses based on the context of previous conversations, remembering customer preferences and past interactions to deliver more relevant recommendations. With self-learning and multi-turn contextual awareness, AiChat's next-generation AI agents can scale human-like interactions while maintaining brand consistency, which we believe can improve customer loyalty and overall customer service satisfaction.

AiChat generates revenue through subscription packages of its conversational platforms and next-generation AI agents. These packages are tailored to businesses based on their size, needs and the volume of customer interactions. AiChat offers flexible pricing models, including monthly and annual subscriptions, as well as performance-based pricing for specific integrations and services, such as automated marketing campaigns and e-commerce automation.

Recent Developments

Acquisition of Prevu, Inc.

On November 21, 2025, we entered into an Agreement and Plan of Merger (the "Prevu Merger Agreement") with Prevu, reAlpha Merger Sub, Inc., a Delaware corporation and a newly formed wholly-owned subsidiary of the Company and Prevu's stockholder representative. The Prevu Merger Agreement provided that, among other things and on the terms and subject to the conditions set forth therein, Merger Sub merged with and into Prevu, with Prevu surviving the merger as a wholly-owned subsidiary of the Company. This merger became effective on November 21, 2025, upon the filing and acceptance of the Certificate of Merger by the Secretary of State of Delaware.

Proposed Merger with InstaMortgage Inc.

On December 19, 2025, we entered into the Merger Agreement with InstaMortgage, the Merger Sub and the stockholders of InstaMortgage (the "Stockholders").

The Merger Agreement provides that, among other things and on the terms and subject to the satisfaction or waiver of the closing conditions and other conditions set forth therein, Merger Sub will merge with and into InstaMortgage at the effective time of the Proposed Merger (as defined above) (the "Effective Time"), with InstaMortgage surviving the Proposed Merger as a wholly-owned subsidiary of the Company.

Pursuant to the terms and conditions of the Merger Agreement, we agreed to pay the Stockholders an aggregate amount of $8,500,000, subject to certain closing adjustments, consisting of: (i) $500,000 in cash to be paid on the closing date of the Proposed Merger, less any applicable withholding tax payable by the Stockholders in accordance with the terms of the Merger Agreement; (ii) $1,500,000 in shares of our common stock to be issued on the closing date of the Proposed Merger and valued based on the VWAP of our common stock as reported on Nasdaq for the ten (10) consecutive trading day period ending on and including the trading day that is one (1) trading day prior to the date of the Merger Agreement; and (iii) $6,500,000 payable in bi-annual payments over three (3) years following the closing date of the Proposed Merger, either in cash or shares of common stock (the "Additional Payment Purchaser Stock"), at our sole discretion, with such Additional Payment Purchaser Stock, if any, valued based on the VWAP of our common stock as reported on Nasdaq or such other trading market, as applicable, for the ten (10) consecutive trading days ending on the date immediately prior to the date on which such issuance is to be made.

Under the terms of the Merger Agreement, the completion of the Proposed Merger is subject to the satisfaction or waiver of certain customary closing conditions, including, among others: (i) the accuracy of the parties' respective representations and warranties in the Merger Agreement, subject to specified materiality qualifications; (ii) compliance by the parties with their respective covenants in the Merger Agreement in all material respects; (iii) the absence of a Material Adverse Effect (as defined in the Merger Agreement) with respect to InstaMortgage or the Company on or after the date of the Merger Agreement and continuing as of immediately prior to the Effective Time; (iv) delivery by each party of the closing deliverables; and (v) receipt of the Regulatory Approvals (as defined in the Merger Agreement), in each case subject to certain limitations further described in the Merger Agreement.

At the Market Offering

On April 2, 2025, we entered into the HCW Sales Agreement under which we may offer and sell shares of our common stock from time to time through Wainwright, acting as exclusive sales agent. On December 23, 2025, we filed a prospectus supplement to our registration statement on Form S-3 (File No. 333-283284) to increase the amount of shares of common stock that we could offer and sell under the HCW Sales Agreement to an aggregate offering price of up to $20,000,000. As of the date of this report, we have sold an aggregate of 25,000 shares of our common stock for aggregate net proceeds of approximately $12,546 following the fiscal year ended December 31, 2025.

Impact of Macroeconomic Conditions, Cyclicality and Seasonality on our Business

U.S. inflation remained above the Federal Reserve's stated 2% target, which rose 2.7% in December 2025 from 12 months earlier. In response to continued inflationary pressures, the Federal Reserve lowered the target federal funds rate by 25 basis points to a range of 3.5% to 3.75% at its December 2025 meeting, signaling a sustained cautious approach as inflation and housing activity moderate.

Mortgage rates remained elevated during 2025, with the average 30-year fixed mortgage rates remaining at nearly 6% by year-end. Elevated borrowing costs, combined with limited housing inventory, have continued to constrain affordability and weigh on home purchase activity and mortgage origination volume. These factors, along with macroeconomic uncertainty, have contributed to slower transaction volumes across much of the housing market.

The residential real estate market is cyclical, with performance influenced by macroeconomic trends, interest rates, credit availability, lending standards and major disruptions in economic or political environments. Local markets may follow different patterns than national trends, leading to regional variations in activity. In addition, transaction volumes follow seasonal patterns, typically peaking in the spring and summer and slowing in the fall and winter. These cyclical and seasonal dynamics, together with prevailing macroeconomic conditions, can create variability in our operating results from quarter to quarter.

Management continues to evaluate the potential effects of current housing market conditions, interest rate trends, and seasonal factors on our operations. The extent of any impact will depend on future developments, including changes in macroeconomic conditions, housing demand, and regulatory or policy actions, all of which are inherently uncertain and difficult to predict. We may adjust elements of our strategy, cost structure, or operational focus in response to these developments to mitigate potential adverse effects and position the business for long-term objectives.

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations. These policies and estimates require the application of significant judgment by management. These estimates can be materially affected by changes from period to period as economic factors and conditions outside of our control change. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. See "Note 2-Summary of Significant Accounting Policies" to our consolidated financial statements included elsewhere in this report for a more complete description of our significant accounting policies.

Critical accounting policies are defined as those that involve significant judgment and potentially could result in materially different results under different assumptions and conditions. Management believes the following critical accounting policies are affected by our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenue and related cost of goods sold in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"). A significant portion of our revenues are derived from products and services offered by AiChat, reAlpha Mortgage and reAlpha Nepal.

We recognize revenue in accordance with ASC 606, when control of services is transferred to the customer. On a standalone basis, we generate revenue by providing monthly support services to third parties. 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 is recognized as a distinct performance obligation, 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 company that provides services related to the development of technology, AI and applications, adheres to ASC 606 for revenue recognition, primarily from its service-based contracts. This approach involves detailed identification of contracts with customers, determination of distinct performance obligations within these contracts, and accurate allocation of transaction prices to these obligations. Revenue is recognized as reAlpha Nepal satisfies each performance obligation, typically over time, reflecting the ongoing delivery and customer consumption of its tech-driven services.

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 generally 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.

Goodwill Impairment Testing

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.

Capitalization of Software Development Costs

The Company adheres to ASC 350-40, Intangibles - Goodwill and Other, Internal-Use Software ("ASC 350-40"), for the capitalization of software development costs. Under these standards, costs incurred during the application development stage which includes coding, testing, and the development of software functionalities that 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 U.S. 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 us and the rate of technological change.

Reclassification Presentation

Certain amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations for the periods presented in this report.

Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. The following discussion focuses on the financial condition and results of operations for the fiscal year ended December 31, 2025 and the fiscal year ended December 31, 2024 and year-to-year comparisons between the fiscal year ended December 31, 2025 and the fiscal year ended December 31, 2024.

Fiscal Year Ended December 31, 2025, compared to Fiscal Year Ended December 31, 2024

		Year ended
		December 31,				December 31,
		2025				2024
Revenue		$	4,518,498			$	948,420
Cost of Revenue			(2,067,060	)			(302,084	)
Gross profit		$	2,451,438			$	646,336
Operating expense			(18,458,396	)			(7,548,950	)
Operating loss			(16,006,958	)			(6,902,614	)
Other expense			(1,583,434	)			(834,360	)
Loss from continuing operations before tax			(17,590,392	)			(7,736,974	)
Loss from discontinued operations before tax			-				(18,339,635	)

Revenues. Revenues were $4,518,498 for the fiscal year ended December 31, 2025, compared to $948,420 for the fiscal year ended December 31, 2024, an increase of approximately 376%. Our revenues currently consist primarily of revenues generated from our homebuying services, as well as revenues generated from our technology services. For the year ended December 31, 2025, revenues from homebuying services were approximately $3,499,949 (77% of total revenue), while revenues from technology services were approximately $1,018,549 (23% of total revenue). This increase in revenue was primarily driven by an increase in revenue generated from our mortgage brokerage transactions by reAlpha Mortgage, revenue generated by GTG Financial through the Rescission Date, subscription fees from AiChat, as well as revenues generated from Prevu's realty services during the period following its acquisition on November 21, 2025 (the "Prevu Acquisition Date"). reAlpha Mortgage generated $1,968,330 through mortgage brokerage transactions during the fiscal year ended December 31, 2025, compared to $604,128 for the same period in 2024. GTG Financial generated $1,416,352 during the fiscal year ended December 31, 2025, until the Rescission Date, at which time GTG Financial ceased to be our subsidiary (see "Note 5 - Business Combinations - Rescission of GTG Financial Acquisition" for more information). Following the Rescission Date, GTG Financial's operations did not contribute to our revenues. AiChat generated $764,512 from subscription fees for its AI conversational technologies offered to enterprise clients, compared to $140,328 in the same period in 2024. Prevu generated $80,656 through real estate brokerage transactions, primarily consisting of broker commissions, during the fiscal year ended December 31, 2025, which reflects Prevu's revenue from the Prevu Acquisition Date through December 31, 2025. There was no comparable revenue from Prevu in the fiscal year ended December 31, 2024.

Cost of revenue. Cost of revenue was $2,067,060 for the fiscal year ended December 31, 2025, compared to $302,084 for the fiscal year ended December 31, 2024, an increase of approximately 584%. Cost of revenue reflects direct expenses associated with delivering our mortgage brokerage services, real estate brokerage services, and technology solutions, including compensation-related costs for personnel supporting loan origination, real estate brokerage activities, and customer interactions from our mortgage and realty subsidiaries. The increase in cost of revenue was primarily attributable to higher direct expenses associated with delivering our mortgage brokerage services and technology solutions, including compensation-related costs for personnel supporting loan originations and customer interactions at our mortgage subsidiaries, reAlpha Mortgage and GTG Financial. In addition, we incurred $17,798 of cost of revenue related to Prevu's real estate brokerage operations following the Prevu Acquisition Date. Cost of revenue attributable to GTG Financial totaled $899,813 for the year ended December 31, 2025 through the Rescission Date, after which GTG Financial ceased to be our subsidiary (see "Note 5-Business Combinations-Rescission of GTG Financial Acquisition" for additional information). Accordingly, no cost of revenue related to GTG Financial was recognized subsequent to the Rescission Date.

Operating expense. Operating expense was $18,458,396 for the fiscal year ended December 31, 2025, compared to $7,548,950 for the fiscal year ended December 31, 2024, an increase of approximately 145%. This increase was primarily driven by an increase in salary expenses as a result of the integration of our acquired businesses, including reAlpha Mortgage, Prevu and GTG Financial, as well as additional personnel added to support the expansion of our platform and operations, which amounted to $6,506,553 compared to $2,841,591 for the same period in 2024, and an increase in marketing and advertising expenses related to our advertising campaign and customer acquisition initiatives that amounted to $5,946,514 compared to $793,004 for the same period in 2024. In addition, we incurred professional and legal services expenses of $3,273,947 related to our general corporate services, litigation matters, regulatory compliance, and capital raising activities, compared to $2,124,946 for the same period in 2024. Operating expenses attributable to GTG Financial in the amount of $513,822 were recognized during the year ended December 31, 2025 until the Rescission Date, at which date GTG Financial ceased to be our subsidiary (see "Note 5-Business Combinations-Rescission of GTG Financial Acquisition" for more information). As a result, following the Rescission Date, we did not incur any operating expenses related to GTG Financial's operations. Operating expenses attributable to Prevu in the amount of $33,990 were recognized from the Prevu Acquisition Date through December 31, 2025.

Other expense. Other expense was $1,583,434 for the fiscal year ended December 31, 2025, compared to other expense of $834,360 for the fiscal year ended December 31, 2024, an increase of approximately 90%. This consists of interest expense of $814,727 which includes $545,624 relating to amortization of original issue discount and debt issuance expense, amortization expenses relating to the $406,250 commitment fee incurred in connection with the GEM Agreement and the loss on extinguishment of debt relating to the Note in the amount of $438,834 which was not present in the same period in 2024, non-cash losses of $456,325 from the increase in fair value of the Series A Preferred Stock liability along preferred stock embedded derivative liability, and a $604,123 decrease in fair value of contingent consideration of reAlpha Mortgage.

Key Business Metrics

We monitor a number of key performance indicators and non-U.S. GAAP financial measures to evaluate the performance of our business operations and the execution of our strategy. These metrics provide management with insight into transaction activity across our platform, operating efficiency, and trends affecting the scale and overall health of our business. We use these measures, together with our financial results, to assess performance across periods, inform management decision-making, and support financial planning and strategic priorities.

		Year Ended
		December 31, 2025				December 31, 2024
Total Transaction Volume		$	116,153,573				38,363,497	(1)
Revenue		$	4,518,498			$	948,420
Cash and Cash Equivalents		$	7,783,529			$	3,123,530
Gross Profit Margin			54	%			68	%
Adjusted EBITDA		$	(13,689,464	)		$	(5,626,474	)

(1)

2024 transaction volume includes activity from September 9, 2024, the date of acquisition of reAlpha Mortgage, through December 31, 2024. Accordingly, the 2024 period does not reflect a full year of operations and is not directly comparable to 2025.

Total Transaction Volume

Total Transaction Volume is a key measure of the scale of our homebuying services offerings. We define Total Transaction Volume as the aggregate dollar volume of transactions generated across our real estate brokerage, mortgage, and title services during the applicable trailing twelve-month period. This includes (i) the closing sale prices of residential properties transacted through our realty services, (ii) the principal loan amounts closed through our mortgage brokerage operations, and (iii) the underlying property transaction value associated with title services provided during the period.

Due to the fact that customers may utilize more than one of our services in connection with a single underlying property transaction, the same property transaction value may be included in more than one component of Total Transaction Volume. As a result, Total Transaction Volume may exceed the dollar value of unique underlying residential property transactions completed during the period.

For realty transactions, we include the full closing sale price for each transaction, regardless of whether our brokerage represented the buyer, the seller, or both sides of the transaction, in accordance with applicable laws and disclosure requirements. This metric excludes rental transactions.

We present Total Transaction Volume on a trailing twelve-month basis to provide a view of transaction activity that smooths seasonal fluctuations and reflects the overall economic throughput of our platform.

Total Transaction Volume is influenced by transaction activity across our business, home prices in the markets we serve, mortgage origination activity, service adoption rates, seasonality, and macroeconomic conditions, including interest rate levels and housing affordability.

Revenue

Revenue represents income earned from services provided across our homebuying services and technology services segments. We generate revenue primarily from real estate brokerage commissions, mortgage brokerage fees, and other service-related revenues, which are recognized in accordance with U.S. GAAP.

Management evaluates revenue growth as an indicator of transaction activity across our platform and the effectiveness of our integrated service offerings. Revenue is influenced by transaction volume, customer adoption of multiple services, home prices in the markets we serve, mortgage origination activity, and prevailing market conditions, including interest rate levels and housing affordability.

Cash and cash equivalents

Cash and cash equivalents represent our primary source of liquidity and include unrestricted cash and highly liquid investments available to fund our operations and support strategic initiatives. Management monitors cash and cash equivalents to assess our liquidity position, working capital needs, and ability to support ongoing operations, platform development, and market expansion activities.

Cash and cash equivalents are influenced by operating performance, timing of transaction activity, capital raising activities, debt service requirements, and investments in technology, research and development, and acquisitions.

Gross profit margin

Gross profit margin represents gross profit as a percentage of revenue and reflects the efficiency of our operations after direct costs associated with delivering our homebuying services and technology services.

Management evaluates gross profit margin as an indicator of operating efficiency and unit economics across our services. Gross profit margin is influenced by service mix, transaction volume, pricing dynamics, compensation and commission structures, and costs associated with operating and supporting our platform, including technology and service delivery expenses.

Non-U.S. GAAP Financial Measures

To supplement our financial information presented in accordance with U.S. GAAP, we believe "Adjusted EBITDA," a "non-U.S. GAAP financial measure," as such term is defined under the rules of the SEC, is useful in evaluating our operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-U.S. GAAP financial measure may be helpful to investors because it provides consistency and comparability with past financial performance. However, this non-U.S. GAAP financial measure is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In addition, other companies, including companies in our industry, may calculate a similarly titled non-U.S. GAAP measure differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of this non-U.S. GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-U.S. GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measure and the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure, and not to rely on any single financial measure to evaluate our business.

We use Adjusted EBITDA, a non-U.S. GAAP financial measure, to evaluate our operating performance and facilitate comparisons across periods and with peer companies. We reconcile our Adjusted EBITDA to our net income (loss) adjusted to exclude interest expense, depreciation and amortization, changes in fair value of contingent consideration and preferred stock, share-based compensation, and other non-cash, non-operating, or non-recurring items that we believe are not indicative of our core business operations. We believe this measure provides useful insight into our ongoing performance; however, it should not be considered a substitute for, or superior to, net income or other financial information prepared in accordance with U.S. GAAP.

The following table provides a reconciliation of net income to Adjusted EBITDA for the periods presented below:

		Year ended December 31,
		2025				2024
Net loss		$	(17,590,392	)		$	(26,022,349	)
Adjusted to exclude the following
Depreciation and amortization			543,170				282,095
Amortization of loan discounts and origination fee(1)			545,624				181,875
Loss from discontinued operations			-				18,339,635
Income tax benefit			-				(54,260	)
Impairment of intangible assets			220,016				-
Changes in fair value of contingent consideration(2)			(604,123	)			-
Change in fair value of preferred stock embedded derivative liability (3)			456,325				-
Loss on extinguishment of debt			438,834				-
Loss (gain) on deconsolidation(4)			(94,071	)			-
Loss (gain) on equity method investments			103,354				(20,663	)
Interest expense			394,434				333,759
Non cash commitment fee expenses(5)			406,250				500,000
Stock-based compensation(6)			862,476				316,183
Equity offering costs(7)			490,868				-
Acquisition-related expenses			137,771				517,251
Adjusted EBITDA		$	(13,689,464	)		$	(5,626,474	)

(1)

Represents amortization of all debt issuance costs and original issue discount due to the repayment of the Note (as defined below) issued to Streeterville Capital, LLC ("Streeterville").

(2)

Represents remeasurement gains or losses related to the contingent consideration of reAlpha Mortgage.

(3)

Represents non-cash remeasurement gains or losses related to the shares of Series A Preferred Stock issued in the MMC transaction.

(4)

Represents a gain recognized upon the rescission of the GTG Financial acquisition.

(5)

Represents the commitment fee of $1,000,000 incurred in connection with the GEM equity facility, which has been amortized over a period of 24 months, beginning on October 23, 2023.

(6)	Represents non-cash stock-based compensation expense associated with shares of common stock issued to consultants ($2,526), shares of common stock issued to employees ($102,880), and restricted stock units (RSUs) granted to executive officers and other eligible employees ($757,071).

(7)

Represents legal and professional fees incurred in connection with the issuance of shares of common stock and warrants from our equity offerings and other capital raise transactions.

Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt services, acquisitions, contractual obligations and other commitments. Our liquidity and capital resources are critical to our ability to execute our business plan and achieve our strategic objectives and we assess our liquidity in terms of our ability to fund operations, pursue acquisitions and meet our obligations as they become due.

Our primary sources of liquidity have historically consisted of proceeds from equity offerings and debt financings, such as the Note (as defined below) issued to Streeterville, and the revenue generated from our services. The cost of capital and historically high-interest rates has a direct impact on our ability to raise capital through debt financings or equity offerings or to pursue acquisitions. The current economic environment supports higher interest rates and more stringent debt terms. As a result, we have been more reliant on equity financing as we navigate the existing market conditions. We cannot provide any assurance that we will be able to raise additional funds on acceptable terms, if at all. Our ability to raise additional capital will depend on various factors, including market conditions, investor demand, and our financial performance.

During the fiscal year ended December 31, 2025, our primary uses of cash included operating expenses, acquisitions, technology development and debt service. In particular, we spent a significant portion of cash to repay the secured promissory note issued to Streeterville (the "Note"), on August 14, 2024 pursuant to a note purchase agreement. Under the terms of the Note, Streeterville could redeem up to $545,000 of the Note per month, commencing March 2025 and at any time thereafter until the Note was repaid in full. See "Note 9--Notes Payable" herein for more information. As a result of these constraints on cash, we initiated various measures to enhance our liquidity position.

As part of our efforts to increase our liquidity, we entered into a warrant inducement transaction, completed two equity offerings and commenced our at-the-market offering programs (each an "ATM Program" and collectively, the "ATM Programs"). Through these transactions, we raised gross proceeds of approximately $25.5 million during the fiscal year ended December 31, 2025. On April 6, 2025, in connection with the warrant inducement transaction, we entered into inducement letter agreements with certain holders of existing warrants dated November 21, 2023 (the "Follow-On Warrants"). Pursuant to the terms of the inducement letter agreements, certain holders of the Follow-On Warrants agreed to exercise their warrants for cash at a reduced exercise price of $0.75 per share. In exchange, we agreed to issue warrants (the "New Warrants") to purchase 8,437,502 shares of our common stock. The warrant inducement transaction closed on April 8, 2025 and resulted in the issuance of 4,218,751 shares of our common stock and gross proceeds of approximately $3.1 million. In addition, we 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. To the extent that the remaining Follow-On Warrants and New Warrants are exercised in full, we will be able to raise approximately $3.8 million in additional gross proceeds from the cash exercise thereof.

On July 18, 2025, upon the closing of the best efforts public offering (the "2025 Public Offering") of the sale 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 our 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 our common stock (the "Series A-2 Warrant Shares," and together with the Series A-1 Warrant Shares, the "July 2025 Warrant Shares"), we raised gross proceeds of $2.0 million. Each of the July 2025 Shares was sold together with one Series A-1 Warrant to purchase one share of our common stock and one Series A-2 Warrant to purchase one share of our common stock at a combined public offering price of $0.15. Each July 2025 Warrant has an exercise price of $0.15 per share and became exercisable beginning on October 8, 2025, the date stockholder approval for the issuance of the July 2025 Warrant Shares was received and became effective (the "Stockholder Approval Date"). We also issued warrants (the "Placement Agent Warrants") to Wainwright, or its designees, to purchase up to 666,667 shares of common stock as partial compensation for the placement agent services it offered in connection with the 2025 Public Offering. The Placement Agent Warrants have an exercise price of $0.1875 and became exercisable on the Stockholder Approval Date. The majority of the July 2025 Warrants and the Placement Agent Warrants have been exercised, resulting in additional gross proceeds of approximately $3.7 million, as of the date of this report, and to the extent that the remaining July 2025 Warrants are exercised in full, we will be able to raise approximately $0.4 million in additional gross proceeds from the cash exercise thereof.

On July 22, 2025, following the completion of a registered direct offering (the "Registered Offering") of 14,285,718 shares of our 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 our common stock with an exercise price of $0.35 per share, we raised gross proceeds of approximately $5.0 million. The Private Placement Warrants were immediately exercisable upon issuance and expire on September 12, 2030. In connection with the concurrent Registered Offering and Private Placement, we also issued warrants (the "RDO Placement Agent Warrants") to Wainwright, or its designees, to purchase up to 714,286 shares of common stock. 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. Most of the Private Placement Warrants and the RDO Placement Agent Warrants have been exercised, resulting in additional gross proceeds of approximately $4.5 million, as of the date of this report, and to the extent that the remaining Private Placement Warrants and RDO Placement Agent Warrants are exercised in full, we will be able to raise approximately $0.4 million in additional gross proceeds from the cash exercise thereof.

With the proceeds of the Registered Offering and concurrent Private Placement, we were able to repay the outstanding balance under the Note in full using cash on hand, which payment was in the amount of approximately $4.5 million. Upon such payment, we fully satisfied all amounts due under the Note, and we were no longer subject to redemptions from Streeterville under the Note, which were adversely affecting our liquidity.

In addition to these equity offerings, we entered into ATM Programs with A.G.P./Alliance Global Partners ("A.G.P.") and Wainwright on December 19, 2024, which was terminated on March 29, 2025, and April 2, 2025, respectively. We issued 160,879 shares of our common stock for gross proceeds of approximately $231,235 pursuant to our ATM Program with A.G.P. during the fiscal year ended December 31, 2025. We terminated our ATM Program with A.G.P. on March 29, 2025 and entered into an ATM Program with Wainwright on April 2, 2025. We issued 2,792,104 shares of common stock for gross proceeds of approximately $985,447 pursuant to our ATM Program with Wainwright during the fiscal year ended December 31, 2025. For more information, see "Note 14-Stockholders' Equity - Shelf Registration on Form S-3" herein.

Our business model requires significant capital expenditures to build and maintain the infrastructure and technology required to support our growing operations. In addition, we may incur additional costs associated with compliance, research and development of new products and services, expansion into new markets or geographies, including through strategic acquisitions, and general corporate overhead. As a result, we may require additional financing in the future to fund our operations, which may include additional equity or debt financings or strategic partnerships or investments. If we are unable to obtain additional financing when required, we may be forced to reduce the scope of our operations, delay the launch of new products or services, or take other actions that could adversely affect our business, financial condition, and results of operations. We may also be required to seek additional financing on terms that are unfavorable to us, which could result in the dilution of our stockholders' ownership interests or the imposition of burdensome terms and restrictions.

In addition to our capital expenditures, we have ongoing disputes with GYBL regarding the GEM Warrants. As of the date of this report, there has been no adjustment to the exercise price of the GEM Warrants given the ongoing disputes related to the exercise price. We do not expect that the GEM Warrants will be exercised while these disputes are pending and when exercised, GYBL may elect to exercise the GEM Warrants on a cashless basis, meaning that we would not receive cash for the exercise of the GEM Warrants. If these disputes are adversely determined against us, we may incur penalties under the GEM Agreement and/or additional litigation expenses and penalties related to these disputes, which could materially adversely impact our liquidity, capital resources and overall financial condition.

Management reassessed our liquidity and financial condition as of December 31, 2025 and determined that although the conditions which previously raised substantial doubt about our ability to continue as a going concern had improved, substantial doubt exists about our ability to continue as a going concern due to our recurring losses, negative operating cash flows and limited cash resources relative to our operating expenses. As of December 31, 2025, we had cash and cash equivalents of approximately $7.7 million, compared to $3.1 million as of December 31, 2024, and an accumulated deficit of $55.98 million.

Management's plan to address the going concern is based on the following strategies:

●

Revenue Growth. For the fiscal year ended December 31, 2025, we generated revenue of approximately $4.5 million, representing growth of approximately 376% compared to the fiscal year ended December 31, 2024 revenue of approximately $0.9 million because of our mortgage brokerage operations, subscription fees from AiChat, the acquisition of Prevu and the related expansion of our integrated homebuying services offerings. Management expects continued revenue growth in 2026 driven by the integration of acquired operations, continued expansion into additional U.S. states, additional strategic acquisitions, including the proposed acquisition of InstaMortgage, if consummated, and the continued development of the reAlpha platform.

●

Acquisition Integration. We have, in the past few years, completed the acquisitions of reAlpha Nepal, AiChat, Hyperfast, reAlpha Mortgage, and during the fiscal year ended December 31, 2025, Prevu. Each of these acquisitions has been integrated or is in the process of being integrated into our operations. These acquisitions collectively expanded our business to provide realty services in 13 U.S. states and Washington, D.C., mortgage brokering services in 31 U.S. states, and digital title and escrow services in three U.S. states. The proposed acquisition of InstaMortgage, if consummated, would add direct mortgage lending capabilities to our business.

●

Capital Structure and Fundraising. We were able to raise aggregate gross proceeds of approximately $25.5 million during the fiscal year ended December 31, 2025, through a combination of warrant exercises, equity offerings, and at-the-market sales. Management intends to continue utilizing available capital-raising mechanisms, subject to market conditions and applicable securities laws, to fund operations and strategic initiatives.

There can be no assurance that management's plans will be successfully implemented. To the extent that we do not generate sufficient revenue to fund our operations beyond such 12-month period, we expect to fund operations through additional equity or debt financing, although capital markets volatility may limit our ability to raise funds on acceptable terms. See "Risk Factors" herein for additional information.

Contractual Commitments and Obligations

Acquisition of Prevu

In connection with the acquisition of Prevu, we are obligated to pay deferred consideration totaling $2.5 million pursuant to the terms of the Prevu Merger Agreement. The deferred consideration is payable in four equal installments of $625,000 over an 18-month period following the closing date, payable in cash or shares of our common stock, at our sole discretion. As of December 31, 2025, three of these installments, totaling approximately $1.9 million, are scheduled to be paid within the next 12 months and are included in current liabilities, with the remaining $0.6 million classified as a long-term liability. See "Recent Developments - Acquisition of Prevu, Inc." for additional information.

Proposed Merger with InstaMortgage

On December 22, 2025, we entered into the Merger Agreement to acquire 100% of the outstanding equity of InstaMortgage for total consideration of approximately $8.5 million, payable in a combination of cash and shares of our common stock, including deferred consideration. The transaction is expected to close in the first half of 2026, subject to regulatory approvals and other customary closing conditions. In connection with this proposed acquisition, we will be required to pay cash consideration of approximately $0.5 million and issue approximately $1.5 million in shares of our common stock if and when the acquisition is consummated. The $0.5 million cash consideration is currently being held in escrow. See "Recent Developments - Proposed Merger with InstaMortgage, Inc." for additional information.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the periods presented.

		Year Ended
		December 31, 2025				December 31, 2024
Net cash used in operating activities		$	(11,262,577	)		$	(6,042,238	)
Net cash used in investing activities		$	(1,742,092	)		$	(1,554,400	)
Net cash provided by financing activities		$	17,651,159			$	4,263,798

Cash Flows from Operating Activities

For the fiscal year ended December 31, 2025, net cash used in operating activities was $11,262,577, compared to $6,042,238 for the same period in 2024. The increase is primarily due to higher operating expenses, including salaries of $6,506,553 and professional and legal fees of $3,273,947.

Cash Flows from Investing Activities

For the fiscal year ended December 31, 2025, net cash used in investing activities was $1,742,092 compared to $1,554,400 for the same period in 2024. This change in cash flows from investing activities is mainly attributable to cash paid to acquisitions of $1,023,053 and capitalization of software development costs during the year ended December 31, 2025.

Cash Flows from Financing Activities

For the fiscal year ended December 31, 2025, net cash provided by financing activities was $17,651,159, compared to $4,263,798 for the same period in 2024. This increase mainly consists of $1,175,994 capital raised through our ATM Programs, proceeds of $17,120,549 from the exercise of warrants, and proceeds of $6,328,101 from the issuance of common stock in connection with our recent equity offerings. These cash inflows were partially offset by the repayment of outstanding debt of $5,623,196 and equity offering expenses of $941,742, such as placement agent fees and other costs related to the equity offerings.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet transactions.

Emerging Growth Company Status

Under Section 102(b)(1) of the JOBS Act, emerging growth companies are exempt from the adoption of new or revised accounting standards until such standards apply to private companies so long as they do not opt out of the extended transition period. Where permissible, we have early adopted certain standards as described in "Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements - Accounting Pronouncements Issued and Adopted" in our audited consolidated financial statements included elsewhere in this report. Accordingly, when a standard has different application dates for public and private companies, we may adopt the standard on the timeline applicable to private companies. As a result, our consolidated financial statements may not be comparable to those of other public companies that comply with public company effective dates.