DUBLIN, Ohio, Oct. 07, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (“reAlpha” or the “Company”), an AI-powered real estate technology company, today announced the full integration of Naamche, its previously acquired subsidiary, into the reAlpha brand and operating model. The integration reflects reAlpha’s ‘One reAlpha’ strategy, aligning its global talent, product portfolio, and culture under a single mission of empowering homebuyers through technology. Since its acquisition in 2024, Naamche ...

DUBLIN, Ohio, Oct. 01, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (“reAlpha” or the “Company”), an AI-powered real estate technology company, today announced the expansion of its mortgage division, reAlpha Mortgage, into Nevada. This milestone reinforces the Company’s national rollout strategy and positions reAlpha to serve one of the country’s fastest-growing mortgage1 and housing markets (in terms of housing inventory).2 Nevada represents a significant opportunity for reAlpha, with over $2 ...

DUBLIN, Ohio, Sept. 23, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (“reAlpha” or the “Company”), an AI-powered real estate technology company, today announced that on September 22, 2025, it received a letter from the Listing Qualifications Department (the “Staff”) of Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company has regained compliance with the minimum market value of listed securities (“MVLS”) requirement, as set forth in Nasdaq Listing Rule 5550(b)(2) (the “Rule”). As previou ...

Core Insights - reAlpha Tech Corp has upgraded its AI assistant, Claire, to function as a digital homebuying concierge, enhancing the homebuying experience for users [1][3] Industry Context - U.S. homebuyers are currently facing affordability challenges due to high home prices and elevated interest rates, with real estate commissions averaging 5.6% of a home's sale price [2] - A survey indicates that nearly 40% of prospective buyers are utilizing AI tools for various aspects of the homebuying process [2] Company Strategy - The upgrade of Claire aligns with reAlpha's mission to empower homebuyers through technology, providing personalized property recommendations and educational resources [3][4] - The concierge service adapts to buyers' needs, offering tailored entry points for both first-time and experienced buyers [5] Technology Integration - Claire utilizes a proprietary AI infrastructure that combines generative AI, large language models, and real estate intelligence to deliver contextually accurate guidance [7] - The platform ensures a seamless experience by integrating various services, allowing buyers to transition smoothly from searching for homes to closing deals [6] Financial Benefits - Through reAlpha's commission rebate program, homebuyers can receive 75% of the buyer's agent's commission back at closing, averaging savings of approximately $8,000 per transaction [8][10] - The enhanced concierge experience aims to reduce complexity and generate measurable value for buyers, contributing to a more efficient homebuying process [8][10]

DUBLIN, Ohio, Sept. 09, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (“reAlpha” or the “Company”), an AI-powered real estate technology company, today announced an upgrade to its internal AI Loan Officer Assistant, enhancing the Company’s ability to streamline mortgage operations by automating document classification, extraction, and validation. The assistant, which could previously only reduce manual document preparation and reconciliation time at the loan processing stage, now functions as a ...

DUBLIN, Ohio, Aug. 29, 2025 (GLOBE NEWSWIRE) -- reAlpha Tech Corp. (Nasdaq: AIRE) (“reAlpha” or the “Company”), an AI-powered real estate technology company, today announced that Chief Executive Officer Mike Logozzo and Chief Financial Officer Piyush Phadke will present at the H.C. Wainwright 27th Annual Global Investment Conference, taking place September 8–10, 2025, at the Lotte New York Palace Hotel in New York City. reAlpha’s corporate presentation is scheduled for Monday, September 8th at 11:00 AM ET. ...

Core Viewpoint - reAlpha Tech Corp. is expanding its AI-powered real estate platform into Georgia, marking its entry into a third major state and enhancing its operational footprint [1][2][3] Group 1: Expansion Details - Georgia recorded over 125,000 home sales in 2024, with a median sale price of $375,000, leading to an annual residential transaction volume of approximately $47 billion [2] - The expansion targets key markets in Georgia, including Atlanta, Savannah, Augusta, and Macon, to serve a growing base of prospective homebuyers [2][3] - The company aims to leverage a media-for-equity partnership with Mercurius Media Capital to enhance brand awareness and consumer reach in Georgia [3] Group 2: Platform Features - reAlpha's AI-powered homebuying platform offers a commission-back experience, saving an average of around $8,000 at closing for homebuyers [4][7] - The platform integrates various services such as realty, title, and mortgage, providing personalized home recommendations and real-time support through its AI assistant, Claire [4][8] - The platform currently has IDX coverage reaching approximately 97% of active listings in Georgia [6] Group 3: Existing Operations - reAlpha has been operating in Georgia since 2018 through its licensed AI-enhanced mortgage subsidiary, reAlpha Mortgage, which currently operates across 30 states [5] - The addition of real estate brokerage capabilities positions reAlpha to deliver a more connected experience for homebuyers in Georgia [5][7] Group 4: Future Plans - The company plans to launch its services in additional states in the coming months, following its expansion into Georgia [7]

[Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Summarizes reAlpha Tech Corp.'s financial results and key business developments for Q2 2025 [Financial Highlights](index=1&type=section&id=Financial%20Highlights) reAlpha Tech Corp. reported substantial revenue growth in Q2 2025, primarily driven by mortgage brokerage transactions, but experienced increased net losses and a decline in gross profit margin year-over-year, alongside a significant decrease in cash Key Financial Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Revenue | 1,300,000 | 62,353 | 1,909% | | Cash (period end) | 587,311 | 3,700,000 | -84.1% | | Gross Profit | 621,465 | 44,103 | 1,309% | | Gross Profit Margin | 50% | 71% | -21 ppts | | Adjusted EBITDA | (3,500,000) | (1,100,000) | -218% | | Net Loss | (4,100,000) | (1,500,000) | -173% | - The increase in gross profit was primarily driven by mortgage brokerage transactions provided by subsidiaries, reAlpha Mortgage and GTG Financial, Inc., which included loan origination fees, broker commissions, and processing fees[5](index=5&type=chunk) - Gross profit margin declined from **71% to 50%** year-over-year, reflecting higher cost of revenue from delivering loan brokerage services and technology solutions[5](index=5&type=chunk) [Business Highlights](index=1&type=section&id=Business%20Highlights) reAlpha made significant strategic and operational advancements, including key leadership appointments, the launch of an AI-powered Loan Officer Assistant, early repayment of a secured promissory note, expansion into new markets, and integration of its technology platform - Mike Logozzo was appointed Chief Executive Officer in June 2025, succeeding founder Giri Devanur, who now serves as Executive Chairman[6](index=6&type=chunk) - Launched a proprietary AI-powered Loan Officer Assistant to streamline mortgage operations, automating key loan origination tasks and showing an approximately **60% reduction in manual document preparation time**[6](index=6&type=chunk) - Fully repaid the approximately **$4.47 million principal balance** outstanding on its **$5.45 million secured promissory note** to Streeterville Capital prior to its scheduled maturity, strengthening the balance sheet[6](index=6&type=chunk) - Appointed Cristol Rippe as Chief Marketing Officer to lead brand, marketing, and communications, bringing over **20 years of experience** in fintech and real estate[9](index=9&type=chunk) - Implemented a new internal organizational structure, transitioning to a functional model to enhance operational efficiency and cross-functional coordination[9](index=9&type=chunk) - Expanded its AI-powered homebuying platform into Texas with real estate brokerage services and entered the Utah mortgage market, marking the first step in its national rollout strategy[9](index=9&type=chunk) - Rebranded 'Be My Neighbor' to 'reAlpha Mortgage' and strengthened its leadership with new CEO and Chief Sales Officer appointments, along with onboarding **five high-performing loan officers**[9](index=9&type=chunk) - Launched a redesigned website and fully integrated its customer relationship management (CRM) platform across real estate and mortgage operations to automate lead capture and pipeline management[9](index=9&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) Outlines reAlpha Tech Corp.'s business model and includes disclosures on forward-looking statements [About reAlpha Tech Corp.](index=2&type=section&id=About%20reAlpha%20Tech%20Corp.) reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market by developing an end-to-end platform for homebuying, including brokerage, mortgage, and title services, through an acquisition-driven growth model - reAlpha Tech Corp. (Nasdaq: AIRE) is an AI-powered real estate technology company transforming the multi-trillion dollar U.S. real estate services market[7](index=7&type=chunk) - The company is developing an end-to-end platform that streamlines the homebuying journey, including real estate brokerage, mortgage, and title services[7](index=7&type=chunk) - reAlpha is building a vertically integrated ecosystem designed to deliver a streamlined and more affordable path to homeownership, utilizing a strategic, acquisition-driven growth model and proprietary AI infrastructure[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements within the press release, emphasizing that actual results may differ materially due to various risks and uncertainties, and advises readers not to place undue reliance on these statements - The press release includes forward-looking statements, identifiable by terminology such as 'may', 'should', 'expect', 'intend', 'will', 'estimate', 'anticipate', 'believe', 'predict', 'potential' or 'continue'[8](index=8&type=chunk) - Factors that may cause actual results to differ materially include reAlpha's ability to pay contractual obligations, liquidity, operating performance, ability to secure adequate financing, limited operating history, technology acceptance, commercialization of AI, market entry, integration of acquired businesses, loss of key employees, legal proceedings, licensing, and ability to identify and acquire complementary companies[8](index=8&type=chunk)[10](index=10&type=chunk) - Readers are cautioned not to put undue reliance on forward-looking statements, and reAlpha does not undertake any obligation to update or revise any forward-looking statements, except as required by law[10](index=10&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Presents reAlpha Tech Corp.'s condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) The balance sheet as of June 30, 2025, shows an increase in total assets and total liabilities compared to December 31, 2024, primarily driven by growth in current assets and deferred liabilities, while cash significantly decreased and stockholders' equity shifted to a deficit Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :------------ | :---------------- | | Cash | 587,311 | 3,123,530 | | Total Current Assets | 5,061,607 | 4,043,098 | | Total Assets | 15,517,538 | 11,994,458 | | Total Current Liabilities | 9,488,487 | 4,145,437 | | Total Liabilities | 16,618,018 | 10,426,986 | | Total Stockholders' (Deficit) Equity | (1,100,480) | 1,567,472 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements of operations indicate substantial revenue growth for both the three and six months ended June 30, 2025, compared to the prior year, but also a significant increase in operating expenses and net loss, reflecting increased investment in growth and operations Statements of Operations Highlights (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------- | :------------ | :------------ | | Revenues | 1,252,381 | 62,353 | | Cost of revenues | 630,916 | 18,250 | | Gross Profit | 621,465 | 44,103 | | Total operating expenses | 4,710,595 | 1,253,498 | | Operating Loss | (4,089,130) | (1,209,395) | | Net Loss | (4,110,016) | (1,478,312) | | Basic loss per share | (0.08) | (0.03) | Statements of Operations Highlights (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :-------------------------- | :------------ | :------------ | | Revenues | 2,178,016 | 82,779 | | Cost of revenues | 1,037,884 | 36,499 | | Gross Profit | 1,140,132 | 46,280 | | Total operating expenses | 7,651,521 | 2,488,704 | | Operating Loss | (6,511,389) | (2,442,424) | | Net Loss | (6,960,368) | (2,897,357) | | Basic loss per share | (0.14) | (0.07) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, reAlpha experienced a significant net cash outflow from operating activities, partially offset by net cash provided by financing activities, resulting in a net decrease in cash and a lower cash balance at period end compared to the prior year Cash Flow Highlights (Six Months Ended June 30) | Activity | H1 2025 ($) | H1 2024 ($) | | :-------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | (4,602,029) | (2,550,879) | | Net cash provided by (used in) investing activities | 191,132 | (79,423) | | Net cash provided by (used in) financing activities | 1,874,264 | (143,885) | | Net decrease in cash | (2,536,633) | (2,774,187) | | Cash - End of Period | 587,311 | 3,682,327 | - Non-cash investing and financing activities included preferred stock issuance for MMC and GTG Financial transactions, deferred cash payments for GTG Financial, and common stock issuance for GTG acquisition and Streeterville Capital, LLC[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) Provides a reconciliation of non-GAAP financial measures, specifically Adjusted EBITDA, to comparable GAAP financial measures [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) reAlpha uses Adjusted EBITDA as a non-GAAP financial measure to evaluate operating performance, excluding non-cash, non-operating, or non-recurring items, showing an increased adjusted loss for both the three and six months ended June 30, 2025 - Adjusted EBITDA is used to evaluate ongoing operations and for internal planning and forecasting, providing consistency and comparability with past financial performance[19](index=19&type=chunk) - Adjusted EBITDA is reconciled to net income (loss) by excluding interest expense, depreciation and amortization, changes in fair value of contingent consideration and preferred stock, share-based compensation, and other non-cash, non-operating, or non-recurring items[20](index=20&type=chunk) Adjusted EBITDA (Q2 and H1 2025 vs 2024) | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :---------------- | :------------ | :------------ | :------------ | :------------ | | Net loss | (4,110,016) | (1,478,312) | (6,960,367) | (2,897,357) | | Adjusted EBITDA | (3,474,092) | (1,147,511) | (5,286,097) | (2,236,601) |

Core Insights - reAlpha Tech Corp. reported a significant revenue increase of 1,909% to approximately $1.3 million in Q2 2025 compared to $62,353 in Q2 2024, indicating strong growth in its AI-powered real estate technology platform [4] - The company is focused on balancing growth with fiscal discipline while commercializing its AI infrastructure for long-term value creation [3] - The appointment of Mike Logozzo as CEO aims to lead the company through its next growth phase, following the transition from founder Giri Devanur to Executive Chairman [5] Financial Highlights - Revenue for Q2 2025 was approximately $1.3 million, a 1,909% increase from $62,353 in Q2 2024 [4] - Gross profit rose to $621,465 in Q2 2025 from $44,103 in Q2 2024, although gross profit margin decreased from 71% to 50% year-over-year due to higher costs [4] - Adjusted EBITDA was approximately $(3.5) million in Q2 2025, worsening from $(1.1) million in Q2 2024 [4] - Net loss increased to approximately $4.1 million in Q2 2025 from $1.5 million in Q2 2024 [4] Business Highlights - The company launched an AI-powered Loan Officer Assistant that automates key loan origination tasks, achieving a 60% reduction in manual document preparation time and a 20% reduction in time per loan file [5] - reAlpha fully repaid a $4.47 million secured promissory note, enhancing its balance sheet and financial flexibility [5] - The company expanded its AI-powered homebuying platform into Texas and entered the Utah mortgage market, marking the beginning of its national rollout strategy [8] - A new internal organizational structure was implemented to enhance operational efficiency and support continued platform growth [8] Leadership Changes - Mike Logozzo was appointed as CEO to guide the company through its next growth phase, succeeding Giri Devanur [5] - Cristol Rippe was appointed as Chief Marketing Officer to oversee brand and marketing strategies [5] Strategic Initiatives - The company transitioned the Be My Neighbor brand to reAlpha Mortgage, strengthening brand cohesion and cultural consistency [8] - A redesigned website was launched to better reflect the company's integrated AI-powered real estate services [8] - The integration of a customer relationship management (CRM) platform across real estate and mortgage operations is expected to improve data accuracy and engagement [8]

PART I - FINANCIAL INFORMATION This part contains the company's unaudited financial statements, management's discussion, market risk disclosures, and internal controls [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements and related notes for recent reporting periods [Condensed Consolidated Balance Sheet](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) The balance sheet shows a significant decrease in cash and a shift to a stockholders' deficit by June 30, 2025 | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | **Assets** | | | | Cash | $587,311 | $3,123,530 | | Total current assets | $5,061,607 | $4,043,098 | | Total assets | $15,517,538 | $11,994,458 | | **Liabilities** | | | | Total current liabilities | $9,488,487 | $4,145,437 | | Total liabilities | $16,618,018 | $10,426,986 | | **Stockholders' (Deficit) Equity** | | | | Total stockholders' (deficit) equity | $(1,100,480) | $1,567,472 | - The company's cash significantly decreased from **$3.12 million** at December 31, 2024, to **$0.59 million** at June 30, 2025. Total assets increased by approximately **29.38%**, while total liabilities increased by approximately **59.39%** over the same period. Stockholders' equity shifted from a positive balance of **$1.57 million** to a deficit of **$(1.10) million**[9](index=9&type=chunk)[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements show significant revenue growth but also a widening net loss due to increased operating expenses | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (%) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenues | $1,252,381 | $62,353 | 1909.0% | | Cost of revenues | $630,916 | $18,250 | 3357.1% | | Gross Profit | $621,465 | $44,103 | 1309.1% | | Operating Expenses | $4,829,411 | $1,253,498 | 285.3% | | Operating Loss | $(4,207,946) | $(1,209,395) | 247.9% | | Net Loss | $(4,110,016) | $(1,478,312) | 178.0% | | Basic loss per share | $(0.08) | $(0.03) | 166.7% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Revenues | $2,178,016 | $82,779 | 2531.1% | | Cost of revenues | $1,037,884 | $36,499 | 2743.5% | | Gross Profit | $1,140,132 | $46,280 | 2362.8% | | Operating Expenses | $7,651,521 | $2,488,704 | 207.5% | | Operating Loss | $(6,511,389) | $(2,442,424) | 166.6% | | Net Loss | $(6,960,368) | $(2,897,357) | 140.2% | | Basic loss per share | $(0.14) | $(0.07) | 100.0% | - Revenues for the three months ended June 30, 2025, increased by **1,909%** to **$1.25 million**, and for the six months ended June 30, 2025, increased by **2,531%** to **$2.18 million**, primarily due to contributions from reAlpha Mortgage, GTG Financial, and AiChat[12](index=12&type=chunk)[178](index=178&type=chunk)[182](index=182&type=chunk) - Net loss significantly widened for both the three-month period (**178% increase** to **$(4.11) million**) and the six-month period (**140.2% increase** to **$(6.96) million**), driven by substantial increases in operating expenses, particularly wages, marketing, and professional fees, following recent acquisitions[13](index=13&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk) [Condensed Consolidated Statements of Stockholders' (Deficit) Equity](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20Equity) Stockholders' equity transitioned to a deficit, while common stock shares outstanding increased due to various issuances | Metric | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :--------------------------------------- | :------------------ | :----------------- | :----------------- | | Total Stockholders' (Deficit) Equity | $1,567,472 | $(965,220) | $(1,100,480) | | Common Stock Shares Outstanding | 45,864,503 | 46,230,934 | 52,364,654 | | Additional Paid-in Capital | $39,770,060 | $40,099,285 | $44,174,344 | | Accumulated Deficit | $(38,260,913) | $(41,110,855) | $(45,222,909) | - The company's total stockholders' equity transitioned from a positive balance of **$1.57 million** at December 31, 2024, to a deficit of **$(1.10) million** by June 30, 2025, primarily due to net losses and other comprehensive losses[17](index=17&type=chunk)[18](index=18&type=chunk) - Common stock shares outstanding increased significantly from **45,864,503** to **52,364,654** during the six months ended June 30, 2025, driven by issuances for warrant exercises, acquisitions (GTG Financial), ATM programs, and employee compensation[17](index=17&type=chunk)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show increased usage in operations, positive investing activities, and significant financing inflows | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,602,029) | $(2,550,879) | | Net cash provided by (used in) investing activities | $191,132 | $(79,423) | | Net cash provided by (used in) financing activities | $1,874,264 | $(143,885) | | Net decrease in cash | $(2,536,633) | $(2,774,187) | | Cash - End of Period | $587,311 | $3,682,327 | - Net cash used in operating activities increased to **$(4.60) million** for the six months ended June 30, 2025, from **$(2.55) million** in the prior year, primarily due to higher operating expenses from acquired businesses[20](index=20&type=chunk)[206](index=206&type=chunk) - Net cash provided by financing activities significantly increased to **$1.87 million**, driven by proceeds from common stock issuance (**$3.51 million**) and debt issuance (**$0.16 million**), partially offset by debt payments (**$1.55 million**) and equity issuance costs[20](index=20&type=chunk)[208](index=208&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, business changes, and financial commitments [Note 1 - Organization and Description of Business](index=7&type=section&id=Note%201%20-%20Organization%20and%20Description%20of%20Business) The company transitioned to a technology-driven, AI-powered integrated services model, discontinuing its rental segment - reAlpha Tech Corp. has transitioned from an asset-heavy operational model focused on short-term rentals to a technology-driven, integrated services company, leveraging AI to enhance the homebuying experience[23](index=23&type=chunk)[24](index=24&type=chunk) - The company discontinued its rental segment operations effective December 31, 2024, due to macroeconomic challenges like elevated interest rates and inflated property prices[23](index=23&type=chunk) - Strategic acquisitions of Naamche, AiChat, reAlpha Mortgage, Hyperfast, and GTG Financial have strengthened AI capabilities and diversified revenue streams across real estate brokerage, mortgage brokering, and digital title/escrow services[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=7&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note details the company's accounting policies for accounts receivable, revenue recognition, and other financial aspects - The company applies the Current Expected Credit Losses (CECL) model to accounts receivable, incorporating historical loss experience, current economic conditions, and forward-looking adjustments[39](index=39&type=chunk)[40](index=40&type=chunk) - A new CECL provision of **$59** was recorded as of June 30, 2025, after collecting all previously outstanding receivables attributable to AiChat and releasing the prior reserve[41](index=41&type=chunk)[42](index=42&type=chunk) - Revenue recognition varies by subsidiary: AiChat recognizes license fees over subscription duration and consulting services based on delivery; reAlpha Mortgage and GTG Financial recognize revenue at loan funding; Naamche recognizes revenue over time as tech-driven services are delivered[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 3 - Going Concern](index=9&type=section&id=Note%203%20-%20Going%20Concern) The company faces substantial doubt about its ability to continue as a going concern due to short-term obligations exceeding resources - The company's short-term obligations exceed available resources under current operational plans, raising substantial doubt about its ability to continue as a going concern for the next 12 months[53](index=53&type=chunk)[54](index=54&type=chunk) - Management anticipates continuing operating losses due to growth initiatives and expects to raise capital through additional debt and/or equity financings[54](index=54&type=chunk) - Recent capital raises in July 2025, including **$7 million** in gross proceeds, are expected to mitigate going concern conditions, with a majority allocated to repaying outstanding debt[54](index=54&type=chunk) [Note 4 - Business Combinations](index=10&type=section&id=Note%204%20-%20Business%20Combinations) This note details the acquisition of GTG Financial, including stock issuance and measurement period adjustments - The acquisition of GTG Financial, Inc. was completed on February 20, 2025, involving the issuance of **700,055 shares** of common stock valued at approximately **$1.29 million**[57](index=57&type=chunk) - A measurement period adjustment of **$835,866** related to the GTG Financial acquisition resulted in a corresponding reduction to goodwill, primarily due to finalizing the equity issuance valuation[57](index=57&type=chunk)[66](index=66&type=chunk) [Note 5 - Property and Equipment, Net](index=10&type=section&id=Note%205%20-%20Property%20and%20Equipment,%20Net) Net property and equipment decreased significantly, primarily due to vehicle disposals, with reduced depreciation expense | Category | June 30, 2025 Net Book Value | December 31, 2024 Net Book Value | | :------------------------- | :----------------------------- | :------------------------------- | | Computer | $41,283 | $18,621 | | Furniture and fixtures | $10,045 | $28,641 | | Vehicles | $0 | $55,376 | | Total | $51,328 | $102,638 | - Total net property and equipment decreased by approximately **50%** from **$102,638** at December 31, 2024, to **$51,328** at June 30, 2025, largely due to the disposal of vehicles[59](index=59&type=chunk)[60](index=60&type=chunk) - Depreciation expense for the six months ended June 30, 2025, was **$17,781**, a significant decrease from **$140,784** in the comparable period of 2024[61](index=61&type=chunk) [Note 6 - Capitalized Software Development Costs, Work In Progress](index=10&type=section&id=Note%206%20-%20Capitalized%20Software%20Development%20Costs,%20Work%20In%20Progress) The company impaired capitalized software due to discontinued development, resulting in a zero net carrying value - During the six months ended June 30, 2025, the company impaired the carrying amount of capitalized software by **$105,900** due to discontinued development and obsolescence[62](index=62&type=chunk)[63](index=63&type=chunk) | Metric | June 30, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Capitalized software development costs, work in progress | $0 | $105,900 | [Note 7 - Goodwill and Intangible Assets](index=11&type=section&id=Note%207%20-%20Goodwill%20and%20Intangible%20Assets) Goodwill increased due to the GTG Financial acquisition, with no impairment identified after an interim test | Metric | January 1, 2025 Balance | June 30, 2025 Balance | | :--------------------------------------- | :---------------------- | :-------------------- | | Goodwill (Technology Services) | $4,211,166 | $6,171,918 | | Goodwill acquired, GTG Financial | N/A | $2,799,523 | | Goodwill measurement period adjustment | N/A | $(838,771) | - Goodwill increased to **$6.17 million** as of June 30, 2025, from **$4.21 million** at January 1, 2025, primarily due to the GTG Financial acquisition, partially offset by measurement period adjustments[66](index=66&type=chunk) | Intangible Asset | June 30, 2025 Net Carrying Value | | :------------------------- | :------------------------------- | | Developed technology | $1,495,557 | | Trademarks and trade names | $1,605,521 | | Customer relationships | $71,005 | | Total | $3,172,083 | - The company performed an interim goodwill impairment test as of June 30, 2025, and determined no impairment was present[69](index=69&type=chunk) [Note 8 - Notes Payable](index=11&type=section&id=Note%208%20-%20Notes%20Payable) Total notes payable decreased due to repayments, with the secured promissory note fully repaid post-quarter end | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Secured promissory note to Streeterville Capital, LLC | $5,455,000 | $5,455,000 | | Less: Repayment (cash and shares of common stock) | $(1,410,000) | — | | Less: Unamortized debt issuance costs and original issue discount | $(303,122) | $(545,624) | | Total notes payable | $3,741,878 | $4,909,376 | - Total notes payable decreased to **$3.74 million** as of June 30, 2025, from **$4.91 million** at December 31, 2024, primarily due to repayments of **$1.41 million** on the secured promissory note to Streeterville Capital, LLC[71](index=71&type=chunk)[73](index=73&type=chunk) - Subsequent to June 30, 2025, the outstanding balance of approximately **$4.47 million** under the Note was fully repaid on July 23, 2025, using cash on hand and proceeds from recent equity offerings, including a **9%** prepayment penalty[74](index=74&type=chunk) [Note 9 - Related Party Transactions](index=12&type=section&id=Note%209%20-%20Related%20Party%20Transactions) The company has outstanding related party loans from its CEO, a board member, and an entity controlled by a board member's spouse - As of June 30, 2025, the company had outstanding related party loans totaling approximately **$330,787** from AiChat's CEO, a board member, and Sea Easy Capital Ltd. (an entity controlled by a board member's spouse)[76](index=76&type=chunk) | Related Party Loan | June 30, 2025 Outstanding Balance | | :--------------------------------------- | :-------------------------------- | | AiChat's CEO (Kester Poh) | ~$104,028 | | Board member (Balaji Swaminathan) | ~$49,113 | | Sea Easy Capital Ltd. (SEA) | ~$177,646 | | Total Short Term Loans - Related Parties | $258,239 | | Total Other Long Term Loans - Related Parties | $22,514 | [Note 11 - Deferred Liabilities, Current Portion](index=13&type=section&id=Note%2011%20-%20Deferred%20Liabilities,%20Current%20Portion) Deferred liabilities significantly increased due to deferred consideration from an acquisition and deferred revenue | Metric | December 31, 2024 | June 30, 2025 | | :--------------------------------------- | :------------------ | :---------------- | | Balance as on December 31, 2024 | $1,534,433 | N/A | | Deferred Revenue - AiChat | — | $37,036 | | Deferred Consideration – GTG Financial | — | $1,344,750 | | Balance as on June 30, 2025 | N/A | $2,916,219 | - Deferred liabilities increased significantly to **$2.92 million** as of June 30, 2025, from **$1.53 million** at December 31, 2024, primarily due to deferred consideration from the GTG Financial acquisition (**$1.34 million**) and deferred revenue from AiChat (**$37,036**)[79](index=79&type=chunk)[80](index=80&type=chunk) [Note 12 – Embedded Derivative Liability](index=13&type=section&id=Note%2012%20%E2%80%93%20Embedded%20Derivative%20Liability) Embedded derivative liabilities were recorded for preferred stock and a media-for-equity transaction, measured at fair value - The company recorded embedded derivative liabilities of **$4.75 million** as of June 30, 2025, related to Series A Preferred Stock issued in the GTG Financial acquisition and the MMC media-for-equity transaction[81](index=81&type=chunk)[84](index=84&type=chunk) - These liabilities represent the fair value of shortfall settlement features, measured using the Black-Scholes option pricing model, with a total increase in fair value of **$215,204** recognized from the prior quarter[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) | Derivative Liability | June 30, 2025 Fair Value | | :--------------------------------------- | :----------------------- | | Embedded Derivative Liability – GTG acquisition | $253,134 | | Embedded Derivative Liability – MMC transaction | $4,492,500 | | Total | $4,745,634 | [Note 13 - Preferred Stock Liability](index=14&type=section&id=Note%2013%20-%20Preferred%20Stock%20Liability) Preferred stock issued in acquisitions is classified as a liability due to redemption and shortfall settlement features - The company issued **264,063 shares** of Series A Preferred Stock with a stated value of **$20** per share in connection with the GTG Financial acquisition and the MMC transaction[86](index=86&type=chunk) - These shares are classified as liabilities under U.S. GAAP due to redemption features and shortfall settlement provisions, with a total net value of **$249,458** as of June 30, 2025[87](index=87&type=chunk)[88](index=88&type=chunk) | Preferred Stock Liability | June 30, 2025 Net Value | | :--------------------------------------- | :---------------------- | | Preferred stock liability – GTG Financial acquisition | $15,632 | | Preferred stock liability – MMC transaction | $184,277 | | Accrued interest on preferred stock | $49,549 | | Total | $249,458 | [Note 14 - Other Long-Term Loans](index=14&type=section&id=Note%2014%20-%20Other%20Long-Term%20Loans) Other long-term loans decreased due to repayments on term loan facilities and the sale of a vehicle | Loan Type | June 30, 2025 Balance | December 31, 2024 Balance | | :------------------------- | :-------------------- | :---------------------- | | Term Loan Facility | $164,595 | $210,866 | | Vehicle Loan | $0 | $48,188 | | Less: Interest Reserve | $(11,670) | $(17,933) | | Total | $152,925 | $241,121 | - Other long-term loans decreased to **$152,925** as of June 30, 2025, from **$241,121** at December 31, 2024, primarily due to repayments on term loan facilities and the sale of a Naamche-owned vehicle[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 15 - Stockholders' Equity (Deficit)](index=14&type=section&id=Note%2015%20-%20Stockholders'%20Equity%20(Deficit)) This note details common and preferred stock outstanding, equity incentive plans, warrant transactions, and ATM programs - As of June 30, 2025, there were **52,364,654 shares** of common stock and **264,043 shares** of Series A Preferred Stock issued and outstanding[91](index=91&type=chunk) - The 2022 Equity Incentive Plan has **2,891,118 shares** available for issuance as of June 30, 2025, and **99,100 shares** were issued to employees during the three months ended June 30, 2025[92](index=92&type=chunk) - The company granted **840,743 Restricted Stock Units (RSUs)** during the six months ended June 30, 2025, with **790,743** remaining outstanding after forfeitures, subject to two-year time-based vesting[97](index=97&type=chunk)[98](index=98&type=chunk) - A warrant inducement transaction on April 6, 2025, resulted in the exercise of **4,218,751** existing warrants for cash at a reduced price of **$0.75** per share, generating approximately **$3.1 million** in gross proceeds, and the issuance of **8,437,502** new warrants[101](index=101&type=chunk) - The company utilized At-The-Market (ATM) programs, issuing **160,879 shares** for **$231,235** gross proceeds under the AGP Sales Agreement (terminated March 29, 2025) and **317,702 shares** for **$107,094** net proceeds under the Wainwright ATM program[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 16 - Commitments and Contingencies](index=16&type=section&id=Note%2016%20-%20Commitments%20and%20Contingencies) The company has deferred cash consideration obligations, contingent liabilities, and is involved in ongoing litigation - The company is obligated to pay deferred cash consideration of **$1.34 million** for the GTG Financial acquisition in three tranches, with the first payment not yet made as of June 30, 2025[113](index=113&type=chunk) - Contingent consideration liabilities for Naamche, GTG Financial, and reAlpha Mortgage totaled **$1.96 million** as of June 30, 2025, with an **$81,000** gain recognized from an increase in the fair value of reAlpha Mortgage's contingent consideration[116](index=116&type=chunk)[118](index=118&type=chunk) - The company is involved in ongoing litigation with GEM Yield Bahamas Limited (GYBL) regarding the enforceability and exercise price adjustment of GEM Warrants, with an appeal pending and a separate lawsuit filed by GYBL[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Note 17 - Segment Reporting](index=18&type=section&id=Note%2017%20-%20Segment%20Reporting) The company operates as one technology services segment, with performance assessed at a consolidated level by the CEO - The company's operations are organized into one operating and one reportable segment: technology services, which includes mortgage, real estate, and technology product lines[123](index=123&type=chunk) - The Chief Executive Officer, as the Chief Operating Decision Maker (CODM), reviews financial information at a consolidated level and assesses performance based on net income (loss)[123](index=123&type=chunk)[124](index=124&type=chunk) [Note 18 - Discontinued Operations](index=18&type=section&id=Note%2018%20-%20Discontinued%20Operations) The company fully discontinued its rental business segment due to lack of future revenue potential and funding - The company fully discontinued its rental business segment operations (Rhove) during the year ended December 31, 2024, due to a lack of future revenue potential and funding[127](index=127&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Rhove Related Assets - Current Assets | $53,476 | $56,931 | | Rhove Related Liabilities - Current Liabilities | $0 | $0 | | Discontinued Operating Loss (Six Months Ended June 30) | $0 (2025) | $(1,710) (2024) | [Note 19 - Subsequent Events](index=19&type=section&id=Note%2019%20-%20Subsequent%20Events) Post-quarter events include significant capital raises through ATM programs and equity offerings, and full debt repayment - Subsequent to June 30, 2025, the company issued **2,474,402 shares** through its ATM program, generating net proceeds of approximately **$837,664**[131](index=131&type=chunk) - On July 2, 2025, the company satisfied a **$350,000** redemption payment to Streeterville by issuing **1,267,656 shares** of common stock[132](index=132&type=chunk) - A best-efforts public offering on July 18, 2025, raised gross proceeds of **$2.0 million** from the sale of **13,333,334 shares** and accompanying warrants[133](index=133&type=chunk) - A registered direct offering and concurrent private placement on July 22, 2025, raised gross proceeds of **$5.0 million** from the sale of **14,285,718 shares** and unregistered warrants[135](index=135&type=chunk) - On July 23, 2025, the company fully repaid its secured promissory note to Streeterville for approximately **$4.47 million**, including a **9%** prepayment penalty, extinguishing all related obligations[136](index=136&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITIONS%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition, operational results, strategic transition to an AI-powered platform, liquidity, and macroeconomic impacts [Business Overview](index=20&type=section&id=Business%20Overview) reAlpha Tech Corp. is developing an AI-powered homebuying platform, integrating realty, mortgage, and title services - reAlpha Tech Corp. is developing an AI-powered, end-to-end homebuying platform named 'reAlpha' to offer a more affordable and streamlined homeownership experience[142](index=142&type=chunk) - The platform integrates AI-driven tools like 'Claire' (an AI agent) and a 'Loan Officer Assistant' to automate tasks, provide tailored property recommendations, and offer realty, mortgage brokering, and digital title/escrow services[143](index=143&type=chunk)[150](index=150&type=chunk) - The company offers a commission refund model, allowing homebuyers to receive up to **75%** of buy-side brokerage commissions when utilizing all three integrated services (realty, mortgage, title/escrow)[145](index=145&type=chunk)[151](index=151&type=chunk) - The full reAlpha platform is currently available only in Florida, with mortgage brokering services in **30 U.S. states** and title/escrow services in **3 U.S. states**, with plans for nationwide expansion by the end of 2026[145](index=145&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [Recent Developments](index=22&type=section&id=Recent%20Developments) Recent developments include Nasdaq compliance issues, ATM program sales, warrant inducement, and post-quarter capital raises - The company received notices from Nasdaq regarding non-compliance with the Minimum Bid Price Requirement (**$1** per share) and the Minimum Market Value of Listed Securities Requirement (**$35 million**), with compliance periods until October 1, 2025, and December 29, 2025, respectively[154](index=154&type=chunk)[155](index=155&type=chunk) - An At-The-Market (ATM) program with Wainwright allowed the sale of **2,792,104 shares** for aggregate net proceeds of approximately **$944,759** as of July 18, 2025[157](index=157&type=chunk) - A warrant inducement transaction on April 6, 2025, generated approximately **$2.9 million** in net proceeds from the exercise of existing warrants at a reduced price, and issued new warrants[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - The company increased its ownership in AiChat to **100%** on June 30, 2025, in exchange for **$240,000** in common stock shares to be issued by December 1, 2025[161](index=161&type=chunk) - Subsequent to the quarter, the company completed a public offering (**$1.56 million** net proceeds) and a registered direct offering with a concurrent private placement (**$4.5 million** net proceeds) in July 2025[166](index=166&type=chunk)[169](index=169&type=chunk) - The secured promissory note to Streeterville Capital, LLC, with an initial principal of **$5.46 million**, was fully repaid on July 23, 2025, for approximately **$4.47 million**, including a **9%** prepayment penalty[170](index=170&type=chunk)[171](index=171&type=chunk) [Impact of Macroeconomic Conditions, Cyclicality and Seasonality on our Business](index=24&type=section&id=Impact%20of%20Macroeconomic%20Conditions,%20Cyclicality%20and%20Seasonality%20on%20our%20Business) Macroeconomic conditions, including inflation and high mortgage rates, continue to constrain the cyclical real estate market - U.S. inflation remained above the Federal Reserve's **2%** target (**2.3%-2.7%**) from April to June 2025, leading the Fed to maintain the target federal funds rate at **4.25%-4.50%**[172](index=172&type=chunk) - Elevated 30-year fixed mortgage rates (high-**6%** range, averaging **6.77%** in June 2025) and limited housing inventory continue to constrain affordability and weigh on home purchase activity and mortgage origination volume[173](index=173&type=chunk) - The residential real estate market is cyclical and seasonal, typically peaking in spring/summer and slowing in fall/winter, which can cause variability in operating results[174](index=174&type=chunk) [Critical Accounting Policies](index=24&type=section&id=Critical%20Accounting%20Policies) No material changes occurred in the company's critical accounting policies during the three months ended June 30, 2025 - There have been no material changes to the company's critical accounting policies or methods during the three months ended June 30, 2025[177](index=177&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the three and six months ended June 30, 2025 [Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024](index=24&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Three%20Months%20Ended%20June%2030,%202024) Revenue significantly increased, but operating expenses also surged, leading to a widened loss for the quarter | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :------------------------- | :-------------- | :-------------- | :--------- | | Revenue | $1,252,381 | $62,353 | 1909% | | Cost of revenue | $630,916 | $18,250 | 3357% | | Gross profit | $621,465 | $44,103 | 1309% | | Operating expense | $4,710,595 | $1,253,498 | 276% | | Operating loss | $(4,089,130) | $(1,209,395) | 238% | | Other expense | $20,886 | $268,046 | -92% | | Loss from continuing operations before tax | $(4,110,016) | $(1,477,441) | 178% | - Revenue increased by **1,909%** to **$1.25 million**, driven by **$1.01 million** from mortgage brokerage transactions (reAlpha Mortgage and GTG Financial) and **$158,660** from AiChat's AI conversational technology[178](index=178&type=chunk) - Operating expenses surged by **276%** to **$4.71 million**, primarily due to **$1.54 million** in salaries from newly acquired businesses, **$1.48 million** in marketing and advertising, and **$440,101** in professional and legal fees related to capital raising activities[180](index=180&type=chunk) [Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024](index=25&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202024) Revenue saw substantial growth, but operating expenses also rose significantly, contributing to a larger net loss | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :------------------------- | :-------------- | :-------------- | :--------- | | Revenue | $2,178,016 | $82,779 | 2531% | | Cost of revenue | $1,037,884 | $36,499 | 2744% | | Gross profit | $1,140,132 | $46,280 | 2363% | | Operating expense | $7,651,521 | $2,488,704 | 207% | | Operating loss | $(6,511,389) | $(2,442,424) | 167% | | Other expense | $448,979 | $453,223 | -1% | | Loss from continuing operations before tax | $(6,960,368) | $(2,895,647) | 140% | - Revenue increased by **2,531%** to **$2.18 million**, with **$1.76 million** from mortgage brokerage transactions and **$268,212** from AiChat's AI technologies[182](index=182&type=chunk) - Operating expenses rose by **207%** to **$7.65 million**, driven by **$2.60 million** in salaries from acquisitions, **$2.00 million** in marketing, and **$1.95 million** in professional and legal services (including **$440,101** for capital raising)[184](index=184&type=chunk) [Non-GAAP Financial Measures](index=25&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA as a non-GAAP measure to evaluate operating performance, excluding certain non-cash items - The company uses Adjusted EBITDA as a non-GAAP financial measure to evaluate operating performance and facilitate comparisons, excluding interest expense, depreciation, amortization, changes in fair value, share-based compensation, and other non-cash/non-recurring items[187](index=187&type=chunk)[189](index=189&type=chunk) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(4,110,016) | $(1,478,312) | $(6,960,368) | $(2,897,357) | | Adjusted EBITDA | $(3,474,092) | $(1,147,511) | $(5,286,098) | $(2,236,601) | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces liquidity challenges, relying on future equity or debt financing, despite recent capital raises - As of June 30, 2025, the company had approximately **$0.58 million** in cash and cash equivalents, down from **$3.1 million** at December 31, 2024[193](index=193&type=chunk) - The company does not believe it has sufficient working capital to meet financial needs for the 12-month period following June 30, 2025, and expects to fund operations through additional equity or debt financing[193](index=193&type=chunk) - Recent capital raises, including **$985,448** from the ATM program, **$3.1 million** from warrant inducement, and **$7.0 million** gross from July 2025 equity offerings, are intended to increase liquidity[196](index=196&type=chunk)[197](index=197&type=chunk) - Following the recent capital raises and full repayment of the Streeterville Note, the company estimates cash and cash equivalents will be sufficient to fund operating expenses and capital expenditure requirements until the end of October 2025[198](index=198&type=chunk) [Contractual Commitments and Obligations](index=27&type=section&id=Contractual%20Commitments%20and%20Obligations) The company has deferred cash consideration obligations for an acquisition and recently repaid a secured promissory note - The secured promissory note to Streeterville Capital, LLC, with an initial principal of **$5.46 million**, was fully repaid on July 23, 2025, for approximately **$4.47 million**, including a **9%** prepayment penalty, eliminating all future cash payment obligations under the note[201](index=201&type=chunk)[202](index=202&type=chunk) - The company is obligated to pay **$1.34 million** in deferred cash consideration for the GTG Financial acquisition in three tranches, with no payments made to date, and the unpaid balance will accrue **4%** interest annually after 180 days from the closing date[203](index=203&type=chunk) - Failure to pay the GTG Financial cash portion in full by the 180th day could allow the seller to rescind the acquisition, potentially impacting the business[203](index=203&type=chunk) [Cash Flows](index=28&type=section&id=Cash%20Flows) Cash flows reflect increased operating cash usage, positive investing activities, and significant financing inflows | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,602,029) | $(2,550,879) | | Net cash provided by (used in) investing activities | $191,132 | $(79,423) | | Net cash provided by (used in) financing activities | $1,874,264 | $(143,885) | - Net cash used in operating activities increased to **$(4.60) million** due to higher operating expenses from acquired businesses, including salaries, marketing, and legal fees[206](index=206&type=chunk) - Net cash provided by investing activities turned positive at **$191,132**, primarily due to the integration of GTG Financial, which added **$349,529** in cash[207](index=207&type=chunk) - Net cash provided by financing activities significantly increased to **$1.87 million**, driven by proceeds from ATM programs, warrant exercises, and debt issuance, partially offset by debt repayments and equity issuance costs[208](index=208&type=chunk) [Off-Balance Sheet Transactions](index=28&type=section&id=Off-Balance%20Sheet%20Transactions) The company does not have any off-balance sheet transactions to disclose - The company does not have any off-balance sheet transactions[209](index=209&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, the company is exempt from providing market risk disclosures - The company is exempt from providing quantitative and qualitative disclosures about market risk as a smaller reporting company[210](index=210&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting [Disclosure Controls and Procedures](index=28&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[212](index=212&type=chunk) [Changes in Internal Control over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during the quarter ended June 30, 2025 - There have been no material changes in internal control over financial reporting during the quarter ended June 30, 2025[213](index=213&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=29&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) Control systems provide reasonable, not absolute, assurance and are subject to inherent limitations and potential circumvention - Management acknowledges that control systems provide only reasonable, not absolute, assurance and are subject to inherent limitations such as faulty judgments, simple errors, circumvention by individuals or collusion, and management override[214](index=214&type=chunk) PART II - OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other required disclosures [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section details ongoing legal disputes with GEM Yield Bahamas Limited regarding GEM Warrants, including lawsuits and counterclaims - The company filed a lawsuit against GYBL on November 1, 2024, seeking rescission of GEM Warrants or a declaratory judgment on their exercise price adjustment, which was dismissed by the Court on March 14, 2025, and is currently under appeal[216](index=216&type=chunk) - GYBL filed a separate lawsuit against the company, asserting breach of GEM Warrants and seeking monetary damages, specific performance, and legal costs, to which the company filed a motion to dismiss[217](index=217&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates risk factors, including operating losses, going concern doubts, Nasdaq compliance, regulatory issues, and market dependency - The company has a history of operating losses, with a net loss of **$4.11 million** for the quarter ended June 30, 2025, and an accumulated deficit of **$45.22 million**, raising substantial doubt about its ability to achieve and sustain profitability[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The company is at risk of delisting from Nasdaq due to non-compliance with the Minimum Bid Price Requirement (**$1** per share) and the Minimum Market Value of Listed Securities Requirement (**$35 million**), with compliance deadlines in October and December 2025[224](index=224&type=chunk)[225](index=225&type=chunk) - The company is permanently barred from raising capital in Massachusetts due to a Consent Order, which could limit its access to capital markets if enforceable[232](index=232&type=chunk) - Financial results are highly dependent on macroeconomic conditions (e.g., interest rates, inflation) and the cyclical/seasonal nature of the U.S. residential real estate market, which can cause significant fluctuations in revenue[234](index=234&type=chunk)[239](index=239&type=chunk) - Ongoing litigation with GYBL could result in a significant downward adjustment of GEM Warrants' exercise price, additional expenses, and diversion of management's time, materially affecting financial position and operations[246](index=246&type=chunk)[247](index=247&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=33&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds have occurred that were not previously reported - No unregistered sales of equity securities or use of proceeds have occurred that were not previously reported in a Form 8-K[251](index=251&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=33&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is not applicable to the company - This item is not applicable[252](index=252&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=33&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - This item is not applicable[253](index=253&type=chunk) [ITEM 5. OTHER INFORMATION](index=33&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[254](index=254&type=chunk) [ITEM 6. EXHIBITS](index=33&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, agreements, and certifications - The exhibits include various corporate documents such as the Second Amended and Restated Certificate of Incorporation, Bylaws, and Certificate of Designation of Series A Convertible Preferred Stock[255](index=255&type=chunk) - Key agreements listed are the Secured Promissory Note, Form of Inducement Letter, and Exchange Agreement with Streeterville Capital, LLC[255](index=255&type=chunk)[256](index=256&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15d-14(a) and Section 1350) are included, along with Inline XBRL documents[256](index=256&type=chunk)