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)

Core Viewpoint - reAlpha Tech Corp. is expanding its mortgage division into Utah, a rapidly growing market, to enhance its national growth strategy and local presence [1][4]. Group 1: Expansion Strategy - The expansion into Utah is part of reAlpha's national growth strategy, targeting a market with an annual mortgage origination volume exceeding $29 billion [3]. - The company has secured licensing in 30 states, demonstrating significant progress toward its nationwide rollout strategy [4]. Group 2: Leadership and Market Approach - reAlpha Mortgage has appointed industry leader Dave Osofsky, who has 23 years of experience, to lead the expansion and increase loan volume in the region [2]. - The company aims to leverage its AI-enhanced platform and local leadership to improve borrower experience and operational efficiency [3]. Group 3: Product Offering and Technology Integration - reAlpha Mortgage offers a comprehensive suite of mortgage products, including Conventional, VA, FHA, and USDA loans, supported by a broad lender network [3]. - The company is focused on integrating technology across its mortgage operations to streamline the homebuying process, making it faster, simpler, and more affordable for consumers [4][6].

Core Insights - reAlpha Tech Corp. has launched reAlpha Mortgage, integrating real estate and mortgage services under one brand to enhance the homebuying experience [1][5] - The company aims to operate nationally while maintaining a strong local impact, focusing on efficiency, access, and value for customers [2] - A new leadership team has been appointed to drive the growth of reAlpha Mortgage, including Jamie Cavanaugh as CEO and Rocky Billore as Chief Sales Officer [2][3] Company Strategy - The transition to reAlpha Mortgage is part of a strategy to create a seamless, end-to-end experience that combines real estate, mortgage, and title services [5] - The company plans to expand its mortgage services into additional U.S. states and enhance AI integration across its operations [6] Product Offering - reAlpha Mortgage offers a comprehensive range of loan products, including Conventional, VA, FHA, and USDA loans, supported by an extensive lender network [4] - The company aims to transform the mortgage experience to make it faster, simpler, and more affordable through AI-enhanced operations [4] Leadership and Expertise - Christopher Griffith, former CEO of Be My Neighbor Mortgage, has been appointed as SVP of Mortgage, focusing on long-term strategy and innovation [3] - The leadership team is committed to scaling reAlpha's mortgage operations and delivering customer-centric innovations [2] Market Position - reAlpha Tech Corp. is positioned to transform the multi-trillion-dollar U.S. real estate services market through an integrated platform that streamlines transactions [7] - The company employs a strategic, acquisition-driven growth model and proprietary AI infrastructure to build a vertically integrated ecosystem [7]

Core Viewpoint - reAlpha Tech Corp. has fully repaid its secured promissory note, marking a significant milestone that enhances its financial position and operational flexibility [1][3]. Financial Summary - The secured promissory note had a principal balance of $5.45 million with an 8% annual interest rate, originally issued on August 14, 2024, and scheduled to mature on February 14, 2026 [2]. - The company utilized available cash, including proceeds from recent equity offerings, to repay the full outstanding balance on July 23, 2025 [2]. Strategic Implications - The repayment allows reAlpha to accelerate product development and market expansion, as well as pursue strategic acquisitions and partnerships [3]. - With the note fully repaid, reAlpha has strengthened its balance sheet and simplified its capital structure, providing greater financial flexibility for growth initiatives [3]. Company Overview - reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market through an integrated platform that streamlines real estate transactions [5]. - The company aims to build a vertically integrated ecosystem that offers a simpler, smarter, and more affordable path to homeownership [5].

Core Viewpoint - reAlpha Tech Corp. has successfully closed a registered direct offering of 14,285,718 shares of common stock at a price of $0.35 per share, raising approximately $5 million in gross proceeds for working capital and general corporate purposes [1][3] Group 1: Offering Details - The offering included a concurrent private placement of unregistered warrants to purchase an equal number of shares at the same exercise price of $0.35, which are exercisable upon issuance and will expire five years from the effective date of the registration statement [1][2] - The common stock was offered under a "shelf" registration statement declared effective by the SEC on November 26, 2024, and the offering was made only by means of a prospectus [4] Group 2: Use of Proceeds - The net proceeds from the offering are intended for working capital and general corporate purposes, which may include debt repayment, future acquisitions, capital expenditures, and cryptocurrency purchases in line with the company's investment policy [3] Group 3: Company Overview - reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market through an integrated platform that streamlines real estate transactions [7] - The company employs a strategic, acquisition-driven growth model and proprietary AI infrastructure to create a vertically integrated ecosystem aimed at simplifying the path to homeownership [7]

Core Viewpoint - reAlpha Tech Corp. has announced a registered direct offering of 14,285,718 shares of common stock at a price of $0.35 per share, alongside a concurrent private placement of unregistered warrants for the same number of shares at the same exercise price [1][3] Group 1: Offering Details - The gross proceeds from the offering are expected to be approximately $5 million before deducting fees and expenses [3] - The unregistered warrants will be exercisable upon issuance and will expire five years from the effective date of the registration statement [1] - The offering is being conducted under a "shelf" registration statement that was declared effective by the SEC on November 26, 2024 [4] Group 2: Use of Proceeds - The net proceeds from the offering are intended for working capital and general corporate purposes, which may include debt repayment, future acquisitions, capital expenditures, and cryptocurrency purchases [3] Group 3: Company Overview - reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market through an end-to-end platform that integrates brokerage, mortgage, and title services [7] - The company employs a strategic, acquisition-driven growth model and proprietary AI infrastructure to create a vertically integrated ecosystem aimed at simplifying homeownership [7]

Core Viewpoint - reAlpha Tech Corp. has successfully closed a public offering of 13,333,334 shares of common stock at a price of $0.15 per share, along with associated warrants, raising approximately $2 million in gross proceeds for working capital and corporate purposes [1][3]. Group 1: Offering Details - The public offering included Series A-1 and Series A-2 warrants, each with an exercise price of $0.15 per share [1]. - The Series A-1 warrants will expire five years from stockholder approval, while the Series A-2 warrants will expire twenty-four months from stockholder approval [1]. - H.C. Wainwright & Co. served as the exclusive placement agent for the offering [2]. Group 2: Use of Proceeds - The net proceeds from the offering are intended for working capital and general corporate purposes, which may include debt repayment, future acquisitions, capital expenditures, and cryptocurrency purchases [3]. Group 3: Company Overview - reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market through an integrated platform that streamlines real estate transactions [6]. - The company employs a strategic, acquisition-driven growth model and proprietary AI infrastructure to create a vertically integrated ecosystem aimed at simplifying homeownership [6].

Core Viewpoint - reAlpha Tech Corp. has announced a public offering of 13,333,334 shares of common stock at a price of $0.15 per share, along with warrants, aiming to raise approximately $2 million for working capital and corporate purposes [1][3]. Group 1: Offering Details - The public offering includes Series A-1 and Series A-2 warrants, each allowing the purchase of up to 13,333,334 shares at an exercise price of $0.15 [1]. - The Series A-1 warrants will expire five years from stockholder approval, while the Series A-2 warrants will expire in twenty-four months [1]. - The closing of the offering is expected around July 18, 2025, pending customary closing conditions [1]. Group 2: Financial Use of Proceeds - The gross proceeds from the offering are anticipated to be approximately $2 million before deducting fees and expenses [3]. - The net proceeds will be used for working capital, debt repayment, future acquisitions, capital expenditures, and cryptocurrency purchases [3]. Group 3: Company Overview - reAlpha Tech Corp. is an AI-powered real estate technology company focused on transforming the U.S. real estate services market [6]. - The company is developing an integrated platform for real estate transactions, including brokerage, mortgage, and title services [6]. - reAlpha aims to create a vertically integrated ecosystem to simplify and enhance the homeownership process [6].

Core Insights - reAlpha Tech Corp. has launched an AI-powered Internal Loan Officer Assistant aimed at improving operational efficiency and loan processing accuracy within its mortgage division [1][2] - The introduction of this AI tool is part of a broader strategy to enhance mortgage operations, following recent acquisitions that expanded the company's services across 30 U.S. states [2][4] - The AI assistant is designed to automate time-consuming tasks, allowing mortgage professionals to focus on customer service and support more clients [3] Company Developments - Early operational results indicate that the AI Loan Officer Assistant can reduce manual document preparation and reconciliation time by approximately 60% during loan processing [3] - The tool automates one-third of the loan intake process, enabling loan teams to process up to 40 additional loans per month per officer, thus supporting increased loan volumes while maintaining service quality [3] - reAlpha's technology roadmap includes plans to evolve the AI assistant to handle more complex mortgage scenarios and improve processing speed, accuracy, and scalability [4] Industry Trends - The launch aligns with a growing trend in the financial sector where institutions are increasingly adopting AI to lower operational costs and enhance service delivery [4] - Industry data suggests that AI integration in mortgage lending can boost loan origination volumes by up to 50%, cut underwriting cycle times by 50%, and reduce operational costs by 30-50% [4]