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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, whether as a result of new information, future events or otherwise, except as required by law. reAlpha Tech Corp.and Subsidiaries Consolidated Balance Sheet December 31, 2024 and December 31, 2023 December 31,2024 December 31,2023 ASSETS Current Assets Cash $3,123,530 $6,456,370 Accounts receivable 182,425 30,630 Receivable from related parties 12,873 – Prepaid expenses 180,158 242,795 Current assets of Discontinued operations 56,931 88,036 Other current assets 487,181 582,463 Total current assets $4,043,098 $7,400,294 Property and Equipment, at cost Property and equipment, net $102,638 $328,539 Other Assets Investments 215,000 115,000 Other long term assets 31,250 406,250 Intangible assets, net 3,285,406 – Long term assets of discontinued operations – 18,335,701 Goodwill 4,211,166 – Capitalized software development – work in progress 105,900 839,085 TOTAL ASSETS $11,994,458 $27,424,869 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accounts payable $655,765 $431,700 Related party payables 9,287 – Short term loans – related parties – current portion 115,086 – Short term loans – unrelated parties – current portion 666,053 190,095 Accrued expenses 1,164,813 799,624 Current liabilities of Discontinued operations – 47,665 Deferred liabilities, current portion 1,534,433 593,750 Total current liabilities $4,145,437 $2,062,834 Long-Term Liabilities Deferred liabilities, net of current portion – 406,250 Mortgage and other long term loans – related parties – net of current portion 45,052 – Mortgage and other long term loans – unrelated parties – net of current portion 241,121 247,000 Note payable, net of discount 4,909,376 – Other long term liabilities 1,086,000 – Total liabilities $10,426,986 $2,716,084 Stockholders’ Equity (Deficit) Preferred stock, $0.001 par value; 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023 – – Common stock ($0.001 par value; 200,000,000 shares authorized, 45,864,503 shares outstanding as of December 31, 2024; 200,000,000 shares authorized, 44,122,091 shares outstanding as of December 31, 2023) 45,865 44,123 Additional paid-in capital 39,770,060 36,899,497 Accumulated deficit (38,260,913) (12,237,885)Accumulated other comprehensive income 5,011 – Total stockholders’ equity (deficit) of reAlpha Tech Corp. 1,560,023 24,705,735 Non-controlling interests in consolidated entities 7,449 3,050 Total stockholders’ equity (deficit) 1,567,472 24,708,785 TOTAL LIABILITIES AND STOCKOLDERS’ EQUITY $11,994,458 $27,424,869 reAlpha Tech Corp.and Subsidiaries Consolidated Statements of Operations and Comprehensive Loss For the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 For theYear Ended For theEightMonthsEnded For theYear Ended December 31,2024 December 31,2023 April 30,2023 Revenues $948,420 $121,690 $419,412 Cost of revenues 302,084 94,665 293,204 Gross Profit 646,336 27,025 126,208 Operating Expenses Wages, benefits and payroll taxes 2,841,591 710,737 1,114,403 Repairs & maintenance 3,216 51,436 24,794 Utilities 11,545 12,321 32,456 Travel 259,661 46,476 – Dues & subscriptions 118,656 24,426 98,000 Marketing & advertising 793,004 193,612 2,002,884 Professional & legal fees 2,124,946 4,572,026 1,470,306 Depreciation & amortization 282,095 30,029 157,802 Impairment of intangible assets 202,968 – – Other operating expenses 911,268 418,697 159,166 Total operating expenses 7,548,950 6,059,760 5,059,811 Operating Loss (6,902,614) (6,032,735) (4,933,603) Other Income (Expense) Gain on sale of myAlphie – 5,502,774 – Interest expense, net (333,759) (70,119) (169,776)Other expense, net (500,601) (144,764) (334,228)Total other (expense) income (834,360) 5,287,891 (504,004) Net Loss from continuing operations before income taxes (7,736,974) (744,844) (5,437,607)Income tax (expense) benefit 54,260 (204,286) – Net Loss from continuing operations (7,682,714) (949,130) (5,437,607) Discontinued operations (Roost and Rhove) Loss from operations of discontinued Operations (261,242) (302,129) (14,776)Loss on abandonment of discontinued Operations (18,078,393) – – Income tax benefit – Loss on discontinued operations $(18,339,635) $(302,129) $(14,776) Net Loss after income taxes $(26,022,349) $(1,251,259) $(5,452,383) Less: Net (Loss) Income Attributable to Non-Controlling Interests 679 464 726 Net Loss Income Attributable to Controlling Interests $(26,023,028) $(1,251,723) $(5,453,109) Other comprehensive income Foreign currency translation adjustments 5,011 – – Total other comprehensive gain 5,011 – – Comprehensive Loss Attributable to Controlling Interests $(26,018,017) $(1,251,723) $(5,453,109) Basic and diluted loss per share Continuing operations $(0.17) $(0.02) $(0.13)Discontinued operations $(0.41) $(0.01) $(0.00)Net Loss per share – basic and diluted $(0.58) $(0.03) $(0.13) Weighted-average outstanding shares – basic 44,631,577 42,688,666 40,439,190 Weighted-average outstanding shares – diluted 44,631,577 42,688,666 40,439,190 Consolidated Statements of Cash Flows For the Year Ended December 31, 2024 and Eight Months Ended December 31, 2023 and Year Ended April 30, 2023 For theYear Ended For theEightMonthsEnded For theYear Ended December 31,2024 December 31,2023 April 30,2023 Cash Flows from Operating Activities: Net (Loss) income $(26,022,349) $(1,251,259) $(5,452,383)Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 466,691 289,067 157,802 Stock based compensation – employees 207,453 – – Stock based compensation – services 108,730 – – Legal & professional expenses – 3,045,290 Amortization of loan discounts and origination fees 181,875 Write-off of capitalized software costs 145,746 – – Impairment of goodwill and Intangible assets 18,280,947 – – Commitment fee expenses 500,000 – – Loss on sale of properties 301 (85,077) (22,817)Gain on previously held equity (20,663) – – Gain on sale of myAlphie – (5,502,774) – Changes in operating assets and liabilities: Accounts receivable (16,437) 37,490 65,696 Receivable from related parties (12,873) 20,874 (20,874)Payable to related parties (56,241) – – Prepaid expenses 62,637 (226,889) 96,038 Other current assets (19,773) (419,849) (81,689)Accounts payable 58,756 48,928 235,433 Accrued expenses (185,118) 621,815 60,741 Deferred liabilities 278,080 593,750 – Total adjustments 19,980,111 (1,577,375) 490,330 Net cash used in operating activities (6,042,238) (2,828,634) (4,962,053) Cash Flows from Investing Activities: Proceeds from sale of properties 293,307 731,343 1,539,997 Additions to property, plant & equipment (12,533) (40,840) 19,721 Cash paid to acquire business (1,268,630) (50,000) (25,000)Cash paid for equity method investment (50,000) – – Cash used for additions to capitalized software development and intangibles (516,544) (134,400) (452,451)Net cash (used in) provided by investing activities (1,554,400) 506,103 1,082,267 Cash Flows from Financing Activities: Proceeds from issuance of debt 6,155,539 190,095 247,000 Payments of debt (1,164,241) – (1,071,709)Deferred financing costs (727,500) Proceeds from issuance of common stock 7,331,938 4,282,274 Settling subscription issuance of common stock contributions – – – Offering costs paid on issuance of common stock – – (416,312)Net cash provided by financing activities 4,263,798 7,522,033 3,041,253 Net Increase (decrease) in cash (3,332,840) 5,199,502 (838,533) Cash – Beginning of Period 6,456,370 1,256,868 2,095,401 Cash – End of Period $3,123,530 $6,456,370 $1,256,868 Cash $3,123,530 $6,456,370 $1,256,868 Restricted cash – – – Total cash $3,123,530 $6,456,370 $1,256,868 Supplemental disclosure of cash flow information Interest expense $(58,897) $(70,119) $(169,776) Explanatory Notes on Use of Non-GAAP Financial Measures To supplement reAlpha’s financial information presented in accordance with U.S.
Factors that may cause actual results to differ materially from current expectations include, but are not limited to: reAlpha’s ability to pay contractual obligations; reAlpha’s liquidity, operating performance, cash flow and ability to secure adequate financing; reAlpha’s limited operating history and that reAlpha has not yet fully developed its AI-based technologies; whether reAlpha’s technology and products will be accepted and adopted by its customers and intended users; reAlpha’s ability to commercialize its developing AI-based technologies; reAlpha’s ability to successfully enter new geographic markets; reAlpha’s ability to integrate the business of its acquired companies into its existing business and the anticipated demand for such acquired companies’ services; reAlpha’s ability to scale its operational capabilities to expand into additional geographic markets and nationally; the potential loss of key employees of reAlpha and of its subsidiaries; the outcome of certain outstanding legal proceedings against reAlpha; reAlpha’s ability to obtain, and maintain, the required licenses to operate in the U.S.states in which it, or its subsidiaries, operate in, or intend to operate in; reAlpha’s ability to successfully identify and acquire companies that are complementary to its business model; reAlpha’s ability to commercialize its developing AI-based technologies; the inability to maintain and strengthen reAlpha’s brand and reputation; any accidents or incidents involving cybersecurity breaches and incidents; the inability to accurately forecast demand for short-term rentals and AI-based real estate-focused products; the inability to execute business objectives and growth strategies successfully or sustain reAlpha’s growth; the inability of reAlpha’s customers to pay for reAlpha’s services; the inability of reAlpha to obtain additional financing or access the capital markets to fund its ongoing operations on acceptable terms and conditions; the outcome of any legal proceedings that might be instituted against reAlpha; changes in applicable laws or regulations, and the impact of the regulatory environment and complexities with compliance related to such environment; and other risks and uncertainties indicated in reAlpha’s U.S.
As such, reAlpha’s financial statements and related financial notes thereto for the twelve months ended December 31, 2024, reflect the Rhove goodwill impairment as discontinued operations.
