reAlpha Tech Corp. Completes Acquisition of reAlpha Asset Management Inc.

TL;DR

reAlpha Tech Corp. just bought out its own asset management arm for 1M shares.

AI Summary

On September 8, 2024, reAlpha Tech Corp. announced the completion of its acquisition of 100% of the outstanding equity interests in reAlpha Asset Management Inc. This transaction involved the issuance of 1,000,000 shares of reAlpha Tech Corp. common stock to the sellers. The company also reported on other events and unregistered sales of equity securities.

Why It Matters

This acquisition consolidates reAlpha Tech Corp.'s control over its asset management subsidiary, potentially streamlining operations and strategic direction.

Risk Assessment

Risk Level: medium — The issuance of a significant number of shares for an acquisition can dilute existing shareholders and indicates a substantial transaction that warrants careful monitoring.

Key Numbers

• 1,000,000 — shares (Issued to acquire reAlpha Asset Management Inc.)

Key Players & Entities

• reAlpha Tech Corp. (company) — Registrant and acquirer
• reAlpha Asset Management Inc. (company) — Acquired entity
• 1,000,000 (dollar_amount) — Number of shares issued in the acquisition
• September 8, 2024 (date) — Date of the reported event

FAQ

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share AIRE The Nasdaq Stock Mar
• $6,000,000 — rs an aggregate purchase price of up to $6,000,000, subject to the adjustments described b
• $1,500,000 — quisition Agreement, consisting of: (i) $1,500,000 in cash paid on the Closing Date, with
• $1.31 — f restricted Common Stock at a price of $1.31 per share, calculated based on the volu
• $3,000,000 — ares"); and (iii) up to an aggregate of $3,000,000 in potential earn-out payments, payable
• $500,000 — nts, payable in three tranches of up to $500,000, $1,000,000 and $1,500,000, respectivel
• $1,000,000 — le in three tranches of up to $500,000, $1,000,000 and $1,500,000, respectively, in cash o

Filing Documents

• ea0213865-8k_realpha.htm (8-K) — 43KB
• ea021386501ex2-1_realpha.htm (EX-2.1) — 229KB
• ea021386501ex99-1_realpha.htm (EX-99.1) — 18KB
• ex99-1_001.jpg (GRAPHIC) — 3KB
• 0001213900-24-076696.txt ( ) — 527KB
• aire-20240908.xsd (EX-101.SCH) — 3KB
• aire-20240908_lab.xml (EX-101.LAB) — 33KB
• aire-20240908_pre.xml (EX-101.PRE) — 22KB
• ea0213865-8k_realpha_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Acquisition of Debt Does Deals, LLC (d/b/a Be My Neighbor) On September 8, 2024 (the "Closing Date"), reAlpha Tech Corp. (the "Company") entered into a Membership Interest Purchase Agreement (the "Acquisition Agreement"), with Debt Does Deals, LLC (d/b/a Be My Neighbor), a Texas limited liability company ("Be My Neighbor"), Christopher Bradley Griffith and Isabel Williams (each, a "Seller," and collectively, the "Sellers"), pursuant to which the Company acquired from the Sellers 100% of the membership interests of Be My Neighbor, a mortgage brokerage company, that were outstanding immediately prior to the execution of the Acquisition Agreement (the "Acquisition"). In exchange for all of the membership interests of Be My Neighbor outstanding immediately prior to the execution of the Acquisition Agreement, and pursuant to the terms and subject to the conditions of the Acquisition Agreement, the Company agreed to pay the Sellers an aggregate purchase price of up to $6,000,000, subject to the adjustments described below to each of the Earn-Out Payments (as defined below) provided in the Acquisition Agreement, consisting of: (i) $1,500,000 in cash paid on the Closing Date, with each Seller receiving a cash amount in proportion to each of their membership interest percentage in Be My Neighbor; (ii) $1,500,000 in restricted shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), or 1,146,837 shares of restricted Common Stock at a price of $1.31 per share, calculated based on the volume weighted average price of the Common Stock as reported on the Nasdaq Capital Market for the seven (7) consecutive trading days ending on the trading day immediately prior to the Closing Date, to be issued within 90 days from the Closing Date and with each Seller receiving an amount of shares of Common Stock in proportion to each of their membership interest percentage in Be My Neighbor (the "Buyer Share

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. The information included in Item 1.01 of this Form 8-K is incorporated by reference into this Item 2.01 to the extent required.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information included in Item 1.01 of this Form 8-K is incorporated by reference into this Item 3.02 to the extent required. The Shares issuable under the Acquisition Agreement, when issued, will be issued pursuant to an exemption from registration provided by Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Securities Act") because such issuances will not involve a public offering, the recipient will take the securities for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients are sophisticated investors. The Shares are subject to transfer restrictions, and the book-entry records evidencing the Shares contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. On August 28, 2024, pursuant to agreements entered into with certain service providers, the Company issued an aggregate of 83,000 shares of Common Stock for the services rendered to the Company, which were issued pursuant to an exemption from registration provided by Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act because such issuances did not involve a public offering, the recipient took the securities for investment and not resale, the Company took appropriate measures to restrict transfer, and the recipients are sophisticated investors. The securities are subject to transfer restrictions, and the book-entry records evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act an

01 Other Events

Item 8.01 Other Events. On September 9, 2024, the Company issued a press release announcing the transaction described in Item 1.01 of this Form 8-K. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference. The information set forth and incorporated into this Item 8.01 of this Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 8.01 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company's filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. 2

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (a) Financial statements of businesses acquired. The Company has determined that the Acquisition will not constitute an acquisition of a significant amount of assets (as defined in Instruction 4 of Item 2.01) and, as such, financial statements contemplated by Item 9.01 of Form 8-K are not required to be reported by Form 8-K with respect to the Acquisition. (b) Pro forma financial information. The Company has determined that the Acquisition will not constitute an acquisition of a significant amount of assets (as defined in Instruction 4 of Item 2.01) and, as such, pro forma financial information contemplated by Item 9.01 of Form 8-K is not required to be reported by Form 8-K with respect to the Acquisition. (d) Exhibits Exhibit Number Description 2.1*+ Membership Interest Purchase Agreement, dated as of September 8, 2024, among reAlpha Tech Corp., Debt Does Deals, LLC (d/b/a Be My Neighbor), Christopher B. Griffith and Isabel Williams. 99.1** Press Release, dated September 9, 2024. 104* Cover Page Interactive Data File (embedded within the Inline XBRL document). * Filed herewith. ** Furnished herewith. + Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: September 9, 2024 reAlpha Tech Corp. By: /s/ Giri Devanur Giri Devanur Chief Executive Officer 4

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