reAlpha Tech announces warrant exercise deal to raise $3.1 million

DUBLIN, Ohio - reAlpha Tech Corp. (NASDAQ:AIRE), a company specializing in real estate technology and artificial intelligence with a current market capitalization of $47.9 million, has entered into definitive agreements for the immediate exercise of certain outstanding warrants. According to InvestingPro data, the company currently trades at $1.04 per share and faces profitability challenges, with a negative EBITDA of $6.23 million in the last twelve months. This move will enable the purchase of approximately 4.2 million shares of common stock at a reduced exercise price of $0.75 per share, lowered from the original $1.44. The transaction is expected to generate gross proceeds of around $3.1 million before deducting fees and estimated expenses. This capital raise comes at a crucial time, as InvestingPro analysis indicates the company operates with a moderate debt level and maintains a current ratio of 0.98, suggesting tight liquidity conditions.

H.C. Wainwright & Co. is serving as the exclusive placement agent for this offering, which is anticipated to close around Tuesday, April 8, 2025, subject to customary closing conditions. The company has disclosed its intention to allocate the net proceeds for general working capital purposes.

In addition to the exercised warrants, reAlpha will issue new unregistered warrants for the purchase of up to 8.4 million shares of common stock. These new warrants will also have an exercise price of $0.75 per share, become exercisable upon stockholder approval, and are set to expire on November 24, 2028.

The offering and the issuance of new warrants are being conducted through a private placement, relying on an exemption from the registration requirements of the Securities Act of 1933. The shares of common stock and the new warrants have not been registered under the Act and are subject to restrictions on their resale in the United States unless registered with the Securities and Exchange Commission (SEC) or an exemption from such registration is applicable.

reAlpha Tech has committed to filing a registration statement with the SEC for the resale of the shares of common stock that will be issued upon exercising the new warrants. Furthermore, the company has adjusted the exercise price for all outstanding November 2023 warrants to match the new reduced price of $0.75 per share.

This press release is a statement of fact and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The sale of these securities will not be lawful in any jurisdiction where such an offer, solicitation, or sale would be prohibited before registration or qualification under the securities laws of that jurisdiction.

reAlpha Tech Corp. is known for developing a commission-free homebuying platform powered by artificial intelligence, aiming to streamline the homebuying experience. While analysts anticipate 5% revenue growth in the coming year, InvestingPro data reveals the company faces significant challenges with a weak overall financial health score of 1.13. This press release contains forward-looking statements regarding the offering’s completion, the satisfaction of closing conditions, stockholder approval, and the intended use of net proceeds. InvestingPro subscribers have access to 13 additional key insights about AIRE’s financial position and market performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

In other recent news, reAlpha Tech Corp. announced the termination of its At the Market Sales Agreement with A.G.P./Alliance Global Partners, effective March 29, 2025. This decision follows the sale of 160,879 shares, generating gross proceeds of $231,235.73. The company also disclosed the departure of Jorge Aldecoa, its former Chief Product Officer, with a separation agreement including a severance payment of $36,667. In legal matters, reAlpha faced a setback as a U.S. District Court dismissed its complaint against GEM Yield Bahamas Limited regarding a warrant dispute, leaving the current terms unchanged. The company is considering an appeal but has not yet determined its next steps. On a positive note, reAlpha expanded its operations by acquiring GTG Financial, Inc., enhancing its mortgage services across 28 states. This acquisition is expected to bolster reAlpha’s AI-powered real estate platform and improve its lending capabilities. Additionally, through its subsidiary AiChat, reAlpha launched advanced AI-powered digital agents to enhance customer service, showcasing its commitment to technological innovation. These developments reflect reAlpha’s ongoing strategic adjustments in both its financial and operational sectors.

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