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DUBLIN, Ohio - reAlpha Tech Corp. (NASDAQ:AIRE) announced Tuesday it has closed its previously announced registered direct offering, raising approximately $5 million in gross proceeds before deducting placement agent fees and other expenses. The funding comes at a crucial time, as InvestingPro data shows the company has been quickly burning through cash, with negative free cash flow of $6.81 million in the last twelve months.
The AI-powered real estate technology company sold 14,285,718 shares of common stock at $0.35 per share in an at-the-market offering under Nasdaq rules. In a concurrent private placement, reAlpha issued unregistered warrants to purchase up to an equal number of shares at the same exercise price, which are exercisable immediately and expire in five years. The stock has shown significant volatility, with a 124% return over the past week despite a 75% decline over the previous six months.
H.C. Wainwright & Co. served as the exclusive placement agent for the transaction.
With a current ratio of 0.58, indicating short-term obligations exceed liquid assets, the company plans to use the net proceeds for working capital and general corporate purposes, which may include debt repayment, acquisitions, capital expenditures, and cryptocurrency purchases in accordance with its investment policy.
The common stock was offered through a shelf registration statement on Form S-3 that became effective in November 2024, while the unregistered warrants were issued in a private placement under Section 4(a)(2) of the Securities Act of 1933.
reAlpha Tech Corp. describes itself as developing an end-to-end platform that integrates brokerage, mortgage, and title services for real estate transactions. The company stated in its press release that it aims to create a vertically integrated ecosystem designed to simplify the path to homeownership. With revenue of $1.85 million in the last twelve months and a market capitalization of $59 million, the company currently trades at a high revenue multiple. InvestingPro subscribers can access 14 additional key insights and detailed financial metrics to better evaluate the company’s potential.
In other recent news, reAlpha Tech Corp. has been active with several financial maneuvers. The company announced it has entered into definitive agreements to raise $5 million through a registered direct offering. This deal involves selling 14,285,718 shares of common stock at $0.35 per share, along with issuing unregistered warrants for the same number of shares. Additionally, reAlpha Tech successfully closed a $2 million public offering, which included 13,333,334 shares of common stock and accompanying warrants. The public offering was priced at $0.15 per share, a move that was part of a strategy to raise gross proceeds before expenses.
Furthermore, reAlpha Tech Corp. entered into a waiver agreement with Streeterville Capital, allowing it to adhere to certain standstill provisions related to its upcoming equity offering. This agreement restricts the company from variable rate financings for up to a year and certain equity financings for 60 days post-closing. These developments indicate reAlpha Tech’s strategic efforts in securing financial stability and operational flexibility.
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