ReAlpha Tech ends acquisition of GTG Financial after payment terms unmet

ReAlpha Tech Corp. (NASDAQ:AIRE), a company currently valued at $31.83 million and showing concerning financial health according to InvestingPro metrics, announced Thursday the termination of its agreement to acquire GTG Financial, Inc., following a notice from Glenn Groves, President and CEO of GTG Financial. The company stated it received written notice from Groves exercising his right to rescind the stock purchase agreement dated February 20, 2025, after reAlpha Tech did not pay the required cash portion within 180 days of closing.

Under the original agreement, reAlpha Tech was to acquire 100% of GTG Financial’s outstanding shares for up to $4.2 million. The purchase price included $281,250 in Series A preferred convertible stock, $1,287,000 in restricted common shares, $1,344,750 in cash, and up to $1,287,000 in potential earn-out payments. The agreement specified that the cash portion would be paid in three installments over 180 days from the closing date.

The company disclosed that, due to the notice and in accordance with the agreement, the transaction has been rescinded effective immediately. As a result, reAlpha Tech will return the acquired shares of GTG Financial to Groves, and Groves will return the shares and securities previously issued by reAlpha Tech. The employment agreement between reAlpha Tech and Groves has also been terminated.

Once the rescission is complete, neither party will have further obligations under the agreement or the related employment contract, except for provisions that explicitly survive termination. GTG Financial will no longer be a subsidiary of reAlpha Tech.

This information is based on a statement included in the company’s recent filing with the Securities and Exchange Commission.

In other recent news, reAlpha Tech Corp. reported a staggering 1,909% increase in revenue for the second quarter of 2025, reaching $1.3 million compared to $62,353 in the previous year. This growth was primarily attributed to mortgage brokerage transactions through its subsidiaries, reAlpha Mortgage and GTG Financial. Additionally, the company’s gross profit rose significantly to $621,465 from $44,103 a year earlier. In another development, reAlpha Tech completed a registered direct offering, raising approximately $5 million in gross proceeds by selling 14,285,718 shares of common stock at $0.35 per share. Concurrently, unregistered warrants were issued to purchase an equal number of shares, exercisable immediately and expiring in five years. Meanwhile, Freedom Broker adjusted its price target for reAlpha Tech to $0.50, down from $1.10, while maintaining a Hold rating, citing shareholder dilution and execution risks. Lastly, reAlpha Tech has scheduled its 2025 annual meeting of stockholders for October 8, 2025, with proposal deadlines set.

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