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Item 5. Other Information

2024-08-14 compared with 2024-04-19 · 150 added, 25 removed, 16 unchanged (92% of the section changed)

Other Information

of the Company’s directors or officers adopted , modified or terminated a Rule 10b-5 trading arrangement or a non-Rule 10b-5

trading arrangement during the fiscal quarter ended March 31, 2024, as such terms are defined under Item 408(a) of Regulation

Exhibit Number

of the Company’s directors or officers adopted , modified or terminated a Rule 10b-5 trading arrangement

or a non-Rule 10b-5 trading arrangement during the fiscal quarter ended June 30, 2024, as such terms are defined under Item 408(a) of Regulation

Disclosure Pursuant

to Item 1.01 of Current Report on Form 8-K – Entry into a Material Definitive Agreement.

August 14, 2024, reAlpha Tech Corp.

(the “Company”) entered into a note purchase agreement (the “Purchase Agreement”)

with Streeterville Capital, LLC (“Lender”) pursuant to which the Company issued and sold to the Lender a secured promissory

note in the original principal amount of $5,455,000 (the “Note”).

The Note carries an original issue discount of $435,000

and the Company agreed to pay $20,000 to the Lender to cover its legal fees, accounting costs, due diligence, monitoring and other transaction

costs, each of which were deducted from the proceeds of the Note received by the Company resulting in a purchase price received by the

Company of $5,000,000.

under the Note accrues at a rate of 8% per annum.

The unpaid amount of the Note, any interest, fees, charges and late fees are due eighteen

months following the date of issuance.

The Company may prepay all or any portion of the outstanding balance of the Note.

If the Company

elects to prepay the Note in part, it will be required to pay to the Lender an amount in cash equal to 109% of the portion of the outstanding

balance the Company elects to prepay.

Commencing seven months after the date of issuance of the Note and

at any time thereafter until the Note is paid in full, the Lender will have the right to redeem up to $545,000 under the Note per month,

which amount will be due and payable in cash within three trading days of the Company’s receipt of a redemption notice from the

Once the Company has made five redemption payments in cash, all subsequent redemption payments paid in cash will be subject to

a 9% redemption premium.

Company’s obligations under the Note and the other transaction documents are secured by all of the non-foreign assets of the Company

and all of the assets of Roost Enterprises, Inc.

(“Roost”), a wholly owned subsidiary of the Company, owned as of the Note’s

issuance date and/or acquired by the Company or Roost, as applicable, at any time while the Note’s obligations are still outstanding,

pursuant to security agreements and intellectual security agreements, each dated as of August 14, 2024, by and between the Company and

the Lender and Roost and the Lender, respectively (the “Security Agreements” and the “IP Security Agreements”).

In addition, the following subsidiaries of the Company each guaranteed all of the Company’s obligations under the Note and the other

transaction documents by way of a guaranty, dated as of August 14, 2024 (the “Guaranty”):

reAlpha Acquisitions, LLC, reAlpha

Acquisitions Churchill, LLC, reAlpha Realty, LLC, Rhove Real Estate 1, LLC, Roost and Naamche Inc.

any time following the occurrence of a Major Trigger Event or Minor Trigger Event (each as defined in the Note), the Lender may, upon

prior written notice to the Company, increase the outstanding balance of the Note by 10% for each occurrence of any Major Trigger Event

and 5% for each occurrence of any Minor Trigger Event (the “Trigger Effect”), provided that the Trigger Effect may only be

applied three times with respect to Major Trigger Events and three times with respect to Minor Trigger Events and the Trigger Effect does

not apply to any default by the Company or any failure by the Company to observe or perform any covenant, obligation, condition or agreement

of the Company under the Note or the other transaction documents in any material respect that is not specifically set forth in the Note

or the Purchase Agreement.

to certain exceptions described below, if the Company fails to cure a Trigger Event within ten trading days following the date of transmission

of a written demand notice by the Lender, the Trigger Event will automatically become an Event of Default (as defined in the Note), provided

that the Company will only have a five trading day cure period with respect to Trigger Events resulting from the Company’s failure

to pay any principal, interest, fees, charges, or any other amount when due and payable under the Note.

Following the occurrence of any

Event of Default, the Lender may, upon written notice to the Company, (i) accelerate the Note, with the outstanding balance of the Note

following application of the Trigger Effect (the “Mandatory Default Amount”) becoming immediately due and payable in cash,

and (ii) cause interest on the outstanding balance of the Note beginning on the date the applicable Event of Default occurred to accrue

at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law.

Notwithstanding the foregoing,

upon the occurrence of certain Trigger Events related to bankruptcy or insolvency, immediately and without notice, an Event of Default

will be deemed to have occurred and the outstanding balance of the Note as of the date of the occurrence of such Bankruptcy-Related Trigger

Event will become immediately and automatically due and payable in cash at the Mandatory Default Amount.

Purchase Agreement provides that at any time during the 12-month period beginning on the date of the issuance and sale of the Note (the

“Closing Date”), the Lender will have the right, but not the obligation, with the Company’s prior written consent, to

reinvest up to an additional $5,000,000 in the aggregate in the Company in one or more notes on the same terms and conditions as the Note.

addition, the Purchase Agreement provides that, until 90 days following repayment of the Note in full, with respect to the Company and

its securities, the Lender and all its affiliates will not solicit proxies, propose or attempt any mergers or restructurings, influence

the Company’s management, join any group regarding the Company’s securities, or take any action necessitating a public announcement

by the Company.

to the terms of the Purchase Agreement, until all of the Company’s obligations under the Note and all other transaction documents

are paid and performed in full, the Company agreed to comply with certain covenants, including but not limited to the following:

Company agreed not to make any Restricted Issuances (as defined in the Purchase Agreement and described below) or grant any lien, security

interest or encumbrance, other than Permitted Liens (as defined in the Security Agreement) on any of its or its subsidiaries’ assets,

in each case without the Lender’s prior written consent, which consent may be granted or withheld in the Lender’s sole discretion,

and (ii) the Company agreed not to enter into any agreement or otherwise agree to any covenant, condition, or obligation that locks up,

restricts in any way or otherwise prohibits the Company, other than such lock ups, restrictions or prohibitions with a term of no more

than 75 days in connection with one transaction, or series of transactions, per any 12 month period:

(a) from entering into a variable

rate transaction with the Lender or any of the Lender’s affiliates, or (b) from issuing Company securities to the Lender or any

of the Lender’s affiliates.

to certain exceptions set forth in the Purchase Agreement, Restricted Issuances include the incurrence or guaranty of any debt obligations

other than trade payables in the ordinary course of business, the issuance of any convertible securities in which the number of shares

that may be issued pursuant to a conversion right, or the conversion price, varies with the market price of the Company’s common

stock, the issuance of any securities with reset provisions and the issuance of any securities in connection with Section 3(a)(9) exchange,

a Section 3(a)(10) settlement, or any other similar settlement or exchange.

Restricted Issuances do not include ATM facilities, commercial

bank loans or lines of credit, leases and any transactions contemplated by agreements or instruments outstanding on the date of the Purchase

Purchase Agreement provides that the Company may use the proceeds received thereunder for the acquisition of up to three businesses or

a portion thereof, provided that such acquisitions occur within 180 days of the Closing Date.

The Company agreed to cause any business

acquired by the Company while the Note is outstanding to enter into a Guaranty, Security Agreement and IP Security Agreement within five

trading days of completion of the acquisition.

Purchase Agreement also contains a “most favored nation” provision under which the Company agreed that so long as the Note

is outstanding, upon any issuance by the Company of any debt security with any economic term or condition more favorable to the holder

of such security or with a term in favor of the holder of such security that was not similarly provided to the Lender, then the Company

shall notify the Lender of such additional or more favorable economic term and such term, at the Lender’s option, shall become a

part of the transaction documents related to the Note for the benefit of the Lender.

Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Maxim Group LLC (“Maxim”),

pursuant to which Maxim agreed to serve as lead placement agent on a “reasonable best efforts basis” in connection with the

sale of the Note and any additional notes (the “Placement”).

Pursuant to the Placement Agency Agreement, the Company agreed

to pay Maxim a cash fee equal to 3.75% of the gross proceeds received by the Company for the Note and any additional notes and to reimburse

Maxim for its reasonable accountable expenses, including legal fees, up to an aggregate amount of $10,000.

In addition, if within nine

months of a closing of a sale of the Note or any additional notes, the Company completes any financing of equity or equity-linked capital-raising

activity with, or receives proceeds from, any of the investors that were introduced to the Company by Maxim in connection with the Placement,

then the Company will pay Maxim a cash fee of 3.75% of the proceeds received from such financing.

foregoing description of the Note, the Purchase Agreement, the Security Agreements, the IP Security Agreements, the Guaranty and the Placement

Agency Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note, the Purchase

Agreement, the Security Agreements, the IP Security Agreements, the Guaranty and the Placement Agency Agreement, copies of which are filed

as Exhibits 4.4, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7 to this report, respectively, and are incorporated herein by reference.

Pursuant to Item 2.03 of Current Report on Form 8-K – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance

Sheet Arrangement of a Registrant.

information set forth in Item 5 under “Disclosure Pursuant to Item 1.01 of Current Report on Form 8-K – Entry into a Material

Definitive Agreement” of this report, to the extent required by Item 2.03 of Current Report on Form 8-K, is incorporated herein

by reference.

Second Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.1 of Form S-11 filed with the SEC on August 8, 2023).

Second Amended and Restated Bylaws (previously filed as Exhibit 3.2 of Form S-11 filed with the SEC on August 8, 2023).

Michael Frenz’s Offer Letter dated February 1, 2024 (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC on February 1, 2024).

First Amendment to Employment Agreement of Giri Devanur, dated February 1, 2024 (previously filed as Exhibit 10.2 of Form 8-K filed with the SEC on February 1, 2024).

First Amendment to Employment Agreement of Michael J.

Logozzo, dated February 1, 2024 (previously filed as Exhibit 10.3 of Form 8-K filed with the SEC on February 1, 2024).

First Amendment to Employment Agreement of Jorge Aldecoa, dated February 1, 2024 (previously filed as Exhibit 10.4 of Form 8-K filed with the SEC on February 1, 2024).

Amended and Restated Stock Purchase Agreement, dated as of February 2, 2024, among reAlpha Tech Corp., Naamche, Inc.

Ltd., the Sellers and the Sellers’ Representative (previously filed as Exhibit 10.1 of Form 8-K filed with the SEC February 8, 2024).

of Warrant (previously filed as Exhibit 6.3 of Form 1-U filed with the SEC on December 5, 2022).

of Common Warrant (previously filed as Exhibit 4.1 of Form 8-K filed with the SEC on November 21, 2023).

Agency Agreement (previously filed as Exhibit 4.2 of Form 8-K filed with the SEC on November 21, 2023).

Secured Promissory Note, dated as of August 14, 2024.

Note Purchase Agreement, dated as of August 14, 2024, by and between

reAlpha Tech Corp.