{"url_path":"/sec/rmax/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1581091/0001104659-26-057523-index.html","accession_number":"0001104659-26-057523","cik":"0001581091","ticker":"RMAX","issuer_name":"RE/MAX Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1581091/0001104659-26-057523-index.html","primary_entity_key":"0001581091","primary_entity_name":"RE/MAX Holdings, Inc."},"word_count":4136,"has_tables":true,"body_markdown":"**Item 1A. Risk Factors**\n\nFor a discussion of our potential risks and uncertainties, please see “Risk Factors” in our 2025 Annual Report on Form 10-K. Other than as described below, there have been no material changes to the risk factors as disclosed in our 2025 Annual Report on Form 10-K, other than as described below.\n\n**Risks Relating to the Pending Merger**\n\nThe Merger, the pendency of the Merger or our failure to consummate the Merger could have a material adverse effect on our business, results of operations, financial condition and the price of our Class A common stock.\n\nOn April 26, 2026, we entered into an Arrangement Agreement and Plan of Merger (the \"Merger Agreement\") by and among the Company, The Real Brokerage Inc., a company existing under the laws of the Province of British Columbia (\"Real\"), Rome Wildlife, Inc., a Delaware corporation (\"New Wildlife\"), and certain other merger subsidiaries of New Wildlife, pursuant to which New Wildlife will acquire the Company and Real (the \"Merger\"). The Merger is subject to certain closing conditions, including adoption of the Merger Agreement by our stockholders, approval of the Arrangement by Real's shareholders, regulatory approvals, consummation of the RIHI Merger, and such other conditions to completion as set forth in the Merger Agreement. There is no assurance that all of the various conditions will be satisfied, or that the Merger will be completed on the proposed terms, within the expected timeframe, or at all. Our ongoing business may be materially adversely affected by the announcement or the pendency of the Merger, and we would be subject to a number of risks, including the following:\n\n●we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees, agents, franchisees and brokers and maintaining our relationships with existing customers and business partners or obtaining potential new customers and business partners;\n\n●we will be required to pay certain significant costs relating to the Merger, regardless of whether the Merger is consummated, such as legal, accounting, financial advisory, regulatory, printing and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger;\n\n●we are unable to solicit other acquisition proposals during the pendency of the Merger, subject to limited exceptions for certain proposals that constitute or would reasonably be expected to lead to a superior proposal, as set forth in the Merger Agreement;\n\n●while the Merger Agreement is in effect, we are subject to certain restrictions on our business activities, including, among other things, restrictions on our ability to engage in certain kinds of material transactions, declare or pay dividends, repurchase shares, or incur certain indebtedness, which could prevent us from pursuing strategic business opportunities, taking actions with respect to the business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and may as a result materially adversely affect our business, results of operations and financial condition;\n\n●matters relating to the Merger require substantial commitments of time and resources by our management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and\n\n●we may commit significant time and resources to defending against litigation (from our stockholders or otherwise) related to the Merger.\n\nIf the Merger is not consummated, the risks described above may materialize or be worsened, and they may have a material adverse effect on our business, results of operations, financial condition and the price of our Class A common stock, particularly to the extent that the current market price of our Class A common stock reflects an assumption that the Merger will be completed. If the Merger is not consummated, investor confidence could decline, stockholder litigation could be brought against us, our directors and/or officers, relationships with existing and prospective agents, franchisees, customers, service providers, investors, lenders and other business partners may be adversely impacted, we may be unable to attract or retain key personnel, our employees could be distracted and their productivity decline and profitability may be adversely impacted due to costs incurred in connection with the pending Merger. We may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of our shares would return to the prices at which our shares traded prior to the announcement of the proposed Merger. If the Merger is not consummated, including as a result of our stockholders failing to adopt the Merger Agreement or Real's shareholders failing to approve the Arrangement, our stockholders will not receive any Merger Consideration in\n\n39\n\n[Table of Contents](#Toc)\n\nconnection with the Merger. Instead, we will remain a public company, our Class A common stock will continue to be listed and traded on the New York Stock Exchange and registered under the Securities Exchange Act of 1934, as amended, and we will be required to continue to file periodic reports with the SEC. In addition, if the Merger Agreement is terminated under certain specified circumstances, we may be required to pay a termination fee to Real, which could have a material adverse effect on our financial condition and liquidity.\n\nEven if successfully completed, there are certain risks to our stockholders from the Merger, including:\n\n●the per share cash price and the stock election exchange ratio under the Merger Agreement are each fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our Class A common stock or Real's common shares;\n\n●aggregate cash consideration payable to our stockholders is subject to proration within specified minimum and maximum amounts, and therefore stockholders who elect to receive cash may receive a portion of their Merger Consideration in shares of New Wildlife common stock, and stockholders who elect to receive stock may receive a portion of their Merger Consideration in cash;\n\n●the market value of the shares of New Wildlife common stock to be received by our stockholders may fluctuate, and the value of such shares at the time of closing may be less than the value at the time the Merger Agreement was executed or at the time such stockholders make their election;\n\n●while the parties intend for the Merger to qualify as a tax-free reorganization for U.S. federal income tax purposes, there can be no assurance that such qualification will be achieved, and if the Merger were to fail to so qualify, our stockholders could be subject to significant U.S. federal income tax liabilities; and\n\n●following the Merger, our stockholders will hold a minority interest in New Wildlife and will therefore have less influence over the management and policies of the combined company than they currently exercise over the Company.\n\nThe proposed Merger is subject to adoption by our stockholders, approval by Real's shareholders and the satisfaction of other closing conditions, some or all of which may not be satisfied or completed within the expected timeframe, or at all.\n\nThe proposed Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which are beyond our control. Completion of the Merger is subject to a number of closing conditions, including, among others, (1) the adoption of the Merger Agreement by the affirmative vote of the holders of not less than a majority of the issued and outstanding shares of Company common stock, (2) the approval of the Arrangement by the requisite vote of Real's shareholders, (3) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (4) the effectiveness of the registration statement on Form S-4 pursuant to which the shares of New Wildlife common stock to be issued in connection with the Merger and the Arrangement will be registered, (5) the authorization for listing on Nasdaq of the New Wildlife common stock to be issued in the Merger and the Arrangement, (6) the consummation of the RIHI Merger, (7) the obtaining of the Interim Order and Final Order under the Business Corporations Act (British Columbia), (8) the absence of any injunction, order or law prohibiting the Merger or the Arrangement, and (9) the absence of a \"Company Material Adverse Effect\" or a \"Parent Material Adverse Effect\" (each as defined in the Merger Agreement). We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicable). Other developments beyond our control, including, but not limited to, changes in domestic or global economic, political or industry conditions, or changes in U.S. or Canadian regulatory requirements, may affect the timing or success of the Merger. Additionally, under circumstances specified in the Merger Agreement, we or Real may terminate the Merger Agreement, including if the Merger has not closed within nine months after the execution of the Merger Agreement (subject to two automatic extensions of forty-five days each if, on each such date, all of the closing conditions, except those relating to certain regulatory approvals, have been satisfied or waived). Any adverse consequence of the pending Merger could be exacerbated by any delays in completion of the Merger or by the termination of the Merger Agreement.\n\nThe obligation of each party to the Merger Agreement to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all\n\n40\n\n[Table of Contents](#Toc)\n\nmaterial respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger, including covenants by each of the Company and Real to conduct their respective businesses in the ordinary course in all material respects consistent with past practice and to not engage in certain kinds of material transactions prior to closing of the Merger. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, (i) in connection with a change in the recommendation of our Board of Directors, including to enter into an agreement for a Superior Proposal (as defined in the Merger Agreement), (ii) in connection with a change in the recommendation of Real's board of directors, (iii) upon the failure to receive the required approval of the Company's stockholders or Real's shareholders, or (iv) in the event of a material uncured breach by either party of its representations, warranties, covenants or other agreements under the Merger Agreement. Upon termination under certain specified circumstances, a termination fee may be payable by either the Company or Real. As a result, we cannot assure you that the Merger will be completed, even if our stockholders adopt the Merger Agreement and Real's shareholders approve the Arrangement, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected timeframe.\n\nWe will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with our employees, agents, franchisees and other third-party business partners.\n\nOur efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our business, results of operations and financial condition. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following the Merger, including with respect to the integration of the Company's and Real's operations and the future leadership structure of the combined company. A substantial amount of our management's and employees' attention will be directed toward the completion of the Merger and related integration planning and thus be diverted from our day-to-day operations.\n\nUncertainty as to the future could adversely affect our business and our relationships with agents, franchisees and other third parties. For example, certain of our franchisees or agents may decide to leave our network or affiliate with competing brands as a result of the proposed Merger, and prospective franchisees or agents may delay or decline to enter into new franchise agreements or affiliation arrangements with us, which could result in a permanent loss of such franchisees or agents even if the Merger is not consummated. Similarly, brokers and loan originators operating under the Motto Mortgage brand may experience uncertainty regarding the future of the Motto franchise system following the Merger. In addition, third-party vendors, technology partners, referral sources and other business partners may seek to modify, renegotiate or terminate their relationships with us as a result of uncertainty surrounding the Merger. Changes to or termination of existing business relationships could adversely affect our agent count, franchise sales, revenue, earnings and financial condition, as well as the market price of our Class A common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or by the termination of the Merger Agreement.\n\nWhile the Merger is pending and the Merger Agreement is in effect, we are subject to restrictions on our business activities.\n\nWhile the Merger is pending and the Merger Agreement is in effect, we are generally required to conduct our business in the ordinary course in all material respects consistent with past practice during the period between the execution of the Merger Agreement and the earlier of the termination of the Merger Agreement and the effective time of the First Merger. Pursuant to the terms of the Merger Agreement, we are restricted from taking certain specified actions without Real's prior consent, which is not to be unreasonably withheld, conditioned or delayed. These limitations include, among other things, certain restrictions on our ability to amend our organizational documents; acquire other businesses and assets; make certain investments; repurchase, reclassify or issue securities, including shares of our Class A common stock; make loans; declare or pay dividends or other distributions; incur indebtedness; incur capital expenditures; enter into, modify or terminate certain contracts, including certain franchise agreements; change accounting policies or procedures; settle certain litigation; change tax classifications and elections; hire or engage employees and independent contractors or modify compensation or benefits arrangements; grant or modify franchise rights or territory agreements; modify the terms of existing franchise arrangements in a manner that is not in the ordinary course of business; take certain actions relating to intellectual property of the Company; or modify or terminate the TRA other than pursuant to the RIHI TRA Amendment. These restrictions could prevent us from pursuing strategic business opportunities, including potential acquisitions, new franchise development initiatives and other growth investments, and from taking other actions with respect to our business that we may consider advantageous, and may, as a result, materially and adversely affect our business, agent count, franchise sales, revenue, results of operations and financial condition. In particular, restrictions on our ability to\n\n41\n\n[Table of Contents](#Toc)\n\nenter into or modify franchise agreements, adjust agent commission structures, invest in technology initiatives or pursue acquisitions could impair our ability to respond to competitive pressures in the real estate brokerage and franchising industry during the pendency of the Merger. Adverse effects arising from these restrictions during the pendency of the Merger could be exacerbated by any delays in consummation of the Merger or termination of the Merger Agreement.\n\nThe Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us.\n\nThe Merger Agreement contains provisions that make it more difficult for us to sell our business to a party other than Real. These provisions include a general prohibition on us soliciting any acquisition proposal or offer for a competing transaction during the pendency of the Merger. While the Merger Agreement permits our Board of Directors to respond to certain unsolicited proposals that constitute or would reasonably be expected to lead to a superior proposal, and to change its recommendation or terminate the Merger Agreement to enter into an agreement for a superior proposal, the Merger Agreement imposes procedural requirements and limitations on our Board of Directors' ability to do so, including a requirement that we provide Real with prior written notice and an opportunity to negotiate revised terms before our Board of Directors may change its recommendation or authorize the Company to enter into an agreement for a superior proposal. If we terminate the Merger Agreement under certain specified circumstances, including in connection with a change in the recommendation of our Board of Directors in order to enter into an agreement for a superior proposal, we may be required to pay Real a termination fee of $25 million. Similarly, if Real terminates the Merger Agreement under certain specified circumstances, Real may be required to pay a termination fee to the Company of $31 million. In addition, upon termination of the Merger Agreement under certain circumstances relating to the failure to obtain required regulatory approvals, including as a result of certain breaches by Real of its regulatory efforts covenants, expiration of the End Date (as defined in the Merger Agreement) due to the failure to obtain regulatory approvals where all other conditions have been satisfied or waived, or the imposition of a permanent restraint relating to antitrust or competition law, Real would be required to pay the Company a regulatory termination fee of $36 million.\n\nThese provisions might discourage a third party that has an interest in acquiring all or a significant part of the Company from considering or proposing an acquisition, even if the party were prepared to pay consideration with a higher per share value than the value of the Merger Consideration proposed to be received in the Merger, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances. In addition, because the Merger Consideration consists of a mix of cash and shares of New Wildlife common stock (subject to election and proration), comparisons between the Merger Consideration and any competing proposal may be complicated by fluctuations in the trading price of New Wildlife common stock or the common shares of Real prior to the closing of the Merger.\n\nIn certain instances, the Merger Agreement requires us to pay a termination fee to Real, and in certain instances requires Real to pay a termination fee to us, which could affect the decisions of a third party considering making an alternative acquisition proposal.\n\nIn certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, we will be required to pay Real a termination fee of $25 million (the \"Company Termination Fee\"). For example, the Company Termination Fee would be payable if the Merger Agreement is terminated (i) by Real as a result of a change in the recommendation of our Board of Directors, (ii) by the Company in order to enter into an agreement for a superior proposal, or (iii) under certain other circumstances involving the existence of a competing acquisition proposal, in each case as more fully described in the Merger Agreement. Separately, in certain specified circumstances, Real would be required to pay a termination fee of $31 million to the Company, including if the Merger Agreement is terminated as a result of a change in the recommendation of Real's board of directors. In addition, upon termination of the Merger Agreement (i) by the Company for certain breaches by Real of the regulatory efforts covenants in the Merger Agreement, (ii) by the Company or Real at the End Date (as defined in the Merger Agreement) if certain required regulatory approvals have not been obtained but all other conditions to closing have been satisfied or waived (except for those that are to be satisfied at the closing), or (iii) by the Company or Real because of a permanent restraint relating to antitrust or competition law, Real would be required to pay the Company a regulatory termination fee of $36 million.\n\nThe requirement to pay a termination fee could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with us and could discourage a third party from making a competing acquisition proposal or inquiry, including a proposal that would be more favorable to our stockholders than the Merger. In addition, because the Merger Consideration consists of a mix of cash and shares of New Wildlife common stock subject to election and proration, a potential competing acquirer may face additional difficulty in structuring a proposal that our Board of Directors would determine to be a superior proposal after taking into account the termination fee that would become payable.\n\n42\n\n[Table of Contents](#Toc)\n\nIf the Merger Agreement is terminated and we are required to pay the termination fee, such payment could materially and adversely affect our financial condition and liquidity, and could reduce the amount of cash available to fund our operations, service our indebtedness, including under our Senior Secured Credit Facility, and pursue other strategic opportunities. Conversely, if Real is required to pay the termination fee or the regulatory termination fee to the Company, such payment may not fully compensate the Company for the costs incurred and opportunities foregone in connection with the Merger, and the Company would remain subject to the risks described elsewhere in this section relating to the failure to consummate the Merger. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the price of our Class A common stock.\n\nWe may be the target of securities class action and derivative lawsuits and other legal or regulatory proceedings, which could result in substantial costs and may delay or prevent the Merger from being completed.\n\nSecurities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such lawsuits or other legal or regulatory proceedings are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment in any such lawsuits or proceedings could result in monetary damages payable by the Company, which could have a negative impact on our liquidity, results of operations and financial condition. In addition, the pendency of such litigation could create uncertainty and negatively affect our relationships with agents, franchisees and other business partners, and could impair our ability to recruit and retain employees.\n\nThe Merger involves a complex, multi-step transaction structure, including the RIHI Merger, the First Merger, the Second Merger and the Arrangement, as well as the concurrent RIHI TRA Amendment, any of which could become the subject of legal challenge. Lawsuits or other proceedings may be brought challenging, among other things, the adequacy of the disclosures in our proxy statement/prospectus on Form S-4, the process conducted by our Board of Directors, the terms of the Merger Agreement, alleged breaches of fiduciary duties by our directors and/or officers, or the fairness of the Merger Consideration, including the allocation between cash and New Wildlife common stock and the proration mechanics. Similarly, Real's shareholders may bring proceedings in connection with the Arrangement under Canadian law, which could independently delay or prevent the consummation of the overall transaction.\n\nAdditionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the proposed Merger, then that injunction may delay or prevent the proposed Merger from being completed, which may exacerbate the other risks described herein and adversely affect our business, results of operations and financial condition. Any such delay could also result in the Merger not being consummated before the Outside Date (as defined in the Merger Agreement), which could give rise to termination rights under the Merger Agreement. Even if we are ultimately successful in defending against such claims, the costs and distraction of litigation during the pendency of the Merger could materially and adversely affect our business, results of operations and financial condition, as well as the price of our Class A common stock."}