Reliance Global Group, Inc. [RELIW] Filings

10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-40020

RELIANCE GLOBAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida

46-3390293

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

300 Blvd. of the Americas, Suite 105 Lakewood, NJ 08701

(Address of principal executive offices) (Zip Code)

732-380-4600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	RELI	The Nasdaq Capital Market
Series A Warrants	RELIW	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company, in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

At November 13, 2023, the registrant had 2,473,859 shares of common stock, par value $0.086 per share, outstanding.

TABLE OF CONTENTS

PART I
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	32
Item 4. Controls and Procedures.	32
PART II
Item 1. Legal Proceedings.	32
Item 1A. Risk Factors.	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	33
Item 3. Defaults Upon Senior Securities.	33
Item 4. Mine Safety Disclosures.	33
Item 5. Other Information.	33
Item 6. Exhibits	33

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	September 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash	$	1,777,348		$	505,410
Restricted cash		1,409,909			1,404,359
Accounts receivable		1,190,780			994,321
Accounts receivable, related parties		21,078			18,292
Accounts receivable		21,078			18,292
Other receivables		813			11,464
Prepaid expense and other current assets		299,522			245,535
Current assets - discontinued operations		-			85,998
Total current assets		4,699,450			3,265,379
Property and equipment, net		145,962			162,767
Right-of-use assets		878,672			1,018,952
Investment in NSURE, Inc.		-			900,000
Intangibles, net		11,675,526			13,439,369
Goodwill		14,287,099			14,287,099
Other non-current assets		23,283			23,284
Other assets - discontinued operations		-			5,330,879
Total assets	$	31,709,992		$	38,427,729

Current liabilities:
Accounts payable and other accrued liabilities	$	999,785		$	951,382
Short term financing agreements		114,394			154,017
Current portion of loans payables, related parties		336,479			1,422,249
Other payables		64,101			101,113
Current portion of long-term debt		1,353,961			1,118,721
Current portion of leases payable		348,492			339,937
Current portion of earn-out liability		687,197			2,153,478
Current liabilities - discontinued operations		-			1,600,636
Total current liabilities		3,904,409			7,841,533

Loans payable, related parties, less current portion		258,785			122,266
Convertible debt, related parties, less current portion		161,855			1,500,000
Long term debt, less current portion		11,380,567			12,349,673
Leases payable, less current portion		561,041			714,068
Earn-out liability, less current portion		-			556,000
Warrant liabilities		1,580,380			6,433,150
Noncurrent liabilities - discontinued operations		-			-
Total liabilities		17,847,037			29,516,690
Stockholders’ equity:
Preferred stock, $0.086 par value; 750,000,000 shares authorized and 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Common stock, $0.086 par value; 133,333,333 shares authorized and 2,304,375 and 1,219,573 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		198,155			104,883
Additional paid-in capital		43,639,612			35,798,139
Accumulated deficit		(29,974,812	)		(26,991,983	)
Total stockholders’ equity		13,862,955			8,911,039
Total liabilities and stockholders’ equity	$	31,709,992		$	38,427,729

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
Revenue
Commission income	$	3,275,583		$	2,821,768		$	10,410,591		$	8,727,614
Total revenue		3,275,583			2,821,768			10,410,591			8,727,614

Operating expenses
Commission expense		796,001			695,020			2,701,601			2,143,562
Salaries and wages		1,775,919			1,629,947			5,230,871			4,899,171
General and administrative expenses		1,368,126			1,117,027			4,430,177			5,080,991
Marketing and advertising		117,752			63,371			364,184			148,057
Depreciation and amortization		652,839			651,395			1,962,066			1,901,140
Total operating expenses		4,710,637			4,156,760			14,688,899			14,172,921

Loss from operations		(1,435,054	)		(1,334,992	)		(4,278,308	)		(5,445,307	)

Other income (expense)
Interest expense		(386,562	)		(281,201	)		(1,126,281	)		(586,251	)
Interest related parties		(32,475	)		(1,730	)		(125,104	)		(5,189	)
Interest expense		(32,475	)		(1,730	)		(125,104	)		(5,189	)
Other (expense) income, net		(310	)		(4,909	)		3,650			(4,414	)
Recognition and change in fair value of warrant liabilities		1,715,397			7,919,315			4,389,120			32,398,530
Total other income		1,296,050			7,631,475			3,141,385			31,802,676

(Loss) income from continuing operations before tax	$	(139,004	)		6,296,483		$	(1,136,922	)		26,357,370
(Loss) income from discontinued operations before tax		-			(174,390	)		(1,845,904	)		(399,585	)
Net (loss) income		(139,004	)		6,122,093			(2,982,827	)		25,957,784

Basic (loss) earnings per share
Continuing operations	$	(0.05	)	$	5.44		$	(0.47	)	$	18.16
Discontinued Operations	$	-		$	(0.15	)	$	(0.75	)	$	(0.37	)
Basic (loss) earnings per share	$	(0.05	)	$	5.29		$	(1.22	)	$	17.79

Diluted (loss) earnings per share
Continuing operations	$	(0.05	)	$	4.83		$	(0.47	)	$	15.93
Discontinued operations	$	-		$	(0.14	)	$	(0.75	)	$	(0.33	)
Diluted (loss) earnings per share	$	(0.05	)	$	4.69		$	(1.22	)	$	15.60

Weighted average number of shares outstanding - Basic		3,021,455			1,156,939			2,436,015			1,069,534
Weighted average number of shares outstanding - Diluted		3,021,455			1,304,878			2,436,015			1,219,822

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Shares		Amount		Shares		Amount		capital			Receivable		Deficit			Total
	Nine Months Ended September 30, 2023
	Preferred Stock				Common Stock				Additional paid-in			Subscription		Accumulated
	Shares		Amount		Shares		Amount		capital			Receivable		Deficit			Total

Balance, December 31, 2022		-	$	-		1,219,573	$	104,883	$	35,798,139		$	-	$	(26,991,983	)		8,911,039

Common shares issued for earnout liabilities		-		-		109,358		9,404		973,074			-		-			982,478

Conversion of convertible debt, related parties		-		-		66,743		5,740		639,260			-		-			645,000

Round up of shares due to reverse split		-		-		15,336		1,300		(5,946	)		-		-			(4,646	)

Shares issued in 2023 private placement		-		-		155,038		13,333		3,433,151			-		-			3,446,484

Share-based compensation		-		-		-		-		43,797			-		-			43,797

Net loss		-		-		-		-		-			-		(1,788,538	)		(1,788,538	)

Balance, March 31, 2023		-		-		1,566,048		134,660		40,881,475			-		(28,780,521	)		12,235,614

Common shares issued for services		-		-		112,557		9,681		368,314			-		-			377,995

Common shares issued for earnout liabilities		-		-		352,260		30,294		1,403,406			-		-			1,433,700

Shares issued for vested stock awards		-		-		22,219		1,911		(1,911	)		-		-			-

Share-based compensation		-		-		-		-		35,367			-		-			35,367

Net loss		-		-		-		-		-			-		(1,055,287	)		(1,055,287	)

Balance, June 30, 2023		-		-		2,053,084		176,546		42,686,651			-		(29,835,808	)		13,027,389

Common shares issued for earnout liabilities						174,610		15,016		463,356								478,372

Common shares issued for vested stock awards						3,017		259		3,510								3,769

Share-based compensation								-		27,779								27,779

Common shares issued for services						400		34		966								1,000

Series B warrant exercise						73,264		6,300		457,350								463,650

Net loss		-		-		-		-					-		(139,004	)		(139,004	)

Balance, September 30, 2023		-		-		2,304,375		198,155		43,639,612			-		(29,974,812	)		13,862,955

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Shares		Amount		Shares			Amount			capital			Receivable			Deficit			Total
	Nine Months Ended September 30, 2022
	Preferred Stock				Common Stock						Additional paid-in			Subscription			Accumulated
	Shares		Amount		Shares			Amount			capital			Receivable			Deficit			Total

Balance, December 31, 2021		-	$	-		730,407		$	62,815		$	27,329,201		$	(20,000,000	)	$	(33,458,145	)	$	(26,066,129	)

Share-based compensation		-		-		-			-			739,960			-			-			739,960

Shares issued due to private placement		9,076		781		178,059			15,313			(16,043	)		20,000,000			-			20,000,051

Shares issued pursuant to acquisition of Medigap		-		-		40,402			3,475			4,759,976			-			-			4,763,451

Exercise of Series A warrants		-		-		25,000			2,150			2,472,850			-			-			2,475,000
Exercise of warrants		-		-		25,000			2,150			2,472,850			-			-			2,475,000

Issuance of prefunded Series C Warrants in exchange for common shares		-		-		(218,462	)		(18,788	)		18,788			-			-			-

Shares issued for vested stock awards		-		-		400			34			(34	)		-			-			-

Net Income		-		-		-			-			-			-			9,340,000			9,340,000

Balance, March 31, 2022		9,076	$

Reliance Global Group, Inc. [RELIW] Filings
Reliance Global Group, Inc. [RELI] Filings
10-Q	[2023-11-13]
10-Q	[2023-08-10]
10-Q	[2023-05-18]
S-1	[2023-04-04]
10-K	[2023-03-30]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-31]
S-1	[2022-02-01]
10-Q	[2021-11-09]
10-Q	[2021-08-17]
10-Q	[2021-05-13]
10-K	[2021-03-24]
S-1	[2020-10-08]

Reliance Global Group, Inc. [RELIW] Filings

Reliance Global Group, Inc. [RELI] Filings