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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 March 31, 2024

 

or

 

☐ 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 May 20, 2024, the registrant had 8,535,591 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. 19
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 24
Item 4. Controls and Procedures. 24
PART II  
Item 1. Legal Proceedings. 25
Item 1A. Risk Factors. 25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 25
Item 3. Defaults Upon Senior Securities. 25
Item 4. Mine Safety Disclosures. 25
Item 5. Other Information. 25
Item 6. Exhibits 26

 

2

 

 

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

   March 31,   December 31, 
   2024   2023 
Assets          
Current assets:          
Cash  $680,138   $1,329,016 
Restricted cash   1,432,847    1,409,895 
Accounts receivable   1,020,879    1,298,863 
Accounts receivable, related parties   6,512    6,603 
Other receivables   29,498    899 
Prepaid expense and other current assets   240,780    333,756 
Total current assets   3,410,654    4,379,032 
           
Property and equipment, net   144,723    139,999 
Right-of-use assets   653,524    739,830 
Intangibles, net   6,611,215    11,042,757 
Goodwill   6,693,099    6,693,099 
Other non-current assets   21,792    20,292 
Total assets  $17,535,007   $23,015,009 
           
Current liabilities:          
Accounts payable and other accrued liabilities  $1,180,328   $835,483 
Short term financing agreements   11,601    56,197 
Current portion of loans payables, related parties   626,676    454,953 
Other payables   23,809    7,414 
Current portion of long-term debt   1,431,875    1,390,766 
Current portion of leases payable   256,340    285,171 
Earn-out liability, current portion   -    159,867 
Total current liabilities   3,530,629    3,189,851 
           
Loans payable, related parties, less current portion   780,915    897,529 
Long term debt, less current portion   10,660,321    11,026,971 
Leases payable, less current portion   427,972    484,335 
Warrant liabilities   173,660    268,993 
Total liabilities   15,573,497    15,867,679 
Stockholders’ equity:          
Preferred stock, $0.086 par value; 750,000,000 shares authorized and 9,076 and 0 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively   -    - 
Common stock, $0.086 par value; 2,000,000,000 shares authorized and 5,692,387 and 4,761,974 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively   489,525    409,509 
Additional paid-in capital   45,820,613    45,739,786 
Accumulated deficit   (44,348,628)   (39,001,965)
Total stockholders’ equity    1,961,510    7,147,330 
Total liabilities and stockholders’ equity  $17,535,007   $23,015,009 

 

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

 

3

 

 

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

   Three Months ended   Three Months ended 
   March 31, 2024   March 31, 2023 
Revenue          
Commission income  $4,082,438   $3,939,103 
Total revenue   4,082,438    3,939,103 
           
Operating expenses          
Commission expense   1,276,542    1,083,326 
Salaries and wages   1,831,662    1,755,894 
General and administrative expenses   1,374,890    837,766 
Marketing and advertising   127,042    136,571 
Change in estimated acquisition earn-out payables   47,761    476,692 
Depreciation and amortization   534,152    653,778 
Asset impairments   3,922,110    - 
Total operating expenses   9,114,159    4,944,027 
           
Loss from operations   (5,031,721)   (1,004,924)
           
Other (expense) income          
Interest expense   (369,677)   (351,823)
Interest expense, related parties   (40,609)   (41,477)
Other income, net   11    3,949 
Recognition and change in fair value of warrant liabilities   95,333    4,266,231 
Total other (expense) income   (314,942)   3,876,880 
           
(Loss) income from continuing operations before tax   (5,346,663)   2,871,956 
Income (loss) from discontinued operations before tax   -    (4,660,494)
Net loss  $(5,346,663)  $(1,788,538)
Basic (loss) earnings per share        
Continuing operations  $(0.81)  $1.92 
Discontinued operations  $-   $(3.07)
Basic (loss) earnings per share  $(0.81)  $(1.15)
           
Diluted loss per share          
Continuing operations  $(0.81)  $(0.59)
Discontinued operations  $-   $(2.18)
Diluted loss per share  $(0.81)  $(2.77)
           
Weighted average number of shares outstanding - basic   6,569,019    1,553,953 
Weighted average number of shares outstanding - diluted   6,569,019    2,185,847 

 

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

 

4

 

 

Reliance Global Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

 

   Shares   Amount   paid-in capital   Deficit   Total 
   Three Months ended March 31, 2024 
   Common stock  

Additional

paid-in

   Accumulated     
   Shares   Amount  

capital

  

deficit

   Total 
                     
Balance, December 31, 2023   4,761,974   $409,509   $45,739,786   $(39,001,965)  $7,147,330 
                          

Common share payments for

earn-outs		   -    -    17,628    -    17,628 
                          
Common shares issued for ATM share sales   187,614    16,135    108,514    -    124,649 
                          
Common shares issued for Abeyance Share conversions   723,264    62,201    (62,201)   -    - 
                          
Common share based compensation   19,535    1,680    16,886         18,566 
                          
Net loss   -    -    -    (5,346,663)   (5,346,663)
                          
Balance, March 31, 2024   5,692,387   $489,525   $45,820,613   $(44,348,628)  $1,961,510 

 

   Three Months ended March 31, 2023 
   Common stock  

Additional

paid-in

   Accumulated     
   Shares   Amount  

capital

  

deficit

   Total 
                          
Balance, December 31, 2022   1,219,573   $104,883   $35,798,139   $(26,991,983)  $8,911,039 
                          
Common shares issued for earn-out liabilities   109,358    9,404    973,074    -    982,478 
                          
Common shares issued to settle loan - Yes Americana   66,743    5,740    639,260    -    645,000 
                          
Round up of Common shares due to reverse split   15,336    1,300    (5,946)   -    (4,646)
                          
Common shares issued in 2023 private placement   155,038    13,333    3,433,151    -    3,446,484 
                          
Common 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 

 

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

 

5

 

 

Reliance Global Group, Inc. and Subsidiaries and Predecessor

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   2024   2023 
   For the 3 months ended March 31, 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net Income  $(5,346,663)  $(1,788,538)
Adjustment to reconcile net income to net cash used in operating activities:          
Depreciation and amortization   534,152    541,873 
Asset impairments   3,922,110    - 
Amortization of debt issuance costs and accretion of debt discount   11,721    11,721 
Non-cash lease expense (income)   1,110    (5,098)
Equity based compensation expense   18,566    43,797 
Recognition and change in fair value of warrant liability   (95,333)   (4,266,231)
Earn-out fair value and write-off adjustments   47,761    476,692 
Change in operating assets and liabilities:          
Accounts receivable   277,984    23,976 
Accounts receivable, related parties   91    6,676 
Other receivables   (28,599)   11,464 
Prepaid expense and other current assets   92,976    81,381 
Other non-current assets   (1,500)   - 
Accounts payables and other accrued liabilities   344,847    125,229 
Other payables   16,395    (294,058)
Net cash used in continuing operating activities   (204,382)   (5,031,116)
           
Net cash adjustments for discontinued operating activities   -    3,966,238 
           
Total net cash used in continuing and discontinued operating activities   (204,382)   (1,064,878)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (12,312)   (6,695)
Purchase of intangibles   (17,132)   (73,894)
           
Net cash used in investing activities   (29,444)   (80,589)
           
Net cash used in discontinued investing activities   -    (15,708)
           
Total net cash used in continuing and discontinued investing activities   (29,444)   (96,297)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Principal repayments of debt   (335,533)   (207,580)
Proceeds of loans payable related parties   -    345,000 
Principal repayments of short term financings   (44,596)   (98,004)
Payments of loans payable, related parties   (136,620)   (412,500)
Proceeds from common shares issued through an at the market offering   124,649    - 
Cash payments on earn-out liability   -    (250,000)
Private Placement of shares and warrants   -    3,446,484 
Net cash used in and provided by continuing financing activities   (392,100)   2,823,400 
           
Net cash used in discontinued financing activities   -    (17,700)
           
Total net cash (used in) and provided by continuing and discontinued financing activities   (392,100)   2,805,700 
           
Net (decrease) and increase in cash and restricted cash   (625,926)   1,644,525 
Cash and restricted cash at beginning of year   2,738,911    1,909,769 
Cash and restricted cash at end of year  $2,112,985   $3,554,294 

 

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

 

6

 

 

Reliance Global Group, Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

 

NOTE 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 

Reliance Global Group, Inc., formerly known as Ethos Media Network, Inc. (“RELI”, “Reliance”, or the “Company”), was incorporated in Florida on August 2, 2013.

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), as the same may be amended from time to time. Capitalized terms not defined in this Form 10-Q refer to capitalized terms as defined in the Form 10-K. Certain prior period accounts and balances in these condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period’s presentation.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of Reliance Global Group, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

 

Liquidity

 

As of March 31, 2024, the Company’s reported cash and restricted cash aggregated balance was approximately $2,113,000, current assets were approximately $3,411,000, while current liabilities were approximately $3,531,000. As of March 31, 2024, the Company had a working capital deficit of approximately $120,000 and stockholders’ equity of approximately $1,962,000. For the three months ended March 31, 2024, the Company presents loss from operations of approximately $5,032,000, which includes a non-cash asset impairment loss of approximately $3,900,000, and net loss of approximately $5,347,000. During the first quarter of 2024 the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) to which the Company may offer and sell, from time to time through the Agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637.

 

Although there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these financial statements with the Securities and Exchange Commission (“SEC”).

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

 

7

 

 

Cash and Restricted Cash

 

Cash and restricted cash reported on our condensed consolidated balance sheets are reconciled to the total shown on our condensed consolidated statements of cash flows as follows:

   March 31, 2024   March 31, 2023 
Cash  $680,138   $2,116,333 
Restricted cash   1,432,847    1,437,961 
Total cash and restricted cash  $2,112,985   $3,554,294 

 

Fair Value of Financial Instruments

 

Level 1 — Observable inputs reflecting quoted prices (unadjusted) in active markets for identical assets and liabilities;

 

Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and

 

Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

 

Warrant Liabilities: The Company re-measures the fair value of its Level 3 warrant liabilities at the balance sheet date, using a binomial option pricing model. The following summarizes the significant unobservable inputs:

   March 31, 2024   December 31, 2023 
Stock price  $0.34   $0.54 
Volatility   135.00%   110.00%
Time to expiry   4.74    4.99 
Dividend yield   0%   0%
Risk free rate   4.20%   3.80%

 

The following reconciles fair value of the liability classified warrants:

   Series B warrant liabilities   Placement agent warrants   Total 
Beginning balance, December 31, 2022  $6,384,250   $48,900   $6,433,150 
Unrealized (gain) loss   (5,534,931)   (48,575)   (5,583,506)
Warrants exercised or exchanged   (580,651)   -    (580,651)
Ending balance, December 31, 2023  $268,668   $325   $268,993 
Unrealized (gain) loss   (95,333)   -    (95,333)
Warrants exercised or exchanged   -    -    - 
Ending balance, March 31, 2024  $173,335   $325   $173,660 

 

8

 

 

Earn-out liabilities: The Company utilizes two valuation methods to value its Level 3 earn-out liabilities, a) the income valuation approach and b) the Monte Carlo simulation method. Key valuation and unobservable inputs for the income valuation approach include contingent payment arrangement terms, projected revenues and cash flows, rates of return, discount rates and probability assessments.

 

The following table reconciles fair value of earn-out liabilities for the periods ended March 31, 2024, and December 31, 2023:

   March 31, 2024   December 31, 2023 
Beginning balance – January 1  $159,867   $2,709,478 
           
Acquisitions and settlements   -    (3,260,403)
           
Period adjustments:          
Fair value changes included in earnings*   47,761    1,716,873 
Earn-out payable in common shares   (17,628)   (159,867)
Earn-out transferred to loans payable, related parties   (190,000)   (846,214)
Ending balance   -    159,867 
Less: Current portion   -    (159,867)
Ending balance, less current portion  $-   $- 

 

* Recorded in the change in estimated acquisition earn-out payables caption on the condensed consolidated statements of operations.

 

Revenue Recognition

 

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

Three Months ended March 31, 2024  Medical   Life   Property and Casualty   Total 
                 
EBS  $229,004   $3,700   $-   $232,704 
USBA   9,758    750    -    10,508 
CCS/UIS   -    -    27,948    27,948 
Montana   442,954    1,209    -    444,163 
Fortman   292,188    1,782    228,815    522,785 
Altruis   2,028,225    6,351    -    2,034,576 
Kush   193,807    -    -    193,807 
Reli Exchange   78,043    42,425    495,479    615,947 
Total  $3,273,979   $56,217   $752,242   $4,082,438 

 

9

 

 

Three Months ended March 31, 2023  Medical   Life     Property and Casualty   Total 
                        
EBS  $233,280   $ 4,100     $-   $237,380 
USBA   11,265     764      -    12,029 
CCS/UIS   -     -      46,770    46,770 
Montana   486,009     4,985      -    490,994 
Fortman   305,877     393      208,145    514,415 
Altruis   1,868,136     -      -    1,868,136 
Kush   320,175     116      -    320,291 
Reli Exchange   71,370     23,381      354,337    449,088 
Total  $3,296,112   $ 33,739     $609,252   $3,939,103 

 

The following are customers representing 10% or more of total revenue:

Insurance Carrier  2024   2023 
   Three Months ended March 31, 
Insurance Carrier  2024   2023 
Priority Health   45%   43%
BlueCross BlueShield   13%   13%

 

No other single customer accounted for more than 10% of the Company’s commission revenues during the three months ended March 31, 2024 and 2023. The loss of any significant customer could have a material adverse effect on the Company. Customers from 2022 were adjusted to reflect percentages of revenue from continued operations.

 

Income Taxes

 

The Company recorded no income tax expense for the three months ended March 31, 2024 and 2023 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

 

As of March 31, 2024 and December 31, 2023, the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.

 

Recently Issued Accounting Pronouncements

 

We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.

 

10

 

 

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS

 

The following table rolls forward the Company’s goodwill balance for the periods ended March 31, 2024, and December 31, 2023, adjusted for discontinued operations.

 

   Goodwill 
December 31, 2022  $14,287,099 
Goodwill impairment recognized as of December 31, 2023   (7,594,000)
December 31, 2023   6,693,099 
March 31, 2024  $6,693,099 

 

Asset Impairments: 

 

During the quarter ended March 31, 2024, certain intangible assets stemming from discontinued operations which were originally transferred to the Company’s operating entity, were determined to have carrying values exceeding fair value, and thus were considered impaired. These intangible assets consisted of, customer relationships, and internally developed and purchased software, with respective net of accumulated amortization asset values of, $3,802,438, $65,411, and $54,261. The write-offs resulted in a total asset impairment charge of $3,922,110, recorded in the asset impairment account on the condensed consolidated statements of operations for the three-month period ended March 31, 2024. 

 

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of March 31, 2024:

 

   Weighted Average Remaining Amortization Period (Years)   Gross Carrying Amount   Accumulated Amortization   Net Carrying Amount 
Trade name and trademarks   1.3   $1,807,188   $(1,408,895)  $398,292 
Internally developed software   3.0    1,694,186    (686,798)   1,007,388 
Customer relationships   6.5    7,372,290    (2,629,691)   4,742,599 
Purchased software   2.2    564,396    (562,844)   1,552 
Video production assets   -    50,000    (50,000)   - 
Non-competition agreements   0.6    3,504,810    (3,043,426)   461,384 
        $14,992,869   $(8,381,654)  $6,611,215 

 

11

 

 

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2023:

 

   Weighted Average Remaining Amortization period (Years)   Gross Carrying Amount   Accumulated Amortization  

Net

Carrying Amount

 
Trade name and trademarks   1.5   $1,807,189   $(1,320,939)  $486,250 
Internally developed software   3.2    1,798,922    (650,029)   1,148,893 
Customer relationships   8.0    11,922,290    (3,193,629)   8,728,661 
Purchased software   0.3    667,206    (618,418)   48,788 
Video Production Assets   -    50,000    (50,000)   - 
Non-competition agreements   0.9    3,504,810    (2,874,645)   630,165 
Trade name and trademarks       $19,750,417   $(8,707,660)  $11,042,757 

 

The following table reflects expected amortization expense as of March 31, 2024, for each of the following five years and thereafter:

Years ending December 31,  Amortization Expense 
2024 (remainder of year)  $1,225,917 
2025   1,395,707 
2026   1,146,882 
2027   807,363 
2028   717,314 
Thereafter   1,318,032 
Total  $6,611,215 

 

12

 

 

NOTE 3. LONG-TERM DEBT AND SHORT-TERM FINANCINGS

 

Long-Term Debt

 

The composition of the long-term debt follows:

  

March 31,

2024

  

December 31,

2023

 
         
           
Oak Street Funding LLC Term Loan   $354,376   $369,602 
Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5%, maturing August 2028, net of deferred financing costs of $9,614 and $10,069 as of March 31, 2024 and December 31, 2023, respectively  $354,376   $369,602 
Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5%, maturing December 2028, net of deferred financing costs of $11,887 and $12,525 as of March 31, 2024 and December 31, 2023, respectively   581,392    604,830 
Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0%, maturing April 2029, net of deferred financing costs of $7,365 and $7,733 as of March 31, 2024 and December 31, 2023, respectively   671,220    695,758 
Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0%, maturing May 2029, net of deferred financing costs of $29,572 and $31,026 as of March 31, 2024 and December 31, 2023, respectively   1,697,935    1,758,558 
Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0%, maturing September 2029, net of deferred financing costs of $34,029 and $35,649 as of March 31, 2024 and December 31, 2023, respectively   2,806,914    2,899,409 
Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5%, maturing May 2032, net of deferred financing costs of $171,406 and $176,762 as of March 31, 2024 and December 31, 2023, respectively   5,980,359    6,089,580 
Long term debt gross   12,092,196    12,417,737 
Less: current portion   (1,431,875)   (1,390,766)
Long-term debt  $10,660,321   $11,026,971 

 

Oak Street Funding LLC – Term Loans and Credit Facilities

Fiscal year ending December 31,  Maturities of Long-Term Debt 
2024 (remainder of year)  $1,055,234 
2025   1,552,772 
2026   1,729,160 
2027   1,925,603 
2028   2,106,978 
Thereafter   3,986,322 
Total   12,356,069 
Less: debt issuance costs   (263,873)
Total  $12,092,196 

 

13

 

 

Short-Term Financings

 

The Company has various short-term notes payable for financed items such as insurance premiums and CRM software purchases. These are normally paid in equal installments over a period of twelve months or less and carry interest rates up to 0.0% and 12.75% per annum. As of March 31, 2024 and December 31, 2023, balances outstanding on short-term financings were $12,000 and $56,000, respectively.

 

NOTE 4. WARRANT LIABILITIES

 

Series B Warrants

 

The Series B Warrant liability effective exercise price as of March 31, 2024 was $0.63, and the outstanding balance, inclusive of 16,303 PAW warrants as of March 31, 2024 and December 31, 2023 was $173,660 and $268,993 respectively, presented in the warrant liability account on the condensed consolidated balance sheets. Pursuant to the terms of the Series B Warrants, during the second quarter of 2024, the Series B Warrant exercise price was reduced from $0.63 per share to $0.26 as a result of dilutive issuances of our Common Stock.

 

For the periods ended March 31, 2024, and 2023, net fair value gains recognized for the Series B Warrants inclusive of the PAW warrants were $95,333 and $4,266,231 respectively, presented in the recognition and change in fair value of warrant liabilities account in the condensed consolidated statements of operations.

 

NOTE 5. EQUITY

 

Common Stock

 

The Company is authorized to issue 2,000,000,000 shares of common stock, $0.086 par value. Each share of issued and outstanding common stock entitles the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

 

During the first quarter of 2024, the Company issued 187,614 shares through its ATM program, 723,264 pursuant to Abeyance Share conversions and 19,535 shares for equity-based compensation.

 

As of March 31, 2024 and December 31, 2023, there were 5,692,387 and 4,761,974 shares of common stock outstanding, respectively.

 

14

 

 

Abeyance Shares

 

During the quarter ended March 31, 2024 upon request from the institutional investor, the Company converted 723,264 Abeyance Shares into Common Stock, thereby issuing 723,264 shares which resulted in a remaining balance of 1,011,000 of outstanding Abeyance Shares as of March 31, 2024.

 

During the second quarter of 2024, upon request from the institutional investor, the Company converted the remaining 1,011,000 Abeyance Shares into Common Stock resulting in zero Abeyance Shares outstanding.

 

Series G Warrants

 

Pursuant to the terms of the Series G Warrants, during the second quarter of 2024, the Series G Warrant exercise price was reduced from $0.6562 per share to $0.26 as a result of sales of our Common Stock pursuant to the ATM Agreement discussed below.

 

At Market Program (the “ATM”)

 

On February 15, 2024, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with EF Hutton LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time through the Agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637 (the “ATM Capacity”). Any Shares offered and sold in the offering will be issued pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-275190), which was declared effective by the Securities and Exchange Commission on November 7, 2023, and the related prospectus supplement and accompanying base prospectus relating to the offering of the Shares. Under the Agreement, the Agent may sell Shares by any method permitted by law and deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The offering of Shares pursuant to the Agreement will terminate upon the earlier of (i) the sale of all of the Shares subject to the Agreement, or (ii) the termination of the Agreement by the Agent or the Company, as permitted therein. The Company shall pay to the Agent in cash, upon each sale of Shares pursuant to the ATM Agreement, an amount equal to 3.5% of the gross proceeds from each sale of Shares. The Company will also reimburse the Agent for certain specified expenses in connection with entering into the Agreement.

 

During the first quarter of 2024 the Company sold 187,614 shares of Common Stock under the ATM Agreement, at a price of $0.6891, receiving proceeds, net of $4,636 in Agent commissions and fees, of $124,649. As of March 31, 2024, the net remaining ATM Capacity was $729,352.

 

Subsequent to the first quarter of 2024, the Company sold an additional 1,320,829 shares of Common Stock under the ATM Agreement, receiving proceeds, net of $15,905 Agent commissions and fees, of $385,052, resulting in net remaining ATM Capacity of, $328,395.

 

Equity-based Compensation

 

Total stock-based compensation expense recorded in general and administrative expenses in the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 is $18,566 and $43,797, respectively.

 

15

 

 

NOTE 6. EARNINGS (LOSS) PER SHARE

 

Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding.

 

If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed in the same manner as basic EPS.

 

The following calculates basic and diluted EPS:

 

   March 31, 2024   March 31, 2023 
   Three Months   Three Months 
   Ended   Ended 
   March 31, 2024   March 31, 2023 
(Loss) income from continuing operations  $(5,346,663

)

  $2,983,861 
Net (loss) income continuing operations, numerator, basic computation   (5,346,663)   2,983,861 
Recognition and change in fair value of warrant liabilities   -    (4,266,231)
Net loss continuing operations, numerator, diluted computation  $(5,346,663)  $(1,282,370)
           
Weighted average common shares, basic   6,569,019    1,553,953 
Effect of series B warrants   -    631,894 
Weighted average common shares, dilutive   6,569,019    2,185,847 
Earnings (loss) per common share – basic  $(0.81)  $1.92 
Earnings (loss) per common share – diluted  $(0.81)  $(0.59)

 

The reversal of the gain on the change fair value of the Series B warrant liability for the three months March 31, 2023 is included in the numerator of the dilutive EPS calculation to eliminate the effects the warrants as the impact is dilutive.

 

Additionally, the following are considered anti-dilutive securities excluded from weighted-average shares used to calculate diluted net loss per common share:

 

  

March 31,

2024

  

March 31,

2023

 
   For the Three Months Ended 
  

March 31,

2024

  

March 31,

2023

 
Shares subject to outstanding common stock options   10,928    10,928 
Shares subject to outstanding Series A warrants   113,000    113,000 
Shares subject to outstanding Series B warrants and PAW’s   882,970    - 
Shares subject to outstanding Series F warrants   -    2,105,264 
Shares subject to outstanding Series G warrants   4,210,529    - 
Shares subject to PA Warrants   52,632    52,632 
Shares subject to unvested stock awards   889    7,709 

 

NOTE 7. LEASES

 

Operating lease expense for the three months ended March 31, 2024 and 2023 was $104,956 and $161,614, respectively. As of March 31, 2024, the weighted average remaining lease term and weighted average discount rate for the operating leases were 3.92 years and 5.98% respectively.

 

16

 

 

Future minimum lease payments under these operating leases consists of the following:

 

Period ending March 31, 2024  Operating Lease Obligations 
2024  $286,739 
2025   119,388 
2026   114,572 
2027   118,009 
2028   121,550 
Thereafter   - 
Total undiscounted operating lease payments   760,258 
Less: Imputed interest   75,946 
Present value of operating lease liabilities  $684,312 

 

NOTE 8. COMMITMENTS AND CONTINGENCIES

 

Legal Contingencies

 

The Company is subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly and no legal contingencies are accrued as of March 31, 2024 and December 31, 2023. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time have been subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.

 

Earn-out liabilities

 

The following outlines changes to the Company’s earn-out liability balances for the respective periods ended March 31, 2024 and December 31, 2023:

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 
Changes due to payments   -    -    -    -    -    - 
Changes due to fair value adjustments   -    47,761    -    -    -    47,761 
Payable in Common Stock   -    (17,628)   -    -    -    (17,628)
Transfers to loans payable, related parties*        -    (190,000)         -    -         -    (190,000)
Ending balance March 31, 2024  $-   $-   $-   $-   $-   $- 

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2022  $667,000   $500,001   $834,943   $147,534   $560,000   $2,709,478 
Payments   (1,433,700)   (750,001)   (929,168)   (147,534)   -    (3,260,403)
Estimate & fair value adjustments   1,612,914    569,734    94,225    -    (560,000)   1,716,873 
Payable in Common Stock   -    (159,867)   -    -    -    (159,867)
Reclass to loans payable, related parties*   (846,214)   -    -    -    -    (846,214)
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 

 

* The Company modified certain contingent earn-out payables by entering into fixed payment arrangements, thus, remaining open balances are reclassified to the loans payable, related parties account on the consolidated balance sheet as of March 31, 2024 and December 31, 2023, respectively.

 

17

 

 

NOTE 9. RELATED PARTY TRANSACTIONS

 

The Company, Southwestern Montana Insurance Center, LLC, a Montana limited liability company (the “Subsidiary”), Southwestern Montana Financial Center, Inc., a Montana corporation (the “Seller”), and Julie A. Blockey (the “Holder”, and collectively with the Company, Subsidiary, and Seller, the “Parties”) entered into a purchase agreement on or around April 1, 2019 (the “Purchase Agreement”), whereby the Company purchased the business and certain assets noted within the Purchase Agreement. On September 29, 2023, the Parties entered into a first amendment to the Purchase Agreement (the “First Amendment”). Pursuant to the First Amendment, the Parties agreed to a total remaining balance of $500,000 owed under the Purchase Agreement. In satisfaction of such remaining balance, the Company agreed to issue 174,610 shares of the Company’s restricted common stock, par value $0.086 per share (the “Common Stock”), to the Holder. The First Amendment also stated that if the Nasdaq official closing price of the Common Stock is less than $2.43 on March 29, 2024 (the “Calculation Date”), then a determination of the Make-Up Amount (as defined herein) will be made. The “Make-Up Amount” means $425,000 minus the Blockey Shares Value (174,610 multiplied by the Nasdaq official closing price of the Common Stock on the Calculation Date). The First Amendment further stated that the Company shall pay the Make-Up Amount with a combination of cash and Company shares. Accordingly, on the Calculation Date, a total Make-Up Amount of $367,496 was determined, and as agreed upon by the Parties, will be payable, $190,000 in cash, and the remaining balance via the issuance of 510,485 of the Company’s Common Stock, subsequently issued to the Seller during April, 2024. The $190,000 cash balance was recorded in the current portion of loans payable related parties account in the condensed consolidated balance sheet as of March 31, 2024.

 

The following table summarizes the loans payable, related parties current and non-current accounts, and the interest expense related parties account as of and for the three-month period ended March 31, 2024 and December 31, 2023, as presented on the condensed consolidated balance sheets and condensed consolidated statements of operations, respectively:

 

  

Current portion of loans payables,

related parties

  

Loans payable, related parties,

less current portion

   Interest expense, related parties 
Related  Party 

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

March 31,

2023

 
Loan to Employee  $14,937   $25,708   $-   $-   $1,730   $1,730 
Barra   244,556    233,504    180,837   $247,055    19,833    39,747 
Fortman   177,183    195,741    600,078    650,473    19,046    - 
Montana   190,000    -    -    -    -    - 
Total  $626,676   $454,953   $780,915   $897,528   $40,609   $41,477 

 

NOTE 10. SUBSEQUENT EVENTS

 

On May 14, 2024, the Company entered into a Stock Exchange Agreement to acquire Spetner Associates (“Spetner”), dated as of May 14, 2024 (the “Stock Exchange Agreement”). Pursuant to the Stock Exchange Agreement, the Company shall: (i) acquire eighty percent (80%) of the issued and outstanding shares of common stock, par value $1.00 per share, of Spetner (the “Spetner Common Stock”) for the amount of $13,714,286 (which shall be paid $8,000,000 in cash, the issuance of certain shares of the Company’s Common Stock, and the Company’s issuance of a promissory note); and (ii) ) have the sole option to acquire the remaining twenty percent (20%) of the Spetner Common Stock for a predetermined amount based on a multiple of EBITDA.

 

18

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

Reliance Global Group, Inc. (the “Company”) operates as a diversified company engaging in business in the insurance market, as well as other related sectors. Our focus is to grow the Company by pursuing an aggressive acquisition strategy, initially and primarily focused upon wholesale and retail insurance agencies.

 

In the insurance sector, our management has extensive experience acquiring and managing insurance portfolios in several states, as well as developing specialized programs targeting niche markets. Our primary strategy is to identify specific risk to reward arbitrage opportunities and develop these on a national platform, thereby increasing revenues and returns, and then identify and acquire undervalued wholesale and retail insurance agencies with operations in growing or underserved segments, expand and optimize their operations, and achieve asset value appreciation while generating interim cash flows.

 

As part of our growth and acquisition strategy, we continue to survey the current insurance market for value-add acquisition opportunities. As of March 31, 2024, we have acquired nine insurance agencies.

 

Over the next 12 months, we plan to focus on the expansion and growth of our business through continued asset acquisitions in insurance markets and organic growth of our current insurance operations through geographic expansion and market share growth, and more specifically, on May 14, 2024, the Company announced the signing of a definitive agreement to acquire Spetner Associates (“Spetner”), a well-established benefits enrollment company that, through its BenManage benefits enrollment company, is a leading provider of voluntary benefits to over 75,000 employees throughout the United States. Pursuant to a Stock Exchange Agreement (the “SE Agreement”), dated as of May 14, 2024, by and among the parties thereto, the Company shall: (i) acquire eighty percent (80%) of the issued and outstanding shares of common stock, par value $1.00 per share, of Spetner (the “Spetner Common Stock”) for the amount of $13,714,286 (which shall be paid in $8 million cash, the issuance of certain shares of common stock of the Company, and the issuance a promissory note of the Company); and (ii) have the sole option to acquire the remaining twenty percent (20%) of the Spetner Common Stock for a predetermined amount based on a multiple of EBITDA.

 

Further, we launched our 5MinuteInsure.com (“5MI”) Insurtech platform during 2021 which expanded our national footprint. 5MI is a high-tech proprietary tool developed by us as a business to consumer portal which enables consumers to instantly compare quotes from multiple carriers and purchase their car and home insurance in a time efficient and effective manner. 5MI taps into the growing number of online shoppers and utilizes advanced artificial intelligence and data mining techniques, to provide competitive insurance quotes in around 5 minutes with minimal data input needed from the consumer. The platform launched during the summer of 2021 and currently operates in 46 states offering coverage with up to 30 highly rated insurance carriers.

 

With the acquisition of Barra, we launched RELI Exchange, our business-to-business (“B2B”) InsurTech platform and agency partner network that builds on the artificial intelligence and data mining backbone of 5MinuteInsure.com. Through RELI Exchange we on-board agency partners and provide them with an InsurTech platform white labeled, designed and branded specifically for their business. This combines the best of digital and human capabilities by providing our agency partners and their customers quotes from multiple carriers within minutes. Since its inception, RELI Exchange has increased its agent roster by more than 130%.

 

Business Operations

 

We’ve adopted a ‘One-Firm’ strategy, whereby the Reliance owned and operated agencies come together to operate as one cohesive unit which allows for efficient and effective cross-selling, cross-collaboration, and the effective deployment of the Company’s human capital. This strategy also aims to enhance the Company’s overall market presence across the U.S., with all business lines operating under the RELI Exchange brand. It’s expected to benefit agents and clients by improving relationships with carriers, leading to better commission and bonus contracts due to higher business volumes. The approach also strengthens the capability of RELI Exchange agency partners in securing diverse insurance policies and fosters increased cross-selling opportunities. This unified strategy positions the company for rapid scaling and integration of accretive acquisitions, expanding its industry reach.

 

Business Trends and Uncertainties

 

The insurance intermediary business is highly competitive, and we actively compete with numerous firms for customers and insurance companies, many of which have relationships with insurance companies, or have a significant presence in niche insurance markets that may give them an advantage over us. Other competitive concerns may include the quality of our products and services, our pricing and the ability of some of our customers to self-insure and the entrance of technology companies into the insurance intermediary business. Several insurance companies are engaged in the direct sale of insurance, primarily to individuals, and do not pay commissions to agents and brokers.

 

Financial Instruments

 

The Company’s financial instruments as of March 31, 2024, consist of derivative warrants. These are accounted at fair value as of inception/issuance date, and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, (non-cash) gain or loss.

 

19

 

 

Insurance Operations

 

Our insurance operations focus on the acquisition and management of insurance agencies throughout the U.S. Our primary focus is to pinpoint undervalued wholesale and retail insurance agencies with operations in growing or underserved segments (including healthcare and Medicare, as well as personal and commercial insurance lines). We then focus on expanding their operations on a national platform and improving operational efficiencies to achieve asset value appreciation while generating interim cash flows. In the insurance sector, our management team has over 100 years of experience acquiring and managing insurance portfolios in several states, as well as developing specialized programs targeting niche markets. We plan to accomplish these objectives by acquiring wholesale and retail insurance agencies it deems to represent a good buying opportunity (as opposed to insurance carriers) as insurance agencies bear no insurance risk. Once acquired, we plan to develop them on a national platform to increase revenues and profits through a synergetic structure. The Company is initially focused on segments that are underserved or growing, including healthcare and Medicare, as well as personal and commercial insurance lines.

 

Insurance Acquisitions and Strategic Activities

 

As of the balance sheet date, we have acquired multiple insurance brokerages (see table below). As our acquisition strategy continues, our reach within the insurance arena can provide us with the ability to offer lower rates, which could boost our competitive position within the industry. In furtherance of this strategy, on May 14, 2024, the Company entered into a Stock Exchange Agreement to acquire Spetner Associates (“Spetner”) for cash, stock and issuance of a promissory note. Spetner is a well-established benefits enrollment company that, through its BenManage benefits enrollment company, is a leading provider of voluntary benefits to over 75,000 employees throughout the United States. Completion of the transaction is subject to standard and stipulated closing. See “Note 10. Subsequent Events” to the financial statements included elsewhere in this Quarterly Report on Form 10-Q.

 

Acquired  

Reliance 100%

Controlled Entity

   Date   Location   Line of Business
                 
U.S. Benefits Alliance, LLC (USBA)   US Benefits Alliance, LLC   October 24, 2018   Michigan   Health Insurance
                 
Employee Benefit Solutions, LLC (EBS)   Employee Benefits Solutions, LLC   October 24, 2018   Michigan   Health Insurance
                 
Commercial Solutions of Insurance Agency, LLC (CCS or Commercial Solutions)   Commercial Coverage Solutions LLC   December 1, 2018   New Jersey   P&C – Trucking Industry
                 
Southwestern Montana Insurance Center, Inc. (Southwestern Montana or Montana)   Southwestern Montana Insurance Center, LLC   April 1, 2019   Montana   Group Health Insurance
                 
Fortman Insurance Agency, LLC (Fortman or Fortman Insurance)   Fortman Insurance Solutions, LLC   May 1, 2019   Ohio   P&C and Health Insurance
                 
Altruis Benefits Consultants, Inc. (Altruis)   Altruis Benefits Corporation   September 1, 2019   Michigan   Health Insurance
                 
UIS Agency, LLC (UIS)   UIS Agency, LLC   August 17, 2020   New York   P&C – Trucking Industry
                 
J.P. Kush and Associates, Inc. (Kush)   Kush Benefit Solutions, LLC   May 1, 2021   Michigan   Health Insurance
                 
Barra & Associates, LLC   RELI Exchange, LLC   April 26, 2022   Illinois   Health Insurance

 

20

 

 

Recent Developments

 

Non-GAAP Measure

 

The Company believes certain financial measures which meet the definition of non-GAAP financial measures, as defined in Regulation G of the SEC rules, provide important supplemental information. Namely our key financial performance metric Adjusted EBITDA (“AEBITDA”) is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. “AEBITDA” is defined as earnings before interest, taxes, depreciation, and amortization (EBITDA) with additional adjustments as further outlined below, to result in Adjusted EBITDA (or “AEBITDA”). The Company considers AEBITDA an important financial metric because it provides a meaningful financial measure of the quality of the Company’s operational, cash impacted and recurring earnings and operating performance across reporting periods. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure to other companies in the industry. AEBITDA is used by management in addition to and in conjunction (and not as a substitute) with the results presented in accordance with GAAP. Management uses AEBITDA to evaluate the Company’s operational performance, including earnings across reporting periods and the merits for implementing cost-cutting measures. We have presented AEBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Consistent with Regulation G, a description of such information is provided below herein and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Report on Form 10-Q under “Results of Operations”.

 

We exclude the following items, and the following items define our non-GAAP financial measure AEBITDA:

 

  ● Interest and related party interest expense: Unrelated to core Company operations and excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Depreciation and amortization: Non-cash charge, excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Goodwill and/or asset impairments: Non-cash charge, excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Equity-based compensation: Non-cash compensation provided to employees and service providers, excluded to provide more meaningful supplemental information regarding the Company’s core cash impacted operational performance.
  ● Change in estimated acquisition earn-out payables: An Earn-out liability is a liability to the seller upon an acquisition which is contingent on future earnings. These liabilities are valued at each reporting period and the changes are reported as either a gain or loss in the change in estimated acquisition earn-out payables account in the consolidated statements of operations. The gain or loss is non-cash, can be highly volatile and overall is not deemed relevant to ongoing operations, thus, it’s excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Recognition and change in fair value of warrant liabilities: This account includes changes to derivative warrant liabilities which are valued at each reporting period and could result in either a gain or loss. The period changes do not impact cash, can be highly volatile, and are unrelated to ongoing operations, and thus are excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Other income (expense), net: Includes non-routine income or expenses and other individually de minimis items and is thus excluded as unrelated to core operations of the company.
  ● Transactional costs: This includes expenses related to mergers, acquisitions, financings and refinancings, and amendments or modification to indebtedness. Thes costs are unrelated to primary Company operations and are excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Non recuring costs: This account includes non-recurring non-operational items, related to costs incurred for a legal suit the Company has filed against one of the third parties involved in the discontinued operations and is excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
  ● Loss from discontinued operations before tax: This account includes the net results from discontinued operations, and since discontinued, are unrelated to the Company’s ongoing operations and thus excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.

 

Refer to the reconciliation of net (loss) income to AEBITDA, illustrated below in tabular format.

 

21

 

 

Results of Operations

 

RELIANCE GLOBAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS ANALYTICS

 

Comparison of the three months ended March 31, 2024 to the three months ended March 31, 2023

 

   March 31, 2024   March 31, 2023   Value Fluctuation   Percent Fluctuation   Explanations
Commission Income  $4,082,438   $3,939,103   $143,335    4%  Increased commission income primarily driven by sustained organic growth.
                        
Commission Expense   1,276,542    1,083,326    193,216    18%  Commission expense increase primarily correlates to the growth and activity in commission income.
Salaries and wages   1,831,662    1,755,894    75,768    4%  Increase in salaries and wages relates to standard annual inflation adjusted pay.
General and administrative expenses (“G&A”)   1,374,890    837,766    537,124    64%  Increased G&A is driven by higher acquisition related and regulatory compliance costs.
Marketing and advertising (“M&A”)   127,042    136,571    (9,529)   -7%  M&A costs substantially similar to prior year.
Change in estimated acquisition earn-out payables   47,761    476,692    (428,931)   -90%  Estimated acquisition earn-out payables decrease due to adjustments of estimated terminal payments and fair value thereof.
Depreciation and amortization   534,152    653,778    (119,626)   -18%  Depreciation and amortization decrease is due to asset impairments in the current period.
Asset impairment   3,922,110    -    3,922,110        Increase in asset impairments is due to impairment of certain intangible assets.
                        
Total operating expenses   9,114,159    4,944,027    4,170,132    84%   
              -         
Loss from operations   (5,031,721)   (1,004,924)   (4,026,797)   401%   
              -         
Other (expense) income             -         
Interest expense   (369,677)   (351,823)   (17,854)   5%  Interest expense increase primarily due to overall increased interest rate environment and new acquisition related debt financing.
Interest expense, related parties   (40,609)   (41,477)   868    -2%  Decreased related party interest primarily due to high interest accruing loan balances paid down.
Other income, net   11    3,949    (3,938)   -100%  Other income (expense) decrease primarily due to certain non-recurring and non-significant other income sources.
Recognition and change in fair value of warrant liabilities   95,333    4,266,231    (4,170,898)   -98%  Decrease in gain due to fair value changes in derivative warrant liabilities carried at fair value.
Total other (expense) income    (314,942)   3,876,880    (4,191,822)   -108%   
                        
Income (loss) from continuing operations before tax   (5,346,663)   2,871,956    (8,218,619)   -286%   
Income (loss) from discontinued operations before tax   -    (4,660,494)   4,660,494    -100%  Decreased loss primarily stems from the complete winding down of discontinued operations.
Net loss  $(5,346,663)  $(1,788,538)   (3,558,125)   199%   
                        
Non-GAAP Measure                       
AEBITDA   (73,654)   169,343    (242,997)   -143%  AEBITDA swing influenced by factors outlined above.

 

22

 

 

Non-GAAP Reconciliation from Net (Loss) Income to AEBITDA

 

The following table provides a reconciliation from net (loss) income to AEBITDA (adjusted EBITDA) for the years ended December 31, 2023 and December 31, 2022.

 

   The Quarter ended   The Quarter ended 
   March 31, 2024   March 31, 2023 
         
Net loss  $(5,346,663)  $(1,788,538)
Adjustments:          
Interest and related party interest expense   410,286    393,300 
Depreciation and amortization   534,152    653,778 
Asset impairment   3,922,110    - 
Equity-based compensation employees, directors, and service providers   154,912    43,797 
Change in estimated acquisition earn-out payables   47,761    476,692 
Other income, net   (11)   (3,949)
Recognition and change in fair value of warrant liabilities   (95,333)   (4,266,231)
Transactional costs   253,893    - 
Nonrecurring costs   45,239    - 
Loss from discontinued operations before tax   -    4,660,494 
Total adjustments   5,273,009    1,957,881 
           
AEBITDA  $(73,654)  $169,343 

 

Liquidity and capital resources

 

As of March 31, 2024, we had a cash balance of approximately $2,113,000 and working capital deficiency of approximately $120,000, compared with a cash balance of approximately $2,739,000 and working capital of approximately $1,189,000 at December 31, 2023. During the first quarter of 2024 the Company entered into an At Market Issuance Sales Agreement with EF Hutton as sales agent (the “ATM Agreement”) under which the Company may offer and sell, from time to time through the sales agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637. Under the ATM Agreement, the Company pays the sales agent a commission equal to 3.5% of the aggregate gross proceeds of any sales of common stock under the ATM Agreement.

 

During the quarter ended March 31, 2024, the Company sold 187,614 shares of Common Stock under the ATM Agreement, at a price of $0.6891, receiving proceeds, net of $4,636 in sales agent commissions and fees, of $124,649. As of March 31, 2024, the net remaining amount we are permitted to sell under the ATM Agreement was $729,352.

 

During the period from April 1, 2024 through May 20, 2024, the Company sold 1,320,829 shares of Common Stock under the ATM Agreement, receiving proceeds, net of $15,905 agent commissions and fees of $385,052. As of May 20, the net remaining amount we are permitted to sell under the ATM Agreement was $328,395.

 

Pursuant to the terms of the Series B Warrants and Series G Warrants, during the second quarter of 2024, the Series B Warrants and Series G Warrants respective exercise prices reduced from $0.63 and $0.6562 per share to $0.26 and $0.26 per share as a result of dilutive issuances of our Common Stock.

 

Inflation

 

The Company generally may be impacted by rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits, and facility leases. The Company believes inflation could have a material impact to pricing and operating expenses in future periods due to the state of the economy and current inflation rates.

 

Off-balance sheet arrangements

 

We do not have any off-balance sheet arrangements as such term is defined in Regulation S-K.

 

Cash Flows

 

  

Three Months Ended

March 31,

 
   2024   2023 
Net cash used in operating activities  $(204,382)   (1,064,878)
Net cash used in investing activities   (29,444)   (96,297)
Net cash (used in) provided by financing activities   (392,100)   2,805,700 
Net (decrease) increase in cash, cash equivalents, and restricted cash  $(625,926)  $1,644,525 

 

23

 

 

Operating Activities

 

Net cash used in operating activities for the three months ended March 31, 2024 was approximately $204,000, compared to net cash flows used in operating activities of approximately $1.1 million for the three months ended March 31, 2023. The cash used includes net loss of approximately $5,347,000, decreased by approximate non-cash adjustments of $5,142,000 related to asset impairments of approximately $3,922,000, income of recognition and change in fair value of warrant liabilities of approximately $95,000, depreciation and amortization of approximately $534,000, other small adjustments totaling approximately $79,000, as well as a net increase in cash due to changes of net working capital items of approximately $702,000.

 

Investing Activities

 

During the three months ended March 31, 2024, cash flows used in investing activities approximated $29,000 compared to cash flows used in investing activities of approximately $96,000 for the three months ended March 31, 2023. The cash used is primarily related to the purchase of property and equipment.

 

Financing Activities

 

During the three months ended March 31, 2024, approximate cash used in financing activities was $392,000 as compared to approximately $2.8 million provided for the three months ended March 31, 2023. Net cash used in financing activities relates to proceeds from common shares issued pursuant to the ATM Agreement totaling approximately $125,000, offset by net debt principal, short term financings, and related party payables repayments of approximately $517,000.

 

Significant Accounting Policies and Estimates

 

We describe our significant accounting policies in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, and our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal year 2023.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

24

 

 

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024, and determined them to be effective.

 

Changes in Internal Control over Financial Reporting

 

During fiscal year 2024, the Company revised its internal controls over its goodwill evaluation process to ensure that any testing performed at interim dates, are rolled forward to the financial statements reporting date. Aside for the foregoing, there have been no other changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter which is the subject of this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II

 

Item 1. Legal Proceedings.

 

We are subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly, no legal contingencies are accrued as of March 31, 2024. Litigation relating to the insurance brokerage industry is not uncommon. As such we, from time to time have been, subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.

 

Item 1A. Risk Factors.

 

Investing in our common stock involves a high degree of risk. You should consider carefully the information disclosed in Part I, Item 1A, “Risk Factors,” contained in our Annual Report on Form 10-K for the year ended December 31, 2023. Except as disclosed below, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as amended from time to time.

 

The exercise of all or any number of outstanding Series G Warrants may dilute a shareholders holding of shares of our common stock.

 

We have issued 4,210,528 Series G Warrants providing for the right to purchase 4,4210,528 shares of our common stock at an initial exercise price of $0.6562 per share which price was reduced to $0.26 per share effective as of May 10, 2024 pursuant to a price reset provision pursuant to the terms of the Series G Warrants and the Company’s issuance of shares of its Common Stock pursuant to the ATM. Our shareholders could be subject to increased dilution upon the exercise of the Series G Warrants. In addition, the exercise of the Series G Warrants and the subsequent sale of shares of common stock issued thereby, could have an adverse effect on the market for our common stock, including the price that a shareholder could obtain for their shares. Further, our shareholders may experience dilution in the value of their investment in our common stock upon the exercise of the Series G Warrants.

 

The number of shares of common stock which may be issued upon exercise of our Series G Warrants is significant in relation to our currently outstanding common stock and could cause downward pressure on the market price for our common stock.

 

The number of shares of common stock issuable upon exercise of our outstanding Series G Warrants is significant in relation to the number of shares of common stock currently outstanding. If the holder of the Series G Warrants determines to sell a substantial number of shares into the market at any given time, there may not be sufficient demand in the market to purchase the shares without a decline in the market price for our common stock. Moreover, continuous sales into the market of a number of shares in excess of the typical trading volume for our common stock, or even the availability of such a large number of shares, could depress the trading market for our common stock over an extended period of time.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None that have not been previously disclosed in our filings with the SEC.

 

Item 3. Defaults Upon Senior Securities.

 

Not applicable.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

Not applicable.

 

25

 

 

Item 6. Exhibits

 

The following exhibits are filed with this Form 10-Q.

 

Exhibit No.   Description
     
10.1   Amendment #1 to the Purchase Agreement, dated as of September 29, 2023, by and between Reliance Global Group, Inc., Southwestern Montana Insurance Center, LLC, Southwestern Montana Financial Center, Inc., and Julie A. Blockey (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2023).
     
10.2   Stock Exchange Agreement by and among Reliance Global Group, Inc., Jonathan S. Spetner, Michelle Spetner and Spetner Associates, Inc. dated May 14, 2024 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2024).
     
31.1*   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2*   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1**   Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer
     
101.INS*   Inline XBRL Instance Document
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*   Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

 

*Filed herewith

**Furnished herewith

 

26

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Reliance Global Group, Inc.
     
Date: May 20, 2024 By: /s/ Ezra Beyman
    Ezra Beyman
    Chief Executive Officer
    (principal executive officer)
     
Date: May 20, 2024 By: /s/ Joel Markovits
    Joel Markovits
    Chief Financial Officer
    (principal financial officer and principal accounting officer)

 

27

 

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Ezra Beyman, certify that:

 

1. I have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 for Reliance Global Group, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: May 20, 2024 By: /s/ Ezra Beyman
    Ezra Beyman
    Chief Executive Officer (Principal Executive Officer)

 

 

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, Joel Markovits, certify that:

 

1. I have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 for Reliance Global Group, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 20, 2024 By: /s/ Joel Markovits
    Joel Markovits
    Chief Financial Officer
    (Principal Financial Officer)

 

 

 

 

Exhibit 32.1

 

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

(Subsections (A) And (B) Of Section 1350, Chapter 63 of Title 18, United States Code)

 

Each of the undersigned officers of Reliance Global Group, Inc. (the “Company”), does hereby certify, that:

 

The Quarterly Report on Form 10-Q for the period ended March 31, 2024 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 20, 2024 By: /s/ Ezra Beyman
    Ezra Beyman
    Chief Executive Officer (Principal Executive Officer)
     
Date: May 20, 2024 By: /s/ Joel Markovits
    Joel Markovits
    Chief Financial Officer
    (Principal Financial Officer)

 

 

 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 20, 2024
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-40020  
Entity Registrant Name RELIANCE GLOBAL GROUP, INC.  
Entity Central Index Key 0001812727  
Entity Tax Identification Number 46-3390293  
Entity Incorporation, State or Country Code FL  
Entity Address, Address Line One 300 Blvd. of the Americas  
Entity Address, Address Line Two Suite 105  
Entity Address, City or Town Lakewood  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 08701  
City Area Code 732  
Local Phone Number 380-4600  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   8,535,591
Common Stock [Member]    
Title of 12(b) Security Common Stock  
Trading Symbol RELI  
Security Exchange Name NASDAQ  
Series A Warrants    
Title of 12(b) Security Series A Warrants  
Trading Symbol RELIW  
Security Exchange Name NASDAQ  
v3.24.1.1.u2
Condensed Consolidated Balance Sheets - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current assets:    
Cash $ 680,138 $ 1,329,016
Restricted cash 1,432,847 1,409,895
Other receivables 29,498 899
Prepaid expense and other current assets 240,780 333,756
Total current assets 3,410,654 4,379,032
Property and equipment, net 144,723 139,999
Right-of-use assets 653,524 739,830
Intangibles, net 6,611,215 11,042,757
Goodwill 6,693,099 6,693,099
Other non-current assets 21,792 20,292
Total assets 17,535,007 23,015,009
Current liabilities:    
Accounts payable and other accrued liabilities 1,180,328 835,483
Short term financing agreements 11,601 56,197
Other payables 23,809 7,414
Current portion of long-term debt 1,431,875 1,390,766
Current portion of leases payable 256,340 285,171
Earn-out liability, current portion 159,867
Total current liabilities 3,530,629 3,189,851
Long term debt, less current portion 10,660,321 11,026,971
Leases payable, less current portion 427,972 484,335
Warrant liabilities 173,660 268,993
Total liabilities 15,573,497 15,867,679
Stockholders’ equity:    
Preferred stock, $0.086 par value; 750,000,000 shares authorized and 9,076 and 0 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Common stock, $0.086 par value; 2,000,000,000 shares authorized and 5,692,387 and 4,761,974 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 489,525 409,509
Additional paid-in capital 45,820,613 45,739,786
Accumulated deficit (44,348,628) (39,001,965)
Total stockholders’ equity 1,961,510 7,147,330
Total liabilities and stockholders’ equity 17,535,007 23,015,009
Nonrelated Party [Member]    
Current assets:    
Accounts receivable 1,020,879 1,298,863
Related Party [Member]    
Current assets:    
Accounts receivable 6,512 6,603
Current liabilities:    
Current portion of loans payables, related parties 626,676 454,953
Loans payable, related parties, less current portion $ 780,915 $ 897,529
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.086 $ 0.086
Preferred stock, shares authorized 750,000,000 750,000,000
Preferred stock, shares issued 9,076 0
Preferred stock, shares outstanding 9,076 0
Common stock, par value $ 0.086 $ 0.086
Common stock, shares authorized 2,000,000,000 2,000,000,000
Common stock, shares issued 5,692,387 4,761,974
Common stock, shares outstanding 5,692,387 4,761,974
v3.24.1.1.u2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue    
Commission income $ 4,082,438 $ 3,939,103
Total revenue 4,082,438 3,939,103
Operating expenses    
Commission expense 1,276,542 1,083,326
Salaries and wages 1,831,662 1,755,894
General and administrative expenses 1,374,890 837,766
Marketing and advertising 127,042 136,571
Change in estimated acquisition earn-out payables 47,761 476,692
Depreciation and amortization 534,152 653,778
Asset impairments 3,922,110
Total operating expenses 9,114,159 4,944,027
Loss from operations (5,031,721) (1,004,924)
Other (expense) income    
Other income, net 11 3,949
Recognition and change in fair value of warrant liabilities 95,333 4,266,231
Total other (expense) income (314,942) 3,876,880
(Loss) income from continuing operations before tax (5,346,663) 2,871,956
Income (loss) from discontinued operations before tax (4,660,494)
Net loss $ (5,346,663) $ (1,788,538)
Basic (loss) earnings per share    
Continuing operations $ (0.81) $ 1.92
Discontinued operations (3.07)
Basic (loss) earnings per share (0.81) (1.15)
Diluted loss per share    
Continuing operations (0.81) (0.59)
Discontinued operations (2.18)
Diluted loss per share $ (0.81) $ (2.77)
Weighted average number of shares outstanding - basic 6,569,019 1,553,953
Weighted average number of shares outstanding - diluted 6,569,019 2,185,847
Nonrelated Party [Member]    
Other (expense) income    
Interest expense $ (369,677) $ (351,823)
Related Party [Member]    
Other (expense) income    
Interest expense $ (40,609) $ (41,477)
v3.24.1.1.u2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2022 $ 104,883 $ 35,798,139 $ (26,991,983) $ 8,911,039
Balance, shares at Dec. 31, 2022 1,219,573      
Common shares issued for earn-out liabilities $ 9,404 973,074 982,478
Common shares issued for earnout liabilities, shares 109,358      
Common share based compensation 43,797 43,797
Net loss (1,788,538) (1,788,538)
Common shares issued to settle loan - Yes Americana $ 5,740 $ 639,260 $ 645,000
Common shares issued to settle loan - Yes Americana, shares 66,743      
Round up of Common shares due to reverse split 1,300 (5,946) (4,646)
Round up of Common shares due to reverse split, shares 15,336      
Common shares issued in 2023 private placement $ 13,333 $ 3,433,151 $ 3,446,484
Common shares issued in 2023 private placement, shares 155,038      
Balance at Mar. 31, 2023 $ 134,660 40,881,475 (28,780,521) 12,235,614
Balance, shares at Mar. 31, 2023 1,566,048      
Balance at Dec. 31, 2023 $ 409,509 45,739,786 (39,001,965) 7,147,330
Balance, shares at Dec. 31, 2023 4,761,974      
Common shares issued for earn-out liabilities 17,628 17,628
Common shares issued for earnout liabilities, shares      
Common shares issued for ATM share sales $ 16,135 108,514 124,649
Common shares issued for ATM share sales, shares 187,614      
Common shares issued for Abeyance Share conversions $ 62,201 (62,201)
Common shares issued for Abeyance Share conversions, shares 723,264      
Common share based compensation $ 1,680 16,886   18,566
Common share based compensation, shares 19,535      
Net loss (5,346,663) (5,346,663)
Balance at Mar. 31, 2024 $ 489,525 $ 45,820,613 $ (44,348,628) $ 1,961,510
Balance, shares at Mar. 31, 2024 5,692,387      
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Income $ (5,346,663) $ (1,788,538)
Adjustment to reconcile net income to net cash used in operating activities:    
Depreciation and amortization 534,152 541,873
Asset impairments 3,922,110
Amortization of debt issuance costs and accretion of debt discount 11,721 11,721
Non-cash lease expense (income) 1,110 (5,098)
Equity based compensation expense 18,566 43,797
Recognition and change in fair value of warrant liability (95,333) (4,266,231)
Earn-out fair value and write-off adjustments 47,761 476,692
Change in operating assets and liabilities:    
Accounts receivable 277,984 23,976
Accounts receivable, related parties 91 6,676
Other receivables (28,599) 11,464
Prepaid expense and other current assets 92,976 81,381
Other non-current assets (1,500)
Accounts payables and other accrued liabilities 344,847 125,229
Other payables 16,395 (294,058)
Net cash used in continuing operating activities (204,382) (5,031,116)
Net cash adjustments for discontinued operating activities 3,966,238
Total net cash used in continuing and discontinued operating activities (204,382) (1,064,878)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (12,312) (6,695)
Purchase of intangibles (17,132) (73,894)
Net cash used in investing activities (29,444) (80,589)
Net cash used in discontinued investing activities (15,708)
Total net cash used in continuing and discontinued investing activities (29,444) (96,297)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Principal repayments of debt (335,533) (207,580)
Proceeds of loans payable related parties 345,000
Principal repayments of short term financings (44,596) (98,004)
Payments of loans payable, related parties (136,620) (412,500)
Proceeds from common shares issued through an at the market offering 124,649
Cash payments on earn-out liability (250,000)
Private Placement of shares and warrants 3,446,484
Net cash used in and provided by continuing financing activities (392,100) 2,823,400
Net cash used in discontinued financing activities (17,700)
Total net cash (used in) and provided by continuing and discontinued financing activities (392,100) 2,805,700
Net (decrease) and increase in cash and restricted cash (625,926) 1,644,525
Cash and restricted cash at beginning of year 2,738,911 1,909,769
Cash and restricted cash at end of year $ 2,112,985 $ 3,554,294
v3.24.1.1.u2
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 

Reliance Global Group, Inc., formerly known as Ethos Media Network, Inc. (“RELI”, “Reliance”, or the “Company”), was incorporated in Florida on August 2, 2013.

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), as the same may be amended from time to time. Capitalized terms not defined in this Form 10-Q refer to capitalized terms as defined in the Form 10-K. Certain prior period accounts and balances in these condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period’s presentation.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of Reliance Global Group, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

 

Liquidity

 

As of March 31, 2024, the Company’s reported cash and restricted cash aggregated balance was approximately $2,113,000, current assets were approximately $3,411,000, while current liabilities were approximately $3,531,000. As of March 31, 2024, the Company had a working capital deficit of approximately $120,000 and stockholders’ equity of approximately $1,962,000. For the three months ended March 31, 2024, the Company presents loss from operations of approximately $5,032,000, which includes a non-cash asset impairment loss of approximately $3,900,000, and net loss of approximately $5,347,000. During the first quarter of 2024 the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) to which the Company may offer and sell, from time to time through the Agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637.

 

Although there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these financial statements with the Securities and Exchange Commission (“SEC”).

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

 

 

Cash and Restricted Cash

 

Cash and restricted cash reported on our condensed consolidated balance sheets are reconciled to the total shown on our condensed consolidated statements of cash flows as follows:

   March 31, 2024   March 31, 2023 
Cash  $680,138   $2,116,333 
Restricted cash   1,432,847    1,437,961 
Total cash and restricted cash  $2,112,985   $3,554,294 

 

Fair Value of Financial Instruments

 

Level 1 — Observable inputs reflecting quoted prices (unadjusted) in active markets for identical assets and liabilities;

 

Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and

 

Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

 

Warrant Liabilities: The Company re-measures the fair value of its Level 3 warrant liabilities at the balance sheet date, using a binomial option pricing model. The following summarizes the significant unobservable inputs:

   March 31, 2024   December 31, 2023 
Stock price  $0.34   $0.54 
Volatility   135.00%   110.00%
Time to expiry   4.74    4.99 
Dividend yield   0%   0%
Risk free rate   4.20%   3.80%

 

The following reconciles fair value of the liability classified warrants:

   Series B warrant liabilities   Placement agent warrants   Total 
Beginning balance, December 31, 2022  $6,384,250   $48,900   $6,433,150 
Unrealized (gain) loss   (5,534,931)   (48,575)   (5,583,506)
Warrants exercised or exchanged   (580,651)   -    (580,651)
Ending balance, December 31, 2023  $268,668   $325   $268,993 
Unrealized (gain) loss   (95,333)   -    (95,333)
Warrants exercised or exchanged   -    -    - 
Ending balance, March 31, 2024  $173,335   $325   $173,660 

 

 

Earn-out liabilities: The Company utilizes two valuation methods to value its Level 3 earn-out liabilities, a) the income valuation approach and b) the Monte Carlo simulation method. Key valuation and unobservable inputs for the income valuation approach include contingent payment arrangement terms, projected revenues and cash flows, rates of return, discount rates and probability assessments.

 

The following table reconciles fair value of earn-out liabilities for the periods ended March 31, 2024, and December 31, 2023:

   March 31, 2024   December 31, 2023 
Beginning balance – January 1  $159,867   $2,709,478 
           
Acquisitions and settlements   -    (3,260,403)
           
Period adjustments:          
Fair value changes included in earnings*   47,761    1,716,873 
Earn-out payable in common shares   (17,628)   (159,867)
Earn-out transferred to loans payable, related parties   (190,000)   (846,214)
Ending balance   -    159,867 
Less: Current portion   -    (159,867)
Ending balance, less current portion  $-   $- 

 

* Recorded in the change in estimated acquisition earn-out payables caption on the condensed consolidated statements of operations.

 

Revenue Recognition

 

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

Three Months ended March 31, 2024  Medical   Life   Property and Casualty   Total 
                 
EBS  $229,004   $3,700   $-   $232,704 
USBA   9,758    750    -    10,508 
CCS/UIS   -    -    27,948    27,948 
Montana   442,954    1,209    -    444,163 
Fortman   292,188    1,782    228,815    522,785 
Altruis   2,028,225    6,351    -    2,034,576 
Kush   193,807    -    -    193,807 
Reli Exchange   78,043    42,425    495,479    615,947 
Total  $3,273,979   $56,217   $752,242   $4,082,438 

 

 

Three Months ended March 31, 2023  Medical   Life     Property and Casualty   Total 
                        
EBS  $233,280   $ 4,100     $-   $237,380 
USBA   11,265     764      -    12,029 
CCS/UIS   -     -      46,770    46,770 
Montana   486,009     4,985      -    490,994 
Fortman   305,877     393      208,145    514,415 
Altruis   1,868,136     -      -    1,868,136 
Kush   320,175     116      -    320,291 
Reli Exchange   71,370     23,381      354,337    449,088 
Total  $3,296,112   $ 33,739     $609,252   $3,939,103 

 

The following are customers representing 10% or more of total revenue:

Insurance Carrier  2024   2023 
   Three Months ended March 31, 
Insurance Carrier  2024   2023 
Priority Health   45%   43%
BlueCross BlueShield   13%   13%

 

No other single customer accounted for more than 10% of the Company’s commission revenues during the three months ended March 31, 2024 and 2023. The loss of any significant customer could have a material adverse effect on the Company. Customers from 2022 were adjusted to reflect percentages of revenue from continued operations.

 

Income Taxes

 

The Company recorded no income tax expense for the three months ended March 31, 2024 and 2023 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

 

As of March 31, 2024 and December 31, 2023, the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.

 

Recently Issued Accounting Pronouncements

 

We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.

 

 
v3.24.1.1.u2
GOODWILL AND OTHER INTANGIBLE ASSETS
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS

 

The following table rolls forward the Company’s goodwill balance for the periods ended March 31, 2024, and December 31, 2023, adjusted for discontinued operations.

 

   Goodwill 
December 31, 2022  $14,287,099 
Goodwill impairment recognized as of December 31, 2023   (7,594,000)
December 31, 2023   6,693,099 
March 31, 2024  $6,693,099 

 

Asset Impairments: 

 

During the quarter ended March 31, 2024, certain intangible assets stemming from discontinued operations which were originally transferred to the Company’s operating entity, were determined to have carrying values exceeding fair value, and thus were considered impaired. These intangible assets consisted of, customer relationships, and internally developed and purchased software, with respective net of accumulated amortization asset values of, $3,802,438, $65,411, and $54,261. The write-offs resulted in a total asset impairment charge of $3,922,110, recorded in the asset impairment account on the condensed consolidated statements of operations for the three-month period ended March 31, 2024. 

 

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of March 31, 2024:

 

   Weighted Average Remaining Amortization Period (Years)   Gross Carrying Amount   Accumulated Amortization   Net Carrying Amount 
Trade name and trademarks   1.3   $1,807,188   $(1,408,895)  $398,292 
Internally developed software   3.0    1,694,186    (686,798)   1,007,388 
Customer relationships   6.5    7,372,290    (2,629,691)   4,742,599 
Purchased software   2.2    564,396    (562,844)   1,552 
Video production assets   -    50,000    (50,000)   - 
Non-competition agreements   0.6    3,504,810    (3,043,426)   461,384 
        $14,992,869   $(8,381,654)  $6,611,215 

 

 

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2023:

 

   Weighted Average Remaining Amortization period (Years)   Gross Carrying Amount   Accumulated Amortization  

Net

Carrying Amount

 
Trade name and trademarks   1.5   $1,807,189   $(1,320,939)  $486,250 
Internally developed software   3.2    1,798,922    (650,029)   1,148,893 
Customer relationships   8.0    11,922,290    (3,193,629)   8,728,661 
Purchased software   0.3    667,206    (618,418)   48,788 
Video Production Assets   -    50,000    (50,000)   - 
Non-competition agreements   0.9    3,504,810    (2,874,645)   630,165 
Trade name and trademarks       $19,750,417   $(8,707,660)  $11,042,757 

 

The following table reflects expected amortization expense as of March 31, 2024, for each of the following five years and thereafter:

Years ending December 31,  Amortization Expense 
2024 (remainder of year)  $1,225,917 
2025   1,395,707 
2026   1,146,882 
2027   807,363 
2028   717,314 
Thereafter   1,318,032 
Total  $6,611,215 

 

 
v3.24.1.1.u2
LONG-TERM DEBT AND SHORT-TERM FINANCINGS
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
LONG-TERM DEBT AND SHORT-TERM FINANCINGS

NOTE 3. LONG-TERM DEBT AND SHORT-TERM FINANCINGS

 

Long-Term Debt

 

The composition of the long-term debt follows:

  

March 31,

2024

  

December 31,

2023

 
         
           
Oak Street Funding LLC Term Loan   $354,376   $369,602 
Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5%, maturing August 2028, net of deferred financing costs of $9,614 and $10,069 as of March 31, 2024 and December 31, 2023, respectively  $354,376   $369,602 
Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5%, maturing December 2028, net of deferred financing costs of $11,887 and $12,525 as of March 31, 2024 and December 31, 2023, respectively   581,392    604,830 
Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0%, maturing April 2029, net of deferred financing costs of $7,365 and $7,733 as of March 31, 2024 and December 31, 2023, respectively   671,220    695,758 
Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0%, maturing May 2029, net of deferred financing costs of $29,572 and $31,026 as of March 31, 2024 and December 31, 2023, respectively   1,697,935    1,758,558 
Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0%, maturing September 2029, net of deferred financing costs of $34,029 and $35,649 as of March 31, 2024 and December 31, 2023, respectively   2,806,914    2,899,409 
Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5%, maturing May 2032, net of deferred financing costs of $171,406 and $176,762 as of March 31, 2024 and December 31, 2023, respectively   5,980,359    6,089,580 
Long term debt gross   12,092,196    12,417,737 
Less: current portion   (1,431,875)   (1,390,766)
Long-term debt  $10,660,321   $11,026,971 

 

Oak Street Funding LLC – Term Loans and Credit Facilities

Fiscal year ending December 31,  Maturities of Long-Term Debt 
2024 (remainder of year)  $1,055,234 
2025   1,552,772 
2026   1,729,160 
2027   1,925,603 
2028   2,106,978 
Thereafter   3,986,322 
Total   12,356,069 
Less: debt issuance costs   (263,873)
Total  $12,092,196 

 

 

Short-Term Financings

 

The Company has various short-term notes payable for financed items such as insurance premiums and CRM software purchases. These are normally paid in equal installments over a period of twelve months or less and carry interest rates up to 0.0% and 12.75% per annum. As of March 31, 2024 and December 31, 2023, balances outstanding on short-term financings were $12,000 and $56,000, respectively.

 
v3.24.1.1.u2
WARRANT LIABILITIES
 3 Months Ended
Mar. 31, 2024
Warrant Liabilities  
WARRANT LIABILITIES

NOTE 4. WARRANT LIABILITIES

 

Series B Warrants

 

The Series B Warrant liability effective exercise price as of March 31, 2024 was $0.63, and the outstanding balance, inclusive of 16,303 PAW warrants as of March 31, 2024 and December 31, 2023 was $173,660 and $268,993 respectively, presented in the warrant liability account on the condensed consolidated balance sheets. Pursuant to the terms of the Series B Warrants, during the second quarter of 2024, the Series B Warrant exercise price was reduced from $0.63 per share to $0.26 as a result of dilutive issuances of our Common Stock.

 

For the periods ended March 31, 2024, and 2023, net fair value gains recognized for the Series B Warrants inclusive of the PAW warrants were $95,333 and $4,266,231 respectively, presented in the recognition and change in fair value of warrant liabilities account in the condensed consolidated statements of operations.

 
v3.24.1.1.u2
EQUITY
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
EQUITY

NOTE 5. EQUITY

 

Common Stock

 

The Company is authorized to issue 2,000,000,000 shares of common stock, $0.086 par value. Each share of issued and outstanding common stock entitles the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

 

During the first quarter of 2024, the Company issued 187,614 shares through its ATM program, 723,264 pursuant to Abeyance Share conversions and 19,535 shares for equity-based compensation.

 

As of March 31, 2024 and December 31, 2023, there were 5,692,387 and 4,761,974 shares of common stock outstanding, respectively.

 

 

Abeyance Shares

 

During the quarter ended March 31, 2024 upon request from the institutional investor, the Company converted 723,264 Abeyance Shares into Common Stock, thereby issuing 723,264 shares which resulted in a remaining balance of 1,011,000 of outstanding Abeyance Shares as of March 31, 2024.

 

During the second quarter of 2024, upon request from the institutional investor, the Company converted the remaining 1,011,000 Abeyance Shares into Common Stock resulting in zero Abeyance Shares outstanding.

 

Series G Warrants

 

Pursuant to the terms of the Series G Warrants, during the second quarter of 2024, the Series G Warrant exercise price was reduced from $0.6562 per share to $0.26 as a result of sales of our Common Stock pursuant to the ATM Agreement discussed below.

 

At Market Program (the “ATM”)

 

On February 15, 2024, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with EF Hutton LLC (the “Agent”), pursuant to which the Company may offer and sell, from time to time through the Agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637 (the “ATM Capacity”). Any Shares offered and sold in the offering will be issued pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-275190), which was declared effective by the Securities and Exchange Commission on November 7, 2023, and the related prospectus supplement and accompanying base prospectus relating to the offering of the Shares. Under the Agreement, the Agent may sell Shares by any method permitted by law and deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The offering of Shares pursuant to the Agreement will terminate upon the earlier of (i) the sale of all of the Shares subject to the Agreement, or (ii) the termination of the Agreement by the Agent or the Company, as permitted therein. The Company shall pay to the Agent in cash, upon each sale of Shares pursuant to the ATM Agreement, an amount equal to 3.5% of the gross proceeds from each sale of Shares. The Company will also reimburse the Agent for certain specified expenses in connection with entering into the Agreement.

 

During the first quarter of 2024 the Company sold 187,614 shares of Common Stock under the ATM Agreement, at a price of $0.6891, receiving proceeds, net of $4,636 in Agent commissions and fees, of $124,649. As of March 31, 2024, the net remaining ATM Capacity was $729,352.

 

Subsequent to the first quarter of 2024, the Company sold an additional 1,320,829 shares of Common Stock under the ATM Agreement, receiving proceeds, net of $15,905 Agent commissions and fees, of $385,052, resulting in net remaining ATM Capacity of, $328,395.

 

Equity-based Compensation

 

Total stock-based compensation expense recorded in general and administrative expenses in the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 is $18,566 and $43,797, respectively.

 

 
v3.24.1.1.u2
EARNINGS (LOSS) PER SHARE
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
EARNINGS (LOSS) PER SHARE

NOTE 6. EARNINGS (LOSS) PER SHARE

 

Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding.

 

If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed in the same manner as basic EPS.

 

The following calculates basic and diluted EPS:

 

   March 31, 2024   March 31, 2023 
   Three Months   Three Months 
   Ended   Ended 
   March 31, 2024   March 31, 2023 
(Loss) income from continuing operations  $(5,346,663

)

  $2,983,861 
Net (loss) income continuing operations, numerator, basic computation   (5,346,663)   2,983,861 
Recognition and change in fair value of warrant liabilities   -    (4,266,231)
Net loss continuing operations, numerator, diluted computation  $(5,346,663)  $(1,282,370)
           
Weighted average common shares, basic   6,569,019    1,553,953 
Effect of series B warrants   -    631,894 
Weighted average common shares, dilutive   6,569,019    2,185,847 
Earnings (loss) per common share – basic  $(0.81)  $1.92 
Earnings (loss) per common share – diluted  $(0.81)  $(0.59)

 

The reversal of the gain on the change fair value of the Series B warrant liability for the three months March 31, 2023 is included in the numerator of the dilutive EPS calculation to eliminate the effects the warrants as the impact is dilutive.

 

Additionally, the following are considered anti-dilutive securities excluded from weighted-average shares used to calculate diluted net loss per common share:

 

  

March 31,

2024

  

March 31,

2023

 
   For the Three Months Ended 
  

March 31,

2024

  

March 31,

2023

 
Shares subject to outstanding common stock options   10,928    10,928 
Shares subject to outstanding Series A warrants   113,000    113,000 
Shares subject to outstanding Series B warrants and PAW’s   882,970    - 
Shares subject to outstanding Series F warrants   -    2,105,264 
Shares subject to outstanding Series G warrants   4,210,529    - 
Shares subject to PA Warrants   52,632    52,632 
Shares subject to unvested stock awards   889    7,709 

 
v3.24.1.1.u2
LEASES
 3 Months Ended
Mar. 31, 2024
Leases  
LEASES

NOTE 7. LEASES

 

Operating lease expense for the three months ended March 31, 2024 and 2023 was $104,956 and $161,614, respectively. As of March 31, 2024, the weighted average remaining lease term and weighted average discount rate for the operating leases were 3.92 years and 5.98% respectively.

 

 

Future minimum lease payments under these operating leases consists of the following:

 

Period ending March 31, 2024  Operating Lease Obligations 
2024  $286,739 
2025   119,388 
2026   114,572 
2027   118,009 
2028   121,550 
Thereafter   - 
Total undiscounted operating lease payments   760,258 
Less: Imputed interest   75,946 
Present value of operating lease liabilities  $684,312 

 
v3.24.1.1.u2
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 8. COMMITMENTS AND CONTINGENCIES

 

Legal Contingencies

 

The Company is subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly and no legal contingencies are accrued as of March 31, 2024 and December 31, 2023. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time have been subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.

 

Earn-out liabilities

 

The following outlines changes to the Company’s earn-out liability balances for the respective periods ended March 31, 2024 and December 31, 2023:

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 
Changes due to payments   -    -    -    -    -    - 
Changes due to fair value adjustments   -    47,761    -    -    -    47,761 
Payable in Common Stock   -    (17,628)   -    -    -    (17,628)
Transfers to loans payable, related parties*        -    (190,000)         -    -         -    (190,000)
Ending balance March 31, 2024  $-   $-   $-   $-   $-   $- 

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2022  $667,000   $500,001   $834,943   $147,534   $560,000   $2,709,478 
Payments   (1,433,700)   (750,001)   (929,168)   (147,534)   -    (3,260,403)
Estimate & fair value adjustments   1,612,914    569,734    94,225    -    (560,000)   1,716,873 
Payable in Common Stock   -    (159,867)   -    -    -    (159,867)
Reclass to loans payable, related parties*   (846,214)   -    -    -    -    (846,214)
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 

 

* The Company modified certain contingent earn-out payables by entering into fixed payment arrangements, thus, remaining open balances are reclassified to the loans payable, related parties account on the consolidated balance sheet as of March 31, 2024 and December 31, 2023, respectively.

 

 
v3.24.1.1.u2
RELATED PARTY TRANSACTIONS
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 9. RELATED PARTY TRANSACTIONS

 

The Company, Southwestern Montana Insurance Center, LLC, a Montana limited liability company (the “Subsidiary”), Southwestern Montana Financial Center, Inc., a Montana corporation (the “Seller”), and Julie A. Blockey (the “Holder”, and collectively with the Company, Subsidiary, and Seller, the “Parties”) entered into a purchase agreement on or around April 1, 2019 (the “Purchase Agreement”), whereby the Company purchased the business and certain assets noted within the Purchase Agreement. On September 29, 2023, the Parties entered into a first amendment to the Purchase Agreement (the “First Amendment”). Pursuant to the First Amendment, the Parties agreed to a total remaining balance of $500,000 owed under the Purchase Agreement. In satisfaction of such remaining balance, the Company agreed to issue 174,610 shares of the Company’s restricted common stock, par value $0.086 per share (the “Common Stock”), to the Holder. The First Amendment also stated that if the Nasdaq official closing price of the Common Stock is less than $2.43 on March 29, 2024 (the “Calculation Date”), then a determination of the Make-Up Amount (as defined herein) will be made. The “Make-Up Amount” means $425,000 minus the Blockey Shares Value (174,610 multiplied by the Nasdaq official closing price of the Common Stock on the Calculation Date). The First Amendment further stated that the Company shall pay the Make-Up Amount with a combination of cash and Company shares. Accordingly, on the Calculation Date, a total Make-Up Amount of $367,496 was determined, and as agreed upon by the Parties, will be payable, $190,000 in cash, and the remaining balance via the issuance of 510,485 of the Company’s Common Stock, subsequently issued to the Seller during April, 2024. The $190,000 cash balance was recorded in the current portion of loans payable related parties account in the condensed consolidated balance sheet as of March 31, 2024.

 

The following table summarizes the loans payable, related parties current and non-current accounts, and the interest expense related parties account as of and for the three-month period ended March 31, 2024 and December 31, 2023, as presented on the condensed consolidated balance sheets and condensed consolidated statements of operations, respectively:

 

  

Current portion of loans payables,

related parties

  

Loans payable, related parties,

less current portion

   Interest expense, related parties 
Related  Party 

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

March 31,

2023

 
Loan to Employee  $14,937   $25,708   $-   $-   $1,730   $1,730 
Barra   244,556    233,504    180,837   $247,055    19,833    39,747 
Fortman   177,183    195,741    600,078    650,473    19,046    - 
Montana   190,000    -    -    -    -    - 
Total  $626,676   $454,953   $780,915   $897,528   $40,609   $41,477 

 
v3.24.1.1.u2
SUBSEQUENT EVENTS
 3 Months Ended
Mar. 31, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 10. SUBSEQUENT EVENTS

 

On May 14, 2024, the Company entered into a Stock Exchange Agreement to acquire Spetner Associates (“Spetner”), dated as of May 14, 2024 (the “Stock Exchange Agreement”). Pursuant to the Stock Exchange Agreement, the Company shall: (i) acquire eighty percent (80%) of the issued and outstanding shares of common stock, par value $1.00 per share, of Spetner (the “Spetner Common Stock”) for the amount of $13,714,286 (which shall be paid $8,000,000 in cash, the issuance of certain shares of the Company’s Common Stock, and the Company’s issuance of a promissory note); and (ii) ) have the sole option to acquire the remaining twenty percent (20%) of the Spetner Common Stock for a predetermined amount based on a multiple of EBITDA.
v3.24.1.1.u2
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), as the same may be amended from time to time. Capitalized terms not defined in this Form 10-Q refer to capitalized terms as defined in the Form 10-K. Certain prior period accounts and balances in these condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period’s presentation.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of Reliance Global Group, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

 
Liquidity

Liquidity

 

As of March 31, 2024, the Company’s reported cash and restricted cash aggregated balance was approximately $2,113,000, current assets were approximately $3,411,000, while current liabilities were approximately $3,531,000. As of March 31, 2024, the Company had a working capital deficit of approximately $120,000 and stockholders’ equity of approximately $1,962,000. For the three months ended March 31, 2024, the Company presents loss from operations of approximately $5,032,000, which includes a non-cash asset impairment loss of approximately $3,900,000, and net loss of approximately $5,347,000. During the first quarter of 2024 the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) to which the Company may offer and sell, from time to time through the Agent, shares of its Common Stock (the “Shares”), having an aggregate offering price of up to $858,637.

 

Although there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these financial statements with the Securities and Exchange Commission (“SEC”).

 
Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

 

 
Cash and Restricted Cash

Cash and Restricted Cash

 

Cash and restricted cash reported on our condensed consolidated balance sheets are reconciled to the total shown on our condensed consolidated statements of cash flows as follows:

   March 31, 2024   March 31, 2023 
Cash  $680,138   $2,116,333 
Restricted cash   1,432,847    1,437,961 
Total cash and restricted cash  $2,112,985   $3,554,294 

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

Level 1 — Observable inputs reflecting quoted prices (unadjusted) in active markets for identical assets and liabilities;

 

Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and

 

Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

 

Warrant Liabilities: The Company re-measures the fair value of its Level 3 warrant liabilities at the balance sheet date, using a binomial option pricing model. The following summarizes the significant unobservable inputs:

   March 31, 2024   December 31, 2023 
Stock price  $0.34   $0.54 
Volatility   135.00%   110.00%
Time to expiry   4.74    4.99 
Dividend yield   0%   0%
Risk free rate   4.20%   3.80%

 

The following reconciles fair value of the liability classified warrants:

   Series B warrant liabilities   Placement agent warrants   Total 
Beginning balance, December 31, 2022  $6,384,250   $48,900   $6,433,150 
Unrealized (gain) loss   (5,534,931)   (48,575)   (5,583,506)
Warrants exercised or exchanged   (580,651)   -    (580,651)
Ending balance, December 31, 2023  $268,668   $325   $268,993 
Unrealized (gain) loss   (95,333)   -    (95,333)
Warrants exercised or exchanged   -    -    - 
Ending balance, March 31, 2024  $173,335   $325   $173,660 

 

 

Earn-out liabilities: The Company utilizes two valuation methods to value its Level 3 earn-out liabilities, a) the income valuation approach and b) the Monte Carlo simulation method. Key valuation and unobservable inputs for the income valuation approach include contingent payment arrangement terms, projected revenues and cash flows, rates of return, discount rates and probability assessments.

 

The following table reconciles fair value of earn-out liabilities for the periods ended March 31, 2024, and December 31, 2023:

   March 31, 2024   December 31, 2023 
Beginning balance – January 1  $159,867   $2,709,478 
           
Acquisitions and settlements   -    (3,260,403)
           
Period adjustments:          
Fair value changes included in earnings*   47,761    1,716,873 
Earn-out payable in common shares   (17,628)   (159,867)
Earn-out transferred to loans payable, related parties   (190,000)   (846,214)
Ending balance   -    159,867 
Less: Current portion   -    (159,867)
Ending balance, less current portion  $-   $- 

 

* Recorded in the change in estimated acquisition earn-out payables caption on the condensed consolidated statements of operations.

 
Revenue Recognition

Revenue Recognition

 

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

Three Months ended March 31, 2024  Medical   Life   Property and Casualty   Total 
                 
EBS  $229,004   $3,700   $-   $232,704 
USBA   9,758    750    -    10,508 
CCS/UIS   -    -    27,948    27,948 
Montana   442,954    1,209    -    444,163 
Fortman   292,188    1,782    228,815    522,785 
Altruis   2,028,225    6,351    -    2,034,576 
Kush   193,807    -    -    193,807 
Reli Exchange   78,043    42,425    495,479    615,947 
Total  $3,273,979   $56,217   $752,242   $4,082,438 

 

 

Three Months ended March 31, 2023  Medical   Life     Property and Casualty   Total 
                        
EBS  $233,280   $ 4,100     $-   $237,380 
USBA   11,265     764      -    12,029 
CCS/UIS   -     -      46,770    46,770 
Montana   486,009     4,985      -    490,994 
Fortman   305,877     393      208,145    514,415 
Altruis   1,868,136     -      -    1,868,136 
Kush   320,175     116      -    320,291 
Reli Exchange   71,370     23,381      354,337    449,088 
Total  $3,296,112   $ 33,739     $609,252   $3,939,103 

 

The following are customers representing 10% or more of total revenue:

Insurance Carrier  2024   2023 
   Three Months ended March 31, 
Insurance Carrier  2024   2023 
Priority Health   45%   43%
BlueCross BlueShield   13%   13%

 

No other single customer accounted for more than 10% of the Company’s commission revenues during the three months ended March 31, 2024 and 2023. The loss of any significant customer could have a material adverse effect on the Company. Customers from 2022 were adjusted to reflect percentages of revenue from continued operations.

 
Income Taxes

Income Taxes

 

The Company recorded no income tax expense for the three months ended March 31, 2024 and 2023 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

 

As of March 31, 2024 and December 31, 2023, the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.
v3.24.1.1.u2
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW

Cash and restricted cash reported on our condensed consolidated balance sheets are reconciled to the total shown on our condensed consolidated statements of cash flows as follows:

   March 31, 2024   March 31, 2023 
Cash  $680,138   $2,116,333 
Restricted cash   1,432,847    1,437,961 
Total cash and restricted cash  $2,112,985   $3,554,294 
SCHEDULE OF WARRANT LIABILITY

   March 31, 2024   December 31, 2023 
Stock price  $0.34   $0.54 
Volatility   135.00%   110.00%
Time to expiry   4.74    4.99 
Dividend yield   0%   0%
Risk free rate   4.20%   3.80%
SCHEDULE OF RECONCILES WARRANT COMMITMENT

The following reconciles fair value of the liability classified warrants:

   Series B warrant liabilities   Placement agent warrants   Total 
Beginning balance, December 31, 2022  $6,384,250   $48,900   $6,433,150 
Unrealized (gain) loss   (5,534,931)   (48,575)   (5,583,506)
Warrants exercised or exchanged   (580,651)   -    (580,651)
Ending balance, December 31, 2023  $268,668   $325   $268,993 
Unrealized (gain) loss   (95,333)   -    (95,333)
Warrants exercised or exchanged   -    -    - 
Ending balance, March 31, 2024  $173,335   $325   $173,660 
SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE

The following table reconciles fair value of earn-out liabilities for the periods ended March 31, 2024, and December 31, 2023:

   March 31, 2024   December 31, 2023 
Beginning balance – January 1  $159,867   $2,709,478 
           
Acquisitions and settlements   -    (3,260,403)
           
Period adjustments:          
Fair value changes included in earnings*   47,761    1,716,873 
Earn-out payable in common shares   (17,628)   (159,867)
Earn-out transferred to loans payable, related parties   (190,000)   (846,214)
Ending balance   -    159,867 
Less: Current portion   -    (159,867)
Ending balance, less current portion  $-   $- 

 

* Recorded in the change in estimated acquisition earn-out payables caption on the condensed consolidated statements of operations.
SCHEDULE OF DISAGGREGATION REVENUE

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

Three Months ended March 31, 2024  Medical   Life   Property and Casualty   Total 
                 
EBS  $229,004   $3,700   $-   $232,704 
USBA   9,758    750    -    10,508 
CCS/UIS   -    -    27,948    27,948 
Montana   442,954    1,209    -    444,163 
Fortman   292,188    1,782    228,815    522,785 
Altruis   2,028,225    6,351    -    2,034,576 
Kush   193,807    -    -    193,807 
Reli Exchange   78,043    42,425    495,479    615,947 
Total  $3,273,979   $56,217   $752,242   $4,082,438 

 

 

Three Months ended March 31, 2023  Medical   Life     Property and Casualty   Total 
                        
EBS  $233,280   $ 4,100     $-   $237,380 
USBA   11,265     764      -    12,029 
CCS/UIS   -     -      46,770    46,770 
Montana   486,009     4,985      -    490,994 
Fortman   305,877     393      208,145    514,415 
Altruis   1,868,136     -      -    1,868,136 
Kush   320,175     116      -    320,291 
Reli Exchange   71,370     23,381      354,337    449,088 
Total  $3,296,112   $ 33,739     $609,252   $3,939,103 
SCHEDULE OF CONCENTRATIONS OF REVENUES

The following are customers representing 10% or more of total revenue:

Insurance Carrier  2024   2023 
   Three Months ended March 31, 
Insurance Carrier  2024   2023 
Priority Health   45%   43%
BlueCross BlueShield   13%   13%
v3.24.1.1.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
SCHEDULE OF IMPAIRMENT OF GOODWILL

The following table rolls forward the Company’s goodwill balance for the periods ended March 31, 2024, and December 31, 2023, adjusted for discontinued operations.

 

   Goodwill 
December 31, 2022  $14,287,099 
Goodwill impairment recognized as of December 31, 2023   (7,594,000)
December 31, 2023   6,693,099 
March 31, 2024  $6,693,099 
SCHEDULE OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of March 31, 2024:

 

   Weighted Average Remaining Amortization Period (Years)   Gross Carrying Amount   Accumulated Amortization   Net Carrying Amount 
Trade name and trademarks   1.3   $1,807,188   $(1,408,895)  $398,292 
Internally developed software   3.0    1,694,186    (686,798)   1,007,388 
Customer relationships   6.5    7,372,290    (2,629,691)   4,742,599 
Purchased software   2.2    564,396    (562,844)   1,552 
Video production assets   -    50,000    (50,000)   - 
Non-competition agreements   0.6    3,504,810    (3,043,426)   461,384 
        $14,992,869   $(8,381,654)  $6,611,215 

 

 

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2023:

 

   Weighted Average Remaining Amortization period (Years)   Gross Carrying Amount   Accumulated Amortization  

Net

Carrying Amount

 
Trade name and trademarks   1.5   $1,807,189   $(1,320,939)  $486,250 
Internally developed software   3.2    1,798,922    (650,029)   1,148,893 
Customer relationships   8.0    11,922,290    (3,193,629)   8,728,661 
Purchased software   0.3    667,206    (618,418)   48,788 
Video Production Assets   -    50,000    (50,000)   - 
Non-competition agreements   0.9    3,504,810    (2,874,645)   630,165 
Trade name and trademarks       $19,750,417   $(8,707,660)  $11,042,757 
SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS

The following table reflects expected amortization expense as of March 31, 2024, for each of the following five years and thereafter:

Years ending December 31,  Amortization Expense 
2024 (remainder of year)  $1,225,917 
2025   1,395,707 
2026   1,146,882 
2027   807,363 
2028   717,314 
Thereafter   1,318,032 
Total  $6,611,215 
v3.24.1.1.u2
LONG-TERM DEBT AND SHORT-TERM FINANCINGS (Tables)
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
SCHEDULE OF LONG TERM DEBT

The composition of the long-term debt follows:

  

March 31,

2024

  

December 31,

2023

 
         
           
Oak Street Funding LLC Term Loan   $354,376   $369,602 
Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5%, maturing August 2028, net of deferred financing costs of $9,614 and $10,069 as of March 31, 2024 and December 31, 2023, respectively  $354,376   $369,602 
Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5%, maturing December 2028, net of deferred financing costs of $11,887 and $12,525 as of March 31, 2024 and December 31, 2023, respectively   581,392    604,830 
Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0%, maturing April 2029, net of deferred financing costs of $7,365 and $7,733 as of March 31, 2024 and December 31, 2023, respectively   671,220    695,758 
Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0%, maturing May 2029, net of deferred financing costs of $29,572 and $31,026 as of March 31, 2024 and December 31, 2023, respectively   1,697,935    1,758,558 
Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0%, maturing September 2029, net of deferred financing costs of $34,029 and $35,649 as of March 31, 2024 and December 31, 2023, respectively   2,806,914    2,899,409 
Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5%, maturing May 2032, net of deferred financing costs of $171,406 and $176,762 as of March 31, 2024 and December 31, 2023, respectively   5,980,359    6,089,580 
Long term debt gross   12,092,196    12,417,737 
Less: current portion   (1,431,875)   (1,390,766)
Long-term debt  $10,660,321   $11,026,971 
SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES

Fiscal year ending December 31,  Maturities of Long-Term Debt 
2024 (remainder of year)  $1,055,234 
2025   1,552,772 
2026   1,729,160 
2027   1,925,603 
2028   2,106,978 
Thereafter   3,986,322 
Total   12,356,069 
Less: debt issuance costs   (263,873)
Total  $12,092,196 
v3.24.1.1.u2
EARNINGS (LOSS) PER SHARE (Tables)
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS

The following calculates basic and diluted EPS:

 

   March 31, 2024   March 31, 2023 
   Three Months   Three Months 
   Ended   Ended 
   March 31, 2024   March 31, 2023 
(Loss) income from continuing operations  $(5,346,663

)

  $2,983,861 
Net (loss) income continuing operations, numerator, basic computation   (5,346,663)   2,983,861 
Recognition and change in fair value of warrant liabilities   -    (4,266,231)
Net loss continuing operations, numerator, diluted computation  $(5,346,663)  $(1,282,370)
           
Weighted average common shares, basic   6,569,019    1,553,953 
Effect of series B warrants   -    631,894 
Weighted average common shares, dilutive   6,569,019    2,185,847 
Earnings (loss) per common share – basic  $(0.81)  $1.92 
Earnings (loss) per common share – diluted  $(0.81)  $(0.59)
SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARE

Additionally, the following are considered anti-dilutive securities excluded from weighted-average shares used to calculate diluted net loss per common share:

 

  

March 31,

2024

  

March 31,

2023

 
   For the Three Months Ended 
  

March 31,

2024

  

March 31,

2023

 
Shares subject to outstanding common stock options   10,928    10,928 
Shares subject to outstanding Series A warrants   113,000    113,000 
Shares subject to outstanding Series B warrants and PAW’s   882,970    - 
Shares subject to outstanding Series F warrants   -    2,105,264 
Shares subject to outstanding Series G warrants   4,210,529    - 
Shares subject to PA Warrants   52,632    52,632 
Shares subject to unvested stock awards   889    7,709 
v3.24.1.1.u2
LEASES (Tables)
 3 Months Ended
Mar. 31, 2024
Leases  
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT

Future minimum lease payments under these operating leases consists of the following:

 

Period ending March 31, 2024  Operating Lease Obligations 
2024  $286,739 
2025   119,388 
2026   114,572 
2027   118,009 
2028   121,550 
Thereafter   - 
Total undiscounted operating lease payments   760,258 
Less: Imputed interest   75,946 
Present value of operating lease liabilities  $684,312 
v3.24.1.1.u2
COMMITMENTS AND CONTINGENCIES (Tables)
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
SCHEDULE OF EARN-OUT LIABILITY

The following outlines changes to the Company’s earn-out liability balances for the respective periods ended March 31, 2024 and December 31, 2023:

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 
Changes due to payments   -    -    -    -    -    - 
Changes due to fair value adjustments   -    47,761    -    -    -    47,761 
Payable in Common Stock   -    (17,628)   -    -    -    (17,628)
Transfers to loans payable, related parties*        -    (190,000)         -    -         -    (190,000)
Ending balance March 31, 2024  $-   $-   $-   $-   $-   $- 

 

   Fortman   Montana   Altruis   Kush   Barra   Total 
Ending balance December 31, 2022  $667,000   $500,001   $834,943   $147,534   $560,000   $2,709,478 
Payments   (1,433,700)   (750,001)   (929,168)   (147,534)   -    (3,260,403)
Estimate & fair value adjustments   1,612,914    569,734    94,225    -    (560,000)   1,716,873 
Payable in Common Stock   -    (159,867)   -    -    -    (159,867)
Reclass to loans payable, related parties*   (846,214)   -    -    -    -    (846,214)
Ending balance December 31, 2023  $-   $159,867   $-   $-   $-   $159,867 

 

* The Company modified certain contingent earn-out payables by entering into fixed payment arrangements, thus, remaining open balances are reclassified to the loans payable, related parties account on the consolidated balance sheet as of March 31, 2024 and December 31, 2023, respectively.
v3.24.1.1.u2
RELATED PARTY TRANSACTIONS (Tables)
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
SCHEDULE OF LOANS PAYABLE TO RELATED PARTIES

The following table summarizes the loans payable, related parties current and non-current accounts, and the interest expense related parties account as of and for the three-month period ended March 31, 2024 and December 31, 2023, as presented on the condensed consolidated balance sheets and condensed consolidated statements of operations, respectively:

 

  

Current portion of loans payables,

related parties

  

Loans payable, related parties,

less current portion

   Interest expense, related parties 
Related  Party 

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

December 31,

2023

  

March 31,

2024

  

March 31,

2023

 
Loan to Employee  $14,937   $25,708   $-   $-   $1,730   $1,730 
Barra   244,556    233,504    180,837   $247,055    19,833    39,747 
Fortman   177,183    195,741    600,078    650,473    19,046    - 
Montana   190,000    -    -    -    -    - 
Total  $626,676   $454,953   $780,915   $897,528   $40,609   $41,477 
v3.24.1.1.u2
SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Accounting Policies [Abstract]      
Cash $ 680,138 $ 1,329,016 $ 2,116,333
Restricted cash 1,432,847 $ 1,409,895 1,437,961
Total cash and restricted cash $ 2,112,985   $ 3,554,294
v3.24.1.1.u2
SCHEDULE OF WARRANT LIABILITY (Details)
Mar. 31, 2024
Dec. 31, 2023
Measurement Input, Share Price [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 0.34 0.54
Measurement Input, Price Volatility [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 135.00 110.00
Measurement Input, Expected Term [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Time to expiry 4 years 8 months 26 days 4 years 11 months 26 days
Measurement Input, Expected Dividend Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 0 0
Measurement Input, Risk Free Interest Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 4.20 3.80
v3.24.1.1.u2
SCHEDULE OF RECONCILES WARRANT COMMITMENT (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Offsetting Assets [Line Items]    
Balance $ 268,993 $ 6,433,150
Unrealized (gain) loss (95,333) (5,583,506)
Warrants exercised or exchanged (580,651)
Balance 173,660 268,993
Series B Warrant Liabilities [Member]    
Offsetting Assets [Line Items]    
Balance 268,668 6,384,250
Unrealized (gain) loss (95,333) (5,534,931)
Warrants exercised or exchanged (580,651)
Balance 173,335 268,668
Placement Agent Warrants [Member]    
Offsetting Assets [Line Items]    
Balance 325 48,900
Unrealized (gain) loss (48,575)
Warrants exercised or exchanged
Balance $ 325 $ 325
v3.24.1.1.u2
SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Accounting Policies [Abstract]    
Beginning balance – January 1 $ 159,867 $ 2,709,478
Acquisitions and settlements (3,260,403)
Fair value changes included in earnings [1] 47,761 1,716,873
Earn-out payable in common shares (17,628) (159,867)
Earn-out transferred to loans payable, related parties (190,000) (846,214)
Ending balance 159,867
Less: Current portion (159,867)
Ending balance, less current portion
[1] Recorded in the change in estimated acquisition earn-out payables caption on the condensed consolidated statements of operations.
v3.24.1.1.u2
SCHEDULE OF DISAGGREGATION REVENUE (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Product Information [Line Items]    
Total $ 4,082,438 $ 3,939,103
Employee Benefits Solutions L L C [Member]    
Product Information [Line Items]    
Total 232,704 237,380
U S Benefits Alliance L L C [Member]    
Product Information [Line Items]    
Total 10,508 12,029
Commercial Coverage Solutions L L C [Member]    
Product Information [Line Items]    
Total 27,948 46,770
Southwestern Montana Financial Center Inc [Member]    
Product Information [Line Items]    
Total 444,163 490,994
Fortman Insurance Services L L C [Member]    
Product Information [Line Items]    
Total 522,785 514,415
Altruis Benefits Consulting Inc [Member]    
Product Information [Line Items]    
Total 2,034,576 1,868,136
Kush [Member]    
Product Information [Line Items]    
Total 193,807 320,291
Reli Exchange [Member]    
Product Information [Line Items]    
Total 615,947 449,088
Medical [Member] | Regular [Member]    
Product Information [Line Items]    
Total 3,273,979 3,296,112
Medical [Member] | Regular [Member] | Employee Benefits Solutions L L C [Member]    
Product Information [Line Items]    
Total 229,004 233,280
Medical [Member] | Regular [Member] | U S Benefits Alliance L L C [Member]    
Product Information [Line Items]    
Total 9,758 11,265
Medical [Member] | Regular [Member] | Commercial Coverage Solutions L L C [Member]    
Product Information [Line Items]    
Total
Medical [Member] | Regular [Member] | Southwestern Montana Financial Center Inc [Member]    
Product Information [Line Items]    
Total 442,954 486,009
Medical [Member] | Regular [Member] | Fortman Insurance Services L L C [Member]    
Product Information [Line Items]    
Total 292,188 305,877
Medical [Member] | Regular [Member] | Altruis Benefits Consulting Inc [Member]    
Product Information [Line Items]    
Total 2,028,225 1,868,136
Medical [Member] | Regular [Member] | Kush [Member]    
Product Information [Line Items]    
Total 193,807 320,175
Medical [Member] | Regular [Member] | Reli Exchange [Member]    
Product Information [Line Items]    
Total 78,043 71,370
Life [Member] | Regular [Member]    
Product Information [Line Items]    
Total 56,217 33,739
Life [Member] | Regular [Member] | Employee Benefits Solutions L L C [Member]    
Product Information [Line Items]    
Total 3,700 4,100
Life [Member] | Regular [Member] | U S Benefits Alliance L L C [Member]    
Product Information [Line Items]    
Total 750 764
Life [Member] | Regular [Member] | Commercial Coverage Solutions L L C [Member]    
Product Information [Line Items]    
Total
Life [Member] | Regular [Member] | Southwestern Montana Financial Center Inc [Member]    
Product Information [Line Items]    
Total 1,209 4,985
Life [Member] | Regular [Member] | Fortman Insurance Services L L C [Member]    
Product Information [Line Items]    
Total 1,782 393
Life [Member] | Regular [Member] | Altruis Benefits Consulting Inc [Member]    
Product Information [Line Items]    
Total 6,351
Life [Member] | Regular [Member] | Kush [Member]    
Product Information [Line Items]    
Total 116
Life [Member] | Regular [Member] | Reli Exchange [Member]    
Product Information [Line Items]    
Total 42,425 23,381
Property and Casualty [Member] | Regular [Member]    
Product Information [Line Items]    
Total 752,242 609,252
Property and Casualty [Member] | Regular [Member] | Employee Benefits Solutions L L C [Member]    
Product Information [Line Items]    
Total
Property and Casualty [Member] | Regular [Member] | U S Benefits Alliance L L C [Member]    
Product Information [Line Items]    
Total
Property and Casualty [Member] | Regular [Member] | Commercial Coverage Solutions L L C [Member]    
Product Information [Line Items]    
Total 27,948 46,770
Property and Casualty [Member] | Regular [Member] | Southwestern Montana Financial Center Inc [Member]    
Product Information [Line Items]    
Total
Property and Casualty [Member] | Regular [Member] | Fortman Insurance Services L L C [Member]    
Product Information [Line Items]    
Total 228,815 208,145
Property and Casualty [Member] | Regular [Member] | Altruis Benefits Consulting Inc [Member]    
Product Information [Line Items]    
Total
Property and Casualty [Member] | Regular [Member] | Kush [Member]    
Product Information [Line Items]    
Total
Property and Casualty [Member] | Regular [Member] | Reli Exchange [Member]    
Product Information [Line Items]    
Total $ 495,479 $ 354,337
v3.24.1.1.u2
SCHEDULE OF CONCENTRATIONS OF REVENUES (Details) - Customer Concentration Risk [Member] - Revenue Benchmark [Member]
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Priority Health [Member]    
Product Information [Line Items]    
Insurance carrier 45.00% 43.00%
Blue Cross Blue Shield [Member]    
Product Information [Line Items]    
Insurance carrier 13.00% 13.00%
v3.24.1.1.u2
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Product Information [Line Items]        
Cash and restricted cash $ 2,113,000      
Assets current 3,410,654   $ 4,379,032  
Liabilities current 3,530,629   3,189,851  
Working capital deficiency 120,000      
Stockholders equity 1,961,510 $ 12,235,614 $ 7,147,330 $ 8,911,039
Operating income loss 5,031,721 1,004,924    
Impairment losses 3,922,110    
Net loss 5,347,000      
Aggregate offering price 858,637      
Income tax benefit $ 0 $ 0    
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer [Member]        
Product Information [Line Items]        
Concentration risk, percentage 10.00% 10.00%    
v3.24.1.1.u2
SCHEDULE OF IMPAIRMENT OF GOODWILL (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]    
Goodwill Beginning $ 14,287,099  
Goodwill impairment loss (7,594,000)  
Goodwill Ending 6,693,099  
Goodwill Ending $ 6,693,099 $ 6,693,099
v3.24.1.1.u2
SCHEDULE OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 14,992,869 $ 19,750,417
Accumulated Amortization (8,381,654) (8,707,660)
Net Carrying Amount $ 6,611,215 $ 11,042,757
Trademarks and Trade Names [Member]    
Finite-Lived Intangible Assets [Line Items]    
Weighted average remaining amortization period 1 year 3 months 18 days 1 year 6 months
Gross Carrying Amount $ 1,807,188 $ 1,807,189
Accumulated Amortization (1,408,895) (1,320,939)
Net Carrying Amount $ 398,292 $ 486,250
Internally Developed Software [Member]    
Finite-Lived Intangible Assets [Line Items]    
Weighted average remaining amortization period 3 years 3 years 2 months 12 days
Gross Carrying Amount $ 1,694,186 $ 1,798,922
Accumulated Amortization (686,798) (650,029)
Net Carrying Amount $ 1,007,388 $ 1,148,893
Customer Relationships [Member]    
Finite-Lived Intangible Assets [Line Items]    
Weighted average remaining amortization period 6 years 6 months 8 years
Gross Carrying Amount $ 7,372,290 $ 11,922,290
Accumulated Amortization (2,629,691) (3,193,629)
Net Carrying Amount $ 4,742,599 $ 8,728,661
Purchased Software [Member]    
Finite-Lived Intangible Assets [Line Items]    
Weighted average remaining amortization period 2 years 2 months 12 days 3 months 18 days
Gross Carrying Amount $ 564,396 $ 667,206
Accumulated Amortization (562,844) (618,418)
Net Carrying Amount 1,552 48,788
Video Production Assets [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 50,000 50,000
Accumulated Amortization (50,000) (50,000)
Net Carrying Amount
Non-competition Agreements [Member]    
Finite-Lived Intangible Assets [Line Items]    
Weighted average remaining amortization period 7 months 6 days 10 months 24 days
Gross Carrying Amount $ 3,504,810 $ 3,504,810
Accumulated Amortization (3,043,426) (2,874,645)
Net Carrying Amount $ 461,384 $ 630,165
v3.24.1.1.u2
SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
2024 (remainder of year) $ 1,225,917  
2025 1,395,707  
2026 1,146,882  
2027 807,363  
2028 717,314  
Thereafter 1,318,032  
Total $ 6,611,215 $ 11,042,757
v3.24.1.1.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset $ (8,381,654)   $ (8,707,660)
Asset impairment charge 3,922,110  
Customer Relationships [Member]      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset (2,629,691)   (3,193,629)
Customer Relationships [Member] | Discontinued Operations [Member]      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset 3,802,438    
Developed Technology Rights [Member] | Discontinued Operations [Member]      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset 65,411    
Purchased Software [Member]      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset (562,844)   $ (618,418)
Purchased Software [Member] | Discontinued Operations [Member]      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets accumulated amortization asset $ 54,261    
v3.24.1.1.u2
SCHEDULE OF LONG TERM DEBT (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Line of Credit Facility [Line Items]    
Long term debt gross $ 12,092,196 $ 12,417,737
Less: current portion (1,431,875) (1,390,766)
Long-term debt 10,660,321 11,026,971
SWMT [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross 671,220 695,758
FIS [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross 1,697,935 1,758,558
ABC [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross 2,806,914 2,899,409
Barra [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross 5,980,359 6,089,580
EBS and USBA [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross 354,376 369,602
CCS [Member]    
Line of Credit Facility [Line Items]    
Long term debt gross $ 581,392 $ 604,830
v3.24.1.1.u2
SCHEDULE OF LONG TERM DEBT (Details) (Parenthetical) - USD ($)
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
SWMT [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 2.00%  
Maturity date April 2029  
Net of deferred financing cost $ 7,365 $ 7,733
FIS [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 2.00%  
Maturity date May 2029  
Net of deferred financing cost $ 29,572 31,026
ABC [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 2.00%  
Maturity date September 2029  
Net of deferred financing cost $ 34,029 35,649
Barra [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 2.50%  
Maturity date May 2032  
Net of deferred financing cost $ 171,406 176,762
EBS and USBA [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 2.50%  
Maturity date August 2028  
Net of deferred financing cost $ 9,614 10,069
CCS [Member]    
Line of Credit Facility [Line Items]    
Variable interest of prime rate plus 1.50%  
Maturity date December 2028  
Net of deferred financing cost $ 11,887 $ 12,525
v3.24.1.1.u2
SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
2024 (remainder of year) $ 1,055,234  
2025 1,552,772  
2026 1,729,160  
2027 1,925,603  
2028 2,106,978  
Thereafter 3,986,322  
Total 12,356,069  
Less: debt issuance costs (263,873)  
Total $ 12,092,196 $ 12,417,737
v3.24.1.1.u2
LONG-TERM DEBT AND SHORT-TERM FINANCINGS (Details Narrative) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Debt Instrument, Interest Rate, Stated Percentage 0.00% 12.75%
Outstanding short-term financings $ 12,000 $ 56,000
v3.24.1.1.u2
WARRANT LIABILITIES (Details Narrative) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Jun. 30, 2024
Offsetting Assets [Line Items]        
Warrant commitment unrealized $ (95,333)   $ (5,583,506)  
Series B Warrant Liability [Member]        
Offsetting Assets [Line Items]        
Warrant exercise price $ 0.63      
Warrant commitment unrealized $ 95,333 $ 4,266,231    
Series B Warrant Liability [Member] | Subsequent Event [Member]        
Offsetting Assets [Line Items]        
Warrant exercise price       $ 0.26
v3.24.1.1.u2
EQUITY (Details Narrative) - USD ($)
 2 Months Ended 3 Months Ended
Feb. 15, 2024
May 17, 2024
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2024
Dec. 31, 2023
Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Common stock, shares authorized     2,000,000,000     2,000,000,000  
Common stock, par value     $ 0.086     $ 0.086  
Common stock, shares outstanding     5,692,387     4,761,974  
Shares issued in private placement     $ 124,649        
General and Administrative Expense [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Stock compensation expense     $ 18,566 $ 43,797      
ATM Agreement [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Shares issued in private placement $ 858,637            
Series G Warrants [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Warrant exercise price     $ 0.6562        
Series G Warrants [Member] | ATM Agreement [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Warrant exercise price         $ 0.26    
Common Stock [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Stock issued during period shares new issues     187,614        
Share conversions     723,264        
Equity based compensation     19,535        
Remaining share outstanding     5,692,387 1,566,048   4,761,974 1,219,573
Shares issued in private placement     $ 16,135        
Common Stock [Member] | ATM Agreement [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Stock issued during period shares new issues     187,614        
Sale of stock, price per share     $ 0.6891        
Receiving proceeds, net     $ 4,636        
Agent commissions     124,649        
Sale of stock, consideration received on transaction     $ 729,352        
Common Stock [Member] | Subsequent Event [Member] | ATM Agreement [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Receiving proceeds, net   $ 15,905          
Agent commissions   385,052          
Sale of stock, consideration received on transaction   $ 328,395          
Sale of stock, number of shares issued in transaction   1,320,829          
Common Stock [Member] | Investor [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Stock issued during period shares new issues     723,264        
Share conversions     723,264        
Remaining share outstanding     1,011,000        
Common Stock [Member] | Investor [Member] | Subsequent Event [Member]              
Accumulated Other Comprehensive Income (Loss) [Line Items]              
Remaining share outstanding         1,011,000    
v3.24.1.1.u2
SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Earnings Per Share [Abstract]    
(Loss) income from continuing operations $ (5,346,663) $ 2,983,861
Net (loss) income continuing operations, numerator, basic computation (5,346,663) 2,983,861
Recognition and change in fair value of warrant liabilities (4,266,231)
Net loss continuing operations, numerator, diluted computation $ (5,346,663) $ (1,282,370)
Weighted average common shares, basic 6,569,019 1,553,953
Effect of series B warrants 631,894
Weighted average common shares, dilutive 6,569,019 2,185,847
Earnings (loss) per common share – basic $ (0.81) $ 1.92
Earnings (loss) per common share – diluted $ (0.81) $ (0.59)
v3.24.1.1.u2
SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARE (Details) - shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Stock Options [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 10,928 10,928
Series A Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 113,000 113,000
Series B Warrants And PA Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 882,970
Series F Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 2,105,264
Series G Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 4,210,529
Placement Agent Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 52,632 52,632
Series B Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Shares subject to unvested stock awards 889 7,709
v3.24.1.1.u2
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT (Details)
Mar. 31, 2024
USD ($)
Leases  
2024 $ 286,739
2025 119,388
2026 114,572
2027 118,009
2028 121,550
Thereafter
Total undiscounted operating lease payments 760,258
Less: Imputed interest 75,946
Present value of operating lease liabilities $ 684,312
v3.24.1.1.u2
LEASES (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Leases    
Lease expense $ 104,956 $ 161,614
Weighted average remaining lease term 3 years 11 months 1 day  
Weighted average discount rate 5.98%  
v3.24.1.1.u2
SCHEDULE OF EARN-OUT LIABILITY (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 $ 159,867 $ 2,709,478
Payments (3,260,403)
Estimate & fair value adjustments 47,761 1,716,873
Payable in Common Stock (17,628) (159,867)
Transfers to loans payable, related parties [1] (190,000)  
Ending balance 159,867
Reclass to loans payable, related parties [1]   (846,214)
Fortman Insurance Agency LLC [Member]    
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 667,000
Payments (1,433,700)
Estimate & fair value adjustments 1,612,914
Payable in Common Stock
Transfers to loans payable, related parties [1]  
Ending balance
Reclass to loans payable, related parties [1]   (846,214)
Southwestern Montana Insurance Center Inc [Member]    
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 159,867 500,001
Payments (750,001)
Estimate & fair value adjustments 47,761 569,734
Payable in Common Stock (17,628) (159,867)
Transfers to loans payable, related parties [1] (190,000)  
Ending balance 159,867
Reclass to loans payable, related parties [1]  
Altruis Benefits Consultants Inc [Member]    
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 834,943
Payments (929,168)
Estimate & fair value adjustments 94,225
Payable in Common Stock
Transfers to loans payable, related parties [1]  
Ending balance
Reclass to loans payable, related parties [1]  
JP Kush And Associates Inc [Member]    
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 147,534
Payments (147,534)
Estimate & fair value adjustments
Payable in Common Stock
Transfers to loans payable, related parties [1]  
Ending balance
Reclass to loans payable, related parties [1]  
Barra [Member]    
Restructuring Cost and Reserve [Line Items]    
Beginning balance – January 1 560,000
Payments
Estimate & fair value adjustments (560,000)
Payable in Common Stock
Transfers to loans payable, related parties [1]  
Ending balance
Reclass to loans payable, related parties [1]  
[1] The Company modified certain contingent earn-out payables by entering into fixed payment arrangements, thus, remaining open balances are reclassified to the loans payable, related parties account on the consolidated balance sheet as of March 31, 2024 and December 31, 2023, respectively.
v3.24.1.1.u2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
Legal contingencies $ 0 $ 0
v3.24.1.1.u2
SCHEDULE OF LOANS PAYABLE TO RELATED PARTIES (Details) - Related Party [Member] - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Related Party Transaction [Line Items]      
Current portion of loans payables, related parties $ 626,676   $ 454,953
Loans payable, related parties, less current portion 780,915   897,528
Interest related parties 40,609 $ 41,477  
Loan To Employee [Member]      
Related Party Transaction [Line Items]      
Current portion of loans payables, related parties 14,937   25,708
Loans payable, related parties, less current portion  
Interest related parties 1,730 1,730  
Barra [Member]      
Related Party Transaction [Line Items]      
Current portion of loans payables, related parties 244,556   233,504
Loans payable, related parties, less current portion 180,837   247,055
Interest related parties 19,833 39,747  
Fortman Insurance Agency LLC [Member]      
Related Party Transaction [Line Items]      
Current portion of loans payables, related parties 177,183   195,741
Loans payable, related parties, less current portion 600,078   650,473
Interest related parties 19,046  
Southwestern Montana Insurance Center Inc [Member]      
Related Party Transaction [Line Items]      
Current portion of loans payables, related parties 190,000  
Loans payable, related parties, less current portion  
Interest related parties  
v3.24.1.1.u2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 3 Months Ended
Apr. 30, 2024
Mar. 29, 2024
Sep. 29, 2023
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]              
Remaining balance       $ 159,867   $ 2,709,478
Common stock, par value       $ 0.086 $ 0.086    
Cash       $ 680,138 $ 1,329,016 $ 2,116,333  
Stock issued during period, value, new issues       124,649      
Assets [Member]              
Related Party Transaction [Line Items]              
Cash       $ 190,000      
Employee [Member] | Purchase Agreement [Member]              
Related Party Transaction [Line Items]              
Remaining balance     $ 500,000        
Agreed to issued shares     174,610        
Common stock, par value   $ 2.43 $ 0.086        
Related party transaction, description of transaction   The “Make-Up Amount” means $425,000 minus the Blockey Shares Value (174,610 multiplied by the Nasdaq official closing price of the Common Stock on the Calculation Date)          
Employee [Member] | Purchase Agreement [Member] | Subsequent Event [Member]              
Related Party Transaction [Line Items]              
Other liabilities, current $ 367,496            
Cash 190,000            
Stock issued during period, value, new issues $ 510,485            
v3.24.1.1.u2
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Stock Exchange Agreement [Member] - Spetner Associates [Member]
May 14, 2024
USD ($)
$ / shares
Subsequent Event [Line Items]  
Date of acquisition agreement May 14, 2024
Acquire percent of issued and outstanding shares of common stock 80.00%
Common stock, par value | $ / shares $ 1.00
Consideration transferred $ 137,142.86
Paid in cash $ 80,000
Sole option to acquire remaining percent of common stock 20.00%
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