Equibles

10-Q

Reliance Global Group, Inc. (EZRA)

10-Q 2023-11-13 For: 2023-09-30
View Original
Added on April 10, 2026

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-Q

☒

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

For the quarterly period ended

September 30, 2023

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<br> or other jurisdiction<br><br> <br>of<br> incorporation or organization) (I.R.S.<br> Employer<br><br> <br>Identification<br> 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<br> Stock RELI The<br> Nasdaq Capital Market
Series<br> A Warrants RELIW The<br> 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<br> accelerated filer ☐ Accelerated<br> filer ☐
Non-accelerated<br> filer ☒ Smaller<br> reporting company ☒
Emerging<br> growth company ☐

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

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

Yes ☐ No ☒

At

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

TABLE

OF CONTENTS

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

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Balance Sheets

December<br> 31, 2022
Assets
Current assets:
Cash 1,777,348 $ 505,410
Restricted cash 1,409,909 1,404,359
Accounts receivable 1,190,780 994,321
Accounts receivable, related<br> parties 21,078 18,292
Accounts<br>receivable 21,078 18,292
Other receivables 813 11,464
Prepaid expense and other<br> current assets 299,522 245,535
Current<br> assets - discontinued operations - 85,998
Total current assets 4,699,450 3,265,379
Property and equipment, net 145,962 162,767
Right-of-use assets 878,672 1,018,952
Investment in NSURE, Inc. - 900,000
Intangibles, net 11,675,526 13,439,369
Goodwill 14,287,099 14,287,099
Other non-current assets 23,283 23,284
Other<br> assets - discontinued operations - 5,330,879
Total<br> assets 31,709,992 $ 38,427,729
Current liabilities:
Accounts payable and other<br> accrued liabilities 999,785 $ 951,382
Short term financing agreements 114,394 154,017
Current portion of loans payables,<br> related parties 336,479 1,422,249
Other payables 64,101 101,113
Current portion of long-term<br> debt 1,353,961 1,118,721
Current portion of leases<br> payable 348,492 339,937
Current<br>portion of earn-out liability 687,197 2,153,478
Current<br> liabilities - discontinued operations - 1,600,636
Total current liabilities 3,904,409 7,841,533
Loans payable, related parties,<br> less current portion 258,785 122,266
Convertible debt, related<br> parties, less current portion 161,855 1,500,000
Long term debt, less current<br> portion 11,380,567 12,349,673
Leases payable, less current<br> portion 561,041 714,068
Earn-out liability, less current<br> portion - 556,000
Warrant liabilities 1,580,380 6,433,150
Noncurrent<br> liabilities - discontinued operations - -
Total<br> liabilities 17,847,037 29,516,690
Stockholders’ equity:
Preferred stock, 0.086 par value; 750,000,000 shares<br> authorized and 0 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively - -
Common stock, 0.086 par value;<br> 133,333,333 shares authorized and 2,304,375 and 1,219,573 issued and outstanding as of September 30, 2023 and December 31, 2022,<br> respectively 198,155 104,883
Additional paid-in capital 43,639,612 35,798,139
Accumulated<br> deficit (29,974,812 ) (26,991,983 )
Total<br> stockholders’ equity 13,862,955 8,911,039
Total<br> liabilities and stockholders’ equity 31,709,992 $ 38,427,729

All values are in US Dollars.

The

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

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Reliance

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Statements of Operations

(Unaudited)

Three<br> Months Ended<br><br> <br>September<br> 30, 2023 Three<br> Months Ended<br><br> <br>September<br> 30, 2022 Nine<br> Months Ended<br><br> <br>September<br> 30, 2023 Nine<br> Months Ended<br><br> <br>September<br> 30, 2022
Revenue
Commission<br> income $ 3,275,583 $ 2,821,768 $ 10,410,591 $ 8,727,614
Total<br> revenue 3,275,583 2,821,768 10,410,591 8,727,614
Operating<br> expenses
Commission expense 796,001 695,020 2,701,601 2,143,562
Salaries and wages 1,775,919 1,629,947 5,230,871 4,899,171
General and administrative<br> expenses 1,368,126 1,117,027 4,430,177 5,080,991
Marketing and advertising 117,752 63,371 364,184 148,057
Depreciation<br> and amortization 652,839 651,395 1,962,066 1,901,140
Total<br> operating expenses 4,710,637 4,156,760 14,688,899 14,172,921
Loss from operations (1,435,054 ) (1,334,992 ) (4,278,308 ) (5,445,307 )
Other income<br> (expense)
Interest expense (386,562 ) (281,201 ) (1,126,281 ) (586,251 )
Interest related parties (32,475 ) (1,730 ) (125,104 ) (5,189 )
Interest expense (32,475 ) (1,730 ) (125,104 ) (5,189 )
Other<br> (expense) income, net (310 ) (4,909 ) 3,650 (4,414 )
Recognition<br> and change in fair value of warrant liabilities 1,715,397 7,919,315 4,389,120 32,398,530
Total<br> other income 1,296,050 7,631,475 3,141,385 31,802,676
(Loss) income from continuing<br> operations before tax $ (139,004 ) 6,296,483 $ (1,136,922 ) 26,357,370
(Loss)<br> income from discontinued operations before tax - (174,390 ) (1,845,904 ) (399,585 )
Net (loss) income (139,004 ) 6,122,093 (2,982,827 ) 25,957,784
Basic<br> (loss) earnings per share
Continuing operations $ (0.05 ) $ 5.44 $ (0.47 ) $ 18.16
Discontinued Operations $ - $ (0.15 ) $ (0.75 ) $ (0.37 )
Basic (loss) earnings per share $ (0.05 ) $ 5.29 $ (1.22 ) $ 17.79
Diluted (loss) earnings per share
Continuing operations $ (0.05 ) $ 4.83 $ (0.47 ) $ 15.93
Discontinued operations $ - $ (0.14 ) $ (0.75 ) $ (0.33 )
Diluted (loss) earnings per share $ (0.05 ) $ 4.69 $ (1.22 ) $ 15.60
Weighted average number of shares outstanding - Basic 3,021,455 1,156,939 2,436,015 1,069,534
Weighted average number of shares outstanding - Diluted 3,021,455 1,304,878 2,436,015 1,219,822

The

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

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Reliance

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Statements of Stockholders’ Equity

(Unaudited)

Shares Amount Shares Amount capital Receivable Deficit Total
Nine<br> Months Ended September 30, 2023
Preferred<br> Stock Common<br> Stock Additional paid-in Subscription Accumulated
Shares Amount Shares Amount capital Receivable Deficit Total
Balance,<br> December 31, 2022 - $ - 1,219,573 $ 104,883 $ 35,798,139 $ - $ (26,991,983 ) 8,911,039
Common shares issued for earnout<br> liabilities - - 109,358 9,404 973,074 - - 982,478
Conversion of convertible<br> debt, related parties - - 66,743 5,740 639,260 - - 645,000
Round up of shares due to<br> reverse split - - 15,336 1,300 (5,946 ) - - (4,646 )
Shares issued in 2023 private<br> placement - - 155,038 13,333 3,433,151 - - 3,446,484
Share-based compensation - - - - 43,797 - - 43,797
Net<br> loss - - - - - - (1,788,538 ) (1,788,538 )
Balance,<br> March 31, 2023 - - 1,566,048 134,660 40,881,475 - (28,780,521 ) 12,235,614
Common shares issued for services - - 112,557 9,681 368,314 - - 377,995
Common shares issued for earnout<br> liabilities - - 352,260 30,294 1,403,406 - - 1,433,700
Shares issued for vested stock<br> awards - - 22,219 1,911 (1,911 ) - - -
Share-based compensation - - - - 35,367 - - 35,367
Net<br> loss - - - - - - (1,055,287 ) (1,055,287 )
Balance,<br> June 30, 2023 - - 2,053,084 176,546 42,686,651 - (29,835,808 ) 13,027,389
Common shares issued for earnout<br> liabilities 174,610 15,016 463,356 478,372
Common shares issued for vested<br> stock awards 3,017 259 3,510 3,769
Share-based compensation - 27,779 27,779
Common shares issued for services 400 34 966 1,000
Series B warrant exercise 73,264 6,300 457,350 463,650
Net<br> loss - - - - - (139,004 ) (139,004 )
Balance,<br> September 30, 2023 - - 2,304,375 198,155 43,639,612 - (29,974,812 ) 13,862,955

The

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

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Reliance

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Statements of Stockholders’ Equity

(Unaudited)

Shares Amount Shares Amount capital Receivable Deficit Total
Nine<br> Months Ended September 30, 2022
Preferred<br> Stock Common<br> Stock Additional paid-in Subscription Accumulated
Shares Amount Shares Amount capital Receivable Deficit Total
Balance,<br> December 31, 2021 - $ - 730,407 $ 62,815 $ 27,329,201 $ (20,000,000 ) $ (33,458,145 ) $ (26,066,129 )
Share-based compensation - - - - 739,960 - - 739,960
Shares issued due to private<br> placement 9,076 781 178,059 15,313 (16,043 ) 20,000,000 - 20,000,051
Shares issued pursuant to<br> acquisition of Medigap - - 40,402 3,475 4,759,976 - - 4,763,451
Exercise of Series A warrants - - 25,000 2,150 2,472,850 - - 2,475,000
Exercise of warrants - - 25,000 2,150 2,472,850 - - 2,475,000
Issuance of prefunded Series<br> C Warrants in exchange for common shares - - (218,462 ) (18,788 ) 18,788 - - -
Shares issued for vested stock<br> awards - - 400 34 (34 ) - - -
Net<br> Income - - - - - - 9,340,000 9,340,000
Balance,<br> March 31, 2022 9,076 $ 781 755,806 $ 64,999 $ 35,304,698 $ - $ (24,118,145 ) $ 11,252,333
Share-based compensation - - - - 179,083 - - 179,083
Issuance of common stock for<br> conversion of Series C warrants - - 218,462 18,788 (17,452 ) - - 1,336
Net<br> Income - - - - - - 10,495,691 10,495,691
Balance,<br> June 30, 2022 9,076 $ 781 974,268 $ 83,787 $ 35,466,329 $ - $ (13,622,454 ) $ 21,928,443
Balance 9,076 $ 781 974,268 $ 83,787 $ 35,466,329 $ - $ (13,622,454 ) $ 21,928,443
Share-based<br> compensation - - - - 314,257 - - 314,257
Issuance of common stock for<br> conversion of Series D warrants - - 81,423 7,002 (6,207 ) - - 795
Issuance of common stock for<br> conversion of warrants - - 81,423 7,002 (6,207 ) - - 795
Shares issued due to conversion<br> of preferred stock (9,076 ) (781 ) 147,939 12,723 (11,942 ) - - -
Net<br> Income - - - - - - 6,122,093 6,122,093
Net<br> income (loss) - - - - - - 6,122,093 6,122,093
Balance,<br> September 30, 2022 - $ - 1,203,630 $ 103,512 $ 35,762,437 $ - $ (7,500,361 ) $ 28,365,588
Balance - $ - 1,203,630 $ 103,512 $ 35,762,437 $ - $ (7,500,361 ) $ 28,365,588

The

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

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Reliance

Global Group, Inc. and Subsidiaries and Predecessor

Condensed

Consolidated Statements of Cash Flows

(Unaudited)

For the Nine Months Ended September 30,
2023 2022
CASH FLOWS<br> FROM OPERATING ACTIVITIES:
Net<br> (loss) income (2,982,827 ) $ 25,957,784
Adjustment<br> to reconcile net (loss) income to net cash used in operating activities:
Depreciation<br> and amortization 1,962,066 1,901,140
Amortization<br> of debt issuance costs and accretion of debt discount 35,163 28,702
Non-cash<br> lease expense (4,192 ) 19,549
Stock<br> compensation expense 106,943 1,233,300
Shares<br> issued for services performed 289,995 -
Recognition<br> and change in fair value of warrant liability (4,389,120 ) (32,398,531 )
Earn-out<br> fair value adjustments 1,291,494 132,445
Change<br> in operating assets and liabilities:
Accounts<br> receivable (196,459 ) 174,025
Accounts<br> receivable, related parties (2,786 ) 5,972
Other<br> receivables 10,651 (31,981 )
Prepaid<br> expense and other current assets 34,136 2,346,510
Other<br> non-current assets - (6,491 )
Accounts<br> payables and other accrued liabilities 48,403 (1,642,938 )
Other<br> payables (37,012 ) 34,841
Net<br> cash used in continuing operating activities (3,833,545 ) (2,245,673 )
Net<br> cash adjustments for discontinued operating activities 3,816,238 67,675
Total<br> net cash used in continuing and discontinued operating activities (17,307 ) (2,177,998 )
CASH FLOWS<br> FROM INVESTING ACTIVITIES:
Purchase<br> of property and equipment (21,206 ) (58,149 )
Purchase of intangibles (160,211 ) (5,392,951 )
Proceeds<br> from sale of investment in NSURE 900,000 -
Business<br> acquisitions, net of cash acquired - (6,000,000 )
Net<br> cash provided by (used in) investing activities 718,583 (11,451,100 )
Net<br> cash used in discontinued investing activities - (13,531,509 )
Total<br> net cash provided by (used in) continuing and discontinued investing activities 718,583 (24,982,609 )
CASH FLOWS<br> FROM FINANCING ACTIVITIES:
Proceeds<br> from borrowings of debt - -
Principal<br> repayments of debt (763,840 ) (663,016 )
Debt issuance<br> costs - (214,257 )
Loans<br> acquired through acquisitions - 6,520,000
Issuance<br> of common shares in exchange for Series C warrants 2,131
Principal<br> repayments of short-term financings (21,923 ) (107,206 )
Payments<br> of loans payable, related parties (954,439 ) (174,206 )
Payments of convertible debt, related parties (693,145 ) 1,500,000
Cash<br> payments on earn-out liability (419,225 ) (1,627,296 )
Proceeds<br> from exercise of warrants into common stock - 2,475,000
Private<br> placement of shares and warrants 3,446,484 17,853,351
Net<br> cash provided by continuing financing activities 593,912 25,564,501
Net cash<br> used in discontinued financing activities (17,700 ) -
Total<br> net cash provided by continuing and discontinued financing activities 576,212 25,564,501
Net increase in cash and restricted<br> cash 1,277,488 (1,596,106 )
Cash<br> and restricted cash at beginning of year 1,909,769 4,620,722
Cash<br> and restricted cash at end of year 3,187,257 3,024,616
SUPPLEMENTAL<br> DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS:
Common<br> stock issuance to settle earn-out liabilities 2,894,550 -

The

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

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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.

Basisof 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, 2022, as the same may be amended from time to time. Certain prior period amounts in the 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 September 30, 2023, the Company’s reported cash and restricted cash aggregated balance was approximately $3,187,000, current assets were approximately $4,699,000, while current liabilities were approximately $3,904,000. As of September 30, 2023, the Company had positive working capital of approximately $795,000 and stockholders’ equity of approximately $13,863,000. For the nine months ended September 30, 2023, the Company reported loss from operations of approximately $4,278,000, a non-cash, non-operating gain on the recognition and change in fair value of warrant liabilities of approximately $4,389,000, resulting in net loss from continuing operations of approximately $1,137,000, a net loss from discontinued operations of approximately $1,846,000, resulting in an overall net loss of approximately $2,983,000. The Company completed a capital offering in March 2023, raising net proceeds of approximately $3,446,000.

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”).

Useof 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.

Cashand 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:

SCHEDULE

OF RESTRICTED CASH IN STATEMENT OF CASH FLOW

September<br> 30, 2023 September<br> 30, 2022
Cash $ 1,777,348 $ 1,615,054
Restricted<br> cash 1,409,909 1,409,562
Total<br> cash and restricted cash $ 3,187,257 $ 3,024,616 
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FairValue 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.

WarrantLiabilities: 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:

SCHEDULE OF WARRANT LIABILITY

September<br> 30, 2023 December<br> 31, 2022
Stock price $ 2.49 $ 8.55
Volatility 105.0 % 105.0 %
Time to expiry 3.26 4.01
Dividend yield 0.0 % 0.0 %
Risk free rate 4.7 % 4.1 %
Warrants measurement input 4.7 % 4.1 %

The following reconciles fair value of the liability classified warrants:

SCHEDULE

OF RECONCILES WARRANT COMMITMENT

Series<br> B Warrant Liabilities Placement<br> Agent Warrants Total
Beginning balance, December 31,<br> 2022 $ 6,384,250 $ 48,900 $ 6,433,150
Unrealized<br> (gain) loss (4,226,950 ) (39,281 ) (4,266,231 )
Ending balance, March<br> 31, 2023 2,157,300 9,619 2,166,919
Unrealized<br> (gain) loss 1,584,684 7,825 1,592,509
Ending balance, June<br> 30, 2023 $ 3,741,984 $ 17,444 $ 3,759,428
Balance $ 3,741,984 $ 17,444 $ 3,759,428
Unrealized<br> (gain) loss $ (1,703,333 ) (12,064 ) (1,715,397 )
Warrants<br> exercised or transferred (463,651 ) - (463,651 )
Ending balance, September<br> 30, 2023 $ 1,575,000 $ 5,380 $ 1,580,380
Balance $ 1,575,000 $ 5,380 $ 1,580,380

Earn-outliabilities: 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. Key unobservable inputs for the Monte Carlo simulation methods are summarized by the following (some presented in ranges):

SCHEDULE

OF FAIR VALUE MEASUREMENTS

September<br> 30, 2023
WACC Risk Premium: 13.5 %
Volatility 50.0% – 105.0 %
Credit Spread: 8.77% -10.4 %
Payment Delay (days) 90
Risk free rate USD<br> Yield Curve or 5.46% - 5.47 %
Discounting Convention: Mid-period
Stock Price $ 2.49
Dividend Yield 0.00 %
Number of Iterations 100,000 
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Undiscounted

remaining earn out payments were approximately $847,854 as of September 30, 2023. The following table reconciles fair value of earn-out liabilities for the periods ended September 30, 2023, and December 31, 2022:

SCHEDULE

OF GAIN OR LOSSES RECOGNIZED FAIR VALUE

September<br> 30, 2023 December<br> 31, 2022
Beginning balance – January<br> 1 $ 2,709,478 $ 3,813,878
Acquisitions and settlements (3,260,403 ) (1,104,925 )
Period adjustments:
Fair<br> value changes included in earnings^*^ 1,291,494 525
Earn-out payable in common shares (53,372 ) -
Ending balance 687,197 2,709,478
Less:<br> Current portion (687,197 ) (2,153,478 )
Ending<br> balance, less current portion $ - $ 556,000
* Recorded<br> in the general and administrative expenses caption on the condensed consolidated statements of operations.
--- ---

RevenueRecognition

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

SCHEDULE

OF DISAGGREGATION REVENUE

Three<br> Months Ended September 30, 2023 Medical Life Property<br> and Casualty Total
EBS $ 206,308 $ 8,900 $ - $ 215,208
USBA 11,266 843 - 12,109
CCS/UIS - - 62,197 62,197
Montana 453,269 1,770 - 455,039
Fortman 288,969 602 268,704 558,275
Altruis 1,200,054 - - 1,200,054
Kush 331,240 - - 331,240
Reli Exchange 66,833 18,139 356,489 441,461
Total $ 2,557,939 $ 30,254 $ 687,390 $ 3,275,583
Nine<br> Months Ended September 30, 2023 Medical Life Property<br> and Casualty Total
--- --- --- --- --- --- --- --- ---
EBS $ 646,259 $ 17,470 $ - $ 663,729
USBA 33,956 2,266 - 36,222
CCS/UIS - - 182,368 182,368
Montana 1,384,060 10,105 - 1,394,165
Fortman 887,605 2,675 700,169 1,590,449
Altruis 4,268,727 - - 4,268,727
Kush 973,719 - - 973,719
Reli Exchange 182,638 103,341 1,015,233 1,301,212
Total $ 8,376,964 $ 135,857 $ 1,897,770 $ 10,410,591 
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| --- | | Three<br> Months Ended September 30, 2022 | Medical | | Life | | Property<br> and Casualty | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | EBS | $ | 206,906 | | 5,478 | $ | - | $ | 212,384 | | USBA | | 13,227 | | 505 | | - | | 13,732 | | CCS/UIS | | - | | - | | 76,035 | | 76,035 | | Montana | | 422,978 | | 3,613 | | - | | 426,591 | | Fortman | | 256,791 | | 2,464 | | 186,860 | | 446,115 | | Altruis | | 895,905 | | 107 | | - | | 896,012 | | Kush | | 366,043 | | 176 | | - | | 366,219 | | Reli Exchange | | 56,232 | | 27,383 | | 301,065 | | 384,680 | | Total | $ | 2,218,083 | | 39,725 | $ | 563,960 | $ | 2,821,768 | | Nine<br> Months Ended September 30, 2022 | Medical | | Life | | Property<br> and Casualty | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | EBS | $ | 633,252 | | 11,965 | $ | - | $ | 645,217 | | USBA | | 38,610 | | 1,028 | | - | | 39,638 | | CCS/UIS | | - | | - | | 177,111 | | 177,111 | | Montana | | 1,379,307 | | 5,710 | | - | | 1,385,017 | | Fortman | | 943,852 | | 5,337 | | 589,924 | | 1,539,113 | | Altruis | | 3,053,474 | | 2,783 | | - | | 3,056,257 | | Kush | | 1,229,326 | | 933 | | - | | 1,230,259 | | Reli Exchange | | 103,893 | | 49,646 | | 501,463 | | 655,002 | | Revenues | $ | 7,381,714 | | 77,402 | $ | 1,268,498 | $ | 8,727,614 |

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

SCHEDULE

OF CONCENTRATIONS OF REVENUES

For<br> the Three Months <br>Ended <br>September 30,
Insurance<br> Carrier 2023 2022
Priority Health 44 % 30 %
BlueCross BlueShield 21 % 13 %
Insurance carrier 21 % 13 %
For<br> the Nine Months <br>Ended <br>September 30,
--- --- --- --- --- --- ---
Insurance<br> Carrier 2023 2022
Priority Health 37 % 34 %
BlueCross BlueShield 14 % 13 %
Insurance carrier 14 % 13 %

No other single customer accounted for more than 10% of the Company’s commission revenues during the three and nine months ended September 30, 2023 and 2022. 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.

IncomeTaxes

The Company recorded no income tax expense for the three and nine months ended September 30, 2023 and 2022 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.

| 11 |

| --- |

As

of September 30, 2023 and December 31, 2022, 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.

DiscontinuedOperations

The

Company’s board of directors approved the discontinuation and abandonment of Medigap Healthcare Insurance Company, LLC (“Medigap”), a subsidiary of the Company, effective April 17, 2023, due to Medigap’s sustained recurring losses stemming from amongst other factors, greater than anticipated revenue chargebacks. The Company was unable to divest its interest in Medigap for value, and accordingly, operations were wound down in an orderly manner. In doing so, the Company transferred to its operating entity, Medigap’s customer relationships and internally developed and purchased software intangible assets, with net of amortization combined value of approximately $4,300,000, as well as, its short-term financing arrangement of $29,500, and each are respectively classified at their adjusted book values in the intangible assets and short term financing agreements accounts in the condensed consolidated balance sheets for the periods ended September 30, 2023 and December 31, 2022. These assets have continued value to the Company and have not been impaired as the fair value exceeds carrying cost. Medigap’s remaining assets were considered to have no remaining asset value and were fully impaired. Certain liabilities and estimated liabilities as outlined in the tables herein, were discharged and/or written-off in conjunction with the Settlement Agreement (as defined below) because of them having a net zero dollar estimated liability value. Accordingly, the Company recognized a net of estimated liability adjustments gain/loss of approximately $0, and an impairment loss of approximately $4,400,000, presented in income (loss) from discontinued operations in the consolidated statements of operations for the three and nine months ended September 30, 2023, respectively. As part of the abandonment, the Company cancelled third party contracts, settled outstanding vendor and other third-party obligations, ceased to enter new customer contracts via Medigap, and no further customer performance obligations existed. The Company does not expect further continuing involvement with Medigap, and in accordance with ASC 205-20-45-9, no corporate overhead has been allocated to discontinued operations.

SettlementAgreement

On

June 30, 2023, the Company entered into a confidential settlement agreement and mutual release (the “Settlement Agreement”) with certain Medigap affiliated entities and persons, and the former owners of Medigap, whereby the Company would receive a settlement payment of $2,900,000 and was released from all past and future Medigap obligations and liabilities. The settlement payment was received in full by the Company in July 2023 and is recorded as income from discontinued operations in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023.

The following tables present the major components of assets and liabilities included in discontinued operations on the condensed consolidated balance sheets.

SCHEDULE

OF DISCONTINUED OPERATIONS ON CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS

September<br> 30, 2023 December<br> 31, 2022
Accounts receivable $ - $ 73,223
Accounts receivable, related<br> parties - 3,595
Accounts<br>receivable - 3,595
Other receivables - 5,388
Prepaid<br> expense and other current assets - 3,792
Current<br> Assets - Discontinued Operations $ - $ 85,998
Condensed consolidated balance<br> sheets - Current Assets - Discontinued Operations $ - $ 85,998
Property and equipment, net - $ 24,116
Right-of-use assets - 163,129
Intangibles, net - 318,000
Goodwill - 4,825,634
Other<br> Assets - Discontinued Operations $ - $ 5,330,879
Condensed consolidated balance<br> sheets - Other Assets - Discontinued Operations $ - $ 5,330,877
Accounts payable and other<br> accrued liabilities - $ 506,585
Chargeback reserve - 915,934
Current<br> portion of leases payable - 178,117
Current<br> Liabilities - Discontinued Operations $ - $ 1,600,636
Condensed<br> consolidated balance sheets - Current Liabilities - Discontinued Operations $ - $ 1,600,636 
| 12 |

| --- |

The following table rolls forward Medigap’s assets and liabilities from their carrying values pre-abandonment to their values post abandonment, and presents the impact of reclassifications, impairments, and write-offs:

Medigap<br> Related Assets Carrying<br> Value Prior To Abandonment Asset<br> and Liability Transfers Retained by the Company Asset<br> Impairments and Liability Write-Offs Carrying<br> Value As of September 30, 2023
Accounts<br> receivable $ 56,398 $ - $ (56,398 ) $ -
Accounts<br> receivable, related party 3,595 - (3,595 ) -
Accounts<br>receivable 3,595 - (3,595 ) -
Other<br> receivables 5,388 - (5,388 ) -
Current<br> assets – Medigap $ 65,381 $ - $ (65,381 ) $ -
Property<br> and equipment, net $ 22,378 $ - $ (22,378 ) $ -
Right-of-use<br> assets 119,594 - (119,594 ) -
Intangibles,<br> net 4,570,536 (4,258,214<br> )^1^ (312,322 ) -
Goodwill 4,825,634 - (4,825,634 ) -
Other<br> assets - Medigap $ 9,538,142 $ (4,258,214 ) $ (5,279,928 ) $ -
Total<br> assets - Medigap $ 9,603,523 $ (4,258,214 ) $ (5,345,309 ) $ -
Accounts<br> payable and other accrued liabilities $ 4,157 $ - $ (4,157 ) $ -
Short<br> term financing agreements 29,500 (29,500 ) - -
Chargeback<br> reserve 831,725 - (831,725<br> )^2^ -
Current<br> portion of leases payable 134,517 - (134,517<br> )^3^ -
Other<br> liabilities 9,842 - (9,842<br> )^3^ -
Current<br> liabilities - Medigap $ 1,009,741 $ (29,500 ) $ (980,241 ) $ -
Total<br> liabilities - Medigap $ 1,009,741 $ (29,500 ) $ (980,241 ) $ -
Net<br> assets and liabilities - Medigap $ 8,593,782 $ (4,228,714 ) $ (4,365,068 ) $ -
1 Includes<br> customer relationships and internally developed and purchased software intangible assets that have continued value to the Company<br> and have not been impaired as the fair value exceeds carrying cost.
--- ---
2 Estimated<br> liability write-off per net zero dollar estimated liability value.
3 Liability<br> discharge pursuant to the Settlement Agreement. 
| 13 |

| --- |

The following tables disaggregate the major classes of pretax gain and loss as presented in discontinued operations in the condensed consolidated statements of operations.

Three<br> Months<br><br> <br>Ended<br><br> <br>September<br> 30,<br><br> <br>2023 Three<br> Months<br><br> <br>Ended<br><br> <br>September<br> 30,<br><br> <br>2022 Nine<br> Months<br><br> <br>Ended<br><br> <br>September<br> 30,<br><br> <br>2023 Nine<br> Months<br><br> <br>Ended<br><br> <br>September<br> 30,<br><br> <br>2022
Income
Commission<br> income $ - $ 1,331,593 $ 744,030 $ 3,868,654
Expenses
Commission<br> expense - 167,837 110,639 473,578
Salaries<br> and wages - 484,783 454,663 1,474,526
General<br> and administrative expenses - 136,070 129,363 384,393
Marketing<br> and advertising - 662,744 426,818 1,774,463
Depreciation<br> and amortization - 62,048 7,283 176,233
Other<br> expenses (income) - (7,500 ) (3,902 ) (14,954 )
Total<br> discontinued operations expenses before impairments and write-offs - 1,505,982 1,124,864 4,268,239
Total<br> discontinued operations income / (loss) before impairments and write-offs $ - $ (174,390 ) $ (380,834 ) $ (399,585 )
Gains<br> and (losses) from recoveries and impairments / write-offs of discontinued operations assets and liabilities
Settlement<br> Recovery $ - - $ 2,900,000 -
Asset impairment losses
Accounts<br> receivable - - 56,398 -
Accounts<br> receivable, related parties - - 3,595 -
Other<br> receivables - - 5,388 -
Property<br> and equipment, net - - 22,378 -
Right-of-use<br> assets - - 119,593 -
Intangibles,<br> net - - 312,322 -
Goodwill - - 4,825,634 -
Total asset impairments - - 5,345,309 -
Liability write-off gains
Accounts<br> payable and other accrued liabilities - - 4,156 -
Other<br> payables - - 9,842 -
Chargeback<br> reserve - - 831,725 -
Current<br> portion of leases payable - - 134,517 -
Total<br> liability write-off gains - - 980,240 -
Discontinued<br> operations net asset and liability impairments / write-offs gains and (losses) - - 4,365,070 -
Net<br> gains and (losses) from recoveries and impairments / write-offs from discontinued operations assets and liabilities - - (1,465,070 ) -
Gain<br> (loss) from discontinued operations before tax - (174,390 ) (1,845,904 ) (399,585 )
Consolidated<br> statement of operations - Income (loss) from discontinued operations before tax $ - $ (174,390 ) $ (1,845,904 ) $ (399,585 )

RecentlyIssued Accounting Pronouncements

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

| 14 |

| --- |

NOTE

  1. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table rolls forward the Company’s goodwill balance for the periods ended September 30, 2023, and December 31, 2022, adjusted for discontinued operations.

SCHEDULE

OF IMPAIRMENT OF GOODWILL

Goodwill
December 31, 2021 $ 10,050,277
Goodwill<br> recognized in connection with Barra acquisition on April 26, 2022 4,236,822
December 31, 2022 14,287,099
September 30, 2023 $ 14,287,099

For

the year ended December 31, 2022, due to a declining market capitalization attributed to Medigap’s performance, the Company performed a goodwill impairment test utilizing the Market Approach – Traded Market Value Method, concluding that the Company’s fair value and resultant net assets, implied a goodwill balance of $19,100,000 versus our goodwill balance prior to write-down of $33,400,000. Thus, the Company recognized a goodwill impairment loss of $14,373,374. As of June 30, 2023, the Company recognized an additional goodwill impairment of $4,825,634 upon the abandonment of Medigap.

The following table rolls forward the Company’s goodwill balance for the periods ended September 30, 2023, and December 31, 2022 inclusive of discontinued operations.

Goodwill
December 31, 2021 $ 10,050,277
Goodwill recognized in connection<br> with Medigap acquisition 19,199,008
Goodwill recognized in connection<br> with Barra acquisition 4,236,822
Goodwill impairment (Medigap)<br> during the year-ended December 31, 2022 (14,373,374 )
December 31, 2022 19,112,733
Goodwill impairment (Medigap)<br> during the nine months ended September 30, 2023 (4,825,634 )
September 30, 2023 $ 14,287,099

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of September 30, 2023:

SCHEDULE

OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD

Weighted Average Remaining Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trade name and trademarks 3.6 $ 1,807,187 $ (1,232,982 ) $ 574,205
Internally developed software 3.4 1,792,186 (557,038 ) 1,235,148
Customer relationships 8.26 11,922,290 (2,914,320 ) 9,007,970
Purchased software 1.85 667,206 (609,677 ) 57,529
Video production assets 0.00 50,000 (50,000 ) -
Non-competition agreements 1.14 3,504,810 (2,704,136 ) 800,674
$ 19,743,679 $ (8,068,153 ) $ 11,675,526 
| 15 |

| --- |

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, 2022:

Weighted<br> Average<br><br> <br>Remaining<br> Amortization<br><br> <br>period<br> (Years) Gross<br> Carrying Amount Accumulated<br> Amortization Net<br> Carrying Amount
Trade name and<br> trademarks 4.4 $ 1,806,188 $ (969,241 ) $ 836,947
Internally developed software 4.1 1,635,178 (287,990 ) 1,347,188
Customer relationships 9.0 11,922,290 (2,076,086 ) 9,846,204
Purchased software 0.4 665,137 (581,497 ) 83,640
Video production assets - 50,000 (50,000 ) -
Non-competition<br> agreements 1.9 3,504,810 (2,179,420 ) 1,325,390
Total $ 19,583,603 $ (6,144,234 ) $ 13,439,369

The following table reflects expected amortization expense as of September 30, 2023, for each of the following five years and thereafter:

SCHEDULE

OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS

Years<br> ending December 31, Amortization Expense
2023 (remainder of year) $ 639,264
2024 2,193,428
2025 1,799,472
2026 1,530,604
2027 1,196,429
Thereafter 4,316,329
Total $ 11,675,526 
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| --- |

NOTE

  1. LONG-TERM DEBT AND SHORT-TERM FINANCINGS

Long-Term Debt

The composition of the long-term debt follows:

SCHEDULE

OF LONG TERM DEBT

December<br> 31, 2022
Oak<br>Street Funding LLC Term Loan 384,402 $ 426,883
Oak Street<br> Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5%, maturing August 2028, net of<br> deferred financing costs of 10,724 and 12,388 as of September 30, 2023 and December 31, 2022, respectively 384,402 $ 426,883
Oak Street Funding LLC<br> Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5%, maturing December<br> 2028, net of deferred financing costs of 13,163 and 15,076 as of September 30, 2023 and December 31, 2022, respectively 627,676 693,682
Oak Street Funding LLC<br> Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0%, maturing April 2029, net of deferred financing<br> costs of 8,101 and 9,206 as of September 30, 2023 and December 31, 2022, respectively 719,654 788,596
Oak Street Funding LLC<br> Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0%, maturing May 2029, net of deferred financing costs<br> of 32,481 and 36,843 as of September 30, 2023 and December 31, 2022, respectively 1,817,583 1,987,846
Oak Street Funding LLC<br> Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0%, maturing September 2029, net of deferred financing<br> costs of 37,269 and 42,129 as of September 30, 2023 and December 31, 2022, respectively 2,989,482 3,249,575
Oak<br> Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5%, maturing May 2032, net of deferred<br> financing costs of 182,118 and 198,188 as of September 30, 2023 and December 31, 2022, respectively 6,195,731 6,321,812
Long term debt gross 12,734,528 13,468,394
Less:<br> current portion (1,353,961 ) (1,118,721 )
Long-term<br> debt 11,380,567 $ 12,349,673

All values are in US Dollars.

OakStreet Funding LLC – Term Loans and Credit Facilities

SCHEDULE

OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES

Fiscal<br> year ending December 31, Maturities<br> of Long-Term Debt
2023 (remainder of year) $ 326,783
2024 1,390,766
2025 1,552,772
2026 1,729,160
2027 1,925,603
Thereafter 6,093,302
Total 13,018,386
Less:<br> debt issuance costs (283,858 )
Total $ 12,734,528 
| 17 |

| --- |

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 8

%

per annum. As of September 30, 2023, and December 31, 2022, balances outstanding on short-term financings were $114,394 and $154,017, respectively.

NOTE

  1. WARRANT LIABILITIES

SeriesB Warrants

Pursuant

to the terms of the Sales and Purchase Agreement (SPA), during the quarter ended September 30, 2023, the Series B Warrants’ effective exercise price reset to $2.43. As of September 30, 2023, there remain 1,166,667 Series B Warrants outstanding.

For

the three and nine months ended September 30, 2023, net fair value gains and losses recognized for the Series B Warrants were gains of $1,703,333 and $4,345,599, respectively. For the three and nine months ended September 30, 2022, net fair value gains and losses recognized for the Series B Warrants were gains of $7,726,161 and $34,621,024, respectively, presented in the recognition and change in fair value of warrant liabilities account in the condensed consolidated statements of operations. The Series B Warrant liability outstanding as of September 30, 2023 and December 31, 2022 was $1,575,000 and $6,384,250 respectively, presented in the warrant liability account on the condensed consolidated balance sheets.

PlacementAgent Warrants

For

the three and nine months ended September 30, 2023, net fair value gains and losses recognized for the Placement Agent Warrants (“PAW”) were gains of $12,064 and $43,520, respectively. For the three and nine months ended September 30, 2022, net fair value gains recognized for the PAW were $193,154 and $1,450,129, respectively, presented in the recognition and change in fair value of warrant liabilities account in the condensed consolidated statements of operations. The PAW liability outstanding as of September 30, 2023 and December 31, 2022 was $5,380 and $48,900, respectively, presented in the warrant liability account on the condensed consolidated balance sheets. As of September 30, 2023, there remain 16,303 PAW’s outstanding.

NOTE

  1. EQUITY

CommonStock

The

Company is authorized to issue 133,333,333 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.

In

January 2023, the Company issued 109,358 shares of the Company’s common stock to settle two earn-out liabilities.

On February 23, 2023, pursuant to authority granted by the Board of Directors of the Company, the Company implemented a 1-for-15 reverse split of the Company’s authorized and issued and outstanding common stock (the “Reverse Split-2023”). The par value remains unchanged. All share and per share information as well as common stock and additional paid-in capital have been retroactively adjusted to reflect the Reverse Split-2023 for all periods presented, unless otherwise indicated. The split resulted in a rounding addition of approximately 15,300 shares valued at par, totaling $1,300.

In

March 2023, Yes Americana, a related party, converted $645,000 of its outstanding convertible debt into 66,743 shares of the Company’s common stock. The conversion considered the fair market value of the stock on the day of conversion of $9.67 for the total of 66,743 shares.

In

March 2023, the Company issued 155,038 shares of the Company’s common stock in conjunction with the Private Placement-2023 as defined and discussed further below.

During

the second quarter of 2023, the Company issued from its common stock, 112,557

shares

in lieu of services provided, 352,260 shares to settle an earn-out liability and 22,219 shares pursuant to vested restricted stock awards earned by agents through an equity-based compensation program at one of the Company’s subsidiaries.

| 18 |

| --- |

During

the third quarter of 2023, the Company issued from its common stock, 174,610

shares

to settle an earn-out liability, 400

shares

in lieu of services provided, and 3,017 shares to employees for vested stock awards.

As

of September 30, 2023 and December 31, 2022, there were 2,304,375 and 1,219,573 shares of common stock outstanding, respectively.

Warrants

SeriesA Warrants

In

conjunction with the Company’s initial public offering, the Company issued 2,070,000

Series

A Warrants, classified as equity warrants per its provisions, which permit holders to obtain a fixed number of shares for a fixed monetary value. The warrants are standalone equity securities transferable without the Company’s consent or knowledge. The warrants were recorded at a value per the offering of $0.01, and may be exercised at any point from the effective date at an exercise price $6.60 until the 5th-year anniversary from issuance (effectively, February 8, 2026) and are not subject to antidilution provisions. Considering 375,000 warrant exercises through September 30, 2023, there remain

1,695,000

Series

A Warrants issued and outstanding as of September 30, 2023 and December 31, 2022. Pursuant to the Reverse Split-2023, the outstanding Series A Warrants are exercisable into 113,000 common shares for an effective exercise price of $99.00.

SeriesE and F Warrants

On March 13, 2023, the Company entered into a securities purchase agreement (the “SPA-2023”) with one institutional buyer for the purchase and sale of, (i) an aggregate of 155,038 shares (the “Common Shares”) of the Company’s common stock, par value $0.086 per share (the “Common Stock”) along with accompanying common warrants (the “Common Units”), (ii) prefunded warrants (the “Prefunded Warrants” or “Series E Warrants”) that are exercisable into 897,594 shares of Common Stock (the “Prefunded Warrant Shares”) along with accompanying common warrants (the “Pre-Funded Units”), and (iii) common warrants (the “Common Warrants” or “Series F Warrants”) to initially acquire up to 2,105,264 shares of Common Stock (the “Common Warrant Shares”) (representing 200% of the Common Shares and Prefunded Warrant Shares) in a private placement offering (the “Private Placement-2023”). Additionally, the Company agreed to issue a warrant to the Placement Agent (defined below), to initially acquire 52,632 shares of common stock (the “PA Warrant”) and entered into a registration rights agreement with the buyer to register for resale the common shares underlying the Series E and F Warrants.

The

aggregate purchase price for the Common Shares, Prefunded Warrants (Series E Warrants) and the Common Warrants (Series F Warrants) to be purchased by the Buyer shall be equal to (i) $3.80 for each Common Unit purchased by such Buyer, or (ii) $3.799 for each Prefunded Unit purchased by the Buyer, which Prefunded Warrants are exercisable into Prefunded Warrant Shares at the initial Exercise Price (as defined in the Prefunded Warrant) of $0.001 per Prefunded Warrant Share in accordance with the Prefunded Warrant.

The

Common Warrant (Series F) has an exercise price of $3.55 per share, subject to adjustment for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the date of the Private Placement-2023. The Common Warrant will be exercisable six months following the date of issuance and will expire five and a half years from the date of issuance.

The

PA Warrant has an exercise price of $3.91 per share, subject to adjustment for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the date of the SPA-2023. The PA Warrant will be exercisable six months following the date of issuance and will expire five years from the date of issuance.

| 19 |

| --- |

The closing of the Private Placement-2023 occurred on March 16, 2023. EF Hutton, a division of Benchmark Investments, LLC (the “Placement Agent”) acted as the sole placement agent and was entitled to an 8% of gross proceeds cash fee and the reimbursement of certain Placement Agent fees and customary expenses.

Gross and net proceeds to the Company from the Private Placement-2023 were approximately $4

million and $3.4

million respectively,

to be utilized primarily for general working capital and administrative purposes. Direct financing fees approximated $553,000.

The Company determined the Series E Warrants, Series F Warrants, and PA Warrants are equity in nature because of provisions, pursuant to the warrant agreements, that permit the holder to obtain a fixed number of shares for a fixed monetary amount. The values offset to $0 in additional paid-in capital in the Company’s condensed consolidated statements of stockholders’ equity (deficit).

As of September 30, 2023, no exercises have occurred and there remain 897,594,

2,105,264 and 52,632 Series E Warrants, Series F Warrants and PA Warrants outstanding respectively.

Equity-basedCompensation

During

the nine-month period ended September 30, 2023, an executive was awarded an annual stock award in conjunction with a promotion agreement, consisting of 2,667 shares of the Company’s common stock per annum, to vest monthly throughout the term of employment. For the three and nine months ended September 30, 2023, total stock compensation for this award was valued at approximately $5,601, and $17,044, respectively, recorded as stock-based compensation.

Total stock-based compensation expense recorded in general and administrative expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 is $27,779 and $106,943, respectively.

NOTE

  1. 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:

SCHEDULE

OF CALCULATIONS OF BASIC AND DILUTED EPS

Three Months<br><br> <br>Ended<br><br> <br>September 30, 2023 Three Months<br><br> <br>Ended<br><br> <br><br><br> <br>September 30, 2022
(Loss)<br> income from continuing operations, numerator, basic and diluted computation $ (139,004 ) $ 6,296,483
Deemed<br> dividend - -
Net<br> income continuing operations, numerator, basic computation
Recognition<br> and change in fair value of warrant liabilities
Net<br> loss continuing operations, numerator, diluted computation
Weighted<br> average common shares, basic 3,021,455 1,156,939
Effect<br> of series B warrants - 147,939
Non-vested<br> stock awards
Weighted<br> average common shares, dilutive 3,021,455 1,304,878
(Loss)<br> earnings per common share – basic $ (0.05 ) $ 5.44
(Loss)<br> earnings per common share – diluted $ (0.05 ) 4.83 
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---
--- --- --- --- --- --- ---
(Loss)<br> income from continuing operations $ (1,136,922 ) $ 26,357,370
Deemed<br> dividend - (6,930,335 )
Net<br> (loss) income from continuing operations, numerator, diluted computation $ (1,136,922 ) $ 19,427,035
Weighted<br> average common shares, basic 2,436,015 1,069,534
Effect<br> of series B warrants - 147,939
Non-vested<br> stock awards - 2,349
Weighted<br> average common shares, dilutive 2,436,015 1,219,822
Loss<br> per common share – basic (0.47 ) 18.16
Loss<br> per common share – diluted $ (0.47 ) $ 15.93

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

SCHEDULE

OF DILUTIVE NET LOSS PER COMMON SHARES

For<br> the Three and Nine Months Ended
September<br> 30, 2023 September<br> 30, 2022
Shares<br> subject to outstanding common stock options 10,298 10,928
Shares subject to Series A warrants 113,000 113,000
Shares subject to Series B warrants 1,182,969 668,297
Shares subject to Series E warrants 887,594 -
Shares<br> subject to series F warrants 2,105,264 -
Shares subject to placement agent warrants 52,632 -
Shares subject to vested and unvested stock awards 5,756 4,085

NOTE

  1. LEASES

Operating

lease expense for the three months ended September 30, 2023 and 2022 was $123,508 and $118,653, respectively. Operating lease expense for the nine months ended September 30, 2023 and 2022 was $362,804 and $337,876 respectively. As of September 30, 2023, the weighted average remaining lease term and weighted average discount rate for the operating leases were 3.82 years and 6.14% respectively.

Future minimum lease payment under these operating leases consisted of the following:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT

Period<br> ending September 30, 2023 Operating<br> Lease Obligations
2023 $ 391,173
2024 210,106
2025 112,904
2026 116,291
2027 119,780
Thereafter 60,774
Total<br> undiscounted operating lease payments 1,011,028
Less:<br> Imputed interest 101,495
Present<br> value of operating lease liabilities $ 909,533 
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NOTE

  1. COMMITMENTS AND CONTINGENCIES

LegalContingencies

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, no legal contingencies are accrued as of September 30, 2023 and December 31, 2022. 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-outliabilities

The following outlines changes to the Company’s earn-out liability balances for the respective periods ended September 30, 2023 and December 31, 2022:

SCHEDULE

OF EARN-OUT LIABILITY

Fortman Montana Altruis Kush Barra Total
Ending<br> balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478
Changes<br> due to business combinations
Changes<br> due to payments (1,433,700 ) (750,000 ) (929,168 ) (147,535 ) - (3,260,403 )
Changes<br> due to fair value adjustments 1,152,525 356,744 94,225 - (312,000 ) 1,291,494
Changes due to amount payable in common shares - (53,372 ) - - - (53,372 )
Ending<br> balance September 30, 2023 $ 385,825 $ 53,372 $ - $ - $ 248,000 $ 687,197
Fortman Montana Altruis Kush Barra Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Ending<br> balance December 31, 2021 $ 515,308 $ 615,969 $ 992,868 $ 1,689,733 $ - $ 3,813,878
Beginning<br> balance $ 515,308 $ 615,969 $ 992,868 $ 1,689,733 $ - $ 3,813,878
Changes<br> due to business combinations - - - - 600,000 600,000
Changes<br> due to payments (34,430 ) (326,935 ) (84,473 ) (1,259,087 ) - (1,704,925 )
Changes<br> due to fair value adjustments 186,122 210,966 (73,452 ) (283,111 ) (40,000 ) 525
Ending<br> balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478
Ending<br> balance $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478 
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NOTE

  1. RELATED PARTY TRANSACTIONS

On September 13, 2022, the Company issued a promissory note to YES Americana Group, LLC (“Americana”) a related party entity beneficially owned by the Company’s Chief Executive Officer, for the principal sum of $1,500,000 (the “Note”), accruing monthly interest of 5% per annum beginning nine months after Note issuance.

On February 7, 2023 , the Company and Americana entered into

an amendment to the Note pursuant to which (i) the principal amount of the Note was increased to $1,845,000, (ii) the maturity date of the Note was amended to January 15, 2026, (iii) the interest rate under the Note shall not increase after the maturity date, and (iv) the Note can be converted at any time, at the option of Americana, into shares of the Company’s common stock, par value $0.086 per share at an agreed upon conversion price .

On

February 13, 2023, Americana effectuated a conversion of $645,000 of the Note into 66,743 shares of the Company’s common stock, $0.086 par value per share, in accordance with the terms of the Amendment. In addition, throughout the year of 2023 the Company repaid principal to Americana of $693,145. As of September 30, 2023, and December 31, 2022 respectively, the balance owed to Americana was $161,855 and $1,500,000, reclassified and recorded in the convertible debt, related parties, less current portion account in the condensed consolidated balance sheets. Interest expense for both the three and nine months ended September 30, 2023, was $4,355, recorded to interest expense, related parties in the condensed consolidated statements of operations.

The

Company has amounts payable to Reliance Global Holdings, LLC, a related party beneficially owned by the Company’s Chief Executive Officer stemming from funds loaned to the Company for various subsidiary acquisitions. These loans do not bear interest and there is no term. Repayment will be made at the Company’s discretion. The open balance is considered non-current and classified to the related parties, less current portion account in the condensed consolidated balance sheets with open balances of $25,479 and $100,724 as of September 30, 2023 and December 31, 2022, respectively.

The

Company incurred a payable of $200,000 to an employee for a software purchased in July of 2019. The payable was issued with a $27,673 discount, utilizing a 7.5% discount rate. There are monthly payment terms of $4,167 through June 2024, the date of final settlement. The balance is carried at present value on the condensed consolidated balance sheets. The Company classifies amounts planned to be settled within twelve months from the balance sheet date to current liabilities. Accordingly, the Company presents current balances of $36,479 and $47,249 in the current portion of loans payables, related parties account in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. Non-current amounts are classified to the loans payable, related parties, less current portion account in the condensed consolidated balance sheets and amounted to $0 and $21,541 as of September 30, 2023, and December 31, 2022, respectively. Amortization expense to bring the payable to present value for the three and nine months ended September 30, 2023 respectively, was $1,730 and $5,189, and is classified to the interest expense, related parties account in the condensed consolidated statements of operations.

Pursuant

to the first amendment to the April 26, 2022 asset purchase agreement between the Company and Barra & Associates, LLC, a related party entity beneficially owned by a senior vice president of the Company, the Company agreed to pay a deferred purchase price (the “DPP”) of $1,375,000 by January 31, 2023, and all amounts unpaid thereafter will accrue interest at a rate of 1.5% per month until paid. The Company intends to fully repay all unpaid amounts inclusive of interest over the next two years. The Company classifies amounts planned to be settled within twelve months from the balance sheet date to current liabilities. Accordingly, the Company reclassifies and presents current balances of $300,000 and $1,375,000 respectively, in the current portion of loans payables, related parties account in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. Non-current amounts are classified to the loans payable, related parties, less current portion account in the condensed consolidated balance sheets and amounted to $233,306 and $0 as of September 30, 2023, and December 31, 2022 respectively. Interest expense for the three and nine months ended September 30, 2023 respectively, was $26,390 and $115,560, recorded to interest expense, related parties in the condensed consolidated statements of operations.

NOTE

  1. INVESTMENT IN NSURE

During

April 2023, the Company sold its remaining 262,684 of NSURE shares to unaffiliated third parties, receiving the shares’ cost basis and cash proceeds of $900,000. The Company’s remaining NSURE share balance as of September 30, 2023, was $0.

NOTE

  1. SUBSEQUENT EVENTS

On October

3, 2023, 168,594 pre-funded Series E Warrants were exercised into 168,594 common shares at an exercise price of $0.001, resulting in $729 of cash proceeds to the Company. Subsequently, the issued and outstanding balance of Series E Warrants is 729,000.

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Item2. 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 September 30, 2023, 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.

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 30%.

BusinessTrends 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.

FinancialInstruments

The Company’s financial instruments as of September 30, 2023, 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.

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InsuranceOperations

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.

InsuranceAcquisitions and Strategic Activities

As of the balance sheet date, we have acquired multiple insurance brokerages (see table below), including both acquisitions of affiliated companies (i.e., owned by Reliance Holdings before the acquisition) and unaffiliated companies. 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.

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

RecentDevelopments

ReverseStock Split

On February 23, 2023, pursuant to authority granted by the Board of Directors of the Company, the Company implemented a 1-for-15 reverse split of the Company’s authorized and issued and outstanding common stock (the “Reverse Split-2023”). The par value remains unchanged. All share and per share information as well as common stock and additional paid-in capital have been retroactively adjusted to reflect the Reverse Split-2023 for all periods presented, unless otherwise indicated. The split resulted in a rounding addition of approximately 15,300 shares valued at par, totaling $1,300.

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SecondAmendment to Fortman Purchase Agreement

As previously disclosed, the Company, Fortman Insurance Services, LLC, Fortman Insurance Agency, LLC, Jonathan Fortman, and Zachary Fortman (collectively, the “Parties”) entered into a purchase agreement on or around May 1, 2019 (the “Purchase Agreement”), whereby the Company purchased the business and certain assets noted within the Purchase Agreement. On May 18, 2023, the Parties entered into that certain second amendment to the Purchase Agreement (the “Second Amendment”). Pursuant to the Second Amendment, the Parties agreed to a total remaining balance of $716,850 owed to both Jonathan Fortman and Zachary Fortman under the Purchase Agreement for a combined total amount owed of $1,433,700. In satisfaction of such remaining balances, the Company agreed to issue 176,130 shares of the Company’s restricted common stock, par value $0.086 per share (the “Common Stock”), to both Jonathan Fortman and Zachary Fortman (collectively, the “Shares”), for a total issuance of 352,260 shares of Common Stock. Following the issuance of the Shares, the Company’s issued and outstanding Common Stock count will be 1,983,308. If the Nasdaq official closing price of the Common Stock is less than $4.07 on November 18, 2023, then the Company shall pay both Jonathan Fortman and Zachary Fortman an amount equal to the Make-Up Payment (as defined herein) within 15 business days thereafter. Pursuant to the Second Amendment, the “Make-Up Payment” means an amount in cash equal to $616,850 minus First Holder Shares Value (as defined herein) to Jonathan Fortman, and $616,850 minus Second Holder Shares Value (as defined herein) to Zachary Fortman. Further, under the Second Amendment, the “First Holder Shares Value” and “Second Holder Shares Value” means 176,130 and 176,130 respectively (subject to appropriate adjustments for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases or increases the Common Stock) multiplied by the Nasdaq official closing price of the Common Stock on November 18, 2023.

SettlementAgreement

On June 30, 2023, the Company entered into a Confidential Settlement Agreement and Mutual Release (the “Settlement Agreement”) by and between the Company, Medigap Healthcare Insurance Agency, LLC, a wholly owned subsidiary of the Company (the “Agency” and together with the Company, the “Reliance Parties”), Pagidem, LLC f/k/a Medigap Healthcare Insurance Company, LLC (“Pagidem”), Joseph J. Bilotti, III (together with Pagidem, the “Bilotti Parties”), Kyle Perrin, Zachary Lewis, T65 Health Insurance Solutions, Inc. f/k/a T65 Health Solutions, Inc. (“T65”), and Seniors First Life, LLC (collectively with Mr. Lewis and T65, the “Lewis Parties”).

The Company, Pagidem, and Mr. Bilotti previously entered into that certain Asset Purchase Agreement dated December 21, 2021 (the “APA”), pursuant to which the Company acquired, and the Bilotti Parties sold, certain assets and liabilities of Pagidem to the Company. As part of the transactions contemplated by the APA, the Company entered into that certain Employment Agreement, dated as of January 10, 2022, by and between the Company and Mr. Perrin (the “Employment Agreement”). The Company later assigned the assets and liabilities it acquired pursuant to the APA, and the Employment Agreement, to Agency. Mr. Perrin previously served as the Chief Operating Officer and Chief Executive Officer of Agency pursuant to the Employment Agreement. The Company and Mr. Lewis entered into that certain Non-Disclosure Agreement, effective as of January 24, 2022 (the “NDA”).

The Company, pursuant to the APA, previously filed a claim with the American Arbitration Association (“AAA”), Case No. 01-23-0002-3404 (the “Bilotti Arbitration”), wherein the Company purports to assert claims against the Bilotti Parties for fraudulent inducement, intentional and negligent misrepresentation, breach of contract, breach of restrictive covenants, conversion, civil theft, tortious interference, and conspiracy (the “Bilotti Claim”). The Company also filed, pursuant to the Employment Agreement, a claim with the AAA, Case No. 01-23-0002-2048(the “Perrin Arbitration”), wherein the Company purports to assert claims against Mr. Perrin for conversion, civil conspiracy, fraud, breach of fiduciary duty, and breach of duty of loyalty and good faith. (the “Perrin Claim”). In the Perrin Arbitration, Mr. Perrin filed counterclaims against the Company for breaches of employment agreement, unjust enrichment, and breach of the covenant of good faith and fair dealing (the “Perrin Counterclaim”).

The Reliance Parties have filed a complaint in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, Case No. 50-2023-CA-010777-XXXXMB, Div. AA (the “Lewis Litigation,” and collectively with the Bilotti Arbitration and the Perrin Arbitration, the “Medigap Disputes”), wherein the Reliance Parties purport to assert claims against the Lewis Parties for tortious interference with business relationship, civil conspiracy, breach of contract, conversion, and unjust enrichment (the “Lewis Claim”).

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The parties to the Settlement Agreement have each disputed and continue to dispute the claims asserted and allegations made against them.

United Insurance Group Agency, Inc. and/or LTC Global, Inc. or those entities’ assignees, affiliates, subsidiaries, partners or parent companies (collectively, the “Factor”), allege the Reliance Parties owe the Factor a debt, which the Reliance Parties dispute.

Pursuant to the terms of the Settlement Agreement, the Medigap Parties agreed to pay to the Company an amount equal to $2,900,000 (the “Settlement Payment”) within five business days of the effective date of the Settlement Agreement. The Company received the Settlement Payment on July 6, 2023.

Upon receipt of the Settlement Payment, the Reliance Parties agreed to release and discharge each and all of the Bilotti Parties, Mr. Perrin, and the Lewis Parties, and each of their present and former agents, servants, or employees, members, owners, shareholders, officers, managers, partners, directors, trustees, representatives, attorneys, contractors, predecessor and successor entities and assigns, parents, subsidiaries and affiliates (collectively, the “Medigap Released Parties”) of and from any and all past, existing, and/or future suits, liabilities, claims, demands, fees, costs, expenses, payments, judgments, damages, actions and rights or causes of action of any kind or nature, from the beginning of the world to the effective date of the Settlement Agreement, including but not limited to (A) any matters that were or could have been alleged in the: (i) the Bilotti Arbitration; (ii) the Perrin Arbitration; (iii) the Lewis Litigation; and (B) (i) any and all claims to additional money, distributions, or compensation of any kind from the Medigap Released Parties; provided, however, that nothing in the Settlement Agreement will serve to release any claims the Reliance Parties may have against the Factor.

In addition, upon receipt of the Settlement Payment, the Medigap Parties agreed to release and discharge each and all of the Reliance Parties, and each of their present and former agents, servants, or employees, members, owners, shareholders, officers, managers, partners, directors, trustees, representatives, attorneys, contractors, predecessor and successor entities and assigns, parents, subsidiaries and affiliates (collectively, the “Reliance Released Parties”) of and from any and all past, existing, and/or future suits, liabilities, claims, demands, fees, costs, expenses, payments, judgments, damages, actions and rights or causes of action of any kind or nature, from the beginning of the world to the effective date of the Settlement Agreement, including but not limited to (A) any matters that were or could have been alleged in the: (i) the Bilotti Arbitration; (ii) the Perrin Arbitration; (iii) the Lewis Litigation; and (B) (i) any and all claims to additional money, distributions, or compensation of any kind from the Medigap Released Parties.

Also, pursuant to the terms of the Settlement Agreement, Mr. Perrin agreed to release the Reliance Parties from all claims arising under any federal, state or local law or statute, including without limitation, the Fair Labor Standards Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family Medical Leave Act, Title VII of the Civil Rights Act of 1964, Employee Retirement Income Security Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the law of contract and tort, any claim for attorneys’ fees, claims for unpaid wages or other employment compensation, and claims of personal injury, including mental and physical pain and suffering or intentional infliction of emotional distress. Additionally, Mr. Perrin expressly waived any right to recover any type of personal relief from the Reliance Parties, including monetary damages or reinstatement, in any administrative action or proceeding, whether state or federal, and whether brought by Mr. Perrin or on his behalf by an administrative agency, related in any way to the matters herein.

Pursuant to the terms of the Settlement Agreement, all of the parties thereto agreed that, upon receipt of the Settlement Payment by the Reliance Parties, they would discharge any obligations under the APA, the Employment Agreement, the NDA and all ancillary documents and agreements referenced or contemplated therein. In addition, within five business days of receipt of the Settlement Payment: (i) the Company will cause the Bilotti Arbitration to be dismissed, with prejudice; (ii) the Reliance Parties and Mr. Perrin will cause the Perrin Arbitration to be dismissed, with prejudice; and (iii) the Reliance Parties will cause the Lewis Litigation to be dismissed, with prejudice.

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Resultsof Operations

Comparisonof the three months ended September 30, 2023 to the three months ended September 30, 2022

The following table sets forth our revenue and operating expenses for each of the years presented.

September 30, 2023 September 30, 2022
Revenue
Commission income $ 3,275,583 $ 2,821,768
Total revenue 3,275,583 2,821,768
Operating expenses
Commission expense 796,001 695,020
Salaries and wages 1,775,919 1,629,947
General and administrative expenses 1,368,126 1,117,027
Marketing and advertising 117,752 63,371
Depreciation and amortization 652,839 651,395
Total operating expenses 4,710,637 4,156,760
Loss from operations (1,435,054 ) (1,334,992 )
Other income (expense)
Interest expense (386,562 ) (281,201 )
Interest related parties (32,475 ) (1,730 )
Other income (expense), net (310 ) (4,909 )
Recognition and change in fair value of warrant liabilities 1,715,397 7,919,315
Total other income (expense) 1,296,050 7,631,475
Loss (income) from continuing operations before tax (139,004 ) 6,296,483
Loss (income) from discontinued operations before tax - (174,390 )
Net income (loss) $ (139,004 ) $ 6,122,093

Revenues

The Company’s revenue is primarily comprised of commissions paid by insurance carriers or their representatives related to insurance plans that have been purchased by a member who used our services. We define a member as an individual or entity currently covered by an insurance plan, including individual and family, Medicare-related, small business, and ancillary plans, as well as property and casualty coverage, including auto, home and life, for which the Company is entitled to receive compensation from an insurance carrier.

The Company had revenues of approximately $3.3 million for the three months ended September 30, 2023, as compared to approximately $2.8 million for the three months ended September 30, 2022. The increase of approximately $454,000 or 16% is primarily driven by organic growth.

Commissionexpense

The Company had total commission expense of approximately $796,000 for the three months ended September 30, 2023, compared to approximately $695,000 for the three months ended September 30, 2022. The increase of approximately $101,000 or 15% is primarily driven by organic growth and in-line with the revenue increase.

Salariesand wages

The Company reported approximately $1.8 million of salaries and wages expense for the three months ended September 30, 2023, compared to approximately $1.6 million for the three months ended September 30, 2022. The increase of approximately $146,000 or 9% is a result of the Company’s growth driven by expanded operations.

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Generaland administrative expenses

The

Company had total general and administrative expenses of approximately $1.4 million for the three months ended September 30, 2023, as compared to approximately $1.1 million for the three months ended September 30, 2022. The increase of approximately $251,000, or 22% is primarily driven by the approximate $270,000 loss in fair value change of the estimated earn-out liability compared to the same period in the prior year which had an approximate gain of $223,000.

Marketingand advertising

The Company reported approximately $118,000 of marketing and advertising expense for the three months ended September 30, 2023 compared to approximately $63,000 for the three months ended September 30, 2022. The increase of approximately $54,000, or 86% is a result of increased branding and outreach efforts to drive the higher organic revenue growth.

Depreciationand amortization

The

Company reported approximately $653,000 of depreciation and amortization expense for the three months ended September 30, 2023 compared to approximately $651,000 for the three months ended September 30, 2022. The increase of approximately $1,000 or 0.2% is primarily a result of additional assets placed in service.

Otherincome and expense

The Company reported approximately $1.3 million of other income for the three months ended September 30, 2023 compared to approximately $7.9 million of other income for the three months ended September 30, 2022. The decrease of approximately $6.2 million, or 78%, is attributable primarily to the change in fair value of warrant liabilities, offset by interest expense.

Comparisonof the nine months ended September 30, 2023 to the nine months ended September 30, 2022

The following table sets forth our revenue and operating expenses for each of the periods presented.

September 30, 2023 September 30, 2022
Revenue
Commission income $ 10,410,591 $ 8,727,614
Total revenue 10,410,591 8,727,614
Operating expenses
Commission expense 2,701,601 2,143,562
Salaries and wages 5,230,871 4,899,171
General and administrative expenses 4,430,177 5,080,991
Marketing and advertising 364,184 148,057
Depreciation and amortization 1,962,066 1,901,140
Total operating expenses 14,688,899 14,172,921
Loss from operations (4,278,308 ) (5,445,307 )
Other income (expense)
Interest expense (1,126,281 ) (586,251 )
Interest related parties (125,104 ) (5,189 )
Other income (expense), net 3,650 (4,414 )
Recognition and change in fair value of warrant liabilities 4,389,120 32,398,530
Total other income (expense) 3,141,385 31,802,676
Income (loss) from continuing operations before tax (1,136,922 ) 26,357,370
Income (loss) from discontinued operations before tax (1,845,904 ) (399,585 )
Net (loss) income $ (2,982,827 ) $ 25,957,784 
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Revenues

The

Company had revenues of approximately $10.4 million for the nine months ended September 30, 2023, as compared to approximately $8.7 million for the nine months ended September 30, 2022. The increase of approximately $1.7 million or 19% is primarily driven by organic growth and the addition of RELI Exchange during the second quarter of 2022.

Commissionexpense

The

Company had total commission expense of approximately $2.7 million for the nine months ended September 30, 2023, compared to approximately $2.1 million for the nine months ended September 30, 2022. The increase of approximately $558,000 or 26% is primarily driven by organic growth and the addition of RELI Exchange during the second quarter of 2022.

Salariesand wages

The Company reported approximately $5.2 million of salaries and wages expense for the nine months ended September 30, 2023, compared to approximately $4.9 million for the nine months ended September 30, 2022. The increase of approximately $331,000 or 7% is a result of the Company’s growth driven by expanded operations and the addition of RELI Exchange during the second quarter of 2022.

Generaland administrative expenses

The

Company had total general and administrative expenses of approximately $4.4 million for the nine months ended September 30, 2023, as compared to approximately $5.1 million for the nine months ended September 30, 2022. The decrease in expense of approximately $651,000, or 13%, is a result of the Company’s focus on leaner operations and the implementation of cost-cutting measures.

Marketingand advertising

The

Company reported approximately $364,000 of marketing and advertising expense for the nine months ended September 30, 2023, compared to approximately $148 million for the nine months ended September 30, 2022. The increase of approximately $216,000 or 146% is a result of the Company increasing its branding and outreach efforts to drive the higher organic revenue growth.

Depreciationand amortization

The

Company reported approximately $2.0 million of depreciation and amortization expense for the nine months ended September 30, 2023, compared to approximately $1.9 million for the nine months ended September 30, 2022. The increase of approximately $60,000, or 3%, is primarily a result of our acquired tangible and intangible assets through business combinations.

Otherincome and expense

The Company reported approximately $3.1 million of other income for the nine months ended September 30, 2023, compared to approximately $

32.4

million of other income for the nine months ended September 30, 2022. The decrease of approximately $28 million, or 86%, is attributable primarily to the change in the fair value of warrant liabilities, offset by interest expense.

Liquidityand capital resources

As of September 30, 2023, we had a cash balance of approximately $3.2 million and working capital of approximately $795,000, compared with a cash balance of approximately $1.9 million and working capital deficit of approximately $4.6 million at December 31, 2022. The improved working capital is primarily attributable to cash proceeds from the issuance of stock with a private placement, other receivables related to discontinued operations recoveries/settlements, and the repayment of liabilities.

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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-balancesheet arrangements

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

CashFlows

Nine<br> Months Ended<br><br> <br>September<br> 30,
2023 2022
Net<br> cash used in operating activities $ (17,307 ) $ (2,177,998 )
Net<br> cash provided and used in investing activities 718,583 (24,982,609 )
Net<br> cash provided by financing activities 576,212 25,564,501
Net<br> increase in cash, cash equivalents, and restricted cash $ 1,277,488 $ (1,596,106 )

OperatingActivities

Net cash used in operating activities for the nine months ended September 30, 2023 was approximately $17,000, compared to net cash flows used in operating activities of approximately $2.2 million for the nine months ended September 30, 2022. The cash used includes net loss of approximately $2.98 million, decreased by approximate non-cash adjustments of $855,000 principally related to income of recognition and change in fair value of warrant liabilities of $4.4 million, offset by earn-out fair value adjustments and depreciation and amortization of $1.3 million and $1.96 million, respectively, as well as a net increase in cash due to changes of net working capital items in the amount of $285,000 and offset by net cash adjustments for discontinued operating activities of $3.8 million.

InvestingActivities

During the nine months ended September 30, 2023, cash flows provided in investing activities approximated $719,000 compared to cash flows used in investing activities of approximately $25 million for the nine months ended September 30, 2022. The cash provided is primarily related to the sale of the Company’s shares in NSURE stock. Total proceeds received in 2023 were $900,000.

FinancingActivities

During the nine months ended September 30, 2023, approximate cash provided by financing activities was $576,000 as compared to approximately $25.6 million for the nine months ended September 30, 2022. Net cash provided by financing activities primarily relates to proceeds from private placement offerings of approximately $3.4 million, offset by net debt principal repayments of $786,000, related party loan and related party convertible debt repayments of $1.6 million, and earn out payments of $419,000.

SignificantAccounting 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 Conditionand Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal year 2022.

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Item3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item4. Controls and Procedures

Evaluationof 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.

During fiscal year 2022, the Company determined it had a material weakness in its disclosure controls and procedures relating to earnings per share (“EPS”). During the quarters ended March 31, June 30 and September 30, 2023, the Company mitigated the deficiency by consulting with qualified advisors that have in-depth EPS expertise. These advisors assisted the Company in the calculations and disclosures of EPS for the three and nine months ended September 30, 2023.

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023, and concluded that they were not effective as of September 30, 2023 due to the material weakness discussed above.

Changesin Internal Control over Financial Reporting

During fiscal year 2022, the Company retained subject matter expert advisors to prepare the accounting and disclosures over Earnings per Share. These advisors assisted the Company in the calculations and disclosures of EPS for the three and nine months ended September 30, 2023. 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

Item1. 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 September 30, 2023. 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.

Item1A. 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, 2022. 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, 2022, as amended from time to time.

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Item2. Unregistered Sales of Equity Securities and Use of Proceeds.

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

Item3. Defaults Upon Senior Securities.

Not applicable.

Item4. Mine Safety Disclosures.

Not applicable.

Item5. Other Information.

Not applicable.

Item6. Exhibits

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

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).
31.1* Certification<br> of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* Certification<br> of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1** Section<br> 1350 Certification of the Chief Executive Officer and Chief Financial Officer
101.INS* Inline<br> XBRL Instance Document
101.CAL* Inline<br> XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH* Inline<br> XBRL Taxonomy Extension Schema Document
101.DEF* Inline<br> XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline<br> XBRL Taxonomy Extension Labels Linkbase Document
101.PRE* Inline<br> XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover<br> Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

*Filed herewith

**Furnished herewith

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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:<br> November 13, 2023 By: /s/ Ezra Beyman
Ezra<br> Beyman
Chief<br> Executive Officer
(principal<br> executive officer)
Date:<br> November 13, 2023 By: /s/ Joel Markovits
Joel<br> Markovits
Chief<br> Financial Officer
(principal<br> financial officer and principal accounting officer) 
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Exhibit31.1

CERTIFICATIONS

I, Ezra Beyman, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 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<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly for the period in which this report is being prepared;
(b) Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
(d) Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> 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<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
(b) Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Dated:<br> November 13, 2023 By: /s/ Ezra Beyman
--- --- ---
Ezra<br> Beyman
Chief<br> Executive Officer (Principal Executive Officer)

Exhibit31.2

CERTIFICATIONS

I, Joel Markovits, certify that:

1. I have reviewed the Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 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<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly for the period in which this report is being prepared;
(b) Designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
(d) Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> 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<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
(b) Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> November 13, 2023 By: /s/ Joel Markovits
--- --- ---
Joel<br> Markovits
Chief<br> Financial Officer
(Principal<br> Financial Officer)

Exhibit32.1

Certification

Pursuantto 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 September 30, 2023 (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:<br> November 13, 2023 By: /s/ Ezra Beyman
Ezra<br> Beyman
Chief<br> Executive Officer (Principal Executive Officer)
Date:<br> November 13, 2023 By: /s/ Joel Markovits
Joel<br> Markovits
Chief<br> Financial Officer
(Principal<br> Financial Officer)

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