10-Q - EZRA - Equibles

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-Q

☒

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

For the quarterly period ended

March 31, 2023

☐

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

For

the transition period from _____ to _____

Commission

File Number: 001-40020

RELIANCE

GLOBAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida	46-3390293
(State<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 Stock	RELI	The Nasdaq Capital Market
Series A Warrants	RELIW	The Nasdaq Capital Market

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

Yes ☒ No ☐

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

Yes ☒ No ☐

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

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

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

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

Yes ☐ No ☒

At

May 18, 2023, the registrant had 1,631,048 shares of common stock, par value $0.086 per share, outstanding.

TABLE

OF CONTENTS

PART I
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	25
Item 4. Controls and Procedures.	25
PART II
Item 1. Legal Proceedings.	26
Item 1A. Risk Factors.	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	27
Item 3. Defaults Upon Senior Securities.	27
Item 4. Mine Safety Disclosures.	27
Item 5. Other Information.	27
Item 6. Exhibits	27

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Reliance

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Balance Sheets

(Unaudited)

			December 31,
			2022
Assets
Current assets:
Cash	2,116,333		$	505,410
Restricted cash	1,437,961			1,404,359
Accounts receivable	970,345			994,321
Accounts receivable, related parties	11,616			18,292
Other receivables	-			11,464
Prepaid expense and other current assets	164,154			245,535
Current assets - discontinued operations	7,354			85,998
Total current assets	4,707,763			3,265,379
Property and equipment, net	155,511			162,767
Right-of-use assets	921,531			1,018,952
Investment in NSURE, Inc.	900,000			900,000
Intangibles, net	12,889,277			9,085,092
Goodwill	14,287,099			14,287,099
Other non-current assets	23,285			23,284
Other assets - discontinued operations	-			9,685,156
Total assets	33,884,466		$	38,427,729
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other accrued liabilities	1,076,612		$	951,382
Short term financing agreements	38,312			106,817
Other payables	1,182,055			1,476,113
Current portion of long-term debt	1,235,052			1,118,721
Current portion of leases payable	312,549			339,937
Earn-out liability, current portion	1,555,692			2,153,478
Current liabilities - discontinued operations	50,228			1,647,836
Total current liabilities	5,450,500			7,794,284
Loans payable, related parties, less current portion	958,743			1,669,515
Long term debt, less current portion	12,035,753			12,349,673
Leases payable, less current portion	638,937			714,068
Earn-out liability, less current portion	398,000			556,000
Warrant liabilities	2,166,919			6,433,150
Non-current liabilities - discontinued operations	-			-
Total liabilities	21,648,852			29,516,690
Stockholders’ equity:
Preferred stock, 0.086<br>par value; 750,000,000 shares authorized<br>and 0 issued and outstanding as of March<br>31, 2023 and December 31, 2022	-			-
Common stock, 0.086 par value; 133,333,333 shares authorized and 1,566,048 and<br>1,219,573 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	134,660			104,883
Additional paid-in capital	40,881,475			35,798,139
Stock subscription receivable	-			-
Accumulated deficit	(28,780,521	)		(26,991,983	)
Total stockholders’ equity	12,235,614			8,911,039
Total liabilities and stockholders’ equity	33,884,466		$	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)

	2023			2022
	Three Months Ended<br><br> <br>March 31,
	2023			2022
Revenue
Commission income	$	3,939,103		$	3,058,697
Total revenue		3,939,103			3,058,697
Operating expenses
Commission expense		1,083,326			785,611
Salaries and wages		1,712,097			1,631,813
General and administrative expenses		1,358,254			2,333,795
Marketing and advertising		136,572			89,529
Depreciation and amortization		541,873			468,278
Total operating expenses		4,832,122			5,309,026
Loss from operations		(893,019	)		(2,250,329	)
Other income
Other expense, net		(389,351	)		(107,751	)
Recognition and change in fair value of warrant liabilities		4,266,231			11,845,964
Total other income		3,876,880			11,738,213
Income from continuing operations	$	2,983,861			9,487,884
Loss from discontinued operations		(4,772,399	)		(147,884	)
Net (loss) income		(1,788,538	)		9,340,000
Basic (loss) earnings per share
Continuing operations	$	1.92		$	2.61
Discontinued operations	$	(3.07	)	$	(0.15	)
Basic (loss) earnings per share	$	(1.15	)	$	2.46
Diluted loss per share
Continuing operations	$	(0.59	)	$	(9.57	)
Discontinued operations	$	(2.18	)	$	(0.12	)
Diluted loss per share	$	(2.77	)	$	(9.69	)
Weighted average number of shares outstanding - basic		1,553,953			980,569
Weighted average number of shares outstanding - diluted		2,185,847			1,195,480

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		Shares		Amount		capital			Receivable		Deficit			Total
	Preferred<br> stock				Common<br> stock				Common<br> stock issuable				Additional<br> paid-in			Subscription		Accumulated
	Shares		Amount		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
Share-based compensation		-		-						-		-		43,797			-		-			43,797
Common<br> shares issued for earnout liability		-		-		109,358		9,404						973,074			-		-			982,478
Common<br> shares issued for Yes Americana loan		-		-		66,743		5,740		-		-		639,260			-		-			645,000
Share<br>round up due to reverse split		-		-		15,336		1,300		-		-		(5,946	)		-		-			(4,646	)
Shares issued for private placement		-		-		155,038		13,333		-		-		3,433,151			-		-			3,446,484
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
Balance		-		-		1,566,048		134,660		-		--		40,881,475			-		(28,780,521	)		12,235,614

The

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

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Reliance

Global Group, Inc. and Subsidiaries

Condensed

Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Shares		Amount		Shares			Amount			Shares		Amount		capital			Receivable			Deficit			Total
	Preferred<br> stock				Common<br> stock						Common<br> stock issuable				Additional paid-in			Subscription			Accumulated			****
	Shares		Amount		Shares			Amount			Shares		Amount		capital			Receivable			Deficit			Total
Balance, December 31, 2021		-	$	-		730,407		$	62,815			0	$	-	$	27,329,201		$	(20,000,000	)	$	(33,458,145	)	$	(26,066,129	)
Balance		-	$	-		730,407		$	62,815			0	$	-	$	27,329,201		$	(20,000,000	)	$	(33,458,145	)	$	(26,066,129	)
Share-based compensation		-		-		-			-			-		-		739,960			-			-			739,960
Shares issued due to private placement		9,076		781		178,059			15,313			-		-		(16,043	)		20,000,000			-			20,000,051
Shares issued pursuant to acquisition of Medigap		-		-		40,402			3,475			-		-		4,759,976			-			-			4,763,451
Exercise of Series A warrants		-		-		25,000			2,150			-		-		2,472,850			-			-			2,475,000
Issuance of prefunded Series C warrants in exchange for common shares		-		-		(218,462	)		(18,788	)		-		-		18,788			-			-			-
Shares issued for vested stock awards		-		-		400			34			-		-		(34	)		-			-			-
Net income		-		-		-			-			-		-		-			-			9,340,000			9,340,000
Net (loss) income		-		-		-			-			-		-		-			-			9,340,000			9,340,000
Balance, March 31, 2022		9,076	$	781		755,807		$	64,999			0	$	-	$	35,304,698		$	-		$	(24,118,145	)	$	11,252,333
Balance		9,076	$	781		755,807		$	64,999			0	$	-	$	35,304,698		$	-		$	(24,118,145	)	$	11,252,333

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)

	2023			2022
	For the Three Months Ended March 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(1,788,538	)	$	9,340,000
Adjustment to reconcile net income to net cash used in operating activities:
Depreciation and amortization		541,873			468,279
Amortization of debt issuance costs and accretion of debt discount		11,721			6,467
Non-cash lease expense		(5,098	)		2,597
Stock compensation expense		43,797			739,960
Recognition and change in fair value of warrant liability		(4,266,231	)		(11,845,964	)
Earn-out fair value and write-off adjustments		476,692			407,071
Change in fair value of warrant liability		-
Change in operating assets and liabilities:
Accounts payables and other accrued liabilities		125,229			(1,875,191	)
Accounts receivable		23,976			(48,228	)
Accounts receivable, related parties		6,676			5,489
Other receivables		11,464			(4,361	)
Other payables		(294,058	)		(1,998	)
Other non-current assets		-			(52,992	)
Prepaid expense and other current assets		81,381			2,220,963
Net cash used in continuing operating<br> activities		(5,031,116	)		(637,908	)
Net cash adjustments for discontinued operating activities		3,966,238			294,628
Total net cash used in continuing and discontinued operating activities		(1,064,878	)		(343,280	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(6,695	)		-
Purchase of intangibles		(73,894	)		(249,235	)
Net cash used in investing activities		(80,589	)		(249,235	)
Net cash used in discontinued investing activities		(15,708	)		(18,142,858	)
Total net cash used in continuing and discontinued investing activities		(96,297	)		(18,392,093	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments of debt		(207,580	)		(227,172	)
Repayments on short term financing		(98,004	)		-
Proceeds from loans payable, related parties		345,000			-
Payments on loans payable, related parties		(412,500	)		(10,770	)
Payments of earn-out liabilities		(250,000	)		-
Proceeds from exercise of warrants into common stock					2,475,000
Proceeds from private placement of shares and warrants		3,446,484			17,853,351
Net cash provided by continuing financing<br> activities		2,823,400			20,090,409
Net cash used in discontinued financing activities		(17,700	)		-
Total net cash provided by continuing and discontinued financing activities		2,805,700			20,090,409
Net increase in cash and restricted cash		1,644,525			1,355,036
Cash and restricted cash at beginning of year		1,909,769			4,620,722
Cash and restricted cash at end of year		3,554,294			5,975,758
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS:
Cash paid for interest		382,410			105,447
Common stock issuance to repay related party liability		645,000			-
Common stock issuance to settle earn-out liabilities		982,478			-
Private placement equity financing costs		552,618			-
Issuance of Series D Warrants		-			6,930,335
Issuance of placement agent warrants		-			1,525,923
Conversion of common stock into Series C Warrants		-			281,815
Common stock issued pursuant to acquisition		-			4,763,451

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.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of 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.

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

Liquidity

As of March 31, 2023, the Company’s

reported cash and restricted cash aggregated balance was approximately $3,554,000, current assets were approximately $4,708,000, while current liabilities were approximately $5,451,000. As of March 31, 2023, the Company had a working capital deficit of approximately $742,000 and stockholders’ equity of approximately $12,236,000. For the three months ended March 31, 2023, the Company reported loss from operations of approximately $893,000, a non-cash, non-operating gain on the recognition and change in fair value of warrant liabilities of approximately $4,266,000, resulting in net income from continuing operations of approximately $2,984,000, a loss from discontinued operations of approximately $4,772,000, resulting in an overall net loss of approximately $1,789,000. For the three months ended March 31, 2023, the Company reported negative cash flows from continuing and discontinued operations of approximately $1,065,000. 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”).

Use of Estimates

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

Cash and Restricted Cash

Cash and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows:

SCHEDULE

OF RESTRICTED CASH IN STATEMENT OF CASH FLOW

	March 31, 2023		March 31, 2022
Cash	$	2,116,333	$	5,491,407
Restricted cash		1,437,961		484,351
Total cash and restricted cash	$	3,554,294	$	5,975,758

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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 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 EARN OUT LIABILITY

	March 31, 2023			December 31,<br><br> <br>2022
Stock price	$	3.01		$	8.55
Volatility		105.0	%		105.0	%
Time to expiry		3.76			4.01
Dividend yield		0	%		0	%
Risk free rate		3.7	%		4.1	%

The following reconciles fair value of the liability classified warrants:

SCHEDULE

OF RECONCILES WARRANT COMMITMENT

	Series B Warrant Commitment			Series B Warrant Liabilities			Placement Agent Warrants			Total
Beginning balance, December 31, 2021	$	37,652,808		$	-		$	-		$	37,652,808
Initial recognition		-			55,061,119			1,525,924			56,587,043
Unrealized loss (gain)		17,408,311			(48,668,869	)		(1,477,024	)		(32,737,582	)
Warrants exercised or transferred		(55,061,119	)		(8,000	)		-			(55,069,119	)
Ending balance, December 31, 2022	$	-		$	6,384,250		$	48,900		$	6,433,150
Unrealized (gain) loss		-		$	(4,226,950	)	$	(39,281	)	$	(4,266,231	)
Ending balance, March 31, 2023	$	-		$	2,157,300		$	9,619		$	2,166,919

Earn-outliabilities: The Company generally values its Level 3 earn-out liabilities using the income valuation approach. Key valuation inputs include contingent payment arrangement terms, projected revenues and cash flows, rate of return, and probability assessments. The following table summarizes the significant unobservable inputs used in the fair value measurements:

SCHEDULE

OF FAIR VALUE MEASUREMENTS

	March 31, 2023		December 31, 2022
Valuation technique		Discounted cash flow	Discounted cash flow
Significant unobservable input		Projected revenue and probability of achievement	Projected revenue and probability of achievement

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The Company values its Level 3 earn-out liability related to the Barra Acquisition using a Monte Carlo simulation in a risk-neutral framework (a special case of the Income Approach). The following summarizes the significant unobservable inputs:

SCHEDULE

OF EARN OUT LIABILITY

	March 31,<br> <br>2023
WACC Risk Premium:		13.5
Volatility		50
Credit Spread:		13
Payment Delay (days)		90
Risk free rate		Yield Curve
Discounting Convention:		Mid-period
Number of Iterations		100,000

All values are in US Dollars.

Undiscounted

remaining earn out payments were approximately $2,123,442 as of March 31, 2023. The following table reconciles fair value of earn-out liabilities for the periods ended March 31, 2023 and December 31, 2022:

SCHEDULE

OF GAIN OR LOSSES RECOGNIZED FAIR VALUE

	March 31, 2023			December 31,<br> 2022
Beginning balance – January 1	$	2,709,478		$	3,813,878
Acquisitions and settlements		(1,232,478	)		(1,104,925	)
Period adjustments:
Fair value changes included in earnings^*^		476,692			525
Ending balance	$	1,953,692		$	2,709,478
Less: Current portion		(1,555,692	)		(2,153,478	)
Ending balance, less current portion		398,000			556,000
*	Recorded as a reduction to general and administrative<br> expenses
---	---

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RevenueRecognition

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

SCHEDULE

OF DISAGGREGATION REVENUE

Three Months ended March 31, 2023	Medical/Life		Property and Casualty		Total
Regular
EBS	$	237,380	$	-	$	237,380
USBA		12,029		-		12,029
CCS/UIS		-		46,770		46,770
Montana		490,994		-		490,994
Fortman		306,270		208,145		514,415
Altruis		1,868,136		-		1,868,136
Kush		320,291		-		320,291
Barra		94,707		354,381		449,088
Total	$	3,329,807	$	609,296	$	3,939,103
Three Months ended March 31, 2022	Medical/Life		Property and Casualty		Total
---	---	---	---	---	---	---
Regular
EBS	$	221,184	$	-	$	221,184
USBA		13,587		-		13,587
CCS/UIS		-		43,881		43,881
Montana		506,721		-		506,721
Fortman		332,600		197,260		529,860
Altruis		1,304,872		-		1,304,872
Kush		438,592		-		438,592
Revenue	$	2,817,556	$	241,141	$	3,058,697

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

SCHEDULE

OF CONCENTRATIONS OF REVENUES

	Three Months ended March 31,
Insurance Carrier	2023			2022
Priority Health		43	%		32	%
BlueCross BlueShield		13	%		13	%
Insurance Carrier		13	%		13	%

No other single customer accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer could have a material adverse effect on the Company.

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IncomeTaxes

The Company recorded no income tax expense for the three months ended March 31, 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.

As

of March 31, 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 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. Aside for retaining certain assets of Medigap that have continued use to the Company, Medigap’s assets were considered impaired and the Company recognized a net of estimated liability adjustments loss of $4.4 million, presented in discontinued operations in the consolidated statement of operations for the period ended March 31, 2023. 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.

RecentlyIssued Accounting Pronouncements

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

NOTE

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table rolls forward the Company’s goodwill balance for the periods ending March 31, 2023 and December 31, 2022.

SCHEDULE

OF IMPAIRMENT OF GOODWILL

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

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

SCHEDULE

OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD

		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade name and trademarks	2.3	$	1,807,188	$	(1,056,995	)	$	750,193
Internally developed software	3.9		1,723,780		(373,580	)		1,350,200
Customer relationships	7.5		11,922,290		(2,355,705	)		9,566,585
Purchased software	3.7		665,136		(592,312	)		72,824
Video Production Assets	0		50,000		(50,000	)		-
Non-competition agreements	1.6		3,504,810		(2,355,335	)		1,149,475
		$	19,673,204	$	(6,783,927	)	$	12,889,277

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:

		Gross Carrying Amount		Accumulated Amortization			Net<br> <br>Carrying Amount
Trade name and trademarks	2.5	$	1,806,188	$	(969,241	)	$	836,947
Internally developed software	4.2		1,529,018		(269,786	)		1,259,232
Customer relationships	7.8		7,372,290		(1,708,767	)		5,663,523
Purchased software	0		562,327		(562,327	)		-
Video Production Assets	0		50,000		(50,000	)		-
Non-competition agreements	1.9		3,504,810		(2,179,420	)		1,325,390
		$	14,824,633	$	(5,739,541	)	$	9,085,092

The following table reflects expected amortization expense as of March 31, 2023, for each of the following five years and thereafter:

SCHEDULE

OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS

Years ending December 31,	Amortization<br> <br>Expense
2023 (remainder of year)	$	1,914,714
2024		2,177,765
2025		1,783,809
2026		1,515,517
2027		1,182,581
Thereafter		4,314,891
Total	$	12,889,277

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NOTE

LONG-TERM DEBT AND SHORT-TERM FINANCINGS

Long-Term Debt

The composition of the long-term debt follows:

SCHEDULE

OF LONG TERM DEBT

			December 31,<br> <br>2022
Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of 11,833 and 12,388 as of March 31, 2023 and December 31, 2022, respectively	412,763		$	426,883
Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of<br> Prime Rate plus 2.5%, maturing August 2028, net of deferred financing costs of 11,833<br> and 12,388<br> as of March 31, 2023 and December 31, 2022, respectively	412,763		$	426,883
Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable<br> interest of Prime Rate plus 1.5%, maturing December 2028, net of deferred financing costs of 14,438<br> and 15,076<br> as of March 31, 2023 and December 31, 2022, respectively	671,685			693,682
Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus<br> 2.0%, maturing April 2029, net of deferred financing costs of 8,837<br> and 9,206<br> as of March 31, 2023 and December 31, 2022, respectively	765,592			788,596
Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0%,<br> maturing May 2029, net of deferred financing costs of 35,389<br> and 36,843<br> as of March 31, 2023 and December 31, 2022, respectively	1,931,005			1,987,846
Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0%,<br> maturing September 2029, net of deferred financing costs of 40,509<br> and 42,129<br> as of March 31, 2023 and December 31, 2022, respectively	3,162,591			3,249,575
Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest<br> of Prime Rate plus 2.5%, maturing May 2032, net of deferred financing costs of 192,831<br> and 198,188<br> as of March 31, 2023 and December 31, 2022, respectively	6,327,169			6,321,812
	13,270,805			13,468,394
Less: current portion	(1,235,052	)		(1,118,721	)
Long-term debt	12,035,753		$	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 year ending December 31,	Maturities of<br> <br>Long-Term Debt
2023 (remainder of year)	$	893,877
2024		1,411,275
2025		1,567,542
2026		1,736,878
2027		1,924,523
Thereafter		6,040,548
Total		13,574,643
Less: debt issuance costs		(303,838	)
Total	$	13,270,805

Short-Term Financings

The

Company has various short-term notes payable for financed items such as insurance premiums and CRM software purchases. Total financed for the quarters ended March 31, 2023, and 2022, respectively, was approximately $154,000 and $0. These are normally paid in equal installments over a period of twelve months or less and carry interest rates ranging between 0% and 8

%

per annum. As of March 31, 2023 and 2022, respectively, approximately $38,000 and $0 remained outstanding on short-term financings.

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NOTE

WARRANT LIABILITIES

SeriesB Warrants

Pursuant to the terms of the SPA, during the quarter

ended March 31, 2023, the Series B Warrants’ effective exercise price reset to $3.55. As of March 31, 2023, there remain 1,331,667 Series B Warrants outstanding.

For the periods ended March 31, 2023 and 2022, net fair value gains and

losses recognized for the Series B Warrants were $4,226,950 and $12,425,426 respectively, presented in the recognition and change in fair value of warrant liabilities account in the consolidated statements of operations. The Series B Warrant liability outstanding as of March 31, 2023 and December 31, 2022 was $2,157,300 and $6,384,250 respectively, presented in the warrant liability account on the consolidated balance sheets.

PlacementAgent Warrants

For the periods ended March 31, 2023

and 2022, net fair value gains and losses recognized for the Placement Agent Warrants (“PAW”) were, a gain of $39,281 and a loss of $579,463, respectively, presented in the recognition and change in fair value of warrant liabilities account in the consolidated statements of operations. The PAW liability outstanding as of March 31, 2022 and December 31, 2022 was $9,619 and $48,900, respectively, presented in the warrant liability account on the consolidated balance sheets.

NOTE

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 entitle 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.

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 of 2023 Yes Americana, a related party,

converted $645,000 of outstanding 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 of 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.

As of March 31, 2023 and December 31, 2022, there

were 1,566,048 and 1,219,573 shares of Common Stock outstanding, respectively.

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Warrants

Series A Warrants

In conjunction with the Company’s initial public

offering, the Company issued 138,000 Series A Warrants which were classified as equity warrants because of provisions, pursuant to the warrant agreement, that permit the holder obtain a fixed number of shares for a fixed monetary amount. The warrants are standalone equity securities that are transferable without the Company’s consent or knowledge. The warrants were recorded at a value per the offering of $0.15. The warrants may be exercised at any point from the effective date until the 5-year anniversary of issuance and are not subject to standard antidilution provisions. The Series A Warrants are exercisable at a per share exercise price equal to 110% of the public offering price of one share of common stock and accompanying Series A Warrant, or $99.00. Series A warrant holders exercised 25,000 Series A warrants in January 2022, resulting in 113,000 of Series A warrants remaining issued and outstanding as of March 31, 2023.

Series E 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.

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).

Equity -basedCompensation

During the period ending March 31, 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 three months ended March 31, 2023, total stock compensation for this award is valued at approximately, $5,842, 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 periods ended March 31, 2023 and 2022 was $43,797 and $739,960, respectively.

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NOTE

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			Three Months
	Ended			Ended
	March 31,<br><br> <br>2023			March 31,<br><br> <br>2022
Income from continuing operations	$	2,983,861		$	9,487,884
Deemed<br> dividend		-			(6,930,335	)
Net income continuing operations, numerator, basic computation		2,983,861			2,557,549
Recognition and change in fair value of warrant liabilities		(4,266,231	)		(13,992,664	)
Net loss continuing operations, numerator, diluted computation	$	(1,282,370	)	$	(11,435,115	)
Weighted average common shares, basic		1,553,953			980,569
Effect of series B warrants		631,894			214,911
Weighted average common shares, dilutive		2,185,847			1,195,480
Earnings (loss) per common share – basic	$	1.92		$	2.61
Earnings (loss) per common share – diluted		(0.59	)		(9.57	)

The reversal of the gain on the change fair value of the Series B warrant liability for the three months March 31, 2023 and 2022 is included in the numerator of the dilutive EPS calculation to eliminate the effects the warrants as the impact is dilutive.

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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

	March 31,<br> <br>2023		March 31,<br> <br>2022
	For the Three Months Ended
	March 31,<br> <br>2023		March 31,<br> <br>2022
Shares subject to outstanding common stock options		10,928		10,928
Shares subject to outstanding Series A warrants		113,000		113,000
Shares subject to outstanding Series F warrants		2,105,264		-
Shares subject to placement agent warrants		52,632		-
Shares subject to unvested stock awards		7,709		661
Shares subject to conversion of Series B preferred stock		-		147,939

NOTE

LEASES

Operating

lease expense for the three months ended March 31, 2023 and 2022 was $161,614 and $145,662, respectively. As of March 31, 2023, the weighted average remaining lease term and weighted average discount rate for the operating leases were 3.85 years and 5.60% respectively.

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

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT

Period ending March 31, 2023	Operating Lease<br> <br>Obligations
2023	$	271,267
2024		269,908
2025		144,124
2026		113,738
2027		117,150
Thereafter		151,052
Total undiscounted operating lease payments		1,067,239
Less: Imputed interest		115,753
Present value of operating lease liabilities	$	951,486

NOTE

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 March 31, 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.

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Earn-outliabilities

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

SCHEDULE OF EARN-OUT LIABILITY

	Fortman		Montana			Altruis			Kush			Barra			Total
Ending balance December 31, 2022	$	667,000	$	500,000		$	834,943		$	147,535		$	560,000		$	2,709,478
Changes due to payments		-		(250,000	)		(834,943	)		(147,535	)		-			(1,232,478	)
Changes due to fair value adjustments		394,467		150,000			94,225			-			(162,000	)		476,692
Ending balance March 31, 2023	$	1,061,467	$	400,000		$	94,225		$	-		$	398,000		$	1,953,692
	Fortman			Montana			Altruis			Kush			Barra			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Ending balance December 31, 2021	$	515,308		$	615,969		$	992,868		$	1,689,733		$	-		$	3,813,878
Changes due to business combinations		-			-			-			-			600,000			600,000
Changes due to payments		(34,430	)		(326,935	)		(84,473	)		(1,259,087	)		-			(1,704,925	)
Changes due to fair value adjustments		186,122			210,966			(73,452	)		(283,111	)		(40,000	)		525
Ending balance December 31, 2022	$	667,000		$	500,000		$	834,943		$	147,535		$	560,000		$	2,709,478

NOTE

RELATED PARTY TRANSACTIONS

On September 13, 2022, the Company issued a promissory note to YES Americana Group, LLC, (Americana) a related party entity for the principal sum of $1,500,000 (the “Note”).

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, during the month of March 2023 the Company repaid to Americana $400,000. As of March 31, 2023 the balance owed to Americana was $800,000.

NOTE 10. SUBSEQUENT EVENTS

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 March 31, 2023 and April 30, 2023 was 262,684 and zero, respectively.

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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. The Company is controlled by the same management team as Reliance Global Holdings, LLC (“Reliance Holdings”), a New York based firm that is the owner and operator of numerous companies with core interests in real estate and insurance. Our relationship with Reliance Holdings provides us with significant benefits: (1) experience, knowledge, and industry relations; (2) a source of acquisition targets currently under Reliance Holdings’ control; and (3) financial and logistics assistance. We are led and advised by a management team that offers over 100 years of combined business expertise in real estate, insurance, and the financial service industry.

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

As part of our growth and acquisition strategy, we continue to survey the current insurance market for value-add acquisition opportunities. As of March 31, 2023, we have acquired nine insurance agencies, including both affiliated and unaffiliated companies and long term, we seek to conduct all transactions and acquisitions through our direct operations.

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, properties 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. A number of insurance companies are engaged in the direct sale of insurance, primarily to individuals, and do not pay commissions to agents and brokers.

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FinancialInstruments

The Company’s financial instruments as of March 31, 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.

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 in order 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<br><br> <br>Health<br> 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	Health<br> Insurance	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

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RecentDevelopments

PrivatePlacement-2023

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 E) 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.

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 and their value is included in the Company’s condensed consolidated statements of stockholders’ equity (deficit).

ReverseStock Split

Resultsof Operations

Comparisonof the three months ended March 31, 2023 to the three months ended March 31, 2022

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

	March 31,<br><br> <br>2023
Revenue
Commission income	$	3,939,103		3,058,697
Total revenue		3,939,103		3,058,697
Operating expenses
Commission expense		1,083,326		785,611
Salaries and wages		1,712,097		1,631,813
General and administrative expenses		1,358,254		2,333,795
Marketing and advertising		136,572		89,529
Depreciation and amortization		541,873		468,278
Total operating expenses		4,832,122		5,309,026
Loss from operations		(893,019	)	(2,250,329	)
Other income (expense)
Other expense, net		(389,351	)	(107,751	)
Recognition and change in fair value of warrant liabilities		4,266,231		11,845,964
Total other income		3,876,880		11,738,213
Income from continuing operations	$	2,983,861		9,487,884
Loss from discontinued operations		(4,772,399	)	(147,884	)
Net (loss) income		(1,788,538	)	9,340,000

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Revenues

The Company’s revenue is primarily comprised of commission paid by health 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 currently covered by an insurance plan, including individual and family, Medicare-related, small business, and ancillary plans, for which the Company is entitled to receive compensation from an insurance carrier.

The Company had revenues of approximately $3.9 million for the three months ended March 31, 2023, as compared to approximately $3.0 million for the three months ended March 31, 2022. The increase of approximately $880,000 or 29% is primarily driven by organic growth and the additional insurance agency acquired in the second quarter of 2022.

Commissionexpense

The Company had total commission expense of approximately $1.0 million for the three months ended March 31, 2023, compared to approximately $785,000 for the three months ended March 31, 2022. The increase of approximately $297,000 or 38% is primarily driven by organic growth and the additional insurance agency acquired in the second quarter of 2022.

Salaries and wages

The Company reported approximately $1.7 million of salaries and wages expense for the three months ended March 31, 2023, compared to approximately $1.6 million for the three months ended March 31, 2022. The increase of approximately $80,000 or 5% is a result of the Company’s growth driven by expanded operations, both organic and due to the additional insurance agency acquired in the second quarter of 2022.

General and administrative expenses

The Company had total general and administrative expenses of approximately $1.4 million for the three months ended March 31, 2023, as compared to approximately $2.3 million for the three months ended March 31, 2022. The decrease in expense of approximately $975,000 or 42% is a result of the Company’s focus on leaner operations and the implementation of cost cutting measures.

Marketingand advertising

The Company reported approximately $137,000 of marketing and advertising expense for the three months ended March 31, 2023 compared to approximately $90,000 for the three months ended March 31, 2022. The increase of approximately $47,000 or 53% is a result of the Company’s growth driven by expanded operations, both organic and due to the additional insurance agency acquired in 2022, as well as overall increased branding and outreach efforts to achieve greater industry presence.

Depreciation and amortization

The Company reported approximately $542,000 of depreciation and amortization expense for the three months ended March 31, 2023 compared to approximately $468,000 for the three months ended March 31, 2022. The increase of approximately $74,000 or 16% is primarily a result of our acquired tangible and intangible assets through business combinations.

Other income and expense

The Company reported approximately $3.9 million of other income for the three months ended March 31, 2023 compared to approximately $11.7 million of other income for the three months ended March 31, 2022. The decrease of approximately $7.9 million or 67% is attributable primarily to the change in fair value of warrant liabilities, offset by interest expense.

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Liquidityand capital resources

As of March 31, 2023, we had a cash balance of approximately $3.6 million and a working capital deficit of approximately $743,000, compared with a cash balance of approximately $1.9 million and working capital deficit of approximately $4.5 million at December 31, 2022. The improved working capital is primarily attributable to the issuance of stock with a private placement and the repayment of current liabilities.

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

	Three Months Ended<br> <br>March 31,
	2023			2022
Net cash used<br> in operating activities	$	(1,064,878	)		(482,906	)
Net cash used in investing<br> activities		(96,297	)		(18,252,467	)
Net<br> cash provided by financing activities		2,805,700			20,090,409
Net increase in cash, cash equivalents, and restricted cash	$	1,644,525		$	1,355,036

OperatingActivities

Net cash used in operating activities for the three months ended March 31, 2023 was approximately $1.0 million, compared to net cash flows used in operating activities of approximately $483,000 for the three months ended March 31, 2022. The cash used includes net loss of approximately $1.8 million, increased by approximate non-cash adjustments of $3.2 million principally related to recognition and change in fair value of warrant liabilities of $4.3 million, offset by earn-out fair value adjustments and depreciation and amortization of $477,000 and $542,000, respectively, as well as a net decrease in cash due to changes of net working capital items in the amount of $45,000 and offset by net cash adjustments for discontinued operating activities of $4.0 million.

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InvestingActivities

During the three months ended March 31, 2023, cash flows used in investing activities approximated $96,000 compared to cash flows used in investing activities of approximately $249,000 for the three months ended March 31, 2022. The cash used reflects cash paid for the purchase of property and equipment and intangible assets.

Financing Activities

During the three months ended March 31, 2023, approximate cash provided by financing activities was $2.8 million as compared to approximately $20.1 million for the three months ended March 31, 2022. Net cash provided by financing activities primarily relates to proceeds from private placement offerings of approximately $3.4 million and $17.9 million respectively for the three month periods ended March 31, 2023 and 2022, offset by net debt principal proceeds and repayments of $623,000.

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.

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 for specifically earnings per share (EPS). During the quarter ended March 31, 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 months ended, March 31, 2023.

Pursuant to the above, our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023, and although appropriate mitigation and remedial action have been taken, will continue to disclose a material weakness and a conclusion of ineffective controls over EPS for the period ended March 31, 2023.

Changesin Internal Control over Financial Reporting

There have not been any 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.

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PART

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 March 31, 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.

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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
3.1	Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22, 2023).
10.1	Promotion Letter by and between Reliance Global Group, Inc. and Joel Markovits dated as of December 28, 2022 (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 January 4, 2023).
10.2	Amendment No. 1 to the Promissory Note, by and between Reliance Global Group, Inc. and YES Americana Group, LLC, dated as of February 7, 2023 (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 February 13, 2023).
10.3	Securities Purchase Agreement, dated March 13, 2023, between Midori Group, Inc and Investor (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 March 14, 2023).
10.4	Form of Warrant (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2023).
10.5	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2023).
10.6	Form of Placement Agent Warrant (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2023).
10.7	Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2023).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 2002
32.1**	Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer
101.INS*	Inline XBRL Instance Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase<br> Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase<br> Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase<br> Document
104	Cover Page Interactive Data File (formatted in IXBRL,<br> 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:	May 18, 2023	By:	/s/ Ezra Beyman
			Ezra Beyman
			Chief Executive Officer
			(principal executive officer)
Date:	May 18, 2023	By:	/s/ Joel Markovits
			Joel Markovits
			Chief Financial Officer
			(principal financial officer and principal accounting<br> officer)

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Exhibit 31.1

CERTIFICATIONS

I, Ezra Beyman, certify that:

I have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 for Reliance Global Group, Inc.;
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;
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;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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: May 18, 2023	By:	/s/ Ezra Beyman
---	---	---
		Ezra Beyman
		Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Joel Markovits, certify that:

I have reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 for Reliance Global Group, Inc.;
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;
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;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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: May 18, 2023	By:	/s/ Joel Markovits
---	---	---
		Joel Markovits
		Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley ActOf 2002

(Subsections (A) And (B) Of Section 1350, Chapter63 of Title 18, United States Code)

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

The Quarterly Report on Form 10-Q for the period ended March 31, 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: May 18, 2023	By:	/s/ Ezra Beyman
		Ezra Beyman
		Chief Executive Officer (Principal Executive Officer)
Date: May 18, 2023	By:	/s/ Joel Markovits
		Joel Markovits
		Chief Financial Officer
		(Principal Financial Officer)