0001812727 false Q3 2021 --12-31 001-40020 false true 0001812727 2021-01-01 2021-09-30 0001812727 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0001812727 RELI:SeriesWarrantsMember 2021-01-01 2021-09-30 0001812727 2021-11-09 0001812727 2021-09-30 0001812727 2020-12-31 0001812727 2021-07-01 2021-09-30 0001812727 2020-07-01 2020-09-30 0001812727 2020-01-01 2020-09-30 0001812727 us-gaap:PreferredStockMember 2020-12-31 0001812727 us-gaap:CommonStockMember 2020-12-31 0001812727 RELI:CommonStockIssuableMember 2020-12-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001812727 us-gaap:RetainedEarningsMember 2020-12-31 0001812727 us-gaap:PreferredStockMember 2021-01-01 2021-03-31 0001812727 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001812727 RELI:CommonStockIssuableMember 2021-01-01 2021-03-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001812727 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001812727 2021-01-01 2021-03-31 0001812727 us-gaap:OverAllotmentOptionMember 2021-01-01 2021-09-30 0001812727 us-gaap:PreferredStockMember 2021-03-31 0001812727 us-gaap:CommonStockMember 2021-03-31 0001812727 RELI:CommonStockIssuableMember 2021-03-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001812727 us-gaap:RetainedEarningsMember 2021-03-31 0001812727 2021-03-31 0001812727 us-gaap:PreferredStockMember 2021-04-01 2021-06-30 0001812727 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001812727 RELI:CommonStockIssuableMember 2021-04-01 2021-06-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001812727 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001812727 2021-04-01 2021-06-30 0001812727 us-gaap:PreferredStockMember 2021-06-30 0001812727 us-gaap:CommonStockMember 2021-06-30 0001812727 RELI:CommonStockIssuableMember 2021-06-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001812727 us-gaap:RetainedEarningsMember 2021-06-30 0001812727 2021-06-30 0001812727 us-gaap:PreferredStockMember 2021-07-01 2021-09-30 0001812727 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001812727 RELI:CommonStockIssuableMember 2021-07-01 2021-09-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001812727 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001812727 us-gaap:PreferredStockMember 2021-09-30 0001812727 us-gaap:CommonStockMember 2021-09-30 0001812727 RELI:CommonStockIssuableMember 2021-09-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001812727 us-gaap:RetainedEarningsMember 2021-09-30 0001812727 us-gaap:PreferredStockMember 2019-12-31 0001812727 us-gaap:CommonStockMember 2019-12-31 0001812727 RELI:CommonStockIssuableMember 2019-12-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001812727 us-gaap:RetainedEarningsMember 2019-12-31 0001812727 2019-12-31 0001812727 us-gaap:PreferredStockMember 2020-01-01 2020-03-31 0001812727 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001812727 RELI:CommonStockIssuableMember 2020-01-01 2020-03-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001812727 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001812727 2020-01-01 2020-03-31 0001812727 us-gaap:PreferredStockMember 2020-03-31 0001812727 us-gaap:CommonStockMember 2020-03-31 0001812727 RELI:CommonStockIssuableMember 2020-03-31 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001812727 us-gaap:RetainedEarningsMember 2020-03-31 0001812727 2020-03-31 0001812727 us-gaap:PreferredStockMember 2020-04-01 2020-06-30 0001812727 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001812727 RELI:CommonStockIssuableMember 2020-04-01 2020-06-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001812727 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001812727 2020-04-01 2020-06-30 0001812727 us-gaap:PreferredStockMember 2020-06-30 0001812727 us-gaap:CommonStockMember 2020-06-30 0001812727 RELI:CommonStockIssuableMember 2020-06-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001812727 us-gaap:RetainedEarningsMember 2020-06-30 0001812727 2020-06-30 0001812727 us-gaap:PreferredStockMember 2020-07-01 2020-09-30 0001812727 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001812727 RELI:CommonStockIssuableMember 2020-07-01 2020-09-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001812727 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001812727 us-gaap:PreferredStockMember 2020-09-30 0001812727 us-gaap:CommonStockMember 2020-09-30 0001812727 RELI:CommonStockIssuableMember 2020-09-30 0001812727 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001812727 us-gaap:RetainedEarningsMember 2020-09-30 0001812727 2020-09-30 0001812727 us-gaap:ComputerEquipmentMember 2021-01-01 2021-09-30 0001812727 RELI:OfficeEquipmentAndFurnitureMember 2021-01-01 2021-09-30 0001812727 us-gaap:LeaseholdImprovementsMember 2021-01-01 2021-09-30 0001812727 srt:MinimumMember 2021-01-01 2021-09-30 0001812727 srt:MaximumMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:EmployeeBenefitsSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2021-01-01 2021-03-31 0001812727 RELI:USBenefitsAllianceLLCMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:CommercialCoverageSolutionsLLCMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2021-07-01 2021-09-30 0001812727 RELI:SouthwesternMontanaFinancialCenterIncMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2021-07-01 2021-09-30 0001812727 RELI:FortmanInsuranceServicesLLCMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2021-07-01 2021-09-30 0001812727 RELI:AltruisBenefitsConsultingIncMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:KushMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:KushMember 2021-07-01 2021-09-30 0001812727 RELI:KushMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember 2021-07-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember 2021-07-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:EmployeeBenefitsSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2021-01-01 2021-09-30 0001812727 RELI:USBenefitsAllianceLLCMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:CommercialCoverageSolutionsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2021-01-01 2021-09-30 0001812727 RELI:SouthwesternMontanaFinancialCenterIncMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2021-01-01 2021-09-30 0001812727 RELI:FortmanInsuranceServicesLLCMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2021-01-01 2021-09-30 0001812727 RELI:AltruisBenefitsConsultingIncMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:KushMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:KushMember 2021-01-01 2021-09-30 0001812727 RELI:KushMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember 2021-01-01 2021-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember 2021-01-01 2021-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:EmployeeBenefitsSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2020-07-01 2020-09-30 0001812727 RELI:USBenefitsAllianceLLCMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:CommercialCoverageSolutionsLLCMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2020-07-01 2020-09-30 0001812727 RELI:SouthwesternMontanaFinancialCenterIncMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2020-07-01 2020-09-30 0001812727 RELI:FortmanInsuranceServicesLLCMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2020-07-01 2020-09-30 0001812727 RELI:AltruisBenefitsConsultingIncMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember 2020-07-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember 2020-07-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:EmployeeBenefitsSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:EmployeeBenefitsSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:USBenefitsAllianceLLCMember 2020-01-01 2020-09-30 0001812727 RELI:USBenefitsAllianceLLCMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:CommercialCoverageSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:CommercialCoverageSolutionsLLCMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:SouthwesternMontanaFinancialCenterIncMember 2020-01-01 2020-09-30 0001812727 RELI:SouthwesternMontanaFinancialCenterIncMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:FortmanInsuranceServicesLLCMember 2020-01-01 2020-09-30 0001812727 RELI:FortmanInsuranceServicesLLCMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember RELI:AltruisBenefitsConsultingIncMember 2020-01-01 2020-09-30 0001812727 RELI:AltruisBenefitsConsultingIncMember 2020-01-01 2020-09-30 0001812727 RELI:MedicalLifeMember RELI:RegularMember 2020-01-01 2020-09-30 0001812727 RELI:PropertyAndCasualtyMember RELI:RegularMember 2020-01-01 2020-09-30 0001812727 srt:ScenarioPreviouslyReportedMember 2020-12-30 0001812727 srt:RestatementAdjustmentMember 2020-12-31 0001812727 srt:ScenarioPreviouslyReportedMember 2020-01-01 2020-12-31 0001812727 srt:RestatementAdjustmentMember 2020-01-01 2020-12-31 0001812727 2020-01-01 2020-12-31 0001812727 srt:ScenarioPreviouslyReportedMember 2020-01-01 2020-12-01 0001812727 srt:RestatementAdjustmentMember 2020-01-01 2020-12-01 0001812727 2020-01-01 2020-12-01 0001812727 srt:ScenarioPreviouslyReportedMember 2021-03-31 0001812727 srt:RestatementAdjustmentMember 2021-03-31 0001812727 srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001812727 srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001812727 RELI:USBAAndEBSMember 2021-01-01 2021-09-30 0001812727 RELI:UISAgencyLLCAndCommercialSolutionsMember 2021-01-01 2021-09-30 0001812727 RELI:SouthwesternMontanaMember 2021-01-01 2021-09-30 0001812727 RELI:FortmanInsuranceMember 2021-01-01 2021-09-30 0001812727 RELI:AltruisMember 2021-01-01 2021-09-30 0001812727 RELI:JPKushAndAssociatesIncMember 2021-01-01 2021-09-30 0001812727 RELI:USBAAndEBSMember 2020-01-01 2020-09-30 0001812727 RELI:CommercialSolutionsMember 2020-01-01 2020-09-30 0001812727 RELI:SouthwesternMontanaMember 2020-01-01 2020-09-30 0001812727 RELI:FortmanInsuranceMember 2020-01-01 2020-09-30 0001812727 RELI:AltruisMember 2020-01-01 2020-09-30 0001812727 RELI:UISAgencyLLCMember 2020-08-16 2020-08-17 0001812727 RELI:UISAgencyLLCMember srt:MinimumMember 2020-08-17 0001812727 RELI:UISAgencyLLCMember 2021-09-30 0001812727 RELI:UISAgencyLLCMember 2020-12-31 0001812727 RELI:UISAgencyLLCMember 2020-08-17 0001812727 RELI:UISAgencyLLCMember RELI:TradeNameAndTrademarksMember 2020-08-16 2020-08-17 0001812727 RELI:UISAgencyLLCMember us-gaap:CustomerRelationshipsMember 2020-08-16 2020-08-17 0001812727 RELI:UISAgencyLLCMember RELI:NoncompetitionAgreementsMember 2020-08-16 2020-08-17 0001812727 RELI:UISAgencyLLCMember us-gaap:GoodwillMember 2020-08-16 2020-08-17 0001812727 RELI:UISAgencyLLCMember 2019-08-17 0001812727 RELI:UISAgencyLLCMember 2020-01-01 2020-08-17 0001812727 RELI:JPKushAndAssociatesIncMember 2021-04-25 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember 2021-09-30 0001812727 RELI:JPKushAndAssociatesIncMember 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember RELI:TradeNameAndTrademarksMember 2021-04-25 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember us-gaap:CustomerRelationshipsMember 2021-04-25 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember RELI:NoncompetitionAgreementsMember 2021-04-25 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember us-gaap:GoodwillMember 2021-04-25 2021-05-02 0001812727 RELI:KushMember 2021-05-02 0001812727 RELI:JPKushAndAssociatesIncMember 2021-01-01 2021-04-30 0001812727 RELI:JPKushAndAssociatesIncMember 2020-01-01 2020-09-30 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember srt:MaximumMember 2020-02-19 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:CommonClassAMember 2020-02-18 2020-02-19 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-02-19 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:CommonClassAMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-02-18 2020-02-19 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2020-02-19 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2020-02-19 0001812727 RELI:ThirdPartyIndividualMember RELI:NSUREIncMember 2020-02-09 2020-02-10 0001812727 RELI:SecuritiesPurchaseAgreementMember RELI:NSUREIncMember us-gaap:CommonClassAMember 2020-12-31 0001812727 RELI:ComputerEquipmentAndSoftwareMember 2021-09-30 0001812727 RELI:ComputerEquipmentAndSoftwareMember 2020-12-31 0001812727 RELI:OfficeEquipmentAndFurnitureMember 2021-09-30 0001812727 RELI:OfficeEquipmentAndFurnitureMember 2020-12-31 0001812727 us-gaap:LeaseholdImprovementsMember 2021-09-30 0001812727 us-gaap:LeaseholdImprovementsMember 2020-12-31 0001812727 RELI:JPKushAndAssociatesIncMember 2021-04-01 2021-06-30 0001812727 RELI:JPKushAndAssociatesIncMember 2021-06-30 0001812727 us-gaap:TrademarksAndTradeNamesMember 2021-01-01 2021-09-30 0001812727 us-gaap:TrademarksAndTradeNamesMember 2021-09-30 0001812727 us-gaap:TrademarksAndTradeNamesMember 2020-09-30 0001812727 RELI:InternallyDevelopedSoftwareMember 2021-01-01 2021-09-30 0001812727 RELI:InternallyDevelopedSoftwareMember 2021-09-30 0001812727 RELI:InternallyDevelopedSoftwareMember 2020-09-30 0001812727 us-gaap:CustomerRelationshipsMember 2021-01-01 2021-09-30 0001812727 us-gaap:CustomerRelationshipsMember 2020-09-30 0001812727 RELI:PurchasedSoftwareMember 2021-01-01 2021-09-30 0001812727 RELI:PurchasedSoftwareMember 2020-09-30 0001812727 RELI:NoncompetitionAgreementsMember 2021-01-01 2021-09-30 0001812727 RELI:NoncompetitionAgreementsMember 2020-09-30 0001812727 us-gaap:TrademarksAndTradeNamesMember 2020-01-01 2020-12-31 0001812727 us-gaap:TrademarksAndTradeNamesMember 2020-12-31 0001812727 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-12-31 0001812727 us-gaap:CustomerRelationshipsMember 2020-12-31 0001812727 RELI:PurchasedSoftwareMember 2020-01-01 2020-12-31 0001812727 RELI:PurchasedSoftwareMember 2020-12-31 0001812727 RELI:NoncompetitionAgreementsMember 2020-01-01 2020-12-31 0001812727 RELI:NoncompetitionAgreementsMember 2020-12-31 0001812727 RELI:EBSandUSBAMember 2021-09-30 0001812727 RELI:EBSandUSBAMember 2020-12-31 0001812727 RELI:SeniorSecuredAmortizingCreditFacilityMember 2021-09-30 0001812727 RELI:SeniorSecuredAmortizingCreditFacilityMember 2020-12-31 0001812727 RELI:SWMTMember 2021-09-30 0001812727 RELI:SWMTMember 2020-12-31 0001812727 RELI:FISMember 2021-09-30 0001812727 RELI:FISMember 2020-12-31 0001812727 RELI:ABCMember 2021-09-30 0001812727 RELI:ABCMember 2020-12-31 0001812727 RELI:EmployeeBenefitsSolutionsLLCAndUSBenefitsAllianceMember RELI:CreditAgreementMember RELI:OakStreetFundingLLCMember 2018-08-02 0001812727 RELI:EmployeeBenefitsSolutionsLLCAndUSBenefitsAllianceMember RELI:CreditAgreementMember RELI:OakStreetFundingLLCMember 2018-07-30 2018-08-02 0001812727 RELI:EmployeeBenefitsSolutionsLLCAndUSBenefitsAllianceMember RELI:CreditAgreementMember RELI:OakStreetFundingLLCMember 2018-12-31 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:SeniorSecuredAmortizingCreditFacilityMember RELI:OakStreetFundingLLCMember 2018-12-07 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:SeniorSecuredAmortizingCreditFacilityMember RELI:OakStreetFundingLLCMember 2018-12-06 2018-12-07 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:SeniorSecuredAmortizingCreditFacilityMember RELI:OakStreetFundingLLCMember us-gaap:PrimeRateMember 2018-12-07 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:SeniorSecuredAmortizingCreditFacilityMember RELI:OakStreetFundingLLCMember 2018-12-31 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:TermLoanMember RELI:OakStreetFundingLLCMember 2019-12-31 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:TermLoanMember RELI:OakStreetFundingLLCMember 2019-01-01 2019-12-31 0001812727 RELI:CommercialCoverageSolutionsLLCMember RELI:SeniorSecuredAmortizingCreditFacilityMember RELI:OakStreetFundingLLCMember us-gaap:PrimeRateMember 2019-12-31 0001812727 RELI:LoanAgreementMember RELI:FirstFinancialBankMember RELI:PaycheckProtectionProgramMember 2020-04-04 0001812727 RELI:LoanAgreementMember RELI:FirstFinancialBankMember RELI:PaycheckProtectionProgramMember 2020-04-03 2020-04-04 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:BlueCrossBlueShieldMember 2021-07-01 2021-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:BlueCrossBlueShieldMember 2020-07-01 2020-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:BlueCrossBlueShieldMember 2021-01-01 2021-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:BlueCrossBlueShieldMember 2020-01-01 2020-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:PriorityHealthMember 2021-07-01 2021-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:PriorityHealthMember 2020-07-01 2020-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:PriorityHealthMember 2021-01-01 2021-09-30 0001812727 us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember RELI:PriorityHealthMember 2020-01-01 2020-09-30 0001812727 RELI:RelianceGlobalHoldingsLLCMember us-gaap:SeriesAPreferredStockMember 2021-02-10 2021-02-11 0001812727 RELI:RelianceGlobalHoldingsLLCMember us-gaap:CommonStockMember 2021-02-10 2021-02-11 0001812727 RELI:SeriesAConvertiblePreferredStockMember 2021-09-30 0001812727 RELI:SeriesAConvertiblePreferredStockMember 2020-12-31 0001812727 2021-02-01 2021-02-28 0001812727 RELI:RelianceGlobalHoldingsLLCMember 2021-02-01 2021-02-28 0001812727 RELI:RelianceGlobalHoldingsLLCMember 2021-02-28 0001812727 RELI:RelianceGlobalHoldingsLLCMember 2021-01-01 2021-09-30 0001812727 RELI:JPKushAndAssociatesIncMember 2021-05-01 2021-05-31 0001812727 RELI:TwoThousandNineteenEquityIncentivePlanMember 2020-12-31 0001812727 RELI:TwoThousandNineteenEquityIncentivePlanMember 2021-09-30 0001812727 RELI:TwoThousandNineteenEquityIncentivePlanMember RELI:CurrentEmployeesMember 2021-01-01 2021-09-30 0001812727 RELI:TwoThousandNineteenEquityIncentivePlanMember RELI:ServiceProviderMember 2020-01-01 2020-09-30 0001812727 RELI:EmployeesDirectorsAndConsultantsMember 2020-01-01 2020-09-30 0001812727 RELI:TwoThousandNineteenEquityIncentivePlanMember RELI:ServiceProviderMember 2021-01-01 2021-09-30 0001812727 RELI:EmployeesDirectorsAndConsultantsMember 2021-01-01 2021-09-30 0001812727 srt:MinimumMember 2021-09-30 0001812727 srt:MaximumMember 2021-09-30 0001812727 srt:MinimumMember 2020-09-30 0001812727 srt:MaximumMember 2020-09-30 0001812727 srt:MinimumMember 2020-01-01 2020-09-30 0001812727 srt:MaximumMember 2020-01-01 2020-09-30 0001812727 us-gaap:SeriesAPreferredStockMember 2021-01-01 2021-09-30 0001812727 us-gaap:SeriesAPreferredStockMember 2020-01-01 2020-09-30 0001812727 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0001812727 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001812727 us-gaap:AccountingStandardsUpdate201602Member 2021-09-30 0001812727 us-gaap:AccountingStandardsUpdate201602Member 2020-09-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure RELI:Agent RELI:Policy

 

 

 

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, 2021

 

RELIANCE GLOBAL GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Florida

(State or other jurisdiction of incorporation or organization)

 

46-3390293

I.R.S. Employer Identification Number

 

524210

(Primary Standard Industrial Code Classification Number)

 

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

732-380-4600

(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)

 

Copies to:

 

Mr. Ezra Beyman

Chief Executive Officer

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

732-380-4600

(Address, including zip code, and telephone number,

including area code, of agent for service)

 

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.

 

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.

 

Yes: ☐ No: ☒

 

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.

 

Yes: ☐ No: ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act).

 

Yes: ☐ No:

 

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   Nasdaq Capital Market

 

At November 09, 2021 the registrant had 10,956,109 shares of common stock, par value $0.086 per share, outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

PART I  
Item 1. Financial Statements 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 23
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 33
Item 4. Controls and Procedures. 33
PART II 33
Item 1. Legal Proceedings. 33
Item 1A. Risk Factors. 33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 45
Item 3. Defaults Upon Senior Securities. 45
Item 4. Mine Safety Disclosures. 45
Item 5. Other Information. 46
Item 6. Exhibits 46

 

 
 

 

Item 1. Financial Statements

 

RELIANCE GLOBAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

    September 30, 2021     December 31, 2020  
ASSETS                
Current assets:                
Cash   $ 5,655,103     $ 45,213  
Restricted cash     484,371       484,368  
Accounts receivable     949,655       862,597  
Accounts receivable, related parties     7,131       -  
Note receivables    

-

      3,825  
Other receivables     2,064       1,952  
Prepaid expense and other current assets     234,552       38,081  
Total current assets     7,332,876       1,436,036  
Property and equipment, net     90,425       79,163  
Right-of-use asset, net     1,140,609       433,529  
Investment in NSURE, Inc.     1,350,000       1,350,000  
Intangibles, net     6,547,595       5,982,434  
Goodwill     9,750,492       8,761,725  
Other non-current assets     16,792       1,800  
Total assets   $ 26,228,789     $ 18,044,687  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and other accrued liabilities   $ 829,537     $ 1,143,582  
Loans payable     -       14,598  
Current portion of loans payables, related parties     -       4,523,045  
Other payables     62,500       62,500  
Current portion of long-term debt     890,901       963,450  
Current portion of leases payable     276,341       176,897  
Total current liabilities     2,059,279       6,884,072  
                 
Loan payables, related parties, less current portion     364,552       143,475  
Long term debt, less current portion     7,324,980       7,885,830  
Leases payable, less current portion     872,871       262,904  
Earn-out liability     2,842,570       2,631,418  
Total liabilities     13,464,252       17,807,699  
                 
Stockholders’ and members’ equity:                
Preferred stock, $0.086 par value; 750,000,000 shares authorized and 1,167 and 395,640 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively     100       33,912  
Common stock, $0.086 par value; 2,000,000,000 shares authorized and 10,944,439 and 4,241,028 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively     939,826       363,517  
Common stock issuable     482,116       822,116  
Additional paid-in capital     26,188,220       11,377,123  
Accumulated deficit     (14,845,725 )     (12,359,680 )
Total stockholders’ equity (deficit)     12,764,537       236,988  
Total liabilities and stockholders’ equity   $ 26,228,789     $ 18,044,687  

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

1
 

 

RELIANCE GLOBAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

    2021     2020     2021     2020  
   

Three months ended

September 30,

   

Nine months ended

September 30,

 
    2021     2020     2021     2020  
REVENUE                        
Commission income   $ 2,581,636     $ 1,680,043     $ 7,096,213     $ 5,326,375  
Total revenue     2,581,636       1,680,043       7,096,213       5,326,375  
                                 
OPERATING EXPENSES                                
Commission expense   $ 660,708     $ 399,322     $ 1,748,451     $ 1,178,806  
Salaries and wages     1,188,267       883,884       3,217,441       2,620,380  
General and administrative expenses     755,130       1,116,907       2,961,881       3,320,779  
Marketing and advertising     65,010       27,212       143,110       128,471  
Depreciation and amortization     387,729       344,888       1,090,183       1,003,070  
Total operating expenses     3,056,844       2,772,213       9,161,066       8,251,506  
                                 
Loss from operations     (475,208 )     (1,092,170 )     (2,064,853 )     (2,925,131 )
                                 
Other expense, net     (120,025 )     (139,397 )     (421,192 )     (424,647 )
 Total non-operating expenses     (120,025 )     (139,397 )     (421,192 )     (424,647 )
                                 
Net loss   $ (595,233 )   $ (1,231,567 )   $ (2,486,045 )   $ (3,349,778 )
                                 
Basic and diluted loss per share   $ (0.05 )   $ (0.30 )   $ (0.25 )   $ (0.80 )
Weighted average number of shares outstanding     10,944,439       4,162,306       9,809,092       4,164,489  

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

2
 

 

RELIANCE GLOBAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

    Shares     Amount     Shares     Amount     Shares     Amount     capital     Deficit     Total  
    Reliance Global Group, Inc.  
    Preferred stock     Common stock     Common stock issuable     Additional paid-in     Accumulated        
    Shares     Amount     Shares     Amount     Shares     Amount     capital     Deficit     Total  
Balance, December 31, 2020     395,640     $ 33,912       4,241,028     $ 363,517       51,042     $ 822,116     $ 11,377,123     $ (12,359,680 )   $ 236,988  
                                                                         
Share based compensation     -       -       -       -       -       -       246,966       -       246,966  
                                                                         
Shares issued for services     -       -       15,000       1,290       -       -       89,760       -       91,050  
                                                                         
Shares issued due to public offering, net of offering costs of $1,672,852     -       -       1,800,000       154,800       -       -       8,954,348       -       9,109,148  
                                                                         
Over-allotment shares from offering, net of offering costs of $250,928     -       -       270,000       23,220       -       -       1,343,153       -       1,366,373  
                                                                         
Warrants sold during public offering at quoted price     -       -       -       -       -       -       20,700       -       20,700  
                                                                         
Shares issued due to conversion of preferred stock     (394,493 )     (33,812 )     3,944,930       339,264       -       -       (305,452 )     -       -  
                                                                         
Shares issued due to conversion of debt     -       -       633,333       54,467       -       -       3,745,533       -       3,800,000  
                                                                         
Rounding shares related to initial public offering     -       -       1,885       -       (3 )     -       -       -       -  
                                                                         
Shares issued pursuant to software purchase     -       -       23,338       1,984       (23,338 )     (340,000 )     338,016       -       -  
                                                                         
Net loss     -       -       -       -       -       -       -       (613,926 )     (613,926 )
                                                                         
Balance, March 31, 2021     1,147     $ 100       10,929,514     $ 938,542       27,701     $ 482,116     $ 25,810,147     $ (12,973,606 )   $ 14,257,299  
                                                                         
Share based compensation
    -       -       -       -       -       -       183,132       -       183,132  
                                                                         
Rounding shares related to initial public offering     20       -       -       -       -       -       -       -       -   
                                                                         
Shares issued pursuant to acquisition of Kush     -       -       14,925       1,284       -       -       48,716       -       50,000  
                                                                         
Net loss     -       -       -       -       -       -       -       (1,276,886 )     (1,276,886 )
                                                                         
Balance, June 30, 2021     1,167     $ 100       10,944,439     $ 939,826       27,701     $ 482,116     $ 26,041,995     $ (14,250,492 )   $ 13,213,545  
                                                                         
Share based compensation     -       -       -       -       -       -       146,225       -       146,225  
                                                                         
Rounding shares related to initial public offering     -       -       -       -       -       -       -       -       -  
                                                                         
Shares issued pursuant to acquisition of Kush     -       -       -       -       -       -       -       -       -  
                                                                         
Net loss     -       -       -       -       -       -       -       (595,233 )     (595,233 )
                                                                         
Balance, September 30, 2021     1,167     $ 100       10,944,439     $ 939,826       27,701     $ 482,116     $ 26,188,220     $ (14,845,725 )   $ 12,764,537  

 

    Reliance Global Group, Inc.  
    Preferred stock     Common stock   Common stock issuable   Additional paid-in     Accumulated        
     Shares     Amount     Shares     Amount     Shares     Amount    

capital

    Deficit     Total  
Balance, December 31, 2019     395,640     $ 33,912       4,115,330     $ 352,743       51,042     $ 822,116     $ 8,216,829     $ (8,783,276 )   $ 642,324  
                                                                         
Shares issued pursuant to investment in NSURE, Inc.     -       -       46,667       4,000       -       -       996,000       -       1,000,000  
                                                                         
Share based compensation     -       -       -       -       -       -       394,719       -       394,719  
                                                                         
Net loss     -       -       -       -       -       -       -       (979,798 )     (979,798 )
                                                                         
Balance, March 31, 2020     395,640     $ 33,912       4,161,997     $ 356,743       51,042     $ 822,116     $ 9,607,548     $ (9,763,074 )   $ 1,057,245  
                                                                         
Share based compensation     -       -       -       -       -       -       448,853       -       448,853  
                                                                         
Net loss     -       -       -       -       -       -       -       (1,138,413 )     (1,138,413 )
                                                                         
Balance, June 30, 2020     395,640     $ 33,912     4,161,997   $ 356,743     51,042   $ 822,116   $ 10,056,401   $ (10,901,487 )   $ 367,685  
                                                                         
Share based compensation     -       -       -       -       -       -       220,205       -       220,205  
                                                                         
Common stock issued due to Stock Purchase Agreement     -       -       31,111       2,667       -       -       197,333       -       200,000  
                                                                         
Common stock issued due to Earnout Agreement     -       -       21,875       1,875       -       -       298,125       -       300,000  
                                                                         
Common stock issuable related ot UIS business acquisition     -       -       17,943       1,538       -       -       198,462       -       200,000  
                                                                         
Shares issued upon termination of employee     -       -       8,102       694       -       -       165,973       -       166,667  
                                                                         
Net loss     -       -       -       -       -       -       -       (1,231,567 )     (1,231,567 )
                                                                         
Balance, September 30, 2020     395,640   $ 33,912     4,241,028   $ 363,517     51,042   $ 822,116   $ 11,136,499   $ (12,133,054 )   $ 222,990  

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

3
 

 

RELIANCE GLOBAL GROUP, INC. AND SUBSIDIATIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

    2021     2020  
    Nine months ended September 30,  
    2021     2020  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (2,486,045 )   $ (3,349,778 )
Adjustment to reconcile net income to net cash used in operating activities:                
Depreciation and amortization     1,090,183       1,003,070  
Amortization of debt issuance costs and accretion of debt discount     37,822       17,165  
Non-cash lease expense     2,331       317  
Stock compensation expense     667,373       1,063,777  
Shares issued pursuant to earn-out agreement     -       (300,000 )
Change in operating assets and liabilities:                
Accounts payables and other accrued liabilities     (314,045 )     208,471  
Accounts receivable     (87,058 )     46,299  
Accounts receivable, related parties     (7,131 )     7,131  
Other receivables     3,825     6,271  
Other payables     (112 )     44,901  
Other non-current assets     (14,992 )     (195,924 )
Prepaid expense and other current assets     (196,471 )     (5,772 )
Net cash used in operating activities     (1,304,320 )     (1,454,072 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of property and equipment     (24,257 )     -  
Investment in NSURE, Inc.     -       (1,350,000 )
Acquisition of business, net of cash acquired     (1,608,586 )     (801,966 )
Purchase of intangibles     (331,054 )     -  
Net cash used in investing activities     (1,963,897 )     (2,151,966 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Principal repayments of debt     (663,907 )     (245,178 )
Proceeds from PPP loan     -       673,700  
Principal repayments of PPP loan     -       (165,000 )
Proceeds from loans payable, related parties     2,931       1,651,815  
Payments of loans payable, related parties     (504,899 )     (165,980 )
Payments on earn-out liability     (452,236 )     -  
Issuance of common stock     10,496,221       1,866,667  
Net cash provided by financing activities     8,878,110       3,616,024  
                 
Net increase in cash and restricted cash     5,609,893       9,986  
Cash and restricted cash at beginning of year     529,581       491,585  
Cash and restricted cash at end of year     6,139,474       501,571  
                 
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS:                
Cash paid for interest     350,175       90,580  
Lease assets obtained in exchange for lease liabilities     861,443       461,504  
Conversion of preferred stock into common stock     339,264       6,088  
Conversion of debt into equity     3,800,000       -  
Common stock issued pursuant to acquisition     50,000       -  
Common stock issued in lieu of services     91,050       -  
Issuance of common stock pursuant to the purchase of software from The Referral Depot, LLC     340,000       -  
Cancellation of common stock shares pursuant to settlement agreement     -       576  

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

4
 

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) (“RELI”, “Reliance”, or the “Company”) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC (“Reliance Holdings”, or “Parent Company”), a related party acquired control of the Company. Ethos Media Network, Inc. was then renamed on October 18, 2018.

 

On August 17, 2020, the Company acquired UIS Agency, Inc. (“UIS”). UIS is an insurance agency and employee benefits provider (See Note 3).

 

On May 1, 2021, the Company acquired J.P. Kush and Associates, Inc. (“Kush”), an independent healthcare insurance agency. (See Note 3).

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s annual report on Form 10-K.

 

Liquidity

 

As of September 30, 2021, the Company’s reported cash and restricted cash aggregated balance was approximately $6,139,000, current assets were approximately $7,333,000, while current liabilities were approximately $2,059,000. As of September 30, 2021, the Company had working capital of approximately $5,274,000 and stockholders’ equity of $12,765,000. For the nine-month period ended September 30, 2021, the Company reported a net loss of approximately $2,486,000and negative cash flows from operations of $1,304,000. The Company also completed an offering in February that raised net proceeds of approximately $10,496,000. Management believes the company’s financial position to be reasonable and sufficient, providing ample liquidity for the foreseeable future.

 

5
 

 

Use of Estimates

 

The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

 

Cash

 

Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

Restricted Cash

 

Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions.

 

The reconciliation of cash and restricted cash reported within the applicable balance sheet accounts that sum to the total of cash and restricted cash presented in the statement of cash flows is as follows:

 

    September 30, 2021     September 30, 2020  
Cash   $ 5,655,103     $ 13,282  
Restricted cash     484,371       488,289  
Total cash and restricted cash   $ 6,139,474     $ 501,571  

 

Property and Equipment

 

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Certain capitalized software has been reclassified in the condensed consolidated balance sheet from property and equipment, net to intangibles, net and comparative periods have been adjusted accordingly. Maintenance and repairs are charged to expense as incurred. Estimated useful lives of the Company’s Property and Equipment are as follows:

 

  Useful Life (in years)
Computer equipment 5
Office equipment and furniture 7
Leasehold improvements Shorter of the useful life or the lease term

 

Fair Value of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

 

6
 

 

Level 1 — Observable inputs that reflect 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.

 

The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on a market index.

 

Deferred Financing Costs

 

The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of September 30, 2021, and December 31, 2020, unamortized deferred financing costs were $139,204, and $186,312, respectively and are netted against the related debt.

 

Business Combinations

 

The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

 

Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value and accretion costs are recognized in earnings.

 

Identifiable Intangible Assets, net

 

Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized during the periods presented.

 

Goodwill and other indefinite-lived intangibles

 

The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets (if any) other than goodwill, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows.

 

7
 

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers which at its core, recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services.

 

The Company’s revenue is primarily comprised of agency commissions earned from health insurance carriers (the “Customer” or “Carrier”) related to insurance plans produced through brokering, producing and servicing agreements between insurance carriers and members. The Company defines a “Member” as an individual, family or entity currently covered or seeking insurance coverage.

 

The Company focuses primarily on agency services for insurance products in the “Healthcare” and property and casualty, which includes auto (collectively “P&C”) space, with nominal activity in the life insurance and bond sectors. Healthcare includes plans for individuals and families, Medicare supplements, ancillary and small businesses.

 

Consideration for all agency services typically is based on commissions calculated by applying contractual commission rates to policy premiums. For P&C, commission rates are applied to premiums due, whereas for healthcare, commission rates, including override commissions, are applied to monthly premiums received by the Carrier.

 

The Company has two forms of billing practices, “Direct Bill” and “Agency Bill”. With Direct Bill, Carriers bill and collect policy premium payments directly from Members without any involvement from the Company. Commissions are paid to the Company by the Carrier in the following month. With Agency Bill, The Company bills Members premiums due and remits them to Carriers net of commission earned.

 

The following outlines the core principles of ASC 606:

 

Identification of the contract, or contracts, with a customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

 

Identification of the performance obligations in the contract. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract.

 

Determination of the transaction price. The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer.

 

Allocation of the transaction price to the performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis.

 

8
 

 

Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company satisfies performance obligations either over time or at a point in time, as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised good or service to the customer.

 

Healthcare revenue recognition:

 

The Company identifies a contract when it has a binding agreement with a Carrier, the Customer, to provide agency services to Members.

 

There typically is one performance obligation in contracts with Carriers, to perform agency services that culminate in monthly premium cash collections by the Carrier. The performance obligation is satisfied through a combination of agency services including, marketing carrier’s insurance plans, soliciting Member applications, binding, executing and servicing insurance policies on a continuous basis throughout a policy’s life cycle which includes and culminates with the Customer’s collection of monthly premiums. No commission is earned if cash is not received by Carrier. Thus, commission revenue is earned only after a month’s cash receipts from Members’ dues is received by the Customer. Each month’s Carrier cash collections is considered a separate unit sold and transferred to the Customer i.e., the satisfaction of that month’s performance obligation.

 

Transaction price is typically stated in a contract and usually based on a commission rate applied to Member premiums paid and received by Carrier. The Company generally continues to receive commission payments from Carriers until a Member’s plan is cancelled or the Company terminates its agency agreement with the Carrier. Upon termination, the Company normally will no longer receive any commissions form Carriers even on business still in place. In some instances, trailing commissions could occur which would be recognized similar to other Healthcare revenue. With one performance obligation, allocation of transaction price is normally not necessary.

 

Healthcare typically utilizes the Direct Bill method.

 

The Company recognizes revenue at a point in time, when it satisfies its monthly performance obligation and control of the service transfers to the Customer. Transfer occurs when Member insurance premium cash payments are received by the Customer. The Customer’s receipt of cash is the culmination and complete satisfaction of the Company’s performance obligation, and the earnings process is complete.

 

With Direct Bill, since the amount of monthly Customer cash receipts is unknown to the Company until the following month when notice is provided by Customer to Company, the Company accrues revenue at each period end. Any estimated revenue accrued and recognized at a period-end is trued up for financial reporting per actual revenue earned as provided by the Customer during the following month.

 

P&C revenue recognition:

 

The Company identifies a contract when it has a binding agreement with a Carrier, the Customer, to provide agency services to Members.

 

There typically is one performance obligation in contracts with Customers, to perform agency services to solicit, receive proposals and bind insurance policies culminating with policy placement. Commission revenue is earned at the time of policy placement.

 

Transaction price is typically stated in a contract and usually based on commission rates applied to Member premiums due. With one performance obligation, allocation of transaction price is normally not necessary.

 

P&C utilizes both the Agency Bill and Direct Bill methods, depending on the Carrier.

 

The Company recognizes revenue at a point in time when it satisfies its performance obligation and control of the service transfers to the Customer. Transfer occurs when the policy placement process is complete.

 

With both Direct Bill and Agency Bill, the Company accrues commission revenue in the period policies are placed. With Agency Bill, payment is typically received from Members in the month earned, however with Direct Bill, payment is typically received from Carriers in the month subsequent to the commissions being earned.

 

Other revenue policies: Insurance commissions earned from Carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the condensed consolidated statements of operations.

 

When applicable, commission revenue is recognized net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage.

 

The Company could earn additional revenue from contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the Carriers (collectively, “Contingent Commissions”). Contingent Commissions are earned when the Company achieves targets established by Carriers. The Carriers notify the Company when it has achieved the target. The Company recognizes revenue for any Contingent Commissions at the time it is reasonably assured that a significant revenue reversal is not probable, which is generally when a Carrier notifies the Company that it is on track or has earned a Contingent Commission.

 

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

 

Three Months ended September 30, 2021     Medical/Life       Property and Casualty       Total  
Regular                        
EBS     226,233       -       226,233  
USBA     18,241       -       18,241  
CCS/UIS     -       120,762       120,762  
Montana     343,546       -       343,546  
Fortman     357,638       194,218       551,856  
Altruis     807,775       -       807,775  
Kush     513,223       -       513,223  
      2,266,656       314,980       2,581,636  

 

Nine Months ended September 30, 2021     Medical/Life       Property and Casualty       Total  
Regular                        
EBS     642,428       -       642,428  
USBA     45,861       -       45,861  
CCS/UIS     -       274,928       274,928  
Montana     1,283,402       -       1,283,402  
Fortman     884,073       628,327       1,512,400  
Altruis     2,558,653       -       2,558,653  
Kush     778,541       -       778,541  
      6,192,958       903,255       7,096,213  

 

Three Months ended September 30, 2020   Medical/Life     Property and Casualty     Total  
Regular                        
EBS     188,670       -       188,670  
USBA     11,757       -       11,757  
CCS/UIS     -       81,344       81,344  
Montana     318,688       -       318,688  
Fortman     258,488       212,454       470,942  
Altruis     608,641       -       608,641  
      1,386,244       293,798       1,680,042  

 

Nine Months ended September 30, 2020   Medical/Life     Property and Casualty     Total  
Regular                        
EBS     567,054       -       567,054  
USBA     206,698       -       206,698  
CCS/UIS     -       227,044       227,044  
Montana     1,148,538       -       1,148,538  
Fortman     880,848       578,229       1,459,077  
Altruis     1,717,964       -       1,717,964  
      4,521,102       805,273       5,326,375  

 

General and Administrative

 

General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs.

 

9
 

 

Marketing and Advertising

 

The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred.

 

Stock-Based Compensation

 

Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur.

 

Leases

 

The Company recognizes leases in accordance with Accounting Standards Codification Topic 842, “Leases” (“ASC 842” or “ASU 2016-12”). This standard provides enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases are recognized as a single lease expense, generally on a straight-line basis.

 

The Company is the lessee in a contract when the Company obtains the right to use an asset. We currently lease real estate and office space under non-cancelable operating lease agreements. When applicable, consideration in a contract is allocated between lease and non-lease components. Lease payments are discounted using the implicit discount rate in the lease. If the implicit discount rate for the lease cannot be readily determined, the Company uses an estimate of its incremental borrowing rate. The Company did not have any contracts accounted for as finance leases as of September 30, 2021, or 2020. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the condensed consolidated statement of operations. The Company determines a lease’s term by agreement with lessor and includes lease extension options and variable lease payments when option and/or variable payments are reasonably certain of being exercised or paid.

 

Income Taxes

 

The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized.

 

10
 

 

Seasonality

 

A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.

 

Prior Period Adjustments

 

During the June 30, 2021 quarterly financial reporting close process, the Company identified certain immaterial adjustments impacting prior reporting periods. Specifically, the Company identified adjustments to correct goodwill and retained earnings in relation to historical purchase price allocation accounting, and adjustments to true up accounts receivable and retained earnings for certain historical accrued revenues. The Company has also separately reclassified its purchase software from property, plant and equipment to intangible assets.

 

The Company assessed the materiality of the adjustments to prior period financial statements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. (SAB) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and ASC 250, Accounting Changes and Error Corrections.

 

Accordingly, the Company’s comparative condensed consolidated financial statements and impacted notes have been revised from amounts previously reported to reflect these adjustments. The following table illustrates the impact on previously reported amounts and adjusted balances presented in the condensed consolidated financial statements for the period ended September 30, 2021.

 

Account  

12/31/2020

As reported

    Adjustment     12/31/20
Adjusted
 
Accounts Receivable     236,651       625,946       862,597  
Goodwill     9,265,070       (503,345 )