EZRA 10-K & 10-Q changes, risk factors and insider trading

Fluctuations in our quarterly and annual financial results have resulted and will continue to result from numerous factors, including:

Worsening of Current U.S. economic conditions as a result of the COVID-19 pandemic and the Russian Federation Military Action may adversely affect our business.

Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position or results of its operations, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

If economic conditions were to worsen, a number of negative effects on our business could result, including declines in values of insurable exposure units, declines in insurance premium rates, the financial insolvency of insurance companies, the reduced ability of customers to pay, declines in the stock of residential housing or declines in property values. Also, if general economic conditions are poor, some of our customers may cease operations completely or be acquired by other companies, which could have an adverse effect on our results of operations and financial condition. If these customers are affected by poor economic conditions, but yet remain in existence, they may face liquidity problems or other financial difficulties that could result in delays or defaults in payments owed to us, which could have a significant adverse impact on our consolidated financial condition and results of operations. Any of these effects could decrease our net revenues and profitability.

As of December 31, 2024, there were no outstanding loan balances due to our CEO affiliated entities, Reliance Global Holdings LLC and YES Americana Group, LLC (“Americana”). However, subsequent to December 31, 2024, and on March 5, 2025 (the “Americana Facility Effective Date”), the Company entered into a revolving credit facility agreement (the “Americana Facility”), and issued a revolving note thereunder in favor of Americana, pursuant to which Americana agreed to lend the Company up to $600,000 for purposes of additional working capital for purposes of additional working capital related to incremental Spetner acquisition related costs, and general uses. The Americana Facility carries interest at an annual rate of 0.1%, calculated on a daily basis. Payment of principal and interest are due on the maturity date, 12 months from the Americana Facility Effective Date and optional pre-payments are permitted at any time. As of March 6, 2025, there is $450,000 outstanding under the Americana Facility.

Reliance Global Group, Inc. was incorporated in Florida on August 2, 2013 under the name Ethos Media Network, Inc. In September 2018, Reliance Holdings, purchased a controlling interest in the Company. Ethos Media Network, Inc. was renamed Reliance Global Group, Inc. on October 18, 2018.

We operate 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. 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 December 31, 2024, we have acquired nine insurance agencies 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 more than 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 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 close to 300%.

Business Operations

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

Business Trends and Uncertainties

The insurance intermediary business is highly competitive, and we actively compete with numerous firms for customers, 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.

Financial Instruments

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

Insurance Operations

Our insurance operations focus on the acquisition and management of insurance agencies throughout the U.S. Our primary focus is to pinpoint undervalued wholesale and retail insurance agencies with operations in growing or underserved segments (including healthcare and Medicare, as well as personal and commercial insurance lines). We then focus on expanding their operations on a national platform and improving operational efficiencies 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.

Revenues

The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines 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.

Insurance Acquisitions and Strategic Activities

As of the date of this filing, we have acquired nine insurance agencies (see table below). As we continue to execute on our acquisition strategy, our reach within the insurance industry can provide us with the ability to offer lower rates, which could boost our competitive position within the industry.

Private Placements

On March 13, 2023, the Company entered into a securities purchase agreement with one institutional buyer for the purchase and sale of, (i) an aggregate of 9,120 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”) that are exercisable into 52,800 shares of Common Stock (the “Prefunded Warrant Shares”) along with accompanying common warrants (the “Pre-Funded Units”), and (iii) common warrants (the “Common Warrants”) to initially acquire up to 123,839 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”). Additionally, the Company agreed to issue a warrant to the Placement Agent (defined below), to initially acquire 3,096 shares of common stock (the “PA Warrant”). The closing of the Private Placement occurred on March 16, 2023. As of December 31, 2024, with exception to the PA Warrant which remains outstanding, the aforementioned warrants have been exercised into common shares and none remain outstanding.

Stock Splits

On February 23, 2023, the Company effectuated a 1-for-15 reverse split of the Company’s issued and outstanding common stock (the “Reverse Split-2023”). The par value remained unchanged.

On July 1, 2024, the Company effectuated a 1-for-17 reverse stock split of the Company’s issued and outstanding common stock (the “Reverse Split-2024”). The par value remained unchanged. All amounts presented in this Annual Report on Form 10-K have been retrospectively adjusted to reflect the Reverse Split-2023 and the Reverse Split-2024 for all periods presented, unless otherwise indicated. The Reverse Split-2024 resulted in a rounding addition of approximately 110,350 shares valued at par, totalling $9,490 for which shares were issued in July 2024.

Bylaws Amendment

On February 4, 2025, the Company’s Board of Directors approved Amendment No. 1 (the “Bylaws Amendment”) to the Company’s bylaws. The Bylaws Amendment had the effect of (i) amending the title of the bylaws to be “Bylaws of Reliance Global Group, Inc.”, to reflect the change of Company’s name since adoption of the bylaws (in May 2017, the Company’s name was changed from Eye on Media Network, Inc. to Ethos Media Network, Inc., and in October 2018, the Company’s name was changed from Ethos Media Network, Inc. to Reliance Global Group, Inc.); and (ii) reducing the quorum needed to hold a meeting of the Company’s stockholders from a majority of the shares entitled to vote, represented in person or proxy, to thirty-three and one-third (33-1/3%) percent of the shares entitled to vote, represented in person or proxy.

Increase in Authorized Shares

On February 7, 2025, the Company filed articles of amendment (the “Articles Amendment”) to its articles of incorporation, as amended, with the Florida Secretary of State. The Articles Amendment had the effect of increasing the total number of authorized shares of the Company’s common stock from 117,647,058 to 2,000,000,000. The Articles Amendment had no effect on the number of authorized shares of preferred stock. Accordingly, following the filing of the Articles Amendment, effective February 7, 2025, the Company’s authorized capital stock consisted of 2,750,000,000 shares, representing (i) 2,000,000,000 shares of common stock, and (ii) 750,000,000 shares of preferred stock.

The Articles Amendment was approved by the Company’s Board of Directors on October 2, 2024, and by the Company’s stockholders on December 31, 2024.

Amendment No. 2 to Spetner Amended and Restated Stock Exchange Agreement

On February 20, 2025, the Company entered into an Amendment No. 2 (the “Amendment”) to that certain Amended and Restated Stock Exchange Agreement, dated as of September 6, 2024 (the “Original Agreement”), by and among the Company, Spetner Associates, Inc. (“Spetner”), Jonathan Spetner, and Agudath Israel of America (“Agudath”), as amended on October 29, 2024 (“Amendment 1”). Mr. Spetner and Agudath may be referred to herein collectively as the “Sellers” and each individually as a “Seller”.

Pursuant to the Amendment, the Company agreed to issue to each of Mr. Spetner and Agudath 78,500 shares of the Company’s common stock as a non-refundable deposit and a prepayment of a portion of the First Purchase Price, in the amount of $239,425 (collectively the “Additional Deposit Shares”). The Additional Deposit Shares were issued on February 20, 2025.

Further, the Amendment provides that the Additional Deposit Shares, (together with the Deposit Shares, as defined in and as issued pursuant to Amendment 1), shall be deemed a deposit and a prepayment of a portion of the First Purchase Price, and shall constitute a portion of the First Payment Shares, the value of the Deposit Shares and the Additional Deposit Shares, and the portion of the First Purchase Price to be paid by issuance of the First Payment Shares which has been satisfied by the issuance of the Deposit Shares and the Additional Deposit Shares, and collectively, was agreed to be equal to $568,856. The Amendment also sets forth that the purchase price for the First Closing Shares shall be $16,050,000, and that $6,500,000 of the First Purchase Price (the “Cash Payment”), shall be paid to Mr. Spetner.

The Original Agreement, prior to Amendment 1, provided that the First Payment Shares would be issued solely to Mr. Spetner, however, the Amendment provides that, in the event that the First Closing occurs, the issuance of Deposit Shares and the Additional Deposit Shares to Agudath as set forth above shall be deemed to satisfy the obligations of the Company to issue such applicable portion of First Payment Shares to Mr. Spetner.

Further, the Amendment provides that, in the event the First Closing occurs, the Deposit Shares and the Additional Deposit Shares shall be retained by the Sellers and shall constitute payment of a portion of the First Payment Shares. The Deposit Shares and the Additional Deposit Shares shall be non-refundable to the Company unless the First Closing is prevented by the Sellers.

Revenue recognition: All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage.

Our common stock is currently listed on The Nasdaq Capital Market. Nasdaq imposes a number of continued listing requirements on listed issuers, including requirements relating to corporate governance, minimum bid price, public float, minimum stockholders' equity, and the market value of listed securities.

On December 12, 2025, the Company received a deficiency notice (the “Bid Price Notice”) from the Listing Qualifications staff of Nasdaq notifying the Company that, for the prior 30 consecutive business days, the closing bid price for the Company's common stock had been below $1.00 per share, and that the Company was therefore not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The Bid Price Notice does not result in the immediate delisting of the Company's common stock from Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until June 10, 2026 (the “Initial Compliance Period”), to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company's common stock must be at least $1.00 per share for a minimum of ten consecutive business days during the Initial Compliance Period.

If the Company does not regain compliance with the Minimum Bid Price Requirement during the Initial Compliance Period, the Company may be eligible for an additional 180-calendar-day compliance period, provided that the Company satisfies Nasdaq's continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (other than the Minimum Bid Price Requirement) and notifies Nasdaq of its intention to cure the deficiency, including, if necessary, by effecting a reverse stock split. There can be no assurance that the Company will be eligible for, or that Nasdaq will grant, an additional compliance period. If the Company is not granted an additional compliance period, or if it appears to Nasdaq that the Company will not be able to cure the deficiency, Nasdaq will provide notice that the Company's common stock is subject to delisting, in which case the Company would have the right to appeal Nasdaq's determination to a Nasdaq Hearings Panel.

On May 7, 2026, the Board approved a reverse stock split of the Company's outstanding shares of common stock at a ratio of 1-for-40. The Company intends to effect the reverse stock split with the principal objective of regaining compliance with the Minimum Bid Price Requirement prior to the expiration of the Initial Compliance Period on June 10, 2026. There can be no assurance, however, that the reverse stock split will achieve its intended effect of increasing the market price of our common stock to a level sufficient to satisfy the Minimum Bid Price Requirement, that any such increase will be sustained for the required ten consecutive business days during the Initial Compliance Period, or that the Company will otherwise regain or maintain compliance with the Minimum Bid Price Requirement or any other Nasdaq continued listing requirement. Even if the reverse stock split causes the closing bid price of our common stock to exceed $1.00 per share initially, the price may decline thereafter as a result of, among other factors, the dilutive effect of future financings, market reaction to the reverse stock split, the trading volatility of small-capitalization companies, and broader market conditions, any of which could cause us to fall back out of compliance with the Minimum Bid Price Requirement.

In addition to the Minimum Bid Price Requirement, Nasdaq's continued listing standards include requirements that we maintain a minimum stockholders' equity of $2.5 million (or alternatively a minimum market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years), minimum public float, and corporate governance standards including with respect to the independence of our directors and the composition of our Board committees. Recent and contemplated changes to the composition of our Board of Directors, including the potential loss of independence of one or more of our directors as a result of our acquisition activities, could affect our compliance with Nasdaq's corporate governance requirements, including the requirement that our audit committee consist of at least three independent directors. We may not satisfy one or more of these continued listing standards in the future, and any failure to do so could result in our receiving additional deficiency notices from Nasdaq and, ultimately, the delisting of our common stock.

Any perception that we may not comply with Nasdaq's continued listing requirements, the public announcement or receipt of any deficiency notice, or a delisting of our common stock by Nasdaq could adversely affect our ability to attract new investors, decrease the liquidity of the outstanding shares of our common stock, reduce the price at which such shares trade, and increase the transaction costs inherent in trading such shares. A delisting could also deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, and might deter certain institutions and persons from investing in our common stock.

If our common stock were to be delisted from Nasdaq, trading of our common stock could be conducted in the over-the-counter market, including on the OTC Markets or other quotation systems. Trading in the over-the-counter market is generally characterized by decreased trading volume, greater price volatility, and reduced liquidity compared to trading on a national securities exchange. As a result, an investor may find it more difficult to dispose of, or obtain accurate quotations for, our common stock. A delisting of our common stock from Nasdaq could also materially adversely affect our ability to raise additional capital (including under our existing at-the-market offering program and our equity line of credit with White Lion Capital, LLC, which require Nasdaq listing), could trigger default or other adverse consequences under our outstanding warrants or other agreements, could result in reduced analyst coverage and investor interest in our securities, could subject our common stock to “penny stock” rules under the Exchange Act, and could negatively impact the perception of our financial condition and prospects. Any of these factors could cause the market price of our common stock to decline and could materially and adversely affect our business, financial condition, and results of operations.

Reliance Global Group, Inc. operates as a holding company that acquires, owns, and actively manages insurance distribution and technology-oriented businesses. Historically, the Company’s primary operations have consisted of the ownership and operation of wholesale and retail insurance agencies and related InsurTech platforms, including RELI Exchange and 5MinuteInsure.com. In January 2026, as described below, the Company launched EZRA International Group as a strategic platform intended to support the Company’s expansion through majority investments in technology-focused businesses.

Recent Developments

Reverse Stock Split and Nasdaq Compliance

On May 7, 2026, our Board of Directors approved a 1-for-40 reverse stock split of our issued and outstanding common stock, as well as a proportional reduction in the number of authorized shares of common stock. The reverse stock split will become effective for trading purposes on May 19, 2026.

The reverse stock split was undertaken to increase the market price of our common stock and to enable us to regain compliance with the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). Following the effectiveness of the reverse stock split, we are required to maintain a minimum closing bid price of at least $1.00 per share for a period of ten consecutive trading days to regain compliance, with a compliance deadline of June 10, 2026.

As a result of the reverse stock split, every 40 shares of our outstanding common stock would be automatically combined into one share of common stock, and the number of authorized shares of common stock will be reduced proportionately. The reverse stock split did not affect stockholders’ relative ownership interests, except with respect to the treatment of fractional shares.

While the reverse stock split increased the per share trading price of our common stock, there can be no assurance that we will be able to maintain compliance with the minimum bid price requirement for the required period or continue to meet Nasdaq’s continued listing standards. We continue to monitor our stock price and may take additional actions, if necessary, to maintain compliance with applicable listing requirements.

On May 6, 2026, the Company’s stockholders approved an amendment to the Company’s 2025 Equity Incentive Plan to increase the number of shares of common stock authorized for issuance thereunder by 14,000,000 shares, from 2,000,000 shares to 16,000,000 shares. The amendment was approved at the Company’s 2026 Annual Meeting of Stockholders and is intended to support the Company’s ongoing employee, director, consultant, and strategic incentive compensation programs.

Strategic Ventures Initiatives

In January 2026, the Company launched EZRA International Group and introduced its Scale51 operating model (“Scale51”), under which the Company intends to pursue majority ownership positions in technology-driven businesses while continuing to operate its insurance brokerage and InsurTech platforms as its operational base.

In furtherance of this strategy, the Company initiated an investment in Enquantum Ltd., a cybersecurity company focused on post-quantum encryption and data protection technologies, through a $166,000 secured convertible note. In February 2026, the Company entered into a Share Purchase Agreement pursuant to which it agreed, subject to specified milestones and other conditions, to acquire up to a 51% ownership interest in Enquantum for aggregate consideration of approximately $2.1 million, payable in tranches.

During February 2026, the Company completed the initial closing under the agreement and acquired an approximate 8% ownership interest on a fully diluted basis through the conversion of the note and a cash investment. Additional tranche-based investments during March and April 2026 increased the Company’s ownership to approximately 16% on a fully diluted basis.

The increase in consolidated Commission Expense was primarily attributable to higher commission rates driven by general market conditions, as well as increased commission expense from the Company’s retained businesses consistent with approximately 11% year-over-year revenue growth. The businesses divested as part of the Company’s portfolio realignment initiatives historically generated proportionally lower commission expense relative to the commission revenue they contributed.