What changed in Reliance Global Group, Inc.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of Reliance Global Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+534 added−52 removedSource: 10-K (2025-03-07) vs 10-K (2024-04-04)
Top changes in Reliance Global Group, Inc.'s 2024 10-K
534 paragraphs added · 52 removed · 45 edited across 2 sections
- Item 1C. Cybersecurity+484 / −1 · 1 edited
- Item 1A. Risk Factors+50 / −51 · 44 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
44 edited+6 added−7 removed131 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
44 edited+6 added−7 removed131 unchanged
2023 filing
2024 filing
Biggest changeAs of December 31, 2023, the are no outstanding loan balances due to affiliated entities to our CEO, Reliance Global Holdings LLC and YES Americana Group, LLC. 26 Under our credit agreements with Oak Street, the Company has agreed that at all times that the loans are outstanding: (i) Ezra Beyman, our chief executive officer, Debra Beyman, Mr.
Biggest changeAs of March 6, 2025, there is $450,000 outstanding under the Americana Facility. 24 Under our credit agreements with Oak Street, the Company has agreed that at all times that the loans are outstanding: (i) Ezra Beyman, our CEO and Chairman of the Board , Debra Beyman, Mr. Beyman’s wife, or Yaakov Beyman, son of Mr. and Ms.
We rely on information technology and third-party vendors to provide effective and efficient service to our customers, process claims, and timely and accurately report information to carriers and which often involves secure processing of confidential sensitive, proprietary, and other types of information.
We rely on information technology and third-party vendors to provide effective and efficient service to our customers, process claims, and timely and accurately report information to carriers which often involves secure processing of confidential sensitive, proprietary, and other types of information.
Ezra Beyman will be President and Chairperson of the Board of the Company, and (iii) Reliance Global Holdings will continue to remain a shareholder of the Company’s equity and Ezra and Debra will be the sole owners of Reliance Global Holdings as tenants in entirety.
Ezra Beyman will be President and Chairperson of the Board of the Company, and (iii) Reliance Global Holdings will continue to remain a shareholder of the Company’s equity and Ezra and Debra will be the sole owners of Reliance Global Holdings as tenants in entirety.
Disclosure of this information could harm our reputation and subject us to liability under our contracts and laws that protect personal data, resulting in increased costs or loss of revenues. 21 Our business, results of operations, financial condition and liquidity may be materially adversely affected by certain actual and potential claims, regulatory actions and proceedings.
Disclosure of this information could harm our reputation and subject us to liability under our contracts and laws that protect personal data, resulting in increased costs or loss of revenues. Our business, results of operations, financial condition and liquidity may be materially adversely affected by certain actual and potential claims, regulatory actions and proceedings.
Such losses may not be insured against or not fully covered through insurance we maintain. 19 Rapid technological change may require additional resources and time to adequately respond to dynamics, which may adversely affect our business and operating results. Frequent technological changes, new products and services and evolving industry standards are influencing the insurance businesses.
Such losses may not be insured against or not fully covered through insurance we maintain. Rapid technological change may require additional resources and time to adequately respond to dynamics, which may adversely affect our business and operating results. Frequent technological changes, new products and services and evolving industry standards are influencing the insurance businesses.
Any failure by us to comply with our own privacy policy, applicable association rules, or with other federal, state or international privacy-related or data protection laws and regulations could result in proceedings against us by governmental entities or others. Dividends unlikely. The Company does not expect to pay dividends for the foreseeable future.
Any failure by us to comply with our own privacy policy, applicable association rules, or with other federal, state or international privacy-related or data protection laws and regulations could result in proceedings against us by governmental entities or others. 26 Dividends unlikely. The Company does not expect to pay dividends for the foreseeable future.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. The Company may be unable to obtain additional financing, if required, to complete an acquisition, or to Company the operations and growth of existing and target business, which could compel the Company to restructure a potential business transaction or abandon a particular business combination.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. 16 The Company may be unable to obtain additional financing, if required, to complete an acquisition, or to Company the operations and growth of existing and target business, which could compel the Company to restructure a potential business transaction or abandon a particular business combination.
In addition, regardless of monetary costs, these matters could have a material adverse effect on our reputation and cause harm to our carrier, customer or employee relationships, or divert personnel and management resources. Our business could be adversely impacted by inflation. Increases in inflation may have an adverse effect on our business.
In addition, regardless of monetary costs, these matters could have a material adverse effect on our reputation and cause harm to our carrier, customer or employee relationships, or divert personnel and management resources. 20 Our business could be adversely impacted by inflation. Increases in inflation may have an adverse effect on our business.
Such coverage may not be adequate or may not continue to be available at commercially reasonable rates and terms. 20 If we fail to comply with the covenants contained in certain of our agreements, our liquidity, results of operations and financial condition may be adversely affected.
Such coverage may not be adequate or may not continue to be available at commercially reasonable rates and terms. If we fail to comply with the covenants contained in certain of our agreements, our liquidity, results of operations and financial condition may be adversely affected.
Because profit-sharing contingent commissions and override commissions affect our revenues, any decrease in their payment to us could adversely affect our results of operations, profitability, and our financial condition. 23 Our business practices and compensation arrangements are subject to uncertainty due to potential changes in regulations.
Because profit-sharing contingent commissions and override commissions affect our revenues, any decrease in their payment to us could adversely affect our results of operations, profitability, and our financial condition. Our business practices and compensation arrangements are subject to uncertainty due to potential changes in regulations.
It is the Company’s expectation that future management following a business combination will determine to retain any earnings for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable future. 28 Speculative Nature of Warrants.
It is the Company’s expectation that future management following a business combination will determine to retain any earnings for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable future. Speculative Nature of Warrants.
The trading price of our common stock could decline due to any of these risks, and investors may lose all or part of their investment. Risks Related to Our Business We may experience significant fluctuations in our quarterly and annual results.
The trading price of our common stock could decline due to any of these risks, and investors may lose all or part of their investment. 15 Risks Related to Our Business We may experience significant fluctuations in our quarterly and annual results.
Any of these effects could decrease our net revenues and profitability. Our business, and therefore our results of operations and financial condition, may be adversely affected by conditions that result in reduced insurer capacity.
Any of these effects could decrease our net revenues and profitability. 21 Our business, and therefore our results of operations and financial condition, may be adversely affected by conditions that result in reduced insurer capacity.
Among the factors that could affect our stock price are: ● General economic and political conditions such as recessions, economic downturns and acts of war or terrorism; ● Quarterly variations in our operating results; ● Seasonality of our business cycle; ● Changes in the market’s expectations about our operating results; ● Our operating results failing to meet the expectation of securities analysts or investors in a particular period; ● Changes in financial estimates and recommendations by securities analysts concerning us or the insurance brokerage or financial services industries in general; ● Operating and stock price performance of other companies that investors deem comparable to us; ● News reports relating to trends in our markets, including any expectations regarding an upcoming “hard” or “soft” market; ● Cyberattacks and other cybersecurity incidents; ● Changes in laws and regulations affecting our business; ● Material announcements by us or our competitors; ● The impact or perceived impact of developments relating to our investments, including the possible perception by securities analysts or investors that such investments divert management attention from our core operations; ● Market volatility; ● A negative market reaction to announced acquisitions; ● Competitive pressures in each of our divisions; ● General conditions in the insurance brokerage and insurance industries; ● Legal proceedings or regulatory investigations; ● Sales of substantial amounts of common shares by our directors, executive officers or significant stockholders or the perception that such sales could occur.
Among the factors that could affect our stock price are: ● General economic and political conditions such as recessions, economic downturns and acts of war or terrorism; ● Quarterly variations in our operating results; ● Seasonality of our business cycle; ● Changes in the market’s expectations about our operating results; ● Our operating results failing to meet the expectation of securities analysts or investors in a particular period; ● Changes in financial estimates and recommendations by securities analysts concerning us or the insurance brokerage or financial services industries in general; ● Operating and stock price performance of other companies that investors deem comparable to us; ● News reports relating to trends in our markets, including any expectations regarding an upcoming “hard” or “soft” market; ● Cyberattacks and other cybersecurity incidents; ● Changes in laws and regulations affecting our business; ● Material announcements by us or our competitors; ● The impact or perceived impact of developments relating to our investments, including the possible perception by securities analysts or investors that such investments divert management attention from our core operations; ● Market volatility; 25 ● A negative market reaction to announced acquisitions; ● Competitive pressures in each of our divisions; ● General conditions in the insurance brokerage and insurance industries; ● Legal proceedings or regulatory investigations; ● Sales of substantial amounts of common shares by our directors, executive officers or significant stockholders or the perception that such sales could occur. ● Stockholder class action lawsuits may be instituted against us following a period of volatility in our stock price.
To date, much of our capital for acquiring and operating insurance agencies comes from loans from unaffiliated lenders, from direct market capital raises or funds provided by Reliance Global Holdings our affiliate. We may be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all.
To date, much of our capital for acquiring and operating insurance agencies comes from loans from unaffiliated lenders, from direct market capital raises or funds provided by an affiliate. We may be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all.
In addition, delisting of our common stock from Nasdaq could 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. The Company’s CEO has a significant common stock equity interest.
In addition, delisting of our common stock from Nasdaq could 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. The Company’s CEO has common stock equity and debt interests.
As of December 31, 2023, the Company is in compliance with all financial covenants. Certain of our agreements contain various covenants that limit the discretion of our management in operating our business and could prevent us from engaging in certain potentially beneficial activities.
As of December 31, 2024, the Company is in compliance with all its financial covenants. 19 Certain of our agreements contain various covenants that limit the discretion of our management in operating our business and could prevent us from engaging in certain potentially beneficial activities.
Further, state insurance regulators and the National Association of Insurance Commissioners continually re-examine existing laws and regulations, and such re-examination may result in the enactment of insurance-related laws and regulations, or the issuance of interpretations thereof, that adversely affect our business.
Further, state insurance regulators and the NAIC continually re-examine existing laws and regulations, and such re-examination may result in the enactment of insurance-related laws and regulations, or the issuance of interpretations thereof, that adversely affect our business.
As of December 31, 2023 we had 4,761,974 shares issued and outstanding. We may be expected to issue additional shares in connection with our pursuit of new business opportunities and new business operations. To the extent that additional shares of common stock are issued, our shareholders would experience dilution of their respective ownership interests.
As of December 31, 2024, we had 2,250,210 shares issued and outstanding. We may be expected to issue additional shares in connection with our pursuit of new business opportunities and new business operations. To the extent that additional shares of common stock are issued, our shareholders would experience dilution of their respective ownership interests.
The Oak Street credit agreements, in the aggregate principal amount of $12,417,737 and $13,468,394, as of December 31, 2023 and 2022, that govern our debt contain various covenants and other limitations with which we must comply including a debt to EBITDA ratio covenant and a covenant that at all times that the loans are outstanding: (i) Ezra Beyman, our chief executive officer, Debra Beyman, Mr.
The Oak Street credit agreements, in the aggregate principal amount of $11,060,319 and $12,417,737, as of December 31, 2024 and 2023, that govern our debt contain various covenants and other limitations with which we must comply with, including covenants for the debt service coverage ratio and debt to EBITDA ratio and a covenant that at all times that the loans are outstanding: (i) Ezra Beyman, our chief executive officer, Debra Beyman, Mr.
FYE 2022 - Michigan – 55%, New York – 2%, Montana – 16%, Ohio – 18%, and Illinois – 9%.). The insurance business is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry.
FYE 2023 - Michigan – 55%, New York – 2%, Montana – 14% and Ohio – 16%, and Illinois – 13%). The insurance business is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry.
Due to the Company’s limited operating history, we believe period to period comparisons of our financial results are not always meaningful and should not be relied upon as an indication of future performance. 17 The Company has limited resources and there is significant competition for business combination opportunities.
Due to the Company’s limited operating history, we believe period to period comparisons of our financial results are not always meaningful and should not be relied upon as an indication of future performance. The Company has limited resources and there is significant competition for business combination opportunities. Therefore, the Company may not be able to acquire other assets or businesses.
Many of these competitors possess greater technical, human, financial and other resources. While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses might be limited if the Company’s limited financial resources are less than that of its competitors.
While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses might be limited if the Company’s limited financial resources are less than that of its competitors.
If we fail to satisfy the expectations of investors and other key stakeholders or our initiatives are not executed as planned, our reputation and financial results could be materially and adversely affected.
If we fail to satisfy the expectations of investors and other key stakeholders or our initiatives are not executed as planned, our reputation and financial results could be materially and adversely affected. 27 Ite m 1B. Unresolved Staff Comments Not applicable.
For the years ended December 31, 2023, and 2022 we derived $13,731,826 and $11,761,882 respectively or 100% of our annual revenue, respectively, from our operations located in these regions (FYE 2023 - Michigan – 55%, New York – 2%, Montana – 14% and Ohio – 16%, and Illinois – 13%.
For the years ended December 31, 2024, and 2023 we derived $14,054,361 and $13,731,826 respectively or 100% of our annual revenue, respectively, from our operations located in these regions (FYE 2024 - Michigan – 53%, New York – 2%, Montana – 13% and Ohio – 16%, and Illinois – 17%.
Beyman’s wife, or Yaakov Beyman, son of Mr. and Ms. Beyman, or someone else approved by Oak Street, as applicable, will be the manager of the current subsidiaries of the Company, (ii) Mr.
Beyman, or someone else approved by Oak Street, as applicable, will be the manager of the current subsidiaries of the Company, (ii) Mr.
This could cause us to incur additional direct costs in complying with any new environmental regulations, as well as increased indirect costs resulting from our customers incurring additional compliance costs that get passed on to us. These costs may adversely impact our results of operations and financial condition.
This could cause us to incur additional direct costs in complying with any new environmental regulations, as well as increased indirect costs resulting from our customers incurring additional compliance costs that get passed on to us.
If the information we rely upon to run our businesses was found to be inaccurate or unreliable or if we fail to effectively maintain our information systems and data integrity, we could experience operational disruptions, regulatory or other legal problems, increases in operating expenses, loss of existing customers, difficulty in attracting new customers, or suffer other adverse consequences.
If the information we rely upon to run our businesses was found to be inaccurate or unreliable or if we fail to effectively maintain our information systems and data integrity, we could experience operational disruptions, regulatory or other legal problems, increases in operating expenses, loss of existing customers, difficulty in attracting new customers, or suffer other adverse consequences. 18 Changes in data privacy and protection laws and regulations, or any failure to comply with such laws and regulations, could adversely affect our business and financial results.
Therefore, the Company may not be able to acquire other assets or businesses. The Company expects to encounter intense competition from other entities having a business objective similar to ours, which are also competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates.
The Company expects to encounter intense competition from other entities having a business objective similar to ours, which are also competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human, financial and other resources.
In addition to potential environmental liabilities or costs associated with our current multifamily residential communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future, or multifamily residential communities we no longer own or operate. 24 We compete in a highly regulated industry, which may result in increased expenses or restrictions on our operations.
In addition to potential environmental liabilities or costs associated with our current multifamily residential communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future, or multifamily residential communities we no longer own or operate.
In addition, and to the extent that banks, securities firms, private equity companies, and insurance companies affiliate, the financial services industry may experience further consolidation, and we therefore may experience increased competition from insurance companies and the financial services industry, as a growing number of larger financial institutions increasingly, and aggressively, offer a wider variety of financial services, including insurance intermediary services. 22 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.
In addition, and to the extent that banks, securities firms, private equity companies, and insurance companies affiliate, the financial services industry may experience further consolidation, and we therefore may experience increased competition from insurance companies and the financial services industry, as a growing number of larger financial institutions increasingly, and aggressively, offer a wider variety of financial services, including insurance intermediary services.
Potential liability or other expenditures associated with potential environmental contamination may be costly. Various federal, state, and local laws subject multifamily residential community owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present in the land or buildings of a multifamily residential community.
Various federal, state, and local laws subject multifamily residential community owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present in the land or buildings of a multifamily residential community. Potentially hazardous materials may include polychlorinated biphenyls, petroleum-based fuels, lead-based paint or asbestos, among other materials.
Although we believe that we are in compliance in all material respects with applicable local, state, and federal laws, rules and regulations, there can be no assurance that more restrictive laws, rules, regulations or interpretations thereof, will not be adopted in the future that could make compliance more difficult or expensive. 25 Risks Related to Investing in our Securities We may experience volatility in our stock price that could affect your investment.
These costs may adversely impact our results of operations and financial condition. 23 Although we believe that we are in compliance in all material respects with applicable local, state, and federal laws, rules and regulations, there can be no assurance that more restrictive laws, rules, regulations or interpretations thereof, will not be adopted in the future that could make compliance more difficult or expensive.
The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities.
Such laws often impose liability without regard to fault or whether the owner or operator knew of, or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities.
If we are not able to successfully attract, retain and motivate our employees, our business, financial results and reputation could be materially and adversely affected. 18 Losing employees who manage or support substantial customer relationships or possess substantial experience or expertise could adversely affect our ability to secure and complete customer engagements, which would adversely affect our results of operations.
Losing employees who manage or support substantial customer relationships or possess substantial experience or expertise could adversely affect our ability to secure and complete customer engagements, which would adversely affect our results of operations.
The loss of our senior leaders or other key personnel, or our inability to continue to identify, recruit and retain such personnel, or to do so at reasonable compensation levels, could materially and adversely affect our business, results of operations, cash flows and financial condition.
The loss of our senior leaders or other key personnel, or our inability to continue to identify, recruit and retain such personnel, or to do so at reasonable compensation levels, could materially and adversely affect our business, results of operations, cash flows and financial condition. 17 Our growth strategy depends, in part, on the acquisition of other insurance intermediaries, which may not be available on acceptable terms in the future or which, if consummated, may not be advantageous to us.
Among other covenants, our debt agreements require us to maintain a minimum ratio of Consolidated EBITDA, adjusted for certain transaction-related items (“Consolidated EBITDA”), to consolidated interest expense and a maximum ratio of consolidated net indebtedness to Consolidated EBITDA.
The restrictive covenants in our debt agreements may impact how we operate our business and prevent us from engaging in certain potentially beneficial activities. Among other covenants, our debt agreements require us to maintain a minimum ratio of EBITDA, adjusted for certain transaction-related items (“Covenant EBITDA”), to interest expense and a maximum ratio of net indebtedness to Covenant EBITDA.
We conduct business in several states of the United States of America and are subject to comprehensive regulation and supervision by government agencies in each of those states.
We compete in a highly regulated industry, which may result in increased expenses or restrictions on our operations. We conduct business in several states of the United States of America and are subject to comprehensive regulation and supervision by government agencies in each of those states.
Upon an event of default, the lender has customary and usual remedies to cure these defaults including, but not limited to, the ability to accelerate the indebtedness. The credit agreements contain financial covenants including debt service coverage ratio and debt to EBIDTA (earnings before interest, taxes, depreciation, and amortization) tests.
Upon an event of default, the lender has customary and usual remedies to cure these defaults including, but not limited to, the ability to accelerate the indebtedness.
Our ability to successfully identify suitable acquisition candidates, complete acquisitions, integrate acquired businesses into our operations, and expand into new markets requires us to implement and continuously improve our operations and our financial and management information systems. Integrated, acquired businesses may not achieve levels of revenues or profitability comparable to our existing operations, or otherwise perform as expected.
Our growth strategy partially includes the acquisition of other insurance intermediaries. Our ability to successfully identify suitable acquisition candidates, complete acquisitions, integrate acquired businesses into our operations, and expand into new markets requires us to implement and continuously improve our operations and our financial and management information systems.
Stockholder class action lawsuits may be instituted against us following a period of volatility in our stock price. Any such litigation could result in substantial cost and a diversion of management’s attention and resources. 27 Possible issuance of additional securities. Our Articles of Incorporation authorize the issuance of 2,000,000,000 shares of common stock, par value $0.086 per share.
Any such litigation could result in substantial cost and a diversion of management’s attention and resources. Possible issuance of additional securities. As of December 31,02024, our Articles of Incorporation authorized the issuance of 117,647,059 shares of common stock, par value $0.086 per share. Effective February 7, 2025, our authorized shares were increased to 2,000,000,000.
In addition, we compete for acquisition and expansion opportunities with firms and banks that may have substantially greater resources than we do.
Integrated, acquired businesses may not achieve levels of revenues or profitability comparable to our existing operations, or otherwise perform as expected. In addition, we compete for acquisition and expansion opportunities with firms and banks that may have substantially greater resources than we do.
There is significant competition from within the insurance industry and from businesses outside the industries for exceptional employees, especially in key positions.
There is significant competition from within the insurance industry and from businesses outside the industries for exceptional employees, especially in key positions. If we are not able to successfully attract, retain and motivate our employees, our business, financial results and reputation could be materially and adversely affected.
Each market has nuances and idiosyncrasies that affect values, marketability, desirability, and demand for individual assets that may not be easily understood from afar. While we believe we can effectively mitigate these risks in a myriad of ways, there is no guarantee that investments in any geographic market will perform as expected.
While we believe we can effectively mitigate these risks in a myriad of ways, there is no guarantee that investments in any geographic market will perform as expected. 22 Potential liability or other expenditures associated with potential environmental contamination may be costly.
Removed
Our growth strategy depends, in part, on the acquisition of other insurance intermediaries, which may not be available on acceptable terms in the future or which, if consummated, may not be advantageous to us. Our growth strategy partially includes the acquisition of other insurance intermediaries.
Added
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.
Removed
Changes in data privacy and protection laws and regulations, or any failure to comply with such laws and regulations, could adversely affect our business and financial results.
Added
Each market has nuances and idiosyncrasies that affect values, marketability, desirability, and demand for individual assets that may not be easily understood from afar.
Removed
The restrictive covenants in our debt agreements may impact how we operate our business and prevent us from engaging in certain potentially beneficial activities.
Added
Risks Related to Investing in our Securities We may experience volatility in our stock price that could affect your investment.
Removed
Potentially hazardous materials may include polychlorinated biphenyls, petroleum-based fuels, lead-based paint or asbestos, among other materials. Such laws often impose liability without regard to fault or whether the owner or operator knew of, or was responsible for, the presence of such materials.
Added
As of March 6, 2025, our CEO and Chairman of the Board, Ezra Beyman, is the beneficial owner of approximately 3.47% of the Company’s common stock, consisting of 99,672 common shares. 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”).
Removed
As previously disclosed in the Current Report on Form 8-K filed on January 16, 2024 by the Company on January 12, 2024, the Company received written notice from Nasdaq’s Listing Qualifications Department notifying the Company that for the preceding 30 consecutive business days (November 29, 2023 to January 11, 2024), the Company’s common stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2).
Added
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.
Removed
The notice has no immediate effect on the listing or trading of the Company’s common stock and the common stock continued to trade on Nasdaq under the symbol “RELI.” In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until July 10, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2).
Added
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.
Removed
As of April 4, 2024, our CEO, Ezra Beyman, is the beneficial owner of approximately 8% of the common stock, consisting of 381,020 common shares.
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
1 edited+483 added−0 removed8 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
1 edited+483 added−0 removed8 unchanged
2023 filing
2024 filing
Biggest changeOur Board shall also receive period reports from management (as deemed applicable) on our cybersecurity risks and cybersecurity risk management program.
Biggest changeOur Board shall also receive period reports from management (as deemed applicable) on our cybersecurity risks and cybersecurity risk management program. 28 Ite m 2. Properties Below is a schedule of the properties we currently occupy: Entity Name Location Own/Lease Description Approx. Sq.
Added
Footage Lease Term Monthly Rent in USD Employee Benefits Solutions Cadillac, Michigan Lease Office Building 3,024 10/2019– 9/2030 $ 2,900 Southwestern Montana Insurance Center Belgrade, Montana Lease Office Building 6,000 4/2024– 3/2028 $ 7,500 Fortman Insurance Center Bluffton, Ohio Lease Office Building 990 2/2025– 1/2030 $ 1,500 Fortman Insurance Center Ottawa, Ohio Lease Office Building 2,386 5/2019– 4/2039 $ 2,640 Altruis Benefits Consultants Bingham Farms, MI Lease Office Building 1,767 6/2021– 8/2027 $ 4,295 Reliance Global Group, Inc.
Added
Lakewood, NJ Lease Office Building 4,436 6/2021 – 3/2029 $ 8,999 Reliance Global Group, Inc. Suffern, NY Lease Office Building 9/2022 – 8/2025 $ 2,000 Reli Exchange Schaumburg, IL Lease Office Building 4/2022 – 07/2028 $ 3,677 Ite m 3.
Added
Legal Proceedings From time to time, we are subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business.
Added
While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows. Litigation relating to the insurance brokerage industry is not uncommon.
Added
As such the Company, from time to time have been, subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future. Ite m 4. Mine Safety Disclosures Not applicable. 29 P ART II Ite m 5.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Holders of Record As of December 31, 2024, there were approximately 524 holders of record of our ordinary shares, although there is a much larger number of beneficial owners.
Added
Dividends The Company has never paid any cash dividends and does not expect to pay dividends for the foreseeable future. We anticipate that we will retain funds and future earnings to support operations and to finance the growth and development of our business.
Added
The payment of dividends will be contingent upon the Company’s future revenues and earnings, if any, capital requirements, overall financial condition, and other factors that our board of directors deems relevant. The payment of any future dividends will be within the discretion of the Company’s board of directors as then constituted.
Added
It is the Company’s expectation that future management following a business combination will determine to retain any earnings for use in its business operations and accordingly, the Company does not anticipate declaring any dividends in the foreseeable future.
Added
Issuer Purchases of Equity Securities There have been no equity securities repurchased by the Company for the years ending December 31, 2024 and 2023.
Added
Market Information Our common stock is listed on the NASDAQ Capital Market under the symbol “RELI”, and our warrants to purchase common stock are listed on the NASDAQ Capital Market under the symbol “RELIW.” On March 5, 2025, the closing price per share of our common stock was $1.47 as reported on the NASDAQ. 30 Recent Sales of Unregistered Securities Date of Transaction Transaction type (e.g. new issuance, cancellation, shares returned to treasury) and all under Section 4(a)(2) of the Securities Act of 1933 Number of Securities Issued (or cancelled) (1) Class of Securities Value of Securities issued ($/per share) at Issuance Were the Securities issued at a discount to market price at the time of issuance?
Added
(Yes/No) Individual/ Entity Securities were issued to (entities must have individual with voting/ investment control disclosed). Reason for Securities issuance (e.g. for cash or debt conversion) OR Nature of Services Provided (if applicable) Restricted or Unrestricted as of this filing? Exemption or Registration Type? 4/25/2024 New 30,029 Common 5.91 No Julie A.
Added
Blockey Acquisition Earn-Out payment 4(a)(2) 5/21/2024 New 17,824 Common 5.61 No Outside the Box Capital Inc. Services Restricted 4(a)(2) 6/20/2024 New 39,569 Common 3.96 No Armistice Capital Master Fund, Ltd. In Exchange for Series B Common Stock Purchase Warrant Restricted 4(a)(2) 6/21/2024 New 192,236 Common 3.96 No Armistice Capital Master Fund, Ltd.
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In Exchange for Series G Common Stock Purchase Warrant Restricted 4(a)(2) 10/9/2024 New 6,667 Common 2.25 No Simon Jacobson Services Restricted 4(a)(2) 10/29/2024 New 70,032 Common Stock 2.35 No Jonathan Spetner Amendment to Stock Exchange Agreement Restricted 4(a)(2) 10/29/2024 New 70,032 Common Stock 2.35 No Agudath Israel of America Amendment to Stock Exchange Agreement Restricted 4(a)(2) 11/20/2024 New 72,464 Common 1.38 No Outside the Box Capital Inc.
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Service Restricted 4(a)(2) 31 Use of Proceeds from Registered Securities Not applicable Issuer Purchases of Equity Securities Not applicable. Ite m 6. Selecte d Financial Data RESERVED Ite m 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview 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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Since its inception, RELI Exchange, has increased its agent roster by close to 300%. 32 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.
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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.
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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.
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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.
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Other competitive concerns may include the quality of our products and services, our pricing and the ability of some of our customers to self-insure and the entrance of technology companies into the insurance intermediary business. A number of insurance companies are engaged in the direct sale of insurance, primarily to individuals, and do not pay commissions to agents and brokers.
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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.
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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).
Added
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.
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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.
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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.
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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).
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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. 33 Acquired Date Location Line of Business U.S.
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Benefits Alliance, LLC (USBA) October 24, 2018 Michigan Health Insurance Employee Benefit Solutions, LLC (EBS) October 24, 2018 Michigan Health Insurance Commercial Solutions of Insurance Agency, LLC (CCS or Commercial Solutions) December 1, 2018 New Jersey P&C – Trucking Industry Southwestern Montana Insurance Center, Inc.
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(Southwestern Montana or Montana) April 1, 2019 Montana Group Health Insurance Fortman Insurance Agency, LLC (Fortman or Fortman Insurance) May 1, 2019 Ohio P&C and Health Insurance Altruis Benefits Consultants, Inc. (Altruis) September 1, 2019 Michigan Health Insurance UIS Agency, LLC (UIS) August 17, 2020 New York Health Insurance J.P. Kush and Associates, Inc.
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(Kush) May 1, 2021 Michigan Health Insurance Barra & Associates, LLC April 26, 2022 Illinois Health Insurance Recent Developments 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”).
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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(“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.
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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.
Added
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.
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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.
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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.
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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.
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The Deposit Shares and the Additional Deposit Shares shall be non-refundable to the Company unless the First Closing is prevented by the Sellers. 34 Non-GAAP Measure The Company believes certain financial measures which meet the definition of non-GAAP financial measures, as defined in Regulation G of the SEC rules, provide important supplemental information.
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Namely our key financial performance metric Adjusted EBITDA (“AEBITDA”) is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. “AEBITDA” is defined as earnings before interest, taxes, depreciation, and amortization (EBITDA) with additional adjustments as further outlined below, to result in Adjusted EBITDA (“AEBITDA”).
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The Company considers AEBITDA an important financial metric because it provides a meaningful financial measure of the quality of the Company’s operational, cash impacted and recurring earnings and operating performance across reporting periods. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure to other companies in the industry.
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AEBITDA is used by management in addition to and in conjunction (and not as a substitute) with the results presented in accordance with GAAP. Management uses AEBITDA to evaluate the Company’s operational performance, including earnings across reporting periods and the merits for implementing cost-cutting measures.
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We have presented AEBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
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Consistent with Regulation G, a description of such information is provided below herein and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Annual Report on Form 10-K under “Results of Operations”.
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We exclude the following items, and the following items define our non-GAAP financial measure AEBITDA: ● Interest and related party interest expense: Unrelated to core Company operations and excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Depreciation and amortization: Non-cash charge, excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Goodwill and/or asset impairment: Non-cash charge, excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Equity-based compensation: Non-cash compensation provided to employees and service providers, excluded to provide more meaningful supplemental information regarding the Company’s core cash impacted operational performance. ● Change in estimated acquisition earn-out payables: An Earn-out liability is a liability to the seller upon an acquisition which is contingent on future earnings.
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These liabilities are valued at each reporting period and the changes are reported as either a gain or loss in the change in estimated acquisition earn-out payables account in the consolidated statements of operations.
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The gain or loss is non-cash, can be highly volatile and overall is not deemed relevant to ongoing operations, thus, it’s excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Recognition and change in fair value of warrant liabilities: This account includes changes to derivative warrant liabilities which are valued at each reporting period and could result in either a gain or loss.
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The period changes do not impact cash, can be highly volatile, and are unrelated to ongoing operations, and thus are excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Other income, net: This account includes non-routine and/or non-core operating income or expenses and other individually de minimis items and is thus excluded as unrelated to core operations of the company. ● Transactional costs: This includes expenses related to mergers, acquisitions, financings and refinancings, and amendments or modification to indebtedness.
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Thes costs are unrelated to primary Company operations and are excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Non-standard costs: This account includes non-standard non-operational items, related to costs incurred for a legal suit the Company has filed against one of the third parties involved in the discontinued operations and was excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. ● Loss from discontinued operations before tax: This account includes the net results from discontinued operations, and since discontinued, are unrelated to the Company’s ongoing operations and thus excluded to provide more meaningful supplemental information regarding the Company’s core operational performance.
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Refer to the reconciliation of net (loss) income to AEBITDA, illustrated below in tabular format.
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Results of Operations Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The following table sets forth our revenue and expenses for each of the years presented and provides insight into the value and percentage changes: 35 RELIANCE GLOBAL GROUP, INC.
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AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ANALYTICS December 31, 2024 December 31, 2023 Value Fluctuation Percent Fluctuation Explanations Commission Income $ 14,054,361 $ 13,731,826 $ 322,535 2 % Increased commission income primarily driven by sustained organic growth. Commission Expense (“CE”) 4,189,599 3,732,939 456,660 12 % Increased CE correlated to growth and revenue mix.
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Salaries and wages (“S&W”) 7,226,810 7,503,052 (276,242 ) -4 % Decreased S&W’s per OneFirm efficiencies and overall leaner operations. General and administrative expenses (“G&A”) 4,219,635 4,089,989 129,646 3 % Increased G&A is due to general inflation and increased acquisition costs, offset by OneFirm efficiency enhancements.
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Marketing and advertising expenses (“M&A”) 357,697 364,974 (7,277 ) -2 % M&A decrease consistent with Company’s current marketing strategy. Change in estimated acquisition earn-out payables 47,761 1,716,873 (1,669,112 ) -97 % Decrease pursuant to the settlement of all earn-out payables. Depreciation and amortization (“D&A”) 1,786,068 2,609,191 (823,123 ) -32 % Decrease due to impaired intangible assets no longer incurring D&A.
Added
Asset impairment 3,922,110 - 3,922,110 0 % Increase due to impaired intangible assets write off.
Added
Goodwill Impairment - 7,594,000 (7,594,000 ) -100 % Total operating expenses 21,749,680 27,611,018 (5,861,338 ) -21 % Loss from operations (7,695,319 ) (13,879,192 ) 6,183,873 -45 % Other income (expense) Interest expense (1,442,808 ) (1,506,186 ) 63,378 -4 % Decrease per principle payments and decreasing interest rates.
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Interest expense related parties (140,802 ) (150,067 ) 9,265 -6 % Decrease per periodic paydowns on loan balances Other income, net 51,345 6,530 44,815 686 % Increased other income relates primarily to certain non-recurring sales of accounts.
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Recognition and change in fair value of warrant liabilities 156,000 5,503,647 (5,347,647 ) -97 % Fluctuation per fair value changes in derivative warrant liabilities and warrants exercised.
Added
Total other (expense) income (1,376,265 ) 3,853,924 (5,230,189 ) -136 % Loss from continuing operations before tax (9,071,584 ) (10,025,268 ) 953,684 -10 % Loss from discontinued operations before tax - (1,984,714 ) 1,984,714 -100 % Net loss $ (9,071,584 ) $ (12,009,982 ) $ 2,938,398 -24 % AEBITDA $ (321,224 ) $ (526,798 ) $ 205,573 -39 % 36 Non-GAAP Reconciliation from Net Loss to AEBITDA The following table provides a reconciliation from net loss to AEBITDA (adjusted EBITDA) for the years ended December 31, 2024 and December 31, 2023.
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December 31, 2024 December 31, 2023 Net loss $ (9,071,584 ) $ (12,009,982 ) Adjustments: Interest and related party interest expense 1,583,610 1,656,253 Depreciation and amortization 1,786,068 2,609,191 Asset impairment 3,922,110 - Goodwill impairment - 7,594,000 Equity-based compensation employees, directors, and service providers 858,108 1,272,155 Change in estimated acquisition earn-out payables 47,761 1,716,873 Other income, net (51,345 ) (6,530 ) Transactional costs 636,494 101,500 Non-standard costs 123,554 58,675 Recognition and change in fair value of warrant liabilities (156,000 ) (5,503,647 ) Loss from discontinued operations before tax - 1,984,714 Total adjustments 8,750,360 11,483,185 AEBITDA $ (321,224 ) $ (526,798 ) Liquidity and capital resources As of December 31, 2024, the Company had a cash balance of approximately $1,798,000, of which approximately $1,425,000 was restricted, and working capital of approximately $416,000, compared with a cash balance of approximately $2,739,000, of which approximately $1,410,000 was restricted and a working capital of approximately $1,189,000 as of December 31, 2023.
Added
Inflation The Company generally may be impacted by rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits, and facility leases. The Company believes inflation could have a material impact to pricing and operating expenses in future periods due to the state of the economy and current inflation rates.
Added
Off-balance sheet arrangements We do not have any off-balance sheet arrangements as such term is defined in Regulation S-K.
Added
Cash Flows Year Ended December 31, 2024 2023 Net cash used in operating activities $ (2,515,000 ) $ (847,970 ) Net cash used and provided in investing activities (83,228 ) 710,189 Net cash provided by financing activities 1,657,000 966,923 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (941,000 ) $ 829,142 37 Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was approximately $2,515,000, compared to approximately $848,000 for the year ended December 31, 2023, representing an increase of cash used in operations of $1,667,000, or 197%.
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