UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
or
For the transition period from _____ to _____
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company, in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
☐ No
At July 30, 2026, the registrant had shares of common stock, par value $ per share, outstanding.
TABLE OF CONTENTS
| 2 |
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Reliance Global Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable | ||||||||
| Accounts receivable, related parties | ||||||||
| Other receivables | ||||||||
| Prepaid expense and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets | ||||||||
| Equity Investments | ||||||||
| Intangibles, net | ||||||||
| Goodwill | ||||||||
| Digital assets, fair value | ||||||||
| Other non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other accrued liabilities | $ | $ | ||||||
| Short-term financing agreements | ||||||||
| Current portion of loans payables, related parties | ||||||||
| Other payables | ||||||||
| Current portion of long-term debt | ||||||||
| Operating lease liability, current portion | ||||||||
| Total current liabilities | ||||||||
| Long term debt, less current portion | ||||||||
| Operating lease liability, less current portion | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ par value; shares authorized and issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Common stock, $ par value; shares authorized and and issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Reliance Global Group, Inc. stockholders’ equity | ||||||||
| Noncontrolling interest | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
Reliance Global Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| Commission income | $ | $ | $ | |||||||||||||
| Total revenue | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Commission expense | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Marketing and advertising expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest (expense) related parties | ( | ) | ( | ) | ||||||||||||
| Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from equity method investment | ( | ) | ( | ) | ||||||||||||
| Realized and unrealized gains on digital assets, net | ||||||||||||||||
| Total other (expense) income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Net loss attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to Reliance Global Group, Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per share | $ | ) | $ | ) | ) | $ | ) | |||||||||
| Weighted average number of shares outstanding–basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Reliance Global Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| Common Stock | ||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total Reliance Global Group, Inc. Stockholders’ Equity | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||
| Balance December 31, 2025 (Audited) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Common share-based compensation | ||||||||||||||||||||||||||||
| Common shares issued for ATM share sales | ||||||||||||||||||||||||||||
| Common shares and warrants issued for a public offering | ||||||||||||||||||||||||||||
| Deemed dividend | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Common share-based compensation | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Additional public offering costs | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Common shares issued for reverse stock split round up | ( | ) | ||||||||||||||||||||||||||
| Common shares issued for services | ||||||||||||||||||||||||||||
| Common shares issued pursuant to sales on an Equity Line of Credit | ||||||||||||||||||||||||||||
| Common shares issued for ATM share sales | ||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Common Stock | Additional Paid-in | Accumulated | Total |
Noncontrolling | ||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Interest | Total | ||||||||||||||||||||||
| Balance December 31, 2024 (Audited) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Common share-based compensation | ||||||||||||||||||||||||||||
| Common shares issued for services | ||||||||||||||||||||||||||||
| Common shares issued for acquisition purchase price prepayment | ||||||||||||||||||||||||||||
| Net loss | - | $ | $ | $ | ( | ) | $ | ( |
) | $ | $ | ( | ) | |||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
| Common share-based compensation | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Common shares issued for services | ||||||||||||||||||||||||||||
| Common shares issued for private placement | ||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( |
) | ( | ) | |||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
Reliance Global Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt issuance costs and accretion of debt discount | ||||||||
| Non-cash lease expense | ( | ) | ||||||
| Equity based compensation expense | ||||||||
| Equity based payments to third parties | ||||||||
| Loss on equity method investment | ||||||||
| Realized gain on digital assets, net | ( | ) | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Accounts receivable, related parties | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Prepaid expense and other current assets | ( | ) | ( | ) | ||||
| Accounts payables and other accrued liabilities | ||||||||
| Other payables | ( | ) | ||||||
| Net cash used in continuing operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of intangibles | ( | ) | ( | ) | ||||
| Sale of digital assets | ||||||||
| Investments in equity investments | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Principal repayments of debt | ( | ) | ( | ) | ||||
| Proceeds from short term financings | ||||||||
| Principal repayments of short term financings | ( | ) | ( | ) | ||||
| Proceeds from loans payable, related parties | ||||||||
| Payments of loans payable, related parties | ( | ) | ( | ) | ||||
| Series J Private Placement | ||||||||
| Proceeds from common shares issued through an at the market offering | ||||||||
| Proceeds from common shares issued through a public offering | ||||||||
| Proceeds from common shares issued through an Equity Line of Credit | ||||||||
| Cash paid for deemed dividends | ( | ) | ||||||
| Net cash provided by continuing financing activities | ||||||||
| Net (decrease) increase in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash at beginning of period | ||||||||
| Cash and restricted cash at end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
Reliance Global Group, Inc. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
NOTE 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Reliance Global Group, Inc., formerly known as Ethos Media Network, Inc. (“RELI”, “Reliance”, or the “Company”), was incorporated in Florida on August 2, 2013.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), as the same may be amended from time to time. Capitalized terms not defined in this Quarterly Report on Form 10-Q refer to capitalized terms as defined in the Form 10-K. Certain prior period accounts and balances in these unaudited condensed consolidated financial statements and notes thereto may have been reclassified to conform to the current period’s presentation.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. During the second quarter of 2026, the Company formed LifeSci Global Group LLC (“LGG”), of which the Company owns 51% through its wholly owned subsidiary EZRA International Group, LLC (“EIG”). LGG is consolidated as a majority-owned subsidiary, and the equity interest not attributable to the Company is presented as a noncontrolling interest. All intercompany transactions and balances have been eliminated in consolidation.
Liquidity
As
of June 30, 2026, the Company’s reported cash and restricted cash aggregated balance was approximately $
Although there can be no assurance that debt or equity financing will be available on acceptable terms, or at all, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these unaudited financial statements with the Securities and Exchange Commission (“SEC”).
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.
Cash and Restricted Cash
Cash and restricted cash (restricted for debt service coverage) on our unaudited condensed consolidated statements of cash flows consists of the following:
| June 30, 2026 | June 30, 2025 | |||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and restricted cash | $ | $ | ||||||
| 7 |
Equity Investments
Equity investments in entities over which the Company does not exercise control or significant influence, and for which there is no readily determinable fair value, are accounted for under the measurement alternative in ASC 321, Investments—Equity Securities. Under this alternative, such investments are carried at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company evaluates such investments for impairment at each reporting period based on qualitative and quantitative factors, including the investee’s financial condition, operating results, and near-term business prospects.
Equity Method Investments
The Company accounts for investments in entities over which it exercises significant influence but does not control using the equity method of accounting (ASC 323). Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss, which is presented as a non-operating item in the Company’s unaudited condensed consolidated statements of operations. Dividends received reduce the carrying value of the investment. The Company performs a memo purchase price allocation at the date of each investment to identify basis differences between the cost allocated to the investee’s assets and liabilities and the investee’s carrying values of those assets and liabilities. Indefinite-lived basis differences are not amortized until the related activities are complete or abandoned; definite-lived basis differences are amortized over the useful life of the underlying asset. The Company assesses its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company translates the financial statements of its equity method investee whose functional currency is not the U.S. dollar using the current rate method; resulting translation adjustments when material are recorded in other comprehensive income.
Revenue Recognition
The following table disaggregates the Company’s revenue by line of business, showing commissions earned:
| Period Ended June 30, 2024 | Medical | Life | Property and Casualty | Total | ||||||||||||
| Three months ended June 30, 2026 | $ | | $ | $ | $ | |||||||||||
| Three months ended June 30, 2025 | $ | $ | $ | $ | ||||||||||||
| Six months ended June 30, 2026 | $ | $ | $ | $ | ||||||||||||
| Six months ended June 30, 2025 | $ | $ | $ | $ | ||||||||||||
The following are customers representing 10% or more of total revenue:
| Three Months Ended June 30, | ||||||||
| Insurance Carrier | 2026 | 2025 | ||||||
| Priority Health | % | % | ||||||
| BlueCross BlueShield | % | % | ||||||
| Six Months Ended June 30, | ||||||||
| Insurance Carrier | 2026 | 2025 | ||||||
| Priority Health | % | % | ||||||
| BlueCross BlueShield | % | % | ||||||
No other single customer accounted for more than 10% of the Company’s commission revenues during the three and six months ended June 30, 2026 and 2025. The loss of any significant customer could have a material adverse effect on the Company.
Income Taxes
The
Company recorded
| 8 |
As of June 30, 2026 and December 31, 2025, the Company provided a full valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.
Noncontrolling Interests
Noncontrolling interests represent the portion of equity in a consolidated subsidiary that is not attributable, directly or indirectly, to the Company. Noncontrolling interests are presented as a separate component of stockholders’ equity in the unaudited condensed consolidated balance sheets. Net income or loss is attributed to the Company and to the noncontrolling interest in proportion to their respective ownership interests, and losses are attributed to the noncontrolling interest even if doing so results in a deficit noncontrolling interest balance.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The ASU requires entities to measure certain digital assets at fair value each reporting period, with changes in fair value recognized in net income, and to provide specific quantitative and qualitative disclosures regarding such holdings. The Company adopted ASU 2023-08 effective July 1, 2025, using the modified retrospective transition method. Since the Company did not hold any digital assets prior to adoption, there were no cumulative-effect adjustments to retained earnings and no retrospective impacts.
In August 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies certain aspects of applying ASC 326, Financial Instruments—Credit Losses, to current accounts receivable and contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The ASU permits entities to apply a practical expedient when estimating expected credit losses for certain short-term receivables and contract assets. The Company adopted ASU 2025-05 during the quarter ended June 30, 2026. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
We do not expect any other recently issued accounting pronouncements to have a material effect on our financial statements not already disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
NOTE 2. Equity Investments
The Company had no equity investments as of December 31, 2025. The Company’s equity investments as of June 30, 2026 consist of the following:
| Investment in: | Accounting Method | Ownership % | Carrying Value | |||||||
| Enquantum | Equity method investment (ASC 323) | % | $ | |||||||
| Innervate | Equity investment (ASC 321) | % | ||||||||
| Total equity investments | $ | |||||||||
Investment In Enquantum
In
January 2026, the Company advanced a $
As
of June 30, 2026, the carrying value of the investment was approximately $
The
Company determined that the investment did not constitute a business acquisition under ASC 805, as substantially all of the fair value
of Enquantum’s gross assets is concentrated in its quantum encryption intellectual property and in-process research and development
(“IPR&D”). In connection with the Company’s equity method accounting analysis under ASC 323, the Company determined
that the purchase price exceeded its proportionate share of Enquantum’s underlying net assets by approximately $
| 9 |
Formation of LGG and Investment in Innervate
In
April 2026, the Company formed LifeSci Global Group LLC, a Delaware limited liability company, to pursue investments
in healthcare and life sciences companies. The Company holds approximately
In
connection with the formation of LGG, EIG entered into a promissory note with LGG (the “LGG Note”) providing for
advances of up to $
On
April 30, 2026, LGG entered into a subscription agreement to acquire a minority equity interest in Innervate Radiopharmaceuticals LLC
(“Innervate”), an early-stage life sciences company developing radiopharmaceutical product candidates, for aggregate consideration
of up to approximately $
The
Company, through LGG, does not exercise control or significant influence over Innervate, and there is no readily determinable fair value
for the investment. Accordingly, the investment is accounted for as an equity investment under the measurement alternative in ASC 321,
Investments—Equity Securities, and is carried at cost, less impairment, adjusted for observable price changes in orderly
transactions for identical or similar investments of the same issuer. As of June 30, 2026, no impairment losses or observable price adjustments
had been recognized, and the carrying value of the investment was $
In
connection with the investment, LGG receives warrants to purchase additional units of Innervate at a ratio of one warrant for every two
units purchased, at an exercise price of $
The formation of LGG, the LGG Note, and the investment in Innervate constitute related party transactions. Certain members of the Company’s management and Board of Directors hold ownership interests in Management Group, and one member of the Company’s Board of Directors serves as the chief executive officer of Innervate. These transactions were reviewed and approved by the independent and disinterested members of the Company’s Board of Directors.
NOTE 3. INTANGIBLE ASSETS
The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of June 30, 2026:
Weighted Average Remaining Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||
| Trade name and trademarks | $ | $ | ( | ) | $ | |||||||||||
| Internally developed software | ( | ) | ||||||||||||||
| Customer relationships | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ |
| 10 |
The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2025:
Weighted Average Remaining Amortization period (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||
| Trade name and trademarks | $ | $ | ( | ) | $ | |||||||||||
| Internally developed software | ( | ) | ||||||||||||||
| Customer relationships | ( | ) | ||||||||||||||
| Non-competition agreements | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ | |||||||||||
The following table reflects expected amortization expense as of June 30, 2026, for each of the following five years and thereafter:
| Years Ending December 31, | Amortization Expense | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
NOTE 4. DIGITAL ASSETS
The Company held no digital assets as of June 30, 2026. The following table summarizes the Company’s digital asset holdings as of December 31, 2025:
| Digital Asset | Holdings | Cost Basis | Fair Value | Hierarchy | ||||||||||||
| ZEC | $ | $ | Level 1 |
| 11 |
NOTE 5. LONG-TERM DEBT AND SHORT-TERM FINANCINGS
Long-Term Debt
The composition of the long-term debt follow
| June 30, 2026 | December 31, 2025 | |||||||
| Oak Street Funding LLC Term Loan for the acquisition of Barra & Associates, LLC, variable interest of prime rate plus | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long-term debt | $ | $ | ||||||
The following table depicts the maturities of the Company’s outstanding long-term debt.
| Years Ending December 31, | Maturities of Long-Term Debt | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | ||||
| Less: debt issuance costs | ( | ) | ||
| Total | $ |
Short-Term Financings
The
Company has various short-term notes payable for financed items such as insurance premiums. These are normally paid in equal installments
over a period of twelve months or less and carry interest rates of up to
NOTE 6. EQUITY
Common Stock
The Company is authorized to issue shares of common stock, $ par value (the “Common Stock”). Each share of issued and outstanding common stock entitles the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the Company upon liquidation or dissolution.
On May 18, 2026, the Company effectuated a
During
the first quarter of 2026, the Company issued shares of Common Stock with a value of $
for equity-based compensation under certain disclosed (see Equity-based Compensation) equity-based compensation programs,
shares of common stock shares with a net value of $
through its ATM Program, and
shares of common stock with a net value of $
During
the second quarter of 2026, the Company issued shares of Common Stock with a value of $
for equity-based compensation under certain disclosed equity-based
compensation programs, shares
of common stock with a value of $
in connection with the rounding of fractional shares resulting
from the reverse stock split,
shares of common stock with a value of $
As of June 30, 2026, and December 31, 2025, there were and shares of common stock outstanding, respectively.
| 12 |
Equity-based Compensation
Pursuant to the April 2025 second amendment to an employment agreement between the Company and an executive, the executive was awarded shares of the Company’s Common Stock annually over the four-year employment term, with each annual tranche vesting equally at shares per quarter, pro-rated for any partial periods. The total fair value of the award is approximately $. During the three and six months ended June 30, 2026, and shares were issued pursuant to the award. As of June 30, 2026, unrecognized compensation expense related to the award was approximately $, which is expected to be recognized through June 2029. For the three and six month periods ended, June 30, 2025, compensation expense on this grant was $.
Total stock-based compensation expense recorded in the unaudited condensed consolidated statements of operations for the three months ended June 30, 2026, and 2025 was $ and $, respectively, and for the six months ended June 30, 2026 and 2025; $ and $, respectively.
2025 Equity Incentive Plan
On May 6, 2026, the Company’s stockholders approved an amendment to the Company’s 2025 Equity Incentive Plan (the “2025 Plan”) to increase the number of shares of common stock authorized for issuance under the 2025 Plan by shares, from shares to shares. The amendment was approved at the Company’s 2026 Annual Meeting of Stockholders.
On June 24, 2026, the Compensation Committee approved equity awards of restricted shares of Common Stock with a value of $ under the Company’s 2025 Equity Incentive Plan (the “June 2026 Grant”) to certain directors, officers, and employees. The shares vest in tranches between July 1, 2026 and July 27, 2026, and the cost will be amortized over the applicable vesting periods, with no equity-based compensation expense recognized for the three and six month periods ended June 30, 2026. As of June 30, 2026, no shares had vested or been issued under the June 2026 Grant.
Following the June 2026 Grant, and after giving effect to the reverse stock split effective May 18, 2026, there remained shares available for issuance under the Company’s 2025 Equity Incentive Plan.
At-the-Market Offering Program
During
the six months ended June 30, 2026, the Company sold
shares of Common Stock under the ATM Program for net proceeds of approximately $
Series K Public Offering
On
January 29, 2026, the Company closed a registered public offering (the “Series K Public Offering”) of shares of its
common stock, which included pre-funded warrants issued in lieu of common stock (the “Series K PF Warrants”), together
with warrants to purchase up to shares of common stock (the “Series K Warrants”), at a combined public offering price
of $ per share (or $
In connection with the Series K Public Offering, the Company agreed to pay the placement agent a cash fee equal to 7.0% of the gross proceeds, a management fee equal to 1.0% of the gross proceeds, and reimbursement of certain expenses. In addition, the Company issued placement agent warrants (the “Series K PAWs”), representing 7.0% of the aggregate number of shares of common stock and Series K PF Warrants sold in the offering. The Series K PAWs have an exercise price of $ per share and expire two years from the initial exercise date.
During
the six months ended June 30, 2026, allSeries K PF Warrants were exercised, and Series K Warrants were exercised for aggregate
proceeds of approximately $
Equity Line of Credit (ELOC)
On
March 12, 2026, the Company entered into Amendment No. 2 to the Common Stock Purchase Agreement with White Lion Capital, LLC (the
“ELOC Agreement”). The amendment extends the term of the facility by modifying the definition of the “Commitment
Period” to continue through the earlier of (i) the date on which the investor has purchased shares equal to the full
commitment amount under the ELOC Agreement or (ii) December 31, 2028. In addition, the amendment increased the total committed
capital available to the Company under the ELOC Agreement (the “Commitment Amount”) to $
| 13 |
On May 6, 2026, the Company’s stockholders approved the issuance of shares of the Company’s common stock in excess of the Exchange Cap under Nasdaq Listing Rule 5635(d) pursuant to the ELOC Agreement. The approval provides the Company with additional flexibility to issue shares under the facility, subject to the terms and conditions of the ELOC Agreement.
Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding.
If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed in the same manner as basic EPS.
| Three Months Ended | Three Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Net loss attributable to Reliance Global Group, Inc. | $ | ( | ) | $ | ( | ) | ||
| Less: deemed dividend adjustment | ||||||||
| Net loss, numerator, basic computation | ( | ) | ( | ) | ||||
| Net loss, numerator, dilutive computation | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares, basic | ||||||||
| Weighted average common shares, dilutive | ||||||||
| Loss per common share – basic | $ | ( | ) | $ | ( | ) | ||
| Loss per common share – diluted | $ | ( | ) | $ | ( | ) | ||
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Net loss attributable to Reliance Global Group, Inc. | $ | ( | ) | $ | ( | ) | ||
| Less: deemed dividend adjustment | ( | ) | ||||||
| Net loss, numerator, basic computation | ( | ) | ( | ) | ||||
| Net loss, numerator, dilutive computation | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares, basic | ||||||||
| Weighted average common shares, dilutive | ||||||||
| Loss per common share – basic | $ | ( | ) | $ | ( | ) | ||
| Loss per common share – diluted | $ | ( | ) | $ | ( | ) | ||
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Shares subject to outstanding Series A warrants | ||||||||
| Shares subject to outstanding PAW’s | ||||||||
| Shares subject to PA Warrants | ||||||||
| Shares subject to Outstanding Series J Warrants | ||||||||
| Shares subject to Outstanding Series J PAW’s | ||||||||
| Shares subject to outstanding Series K Warrants | ||||||||
| Shares subject to outstanding Series K PAWs | ||||||||
| Shares subject to unvested stock awards | ||||||||
| 14 |
NOTE 8. LEASES
Operating
lease expense for the three months ended June 30, 2026, and 2025 was $
The following table depicts future minimum lease payments for the Company’s operating leases.
| Fiscal year ending December 31, | Operating Lease Obligations | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total undiscounted operating lease payments | ||||
| Less: Imputed interest | ( | ) | ||
| Present value of operating lease liabilities | $ |
NOTE 9. COMMITMENTS AND CONTINGENCIES
Legal Contingencies
The
Company is subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business.
While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters
will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly
NOTE 10. RELATED PARTY TRANSACTIONS
Americana Credit Agreement and Revolving Note
On
March 5, 2025, the Company entered into a Revolving Credit Facility Agreement with YES Americana Group, LLC (“Americana”),
which was amended on June 24, 2025 (the “Credit Agreement”). Under the Credit Agreement, Americana agreed to provide the
Company with a revolving credit facility of up to $
| 15 |
As of June 30, 2026, there were no outstanding loans payable to related parties, compared to $
Settlement Agreements
Reliance
Global Holdings, LLC (“RGH”), an affiliate of the Company, was previously party to certain guarantees related to historical
stock purchase transactions involving the Company’s common stock. In March 2026, the Company entered into two separate full and
final release and settlement agreements (collectively, the “Settlement Agreements”) with third parties relating to such transactions
and the related guarantees issued by RGH. Under the terms of the Settlement Agreements, the Company agreed to pay aggregate cash consideration
of approximately $
Formation of LGG and Investment in Innervate
During the three months ended June 30, 2026, the Company formed LGG and, through LGG, invested in Innervate. These transactions involve related parties, as certain members of the Company’s management and Board of Directors hold ownership interests in the noncontrolling member of LGG, and one member of the Company’s Board of Directors serves as the chief executive officer of Innervate. For a full description of these related party transactions, including the Company’s ownership interests, the intercompany promissory note, and the investment in Innervate, see Note 2 - Formation of LGG and Investment in Innervate.
NOTE 11. SEGMENT REPORTING
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”). The CODM evaluates the performance of the Company’s operations and makes decisions regarding the allocation of resources based on the operating results of the Company’s insurance business.
During the second quarter of 2026, management reassessed the information regularly reviewed by the CODM for purposes of assessing performance and allocating resources. As a result of changes in the Company’s strategic focus and internal reporting, management determined that the Company operates as a single reportable segment beginning in the second quarter of 2026. Prior period information has been recast to conform to the current period presentation.
Segment profit or loss is measured based on segment net income (loss), which reflects the operating results of the Company’s insurance business. Corporate overhead, and depreciation and amortization are excluded from the measure of segment profit or loss regularly reviewed by the CODM and are presented as reconciling items to consolidated results. Corporate overhead includes cash and non-cash executive compensation, public company costs, professional fees, SEC reporting costs, equity method investment related costs, and other corporate expenses not included in the measure of segment profit or loss reviewed by the CODM.
The CODM regularly reviews commission revenue and the following significant expense categories in evaluating segment performance:
| ● | Commission expense | |
| ● | Salaries and wages | |
| ● | General and administrative expenses | |
| ● | Marketing and advertising | |
| ● | Interest expense |
The Company does not provide the CODM with information regarding segment assets, and accordingly, such information is not regularly reviewed for purposes of assessing performance or allocating resources.
| 16 |
The following tables present financial information for the Company’s reportable segment.
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Insurance | Insurance | |||||||
| Commission income | $ | $ | ||||||
| Total Revenue | ||||||||
| Total operating expenses | ||||||||
| Commission expense | ||||||||
| Salaries and wages | ||||||||
| General and administrative expenses | ||||||||
| Marketing and advertising | ||||||||
| Interest expense | ||||||||
| Interest (expense) related parties | ||||||||
| Segment net income | $ | $ | ||||||
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Insurance | Insurance | |||||||
| Commission income | $ | $ | ||||||
| Total Revenue | ||||||||
| Total operating expenses | ||||||||
| Commission expense | ||||||||
| Salaries and wages | ||||||||
| General and administrative expenses | ||||||||
| Marketing and advertising | ||||||||
| Interest expense | ||||||||
| Interest (expense) related parties | ||||||||
| Segment net income | $ | $ | ||||||
| 17 |
Reconciliation of total segment revenue and net income to consolidated results:
| Three Months Ended | Three Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Total insurance segment revenue | $ | $ | ||||||
| Consolidated revenue | ||||||||
| Total insurance segment net income | ||||||||
| Corporate overhead | ( |
) | ( |
) | ||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Total segment revenue | $ | $ | ||||||
| Consolidated revenue | ||||||||
| Total segment net income | ||||||||
| Corporate overhead | ( |
) | ( |
) | ||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| 18 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties and assumptions. You should read the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this report—including statements regarding our strategy (including our digital-asset treasury strategy and related blockchain/tokenization initiatives), future financial condition, liquidity and capital resources, future operations, projected revenues, earnings (losses), margins, cash flows, business prospects, potential acquisitions and integration, and plans and objectives of management—are forward-looking statements.
Words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “guidance,” “intends,” “may,” “might,” “outlook,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would,” and similar expressions (and negative forms of such words) are intended to identify forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to:
| ● | our need to raise additional capital, which may not be available on acceptable terms or at all; | |
| ● | our ability to satisfy and maintain compliance with The Nasdaq Capital Market’s continued listing standards, including the $1.00 minimum bid price requirement; and the $5.0 million minimum Market Value of Listed Securities (“MVLS”) requirement; | |
| ● | our ability to maintain the listing of our common stock on the Nasdaq Capital Market; | |
| ● | volatility in the price of our securities due to changes in the capital markets, our industry, or our capital structure; | |
| ● | our ability to execute on our acquisition strategy and integrate acquired businesses successfully; | |
| ● | our ability to retain key personnel and effectively manage growth; | |
| ● | the risk that we and our agency partners are unable to generate expected revenues or margins; | |
| ● | risks associated with the insurance brokerage industry, including carrier concentration, regulation, competition, and cyclicality; | |
| ● | the impact of economic conditions, inflation, and interest rate trends on our operations and customer demand; | |
| ● | risks associated with our recently announced expansion into the technology sector through our EZRA International Group platform and our Scale51 operating model, including our ability to identify, complete, and integrate investments in technology-driven businesses or to realize value from minority investments such as Enquantum; | |
| ● | risks associated with our recent expansion into the life sciences sector through LifeSci Global Group LLC, including the speculative nature of early-stage life sciences investments including its investment in Innervate, and conflicts of interest with our directors and officers; | |
| ● | potential disruptions due to cybersecurity incidents or system failures; | |
| ● | risks associated with legal proceedings and compliance obligations; | |
| ● | risks specific to our digital-asset treasury strategy; and | |
| ● | other risks and uncertainties described in this Quarterly Report on Form 10-Q (including under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) and in our other filings with the Securities and Exchange Commission. |
Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are expressly qualified in their entirety by this cautionary note.
| 19 |
Overview
Reliance Global Group, Inc. is an InsurTech company focused on acquiring, owning and operating wholesale and retail insurance agencies and developing technology solutions that enhance insurance distribution and operations. The Company’s primary operations consist of its insurance brokerage businesses and proprietary technology platforms, including RELI Exchange and 5MinuteInsure.com.
Business Operations
Equity Investments
During the first half of 2026, the Company, through its Scale 51 operating model, and EZRA International Group (“EIG”), pursued selected strategic equity investments in technology and healthcare-related businesses intended to complement its core insurance operations. During the second quarter of 2026, management reassessed its strategic priorities and capital allocation objectives and reduced its level of active strategic investment activity while continuing to support and monitor its existing investments and selectively evaluate future investment opportunities.
Enquantum
In the first quarter of 2026, 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 through June 30, 2026 increased the Company’s ownership to approximately 20% on a fully diluted basis, or approximately 34% of Enquantum’s issued and outstanding shares. During the six months ended June 30, 2026, the Company funded an aggregate of approximately $0.8 million under the agreement.
The agreement provides for additional milestone-based investments intended to increase the Company’s ownership to a controlling interest over time, including a final transaction to reach approximately 51% ownership. The Company also expects to issue shares of its common stock in connection with a final control step-up. The Company views this investment as an initial execution of its Scale51 strategy.
Formation of LGG and Investment in Innervate
In April 2026, the Company formed LifeSci Global Group LLC (“LGG”) to pursue investments in healthcare-related companies, with the Company holding a majority ownership interest of approximately 51% through its wholly owned subsidiary EZRA International Group, LLC (“EIG”). The remaining ownership interest is held by an entity affiliated with certain members of the Company’s management and Board of Directors. LGG is consolidated as a majority-owned subsidiary, and the interest not held by the Company is presented as a noncontrolling interest. In connection with the formation, EIG entered into a financing arrangement with LGG providing for borrowings of up to $2.0 million, of which $0.5 million had been advanced as of June 30, 2026 (and $0.65 million had been advanced as of the date of this report). Amounts advanced under this arrangement eliminate in consolidation.
Also in April 2026, LGG entered into an agreement to invest up to approximately $2.0 million in Innervate Radiopharmaceuticals LLC (“Innervate”), an early-stage life sciences company, in exchange for a minority equity interest and certain additional rights, including warrants and preferential payment rights. The investment is payable in installments at LGG’s discretion. Using proceeds from the LGG financing arrangement described above, as of June 30, 2026, LGG had funded $0.5 million and as of the date of this report had funded $0.65 million, and held a minority equity interest in Innervate, which is accounted for as an equity investment. The Company expects LGG to serve as a platform for expanding its presence in the healthcare and life sciences sector.
These arrangements involve related parties, as certain members of management and the Board hold ownership interests in the minority member of LGG, and one director serves as the chief executive officer of Innervate. The transactions were reviewed and approved by the independent and disinterested members of the Company’s Board of Directors.
Scentech Transaction
During the second quarter of 2026, the Company determined not to proceed with its previously disclosed proposed acquisition of an interest in Scentech Medical Ltd. No definitive agreement was executed, and the parties did not reach final terms. The Company has not incurred any termination fees or other material liabilities in connection with the discontinuation of those discussions.
Capital Markets Activity
In January 2026, the Company completed a public offering that generated gross proceeds of approximately $2.0 million, enhancing liquidity and capital resources. The offering consisted of common stock and accompanying warrants, and during the three months ended March 31, 2026, the Company received approximately $0.8 million from the exercise of outstanding warrants.
| 20 |
In February 2026, the Company amended its at-the-market (“ATM”) offering program, increasing the aggregate amount of common stock that may be offered and sold from time to time to approximately $1.8 million. The ATM program provides the Company with additional flexibility to access capital as needed, subject to market conditions. Additionally, beginning in the first quarter of 2026, and through the date of this report, the Company sold shares under its ATM program for combined net proceeds of approximately $1,284,000, with remaining availability of approximately $456,000 under the program for future issuances.
In March 2026, the Company also amended its equity line of credit facility, extending the availability period through December 31, 2028 (subject to earlier utilization) and increasing the total committed capital to $50.0 million. Collectively, these activities enhanced the Company’s financial flexibility and access to capital to support working capital, merger and acquisition activities, and general corporate purposes.
NASDAQ Ticker Symbol Change
On January 22, 2026, the Company announced that its ticker symbol on the Nasdaq Capital Market will change from “RELI” to “EZRA,” which took effect at the open of trading on Monday, January 26, 2026. The Company’s common stock remained listed on the Nasdaq Capital Market and the Company’s CUSIP number remained unchanged. No action was required by the Company’s stockholders in connection with the ticker symbol change.
Settlement Agreements
During March 2026, the Company entered into settlement agreements related to certain prior stock purchase transactions and matters involving previously asserted guarantees, including those associated with related parties. In connection with these agreements, the Company paid aggregate settlement amounts of approximately $131,000. The settlements were reviewed and approved by the independent members of the Company’s Board of Directors.
Amendment to 2025 Equity Incentive Plan
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 350,000 shares, from 50,000 shares to 400,000 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.
Reverse Stock Split
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 became effective for trading purposes on May 18, 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). On June 2, 2026, we received a letter from the Nasdaq Listing Qualifications Department notifying us that we had regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), and that the matter is now closed.
As a result of the reverse stock split, every 40 shares of our outstanding common stock were automatically combined into one share of common stock, and the number of authorized shares of common stock was reduced proportionately. The reverse stock split did not affect stockholders’ relative ownership interests, except with respect to the treatment of fractional shares. As a result of the reverse stock split, the CUSIP number assigned to the Company’s common stock was changed to 75946W504.
While the reverse stock split increased the per share trading price of our common stock, there can be no assurance that we will continue to meet Nasdaq’s continued listing standards in the future. We continue to monitor our stock price and may take additional actions, if necessary, to maintain compliance with applicable listing requirements.
| 21 |
Corporate Governance
On March 11, 2026, the Company adopted Amended and Restated Bylaws, which, among other things, revised the provision relating to the timing of the annual meeting of stockholders so that the date, time and place of the annual meeting may be determined by the Company’s Board of Directors. On March 17, 2026, the Company filed Articles of Restatement with the Florida Department of State, restating the Company’s Articles of Incorporation in their entirety.
Business Trends and Uncertainties
The insurance intermediary business is highly competitive, and we actively compete with numerous firms for customers and insurance companies, many of which have relationships with insurance companies, or have a significant presence in niche insurance markets that may give them an advantage over us. Other competitive concerns may include the quality of our products and services, our pricing and the ability of some of our customers to self-insure and the entrance of technology companies into the insurance intermediary business. Several insurance companies are engaged in the direct sale of insurance, primarily to individuals, and do not pay commissions to agents and brokers.
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 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.
Insurance Agency/Brokerage Acquisitions
As of June 30, 2026, we have acquired multiple insurance brokerages, some of which were subsequently sold (see table below). As our acquisition strategy continues, our reach within the insurance arena can provide us with the ability to offer lower rates, which could boost our competitive position within the industry.
| Acquired | Reliance 100% Controlled Entity |
Date | Location | Line of Business | ||||
| U.S. Benefits Alliance, LLC (USBA)* | US Benefits Alliance, LLC | October 24, 2018 | Michigan | Health Insurance | ||||
| Employee Benefit Solutions, LLC (EBS)* | Employee Benefits Solutions, LLC | October 24, 2018 | Michigan | Health Insurance | ||||
| Commercial Solutions of Insurance Agency, LLC (CCS or Commercial Solutions) | Commercial Coverage Solutions LLC | December 1, 2018 | New Jersey | P&C – Trucking Industry | ||||
| Southwestern Montana Insurance Center, Inc. (Southwestern Montana or Montana) | Southwestern Montana Insurance Center, LLC | April 1, 2019 | Montana | Group Health Insurance | ||||
| Fortman Insurance Agency, LLC (Fortman or Fortman Insurance)* | Fortman Insurance Services, LLC | May 1, 2019 | Ohio | P&C and Health Insurance | ||||
| Altruis Benefits Consultants, Inc. (Altruis) | Altruis Benefits Corporation | September 1, 2019 | Michigan | Health Insurance | ||||
| UIS Agency, LLC (UIS) | UIS Agency, LLC | August 17, 2020 | New York | P&C – Trucking Industry | ||||
| J.P. Kush and Associates, Inc. (Kush) | Kush Benefit Solutions, LLC | May 1, 2021 | Michigan | Health Insurance | ||||
| Barra & Associates, LLC | RELI Exchange, LLC | April 26, 2022 | Illinois | P&C and Health Insurance |
*This agency was sold by the Company during the year ended December 31, 2025.
| 22 |
Non-GAAP Financial 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. Adjusted EBITDA (“AEBITDA”), our key financial performance metric, is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). “AEBITDA” is defined as earnings before interest, taxes, depreciation, and amortization (EBITDA) with additional adjustments as further outlined below. 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. 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. 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. 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 Quarterly Report on Form 10-Q under “Results of Operations”.
We exclude the following items when calculating AEBITDA, 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 impairments: 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 , (including period amortization cost of service provider prepaid expenses that were prepaid with stock) excluded to provide more meaningful supplemental information regarding the Company’s core cash impacted operational performance. | |
| ● | Other income (expense), net: Includes certain non-routine income or expenses and other individually de minimis items and is thus excluded as unrelated to core operations of the company. | |
| ● | Gain (Loss) from Equity Method Investment: Includes certain gains and losses on equity method investments that are non-cash, and thus excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. |
| 23 |
| ● | Unrealized gains (losses) on digital assets, net: This account includes unrealized gains and losses from digital assets 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. These 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-recurring non-operational items, related to costs incurred for a legal suit the Company has filed against one of the third parties involved in previously discontinued operations and was excluded to provide more meaningful supplemental information regarding the Company’s core operational performance. |
Refer to the reconciliation of net (loss) income to AEBITDA, illustrated below in tabular format.
Results of Operations
RELIANCE GLOBAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS ANALYTICS
Comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025
| Three Months Ended | ||||||||||||||||
| June 30, 2026 | June 30, 2025 | Value Fluctuation | Percent Fluctuation | |||||||||||||
| Commission Income (“CI”) | $ | 2,110,815 | $ | 3,086,677 | $ | (975,862 | ) | -32 | % | |||||||
| Commission Expense (“CE”) | 826,991 | 988,774 | (161,783 | ) | -16 | % | ||||||||||
| Salaries and wages (“S&W”) | 1,567,040 | 2,563,519 | (996,479 | ) | -39 | % | ||||||||||
| General and administrative expenses (“G&A”) | 1,157,649 | 1,492,839 | (335,190 | ) | -22 | % | ||||||||||
| Marketing and advertising expenses (“M&A”) | 130,370 | 67,207 | 63,162 | 94 | % | |||||||||||
| Depreciation and amortization (“D&A”) | 252,976 | 346,151 | (93,175 | ) | -27 | % | ||||||||||
| Total operating expenses | 3,935,026 | 5,458,490 | (1,523,465 | ) | -28 | % | ||||||||||
| - | ||||||||||||||||
| Loss from operations | (1,824,211 | ) | (2,371,813 | ) | 547,602 | -23 | % | |||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (124,659 | ) | (297,642 | ) | 172,983 | -58 | % | |||||||||
| Interest (expense) related parties | - | (21,346 | ) | 21,346 | -100 | % | ||||||||||
| Other income (expense), net | (16,266 | ) | (20,100 | ) | 3,834 | -19 | % | |||||||||
| Loss from Equity Method Investment | (94,354 | ) | - | (94,354 | ) | - | ||||||||||
| Realized and unrealized gains (losses) on digital assets, net | 65,206 | - | 65,206 | - | ||||||||||||
| Total other (expense) income | (170,073 | ) | (339,088 | ) | 169,015 | -50 | % | |||||||||
| Net loss | (1,994,284 | ) | (2,710,901 | ) | 716,617 | -26 | % | |||||||||
| Less: Net loss attributable to noncontrolling interests | (2,913 | ) | - | (2,913 | ) | - | ||||||||||
| Net loss attributable to Reliance Global Group, Inc. | $ | (1,991,371 | ) | $ | (2,710,901 | ) | $ | 719,530 | -27 | % | ||||||
| Non-GAAP Measure: | ||||||||||||||||
| AEBITDA | $ | (1,144,506 | ) | $ | (381,690 | ) | $ | (762,816 | ) | 200 | % | |||||
| 24 |
Three Months Ended June 30, 2026
Commission Income (CI)
The decrease in consolidated Commission Income was primarily attributable to portfolio realignments completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission revenue previously generated by these operations.
Commission Expense (CE)
The decrease in consolidated Commission Expense was primarily attributable to the Company’s portfolio realignment initiatives completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission expense previously incurred by these operations.
Salaries and Wages (S&W)
The decrease in consolidated Salaries and Wages was primarily attributable to lower non-cash share-based compensation expense, as well as the elimination of compensation costs associated with Fortman Insurance Services and Employee Benefits Solutions following their divestiture offset by increased compensation costs.
General and Administrative Expenses (G&A)
The decline in consolidated General and Administrative expenses was primarily attributable was primarily attributable to cost efficiencies and reduced operating expenses resulting from the Company's OneFirm operating model. The comparison was also affected by Scale51 initiatives in 2026 and acquisition activities in 2025.
Marketing and Advertising Expenses (M&A)
The increase in consolidated Marketing and Advertising expenses reflects the Company’s current marketing strategy and increased investment in growth initiatives.
Depreciation and Amortization (D&A)
The decrease in consolidated Depreciation and Amortization expense reflects the pursuant to the passage of time as assets become fully amortized and elimination of FIS, EBS, USBA assets.
Other Income (Expense)
The decrease in consolidated total other expense was primarily attributable to lower interest expense, including on related party balances, driven by paydowns and the payoff of certain loan balances, lower other expenses primarily related to charitable contributions, and a realized gain on the sale on digital assets partially offset by a loss on an equity method investment.
AEBITDA
The decrease in consolidated AEBITDA was primarily attributable to significantly lower add-backs for non-cash equity-based compensation in 2026 compared to the prior-year period, partially offset by improved operating performance, including reductions in salaries and wages and general and administrative expenses.
| 25 |
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
| Six Months ended | ||||||||||||||||
| June 30, 2026 | June 30, 2025 | Value Fluctuation | Percent Fluctuation | |||||||||||||
| Commission Income | $ | 5,937,607 | $ | 7,322,897 | $ | (1,385,290 | ) | -19 | % | |||||||
| Commission Expense (“CE”) | 2,408,808 | 2,458,202 | (49,394 | ) | -2 | % | ||||||||||
| Salaries and wages (“S&W”) | 3,180,151 | 4,793,357 | (1,613,206 | ) | -34 | % | ||||||||||
| General and administrative expenses (“G&A”) | 2,514,230 | 3,009,067 | (494,837 | ) | -16 | % | ||||||||||
| Marketing and advertising expenses (“M&A”) | 341,018 | 134,483 | 206,535 | 154 | % | |||||||||||
| Depreciation and amortization (“D&A”) | 557,420 | 706,746 | (149,326 | ) | -21 | % | ||||||||||
| Total operating expenses | 9,001,627 | 11,101,855 | (2,100,226 | ) | -19 | % | ||||||||||
| - | ||||||||||||||||
| Loss from operations | (3,064,020 | ) | (3,778,958 | ) | 714,936 | -19 | % | |||||||||
| - | ||||||||||||||||
| Other income (expense) | - | |||||||||||||||
| Interest expense | (251,045 | ) | (598,124 | ) | 347,079 | -58 | % | |||||||||
| Interest (expense) related parties | - | (46,106 | ) | 46,106 | -100 | % | ||||||||||
| Other income (expense), net | (39,266 | ) | (24,598 | ) | (14,668 | ) | 60 | % | ||||||||
| Loss from Equity Method Investment | (120,384 | ) | - | (120,384 | ) | - | ||||||||||
| Realized and unrealized gains on digital assets, net | 9,263 | - | 9,263 | - | ||||||||||||
| Total other (expense) income | (401,432 | ) | (668,828 | ) | 267,396 | -40 | % | |||||||||
| Loss from continuing operations before tax | (3,465,452 | ) | (4,447,786 | ) | 982,332 | -22 | % | |||||||||
| Less: Net loss attributable to noncontrolling interests | (2,913 | ) | - | (2,913 | ) | - | ||||||||||
| Net loss attributable to Reliance Global Group, Inc. | $ | (3,462,539 | ) | $ | (4,447,786 | ) | $ | 985,245 | -22 | % | ||||||
| Non-GAAP Measure: | ||||||||||||||||
| AEBITDA | $ | (1,572,241 | ) | $ | (211,688 | ) | $ | (1,360,552 | ) | 643 | % | |||||
Six Months Ended June 30, 2026
Commission Income (CI)
The decrease in consolidated Commission Income was primarily attributable to portfolio realignments completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission revenue previously generated by these operations offset by an increase in commission income from our retained businesses.
Commission Expense (CE)
The decrease in consolidated Commission Expense was primarily attributable to the Company’s portfolio realignment initiatives completed during 2025, including the divestiture of Employee Benefits Solutions (EBS) which eliminated commission expense previously incurred by these operations, offset by higher commission rates of our retained businesses due to general market conditions.
Salaries and Wages (S&W)
The decrease in consolidated Salaries and Wages was primarily attributable to lower non-cash share-based compensation expense, as well as the elimination of compensation costs associated with Fortman Insurance Services and Employee Benefits Solutions following their divestiture offset by increased compensation costs.
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General and Administrative Expenses (G&A)
The decline in consolidated General and Administrative expenses was primarily attributable to cost efficiencies and reduced operating expenses resulting from the Company's OneFirm operating model. The comparison was also affected by Scale51 initiatives in 2026 and acquisition activities in 2025.
Marketing and Advertising Expenses (M&A)
The increase in consolidated Marketing and Advertising expenses reflects the Company’s current marketing strategy and increased investment in growth initiatives.
Depreciation and Amortization (D&A)
The decrease in consolidated Depreciation and Amortization expense reflects the pursuant to the passage of time as assets become fully amortized and elimination of FIS, EBS, USBA assets.
Other Income (Expense)
The decrease in consolidated total other expense was primarily attributable to lower interest expense, including on related party balances, driven by paydowns and the payoff of certain loan balances, and a realized gain on the sale on digital assets partially offset by a loss on an equity method investment and higher other expenses primarily related to charitable contributions.
AEBITDA
The decrease in consolidated AEBITDA was primarily attributable to significantly lower add-backs for non-cash equity-based compensation in 2026 compared to the prior-year period, partially offset by improved operating performance, including reductions in salaries and wages and general and administrative expenses.
Insurance Segment – Results of Operations
Insurance segment comparison of the three months ended June 30, 2026 to the three months ended June 30, 2025
| June 30, 2026 | June 30, 2025 | Change | % Change | |||||||||||||
| Insurance | Insurance | |||||||||||||||
| Commission income | $ | 2,110,815 | $ | 3,086,677 | $ | (975,862 | ) | -32 | % | |||||||
| Total Revenue | 2,110,815 | 3,086,677 | ||||||||||||||
| Total operating expenses | ||||||||||||||||
| Commission expense | 826,991 | 988,774 | (161,784 | ) | -16 | % | ||||||||||
| Salaries and wages | 729,610 | 1,199,907 | (470,297 | ) | -39 | % | ||||||||||
| General and administrative expenses | 244,259 | 345,703 | (101,444 | ) | -29 | % | ||||||||||
| Marketing and advertising | 4,930 | 17,207 | (12,277 | ) | -71 | % | ||||||||||
| Interest expense | 119,388 | 292,344 | (172,955 | ) | -59 | % | ||||||||||
| Interest expense related parties | - | 21,176 | (21,176 | ) | -100 | % | ||||||||||
| Insurance Segment Net income | $ | 185,636 | $ | 221,566 | $ | (35,929 | ) | -16 | % | |||||||
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Insurance segment revenue decreased compared to the prior-year period. Commission Income decreased, primarily attributable to portfolio realignments completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission revenue previously generated by these operations.
Total operating expenses decreased overall compared to the prior-year period, primarily reflecting cost reductions associated with the divestiture of certain business operations and ongoing efficiency initiatives.
| ● | Commission expense decreased, primarily attributable to the Company’s portfolio realignment initiatives completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission expense previously incurred by these operations. |
| ● | Salaries and wages decreased significantly due to the elimination of personnel costs associated with the divested FIS and EBS businesses. |
| ● | General and administrative expenses declined as a result of operational efficiencies achieved through the Company’s OneFirm initiative and a leaner organizational structure. |
| ● | Marketing and advertising expenses decreased substantially, consistent with the Company’s current marketing strategy. |
Total interest expense (including related party interest) decreased significantly due to the repayment of outstanding loan balances and periodic paydowns of related party obligations.
As a result of the above factors, the Insurance segment’s net income decreased compared to the prior-year period, primarily driven by the decline in revenue following the divestitures reductions in operating expenses but partially offset by lower operating expenses and lower interest expense.
Insurance segment comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
| June 30,2026 | June 30, 2025 | Change | % Change | |||||||||||||
| Insurance | Insurance | |||||||||||||||
| Commission income | $ | 5,937,607 | $ | 7,322,897 | $ | (1,385,290 | ) | -19 | % | |||||||
| Total Revenue | 5,937,607 | 7,322,897 | ||||||||||||||
| Total operating expenses | ||||||||||||||||
| Commission expense | 2,408,808 | 2,458,202 | (49,394 | ) | -2 | % | ||||||||||
| Salaries and wages | 1,524,261 | 2,367,215 | (842,953 | ) | -36 | % | ||||||||||
| General and administrative expenses | 525,548 | 712,538 | (186,989 | ) | -26 | % | ||||||||||
| Marketing and advertising | 6,855 | 33,991 | (27,136 | ) | -80 | % | ||||||||||
| Interest expense | 241,421 | 588,599 | (347,177 | ) | -59 | % | ||||||||||
| Interest expense related parties | - | 45,887 | (45,887 | ) | -100 | % | ||||||||||
| Insurance Segment net income | $ | 1,230,713 | $ | 1,116,466 | $ | 114,247 | 10 | % | ||||||||
Insurance segment revenue decreased compared to the prior-year period. Commission Income decreased, primarily attributable to portfolio realignments completed during 2025, including the divestitures of Fortman Insurance Services (FIS), Employee Benefits Solutions (EBS), and U.S. Benefits Alliance (USBA), which eliminated commission revenue previously generated by these operations offset by an increase in commission income from our retained businesses.
Total operating expenses decreased overall compared to the prior-year period, primarily reflecting cost reductions associated with the divestiture of certain business operations and ongoing efficiency initiatives.
| ● | Commission expense decreased, primarily attributable to the Company’s portfolio realignment initiatives completed during 2025, including the divestiture of Employee Benefits Solutions (EBS) which eliminated commission expense previously incurred by these operations, offset by higher commission rates of our retained businesses due to general market conditions. |
| ● | Salaries and wages decreased significantly due to the elimination of personnel costs associated with the divested FIS and EBS businesses. |
| ● | General and administrative expenses declined as a result of operational efficiencies achieved through the Company’s OneFirm initiative and a leaner organizational structure. |
| ● | Marketing and advertising expenses decreased substantially, consistent with the Company’s current marketing strategy. |
Total interest expense (including related party interest) decreased significantly due to the repayment of outstanding loan balances and periodic paydowns of related party obligations.
As a result of the above factors, Insurance segment profitability improved compared to the prior-year period. The increase was primarily driven by reductions in operating expenses and lower interest expense, partially offset by the decline in revenue following the divestitures.
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Non-GAAP Reconciliation from Net Loss to AEBITDA
The following table provides a reconciliation from net income (loss) to consolidated AEBITDA for periods ended June 30, 2026, and June 30, 2025
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income (loss) | $ | (1,994,284 | ) | $ | (2,710,901 | ) | $ | (3,465,452 | ) | $ | (4,447,786 | ) | ||||
| Adjustments: | ||||||||||||||||
| Interest and related party interest expense | 124,659 | 318,988 | 251,045 | 644,230 | ||||||||||||
| Depreciation and amortization | 252,976 | 346,151 | 557,420 | 706,746 | ||||||||||||
| Share based compensation employees directors and third parties | 210,536 | 1,479,557 | 401,894 | 2,504,542 | ||||||||||||
| Other (income) expense, net | - | - | - | 24,598 | ||||||||||||
| Transactional costs | 232,459 | 248,049 | 571,731 | 391,236 | ||||||||||||
| Non-standard costs | - | (63,534 | ) | - | (35,254 | ) | ||||||||||
| Loss from Equity Method Investment | 94,354 | - | 120,384 | - | ||||||||||||
| Realized and unrealized gains on digital assets, net | (65,206 | ) | - | (9,263 | ) | - | ||||||||||
| Total adjustments | 849,778 | 2,329,211 | 1,893,211 | 4,236,098 | ||||||||||||
| AEBITDA | $ | (1,144,506 | ) | $ | (381,690 | ) | $ | (1,572,241 | ) | $ | (211,688 | ) | ||||
Liquidity and capital resources
On July 22, 2026, the SEC approved Nasdaq’s adoption of a new continued listing standard requiring listed companies to maintain a minimum Market Value of Listed Securities of $5 million. Management is evaluating the implications of this rule and continues to assess alternatives available to maintain compliance with Nasdaq’s continued listing requirements. Overall, the Company continues to maintain a strong liquidity position and flexible access to capital to support its operations and growth initiatives, including investments by LGG. Management believes that existing cash balances, anticipated operating cash flows, and available financing facilities provide sufficient resources to fund current obligations and planned expenditures for at least the next twelve months.
During 2025, the Company further diversified its capital structure through a combination of equity-based financing arrangements, including the Equity Line of Credit (“ELOC”) with White Lion Capital, LLC, the At-the-Market (“ATM”) Program with H.C. Wainwright & Co., LLC, and the Private Placement-2025 completed in June 2025. During the first quarter of 2026, the Company completed a public offering generating gross proceeds of approximately $2.0 million before offering expenses. These financing vehicles provide the Company with multiple sources of capital that may be accessed opportunistically and at prevailing market prices while maintaining control over timing and issuance levels. During the six months ended June 30, 2026, the Company sold 278,978 shares of Common Stock under the ATM Program for net proceeds of approximately $1,117,000. As of June 30, 2026, approximately $632,000 of Common Stock remained available for issuance under the ATM Program. During the six months ended June 30, 2026, the Company sold 3,000 shares under the ELOC Agreement for net proceeds of $11,367. As of June 30, 2026, remaining capacity under the facility was approximately $49.1 million. As discussed elsewhere in this Report, including under Part II, Item 1A (Risk Factors), our access to the capital markets and additional financing, including these financing vehicles, is subject to certain risks that may be outside of our control.
Management intends to use the net proceeds from these financings for general corporate purposes, including working capital, technology development, and to advance ongoing Scale51 initiatives. Management continues to evaluate additional financing alternatives and believes that the combination of strengthened balance-sheet metrics, flexible equity facilities, and expected operational cash flows provides adequate liquidity to support both near-term needs and long-term strategic growth objectives.
As of June 30, 2026, we had a combined unrestricted and restricted total cash balance of approximately $1,807,000 and working capital of approximately $1,228,695, compared with a combined unrestricted and restricted total cash balance of approximately $2,731,000 and working capital of approximately $1,875,000 as of December 31, 2025.
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Inflation
The Company generally may be impacted by rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits, and facility leases. The Company believes inflation could have a material impact on pricing and operating expenses in future periods due to the state of the economy and current inflation rates.
Off-balance sheet arrangements
We did not have any off-balance sheet arrangements, as such term is defined in Regulation S-K, during the six months ended June 30, 2026.
Cash Flows
Six Months Ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (2,231,553 |
) | (654,681 | ) | |||
| Net cash used in investing activities | (1,233,919 |
) | (27,137 | ) | ||||
| Net cash provided by financing activities | 2,541,486 |
2,259,335 | ||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | $ | (923,986 |
) | $ | 1,577,517 | |||
Operating Activities
Net cash used in operating activities for the six months ended June 30, 2026 was approximately $2,232,000, compared to approximately $655,000 for the six months ended June 30, 2025. Cash used in operating activities for the 2026 period reflects a net loss of approximately $3,465,000, partially offset by net non-cash adjustments of approximately $1,073,000 and by approximately $161,000 of cash provided by changes in operating assets and liabilities. The non-cash adjustments consisted primarily of depreciation and amortization of approximately $557,000, equity-based compensation and equity-based payments to third parties of approximately $402,000, loss on equity method investment of approximately $120,000, and amortization of debt issuance costs of approximately $5,000, partially offset by approximately $12,000 of non-cash lease adjustments and unrealized gains on digital assets.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2026 was approximately $1,234,000, compared to approximately $27,000 for the six months ended June 30, 2025. Cash used in investing activities for the 2026 period consisted primarily of equity investments of approximately $1,334,000 and purchases of intangible assets and property and equipment of approximately $18,000, partially offset by proceeds from sales of crypto assets of approximately $118,000.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2026 was approximately $2,541,000, compared to approximately $2,259,000 for the six months ended June 30, 2025. Cash provided by financing activities for the 2026 period consisted primarily of proceeds of approximately $2,526,000 from common shares issued through a public offering, approximately $1,117,000 from common shares issued through an at-the-market offering, approximately $150,000 from short-term financings, and approximately $11,000 from common shares issued through an equity line of credit, partially offset by principal repayments of debt of approximately $743,000, payments of loans payable to related parties of approximately $287,000, principal repayments of short-term financings of approximately $103,000, and cash paid for deemed dividends of approximately $131,000.
Significant Accounting Policies and Estimates
We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, and our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal year 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026, and determined them to be effective as of June 30, 2026.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
Item 1. Legal Proceedings.
We are subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly, no legal contingencies are accrued as of June 30, 2026. Litigation relating to the insurance brokerage industry is not uncommon. As such we, from time to time have been subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.
Item 1A. Risk Factors.
Investing in our common stock involves a high degree of risk. You should consider carefully the information disclosed in Part I, Item 1A, “Risk Factors,” contained in our Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time. As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time. The following risk factors are applicable to our recently announced expansion into the technology sector through EZRA International Group LLC and life sciences sector through LifeSci Global Group LLC, as well as our qualification for continued listing on the Nasdaq Capital Market, and are being provided to supplement those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Failure to satisfy Nasdaq’s new minimum Market Value of Listed Securities requirement, its minimum bid price requirement or other continued listing requirements could result in the delisting of our common stock.
In July 2026, the SEC approved Nasdaq’s adoption of a new continued listing standard requiring companies listed on The Nasdaq Capital Market to maintain a minimum Market Value of Listed Securities (“MVLS”) of $5.0 million. Under the new rule, if a company’s MVLS remains below $5.0 million for 30 consecutive business days, Nasdaq may issue a Staff Delisting Determination without first providing a customary compliance period. Although a company may appeal such determination, its common stock would generally be suspended from trading on Nasdaq during the appeal process.
Based on the current market price of our common stock, our Market Value of Listed Securities has recently been below the $5.0 million threshold. Accordingly, there can be no assurance that we will satisfy the MVLS continued listing requirement within the applicable period prescribed by Nasdaq’s rules or otherwise maintain compliance with Nasdaq’s continued listing standards.
On December 12, 2025, the Company received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that it was not in compliance with Nasdaq’s minimum bid price requirement under Listing Rule 5550(a)(2). On June 2, 2026, Nasdaq notified the Company that it had regained compliance with the minimum bid price requirement and that the matter was closed. Nasdaq further noted that, pursuant to Listing Rule 5810(c)(3)(A)(iv), because of the Company’s prior reverse stock splits, the Company may not be eligible for a future compliance period under the minimum bid price rule if it were to become non-compliant with that requirement again.
Any delisting of our common stock from Nasdaq could materially and adversely affect the liquidity and market price of our common stock, reduce analyst coverage and institutional investor interest, impair our ability to access the capital markets, including under financing arrangements that require a Nasdaq listing (including under our existing at-the-market offering program which requires Nasdaq listing), and adversely affect our business, financial condition, and results of operations. If our common stock were delisted from Nasdaq, it would likely trade on an over-the-counter market, where trading is generally characterized by lower trading volumes, reduced liquidity, wider bid-ask spreads, and greater price volatility than trading on a national securities exchange.
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Risks Related to Our Technology Investment Strategy and Enquantum
Our expansion into the technology sector through EZRA International Group and Scale51 represents a new line of business in which we have limited operating experience.
In January 2026, we launched EZRA International Group and introduced our Scale51 operating model, under which we intend to pursue majority ownership positions in technology-driven businesses. Operating, evaluating, and managing technology-focused businesses requires expertise that differs materially from the expertise required to operate our insurance brokerage and InsurTech businesses, and our management team has limited direct experience operating businesses in many of the technology subsectors we may target, including post-quantum cryptography, cybersecurity, artificial intelligence, and other emerging technology fields. Successful execution of our Scale51 strategy depends on our ability to identify suitable investment opportunities, conduct adequate technical and commercial diligence, negotiate transactions on favorable terms, secure required regulatory and third-party approvals, integrate or oversee acquired or portfolio companies, and recruit and retain personnel with relevant technical expertise. We may be unable to do any of these things effectively. If our Scale51 strategy proves unsuccessful, our financial condition, results of operations, and the market price of our common stock could be materially adversely affected.
Investments in early-stage technology companies, including Enquantum, are highly speculative and subject to a substantial risk of loss.
Enquantum is an early-stage company that has generated no revenue, has a shareholders’ deficit, has current liabilities in excess of current assets, and is dependent on our continued milestone funding for its operations. Early-stage technology companies are subject to numerous risks, including the lengthy, expensive, and uncertain nature of technology development; the possibility that products or technologies will fail to perform as intended or fail to achieve commercial acceptance; reliance on a small number of key personnel; the need to secure and maintain intellectual property protection; competition from larger and better-capitalized companies and from alternative or substitute technologies; and dependence on additional capital, which may be unavailable on acceptable terms or at all. Many early-stage technology companies fail to achieve commercialization and ultimately cease operations. We may be required to write down or write off all or a substantial portion of our investment in Enquantum, and we may not realize any return on our investment.
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The market for post-quantum cryptography and related technologies is unproven, and Enquantum’s products may fail to achieve technical or commercial success.
Enquantum’s business is focused on post-quantum cryptography and related data protection technologies. The market for post-quantum cryptography is at an early and evolving stage, and broader commercial adoption depends on a number of factors outside Enquantum’s control, including the timing and pace of the development of cryptographically relevant quantum computers, the publication and adoption of post-quantum cryptographic standards by U.S. and foreign standards-setting bodies (including the National Institute of Standards and Technology), regulatory mandates affecting cryptographic transitions, and customer awareness of and willingness to invest in post-quantum protections. Enquantum’s product candidates may fail to satisfy applicable standards, may be technically inferior to competing products or implementations developed by larger or better-resourced competitors, or may be rendered obsolete by alternative technologies or approaches. Even if Enquantum’s technology proves technically sound, the market may not develop on the timeline or at the scale that Enquantum and we currently anticipate.
Enquantum’s business is dependent on its ability to obtain, maintain, and enforce intellectual property rights, which is uncertain.
The value of our investment in Enquantum is substantially dependent on Enquantum’s ability to obtain, maintain, defend, and enforce patent, trade secret, and other intellectual property protection for its quantum-encryption technologies, product candidates, and know-how. Enquantum’s intellectual property positions involve complex legal, scientific, and factual questions, and we have allocated a substantial portion of the excess of our investment cost over Enquantum’s net assets to Enquantum’s intellectual property and in-process research and development. Enquantum may be unable to obtain meaningful patent protection in relevant jurisdictions, issued patents may be narrowed, invalidated, or held unenforceable, and competitors may develop products that design around Enquantum’s patents. Enquantum may also be subject to claims that its products or technologies infringe third-party intellectual property rights, including from larger competitors with extensive patent portfolios in cryptography and security. Any failure to protect or defend Enquantum’s intellectual property could materially adversely affect Enquantum’s prospects, the value of our investment, and the recoverability of the basis difference allocated to Enquantum’s intellectual property and in-process research and development.
We may not obtain a controlling interest in Enquantum on the timeline we currently anticipate, or at all.
We have entered into a Share Purchase Agreement contemplating the acquisition of up to 51% of Enquantum’s fully diluted ordinary shares for aggregate consideration of approximately $2.1 million, payable in milestone-based tranches over approximately ten months and including a final control step-up tranche payable in shares of our common stock. Our ability to acquire a controlling interest in Enquantum is subject to satisfaction of specified milestones and other conditions, the continued availability of capital to fund the remaining tranches, the absence of disputes between the parties, and the absence of intervening regulatory or third-party developments. We may be unable to satisfy the conditions to one or more remaining tranches on a timely basis, or at all. Even if we acquire a controlling interest, we will be required to consolidate Enquantum as a majority-owned subsidiary under U.S. generally accepted accounting principles, which would materially change our consolidated financial statements and may introduce volatility into our reported results.
Our investment in Enquantum requires significant ongoing capital commitments that may exceed currently anticipated amounts.
Our remaining unfunded commitment under the Enquantum Share Purchase Agreement is approximately $1,458,000 in cash tranches, plus approximately $125,000 payable in shares of our common stock for the final control step-up tranche. Enquantum is dependent on our continued milestone funding for its operations, and Enquantum may require additional capital from us beyond our current commitments to fund its operations, complete development of its product candidates, or achieve commercialization. Any such additional funding requirements could be substantial and may exceed amounts we currently anticipate. We may not have sufficient capital to satisfy these funding needs, and any required external financing may not be available on acceptable terms or at all. To the extent we are unable or unwilling to provide additional funding to Enquantum, the value of our existing investment in Enquantum could be impaired and Enquantum’s operations may be curtailed or cease entirely.
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Our investment in Enquantum, an Israeli company, exposes us to cross-border legal, regulatory, geopolitical, and tax risks.
Enquantum is an Israeli company with operations in Israel. Our investment is therefore subject to a range of cross-border risks that we have not historically faced in our domestic insurance brokerage business, including the application of Israeli corporate, securities, intellectual property, employment, and tax laws and regulations to Enquantum and to our investment; restrictions on the export of cryptographic technology under U.S. and Israeli export control regimes; foreign currency exchange risks; political, economic, and military instability in Israel and the broader region, including ongoing armed conflicts and security risks affecting Israeli operations and personnel; and difficulties in enforcing contractual rights or judgments across jurisdictions. We rely on Israeli counsel and advisors with respect to matters of Israeli law, and our directors, officers, and U.S. counsel may have limited ability to independently evaluate Israeli legal, regulatory, and operational risks. Any of these risks, individually or in the aggregate, could materially adversely affect Enquantum’s operations and the value of our investment.
Our minority position in Enquantum currently limits our ability to control or influence its strategic direction.
We currently hold a minority equity interest in Enquantum, representing approximately 34% of Enquantum’s issued and outstanding shares as of April 21, 2026. We hold two of five seats on Enquantum’s board of directors, but we do not control Enquantum, and key strategic, operational, financing, and personnel decisions affecting Enquantum may be made without our consent. Enquantum may pursue a strategy with which we disagree, may issue additional equity that dilutes our ownership interest, may enter into transactions on terms that we view as unfavorable, or may experience disputes among its equity holders or management. Until we acquire a controlling interest, our ability to direct Enquantum’s affairs to realize our investment objectives will be limited.
The accounting treatment of our Enquantum investment is complex and subject to revision based on subsequent events.
We account for our investment in Enquantum under the equity method of accounting, with a substantial portion of our investment cost recognized as an indefinite-lived intangible basis difference allocated to Enquantum’s quantum-encryption intellectual property and in-process research and development. Application of the relevant accounting standards to this investment requires significant judgment, and the carrying value of the investment is subject to evaluation for impairment whenever events or circumstances indicate the carrying value may not be recoverable. If we acquire a controlling interest in Enquantum, we will be required to apply business combination accounting under ASC 805, which would require, among other things, the remeasurement of our existing investment at fair value and recognition of any resulting gain or loss, the identification and fair value measurement of acquired assets and assumed liabilities, and the consolidation of Enquantum’s operating results and financial position. Changes in our or Enquantum’s circumstances, including changes in milestone achievement, financing terms, governance rights, intellectual property positions, or the financial condition of Enquantum, may require us to revise our accounting conclusions, recognize material impairment charges, or restate prior period financial statements.
Risks Related to Our Life Sciences Investment Strategy and LGG
Our expansion into the life sciences sector represents a new line of business in which we have limited operating experience.
Through LGG, we have entered the healthcare and life sciences sector, a field in which we have not previously operated and in which our management team has limited direct operating experience. The life sciences sector is highly specialized and differs materially from the insurance and digital asset businesses that have historically constituted our principal lines of business. Successfully evaluating, executing, and managing investments in healthcare-related companies requires scientific, clinical, regulatory, and commercial expertise that we may not possess internally and that we may be required to obtain through hires, advisors, or third-party consultants, any of which may be costly or unavailable on acceptable terms. Our lack of historical experience in the sector may impair our ability to identify suitable investment opportunities, conduct adequate diligence, anticipate sector-specific risks, or realize the anticipated benefits of our life sciences strategy. If our life sciences strategy proves unsuccessful, our financial condition, results of operations, and the market price of our common stock could be materially adversely affected.
Investments in early-stage life sciences companies, including Innervate, are highly speculative and subject to a substantial risk of loss.
LGG’s initial investment is in Innervate, an early-stage life sciences company developing radiopharmaceutical product candidates. Early-stage life sciences companies are subject to numerous risks that are unique to the sector, including the lengthy, expensive, and uncertain nature of preclinical and clinical development; the need to obtain regulatory approval from the U.S. Food and Drug Administration and comparable foreign authorities before any product candidate may be commercialized; the possibility that product candidates will fail to demonstrate safety or efficacy at any stage of development; reliance on third-party manufacturers, contract research organizations, and clinical investigators; the need to secure and maintain patent and other intellectual property protection; potential product liability exposure; competition from larger and better-capitalized companies; and dependence on additional capital, which may be unavailable on acceptable terms or at all. Radiopharmaceutical products in particular are subject to specialized regulatory requirements relating to the handling, transportation, manufacture, and administration of radioactive materials. Many early-stage life sciences companies fail to bring any product to market and ultimately cease operations. We may be required to write down or write off all or a substantial portion of our investment in Innervate, and we may not realize any return on our investment.
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LGG is a newly formed entity with no operating history, and we may not realize the anticipated benefits of our life sciences platform strategy.
LGG was formed in April 2026 and has no operating history. We expect LGG to serve as the platform through which we pursue additional investments in the healthcare and life sciences sector, but there can be no assurance that LGG will identify, complete, or successfully manage future investments, or that any such investments will generate returns. Our ability to deploy capital through LGG is dependent on, among other things, the availability of suitable investment opportunities, our continued willingness and ability to fund LGG, the performance of LGG’s portfolio companies, and the cooperation of our minority partner in LGG. The formation of LGG and the establishment of related governance, accounting, and compliance infrastructure may also divert management attention and resources from our other lines of business. If LGG fails to achieve its strategic objectives, we may not recover the capital we have committed to LGG and our financial condition and results of operations could be materially and adversely affected.
We have committed capital to LGG and may be required to commit additional capital, which may not be available on favorable terms.
In connection with the formation of LGG, we entered into a promissory note providing for borrowings by LGG of up to $2.0 million, $500,000 of which had been advanced as of April 30, 2026. We may, in the future, be required or elect to provide additional debt or equity financing to LGG to fund follow-on investments in Innervate, to support new investments by LGG, or to fund LGG’s operating expenses. Any such additional funding requirements could be substantial and may exceed amounts we currently anticipate. We may not have sufficient capital available to satisfy these funding needs from cash on hand, and any required external financing may not be available on acceptable terms, or at all. To the extent we are unable or unwilling to provide additional funding to LGG, the value of our existing investments in LGG and its portfolio companies could be impaired. Conversely, our funding of LGG may reduce the capital available for our other business lines and strategic priorities.
Our investment in LGG and Innervate involves significant related party transactions and conflicts of interest.
LGG is owned approximately 51% by us and approximately 49% by LifeSci Management Group LLC, an entity owned by certain members of our management and Board of Directors. As a result, members of our management and Board of Directors have direct and indirect economic interests in LGG that differ from those of our public stockholders. In addition, one of our directors serves as the chief executive officer of Innervate, the company in which LGG made its initial investment. These overlapping relationships create actual and potential conflicts of interest with respect to, among other matters, the negotiation of the terms of our funding arrangements with LGG, decisions regarding additional capital commitments to LGG, the selection, valuation, and timing of LGG investments, decisions concerning Innervate (including any future financings, strategic transactions, or exits), the allocation of business opportunities between us and LGG, and the management of LGG’s portfolio. Although the formation of LGG, the related financing arrangements, and the Innervate investment were reviewed and approved by the independent and disinterested members of our Board of Directors, the existence of these conflicts may result in decisions that are less favorable to us than those that would be made in arm’s-length transactions with unrelated third parties, and could expose us to litigation, regulatory scrutiny, or reputational harm. Future related party transactions involving LGG, its minority owner, or its portfolio companies may arise, and we cannot assure you that the procedures we have implemented will be adequate to mitigate the risks associated with such transactions.
Our minority ownership position in Innervate limits our ability to control or influence its strategic direction.
LGG holds a minority equity interest in Innervate. Although LGG has obtained certain additional rights in connection with its investment, LGG does not control Innervate, and key strategic, operational, financing, and personnel decisions affecting Innervate may be made without LGG’s consent. Innervate may pursue a strategy with which we disagree, may issue additional equity that dilutes LGG’s ownership interest, may enter into transactions on terms that we view as unfavorable, or may experience disputes among its equity holders or management. Our director’s role as chief executive officer of Innervate does not assure that Innervate’s actions will align with our interests, and any decisions made by that director in his capacity as an officer of Innervate are subject to fiduciary duties owed to Innervate and its other equity holders, which may diverge from his duties to us. The illiquid and privately held nature of LGG’s investment in Innervate may also make it difficult or impossible for us to exit the investment on a timely basis or at a favorable price.
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Consolidation of LGG, and any future consolidation of Innervate, may introduce volatility and complexity into our financial statements.
We expect to consolidate LGG in our financial statements as a majority-owned subsidiary, with the noncontrolling interest of LifeSci Management Group LLC reflected accordingly. As LGG’s portfolio grows, our consolidated financial statements will reflect LGG’s investment activity, including changes in the fair value of its portfolio investments and operating expenses, which may introduce volatility and complexity into our reported results. Application of the relevant accounting standards to LGG, its investments, and its capital structure requires significant judgment, and changes in our or LGG’s circumstances—including changes in ownership percentages, governance rights, or the financial condition of portfolio companies—may require us to revise our accounting conclusions, recognize impairment charges, or restate prior period financial statements. In addition, the integration of life sciences-related accounting, valuation, and disclosure processes into our financial reporting function may strain our internal controls over financial reporting, particularly given our status as a smaller reporting company.
Innervate’s radiopharmaceutical product candidates are subject to specialized and overlapping regulatory regimes that increase the cost, complexity, and risk of development.
Radiopharmaceutical products are subject not only to the regulatory requirements applicable to pharmaceutical products generally, including the U.S. Food and Drug Administration’s investigational new drug, new drug application, and biologics license application processes, but also to the requirements of the U.S. Nuclear Regulatory Commission, Agreement State radiation control programs, the U.S. Department of Transportation, and analogous foreign authorities governing the production, handling, storage, transportation, and administration of radioactive materials. These overlapping regimes can lengthen development timelines, increase costs, and create the risk of inconsistent or conflicting requirements. Failure to obtain or maintain any required license, registration, or authorization, or any violation of applicable radiation safety or transportation requirements, could delay or prevent the development or commercialization of Innervate’s product candidates and adversely affect the value of LGG’s investment.
Innervate depends on the availability of medical radioisotopes and specialized manufacturing infrastructure, the supply of which is limited and subject to disruption.
Radiopharmaceutical product candidates require medical radioisotopes, many of which are produced by a small number of nuclear reactors and cyclotrons worldwide and are subject to supply constraints, geopolitical risk, aging production infrastructure, and short half-lives that make stockpiling impractical. In addition, the manufacture, compounding, and distribution of radiopharmaceutical products require specialized facilities, equipment, and personnel that are not widely available. Disruptions in isotope supply or manufacturing capacity, the loss of a key supplier or contract manufacturer, or the inability to secure manufacturing capacity on commercially reasonable terms could delay clinical development, impair commercialization, or result in increased costs for Innervate, any of which could materially adversely affect the value of LGG’s investment.
Even if Innervate’s product candidates obtain regulatory approval, commercial success will depend on coverage, pricing, and reimbursement determinations that are outside Innervate’s control.
The commercial viability of any approved radiopharmaceutical product depends on the willingness of government payors, including Medicare and Medicaid, and private third-party payors to provide adequate coverage and reimbursement. Coverage and reimbursement determinations for radiopharmaceutical products, particularly those administered in hospital outpatient or imaging settings, are subject to evolving payment methodologies, separate payment policies, bundling rules, and ongoing legislative and regulatory reform efforts in the United States and abroad. There can be no assurance that Innervate’s product candidates, if approved, will receive favorable coverage or reimbursement, and inadequate reimbursement could limit market acceptance, pricing, and ultimately the value of LGG’s investment.
Innervate’s success depends on its ability to obtain, maintain, and enforce intellectual property rights, which is uncertain and expensive.
The value of LGG’s investment in Innervate is substantially dependent on Innervate’s ability to obtain, maintain, defend, and enforce patent and other intellectual property protection for its product candidates, technologies, and know-how. The patent positions of life sciences companies are highly uncertain and involve complex legal, scientific, and factual questions. Innervate may be unable to obtain meaningful patent protection in relevant jurisdictions, issued patents may be narrowed, invalidated, or held unenforceable, and competitors may develop products that design around Innervate’s patents. Innervate may also be subject to claims that its product candidates infringe third-party intellectual property rights, which could result in injunctive relief, damages, or the need to obtain licenses on commercially unreasonable terms. Any failure to protect or defend Innervate’s intellectual property could materially adversely affect Innervate’s prospects and the value of LGG’s investment.
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Innervate is exposed to product liability and clinical trial liability risks that may not be adequately covered by insurance.
The development, testing, and any commercialization of radiopharmaceutical product candidates involves inherent risk of product liability claims, including claims arising from radiation exposure, adverse events in clinical trials, contamination, off-target effects, manufacturing defects, and the prescribing or administration of approved products. Such claims may result in substantial damages, regulatory action, the suspension or termination of clinical trials, recalls, reputational harm, and significant defense costs. Insurance coverage for clinical trial liability and product liability in the radiopharmaceutical sector may be limited, expensive, or unavailable, and Innervate may not maintain coverage that is adequate to address all potential claims. Any uninsured or underinsured liability could materially impair Innervate’s operations and the value of LGG’s investment.
Innervate is subject to a broad range of healthcare laws and regulations, violations of which could result in significant penalties.
Innervate’s current and future operations may be subject to extensive U.S. federal and state, and analogous foreign, healthcare laws and regulations, including, among others, the federal Anti-Kickback Statute, the federal False Claims Act, the federal Physician Payments Sunshine Act, the Health Insurance Portability and Accountability Act, the Foreign Corrupt Practices Act, and laws governing the marketing and promotion of pharmaceutical products. These laws are subject to evolving interpretation and aggressive enforcement, and even unintentional violations may give rise to substantial civil and criminal penalties, exclusion from federal healthcare programs, corporate integrity obligations, and reputational harm. Any government investigation or enforcement action involving Innervate, even if ultimately resolved without findings of wrongdoing, could materially adversely affect Innervate and the value of LGG’s investment.
The fair value of LGG’s investment in Innervate is inherently uncertain and may be subject to material adjustment.
Innervate is a privately held company with no public trading market for its securities, and the fair value of LGG’s investment will be determined based on management’s estimates and judgments, including assumptions regarding Innervate’s product development progress, capital needs, comparable company valuations, the rights and preferences of Innervate’s various classes of equity, and broader market conditions. These valuation determinations are inherently subjective and may be required to be revised materially as a result of subsequent events, including the results of clinical or preclinical studies, regulatory developments, financing rounds at lower valuations (so-called “down rounds”), changes in market conditions, or new information regarding Innervate. Any downward adjustment in the fair value of LGG’s investment could result in material non-cash charges to our consolidated results of operations.
Future investments by LGG may expose us to additional, and potentially different, life sciences-related risks.
We have stated our expectation that LGG will serve as a platform for additional investments in the healthcare and life sciences sector. Future investments may involve different therapeutic modalities, disease areas, regulatory pathways, geographies, or stages of development than the Innervate investment, and may expose us to risks that we have not previously encountered. Future investments may also involve additional related party considerations, larger capital commitments, the use of leverage, the issuance of equity or debt securities by us or our subsidiaries, or the assumption of contingent liabilities. We may be unable to identify suitable investments, complete acquisitions on acceptable terms, integrate or oversee acquired or portfolio companies, or realize the strategic and financial benefits we anticipate. Any failure to execute on LGG’s investment strategy could materially adversely affect our financial condition, results of operations, and the market price of our common stock.
Our expansion into the life sciences sector, alongside our existing insurance and digital asset businesses, may adversely affect investor perceptions of our strategic focus and capital discipline.
Within a relatively short period, we have announced significant new strategic initiatives, including our digital asset treasury strategy and, through LGG, our expansion into the healthcare and life sciences sector. Investors, analysts, rating agencies, lenders, customers, and regulators may view these initiatives as evidence of strategic drift, lack of focus, or insufficient capital discipline, particularly when undertaken alongside related party arrangements and during a period in which we are addressing Nasdaq listing compliance matters. Negative perceptions could adversely affect our access to capital, the cost of capital, our relationships with counterparties, our ability to attract and retain personnel, and the market price of our common stock, regardless of the underlying performance of any individual business line.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
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Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(a) On March 11, 2026, the Company adopted Amended and Restated Bylaws (the “Amended and Restated Bylaws”). The Amended and Restated Bylaws revise the provision governing the date of the Company’s annual meeting of shareholders to provide that the annual meeting will be held on such date and at such time as determined by the Company’s Board of Directors, rather than on the second Tuesday of April of each year. No other substantive changes were made to the bylaws.
In addition, on March 17, 2026, the Company filed Articles of Restatement of its Articles of Incorporation (the “Articles of Restatement”) with the Secretary of State of the State of Florida. The Articles of Restatement restate the Company’s Articles of Incorporation in their entirety and became effective upon filing.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.
c)
During the quarter ended June 30, 2026, no director or officer
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Item 6. Exhibits
The following exhibits are filed or furnished with this Quarterly Report on Form 10-Q.
*Filed herewith
**Furnished herewith
† Management contract, compensation plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Reliance Global Group, Inc. | ||
| Date: July 30, 2026 | By: | /s/ Ezra Beyman |
| Ezra Beyman | ||
| Chief Executive Officer | ||
| (principal executive officer) | ||
| Date: July 30, 2026 | By: | /s/ Joel Markovits |
| Joel Markovits | ||
| Chief Financial Officer | ||
| (principal financial officer and principal accounting officer) | ||
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