Executive Summary / Key Takeaways

• Reliance Global Group (RELIW) is executing a strategy to transform the traditional insurance brokerage model through aggressive acquisitions and proprietary Insurtech platforms, aiming for scalable, profitable growth.
• The company demonstrated significant financial improvement in Q1 2025, narrowing its net loss by 68% and achieving positive Adjusted EBITDA of $145,407, building on momentum from 2024 driven by organic growth, cost efficiencies from its "OneFirm" strategy, and the absence of prior-year impairment charges.
• The pending acquisition of Spetner Associates is a potential game-changer, expected to nearly double consolidated revenues to approximately $28 million and significantly boost EBITDA, creating substantial cross-selling opportunities across a large employee base.
• RELIW's proprietary AI-powered technology, including the RELI Exchange B2B platform and new Relay Auto Leasing service, provides tangible operational benefits like faster quoting and processing, positioning the company for differentiation in competitive niches despite facing larger, more financially robust competitors.
• While facing challenges inherent in a competitive market and managing liquidity with negative working capital, management is confident in its ability to execute its growth strategy, leverage non-dilutive financing sources (including a new real estate division post-Spetner), and continue the trend towards sustained profitability.

The Blueprint: Acquisitions, Technology, and the "OneFirm" Vision

Reliance Global Group, Inc. (RELIW) operates in the dynamic and highly competitive insurance market, carving out a niche through a dual-pronged strategy: aggressive acquisition of established insurance agencies and the development of proprietary Insurtech solutions. Founded in 2013, the company embarked on a journey to consolidate fragmented parts of the market, acquiring nine agencies across various states and lines of business, including health, Medicare, personal, and commercial insurance, as well as specialized areas like trucking and employee benefits. This history of inorganic growth laid the groundwork for its current operational structure and strategic focus.

Central to RELIW's operational evolution is its "OneFirm" strategy, designed to unify its geographically dispersed agencies into a cohesive unit. This initiative aims to enhance efficiency, optimize human capital, consolidate vendor relationships, and foster cross-selling opportunities across the entire network. Management credits this approach with contributing to streamlined expenses and improved operating results.

The company operates within a fiercely competitive landscape. It faces direct competition from large, established insurance brokerage firms like Arthur J. Gallagher & Co. (AJG), Marsh & McLennan Companies, Inc. (MMC), and Aon plc (AON). These industry giants possess significant scale, global reach, deep relationships with carriers, and substantial financial resources, allowing them to achieve higher operating margins and greater financial stability compared to RELIW. For instance, while RELIW's TTM operating margin stands at -28.65%, AJG, MMC, and AON report operating margins well over 20%. Similarly, RELIW's TTM Debt/Equity ratio is significantly higher at 4.94 compared to its larger peers.

Beyond traditional brokers, RELIW also competes with direct-to-consumer Insurtech companies that leverage technology to bypass intermediaries. These players can offer lower premiums through streamlined digital processes, posing a threat, particularly in retail segments.

In response to this competitive environment, RELIW is strategically positioning itself as a tech-enabled acquirer focused on underserved and growing niches. Its technological differentiation is a key component of this strategy. The company has developed a proprietary AI and data mining backbone, initially powering its B2C platform, 5MinuteInsure.com (5MI). This technology enables consumers to get quick quotes (around 5 minutes) from multiple carriers (up to 30) with minimal data input, operating in 46 states.

Building on this foundation, RELIW launched RELI Exchange, its B2B Insurtech platform and agency partner network. RELI Exchange provides agency partners with a white-labeled platform that leverages the same AI/data mining capabilities to deliver rapid quotes from multiple carriers. This platform has seen its agent roster increase by over 300. Management highlights that this technology combines the best of digital and human capabilities, streamlining workflows for agents and speeding up the policy issuance process. While specific, comprehensive quantitative metrics comparing the efficiency gains directly against competitors across all segments are not publicly detailed, management commentary suggests the AI tools enable faster processing speeds and contribute to operational efficiencies. The strategic intent is clear: use technology to empower agents, enhance the customer experience, and create a more competitive offering, particularly for independent agencies.

Strategic Initiatives Driving Future Growth

RELIW's forward trajectory is heavily reliant on executing several key strategic initiatives, building upon its foundational acquisition and technology strategies.

The most significant near-term catalyst is the anticipated acquisition of Spetner Associates. Described by management as transformative and nearing completion, Spetner is a benefits enrollment company with a large base of over 85,000 covered employees and deep experience in personal and commercial lines. The strategic rationale is compelling: Spetner is expected to significantly expand RELIW's market footprint, enhance its agency network, and add substantial scale. Crucially, it is projected to create immediate and significant cross-selling opportunities, particularly by offering RELI Exchange's Quote and Buy and the new Relay Auto Leasing services to Spetner's extensive employee base. Management projects this acquisition will nearly double consolidated annual revenues to approximately $28 million and significantly boost EBITDA, citing Spetner's healthy EBITDA margin (around 40% or north). The successful integration of Spetner is paramount to achieving RELIW's stated growth and profitability targets.

Further enhancing the RELI Exchange platform, the company recently launched Relay Auto Leasing. This new service, integrated into the agent dashboard, allows agency partners to offer vehicle leasing nationwide. Agents earn commissions on both the lease and the bundled insurance policy, creating a powerful recurring revenue stream and deepening client relationships. Early feedback is reported as outstanding, and this service is seen as a key differentiator for RELI Exchange. Additionally, an AI-powered commercial quote and buying solution was launched on RELI Exchange in Q3 2024, designed to accelerate the quoting process for commercial policies, empowering agents and increasing commission potential.

Looking beyond the insurance sector, RELIW announced plans in early July 2024 to launch a new division focused on acquiring multifamily and commercial real estate properties. This initiative, planned to commence after the Spetner acquisition closes, aims to diversify the company's portfolio and leverage management's prior experience in this sector. The strategic intent is to acquire undervalued assets and utilize non-dilutive financing sources supported by the intrinsic value of the real estate and operational cash flows.

These strategic moves – the Spetner acquisition, the expansion of the RELI Exchange platform with new services like Relay Auto Leasing and commercial quoting, and the planned real estate diversification – collectively represent RELIW's blueprint for achieving scalable growth and moving towards its long-term goal of becoming a multi-billion dollar, highly profitable enterprise.

Financial Performance: A Trend Towards Improvement

RELIW's recent financial results indicate a positive trend, particularly in profitability metrics, building momentum from 2024 into the first quarter of 2025.

For the three months ended March 31, 2025, total revenue (commission income) increased by 4% to $4.24 million, up from $4.08 million in the same period of 2024. This growth was attributed primarily to sustained organic growth across the company's insurance distribution channels.

Operating expenses saw notable shifts. Commission expense increased by 15% to $1.47 million, correlated with the rise in revenues and higher payouts to agents. Salaries and wages increased by 22% to $2.23 million, primarily due to non-cash equity awards ($540,000), though cash salaries and wages reportedly decreased quarter-over-quarter due to OneFirm efficiencies. General and administrative expenses increased by 10% to $1.52 million, also influenced by non-cash equity awards ($485,000), but management highlighted disciplined cost controls and OneFirm success offsetting cash increases. Marketing and advertising expenses decreased significantly by 47% to $67,275, consistent with the company's strategy. Depreciation and amortization decreased by 32% to $360,595.

A key factor in the improved bottom line was the absence of asset impairment charges in Q1 2025, compared to $3.92 million in Q1 2024. This, combined with the operational adjustments, led to a substantial 68% reduction in the net loss, from $5.35 million in Q1 2024 to $1.74 million in Q1 2025.

Perhaps most significantly for investors, the company achieved positive Adjusted EBITDA of $145,407 in Q1 2025, a marked improvement from a loss of $73,654 in Q1 2024. This 300% improvement in this key non-GAAP metric is highlighted by management as a continuation of the trend towards sustained and increased profitability, reflecting the impact of OneFirm efficiencies, disciplined fiscal management, and cost controls.

Looking at the full year 2024, revenues increased by 2% to $14.05 million. Total operating expenses decreased by 21%, leading to a 45% improvement in the loss from operations and a 24% decrease in the net loss ($9.07 million vs $12.01 million in 2023). Adjusted EBITDA for 2024 also improved by 39%, moving from a loss of $0.5 million to a loss of $0.3 million, demonstrating the positive impact of the OneFirm strategy and organic growth.

From a liquidity perspective, as of March 31, 2025, RELIW had cash and restricted cash of approximately $1.81 million and negative working capital of approximately $77,000. While this indicates a tight current financial position, management asserts its financial position and ability to raise capital are reasonable and sufficient, not raising substantial doubt about the company's ability to continue as a going concern within the next year.

The Americana Credit Agreement, providing a revolving facility of up to $600,000 at a low 0.10% interest rate, offers a source of working capital. Cash flow from operations improved significantly, moving from a net use of $204,000 in Q1 2024 to a net provide of $198,000 in Q1 2025. Investing activities used $15,000, primarily for asset purchases, while financing activities used $169,000, reflecting debt repayments offset by related party loan proceeds.

The company also simplified its capital structure in July 2024 by exercising outstanding Series B and Series G warrants, which management believes eliminated a perceived overhang on the stock and enhances the capital table for current and future investors.

Competitive Dynamics and Strategic Positioning

RELIW operates in a market where scale, technology, and relationships are critical. Compared to the large global brokers like AJG, MMC, and AON, RELIW is a much smaller player with a significantly lower market share (<1% estimated in the U.S.). These larger competitors benefit from economies of scale, allowing for higher operating margins and greater pricing power. Their established brands and extensive global networks provide a significant competitive moat.

However, RELIW aims to compete by leveraging its agility and technology in specific ways. Its AI-powered platforms, 5MI and RELI Exchange, are designed to offer efficiency and ease of use, particularly for independent agents. The ability to provide quick quotes from multiple carriers and streamline workflows through automation is a direct challenge to potentially slower, more complex systems used by larger, legacy players. While specific, comprehensive quantitative metrics comparing the precise impact of RELIW's tech versus competitors' are not fully detailed, management's emphasis on 5-minute quotes, increased agent roster, and new services like Relay Auto Leasing suggests a focus on speed, convenience, and value-add for agents and customers in specific niches. The stated goal for RELI Exchange to be the "most competitive and insurance-friendly insurtech solution" underscores this ambition.

RELIW's acquisition strategy also differentiates it. By targeting undervalued agencies in growing or underserved segments (like trucking or voluntary benefits via Spetner), the company seeks to achieve higher ROI (targeting 15-20%) and build market share in areas where larger brokers might be less focused or less efficient. The planned Spetner acquisition, specifically, is expected to provide immediate access to a large employee base for cross-selling, a direct way to leverage existing relationships against competitors who might lack such specific access points.

Despite these advantages, RELIW faces vulnerabilities. Its smaller scale results in higher operating costs per unit compared to larger, more efficient competitors. Its financial metrics, including lower margins and higher debt levels, make it more susceptible to economic downturns and less able to absorb shocks or fund large-scale initiatives without external financing compared to its cash-rich peers. Dependence on key customers (any single customer over 10% of revenue poses a risk) and relationships with insurance carriers are also factors that could impact its standing.

The entry of direct-to-consumer Insurtechs, while not directly competing for the same agency partners as RELI Exchange, represents a broader market shift towards digital channels that could pressure traditional brokerage models, including RELIW's retail operations.

Overall, RELIW's competitive positioning is that of a growth-oriented, tech-enabled niche player. It seeks to exploit opportunities through targeted acquisitions and technological innovation, particularly in the B2B space with RELI Exchange. Its success hinges on its ability to effectively integrate acquisitions like Spetner, scale its technology platforms to achieve greater efficiencies, and manage its financial resources prudently to sustain its growth trajectory against larger, more financially stable competitors and disruptive Insurtech models.

Outlook and Risks

Management expresses confidence in RELIW's trajectory towards scalable long-term growth and increased profitability, citing the momentum from Q1 2025 and the strategic initiatives underway. The anticipated closing of the Spetner acquisition is a central pillar of this outlook, with explicit projections of nearly doubling consolidated annual revenues to approximately $28 million and significantly boosting EBITDA. Management expects EBITDA to continue improving as the company progresses through 2025, particularly post-Spetner integration. The long-term mission remains to build a multi-billion dollar, highly profitable enterprise.

The assumptions underlying this positive outlook include the successful and timely closing and integration of the Spetner acquisition, the effective realization of cross-selling synergies, continued organic growth driven by the OneFirm strategy and technology platforms, and disciplined cost management. The planned real estate division is also expected to contribute to long-term value creation and provide access to non-dilutive financing.

However, this outlook is subject to several risks. The successful integration of acquired businesses, including Spetner, is complex and involves potential challenges in combining operations, cultures, and technologies. Failure to realize expected synergies could impact financial performance. The highly competitive nature of the insurance market means pricing pressure and the need for continuous investment in technology and talent. Competition from large brokers with greater resources and direct-to-consumer Insurtechs could limit market share gains or pressure margins. Dependence on key customer relationships and insurance carriers is a potential vulnerability. While management is confident in its liquidity, negative working capital and reliance on external financing (including related party loans like the Americana facility) pose risks if capital markets tighten or operational performance falters. Inflation could also impact operating expenses. Finally, litigation is a common risk in the industry.

These risks highlight the execution challenge facing RELIW. While the strategic vision and recent financial improvements are encouraging, realizing the full potential of the Spetner acquisition and technology investments requires diligent execution and navigating external market pressures.

Conclusion

Reliance Global Group (RELIW) is actively pursuing a transformative strategy within the competitive insurance brokerage sector, leveraging a history of acquisitions and a growing suite of proprietary Insurtech tools. The company's recent financial performance, particularly the significant reduction in net loss and achievement of positive Adjusted EBITDA in Q1 2025, signals positive momentum driven by operational efficiencies and organic growth.

The impending acquisition of Spetner Associates stands as a pivotal moment, poised to substantially increase scale, revenue, and profitability while unlocking significant cross-selling potential. Coupled with the ongoing development of the RELI Exchange platform and new services like Relay Auto Leasing, RELIW is building a tech-enabled model designed to differentiate itself and empower independent agents. While the company faces formidable competition from larger, more financially stable players and disruptive Insurtech models, its focus on targeted acquisitions and technological innovation in specific niches provides a pathway for growth. The successful integration of Spetner, continued operational execution, and prudent financial management will be critical determinants of RELIW's ability to sustain its positive trajectory and realize its ambitious long-term goals in this dynamic market.