Reliance Global Group Inc

m 1. BUSINESS

About Reliance Global Group, Inc.

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

We operate as a company managing assets in the insurance markets, as well as other related sectors. Our focus is to grow the Company by pursuing an aggressive acquisition strategy, initially and primarily focused upon wholesale and retail insurance agencies as well as advancing in the Insurtech space. We are led and advised by a management team that offers over 100 years of combined business expertise in insurance, real estate and the financial service industry.

In the insurance sector, our management has extensive experience acquiring and managing insurance portfolios in several states, as well as developing specialized programs targeting niche markets. Our primary strategy is to identify specific risk to reward arbitrage opportunities and develop these on a national platform, thereby increasing revenues and returns, and then identify and acquire undervalued wholesale and retail insurance agencies with operations in growing or underserved segments, expand and optimize their operations, and achieve asset value appreciation while generating interim cash flows.

As part of our growth and acquisition strategy, we remain active in M&A markets and anticipate completing insurance agency/brokerage transactions throughout the course of 2025 and beyond. As of December 31, 2024, we have acquired nine insurance agencies and continue to migrate into our single brand name, RELI Exchange.

Recent Developments

Spetner Stock Exchange Agreement

On May 14, 2024, and as amended and restated on September 6, 2024, the Company entered into a Stock Exchange Agreement (the “Stock Exchange Agreement”) to acquire Spetner Associates, Inc. (“Spetner”). Spetner is a dynamic tech enabled benefits enrollment company and a leader in its field.

Pursuant to the Stock Exchange Agreement, the Company agreed to: (i) acquire 80% of the issued and outstanding shares of common stock, par value $1.00 per share, of Spetner for $13,714,286 (which amount is to be paid as $5,500,000 in cash, shares of the Company’s common stock equal to a beneficial ownership of 9.9% in the Company at the time of issuance, and any remaining balance is to be paid by the Company’s issuance of promissory notes); and (ii) have the sole option to acquire the remaining 20% of Spetner common stock for a predetermined amount based on a multiple of 10 of EBITDA. On October 29, 2024, the Company entered into Amendment No. 1 (“Amendment No. 1”) to the Stock Exchange Agreement. Pursuant to Amendment No. 1, the Company issued to the sellers of Spetner, 140,064 shares of the Company’s common stock, as a non-refundable deposit and a prepayment of a portion of the First Purchase Price (as defined in the Stock Exchange Agreement), in the approximate amount of $329,431.

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

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

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

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

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

The Company expects to leverage synergies Spetner will provide for its other subsidiaries by means of integration and harnessing cross selling opportunities.

Bylaws Amendment

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

Increase in Authorized Shares

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

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

Further, fiscal year 2024 continued to provide sustained organic growth in our current portfolio of owned insurance agencies and also marked significant advancements in our proprietary InsurTech capabilities, further enhancing our abilities to support agents and clients alike.

Technological Innovation and Market Leadership

In 2021 we developed and launched 5MinuteInsure.com (5MI), a proprietary direct-to-consumer InsurTech platform that enables consumers to compare and purchase car and home insurance in a time-efficient and effective manner. Currently live in 44 states, 5MI offers coverage with more than thirty carriers. 5MI was the percussor of the RELI Exchange platform and with advancements such as the Client Referral Portal and the Advanced Quote & Bind Solution, RELI Exchange now combines the low barriers to entry of an agency network with state-of-the-art technology. By leveraging artificial intelligence (“AI”) and data mining, our platforms provide instant and competitive insurance quotes from more than 30 insurance carriers nationwide while reducing administrative burdens for agents.

Our competitive advantage includes:

Looking Ahead

With these developments, the Company continues to redefine the insurance landscape. Our One-Firm approach unites owned and operated agencies into a single cohesive unit, allowing for efficient cross-collaboration, market expansion, and improved carrier relationships. As we move into 2025, we remain dedicated to scaling our operations, pursuing strategic acquisitions, and expanding our suite of InsurTech solutions to meet the evolving needs of agents, carriers, and clients. We anticipate continuing our focus on enhancing digital capabilities while leveraging our strong industry presence to expand our market share and operational footprint.

The RELI Exchange Business to Business (“B2B”) InsurTech platform and partner network for insurance agents and agencies also:

In addition, we have a vast mentorship program behind the scenes, to upskill our sales teams. Once people are registered, we enroll them in our mentorship program, and coach them to bring new business.

RELI Exchange is a complete, private label system where agents have more flexibility in how they choose to brand themselves, compared to competitor platforms that require agents to work under the platform’s brand name. We believe agents have a greater sense of ownership on our platform, and the feeling that comes with a well-financed agency.

Insurance Agency Industry Overview

There are three main insurance sectors: (1) property/casualty (P/C), which consists mainly of auto, home, and commercial insurance; (2) life/health (L/H), which consists mainly of life insurance and annuity products; and (3) accident and health, which is normally written by insurers whose main business is health insurance. The insurance industry plays a huge role in the U.S. economy (Source: OECD Insurance Statistics).

Insurance agencies act as intermediaries between insurance carriers and consumers. Unlike carriers, agencies do not bear insurance risk.

An insurance agency or broker solicits, writes, and binds policies through many different insurance companies, as they are not directly employed by any insurance carrier. Thus, insurance agencies can decide which insurance carriers they would like to represent and which products they would like to sell. They are like a retail shop that sells insurance services and products created by the insurance carrier. The main difference between a broker and an agent has to do with who they represent. An agent represents one or more insurance companies, acting as an extension of the insurer. A broker represents the insurance buyer.

An insurance carrier, on the other hand, is a manufacturer of insurance services and products that the insurance agencies sell. They control the underwriting process, claims process, pricing, and the overall management of the insurance products. Insurance carriers do not sell their products through direct agents, but only through independent agencies. Insurance policies are created and administered by the insurance carrier.

A key operating difference between agencies and carriers is the risk profile. The potential financial risks to the insurance industry caused by unforeseen events such as natural disasters are the responsibility of the carriers (and their re-insurers). Agencies and brokers bear no insurance risk. This risk difference is key, especially considering volatile weather patterns and an increased rate of natural disasters.

The global InsurTech market size was valued at $17.08 billion in 2024 and is expected to grow to $82.3 billion by 2029, at a compound annual growth rate of 38.9% (Insurtech Global Market Report 2025). The increasing need for digitization of insurance services is expected to propel the market growth. Insurtech is the usage of technology innovations particularly designed to make the existing insurance model more efficient. By using technologies such as AI and data analytics, InsurTech solutions allow products to be priced more competitively. Insurance companies are widely adopting these solutions to drive cheaper, better, and faster operational results. Hence, the insurance industry is witnessing increased investment in technology. The outbreak of COVID-19 had a positive impact on the market. Numerous insurance companies are reconsidering their long-term strategies and short-term needs. COVID-19 and its impacts have accelerated the implementation of online platforms and new mobile applications to meet consumer needs. (Sources: Grand View Research, Insurtech Market Size, Share & Growth Report, 2021-2028 and 2022 - 2030).

The Company therefore has strategically invested in its RELI Exchange and 5MI online digital platforms as additional steps in expanding its national footprint which now also includes a client referral portal. As discussed above, RELI Exchange and 5MI are high-tech proprietary tools developed by the Company as business to business or business to consumer portals which enables agents/consumers to compare and purchase car home and life insurance in a time efficient and effective manner. These platforms tap into the growing number of online users and utilize advanced AI and data mining techniques, to provide competitive insurance quotes in approximately 1-5 minutes, with minimal data input needed from the agent/consumer.

General Industry Outlook

Insurance brokers and agencies play a critical role within the insurance market by distributing policies and consulting insurance underwriters and consumers. This industry is a vital component to the larger insurance sector as industry operators act as intermediaries between insurance providers and downstream consumers. Operators generate income via commissions earned on policies sold. Given the transaction-based nature of the industry, revenue primarily depends on three factors: (1) policy (premium) pricing; (2) demand for insurance; and (3) the popularity of using agents and brokers in the distribution process.

Some of the issues that insurers must address will fall within the areas of mergers and acquisitions (M&A), technology, product development, talent, as well as tax reform, as described below.

Insurance Options

Single-carrier platforms limit buyers’ choices and often lead to high costs or insufficient coverage. We’ve partnered with an extensive list of carriers and filter results for buyers according to their needs. This gets them the right coverage at a fair price. From there, they’re connected to an agent who onboards them with minimal friction.

Insurance Buyers

Insurance buyers want coverage that fits their needs at a fair price. They also want good customer service. We believe the independent insurance agents, combined with the RELI Exchange platform can serve these needs best. Our platform makes it easy to weigh the options and connect with a knowledgeable agent with the buyer’s interests in mind.

Expert Agents

We train our agents to evaluate coverages based on buyers’ needs, and to explain options in simple terms. Furthermore, service doesn’t stop there. People’s needs change during different life events, and we facilitate adjustments to their coverage when it matters most.

Agents can revolutionize their insurance businesses—or start a new one on RELI Exchange. They have the freedom to offer coverage from a variety of carriers, utilizing our cutting-edge technology and proven sales system. This is particularly beneficial to captive insurance agents who previously found themselves limited to one carrier and pricing model. By offering more choices, agents now have more chances of closing business with interested buyers. By partnering with us, agents gain access to a variety of carriers, yet are able to streamline their workflows to focus on business development with support from our team and lower marketing costs.

Top Carriers

Insurance carriers want to maximize profits without detracting from the customer experience. The challenge is that it’s costly to distribute coverage through independent agents with varying levels of expertise. Some carriers choose the Captive Agent route to save on cost, but RELI Exchange offers a better alternative. We reduce overhead and scale distribution for carriers while maintaining good standards with our technology and back office support team.

The performance improvements and lower costs lead to higher customer retention and a better customer experience, which translates to a higher customer lifetime value and more profits for the carrier and the agent.

Leadership Team

Our leadership team has over 100 years of combined industry experience.

Information About our Executive Officers

*Ezra Beyman.*Mr. Beyman, age 70, has served as the Chairman of our Board and our Chief Executive Officer since 2018. Mr. Beyman is the central force leading the success and growth of Reliance Global Group, Inc. Drawing on his nearly three decades of entrepreneurial experience in real estate and over ten years in insurance, he has set his vision and acuity on one integrated goal: integrity and success. At one point in time Mr. Beyman’s portfolio of commercial and residential properties comprised of approximately 40,000 units, as well as several insurance agencies. In 1985, he founded a small mortgage brokerage, together with his wife, which he operated in his basement. From there, his company rapidly grew into a dynamic force on the market. By 2008, he owned the third largest licensed mortgage brokerage in the U.S., having acquired numerous mortgage companies in the interim. He also expanded to real estate acquisition, having grown his portfolio to over three billion dollars. In expanding his investments, Mr. Beyman began exploring opportunities in other markets, acquiring several insurance agencies in both Florida and New Jersey. His ventures included entering the domains of warrantee and insurance carriers. Raised in the New York metropolitan area, Mr. Beyman spent his secondary and post-secondary school years at Mesivta Tifereth Yerushalayim, where he advanced his analytic abilities while mastering various areas of Talmudic studies, earning a position as one of the closest students of the Dean. He earned his First Talmudic degree in 1975.

Joel Markovits. Mr. Markovits, age 44, has served as our Chief Financial Officer since January 1, 2023. He joined Reliance in June 2021 as our Financial Reporting Manager, acting in this role through January 31, 2022. As of February 1, 2022, Mr. Markovits served in the capacity of Chief Accounting Officer through December 31, 2022 when he began his role as Chief Financial Officer. Prior to joining Reliance, Mr. Markovits was a senior manager at KPMG LLP from April 2015 to May 2021, where he led some of the larger and more complex audit engagements, including serving as lead audit senior manager on a global $16 billion (annual revenues) enterprise reporting on both U.S. GAAP and IFRS standards. He was also a data and analytics specialist and technology innovation leader at KPMG LLP for its largest U.S. business unit, overseeing the development and deployment of technological capabilities that enhanced data analyses. Mr. Markovits has been a Certified Public Accountant in the State of New Jersey since November 2013.

Yaakov Beyman. Mr. Beyman, age 42, joined Reliance in July 2018. Prior to joining the Company, from December 2012 to July 2018, he was Executive VP of Insurance Division, of Empire Insurance Holdings. Mr. Beyman oversees our overall insurance operations, including strategy and developing/implementing operational tools. He holds insurance licenses in most of the continental U.S., and is involved heavily in marketing, maintaining state of the art technological models, financial management and distributions, and entity creation and maintenance.

Information About Other Key Employees

Grant Barra. Mr. Barra, age 43, has served as our Senior Vice President since April 2022, and has brought significant experience in the insurance industry. In 2008, he founded Barra & Associates in 2008, which quickly grew to become a recognized provider of both personal and commercial insurance products, including property and casualty, life, health and other insurance products. Mr. Barra served as Barra & Associates’ CEO until it was acquired by Reliance in 2022 and subsequently rebranded as RELI Exchange. Mr. Barra also previously served in a leadership role for a single life carrier, where he focused on recruitment, development, and motivating independent agents to sell life insurance products. Earlier in his career, he founded Grant Barra Agency, providing all lines of insurance policies under a captive agency agreement. Mr. Barra received a Bachelor of Science in Business Administration from DeVry University, in addition to earning a certificate in contract law with Harvard University (HarvardX). He is a Chartered Leadership Fellow and a member of the Life Underwriting Training Council at The American College of Financial Services.

Moshe Fishman. Mr. Fishman, age 34, brings a unique perspective to the insurance sales process. Prior to joining Reliance, Moshe founded Tekeno Travel in 2010, a luxury travel concierge company. In 2014, Moshe launched Fishman Insurance Agency with a strong focus on property and casualty insurance. In 2017 Mr. Fishman formed Tekeno Financial which had an exclusive focus on alternative investment vehicles with a strong understanding of particular life insurance structures. In early 2021, Mr. Fishman joined Reliance and is one of the driving talents of the RELI Exchange and 5MI platforms.

Agency Partner Network and Proprietary InsurTech Platform at ReliExchange.com

Our go-to-market strategy

Our go-to-market high level goals include:

Target #1: Captive

Target #2: Agency Producers/CSRs

Target #3: New Agency Startups

Promotion

To meet our agency registration objectives, we have engaged in both inbound and outbound marketing. Outbound sales and marketing includes outreach on social media through posts and direct messages using tools on LinkedIn and other platforms, phone, email, and other methods of communication. Inbound marketing is primarily through driving traffic to our website through search engines, social media, and digital publicity campaigns. These combined tactics give us a constant influx of marketing qualified leads (MQL) and sales qualified leads (SQL) to predictably hit our target metrics each month.

Email Marketing

As we continue to build our database of customers and prospects, we will implement an effective email marketing campaign. This includes newsletters as well as content flows that drip out over time to keep people engaged. This content is pre-programmed to automatically fire at set intervals whenever someone registers for a list. Through automation, we continue to build rapport with people who eventually sign up for the service.

Public Relations

The digital marketing tactics that we use have the following benefits:

Social Media

Using platforms like LinkedIn, Facebook, and X (formerly Twitter), we post regular content with the aim of growing our visibility and credibility through social media storytelling. Our goal is to maintain a consistent brand story for customers, prospects, stakeholders, and industry experts. Tactics include:

Podcasts

We have appeared on several podcasts as subject matter experts, and will continue with outreach to increase exposure, visibility, brand awareness, and sales.

Website Search Engine Optimization (“SEO”)

Our goal is to improve the website to drive more organic traffic through Google and other search engines. The two primary objectives are to create engaging content, and to improve the technical SEO of our website.

SEO growth opportunities include:

Products

Our best-in-class product offerings include the following:

Our value proposition is that we provide people a complete, white label business. Agents have a fast and easy website presence, get contracts with carriers they would not normally access, and can get paid for referrals.

Price

Costs are very low. Access is approximately $90/month for agents, and $190/month for agency partners. This is a singular solution that provides an all-in-one insurance agency.

For comparison, people used to pay approximately $50,000 to build out an insurance agency. Additionally, licensing can be approximately $750, with $100-200 in monthly expenditures. RELI Exchange removes these costly barriers to entry through technology.

With the RELI Exchange platform, our vision is to remove all barriers and activate contracted agents at scale. Being cost-efficient for these agencies is key to our success. Unlike the franchise model, RELI Exchange is designed with low barriers to entry and a compelling value proposition. In addition, RELI Exchange significantly enhances competitive advantages through provided agency partners.

People (Target Audience)

We have identified several highly receptive target audiences, including:

The RELI Exchange Platform

The RELI Exchange platform is a revolutionary way to get insurance quotes without requiring users to undergo a complicated process of manually completing lengthy forms. With basic contact information, our proprietary tool can generate accurate home auto and life insurance quotes from credible providers in under 5 minutes, for free. Then, our platform connects each user with a fully trained and knowledgeable agent who guides them through the rest of the process to deliver the best coverage at the best price.

RELI Exchange is at the forefront of the digital transformation of the insurance industry. Our platform leverages unique technology, a proprietary database, and expert methodologies from experienced insurance agents to deliver a quality experience to agents and people looking to get insured.

In addition to providing customers with a great experience, RELI Exchange automates many processes for agents to free up their time to sell to new customers. The result is higher profitability with less work. Most importantly, mentorship is part of the RELI Exchange model, so that agents always receive the support they need to be successful.

System for Agent and Agency Partner Success

RELI Exchange agents have a distinct advantage over their captive counterparts when it comes to serving clients. They have access to multiple carriers in their markets, to provide more choices and solutions that fit their customers’ needs. Additionally, our automations and back-office support eliminate time spent on service requests and renewals, so agents can focus on sales growth.

We spent years developing our proprietary sales processes, backed up by an engaging mentorship program to maximize agent success. We provide every agent with comprehensive training, product and carrier knowledge, and cutting-edge technology. Plus, our back-office support team is readily available to train and assist agents at every step.

We actively recruit agents who are passionate about owning their own business and have a proven track record in business development. Our revenues are tied directly to their success, creating an environment that delivers consistent results.

Agents benefit from low startup costs and minimal overhead—no employees or physical location is required. In contrast, captive agents are often burdened with immediate hiring requirements, storefront leases, and advertising budgets. Moreover, our software platform delivers economies of scale so that fixed and variable costs are reduced for greater profitability.

Online Insurance and 5MI

In August 2021, we launched 5MI, which is a licensed online insurance agency that utilizes state of the art digital technology and seek to use this platform to develop business in the online insurance business which we believe represents an underutilized opportunity.

While 90% of customers are open to purchasing insurance online, 75% of the people who attempt to make online purchases report problems (Source: J.D. Power,Direct-to-Consumer Auto Insurers Take Top Honors in Shopping Study as New Normal Arrives for P&C Industry, J.D. Power Finds; Invoca, 41 Insurance Marketing Statistics You Need to Know in 2024). Moreover, the current insurance purchasing processes is time consuming and lacks transparency. We believe consumers are looking for an online platform that will replicate the services they could obtain from a traditional brick and mortar insurance agency, thus driving business toward the online site as we all migrate to online.

Another key benefit to our online insurance platform is the ability to combine seamlessly with electronic capabilities in processing, such as 5MI’s proprietary backend processing technology to support our traditional agency business. The 5MI technology is used internally through our RELI Exchange markets to offer more products to our existing client base. By implementing AI, robotic process automation and automatic shopping for best rates at renewals, we believe we can dramatically reduce costs, and allow our agents to focus on selling new policies, creating a digitally empowered and scalable insurance agency model.

Specific benefits of the 5MI platform include:

Thus, we believe in the specific benefits of the online insurance business, and we believe that 5MI provides the platform to transform this segment of the industry.

Business Operations (OneFirm and RELI Exchange)

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

Insurance M&A Overview

M&A deal volume in the insurance agency market remains robust with $281 billion in deals during 2024 (Deloitte).

Reliance Insurance Agency Brand Acquisitions:

Acquisition History

Insurance Agency Acquisition Strategy

Digitizing Bricks & Mortar Agencies

Employees

As of December 31, 2024, we employed 64 employees across all Company subsidiaries.

We believe that a diverse workforce is important to our success. We will continue to focus on the hiring, retention, and advancement of underrepresented populations, and to cultivate an inclusive and diverse corporate culture. In the future, we intend to continue to evaluate our use of human capital measures or objectives in managing our business such as the factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in our workforce.

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

We also provide robust compensation and benefits programs to help meet the needs of our employees. We believe that we maintain a satisfactory working relationship with our employees and have not experienced any labor disputes.

Competition

The insurance brokerage business is highly competitive, and numerous firms actively compete with us for customers and insurance markets. Competition is largely based upon innovation, knowledge, terms and conditions of coverage, quality of service and price. We believe that we’re well positioned to be highly competitive and continuously gain market share. Additionally, our focus on InsurTech is a game-changer in the industry and helps us stand-out versus. the competition.

Insurance agency M&A is a highly competitive industry, as well. Competition is due to many well-established companies having extensive experience in identifying and effecting business combinations who possess great technical, human, and financial resources. Several firms and banks with substantially greater resources and market presence compete with us. While we believe that there are numerous potential target businesses that we could acquire, our ability to compete in acquiring certain sizable target businesses might be limited.

Government Regulation

The business practices and compensation arrangements of the insurance intermediary industry, including our practices and arrangements, are regulated by various governmental authorities. Certain of our offices are parties to profit-sharing contingent commission agreements with certain insurance companies, including agreements providing for potential payment of revenue-sharing commissions by insurance companies based primarily on the overall profitability of the aggregate business written with those insurance companies and/or additional factors such as retention ratios and the overall volume of business that an office or offices place with those insurance companies. The legislatures of various states may adopt new laws addressing contingent commission arrangements, including laws prohibiting such arrangements, and addressing disclosure of such arrangements to insureds.

We and our employees must be licensed to act as brokers, intermediaries, or third-party administrators by state regulatory authorities in the locations in which we conduct business. Regulations and licensing laws vary by individual state and are often complex. The applicable licensing laws and regulations in all states are subject to amendment or reinterpretation by regulatory authorities, and such authorities are vested in most cases with relatively broad discretion as to the granting, revocation, suspension, and renewal of licenses. We believe that we are in compliance with the applicable licensing laws and regulations of all states in which we currently operate. However, the possibility still exists that we or our employees could be excluded or temporarily suspended from carrying on some or all of our activities in, or could otherwise be subjected to penalties by, a particular jurisdiction.

Nearly all states have insurance laws requiring personal property and casualty insurers to file rating plans, policy or coverage forms, and other information with the state’s regulatory authority. In many cases, such rating plans, policy, or coverage forms, must be approved prior to use and the regulator has the authority to disapprove a rate filing. While we are not an insurer, and thus not required to comply with state laws and regulations regarding insurance rates, our commissions are derived from a percentage of the premium rates set by insurers in conjunction with state law.

Stock Splits

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

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

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