Reliance Global Group, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30,2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number:001-40020

RELIANCE GLOBAL GROUP, INC.

(Exact name of registrant as specified in its charter)

300 Blvd. of the Americas, Suite 105 Lakewood, NJ 08701

(Address of principal executive offices) (Zip Code)

732-380-4600

(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:

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.

Yes ☒ No ☐

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).

Yes ☒ No ☐

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.

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, 2025, the registrant had 4,346,054 shares of common stock, par value $0.086 per share, outstanding.

TABLE OF CONTENTS

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Stockholders’ Equity

Reliance Global Group, Inc. and Subsidiaries and Predecessor

Condensed Consolidated Statements of Cash Flows

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, 2024 (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 subsidiaries. All intercompany transactions and balances have been eliminated in consolidation Current and long-lived assets and liabilities forming the Fortman disposal group, have been reclassified and separately presented on the June 30, 2025, condensed consolidated balance sheet, as current assets held for sale and current liabilities related to assets held for sale. See Note 10 - Assets and related liabilities held for sale.

Liquidity

As of June 30, 2025, the Company’s reported cash and restricted cash aggregated balance was approximately $3,375,000, current assets were approximately $7,110,000 and current liabilities were approximately $5,021,000. As of June 30, 2025, the Company had working capital of approximately $2,089,000 and stockholders’ equity of approximately $3,082,000. For the six months ended June 30, 2025, the Company had a loss from operations of approximately $3,779,000, and net loss of approximately $4,448,000.

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) reported on our condensed consolidated balance sheets are reconciled to the total shown on our unaudited condensed consolidated statements of cash flows as follows:

Revenue Recognition

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

The following are customers representing 10% or more of total revenue:

No other single customer accounted for more than 10% of the Company’s commission revenues during the three and six months ended June 30, 2025 and 2024. The loss of any significant customer could have a material adverse effect on the Company.

Income Taxes

The Company recordedno income tax expense for the three and six months ended June 30, 2025 and 2024 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyses various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

As of June 30, 2025 and December 31, 2024, 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.

Deferred Financing Costs

The Company defers specific incremental costs directly attributable to a proposed equity offering of securities and charges them against the gross equity proceeds of the offering once consummated. Similarly, the Company capitalizes costs directly associated with a proposed debt financing arrangement to later be presented as a direct deduction to the carrying amount of the related debt liability once consummated and henceforth amortized using the effective interest method. Such costs may include fees charged by underwriters, brokers, attorneys, regulators, printers, transfer agents and lenders, respectively. If a proposed share offering or debt financing is later aborted or withdrawn, these deferred costs are expensed at that time. As of June 30, 2025, and December 31, 2024, deferred financing costs amounted to $25,000 and $10,060 respectively, presented in the prepaids and other current assets account on the condensed consolidated balance sheets.

Recently Issued Accounting Pronouncements

We do not expect any 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, 2024.

NOTE 2. 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, 2025:

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, 2024:

The following table reflects expected amortization expense as of June 30, 2025, for each of the following five years and thereafter:

NOTE 3. LONG-TERM DEBT AND SHORT-TERM FINANCINGS

Long-Term Debt

The composition of long-term debt, collateralized by certain commission revenues, is as follows:

The following table depicts the maturities of the Company’s outstanding long-term debt.

Subsequent to the quarter ended, June 30, 2025, during July 2025, the Company pre-paid $4,997,292 of its long-term Oak Street debt pursuant to proceeds received from the Fortman sale as further described in Note 11 -subsequent events. No pre-payment penalty was assessed. The adjusted remaining outstanding long-term debt balance subsequent to these pre-payments was, $5,519,084 or $5,374,461 when factoring and netting debt issuance costs.

Short-Term Financings

The Company has various short-term notes payable for financed items such as insurance premiums. These are normally paid in equal instalments over a period of twelve months or less and carry interest rates of up to 11.95% per annum. As of June 30, 2025, and December 31, 2024, balances outstanding on short-term financings were $106,211 and $58,829 respectively.

NOTE 4. EQUITY

Common Stock

The Company is authorized to issue 2,000,000,000 shares of common stock, $0.086 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 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 following the Reverse Split-2024. All share and per share information as well as common stock and additional paid-in capital have been retroactively adjusted to reflect 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.

During the first quarter of 2025, as further described herein under the header, Equity-based compensation, certain directors, executives, and employees were issued 462,605 shares of common stock pursuant to equity awards granted for the 2024 fiscal year, with a value of $957,785. An additional 54 shares were issued to two executives pursuant to previously disclosed employment agreements.

During the first quarter of 2025, pursuant to a proposed business combination transaction, the Company issued to the selling parties 157,000 shares of Common Stock with a value of $239,425 as a second prepayment and additional non-refundable deposit on the proposed purchase price. See additional information regarding these shares in Note 10 -Subsequent Events.

During the first quarter of 2025, the Company issued 105,000 shares of Common Stock with a value of $141,750 for a service provider prepayment which was recorded to the prepaids and other current assets account on the condensed consolidated balance sheets as of June 30, 2025.

During the second quarter of 2025, the Company issued a service provider,123,967 shares of Common Stock with a value of $150,000 in lieu of services to be provided, and 40 shares of equity-based compensation were issued to an executive as the final payment under a previously disclosed employment agreement.

As of June 30, 2025, and December 31, 2024, there were 3,098,876 and 2,250,210 shares of common stock outstanding, respectively.

Equity-based Compensation

During the first quarter of 2025 certain directors, executives, and employees were granted 999,995 shares of common stock in equity awards for the 2024 fiscal year, with a value of $2,049,675, vesting during the first and third quarters of 2025. As of June 30, 2025,462,605 shares, or $957,785 of these equity awards were vested and 537,390 shares, or $1,091,889 were unvested. The unvested amounts pertain to executives and employees and are amortized and expensed over the applicable service periods, with the Company recognizing $861,591 of equity-based compensation expense for the six-month period ended, June 30, 2025 presented in the salaries and wages account in the condensed consolidated statements of operations.

Pursuant to the April 2025 second amendment to an employment agreement between the Company and an executive, the executive was awarded 40,000 shares of the Company’s Common Stock annually over thefour-year employment term, where each annual tranche vests equally at 10,000 shares each quarter, pro-rated for any partial periods. The total value of each annual tranche is $62,000. For the three and six month periods ended, June 30, 2025, compensation expense on this grant was $7,253. As of June 30, 2025, no shares have been issued under this agreement.

Subsequent to June 30, 2025, the Compensation Committee approved adjustments to the compensation structure for directors and executives. These included the grant of 1,692,673 restricted shares with a value of $2,495,000 under the Company’s 2025 Equity Incentive Plan (the “July Grant”). The grants, which vest over periods between July 2025 and January 2026, were awarded to certain directors, officers, and employees, and its cost will be amortized over the various vesting periods with no impact to equity-based compensation expense for the three and six month periods ended, June 30, 2025. The Company also increased the base salary of its Chief Executive Officer (the “CEO”) and approved a discretionary bonus for the CEO, both effective in July 2025.

Total stock-based compensation expense recorded in the unaudited condensed consolidated statements of operations for the three months ended June 30, 2025, and 2024 was $877,368 and $245,766, respectively, and for the six months ended June 30, 2025 and 2024; $1,852,353 and $264,331, respectively.

2025 Equity Incentive Plan

On March 18, 2025, the Board approved, and subsequently the stockholders approved, the 2025 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to provide a means through with the Company and its subsidiaries may attract and retain key personnel, and to provide a means whereby directors, officer, employees, consultants, and advisors of the Company and its subsidiaries can acquire and maintain an equity interest in the Company, or be paid incentive compensation, thereby strengthening their commitment to the welfare of the Company and its subsidiaries and aligning their interests with those of the Company’s stockholders. The Plan provides for various stock-based incentive awards, including incentive and nonqualified stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units (“RSUs”), and other equity-based or cash-based awards. The total number of shares of common stock authorized for issuance under the Plan is 2,000,000 shares. Following the July Grant, there remained 307,327 shares available for issuance under the Plan.

Administration of the Plan. The Plan is to be administered by the Compensation Committee of the Board. The Compensation Committee is authorized to select from among eligible employees, directors, and service providers those individuals to whom shares and options are to be granted and to determine the number of shares to be subject to, and the terms and conditions of the options. The Compensation Committee is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plans. Generally, the interpretation and construction of any provision of the Plans or any shares and options granted hereunder is within the discretion of the Compensation Committee.

The Plan was approved by the Company’s stockholders on May 29, 2025, becoming effective as of March 18, 2025, and will terminate on March 18, 2035, unless terminated earlier by the Board.

As of June 30, 2025, there remained 2,002,414 shares available for issuance under the Company’s various equity incentive plans. Following the July Grant, there remained 309,741 shares available for issuance under the Company’s various equity incentive plans.

Series J Private Placement

On June 18, 2025, the Company entered into a securities purchase agreement (the “SPA-2025”) with a certain accredited investor (the “SPA Purchaser”) for the issuance and sale in a private placement (the “Private Placement-2025”) of (i) pre-funded warrants (the “Series J-PF Warrants”) to purchase up to 1,488,096 shares of the Company’s Common Stock at an exercise price of $0.001 per share, and (ii) warrants (the “Series J Warrants”) to purchase up to 2,976,192 shares of Common Stock at an exercise price of $1.43 per share. The Private Placement-2025 was priced at the market at a combined purchase price per share and accompanying Series J Warrant of $1.68. The closing of the Private Placement-2025 occurred on or about June 20, 2025.

Aggregate gross proceeds to the Company from the Private Placement-2025 were approximately $2.5 million, prior to deducting placement agent fees and other offering expenses payable by the Company, estimated at around $351,000, which resulted in estimated net proceeds of $2.15 million. The Company would receive an additional approximate $4.25 million in aggregate gross proceeds if all of the Series J Warrants were exercised via a cash exercise. The Company plans to use the proceeds from the Private Placement for working capital and general corporate purposes.

The Series J-PF Warrants are exercisable from the date of issuance until exercised in full. The Series J Warrants are exercisable from the date of issuance and expiretwo years from the Effective Date (as defined in the SPA-2025). The holder of the Series J-PF Warrants and the Series J Warrants may not exercise any portion of such holder’s Series J-PF Warrants or Series J Warrants to the extent that the holder, together with its affiliates, would beneficially own, respectively, more than 9.99% of 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after exercise.

In connection with the Private Placement-2025, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as of June 18, 2025, with the SPA Purchaser, to register for resale the common shares underlying the Series J-PF Warrants and Series J Warrants.

H.C. Wainwright & Co., LLC (“Wainwright”) acted as the Company’s sole placement agent in connection with the Private Placement-2025. Pursuant to the engagement terms, the Company paid Wainwright a total cash fee equal to 7.0% of the aggregate gross proceeds of the Private Placement-2025, as well as certain expenses, including $50,000 for legal fees and expenses, $35,000 for non-accountable expenses, and a management fee equal to 1.0% of the gross proceeds of the Private Placement-2025. In addition, the Company issued to Wainwright placement agent warrants (the “Series J PAW’s”) to purchase up to an aggregate of 104,167 shares of Common Stock at an exercise price equal to $2.10 per share. The Series J PAW’s have substantially the same terms as the Series J Warrants.

The Company determined pursuant to the terms of the Series J Warrants, Series J PF Warrants, and Series J PAW’s that they are equity instruments in nature, also because they permit the holder to obtain a fixed number of shares for a fixed monetary amount. The net proceeds were recorded to additional paid in capital on the condensed consolidated balance sheets as of June 30, 2025.

NOTE 5. EARNINGS (LOSS) PER SHARE

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.

The following calculates basic and diluted EPS from operations:

Additionally, the following are considered anti-dilutive securities excluded from weighted-average shares used to calculate diluted net loss per common share:

Subsequent to June 30, 2025, the Company granted 1,692,673 shares to certain directors, officers, and employees. The grants had a value of $2,495,000 and vest over the periods between, July 2025 and January 2026. These shares, if granted before June 30, 2025, would have been considered anti-dilutive securities and would be excluded from weighted-average shares used to calculate diluted net loss per common share.

NOTE 6. LEASES

Operating lease expense for the three months ended June 30, 2025, and 2024 was $108,697 and $102,073, respectively. Operating lease expense for the six months ended June 30, 2025, and 2024 was $216,362 and $207,029 respectively. As of June 30, 2025, the weighted average remaining lease term and weighted average discount rate for the operating leases were 4.59 years and 9.43%, respectively.

Pursuant to Note 10 -Assets and related liabilities held for sale, the Company reclassified its leases pertaining to Fortman Insurance, LLC (“the Fortman Leases”) to assets and liabilities held for sale.

The following table depicts future minimum lease payments for the Company’s operating leases excluding Fortman Leases.

NOTE 7. 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 accordinglyno legal contingencies are accrued as of June 30, 2025, and December 31, 2024. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time has been subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.

NOTE 8. RELATED PARTY TRANSACTIONS

*Americana Credit Agreement and Revolving Note:*On March 5, 2025, and as amended on June 24, 2025, the Company and YES Americana Group, LLC (“Americana”) entered into a Revolving Credit Facility Agreement (the “Credit Agreement”) pursuant to which Americana agreed to extend a revolving credit facility of up to $2,000,000 to the Company (the “Facility”), to provide additional working capital for the Company to cover incremental M&A acquisition related costs, as well as for general working capital uses. Subject to the terms and conditions of the Credit Agreement and the other transaction documents, and in reliance upon the representations and warranties set forth therein, Americana agreed to make loans to the Company from time to time, pursuant to the terms of the Credit Agreement, until, but not including, the Maturity Date (as hereinafter defined), provided, however, that the aggregate principal balance of all loans outstanding at any time under the Credit Agreement will not exceed the Loan Availability, defined in the Credit Agreement as $2,000,000 less any obligations the Credit Agreement and related transaction documents. Loans made by Americana may be repaid and, subject to the terms and conditions of the Credit Agreement, borrowed again up to, but not including, the Maturity Date, unless the loans are otherwise terminated or extended as provided in the Credit Agreement. The “Maturity Date” means the earlier of (i) 12 months from March 5, 2025; (ii) the date of prepayment of the Revolving Note (as hereinafter defined) by the Company (subject to the terms of the Credit Agreement) and the termination of the Credit Agreement as of such date; or (iii)the date of the occurrence of an Event of Default (as defined in the Credit Agreement) and acceleration of the Revolving Note pursuant to the Credit Agreement. Subject to the terms and conditions of the Credit Agreement, any request for a loan under the Credit Agreement may be made from time to time and in such amounts as the Company may choose. Loans under the Credit Agreement bear interest at the rate of 0.1% per annum. No principal or interest payments are due as to any loan under the Credit Agreement prior to the Maturity Date, and there are no prepayment penalties. Pursuant to the terms of the Credit Agreement, on March 5, 2025, and as amended on June 24, 2025 the Company executed an unsecured revolving promissory note (the “Revolving Note”) to evidence the loans under the Credit Agreement, in favor of Americana in the principal amount of, the greater of: (i) $1,075,064 and (ii) the aggregate principal amount of all Loans outstanding under and pursuant to the Credit Agreement. As of June 30, 2025, the outstanding balance on the Facility was $1,023,537 presented in the current portion of loans payables, related parties account on the condensed consolidated balance sheets.

The following table summarizes the loans payable, related parties current and non-current accounts, as of the periods ended June 30, 2025 and December 31, 2024, and the interest expense related parties account for the three and six month periods ended June 30, 2025 and June 30, 2024, as presented on the condensed consolidated balance sheets and condensed consolidated statements of operations, respectively:

Subsequent to June 30, 2025, the Company repaid in full the Asset Purchase Agreement Liability total outstanding balance of $552,931 which included accrued interest through the payment date.

NOTE 9. SEGMENT REPORTING

The following table provides the financial results of our Insurance Segment:

NOTE 10. ASSETS AND RELATED LIABILITIES HELD FOR SALE

During the second quarter of 2025, the Company committed to a plan to sell the asset group associated with its wholly owned subsidiary Fortman Insurance Services, LLC (“Fortman”) (see Note 11 –Subsequent Events), as part of its strategy to monetize certain assets to focus and grow core operations and pay-off long term debt. The sale closed on July 7, 2025, with an effective date of July 1, 2025. The disposal group met the criteria to be classified as held for sale under ASC 360-10-45 during the quarter ended, June 30, 2025, but did not qualify as a discontinued operation under ASC 205-20, as it does not represent a strategic shift that has or will have a major effect on the Company’s operations or financial results.

The assets and liabilities of the disposal group have been separately presented on the June 30, 2025, condensed consolidated balance sheet, as current assets held for sale and current liabilities related to assets held for sale. The assets held for sale account includes, accounts receivable, prepaid expenses, property and equipment, intangibles, right of use assets and goodwill. Depreciation and amortization (when material) ceased on long-lived assets within the group effective on the classification date. The liabilities related to assets held for sale account includes the disposal group’s accounts payable and operating lease liabilities. No assets or liabilities were classified as held for sale as of December 31, 2024.

The Company measured the held for sale disposal group at the lower of, carrying value (“CV”), and fair value less costs to sell (“FV”), and determined that FV exceeded CV, thus there was no impairment charge. The Company expects to recognize a gain on sale during the third quarter of 2025, in an estimated amount of $2.99 million.

The following table summarizes the major classes of assets and liabilities classified as held for sale as of June 30, 2025:

Pre-tax net income for Fortman on a standalone basis was $25,373 and $9,334 for the three months ended, June 30, 2025, and 2024 respectively, and $105,337 and $8,917 for six months ended June 30, 2025 and 2024.

NOTE 11. SUBSEQUENT EVENTS

Fortman Insurance Services, LLC Transaction

On July 7, 2025, the Company, Fortman Insurance Services, LLC, an Ohio limited liability company and wholly owned subsidiary of the Company (the “Seller”, or “Fortman”), and Fortman Insurance Agency, LLC, an Ohio limited liability company (the “Purchaser”), entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), pursuant to which the Seller agreed to sell substantially all of the assets of its insurance agency business (the “Fortman Business”) to the Purchaser for aggregate cash consideration of $5,000,000 (the “Transaction”). The Transaction closed on July 7, 2025, and was effective as of 12:01 a.m. Eastern Time on July 1, 2025.

The assets sold pursuant to the Asset Purchase Agreement included the Seller’s book of business, accounts, rights to renewal commissions and entitlements arising from new or renewal insurance business after July 1, 2025 (the “Effective Date”), as well as associated goodwill, leasehold interests, intellectual property (including the Fortman Insurance Services and Fortman Insurance Agency names), and other tangible and intangible assets used in the Fortman Business, and certain liabilities were assumed by the Purchaser. The Transaction excluded, among other things, Seller’s pre-Effective Date cash and cash equivalents, and other specified excluded assets and liabilities.

Termination of the Spetner Agreement

On July 22, 2025, the Company received and accepted written notice from Spetner Associates, Inc. (“Spetner”), of the termination of that certain Stock Exchange Agreement, dated as of May 14, 2024, and as amended on September 6, 2024, October 29, 2024, and February 20, 2025 (collectively, the “Stock Exchange Agreement”). There are no material relationships between the Company and the Spetner Parties other than in respect of the Stock Exchange Agreement.

On October 29, 2024, and February 20, 2025, the Company issued 140,064 shares and 157,000 shares of its common stock to the Spetner sellers, representing non-refundable prepayments of approximately $329,430 and $239,425, respectively, as partial consideration for the contemplated acquisition. These were initially recorded by the Company as deferred equity costs in the prepaid expense and other current assets account on the consolidated balance sheets as of December 31, 2024, and March 31, 2025, respectively. However, pursuant to the termination of the Stock Exchange Agreement, the Company does not expect to recover these shares issued and has thus expensed them to the general and administrative account in the condensed consolidated statements of operations, for the three and six month periods ending, June 30, 2025.