Greetings. Welcome to the Reliance Global Third Quarter 2023 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Ted Ayvas, Investor Relations. Ted, you may begin..

Thanks, Paul. Good afternoon, and thank you for joining Reliance Global Group's 2023 Third Quarter Financial Results and Business Update Conference Call. On the call with us today are Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group, and Joel Markovits, Chief Financial Officer at Reliance.

Earlier today, the company announced its operating results for the three months ended September 30, 2023. The press release is posted on the company's website, www.relianceglobalgroup.com.

In addition, the company has filed its quarterly report on Form 10-Q with the US Securities and Exchange Commission, as well, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov.

If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr.

Beyman reviews the company's operating results for the quarter ended September 30, 2023, we would like to remind everyone that this conference call may contain forward-looking statements.

All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations are forward-looking statements.

The words anticipate, estimate, expect, project, plan, seek, intend, believe, may, might, will, should, could, likely, continue, design and the negative of such terms and other words and terms of similar expressions are intended to identify forward-looking statements.

These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs.

These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's Form 10-K filed with the US Securities and Exchange Commission on March 30, 2023.

Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements.

In addition, neither the company nor any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements.

All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties.

Having said that, I'd now like to turn the call over to Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group.

Ezra?.

Thank you, Ted. Good afternoon, and thanks to everyone for joining us today. We are pleased to report a 16% and 19% year-over increase in revenue for the third quarter and first nine months of 2023, respectively. This growth primarily stems from the organic expansion of our business, bolstered by our acquisition of Barra & Associates in April 2022.

Following the acquisition and the rebranding to RELI Exchange, our agency network has demonstrated consistent growth. Despite substantial investments in RELI Exchange, we managed to cut our operational losses by over 21% in the first nine months of 2023 compared to the same period last year.

Additionally, our working capital has increased [$5.3] (ph) million or 117% since the end of the 2022 fiscal year. RELI Exchange is crucial to our long-term strategic vision and growth, and we are extremely pleased with the significant progress we've made in such a short time.

By equipping independent agencies with a robust array of business tools, which include cutting-edge technologies and AI capabilities, RELI Exchange enables these agencies to not only compete but often outperform larger national agencies in their services.

Looking ahead, we're moving to consolidate our stand-alone agencies under the umbrella of RELI Exchange. We're confident this move will bring substantial benefits and efficiencies to both our agents and their clients.

This consolidation is expected to significantly enhance the company's market presence across the US as Reliance Global Group will now operate under a unified brand across all business lines.

We also anticipate that this will fortify our relationships with carriers, enabling us to negotiate better commission and bonus contracts, thanks to increased business volumes.

Additionally, the strategy will empower our RELI Exchange agency partners, assuring them that the company can insist and effectively securing policies along their broad range of insurance products.

It will also create more cross-selling opportunities for our agency partners and allow the company to more efficiently leverage the extensive talent within our organization, particularly in their insurance specialties. Lastly, we believe this unified single firm approach will position us to scale rapidly and seamlessly integrate new acquisitions.

I would now like to turn the call over to Joel Markovits, Chief Financial Officer of Reliance Global, who will review the financial results for the quarter ended September 30, 2023..

Thank you, Ezra, and good afternoon. Great to be here with you all today. I'm super charged to share our financial results for the third quarter of 2023. Figures presented are approximates. The company's revenue for the three and nine months ended September 30, 2023, was $3.3 million and $10.4 million, respectively.

For the three months, this represents a 16% increase from $2.8 million in the previous year. For nine months, this represents a 19% increase from $8.7 million in the previous year. As mentioned by Ezra, the two primary factors driving the enhancements are organic growth and the Q2 '22 acquisition of Barra & Associates, now known as RELI Exchange.

Total operating expense for the three months ended 9/30/2023, increased by only 13% or $554,000 from the same period in the prior year, notwithstanding a 16% increase in top line revenue.

For the nine months ended September 30, 2023, total operating expense increased by only 4% or $516,000 compared to the same period in the prior year, notwithstanding a 19% increase in top line revenue.

Loss from operations increased modestly, growing 7% or $100,000 for the three months ended 9/30/2023 and actually decreased for the nine months ended 9/30/2023 by 21% or $1.2 million.

These results continue to demonstrate the effectiveness of efficiencies, Reliance has incorporated in its operations, which are clearly evident in enhanced financial figures. Net loss for the three and nine months ended September 30, 2023, was $139,000 and $3 million, respectively.

For the same periods in the prior year, there was net income, but that was due to significant unrealized noncash gains in the fair valuation of our derivative positions, which did not reoccur in 2023.

Working capital increased by $5.4 million or 117% as of September 30, 2023, from December 31, 2022, due in part to a capital raised earlier this year, a cash collection from a legal settlement and of course, enhanced cash management incorporated by the company. With this, we conclude our prepared remarks.

Happy to answer any questions or comments participants may have. Operator, kindly open the lines, please..

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] And the first question today is coming from Mike Albanese from EF Hutton. Mike, your line is live..

Hey guys, how you doing?.

Good..

Good. Thanks for taking my questions here. Just a couple of quick ones. First, regarding the nice growth here, attributable to both organic and then the acquisition.

Can you dissect that a little bit further and maybe just provide some insight into how much of that is organic versus how much is actually due to the acquisitions?.

Sure. So organic, I'd say the Q3 numbers, so three months ended, that's all organic growth, right? I think it was 16% growth. And then we have 19% for the nine months, that would be partially organic and due to the acquisition.

If we want to get to more precise, we have to take it a little further, but certainly for the three months ended, that's all organic because we did have Barra throughout both periods, both 2022 and 2023. So any growth in these numbers would be organic growth..

Got it. That's super helpful. Okay. So 16% is organic. And obviously, the acquisition has helped through that whole period. So that makes sense.

And then just regarding kind of expense management, any cost cutting you've done? I mean, how much room is left for you to kind of continue to do that right-size your G&A and your cost structure? Is there more on the table where you can pull things in a little bit tighter? Or how are you thinking about that?.

Yeah. Certainly, there is more room for areas where we can trim down our costs. We continue to enhance our 1-firm vision. I'm sure you've seen some of the messaging around that, and there's more to come also in the future. So that really consolidates our entities and streamlines our operations.

And as we move the needle forward and we bring together our carrier contracts and then start operating at a streamlined cohesive one-firm company where we cross-sell and cross-use talent across our geographical locations, I think we'll see additional cost deficiencies come through..

By the way, I'll just add to that, Joel that’s excellent, but it's from both ends. As we do this, you could see both ends, revenue going up because of getting better commissions, and more cross-selling, which is very significant and cutting expenses. So it's really both -- pulling both ends in the right direction..

Got it. Yeah. So you've been trimming expenses. You can trim a little bit further. While at the same time, you're gaining operating leverage..

Sure..

Okay, great. All right. That's really it on my end. Nice quarter, guys, continuing your March towards profitability from a cash flow standpoint. So congrats on the quarter there..

Thank you very much..

Thanks, Mike..

[Operator Instructions] The next question is coming from [Nick Pincus from Forrest Capital] (ph). Nick, your line is live..

Hey, guys. Congratulations. Again, another strong quarter. So you've been successful in the acquisition strategy.

And now that you've digested Barra, are you looking at additional acquisitions? And if so, what are the criteria that you look at when you're evaluating those acquisitions?.

Okay. Thanks. I'll handle that. Yes. First of all, the answer is a resounding yes. Absolutely, we're looking for acquisitions. In fact, we're actively evaluating opportunities that could be very interesting, really very interesting. And that is a way to grow. But we do look at my experience in the private world 30 years in business.

We know when we see a good management team in place, and we don't like to reinvent the wheel and if they broke, don't fix it, but we come in with use cost efficiencies and everything else, but without killing the business, but if it makes sense to the business, and it's not a crazy multiple, we are definitely -- we do have a reputation of coming to the table.

That's extremely important to the brokers and the sellers when we say we're going to do buy a deal, if it makes sense, we buy it. So not just a tire kickers. So the answer to your question, definitely, yes. And that's one of the things I'm very involved in and very much so..

Great. Thank you..

Thank you..

Thank you. And there were no other questions at this time. I'd like to hand the call back over to the management team for closing remarks..

Thank you very much. On behalf of Ezra, and the entire Reliance team, we appreciate your participation in this business update, and we're truly excited about the prospects of the company. Thanks again for joining us who now joined. Until next time, all the best..

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation..