Acquisition Strategy - As of September 30, 2024, the Company has acquired nine insurance agencies as part of its aggressive acquisition strategy [69] - The Company plans to acquire 80% of Spetner Associates for $13,714,286, which includes $5,500,000 in cash and stock issuance [70] - The Company focuses on acquiring undervalued insurance agencies in growing or underserved segments, including healthcare and Medicare [76] - The acquisition strategy aims to offer lower rates, thereby boosting the Company's competitive position within the insurance industry [77] Financial Performance - Commission income for the three months ended September 30, 2024, was $3,441,458, representing a 5% increase from $3,275,583 in the same period of 2023 [83] - Total operating expenses decreased by 16% to $3,953,435 for the three months ended September 30, 2024, down from $4,710,637 in 2023 [83] - Net loss for the three months ended September 30, 2024, was $(837,314), a 502% increase compared to a net loss of $(139,004) in 2023 [83] - AEBITDA for the three months ended September 30, 2024, was $42,508, a significant improvement from $(200,602) in the same period of 2023 [86] - Commission income for the nine months ended September 30, 2024, was $10,757,238, reflecting a 3% increase from $10,410,591 in 2023 [84] - Total operating expenses for the nine months ended September 30, 2024, increased by 19% to $17,447,516, compared to $14,688,899 in 2023 [84] - Net loss for the nine months ended September 30, 2024, was $(7,673,373), a 157% increase from $(2,982,827) in 2023 [84] - AEBITDA for the nine months ended September 30, 2024, was $(209,114), an improvement from $(467,635) in the same period of 2023 [86] Cash Flow and Liquidity - As of September 30, 2024, the company had a cash balance of approximately $2,354,000, down from $2,739,000 at December 31, 2023 [87] - The company sold 658,088 shares of common stock under the ATM Agreement, receiving net proceeds of $2,824,227 during the nine months ended September 30, 2024 [88] - Net cash used in continuing operating activities for the nine months ended September 30, 2024, was approximately $1,648,000, a decrease from $3,833,545 for the same period in 2023, reflecting a significant improvement [93] - Cash flows used in continuing and discontinued investing activities were approximately $59,000 for the nine months ended September 30, 2024, compared to $719,000 provided in the same period in 2023, indicating a shift towards cash outflows [94] - Cash provided by continuing and discontinued financing activities was approximately $1,321,449 for the nine months ended September 30, 2024, up from $576,212 in the prior year, driven by proceeds from common shares issued [95] - The net loss for the nine months ended September 30, 2024, was approximately $7,673,000, with non-cash adjustments totaling approximately $5,830,000 [93] - The company reported a net increase in cash due to changes in net working capital items of approximately $195,000 during the nine months ended September 30, 2024 [93] Operational Efficiency - RELI Exchange has increased its agent roster by over 130% since its inception, enhancing the Company's B2B InsurTech capabilities [71] - The Company adopted a "OneFirm" strategy to improve cross-selling and operational efficiency across its agencies, enhancing market presence [72] - The company has extensive experience in managing insurance portfolios, with over 100 years of combined management experience in the sector [76] Corporate Governance - The Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of September 30, 2024, and determined them to be effective [99] - There have been no changes in internal control over financial reporting that materially affected the company during the most recently completed fiscal quarter [100] - The company is subject to various legal proceedings, but management does not believe these will have a material adverse effect on its financial position or operations [102] Stock and Shareholder Actions - The Company executed a 1-for-17 reverse stock split on July 1, 2024, resulting in a rounding addition of approximately 110,350 shares valued at par [80] - Adjusted EBITDA (AEBITDA) is a key financial performance metric used by the Company to evaluate operational performance across reporting periods [81]
Reliance (RELI) - 2024 Q3 - Quarterly Report