Reliance (US:RELI)2025-11-06 21:56Acquisition Strategy - As of September 30, 2025, the company has acquired nine insurance agencies as part of its aggressive acquisition strategy[96] - The company has extensive experience in acquiring and managing insurance portfolios, focusing on undervalued agencies in growing or underserved segments[95] Market Expansion and Digital Initiatives - The company plans to focus on geographic expansion and market share growth over the next 12 months, alongside its Digital Asset Treasury Initiative[97] - The 5MinuteInsure.com platform operates in 46 states, allowing consumers to compare quotes from up to 30 insurance carriers in approximately 5 minutes[99] - The RELI Exchange platform has increased its agent roster by over 300% since its inception, enhancing the company's B2B capabilities[100] - The company aims to tokenize insurance-linked assets, potentially creating a new investment class that increases transparency and liquidity in the insurance market[101] - The company has adopted a "OneFirm" strategy to enhance cross-selling and operational efficiency across its agencies[102] Financial Performance - Commission Income decreased by 27% to $2,495,975 from $3,441,458, primarily due to loss of revenue from the sale of Fortman Insurance Services[130] - Salaries and wages increased by 129% to $3,912,326 from $1,707,737, influenced by non-cash share-based compensation[130] - General and administrative expenses rose by 36% to $1,120,776 from $821,510, driven by director non-cash equity awards[130] - Total operating expenses increased by 62% to $6,409,658 from $3,953,435, reflecting overall operational changes[130] - Loss from operations significantly increased by 664% to $(3,913,683) from $(511,977)[130] - Interest expense decreased by 31% to $(246,722) from $(356,320) due to payoffs on loan balances[130] - Gain on sale of business amounted to $3,033,554, reflecting a significant increase compared to the previous period[131] - AEBITDA improved to $(707,021) from $(749,530), indicating a positive trend in operational efficiency[131] - Other income decreased by 125% to $(16,470) from $65,785, primarily due to fluctuations in digital asset valuations[131] - The company is focusing on market expansion and operational efficiencies to mitigate losses and improve financial performance[130] - Commission Income decreased by 8.72% to $9,818,872 compared to $10,757,238 in the previous year[132] - Salaries and Wages increased by 58% to $8,705,682, primarily due to the elimination of "FIS" salaries[132] - General and Administrative expenses rose by 30% to $4,129,842, driven by director non-cash equity awards[132] - Loss from operations increased by 15% to $(7,692,638) compared to $(6,690,278) in the previous year[132] - Interest expense decreased by 23% to $(844,846) due to payoffs on the majority of loan balances[132] - Gain on sale of business (FIS) amounted to $3,033,554, reflecting a significant increase[133] - Total operating expenses remained relatively stable at $17,511,510, with a slight increase of 0% compared to the previous year[132] - AEBITDA showed a significant decline of 339% to $(918,706) from $(209,113) in the previous year[133] - Asset impairment was recorded at $0, a decrease of 100% from $3,922,110 in the previous year[132] - Marketing and Advertising expenses decreased by 34% to $201,399, aligning with the company's current marketing strategy[132] - For the nine months ended September 30, 2025, the company reported a net loss of approximately $5.6 million, an improvement from a net loss of approximately $7.7 million for the same period in 2024[134] - The company achieved AEBITDA of approximately $(918,706) for the nine months ended September 30, 2025, compared to $(209,114) for the same period in 2024[134] Capital and Financing Activities - The company entered into a Common Stock Purchase Agreement allowing it to sell up to $10 million of newly issued shares to White Lion Capital, enhancing its capital resources[113] - The company issued 450,000 shares of Common Stock for net proceeds of approximately $350,000, with an additional 300,000 shares issued post-quarter for approximately $300,000, leaving a remaining capacity of approximately $9.3 million under the ELOC[115] - The company sold 1,853,048 shares under the At-the-Market Program, generating net proceeds of approximately $2,021,681 after deducting sales commissions and offering expenses[117] - The company entered into a Private Placement agreement for the purchase of up to 1,488,096 shares at an exercise price of $0.001 per share, and up to 2,976,192 shares at an exercise price of $1.43 per share[118] - The company issued $100,000 of fully earned common stock as commitment shares in two tranches, with the first tranche of $50,000 issued as of September 30, 2025[114] - The company executed Amendment No. 1 to the Common Stock Purchase Agreement with White Lion Capital, allowing for a Fixed Purchase Notice option to sell shares at a price equal to 90% of the lowest traded price during a specified time[116] - The company intends to use net proceeds from the ATM Program for general corporate purposes[117] - The company has filed a registration statement on Form S-1 for the resale of shares issuable under the White Lion Agreements, which was declared effective on September 4, 2025[114] - The company raised approximately $4.5 million in net proceeds through equity financing programs during the nine months ended September 30, 2025, including $2.0 million from the ATM Program and $2.1 million from the Private Placement-2025[137] - The company has approximately $9.3 million of capacity remaining under the Equity Line of Credit as of September 30, 2025[138] Cash Flow and Liquidity - As of September 30, 2025, the company had a total cash balance of approximately $3.5 million, an increase from approximately $1.8 million as of December 31, 2024[140] - Cash flows provided by investing activities were approximately $4.3 million for the nine months ended September 30, 2025, compared to cash flows used of approximately $58,787 for the same period in 2024[145] - The company experienced a net cash used in operating activities of approximately $1.5 million for the nine months ended September 30, 2025, a slight improvement from $1.6 million for the same period in 2024[144] - The company reported a significant increase of approximately 590% in unrestricted cash since the fiscal year-end 2024[137] - Management intends to utilize net proceeds from financing for general corporate purposes, including working capital and technology development[139] Economic Outlook - The company anticipates that inflation may materially impact pricing and operating expenses in future periods[141]