Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Reliance Global Group, Inc. |
Entity Central Index Key | 0001812727 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | |||
Cash | $ 270,304 | $ 6,703 | $ 12,456 |
Restricted cash | 491,755 | 484,882 | 88,750 |
Accounts receivable | 103,822 | ||
Accounts receivable, related parties | 7,131 | ||
Note receivables | 3,825 | 3,825 | |
Other receivables | 2,487 | 8,284 | 17,319 |
Prepaid expense and other current assets | 32,309 | 32,309 | |
Total current assets | 800,680 | 646,956 | 118,525 |
Property and equipment, net | 488,601 | 592,251 | 57,205 |
Right-of-use asset | 477,404 | 569,650 | |
Investment in NSURE, Inc. | 1,200,000 | ||
Intangibles, net | 6,079,052 | 6,633,584 | 604,489 |
Goodwill | 8,548,608 | 8,548,608 | 1,705,548 |
Other non-current assets | 1,984 | 1,984 | 3,784 |
Total assets | 17,596,329 | 16,993,033 | 2,489,551 |
Current liabilities: | |||
Accounts payable and other accrued liabilities | 340,125 | 153,226 | 98,654 |
Loans payable | 143,957 | 19,401 | |
Current portion of loans payables, related parties | 3,668,257 | 3,311,844 | 962,325 |
Other payables | 62,500 | 8,351 | 16,942 |
Current portion of long-term debt | 963,450 | 1,010,570 | 90,580 |
Current portion of leases payable | 183,684 | 164,367 | |
Total current liabilities | 5,361,973 | 4,667,759 | 1,168,501 |
Loan payables, related parties, less current portion | 140,016 | 150,786 | |
Loans payable, less current portion | 379,341 | ||
Long term debt, less current portion | 8,197,264 | 8,270,955 | 1,621,101 |
Leases payable, less current portion | 300,000 | 411,159 | |
Earn-out liability | 2,850,050 | 2,850,050 | |
Total liabilities | 17,228,644 | 16,350,709 | 2,789,602 |
Stockholders' and members' equity (deficit): | |||
Preferred stock, $0.001 par value; 750,000,000 shares authorized and 33,911,991 and 40,000,000 issued and outstanding as of June 30, 2020, December 31, 2019 and 2018 Respectively | 33,912 | 33,912 | 40,000 |
Common stock, $0.001 par value; 2,000,000,000 shares authorized and 356,742,548 and 352,742,548 and 265,699,106 issued and outstanding as of June 30, 2020, December 31, 2019 and December 31, 2018, respectively | 356,743 | 352,743 | 265,699 |
Common stock issuable | 822,116 | 822,116 | |
Additional paid-in capital | 10,056,401 | 8,216,829 | 4,682,045 |
Accumulated deficit | (10,901,487) | (8,783,276) | (5,287,795) |
Total stockholders' equity (deficit) | 367,685 | 642,324 | (300,051) |
Total liabilities and stockholders' equity (deficit) | $ 17,596,329 | $ 16,993,033 | $ 2,489,551 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 750,000,000 | 750,000,000 | 750,000,000 |
Preferred stock, shares issued | 33,911,991 | 33,911,991 | 40,000,000 |
Preferred stock, shares outstanding | 33,911,991 | 33,911,991 | 40,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 356,742,548 | 352,742,548 | 265,699,106 |
Common stock, shares outstanding | 356,742,548 | 352,742,548 | 265,699,106 |
Common stock, issuable | $ 4,375,000 | $ 4,375,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 31, 2018 | Dec. 31, 2019 | |
REVENUE | |||||||
Commission income | $ 1,642,018 | $ 1,017,022 | $ 3,646,332 | $ 1,383,086 | |||
Total revenue | 1,642,018 | 1,017,022 | 3,646,332 | 1,383,086 | |||
OPERATING EXPENSES | |||||||
Commission expense | 353,899 | 140,231 | 779,484 | 234,671 | |||
Salaries and wages | 868,222 | 613,392 | 1,736,496 | 868,406 | |||
General and administrative expenses | 1,082,752 | 480,217 | 2,203,872 | 1,067,719 | |||
Marketing and advertising | 33,497 | 30,832 | 101,259 | 77,249 | |||
Depreciation and amortization | 329,091 | 111,674 | 658,182 | 135,550 | |||
Total operating expenses | 2,667,461 | 1,376,346 | 5,479,293 | 2,383,595 | |||
Income loss from operations | (1,025,443) | (359,324) | (1,832,961) | (1,000,509) | |||
Other expense, net | (112,970) | (66,884) | (285,250) | (102,452) | |||
Total non-operating expenses | (112,970) | (66,884) | (285,250) | (102,452) | |||
Net income (loss) | $ (1,138,413) | $ (426,208) | $ (2,118,211) | $ (1,102,961) | |||
Basic and diluted loss per share | $ 0 | $ 0 | $ (0.01) | $ 0 | |||
Weighted average number of shares outstanding | 356,742,548 | 323,930,512 | 355,863,427 | 315,825,288 | |||
Successor [Member] | |||||||
REVENUE | |||||||
Commission income | $ 390,770 | $ 4,450,785 | |||||
Total revenue | 390,770 | 4,450,785 | |||||
OPERATING EXPENSES | |||||||
Commission expense | 156,763 | 705,714 | |||||
Salaries and wages | 142,016 | 2,316,533 | |||||
General and administrative expenses | 885,800 | 3,638,896 | |||||
Marketing and advertising | 1,121 | 165,574 | |||||
Depreciation and amortization | 25,451 | 727,979 | |||||
Total operating expenses | 1,211,151 | 7,554,696 | |||||
Income loss from operations | (820,381) | (3,103,911) | |||||
Other expense, net | (27,924) | (391,570) | |||||
Settlement agreement expense | (306,981) | ||||||
Total non-operating expenses | (334,905) | (391,570) | |||||
Net income (loss) | $ (1,155,286) | $ (3,495,481) | |||||
Basic and diluted loss per share | $ (0.01) | $ (0.01) | |||||
Weighted average number of shares outstanding | 180,479,232 | 246,656,149 | |||||
Predecessor [Member] | |||||||
REVENUE | |||||||
Commission income | $ 627,991 | ||||||
Total revenue | 627,991 | ||||||
OPERATING EXPENSES | |||||||
Commission expense | 283,282 | ||||||
Salaries and wages | 95,738 | ||||||
General and administrative expenses | 181,400 | ||||||
Marketing and advertising | 5,193 | ||||||
Depreciation and amortization | 1,778 | ||||||
Total operating expenses | 567,391 | ||||||
Income loss from operations | 60,600 | ||||||
Other expense, net | (2,279) | ||||||
Settlement agreement expense | |||||||
Total non-operating expenses | (2,279) | ||||||
Net income (loss) | $ 58,321 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Preferred Stock [Member]Successor [Member] | Common Stock [Member] | Common Stock [Member]Successor [Member] | Common Stock [Member]Family Health Advisors, Inc [Member]Predecessor [Member] | Common Stock [Member]Employee Benefit Solutions, Inc [Member]Predecessor [Member] | Common Stock Issuable [Member] | Common Stock Issuable [Member]Successor [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Successor [Member] | Additional Paid-in Capital [Member]Family Health Advisors, Inc [Member]Predecessor [Member] | Additional Paid-in Capital [Member]Employee Benefit Solutions, Inc [Member]Predecessor [Member] | Retained Earnings (Accumulated Deficit) [Member] | Retained Earnings (Accumulated Deficit) [Member]Successor [Member] | Retained Earnings (Accumulated Deficit) [Member]Family Health Advisors, Inc [Member]Predecessor [Member] | Retained Earnings (Accumulated Deficit) [Member]Employee Benefit Solutions, Inc [Member]Predecessor [Member] | Total | Successor [Member] | Predecessor [Member] | Predecessors [Member] | Member's EquityTri Star Benefits, LLC [Member]Predecessor [Member] |
Ending balance at Dec. 31, 2017 | $ 1,000 | $ 17,485 | $ 870 | $ (222,728) | $ (184,036) | $ 19,337 | |||||||||||||||
Ending balance, shares at Dec. 31, 2017 | 10,000 | 100 | |||||||||||||||||||
Distributions | (18,500) | (18,500) | |||||||||||||||||||
Dividends | (1,000) | (42,234) | (4,920) | (48,154) | |||||||||||||||||
Shares issued pursuant to settlement agreement | |||||||||||||||||||||
Net income (loss) | 19,832 | 18,758 | $ 58,321 | 58,321 | 19,731 | ||||||||||||||||
Ending balance at Jul. 31, 2018 | $ 50,000 | $ 146,993 | $ 3,993,371 | 17,485 | $ (4,132,509) | (21,532) | (208,890) | $ 57,855 | (192,369) | 20,568 | |||||||||||
Ending balance, shares at Jul. 31, 2018 | 50,000,000 | 146,993,149 | 1,000 | 100 | |||||||||||||||||
Beginning balance at Dec. 31, 2017 | 1,000 | 17,485 | 870 | (222,728) | (184,036) | 19,337 | |||||||||||||||
Beginning balance, shares at Dec. 31, 2017 | 10,000 | 100 | |||||||||||||||||||
Ending balance at Dec. 31, 2018 | $ 40,000 | $ 40,000 | $ 265,699 | $ 265,699 | $ 4,682,045 | 4,682,045 | $ (5,287,795) | (5,287,795) | $ (300,051) | (300,051) | |||||||||||
Ending balance, shares at Dec. 31, 2018 | 40,000,000 | 40,000,000 | 265,699,106 | 265,699,106 | |||||||||||||||||
Beginning balance at Jul. 31, 2018 | $ 50,000 | $ 146,993 | 3,993,371 | $ 17,485 | (4,132,509) | $ (21,532) | $ (208,890) | 57,855 | $ (192,369) | $ 20,568 | |||||||||||
Beginning balance, shares at Jul. 31, 2018 | 50,000,000 | 146,993,149 | 1,000 | 100 | |||||||||||||||||
Shares issued pursuant to business acquisitions | $ 16,400 | (74,255) | (57,855) | ||||||||||||||||||
Shares issued pursuant to business acquisitions, shares | 16,400,000 | ||||||||||||||||||||
Shares issued pursuant to settlement agreement | $ 2,306 | 304,675 | 306,981 | ||||||||||||||||||
Shares issued pursuant to settlement agreement, shares | 2,305,957 | ||||||||||||||||||||
Share based compensation | 89,950 | 89,950 | |||||||||||||||||||
Stock issued for services | 458,304 | 458,304 | |||||||||||||||||||
Stock issued for services, shares | |||||||||||||||||||||
Conversion of preferred stock | $ (10,000) | $ 100,000 | (90,000) | ||||||||||||||||||
Conversion of preferred stock, shares | (10,000,000) | 100,000,000 | |||||||||||||||||||
Net income (loss) | (1,155,286) | (1,155,286) | |||||||||||||||||||
Ending balance at Dec. 31, 2018 | $ 40,000 | $ 40,000 | $ 265,699 | $ 265,699 | 4,682,045 | 4,682,045 | (5,287,795) | (5,287,795) | (300,051) | (300,051) | |||||||||||
Ending balance, shares at Dec. 31, 2018 | 40,000,000 | 40,000,000 | 265,699,106 | 265,699,106 | |||||||||||||||||
Share based compensation | 387,999 | 387,999 | |||||||||||||||||||
Conversion of preferred stock | $ (6,088) | $ 60,880 | (54,792) | ||||||||||||||||||
Conversion of preferred stock, shares | (6,088,009) | 60,880,088 | |||||||||||||||||||
Shares cancelled pursuant to issuance of common stock for business acquisition | $ (576) | 576 | |||||||||||||||||||
Shares cancelled pursuant to issuance of common stock for business acquisition, shares | (576,489) | ||||||||||||||||||||
Net income (loss) | (1,102,961) | (1,102,961) | |||||||||||||||||||
Ending balance at Jun. 30, 2019 | $ 33,912 | $ 326,003 | 5,015,828 | (6,390,756) | (1,015,013) | ||||||||||||||||
Ending balance, shares at Jun. 30, 2019 | 33,911,991 | 326,002,705 | |||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 40,000 | $ 40,000 | $ 265,699 | $ 265,699 | 4,682,045 | 4,682,045 | (5,287,795) | (5,287,795) | (300,051) | (300,051) | |||||||||||
Beginning balance, shares at Dec. 31, 2018 | 40,000,000 | 40,000,000 | 265,699,106 | 265,699,106 | |||||||||||||||||
Shares issued pursuant to business acquisitions | $ 14,747 | 2,553,617 | 2,568,364 | ||||||||||||||||||
Shares issued pursuant to business acquisitions, shares | 14,746,592 | ||||||||||||||||||||
Shares issued pursuant to settlement agreement | |||||||||||||||||||||
Share based compensation | 1,047,376 | 1,047,376 | |||||||||||||||||||
Conversion of preferred stock | $ (6,088) | $ 60,880 | (54,792) | ||||||||||||||||||
Conversion of preferred stock, shares | (6,088,009) | 60,880,088 | |||||||||||||||||||
Shares issued to Reliance Global Holdings, LLC, related party, for transfer of ownership of SWMT and FIS | $ 14,839 | (14,839) | |||||||||||||||||||
Shares issued to Reliance Global Holdings, LLC, related party, for transfer of ownership of SWMT and FIS, shares | 14,839,011 | ||||||||||||||||||||
Shares cancelled pursuant to settlement agreement | $ (576) | 576 | |||||||||||||||||||
Shares cancelled pursuant to settlement agreement, shares | (576,489) | ||||||||||||||||||||
Common stock issuable related to business acquisition | $ 482,116 | 482,116 | |||||||||||||||||||
Common stock issuable related to business acquisition, shares | 2,375,000 | ||||||||||||||||||||
Common stock issuable related to software purchase | $ 340,000 | 340,000 | |||||||||||||||||||
Common stock issuable related to software purchase, shares | 2,000,000 | ||||||||||||||||||||
Shares cancelled pursuant to issuance of common stock for business acquisition | $ (2,846) | 2,846 | |||||||||||||||||||
Shares cancelled pursuant to issuance of common stock for business acquisition, shares | (2,845,760) | ||||||||||||||||||||
Net income (loss) | (3,495,481) | (3,495,481) | |||||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 33,912 | $ 33,912 | $ 352,743 | $ 352,743 | $ 822,116 | $ 822,116 | 8,216,829 | $ 8,216,829 | (8,783,276) | $ (8,783,276) | 642,324 | $ 642,324 | |||||||||
Ending balance, shares at Dec. 31, 2019 | 33,911,991 | 33,911,991 | 352,742,548 | 352,742,548 | 4,375,000 | 4,375,000 | |||||||||||||||
Share based compensation | 843,572 | 843,572 | |||||||||||||||||||
Shares issued pursuant to investment in NSURE, Inc. | $ 4,000 | 996,000 | 1,000,000 | ||||||||||||||||||
Shares issued pursuant to investment in NSURE, Inc., shares | 4,000,000 | ||||||||||||||||||||
Net income (loss) | (2,118,211) | (2,118,211) | |||||||||||||||||||
Ending balance at Jun. 30, 2020 | $ 33,912 | $ 356,743 | $ 822,116 | $ 10,056,401 | $ (10,901,487) | $ 367,685 | |||||||||||||||
Ending balance, shares at Jun. 30, 2020 | 33,911,991 | 356,742,548 | 4,375,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 5 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) | $ (2,118,211) | $ (1,102,961) | ||||
Adjustment to reconcile net income to net cash used in operating activities: | ||||||
Depreciation and amortization | 658,182 | 135,550 | ||||
Amortization of debt issuance costs and accretion of debt discount | 11,443 | 1,194 | ||||
Non-cash lease expense | 404 | 5,531 | ||||
Goodwill impairment | $ 593,790 | $ 0 | ||||
Stock compensation expense | 843,572 | 387,999 | ||||
Change in operating assets and liabilities: | ||||||
Accounts payables and other accrued liabilities | 186,899 | (102,154) | ||||
Accounts receivable | 103,822 | |||||
Accounts receivable, related parties | 7,131 | |||||
Other receivables | 5,797 | 32,649 | ||||
Other payables | 54,149 | 799 | ||||
Other non-current assets | 1,800 | |||||
Prepaid expense and other current assets | (19,008) | |||||
Net cash used in operating activities | (246,812) | (658,601) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Investment in NSURE, Inc. | (1,200,000) | |||||
Acquisition of business, net of cash acquired | (5,530,831) | |||||
Net cash used in investing activities | (1,200,000) | (5,530,831) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from borrowings of debt | 3,784,000 | |||||
Principal repayments of debt | (132,254) | (114,159) | ||||
Loans acquired through acquisitions, related parties | 19,401 | |||||
Proceeds from PPP loan | 673,700 | |||||
Principal repayments of PPP loan | (165,000) | |||||
Proceeds from loans payable, related parties | 373,000 | 2,799,056 | ||||
Payments of loans payable, related parties | (31,950) | (38,336) | ||||
Payments of loans payable | (210) | |||||
Issuance of common stock for acquisitions | 1,000,000 | |||||
Net cash provided by financing activities | 1,717,286 | 6,449,962 | ||||
Net increase in cash and restricted cash | 270,474 | 260,530 | ||||
Cash and restricted cash at beginning of year | 491,585 | 101,206 | 101,206 | |||
Cash and restricted cash at end of year | $ 101,206 | 762,059 | 361,736 | 491,585 | 101,206 | |
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||||||
Conversion of preferred stock into common stock | 6,088 | |||||
Cash paid for interest | 86,310 | 96,997 | ||||
Acquisition of lease asset and liability | 591,958 | |||||
Cancellation of common stock shares pursuant to settlement agreement | 576 | |||||
Successor [Member] | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) | (1,155,286) | (3,495,481) | ||||
Adjustment to reconcile net income to net cash used in operating activities: | ||||||
Depreciation and amortization | 25,451 | 727,979 | ||||
Amortization of debt issuance costs and accretion of debt discount | 1,138 | 13,949 | ||||
Non-cash lease expense | 6,608 | |||||
Goodwill impairment | 593,790 | |||||
Stock compensation expense | 548,254 | 1,047,376 | ||||
Common stock issuable | 822,116 | |||||
Shares issued pursuant to settlement agreement | 306,981 | |||||
Change in operating assets and liabilities: | ||||||
Accounts payables and other accrued liabilities | 98,654 | 54,572 | ||||
Accounts receivable | (103,822) | |||||
Accounts receivable, related parties | (7,131) | |||||
Note receivables | (3,825) | |||||
Other receivables | (17,319) | 9,035 | ||||
Other payables | 16,942 | (8,591) | ||||
Other non-current assets | 33,716 | 1,800 | ||||
Prepaid expense and other current assets | (32,309) | |||||
Net cash used in operating activities | (141,469) | (373,934) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Note receivable, related parties | ||||||
Acquisition of business, net of cash acquired | (1,066,500) | (11,317,325) | ||||
Purchase of property and equipment | (56,193) | (562,327) | ||||
Net cash used in investing activities | (1,122,693) | (11,879,652) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from borrowings of debt | 1,025,000 | 7,982,005 | ||||
Principal repayments of debt | (16,763) | (209,985) | ||||
Debt issuance costs | (25,506) | (216,125) | ||||
Loans acquired through acquisitions | 19,401 | |||||
Loans acquired through acquisitions, related parties | 210 | |||||
Dividends paid | ||||||
Distributions to stockholders and members | ||||||
Issuance of loans payables, related parties | 382,637 | |||||
Proceeds from notes payable, related parties | 3,366,542 | |||||
Payment of notes payable | ||||||
Proceeds of notes payable, related parties | (866,447) | |||||
Issuance of common stock for acquisitions | 2,568,364 | |||||
Net cash provided by financing activities | 1,365,368 | 12,643,965 | ||||
Net increase in cash and restricted cash | 101,206 | 390,379 | ||||
Cash and restricted cash at beginning of year | $ 491,585 | $ 101,206 | 101,206 | |||
Cash and restricted cash at end of year | 101,206 | 491,585 | 101,206 | |||
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||||||
Conversion of preferred stock into common stock | 10,000 | 10,000 | ||||
Cash paid for interest | 26,915 | 414,645 | ||||
Acquisition of lease asset and liability | 684,083 | |||||
Cancellation of common stock shares pursuant to settlement agreement | 576 | |||||
Cancellation of common stock shares pursuant to issuance of common stock for acquisition of FIS | 2,846 | |||||
Transfer of common stock shares to Reliance Global Holdings, LLC pursuant to transfer of ownership of SWMT and FIS | 14,839 | |||||
Assumed earn-out liability pursuant to the issuance of shares in regard to the SWMT, FIS, and ABC Transactions | 2,850,050 | |||||
Acquisition of loan payable, related party, pursuant to the purchase of software from The Referral Depot, LLC | 200,000 | |||||
Acquisition of intangibles, net through issuance of shares | 294,250 | |||||
Acquisition of goodwill through issuance of shares | 853,796 | |||||
Assumed long-term debt pursuant to the issuance of shares in regard to the USBA and EBS Transactions | 727,812 | |||||
Assumed loans payable, related party pursuant to the issuance of shares in regard to the USBA and EBS Transactions | 459,688 | |||||
Predecessor [Member] | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) | 58,321 | |||||
Adjustment to reconcile net income to net cash used in operating activities: | ||||||
Depreciation and amortization | 1,778 | |||||
Amortization of debt issuance costs and accretion of debt discount | ||||||
Non-cash lease expense | ||||||
Goodwill impairment | ||||||
Stock compensation expense | ||||||
Common stock issuable | ||||||
Shares issued pursuant to settlement agreement | ||||||
Change in operating assets and liabilities: | ||||||
Accounts payables and other accrued liabilities | 73,440 | |||||
Accounts receivable | ||||||
Accounts receivable, related parties | ||||||
Note receivables | ||||||
Other receivables | ||||||
Other payables | ||||||
Other non-current assets | ||||||
Prepaid expense and other current assets | ||||||
Net cash used in operating activities | 133,539 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Note receivable, related parties | (2,277) | |||||
Acquisition of business, net of cash acquired | ||||||
Purchase of property and equipment | ||||||
Net cash used in investing activities | (2,277) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from borrowings of debt | ||||||
Principal repayments of debt | ||||||
Debt issuance costs | ||||||
Loans acquired through acquisitions | ||||||
Loans acquired through acquisitions, related parties | ||||||
Dividends paid | (48,154) | |||||
Distributions to stockholders and members | (18,500) | |||||
Issuance of loans payables, related parties | ||||||
Proceeds from notes payable, related parties | ||||||
Payment of notes payable | (5,217) | |||||
Proceeds of notes payable, related parties | (24,414) | |||||
Issuance of common stock for acquisitions | ||||||
Net cash provided by financing activities | (96,285) | |||||
Net increase in cash and restricted cash | 34,977 | |||||
Cash and restricted cash at beginning of year | $ 58,588 | 23,611 | $ 23,611 | |||
Cash and restricted cash at end of year | 58,588 | |||||
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||||||
Conversion of preferred stock into common stock | ||||||
Cash paid for interest | 2,164 | |||||
Acquisition of lease asset and liability | ||||||
Cancellation of common stock shares pursuant to settlement agreement | ||||||
Cancellation of common stock shares pursuant to issuance of common stock for acquisition of FIS | ||||||
Transfer of common stock shares to Reliance Global Holdings, LLC pursuant to transfer of ownership of SWMT and FIS | ||||||
Assumed earn-out liability pursuant to the issuance of shares in regard to the SWMT, FIS, and ABC Transactions | ||||||
Acquisition of loan payable, related party, pursuant to the purchase of software from The Referral Depot, LLC | ||||||
Acquisition of intangibles, net through issuance of shares | ||||||
Acquisition of goodwill through issuance of shares | ||||||
Assumed long-term debt pursuant to the issuance of shares in regard to the USBA and EBS Transactions | ||||||
Assumed loans payable, related party pursuant to the issuance of shares in regard to the USBA and EBS Transactions |
Balance Sheets (Southwestern Mo
Balance Sheets (Southwestern Montana Financial Center, Inc.) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 12,456 | |
Property and equipment, net | 57,205 | |
Total assets | 2,489,551 | |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 98,654 | |
Current portion of long-term debt | 90,580 | |
Total current liabilities | 1,168,501 | |
Long term debt, less current portion | 1,621,101 | |
Total liabilities | 2,789,602 | |
Stockholder's deficit: | ||
Common stock, no par; 50,000 shares authorized; 20,000 issued and outstanding | 265,699 | |
Accumulated deficit | (5,287,795) | |
Total liabilities and stockholders' equity (deficit) | 2,489,551 | |
Southwestern Montana Financial Center, Inc. [Member] | ||
Current assets: | ||
Cash | 284 | $ 222 |
Property and equipment, net | 91,962 | 122,273 |
Total assets | 92,246 | 122,495 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 73,506 | 87,020 |
Current portion of long-term debt | 35,200 | 38,301 |
Total current liabilities | 108,706 | 125,321 |
Long term debt, less current portion | 23,206 | 58,405 |
Total liabilities | 131,912 | 183,726 |
Stockholder's deficit: | ||
Common stock, no par; 50,000 shares authorized; 20,000 issued and outstanding | ||
Accumulated deficit | (39,666) | (61,231) |
Total liabilities and stockholders' equity (deficit) | $ 92,246 | $ 122,495 |
Balance Sheets (Southwestern _2
Balance Sheets (Southwestern Montana Financial Center, Inc.) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | |
Common stock, shares issued | 356,742,548 | 352,742,548 | 265,699,106 | |
Common stock, shares outstanding | 356,742,548 | 352,742,548 | 265,699,106 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Common stock, par value | ||||
Common stock, shares authorized | 50,000 | 50,000 | ||
Common stock, shares issued | 20,000 | 20,000 | ||
Common stock, shares outstanding | 20,000 | 20,000 |
Statements of Income (Southwest
Statements of Income (Southwestern Montana Financial Center, Inc.) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Southwestern Montana Financial Center, Inc. [Member] | ||
REVENUE | ||
Commission income | $ 1,527,100 | $ 1,519,195 |
OPERATING EXPENSES | ||
Salaries and wages | 998,897 | 973,795 |
General and administrative expenses | 406,420 | 461,745 |
Marketing and advertising | 4,073 | 5,525 |
Depreciation and amortization | 30,311 | 27,815 |
Loss on sale of assets | 9,400 | |
Total operating expenses | 1,439,701 | 1,478,280 |
Income loss from operations | 87,399 | 40,915 |
OTHER EXPENSE | ||
Interest expense | 6,928 | 3,650 |
Net income (loss) | $ 80,471 | $ 37,265 |
Statements of Stockholder's Def
Statements of Stockholder's Deficit (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] - USD ($) | Common Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total Stockholder's Deficiency [Member] |
Beginning balance at Dec. 31, 2016 | $ (38,071) | $ (38,071) | |
Beginning balance, shares at Dec. 31, 2016 | 20,000 | ||
Distributions | $ (60,425) | $ (60,425) | |
Net income (loss) | 37,265 | 37,265 | |
Ending balance at Dec. 31, 2017 | $ (61,231) | $ (61,231) | |
Ending balance, shares at Dec. 31, 2017 | 20,000 | ||
Beginning balance at Dec. 31, 2017 | $ (61,231) | $ (61,231) | |
Beginning balance, shares at Dec. 31, 2017 | 20,000 | ||
Distributions | $ (58,906) | $ (58,906) | |
Net income (loss) | 80,471 | 80,471 | |
Ending balance at Dec. 31, 2018 | $ (39,666) | $ (39,666) | |
Ending balance, shares at Dec. 31, 2018 | 20,000 | ||
Ending balance at Dec. 31, 2018 | $ (39,666) | $ (39,666) | |
Ending balance, shares at Dec. 31, 2018 | 20,000 | ||
Beginning balance at Dec. 31, 2018 | $ (39,666) | $ (39,666) | |
Beginning balance, shares at Dec. 31, 2018 | 20,000 |
Statements of Cash Flows (South
Statements of Cash Flows (Southwestern Montana Financial Center, Inc.) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income (loss) | $ (1,102,961) | |||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 135,550 | |||
Change in operating assets and liabilities: | ||||
Net cash used in operating activities | (658,601) | |||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||
Net cash used in investing activities | (5,530,831) | |||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Net cash provided by financing activities | 6,449,962 | |||
Net increase in cash and restricted cash | 260,530 | |||
Cash and restricted cash at beginning of year | 101,206 | $ 101,206 | ||
Cash and restricted cash at end of year | 361,736 | 491,585 | $ 101,206 | |
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||||
Cash paid for interest | 96,997 | |||
Southwestern Montana Financial Center, Inc. [Member] | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income (loss) | 80,471 | $ 37,265 | ||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 30,311 | 27,815 | ||
Loss on sale of equipment | 9,400 | |||
Change in operating assets and liabilities: | ||||
Accounts payable and accrued expenses | (13,514) | 22,244 | ||
Net cash used in operating activities | 97,268 | 96,724 | ||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||
Purchase of property and equipment | (86,492) | |||
Proceeds from sale of property and equipment | 33,001 | |||
Net cash used in investing activities | (53,491) | |||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Payment of stockholder distributions | (58,906) | (60,425) | ||
Proceeds from issuance of notes payable | 86,252 | |||
Payment of notes payable | (38,300) | (68,883) | ||
Net cash provided by financing activities | (97,206) | (43,056) | ||
Net increase in cash and restricted cash | 62 | 177 | ||
Cash and restricted cash at beginning of year | $ 284 | $ 284 | 222 | 45 |
Cash and restricted cash at end of year | 284 | 222 | ||
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||||
Cash paid for interest | $ 6,928 | $ 3,650 |
Balance Sheets (Fortman Insuran
Balance Sheets (Fortman Insurance Agency, LLC) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 12,456 | |
Prepaid and other current assets | ||
Total current assets | 118,525 | |
Property and equipment, net | 57,205 | |
Total assets | 2,489,551 | |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 98,654 | |
Current portion of long-term debt | 90,580 | |
Total current liabilities | 1,168,501 | |
Long term debt, less current portion | 1,621,101 | |
Total liabilities | 2,789,602 | |
Members' equity: | ||
Total liabilities and stockholders' equity (deficit) | 2,489,551 | |
Fortman Insurance Agency, LLC [Member] | ||
Current assets: | ||
Cash | 102,592 | $ 141,513 |
Investment | 35,804 | |
Prepaid and other current assets | 550 | 1,010 |
Total current assets | 103,142 | 178,327 |
Property and equipment, net | 129,126 | 127,267 |
Total assets | 232,268 | 305,594 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 54,532 | 61,781 |
Due to insurance providers | 5,966 | 8,673 |
Current portion of long-term debt | 14,677 | 13,037 |
Total current liabilities | 75,175 | 83,491 |
Long term debt, less current portion | 28,844 | 57,876 |
Total liabilities | 104,019 | 141,367 |
Members' equity: | ||
Members' equity | 128,249 | 164,227 |
Total liabilities and stockholders' equity (deficit) | $ 232,268 | $ 305,594 |
Statements of Income (Fortman I
Statements of Income (Fortman Insurance Agency, LLC) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fortman Insurance Agency, LLC [Member] | ||
REVENUE | ||
Commission income | $ 1,661,937 | $ 1,704,341 |
OPERATING EXPENSES | ||
Salaries and wages | 793,868 | 811,707 |
General and administrative expenses | 290,573 | 294,985 |
Marketing and advertising | 54,188 | 70,002 |
Depreciation and amortization | 22,335 | 26,225 |
Loss (gain) on sale of assets | 9,154 | (4,064) |
Total operating expenses | 1,170,118 | 1,198,855 |
Income loss from operations | 491,819 | 505,486 |
OTHER EXPENSE | ||
Interest expense, net | 611 | 1,641 |
Net income (loss) | $ 491,208 | $ 503,845 |
Statements of Members' Equity (
Statements of Members' Equity (Fortman Insurance Agency, LLC) | Fortman Insurance Agency, LLC [Member]Total Stockholder's Deficiency [Member]USD ($) |
Beginning balance at Dec. 31, 2016 | $ 166,861 |
Member distributions | (506,479) |
Net income (loss) | 503,845 |
Ending balance at Dec. 31, 2017 | 164,227 |
Beginning balance at Dec. 31, 2017 | 164,227 |
Member distributions | (527,186) |
Net income (loss) | 491,208 |
Ending balance at Dec. 31, 2018 | 128,249 |
Ending balance at Dec. 31, 2018 | 128,249 |
Beginning balance at Dec. 31, 2018 | $ 128,249 |
Statements of Cash Flows (Fortm
Statements of Cash Flows (Fortman Insurance Agency, LLC) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income (loss) | $ (1,102,961) | |||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||
Depreciation expense | 15,528 | $ 94,474 | ||
Change in operating assets and liabilities: | ||||
Accounts payable and accrued expenses | (102,154) | |||
Net cash used in operating activities | (658,601) | |||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Net cash provided by financing activities | 6,449,962 | |||
Net increase in cash and restricted cash | 260,530 | |||
Cash and restricted cash at beginning of year | 101,206 | 101,206 | ||
Cash and restricted cash at end of year | 361,736 | 491,585 | $ 101,206 | |
SUPPLEMENTAL DISCLOSURE OF CASH: | ||||
Cash paid for interest | 96,997 | |||
Fortman Insurance Agency, LLC [Member] | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income (loss) | 491,208 | $ 503,845 | ||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||
Depreciation expense | 22,335 | 26,225 | ||
Non-cash interest | 465 | |||
Loss (gain) on sale of equipment | 9,154 | (4,064) | ||
Change in operating assets and liabilities: | ||||
Prepaid and other current assets | 460 | 6,190 | ||
Accounts payable and accrued expenses | (7,249) | (26,315) | ||
Due to insurance providers | (2,707) | (2,129) | ||
Net cash used in operating activities | 513,666 | 503,752 | ||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||
Purchase of property and equipment | (48,168) | (10,230) | ||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Payment of stockholder distributions | (491,382) | (506,479) | ||
Payment of notes payable | (13,037) | (14,195) | ||
Net cash provided by financing activities | (504,419) | (520,674) | ||
Net increase in cash and restricted cash | (38,921) | (27,152) | ||
Cash and restricted cash at beginning of year | $ 102,592 | $ 102,592 | 141,513 | 168,665 |
Cash and restricted cash at end of year | 102,592 | 141,513 | ||
SUPPLEMENTAL DISCLOSURE OF CASH: | ||||
Cash paid for interest | 2,340 | 2,127 | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: | ||||
Purchase of property and equipment with long term note | 23,430 | |||
Payoff of note payable with proceeds from trade in of property and equipment | 37,785 | |||
Distribution of investment to members | $ 35,804 |
Balance Sheets (Altruis Benefit
Balance Sheets (Altruis Benefit Consultants, Inc.) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Total current assets | $ 118,525 | |
Other assets | 3,784 | |
Total assets | 2,489,551 | |
Current liabilities: | ||
Loans payable | ||
Total current liabilities | 1,168,501 | |
Stockholder's equity: | ||
Common stock, no par value; 60,000 shares authorized and 200 shares issued and outstanding | 265,699 | |
Retained earnings | (5,287,795) | |
Total stockholders' equity (deficit) | (300,051) | |
Total liabilities and stockholders' equity (deficit) | 2,489,551 | |
Altruis Benefit Consultants Inc [Member] | ||
Current assets: | ||
Cash and cash equivalents | 1,649,895 | $ 934,671 |
Investments (Carrying cost of $0 and $296,538 as of December 31, 2018 and 2017, respectively) | 305,154 | |
Loans receivable | 20,000 | |
Total current assets | 1,669,895 | 1,239,825 |
Other assets | 37 | 54 |
Security deposit | 2,275 | 2,275 |
Total assets | 1,672,207 | 1,242,154 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 37,875 | 41,638 |
Loans payable | 71,923 | 91,923 |
Total current liabilities | 109,798 | 133,561 |
Stockholder's equity: | ||
Common stock, no par value; 60,000 shares authorized and 200 shares issued and outstanding | ||
Retained earnings | 1,562,409 | 1,099,977 |
Accumulated other comprehensive income | 8,616 | |
Total stockholders' equity (deficit) | 1,562,409 | 1,108,593 |
Total liabilities and stockholders' equity (deficit) | $ 1,672,207 | $ 1,242,154 |
Balance Sheets (Altruis Benef_2
Balance Sheets (Altruis Benefit Consultants, Inc.) (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, carrying cost | ||
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 2,000,000,000 | |
Common stock, shares issued | 265,699,106 | |
Common stock, shares outstanding | 265,699,106 | |
Altruis Benefit Consultants Inc [Member] | ||
Investments, carrying cost | $ 0 | $ 296,538 |
Common stock, par value | ||
Common stock, shares authorized | 60,000 | 60,000 |
Common stock, shares issued | 200 | 200 |
Common stock, shares outstanding | 200 | 200 |
Statements of Income and Compre
Statements of Income and Comprehensive Income (Altruis Benefit Consultants, Inc.) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Altruis Benefit Consultants Inc [Member] | ||
REVENUE | ||
Commission income | $ 2,603,468 | $ 2,270,778 |
OPERATING EXPENSES | ||
Commission expense | 832,596 | 909,027 |
Salaries and wages | 445,093 | 377,126 |
General and administrative expenses | 454,846 | 291,079 |
Marketing and advertising | 17,270 | 2,338 |
Total operating expenses | 1,749,805 | 1,579,570 |
Income loss from operations | 853,663 | 691,208 |
OTHER INCOME (EXPENSE) | ||
Interest and dividend income | 15,582 | 21,351 |
Realized (loss) gain on investments | (8,528) | 417 |
Total other income | 7,054 | 21,768 |
Net income (loss) | 860,717 | 712,976 |
OTHER COMPREHENSIVE (LOSS) INCOME | ||
Reclassification for sales of investments | (8,616) | 5,912 |
Comprehensive income | $ 852,101 | $ 718,888 |
Statements of Stockholder's Equ
Statements of Stockholder's Equity (Altruis Benefit Consultants, Inc.) - Altruis Benefit Consultants Inc [Member] - USD ($) | Common Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Stockholder's Deficiency [Member] |
Beginning balance at Dec. 31, 2016 | $ 547,889 | $ 2,704 | $ 550,593 | |
Beginning balance, shares at Dec. 31, 2016 | 200 | |||
Distributions | (160,888) | (160,888) | ||
Unrealized gain on investments | 5,912 | 5,912 | ||
Net income | 712,976 | 712,976 | ||
Ending balance at Dec. 31, 2017 | 1,099,977 | 8,616 | 1,108,593 | |
Ending balance, shares at Dec. 31, 2017 | 200 | |||
Beginning balance at Dec. 31, 2017 | 1,099,977 | 8,616 | 1,108,593 | |
Beginning balance, shares at Dec. 31, 2017 | 200 | |||
Distributions | (398,285) | (398,285) | ||
Reclassification for sales of investments | (8,616) | (8,616) | ||
Net income | 860,717 | 860,717 | ||
Ending balance at Dec. 31, 2018 | 1,562,409 | 1,562,409 | ||
Ending balance, shares at Dec. 31, 2018 | 200 | |||
Ending balance at Dec. 31, 2018 | 1,562,409 | 1,562,409 | ||
Ending balance, shares at Dec. 31, 2018 | 200 | |||
Beginning balance at Dec. 31, 2018 | $ 1,562,409 | $ 1,562,409 | ||
Beginning balance, shares at Dec. 31, 2018 | 200 |
Statements of Cash Flows (Altru
Statements of Cash Flows (Altruis Benefit Consultants, Inc.) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income | $ (1,102,961) | |||
Change in operating assets and liabilities: | ||||
Accounts payable and accrued expenses | (102,154) | |||
Net cash used in operating activities | (658,601) | |||
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: | ||||
Net cash used in investing activities | (5,530,831) | |||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Net cash provided by financing activities | 6,449,962 | |||
Net increase in cash and restricted cash | 260,530 | |||
Cash and restricted cash at beginning of year | 101,206 | $ 101,206 | ||
Cash and restricted cash at end of year | 361,736 | 491,585 | $ 101,206 | |
Altruis Benefit Consultants Inc [Member] | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income | 860,717 | $ 712,976 | ||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||
Realized loss (gain) on investments | 8,528 | (417) | ||
Change in operating assets and liabilities: | ||||
Other assets | 17 | 31 | ||
Accounts payable and accrued expenses | (3,763) | 9,121 | ||
Net cash used in operating activities | 865,499 | 721,711 | ||
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: | ||||
Advances made on loans | (20,000) | |||
Proceeds on sale of investments | 288,010 | |||
Net cash used in investing activities | 268,010 | |||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||
Stockholder distributions | (398,285) | (160,888) | ||
Borrowing on loans | 91,923 | |||
Repayments on loans | (20,000) | |||
Net cash provided by financing activities | (418,285) | (68,965) | ||
Net increase in cash and restricted cash | 715,224 | 652,746 | ||
Cash and restricted cash at beginning of year | $ 1,649,895 | $ 1,649,895 | 934,671 | 281,925 |
Cash and restricted cash at end of year | $ 1,649,895 | $ 934,671 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) (“RELI”, “Reliance”, or the “Company”) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC (“Reliance Holdings”, or “Parent Company”), a related party acquired control of the Company (see Note 4). Ethos Media Network, Inc. was then renamed on October 18, 2018. On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (see Note 3) (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. (the “EBS Transaction”, and, together with USBA Transaction, the “Common Control Transactions”). On October 24, 2018, a related party of the Company, entered into a purchase agreement to sell assign, and convey membership interest and all other property rights in EBS and USBA to Reliance. USBA is a general agent for various insurance companies and earns override commissions on business placed by other “downstream” agencies. EBS is a retail broker with its revenues mainly sourced from independent contractor brokers. On December 1, 2018, Commercial Coverage Solutions, LLC (“CCS”), a wholly owned subsidiary of Reliance, acquired Commercial Solutions of Insurance Agency, LLC (see Note 3). CCS is a property and casualty insurance agency that specializes in commercial trucking and transportation insurance. On April 1, 2019, Southwestern Montana Insurance Center, LLC (“SWMT”), a wholly owned subsidiary of Reliance, acquired Southwestern Montana Financial Center, Inc. (See Note 3). SWMT is an insurance services firm which specializes in providing personal and commercial lines of insurance. On May 1, 2019, Fortman Insurance Services, LLC (“FIS”), a wholly owned subsidiary of Reliance, acquired Fortman Insurance Agency, LLC (See Note 3). FIS is an insurance services firm which specializes in providing personal and commercial lines of insurance. On September 1, 2019, the Company acquired Altruis Benefits Consulting, Inc. (“ABC”). ABC is an insurance agency and employee benefits provider. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Liquidity The Company has incurred losses of $2,118,211 for the six months ended June 30, 2020. At June 30, 2020, the Company had a working capital deficiency of approximately $4,811,725. In 2019, the Company acquired three additional agencies to grow the company and improve profitability. Since these acquisitions are recent, management’s plans to achieve operational efficiencies and reduce expenses will be implemented and enable the Company to continue to meet its obligations for at least the next twelve months. On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. Reliance Holdings has committed to fund the Company for at least the next 12 months. Additionally, management is planning to raise additional financing through an equity offering, although, there can be no assurance that additional equity financing will be available on terms acceptable to the Company or at all. The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the condensed consolidated financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. To date, there has been minimal to no effect to the Company due to the outbreak; however, the Company is unable to estimate any long-term effects the coronavirus will have on its results of operations, financial condition or liquidity for fiscal year 2020. Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the condensed consolidated financial statements and related disclosures. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. Liquidity As of December 31, 2019, the Company’s reported cash balance was approximately $6,700, current assets were approximately $647,000 while current liabilities were approximately $4,668,000 including loan payable to related party of approximately $3,312,000. The Company had stockholders’ equity of $642,324. For the year ended December 31, 2019, the Company reported a net loss of approximately $(3,495,000) and negative cash flow from operations of $(373,934). Management believes that the company’s financial position may cause concern about the Company’s liquidity. Therefore, management has developed plans that should alleviate any liquidity issues. Management believes that has plans that will alleviate any liquidity issues over next twelve months. Management’s cash flow forecast for 2021 and beyond indicate that its business should generate positive cash flows from their operations. During the year, the Company acquired three new entities. As the three acquisitions took place in April, May, and September of 2019, respectively, the Company did not receive the benefit of revenue from these entities for a substantial portion of the year. Further, the largest acquisition in terms of revenue was Altruis Benefit Consultants, Inc. which was not acquired until September of 2019. Going forward the Company will recognize revenue from these entities for the full year which will increase cash flows. In addition, the Company incurred several one-time expenses, related to professional and legal fees for the three acquisitions that closed in 2019, which contributed to the Company’s net loss. Reliance Holdings has also agreed to support the Company if required and management believes that the related party holding the loan to related party discussed above will forebear on any amounts due should the company be unable to fulfil its payment obligations under the loan agreement. Management is also planning to raise capital through an initial public offering of the Company’s equity securities. However, there can be no assurance that management will be successful in raising capital through sale of equity securities. Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. Deferred Financing Costs The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of December 31, 2019, and 2018, unamortized deferred financing costs were $213,733, and $46,556, respectively and are netted against the related debt. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Identifiable Intangible Assets, net Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized in the predecessor and successor periods presented. Goodwill and other indefinite-lived intangibles The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets other than goodwill, such as trade names, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This ASU, which the Company adopted as of January 1, 2019, did not have a material effect on the Company’s consolidated financial statements. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur. Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. Seasonality A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU was adopted by the Company using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company adopted Accounting Standards Update (“ASU”) 2017- 04 Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment early in August 2018 Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the consolidated financial statements and related disclosures. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Acquisitions | |
Acquisitions | NOTE 2. Acquisitions USBA and EBS On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. Management considers USBA and EBS as a single business EBS is an agency while USBA is a Managing General Agent (“MGA”) requiring two separate legal entities to conduct business. For the six months ended June 30, 2020 USBA and EBS recorded income before depreciation amortization of $66,801. CCS On December 1, 2018, CCS, a wholly owned subsidiary of the Company acquired the business and certain assets of Commercial Insurance Agency, LLC. For the six months ended June 30, 2020 CCS had a loss before depreciation and amortization of $(20,187). SWMT On April 1, 2019, Southwestern Montana Insurance Center LLC (SWMT), a wholly owned Subsidiary of Reliance Holdings acquired the business and certain assets of Southwestern Montana Financial Center, Inc. The purchase agreement for Southwestern Montana Financial Center Inc included and earn-out payment. At June 30, 2020 the earn-out liability related to this acquisition was $522,533 and is included in earnout liability in long term liabilities in the accompanying financial statements. For the six months ended June 30, 2020 SWMT reported income before depreciation and amortization of $277,723. FIS On May 1, 2019 Fortman Insurance Services, LLC a subsidiary of Reliance Holdings, acquired the business and certain assets of Fortman Insurance Agency, LLC. The Purchase of Fortman Insurance Agency, LLC included an earn-out measured for the 12 months from May 1,2021 through April 30, 2022. At June 30, 2020 the earn-out liability related to this acquisition was $522,533 and is included in earnout liability in long term liabilities in the accompanying financial statements. For the six months ended June 30, 2020 FIS reported income before depreciation and amortization of $309,042. ABC Acquisition On September 1, 2019, the Company acquired Altruis Benefits Consulting, Inc. (ABC Acquisition). The ABC Acquisition included an earn out with three yearly payments Commencing on September1, 2019 and ending on August 31, 2022. At June 30, 2020, the earn out liability was 1,894,842.00 and is included in earnout liability in long term liabilities in the accompanying condensed consolidated balance sheet. For the six months ended June 30,2020, ABC reported income before depreciation and amortization of $193,327 . |
Strategic Investments and Busin
Strategic Investments and Business Combination | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Strategic Investments and Business Combination | NOTE 3. Strategic Investments and Business Combination USBA Transaction On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. (the “EBS Transaction”, and, together with USBA Transaction, the “Common Control Transactions”). The USBA Transaction was accounted for by Reliance Holdings as a business combination in accordance with the acquisition method defined in ASC 805-10 and 805-20, whereby the total purchase consideration was allocated to intangible assets acquired based on their respective estimated fair values. The acquisition method of accounting uses the fair value concept defined in ASC 820. ASC 805 requires, among other things, that assets acquired, and liabilities assumed, if any, in a business combination be recognized at their fair values as of the acquisition date. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. The allocation of the purchase price in connection with the FHA/TSB Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 6,520 3 Customer relationships 116,100 9 Non-competition agreements 48,540 5 Goodwill 578,840 Indefinite $ 750,000 Goodwill of $578,840 arising from the FHA/TSB Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the FHA/TSB Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the FHA/TSB Acquisition incurred were $83,162 recorded as a component of General and administrative on the accompanying Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018 since the FHA/TSB common control date. The revenues of the acquired business for the period from August 1, 2018 through December 31, 2018 from the FHA/TSB common control date was $135,425 and the net loss was $12,145. EBS Transaction On August 1, 2018, EBS, a subsidiary of Reliance Holdings entered into a Purchase Agreement with Employee Benefit Solutions Inc. whereby the EBS purchased the business and certain assets noted within the Purchase Agreement (the “EBS Acquisition”) for a total purchase price of $400,000 Reliance Holdings accounted for the EBS Acquisition as a business combination in accordance using the acquisition method under the guidance contained in ASC 805-10 and 805-20. The acquisition method of accounting requires, among other things, that assets acquired, and liabilities assumed, if any, in a business purchase combination be recognized at their fair values as of the acquisition date. The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. he allocation of the purchase price in connection with the EBS Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 33,140 20 Customer relationships 47,630 9 Non-competition agreements 42,320 5 Goodwill 274,956 Indefinite Fixed assets 1,954 5-7 $ 400,000 Goodwill of $274,956 arising from the EBS Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the EBS Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the EBS Acquisition incurred were $44,353 recorded as a component of General and administrative expenses on the accompanying Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018 since the EBS common control date. The revenues of the acquired business for the period from August 1, 2018 through December 31, 2018 from the EBS common control date was $246,965 and the net loss was $143,450. Transfer of USBA and EBS to the Company On October 24, 2018, Reliance Holdings and the Company entered into a Bill of Sale agreement to transfer all of the outstanding membership interest in EBS LLC and USBA LLC. In exchange for the membership interest, the Board of Directors of the Company authorized and issued 16,400,000 shares of restricted common stock of the Company for all the membership interest of USBA LLC and EBS LLC. The Company considered this transfer between entities under common control relying on the guidance ASC 805-50 for common control transactions Accordingly, this transfer was measured using the carrying amount of the net assets transferred and presented retrospectively from the date acquired by the parent in accordance with guidance contained in paragraph ASC805-50-30-6 For the year ended December 31, 2019, EBS in combination with USBA, had a loss of ($276,859) before depreciation and amortization. EBS and USBA are viewed on a combined basis as they are “one entity” however they operate as an agency (EBS) and a Managing General Agent (“MGA”) (USBA) which is why they are two legally separate entities. CCS Acquisition On December 1, 2018, Commercial Coverage Solutions LLC, a wholly-owned subsidiary of the Company (“CCS”), entered into a Purchase Agreement with Commercial Solutions of Insurance Agency, LLC (“CSIA”) whereby CCS purchased the business and certain assets of CSIA noted within the Purchase Agreement (the “CSIA Acquisition”) for a total purchase price of $1,200,000. The total purchase price is made up of (1) a cash payment of $1,080,000 (the “Cash Payment”) on the “Closing Date” or the first bank business day thereafter (i.e. December 1, 2018); (2) the balance of the purchase price, having a value of $120,000, was paid in the form of 761,905 shares of common stock in the Company, issued at a per-share price equal to Fifteen and 75/100 Cents ($0.1575) (the “Closing Shares”); and (3) the amount of any cash necessary to satisfy the required closing date working capital shall be set off against the Cash Payment by CCS. “Required closing date working capital” shall consist only of cash and pre-paid rent and/or security deposits or pre-payments or deposits for any assumed liabilities. The Closing Shares are to be transferred from the shares owned by Reliance Holdings and were transferred subsequent to December 31, 2018; and as a result, is a component of Loans payables, related parties on the accompanying Consolidated Balance Sheets. The CSIA Acquisition was accounted for as a business combination under the acquisition method under the guidance contained in ASC 805-10 and 805-20. Accordingly, the total purchase consideration was allocated to tangible and intangible assets acquired based on their respective estimated fair values. The acquisition method requires, among other things, that assets acquired, and liabilities assumed in a business purchase combination be recognized at their fair values as of the acquisition. The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. The allocation of the purchase price in connection with the CSIA Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Cash $ 13,500 N/A Fixed Assets 1,638 5-7 Customer relationships 284,560 11 Non-competition agreements 40,050 5 Trade name and trademarks 8,500 2 Goodwill 851,752 Indefinite $ 1,200,000 Goodwill of $851,752 arising from the CSIA Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the CSIA Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the CSIA Acquisition incurred were $113,247 recorded as a component of General and administrative expense on the accompanying Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations for the period from August 1, 2018 to December 31, 2018 since the CSIA Acquisition date. The revenues of the acquired business for the period from December 1, 2018 through December 31, 2018 from the CSIA Acquisition was $8,380 and the net loss was $136,568. For the year ended December 31, CCS reported a loss from operations of $659,940. SWMT Transaction On April 1, 2019, SWMT, a wholly owned subsidiary of Reliance Holdings entered into a Purchase Agreement with Southwestern Montana Financial Center, Inc. whereby the SWMT purchased the business and certain assets noted within the Purchase Agreement (the “SWMT Acquisition”) for a total purchase price of $2,394,509. The purchase price was paid with a cash payment of $1,389,840, 500,000 in shares of the Company’s common stock, and an earn-out payment equal to 32% of the final earn-out EBITDA multiplied by 5.00, which is payable in $300,000 in shares of the Company’s common stock with any amount in excess over $300,000 to be paid in cash. The balance of the earn-out liability as of December 31, 2019 was $522,553 and is included in long term debt on the balance sheet. SWMT was transferred to the Company from Reliance Holdings as noted in Note 4. The SWMT Acquisition was accounted for as a business combination in accordance using the acquisition method under the guidance in ASC 805-10 and 805-20. Accordingly, the total purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values. The acquisition method of accounting requires, among other things, that assets acquired, and liabilities assumed, if any, in a business purchase combination be recognized at the acquisition date fair value. The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. The allocation of the purchase price in connection with the SWMT Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Customer relationships $ 561,000 10 Non-competition agreements 599,200 5 Goodwill 1,217,790 Indefinite Fixed assets 41,098 5-7 Loan Payable (24,579 ) $ 2,394,509 Goodwill of $1,217,790 arising from the SWMT Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the SWMT Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the SWMT Acquisition were $122,660, which were paid in full by Reliance Global Holdings, LLC, a related party. The expense is recognized in in general and administrative expenses in the accompanying statements of operations. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations from the date of acquisition through December 31, 2019. The revenues of the acquired business for the period from April 1, 2019 to December 31, 2019 was $1,106,432 and the net income was $46,835. FIS Transaction On May 1, 2019, Fortman Insurance Services, LLC (“FIS”), subsidiary of Reliance Holdings, entered into a Purchase Agreement with Fortman Insurance Agency, LLC whereby the FIS purchased the business and certain assets noted within the Purchase Agreement (the “FIS Acquisition”) for a total purchase price of $4,156,405. The purchase price was paid with a cash payment of $3,223,750, $500,000 in shares of the Company’s common stock held by Reliance Holdings, and an earn-out payment equal to 10% of the final earn-out EBITDA multiplied by 6.25. The earn-out measurement period is 12 months commencing May 1, 2021 and ending April 30, 2022. The earn-out shall not accrue and shall be paid without interest within 60 days after the measurement period. The balance of the earn out liability as of December 31, 2019 was $432,655 and is included in long term debt on the balance sheet. Reliance Holdings accounted for the FIS Acquisition using the acquisition method using the guidance contained in ASC 805-10 and 805-20. The acquisition method requires, among other things, that assets acquired, and liabilities assumed, if any, in a business purchase combination be recognized at their fair values at the acquisition date. The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. The allocation of the purchase price in connection with the FIS Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 289,400 5 Customer relationships 1,824,000 10 Non-competition agreements 752,800 5 Goodwill 1,269,731 Indefinite Fixed assets 19,924 5-7 Prepaid rent 550 $ 4,156,405 Goodwill of $1,269,731 arising from the FIS Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the FIS Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the FIS Acquisition were $63,663, which were paid in full by Reliance Global Holdings, LLC, a related party and is included in general and administrative expenses in the statement of operations. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2019. The revenues of the acquired business for the period from May 1, 2019 to December 31, 2019 was $1,186,951 and income before interest depreciation and amortization was $389,708. Transfer of SWMT and FIS to the Company In September 2019, Reliance Holdings and the Company entered into a Bill of Sale agreement to transfer all of the outstanding membership interest in SWMT LLC and FIS LLC. In exchange for the membership interest, the Board of Directors of the Company authorized and issued 14,839,011 shares of restricted common stock of the Company for all the membership interest of SWMT LLC and FIS LLC. The Company considered this transfer between entities under common control relying on the guidance ASC 805-50 for common control transactions Accordingly, this transfer was measured using the carrying amount of the net assets transferred and presented retrospectively from the date acquired by the Parent in accordance with guidance contained in paragraph ASC805-50-30-6. ABC Transaction On September 1, 2019, the Company entered into a Stock Purchase Agreement with Altruis Benefits Consulting, Inc. whereby the Company shall purchase the business and certain assets noted within the Purchase Agreement (the “ABC Transaction”) for a total purchase price of $7,688,168. The purchase price was paid with a cash payment of $5,202,364, $578,040 in shares of the Company’s common stock, and an earn-out payment made annually for 3 years. Each year one-third of the earn-out shares held in escrow shall be released to the seller. The yearly earn-out payments are equal to 6.66% of the final earn-out EBITDA multiplied by 7.00. The earn-out measurement periods are the 12 months commencing September 1, 2019 and ending August 31, 2022. The balance of the earn-out liability as of December 31, 2019 was $1,894,842 and is included in long term debt on the balance sheet. The ABC Acquisition is being accounted for as a business combination in accordance with the acquisition method using the guidance contained in ASC 805-10 and 805-20 Accordingly, the total purchase consideration was allocated to intangible assets acquired based on their respective estimated fair values. The acquisition method of accounting requires, among other things, that assets acquired, and liabilities assumed, if any, in a business purchase combination be recognized at their fair values as of the acquisition date. The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing. The allocation of the purchase price in connection with the ABC Transaction was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Cash $ 1,850,037 Trade name and trademarks 714,600 5 Customer relationships 753,000 10 Non-competition agreements 1,168,600 5 Goodwill 4,949,329 Indefinite Fixed assets 85 5 Payable to seller (1,747,483 ) $ 7,688,168 Goodwill of $4,949,329 arising from the ABC Acquisition consisted of the value of the employee workforce and the residual value after all identifiable intangible assets were valued. Goodwill recognized pursuant to the ABC Acquisition is currently expected to be deductible for income tax purposes. Total acquisition costs for the ABC Acquisition incurred were $92,172 recorded as a component of General and administrative expenses on the accompanying Consolidated Statement of Operations for the year ended December 31, 2019. The operating results of the acquired business has been included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2019. The revenues of the acquired business for the period from September 1, 2019 to December 31, 2019 was $625,036. The net loss for September 1, 2019 to December 31, 2019 was $67,682. |
Recapitalization and Common Con
Recapitalization and Common Control Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Recapitalization And Common Control Transactions | |
Recapitalization and Common Control Transactions | NOTE 4. RECAPITALIZATION AND COMMON CONTROL TRANSACTIONS The purchase of Ethos, as described in Note 1, is being accounted for as a reverse recapitalization. As such, Reliance and its wholly owned subsidiaries are treated as the continuing company and Ethos is treated as the “acquired’’ company for financial reporting purposes. This determination was primarily based on the operations of Reliance’s subsidiaries comprising of substantially all the ongoing operations of the post-combination company, the parent company of Reliance owning 84.5% of the voting control of Reliance and Reliance’s parent senior management comprising substantially all of the senior management of the post-combination Company. Accordingly, for accounting purposes, the purchase of Ethos is treated as the equivalent of Reliance and its wholly owned subsidiaries are issuing stock for the net assets of Ethos, accompanied by a recapitalization. The net assets of Reliance are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the purchase of Ethos are the historical operations of Reliance and its wholly owned subsidiaries are the combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC as discussed in Note 3. The amount of consideration paid on September 21, 2018 to the controlling seller of Ethos was $287,500. Immediately following, the parent of Reliance owned approximately 50,000,000 preferred shares and 46,489,000 common shares of Ethos. Ethos was then renamed on October 18, 2018. On October 24, 2018, Reliance Holdings and the Company entered into a Bill of Sale agreement to transfer all of the outstanding membership interest in EBS LLC and USB LLC. In exchange for the membership interest, the Board of Directors of the Company authorized and issued 16,400,000 shares of restricted common stock of the Company for all the membership interest of USB LLC and EBS LLC. During September 2019, Reliance Holdings transferred all of the outstanding membership interest in SWMT and FIS to the Company. In exchange for the membership interest, the Board of Directors of Reliance Inc. issued 14,839,011 shares of restricted common stock of Reliance Inc. for all the membership interest of SWMT and FIS. |
Investment in NSURE, Inc.
Investment in NSURE, Inc. | 6 Months Ended |
Jun. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Investment in NSURE, Inc. | NOTE 3. INVESTMENT IN NSURE, INC. On February 19, 2020, the Company entered into a securities purchase agreement with NSURE, Inc. (“NSURE”) whereas the Company may invest up to an aggregate of $20,000,000 in NSURE which will be funded with three tranches. In exchange, the Company will receive a total of 5,837,462 shares of NSURE’s Class A Common Stock, which represents 35% of the outstanding shares. The first tranche of $1,000,000 was paid immediately upon execution of the agreement. As a result of the first tranche, the Company received 291,873 shares of NSURE’s Class A Common Stock, which represents 3% ownership of NSURE. The second tranche of $3,000,000 and third tranche of $16,000,000 are not due until a later date in 2020. NSure’s equity securities do not have a readily determinable fair value because NSure is a private company whose equity securities are not traded on an exchange registered with the U.S. Securities and Exchange Commission or in the Over-the-Counter Markets Accordingly, the Company accounts for its investment in NSure at cost less impairment, if any, plus or minus any changes resulting from observable changes in orderly transactions until such time that a readily determinable fair value becomes available. Once the Company determines that it can exercise significant influence over NSURE, it will begin to account for its investment under the equity method. On June 1, 2020, the Company invested an additional $200,000 and received 58,375 shares of NSURE Class A Common Stock. As of June 30, 2020, the investment balance is $1,200,000. On August 5, 2020 and August 20, 2020, the Company invested an additional $100,000 and $50,000, respectively, for which the Company received 43,781 shares of NSURE Class A common stock. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc. The Company received proceeds of $1,000,000 for the issuance of these common shares. |
Property and Equipment
Property and Equipment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | NOTE 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Condensed Consolidated Statements of Operations was $103,650 and $15,528 for the six months ended June 30, 2020 and 2019, respectively | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Consolidated Statement of Operations was $94,474 and $2,580 for the year ended December 31, 2019 and the period from August 1, 2018 to December 31, 2018, respectively. Software On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD), a related party, to purchase a client referral software created exclusively for the insurance industry. The Company purchased this software to be utilized internally and does not plan to license, sell, or otherwise market the software, as such the total cost of the software has been capitalized and will be amortized on a straight-line basis over the useful life. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares (at $0.17 per share which amounted to $340,000) of the Company. Per the agreement, the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, the Company recorded a loan payable to a related party of $172,327, net of discount on the loan of $27,673. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. The total carrying cost of the software as of December 31, 2019 is $562,327. Depreciation Expense related to the software for the year ending December 31, 2019 was $78,101. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill and Other Intangible Assets | NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS Effective January 1, 2020 the Company reorganized its reporting structure into a single operating unit. All of the acquisitions made by the Company are in one industry insurance agencies. These agencies operate in a very similar economic and regulatory environment. The Company has one executive who is responsible for the operations of the insurance agencies. This executive reports directly to the Chief Financial Officer (“CFO”) on a quarterly basis. Additionally, the CFO who is responsible for the strategic direction of the Company review the operations of the insurance agency business as opposed to an office by office view. In accordance with guidance in ASC 350-20-35-45 all the Company’s goodwill will be reassigned to a single reporting unit. Accordingly, beginning with the October 1, 2020 impairment test, the Company will test for impairment at the insurance agency level. 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, 2020: Weighted Average Remaining Amortization period (Years) Gross Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.1 $ 1,052,160 $ (200,700 ) $ 961,040 Customer relationships 9.1 3,586,290 (442,465 ) 3,034,245 Non-competition agreements 4.2 2,651,510 (567,743 ) 2,083,767 $ 7,289,960 $ (1,210,908 ) $ 6,079,052 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, 2019: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.3 $ 1,052,160 $ (96,258 ) $ 955,902 Customer relationships 9.4 3,586,290 (257,529 ) 3,328,761 Non-competition agreements 4.4 2,651,510 (302,589 ) 2,348,921 $ 7,289,960 $ (656,376 ) $ 6,633,584 Amortization expense was $554,532 and $44,789 for the six months ended June 30, 2020 and 2019, respectively. The amortization expense of acquired intangible assets for each of the following five years and thereafter are expected to be as follows: Years ending June 30, Amortization Expense 2020 (remaining six months) $ 818,364 2021 1,091,343 2022 1,090,620 2023 1,075,827 2024 533,822 Thereafter 1,469,076 Total $ 6,079,052 | NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill, allocated per unit, is set forth below. The most recent goodwill impairment test was performed in October of 2019 and was a quantitative test performed by a valuation consultant. The impairment test was only performed for the EBS & USBA reporting unit and the CCS reporting unit. All other reporting units were acquired in 2019 and not subject to formal impairment testing as they were not held for at least one year and there were no indications of impairment. The Company evaluated whether the COVID-19 pandemic was a triggering event for testing goodwill impairment. After evaluating the performance of the various reporting units, the Company considered that the COVID-19 pandemic did not trigger an impairment test. The Company tested goodwill using discounted cash flow analysis and probability weighted market multiples valuations to determine the fair value of EBS, USBA, and CCS. The Company determined that CCS was overvalued by $593,790 and recorded goodwill impairment expense for the full amount. During the year ended December 31, 2019 and 2018, the Company recorded impairment of goodwill of $593,790 and $0, respectively. After accounting for the goodwill impairment, the excess fair value over carrying value of the EBS&USBA reporting unit and the CCS reporting unit were $677,772 (42%) and $0, respectively. Reporting Unit EBS & USBA CCS SWMT FIS ABC Total Balance, August 1, 2018 $ - $ - $ - $ - $ - $ - Transfer from Holdings 853,796 853,796 CCS Acquisition 851,752 851,752 Impairment December 31, 2018 $ 853,796 851,752 1,705,548 Transfer from Holdings 1,217,790 1,269,731 2,487,521 ABC transaction 4,949,329 4,949,329 Impairment (593,790 ) (593,790 ) Balance December 31, 2019 $ 853,796 $ 257,962 $ 1,217,790 $ 1,269,731 $ 4,949,329 $ 8,548,608 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, 2019: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.3 $ 1,052,160 $ (96,258 ) $ 955,902 Customer relationships 9.4 3,586,290 (257,529 ) 3,328,761 Non-competition agreements 4.4 2,651,510 (302,589 ) 2,348,921 $ 7,289,960 $ (656,376 ) $ 6,633,584 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, 2018: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 14.0 $ 48,160 $ (1,951 ) $ 46,209 Customer relationships 10.1 448,290 (12,680 ) 435,610 Non-competition agreements 4.7 130,910 (8,240 ) 122,670 $ 627,360 $ (22,871 ) $ 604,489 Amortization expense was $633,505 and $22,871 for the year ended December 31, 2019 and the period from August 1, 2018 to December 31, 2018, respectively. The amortization expense of acquired intangible assets for each of the following five years are expected to be as follows: Years ending December 31, Amortization 2020 $ 1,096,692 2021 1,091,887 2022 1,090,620 2023 1,082,374 2024 710,052 Thereafter 1,561,959 Total $ 6,633,584 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Payables and Accruals [Abstract] | ||
Accounts Payable and Accrued Liabilities | NOTE 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Significant components of accounts payable and accrued liabilities were as follows: June 30, 2020 December 31, 2019 Accounts payable $ 313,045 $ 102,112 Accrued expenses 12,130 5,797 Accrued credit card payables 14,950 32,395 Other accrued liabilities - 12,922 $ 340,125 $ 153,226 | NOTE 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Significant components of accounts payable and accrued liabilities were as follows: December 31, 2019 December 31, 2018 Accounts payable $ 102,112 $ 14,888 Accrued expenses 5,797 65,302 Accrued credit card payables 32,395 18,464 Other accrued liabilities 12,922 - $ 153,226 $ 98,654 |
Long-Term Debt
Long-Term Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Long-Term Debt | NOTE 7. LONG-TERM DEBT The composition of the long-term debt follows: June 30, 2020 December 31, 2019 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $17,935 and $19,044 as of June 30, 2020 and December 31, 2019, respectively $ 570,157 $ 595,797 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,098 and $22,737 as of June 30, 2020 and December 31, 2019, respectively 921,038 963,174 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $15,243 and $16,685 as of June 30, 2020 and December 31, 2019, respectively 1,024,472 1,066,815 Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $51,385 and $54,293 as of June 30, 2020 and December 31, 2019, respectively 2,577,670 2,593,707 Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $60,623 and $65,968 as of June 30, 2020 and December 31, 2019, respectively 4,067,377 4,062,032 9,160,714 9,281,525 Less: current portion (963,450 ) (1,010,570 ) Long-term debt $ 8,197,264 $ 8,270,955 Oak Street Funding LLC – Term Loans On August 1, 2018, EBS and USBA entered into a Credit Agreement with Oak Street Funding LLC (“Oak Street”) whereby EBS and USBA borrowed $750,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. Interest accrues at 5.00% on the basis of a 360-day year, maturing 120 months from the Amortization Date (September 25, 2018). For the period from August 1, 2018 to December 31, 2018, the Company incurred debt issuance costs associated with the Term Loan in the amount of $22,188, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring entities through the respective USBA and EBS acquisitions. On April 1, 2019, SWMT entered into a Credit Agreement with Oak Street whereby SWMT borrowed $1,136,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $28,849, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring an entity through SWMT. On May 1, 2019, FIS entered into a Credit Agreement with Oak Street whereby FIS borrowed $2,648,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $58,171, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring an entity through FIS. On September 5, 2019, the Company entered into a Credit Agreement with Oak Street whereby the Company borrowed $4,128,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $94,105, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the term loan were to be used for the purpose of acquiring ABC. Oak Street Funding LLC – Senior Secured Amortizing Credit Facility (“Facility”) On December 7, 2018, CCS entered into a Facility with Oak Street whereby CCS borrowed $1,025,000 from Oak Street under a senior secured amortizing credit facility. The borrowing rate under the Facility is a variable rate equal to Prime +1.50% and matures 10 years from the closing date. For the period from August 1, 2018 to December 31, 2018, the Company incurred debt issuance costs associated with the Facility in the amount of $25,506, which were deferred and are amortized over the length of the Facility. The proceeds of the term loan were to be used for the purpose of acquiring CSIA. Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of June 30, 2020 are: Period ending June 30, Maturities of Long-Term Debt 2020 (remaining six months) $ 474,495 2021 963,450 2022 963,450 2023 963,450 2024 963,450 Thereafter 4,832,419 Total $ 9,160,714 As of March 31, 2020, the Company was not in compliance with a covenant due to start up initiatives that were funded by Reliance Holdings. The Company received a waiver of default from Oak Street Funding LLC. Loans Payable Paycheck Protection Program On April 4, 2020, the Company entered into a loan agreement with First Financial Bank for a loan of $673,700 pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. This loan is evidenced by a promissory note dated April 4, 2020 and matures two years from the disbursement date. This loan bears interest at a rate of 1.00% per annum, with the first six months of interest deferred. Principal and interest are payable monthly commencing one year after the disbursement date and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. This loan contains customary events of default relating to, among other things, payment defaults or breaches of the terms of the loan. Upon the occurrence of an event of default, the lender may require immediate repayment of all amounts outstanding under the note. The principal and interest of the loan are repayable in 18 monthly equal installments of $37,913 each. Interest accrued in the first six months is included in the monthly installments. Installments must be paid on the 24 th Under the terms of the PPP, up to the entire amount of principal and accrued interest may be forgiven to the extent loan proceeds are used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration under the PPP. The Company intends to use the entire loan amount for designated qualifying expenses and to apply for forgiveness in accordance with the terms of the PPP. No assurance can be given that the Company will obtain forgiveness of the loan in whole or in part. June 30, 2020 PPP Loan as of June 30, 2020 $ 508,700 Less: current portion (129,359 ) Long-term loans payable $ 379,341 | NOTE 8. LONG-TERM DEBT The composition of the long-term debt follows: December 31, 2019 December 31, 2018 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $19,044 and $21,263 as of December 31, 2019 and 2018, respectively $ 595,797 $ 711,974 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,737 and $25,293 as of December 31, 2019 and 2018, respectively 963,174 999,707 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $16,685 as of December 31, 2019 1,066,815 - Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $54,293 as of December 31, 2019 2,593,707 - Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $65,968 as of December 31, 2019 4,062,032 - 9,281,525 1,711,681 Less: current portion (1,010,570 ) (90,580 ) Long-term debt $ 8,270,955 $ 1,621,101 Oak Street Funding LLC – Term Loans On August 1, 2018, EBS and USBA entered into a Credit Agreement with Oak Street Funding LLC (“Oak Street”) whereby EBS and USBA borrowed $750,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. Interest will accrue at 5.00% on the basis of a 360-day year, maturing 120 months from the Amortization Date (September 25, 2018). For the period from August 1, 2018 to December 31, 2018, the Company incurred debt issuance costs associated with the Term Loan in the amount of $22,188, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring entities through the respective USBA and EBS acquisitions. On April 1, 2019, SWMT entered into a Credit Agreement with Oak Street Funding LLC (“Oak Street”) whereby SWMT borrowed $1,136,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $28,849, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring an entity through SWMT. On May 1, 2019, FIS entered into a Credit Agreement with Oak Street Funding LLC (“Oak Street”) whereby FIS borrowed $2,648,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $58,171, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the Term Loan were to be used for the purpose of acquiring an entity through FIS. On September 5, 2019, ABC entered into a Credit Agreement with Oak Street Funding LLC (“Oak Street”) whereby ABC borrowed $4,128,000 from Oak Street under a Term Loan. The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. For the year ended December 31, 2019, the Company incurred debt issuance costs associated with the Term Loan in the amount of $94,105, which were deferred and are amortized to interest expense over the length of the Term Loan. The proceeds of the term loan were to be used for the purpose of acquiring ABC. Oak Street Funding LLC – Senior Secured Amortizing Credit Facility (“Facility”) On December 7, 2018, CCS entered into a Facility with Oak Street whereby CCS borrowed $1,025,000 from Oak Street under a senior secured amortizing credit facility. The borrowing rate under the Facility is a variable rate equal to Prime +1.50% and matures 10 years from the closing date. For the period from August 1, 2018 to December 31, 2018, the Company incurred debt issuance costs associated with the Facility in the amount of $25,506, which were deferred and are amortized over the length of the Facility. The proceeds of the term loan were to be used for the purpose of acquiring CSIA. Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of December 31, 2019 are: Years ending December 31, Maturities of 2020 $ 1,010,570 2021 1,010,570 2022 1,010,570 2023 1,010,570 2024 1,010,570 Thereafter 4,228,674 Total $ 9,281,525 As of December 31, 2019, the Company was not in compliance with a covenant due to start up initiatives that were funded by Reliance Holdings. The Company received a waiver of default from Oak Street Funding LLC. |
Significant Customers
Significant Customers | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | ||
Significant Customers | NOTE 8. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 BlueCross BlueShield 30 % 27 % 27 % 27 % Priority Health 28 % 16 % 26 % 21 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BlueCross BlueShield, could have a material adverse effect on the Company. | NOTE 9. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: Insurance Carrier December 31, 2019 December 31, 2018 BlueCross BlueShield 26.2 % 39.5 % Priority Health 19.7 % 44.2 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BCBS, could have a material adverse effect on the Company. |
Equity
Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Equity | NOTE 9 EQUITY Preferred Stock The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of June 30, 2020, and December 31, 2019, there were 33,911,991 shares of Series A Convertible Preferred Stock issued and outstanding. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc discussed in Note 3. The Company received proceeds of $1,000,000 for the issuance of these common shares. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. On May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2020: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 $ 2,995,640 Granted 2,000,000 0.39 4.73 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2020 21,700,000 $ 0.20 3.71 $ - The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2019: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Outstanding at December 31, 2018 - $ - - $ - Granted 3,000,000 0.20 3.71 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2019 3,000,000 $ 0.20 3.71 $ - The following is a summary of the Company’s non-vested stock options as of June 30, 2020, and changes during the six months ended June 30, 2020: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 Granted 2,000,000 0.39 4.73 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2020 18,700,000 $ 0.20 3.66 The following is a summary of the Company’s non-vested stock options as of June 30, 2019, and changes during the six months ended June 30, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 3,000,000 0.20 3.66 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2019 1,500,000 $ 0.20 3.66 During the six months ended June 30, 2020, the Board approved options to be issued pursuant to the Plan to a certain current employee totaling 2,000,000 shares. These options have been granted with an exercise price greater than the market value of the common stock on the date of grant and have a contractual term of 5 years. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the six months ended June 30, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,967,480 which will be amortized in future periods through February 2024. During the six months ended June 30, 2020, the Company recognized $843,572 of compensation expense relating to the stock options granted to employees, directors, and consultants. During the six months ended June 30, 2019, the Company recognized $703,249 of compensation expense relating to the stock options granted to a service provider. As of June 30, 2020, unrecognized compensation expense totaled $2,076,532 which will be recognized on a straight-line basis over the vesting period or requisite service period through February 2024. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on June 30, 2020 and 2019, respectively. The market values as of June 30, 2020 and 2019, were $0.19 and $0.13, respectively, based on the closing bid prices for June 30, 2020 and 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Exercise price $ 0.39 $ 0.20 Expected term 3.75 years 3.25 years Risk-free interest rate 0.38 % 2.43 % Estimated volatility 318.00 % 533.64 % Expected dividend - - Option price at valuation date $ 0.31 $ 0.19 | NOTE 10. EQUITY Preferred Stock - Successor The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of December 31, 2019 and 2018, there were 33,911,991 and 40,000,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock - Successor The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In October 2018, Reliance Global Holdings, LLC transferred 6,584,830 shares of the Company’s common stock at a price of $0.07 per share to a non-employee of the Company for legal services provided to the Company. In November 2018, the Company issued 16,400,000 shares of common stock as part of the transaction discussed in Note 4. In November 2018, Reliance Global Holdings, LLC, a related party, converted 10,000,000 shares of Series A Convertible Preferred Stock into 100,000,000 shares of common stock. In November 2018, Reliance Global Holdings, LLC, a related party, transferred 500,000 shares of the Company’s common stock at a price of $0.1799 per share to an employee of the Company. The transaction was accounted for as share based compensation and the Company recognized $89,950 of share-based compensation. In November 2018, 2,305,957 shares of the Company’s common stock were transferred to EMA Financial LLC (“EMA”). The transfer was the result of an obligation of Ethos prior to the recapitalization (see Note 4). The Company contested this transfer as it was represented that the obligation was settled prior to the recapitalization. Subsequently, on May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD) to purchase a client referral software created exclusively for the insurance industry. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares of the Company. Per the agreement the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. In September 2019, Reliance Global Holdings, LLC transferred its ownership in SWMT and FIS to the Company in exchange for 14,839,011 shares of restricted common stock. In September 2019, the Company issued 11,900,832 shares of common stock to the former sole shareholder of Altruis Benefits Consulting, Inc. as a result of the ABC Acquisition (see Note 4). Common Stock – Predecessor On all matters submitted to stockholders for vote, Employee Benefits Solutions, Inc. and Family Health Advisors, Inc.’s common stockholders are entitled to one vote per share, voting together as a single class, and do not have cumulative voting rights. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share equally in all assets remaining after the payment of any liabilities. Members’ Equity – Predecessor Tri Star Benefits, LLC is a Michigan limited liability company. Each member of Tri Star Benefits, LLC is entitled to vote on any matter submitted to a vote. The affirmative vote of a majority of the membership interest of all the members entitled to vote on such matter is required. In the event of the dissolution of Tri Star Benefits, LLC, its assets shall be distributed first to its creditors, to the extent permitted by law, in satisfaction of Tri Star Benefits, LLC’s debts, liabilities, and obligations, including those owed to its members. Thereafter, the assets shall be distributed as a liquidation distribution to the members who have positive capital accounts. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 - $ - - - Granted 19,700,000 0.18 4.62 - Forfeited or expired - - - - Exercised - - - - Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 2,995,640 The following is a summary of the Company’s non-vested stock options as of December 31, 2019, and changes during the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 19,700,000 0.18 4.62 Vested (1,500,000 ) 0.20 4.21 Forfeited or expired - - - Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to certain current employees totaling 12,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to consultants totaling 4,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to nonemployee directors totaling 700,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 4-year period through November 2023 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,343,861 which will be amortized in future periods through November 2023. During the year ended December 31, 2019, the Company recognized $465,377 of compensation expense relating to the stock options granted to employees, directors, and consultants and $581,999 of compensation expense relating to the stock options granted to service providers. As of December 31, 2019, unrecognized compensation expense totaled $2,296,485 which will be recognized on a straight-line basis over the vesting period or requisite service period through November 2023. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on December 31, 2019. The market values as of December 31, 2019 was $0.33 based on the closing bid price for December 31, 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Year Ended December 31, 2019 Exercise price $ 0.17 - $0.27 Expected term 3.25 to 3.75 years Risk-free interest rate 1.35% - 2.43% Estimated volatility 484.51% - 533.64% Expected dividend - Option price at valuation date $ 0.16 - $0.27 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Earnings (Loss) Per Share | NOTE 10. 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. The control number for determining whether including potential common stock in the diluted EPS computation would be antidilutive is net income. As a result, 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. Accordingly, the outstanding Series A Convertible Preferred Stock is considered anti-dilutive in which 33,911,991 were issued and outstanding at June 30, 2020 and 2019, respectively. Series A Convertible Preferred Stock is convertible into common stock on a 10 for 1 basis. The outstanding stock options are considered anti-dilutive in which 21,700,000 and 3,000,000 were issued and outstanding at June 30, 2020 and 2019, respectively. The calculations of basic and diluted EPS, are as follows: June 30, 2020 June 30, 2019 Basic and diluted loss per common share: Net loss $ (2,118,211 ) $ (1,102,961 ) Basic weighted average shares outstanding 355,863,427 315,825,288 Basic and diluted loss per common share: $ (0.01 ) $ (0.00 ) | NOTE 11. 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. The control number for determining whether including potential common stock in the diluted EPS computation would be antidilutive is net income. As a result, 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. Accordingly, the outstanding Series A Convertible Preferred Stock is considered anti-dilutive in which 33,911,991 and 40,000,000 were issued and outstanding at December 31, 2019 and 2018, respectively. Series A Convertible Preferred Stock is convertible into common stock on a 10 for 1 basis. The outstanding stock options are considered anti-dilutive in which 19,700,000 were issued and outstanding at December 31, 2019. The calculations of basic and diluted EPS, are as follows: December 31, 2019 December 31, 2018 Basic and diluted loss per common share: Net loss $ (3,495,481 ) $ (1,155,286 ) Basic weighted average shares outstanding 246,656,149 180,479,232 Basic and diluted loss per common share: $ (0.01 ) $ (0.01 ) |
Leases
Leases | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Leases | NOTE 11. LEASES Operating Leases The Company adopted ASU 2016-02, Leases, effective January 1, 2019. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease, initially measured at the present value of the lease payments. As a result, we recorded right-of-use assets aggregating $684,083 as of January 1, 2019, utilizing a discount rate of 7.45%. That amount consists of operating leases on buildings and office space. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. As of June 30, 2020, the Company reflected accumulated amortization of right of use assets of $185,033 related to these leases, resulting in a net asset balance of $477,404. In accordance with ASU 2016-02, the right-of-use assets are being amortized over the life of the underlying leases. As of June 30, 2020, the weighted average remaining lease term for the operating leases is 2.97 years. The weighted average discount rate for the operating leases is 7.45%. Future minimum lease payment under these operating leases consisted of the following: Year ending June 30, Operating Lease Obligations 2020 (remaining six months) $ 112,228 2021 172,363 2022 144,000 2023 81,000 2024 33,000 Total undiscounted operating lease payments 542,590 Less: Imputed interest (58,907 ) Present value of operating lease liabilities $ 483,684 | NOTE 12. LEASES Operating Leases The Company adopted ASU 2016-02, Leases, effective January 1, 2019. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease, initially measured at the present value of the lease payments. As a result, we recorded right-of-use assets aggregating $684,083 as of January 1, 2019, utilizing a discount rate of 7.45%. That amount consists of operating leases on buildings and office space. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. As of December 31, 2019, the Company reflected accumulated amortization of right of use assets of $114,433 related to these leases, resulting in a net asset balance of $569,650. In accordance with ASU 2016-02, the right-of-use assets are being amortized over the life of the underlying leases. As of December 31, 2019, the weighted average remaining lease term for the operating leases is 3.42 years. The weighted average discount rate for the operating leases is 7.45%. Future minimum lease payment under these operating leases consisted of the following: Year ending December 31, Operating Lease Obligations 2020 $ 224,096 2021 172,363 2022 144,000 2023 81,000 2024 33,000 Thereafter - Total undiscounted operating lease payments 654,459 Less: Imputed interest 78,931 Present value of operating lease liabilities $ 575,528 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 12 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 accordingly, no legal contingencies are accrued as of June 30, 2020 and December 31, 2019. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time have 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 13. 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 accordingly, no legal contingencies are accrued as of December 31, 2019 and 2018. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time have been, subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14. INCOME TAXES The provision (benefit) for income taxes consists of the following for the year ended December 31, 2019 and the period from August 1, 2018 through December 31, 2018: December 31, 2019 August 1, 2018 to December 31, 2018 Federal $ - $ - State - - Deferred - - Total $ - $ - The difference between the actual income tax rate versus the tax computed at the Federal Statutory rate follows: December 31, 2019 August 1, 2018 to December 31, 2018 Federal rate 21 % 21 % State net of federal 3 % 3 % Non-deductible acquired intangible assets (18 )% 0 % Valuation allowance (6 )% (24 )% Effective income tax rate 0 % 0 % The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of December 31, 2019 and 2018. Deferred income tax assets and (liabilities) consist of the following: December 31, 2019 December 31, 2018 Deferred tax assets Net operating loss carryforward $ 1,013,793 $ 351,114 Other 3 2,833 Total deferred tax assets 1,013,796 353,947 Valuation allowance (559,175 ) (353,947 ) Net deferred tax assets 454,621 - Deferred tax liabilities Goodwill and intangibles $ (454,621 ) $ - Other - - Total deferred tax liabilities (454,621 ) - Net deferred taxes $ - $ - The Company has not recognized a deferred tax asset and corresponding increase in the valuation allowance for the deductible temporary difference resulting from its stock-based compensation expense because the timing of the recognition of the tax deduction will be absorbed into the net operating loss carryforward. The Company has approximately $4,277,000 of Federal Net Operating Loss Carry forwards, of which $1.3 million will begin to expire beginning 2031 and $3 million will not expire but are limited to use of 80% of current year taxable income. The Company has approximately $4,277,000 of state net operation loss carry forward to offset future taxable income in the states in which it currently operates. Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three-year period. Such limitation of the net operating losses may have occurred, but we have not analyzed it at this time as the deferred tax asset is fully reserved. On March 27, 2020, the US government signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law, a $2 trillion relief package to provide support to individuals, businesses and government organizations during the COVID-19 pandemic. The income tax provisions contained in the CARES Act are not likely to have an impact for the Company. The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21% and requires the Company to re-measure certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. The Company adopted the new rate as it relates to the calculations of deferred tax amounts as of January 1, 2018. During the year ended December 31, 2019, the valuation allowance increased $207,967. The tax period ending December 31, 2018 is open for examination. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 13. RELATED PARTY TRANSACTIONS The Company has entered into a Loan Agreement with Reliance Global Holdings, LLC, a related party under common control. There is no term to the loan, and it bears no interest. Repayment will be made as the Company has business cash flows. The proceeds from the various loans were utilized to fund the FHA/TSB Acquisition, the EBS Acquisition, CCS Acquisition, SWMT Acquisition, FIS Acquisition, and ABC Acquisition. At June 30, 2020, the Company owed a de minimis amount to Reliance Global Holdings, LLC. At June 30, 2020 and December 31, 2019, Reliance Holdings owned approximately 26% and 32%, respectively, of the common stock of the Company. | NOTE 15. RELATED PARTY TRANSACTIONS Successor The Company has entered into a Loan Agreement with Reliance Global Holdings, LLC, a related party under common control. There is no term to the loan, and it bears no interest. Repayment will be made as the Company has business cash flows. The proceeds from the various loans were utilized to fund the FHA/TSB Acquisition, the EBS Acquisition, CCS Acquisition, SWMT Acquisition, FIS Acquisition, and ABC Acquisition. As of December 31, 2019, and the 2018 the related party loan payable was $3,311,844 and $962,325 respectively. Reliance Holdings provided $300,981 for funding of the FHA/TSB Acquisition and paid $83,162 in transaction costs on behalf of the Company. Reliance Holdings provided $160,523 for funding the USBA Acquisition and paid $44,353 in transaction costs on behalf of the Company. The CCS Acquisition, Reliance Holdings provided $242,484 for funding of the acquisition and paid $113,247 in transaction costs on behalf of the Company. Included in the funding this acquisition is the balance of the purchase price, having a value of $120,000, that is to be paid in the form 761,905 shares of common stock in the Company. The Closing Shares are to be transferred from the shares owned by Reliance Holdings and were transferred subsequent to December 31, 2018; and as a result, is a component of Loans payables, related parties on the accompanying Consolidated Balance Sheets. Reliance Global Holdings, LLC provided $335,169 for funding of the SWMT Acquisition and paid $122,660 in transaction costs on behalf of the Company. Reliance Global Holdings, LLC provided $779,099 for funding of the FIS Acquisition and paid $63,663 in transaction costs on behalf of the Company. Reliance Global Holdings, LLC provided $1,378,961 for funding of the ABC Acquisition. Reliance Global Holdings, LLC provided $50,000 for funding of the purchase of software from The Referral Depot, LLC. In October 2019, the Company began sharing leased office space with Reliance Global Holdings, LLC. Reliance Global Holdings, LLC leases the office space from an unrelated third party and is the only lessee listed per the lease agreement. Both Reliance Global Holdings, LLC and the Company each pay 50% of the monthly rent payments. As the Company is not legally obligated to make payments on the lease, this is treated as a month-to-month expense. For the year ended December 31, 2019, the Company’s paid $16,153 towards the lease and recorded as rent expense in the Statement of Operations. At December 31, 2019 and 2018, Reliance Holdings owned approximately 32% and 57%, respectively, of the common stock of the Company. Predecessor As of December 31, 2017, Family Health Advisors, Inc. has a note receivable from a stockholder of Family Health Advisors, Inc. and Employee Benefits Solutions, Inc., in the amount of $570. This loan bears no interest and has no repayment terms. As of December 31, 2017, Employee Benefits Solutions, Inc. has a note payable to a stockholder in the amount of $31,943. This loan bears no interest and has no repayment terms. During the year ended December 31, 2017, $5,000 of a note receivable was forgiven and treated as a distribution to a stockholder. As of December 31, 2017, Family Health Advisors, Inc. paid Employee Benefits Solutions, Inc. $4,125 for their portion of rent at the office space leased by Employee Benefits Solutions, Inc. Family Health Advisors, Inc. collects commissions as general agent and paid commissions to Employee Benefits Solutions, Inc. for their services. During the year ended December 31, 2017, Family Health Advisors, Inc. paid Employee Benefits Solutions, Inc. $35,009 in commissions. These transactions have been eliminated in the combination. |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 14. SUBSEQUENT EVENTS On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. | NOTE 16. SUBSEQUENT EVENTS On February 19, 2020, the Company entered into a securities purchase agreement with NSURE, Inc. (“NSURE”) whereas the Company may invest up to an aggregate of $20,000,000 in NSURE which will be funded with three tranches. In exchange, the Company will receive a total of 5,837,462 shares of NSURE’s Class A Common Stock, which represents 35% of the outstanding shares. The first tranche of $1,000,000 was paid immediately upon execution of the agreement. As a result of the first tranche, the Company received 291,873 shares of NSURE’s Class A Common Stock. The second tranche of $3,000,000 and third tranche of $16,000,000 are not due until a later date in 2020. The Company will use the cost method of acquisition for the initial recognition of this investment. Once the Company determines that it can exercise significant influence over NSURE, it will begin to account for its investment under the equity method. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc. The Company received proceeds of $1,000,000 for the issuance of these common shares. On March 23, 2020, the Company granted 2,000,000 options exercisable for shares of common stock to an employee. The options have an exercise price of $0.39 and expire on March 23, 2025. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Coronavirus (COVID-19) Impact The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the service of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. Given the daily evolution of the coronavirus and the global responses to curb its spread, the Company is not able to estimate the effects of the coronavirus on its results of operations, financial condition or liquidity for fiscal year 2020. |
Organization and Description _2
Organization and Description of Business (Southwestern Montana Financial Center, Inc.) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) (“RELI”, “Reliance”, or the “Company”) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC (“Reliance Holdings”, or “Parent Company”), a related party acquired control of the Company (see Note 4). Ethos Media Network, Inc. was then renamed on October 18, 2018. On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (see Note 3) (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. (the “EBS Transaction”, and, together with USBA Transaction, the “Common Control Transactions”). On October 24, 2018, a related party of the Company, entered into a purchase agreement to sell assign, and convey membership interest and all other property rights in EBS and USBA to Reliance. USBA is a general agent for various insurance companies and earns override commissions on business placed by other “downstream” agencies. EBS is a retail broker with its revenues mainly sourced from independent contractor brokers. On December 1, 2018, Commercial Coverage Solutions, LLC (“CCS”), a wholly owned subsidiary of Reliance, acquired Commercial Solutions of Insurance Agency, LLC (see Note 3). CCS is a property and casualty insurance agency that specializes in commercial trucking and transportation insurance. On April 1, 2019, Southwestern Montana Insurance Center, LLC (“SWMT”), a wholly owned subsidiary of Reliance, acquired Southwestern Montana Financial Center, Inc. (See Note 3). SWMT is an insurance services firm which specializes in providing personal and commercial lines of insurance. On May 1, 2019, Fortman Insurance Services, LLC (“FIS”), a wholly owned subsidiary of Reliance, acquired Fortman Insurance Agency, LLC (See Note 3). FIS is an insurance services firm which specializes in providing personal and commercial lines of insurance. On September 1, 2019, the Company acquired Altruis Benefits Consulting, Inc. (“ABC”). ABC is an insurance agency and employee benefits provider. | |
Southwestern Montana Financial Center, Inc. [Member] | ||
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Southwestern Montana Financial Center, Inc. (the “Company”), was incorporated in the state of Montana on December 28, 2012. The Company is a privately-held insurance services firm which specializes in providing employee benefits insurance to groups and individuals. As an independent agent, the Company has access to a variety of insurance programs that provide competitive insurance rates to meet individual business needs. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Liquidity The Company has incurred losses of $2,118,211 for the six months ended June 30, 2020. At June 30, 2020, the Company had a working capital deficiency of approximately $4,811,725. In 2019, the Company acquired three additional agencies to grow the company and improve profitability. Since these acquisitions are recent, management’s plans to achieve operational efficiencies and reduce expenses will be implemented and enable the Company to continue to meet its obligations for at least the next twelve months. On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. Reliance Holdings has committed to fund the Company for at least the next 12 months. Additionally, management is planning to raise additional financing through an equity offering, although, there can be no assurance that additional equity financing will be available on terms acceptable to the Company or at all. The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the condensed consolidated financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. To date, there has been minimal to no effect to the Company due to the outbreak; however, the Company is unable to estimate any long-term effects the coronavirus will have on its results of operations, financial condition or liquidity for fiscal year 2020. Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the condensed consolidated financial statements and related disclosures. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. Liquidity As of December 31, 2019, the Company’s reported cash balance was approximately $6,700, current assets were approximately $647,000 while current liabilities were approximately $4,668,000 including loan payable to related party of approximately $3,312,000. The Company had stockholders’ equity of $642,324. For the year ended December 31, 2019, the Company reported a net loss of approximately $(3,495,000) and negative cash flow from operations of $(373,934). Management believes that the company’s financial position may cause concern about the Company’s liquidity. Therefore, management has developed plans that should alleviate any liquidity issues. Management believes that has plans that will alleviate any liquidity issues over next twelve months. Management’s cash flow forecast for 2021 and beyond indicate that its business should generate positive cash flows from their operations. During the year, the Company acquired three new entities. As the three acquisitions took place in April, May, and September of 2019, respectively, the Company did not receive the benefit of revenue from these entities for a substantial portion of the year. Further, the largest acquisition in terms of revenue was Altruis Benefit Consultants, Inc. which was not acquired until September of 2019. Going forward the Company will recognize revenue from these entities for the full year which will increase cash flows. In addition, the Company incurred several one-time expenses, related to professional and legal fees for the three acquisitions that closed in 2019, which contributed to the Company’s net loss. Reliance Holdings has also agreed to support the Company if required and management believes that the related party holding the loan to related party discussed above will forebear on any amounts due should the company be unable to fulfil its payment obligations under the loan agreement. Management is also planning to raise capital through an initial public offering of the Company’s equity securities. However, there can be no assurance that management will be successful in raising capital through sale of equity securities. Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. Deferred Financing Costs The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of December 31, 2019, and 2018, unamortized deferred financing costs were $213,733, and $46,556, respectively and are netted against the related debt. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Identifiable Intangible Assets, net Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized in the predecessor and successor periods presented. Goodwill and other indefinite-lived intangibles The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets other than goodwill, such as trade names, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This ASU, which the Company adopted as of January 1, 2019, did not have a material effect on the Company’s consolidated financial statements. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur. Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. Seasonality A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU was adopted by the Company using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company adopted Accounting Standards Update (“ASU”) 2017- 04 Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment early in August 2018 Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the consolidated financial statements and related disclosures. | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Property and Equipment Property and equipment are stated at cost. Depreciation of assets is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Useful Life (in years) Office equipment 5 Vehicles 5 Furniture and fixtures 7 Leasehold improvements 15 Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $4,073 and $5,525, respectively. Income Taxes The Company has elected to be taxed as an S corporation for federal and state income tax purposes whereby taxable income is reported by the stockholder. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Property and Equipment (Southwe
Property and Equipment (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment | NOTE 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Condensed Consolidated Statements of Operations was $103,650 and $15,528 for the six months ended June 30, 2020 and 2019, respectively | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Consolidated Statement of Operations was $94,474 and $2,580 for the year ended December 31, 2019 and the period from August 1, 2018 to December 31, 2018, respectively. Software On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD), a related party, to purchase a client referral software created exclusively for the insurance industry. The Company purchased this software to be utilized internally and does not plan to license, sell, or otherwise market the software, as such the total cost of the software has been capitalized and will be amortized on a straight-line basis over the useful life. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares (at $0.17 per share which amounted to $340,000) of the Company. Per the agreement, the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, the Company recorded a loan payable to a related party of $172,327, net of discount on the loan of $27,673. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. The total carrying cost of the software as of December 31, 2019 is $562,327. Depreciation Expense related to the software for the year ending December 31, 2019 was $78,101. | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Property and Equipment | NOTE 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Useful Lives December 31, 2018 December 31, 2017 Office equipment 5 $ 26,322 $ 26,322 Vehicles 5 125,046 125,046 Furniture and fixtures 7 10,103 10,103 Leasehold improvements 15 2,949 2,949 Property and equipment, gross 164,420 164,420 Less: Accumulated depreciation (72,458 ) (42,147 ) Property and equipment, net $ 91,962 $ 122,273 Depreciation expense associated with property and equipment was $30,311 and $27,815 for the years ended December 31, 2018 and 2017, respectively. |
Debt (Southwestern Montana Fina
Debt (Southwestern Montana Financial Center, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Southwestern Montana Financial Center, Inc. [Member] | |
Debt | NOTE 4. DEBT Debt consisted of the following at: December 31, 2018 December 31, 2017 Vehicle note payable due August 2020 $ 31,797 $ 51,118 Vehicle note payable due September 2021 18,386 25,083 Vehicle note payable due December 2019 6,882 15,605 Vehicle note payable due May 2019 1,341 4,900 58,406 96,706 Less: current portion 35,200 38,301 Long-term debt $ 23,206 $ 58,405 Future minimum payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 35,200 2020 18,609 2021 4,597 Total $ 58,406 On July 21, 2017, the Company entered into a note agreement with a financial institution whereby the Company borrowed $59,000 for the purchase of a vehicle. The note bears an interest rate of 2.99% and requires monthly payments of principal and interest until the note matures on August 20, 2020. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $31,797 and $51,118, respectively. On August 5, 2017, the Company entered into a note agreement with a financial institution whereby the Company borrowed $27,252 for the purchase of a vehicle. The note bears an interest rate of 2.99% and requires monthly payments of principal and interest until the note matures on September 4, 2021. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $18,386 and $25,083, respectively. On November 8, 2016, the Company entered into a note agreement with a financial institution whereby the Company borrowed $24,018 for the purchase of a vehicle. The note bears an interest rate of 2.90% and requires monthly payments of principal and interest until the note matures on December 8, 2019. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $6,882 and $15,605, respectively. On April 15, 2015, the Company entered into a note agreement with a financial institution whereby the Company borrowed $14,536 for the purchase of a vehicle. The note bears an interest rate of 5.67% and requires monthly payments of principal and interest until the note matures on May 15, 2019. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $1,341 and $4,900, respectively. |
Significant Customers (Southwes
Significant Customers (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Customers | NOTE 8. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 BlueCross BlueShield 30 % 27 % 27 % 27 % Priority Health 28 % 16 % 26 % 21 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BlueCross BlueShield, could have a material adverse effect on the Company. | NOTE 9. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: Insurance Carrier December 31, 2019 December 31, 2018 BlueCross BlueShield 26.2 % 39.5 % Priority Health 19.7 % 44.2 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BCBS, could have a material adverse effect on the Company. | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Significant Customers | NOTE . SIGNIFICANT CUSTOMERS For the year ended December 31, 2018, two insurance carriers accounted for 49% and 21%, respectively, of the Company’s commission revenues. For the year ended December 31, 2017, two insurance carriers accounted for 63% and 16%, respectively, of the Company’s commission revenues. |
Equity (Southwestern Montana Fi
Equity (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity | NOTE 9 EQUITY Preferred Stock The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of June 30, 2020, and December 31, 2019, there were 33,911,991 shares of Series A Convertible Preferred Stock issued and outstanding. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc discussed in Note 3. The Company received proceeds of $1,000,000 for the issuance of these common shares. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. On May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2020: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 $ 2,995,640 Granted 2,000,000 0.39 4.73 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2020 21,700,000 $ 0.20 3.71 $ - The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2019: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Outstanding at December 31, 2018 - $ - - $ - Granted 3,000,000 0.20 3.71 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2019 3,000,000 $ 0.20 3.71 $ - The following is a summary of the Company’s non-vested stock options as of June 30, 2020, and changes during the six months ended June 30, 2020: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 Granted 2,000,000 0.39 4.73 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2020 18,700,000 $ 0.20 3.66 The following is a summary of the Company’s non-vested stock options as of June 30, 2019, and changes during the six months ended June 30, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 3,000,000 0.20 3.66 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2019 1,500,000 $ 0.20 3.66 During the six months ended June 30, 2020, the Board approved options to be issued pursuant to the Plan to a certain current employee totaling 2,000,000 shares. These options have been granted with an exercise price greater than the market value of the common stock on the date of grant and have a contractual term of 5 years. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the six months ended June 30, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,967,480 which will be amortized in future periods through February 2024. During the six months ended June 30, 2020, the Company recognized $843,572 of compensation expense relating to the stock options granted to employees, directors, and consultants. During the six months ended June 30, 2019, the Company recognized $703,249 of compensation expense relating to the stock options granted to a service provider. As of June 30, 2020, unrecognized compensation expense totaled $2,076,532 which will be recognized on a straight-line basis over the vesting period or requisite service period through February 2024. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on June 30, 2020 and 2019, respectively. The market values as of June 30, 2020 and 2019, were $0.19 and $0.13, respectively, based on the closing bid prices for June 30, 2020 and 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Exercise price $ 0.39 $ 0.20 Expected term 3.75 years 3.25 years Risk-free interest rate 0.38 % 2.43 % Estimated volatility 318.00 % 533.64 % Expected dividend - - Option price at valuation date $ 0.31 $ 0.19 | NOTE 10. EQUITY Preferred Stock - Successor The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of December 31, 2019 and 2018, there were 33,911,991 and 40,000,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock - Successor The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In October 2018, Reliance Global Holdings, LLC transferred 6,584,830 shares of the Company’s common stock at a price of $0.07 per share to a non-employee of the Company for legal services provided to the Company. In November 2018, the Company issued 16,400,000 shares of common stock as part of the transaction discussed in Note 4. In November 2018, Reliance Global Holdings, LLC, a related party, converted 10,000,000 shares of Series A Convertible Preferred Stock into 100,000,000 shares of common stock. In November 2018, Reliance Global Holdings, LLC, a related party, transferred 500,000 shares of the Company’s common stock at a price of $0.1799 per share to an employee of the Company. The transaction was accounted for as share based compensation and the Company recognized $89,950 of share-based compensation. In November 2018, 2,305,957 shares of the Company’s common stock were transferred to EMA Financial LLC (“EMA”). The transfer was the result of an obligation of Ethos prior to the recapitalization (see Note 4). The Company contested this transfer as it was represented that the obligation was settled prior to the recapitalization. Subsequently, on May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD) to purchase a client referral software created exclusively for the insurance industry. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares of the Company. Per the agreement the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. In September 2019, Reliance Global Holdings, LLC transferred its ownership in SWMT and FIS to the Company in exchange for 14,839,011 shares of restricted common stock. In September 2019, the Company issued 11,900,832 shares of common stock to the former sole shareholder of Altruis Benefits Consulting, Inc. as a result of the ABC Acquisition (see Note 4). Common Stock – Predecessor On all matters submitted to stockholders for vote, Employee Benefits Solutions, Inc. and Family Health Advisors, Inc.’s common stockholders are entitled to one vote per share, voting together as a single class, and do not have cumulative voting rights. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share equally in all assets remaining after the payment of any liabilities. Members’ Equity – Predecessor Tri Star Benefits, LLC is a Michigan limited liability company. Each member of Tri Star Benefits, LLC is entitled to vote on any matter submitted to a vote. The affirmative vote of a majority of the membership interest of all the members entitled to vote on such matter is required. In the event of the dissolution of Tri Star Benefits, LLC, its assets shall be distributed first to its creditors, to the extent permitted by law, in satisfaction of Tri Star Benefits, LLC’s debts, liabilities, and obligations, including those owed to its members. Thereafter, the assets shall be distributed as a liquidation distribution to the members who have positive capital accounts. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 - $ - - - Granted 19,700,000 0.18 4.62 - Forfeited or expired - - - - Exercised - - - - Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 2,995,640 The following is a summary of the Company’s non-vested stock options as of December 31, 2019, and changes during the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 19,700,000 0.18 4.62 Vested (1,500,000 ) 0.20 4.21 Forfeited or expired - - - Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to certain current employees totaling 12,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to consultants totaling 4,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to nonemployee directors totaling 700,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 4-year period through November 2023 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,343,861 which will be amortized in future periods through November 2023. During the year ended December 31, 2019, the Company recognized $465,377 of compensation expense relating to the stock options granted to employees, directors, and consultants and $581,999 of compensation expense relating to the stock options granted to service providers. As of December 31, 2019, unrecognized compensation expense totaled $2,296,485 which will be recognized on a straight-line basis over the vesting period or requisite service period through November 2023. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on December 31, 2019. The market values as of December 31, 2019 was $0.33 based on the closing bid price for December 31, 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Year Ended December 31, 2019 Exercise price $ 0.17 - $0.27 Expected term 3.25 to 3.75 years Risk-free interest rate 1.35% - 2.43% Estimated volatility 484.51% - 533.64% Expected dividend - Option price at valuation date $ 0.16 - $0.27 | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Equity | NOTE 6. EQUITY Stockholder’s Deficit The Company shall have the authority to issue two classes of stock, voting and non-voting, with no par value. The aggregate number of shares of such stock which the Company has the authority to issue is 50,000 shares. As of December 31, 2018 and 2017, the Company has issued 20,000 shares of voting common stock to one stockholder. Each share of issued common stock entitles the holder thereof to fully participate in all stockholder meetings, to cast one vote on each matter with respect to which stockholders 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 corporation upon liquidation or dissolution. |
Commitments and Related Party T
Commitments and Related Party Transactions (Southwestern Montana Financial Center, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Southwestern Montana Financial Center, Inc. [Member] | |
Commitments and Related Party Transactions | NOTE 7. COMMITMENTS AND RELATED PARTY TRANSACTIONS Operating Leases The Company has two lease agreements to lease office space from a related party through common ownership. The leases are classified as operating leases for terms of two and five years, respectively. One lease expires in March 2020 and the other lease expires in March 2023. Future minimum lease payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 111,000 2020 88,500 2021 84,000 2022 84,000 2023 21,000 Total $ 388,500 Rent expense amounted to $138,000 and $137,874 for the years ended December 31, 2018 and 2017, respectively. |
Subsequent Events (Southwestern
Subsequent Events (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsequent Events | NOTE 14. SUBSEQUENT EVENTS On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. | NOTE 16. SUBSEQUENT EVENTS On February 19, 2020, the Company entered into a securities purchase agreement with NSURE, Inc. (“NSURE”) whereas the Company may invest up to an aggregate of $20,000,000 in NSURE which will be funded with three tranches. In exchange, the Company will receive a total of 5,837,462 shares of NSURE’s Class A Common Stock, which represents 35% of the outstanding shares. The first tranche of $1,000,000 was paid immediately upon execution of the agreement. As a result of the first tranche, the Company received 291,873 shares of NSURE’s Class A Common Stock. The second tranche of $3,000,000 and third tranche of $16,000,000 are not due until a later date in 2020. The Company will use the cost method of acquisition for the initial recognition of this investment. Once the Company determines that it can exercise significant influence over NSURE, it will begin to account for its investment under the equity method. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc. The Company received proceeds of $1,000,000 for the issuance of these common shares. On March 23, 2020, the Company granted 2,000,000 options exercisable for shares of common stock to an employee. The options have an exercise price of $0.39 and expire on March 23, 2025. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Coronavirus (COVID-19) Impact The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the service of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. Given the daily evolution of the coronavirus and the global responses to curb its spread, the Company is not able to estimate the effects of the coronavirus on its results of operations, financial condition or liquidity for fiscal year 2020. | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Subsequent Events | NOTE 8. SUBSEQUENT EVENTS The Company evaluated events that have occurred from the date of the financial statements through March 16, 2020, the date the financial statements were available to be issued. On April 1, 2019, the Company was acquired by Reliance Global Group, Inc. through its subsidiary Southwestern Montana Insurance Center, LLC for a purchase price of approximately $2,395,000. |
Organization and Description _3
Organization and Description of Business (Fortman Insurance Agency, LLC) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) (“RELI”, “Reliance”, or the “Company”) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC (“Reliance Holdings”, or “Parent Company”), a related party acquired control of the Company (see Note 4). Ethos Media Network, Inc. was then renamed on October 18, 2018. On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (see Note 3) (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. (the “EBS Transaction”, and, together with USBA Transaction, the “Common Control Transactions”). On October 24, 2018, a related party of the Company, entered into a purchase agreement to sell assign, and convey membership interest and all other property rights in EBS and USBA to Reliance. USBA is a general agent for various insurance companies and earns override commissions on business placed by other “downstream” agencies. EBS is a retail broker with its revenues mainly sourced from independent contractor brokers. On December 1, 2018, Commercial Coverage Solutions, LLC (“CCS”), a wholly owned subsidiary of Reliance, acquired Commercial Solutions of Insurance Agency, LLC (see Note 3). CCS is a property and casualty insurance agency that specializes in commercial trucking and transportation insurance. On April 1, 2019, Southwestern Montana Insurance Center, LLC (“SWMT”), a wholly owned subsidiary of Reliance, acquired Southwestern Montana Financial Center, Inc. (See Note 3). SWMT is an insurance services firm which specializes in providing personal and commercial lines of insurance. On May 1, 2019, Fortman Insurance Services, LLC (“FIS”), a wholly owned subsidiary of Reliance, acquired Fortman Insurance Agency, LLC (See Note 3). FIS is an insurance services firm which specializes in providing personal and commercial lines of insurance. On September 1, 2019, the Company acquired Altruis Benefits Consulting, Inc. (“ABC”). ABC is an insurance agency and employee benefits provider. | |
Fortman Insurance Agency, LLC [Member] | ||
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Fortman Insurance Agency, LLC (the “Company”), was organized in the state of Ohio on May 13, 2015. The Company is a full-service property and casualty and employee benefits insurance agency based in Ottawa, Ohio handling principally personal lines and small commercial accounts. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Liquidity The Company has incurred losses of $2,118,211 for the six months ended June 30, 2020. At June 30, 2020, the Company had a working capital deficiency of approximately $4,811,725. In 2019, the Company acquired three additional agencies to grow the company and improve profitability. Since these acquisitions are recent, management’s plans to achieve operational efficiencies and reduce expenses will be implemented and enable the Company to continue to meet its obligations for at least the next twelve months. On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. Reliance Holdings has committed to fund the Company for at least the next 12 months. Additionally, management is planning to raise additional financing through an equity offering, although, there can be no assurance that additional equity financing will be available on terms acceptable to the Company or at all. The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the condensed consolidated financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. To date, there has been minimal to no effect to the Company due to the outbreak; however, the Company is unable to estimate any long-term effects the coronavirus will have on its results of operations, financial condition or liquidity for fiscal year 2020. Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the condensed consolidated financial statements and related disclosures. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. Liquidity As of December 31, 2019, the Company’s reported cash balance was approximately $6,700, current assets were approximately $647,000 while current liabilities were approximately $4,668,000 including loan payable to related party of approximately $3,312,000. The Company had stockholders’ equity of $642,324. For the year ended December 31, 2019, the Company reported a net loss of approximately $(3,495,000) and negative cash flow from operations of $(373,934). Management believes that the company’s financial position may cause concern about the Company’s liquidity. Therefore, management has developed plans that should alleviate any liquidity issues. Management believes that has plans that will alleviate any liquidity issues over next twelve months. Management’s cash flow forecast for 2021 and beyond indicate that its business should generate positive cash flows from their operations. During the year, the Company acquired three new entities. As the three acquisitions took place in April, May, and September of 2019, respectively, the Company did not receive the benefit of revenue from these entities for a substantial portion of the year. Further, the largest acquisition in terms of revenue was Altruis Benefit Consultants, Inc. which was not acquired until September of 2019. Going forward the Company will recognize revenue from these entities for the full year which will increase cash flows. In addition, the Company incurred several one-time expenses, related to professional and legal fees for the three acquisitions that closed in 2019, which contributed to the Company’s net loss. Reliance Holdings has also agreed to support the Company if required and management believes that the related party holding the loan to related party discussed above will forebear on any amounts due should the company be unable to fulfil its payment obligations under the loan agreement. Management is also planning to raise capital through an initial public offering of the Company’s equity securities. However, there can be no assurance that management will be successful in raising capital through sale of equity securities. Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. Deferred Financing Costs The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of December 31, 2019, and 2018, unamortized deferred financing costs were $213,733, and $46,556, respectively and are netted against the related debt. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Identifiable Intangible Assets, net Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized in the predecessor and successor periods presented. Goodwill and other indefinite-lived intangibles The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets other than goodwill, such as trade names, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This ASU, which the Company adopted as of January 1, 2019, did not have a material effect on the Company’s consolidated financial statements. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur. Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. Seasonality A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU was adopted by the Company using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company adopted Accounting Standards Update (“ASU”) 2017- 04 Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment early in August 2018 Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the consolidated financial statements and related disclosures. | |
Fortman Insurance Agency, LLC [Member] | |||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Property and Equipment Property and equipment are stated at cost. Depreciation of assets is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Useful Life (in years) Land improvements 15 Vehicles 5 Office equipment, furniture, and fixtures 7 Investment The Company held purchased and held shares of a private bank which is classified as investment on the balance sheet. The shares were carried at cost and evaluated for impairment annually. Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $54,188 and $70,002, respectively. Income Taxes The Company is a limited liability corporation and has elected to be treated as a pass-through entity for federal and state income tax purposes whereby taxable income is reported by the members. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Property and Equipment (Fortman
Property and Equipment (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment | NOTE 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Condensed Consolidated Statements of Operations was $103,650 and $15,528 for the six months ended June 30, 2020 and 2019, respectively | NOTE 5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 Depreciation expense associated with property and equipment is included in depreciation within the Company’s Consolidated Statement of Operations was $94,474 and $2,580 for the year ended December 31, 2019 and the period from August 1, 2018 to December 31, 2018, respectively. Software On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD), a related party, to purchase a client referral software created exclusively for the insurance industry. The Company purchased this software to be utilized internally and does not plan to license, sell, or otherwise market the software, as such the total cost of the software has been capitalized and will be amortized on a straight-line basis over the useful life. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares (at $0.17 per share which amounted to $340,000) of the Company. Per the agreement, the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, the Company recorded a loan payable to a related party of $172,327, net of discount on the loan of $27,673. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. The total carrying cost of the software as of December 31, 2019 is $562,327. Depreciation Expense related to the software for the year ending December 31, 2019 was $78,101. | |
Fortman Insurance Agency, LLC [Member] | |||
Property and Equipment | NOTE 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Useful Lives December 31, 2018 December 31, 2017 Land improvements 15 $ 25,500 $ 25,500 Vehicles 5 119,594 116,325 Office equipment, furniture, and fixtures 7 7,780 7,780 Property and equipment, gross 152,874 149,605 Less: Accumulated depreciation (23,748 ) (22,338 ) Property and equipment, net $ 129,126 $ 127,267 Depreciation expense associated with property and equipment was $22,335 and $26,225 for the years ended December 31, 2018 and 2017, respectively. |
Debt (Fortman Insurance Agency,
Debt (Fortman Insurance Agency, LLC) | 12 Months Ended |
Dec. 31, 2018 | |
Fortman Insurance Agency, LLC [Member] | |
Debt | NOTE 4. DEBT Debt consisted of the following at: December 31, 2018 December 31, 2017 Vehicle note payable due December 2022 $ - $ 42,412 Vehicle note payable due February 2022 21,905 28,501 Vehicle note payable due August 2022 21,616 - 43,521 70,913 Less: current portion 14,677 13,037 Long-term debt $ 28,844 $ 57,876 Future minimum payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 14,677 2020 14,677 2021 11,975 2022 2,191 Total $ 43,521 Note Payables On December 28, 2016, the Company entered into a note agreement with a financial institution whereby the Company borrowed $50,160 for the purchase of a vehicle. The note bears an interest rate of 3% and requires monthly payments of principal and interest until the note matures on December 27, 2022. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $0 and $42,412, respectively. On February 26, 2016, the Company entered into a note agreement with a financial institution whereby the Company borrowed $40,210 for the purchase of a vehicle. The note bears an interest rate of 2.25% and requires monthly payments of principal and interest until the note matures on February 26, 2022. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $21,905 and $28,501, respectively. On August 11, 2018, the Company entered into a note agreement with a financial institution whereby the Company borrowed $23,430 for the purchase of a vehicle. The note bears an interest rate of 7.15% and requires monthly payments of principal and interest until the note matures on August 17, 2022. This note is collateralized by the vehicle. As of December 31, 2018, and 2017, this note payable had an outstanding principal balance of $21,616 and $0, respectively. |
Significant Customers (Fortman
Significant Customers (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Customers | NOTE 8. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 BlueCross BlueShield 30 % 27 % 27 % 27 % Priority Health 28 % 16 % 26 % 21 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BlueCross BlueShield, could have a material adverse effect on the Company. | NOTE 9. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: Insurance Carrier December 31, 2019 December 31, 2018 BlueCross BlueShield 26.2 % 39.5 % Priority Health 19.7 % 44.2 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BCBS, could have a material adverse effect on the Company. | |
Fortman Insurance Agency, LLC [Member] | |||
Significant Customers | NOTE 5. SIGNIFICANT CUSTOMERS For the year ended December 31, 2018, two insurance carriers accounted for 13% and 12%, respectively, of the Company’s commission revenues. For the year ended December 31, 2017, three insurance carriers accounted for 15%, 12%, and 12%, respectively, of the Company’s commission revenues. |
Members' Equity (Fortman Insura
Members' Equity (Fortman Insurance Agency, LLC) | 12 Months Ended |
Dec. 31, 2018 | |
Fortman Insurance Agency, LLC [Member] | |
Members' Equity | NOTE 6. MEMBERS’ EQUITY The Company was organized as an Ohio limited liability company on May 13, 2015 with a duration of 30 years and is owned equally by two members. In the event of the dissolution of the Company, its assets shall be distributed first to its creditors, to the extent permitted by law, in satisfaction of the Company’s debts, liabilities, and obligations, including those owed to its members. Thereafter, the assets shall be distributed as a liquidation distribution to the members who have positive capital accounts. |
Commitments and Related Party_2
Commitments and Related Party Transactions (Fortman Insurance Agency, LLC) | 12 Months Ended |
Dec. 31, 2018 | |
Fortman Insurance Agency, LLC [Member] | |
Commitments and Related Party Transactions | NOTE 7. COMMITMENTS AND RELATED PARTY TRANSACTIONS Operating Leases The Company has a lease agreement to lease office space in Ottawa, Ohio from a related party through common ownership, classified as an operating lease. This lease is $6,000 per month. This lease is month- to-month and can be cancelled at any time. The Company has a lease agreement to lease office space in Bluffton, Ohio from an unrelated third party, classified as an operating lease. This lease is $680 per month and ends March 1, 2020. Future minimum lease payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 8,160 2020 2,720 Total $ 10,880 Rent expense amounted to $81,960 and $80,160 for the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, the Company transferred 900 shares of private bank stock to another entity owned by the members of the Company. The shares were transferred out of the Company through shareholder distributions at the carrying value of $35,804. |
Subsequent Events (Fortman Insu
Subsequent Events (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsequent Events | NOTE 14. SUBSEQUENT EVENTS On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. | NOTE 16. SUBSEQUENT EVENTS On February 19, 2020, the Company entered into a securities purchase agreement with NSURE, Inc. (“NSURE”) whereas the Company may invest up to an aggregate of $20,000,000 in NSURE which will be funded with three tranches. In exchange, the Company will receive a total of 5,837,462 shares of NSURE’s Class A Common Stock, which represents 35% of the outstanding shares. The first tranche of $1,000,000 was paid immediately upon execution of the agreement. As a result of the first tranche, the Company received 291,873 shares of NSURE’s Class A Common Stock. The second tranche of $3,000,000 and third tranche of $16,000,000 are not due until a later date in 2020. The Company will use the cost method of acquisition for the initial recognition of this investment. Once the Company determines that it can exercise significant influence over NSURE, it will begin to account for its investment under the equity method. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc. The Company received proceeds of $1,000,000 for the issuance of these common shares. On March 23, 2020, the Company granted 2,000,000 options exercisable for shares of common stock to an employee. The options have an exercise price of $0.39 and expire on March 23, 2025. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Coronavirus (COVID-19) Impact The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the service of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. Given the daily evolution of the coronavirus and the global responses to curb its spread, the Company is not able to estimate the effects of the coronavirus on its results of operations, financial condition or liquidity for fiscal year 2020. | |
Fortman Insurance Agency, LLC [Member] | |||
Subsequent Events | NOTE 8. SUBSEQUENT EVENTS The Company evaluated events that have occurred from the date of the financial statements through March 25, 2020, the date the financial statements were available to be issued. On May 1, 2019, the Company was acquired by Reliance Global Group, Inc. (“RELI”) through its subsidiary Fortman Insurance Services, LLC for a purchase price of approximately $4,156,000. |
Organization and Description _4
Organization and Description of Business (Altruis Benefit Consultants, Inc.) (USD $) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) (“RELI”, “Reliance”, or the “Company”) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC (“Reliance Holdings”, or “Parent Company”), a related party acquired control of the Company (see Note 4). Ethos Media Network, Inc. was then renamed on October 18, 2018. On August 1, 2018, a related party to Reliance Holdings, US Benefits Alliance, LLC (“USBA”) acquired certain properties and assets of the insurance businesses of Family Health Advisors, Inc. and Tri Star Benefits, LLC (see Note 3) (the “USBA Transaction”). Also, on August 1, 2018, Employee Benefits, Solutions, LLC, (“EBS”), related party, acquired certain properties and assets of the insurance business of Employee Benefit Solutions, Inc. (the “EBS Transaction”, and, together with USBA Transaction, the “Common Control Transactions”). On October 24, 2018, a related party of the Company, entered into a purchase agreement to sell assign, and convey membership interest and all other property rights in EBS and USBA to Reliance. USBA is a general agent for various insurance companies and earns override commissions on business placed by other “downstream” agencies. EBS is a retail broker with its revenues mainly sourced from independent contractor brokers. On December 1, 2018, Commercial Coverage Solutions, LLC (“CCS”), a wholly owned subsidiary of Reliance, acquired Commercial Solutions of Insurance Agency, LLC (see Note 3). CCS is a property and casualty insurance agency that specializes in commercial trucking and transportation insurance. On April 1, 2019, Southwestern Montana Insurance Center, LLC (“SWMT”), a wholly owned subsidiary of Reliance, acquired Southwestern Montana Financial Center, Inc. (See Note 3). SWMT is an insurance services firm which specializes in providing personal and commercial lines of insurance. On May 1, 2019, Fortman Insurance Services, LLC (“FIS”), a wholly owned subsidiary of Reliance, acquired Fortman Insurance Agency, LLC (See Note 3). FIS is an insurance services firm which specializes in providing personal and commercial lines of insurance. On September 1, 2019, the Company acquired Altruis Benefits Consulting, Inc. (“ABC”). ABC is an insurance agency and employee benefits provider. | |
Altruis Benefit Consultants Inc [Member] | ||
Organization and Description of Business | NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Altruis Benefit Consultants, Inc. (the “Company”), was incorporated in the state of Michigan in December 2011. The Company is a privately-held employee benefits insurance agency and general agency based in Bingham Falls, MI. The Company’s operations primarily include the sale of individual health insurance products and Medicare policies. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Altruis Benefit Consultants, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Liquidity The Company has incurred losses of $2,118,211 for the six months ended June 30, 2020. At June 30, 2020, the Company had a working capital deficiency of approximately $4,811,725. In 2019, the Company acquired three additional agencies to grow the company and improve profitability. Since these acquisitions are recent, management’s plans to achieve operational efficiencies and reduce expenses will be implemented and enable the Company to continue to meet its obligations for at least the next twelve months. On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. Reliance Holdings has committed to fund the Company for at least the next 12 months. Additionally, management is planning to raise additional financing through an equity offering, although, there can be no assurance that additional equity financing will be available on terms acceptable to the Company or at all. The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the condensed consolidated financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. To date, there has been minimal to no effect to the Company due to the outbreak; however, the Company is unable to estimate any long-term effects the coronavirus will have on its results of operations, financial condition or liquidity for fiscal year 2020. Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the condensed consolidated financial statements and related disclosures. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. Liquidity As of December 31, 2019, the Company’s reported cash balance was approximately $6,700, current assets were approximately $647,000 while current liabilities were approximately $4,668,000 including loan payable to related party of approximately $3,312,000. The Company had stockholders’ equity of $642,324. For the year ended December 31, 2019, the Company reported a net loss of approximately $(3,495,000) and negative cash flow from operations of $(373,934). Management believes that the company’s financial position may cause concern about the Company’s liquidity. Therefore, management has developed plans that should alleviate any liquidity issues. Management believes that has plans that will alleviate any liquidity issues over next twelve months. Management’s cash flow forecast for 2021 and beyond indicate that its business should generate positive cash flows from their operations. During the year, the Company acquired three new entities. As the three acquisitions took place in April, May, and September of 2019, respectively, the Company did not receive the benefit of revenue from these entities for a substantial portion of the year. Further, the largest acquisition in terms of revenue was Altruis Benefit Consultants, Inc. which was not acquired until September of 2019. Going forward the Company will recognize revenue from these entities for the full year which will increase cash flows. In addition, the Company incurred several one-time expenses, related to professional and legal fees for the three acquisitions that closed in 2019, which contributed to the Company’s net loss. Reliance Holdings has also agreed to support the Company if required and management believes that the related party holding the loan to related party discussed above will forebear on any amounts due should the company be unable to fulfil its payment obligations under the loan agreement. Management is also planning to raise capital through an initial public offering of the Company’s equity securities. However, there can be no assurance that management will be successful in raising capital through sale of equity securities. Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. Deferred Financing Costs The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of December 31, 2019, and 2018, unamortized deferred financing costs were $213,733, and $46,556, respectively and are netted against the related debt. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Identifiable Intangible Assets, net Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized in the predecessor and successor periods presented. Goodwill and other indefinite-lived intangibles The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets other than goodwill, such as trade names, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This ASU, which the Company adopted as of January 1, 2019, did not have a material effect on the Company’s consolidated financial statements. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur. Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. Seasonality A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU was adopted by the Company using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company adopted Accounting Standards Update (“ASU”) 2017- 04 Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment early in August 2018 Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the consolidated financial statements and related disclosures. | |
Altruis Benefit Consultants Inc [Member] | |||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s Financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Cash and cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company maintains its cash and cash equivalents at three financial institutions. Accounts are insured by the Federal Deposit Insurance Corporation and certain account balances may exceed insured limits. 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Fair Value The Company measures certain assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy: Level 1 ___ Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 ___ Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company; and Level 3 ___ Unobservable inputs which reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The Company has investments held by a financial institution. The underlying investments are primarily a unit investment trust that is considered Level 1 financial instruments since they are valued upon listed or quoted market rates. As the market price of the underlying assets is readily observable and transparent, the investments are carried at fair value on the balance sheet. Unrealized gains and losses related to these investments are reported on the balance sheet through other comprehensive income. As of December 31, 2018 and 2017, the fair value of other investments was $0 and $305,154, respectively. Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. Commission Expense Commission expense consists of payments made to agents for the sale of insurance policies. General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consists of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $17,270 and $2,338, respectively. Income Taxes The Company has elected to be taxed as an S corporation for federal and state income tax purposes whereby taxable income is reported by the stockholder. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Significant Customers (Altruis
Significant Customers (Altruis Benefit Consultants, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Customers | NOTE 8. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 BlueCross BlueShield 30 % 27 % 27 % 27 % Priority Health 28 % 16 % 26 % 21 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BlueCross BlueShield, could have a material adverse effect on the Company. | NOTE 9. SIGNIFICANT CUSTOMERS Carriers representing 10% or more of total revenue are presented in the table below: Insurance Carrier December 31, 2019 December 31, 2018 BlueCross BlueShield 26.2 % 39.5 % Priority Health 19.7 % 44.2 % No other single insurance carrier accounted for more than 10% of the Company’s commission revenues. The loss of any significant customer, including Priority Health and BCBS, could have a material adverse effect on the Company. | |
Altruis Benefit Consultants Inc [Member] | |||
Significant Customers | NOTE 3. SIGNIFICANT CUSTOMERS For the year ended December 31, 2018, two insurance carriers accounted for 51% and 19%, respectively, of the Company’s commission revenues. For the year ended December 31, 2017, two insurance carriers accounted for 40% and 19%, respectively, of the Company’s commission revenues |
Equity (Altruis Benefit Consult
Equity (Altruis Benefit Consultants, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity | NOTE 9 EQUITY Preferred Stock The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of June 30, 2020, and December 31, 2019, there were 33,911,991 shares of Series A Convertible Preferred Stock issued and outstanding. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc discussed in Note 3. The Company received proceeds of $1,000,000 for the issuance of these common shares. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. On May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2020: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 $ 2,995,640 Granted 2,000,000 0.39 4.73 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2020 21,700,000 $ 0.20 3.71 $ - The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2019: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Outstanding at December 31, 2018 - $ - - $ - Granted 3,000,000 0.20 3.71 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2019 3,000,000 $ 0.20 3.71 $ - The following is a summary of the Company’s non-vested stock options as of June 30, 2020, and changes during the six months ended June 30, 2020: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 Granted 2,000,000 0.39 4.73 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2020 18,700,000 $ 0.20 3.66 The following is a summary of the Company’s non-vested stock options as of June 30, 2019, and changes during the six months ended June 30, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 3,000,000 0.20 3.66 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2019 1,500,000 $ 0.20 3.66 During the six months ended June 30, 2020, the Board approved options to be issued pursuant to the Plan to a certain current employee totaling 2,000,000 shares. These options have been granted with an exercise price greater than the market value of the common stock on the date of grant and have a contractual term of 5 years. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the six months ended June 30, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,967,480 which will be amortized in future periods through February 2024. During the six months ended June 30, 2020, the Company recognized $843,572 of compensation expense relating to the stock options granted to employees, directors, and consultants. During the six months ended June 30, 2019, the Company recognized $703,249 of compensation expense relating to the stock options granted to a service provider. As of June 30, 2020, unrecognized compensation expense totaled $2,076,532 which will be recognized on a straight-line basis over the vesting period or requisite service period through February 2024. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on June 30, 2020 and 2019, respectively. The market values as of June 30, 2020 and 2019, were $0.19 and $0.13, respectively, based on the closing bid prices for June 30, 2020 and 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Exercise price $ 0.39 $ 0.20 Expected term 3.75 years 3.25 years Risk-free interest rate 0.38 % 2.43 % Estimated volatility 318.00 % 533.64 % Expected dividend - - Option price at valuation date $ 0.31 $ 0.19 | NOTE 10. EQUITY Preferred Stock - Successor The Company has been authorized to issue 750,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of December 31, 2019 and 2018, there were 33,911,991 and 40,000,000 shares of Series A Convertible Preferred Stock issued and outstanding, respectively. Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. Common Stock - Successor The Company has been authorized to issue 2,000,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle 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 corporation upon liquidation or dissolution. In October 2018, Reliance Global Holdings, LLC transferred 6,584,830 shares of the Company’s common stock at a price of $0.07 per share to a non-employee of the Company for legal services provided to the Company. In November 2018, the Company issued 16,400,000 shares of common stock as part of the transaction discussed in Note 4. In November 2018, Reliance Global Holdings, LLC, a related party, converted 10,000,000 shares of Series A Convertible Preferred Stock into 100,000,000 shares of common stock. In November 2018, Reliance Global Holdings, LLC, a related party, transferred 500,000 shares of the Company’s common stock at a price of $0.1799 per share to an employee of the Company. The transaction was accounted for as share based compensation and the Company recognized $89,950 of share-based compensation. In November 2018, 2,305,957 shares of the Company’s common stock were transferred to EMA Financial LLC (“EMA”). The transfer was the result of an obligation of Ethos prior to the recapitalization (see Note 4). The Company contested this transfer as it was represented that the obligation was settled prior to the recapitalization. Subsequently, on May 24, 2019, the Company entered into a Confidential Settlement Agreement and General Release to settle its dispute with EMA. Under the terms of this settlement agreement the Company agreed to allow EMA to retain 1,729,468 shares of the Company’s common stock in which the Company received 576,489 of the Company’s common stock back which was subsequently cancelled. At the date of the transfer the Company’s common stock was valued at $0.1775 based on its closing price. Accordingly, the Company recorded a settlement charge of $306,981 based upon the common stock retained by EMA. In January 2019, Reliance Global Holdings, LLC, a related party, converted 5,485,325 shares of Series A Convertible Preferred Stock into 54,853,248 shares of common stock. In February 2019, Reliance Global Holdings, LLC, a related party, converted 318,108 shares of Series A Convertible Preferred Stock into 3,181,080 shares of common stock. In May 2019, the Company was to issue 2,845,760 shares of common stock to the members of Fortman Insurance Agency, LLC as a result of the FIS Acquisition (see Note 4). In September 2019, Reliance Global Holdings, LLC, a related party, converted 284,576 shares of Series A Convertible Preferred Stock into 2,845,760 shares of common stock which were immediately cancelled. The Company then issued 2,845,760 new shares of common stock to the members of Fortman Insurance Agency, LLC. On July 22, 2019, the Company entered into a purchase agreement with The Referral Depot, LLC (TRD) to purchase a client referral software created exclusively for the insurance industry. The total purchase price of the software is $250,000 cash and 2,000,000 restricted common shares of the Company. Per the agreement the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. As of December 31, 2019, no shares related to this acquisition have been issued. The Company has recorded the 2,000,000 shares as common stock issuable as of December 31, 2019. In September 2019, Reliance Global Holdings, LLC transferred its ownership in SWMT and FIS to the Company in exchange for 14,839,011 shares of restricted common stock. In September 2019, the Company issued 11,900,832 shares of common stock to the former sole shareholder of Altruis Benefits Consulting, Inc. as a result of the ABC Acquisition (see Note 4). Common Stock – Predecessor On all matters submitted to stockholders for vote, Employee Benefits Solutions, Inc. and Family Health Advisors, Inc.’s common stockholders are entitled to one vote per share, voting together as a single class, and do not have cumulative voting rights. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share equally in all assets remaining after the payment of any liabilities. Members’ Equity – Predecessor Tri Star Benefits, LLC is a Michigan limited liability company. Each member of Tri Star Benefits, LLC is entitled to vote on any matter submitted to a vote. The affirmative vote of a majority of the membership interest of all the members entitled to vote on such matter is required. In the event of the dissolution of Tri Star Benefits, LLC, its assets shall be distributed first to its creditors, to the extent permitted by law, in satisfaction of Tri Star Benefits, LLC’s debts, liabilities, and obligations, including those owed to its members. Thereafter, the assets shall be distributed as a liquidation distribution to the members who have positive capital accounts. Stock Options During the year ended December 31, 2019, the Company adopted the Reliance Global Group, Inc. 2019 Equity Incentive Plan (the “Plan”) under which options exercisable for shares of common stock have been or may be granted to employees, directors, consultants, and service providers. A total of 60,000,000 shares of common stock are reserved for issuance under the Plan. At December 31, 2019, there were 40,300,000 shares of common stock reserved for future awards under the Plan. The Company issues new shares of common stock from the shares reserved under the Plan upon exercise of options. The Plan is administered by the Board of Directors (the “Board”). The Board is authorized to select from among eligible employees, directors, and service providers those individuals to whom 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 Board is also authorized to prescribe, amend, and rescind terms relating to options granted under the Plan. Generally, the interpretation and construction of any provision of the Plan or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees, non-employee directors, consultants, and service providers are eligible to receive options which are not ISOs, i.e. “Non-Statutory Stock Options.” The options granted by the Board in connection with its adoption of the Plan were Non-Statutory Stock Options. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 - $ - - - Granted 19,700,000 0.18 4.62 - Forfeited or expired - - - - Exercised - - - - Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 2,995,640 The following is a summary of the Company’s non-vested stock options as of December 31, 2019, and changes during the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 19,700,000 0.18 4.62 Vested (1,500,000 ) 0.20 4.21 Forfeited or expired - - - Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to certain current employees totaling 12,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to consultants totaling 4,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 3-year period through August 2022 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to nonemployee directors totaling 700,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grants and have a contractual term of 5 years. The options vest ratably over a 4-year period through November 2023 and remain subject to forfeiture if vesting conditions are not met. Compensation cost is recognized on a straight-line basis over the vesting period or requisite service period. During the year ended December 31, 2019, the Board approved options to be issued pursuant to the Plan to a service provider totaling 3,000,000 shares. These options have been granted with an exercise price equal to the market value of the common stock on the date of grant and have a contractual term of 5 years. One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. As of December 31, 2019, the Company determined the services were no longer needed, as such no services were provided subsequent to December 31, 2019. The Company deemed the services provided to be helpful and allowed the second half of the options to vest as scheduled. As services were only provided during the year ended December 31, 2019, the full compensation cost associated with these options was recognized during the year. The Company determined that the options granted had a total fair value of $3,343,861 which will be amortized in future periods through November 2023. During the year ended December 31, 2019, the Company recognized $465,377 of compensation expense relating to the stock options granted to employees, directors, and consultants and $581,999 of compensation expense relating to the stock options granted to service providers. As of December 31, 2019, unrecognized compensation expense totaled $2,296,485 which will be recognized on a straight-line basis over the vesting period or requisite service period through November 2023. The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on December 31, 2019. The market values as of December 31, 2019 was $0.33 based on the closing bid price for December 31, 2019. The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The expected term of the options was computed by taking the mid-point between the vesting date and expiration date. The following assumptions were used in the Black-Scholes option-pricing model: Year Ended December 31, 2019 Exercise price $ 0.17 - $0.27 Expected term 3.25 to 3.75 years Risk-free interest rate 1.35% - 2.43% Estimated volatility 484.51% - 533.64% Expected dividend - Option price at valuation date $ 0.16 - $0.27 | |
Altruis Benefit Consultants Inc [Member] | |||
Equity | NOTE 4. EQUITY Stockholder’s Equity The Company shall have the authority to issue one class of common stock, with no par value. The number of shares of such stock which the Company has the authority to issue is 60,000 shares. As of December 31, 2018 and 2017, the Company has issued 200 shares of common stock to one stockholder. Any action required or permitted to be taken at an annual or special meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a written consent is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. |
Commitments and Related Party_3
Commitments and Related Party Transactions (Altruis Benefit Consultants, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Altruis Benefit Consultants Inc [Member] | |
Commitments and Related Party Transactions | NOTE 5. COMMITMENTS AND RELATED PARTY TRANSACTIONS Operating Leases The Company has one lease agreement to lease office in Bingham, Michigan from an unrelated third party, classified as an operating lease. This lease approximates $4,500 per month and ends May 31, 2021. The Company’s approximate future minimum payment obligations under the lease commitments are as follows: Years ending December 31, 2019 $ 54,000 2020 54,000 2021 23,000 Total $ 131,000 Rent expense amounted to $48,074 and $31,798 for the years ended December 31, 2018 and 2017, respectively. |
Retirement Plan (Altruis Benefi
Retirement Plan (Altruis Benefit Consultants, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Altruis Benefit Consultants Inc [Member] | |
Retirement Plan | NOTE 6. RETIREMENT PLAN The Company has a 401(k) retirement plan which allows both employer and employee contributions. For the years ended December 31, 2018 and 2017, the Company recorded employer contribution expense of $2,449 and $8,275, respectively. |
Subsequent Events (Altruis Bene
Subsequent Events (Altruis Benefit Consultants, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsequent Events | NOTE 14. SUBSEQUENT EVENTS On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. | NOTE 16. SUBSEQUENT EVENTS On February 19, 2020, the Company entered into a securities purchase agreement with NSURE, Inc. (“NSURE”) whereas the Company may invest up to an aggregate of $20,000,000 in NSURE which will be funded with three tranches. In exchange, the Company will receive a total of 5,837,462 shares of NSURE’s Class A Common Stock, which represents 35% of the outstanding shares. The first tranche of $1,000,000 was paid immediately upon execution of the agreement. As a result of the first tranche, the Company received 291,873 shares of NSURE’s Class A Common Stock. The second tranche of $3,000,000 and third tranche of $16,000,000 are not due until a later date in 2020. The Company will use the cost method of acquisition for the initial recognition of this investment. Once the Company determines that it can exercise significant influence over NSURE, it will begin to account for its investment under the equity method. In February 2020, the Company issued 4,000,000 shares of common stock to a third-party individual for the purpose of raising capital to fund the Company’s investment in NSURE, Inc. The Company received proceeds of $1,000,000 for the issuance of these common shares. On March 23, 2020, the Company granted 2,000,000 options exercisable for shares of common stock to an employee. The options have an exercise price of $0.39 and expire on March 23, 2025. The options vest ratably over a 4-year period through February 2024 and remain subject to forfeiture if vesting conditions are not met. Coronavirus (COVID-19) Impact The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the service of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. Given the daily evolution of the coronavirus and the global responses to curb its spread, the Company is not able to estimate the effects of the coronavirus on its results of operations, financial condition or liquidity for fiscal year 2020. | |
Altruis Benefit Consultants Inc [Member] | |||
Subsequent Events | NOTE 7. SUBSEQUENT EVENTS The Company evaluated events that have occurred from the date of the financial statements through April 28, 2020, the date the financial statements were available to be issued. On September 1, 2019, the Company was acquired by Reliance Global Group, Inc. for a purchase price of approximately $7,200,000. The spread of the COVID-19 outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the COVID-19 outbreak on the financial statements cannot be reasonably estimated at this time. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. | Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. |
Liquidity | Liquidity The Company has incurred losses of $2,118,211 for the six months ended June 30, 2020. At June 30, 2020, the Company had a working capital deficiency of approximately $4,811,725. In 2019, the Company acquired three additional agencies to grow the company and improve profitability. Since these acquisitions are recent, management’s plans to achieve operational efficiencies and reduce expenses will be implemented and enable the Company to continue to meet its obligations for at least the next twelve months. On July 1, 2020, the Company entered into an agreement to provide additional lines of insurance to small business groups. These additional lines of insurance will provide revenue expansion opportunities and allows the Company to access an even larger insurance market. Reliance Holdings has committed to fund the Company for at least the next 12 months. Additionally, management is planning to raise additional financing through an equity offering, although, there can be no assurance that additional equity financing will be available on terms acceptable to the Company or at all. The spread of the coronavirus (COVID-19) outbreak in the United States has resulted in economic uncertainties which may negatively impact the Company’s business operations. While the disruption is expected to be temporary, there is uncertainty surrounding the duration and extent of the impact. The impact of the coronavirus outbreak on the condensed consolidated financial statements cannot be reasonably estimated at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment could harm our business and our business strategy. While we do not anticipate any material impact to our business operations as a result of the coronavirus, in the event of a major disruption caused by the outbreak of pandemic diseases such as coronavirus, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy and we cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry and workforce. To date, there has been minimal to no effect to the Company due to the outbreak; however, the Company is unable to estimate any long-term effects the coronavirus will have on its results of operations, financial condition or liquidity for fiscal year 2020. | Liquidity As of December 31, 2019, the Company’s reported cash balance was approximately $6,700, current assets were approximately $647,000 while current liabilities were approximately $4,668,000 including loan payable to related party of approximately $3,312,000. The Company had stockholders’ equity of $642,324. For the year ended December 31, 2019, the Company reported a net loss of approximately $(3,495,000) and negative cash flow from operations of $(373,934). Management believes that the company’s financial position may cause concern about the Company’s liquidity. Therefore, management has developed plans that should alleviate any liquidity issues. Management believes that has plans that will alleviate any liquidity issues over next twelve months. Management’s cash flow forecast for 2021 and beyond indicate that its business should generate positive cash flows from their operations. During the year, the Company acquired three new entities. As the three acquisitions took place in April, May, and September of 2019, respectively, the Company did not receive the benefit of revenue from these entities for a substantial portion of the year. Further, the largest acquisition in terms of revenue was Altruis Benefit Consultants, Inc. which was not acquired until September of 2019. Going forward the Company will recognize revenue from these entities for the full year which will increase cash flows. In addition, the Company incurred several one-time expenses, related to professional and legal fees for the three acquisitions that closed in 2019, which contributed to the Company’s net loss. Reliance Holdings has also agreed to support the Company if required and management believes that the related party holding the loan to related party discussed above will forebear on any amounts due should the company be unable to fulfil its payment obligations under the loan agreement. Management is also planning to raise capital through an initial public offering of the Company’s equity securities. However, there can be no assurance that management will be successful in raising capital through sale of equity securities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | |
Cash | Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 | Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. | |
Deferred Financing Costs | Deferred Financing Costs The Company has recorded deferred financing costs as a result of fees incurred by the Company in conjunction with its debt financing activities. These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term of the related debt. As of December 31, 2019, and 2018, unamortized deferred financing costs were $213,733, and $46,556, respectively and are netted against the related debt. | |
Business Combinations | Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. | |
Identifiable Intangible Assets, Net | Identifiable Intangible Assets, net Finite-lived intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging from 3 to 20 years. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment was recognized in the predecessor and successor periods presented. | |
Goodwill and Other Indefinite-Lived Intangibles | Goodwill and other indefinite-lived intangibles The Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is assigned to a reporting unit on the acquisition date and tested for impairment at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. Similarly, indefinite-lived intangible assets other than goodwill, such as trade names, are tested annually or more frequently if indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. | |
Revenue | Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 | Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 |
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | |
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. | |
Stock-Based Compensation | Stock-Based Compensation In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This ASU, which the Company adopted as of January 1, 2019, did not have a material effect on the Company’s consolidated financial statements. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term. As the Reliance Global Group, Inc. Equity Incentive Plan 2019 was adopted in January of 2019, the Company lacks the historical basis to estimate forfeitures and will recognize forfeitures as they occur. | |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. | |
Income Taxes | Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. | Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. |
Seasonality | Seasonality A greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU was adopted by the Company using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company adopted Accounting Standards Update (“ASU”) 2017- 04 Intangibles - Goodwill and Other, Simplifying the Accounting for Goodwill Impairment early in August 2018 | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the condensed consolidated financial statements and related disclosures. | Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that they will have a significant impact on the consolidated financial statements and related disclosures. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Policies) (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. | Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 | ||
Revenue Recognition | Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 | Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 | |
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. | ||
Income Taxes | Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. | Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). | ||
Use of Estimates | 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation of assets is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Useful Life (in years) Office equipment 5 Vehicles 5 Furniture and fixtures 7 Leasehold improvements 15 | ||
Revenue Recognition | Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. | ||
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $4,073 and $5,525, respectively. | ||
Income Taxes | Income Taxes The Company has elected to be taxed as an S corporation for federal and state income tax purposes whereby taxable income is reported by the stockholder. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Policies) (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. | Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation, including for assets acquired under capital leases or finance leases, are recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 | ||
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. | ||
Income Taxes | Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. | Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. | |
Fortman Insurance Agency, LLC [Member] | |||
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). | ||
Use of Estimates | 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation of assets is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Useful Life (in years) Land improvements 15 Vehicles 5 Office equipment, furniture, and fixtures 7 | ||
Investment | Investment The Company held purchased and held shares of a private bank which is classified as investment on the balance sheet. The shares were carried at cost and evaluated for impairment annually. | ||
Revenue Recognition | Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. | ||
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $54,188 and $70,002, respectively. | ||
Income Taxes | Income Taxes The Company is a limited liability corporation and has elected to be treated as a pass-through entity for federal and state income tax purposes whereby taxable income is reported by the members. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Policies) (Altruis Benefit Consultants, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our audited consolidated financial statements for the year ended December 31, 2019. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. | Basis of Presentation and Principles of Consolidation The Common Control Transactions on August 1, 2018 is deemed to be the start of the successor period. The financial reporting periods are as follows: ● The consolidated successor period of the Company reflecting the Recapitalization and Common Control Transactions, from August 1, 2018 to December 31, 2018 and December 31, 2019. ● The combined predecessor period of Family Health Advisors, Inc., Employee Benefits Solutions, Inc., and Tri Star Benefits, LLC, for the period from January 1, 2018 to July 31, 2018. The accompanying consolidated and combined financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. The combined financial statements include Family Health Advisors, Inc., Employee Benefits Solutions, LLC, and Tri Star Benefits, LLC. All intercompany transactions and balances have been eliminated in consolidation and combination. | |
Cash and Cash Equivalents | Cash The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 | Cash Cash consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Fair Value | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. The Company’s balance sheet includes certain financial instruments, including cash, notes receivables, accounts payable, notes payables and short and long-term debt. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on the market index. | ||
Revenue Recognition | Revenue The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 | Revenue Recognition In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing. ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). This ASU, which the Company adopted using the prospective method effective January 1, 2019. The adoption did not have a material effect on the Company’s consolidated financial statements. The Company’s revenue is primarily comprised of commission paid by health insurance carriers related to insurance plans that have been purchased by a member who used the Company’s service. The Company defines a member as an individual currently covered by an insurance plan, including individual and family, Medicare-related, small business and ancillary plans, for which the Company are entitled to receive compensation from an insurance carrier. The core principle of ASC 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in ASC 606: Identification of the contract, or contracts, with a customer Identification of the performance obligations in the contract Determination of the transaction price Allocation of the transaction price to the performance obligations in the contract Recognition of revenue when, or as, the Company satisfies a performance obligation For individual and family, Medicare supplement, small business and ancillary plans, the Company’s compensation is generally a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan (commissions) and, to a lesser extent, override commissions that health insurance carriers pays the Company for achieving certain objectives. Premium-based commissions are reported to the Company after the premiums are collected by the carrier, generally monthly. The Company generally continues to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or the Company otherwise does not remain the agent on the policy. The Company recognizes commission revenue for individual and family, Medicare Supplement, small business and ancillary plans when premiums are effective. The Company determines that there is persuasive evidence of an arrangement when the Company has a commission agreement with a health insurance carrier, a carrier reports to the Company that it has approved an application submitted through the Company’s platform, and the applicant starts making payments on the plan. The Company’s services are complete when a carrier has approved an application. The seller’s price is fixed or determinable and collectability is reasonably assured when commission amounts have been reported to the Company by a carrier. Commission revenue from insurance distribution and brokerage operations is recognized when all placement services have been provided, protection is afforded under the insurance policy, and the premium is known or can be reasonably estimated and is billable. In general, two types of billing practices occur as part of our agency contracts, which is direct bill and agency bill. In direct bill scenarios, the insurance carriers that underwrite the insurance policies directly bill and collect the premium for the policy without any involvement from the Company. Upon collection, a commission is then remitted from the insurance carrier to the Company. These commissions have not met the criteria for revenue recognition until the Company receives the commissions, as the Company does not have insight into policy acceptance and premium collections until the commission is received from the insurance carrier, representing that the insurance policy has been bound and therefore commissions have been earned by the Company. The second billing practice where the Company bills the policy holder and collects the premiums (“Agency Bill”) provides greater transparency by the Company into the acceptance of the policy and premium collection. As part of the Agency Bill process, the Company can, at times, net its commissions out of the premiums to be sent to the insurance carriers. For Agency Bill customers, the revenue recognition criteria are considered met when the Agency receives the premiums from the policy holder, with an allowance established against the revenue for policies that may not be bound by the insurance companies. All commission revenue is recorded net of any deductions for estimated commission adjustments due to lapses, policy cancellations, and revisions in coverage. Insurance commissions earned from carriers for life insurance products are recorded gross of amounts due to agents, with a corresponding commission expense for downstream agent commissions being recorded as commission expense within the statements of operations. The Company earns additional revenue including contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue or profit targets established periodically by the carriers (collectively the Contingent Commissions). The Contingent Commissions are earned when the Company achieves the targets established by the insurance carries. The insurance carriers notify the company when it has achieved the target. The Company only recognizes revenue to the extent that it is probable that a significant reversal of the revenue will not occur. The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 | |
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed as incurred. | ||
Income Taxes | Income Taxes The Company sustained losses in the three and six months ended June 30, 2020 and June 30, 2019 and the effective tax rate was 0.0% in all periods as a result of a change in the deferred tax valuation allowance. In the three months and six months ended June 30, 2020, the effective rate also included disallowed expenses used to substantiate the expected forgiveness of the loan secured under the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief and Economic Security Act enacted March 27, 2020 (the “CARES Act”). Accordingly, loan proceeds used to pay for payroll and select overhead costs may substantiate the forgiveness of the PPP loan but become non-deductible expenses for tax purposes. The Company has approximately $5,275,000 and $4,277,000 of Federal Net Operating Loss Carry forwards as of June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the valuation allowance increased $436,759. The Company did not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized benefits as a component income tax expense (benefit). The Company did not recognize any interest or penalties, nor did it have any interest or penalties accrued as of June 30, 2020 and 2019. | Income Taxes The Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. | |
Altruis Benefit Consultants Inc [Member] | |||
Basis of Presentation | Basis of Presentation The Company’s Financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). | ||
Cash and Cash Equivalents | Cash and cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company maintains its cash and cash equivalents at three financial institutions. Accounts are insured by the Federal Deposit Insurance Corporation and certain account balances may exceed insured limits. | ||
Use of Estimates | 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 and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses, during the reporting periods. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. | ||
Fair Value | Fair Value The Company measures certain assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy: Level 1 ___ Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 ___ Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company; and Level 3 ___ Unobservable inputs which reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The Company has investments held by a financial institution. The underlying investments are primarily a unit investment trust that is considered Level 1 financial instruments since they are valued upon listed or quoted market rates. As the market price of the underlying assets is readily observable and transparent, the investments are carried at fair value on the balance sheet. Unrealized gains and losses related to these investments are reported on the balance sheet through other comprehensive income. As of December 31, 2018 and 2017, the fair value of other investments was $0 and $305,154, respectively. | ||
Revenue Recognition | Revenue Recognition The Company earns commission income on gross written premiums in accordance with its contracts with insurance carriers and is earned when collected. | ||
Commission Expense | Commission Expense Commission expense consists of payments made to agents for the sale of insurance policies. | ||
General and Administrative | General and Administrative General and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service fees, office rent, all employee travel expenses, and other general costs. | ||
Marketing and Advertising | Marketing and Advertising The Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s online advertising channel expense primarily consists of social media ads. Advertising costs for both direct and online channels are expensed as incurred. During the years ended December 31, 2018 and 2017, the Company incurred marketing and advertising expenses of $17,270 and $2,338, respectively. | ||
Income Taxes | Income Taxes The Company has elected to be taxed as an S corporation for federal and state income tax purposes whereby taxable income is reported by the stockholder. Accordingly, no provision has been made for federal or state income taxes. As of December 31, 2018, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. Generally, tax years 2015 to 2018 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Schedule of Cash and Restricted Cash | The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: June 30, 2020 June 30, 2019 Cash $ 270,304 $ 83,786 Restricted cash 491,755 277,950 Total cash and restricted cash $ 762,059 $ 361,736 | The reconciliation of cash and restricted cash reported within the applicable balance sheet that sum to the total of the same such amounts shown in the statement of cash flows is as follows: December 31, 2019 December 31, 2018 Cash $ 6,703 $ 12,456 Restricted cash 484,882 88,750 Total cash and restricted cash $ 491,585 $ 101,206 |
Schedule of Disaggregation Revenue | Six months ended June 30, 2020 Medical Life Property and Casualty Total Regular $ 3,146,340 $ 1,065 $ 472,391 $ 3,619,796 Contingent commission $ 26,536 $ 26,536 Profit-sharing Override commission Bonuses Total six months ended June 30, 2020 $ 3,146,340 $ 1,065 $ 498,927 $ 3,646,332 Six months ended June 30, 2019 Regular $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 Contingent commission Profit Sharing Override commission Bonuses Total six months ended June 30, 2019 $ 1,092,934 $ 1,558 $ 288,594 $ 1,383,086 | The following table disaggregates the Company’s revenue by line of business: Year ended December 31, 2019 Medical Life Property and Casualty Total Regular $ 3,582,182 $ 1,810 $ 866,793 $ 4,450,785 Contingent commission Profit-sharing Override commission Bonuses Total year ended $ 3,582,182 $ 1,810 8866,793 $ 4,450,785 Period from August 1, 2018 through December 31, 2018 Regular $ 382,391 $ 8,379 $ 390,770 Contingent commission Profit Sharing Override commission Bonuses Total period from August 1, 2018 through December 31, 2018 $ 382,391 $ 8,379 $ 390,770 |
Schedule of Estimated Useful Life of Property Plant and Equipment | The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 |
Strategic Investments and Bus_2
Strategic Investments and Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Family Health Advisors, Inc. and Tri Star Benefits, LLC [Member] | |
Schedule of Allocation of Purchase Price | The allocation of the purchase price in connection with the FHA/TSB Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 6,520 3 Customer relationships 116,100 9 Non-competition agreements 48,540 5 Goodwill 578,840 Indefinite $ 750,000 |
Employee Benefit Solutions, Inc [Member] | |
Schedule of Allocation of Purchase Price | he allocation of the purchase price in connection with the EBS Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 33,140 20 Customer relationships 47,630 9 Non-competition agreements 42,320 5 Goodwill 274,956 Indefinite Fixed assets 1,954 5-7 $ 400,000 |
Commercial Solutions of Insurance Agency, LLC [Member] | |
Schedule of Allocation of Purchase Price | The allocation of the purchase price in connection with the CSIA Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Cash $ 13,500 N/A Fixed Assets 1,638 5-7 Customer relationships 284,560 11 Non-competition agreements 40,050 5 Trade name and trademarks 8,500 2 Goodwill 851,752 Indefinite $ 1,200,000 |
Southwestern Montana Financial Center, Inc. [Member] | |
Schedule of Allocation of Purchase Price | The allocation of the purchase price in connection with the SWMT Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Customer relationships $ 561,000 10 Non-competition agreements 599,200 5 Goodwill 1,217,790 Indefinite Fixed assets 41,098 5-7 Loan Payable (24,579 ) $ 2,394,509 |
Fortman Insurance Agency, LLC [Member] | |
Schedule of Allocation of Purchase Price | The allocation of the purchase price in connection with the FIS Acquisition was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Trade name and trademarks $ 289,400 5 Customer relationships 1,824,000 10 Non-competition agreements 752,800 5 Goodwill 1,269,731 Indefinite Fixed assets 19,924 5-7 Prepaid rent 550 $ 4,156,405 |
Altruis Benefits Consulting, LLC [Member] | |
Schedule of Allocation of Purchase Price | The allocation of the purchase price in connection with the ABC Transaction was calculated as follows: Description Fair Value Weighted Average Useful Life (Years) Cash $ 1,850,037 Trade name and trademarks 714,600 5 Customer relationships 753,000 10 Non-competition agreements 1,168,600 5 Goodwill 4,949,329 Indefinite Fixed assets 85 5 Payable to seller (1,747,483 ) $ 7,688,168 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 | Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Impairment of Goodwill | Reporting Unit EBS & USBA CCS SWMT FIS ABC Total Balance, August 1, 2018 $ - $ - $ - $ - $ - $ - Transfer from Holdings 853,796 853,796 CCS Acquisition 851,752 851,752 Impairment December 31, 2018 $ 853,796 851,752 1,705,548 Transfer from Holdings 1,217,790 1,269,731 2,487,521 ABC transaction 4,949,329 4,949,329 Impairment (593,790 ) (593,790 ) Balance December 31, 2019 $ 853,796 $ 257,962 $ 1,217,790 $ 1,269,731 $ 4,949,329 $ 8,548,608 | |
Schedule of Intangible Assets and Weighted-Average Remaining Amortization Period | 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, 2020: Weighted Average Remaining Amortization period (Years) Gross Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.1 $ 1,052,160 $ (200,700 ) $ 961,040 Customer relationships 9.1 3,586,290 (442,465 ) 3,034,245 Non-competition agreements 4.2 2,651,510 (567,743 ) 2,083,767 $ 7,289,960 $ (1,210,908 ) $ 6,079,052 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, 2019: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.3 $ 1,052,160 $ (96,258 ) $ 955,902 Customer relationships 9.4 3,586,290 (257,529 ) 3,328,761 Non-competition agreements 4.4 2,651,510 (302,589 ) 2,348,921 $ 7,289,960 $ (656,376 ) $ 6,633,584 | 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, 2019: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 4.3 $ 1,052,160 $ (96,258 ) $ 955,902 Customer relationships 9.4 3,586,290 (257,529 ) 3,328,761 Non-competition agreements 4.4 2,651,510 (302,589 ) 2,348,921 $ 7,289,960 $ (656,376 ) $ 6,633,584 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, 2018: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 14.0 $ 48,160 $ (1,951 ) $ 46,209 Customer relationships 10.1 448,290 (12,680 ) 435,610 Non-competition agreements 4.7 130,910 (8,240 ) 122,670 $ 627,360 $ (22,871 ) $ 604,489 |
Schedule of Amortization Expense of Acquired Intangibles Assets | The amortization expense of acquired intangible assets for each of the following five years and thereafter are expected to be as follows: Years ending June 30, Amortization Expense 2020 (remaining six months) $ 818,364 2021 1,091,343 2022 1,090,620 2023 1,075,827 2024 533,822 Thereafter 1,469,076 Total $ 6,079,052 | The amortization expense of acquired intangible assets for each of the following five years are expected to be as follows: Years ending December 31, Amortization 2020 $ 1,096,692 2021 1,091,887 2022 1,090,620 2023 1,082,374 2024 710,052 Thereafter 1,561,959 Total $ 6,633,584 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Payables and Accruals [Abstract] | ||
Schedule of Accounts Payable and Accrued Liabilities | Significant components of accounts payable and accrued liabilities were as follows: June 30, 2020 December 31, 2019 Accounts payable $ 313,045 $ 102,112 Accrued expenses 12,130 5,797 Accrued credit card payables 14,950 32,395 Other accrued liabilities - 12,922 $ 340,125 $ 153,226 | Significant components of accounts payable and accrued liabilities were as follows: December 31, 2019 December 31, 2018 Accounts payable $ 102,112 $ 14,888 Accrued expenses 5,797 65,302 Accrued credit card payables 32,395 18,464 Other accrued liabilities 12,922 - $ 153,226 $ 98,654 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Schedule of Long-Term Debt | The composition of the long-term debt follows: June 30, 2020 December 31, 2019 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $17,935 and $19,044 as of June 30, 2020 and December 31, 2019, respectively $ 570,157 $ 595,797 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,098 and $22,737 as of June 30, 2020 and December 31, 2019, respectively 921,038 963,174 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $15,243 and $16,685 as of June 30, 2020 and December 31, 2019, respectively 1,024,472 1,066,815 Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $51,385 and $54,293 as of June 30, 2020 and December 31, 2019, respectively 2,577,670 2,593,707 Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $60,623 and $65,968 as of June 30, 2020 and December 31, 2019, respectively 4,067,377 4,062,032 9,160,714 9,281,525 Less: current portion (963,450 ) (1,010,570 ) Long-term debt $ 8,197,264 $ 8,270,955 | The composition of the long-term debt follows: December 31, 2019 December 31, 2018 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $19,044 and $21,263 as of December 31, 2019 and 2018, respectively $ 595,797 $ 711,974 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,737 and $25,293 as of December 31, 2019 and 2018, respectively 963,174 999,707 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $16,685 as of December 31, 2019 1,066,815 - Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $54,293 as of December 31, 2019 2,593,707 - Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $65,968 as of December 31, 2019 4,062,032 - 9,281,525 1,711,681 Less: current portion (1,010,570 ) (90,580 ) Long-term debt $ 8,270,955 $ 1,621,101 |
Schedule of Cumulative Maturities of Long-Term Obligations | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of June 30, 2020 are: Period ending June 30, Maturities of Long-Term Debt 2020 (remaining six months) $ 474,495 2021 963,450 2022 963,450 2023 963,450 2024 963,450 Thereafter 4,832,419 Total $ 9,160,714 | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of December 31, 2019 are: Years ending December 31, Maturities of 2020 $ 1,010,570 2021 1,010,570 2022 1,010,570 2023 1,010,570 2024 1,010,570 Thereafter 4,228,674 Total $ 9,281,525 |
Schedule of Long-Term Loans Payable | June 30, 2020 PPP Loan as of June 30, 2020 $ 508,700 Less: current portion (129,359 ) Long-term loans payable $ 379,341 |
Significant Customers (Tables)
Significant Customers (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | ||
Schedule of Concentrations of Revenues | Carriers representing 10% or more of total revenue are presented in the table below: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 BlueCross BlueShield 30 % 27 % 27 % 27 % Priority Health 28 % 16 % 26 % 21 % | Carriers representing 10% or more of total revenue are presented in the table below: Insurance Carrier December 31, 2019 December 31, 2018 BlueCross BlueShield 26.2 % 39.5 % Priority Health 19.7 % 44.2 % |
Equity (Tables)
Equity (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Summary of Stock Options | The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2020: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 $ 2,995,640 Granted 2,000,000 0.39 4.73 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2020 21,700,000 $ 0.20 3.71 $ - The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the six months ended June 30, 2019: Options Weighted Average Exercise Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Outstanding at December 31, 2018 - $ - - $ - Granted 3,000,000 0.20 3.71 - Forfeited or expired - - - - Exercised - - - - Outstanding at June 30, 2019 3,000,000 $ 0.20 3.71 $ - | The following is a summary of the stock options granted, forfeited or expired, and exercised under the Plan for the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 - $ - - - Granted 19,700,000 0.18 4.62 - Forfeited or expired - - - - Exercised - - - - Outstanding at December 31, 2019 19,700,000 $ 0.18 4.62 2,995,640 |
Summary of Non-Vested Stock Options | The following is a summary of the Company’s non-vested stock options as of June 30, 2020, and changes during the six months ended June 30, 2020: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 Granted 2,000,000 0.39 4.73 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2020 18,700,000 $ 0.20 3.66 The following is a summary of the Company’s non-vested stock options as of June 30, 2019, and changes during the six months ended June 30, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 3,000,000 0.20 3.66 Vested (1,500,000 ) 0.20 3.66 Forfeited or expired - - - Non-vested at June 30, 2019 1,500,000 $ 0.20 3.66 | The following is a summary of the Company’s non-vested stock options as of December 31, 2019, and changes during the year ended December 31, 2019: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Non-vested at December 31, 2018 - $ - - Granted 19,700,000 0.18 4.62 Vested (1,500,000 ) 0.20 4.21 Forfeited or expired - - - Non-vested at December 31, 2019 18,200,000 $ 0.18 4.30 |
Schedule of Assumption of Black-Scholes Option Pricing Model | The following assumptions were used in the Black-Scholes option-pricing model: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Exercise price $ 0.39 $ 0.20 Expected term 3.75 years 3.25 years Risk-free interest rate 0.38 % 2.43 % Estimated volatility 318.00 % 533.64 % Expected dividend - - Option price at valuation date $ 0.31 $ 0.19 | The following assumptions were used in the Black-Scholes option-pricing model: Year Ended December 31, 2019 Exercise price $ 0.17 - $0.27 Expected term 3.25 to 3.75 years Risk-free interest rate 1.35% - 2.43% Estimated volatility 484.51% - 533.64% Expected dividend - Option price at valuation date $ 0.16 - $0.27 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Schedule of Calculations of Basic and Diluted EPS | The calculations of basic and diluted EPS, are as follows: June 30, 2020 June 30, 2019 Basic and diluted loss per common share: Net loss $ (2,118,211 ) $ (1,102,961 ) Basic weighted average shares outstanding 355,863,427 315,825,288 Basic and diluted loss per common share: $ (0.01 ) $ (0.00 ) | The calculations of basic and diluted EPS, are as follows: December 31, 2019 December 31, 2018 Basic and diluted loss per common share: Net loss $ (3,495,481 ) $ (1,155,286 ) Basic weighted average shares outstanding 246,656,149 180,479,232 Basic and diluted loss per common share: $ (0.01 ) $ (0.01 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Schedule of Future Minimum Lease Payment | Future minimum lease payment under these operating leases consisted of the following: Year ending June 30, Operating Lease Obligations 2020 (remaining six months) $ 112,228 2021 172,363 2022 144,000 2023 81,000 2024 33,000 Total undiscounted operating lease payments 542,590 Less: Imputed interest (58,907 ) Present value of operating lease liabilities $ 483,684 | Future minimum lease payment under these operating leases consisted of the following: Year ending December 31, Operating Lease Obligations 2020 $ 224,096 2021 172,363 2022 144,000 2023 81,000 2024 33,000 Thereafter - Total undiscounted operating lease payments 654,459 Less: Imputed interest 78,931 Present value of operating lease liabilities $ 575,528 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision (benefit) for income taxes consists of the following for the year ended December 31, 2019 and the period from August 1, 2018 through December 31, 2018: December 31, 2019 August 1, 2018 to December 31, 2018 Federal $ - $ - State - - Deferred - - Total $ - $ - |
Schedule of Income Tax Rate | The difference between the actual income tax rate versus the tax computed at the Federal Statutory rate follows: December 31, 2019 August 1, 2018 to December 31, 2018 Federal rate 21 % 21 % State net of federal 3 % 3 % Non-deductible acquired intangible assets (18 )% 0 % Valuation allowance (6 )% (24 )% Effective income tax rate 0 % 0 % |
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income tax assets and (liabilities) consist of the following: December 31, 2019 December 31, 2018 Deferred tax assets Net operating loss carryforward $ 1,013,793 $ 351,114 Other 3 2,833 Total deferred tax assets 1,013,796 353,947 Valuation allowance (559,175 ) (353,947 ) Net deferred tax assets 454,621 - Deferred tax liabilities Goodwill and intangibles $ (454,621 ) $ - Other - - Total deferred tax liabilities (454,621 ) - Net deferred taxes $ - $ - |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Tables) (Southwestern Montana Financial Center, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Southwestern Montana Financial Center, Inc. [Member] | |
Schedule of Estimated Useful Life of Property and Equipment | Useful Life (in years) Office equipment 5 Vehicles 5 Furniture and fixtures 7 Leasehold improvements 15 |
Property and Equipment (Table_2
Property and Equipment (Tables) (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 | Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated Useful Lives December 31, 2018 December 31, 2017 Office equipment 5 $ 26,322 $ 26,322 Vehicles 5 125,046 125,046 Furniture and fixtures 7 10,103 10,103 Leasehold improvements 15 2,949 2,949 Property and equipment, gross 164,420 164,420 Less: Accumulated depreciation (72,458 ) (42,147 ) Property and equipment, net $ 91,962 $ 122,273 |
Debt (Tables) (Southwestern Mon
Debt (Tables) (Southwestern Montana Financial Center, Inc.) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Debt | The composition of the long-term debt follows: June 30, 2020 December 31, 2019 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $17,935 and $19,044 as of June 30, 2020 and December 31, 2019, respectively $ 570,157 $ 595,797 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,098 and $22,737 as of June 30, 2020 and December 31, 2019, respectively 921,038 963,174 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $15,243 and $16,685 as of June 30, 2020 and December 31, 2019, respectively 1,024,472 1,066,815 Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $51,385 and $54,293 as of June 30, 2020 and December 31, 2019, respectively 2,577,670 2,593,707 Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $60,623 and $65,968 as of June 30, 2020 and December 31, 2019, respectively 4,067,377 4,062,032 9,160,714 9,281,525 Less: current portion (963,450 ) (1,010,570 ) Long-term debt $ 8,197,264 $ 8,270,955 | The composition of the long-term debt follows: December 31, 2019 December 31, 2018 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $19,044 and $21,263 as of December 31, 2019 and 2018, respectively $ 595,797 $ 711,974 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,737 and $25,293 as of December 31, 2019 and 2018, respectively 963,174 999,707 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $16,685 as of December 31, 2019 1,066,815 - Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $54,293 as of December 31, 2019 2,593,707 - Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $65,968 as of December 31, 2019 4,062,032 - 9,281,525 1,711,681 Less: current portion (1,010,570 ) (90,580 ) Long-term debt $ 8,270,955 $ 1,621,101 | |
Schedule of Furture Minimum Payments of Debt | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of June 30, 2020 are: Period ending June 30, Maturities of Long-Term Debt 2020 (remaining six months) $ 474,495 2021 963,450 2022 963,450 2023 963,450 2024 963,450 Thereafter 4,832,419 Total $ 9,160,714 | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of December 31, 2019 are: Years ending December 31, Maturities of 2020 $ 1,010,570 2021 1,010,570 2022 1,010,570 2023 1,010,570 2024 1,010,570 Thereafter 4,228,674 Total $ 9,281,525 | |
Southwestern Montana Financial Center, Inc. [Member] | |||
Schedule of Debt | Debt consisted of the following at: December 31, 2018 December 31, 2017 Vehicle note payable due August 2020 $ 31,797 $ 51,118 Vehicle note payable due September 2021 18,386 25,083 Vehicle note payable due December 2019 6,882 15,605 Vehicle note payable due May 2019 1,341 4,900 58,406 96,706 Less: current portion 35,200 38,301 Long-term debt $ 23,206 $ 58,405 | ||
Schedule of Furture Minimum Payments of Debt | Future minimum payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 35,200 2020 18,609 2021 4,597 Total $ 58,406 |
Commitments and Related Party_4
Commitments and Related Party Transactions (Tables) (Southwestern Montana Financial Center, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Southwestern Montana Financial Center, Inc. [Member] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 111,000 2020 88,500 2021 84,000 2022 84,000 2023 21,000 Total $ 388,500 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Tables) (Fortman Insurance Agency, LLC) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Estimated Useful Life of Property and Equipment | The estimated useful life of the Companies Property and Equipment is as follows: Useful Life (in years) Computer equipment and software 5 Office equipment and furniture 7 Leasehold improvements Shorter of the useful life or the lease term Software 3 | |
Fortman Insurance Agency, LLC [Member] | ||
Schedule of Estimated Useful Life of Property and Equipment | The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Useful Life (in years) Land improvements 15 Vehicles 5 Office equipment, furniture, and fixtures 7 |
Property and Equipment (Table_3
Property and Equipment (Tables) (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated Useful Lives (Years) June 30, 2020 December 31, 2019 Computer equipment and software 5 $ 33,774 $ 33,774 Office equipment and furniture 7 36,573 36,573 Leasehold Improvements Shorter of the useful life or the lease term 56,631 56,631 Software 3 562,327 562,327 Property and equipment, gross 689,305 689,305 Less: Accumulated depreciation and amortization (200,704 ) (97,054 ) Property and equipment, net $ 488,601 $ 592,251 | Property and equipment consisted of the following: Estimated December 31, 2019 December 31, 2018 Computer equipment and software 5 $ 33,774 $ 6,445 Office equipment and furniture 7 36,573 9,257 Leasehold Improvements Shorter of the useful life or the lease term 56,631 44,082 Software 3 562,327 - Property and equipment, gross 689,305 59,785 Less: Accumulated depreciation and amortization (97,054 ) (2,580 ) Property and equipment, net $ 592,251 $ 57,205 | |
Fortman Insurance Agency, LLC [Member] | |||
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated Useful Lives December 31, 2018 December 31, 2017 Land improvements 15 $ 25,500 $ 25,500 Vehicles 5 119,594 116,325 Office equipment, furniture, and fixtures 7 7,780 7,780 Property and equipment, gross 152,874 149,605 Less: Accumulated depreciation (23,748 ) (22,338 ) Property and equipment, net $ 129,126 $ 127,267 |
Debt (Tables) (Fortman Insuranc
Debt (Tables) (Fortman Insurance Agency, LLC) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Debt | The composition of the long-term debt follows: June 30, 2020 December 31, 2019 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $17,935 and $19,044 as of June 30, 2020 and December 31, 2019, respectively $ 570,157 $ 595,797 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,098 and $22,737 as of June 30, 2020 and December 31, 2019, respectively 921,038 963,174 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $15,243 and $16,685 as of June 30, 2020 and December 31, 2019, respectively 1,024,472 1,066,815 Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $51,385 and $54,293 as of June 30, 2020 and December 31, 2019, respectively 2,577,670 2,593,707 Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $60,623 and $65,968 as of June 30, 2020 and December 31, 2019, respectively 4,067,377 4,062,032 9,160,714 9,281,525 Less: current portion (963,450 ) (1,010,570 ) Long-term debt $ 8,197,264 $ 8,270,955 | The composition of the long-term debt follows: December 31, 2019 December 31, 2018 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $19,044 and $21,263 as of December 31, 2019 and 2018, respectively $ 595,797 $ 711,974 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, net of deferred financing costs of $22,737 and $25,293 as of December 31, 2019 and 2018, respectively 963,174 999,707 Oak Street Funding LLC Term Loan for the acquisition of SWMT, net of deferred financing costs of $16,685 as of December 31, 2019 1,066,815 - Oak Street Funding LLC Term Loan for the acquisition of FIS, net of deferred financing costs of $54,293 as of December 31, 2019 2,593,707 - Oak Street Funding LLC Term Loan for the acquisition of ABC, net of deferred financing costs of $65,968 as of December 31, 2019 4,062,032 - 9,281,525 1,711,681 Less: current portion (1,010,570 ) (90,580 ) Long-term debt $ 8,270,955 $ 1,621,101 | |
Schedule of Furture Minimum Payments of Debt | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of June 30, 2020 are: Period ending June 30, Maturities of Long-Term Debt 2020 (remaining six months) $ 474,495 2021 963,450 2022 963,450 2023 963,450 2024 963,450 Thereafter 4,832,419 Total $ 9,160,714 | Aggregated cumulative maturities of long-term obligations (including the Term Loan and the Facility), excluding deferred financing costs, as of December 31, 2019 are: Years ending December 31, Maturities of 2020 $ 1,010,570 2021 1,010,570 2022 1,010,570 2023 1,010,570 2024 1,010,570 Thereafter 4,228,674 Total $ 9,281,525 | |
Fortman Insurance Agency, LLC [Member] | |||
Schedule of Debt | Debt consisted of the following at: December 31, 2018 December 31, 2017 Vehicle note payable due December 2022 $ - $ 42,412 Vehicle note payable due February 2022 21,905 28,501 Vehicle note payable due August 2022 21,616 - 43,521 70,913 Less: current portion 14,677 13,037 Long-term debt $ 28,844 $ 57,876 | ||
Schedule of Furture Minimum Payments of Debt | Future minimum payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 14,677 2020 14,677 2021 11,975 2022 2,191 Total $ 43,521 |
Commitments and Related Parties
Commitments and Related Parties Transaction (Tables) (Fortman Insurance Agency, LLC) | 12 Months Ended |
Dec. 31, 2018 | |
Fortman Insurance Agency, LLC [Member] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments approximate the following as of December 31, 2018: Years ending December 31, 2019 $ 8,160 2020 2,720 Total $ 10,880 |
Commitments and Related Party_5
Commitments and Related Party Transactions (Tables) (Altruis Benefit Consultants, Inc.) | 12 Months Ended |
Dec. 31, 2018 | |
Altruis Benefit Consultants Inc [Member] | |
Schedule of Future Minimum Lease Payments | The Company’s approximate future minimum payment obligations under the lease commitments are as follows: Years ending December 31, 2019 $ 54,000 2020 54,000 2021 23,000 Total $ 131,000 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||||
Net income (loss) | $ (1,138,413) | $ (426,208) | $ (2,118,211) | $ (1,102,961) | |
Working capital deficiency | $ 4,811,725 | $ 4,811,725 | |||
Effective tax rate | 0.00% | 0.00% | 0.00% | 0.00% | |
Federal net operating loss carry forwards | $ 5,275,000 | $ 5,275,000 | $ 4,277,000 | ||
Valuation allowance increased | 436,759 | $ 207,967 | |||
Interest or penalties |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jul. 31, 2018 | |
Cash | $ 270,304 | $ 83,786 | $ 12,456 | $ 270,304 | $ 83,786 | $ 6,703 | |
Current assets | 800,680 | 118,525 | 800,680 | 646,956 | |||
Current liabilities | 5,361,973 | 1,168,501 | 5,361,973 | 4,667,759 | |||
Loan payable to related party | 3,312,000 | ||||||
Stockholder's equity | 367,685 | (1,015,013) | (300,051) | 367,685 | (1,015,013) | 642,324 | |
Net income (loss) | $ (1,138,413) | $ (426,208) | (2,118,211) | (1,102,961) | |||
Net cash used in operating activities | $ (246,812) | $ (658,601) | |||||
Unamortized deferred financing costs | 46,556 | 213,733 | |||||
Successor [Member] | |||||||
Stockholder's equity | (300,051) | 642,324 | $ 57,855 | ||||
Net income (loss) | (1,155,286) | (3,495,481) | |||||
Net cash used in operating activities | $ (141,469) | $ (373,934) | |||||
Successor [Member] | Minimum [Member] | |||||||
Estimated useful lives of intangible assets | 3 years | ||||||
Successor [Member] | Maximum [Member] | |||||||
Estimated useful lives of intangible assets | 20 years |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Schedule of Cash and Restricted Cash (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash | $ 270,304 | $ 6,703 | $ 83,786 | $ 12,456 |
Restricted cash | 491,755 | 484,882 | 277,950 | 88,750 |
Total cash and restricted cash | $ 762,059 | $ 491,585 | $ 361,736 | $ 101,206 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Schedule of Cash and Restricted Cash (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash | $ 270,304 | $ 6,703 | $ 83,786 | $ 12,456 |
Restricted cash | 491,755 | 484,882 | 277,950 | 88,750 |
Total cash and restricted cash | $ 762,059 | $ 491,585 | $ 361,736 | $ 101,206 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property Plant and Equipment (Details) (10-K) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Computer Equipment and Software [Member] | ||
Estimated useful life | 5 years | 5 years |
Computer Equipment and Software [Member] | Successor [Member] | ||
Estimated useful life | 5 years | |
Office Equipment and Furniture [Member] | ||
Estimated useful life | 7 years | 7 years |
Office Equipment and Furniture [Member] | Successor [Member] | ||
Estimated useful life | 7 years | |
Leasehold Improvements [Member] | Successor [Member] | ||
Estimated useful life description | Shorter of the useful life or the lease term | |
Software [Member] | Successor [Member] | ||
Estimated useful life | 3 years |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Schedule of Disaggregation Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | $ 1,642,018 | $ 1,017,022 | $ 3,646,332 | $ 1,383,086 |
Regular [Member] | ||||
Revenue | 3,619,796 | 1,383,086 | ||
Contingent Commission [Member] | ||||
Revenue | 26,536 | |||
Profit Sharing [Member] | ||||
Revenue | ||||
Override Commission [Member] | ||||
Revenue | ||||
Bonuses [Member] | ||||
Revenue | ||||
Medical [Member] | ||||
Revenue | 3,146,340 | 1,092,934 | ||
Medical [Member] | Regular [Member] | ||||
Revenue | 3,146,340 | 1,092,934 | ||
Medical [Member] | Contingent Commission [Member] | ||||
Revenue | ||||
Medical [Member] | Profit Sharing [Member] | ||||
Revenue | ||||
Medical [Member] | Override Commission [Member] | ||||
Revenue | ||||
Medical [Member] | Bonuses [Member] | ||||
Revenue | ||||
Life [Member] | ||||
Revenue | 1,065 | 1,558 | ||
Life [Member] | Regular [Member] | ||||
Revenue | 1,065 | 1,558 | ||
Life [Member] | Contingent Commission [Member] | ||||
Revenue | ||||
Life [Member] | Profit Sharing [Member] | ||||
Revenue | ||||
Life [Member] | Override Commission [Member] | ||||
Revenue | ||||
Life [Member] | Bonuses [Member] | ||||
Revenue | ||||
Property and Casualty [Member] | ||||
Revenue | 498,927 | 288,594 | ||
Property and Casualty [Member] | Regular [Member] | ||||
Revenue | 472,391 | 288,594 | ||
Property and Casualty [Member] | Contingent Commission [Member] | ||||
Revenue | 26,536 | |||
Property and Casualty [Member] | Profit Sharing [Member] | ||||
Revenue | ||||
Property and Casualty [Member] | Override Commission [Member] | ||||
Revenue | ||||
Property and Casualty [Member] | Bonuses [Member] | ||||
Revenue |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Schedule of Disaggregation Revenue (Details) (10-K) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue | $ 1,642,018 | $ 1,017,022 | $ 3,646,332 | $ 1,383,086 | ||
Regular [Member] | ||||||
Revenue | 3,619,796 | 1,383,086 | ||||
Contingent Commission [Member] | ||||||
Revenue | 26,536 | |||||
Profit Sharing [Member] | ||||||
Revenue | ||||||
Override Commission [Member] | ||||||
Revenue | ||||||
Successor [Member] | ||||||
Revenue | $ 390,770 | $ 4,450,785 | ||||
Successor [Member] | Regular [Member] | ||||||
Revenue | 390,770 | 4,450,785 | ||||
Successor [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Successor [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Successor [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Successor [Member] | Bonus [Member] | ||||||
Revenue | ||||||
Medical [Member] | ||||||
Revenue | 3,146,340 | 1,092,934 | ||||
Medical [Member] | Regular [Member] | ||||||
Revenue | 3,146,340 | 1,092,934 | ||||
Medical [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Medical [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Medical [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Medical [Member] | Successor [Member] | ||||||
Revenue | 382,391 | 3,582,182 | ||||
Medical [Member] | Successor [Member] | Regular [Member] | ||||||
Revenue | 382,391 | 3,582,182 | ||||
Medical [Member] | Successor [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Medical [Member] | Successor [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Medical [Member] | Successor [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Medical [Member] | Successor [Member] | Bonus [Member] | ||||||
Revenue | ||||||
Life [Member] | ||||||
Revenue | 1,065 | 1,558 | ||||
Life [Member] | Regular [Member] | ||||||
Revenue | 1,065 | 1,558 | ||||
Life [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Life [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Life [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Life [Member] | Successor [Member] | ||||||
Revenue | 1,810 | |||||
Life [Member] | Successor [Member] | Regular [Member] | ||||||
Revenue | 1,810 | |||||
Life [Member] | Successor [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Life [Member] | Successor [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Life [Member] | Successor [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Life [Member] | Successor [Member] | Bonus [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | ||||||
Revenue | 498,927 | 288,594 | ||||
Property and Casualty [Member] | Regular [Member] | ||||||
Revenue | 472,391 | 288,594 | ||||
Property and Casualty [Member] | Contingent Commission [Member] | ||||||
Revenue | 26,536 | |||||
Property and Casualty [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | Successor [Member] | ||||||
Revenue | 8,379 | 866,793 | ||||
Property and Casualty [Member] | Successor [Member] | Regular [Member] | ||||||
Revenue | 8,379 | 866,793 | ||||
Property and Casualty [Member] | Successor [Member] | Contingent Commission [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | Successor [Member] | Profit Sharing [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | Successor [Member] | Override Commission [Member] | ||||||
Revenue | ||||||
Property and Casualty [Member] | Successor [Member] | Bonus [Member] | ||||||
Revenue |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Sep. 01, 2019 | May 01, 2019 | Jun. 30, 2020 |
USBA And EBS [Member] | |||
Income (loss) before depreciation and amortization | $ 66,801 | ||
Commercial Coverage Solutions, LLC [Member] | |||
Income (loss) before depreciation and amortization | (20,187) | ||
Southwestern Montana Financial Center, Inc. [Member] | |||
Income (loss) before depreciation and amortization | 277,723 | ||
Earn-out liability | 522,533 | ||
Fortman Insurance Services, LLC [Member] | |||
Income (loss) before depreciation and amortization | 309,042 | ||
Earn-out liability | 522,533 | ||
Earn-out measurement period | 12 months | ||
Business combination commencing date | May 1, 2021 | ||
Business combination ending date | Apr. 30, 2022 | ||
Altruis Benefits Consulting, LLC [Member] | |||
Income (loss) before depreciation and amortization | 193,327 | ||
Earn-out liability | $ 1,894,842 | ||
Business combination commencing date | Sep. 1, 2019 | ||
Business combination ending date | Aug. 31, 2022 | ||
Earn-out payment term | 3 years |
Strategic Investments and Bus_3
Strategic Investments and Business Combination (Details Narrative) (10-K) - USD ($) | Sep. 01, 2019 | May 01, 2019 | Apr. 02, 2019 | Dec. 02, 2018 | Oct. 24, 2018 | Aug. 02, 2018 | Aug. 02, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jul. 31, 2018 |
Goodwill | $ 8,548,608 | $ 1,705,548 | $ 1,705,548 | $ 8,548,608 | $ 8,548,608 | $ 8,548,608 | $ 1,705,548 | $ 8,548,608 | ||||||||
Number of shares issued for business combination, shares | 761,905 | |||||||||||||||
Southwestern Montana Financial Center, Inc. [Member] | ||||||||||||||||
Earn-out liability | 522,533 | |||||||||||||||
Fortman Insurance Services, LLC [Member] | ||||||||||||||||
Earn-out liability | 522,533 | |||||||||||||||
Altruis Benefits Consulting, LLC [Member] | ||||||||||||||||
Earn-out liability | $ 1,894,842 | |||||||||||||||
Successor [Member] | ||||||||||||||||
Goodwill | 1,705,548 | 1,705,548 | $ 1,705,548 | |||||||||||||
Successor [Member] | Bill of Sale Agreement USBA and EBS [Member] | ||||||||||||||||
Net income (loss) on business combination | (276,859) | |||||||||||||||
Number of shares issued for business combination, shares | 16,400,000 | |||||||||||||||
Successor [Member] | Bill of Sale Agreement SWMT LLC and FIS LLC [Member] | ||||||||||||||||
Revenue from the acquired business | 625,036 | |||||||||||||||
Net income (loss) on business combination | 67,682 | |||||||||||||||
Number of shares issued for business combination, shares | 14,839,011 | |||||||||||||||
Earn-out liability | 1,894,842 | 1,894,842 | 1,894,842 | 1,894,842 | ||||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | ||||||||||||||||
Goodwill | $ 578,840 | $ 578,840 | ||||||||||||||
Acquisition costs | 83,162 | |||||||||||||||
Revenue from the acquired business | 135,425 | |||||||||||||||
Net income (loss) on business combination | 12,145 | |||||||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | ||||||||||||||||
Goodwill | $ 274,956 | 274,956 | ||||||||||||||
Acquisition costs | 44,353 | |||||||||||||||
Revenue from the acquired business | 246,965 | |||||||||||||||
Net income (loss) on business combination | $ 143,450 | |||||||||||||||
Total purchase price | $ 400,000 | |||||||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | ||||||||||||||||
Goodwill | $ 851,752 | |||||||||||||||
Acquisition costs | 113,247 | |||||||||||||||
Revenue from the acquired business | 8,380 | |||||||||||||||
Net income (loss) on business combination | 136,568 | |||||||||||||||
Total purchase price | $ 1,200,000 | |||||||||||||||
Business combination description | The total purchase price is made up of (1) a cash payment of $1,080,000 (the "Cash Payment") on the "Closing Date" or the first bank business day thereafter (i.e. December 1, 2018); (2) the balance of the purchase price, having a value of $120,000, was paid in the form of 761,905 shares of common stock in the Company, issued at a per-share price equal to Fifteen and 75/100 Cents ($0.1575) (the "Closing Shares"); and (3) the amount of any cash necessary to satisfy the required closing date working capital shall be set off against the Cash Payment by CCS. "Required closing date working capital" shall consist only of cash and pre-paid rent and/or security deposits or pre-payments or deposits for any assumed liabilities. | |||||||||||||||
Cash | $ 1,080,000 | |||||||||||||||
Business combination loss from operations | $ 659,940 | |||||||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | ||||||||||||||||
Goodwill | $ 1,217,790 | |||||||||||||||
Acquisition costs | 122,660 | |||||||||||||||
Revenue from the acquired business | 1,106,432 | |||||||||||||||
Net income (loss) on business combination | 46,835 | |||||||||||||||
Total purchase price | $ 2,394,509 | |||||||||||||||
Number of shares issued for business combination, shares | 500,000 | |||||||||||||||
Cash | $ 300,000 | |||||||||||||||
Purchase price paid in cash | $ 1,389,840 | |||||||||||||||
Earn out payment percentage | 32.00% | |||||||||||||||
Number of shares of common stock | $ 300,000 | |||||||||||||||
Earn-out liability | 522,553 | 522,553 | 522,553 | 522,553 | ||||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | ||||||||||||||||
Goodwill | $ 1,269,731 | |||||||||||||||
Acquisition costs | 63,663 | |||||||||||||||
Revenue from the acquired business | 1,186,951 | |||||||||||||||
Net income (loss) on business combination | 389,708 | |||||||||||||||
Total purchase price | 4,156,405 | |||||||||||||||
Purchase price paid in cash | $ 3,223,750 | |||||||||||||||
Earn out payment percentage | 10.00% | |||||||||||||||
Number of shares of common stock | $ 500,000 | |||||||||||||||
Earn-out liability | $ 432,655 | $ 432,655 | $ 432,655 | $ 432,655 | ||||||||||||
Successor [Member] | Altruis Benefits Consulting, LLC [Member] | ||||||||||||||||
Goodwill | $ 4,949,329 | |||||||||||||||
Acquisition costs | 92,172 | |||||||||||||||
Total purchase price | 7,688,168 | |||||||||||||||
Purchase price paid in cash | $ 5,202,364 | |||||||||||||||
Earn out payment percentage | 6.66% | |||||||||||||||
Number of shares of common stock | $ 578,040 |
Strategic Investments and Bus_4
Strategic Investments and Business Combination - Schedule of Allocation of Purchase Price (Details) (10-K) - USD ($) | Sep. 03, 2019 | May 03, 2019 | Apr. 02, 2019 | Dec. 02, 2018 | Aug. 02, 2018 | Dec. 31, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 01, 2019 | May 01, 2019 | Jul. 31, 2018 |
Goodwill | $ 1,705,548 | $ 8,548,608 | $ 8,548,608 | ||||||||
Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 4 years 1 month 6 days | 4 years 3 months 19 days | |||||||||
Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 9 years 1 month 6 days | 9 years 4 months 24 days | |||||||||
Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 4 years 2 months 12 days | 4 years 4 months 24 days | |||||||||
Successor [Member] | |||||||||||
Goodwill | $ 1,705,548 | ||||||||||
Successor [Member] | Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | 14 years | |||||||||
Successor [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 10 years | 10 years 1 month 6 days | |||||||||
Successor [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | 4 years 8 months 12 days | |||||||||
Successor [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Fixed Assets [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | |||||||||||
Trade name and trademarks | $ 6,250 | ||||||||||
Customer relationships | 116,100 | ||||||||||
Non-competition agreements | 48,540 | ||||||||||
Goodwill | 578,840 | ||||||||||
Purchase consideration allocated | $ 750,000 | ||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 3 years | ||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 9 years | ||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | US Benefits Alliance, LLC [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | |||||||||||
Trade name and trademarks | $ 33,140 | ||||||||||
Customer relationships | 47,630 | ||||||||||
Non-competition agreements | 42,320 | ||||||||||
Goodwill | 274,956 | ||||||||||
Fixed assets | 1,954 | ||||||||||
Purchase consideration allocated | $ 400,000 | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 20 years | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 9 years | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Fixed Assets [Member] | Minimum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Employee Benefit Solutions, Inc [Member] | Fixed Assets [Member] | Maximum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 7 years | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | |||||||||||
Trade name and trademarks | $ 8,500 | ||||||||||
Customer relationships | 284,560 | ||||||||||
Non-competition agreements | 40,050 | ||||||||||
Goodwill | 851,752 | ||||||||||
Fixed assets | 1,638 | ||||||||||
Cash | 13,500 | ||||||||||
Purchase consideration allocated | $ 1,200,000 | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 2 years | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 11 years | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Fixed Assets [Member] | Minimum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Commercial Solutions of Insurance Company [Member] | Fixed Assets [Member] | Maximum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 7 years | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | |||||||||||
Customer relationships | $ 561,000 | ||||||||||
Non-competition agreements | 599,200 | ||||||||||
Goodwill | 1,217,790 | ||||||||||
Fixed assets | 41,098 | ||||||||||
Loan Payable | (24,579) | ||||||||||
Purchase consideration allocated | $ 2,394,509 | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 10 years | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | Fixed Assets [Member] | Minimum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Southwestern Montana Financial Center, Inc. [Member] | Fixed Assets [Member] | Maximum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 7 years | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | |||||||||||
Trade name and trademarks | $ 289,400 | ||||||||||
Customer relationships | 1,824,000 | ||||||||||
Non-competition agreements | 752,800 | ||||||||||
Goodwill | 1,269,731 | ||||||||||
Fixed assets | 19,924 | ||||||||||
Prepaid rent | 550 | ||||||||||
Purchase consideration allocated | $ 4,156,405 | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Trade Name and Trademarks [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Customer Relationships [Member] | |||||||||||
Weighted Average Useful Life (Years) | 10 years | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Non-competition Agreements [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Goodwill [Member] | |||||||||||
Weighted Average Useful Life (Years) description | Indefinite | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Fixed Assets [Member] | Minimum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 5 years | ||||||||||
Successor [Member] | Fortman Insurance Services, LLC [Member] | Fixed Assets [Member] | Maximum [Member] | |||||||||||
Weighted Average Useful Life (Years) | 7 years | ||||||||||
Successor [Member] | Altruis Benefits Consulting, LLC [Member] | |||||||||||
Trade name and trademarks | $ 714,600 | ||||||||||
Customer relationships | 753,000 | ||||||||||
Non-competition agreements | 1,168,600 | ||||||||||
Goodwill | 4,949,329 | ||||||||||
Fixed assets | 85 | ||||||||||
Cash | 1,850,037 | ||||||||||
Payable to seller | (1,747,483) | ||||||||||
Purchase consideration allocated | $ 7,688,168 |
Recapitalization and Common C_2
Recapitalization and Common Control Transactions (Details Narrative) (10-K) - Successor [Member] - USD ($) | Sep. 01, 2019 | Oct. 24, 2018 | Sep. 21, 2018 | Dec. 31, 2019 |
Bill of Sale Agreement USBA and EBS [Member] | ||||
Number of restricted shares issued during period | 16,400,000 | |||
Bill of Sale Agreement SWMT LLC and FIS LLC [Member] | ||||
Number of restricted shares issued during period | 14,839,011 | |||
Ethos Media Network, Inc [Member] | ||||
Equity ownership percentage | 84.50% | |||
Ethos Media Network, Inc [Member] | Preferred Stock [Member] | ||||
Number of shares owned, during period | 50,000,000 | |||
Ethos Media Network, Inc [Member] | Common Stock [Member] | ||||
Number of shares owned, during period | 46,489,000 | |||
Ethos Media Network, Inc [Member] | Controlling Seller of Ethos [Member] | ||||
Amount of consideration paid | $ 287,500 |
Investment in NSURE, Inc. (Deta
Investment in NSURE, Inc. (Details Narrative) - USD ($) | Feb. 19, 2020 | Feb. 29, 2020 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 20, 2020 | Aug. 05, 2020 | Jun. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Investments | $ 1,200,000 | |||||||||
Number of shares of common stock, shares | 16,400,000 | |||||||||
Proceeds from issuance of common stock | 1,000,000 | |||||||||
NSURE, Inc. [Member] | Third-Party Individual [Member] | ||||||||||
Number of shares of common stock, shares | 4,000,000 | |||||||||
Proceeds from issuance of common stock | $ 1,000,000 | |||||||||
NSURE, Inc. [Member] | Subsequent Event [Member] | Third-Party Individual [Member] | ||||||||||
Number of shares of common stock, shares | 4,000,000 | |||||||||
Proceeds from issuance of common stock | $ 1,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | ||||||||||
Investments | $ 50,000 | $ 100,000 | $ 200,000 | |||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | First Tranche [Member] | ||||||||||
Investments | $ 1,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | First Tranche [Member] | Subsequent Event [Member] | ||||||||||
Investments | 1,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Second Tranche [Member] | ||||||||||
Investments | 3,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Second Tranche [Member] | Subsequent Event [Member] | ||||||||||
Investments | 3,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Third Tranche [Member] | ||||||||||
Investments | 16,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Third Tranche [Member] | Subsequent Event [Member] | ||||||||||
Investments | $ 16,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | ||||||||||
Investments | $ 43,781 | $ 58,375 | ||||||||
Number of shares of common stock, shares | 5,837,462 | |||||||||
Common stock percentage | 35.00% | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | Subsequent Event [Member] | ||||||||||
Number of shares of common stock, shares | 5,837,462 | |||||||||
Common stock percentage | 35.00% | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | First Tranche [Member] | ||||||||||
Number of shares of common stock, shares | 291,873 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | First Tranche [Member] | Subsequent Event [Member] | ||||||||||
Number of shares of common stock, shares | 291,873 | |||||||||
Ownership interest | 3.00% | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Maximum [Member] | ||||||||||
Investments | $ 20,000,000 | |||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||
Investments | $ 20,000,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 103,650 | $ 15,528 | $ 94,474 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) (10-K) - USD ($) | Jun. 22, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Depreciation expense | $ 103,650 | $ 15,528 | $ 94,474 | ||
Loan payable to related party | $ 962,325 | 3,668,257 | 3,311,844 | ||
Carrying cost | 59,785 | 689,305 | 689,305 | ||
Software [Member] | |||||
Depreciation expense | 78,101 | ||||
Carrying cost | $ 562,327 | 562,327 | |||
The Referral Depot, LLC (TRD) [Member] | |||||
Loan payable to related party | 172,327 | ||||
Discount on the loan | 27,673 | ||||
Purchase Agreement [Member] | The Referral Depot, LLC (TRD) [Member] | |||||
Payments to acquire software | $ 250,000 | ||||
Common stock issuable related to software purchase | $ 2,000,000 | ||||
Common stock issuable related to software purchase, value | 340,000 | ||||
Share price per share | $ 0.17 | ||||
Payment description | Per the agreement, the Company paid an initial payment of $50,000 at closing and the remaining $200,000 will be paid with forty-eight equal monthly payments commencing on the first anniversary of the effective date, or July 22, 2020. | ||||
Initial payment | $ 50,000 | ||||
Periodic payment | $ 200,000 | ||||
Successor [Member] | |||||
Depreciation expense | $ 2,580 | ||||
Common stock issuable related to software purchase | $ 340,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, gross | $ 689,305 | $ 689,305 | $ 59,785 |
Less: Accumulated depreciation and amortization | (200,704) | (97,054) | (2,580) |
Property and equipment, net | $ 488,601 | $ 592,251 | 57,205 |
Computer Equipment and Software [Member] | |||
Property and equipment, useful life | 5 years | 5 years | |
Property and equipment, gross | $ 33,774 | $ 33,774 | 6,445 |
Office Equipment and Furniture [Member] | |||
Property and equipment, useful life | 7 years | 7 years | |
Property and equipment, gross | $ 36,573 | $ 36,573 | 9,257 |
Leasehold Improvements [Member] | |||
Property and equipment, useful lives | Shorter of the useful life or the lease term | Shorter of the useful life or the lease term | |
Property and equipment, gross | $ 56,631 | $ 56,631 | 44,082 |
Software [Member] | |||
Property and equipment, useful life | 3 years | 3 years | |
Property and equipment, gross | $ 562,327 | $ 562,327 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Property and Equipment (Details) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, gross | $ 689,305 | $ 689,305 | $ 59,785 |
Less: Accumulated depreciation and amortization | (200,704) | (97,054) | (2,580) |
Property and equipment, net | $ 488,601 | $ 592,251 | 57,205 |
Computer Equipment and Software [Member] | |||
Property and equipment, useful life | 5 years | 5 years | |
Property and equipment, gross | $ 33,774 | $ 33,774 | 6,445 |
Office Equipment and Furniture [Member] | |||
Property and equipment, useful life | 7 years | 7 years | |
Property and equipment, gross | $ 36,573 | $ 36,573 | 9,257 |
Leasehold Improvements [Member] | |||
Property and equipment, useful lives | Shorter of the useful life or the lease term | Shorter of the useful life or the lease term | |
Property and equipment, gross | $ 56,631 | $ 56,631 | 44,082 |
Software [Member] | |||
Property and equipment, useful life | 3 years | 3 years | |
Property and equipment, gross | $ 562,327 | $ 562,327 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 554,532 | $ 44,789 | $ 633,505 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details Narrative) (10-K) - USD ($) | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill impairment | $ 593,790 | $ 0 | |||
Amortization expense | $ 554,532 | $ 44,789 | 633,505 | ||
Successor [Member] | |||||
Goodwill impairment | 593,790 | ||||
Amortization expense | $ 22,871 | ||||
Employee Benefit Solutions, Inc & US Benefits Alliance LLC [Member] | |||||
Excess amount of fair value over carrying value | $ 677,772 | ||||
Excess fair value percentage | 42.00% | ||||
Commercial Solutions of Insurance Company [Member] | |||||
Excess amount of fair value over carrying value | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Impairment of Goodwill (Details) (10-K) - USD ($) | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill beginning balance | $ 8,548,608 | $ 1,705,548 | $ 1,705,548 | ||
Transfer from Holdings | 2,487,521 | ||||
Acquisition / Transaction | 4,949,329 | ||||
Impairment | (593,790) | $ 0 | |||
Goodwill ending balance | $ 1,705,548 | 8,548,608 | 8,548,608 | 1,705,548 | |
Successor [Member] | |||||
Goodwill beginning balance | 1,705,548 | 1,705,548 | |||
Transfer from Holdings | 853,796 | ||||
Acquisition / Transaction | 851,752 | ||||
Impairment | (593,790) | ||||
Goodwill ending balance | 1,705,548 | 1,705,548 | |||
Employee Benefit Solutions, Inc & US Benefits Alliance LLC [Member] | |||||
Goodwill beginning balance | 853,796 | 853,796 | 853,796 | ||
Goodwill ending balance | 853,796 | 853,796 | 853,796 | ||
Employee Benefit Solutions, Inc & US Benefits Alliance LLC [Member] | Successor [Member] | |||||
Transfer from Holdings | 853,796 | ||||
Commercial Solutions of Insurance Company [Member] | |||||
Goodwill beginning balance | 257,962 | 851,752 | 851,752 | ||
Impairment | (593,790) | ||||
Goodwill ending balance | 851,752 | 257,962 | 851,752 | ||
Commercial Solutions of Insurance Company [Member] | Successor [Member] | |||||
Acquisition / Transaction | 851,752 | ||||
Southwestern Montana Financial Center, Inc. [Member] | |||||
Goodwill beginning balance | 1,217,790 | ||||
Transfer from Holdings | 1,217,790 | ||||
Goodwill ending balance | 1,217,790 | ||||
Fortman Insurance Services, LLC [Member] | |||||
Goodwill beginning balance | 1,269,731 | ||||
Transfer from Holdings | 1,269,731 | ||||
Goodwill ending balance | 1,269,731 | ||||
Altruis Benefits Consulting, LLC [Member] | |||||
Goodwill beginning balance | $ 4,949,329 | ||||
Acquisition / Transaction | 4,949,329 | ||||
Goodwill ending balance | $ 4,949,329 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Intangible Assets and Weighted-Average Remaining Amortization Period (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gross Carrying Amount | $ 7,289,960 | $ 7,289,960 | $ 627,360 |
Accumulated Amortization | (1,210,908) | (656,376) | (22,871) |
Intangibles, net | $ 6,079,052 | $ 6,633,584 | 604,489 |
Trade Name and Trademarks [Member] | |||
Finite-lived intangible asset, useful life | 4 years 1 month 6 days | 4 years 3 months 19 days | |
Gross Carrying Amount | $ 1,052,160 | $ 1,052,160 | 48,160 |
Accumulated Amortization | (200,700) | (96,258) | (1,951) |
Intangibles, net | $ 961,040 | $ 955,902 | 46,209 |
Customer Relationships [Member] | |||
Finite-lived intangible asset, useful life | 9 years 1 month 6 days | 9 years 4 months 24 days | |
Gross Carrying Amount | $ 3,586,290 | $ 3,586,290 | 448,290 |
Accumulated Amortization | (442,465) | (257,529) | (12,680) |
Intangibles, net | $ 3,034,245 | $ 3,328,761 | 435,610 |
Non-competition Agreements [Member] | |||
Finite-lived intangible asset, useful life | 4 years 2 months 12 days | 4 years 4 months 24 days | |
Gross Carrying Amount | $ 2,651,510 | $ 2,651,510 | 130,910 |
Accumulated Amortization | (567,743) | (302,589) | (8,240) |
Intangibles, net | $ 2,083,767 | $ 2,348,921 | $ 122,670 |
Schedule of Intangible Assets a
Schedule of Intangible Assets and Weighted-Average Remaining Amortization Period (Details) (10-K) - USD ($) | Sep. 03, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Dec. 31, 2019 |
Gross Carrying Amount | $ 627,360 | $ 7,289,960 | $ 7,289,960 | |
Accumulated Amortization | (22,871) | (1,210,908) | (656,376) | |
Intangibles, net | 604,489 | $ 6,079,052 | $ 6,633,584 | |
Trade Name and Trademarks [Member] | ||||
Finite-lived intangible asset, useful life | 4 years 1 month 6 days | 4 years 3 months 19 days | ||
Gross Carrying Amount | 48,160 | $ 1,052,160 | $ 1,052,160 | |
Accumulated Amortization | (1,951) | (200,700) | (96,258) | |
Intangibles, net | $ 46,209 | $ 961,040 | $ 955,902 | |
Trade Name and Trademarks [Member] | Successor [Member] | ||||
Finite-lived intangible asset, useful life | 5 years | 14 years | ||
Customer Relationships [Member] | ||||
Finite-lived intangible asset, useful life | 9 years 1 month 6 days | 9 years 4 months 24 days | ||
Gross Carrying Amount | $ 448,290 | $ 3,586,290 | $ 3,586,290 | |
Accumulated Amortization | (12,680) | (442,465) | (257,529) | |
Intangibles, net | $ 435,610 | $ 3,034,245 | $ 3,328,761 | |
Customer Relationships [Member] | Successor [Member] | ||||
Finite-lived intangible asset, useful life | 10 years | 10 years 1 month 6 days | ||
Non-competition Agreements [Member] | ||||
Finite-lived intangible asset, useful life | 4 years 2 months 12 days | 4 years 4 months 24 days | ||
Gross Carrying Amount | $ 130,910 | $ 2,651,510 | $ 2,651,510 | |
Accumulated Amortization | (8,240) | (567,743) | (302,589) | |
Intangibles, net | $ 122,670 | $ 2,083,767 | $ 2,348,921 | |
Non-competition Agreements [Member] | Successor [Member] | ||||
Finite-lived intangible asset, useful life | 5 years | 4 years 8 months 12 days |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Schedule of Amortization Expense of Acquired Intangibles Assets (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2020 (remaining six months) | $ 818,364 | ||
2021 | 1,091,343 | $ 1,096,692 | |
2022 | 1,090,620 | 1,091,887 | |
2023 | 1,075,827 | 1,090,620 | |
2024 | 533,822 | 1,082,374 | |
Thereafter | 1,469,076 | ||
Intangibles, net | $ 6,079,052 | $ 6,633,584 | $ 604,489 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Schedule of Amortization Expense of Acquired Intangibles Assets (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2020 | $ 1,091,343 | $ 1,096,692 | |
2021 | 1,090,620 | 1,091,887 | |
2022 | 1,075,827 | 1,090,620 | |
2023 | 533,822 | 1,082,374 | |
2024 | 710,052 | ||
Thereafter | 1,561,959 | ||
Intangibles, net | $ 6,079,052 | $ 6,633,584 | $ 604,489 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 313,045 | $ 102,112 | $ 14,888 |
Accrued expenses | 12,130 | 5,797 | 65,302 |
Accrued credit card payables | 14,950 | 32,395 | 18,464 |
Other accrued liabilities | 12,922 | ||
Accounts payable and accrued liabilities | $ 340,125 | $ 153,226 | $ 98,654 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 313,045 | $ 102,112 | $ 14,888 |
Accrued expenses | 12,130 | 5,797 | 65,302 |
Accrued credit card payables | 14,950 | 32,395 | 18,464 |
Other accrued liabilities | 12,922 | ||
Accounts payable and accrued liabilities | $ 340,125 | $ 153,226 | $ 98,654 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Apr. 04, 2020 | Sep. 05, 2019 | May 01, 2019 | Apr. 02, 2019 | Dec. 07, 2018 | Aug. 02, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Repayment of loans | $ 165,000 | ||||||||||
Senior Secured Amortizing Credit Facility [Member] | |||||||||||
Debt issuance costs | 22,098 | $ 22,737 | $ 25,293 | ||||||||
Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||||
Borrowings | $ 4,128,000 | ||||||||||
Debt description | The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||||
Debt issuance costs | 94,105 | ||||||||||
Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||||
Debt instrument, interest rate | 2.00% | ||||||||||
Loan Agreement [Member] | First Financial Bank [Member] | |||||||||||
Loans | 508,700 | ||||||||||
Prepayment penalties | |||||||||||
Principal and interest | $ 37,913 | ||||||||||
Repayment of loans | 165,000 | ||||||||||
Loan Agreement [Member] | First Financial Bank [Member] | Paycheck Protection Program [Member] | |||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||
Loans | $ 673,700 | ||||||||||
Debt instrument term | 2 years | ||||||||||
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | |||||||||||
Debt issuance costs | 17,935 | 19,044 | $ 21,263 | ||||||||
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||||
Borrowings | $ 750,000 | ||||||||||
Debt description | Interest accrues at 5.00% on the basis of a 360-day year, maturing 120 months from the Amortization Date (September 25, 2018). | ||||||||||
Debt instrument, interest rate | 5.00% | ||||||||||
Debt issuance costs | 22,188 | ||||||||||
Southwestern Montana Financial Center, Inc. [Member] | |||||||||||
Debt issuance costs | 15,243 | 16,685 | |||||||||
Southwestern Montana Financial Center, Inc. [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||||
Borrowings | $ 1,136,000 | ||||||||||
Debt description | The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||||
Debt issuance costs | 28,849 | ||||||||||
Southwestern Montana Financial Center, Inc. [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||||
Debt instrument, interest rate | 2.00% | ||||||||||
Fortman Insurance Agency, LLC [Member] | |||||||||||
Debt issuance costs | $ 51,385 | 54,293 | |||||||||
Fortman Insurance Agency, LLC [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||||
Borrowings | $ 2,648,000 | ||||||||||
Debt description | The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||||
Debt issuance costs | $ 58,171 | ||||||||||
Fortman Insurance Agency, LLC [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||||
Debt instrument, interest rate | 2.00% | ||||||||||
Commercial Coverage Solutions, LLC [Member] | Oak Street Funding LLC [Member] | Senior Secured Amortizing Credit Facility [Member] | |||||||||||
Borrowings | $ 1,025,000 | ||||||||||
Debt description | The borrowing rate under the Facility is a variable rate equal to Prime +1.50% and matures 10 years from the closing date. | ||||||||||
Debt issuance costs | $ 25,506 | ||||||||||
Commercial Coverage Solutions, LLC [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | Senior Secured Amortizing Credit Facility [Member] | |||||||||||
Debt instrument, interest rate | 1.50% |
Long-Term Debt (Details Narra_2
Long-Term Debt (Details Narrative) (10-K) - USD ($) | Sep. 05, 2019 | May 01, 2019 | Apr. 02, 2019 | Dec. 07, 2018 | Aug. 02, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Senior Secured Amortizing Credit Facility [Member] | |||||||||
Debt issuance costs | $ 22,098 | $ 22,737 | $ 25,293 | ||||||
Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||
Borrowings | $ 4,128,000 | ||||||||
Debt description | The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||
Debt issuance costs | 94,105 | ||||||||
Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||
Debt instrument, interest rate | 2.00% | ||||||||
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | |||||||||
Debt issuance costs | 17,935 | 19,044 | $ 21,263 | ||||||
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||
Borrowings | $ 750,000 | ||||||||
Debt description | Interest accrues at 5.00% on the basis of a 360-day year, maturing 120 months from the Amortization Date (September 25, 2018). | ||||||||
Debt instrument, interest rate | 5.00% | ||||||||
Debt issuance costs | 22,188 | ||||||||
Southwestern Montana Financial Center, Inc. [Member] | |||||||||
Debt issuance costs | 15,243 | 16,685 | |||||||
Southwestern Montana Financial Center, Inc. [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||
Borrowings | $ 1,136,000 | ||||||||
Debt description | The Term Loan is secured by certain assets of the Company. The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||
Debt issuance costs | 28,849 | ||||||||
Southwestern Montana Financial Center, Inc. [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||
Debt instrument, interest rate | 2.00% | ||||||||
Fortman Insurance Agency, LLC [Member] | |||||||||
Debt issuance costs | $ 51,385 | 54,293 | |||||||
Fortman Insurance Agency, LLC [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | |||||||||
Borrowings | $ 2,648,000 | ||||||||
Debt description | The borrowing rate under the Facility is a variable rate equal to Prime + 2.00% and matures 10 years from the closing date. | ||||||||
Debt issuance costs | $ 58,171 | ||||||||
Fortman Insurance Agency, LLC [Member] | Credit Agreement [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | |||||||||
Debt instrument, interest rate | 2.00% | ||||||||
Commercial Coverage Solutions, LLC [Member] | Oak Street Funding LLC [Member] | Senior Secured Amortizing Credit Facility [Member] | |||||||||
Borrowings | $ 1,025,000 | ||||||||
Debt description | The borrowing rate under the Facility is a variable rate equal to Prime +1.50% and matures 10 years from the closing date. | ||||||||
Debt issuance costs | $ 25,506 | ||||||||
Commercial Coverage Solutions, LLC [Member] | Oak Street Funding LLC [Member] | Prime Plus [Member] | Senior Secured Amortizing Credit Facility [Member] | |||||||||
Debt instrument, interest rate | 1.50% |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 |
Less: current portion | (963,450) | (1,010,570) | (90,580) |
Long-term debt | 8,197,264 | 8,270,955 | 1,621,101 |
Senior Secured Amortizing Credit Facility [Member] | |||
Long-term debt total | 921,038 | 963,174 | 999,707 |
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | |||
Long-term debt total | 570,157 | 595,797 | 711,974 |
Southwestern Montana Financial Center, Inc. [Member] | |||
Long-term debt total | 1,024,472 | 1,066,815 | |
Fortman Insurance Agency, LLC [Member] | |||
Long-term debt total | 2,577,670 | 2,593,707 | |
Altruis Benefits Consulting, LLC [Member] | |||
Long-term debt total | $ 4,067,377 | $ 4,062,032 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Long-Term Debt (Details) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Senior Secured Amortizing Credit Facility [Member] | ||||
Net of deferred financing costs | $ 22,098 | $ 22,737 | $ 25,293 | |
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | ||||
Net of deferred financing costs | 17,935 | 19,044 | $ 21,263 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Net of deferred financing costs | 15,243 | 16,685 | ||
Fortman Insurance Agency, LLC [Member] | ||||
Net of deferred financing costs | 51,385 | 54,293 | ||
Altruis Benefits Consulting, LLC [Member] | ||||
Net of deferred financing costs | $ 60,623 | $ 65,968 |
Long-Term Debt - Schedule of _3
Long-Term Debt - Schedule of Long-Term Debt (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 |
Less: current portion | (963,450) | (1,010,570) | (90,580) |
Long-term debt | 8,197,264 | 8,270,955 | 1,621,101 |
Senior Secured Amortizing Credit Facility [Member] | |||
Long-term debt total | 921,038 | 963,174 | 999,707 |
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | |||
Long-term debt total | 570,157 | 595,797 | 711,974 |
Southwestern Montana Financial Center, Inc. [Member] | |||
Long-term debt total | 1,024,472 | 1,066,815 | |
Fortman Insurance Agency, LLC [Member] | |||
Long-term debt total | 2,577,670 | 2,593,707 | |
Altruis Benefits Consulting, LLC [Member] | |||
Long-term debt total | $ 4,067,377 | $ 4,062,032 |
Long-Term Debt - Schedule of _4
Long-Term Debt - Schedule of Long-Term Debt (Details) (10-K) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Senior Secured Amortizing Credit Facility [Member] | ||||
Net of deferred financing costs | $ 22,098 | $ 22,737 | $ 25,293 | |
Employee Benefits, Solutions, LLC, and US Benefits Alliance [Member] | ||||
Net of deferred financing costs | 17,935 | 19,044 | $ 21,263 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Net of deferred financing costs | 15,243 | 16,685 | ||
Fortman Insurance Agency, LLC [Member] | ||||
Net of deferred financing costs | 51,385 | 54,293 | ||
Altruis Benefits Consulting, LLC [Member] | ||||
Net of deferred financing costs | $ 60,623 | $ 65,968 |
Long-Term Debt - Schedule of Cu
Long-Term Debt - Schedule of Cumulative Maturities of Long-Term Obligations (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
2020 (remaining six months) | $ 474,495 | ||
2021 | 963,450 | $ 1,010,570 | |
2022 | 963,450 | 1,010,570 | |
2023 | 963,450 | 1,010,570 | |
2024 | 963,450 | 1,010,570 | |
Thereafter | 4,832,419 | 4,228,674 | |
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 |
Long-Term Debt - Schedule of _5
Long-Term Debt - Schedule of Cumulative Maturities of Long-Term Obligations (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
2020 | $ 963,450 | $ 1,010,570 | |
2021 | 963,450 | 1,010,570 | |
2022 | 963,450 | 1,010,570 | |
2023 | 963,450 | 1,010,570 | |
2024 | 1,010,570 | ||
Thereafter | 4,832,419 | 4,228,674 | |
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 |
Long-Term Debt - Schedule of _6
Long-Term Debt - Schedule of Long-Term Loans Payable (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Less: current portion | $ 143,957 | $ 19,401 | |
Long-term loans payable | 379,341 | ||
Paycheck Protection Program [Member] | |||
Less: current portion | $ 508,700 |
Significant Customers - Schedul
Significant Customers - Schedule of Concentrations of Revenues (Details) - Revenue [Member] | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
BlueCross BlueShield [Member] | |||||
Concentration of risk percentage | 30.00% | 27.00% | 27.00% | 27.00% | 26.20% |
Priority Health [Member] | |||||
Concentration of risk percentage | 28.00% | 16.00% | 26.00% | 21.00% | 19.70% |
Significant Customers - Sched_2
Significant Customers - Schedule of Concentrations of Revenues (Details) (10-K) - Revenue [Member] | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
BlueCross BlueShield [Member] | ||||||
Concentration of risk percentage | 30.00% | 27.00% | 27.00% | 27.00% | 26.20% | |
BlueCross BlueShield [Member] | Successor [Member] | ||||||
Concentration of risk percentage | 39.50% | |||||
Priority Health [Member] | ||||||
Concentration of risk percentage | 28.00% | 16.00% | 26.00% | 21.00% | 19.70% | |
Priority Health [Member] | Successor [Member] | ||||||
Concentration of risk percentage | 44.20% |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | May 24, 2019 | Feb. 29, 2020 | Sep. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock authorized | 750,000,000 | 750,000,000 | 750,000,000 | ||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock issued | 33,911,991 | 33,911,991 | 40,000,000 | ||||||||
Preferred stock outstanding | 33,911,991 | 33,911,991 | 40,000,000 | ||||||||
Preferred stock voting rights description | Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. | Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. | |||||||||
Common stock authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | ||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Number of shares of common stock, shares | 16,400,000 | ||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||||
Options issued | 2,000,000 | 3,000,000 | 19,700,000 | ||||||||
Share based compensation contractual term | 4 years 7 months 13 days | 0 years | 0 years | ||||||||
Number of shares vested | 1,500,000 | 1,500,000 | 1,500,000 | ||||||||
Compensation expense | $ 843,572 | $ 703,249 | |||||||||
Unrecognized compensation expense | $ 2,076,532 | ||||||||||
Market value of share | $ 0.19 | $ 0.13 | $ 0.33 | ||||||||
2019 Equity Incentive Plan [Member] | |||||||||||
Common stock reserved for issuance | 60,000,000 | 40,300,000 | |||||||||
Options issued | 2,000,000 | 3,000,000 | |||||||||
Share based compensation contractual term | 5 years | 5 years | |||||||||
Vesting period | 4 years | ||||||||||
Fair value of options grants | $ 3,967,480 | ||||||||||
Number of shares vested | 1,500,000 | ||||||||||
Fortman Insurance Agency, LLC [Member] | |||||||||||
Number of shares of common stock, shares | 2,845,760 | ||||||||||
Confidential Settlement Agreement [Member] | |||||||||||
Common stock par value | $ 0.1775 | ||||||||||
Number of shares of common stock, shares | 576,489 | ||||||||||
Proceeds from issuance of common stock | $ 306,981 | ||||||||||
EMA retained, shares | 1,729,468 | ||||||||||
Confidential Settlement Agreement [Member] | Fortman Insurance Services, LLC [Member] | |||||||||||
Number of shares of common stock, shares | 2,845,760 | ||||||||||
Third-Party Individual [Member] | NSURE, Inc. [Member] | |||||||||||
Number of shares of common stock, shares | 4,000,000 | ||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||
Preferred stock issued | 33,911,991 | 33,911,991 | |||||||||
Preferred stock outstanding | 33,911,991 | 33,911,991 | |||||||||
Series A Convertible Preferred Stock [Member] | Reliance Global Holdings, LLC [Member] | |||||||||||
Number of shares of common stock, shares | 2,845,760 | 3,181,080 | 54,853,248 | ||||||||
Debt conversion, conversion of stock | 284,576 | 318,108 | 5,485,325 |
Equity (Details Narrative) (10-
Equity (Details Narrative) (10-K) - USD ($) | Sep. 30, 2019 | Jul. 22, 2019 | May 24, 2019 | Nov. 30, 2018 | Sep. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Nov. 30, 2018 | Oct. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock authorized | 750,000,000 | 750,000,000 | 750,000,000 | |||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Preferred stock issued | 33,911,991 | 33,911,991 | 40,000,000 | |||||||||||
Preferred stock outstanding | 33,911,991 | 33,911,991 | 40,000,000 | |||||||||||
Preferred stock voting rights description | Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. | Each share of Series A Convertible Preferred Stock shall have ten (10) votes per share and may be converted into ten (10) shares of $0.001 par value common stock. The holders of the Series A Convertible Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefore, cumulative dividends payable in cash. The annual interest rate at which cumulative preferred dividends will accrue on each share of Series A Convertible Preferred Stock is 0%. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, before any distribution of assets of the Corporation shall be made to or set apart for the holders of the Common Stock and subject and subordinate to the rights of secured creditors of the Company, the holders of Series A Preferred Stock shall receive an amount per share equal to the greater of (i) one dollar ($1.00), adjusted for any recapitalization, stock combinations, stock dividends (whether paid or unpaid), stock options and the like with respect to such shares, plus any accumulated but unpaid dividends (whether or not earned or declared) on the Series A Convertible Preferred Stock, and (ii) the amount such holder would have received if such holder has converted its shares of Series A Convertible Preferred Stock to common stock, subject to but immediately prior to such liquidation. | ||||||||||||
Common stock authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | |||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Share price | $ 0.31 | $ 0.19 | ||||||||||||
Number of shares of common stock, shares | 16,400,000 | |||||||||||||
Compensation expense | $ 843,572 | $ 703,249 | ||||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | |||||||||||||
Common stock value | $ 200,000 | |||||||||||||
Options issued | 2,000,000 | 3,000,000 | 19,700,000 | |||||||||||
Share based compensation contractual term | 4 years 7 months 13 days | 0 years | 0 years | |||||||||||
Share based compensation | $ 843,572 | $ 387,999 | ||||||||||||
Unrecognized compensation expense | $ 2,296,485 | |||||||||||||
Market value of share | $ 0.19 | $ 0.13 | $ 0.33 | |||||||||||
2019 Equity Incentive Plan [Member] | ||||||||||||||
Common stock reserved for issuance | 60,000,000 | 40,300,000 | ||||||||||||
Number of shares authorised to issuance | 60,000,000 | |||||||||||||
Options issued | 2,000,000 | 3,000,000 | ||||||||||||
Share based compensation contractual term | 5 years | 5 years | ||||||||||||
Vesting period | 4 years | |||||||||||||
Fair value of options grants | $ 3,967,480 | |||||||||||||
Fortman Insurance Agency, LLC [Member] | ||||||||||||||
Number of shares of common stock, shares | 2,845,760 | |||||||||||||
Confidential Settlement Agreement [Member] | ||||||||||||||
Common stock par value | $ 0.1775 | |||||||||||||
Number of shares of common stock, shares | 576,489 | |||||||||||||
EMA retained, shares | 1,729,468 | |||||||||||||
Proceeds from issuance of common stock | $ 306,981 | |||||||||||||
Confidential Settlement Agreement [Member] | Fortman Insurance Services, LLC [Member] | ||||||||||||||
Number of shares of common stock, shares | 2,845,760 | |||||||||||||
Reliance Global Holdings, LLC [Member] | ||||||||||||||
Number of shares exchanged | 14,839,011 | |||||||||||||
Altruis Benefits Consulting, LLC [Member] | ||||||||||||||
Number of shares of common stock, shares | 11,900,832 | |||||||||||||
Reliance Global Holdings, LLC [Member] | ||||||||||||||
Number of shares transferred | 6,584,830 | |||||||||||||
Share price | $ 0.07 | |||||||||||||
The Referral Depot, LLC [Member] | ||||||||||||||
Common stock value | $ 250,000 | |||||||||||||
Number of restricted common stock | 2,000,000 | |||||||||||||
Common stock reserved for issuance | 2,000,000 | |||||||||||||
The Referral Depot, LLC [Member] | Initial Payment [Member] | ||||||||||||||
Common stock value | $ 50,000 | |||||||||||||
Current Employees [Member] | 2019 Equity Incentive Plan [Member] | ||||||||||||||
Options issued | 12,000,000 | |||||||||||||
Share based compensation contractual term | 5 years | |||||||||||||
Vesting period | 3 years | |||||||||||||
Consultants [Member] | 2019 Equity Incentive Plan [Member] | ||||||||||||||
Options issued | 4,000,000 | |||||||||||||
Share based compensation contractual term | 5 years | |||||||||||||
Vesting period | 3 years | |||||||||||||
Nonemployee Directors [Member] | 2019 Equity Incentive Plan [Member] | ||||||||||||||
Options issued | 700,000 | |||||||||||||
Share based compensation contractual term | 5 years | |||||||||||||
Vesting period | 3 years | |||||||||||||
Service Provider [Member] | 2019 Equity Incentive Plan [Member] | ||||||||||||||
Options issued | 3,000,000 | |||||||||||||
Share based compensation contractual term | 5 years | |||||||||||||
Vesting description | One half of these options, or 1,500,000 shares, vested immediately upon issuance; the other half of these options vest on the one-year anniversary of the grant date, or March 14, 2020, unless the Company deems the services provided to be unhelpful, in which case the second half of the options shall be void. The service period per the agreement was from February 2019 to February 2020. | |||||||||||||
Fair value of options grants | $ 3,343,861 | |||||||||||||
Employees, Directors, and Consultants [Member] | ||||||||||||||
Share based compensation | 465,377 | |||||||||||||
Service Providers [Member] | ||||||||||||||
Share based compensation | $ 581,999 | |||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock issued | 33,911,991 | 33,911,991 | ||||||||||||
Preferred stock outstanding | 33,911,991 | 33,911,991 | ||||||||||||
Series A Convertible Preferred Stock [Member] | Reliance Global Holdings, LLC [Member] | ||||||||||||||
Number of shares of common stock, shares | 2,845,760 | 3,181,080 | 54,853,248 | |||||||||||
Debt conversion, conversion of stock | 284,576 | 318,108 | 5,485,325 | |||||||||||
Series A Convertible Preferred Stock [Member] | Reliance Global Holdings, LLC [Member] | ||||||||||||||
Preferred stock par value | $ 0.1799 | $ 0.1799 | ||||||||||||
Common stock par value | $ 0.1775 | $ 0.1775 | ||||||||||||
Number of shares of common stock, shares | 100,000,000 | |||||||||||||
Debt conversion, conversion of stock | 10,000,000 | |||||||||||||
Transferred of common stock | 500,000 | |||||||||||||
Compensation expense | $ 89,950 | |||||||||||||
EMA retained, shares | 576,489 | |||||||||||||
Series A Convertible Preferred Stock [Member] | EMA Financial LLC [Member] | ||||||||||||||
Transferred of common stock | 2,305,957 | |||||||||||||
EMA retained, shares | 1,729,468 | |||||||||||||
Proceeds from issuance of common stock | $ 306,981 |
Equity - Summary of Stock Optio
Equity - Summary of Stock Options (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Number of Stock Options Outstanding, Outstanding at Beginning of Period | 19,700,000 | ||
Number of Stock Options Outstanding, Granted | 2,000,000 | 3,000,000 | 19,700,000 |
Number of Stock Options Outstanding, Forfeited or Expired | |||
Number of Stock Options Outstanding, Exercised | |||
Number of Stock Options Outstanding, Outstanding at End of Period | 21,700,000 | 3,000,000 | 19,700,000 |
Weighted Average Exercise Price Per Share, Outstanding at Beginning of Period | $ 0.18 | ||
Weighted Average Exercise Price Per Share, Granted | 0.39 | 0.20 | 0.18 |
Weighted Average Exercise Price Per Share, Forfeited | |||
Weighted Average Exercise Price Per Share, Exercised | |||
Weighted Average Exercise Price, Outstanding at End of Period | $ 0.20 | $ 0.20 | $ 0.18 |
Weighted Average Remaining Contractual Life (years), Outstanding at Beginning of Period | 4 years 7 months 13 days | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Granted | 4 years 8 months 23 days | 3 years 8 months 16 days | 4 years 7 months 13 days |
Weighted Average Remaining Contractual Life (years), Forfeited or Expired | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Exercised | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Outstanding at End of Period | 3 years 8 months 16 days | 3 years 8 months 16 days | 4 years 7 months 13 days |
Aggregate Intrinsic Value, Outstanding at Beginning of Period | $ 2,995,640 | ||
Aggregate Intrinsic Value, Granted | |||
Aggregate Intrinsic Value, Forfeited or Expired | |||
Aggregate Intrinsic Value, Exercised | |||
Aggregate Intrinsic Value, Outstanding at End of Period | $ 2,995,640 |
Equity - Summary of Stock Opt_2
Equity - Summary of Stock Options (Details) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Number of Stock Options Outstanding, Outstanding at Beginning of Period | 19,700,000 | ||
Number of Stock Options Outstanding, Granted | 2,000,000 | 3,000,000 | 19,700,000 |
Number of Stock Options Outstanding, Forfeited or Expired | |||
Number of Stock Options Outstanding, Exercised | |||
Number of Stock Options Outstanding, Outstanding at End of Period | 21,700,000 | 3,000,000 | 19,700,000 |
Weighted Average Exercise Price Per Share, Outstanding at Beginning of Period | $ 0.18 | ||
Weighted Average Exercise Price Per Share, Granted | 0.39 | 0.20 | 0.18 |
Weighted Average Exercise Price Per Share, Forfeited | |||
Weighted Average Exercise Price Per Share, Exercised | |||
Weighted Average Exercise Price, Outstanding at End of Period | $ 0.20 | $ 0.20 | $ 0.18 |
Weighted Average Remaining Contractual Life (years), Outstanding at Beginning of Period | 4 years 7 months 13 days | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Granted | 4 years 8 months 23 days | 3 years 8 months 16 days | 4 years 7 months 13 days |
Weighted Average Remaining Contractual Life (years), Forfeited or Expired | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Exercised | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Outstanding at End of Period | 3 years 8 months 16 days | 3 years 8 months 16 days | 4 years 7 months 13 days |
Aggregate Intrinsic Value, Outstanding at Beginning of Period | $ 2,995,640 | ||
Aggregate Intrinsic Value, Granted | |||
Aggregate Intrinsic Value, Forfeited or Expired | |||
Aggregate Intrinsic Value, Exercised | |||
Aggregate Intrinsic Value, Outstanding at End of Period | $ 2,995,640 |
Equity - Summary of Non-Vested
Equity - Summary of Non-Vested Stock Options (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Number of Non-vested Stock Options Outstanding, Outstanding at Beginning of Period | 18,200,000 | ||
Number of Non-vested Stock Options Outstanding, Granted | 2,000,000 | 3,000,000 | 19,700,000 |
Number of Non-vested Stock Options Outstanding, Vested | (1,500,000) | (1,500,000) | (1,500,000) |
Number of Non-vested Stock Options Outstanding, Forfeited or Expired | |||
Number of Non-vested Stock Options Outstanding, Outstanding at End of Period | 18,700,000 | 1,500,000 | 18,200,000 |
Weighted Average Exercise Price Per Share, Outstanding at Beginning of Period | $ 0.18 | ||
Weighted Average Exercise Price Per Share, Granted | 0.39 | 0.20 | 0.18 |
Weighted Average Exercise Price Per Share, Vested | 0.20 | 0.20 | 0.20 |
Weighted Average Exercise Price Per Share, Forfeited or Expired | |||
Weighted Average Exercise Price, Outstanding at End of Period | $ 0.20 | $ 0.20 | $ 0.18 |
Weighted Average Remaining Contractual Life (years), Outstanding at Beginning of Period | 4 years 3 months 19 days | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Granted | 4 years 8 months 23 days | 3 years 7 months 28 days | 4 years 7 months 13 days |
Weighted Average Remaining Contractual Life (years), Vested | 3 years 7 months 28 days | 3 years 7 months 28 days | 4 years 2 months 16 days |
Weighted Average Remaining Contractual Life (years), Forfeited or Expired | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Outstanding at End of Period | 3 years 7 months 28 days | 3 years 7 months 28 days | 4 years 3 months 19 days |
Equity - Summary of Non-Veste_2
Equity - Summary of Non-Vested Stock Options (Details) (10-K) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Number of Non-vested Stock Options Outstanding, Outstanding at Beginning of Period | 18,200,000 | ||
Number of Non-vested Stock Options Outstanding, Granted | 2,000,000 | 3,000,000 | 19,700,000 |
Number of Non-vested Stock Options Outstanding, Vested | (1,500,000) | (1,500,000) | (1,500,000) |
Number of Non-vested Stock Options Outstanding, Forfeited or Expired | |||
Number of Non-vested Stock Options Outstanding, Outstanding at End of Period | 18,700,000 | 1,500,000 | 18,200,000 |
Weighted Average Exercise Price Per Share, Outstanding at Beginning of Period | $ 0.18 | ||
Weighted Average Exercise Price Per Share, Granted | 0.39 | 0.20 | 0.18 |
Weighted Average Exercise Price Per Share, Vested | 0.20 | 0.20 | 0.20 |
Weighted Average Exercise Price Per Share, Forfeited or Expired | |||
Weighted Average Exercise Price, Outstanding at End of Period | $ 0.20 | $ 0.20 | $ 0.18 |
Weighted Average Remaining Contractual Life (years), Outstanding at Beginning of Period | 4 years 3 months 19 days | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Granted | 4 years 8 months 23 days | 3 years 7 months 28 days | 4 years 7 months 13 days |
Weighted Average Remaining Contractual Life (years), Vested | 3 years 7 months 28 days | 3 years 7 months 28 days | 4 years 2 months 16 days |
Weighted Average Remaining Contractual Life (years), Forfeited or Expired | 0 years | 0 years | 0 years |
Weighted Average Remaining Contractual Life (years), Outstanding at End of Period | 3 years 7 months 28 days | 3 years 7 months 28 days | 4 years 3 months 19 days |
Equity - Schedule of Assumption
Equity - Schedule of Assumption of Black-Scholes Option Pricing Model (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Exercise price | $ 0.39 | $ 0.20 | |
Expected term | 3 years 9 months | 3 years 2 months 30 days | |
Risk-free interest rate | 0.38% | 2.43% | |
Estimated volatility | 318.00% | 533.64% | |
Expected dividend | 0.00% | 0.00% | |
Option price at valuation date | $ 0.31 | $ 0.19 |
Equity - Schedule of Assumpti_2
Equity - Schedule of Assumption of Black-Scholes Option Pricing Model (Details) (10-K) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Exercise price | $ 0.39 | $ 0.20 | |
Expected term | 3 years 9 months | 3 years 2 months 30 days | |
Risk-free interest rate | 0.38% | 2.43% | |
Estimated volatility | 318.00% | 533.64% | |
Expected dividend | 0.00% | 0.00% | |
Option price at valuation date | $ 0.31 | $ 0.19 | |
Minimum [Member] | |||
Exercise price | $ 0.017 | ||
Expected term | 3 years 2 months 30 days | ||
Risk-free interest rate | 1.35% | ||
Estimated volatility | 484.51% | ||
Option price at valuation date | $ 0.16 | ||
Maximum [Member] | |||
Exercise price | $ 0.27 | ||
Expected term | 3 years 9 months | ||
Risk-free interest rate | 2.43% | ||
Estimated volatility | 533.64% | ||
Option price at valuation date | $ 0.27 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Common stock conversion basis | 10 for 1 basis | 10 for 1 basis | |
Stock Options [Member] | |||
Anti-dilutive securities | $ 21,700,000 | $ 3,000,000 | $ 19,700,000 |
Series A Convertible Preferred Stock [Member] | |||
Anti-dilutive securities | $ 33,911,991 | $ 33,911,991 | $ 33,911,991 |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details Narrative) (10-K) - $ / shares | 5 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Common stock conversion basis | 10 for 1 basis | 10 for 1 basis | ||
Stock Options [Member] | ||||
Anti-dilutive securities | $ 21,700,000 | $ 3,000,000 | $ 19,700,000 | |
Series A Convertible Preferred Stock [Member] | ||||
Anti-dilutive securities | $ 33,911,991 | $ 33,911,991 | $ 33,911,991 | |
Series A Convertible Preferred Stock [Member] | Successor [Member] | ||||
Anti-dilutive securities | $ 40,000,000 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Calculations of Basic and Diluted EPS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (1,138,413) | $ (426,208) | $ (2,118,211) | $ (1,102,961) |
Basic weighted average shares outstanding | 356,742,548 | 323,930,512 | 355,863,427 | 315,825,288 |
Basic and diluted loss per common share: | $ 0 | $ 0 | $ (0.01) | $ 0 |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Calculations of Basic and Diluted EPS (Details) (10-K) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Net loss | $ (1,138,413) | $ (426,208) | $ (2,118,211) | $ (1,102,961) | ||
Basic weighted average shares outstanding | 356,742,548 | 323,930,512 | 355,863,427 | 315,825,288 | ||
Basic and diluted loss per common share: | $ 0 | $ 0 | $ (0.01) | $ 0 | ||
Successor [Member] | ||||||
Net loss | $ (1,155,286) | $ (3,495,481) | ||||
Basic weighted average shares outstanding | 180,479,232 | 246,656,149 | ||||
Basic and diluted loss per common share: | $ (0.01) | $ (0.01) |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Right-of-use assets | $ 477,404 | $ 569,650 | ||
Accumulated amortization of right of use assets | $ 185,033 | $ 114,433 | ||
Weighted average remaining lease term | 2 years 11 months 19 days | 3 years 5 months 1 day | ||
Weighted average discount rate | 7.45% | 7.45% | ||
ASU 2016-02 [Member] | ||||
Right-of-use assets | $ 684,083 | |||
Operating lease discount rate | 7.45% |
Leases (Details Narrative) (10-
Leases (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Right-of-use assets | $ 477,404 | $ 569,650 | ||
Accumulated amortization of right of use assets | $ 185,033 | $ 114,433 | ||
Weighted average remaining lease term | 2 years 11 months 19 days | 3 years 5 months 1 day | ||
Weighted average discount rate | 7.45% | 7.45% | ||
ASU 2016-02 [Member] | ||||
Right-of-use assets | $ 684,083 | |||
Operating lease discount rate | 7.45% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payment (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (remaining six months) | $ 112,228 | |
2021 | 172,363 | $ 224,096 |
2022 | 144,000 | 172,363 |
2023 | 81,000 | 144,000 |
2024 | 33,000 | 81,000 |
Total undiscounted operating lease payments | 542,590 | 654,459 |
Less: Imputed interest | (58,907) | 78,931 |
Present value of operating lease liabilities | $ 483,684 | $ 575,528 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Lease Payment (Details) (10-K) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 172,363 | $ 224,096 |
2021 | 144,000 | 172,363 |
2022 | 81,000 | 144,000 |
2023 | 33,000 | 81,000 |
2024 | 33,000 | |
Thereafter | ||
Total undiscounted operating lease payments | 542,590 | 654,459 |
Less: Imputed interest | (58,907) | 78,931 |
Present value of operating lease liabilities | $ 483,684 | $ 575,528 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Federal net operating loss carryforward | $ 4,277,000 | |
Operating loss carryforward limitation | Federal Net Operating Loss Carry forwards, of which $1.3 million will begin to expire beginning 2031 | |
Income tax expiration date description | $3 million will not expire but are limited to use of 80% of current year taxable income. | |
Income tax percentage description | The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21% and requires the Company to re-measure certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. | |
Income tax percentage | 21.00% | |
Change in valuation of allowance | $ 436,759 | $ 207,967 |
CARES Act [Member] | ||
Income tax percentage description | Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three-year period. Such limitation of the net operating losses may have occurred, but we have not analyzed it at this time as the deferred tax asset is fully reserved. On March 27, 2020, the US government signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law, a $2 trillion relief package to provide support to individuals, businesses and government organizations during the COVID-19 pandemic. |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) (10-K) - Successor [Member] - USD ($) | 5 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Federal | ||
State | ||
Deferred | ||
Total |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Rate (Details) (10-K) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Federal rate | 21.00% | |||||
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% | ||
Successor [Member] | ||||||
Federal rate | 21.00% | 21.00% | ||||
State net of federal | 3.00% | 3.00% | ||||
Non-deductible acquired intangible assets | 0.00% | (18.00%) | ||||
Valuation allowance | (24.00%) | (6.00%) | ||||
Effective income tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) (10-K) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 1,013,793 | $ 351,114 |
Other | 3 | 2,833 |
Total deferred tax assets | 1,013,796 | 353,947 |
Valuation allowance | (559,175) | (353,947) |
Net deferred tax assets | 454,621 | |
Goodwill and intangibles | (454,621) | |
Other | ||
Total deferred tax liabilities | (454,621) | |
Net deferred taxes |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Jun. 30, 2020 | Dec. 31, 2019 |
Reliance Global Holdings, LLC [Member] | ||
Ownership percentage | 26.00% | 32.00% |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) (10-K) - USD ($) | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2020 |
Related party loan payable | $ 3,311,844 | $ 962,325 | $ 3,668,257 | ||
Common stock, value | $ 120,000 | ||||
Shares issued during acquisition | 761,905 | ||||
Percentage of monthly rent payments | 50.00% | ||||
Percentage of common stock owned | 32.00% | 57.00% | |||
Predecessor [Member] | Employee Benefits Solutions, Inc [Member] | |||||
Rent expense | $ 4,125 | ||||
Commissions | 35,009 | ||||
Predecessor [Member] | Stockholder [Member] | Employee Benefits Solutions, Inc [Member] | |||||
Related party note receivable | 570 | $ 570 | |||
Related party note payable | $ 31,943 | 31,943 | |||
Note receivable forgiveness | $ 5,000 | ||||
FHA/TSB Acquisition [Member] | Successor [Member] | |||||
Acquisition | $ 300,981 | ||||
Transaction cost | 83,162 | ||||
USBA Acquisition [Member] | Successor [Member] | |||||
Acquisition | 160,523 | ||||
Transaction cost | 44,353 | ||||
CCS Acquisition [Member] | Successor [Member] | |||||
Acquisition | 242,484 | ||||
Transaction cost | 113,247 | ||||
SWMT Acquisition [Member] | Successor [Member] | |||||
Acquisition | 335,169 | ||||
Transaction cost | 122,660 | ||||
FIS Acquisition [Member] | Successor [Member] | |||||
Acquisition | 779,099 | ||||
Transaction cost | 63,663 | ||||
ABC Acquisition [Member] | Successor [Member] | |||||
Acquisition | 1,378,961 | ||||
The Referral Depot LLC [Member] | Successor [Member] | |||||
Acquisition | $ 50,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) (10-K) - USD ($) | Mar. 23, 2020 | Feb. 19, 2020 | Feb. 29, 2020 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Aug. 20, 2020 | Aug. 05, 2020 | Jun. 01, 2020 | Dec. 31, 2018 |
Investments | $ 1,200,000 | ||||||||||
Number of shares of common stock, shares | 16,400,000 | ||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||||
Options issued | 2,000,000 | 3,000,000 | 19,700,000 | ||||||||
NSURE, Inc. [Member] | Third-Party Individual [Member] | |||||||||||
Number of shares of common stock, shares | 4,000,000 | ||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | |||||||||||
Investments | $ 50,000 | $ 100,000 | $ 200,000 | ||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | First Tranche [Member] | |||||||||||
Investments | $ 1,000,000 | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Second Tranche [Member] | |||||||||||
Investments | 3,000,000 | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Third Tranche [Member] | |||||||||||
Investments | $ 16,000,000 | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | |||||||||||
Investments | $ 43,781 | $ 58,375 | |||||||||
Number of shares of common stock, shares | 5,837,462 | ||||||||||
Common stock percentage | 35.00% | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | First Tranche [Member] | |||||||||||
Number of shares of common stock, shares | 291,873 | ||||||||||
Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Maximum [Member] | |||||||||||
Investments | $ 20,000,000 | ||||||||||
Subsequent Event [Member] | |||||||||||
Options issued | 2,000,000 | ||||||||||
Vesting period | 4 years | ||||||||||
Exercise price | $ 0.39 | ||||||||||
Expiration term | Expire on March 23, 2025 | ||||||||||
Subsequent Event [Member] | NSURE, Inc. [Member] | Third-Party Individual [Member] | |||||||||||
Number of shares of common stock, shares | 4,000,000 | ||||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | First Tranche [Member] | |||||||||||
Investments | 1,000,000 | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Second Tranche [Member] | |||||||||||
Investments | 3,000,000 | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Third Tranche [Member] | |||||||||||
Investments | $ 16,000,000 | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | |||||||||||
Number of shares of common stock, shares | 5,837,462 | ||||||||||
Common stock percentage | 35.00% | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Class A Common Stock [Member] | First Tranche [Member] | |||||||||||
Number of shares of common stock, shares | 291,873 | ||||||||||
Ownership interest | 3.00% | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | NSURE, Inc. [Member] | Maximum [Member] | |||||||||||
Investments | $ 20,000,000 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies (Details Narrative) (Southwestern Montana Financial Center, Inc.) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Marketing and advertising expenses | $ 33,497 | $ 30,832 | $ 101,259 | $ 77,249 | ||
Interest and penalties | ||||||
Southwestern Montana Financial Center, Inc. [Member] | ||||||
Marketing and advertising expenses | $ 4,073 | $ 5,525 | ||||
Interest and penalties |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Office Equipment [Member] | |
Estimated useful life | 5 years |
Vehicles [Member] | |
Estimated useful life | 5 years |
Furniture and Fixtures [Member] | |
Estimated useful life | 7 years |
Leasehold Improvements [Member] | |
Estimated useful life | 15 years |
Property and Equipment (Detai_3
Property and Equipment (Details Narrative) (Southwestern Montana Financial Center, Inc.) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation expense | $ 103,650 | $ 15,528 | $ 94,474 | ||
Southwestern Montana Financial Center, Inc. [Member] | |||||
Depreciation expense | $ 30,311 | $ 27,815 |
Property and Equipment - Sche_3
Property and Equipment - Schedule of Property and Equipment (Details) (Southwestern Montana Financial Center, Inc.) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Property and equipment, gross | $ 59,785 | $ 689,305 | $ 689,305 | |
Less: Accumulated depreciation | (2,580) | (200,704) | (97,054) | |
Property and equipment, net | 57,205 | 488,601 | 592,251 | |
Leasehold Improvements [Member] | ||||
Property and equipment, gross | 44,082 | $ 56,631 | $ 56,631 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Property and equipment, gross | 164,420 | $ 164,420 | ||
Less: Accumulated depreciation | (72,458) | (42,147) | ||
Property and equipment, net | $ 91,962 | 122,273 | ||
Southwestern Montana Financial Center, Inc. [Member] | Office Equipment [Member] | ||||
Property and equipment, estimated useful lives | 5 years | |||
Property and equipment, gross | $ 26,322 | 26,322 | ||
Southwestern Montana Financial Center, Inc. [Member] | Vehicles [Member] | ||||
Property and equipment, estimated useful lives | 5 years | |||
Property and equipment, gross | $ 125,046 | 125,046 | ||
Southwestern Montana Financial Center, Inc. [Member] | Furniture and Fixtures [Member] | ||||
Property and equipment, estimated useful lives | 7 years | |||
Property and equipment, gross | $ 10,103 | 10,103 | ||
Southwestern Montana Financial Center, Inc. [Member] | Leasehold Improvements [Member] | ||||
Property and equipment, estimated useful lives | 15 years | |||
Property and equipment, gross | $ 2,949 | $ 2,949 |
Debt (Details Narrative) (South
Debt (Details Narrative) (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] - USD ($) | Aug. 05, 2017 | Jul. 21, 2017 | Nov. 08, 2016 | Apr. 15, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Proceeds from note payable | $ 86,252 | |||||
Note Agreement One [Member] | ||||||
Proceeds from note payable | $ 59,000 | |||||
Debt instrument, interest rate | 2.99% | |||||
Debt instrument, maturity date | Aug. 20, 2020 | |||||
Outstanding principal balance of note payable | 31,797 | 51,118 | ||||
Note Agreement Two [Member] | ||||||
Proceeds from note payable | $ 27,252 | |||||
Debt instrument, interest rate | 2.99% | |||||
Debt instrument, maturity date | Sep. 4, 2021 | |||||
Outstanding principal balance of note payable | 18,386 | 25,083 | ||||
Note Agreement Three [Member] | ||||||
Proceeds from note payable | $ 24,018 | |||||
Debt instrument, interest rate | 2.90% | |||||
Debt instrument, maturity date | Dec. 8, 2019 | |||||
Outstanding principal balance of note payable | 6,882 | 15,605 | ||||
Note Agreement Four [Member] | ||||||
Proceeds from note payable | $ 14,536 | |||||
Debt instrument, interest rate | 5.67% | |||||
Debt instrument, maturity date | May 15, 2019 | |||||
Outstanding principal balance of note payable | $ 1,341 | $ 4,900 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) (Southwestern Montana Financial Center, Inc.) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 | |
Less: current portion | 963,450 | 1,010,570 | 90,580 | |
Long-term debt | $ 8,197,264 | $ 8,270,955 | 1,621,101 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Long-term debt total | 58,406 | $ 96,706 | ||
Less: current portion | 35,200 | 38,301 | ||
Long-term debt | 23,206 | 58,405 | ||
Southwestern Montana Financial Center, Inc. [Member] | Vehicle Note Payable Due August 2020 [Member] | ||||
Long-term debt total | 31,797 | 51,118 | ||
Southwestern Montana Financial Center, Inc. [Member] | Vehicle Note Payable Due September 2021 [Member] | ||||
Long-term debt total | 18,386 | 25,083 | ||
Southwestern Montana Financial Center, Inc. [Member] | Vehicle Note Payable Due December 2019 [Member] | ||||
Long-term debt total | 6,882 | 15,605 | ||
Southwestern Montana Financial Center, Inc. [Member] | Vehicle Note Payable Due May 2019 [Member] | ||||
Long-term debt total | $ 1,341 | $ 4,900 |
Debt - Schedule of Future Minim
Debt - Schedule of Future Minimum Payments of Debt (Details) (Southwestern Montana Financial Center, Inc.) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
2019 | $ 963,450 | $ 1,010,570 | ||
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
2019 | 35,200 | |||
2020 | 18,609 | |||
2021 | 4,597 | |||
Long-term debt total | $ 58,406 | $ 96,706 |
Significant Customers (Details
Significant Customers (Details Narrative) (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] - Revenue [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance Carrier One [Member] | ||
Concentration of risk percentage | 49.00% | 63.00% |
Insurance Carrier Two [Member] | ||
Concentration of risk percentage | 21.00% | 16.00% |
Equity (Details Narrative) (Sou
Equity (Details Narrative) (Southwestern Montana Financial Center, Inc.) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | |
Common stock, shares issued | 356,742,548 | 352,742,548 | 265,699,106 | |
Southwestern Montana Financial Center, Inc. [Member] | ||||
Common stock, par value | ||||
Common stock, shares authorized | 50,000 | 50,000 | ||
Common stock, shares issued | 20,000 | 20,000 |
Commitments and Related Party_6
Commitments and Related Party Transactions (Details Narrative) (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] | 12 Months Ended | |
Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | |
Number of lease agreements | Number | 2 | |
Operating lease expiration year one | 2020-03 | |
Operating lease expiration year two | 2023-03 | |
Rent expense | $ | $ 138,000 | $ 137,874 |
Minimum [Member] | ||
Operating leases term of contract | 2 years | |
Maximum [Member] | ||
Operating leases term of contract | 5 years |
Commitments and Related Party_7
Commitments and Related Party Transactions - Schedule of Future Minimum Lease Payments (Details) (Southwestern Montana Financial Center, Inc.) - Southwestern Montana Financial Center, Inc. [Member] | Dec. 31, 2018USD ($) |
2019 | $ 111,000 |
2020 | 88,500 |
2021 | 84,000 |
2022 | 84,000 |
2023 | 21,000 |
Total | $ 388,500 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (Southwestern Montana Financial Center, Inc.) | Apr. 02, 2019USD ($) |
Southwestern Montana Financial Center, Inc. [Member] | Subsequent Event [Member] | |
Business acquistion purchase price | $ 2,395,000 |
Summary of Significant Accou_21
Summary of Significant Accounting Policies (Details Narrative) (Fortman Insurance Agency, LLC) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Marketing and advertising expenses | $ 33,497 | $ 30,832 | $ 101,259 | $ 77,249 | ||
Interest and penalties | ||||||
Fortman Insurance Agency, LLC [Member] | ||||||
Marketing and advertising expenses | $ 54,188 | $ 70,002 | ||||
Interest and penalties |
Summary of Significant Accou_22
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) (Fortman Insurance Agency, LLC) - Fortman Insurance Agency, LLC [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Land Improvements [Member] | |
Estimated useful life | 15 years |
Vehicles [Member] | |
Estimated useful life | 5 years |
Office Equipment Furniture And Fixtures [Member] | |
Estimated useful life | 7 years |
Property and Equipment (Detai_4
Property and Equipment (Details Narrative) (Fortman Insurance Agency, LLC) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation expense | $ 103,650 | $ 15,528 | $ 94,474 | ||
Fortman Insurance Agency, LLC [Member] | |||||
Depreciation expense | $ 22,335 | $ 26,225 |
Property and Equipment - Sche_4
Property and Equipment - Schedule of Property and Equipment (Details) (Fortman Insurance Agency, LLC) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Property and equipment, gross | $ 59,785 | $ 689,305 | $ 689,305 | |
Less: Accumulated depreciation and amortization | (2,580) | (200,704) | (97,054) | |
Property and equipment, net | 57,205 | $ 488,601 | $ 592,251 | |
Fortman Insurance Agency, LLC [Member] | ||||
Property and equipment, gross | 152,874 | $ 149,605 | ||
Less: Accumulated depreciation and amortization | (23,748) | (22,338) | ||
Property and equipment, net | $ 129,126 | 127,267 | ||
Fortman Insurance Agency, LLC [Member] | Land Improvements [Member] | ||||
Property and equipment, useful life | 15 years | |||
Property and equipment, gross | $ 25,500 | 25,500 | ||
Fortman Insurance Agency, LLC [Member] | Vehicles [Member] | ||||
Property and equipment, useful life | 5 years | |||
Property and equipment, gross | $ 119,594 | 116,325 | ||
Fortman Insurance Agency, LLC [Member] | Office Equipment Furniture And Fixtures [Member] | ||||
Property and equipment, useful life | 7 years | |||
Property and equipment, gross | $ 7,780 | $ 7,780 |
Debt (Details Narrative) (Fortm
Debt (Details Narrative) (Fortman Insurance Agency, LLC) - Fortman Insurance Agency, LLC [Member] - USD ($) | Aug. 11, 2018 | Dec. 28, 2016 | Feb. 26, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Note Agreement One [Member] | |||||
Proceeds from note payable | $ 50,160 | ||||
Debt instrument, interest rate | 3.00% | ||||
Outstanding principal balance of note payable | $ 0 | $ 42,412 | |||
Note Agreement Two [Member] | |||||
Proceeds from note payable | $ 40,210 | ||||
Debt instrument, interest rate | 2.25% | ||||
Debt instrument maturity date | Feb. 26, 2022 | ||||
Outstanding principal balance of note payable | 21,905 | 28,501 | |||
Note Agreement Three [Member] | |||||
Proceeds from note payable | $ 23,430 | ||||
Debt instrument, interest rate | 7.15% | ||||
Debt instrument maturity date | Aug. 17, 2022 | ||||
Outstanding principal balance of note payable | $ 21,616 | $ 0 |
Debt - Schedule of Debt (Deta_2
Debt - Schedule of Debt (Details) (Fortman Insurance Agency, LLC) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Long term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 | |
Less: current portion | 963,450 | 1,010,570 | 90,580 | |
Long-term debt | $ 8,197,264 | $ 8,270,955 | 1,621,101 | |
Fortman Insurance Agency, LLC [Member] | ||||
Long term debt total | 43,521 | $ 70,913 | ||
Less: current portion | 14,677 | 13,037 | ||
Long-term debt | 28,844 | 57,876 | ||
Fortman Insurance Agency, LLC [Member] | Vehicle Note Payable Due December 2022 [Member] | ||||
Long term debt total | 42,412 | |||
Fortman Insurance Agency, LLC [Member] | Vehicle Note Payable Due February 2022 [Member] | ||||
Long term debt total | 21,905 | 28,501 | ||
Fortman Insurance Agency, LLC [Member] | Vehicle Note Payable Due August 2022 [Member] | ||||
Long term debt total | $ 21,616 |
Debt - Schedule of Future Min_2
Debt - Schedule of Future Minimum Payments (Details) (Fortman Insurance Agency, LLC) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
2019 | $ 963,450 | $ 1,010,570 | ||
Long-term debt total | $ 9,160,714 | $ 9,281,525 | $ 1,711,681 | |
Fortman Insurance Agency, LLC [Member] | ||||
2019 | 14,677 | |||
2020 | 14,677 | |||
2021 | 11,975 | |||
2022 | 2,191 | |||
Long-term debt total | $ 43,521 | $ 70,913 |
Significant Customers (Detail_2
Significant Customers (Details Narrative) (Fortman Insurance Agency, LLC) - Fortman Insurance Agency, LLC [Member] - Revenue [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance Carrier One [Member] | ||
Concentration of risk percentage | 13.00% | 15.00% |
Insurance Carrier Two [Member] | ||
Concentration of risk percentage | 12.00% | 12.00% |
Insurance Carrier Three [Member] | ||
Concentration of risk percentage | 12.00% |
Commitments and Related Party_8
Commitments and Related Party Transactions (Details Narrative) (Fortman Insurance Agency, LLC) - Fortman Insurance Agency, LLC [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating lease rent expenses | $ 81,960 | $ 80,160 |
Transeferred shares | 900 | |
Distribution of investment to members | $ 35,804 | |
Ottawa [Member] | ||
Operating lease cost, per month | 6,000 | |
Bluffton [Member] | ||
Operating lease cost, per month | $ 680 | |
operating lease expiration date | Mar. 1, 2020 |
Commitments and Related Party_9
Commitments and Related Party Transactions - Schedule of Future Minimum Lease Payments (Details) (Fortman Insurance Agency, LLC) - Fortman Insurance Agency, LLC [Member] | Dec. 31, 2018USD ($) |
2019 | $ 8,160 |
2020 | 2,720 |
Total | $ 10,880 |
Subsequent (Details Narrative)
Subsequent (Details Narrative) (Fortman Insurance Agency, LLC) | May 02, 2019USD ($) |
Fortman Insurance Agency, LLC [Member] | Subsequent Event [Member] | |
Business acquistion purchase price | $ 4,156,000 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies (Details Narrative) (Altruis Benefit Consultants, Inc.) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Marketing and advertising expenses | $ 33,497 | $ 30,832 | $ 101,259 | $ 77,249 | ||
Altruis Benefit Consultants Inc [Member] | ||||||
Fair value of other investments | $ 0 | $ 305,154 | ||||
Marketing and advertising expenses | $ 17,270 | $ 2,338 |
Significant Customers - Sched_3
Significant Customers - Schedule of Concentrations of Revenues (Details) (Altruis Benefit Consultants, Inc.) - Altruis Benefit Consultants Inc [Member] - Revenue [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance Carrier One [Member] | ||
Concentration of risk percentage | 51.00% | 40.00% |
Insurance Carrier Two [Member] | ||
Concentration of risk percentage | 19.00% | 19.00% |
Equity (Details Narrative) (Alt
Equity (Details Narrative) (Altruis Benefit Consultants, Inc.) - shares | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | |
Common stock, shares issued | 356,742,548 | 352,742,548 | 265,699,106 | |
Altruis Benefit Consultants Inc [Member] | ||||
Common stock, shares authorized | 60,000 | 60,000 | ||
Common stock, shares issued | 200 | 200 |
Commitments and Related Part_10
Commitments and Related Party Transactions (Details Narrative) (Altruis Benefit Consultants, Inc.) - Altruis Benefit Consultants Inc [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Rent expense | $ 48,074 | $ 31,798 |
Bingham, Michigan [Member] | ||
Operating lease cost, per month | $ 4,500 | |
Operating lease maturity | May 31, 2021 |
Commitments and Related Part_11
Commitments and Related Party Transactions - Schedule of Future Minimum Lease Payments (Details) (Altruis Benefit Consultants, Inc.) - Altruis Benefit Consultants Inc [Member] | Dec. 31, 2018USD ($) |
2019 | $ 54,000 |
2020 | 54,000 |
2021 | 23,000 |
Total | $ 131,000 |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) (Altruis Benefit Consultants, Inc.) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Altruis Benefit Consultants Inc [Member] | ||
Employer contribution expense | $ 2,449 | $ 8,275 |
Subsequent Events (Details Na_3
Subsequent Events (Details Narrative) (Altruis Benefit Consultants, Inc.) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Altruis Benefit Consultants Inc [Member] | Subsequent Event [Member] | |
Business acquistion purchase price | $ 7,200,000 |