Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 18, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40020 | |
Entity Registrant Name | RELIANCE GLOBAL GROUP, INC. | |
Entity Central Index Key | 0001812727 | |
Entity Tax Identification Number | 46-3390293 | |
Entity Incorporation, State or Country Code | FL | |
Entity Address, Address Line One | 300 Blvd. of the Americas | |
Entity Address, Address Line Two | Suite 105 | |
Entity Address, City or Town | Lakewood | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08701 | |
City Area Code | 732 | |
Local Phone Number | 380-4600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,631,048 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | RELI | |
Security Exchange Name | NASDAQ | |
Series A Warrants [Member] | ||
Title of 12(b) Security | Series A Warrants | |
Trading Symbol | RELIW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 2,116,333 | $ 505,410 |
Restricted cash | 1,437,961 | 1,404,359 |
Other receivables | 11,464 | |
Prepaid expense and other current assets | 164,154 | 245,535 |
Current assets - discontinued operations | 7,354 | 85,998 |
Total current assets | 4,707,763 | 3,265,379 |
Property and equipment, net | 155,511 | 162,767 |
Right-of-use assets | 921,531 | 1,018,952 |
Investment in NSURE, Inc. | 900,000 | 900,000 |
Intangibles, net | 12,889,277 | 9,085,092 |
Goodwill | 14,287,099 | 14,287,099 |
Other non-current assets | 23,285 | 23,284 |
Other assets - discontinued operations | 9,685,156 | |
Total assets | 33,884,466 | 38,427,729 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 1,076,612 | 951,382 |
Short term financing agreements | 38,312 | 106,817 |
Other payables | 1,182,055 | 1,476,113 |
Current portion of long-term debt | 1,235,052 | 1,118,721 |
Current portion of leases payable | 312,549 | 339,937 |
Earn-out liability, current portion | 1,555,692 | 2,153,478 |
Current liabilities - discontinued operations | 50,228 | 1,647,836 |
Total current liabilities | 5,450,500 | 7,794,284 |
Loans payable, related parties, less current portion | $ 958,743 | $ 1,669,515 |
Other Liability, Noncurrent, Related and Nonrelated Party Status [Extensible Enumeration] | Related Party [Member] | Related Party [Member] |
Long term debt, less current portion | $ 12,035,753 | $ 12,349,673 |
Leases payable, less current portion | 638,937 | 714,068 |
Earn-out liability, less current portion | 398,000 | 556,000 |
Warrant liabilities | 2,166,919 | 6,433,150 |
Non-current liabilities - discontinued operations | ||
Total liabilities | 21,648,852 | 29,516,690 |
Stockholders’ equity: | ||
Preferred stock, $0.086 par value; 750,000,000 shares authorized and 0 issued and outstanding as of March 31, 2023 and December 31, 2022 | ||
Common stock, $0.086 par value; 133,333,333 shares authorized and 1,566,048 and 1,219,573 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 134,660 | 104,883 |
Additional paid-in capital | 40,881,475 | 35,798,139 |
Stock subscription receivable | ||
Accumulated deficit | (28,780,521) | (26,991,983) |
Total stockholders’ equity | 12,235,614 | 8,911,039 |
Total liabilities and stockholders’ equity | 33,884,466 | 38,427,729 |
Nonrelated Party [Member] | ||
Current assets: | ||
Accounts receivable, related parties | 970,345 | 994,321 |
Related Party [Member] | ||
Current assets: | ||
Accounts receivable, related parties | $ 11,616 | $ 18,292 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.086 | |
Preferred Stock, Shares Authorized | 750,000,000 | |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.086 | $ 0.086 |
Common stock, shares authorized | 133,333,333 | 133,333,333 |
Common stock, shares issued | 1,566,048 | 1,219,573 |
Common stock, shares outstanding | 1,566,048 | 1,219,573 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | ||
Commission income | $ 3,939,103 | $ 3,058,697 |
Total revenue | 3,939,103 | 3,058,697 |
Operating expenses | ||
Commission expense | 1,083,326 | 785,611 |
Salaries and wages | 1,712,097 | 1,631,813 |
General and administrative expenses | 1,358,254 | 2,333,795 |
Marketing and advertising | 136,572 | 89,529 |
Depreciation and amortization | 541,873 | 468,278 |
Total operating expenses | 4,832,122 | 5,309,026 |
Loss from operations | (893,019) | (2,250,329) |
Other income | ||
Other expense, net | (389,351) | (107,751) |
Recognition and change in fair value of warrant liabilities | 4,266,231 | 11,845,964 |
Total other income | 3,876,880 | 11,738,213 |
Income from continuing operations | 2,983,861 | 9,487,884 |
Loss from discontinued operations | (4,772,399) | (147,884) |
Net (loss) income | $ (1,788,538) | $ 9,340,000 |
Basic (loss) earnings per share | ||
Continuing operations | $ 1.92 | $ 2.61 |
Discontinued operations | (3.07) | (0.15) |
Basic (loss) earnings per share | (1.15) | 2.46 |
Diluted loss per share | ||
Continuing operations | (0.59) | (9.57) |
Discontinued operations | (2.18) | (0.12) |
Diluted loss per share | $ (2.77) | $ (9.69) |
Weighted average number of shares outstanding - basic | 1,553,953 | 980,569 |
Weighted average number of shares outstanding - diluted | 2,185,847 | 1,195,480 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Common Stock Issuable [Member] | Additional Paid-in Capital [Member] | Subscription Receivable [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 62,815 | $ 27,329,201 | $ (20,000,000) | $ (33,458,145) | $ (26,066,129) | ||
Balance, shares at Dec. 31, 2021 | 730,407 | 0 | |||||
Share-based compensation | 739,960 | 739,960 | |||||
Net (loss) income | 9,340,000 | 9,340,000 | |||||
Shares issued due to private placement | $ 781 | $ 15,313 | (16,043) | 20,000,000 | 20,000,051 | ||
Shares issued due to private placement, shares | 9,076 | 178,059 | |||||
Shares issued pursuant to acquisition of Medigap | $ 3,475 | 4,759,976 | 4,763,451 | ||||
Shares issued pursuant to acquisition of Medigap, shares | 40,402 | ||||||
Exercise of Series A warrants | $ 2,150 | 2,472,850 | 2,475,000 | ||||
Exercise of Series A warrants, shares | 25,000 | ||||||
Issuance of prefunded Series C warrants in exchange for common shares | $ (18,788) | 18,788 | |||||
Issuance of prefunded Series C Warrants in exchange for common shares, shares | (218,462) | ||||||
Shares issued for vested stock awards | $ 34 | (34) | |||||
Shares issued for vested stock awards, shares | 400 | ||||||
Balance at Mar. 31, 2022 | $ 781 | $ 64,999 | 35,304,698 | (24,118,145) | 11,252,333 | ||
Balance, shares at Mar. 31, 2022 | 9,076 | 755,807 | 0 | ||||
Balance at Dec. 31, 2022 | $ 104,883 | 35,798,139 | (26,991,983) | 8,911,039 | |||
Balance, shares at Dec. 31, 2022 | 1,219,573 | ||||||
Share-based compensation | 43,797 | 43,797 | |||||
Common shares issued for earnout liability | $ 9,404 | 973,074 | 982,478 | ||||
Common shares issued to settle earnout liability, shares | 109,358 | ||||||
Common shares issued for Yes Americana loan | $ 5,740 | $ 639,260 | $ 645,000 | ||||
Common shares issued to settle loan - Yes Americana, shares | 66,743 | ||||||
Share round up due to reverse split | 1,300 | (5,946) | (4,646) | ||||
Share round up due to reverse split, shares | 15,336 | ||||||
Shares issued for private placement | $ 13,333 | $ 3,433,151 | $ 3,446,484 | ||||
Private placement of shares | 155,038 | ||||||
Net (loss) income | (1,788,538) | (1,788,538) | |||||
Balance at Mar. 31, 2023 | $ 134,660 | $ 40,881,475 | $ (28,780,521) | $ 12,235,614 | |||
Balance, shares at Mar. 31, 2023 | 1,566,048 | 262,684 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (1,788,538) | $ 9,340,000 |
Adjustment to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 541,873 | 468,279 |
Amortization of debt issuance costs and accretion of debt discount | 11,721 | 6,467 |
Non-cash lease expense | (5,098) | 2,597 |
Stock compensation expense | 43,797 | 739,960 |
Recognition and change in fair value of warrant liability | (4,266,231) | (11,845,964) |
Earn-out fair value and write-off adjustments | 476,692 | 407,071 |
Change in fair value of warrant liability | ||
Change in operating assets and liabilities: | ||
Accounts payables and other accrued liabilities | 125,229 | (1,875,191) |
Accounts receivable | 23,976 | (48,228) |
Accounts receivable, related parties | 6,676 | 5,489 |
Other receivables | 11,464 | (4,361) |
Other payables | (294,058) | (1,998) |
Other non-current assets | (52,992) | |
Prepaid expense and other current assets | 81,381 | 2,220,963 |
Net cash used in continuing operating activities | (5,031,116) | (637,908) |
Net cash adjustments for discontinued operating activities | 3,966,238 | 294,628 |
Total net cash used in continuing and discontinued operating activities | (1,064,878) | (343,280) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (6,695) | |
Purchase of intangibles | (73,894) | (249,235) |
Net cash used in investing activities | (80,589) | (249,235) |
Net cash used in discontinued investing activities | (15,708) | (18,142,858) |
Total net cash used in continuing and discontinued investing activities | (96,297) | (18,392,093) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal repayments of debt | (207,580) | (227,172) |
Repayments on short term financing | (98,004) | |
Proceeds from loans payable, related parties | 345,000 | |
Payments on loans payable, related parties | (412,500) | (10,770) |
Payments of earn-out liabilities | (250,000) | |
Proceeds from exercise of warrants into common stock | 2,475,000 | |
Proceeds from private placement of shares and warrants | 3,446,484 | 17,853,351 |
Net cash provided by continuing financing activities | 2,823,400 | 20,090,409 |
Net cash used in discontinued financing activities | (17,700) | |
Total net cash provided by continuing and discontinued financing activities | 2,805,700 | 20,090,409 |
Net increase in cash and restricted cash | 1,644,525 | 1,355,036 |
Cash and restricted cash at beginning of year | 1,909,769 | 4,620,722 |
Cash and restricted cash at end of year | 3,554,294 | 5,975,758 |
SUPPLEMENTAL DISCLOSURE OF CASH AND NON-CASH TRANSACTIONS: | ||
Cash paid for interest | 382,410 | 105,447 |
Common stock issuance to repay related party liability | 645,000 | |
Common stock issuance to settle earn-out liabilities | 982,478 | |
Private placement equity financing costs | 552,618 | |
Issuance of Series D Warrants | 6,930,335 | |
Issuance of placement agent warrants | 1,525,923 | |
Conversion of common stock into Series C Warrants | 281,815 | |
Common stock issued pursuant to acquisition | $ 4,763,451 |
SUMMARY OF BUSINESS AND SIGNIFI
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Reliance Global Group, Inc., formerly known as Ethos Media Network, Inc. (“RELI”, “Reliance”, or the “Company”), was incorporated in Florida on August 2, 2013. Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The accompanying unaudited condensed consolidated financial statements include the accounts of Reliance Global Group, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Liquidity As of March 31, 2023, the Company’s reported cash and restricted cash aggregated balance was approximately $ 3,554,000 4,708,000 5,451,000 742,000 12,236,000 893,000 4,266,000 2,984,000 4,772,000 1,789,000 3,446,000 Although there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these financial statements with the Securities and Exchange Commission (“SEC”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Cash and Restricted Cash Cash and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows: SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW March 31, 2023 March 31, 2022 Cash $ 2,116,333 $ 5,491,407 Restricted cash 1,437,961 484,351 Total cash and restricted cash $ 3,554,294 $ 5,975,758 Fair Value of Financial Instruments Level 1 — Observable inputs reflecting quoted prices (unadjusted) in active markets for identical assets and liabilities; 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. Warrant Liabilities: SCHEDULE OF EARN OUT LIABILITY March 31, 2023 December 31, 2022 Stock price $ 3.01 $ 8.55 Volatility 105.0 % 105.0 % Time to expiry 3.76 4.01 Dividend yield 0 % 0 % Risk free rate 3.7 % 4.1 % The following reconciles fair value of the liability classified warrants: SCHEDULE OF RECONCILES WARRANT COMMITMENT Series B Warrant Commitment Series B Warrant Liabilities Placement Agent Warrants Total Beginning balance, December 31, 2021 $ 37,652,808 $ - $ - $ 37,652,808 Initial recognition - 55,061,119 1,525,924 56,587,043 Unrealized loss (gain) 17,408,311 (48,668,869 ) (1,477,024 ) (32,737,582 ) Warrants exercised or transferred (55,061,119 ) (8,000 ) - (55,069,119 ) Ending balance, December 31, 2022 $ - $ 6,384,250 $ 48,900 $ 6,433,150 Unrealized (gain) loss - $ (4,226,950 ) $ (39,281 ) $ (4,266,231 ) Ending balance, March 31, 2023 $ - $ 2,157,300 $ 9,619 $ 2,166,919 Earn-out liabilities: SCHEDULE OF FAIR VALUE MEASUREMENTS March 31, 2023 December 31, 2022 Valuation technique Discounted cash flow Discounted cash flow Significant unobservable input Projected revenue and probability of achievement Projected revenue and probability of achievement The Company values its Level 3 earn-out liability related to the Barra Acquisition using a Monte Carlo simulation in a risk-neutral framework (a special case of the Income Approach). The following summarizes the significant unobservable inputs: SCHEDULE OF EARN OUT LIABILITY March 31, 2023 WACC Risk Premium: 13.5 % Volatility 50 % Credit Spread: 13 % Payment Delay (days) 90 Risk free rate USD Yield Curve Discounting Convention: Mid-period Number of Iterations 100,000 Undiscounted remaining earn out payments were approximately $ 2,123,442 SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE March 31, 2023 December 31, 2022 Beginning balance – January 1 $ 2,709,478 $ 3,813,878 Acquisitions and settlements (1,232,478 ) (1,104,925 ) Period adjustments: Fair value changes included in earnings * 476,692 525 Ending balance $ 1,953,692 $ 2,709,478 Less: Current portion (1,555,692 ) (2,153,478 ) Ending balance, less current portion 398,000 556,000 * Recorded as a reduction to general and administrative expenses Revenue Recognition The following table disaggregates the Company’s revenue by line of business, showing commissions earned: SCHEDULE OF DISAGGREGATION REVENUE Three Months ended March 31, 2023 Medical/Life Property and Casualty Total Regular EBS $ 237,380 $ - $ 237,380 USBA 12,029 - 12,029 CCS/UIS - 46,770 46,770 Montana 490,994 - 490,994 Fortman 306,270 208,145 514,415 Altruis 1,868,136 - 1,868,136 Kush 320,291 - 320,291 Barra 94,707 354,381 449,088 Total $ 3,329,807 $ 609,296 $ 3,939,103 Three Months ended March 31, 2022 Medical/Life Property and Casualty Total Regular EBS $ 221,184 $ - $ 221,184 USBA 13,587 - 13,587 CCS/UIS - 43,881 43,881 Montana 506,721 - 506,721 Fortman 332,600 197,260 529,860 Altruis 1,304,872 - 1,304,872 Kush 438,592 - 438,592 Revenue $ 2,817,556 $ 241,141 $ 3,058,697 The following are customers representing 10% or more of total revenue: SCHEDULE OF CONCENTRATIONS OF REVENUES Three Months ended March 31, Insurance Carrier 2023 2022 Priority Health 43 % 32 % BlueCross BlueShield 13 % 13 % Insurance Carrier 13 % 13 % No other single customer accounted for more than 10 Income Taxes The Company recorded no income tax expense for the three months ended March 31, 2023 and 2022 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of March 31, 2023 Discontinued Operations The Company’s board of directors approved the discontinuation of Medigap Healthcare Insurance Company, LLC (“Medigap”), a subsidiary of the Company, effective April 17, 2023, due to Medigap’s sustained recurring losses stemming from amongst other factors, greater than anticipated revenue chargebacks. Aside for retaining certain assets of Medigap that have continued use to the Company, Medigap’s assets were considered impaired and the Company recognized a net of estimated liability adjustments loss of $ 4.4 million, presented in discontinued operations in the consolidated statement of operations for the period ended March 31, 2023. The Company does not expect further continuing involvement with Medigap, and in accordance with ASC 205-20-45-9, no corporate overhead has been allocated to discontinued operations. Recently Issued Accounting Pronouncements We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS The following table rolls forward the Company’s goodwill balance for the periods ending March 31, 2023 and December 31, 2022. SCHEDULE OF IMPAIRMENT OF GOODWILL Goodwill December 31, 2021 $ 10,050,277 Goodwill recognized in connection with Barra acquisition on April 26, 2022 4,236,822 December 31, 2022 14,287,099 March 31, 2023 $ 14,287,099 The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of March 31, 2023: SCHEDULE OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 2.3 $ 1,807,188 $ (1,056,995 ) $ 750,193 Internally developed software 3.9 1,723,780 (373,580 ) 1,350,200 Customer relationships 7.5 11,922,290 (2,355,705 ) 9,566,585 Purchased software 3.7 665,136 (592,312 ) 72,824 Video Production Assets 0 50,000 (50,000 ) - Non-competition agreements 1.6 3,504,810 (2,355,335 ) 1,149,475 $ 19,673,204 $ (6,783,927 ) $ 12,889,277 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, 2022: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 2.5 $ 1,806,188 $ (969,241 ) $ 836,947 Internally developed software 4.2 1,529,018 (269,786 ) 1,259,232 Customer relationships 7.8 7,372,290 (1,708,767 ) 5,663,523 Purchased software 0 562,327 (562,327 ) - Video Production Assets 0 50,000 (50,000 ) - Non-competition agreements 1.9 3,504,810 (2,179,420 ) 1,325,390 $ 14,824,633 $ (5,739,541 ) $ 9,085,092 The following table reflects expected amortization expense as of March 31, 2023, for each of the following five years and thereafter: SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS Years ending December 31, Amortization Expense 2023 (remainder of year) $ 1,914,714 2024 2,177,765 2025 1,783,809 2026 1,515,517 2027 1,182,581 Thereafter 4,314,891 Total $ 12,889,277 |
LONG-TERM DEBT AND SHORT-TERM F
LONG-TERM DEBT AND SHORT-TERM FINANCINGS | 3 Months Ended |
Mar. 31, 2023 | |
Long-term Debt And Short-term Financings | |
LONG-TERM DEBT AND SHORT-TERM FINANCINGS | NOTE 3. LONG-TERM DEBT AND SHORT-TERM FINANCINGS Long-Term Debt The composition of the long-term debt follows: SCHEDULE OF LONG TERM DEBT March 31, 2023 December 31, 2022 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $11,833 and $12,388 as of March 31, 2023 and December 31, 2022, respectively $ 412,763 $ 426,883 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5 August 2028 11,833 12,388 $ 412,763 $ 426,883 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5 December 2028 14,438 15,076 671,685 693,682 Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0 April 2029 8,837 9,206 765,592 788,596 Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0 May 2029 35,389 36,843 1,931,005 1,987,846 Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0 September 2029 40,509 42,129 3,162,591 3,249,575 Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5 May 2032 192,831 198,188 6,327,169 6,321,812 13,270,805 13,468,394 Less: current portion (1,235,052 ) (1,118,721 ) Long-term debt $ 12,035,753 $ 12,349,673 Oak Street Funding LLC – Term Loans and Credit Facilities SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES Fiscal year ending December 31, Maturities of Long-Term Debt 2023 (remainder of year) $ 893,877 2024 1,411,275 2025 1,567,542 2026 1,736,878 2027 1,924,523 Thereafter 6,040,548 Total 13,574,643 Less: debt issuance costs (303,838 ) Total $ 13,270,805 Short-Term Financings The Company has various short-term notes payable for financed items such as insurance premiums and CRM software purchases. Total financed for the quarters ended March 31, 2023, and 2022, respectively, was approximately $ 154,000 and $ 0 . These are normally paid in equal installments over a period of twelve months or less and carry interest rates ranging between 0 % and 8 % per annum. As of March 31, 2023 and 2022, respectively, approximately $ 38,000 and $ 0 remained outstanding on short-term financings. |
WARRANT LIABILITIES
WARRANT LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Warrant Liabilities | |
WARRANT LIABILITIES | NOTE 4. WARRANT LIABILITIES Series B Warrants Pursuant to the terms of the SPA, during the quarter ended March 31, 2023, the Series B Warrants’ effective exercise price reset to $ 3.55 1,331,667 For the periods ended March 31, 2023 and 2022, net fair value gains and losses recognized for the Series B Warrants were $ 4,226,950 12,425,426 2,157,300 6,384,250 Placement Agent Warrants For the periods ended March 31, 2023 and 2022, net fair value gains and losses recognized for the Placement Agent Warrants (“PAW”) were, a gain of $ 39,281 579,463, 9,619 48,900, |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 5. EQUITY Common Stock The Company is authorized to issue 133,333,333 0.086 On February 23, 2023, pursuant to authority granted by the Board of Directors of the Company, the Company implemented a 1-for-15 reverse split 15,300 1,300 In March of 2023 Yes Americana, a related party, converted $ 645,000 66,743 9.67 66,743 In March of 2023 the company issued 155,038 As of March 31, 2023 and December 31, 2022, there were 1,566,048 1,219,573 Warrants Series A Warrants In conjunction with the Company’s initial public offering, the Company issued 138,000 0.15 110 99.00 25,000 113,000 Series E and F Warrants On March 13, 2023, the Company entered into a securities purchase agreement (the “SPA-2023”) with one institutional buyer for the purchase and sale of, (i) an aggregate of 155,038 0.086 897,594 2,105,264 52,632 entered into a registration rights agreement with the buyer to register for resale the common shares underlying the Series E and F Warrants. The aggregate purchase price for the Common Shares, Prefunded Warrants (Series E Warrants) and the Common Warrants (Series F Warrants) to be purchased by the Buyer shall be equal to (i) $ 3.80 3.799 0.001 The Common Warrant (Series F) has an exercise price of $ 3.55 . The Common Warrant will be exercisable six months following the date of issuance and will expire five and a half years from the date of issuance. 3.91 The closing of the Private Placement-2023 occurred on March 16, 2023. EF Hutton, a division of Benchmark Investments, LLC (the “Placement Agent”) acted as the sole placement agent and was entitled to an 8 Gross and net proceeds to the Company from the were approximately $ 4 3.4 553,000 The Company determined the Series E Warrants, Series F Warrants, and PA Warrants are equity in nature because of provisions, pursuant to the warrant agreements, that permit the holder to obtain a fixed number of shares for a fixed monetary amount. The values offset to $ 0 Equity -based Compensation During the period ending March 31, 2023, an executive was awarded an annual stock award in conjunction with a promotion agreement, consisting of 2,667 5,842 Total stock-based compensation expense recorded in general and administrative expenses in the condensed consolidated statements of operations for the periods ended March 31, 2023 and 2022 was $ 43,797 739,960 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 6. EARNINGS (LOSS) PER SHARE Basic earnings per common share (“EPS”) applicable to common stockholders is computed by dividing earnings applicable to common stockholders by the weighted-average number of common shares outstanding. If there is a loss from operations, diluted EPS is computed in the same manner as basic EPS is computed. Similarly, if the Company has net income but its preferred dividend adjustment made in computing income available to common stockholders results in a net loss available to common stockholders, diluted EPS would be computed in the same manner as basic EPS. The following calculates basic and diluted EPS: SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS Three Months Three Months Ended Ended March 31, 2023 March 31, 2022 Income from continuing operations $ 2,983,861 $ 9,487,884 Deemed dividend - (6,930,335 ) Net income continuing operations, numerator, basic computation 2,983,861 2,557,549 Recognition and change in fair value of warrant liabilities (4,266,231 ) (13,992,664 ) Net loss continuing operations, numerator, diluted computation $ (1,282,370 ) $ (11,435,115 ) Weighted average common shares, basic 1,553,953 980,569 Effect of series B warrants 631,894 214,911 Weighted average common shares, dilutive 2,185,847 1,195,480 Earnings (loss) per common share – basic $ 1.92 $ 2.61 Earnings (loss) per common share – diluted (0.59 ) (9.57 ) The reversal of the gain on the change fair value of the Series B warrant liability for the three months March 31, 2023 and 2022 is included in the numerator of the dilutive EPS calculation to eliminate the effects the warrants as the impact is dilutive. SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARES March 31, 2023 March 31, 2022 For the Three Months Ended March 31, 2023 March 31, 2022 Shares subject to outstanding common stock options 10,928 10,928 Shares subject to outstanding Series A warrants 113,000 113,000 Shares subject to outstanding Series F warrants 2,105,264 - Shares subject to placement agent warrants 52,632 - Shares subject to unvested stock awards 7,709 661 Shares subject to conversion of Series B preferred stock - 147,939 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
LEASES | NOTE 7. LEASES Operating lease expense for the three months ended March 31, 2023 and 2022 was $ 161,614 145,662, 3.85 5.60 Future minimum lease payment under these operating leases consisted of the following: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT Period ending March 31, 2023 Operating Lease Obligations 2023 $ 271,267 2024 269,908 2025 144,124 2026 113,738 2027 117,150 Thereafter 151,052 Total undiscounted operating lease payments 1,067,239 Less: Imputed interest 115,753 Present value of operating lease liabilities $ 951,486 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8. 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 March 31, 2023 and December 31, 2022. 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. Earn-out liabilities The following outlines changes to the Company’s earn-out liability balances for the respective periods ended March 31, 2023 and December 31, 2022: SCHEDULE OF EARN-OUT LIABILITY Fortman Montana Altruis Kush Barra Total Ending balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478 Changes due to payments - (250,000 ) (834,943 ) (147,535 ) - (1,232,478 ) Changes due to fair value adjustments 394,467 150,000 94,225 - (162,000 ) 476,692 Ending balance March 31, 2023 $ 1,061,467 $ 400,000 $ 94,225 $ - $ 398,000 $ 1,953,692 Fortman Montana Altruis Kush Barra Total Ending balance December 31, 2021 $ 515,308 $ 615,969 $ 992,868 $ 1,689,733 $ - $ 3,813,878 Changes due to business combinations - - - - 600,000 600,000 Changes due to payments (34,430 ) (326,935 ) (84,473 ) (1,259,087 ) - (1,704,925 ) Changes due to fair value adjustments 186,122 210,966 (73,452 ) (283,111 ) (40,000 ) 525 Ending balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9. RELATED PARTY TRANSACTIONS On September 13, 2022, the Company issued a promissory note to YES Americana Group, LLC, (Americana) a related party entity for the principal sum of $ 1,500,000 On February 7, 2023, the Company and Americana entered into an amendment to the Note pursuant to which (i) the principal amount of the Note was increased to $ 1,845,000 0.086 On February 13, 2023, Americana effectuated a conversion of $ 645,000 66,743 0.086 400,000 800,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10. SUBSEQUENT EVENTS During April 2023, the Company sold its remaining 262,684 900,000 262,684 zero |
SUMMARY OF BUSINESS AND SIGNI_2
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The accompanying unaudited condensed consolidated financial statements include the accounts of Reliance Global Group, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Liquidity | Liquidity As of March 31, 2023, the Company’s reported cash and restricted cash aggregated balance was approximately $ 3,554,000 4,708,000 5,451,000 742,000 12,236,000 893,000 4,266,000 2,984,000 4,772,000 1,789,000 3,446,000 Although there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these financial statements with the Securities and Exchange Commission (“SEC”). |
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, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Cash and Restricted Cash | Cash and Restricted Cash Cash and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows: SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW March 31, 2023 March 31, 2022 Cash $ 2,116,333 $ 5,491,407 Restricted cash 1,437,961 484,351 Total cash and restricted cash $ 3,554,294 $ 5,975,758 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Level 1 — Observable inputs reflecting quoted prices (unadjusted) in active markets for identical assets and liabilities; 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. Warrant Liabilities: SCHEDULE OF EARN OUT LIABILITY March 31, 2023 December 31, 2022 Stock price $ 3.01 $ 8.55 Volatility 105.0 % 105.0 % Time to expiry 3.76 4.01 Dividend yield 0 % 0 % Risk free rate 3.7 % 4.1 % The following reconciles fair value of the liability classified warrants: SCHEDULE OF RECONCILES WARRANT COMMITMENT Series B Warrant Commitment Series B Warrant Liabilities Placement Agent Warrants Total Beginning balance, December 31, 2021 $ 37,652,808 $ - $ - $ 37,652,808 Initial recognition - 55,061,119 1,525,924 56,587,043 Unrealized loss (gain) 17,408,311 (48,668,869 ) (1,477,024 ) (32,737,582 ) Warrants exercised or transferred (55,061,119 ) (8,000 ) - (55,069,119 ) Ending balance, December 31, 2022 $ - $ 6,384,250 $ 48,900 $ 6,433,150 Unrealized (gain) loss - $ (4,226,950 ) $ (39,281 ) $ (4,266,231 ) Ending balance, March 31, 2023 $ - $ 2,157,300 $ 9,619 $ 2,166,919 Earn-out liabilities: SCHEDULE OF FAIR VALUE MEASUREMENTS March 31, 2023 December 31, 2022 Valuation technique Discounted cash flow Discounted cash flow Significant unobservable input Projected revenue and probability of achievement Projected revenue and probability of achievement The Company values its Level 3 earn-out liability related to the Barra Acquisition using a Monte Carlo simulation in a risk-neutral framework (a special case of the Income Approach). The following summarizes the significant unobservable inputs: SCHEDULE OF EARN OUT LIABILITY March 31, 2023 WACC Risk Premium: 13.5 % Volatility 50 % Credit Spread: 13 % Payment Delay (days) 90 Risk free rate USD Yield Curve Discounting Convention: Mid-period Number of Iterations 100,000 Undiscounted remaining earn out payments were approximately $ 2,123,442 SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE March 31, 2023 December 31, 2022 Beginning balance – January 1 $ 2,709,478 $ 3,813,878 Acquisitions and settlements (1,232,478 ) (1,104,925 ) Period adjustments: Fair value changes included in earnings * 476,692 525 Ending balance $ 1,953,692 $ 2,709,478 Less: Current portion (1,555,692 ) (2,153,478 ) Ending balance, less current portion 398,000 556,000 * Recorded as a reduction to general and administrative expenses |
Investment, Policy [Policy Text Block] | |
Revenue Recognition | Revenue Recognition The following table disaggregates the Company’s revenue by line of business, showing commissions earned: SCHEDULE OF DISAGGREGATION REVENUE Three Months ended March 31, 2023 Medical/Life Property and Casualty Total Regular EBS $ 237,380 $ - $ 237,380 USBA 12,029 - 12,029 CCS/UIS - 46,770 46,770 Montana 490,994 - 490,994 Fortman 306,270 208,145 514,415 Altruis 1,868,136 - 1,868,136 Kush 320,291 - 320,291 Barra 94,707 354,381 449,088 Total $ 3,329,807 $ 609,296 $ 3,939,103 Three Months ended March 31, 2022 Medical/Life Property and Casualty Total Regular EBS $ 221,184 $ - $ 221,184 USBA 13,587 - 13,587 CCS/UIS - 43,881 43,881 Montana 506,721 - 506,721 Fortman 332,600 197,260 529,860 Altruis 1,304,872 - 1,304,872 Kush 438,592 - 438,592 Revenue $ 2,817,556 $ 241,141 $ 3,058,697 The following are customers representing 10% or more of total revenue: SCHEDULE OF CONCENTRATIONS OF REVENUES Three Months ended March 31, Insurance Carrier 2023 2022 Priority Health 43 % 32 % BlueCross BlueShield 13 % 13 % Insurance Carrier 13 % 13 % No other single customer accounted for more than 10 |
Income Taxes | Income Taxes The Company recorded no income tax expense for the three months ended March 31, 2023 and 2022 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of March 31, 2023 |
Discontinued Operations | Discontinued Operations The Company’s board of directors approved the discontinuation of Medigap Healthcare Insurance Company, LLC (“Medigap”), a subsidiary of the Company, effective April 17, 2023, due to Medigap’s sustained recurring losses stemming from amongst other factors, greater than anticipated revenue chargebacks. Aside for retaining certain assets of Medigap that have continued use to the Company, Medigap’s assets were considered impaired and the Company recognized a net of estimated liability adjustments loss of $ 4.4 million, presented in discontinued operations in the consolidated statement of operations for the period ended March 31, 2023. The Company does not expect further continuing involvement with Medigap, and in accordance with ASC 205-20-45-9, no corporate overhead has been allocated to discontinued operations. |
[custom:PriorPeriodAdjustmentPolicyTextBlock] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements. |
SUMMARY OF BUSINESS AND SIGNI_3
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Platform Operator, Crypto-Asset [Line Items] | |
SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW | Cash and restricted cash reported on our Condensed Consolidated Balance Sheets are reconciled to the total shown on our Condensed Consolidated Statements of Cash Flows as follows: SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW March 31, 2023 March 31, 2022 Cash $ 2,116,333 $ 5,491,407 Restricted cash 1,437,961 484,351 Total cash and restricted cash $ 3,554,294 $ 5,975,758 |
SCHEDULE OF EARN OUT LIABILITY | SCHEDULE OF EARN OUT LIABILITY March 31, 2023 December 31, 2022 Stock price $ 3.01 $ 8.55 Volatility 105.0 % 105.0 % Time to expiry 3.76 4.01 Dividend yield 0 % 0 % Risk free rate 3.7 % 4.1 % |
SCHEDULE OF RECONCILES WARRANT COMMITMENT | The following reconciles fair value of the liability classified warrants: SCHEDULE OF RECONCILES WARRANT COMMITMENT Series B Warrant Commitment Series B Warrant Liabilities Placement Agent Warrants Total Beginning balance, December 31, 2021 $ 37,652,808 $ - $ - $ 37,652,808 Initial recognition - 55,061,119 1,525,924 56,587,043 Unrealized loss (gain) 17,408,311 (48,668,869 ) (1,477,024 ) (32,737,582 ) Warrants exercised or transferred (55,061,119 ) (8,000 ) - (55,069,119 ) Ending balance, December 31, 2022 $ - $ 6,384,250 $ 48,900 $ 6,433,150 Unrealized (gain) loss - $ (4,226,950 ) $ (39,281 ) $ (4,266,231 ) Ending balance, March 31, 2023 $ - $ 2,157,300 $ 9,619 $ 2,166,919 |
SCHEDULE OF FAIR VALUE MEASUREMENTS | SCHEDULE OF FAIR VALUE MEASUREMENTS March 31, 2023 December 31, 2022 Valuation technique Discounted cash flow Discounted cash flow Significant unobservable input Projected revenue and probability of achievement Projected revenue and probability of achievement |
SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE | SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE March 31, 2023 December 31, 2022 Beginning balance – January 1 $ 2,709,478 $ 3,813,878 Acquisitions and settlements (1,232,478 ) (1,104,925 ) Period adjustments: Fair value changes included in earnings * 476,692 525 Ending balance $ 1,953,692 $ 2,709,478 Less: Current portion (1,555,692 ) (2,153,478 ) Ending balance, less current portion 398,000 556,000 * Recorded as a reduction to general and administrative expenses |
SCHEDULE OF DISAGGREGATION REVENUE | The following table disaggregates the Company’s revenue by line of business, showing commissions earned: SCHEDULE OF DISAGGREGATION REVENUE Three Months ended March 31, 2023 Medical/Life Property and Casualty Total Regular EBS $ 237,380 $ - $ 237,380 USBA 12,029 - 12,029 CCS/UIS - 46,770 46,770 Montana 490,994 - 490,994 Fortman 306,270 208,145 514,415 Altruis 1,868,136 - 1,868,136 Kush 320,291 - 320,291 Barra 94,707 354,381 449,088 Total $ 3,329,807 $ 609,296 $ 3,939,103 Three Months ended March 31, 2022 Medical/Life Property and Casualty Total Regular EBS $ 221,184 $ - $ 221,184 USBA 13,587 - 13,587 CCS/UIS - 43,881 43,881 Montana 506,721 - 506,721 Fortman 332,600 197,260 529,860 Altruis 1,304,872 - 1,304,872 Kush 438,592 - 438,592 Revenue $ 2,817,556 $ 241,141 $ 3,058,697 |
SCHEDULE OF CONCENTRATIONS OF REVENUES | The following are customers representing 10% or more of total revenue: SCHEDULE OF CONCENTRATIONS OF REVENUES Three Months ended March 31, Insurance Carrier 2023 2022 Priority Health 43 % 32 % BlueCross BlueShield 13 % 13 % Insurance Carrier 13 % 13 % |
Fair Value, Inputs, Level 3 [Member] | |
Platform Operator, Crypto-Asset [Line Items] | |
SCHEDULE OF EARN OUT LIABILITY | The Company values its Level 3 earn-out liability related to the Barra Acquisition using a Monte Carlo simulation in a risk-neutral framework (a special case of the Income Approach). The following summarizes the significant unobservable inputs: SCHEDULE OF EARN OUT LIABILITY March 31, 2023 WACC Risk Premium: 13.5 % Volatility 50 % Credit Spread: 13 % Payment Delay (days) 90 Risk free rate USD Yield Curve Discounting Convention: Mid-period Number of Iterations 100,000 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF IMPAIRMENT OF GOODWILL | The following table rolls forward the Company’s goodwill balance for the periods ending March 31, 2023 and December 31, 2022. SCHEDULE OF IMPAIRMENT OF GOODWILL Goodwill December 31, 2021 $ 10,050,277 Goodwill recognized in connection with Barra acquisition on April 26, 2022 4,236,822 December 31, 2022 14,287,099 March 31, 2023 $ 14,287,099 |
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 March 31, 2023: SCHEDULE OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 2.3 $ 1,807,188 $ (1,056,995 ) $ 750,193 Internally developed software 3.9 1,723,780 (373,580 ) 1,350,200 Customer relationships 7.5 11,922,290 (2,355,705 ) 9,566,585 Purchased software 3.7 665,136 (592,312 ) 72,824 Video Production Assets 0 50,000 (50,000 ) - Non-competition agreements 1.6 3,504,810 (2,355,335 ) 1,149,475 $ 19,673,204 $ (6,783,927 ) $ 12,889,277 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, 2022: Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name and trademarks 2.5 $ 1,806,188 $ (969,241 ) $ 836,947 Internally developed software 4.2 1,529,018 (269,786 ) 1,259,232 Customer relationships 7.8 7,372,290 (1,708,767 ) 5,663,523 Purchased software 0 562,327 (562,327 ) - Video Production Assets 0 50,000 (50,000 ) - Non-competition agreements 1.9 3,504,810 (2,179,420 ) 1,325,390 $ 14,824,633 $ (5,739,541 ) $ 9,085,092 |
SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS | The following table reflects expected amortization expense as of March 31, 2023, for each of the following five years and thereafter: SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS Years ending December 31, Amortization Expense 2023 (remainder of year) $ 1,914,714 2024 2,177,765 2025 1,783,809 2026 1,515,517 2027 1,182,581 Thereafter 4,314,891 Total $ 12,889,277 |
LONG-TERM DEBT AND SHORT-TERM_2
LONG-TERM DEBT AND SHORT-TERM FINANCINGS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-term Debt And Short-term Financings | |
SCHEDULE OF LONG TERM DEBT | The composition of the long-term debt follows: SCHEDULE OF LONG TERM DEBT March 31, 2023 December 31, 2022 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, net of deferred financing costs of $11,833 and $12,388 as of March 31, 2023 and December 31, 2022, respectively $ 412,763 $ 426,883 Oak Street Funding LLC Term Loan for the acquisition of EBS and USBA, variable interest of Prime Rate plus 2.5 August 2028 11,833 12,388 $ 412,763 $ 426,883 Oak Street Funding LLC Senior Secured Amortizing Credit Facility for the acquisition of CCS, variable interest of Prime Rate plus 1.5 December 2028 14,438 15,076 671,685 693,682 Oak Street Funding LLC Term Loan for the acquisition of SWMT, variable interest of Prime Rate plus 2.0 April 2029 8,837 9,206 765,592 788,596 Oak Street Funding LLC Term Loan for the acquisition of FIS, variable interest of Prime Rate plus 2.0 May 2029 35,389 36,843 1,931,005 1,987,846 Oak Street Funding LLC Term Loan for the acquisition of ABC, variable interest of Prime Rate plus 2.0 September 2029 40,509 42,129 3,162,591 3,249,575 Oak Street Funding LLC Term Loan for the acquisition of Barra, variable interest of Prime Rate plus 2.5 May 2032 192,831 198,188 6,327,169 6,321,812 13,270,805 13,468,394 Less: current portion (1,235,052 ) (1,118,721 ) Long-term debt $ 12,035,753 $ 12,349,673 |
SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES | SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES Fiscal year ending December 31, Maturities of Long-Term Debt 2023 (remainder of year) $ 893,877 2024 1,411,275 2025 1,567,542 2026 1,736,878 2027 1,924,523 Thereafter 6,040,548 Total 13,574,643 Less: debt issuance costs (303,838 ) Total $ 13,270,805 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS | The following calculates basic and diluted EPS: SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS Three Months Three Months Ended Ended March 31, 2023 March 31, 2022 Income from continuing operations $ 2,983,861 $ 9,487,884 Deemed dividend - (6,930,335 ) Net income continuing operations, numerator, basic computation 2,983,861 2,557,549 Recognition and change in fair value of warrant liabilities (4,266,231 ) (13,992,664 ) Net loss continuing operations, numerator, diluted computation $ (1,282,370 ) $ (11,435,115 ) Weighted average common shares, basic 1,553,953 980,569 Effect of series B warrants 631,894 214,911 Weighted average common shares, dilutive 2,185,847 1,195,480 Earnings (loss) per common share – basic $ 1.92 $ 2.61 Earnings (loss) per common share – diluted (0.59 ) (9.57 ) |
SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARES | SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARES March 31, 2023 March 31, 2022 For the Three Months Ended March 31, 2023 March 31, 2022 Shares subject to outstanding common stock options 10,928 10,928 Shares subject to outstanding Series A warrants 113,000 113,000 Shares subject to outstanding Series F warrants 2,105,264 - Shares subject to placement agent warrants 52,632 - Shares subject to unvested stock awards 7,709 661 Shares subject to conversion of Series B preferred stock - 147,939 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT | Future minimum lease payment under these operating leases consisted of the following: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT Period ending March 31, 2023 Operating Lease Obligations 2023 $ 271,267 2024 269,908 2025 144,124 2026 113,738 2027 117,150 Thereafter 151,052 Total undiscounted operating lease payments 1,067,239 Less: Imputed interest 115,753 Present value of operating lease liabilities $ 951,486 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF EARN-OUT LIABILITY | The following outlines changes to the Company’s earn-out liability balances for the respective periods ended March 31, 2023 and December 31, 2022: SCHEDULE OF EARN-OUT LIABILITY Fortman Montana Altruis Kush Barra Total Ending balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478 Changes due to payments - (250,000 ) (834,943 ) (147,535 ) - (1,232,478 ) Changes due to fair value adjustments 394,467 150,000 94,225 - (162,000 ) 476,692 Ending balance March 31, 2023 $ 1,061,467 $ 400,000 $ 94,225 $ - $ 398,000 $ 1,953,692 Fortman Montana Altruis Kush Barra Total Ending balance December 31, 2021 $ 515,308 $ 615,969 $ 992,868 $ 1,689,733 $ - $ 3,813,878 Changes due to business combinations - - - - 600,000 600,000 Changes due to payments (34,430 ) (326,935 ) (84,473 ) (1,259,087 ) - (1,704,925 ) Changes due to fair value adjustments 186,122 210,966 (73,452 ) (283,111 ) (40,000 ) 525 Ending balance December 31, 2022 $ 667,000 $ 500,000 $ 834,943 $ 147,535 $ 560,000 $ 2,709,478 |
SCHEDULE OF RESTRICTED CASH IN
SCHEDULE OF RESTRICTED CASH IN STATEMENT OF CASH FLOW (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Accounting Policies [Abstract] | |||
Cash | $ 2,116,333 | $ 505,410 | $ 5,491,407 |
Restricted cash | 1,437,961 | $ 1,404,359 | 484,351 |
Total cash and restricted cash | $ 3,554,294 | $ 5,975,758 |
SCHEDULE OF EARN OUT LIABILITY
SCHEDULE OF EARN OUT LIABILITY (Details) | 3 Months Ended | |
Mar. 31, 2023 shares | Dec. 31, 2022 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk free rate | USD Yield Curve | |
Discounting Convention | Mid-period | |
Number of iterations | 100,000 | |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 3.01 | 8.55 |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 105 | 105 |
Measurement Input, Price Volatility [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 50 | |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 3 years 9 months 3 days | 4 years 3 days |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 0 | 0 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 3.7 | 4.1 |
WACC Risk Premium [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 13.5 | |
Credit Spread [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 13 | |
Payment Delay (Days) [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn out liability | 90 days |
SCHEDULE OF RECONCILES WARRANT
SCHEDULE OF RECONCILES WARRANT COMMITMENT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Offsetting Assets [Line Items] | |||
Ending balance, December 31, 2022 | $ 6,433,150 | $ 37,652,808 | $ 37,652,808 |
Initial recognition | 56,587,043 | ||
Unrealized loss (gain) | 4,266,231 | (32,737,582) | |
Warrants exercised or transferred | (55,069,119) | ||
Unrealized (gain) loss | (4,266,231) | 32,737,582 | |
Ending balance, March 31, 2023 | 2,166,919 | 6,433,150 | |
Series B Warrant Commitment [Member] | |||
Offsetting Assets [Line Items] | |||
Ending balance, December 31, 2022 | 37,652,808 | 37,652,808 | |
Initial recognition | |||
Unrealized loss (gain) | 17,408,311 | ||
Warrants exercised or transferred | (55,061,119) | ||
Unrealized (gain) loss | (17,408,311) | ||
Ending balance, March 31, 2023 | |||
Series B Warrant Liabilities [Member] | |||
Offsetting Assets [Line Items] | |||
Ending balance, December 31, 2022 | 6,384,250 | ||
Initial recognition | 55,061,119 | ||
Unrealized loss (gain) | 4,226,950 | (48,668,869) | |
Warrants exercised or transferred | (8,000) | ||
Unrealized (gain) loss | (4,226,950) | 48,668,869 | |
Ending balance, March 31, 2023 | 2,157,300 | 6,384,250 | |
Placement Agent Warrants [Member] | |||
Offsetting Assets [Line Items] | |||
Ending balance, December 31, 2022 | 48,900 | ||
Initial recognition | 1,525,924 | ||
Unrealized loss (gain) | 39,281 | 579,463 | (1,477,024) |
Warrants exercised or transferred | |||
Unrealized (gain) loss | (39,281) | $ (579,463) | 1,477,024 |
Ending balance, March 31, 2023 | $ 9,619 | $ 48,900 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 3 [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Platform Operator, Crypto-Asset [Line Items] | ||
Valuation technique | Discounted cash flow | Discounted cash flow |
Significant unobservable input | Projected revenue and probability of achievement | Projected revenue and probability of achievement |
SCHEDULE OF GAIN OR LOSSES RECO
SCHEDULE OF GAIN OR LOSSES RECOGNIZED FAIR VALUE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | ||
Platform Operator, Crypto-Asset [Line Items] | |||
Beginning balance – January 1 | $ 2,709,478 | $ 3,813,878 | |
Ending balance | 1,953,692 | 2,709,478 | |
Less: Current portion | (1,555,692) | (2,153,478) | |
Ending balance, less current portion | 398,000 | 556,000 | |
Fair Value, Inputs, Level 3 [Member] | |||
Platform Operator, Crypto-Asset [Line Items] | |||
Beginning balance – January 1 | 2,709,478 | 3,813,878 | |
Acquisitions and settlements | (1,232,478) | (1,104,925) | |
Fair value changes included in earnings | [1] | 476,692 | 525 |
Ending balance | $ 1,953,692 | $ 2,709,478 | |
[1]Recorded as a reduction to general and administrative expenses |
SCHEDULE OF DISAGGREGATION REVE
SCHEDULE OF DISAGGREGATION REVENUE (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2021 | |
Product Information [Line Items] | ||
Revenue | $ 3,939,103 | $ 3,058,697 |
Employee Benefits Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 237,380 | 221,184 |
U S Benefits Alliance L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 12,029 | 13,587 |
Commercial Coverage Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 46,770 | 43,881 |
Southwestern Montana Financial Center Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | 490,994 | 506,721 |
Fortman Insurance Services L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 514,415 | 529,860 |
Altruis Benefits Consulting Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | 1,868,136 | 1,304,872 |
Kush [Member] | ||
Product Information [Line Items] | ||
Revenue | 320,291 | 438,592 |
Barra [Member] | ||
Product Information [Line Items] | ||
Revenue | 449,088 | |
Medical/Life [Member] | Regular [Member] | ||
Product Information [Line Items] | ||
Revenue | 3,329,807 | 2,817,556 |
Medical/Life [Member] | Regular [Member] | Employee Benefits Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 237,380 | 221,184 |
Medical/Life [Member] | Regular [Member] | U S Benefits Alliance L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 12,029 | 13,587 |
Medical/Life [Member] | Regular [Member] | Commercial Coverage Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Medical/Life [Member] | Regular [Member] | Southwestern Montana Financial Center Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | 490,994 | 506,721 |
Medical/Life [Member] | Regular [Member] | Fortman Insurance Services L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 306,270 | 332,600 |
Medical/Life [Member] | Regular [Member] | Altruis Benefits Consulting Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | 1,868,136 | 1,304,872 |
Medical/Life [Member] | Regular [Member] | Kush [Member] | ||
Product Information [Line Items] | ||
Revenue | 320,291 | 438,592 |
Medical/Life [Member] | Regular [Member] | Barra [Member] | ||
Product Information [Line Items] | ||
Revenue | 94,707 | |
Property and Casualty [Member] | Regular [Member] | ||
Product Information [Line Items] | ||
Revenue | 609,296 | 241,141 |
Property and Casualty [Member] | Regular [Member] | Employee Benefits Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Property and Casualty [Member] | Regular [Member] | U S Benefits Alliance L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Property and Casualty [Member] | Regular [Member] | Commercial Coverage Solutions L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 46,770 | 43,881 |
Property and Casualty [Member] | Regular [Member] | Southwestern Montana Financial Center Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Property and Casualty [Member] | Regular [Member] | Fortman Insurance Services L L C [Member] | ||
Product Information [Line Items] | ||
Revenue | 208,145 | 197,260 |
Property and Casualty [Member] | Regular [Member] | Altruis Benefits Consulting Inc [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Property and Casualty [Member] | Regular [Member] | Kush [Member] | ||
Product Information [Line Items] | ||
Revenue | ||
Property and Casualty [Member] | Regular [Member] | Barra [Member] | ||
Product Information [Line Items] | ||
Revenue | $ 354,381 |
SCHEDULE OF CONCENTRATIONS OF R
SCHEDULE OF CONCENTRATIONS OF REVENUES (Details) - Customer Concentration Risk [Member] - Revenue Benchmark [Member] | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Priority Health [Member] | ||
Product Information [Line Items] | ||
Insurance Carrier | 43% | 32% |
Blue Cross Blue Shield [Member] | ||
Product Information [Line Items] | ||
Insurance Carrier | 13% | 13% |
SUMMARY OF BUSINESS AND SIGNI_4
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | |||||
Restricted Cash and Cash Equivalents | $ 3,554,000 | $ 3,554,000 | |||
Assets, Current | 4,707,763 | 4,707,763 | $ 3,265,379 | ||
Liabilities, Current | 5,450,500 | 5,450,500 | 7,794,284 | ||
Working capital deficiency | 742,000 | 742,000 | |||
Equity, Attributable to Parent | 12,235,614 | 12,235,614 | $ 11,252,333 | $ 8,911,039 | $ (26,066,129) |
Operating Income (Loss) | 893,019 | 2,250,329 | |||
Derivative, Gain (Loss) on Derivative, Net | 4,266,000 | ||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | 2,983,861 | 9,487,884 | |||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 4,772,000 | ||||
Net loss | 1,788,538 | $ (9,340,000) | |||
[custom:NetProceedsFromPrivatePlacementIssuanceOfValueAndWarrant] | 3,446,000 | ||||
Earn out payments | $ 2,123,442 | 2,123,442 | |||
Medigap Healthcare Insurance Company LLC [Member] | Discontinued Operations [Member] | |||||
Product Information [Line Items] | |||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 4,400,000 | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer [Member] | |||||
Product Information [Line Items] | |||||
Concentration Risk, Percentage | 10% |
SCHEDULE OF IMPAIRMENT OF GOODW
SCHEDULE OF IMPAIRMENT OF GOODWILL (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Goodwill Beginning | $ 10,050,277 |
Goodwill | 14,287,099 |
Barra [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Goodwill acquired during period | $ 4,236,822 |
SCHEDULE OF INTANGIBLE ASSETS A
SCHEDULE OF INTANGIBLE ASSETS AND WEIGHTED-AVERAGE REMAINING AMORTIZATION PERIOD (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 19,673,204 | $ 14,824,633 |
Accumulated Amortization | (6,783,927) | (5,739,541) |
Net Carrying Amount | 12,889,277 | $ 9,085,092 |
Gross carrying amount | $ 12,889,277 | |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 2 years 3 months 18 days | 2 years 6 months |
Gross Carrying Amount | $ 1,807,188 | $ 1,806,188 |
Accumulated Amortization | (1,056,995) | (969,241) |
Net Carrying Amount | $ 750,193 | |
Gross carrying amount | $ 836,947 | |
Internally Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 3 years 10 months 24 days | 4 years 2 months 12 days |
Gross Carrying Amount | $ 1,723,780 | $ 1,529,018 |
Accumulated Amortization | (373,580) | (269,786) |
Net Carrying Amount | $ 1,350,200 | |
Gross carrying amount | $ 1,259,232 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 7 years 6 months | 7 years 9 months 18 days |
Gross Carrying Amount | $ 11,922,290 | $ 7,372,290 |
Accumulated Amortization | (2,355,705) | (1,708,767) |
Net Carrying Amount | $ 9,566,585 | |
Gross carrying amount | $ 5,663,523 | |
Purchased Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 3 years 8 months 12 days | 0 years |
Gross Carrying Amount | $ 665,136 | $ 562,327 |
Accumulated Amortization | (592,312) | (562,327) |
Net Carrying Amount | $ 72,824 | |
Gross carrying amount | ||
Video Production Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 0 years | 0 years |
Gross Carrying Amount | $ 50,000 | $ 50,000 |
Accumulated Amortization | (50,000) | (50,000) |
Net Carrying Amount | ||
Gross carrying amount | ||
Non-competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 1 year 7 months 6 days | 1 year 10 months 24 days |
Gross Carrying Amount | $ 3,504,810 | $ 3,504,810 |
Accumulated Amortization | (2,355,335) | (2,179,420) |
Net Carrying Amount | $ 1,149,475 | |
Gross carrying amount | $ 1,325,390 |
SCHEDULE OF AMORTIZATION EXPENS
SCHEDULE OF AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLES ASSETS (Details) | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remainder of year) | $ 1,914,714 |
2024 | 2,177,765 |
2025 | 1,783,809 |
2026 | 1,515,517 |
2027 | 1,182,581 |
Thereafter | 4,314,891 |
Total | $ 12,889,277 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Long term debt current | $ 13,270,805 | $ 13,468,394 |
Long term debt current | (1,235,052) | (1,118,721) |
Long term debt current | 12,035,753 | 12,349,673 |
SWMT [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | 765,592 | 788,596 |
FIS [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | 1,931,005 | 1,987,846 |
ABC [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | 3,162,591 | 3,249,575 |
Barra [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | 6,327,169 | 6,321,812 |
EBS and USBA [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | 412,763 | 426,883 |
CCS [Member] | ||
Line of Credit Facility [Line Items] | ||
Long term debt current | $ 671,685 | $ 693,682 |
SCHEDULE OF LONG TERM DEBT (D_2
SCHEDULE OF LONG TERM DEBT (Details) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
SWMT [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 2% | |
Maturity date | April 2029 | |
Net of deferred financing cost | $ 8,837 | $ 9,206 |
FIS [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 2% | |
Maturity date | May 2029 | |
Net of deferred financing cost | $ 35,389 | 36,843 |
ABC [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 2% | |
Maturity date | September 2029 | |
Net of deferred financing cost | $ 40,509 | 42,129 |
Barra [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 2.50% | |
Maturity date | May 2032 | |
Net of deferred financing cost | $ 192,831 | 198,188 |
EBS and USBA [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 2.50% | |
Maturity date | August 2028 | |
Net of deferred financing cost | $ 11,833 | 12,388 |
CCS [Member] | ||
Line of Credit Facility [Line Items] | ||
Variable interest of prime rate plus | 1.50% | |
Maturity date | December 2028 | |
Net of deferred financing cost | $ 14,438 | $ 15,076 |
SCHEDULE OF CUMULATIVE MATURITI
SCHEDULE OF CUMULATIVE MATURITIES OF LONG -TERM LOANS AND CREDIT FACILITIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Long-term Debt And Short-term Financings | ||
2023 (remainder of year) | $ 893,877 | |
2024 | 1,411,275 | |
2025 | 1,567,542 | |
2026 | 1,736,878 | |
2027 | 1,924,523 | |
Thereafter | 6,040,548 | |
Total | 13,574,643 | |
Less: debt issuance costs | (303,838) | |
Total | $ 13,270,805 | $ 13,468,394 |
LONG-TERM DEBT AND SHORT-TERM_3
LONG-TERM DEBT AND SHORT-TERM FINANCINGS (Details Narrative) - USD ($) | Mar. 31, 2023 | Mar. 31, 2022 |
Long-term Debt And Short-term Financings | ||
Debt Instrument, Face Amount | $ 154,000 | $ 0 |
Debt Instrument, Interest Rate, Stated Percentage | 0% | 8% |
Short-Term Bank Loans and Notes Payable | $ 38,000 | $ 0 |
WARRANT LIABILITIES (Details Na
WARRANT LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Mar. 13, 2023 | |
Offsetting Assets [Line Items] | ||||
Exercise price | $ 0.15 | $ 0.001 | ||
Net fair value gains losses | $ 4,266,231 | $ (32,737,582) | ||
Series B Warrants [Member] | ||||
Offsetting Assets [Line Items] | ||||
Exercise price | $ 3.55 | |||
Series B Warrant [Member] | ||||
Offsetting Assets [Line Items] | ||||
Number of shares issued | 1,331,667 | |||
Series B Warrant Liabilities [Member] | ||||
Offsetting Assets [Line Items] | ||||
Net fair value gains losses | $ 4,226,950 | $ 12,425,426 | ||
Warrant liability | 2,157,300 | 6,384,250 | ||
Placement Agent Warrants [Member] | ||||
Offsetting Assets [Line Items] | ||||
Net fair value gains losses | 39,281 | $ 579,463 | (1,477,024) | |
Warrant liability | $ 9,619 | $ 48,900 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||||
Mar. 16, 2023 | Mar. 13, 2023 | Feb. 23, 2023 | Mar. 13, 2022 | Mar. 31, 2023 | Jan. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 01, 2023 | Jan. 13, 2023 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Common stock, shares authorized | 133,333,333 | 133,333,333 | 133,333,333 | ||||||||
Common stock, par value | $ 0.086 | $ 0.086 | $ 0.086 | ||||||||
Stockholders' equity, reverse stock split | 1-for-15 reverse split | ||||||||||
Common stock, shares outstanding | 1,566,048 | 1,566,048 | 1,219,573 | ||||||||
Warrents exercise price | $ 0.001 | $ 0.15 | $ 0.15 | ||||||||
Gross proceeds cash fee | $ 8 | ||||||||||
Proceeds from issuance of debt | $ 4,000,000 | ||||||||||
Proceeds from issuance of debt | 3,400,000 | ||||||||||
Direct finnacing fee | 553,000 | ||||||||||
Additional paid in capital | $ 40,881,475 | 40,881,475 | $ 35,798,139 | ||||||||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | 2,667 | ||||||||||
Share-Based Payment Arrangement, Expense | 5,842 | ||||||||||
Stock compensation expense | 43,797 | $ 739,960 | |||||||||
Warrant Agreement [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Additional paid in capital | 0 | $ 0 | |||||||||
Series E [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, acquisitions | 2,105,264 | ||||||||||
Series F [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, acquisitions | 52,632 | ||||||||||
Americana [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Debt conversion original debt amount | $ 645,000 | ||||||||||
Debt Conversion converted instrument shares | 66,743 | ||||||||||
Debt instrument convertible conversion price | $ 9.67 | ||||||||||
Series A Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Class of common stock warrant | 138,000 | 138,000 | |||||||||
Warrents exercise price | $ 99 | $ 99 | |||||||||
Exercise price percentage | 110% | 110% | |||||||||
Exercise of series A warrants, shares | 113,000 | ||||||||||
Series E Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrents exercise price | 3.55 | ||||||||||
Series E Warrants [Member] | Common Unit [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrents exercise price | 3.80 | ||||||||||
Series E Warrants [Member] | Prefunded Unit [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrents exercise price | 3.799 | ||||||||||
PA Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Warrents exercise price | $ 3.91 | ||||||||||
Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Class of common stock warrant | 15,300 | ||||||||||
Number of shares issued | 155,038 | 155,038 | |||||||||
Exercise of series A warrants, shares | 25,000 | ||||||||||
Stock issued during period, shares, acquisitions | 40,402 | ||||||||||
Common Stock [Member] | Private Placement [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Number of shares issued | 155,038 | ||||||||||
Common Stock [Member] | Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Class of common stock warrant | 1,300 | ||||||||||
Common Stock [Member] | Series E And F Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Class of common stock warrant | 897,594 | ||||||||||
Series A Warrants [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Exercise of series A warrants, shares | 25,000 |
SCHEDULE OF CALCULATIONS OF BAS
SCHEDULE OF CALCULATIONS OF BASIC AND DILUTED EPS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Income from continuing operations | $ 2,983,861 | $ 9,487,884 |
Deemed dividend | (6,930,335) | |
Net income continuing operations, numerator, basic computation | 2,983,861 | 2,557,549 |
Recognition and change in fair value of warrant liabilities | (4,266,231) | (13,992,664) |
Net loss continuing operations, numerator, diluted computation | $ (1,282,370) | $ (11,435,115) |
Weighted average common shares, basic | 1,553,953 | 980,569 |
Effect of series B warrants | 631,894 | 214,911 |
Weighted average common shares, dilutive | 2,185,847 | 1,195,480 |
Earnings (loss) per common share – basic | $ 1.92 | $ 2.61 |
Earnings (loss) per common share – diluted | $ (0.59) | $ (9.57) |
SCHEDULE OF DILUTIVE NET LOSS P
SCHEDULE OF DILUTIVE NET LOSS PER COMMON SHARES (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 10,928 | 10,928 |
Series A Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 113,000 | 113,000 |
Series F Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 2,105,264 | |
Placement Agent Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 52,632 | |
Unvested Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 7,709 | 661 |
Conversion Of Series B Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to conversion of Series B preferred stock | 147,939 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT (Details) | Mar. 31, 2023 USD ($) |
Leases | |
2023 | $ 271,267 |
2024 | 269,908 |
2025 | 144,124 |
2026 | 113,738 |
2027 | 117,150 |
Thereafter | 151,052 |
Total undiscounted operating lease payments | 1,067,239 |
Less: Imputed interest | 115,753 |
Present value of operating lease liabilities | $ 951,486 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases | ||
Lease expense | $ 161,614 | $ 145,662 |
Weighted average remaining lease term | 3 years 10 months 6 days | |
Weighted average discount rate | 5.60% |
SCHEDULE OF EARN-OUT LIABILITY
SCHEDULE OF EARN-OUT LIABILITY (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | $ 2,709,478 | $ 3,813,878 |
Changes due to payments | (1,232,478) | (1,704,925) |
Changes due to fair value adjustments | 476,692 | 525 |
Ending balance | 1,953,692 | 2,709,478 |
Changes due to business combinations | 600,000 | |
Fortman Insurance Agency LLC [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | 667,000 | 515,308 |
Changes due to payments | (34,430) | |
Changes due to fair value adjustments | 394,467 | 186,122 |
Ending balance | 1,061,467 | 667,000 |
Changes due to business combinations | ||
Southwestern Montana Insurance Center Inc [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | 500,000 | 615,969 |
Changes due to payments | (250,000) | (326,935) |
Changes due to fair value adjustments | 150,000 | 210,966 |
Ending balance | 400,000 | 500,000 |
Changes due to business combinations | ||
Altruis Benefits Consultants Inc [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | 834,943 | 992,868 |
Changes due to payments | (834,943) | (84,473) |
Changes due to fair value adjustments | 94,225 | (73,452) |
Ending balance | 94,225 | 834,943 |
Changes due to business combinations | ||
JP Kush And Associates Inc [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | 147,535 | 1,689,733 |
Changes due to payments | (147,535) | (1,259,087) |
Changes due to fair value adjustments | (283,111) | |
Ending balance | 147,535 | |
Changes due to business combinations | ||
Barra [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance – January 1 | 560,000 | |
Changes due to payments | ||
Changes due to fair value adjustments | (162,000) | (40,000) |
Ending balance | $ 398,000 | 560,000 |
Changes due to business combinations | $ 600,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |||||
Feb. 13, 2023 | Feb. 07, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Sep. 13, 2022 | |
Promissory note principle | $ 154,000 | $ 0 | ||||
Common stock par value | $ 0.086 | $ 0.086 | ||||
Repayment of related party debt | $ 412,500 | $ 10,770 | ||||
YES Americana Group LLC [Member] | ||||||
Promissory note principle | $ 1,845,000 | $ 1,500,000 | ||||
Debt instrument description | On February 7, 2023, the Company and Americana entered into an amendment to the Note pursuant to which (i) the principal amount of the Note was increased to $1,845,000, (ii) the maturity date of the Note was amended to January 15, 2026, (iii) the interest rate under the Note shall not increase after the maturity date, and (iv) the Note can be converted at any time, at the option of Americana, into shares of the Company’s common stock, par value $0.086 per share at an agreed upon conversion price | |||||
Common stock par value | $ 0.086 | $ 0.086 | ||||
Conversion of stock | $ 645,000 | |||||
Conversion of stock shares | 66,743 | |||||
Repayment of related party debt | 400,000 | |||||
Repayment of related party owed | $ 800,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | |
Apr. 30, 2023 | Mar. 31, 2023 | |
Subsequent Event [Line Items] | ||
Remaining balance shares | 262,684 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Sale of stock | 262,684 | |
Sale of stock | $ 900,000 | |
Remaining balance shares | 0 |