Reliance Global Group, Inc.

Greetings. Welcome to the Reliance Global Group Fourth Quarter Business Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Avis, Investor Relations. Ted, you may begin.

Thanks, Paul. Good afternoon, and thank you for joining Reliance Global Group's 2025 Fourth Quarter and Year-End Financial Results and Business Update Conference Call. On the call with us today are Ezra Baiman, Chairman and Chief Executive Officer of Reliance Global Group, and Joe Markovits, Chief Financial Officer of Reliance. Earlier today, the company announced its operating results for the quarter ended December 31, 2025, and the press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company will be filing its annual report on Form 10-K with the U.S. Securities and Exchange Commission today, which can also be accessed on the company's website as well as the SEC's website, www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Bayman reviews the company's operating results for the quarter end of December 31st, 2025, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. The words anticipate, estimate, expect, project, plan, seek, intend, believe, may, might, will, should, could, likely, continue, design, and the negative of such terms, in other words, in terms of similar expressions, are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's form 10-K file with the U.S. Securities and Exchange Commission. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or applied in the forward-looking statements. You should not reply upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, It cannot guarantee future results, level of activity, performance, or achievements. In addition, it is the company nor any other person that sees responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call. You should evaluate all forward-looking statements made by the company and in the context of these risks and uncertainties. Having said that, I would now like to turn the call over to Mr. Ezra Baiman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra?

Thanks, Ted. Good afternoon, and thank you to everyone for joining us today. When I think about 2025, what stands out most is the progress we've made reshaping the company for the future. Over the past year, we focused on strengthening the foundation of the business while beginning to execute on a broader strategy designed to expand reliance beyond its traditional insurance roots and into a technology-driven growth platform. In simple terms, our strategy is built around two complementary pillars. The first is our insurance and insure tech platform, which provides recurring revenue, strong industry relationships, and a stable operational foundation. The second is Ezra International Group and the Scale 51 model, which allows us to identify innovative technology companies and build meaningful ownership positions as those businesses grow and scale. Together, these pillars are designed to give reliance both operating stability and exposure to emerging technology opportunities that we believe can create long-term value. At the center of that strategy, is the Scale51 operating model, which operates within our Exra International Group platform. Scale51 is designed to identify innovative technology companies, acquire meaningful ownership positions, and actively support their growth as they scale into global markets. By leveraging our public company platform, operational expertise, and strategic relationships, we aim to help promising technologies move from early renovation to scalable commercial businesses. Through this model, we are targeting sectors where innovation and long-term growth opportunities are accelerating, including cybersecurity, artificial intelligence, fintech, and digital health. While Scale51 represents an important expansion of our strategy, it is built on a business that continues to generate stable operating performance. Our insurance and insured tech operations serve as the operational backbone of the company, generating recurring revenue while supporting our long-term initiatives. In 2025, these operations generated more than $12 million in commission income, demonstrating the strength of the platform we have built. A key driver of our platform is Rely Exchange, our technology-enabled distribution network that connects independent insurance agencies with carrier markets and operational tools that help them grow their businesses. We saw strong evidence of that growth during the year with personal lines, property, and casualty premiums generating through ReliExchange increasing approximately 36% year over year, and policies written during the most recent health insurance open enrollment season increasing approximately 72%. Since acquiring ReliExchange in 2022, our partner network has expanded from roughly 65 agencies to approximately 250 today, significantly increasing our distribution reach and supporting continued organic growth. At the same time, we took several steps during the year to strengthen our balance sheet and simplify our operating structure. As part of this effort, we monetized several non-core operations to sharpen our strategic focus and redeploy capital toward high growth opportunities. This included the sale of Fortman Insurance Services for $5 million in cash and the sale of employee benefits solutions and U.S. Benefits Alliance. While these businesses have been part of our portfolio for several years, we determined that redeploying the capital and management focus toward real-life exchange and our technology initiatives through Ezra International Group better aligns with our long-term strategy. These actions help simplify the organization, reduce operational complexity, and improve financial flexibility. With that foundation in place, We began executing on the scale 51 strategy through several initial transactions that illustrate the type of opportunities we intend to pursue over time. One example is our investment in InQuantum, a company developing next-generation post-quantum encryption technology designed to protect critical digital infrastructure as quantum computing advances. Quantum computing has the potential to fundamentally change cybersecurity. Many of the encryption systems currently protecting financial networks, cloud infrastructure, telecommunication systems, government data, and other critical structure, infrastructure, rely on mathematical problems that today's computers cannot easily solve. However, sufficiently advanced quantum computers could eventually break many of these existing cryptographic systems, creating what many experts view as one of the most significant long-term cybersecurity challenges facing the digital economy. Governments and industry are already preparing for this transition. New post-quantum encryption standards are being developed, and organizations are beginning to evaluate how they will migrate their systems to quantum-resistant cryptography. Analysts expect this transition to require large-scale upgrades across financial systems, cloud infrastructure, telecommunications networks, and government systems over the coming decades. Through our investment in Quantum, we believe Reliance is positioning itself to participate in this emerging cybersecurity opportunity. Importantly, our agreement establishes a milestone-based pathway toward majority ownership as the company continues to advance its technology and expand its commercial activities. We also announced an agreement to acquire a majority stake in Centec Medical, an artificial intelligence diagnostic company developing non-invasive Breath analysis technology designed to detect disease-related biomarkers earlier than traditional testing methods. Early detection remains one of the most important challenges in healthcare, particularly for serious diseases where earlier diagnosis can significantly improve treatment outcomes. Advances in artificial intelligence and biomaker analysis are creating new opportunities to identify disease signatures using non-invasive diagnostic tools. Centec is developing technology that combines AI-driven analytics with breadth analysis to help identify disease indicators earlier and more efficiently. If successfully developed and commercialized, technologies like this could help physicians detect certain diseases sooner while reducing the need for more invasive testing procedures. Through this transition, Reliance will acquire a majority ownership position, allowing us to participate in the potential growth of this emerging diagnostic platform as it continues to advance its technology and commercial commitment. Taken together, these transactions represent the initial steps in executing our Scale 51 strategy within the Azure International Group platform, which is focused on identifying innovative technologies and building meaningful ownership positions in companies operating in high growth sectors such as cybersecurity, artificial intelligence, and digital health. As part of this strategic evolution, we also transitioned our NASDAQ ticker symbol from RELI to Ezra, E-Z-R-A, aligning the company's public identity with the broader vision we are building through Ezra International to develop a portfolio of technology-driven businesses that can scale globally and create long-term value for our shareholders. When you step back and look at the bigger picture, Reliance is evolving into something broader than a traditional insurance company. Our insurance and insured tech platform continues to provide a stable operating base, while Esri International Group and the Scale 51 strategy expand our reach into emerging technology sectors where innovation and long-term growth opportunities are accelerating. By combining the stability of our insurance platform with targeted ownership in innovative technology companies, We believe we are building a model that can participate in both recurring operating growth and long-term value creation from emerging technologies. We are still in the early stages of executing the strategy, but the progress we made during 2025 established an important foundation for what we believe can be an exciting next chapter for the company. I would like to now turn the call over to Joel Markowitz, Chief Financial Officer of Reliance Global, to review the 2025 financial results. Joel?

Thank you very much, Ezra, and good afternoon, everyone. I appreciate you joining today's course. It will be my pleasure to walk through some of our key financial highlights for the year ended December 31st, 2025. Unless otherwise noted, all figures discussed are approximate. Our financial priorities during 2025 were centered on strengthening our balance sheet, improving liquidity, and positioning the company for disciplined long-term growth. As Ezra mentioned earlier, 2025 was an important transition year for us. During the year, we executed a portfolio realignment through the asset sales of our subsidiaries, Fortman Insurance Services, Employee Benefit Solutions, and U.S. Benefits Alliance. These transactions allowed us to reduce debt, strengthen our balance sheet, and simplify our operating structure. And we repositioned the business to support our Scale 51 technology growth strategy. Importantly, our insurance brokerage and insurtech platforms continue to provide a stable operating foundation, which we believe positions the company well as we pursue this next phase of growth. Let's begin with a quick look at the balance sheet compared with year-end 2024. Unrestricted cash increased $0.9 million, or 250%, to $1.3 million at December 31, 2025, compared with $0.4 million a year ago. Welcome capital improved by $1.5 million, or 351%, to $1.9 million, and stockholders' equity increased $3.4 million, or 114%, to $6.4 million. These improvements reflect our continued focus on strengthening our financial position and maintaining the flexibility needed to support our future growth initiatives. Turning to the income statement, Commission income totaled $12.4 million for the year ended December 31, 2025, compared with $14.1 million in 2024. The decrease primarily reflects our strategic portfolio realignment during the year, with the divestitures of subsidiaries previously mentioned. Commission expense was $4.6 million, compared with $4.2 million in 2024. The increase primarily reflects higher commissions associated with increased sales activity within certain of our remaining operations, as well as general market conditions across the insurance sector. Salaries and wages totaled $10.3 million in 2025, compared with $7.2 million in 2024. The increase primarily reflects non-cash share-based compensation recognized during the year, which aligns management incentives with long-term shareholder value, partially offset by the elimination of salaries associated with the divested subsidiaries pursuant to our portfolio realignment. General and administrative expenses were $4.9 million compared with $4.2 million in 2024. The increase was largely driven by non-cash equity awards to directors and service providers aligning incentives with long-term shareholder value offset by operational efficiencies achieved through the company's one firm operating model. Net loss improved by $2 million to $7 million compared with $9.1 million in 2024, primarily reflecting gains from our portfolio realignment transactions, as well as the absence of asset impairment charges recorded in the prior year. Finally, adjusted EBITDA, which is a non-GAAP financial measure, was a loss of $1.6 million compared with a loss of $0.3 million in 2024. The change primarily reflects the revenue fluctuations following the company's portfolio realignment transactions, as well as some higher operating costs and slightly higher commission expense associated with increased sales activity within certain of our remaining operations. Overall, we believe the actions taken during 2025 strengthened our balance sheet simplified our operating structure, and positioned Reliance to support its next phase of growth. With that, I'll turn the call back over to the operator to open the line for questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys.

One moment, please, while we poll for questions. And the first question today is coming from Nicole Kauffman from Blackridge.

Nicole, your line is live.

Hello, gentlemen. How are you today?

Okay.

How are you?

Well, I couldn't... Doing well. Congratulations on the progress and thank you for taking my questions. My first question is around scale 51 and you spent some time during the call discussing this initiative, which sounds like an exciting new direction for the company. But can you share a bit more about what investors should expect from the scale 51 strategy over the next six to 12 months?

Okay. I mean, I think In a very short phrase, and I'll elaborate a little more, positive, big, good excitement, which should translate into bottom lines as well. We're focusing on not very young companies, which have less promise, but companies that somewhat already show either close to revenue or accomplishing certain things, and usually, yes, close to revenue. We've talked to a lot of companies before we zero in, and we think that we're off to a good start, both within Quantum, which we've already closed, and what we're seeing and the excitement about that. It's really more major, actually, than we realized. During due diligence, we discovered it was better than we thought. It's getting exciting. We hope to share that as things progress, as milestones are achieved, and that's part of our policy and philosophies. We're not just handing over checks. Milestones have to be achieved for us to make payments or investments, and so far that's working, and we look forward to a lot more.

Well, thank you for expanding on that for me. And during the call you also highlighted the growing need for post quantum encryption technologies where is in quantum currently in terms of product development and commercialization and What kind of timeline might investors expect before the company begins generating revenue?

the truth is we're excited to say that revenue is quite possible even within the year and even later this year. They're working on a few years and we're coming to the point where we have the team that's there and we have very strategic people on the team that we're working towards revenue, hopefully even later this year. I will say that I'm not sure everyone appreciates what quantum computing is, but quantum computing is we're talking about as fast as you think you get your computing today, quantum computing that's being worked on worldwide is about 10,000 times quicker than existing computing. That could tell you why it's so, so crucial and important to have something that protects the encryption, that you have all the codes and things that are today will be meaningless with that type of computing that can be broken in seconds. So this, and we're learning more as, As we have this team and they really know what they're doing in execution, the due diligence team was extremely, overwhelmingly impressed by the team of InQuantum. And it's getting exciting, really. We hope it'll translate into dollars and cents soon. But it's a really exciting development that's needed for the world, and it'll be good for Reliance and for Ezra International Group.

Yes, well, thank you. I'm looking forward to that. My last question is around the Centec opportunity, which sounds really interesting, and particularly the non-invasive breath analysis technology. Can you expand on what makes Centec's approach unique and what you believe differentiates it from other diagnostic technologies currently in development?

Okay. That's great. That's a very good question. I'm excited to give you an answer. As you know, there are, you know, many diseases. And one of them that actually CENTAC is focused on is pancreatic cancer. And I'm sure you know that usually when someone gets a diagnosis of pancreatic cancer, it's usually somewhat late. Maybe it could be stage four. It's not a diagnosis that someone wants to hear. Believe it or not... And the technology already exists and has been proven with other diseases, but now, you know, the concept of biomarkers that exist in human breath. And there's, of course, not finally proven yet. That's all in the process, but there's good reason to believe, based on the science and the research that's been done, that this will help in identifying serious diseases as well, like pancreatic cancer. which means coming in way earlier than previously diagnosed. And what it just means, whether it means moving the pancreas, whatever has to be done, it's, you know, it's a life and death difference, literally. It makes a difference whether a person literally, you know, with their breath, actually a painless, simple test that could determine, hey, we better take care of this without any, you know, major investment or even worse, people having to go through therapy, who knows if it worked. So this is major, major, major. And actually our due diligence team as well, savvy, very savvy people, and they were blown away themselves. Early detection saves lives. That's a given. Everyone knows that, and that's what we're at. So we look forward to both helping the world, and that's what the word Ezra means actually, help, but also helping the company. So we're looking forward to some exciting financial rewards for it as well.

Yeah, well, that does sound very exciting, and I look forward to the developments associated with that. Thank you for taking my questions, and I'll hop back in the queue if I have further questions. I appreciate it.

Thank you very much.

Thank you. And once again, it will be star one on your phone at this time if you wish to ask a question. That's star one if you wish to ask a question.

And there were no other questions at this time.

I would now like to hand the call back to the Reliance Global Management team for closing remarks.

Thank you. 2025 represented an important year of progress for Reliance. including a significantly stronger balance sheet with higher cash, improved working capital, increased stockholders' equity, and reduced long-term debt. We streamlined the organization through strategic divestitures and continued one-firm efficiencies, creating a leaner operating structure, while our insurance brokerage and insurtech platforms remained a stable foundation, generating more than $12 million in commission income during the year. We launched Azure International Group at scale of 51 and have begun executing through our investment in the quantum and the intent to acquire a majority stake in Centec Medical. Overall, we are encouraged by the progress made during the year and remain confident in our ability to continue strengthening the business and delivering long-term value to our shareholders. Thank you for joining us today for our business update. We look forward to speaking with you again on our next call.

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