Reliance Global Group, Inc. ($EZRA)

Greetings, and welcome to the Reliance Global Group 2026 First Quarter Business Update Call. [Operator Instructions] And please note, this conference call is being recorded. I will now turn the conference over to your host, Mr. Ted Ayvas, Investor Relations. Sir, the floor is yours.

Thanks, Ali. Good afternoon, and thank you for joining Reliance Global Group's 2026 First Quarter Financial Results and Business Update Conference Call. On the call with us today are Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group; Joel Markovits, Chief Financial Officer of Reliance; and Mo Fishman, Senior Vice President of Strategic Ventures for Reliance. Earlier today, the company announced its operating results for the quarter ended March 31, 2026, and the press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company will be filing its quarterly report on Form 10-Q 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 at 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. Beyman reviews the company's operating results for the quarter ended March 31, 2026, 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 the 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 and other words and 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 filed 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 implied in the forward-looking statements. You should not rely 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, neither the company nor any other person assumes 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 in the context of these risks and uncertainties. Having said that, I'd like to turn the call over to Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra?

Thank you very much, Ted, and good afternoon, everyone. The first quarter represents an important step as we continue executing the strategy we established over the past year. During that time, we focused on simplifying the business, strengthening the balance sheet and creating a clear framework for long-term growth. We are now building on that foundation and advancing into a more active phase of execution. Our business model is built around 2 complementary segments. The first is our Insurance segment and InsurTech platform, which provides recurring revenue, established carrier and agent relationships and a scalable distribution infrastructure supported by our technology platforms. This business not only generates consistent operating cash flow, but also provide visibility into market trends, customer behavior and product demand, all of which support our broader strategic initiatives. The second is our Strategic Ventures segment, which is anchored by EZRA International Group and our Scale51 model, which together form the foundation of our investment strategy. EZRA International serves as the platform through which we identify and evaluate opportunities across technology and life sciences. While Scale51 provides the operating discipline we used to deploy capital in stages and scale those businesses over time through an ownership-driven approach. This combination allows us to maintain a stable operating base while selectively allocating capital into opportunities where we identify a high potential for growth and value over time. Within our insurance operations, we continue to operate a more streamlined and efficient business following the portfolio realignment completed in 2025. Those actions reduced complexity, improved cost structure and position the platform for more scalable growth. RELI Exchange remains a central component of this strategy. It provides a technology-enabled distribution network connecting independent agents with carrier markets while allowing us to expand our tech reach without a corresponding increase in fixed costs. During the quarter, we continued to enhance the platform with the rollout of RELI Exchange 2.0, which is designed to improve scalability, streamline agent onboarding and increase overall operating efficiency. These enhancements are intended to support continued growth across the network while improving productivity and reducing friction within the platform. We continue to see a steady engagement across RELI Exchange and believe it positions us well to drive organic growth over time. In addition, 5minuteinsure.com continues to support direct-to-consumer acquisition, complementing our agency network and expanding our distribution capabilities. Taken together, these operations provide a stable foundation that supports both current performance and our broader strategic initiatives. Turning to EZRA International Group and our Scale51 model. This is where we are beginning to see the strategy translate into execution. EZRA International serves as a platform through which we identify and evaluate opportunities across technology and life sciences, while Scale51 provides the framework we use to structure investments, deploy capital progressively and expand our ownership as businesses demonstrate tangible progress. Our focus is on identifying emerging technologies early, deploying capital in a disciplined manner and increasing ownership of those businesses as those businesses achieve defined technical and commercial milestones. This approach allows us to align capital deployment with performance, manage risk more effectively and build positions in companies that demonstrate measurable progress. A clear example of the EZRA strategy in action is our investment in Enquantum. Enquantum is developing post-quantum cybersecurity technology designed to address what we believe is a significant long-term challenge in data security. As quantum computing advances, existing encryption methods may become vulnerable, creating the need for a quantum-resistant solutions across industries. Through our milestone-based investment structure to date, we have increased our ownership in Enquantum to approximately 29% with the increase tied directly to the achievement of defined technical and commercial milestones. This reflects the performance-driven investment model we are applying across Scale51 where additional capital is committed as execution is demonstrated. We have supercharged the existing top-tier Enquantum team with commercialization experts that serve to further enhance the reach of the post-quantum cryptography solutions that they provide their customers. More recently, we expanded into a new vertical with the launch of LifeSci Global Group, led by highly qualified biotech professionals, David Turner and Scott Korman. Life sciences represent an area of significant long-term opportunity, particularly as advancements in data, diagnostics and artificial intelligence continue to reshape how diseases are detected, monitored and treated. We are seeing increasing demand for early detection, more precise diagnostics and less invasive testing methods, all of which are driving innovation across the health care ecosystem. These trends are creating opportunities for emerging platforms with differentiated technologies to scale over time. LifeSci provides a dedicated platform through which we can pursue these opportunities using the same stage investment approach with a focus on expanding our participation in businesses as they progress, both technically and commercially. LifeSci Global marked this initial transaction with the completion of a strategic investment into Innervate. I'm sorry, into Innervate Radiopharmaceuticals, a developer of position imaging -- I'm sorry, positron emission tomography, imaging and therapeutic radiopharmaceuticals focused initially on neuroblastoma and broader future applications in cardiovascular and neurodegenerative diseases. We also continue to evaluate and support additional opportunities within its expanding pipeline. Opportunities like this align with our focus on emerging technologies that address meaningful clinical needs, particularly in areas where innovation can improve outcomes and expand over time into broader indications. The investment into Innervate reflects the type of differentiated platforms we are targeting within the life sciences sector using our phased capital deployment strategy. In summary, we are building a business with 2 complementary drivers of value, a stable cash-generating insurance platform and a scalable acquisition plus investment strategy focused on innovation and long-term growth. What is important is how these 2 components work together. Our insurance platform provides a consistent operating foundation and financial flexibility, while our investment strategy allows us to deploy capital into emerging opportunities where we believe we can build larger ownership stakes as those businesses gain traction. As we look ahead, our focus is on continuing to execute this model in a disciplined and repetitive way, broadening our opportunity set, advancing current investments and increasing exposure to platforms that demonstrate meaningful progress. While we are still in the early stages of this strategy, we believe the foundation we have established, combined with progress we are beginning to see across multiple verticals position us well to create long-term value for our shareholders. I would like now to turn the call over to Joel Markovits, Chief Financial Officer of Reliance Global, to review the Q1 2026 financial results. Joel?

Thank you very much, Ezra, and good afternoon, everyone. It's my absolute pleasure to review our key financial highlights for the quarter ended March 31, 2026. All figures discussed are approximate. Starting with the consolidated balance sheet, we continued to strengthen our financial position during the quarter. At March 31, 2026, compared to December 31, 2025, unrestricted cash increased to $2.3 million compared with $1.3 million. Combined cash, including restricted cash, increased to $3.2 million versus $2.7 million. Working capital improved to $2.6 million compared with $1.9 million and stockholders' equity increased to $7.4 million compared with $6.4 million. These improvements reflect our continued focus on maintaining financial flexibility while supporting the execution of our strategic initiatives. Turning to consolidated financial results. Commission income for the quarter was $3.8 million compared with $4.2 million in the prior year period. The decrease was primarily due to the 2025 divestiture of certain noncore operations and the decline was partially offset by 11% organic revenue growth from the company's retained businesses. Commission expense was $1.6 million compared with $1.5 million for the same period in 2025. The increase primarily reflects higher commission rates driven by general market conditions as well as increased commission expense consistent with 11% organic revenue growth in the retained businesses. Salaries and wages were $1.6 million for the quarter ended March 31, 2026, compared with $2.2 million in the prior year period. The decrease was primarily attributable to lower stock-based compensation expense as well as reduced personnel costs following the divestiture of the noncore operations during 2025. General and administrative expenses were $1.4 million in the first quarter of 2026 compared with $1.5 million in the prior year period. The decrease primarily reflects continued cost optimization efforts and lower noncash equity compensation expense. Net loss improved to $1.4 million for the first quarter of 2026 compared with $1.7 million for the same period in 2025. Improvement was primarily attributable to lower operating expenses and reduced interest expense. Adjusted EBITDA, our EBITDA, a non-GAAP financial measure, was negative $0.4 million compared with positive EBITDA of $0.1 million for the same period in 2025. The decrease primarily reflects lower stock-based compensation add-backs in 2026 compared to the prior year period, partially offset by improved operating performance, including lower salaries and wages and reduced general and administrative expenses. Turning briefly to segment performance. Our Strategic Ventures segment net loss of $0.4 million primarily reflects costs associated with the launch and ongoing development of EZRA International Group and the Scale51 operating model as well as the equity investment loss related to our investment in Enquantum. Our Insurance segment net income improved to $0.7 million for the first quarter of 2026 compared with $0.5 million for the same period in 2025. Improvement was driven by lower operating expenses, continued efficiencies from the company's One Firm initiative and 11% year-over-year revenue growth from the company's retained businesses. Overall, our financial results reflect a company that is more streamlined, more focused and operating from a stronger balance sheet while continuing to invest selectively in growth initiatives aligned with our long-term strategy. With that, I'll turn it back to the operator for questions.

[Operator Instructions] Our first question is coming from Chaim Englander, who is an Investor.

Do you hear me?

Yes, we do.

Congratulations on all your milestones and keep having much success. I just wanted to compliment you guys. I know you went into the Zcash. I don't know if you're following it, but it was almost 600 last night. Do you plan on doing any more or?

We did observe the growth, and it's actually is probably the best performing crypto around. Our strategy is -- yes, right. That's a great story. So right now, we feel comfortable we did the Zcash, but -- and we did it smartly, not recklessly, not putting -- not deploying that much, but we are in the positive now with it actually. But we're looking to see if we should do further we want to -- we're focusing more on the bread and butter businesses in the -- both in insurance and the tech. But we will look at it, but we are happy that we made the Zcash choice.

I can go through your whole 10-K. Is it listed as your assets here?

Joel, you can say where is it listed as an?

Of course, yes, it would be under the heading digital assets on the balance sheet.

Okay. I just make sure they pick it up out there. One of your great assets that you have.

[Operator Instructions] Our next question is coming from Nicole Kaufman with Blackridge Capital.

Congratulations on the progress this quarter. My first question, would you please provide some additional color on Enquantum and what the milestones to continue increasing your ownership position towards 51% are based on? And more broadly, how should investors think about the pace of deployment under the EZRA and Scale51 model going forward towards additional acquisitions or investments?

Okay. I think Moshe Fishman is best equipped to answer those questions.

Hello, everybody. Moshe Fishman here. But I'll tell you with the milestones, while they're not publicly announced, but they all have underlying similarities that the equity for EZRA is designed to increase as the company risk decrease. And that's really we want to have a bigger piece and not continue funding until we see any risk profile look healthier. And that's really when every young company as it matures, the risks go down, and that's purposely designed in that manner as well as additional acquisitions, investments into additional companies. We have and we continue to review many companies that are looking to be acquired or invested by EZRA and we are looking at many aspects of these potential companies, and we're quite selective to partner with a company that we feel our combined skill set and -- from our team, combined with the current company leadership is going to create tremendous value and for our shareholders. That's really the front and center looking at the big picture of trying to create value for the shareholders.

Yes, I appreciate that. And you guys mentioned approximately 11% organic revenue growth from the retained insurance operations despite the portfolio realignment. Could you discuss what is driving that growth and how you see the insurance platform contributing to the company's broader strategy going forward?

Absolutely. I'll handle that. The truth is we're very proud to say that we bought RELI Exchange. It was originally Barra & Associates in 2022. It's about 4 years now. And we've pretty much over the last year or 2, perfected the system of getting new agents. Remember, when we started when we acquired that business, it had about 60-something agents. We're now over 300. And the system is getting better and stronger even exponentially someone. And we are really -- I think I could say this because no secret, everyone in the world is using AI to better things. We actually -- we're in serious discussions with some real AI experts, some of which we have in-house to really supercharge that business, really. In other words, that we're just getting because the system works with the agents, they bring business. We give them 5-minute insurer, strong support. They're able to quote and save tremendous amount of time, not having to go back and forth, getting close from carriers, literally in 5 minutes to have it all in front of them. So the system works. We're getting compliments. We're giving them good back-office support. But as AI improves, less back office support is needed. So it's really ripe for super growth on that, and we're in the midst of that. So we look forward to even showing much bigger than 11% increases. It is going in the right direction, and we're proud of that. But now with different things going on in AI and technology and our -- also our stronger -- as we grow, we're getting stronger and better connections with the carriers, specifically meaning we get better commissions, better service. They're happy because we're spread also geographically, but not just in one location. So the carriers like that, too. So we're looking forward to someone asking that question next quarter or in the next few quarters and even getting a stronger response. But we're on it, and it's working. And the old thing, if it broke, don't fix it, just improve it. And that's what we're doing.

I look forward to seeing that. And my last question, can you elaborate on the strategic rationale behind launching LifeSci Global Group and how you evaluate opportunities like Innervate? Like what characteristics are you looking for when considering additional life sciences investments?

So as you probably know, life science investments very often at very early stages, that's what they remain in early stages. We -- in the life science field where you need FDA approval of the like, we're really focusing more on companies that already have somewhat of a proven performance. In fact, the first one, Innervate, that's already after Stage 3 testing. So it's already clinically been tested and proven. It works. It actually works. It's not hypothetical anymore. And now as we get closer to FDA approval, but it's really just going through the motion because it already works, it's really exciting. So that's one thing we look for. We're not looking for very real estate. You want to see some proven performance. And another component in the biotech sector as we look for the team. The team, the people are -- that's one thing even with modern technology and AI and everything else, you need people, you need good people. And that comes with a very good team. I mean, as you know, that Scott Korman has been a Board member with us for 6 years. He's an expert. He's actually -- him and his partner, David Turner, have several -- this is probably the most important. They have several successful exits. So they've been -- they know it, they get -- they know what to do, where to focus on, and they've made significant dollar and cent exits. That's what we're looking for. So it's a combination of better than just early stage, good team and it makes sense, common sense. We happens to be helping the world, too, in this case, curing a rare child disease, which is devastating. This would be a beautiful thing to literally help the world. Thank you very much.

We currently have no further questions in the queue at that time. [Operator Instructions]. Okay. As there are no further questions at this time, I'd like to turn the call back over to management for any closing remarks.

Thank you very much. Before we conclude today's call, I'd like to briefly highlight a few key takeaways from the quarter. First, we continue to strengthen our balance sheet with meaningful improvements in cash, working capital and stockholders' equity, providing us with increased financial flexibility. Second, the benefits of the portfolio management completed during 2025 are becoming increasingly evident as we continue operating with a more streamlined and efficient structure that is better aligned with our long-term strategic priorities. Third, our insurance segment and InsurTech platform continue to provide a stable operational and financial foundation for the business, generating recurring revenues and supporting investments in future growth opportunities. Finally, we are continuing to execute on our strategic venture strategy through EZRA International Group and Scale51 operating model, advancing current investments while expanding our pipeline in a disciplined and selective manner. As we look ahead, our focus remains on maintaining this disciplined approach while continuing to execute across both our operating platforms and Strategic Venture initiatives. We appreciate your time today and your continued interest in Reliance Global Group. We look forward to updating you again next quarter. In the meantime, on behalf of EZRA and the entire Reliance team, thank you, and have a great day.

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.