Good day, everyone, and welcome to the Reliance Global Group Fourth Quarter and 2022 Year-End Financial Results and Business Update Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Ted Ayvas. Sir, the floor is yours.

Thanks, Matthew. Good afternoon, and thank you for joining Reliance Global Group's 2022 year-end 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; and Joel Markovits, Chief Financial Officer of Reliance. Earlier today, the company announced its operating results for the year ended December 31, 2022. The press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company filed its annual report on [Form 10-K] with the U.S. Securities and Exchange Commission earlier 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 212-671-1021. Before Mr. Beyman reviews the company's operating results for 2022, 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 and 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 filed with the United States Securities and Exchange Commission on March 30, 2023. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this 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 in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I will now turn the call over to Ezra Beyman. Ezra?

Thank you, Ted. Good afternoon, and thanks to everyone for joining us today. 2022 was a transformative year for the company as evidenced by the 73% increase in revenue for 2022. This growth reflects the acquisitions we've completed as well as the overall solid performance from our operating subsidiaries. Most importantly, we acquired Barra & Associates in April 2022, which became the foundation upon which we built RELI Exchange. As most of you are aware, RELI Exchange is our first-in-class business-to-business InsurTech platform and agency partner network for insurance agencies and agents and agencies providing independent agents a comprehensive suite of business development tools, enabling them to effectively complete and win against national agencies. The RELI Exchange InsurTech platform is a game changer for the company and the industry. The fact that our platform is resonating so well is illustrated by the fact that RELI Exchange has experienced an almost 200% increase in agency partners since its launch in July of 2022. Additionally, we regularly introduce new products to our platform, further enhancing the value we provide to clients. A prime example of this is our exclusive life insurance quotation tool, added to the platform in February of 2023, which enables agents to quickly compare policy options and pricing in under a minute as well as a streamline policy binding and facilitate more productive client conversations. With this tool, consumers receive complete transparency on available coverage options and the expected cost. Our primary goal is to assist our customers in obtaining the necessary level of insurance to safeguard their asset, while also ensuring that they receive the best possible value for their investment. Moreover, quick and accurate quotes are essential to our agency partners, enabling them to sell more policies and accelerate their business growth. The RELI Exchange platform was…

Thank you very much, Ezra, and good afternoon, all. It's wonderful to be here today, and I'm excited to share the following financial results with you. Please note that all figures presented are approximates. The company's revenue for the year ended December 31, 2022, was $16.8 million. This represents a phenomenal 73% increase, as Ezra mentioned, from $9.7 million in 2021. This substantial increase is primarily attributable to organic growth as well as the new agencies we acquired in 2022. On the expense side, commission expense amounted to $3.4 million compared to $2.4 million in 2021. Salaries and wages totaled $8.6 million versus $4.7 million in the prior year. General and administrative expenses, they totaled $6.8 million versus $3.6 million in 2021. Marketing and advertising totaled $2.6 million compared to $326,000 in the prior year. Increases in their full management expenses are primarily driven by our expanded operations, both organic and from our additional 2022 agency acquisitions. With regards to depreciation and amortization, we reported $2.8 million in 2022 compared to $1.6 million in 2021. Increase primarily is due to activity within our fixed assets. Property, plant and equipment increased by [$56,000] and intangible assets increased to $6.7 million. The growth in fixed assets stems from the company's business combinations and resulting acquired tangible and intangible assets during 2022. We reported $14.4 million goodwill impairment charge versus $0 in the previous year. This was a result of a goodwill evaluation performed by the company. The [charge] of the P&L has no impact on cash or liquidity of the company. With regards to other income or other expense, we reported $28.2 million of net other income during the current year compared to a net loss of $18.2 million in the prior year. The fluctuation of $46.4 million primarily stems from swing in the fair value of our derivative warrant liabilities. Net income for the year ended December 31, 2022, was $6.5 million compared to a net loss of $21.1 million in the prior year. The positive swing is explained by the P&L narrative just provided on a line-by-line basis. This concludes our prepared remarks. We'll be happy to answer questions or discuss any comments you may have. Operator, kindly open the lines, please.

[Operator Instructions] Your first question is coming from Ed Reily from EF Hutton.

Congrats on the strong top line growth during the year. I'm wondering if you're able to break down what the organic growth rate was the agencies during the year.

If we can go agency by agency, I think maybe...

Or just total...

I'm not going to have it all, but I know -- is it 10%? The round numbers, I think organic growth, I believe, was about -- I'm not sure in every single agency, but I think on the main ones, I think I remember hearing at least 10%.

And then on the partnership growth on the Exchange platform, could you maybe provide us with some color on the marketing strategy and how you're able to grow partners on that platform?

Right. So, that's going to -- we're proud to share that. As opposed to typical InsurTech companies that have to spend fortunes, tens, sometimes not tens, hundreds of millions of dollars, we're spending very -- almost nothing on marketing because remember, we have a very targeted audience. We're not going after 300 million Americans or 350 or so, we're going after the relatively very targeted audience of existing agents, whether they are captives or existing independent agents and so our marketing cost is really close to 0 actually. And exactly that's the way it's working, and that's why we're able to build. We've actually given a directive to add -- it's only the recruiting cost, the recruiting staff, which we've added that we've given the approval to go up to like 10 recruiters from 2 or so and we want to go after now, big emphasis on experienced agents who bring revenue to the table almost immediately. So, we're proud of that concept of the going ahead -- we're not having to spend fortunes in marketing, just recruiting and once, as you see, once they get wind of what we're doing compared to what they're doing, wherever they are, they're really jumping. And it's we're very -- we're proud of that. And the concept is working. Now, we hope to be able to reap the -- go to the bottom line. There is no franchise fees so we'll have -- we don't have that threshold or barrier of joining us. So, they could join pretty quickly.

And then you added life insurance as a product recently. What other types of products are you looking to add to the Exchange in the future? And maybe if you could maybe -- if you could share some of your top strategic priorities for the 2023 fiscal year, that would be great.

I think one of the biggest, as you mentioned before, one of the largest, our biggest goal is now really ramp up, going to 200 agents was really a tiny step for us. We're really to go in -- we spoke about before going to 1,000 and beyond in agents. But I think it's important to note that, that would go right to the bottom line pretty much going after the experienced agents. But the way we're doing, we have also the rookies, but the experienced agents who are not happy with their existing in our relationships in many ways, and very simple, we've mentioned this metric before, a captive who has a -- whatever you have his existing captive relationship, whether it's Allstate, State Farm, whoever, when he goes and gives a quote to a customer, typically, he has maybe a one to two chance out of 10 getting that customer. In our case, when we're giving them quotes from 30 carriers, we have -- it's unbelievable the difference. We're talking about eight to 10 out of 10 chance. So, when they see that and they see the technology and we see the independence we give them with our white labeling and quick response is unbelievable. The tech infrastructure in place. So, now we're just scaling really. And really going forward, we've already spent the technology cost. So, it's pretty much going forward, it goes to the bottom line, just as we add agents and add agents and the 1,000 number is just a very conservative number. The experience has told us we have -- there's a lot of runway here to go.

Curious as to maybe the -- your internal goal for the time line of hitting that 1,000 mark.

I'd like to say within about -- within a year from now. I can't commit to that, but I would like to say that with the -- but I have to -- part of that is ramping up more the recruiters. So, we haven't -- we're in the process of hiring more and more recruiters. So, I don't know, a year to 18 months.

Your next question is coming from [Elon Friedman from VKC Capital].

Congratulations on the revenue growth. Given that RELI Exchange is largely a SaaS model, I would imagine most of the investment was in the upfront end and the incremental margin should be pretty high. Would it be correct to say that this business should start generating meaningful cash flow on a stand-alone basis?

Yes, that is a very smart and good assumption. We've already the -- pretty much the technology cost is done. The infrastructure is there. Remember, we also bought an existing operation from Barra & Associates with already existing operation. So, we didn't have to reinvent the wheel. It's in place. And now with the technology we added and everything that we've done, we're just now -- we're on the runway, taking off in a big way. What we've done now is just a kid stuff. Now, we really look to grow and there's not, except for the recruiter cost, which is you can realize is minimal compared to the potential here, there's no major marketing cost. [indiscernible], it's just recruiting and time. And yes, you're right. The growth should go to the bottom line. That's correct for the most part.

Your next question is coming from [James Englander].

I'm a shareholder and a warrant holder. I wanted to ask the company if it's possible now with the reverse stock split, if you can do a reverse on the warrants and bring the strike price back down to the original [$6,060]?

Sure. I can, yes, thanks for that question. It's something that we are considering and we're in active discussions with counsel to see what the most efficient way would be to do that. But yes, it's a great question, and we are considering it.

And then you understand all the advantages because then once we're in the money, then there's an incentive to exercise and then you don't have to go to the street to raise money if you have warrant holders. Okay, appreciate you working on it.

We get it, and you're on the money, and we want to be in the money. So, for you -- so we're good with that.

Your next question is coming from [Emmanuel Kramer].

Thank you for good quarter and year ending. Do you have any guidance for the current quarter that's just ending?

I guess that's a Joel question.

Yes. It's a great question. I'm hesitant to give I guess potentially non-material -- non-public material information. But I'd say that we're having a good quarter overall. And yes, as soon as we're able to give guidance substantively, we will.

A follow-up question. It was important today in the Wall Street Journal that AI, they want to pause and slow down. How will that affect you?

That doesn't really affect, we're already in place. And the beauty of our AI, we mentioned that in my comments, I think I should reiterate that, we're not getting rid of the humans. We're just helping the humans. Much of AI -- I know something came out recently that they're expecting could impact like 80% of the population of AI. We actually pride ourselves in not just -- we're actually helping humans use technology. So, we're not worried about that at all. And we're not -- our AI has already done. We're not really waiting for more. In other, if we make it too easy, the customer would have to just call and breathe into the phone and the rest would be filled out. Right now, they're giving very minimal information to -- yes. We've done essentially is we have empowered the agents with the AI instead of using it against them. So, it's everyone -- it's a win-win for everyone.

You just recently raised $4 million. Did you get the close on that, you got the full $4 million? Or do you have to do with exercising the warrants to get the full $4 million?

Yes, we got the $4 million minus any cost to raise the funds. But no, there were warrants attached to the overall offering, but that didn't impact the cash that we received when we closed.

Yes. Nothing to do with the cash we received.

That concludes our Q&A session. I will now hand the conference back to management for closing remarks.

Thank you all. So, on behalf of Ezra and the entire Reliance team, I would like to thank you for your participation in this business update and 2022 financial results conference call. We are very excited about the company's future and its growth prospects. We look forward to providing further updates as developments unfold. Thank you. Have a great rest of the day.

This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.