Greetings. Welcome to the Reliance Global Group First Quarter Business Update Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ted Ayvas, Investor Relations. You may begin.

Thanks, John. Good afternoon, and thank you for joining Reliance Global Group's 2024 Full 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; and Joel Markovits, Chief Financial Officer at Reliance. Earlier today, the company announced its operating results for the quarter ended March 31, 2024. The press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company has filed 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, 2024, we would like to remind everyone that the 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 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 on April 4, 2024. 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. Having said that, I'd now like to turn the call over to Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra?

Thanks, Ted. Good afternoon, and thank you to everyone for joining us today. It is an exciting time for us to share the significant press we have made at the Reliance Global Group. In early April, we shared insights into our operations and I'm pleased to report that in the first quarter of 2024, we continued this trend of solid performance marked by steady organic growth. This quarter, our emphasis was our influencing our new OneFirm approach, which integrates our 9 owned and operated agencies across the United States into a single unified entity. As these efforts continue to gain traction, we believe that we will experience significant improvement in both our revenue and profitability. As you may know, we recently announced that we have entered into a definitive agreement to acquire Spetner Associates, a well-established benefits and enrollment company. Spetner through BenManage benefits and enrollment company is a leading provider of voluntary benefits to over 75,000 employees throughout the United States. We are confident that this acquisition of Spetner will prove to be the most significant acquisition and a pivotal turning point in the company's history. The strategic move is expected to dramatically enhance our capabilities and position us strongly in the market setting a new benchmark for our future endeavors. I would like to take this time to delve deeper into the reasons behind this acquisition and what it means for the company's future. The integration of Spetner's expertise and extensive client base into our operations is expected to significantly enhance our market position, expand our service offering and accelerate our growth trajectory. By aligning Spetner's innovative benefits solutions with our strategic goals, we aim to create more value for our stakeholders and strengthen our competitive edge in the industry. This acquisition is not just about growth, it's…

Thank you very much, Ezra. Good afternoon, everyone. Great to be here with you all today. I'll be happy to share our financial results for the quarter ended March 31, 2024. All figures presented are approximate. Our revenues, commission income increased by $143,000 or 4% to $4.1 million in Q1 of 2024, compared to $3.9 million in Q1 of 2023. Revenue increase is driven by sustained organic growth. Commission expense increased by $193,000 or 18% to $1.3 million in Q1 2024, compared to $1.1 million in Q1 2023. Change is driven primarily by the growth in commission income revenues, which have a higher ratio of commission expense in Q1 versus other quarters. Salaries and wages increased slightly by $76,000 or 4% in this quarter versus last, increases tied to typical annual update in adjusted today. General and administrative expenses increased by $537,000 to $1.4 million in the first quarter of 2024, compared to $838,000 in 2023. And the increase is driven by acquisition costs as well as higher regulatory compliance-related costs. Net loss was $5.3 million in Q1 2024, compared to a net loss of $1.8 million in Q1 2023. Increase of $3.5 million is primarily linked to Q1 2024 intangible asset noncash impairment charge of $3.9 million. Additionally, EBITDA, our adjusted EBITDA metric came in at a nominal negative $74,000 for the quarter. And we do expect EBITDA to further improve as we continue throughout the fiscal year and especially post our anticipated closing on the Spetner M&A transaction, as mentioned by Ezra. With this, we conclude our prepared remarks. We'll be happy to answer any questions or comments participants may have. Operator, kindly open the lines.

[Operator Instructions] Our first question comes from Jesse Sobelson with E.F. Hutton.

Congrats on signing this definitive agreement to acquire Spetner. I wanted to focus my questions here. Firstly, just on timing, you did sign a definitive agreement. When do you expect this deal to close? And given the guidance of the asset generating $14 million in revenue or so, maybe $4 million in EBITDA on a go-forward basis, how much of that is expected to be contributed to this fiscal year, given the timing on closing?

The first part of the question, we're looking forward to the third quarter to close. And as far as the -- I guess, about it, depending when it is, but about half of that. It's already -- it's already in the run. Another way, we've been watching the deal and seeing as we speak in live time where the numbers are and it's right on target. It's the acquisition that we haven't boarded yet, but we've been watching it and it's running the way we expected.

Great, so there is no seasonality? Sorry to cut you off, please go ahead.

So in other words, as far as -- since we hope to close in third quarter depending what time it is, but it should be about half a year. It's just sort of give us -- already. It's up and running, hits the ground running, so to speak.

Right. On that point, with the guided financials, is this just for the business as a stand-alone entity? Or in order to realize the numbers that you're guiding to, would there need to be any efforts to realize synergies, either on the cost front or the sales front?

No. This is on the as is, but that's before we do any of the synergies. As of Day 1, it should be on track for that. It's already in place what's there. We look forward to lots of gravy with the synergies and the cross-selling but right now, it's just as turnkey.

Okay. Great. And then just to make sure I understand the numbers, so I just want to make sure I'm right, I think the acquisition was about $13.7 million in consideration, $8 million in cash and then the remainder in a promissory note. And that translates to, I'd say, roughly 1x forward sales and about 4x forward EBITDA. Is that correct?

That's correct. Which if you know the industry, those are pretty good numbers.

Pretty good. Yes. And then the last thing that I just wanted to ask is on the balance sheet going forward. Can you share what it's going to look like? Net debt, shares outstanding, cash position and then that would be it for me.

It's a Joel question.

Yes. I think time will tell in terms of post Spetner deal. Obviously, there's going to be significant receivables that will pick up just based on the amount of revenue they have. So we'll definitely see an uptick in our assets. Fixed assets will increase as well, basically intangibles as we're going to acquire and goodwill. So we definitely see all that improved cash flow be increased substantially because this is a very high cash business that will churn through millions dollars in commission revenues of cash each year. So we definitely expect things to go an orderly in terms of the asset side. Liability is nothing too significant. That's going to be the promissory note that was discussed. And -- but we don't really expect anything except for typical accounts payable, [indiscernible] any vendor views that might be existing in the Spetner books.

That's not expected to be significant.

[Operator Instructions] The next question comes from Alan [indiscernible].

You mentioned on the call that your OneFirm vision is materializing. Can you provide any additional context on the progress you're making with your OneFirm vision?

Of course, great question. I'd be happy to expand on that. So currently [indiscernible] in excise of consolidating our carrier contracts and have made tremendous headway with property and casualty, that begun making strides with the Health group and life as well. Also unifying our agency management systems where we will have just 2 one for P&C and one for Health and Group benefits, which is expected to streamline our administrative processes and enhance our reporting capabilities. On the expense side, we continue to shave off in our costs, by pooling together what used to be individual vendor contracts into group contracts, which often provides volume discounts. OneFirm also enables us to roll out certain best-in-class systems across all of our office locations. We're also redesigning our teams and human capital. We're more aligned with our revenue streams, irrespective of geographical location. This is encouraging robust cost collaboration between our offices, it's enhancing our corporate culture, corporate environment and employee satisfaction and will also likely continue to spur on additional cross-selling revenue generating opportunities. Thanks again for the question. Hopefully, this provides a good summary of where we're at today.

We have no further questions in queue. I would like to turn the call back to management for closing remarks.

Sure. On behalf of Ezra, and entire Reliance team, thank you for your participation in this business update call. We couldn't be more excited about the prospects of the company as we continue our journey forward. Looking forward to next time. And until then, all the very best.

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