Investment Highlights for Reliance Global Group, Inc.

Key Investment Highlights for Reliance Global Group, Inc. (RELI-OTC)

• Reliance Global Group, Inc. (“RELI” or “the Company”) operates as a diversified holding company investing in real estate and insurance markets, as well as other related sectors. RELI’s focus is to grow the Company by pursuing an aggressive acquisition strategy, including both real estate and wholesale and retail insurance agencies. 

• The Company is controlled by the same management team as Reliance Global Holdings, LLC, a limited liability company that is the owner of numerous companies in the real estate and insurance sectors. Reliance Global Holdings’ management offers over 100 years of combined business expertise in real estate, insurance, and the financial service industry. RELI’s relationship with Reliance Holding Group provides the Company with significant benefits: (1) experience, know-how, and industry relations in both the real estate and insurance industries; (2) a source of acquisition targets currently under Reliance Global Holdings control; and (3) financial and logistic assistance.

• RELI acquires existing businesses with proven track records and where it sees value-added opportunities. The Company’s acquisitions include both affiliated properties—properties currently owned or controlled by Reliance Global Holdings—as well as non-affiliated parties. To date, RELI’s acquisitions have been privately funded through Reliance Global Holdings’ investment of funds and assets. RELI is now seeking private capital from outside sources to procure $10 million to $20 million of additional funds to be used to secure and finance new acquisitions.

• RELI plans to act as both the holder and merchant of its acquisitions. After acquiring a specific asset, the Company plans to utilize its management expertise to derive a continued cash flow. Then, when the asset displays a significant capital appreciation, RELI plans to act a merchant and sell it in order to capitalize on the higher value.

• RELI is currently in negotiations with several affiliated and non-affiliated parties and expects to complete a number of material transactions during 2019. The Company seeks to conduct all transactions and acquisitions through the operations of RELI, as well as complete the acquisition and transfer of desirable assets currently under Reliance Global Holdings control. In addition, in some instances, Reliance Global Holdings could act as a place holder to facilitate the acquisition process, with those properties later transferred under RELI’s umbrella.

• As of September 2018 (the time the Company was created via a reverse merger), RELI elected to terminate its status as an SEC-reporting entity because they intended to acquire businesses which did not have SEC-compliant audited financial statements. Thus, RELI made the decision to complete the acquisitions and then to perform SEC-compliant audits of the businesses (which is ongoing) to become a SEC-reporting issuer again.

• In the real estate division, the Company’s primary focus is to acquire and manage undervalued multifamily properties throughout various geographical locations in the U.S.; improve operational expenses; and derive profits through increased interim cash flows and substantial exit value gains from capital appreciation.

• The Company intends to target multifamily properties throughout the U.S. that offer the potential to achieve attractive risk-adjusted returns. RELI specifically targets Class B properties with over 100 units that are priced below the market cap rate margin for that particular market. Class B properties, the second level of multifamily asset classes, are generally built within the last 20 years, offer good quality construction, and command rental income just under Class A properties. When comparing Class B to their Class A counterparts, the former normally offers a higher cap rate, can be viewed as value investments, and can be recession insulated. That is because under economic uncertainty, Class B buildings do not have to rely on premium rents to drive profitability.

• RELI is currently under contract with Reliance Global Holdings to acquire 19 multifamily properties. These properties have been under the control of Reliance Global Holdings since approximately 2005. The combined properties have a net equity of $30 million and a combined asset value of over $110 million.

• Despite the tumultuous stock market at the end of 2018, the current economic trajectory points to an expected strong ongoing performance for the real estate market. The technology stock bubble that began in late 2016 seems to have ended in 2018. Investors who were preoccupied with technology stocks eventually saw favorable opportunities in real estate, which had become one of the most undervalued segments of the investment market. The same applies to the sub-market of multifamily properties, with key drivers—healthy job growth, rising wages, rising interests, and worsening home affordability—pointing to the expected continued growth of multifamily property demand in the next few years.

INSURANCE OPERATIONS

• RELI’s insurance operations focus on the acquisition and management of undervalued wholesale and retail insurance agencies with operations in growing or underserved segments (including healthcare and Medicare). Once acquired, the Company aims to expand their operations on a national platform; improve operational efficiencies; and achieve asset value appreciation while generating interim cash flows.

• A key operating difference between agencies and carriers is the risk profile. The financial risks to the insurance industry caused by unforeseen event such as natural disasters are the responsibility of the carriers. Agencies bear no insurance risks. Furthermore, an increase the occurrence of natural disasters generally boosts demand for insurance and results in possible premium increases, which would actually benefit insurance agents, despite damaged profit margins among these upstream underwriters and carriers.

• To date, RELI has acquired five insurance agencies, including both affiliated (i.e. owned by Reliance Global Holdings) and unaffiliated companies, and has executed Letters of Intent (LOIs) for the acquisition of two additional insurance agencies. As its acquisition strategy continues, RELI’s large reach across the insurance space can provide the Company with the ability to offer lower rates, which could boost RELI’s competitive position within the industry.

• On February 2019, RELI arranged to commit significant funds, up to $1.5 million, and launched a national campaign to recruit independent health agents, brokers, and National Marketing Organizations aimed at the growth and expansion of RELI’s health insurance business. The investment of funds will be supplied by Reliance Global Holdings. The campaign, coupled with RELI’s acquisition activities, are expected to be a catalyst for the Company to become a national leader in the Medicare insurance sales market.