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Saturday, December 9, 2023

Reliance Global Group, Inc. (RELI) Stock on a Continuous Decline, Here’s the Reason

Reliance Global Group, Inc. (RELI), a company engaged in the acquisition and management of wholesale and retail insurance agencies, has declined 5.09% in aftermarket trading session. Consequently, RELI stock is trading at $4.1 at the time of the wiring. On Thursday, RELI closed the day at $4.32 after plunging 10.74% in the mid-day session. The consistent decline could be attributed to the announcement of the private placement.

Why RELI Declining?

On Thursday, RELI announced a private placement of preferred stock, common stock and warrants. The gross proceeds from the placement were estimated to be $20.0 million before deducting the placement agent’s fees and other estimated offering expenses. The company announced that the offering is expected to close on 27th December 2021. The Company intends to use the net proceeds from the private placement primarily to fund the recently announced planned acquisition of Medigap. Also, it intends to support expanded marketing activities around 5MinuteInsure.com, and for general working capital and administrative purposes.

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Q3 2021 Operational Results

On 10th November, RELI released the operational results for the third quarter of the fiscal year 2021. The quarter ended on 30th September 2021. The company generated revenue of $2.5 million during the quarter against $1.6 million for the same period of 2020. The commission expenses stood at $0.66 million during the quarter against $0.39 million for the same period of 2020. The general and administrative expense for the period was $0.75 million against $1.1 million for the same period of 2020. The net loss suffered by the company during the three months was $0.59 million (or $0.05 per share) against $1.2 million (or $0.30 per share) for the same period of 2020.

Executive Commentary

Ezra Beyman, CEO of RELI, while commenting on the results said that the company has continued to generate strong growth during the quarter. The growth reflects the solid performance of the company’s insurance agencies. The company is on track to commercially launch the 5MinuteInsure.com platform in several states in the coming weeks. The company now has regulatory approval in 46 states and continues to add new insurance carriers to our network.

Future Outlook for RELI

During the last month, RELI stock has surged more than 70% owing to the excellent business expansion strategies by the company which has attracted investors toward the stock. For analysts, the continuation of similar policies would yield the investor numerous benefits in near future. Hence, potential investors should keep a close eye on the performance of RELI stock.

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