According to the S1 comments - that's the answer to the comment.
Use of Proceeds, page 23 3. We note your response to comment 15 that the acquisition that was referenced in your Summary section is not reasonably likely to close; however, you have not revised disclosure at page 27 stating that you plan to use some of the proceeds for acquisitions, in addition to other funds. Please revise to identify this anticipated use of proceeds here, if applicable, or revise the two sections for consistency. Refer to Item 504 of Regulation S- K.
This summary highlights selected information from this prospectus and does not contain all of the information that you should consider in making your investment decision. You should carefully read the entire prospectus and any related free writing prospectus, including the risks of investing in our securities discussed under the heading “Risk Factors” contained in the prospectus supplement and any related free writing prospectus.
The terms “Reliance,” the “Company,” “we,” “our” or “us” in this prospectus refer to Reliance Global Group, Inc. and its wholly-owned subsidiaries, unless the context suggests otherwise.
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About Reliance Global Group, Inc.
Reliance Global Group, Inc. (formerly known as Ethos Media Network, Inc.) was incorporated in Florida on August 2, 2013. In September 2018, Reliance Global Holdings, LLC, a related party, purchased a controlling interest in the Company. Ethos Media Network, Inc. was renamed Reliance Global Group, Inc. on October 18, 2018.
We operate as a company managing in assets in the insurance markets, as well as other related sectors. Our focus is to grow the Company by pursuing an aggressive acquisition strategy, initially and primarily focused upon wholesale and retail insurance agencies. The Company is controlled by the same management team as Reliance Global Holdings, LLC (“Reliance Holdings”), a New York based firm that is the owner and operator of numerous companies with core interests in real estate and insurance. Our relationship with Reliance Holdings provides us with significant benefits: (1) experience, knowhow, and industry relations in both sectors; (2) a source of acquisition targets currently under Reliance Holdings’ control; and (3) financial and logistics assistance. We are led and advised by a management team that offers over 100 years of combined business expertise in real estate, insurance, and the financial service industry.
In the insurance sector, our management has extensive experience acquiring and managing insurance portfolios in several states, as well as developing specialized programs targeting niche markets. Our primary strategy is to identify specific risk to reward arbitrage opportunities and develop these on a national platform, thereby increasing revenues and returns, and then identify and acquire undervalued wholesale and retail insurance agencies with operations in growing or underserved segments, expand and optimize their operations, and achieve asset value appreciation while generating interim cash flows.
As part of our growth and acquisition strategy, we are currently in negotiations with several non-affiliated parties and expect to complete a number of material insurance asset transactions throughout the course of 2020. As of December 31, 2019, we have acquired six insurance agencies, including both affiliated and unaffiliated companies. In addition to the acquisition of UIS Agency, LLC in August 2020, an unaffiliated niche transportation insurance agency we are in the process of continuing our investments in NSure Inc. As of October 8, 2020, our total investment in Nsure, Inc., a digital insurance agency, amounted to $1.350 million. Reliance Holdings has committed to fund the Company for at least the next 12 months in the event that the capital raise is not successful. Additionally, we are in the process of closing on an acquisition that will make the Company cash positive. Specifically, the target agency reports over 145 affiliated offices in approximately 40 states nationwide. In addition, they have established relationships with over 120 well-known local and national carriers. The target agency has experienced steady organic growth and is generating over $150 million in recurring annual premiums. In addition, the audited financials for the company reflect over $2.5 million in net income in 2019, and we anticipate the transaction will be immediately accretive to our earnings. Moreover, the combination of this target acquisition with the cash flow of our existing portfolio, should ensure very strong, positive cash flow of the combined entities going forward.
Long term, we seek to conduct all transactions and acquisitions through the direct operations of the Company. However, in some instances, Reliance Global Holdings could act as a place holder to facilitate the acquisition process, with those properties later transferred to us. In addition, we and Reliance Holdings plan to conduct future transactions in order to transfer additional assets to us, with the final goal of transferring most of the desirable properties, excluding assets that Reliance Holdings owns via joint venture or with third parties.
Over the next 12 months, we plan to focus on the expansion and growth of our business through two different channels: continued asset acquisitions in insurance markets; and organic growth of our current insurance operations through geographic expansion and market share growth.
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