Reliance Global Group, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Reliance Global Group, Inc. (RELI) on January 14, 2022, reporting events occurring on January 10, 2022. The filing details the acquisition of assets from Medigap Healthcare Insurance Company, LLC and the associated employment agreement with the acquired entity's former COO.
Key Financial Metrics and Transaction Details
The filing does not provide standard periodic financial metrics such as revenue, profit, cash flow, margins, or debt levels for the reporting period. The primary financial data relates to the acquisition transaction:
- Total Purchase Price: $20,096,250
- Cash Consideration: $18,138,750
- Stock Consideration: 606,037 shares of restricted common stock
- Employment Compensation: Annual salary of $200,000 plus a one-time bonus of $100,000 for Kyle Perrin.
Material Changes
The material change reported is the expansion of the Company's asset base through the purchase of all assets of Medigap Healthcare Insurance Company, LLC. This transaction involves a significant cash outflow and the issuance of unregistered securities. The purchase price is subject to post-closing adjustments to reconcile pre-closing credits and liabilities.
Outlook, Risks, and Unusual Items
Management Commentary and Agreements: The Company entered into a three-year employment agreement with Kyle Perrin to manage the acquired assets. Mr. Perrin is entitled to an annual bonus of 3.5% of the Company's EBITDA and is subject to a two-year non-compete provision.
Securities Restrictions: The 606,037 shares issued to the seller are subject to lock-up arrangements: 50% may be sold after the one-year anniversary of closing, and the remaining 50% after the second-year anniversary.
Financial Reporting: Pro forma financial information and required financial statements under Item 9.01 are not included in this filing but will be filed within 71 days of the report date.
Key Facts for Investor Verification
- Verify the final purchase price after post-closing adjustments for credits and liabilities.
- Confirm the dilution impact of the 606,037 shares issued to the seller.
- Monitor the upcoming filing (within 71 days) for pro forma financial information to assess the acquisition's impact on the balance sheet.
- Review the specific terms of the non-compete and termination provisions in the employment agreement with Kyle Perrin.