| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation and Principles of Consolidation The
accompanying consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles
generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the
accounting of Reliance Global Group, Inc., and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated
in consolidation. Liquidity As
of December 31, 2023, the Company’s reported cash and restricted cash aggregated balance was approximately $ 2,739,000 4,379,000 3,190,000 1,189,000 7,147,000 13,879,000 7,594,000 5,504,000 1,650,000 10,025,000 1,985,000 12,010,000 3,446,000 Although
there can be no assurance that debt or equity financing will be available on acceptable terms, the Company believes its financial position
and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or
events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year
of filing these financial statements with the Securities and Exchange Commission (“SEC”). Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management
bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could
differ materially from those estimates. Cash
and Restricted Cash Cash
consists of checking accounts. The Company considers all highly liquid investments with an original maturity of three months or less
to be cash equivalents. Restricted
cash includes cash pledged as collateral to secure obligations and/or all cash whose use is otherwise limited by contractual provisions. At
times, some cash balances held in banks may exceed the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit
of $ 250,000 The
reconciliation of cash and restricted cash reported within the applicable balance sheet accounts that sum to the total of cash and restricted
cash presented in the statement of cash flows is as follows: SCHEDULE
OF RESTRICTED CASH IN STATEMENT OF CASH FLOW
December
31, 2023 December
31, 2022
Cash $ 1,329,016 $ 505,410
Restricted cash 1,409,895 1,404,359
Total cash and restricted cash $ 2,738,911 $ 1,909,769 Property
and Equipment Property
and equipment is stated at cost, less accumulated depreciation. Depreciation is recognized over an asset’s estimated useful life
using the straight-line method beginning on the date an asset is placed in service. The Company regularly evaluates the estimated remaining
useful lives of the Company’s property and equipment to determine whether events or changes in circumstances warrant a revision
to the remaining period of depreciation. Certain capitalized software has been reclassified in the consolidated balance sheet from property
and equipment, net to intangibles, net and comparative periods have been adjusted accordingly. Maintenance and repairs are charged to
expense as incurred. Estimated useful lives of the Company’s Property and Equipment are as follows: SCHEDULE OF ESTIMATED USEFUL LIVE PROPERTY AND EQUIPMENT
Useful Life (in years)
Computer equipment 5
Office equipment and furniture 7
Leasehold improvements Shorter of the useful life or the lease term Fair
Value of Financial Instruments Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: Level
1 — Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets and liabilities; Level
2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly
or indirectly for substantially the full term of the asset or liability; and Level
3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market
participants would use in pricing the asset or liability, including assumptions about risk. As
of December 31, 2023, and 2022 respectively, the Company’s balance sheet includes certain financial instruments, including cash,
notes receivables, accounts payable, and short and long-term debt. The carrying amounts of current assets and current liabilities approximate
their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
The carrying amounts of long-term debt approximate their fair value as the variable interest rates are based on a market index. Warrant
Liabilities: Warrant Liabilities SCHEDULE OF WARRANT LIABILITY
December 31, 2023 December 31, 2022
Stock price $ 0.54 $ 8.55
Volatility 110.0 % 105.0 %
Time to Expiry 4.99 4.01
Dividend yield 0 % 0 %
Risk free rate 3.8 % 4.1 %
Warrant
Liabilities 3.8 % 4.1 % The
following reconciles the warrant liabilities for the years ended December 31, 2023 and 2022: SCHEDULE
OF RECONCILES WARRANT COMMITMENT
Years ended December 31, 2023 and 2022
Series B Warrant Commitment Series B warrant liabilities Placement agent warrants Total
Beginning balance, December 31, 2021 37,652,808 - - 37,652,808
Initial recognition - 55,061,119 1,525,924 56,587,043
Unrealized (gain) loss 17,408,311 (48,668,869 ) (1,477,024 ) (32,737,582 ) 1
Warrants exercised or transferred (55,061,119 ) (8,000 ) - (55,069,119 )
Ending balance, December 31, 2022 $ - $ 6,384,250 $ 48,900 $ 6,433,150
Beginning balance, December 31, 2022 $ - $ 6,384,250 $ 48,900 $ 6,433,150
Unrealized (gain) loss (5,534,931 ) (48,575 ) (5,583,506 ) 2
Warrants exercised or exchanged - (580,651 ) - (580,651 )
Ending balance, December 31, 2023 - $ 268,668 $ 325 $ 268,993
1 Recognition and change
in fair value of warrant liabilities per income statement is $ 29,064,958 3,672,624
2 Recognition and change in fair value of warrant liabilities per income statement is $ 5,503,647 79,859 Earn-out
liabilities: SCHEDULE
OF FAIR VALUE MEASUREMENTS
December
31, 2023 December
31, 2022
Valuation technique Discounted cash
flow Discounted cash
flow
Significant unobservable
input Projected
revenue and probability of achievement Projected
revenue and probability of achievement The
Company values its Level 3 earn-out liability related to the Southwestern Montana Insurance Center acquisition using a Monte Carlo simulation in a risk-neutral framework
(a special case of the Income Approach). The following summarizes the significant unobservable inputs: SCHEDULE
OF LEVEL 3 FAIR VALUE MEASUREMENTS
December 31, 2023
Volatility 110 %
Credit Spread 7.73 %
Number of trading days 252
Risk free rate 5.34 %
Remaining term (years) 0.2
Stock Price $ 0.54
Dividend Yield 0 %
Number of Iterations 100,000 Undiscounted
remaining earn out cash payments were approximately $ 165,000 SCHEDULE
OF GAIN OR LOSSES RECOGNIZED FAIR VALUE
December 31, December 31,
Beginning balance – January 1 $ 2,709,478 $ 3,813,878
Acquisitions and Settlements (3,260,403 ) (1,104,924 )
Period adjustments:
Fair
value and estimate changes * 1,716,873 524
Earn-out payable in common shares (159,867 ) -
Earn-out transferred to loans payable, related parties (846,214 ) -
Ending balance $ 159,867 $ 2,709,478
Less: Current portion (159,867 ) (2,153,478 )
Ending balance, less current portion $ - $ 556,000
* Recorded as change in estimated acquisition earn-out payables on the consolidated statements of operations. Deferred
Financing Costs The
Company has recorded deferred financing costs because of fees incurred by the Company in conjunction with its debt financing activities.
These costs are amortized to interest expense using the straight-line method which approximates the interest rate method over the term
of the related debt. As of December 31, 2023, and 2022, unamortized deferred financing costs were $ 273,864 313,829 Business
Combinations The
Company accounts for its business combinations using the acquisition method of accounting. Under the acquisition method, assets acquired,
liabilities assumed, and consideration transferred are recorded at the date of acquisition at their respective fair values. Definite-lived
intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values
of the net assets acquired is recorded as goodwill. Goodwill
represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination.
Acquisition-related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination
provides for contingent consideration such as earn-outs, the Company records the contingent consideration at fair value at the acquisition
date. The Company remeasures fair value as of each reporting date and changes resulting from events after the acquisition date, are recognized
as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent
settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value
and accretion costs are recognized in earnings. Identifiable
Intangible Assets, net Finite-lived
intangible assets such as customer relationships assets, trademarks and tradenames are amortized over their estimated useful lives, generally
on a straight-line basis for periods ranging from 3 20 Goodwill
and other indefinite-lived intangibles The
Company records goodwill when the purchase price of a business acquisition exceeds the estimated fair value of net identified tangible
and intangible assets acquired. Goodwill is assigned on the acquisition date and tested for impairment at least annually, or more frequently
when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its
carrying value. Similarly, indefinite-lived intangible assets (if any) other than goodwill are tested annually or more frequently if
indicated, for impairment. If impaired, intangible assets are written down to fair value based on the expected discounted cash flows. Financial
Instruments The
Company evaluates issued financial instruments for classification as either equity or liability based on an assessment of the
financial instrument’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity
(“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”) as well as in accordance with ASU 2020-06. The assessment considers whether the
financial instruments issued are freestanding pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and, if
applicable whether the financial instruments meet all of the requirements for equity classification under ASC 815, including whether
the financial instruments are indexed to the Company’s own Common Stock, among other conditions for equity classification.
This assessment, which requires the use of professional judgment, is conducted at the time of issuance and as of each subsequent
reporting period end date while the financial instruments are outstanding. Financial instruments that are determined to be
liabilities under ASC 480 or ASC 815 are held at their initial fair value and remeasured to fair value at each subsequent reporting
date, with changes in fair value recorded as a non-operating, non-cash loss or gain, as applicable. The
Company’s financial instruments consist of derivatives related to the warrants issued with the securities purchase agreement as
discussed in Note 9, Warrant Liabilities The adoption of Topic 326 did not significantly change our approach to
the valuation of trade receivables. The Company determines whether there is an expected loss on our accounts receivable by reviewing all
available data, including our customers' latest available financial statements, their credit standing, our historical collection experience,
and current and future market and economic conditions. As of December 31, 2023, and December 31, 2022, it was not deemed necessary to
recognize any allowance for credit losses on our trade receivables. Revenue
Recognition The
Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers The
Company’s revenue is primarily comprised of agency commissions earned from insurance carriers (the “Customer” or “Carrier”)
related to insurance plans produced through brokering, producing, and servicing agreements between insurance carriers and members. The
Company defines a “Member” as an individual, family or entity currently covered or seeking insurance coverage. The
Company focuses primarily on agency services for insurance products in the “Healthcare” and property and casualty, which
includes auto (collectively “P&C”) space, with nominal activity in the life insurance and bond sectors. Healthcare includes
plans for individuals and families, Medicare supplements, ancillary and small businesses. The Company also earns revenue in the “Insurance
Marketing” space as discussed further below. Consideration
for all agency services typically is based on commissions calculated by applying contractual commission rates to policy premiums. For
P&C, commission rates are applied to premiums due, whereas for healthcare, commission rates, including override commissions, are
applied to monthly premiums received by the Carrier. The
Company has two forms of billing practices, “Direct Bill” and “Agency Bill”. With Direct Bill, Carriers bill
and collect policy premium payments directly from Members without any involvement from the Company. Commissions are paid to the Company
by the Carrier in the following month. With Agency Bill, the Company bills Members premiums due and remits them to Carriers net of commission
earned. The
following outlines the core principles of ASC 606: Identification
of the contract, or contracts, with a customer Identification
of the performance obligations in the contract Determination
of the transaction price Allocation
of the transaction price to the performance obligations in the contract Recognition
of revenue when, or as, the Company satisfies a performance obligation Healthcare
revenue recognition: The
Company identifies a contract when it has a binding agreement with a Carrier, the Customer, to provide agency services to Members. There
typically is one performance obligation in contracts with Carriers, to perform agency services that culminate in monthly premium cash
collections by the Carrier. The performance obligation is satisfied through a combination of agency services including, marketing carrier’s
insurance plans, soliciting Member applications, binding, executing and servicing insurance policies on a continuous basis throughout
a policy’s life cycle which includes and culminates with the Customer’s collection of monthly premiums. No commission is
earned if cash is not received by Carrier. Thus, commission revenue is earned only after a month’s cash receipts from Members’
dues is received by the Customer. Each month’s Carrier cash collections is considered a separate unit sold and transferred to the
Customer i.e., the satisfaction of that month’s performance obligation. Transaction
price is typically stated in a contract and usually based on a commission rate applied to Member premiums paid and received by Carrier.
The Company generally continues to receive commission payments from Carriers until a Member’s plan is cancelled or the Company
terminates its agency agreement with the Carrier. Upon termination, the Company normally will no longer receive any commissions from
Carriers even on business still in place. In some instances, trailing commissions could occur which would be recognized similar to other
Healthcare revenue. With one performance obligation, allocation of transaction price is normally not necessary. Healthcare
typically utilizes the Direct Bill method. The
Company recognizes revenue at a point in time when it satisfies its monthly performance obligation and control of the service transfers
to the Customer. Transfer occurs when Member insurance premium cash payments are received by the Customer. The Customer’s receipt
of cash is the culmination and complete satisfaction of the Company’s performance obligation, and the earnings process is complete. With
Direct Bill, since the amount of monthly Customer cash receipts is unknown to the Company until the following month when notice is provided
by Customer to Company, the Company accrues revenue at each period end. Any estimated revenue accrued and recognized at a period-end
is trued up for financial reporting per actual revenue earned as provided by the Customer during the following month. P&C
revenue recognition The
Company identifies a contract when it has a binding agreement with a Carrier, the Customer, to provide agency services to Members. There
typically is one performance obligation in contracts with Customers, to perform agency services to solicit, receive proposals and bind
insurance policies culminating with policy placement. Commission revenue is earned at the time of policy placement. Transaction
price is typically stated in a contract and usually based on commission rates applied to Member premiums due. With one performance obligation,
allocation of transaction price is normally not necessary. P&C
utilizes both the Agency Bill and Direct Bill methods, depending on the Carrier. The
Company recognizes revenue at a point in time when it satisfies its performance obligation and control of the service transfers to the
Customer. Transfer occurs when the policy placement process is complete. With
both Direct Bill and Agency Bill, the Company accrues commission revenue in the period policies are placed. With Agency Bill, payment
is typically received from Members in the month earned, however with Direct Bill, payment is typically received from Carriers in the
month subsequent to the commissions being earned. Other
revenue policies: When
applicable, commission revenue is recognized net of any deductions for estimated commission adjustments due to lapses, policy cancellations,
and revisions in coverage. The
Company could earn additional revenue from contingent commissions, profit-sharing, override and bonuses based on meeting certain revenue
or profit targets established periodically by the Carriers (collectively, “Contingent Commissions”). Contingent Commissions
are earned when the Company achieves targets established by Carriers. The Carriers notify the Company when it has achieved the target.
The Company recognizes revenue for any Contingent Commissions at the time it is reasonably assured that a significant revenue reversal
is not probable, which is generally when a Carrier notifies the Company that it is on track or has earned a Contingent Commission. The
following table disaggregates the Company’s revenue by line of business, showing commissions earned: SCHEDULE
OF DISAGGREGATION REVENUE
Year ended December 31, 2023 Medical Life Property and Casualty Total
EBS $ 883,327 $ 22,114 $ - $ 905,441
USBA 43,193 3184 - 46,377
CCS/UIS - - 289,486 289,486
Montana 1,863,455 12,488 - 1,875,943
Fortman 1,161,506 5,487 1,044,592 2,211,585
Altruis 5,454,654 - - 5,454,654
Kush 1,209,854 - - 1,209,854
Reli Exchange 209,615 127,486 1,401,385 1,738,486
Total $ 10,825,064 $ 170,759 $ 2,735,463 $ 13,731,826
Year
ended December
31, 2022 Medical Life Property
and Casualty Total
EBS $ 781,570 $ 16,843 $ - $ 798,413
USBA 51,006 1462 - 52,468
CCS/UIS - - 254,325
254,325
Montana 1,860,475 7,661 - 1,868,136
Fortman 1,267,945 6705 842,961 2,117,611
Altruis 4,041,495 2954 - 4,044,449
Kush 1,535,416 1040 - 1,536,456
Reli
Exchange 152,094 106,052 831,878 1,090,024
Total $ 9,690,001 $ 142,717 $ 1,929,164 $ 11,761,882 General
and Administrative General
and administrative expenses primarily consist of personnel costs for the Company’s administrative functions, professional service
fees, office rent, all employee travel expenses, and other general costs. Marketing
and Advertising The
Company’s direct channel expenses primarily consist of costs for e-mail marketing and newspaper advertisements. The Company’s
online advertising channel expense primarily consist of social media ads. Advertising costs for both direct and online channels are expensed
as incurred. Equity-Based Compensation Equity-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a
straight-line basis over the requisite service period, based on the terms of the awards. The fair value of the stock-based payments
to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there
is a contractual term for services in which case such compensation would be amortized over the contractual term. To the extent
possible, the Company will estimate and recognize expected forfeitures. Leases The
Company recognizes leases in accordance with Accounting Standards Codification Topic 842, “Leases” (“ASC 842”
or “ASU 2016-12”). This standard provides enhanced transparency and comparability by requiring lessees to record right-of-use
assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases are recognized as a
single lease expense, generally on a straight-line basis. The
Company is the lessee in a contract when the Company obtains the right to use an asset. We currently lease real estate and office space
under non-cancelable operating lease agreements. When applicable, consideration in a contract is allocated between lease and non-lease
components. Lease payments are discounted using the implicit discount rate in the lease. If the implicit discount rate for the lease
cannot be readily determined, the Company uses an estimate of its incremental borrowing rate. The Company did not have any contracts
accounted for as finance leases as of December 31, 2023, or 2022. Operating leases are included in the line items right-of-use assets,
current portion of leases payable, and leases payable, less current portion in the consolidated balance sheets. Right-of-use (“ROU”)
asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s
obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum
lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded
on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated statement of operations.
The Company determines a lease’s term by agreement with lessor and includes lease extension options and variable lease payments
when option and/or variable payments are reasonably certain of being exercised or paid. Income
Taxes The
Company recognizes deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between the book
and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than
not that some portion or all of the deferred tax asset will not be realized. In evaluating its ability to recover deferred tax assets
within the jurisdiction in which they arise, the Company considers all available positive and negative evidence, including the expected
reversals of taxable temporary differences, projected future taxable income, taxable income available via carryback to prior years, tax
planning strategies, and results of recent operations. The Company assesses the realizability of its deferred tax assets, including scheduling
the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal
of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied
upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the
temporary differences giving rise to the deferred tax assets that will be realized. Discontinued Operations The Company’s board of directors approved the
discontinuation and abandonment of Medigap Healthcare Insurance Company, LLC (“Medigap”), a subsidiary of the Company, effective
April 17, 2023, due to Medigap’s sustained recurring losses stemming from amongst other factors, greater than anticipated revenue
chargebacks. The Company was unable to divest its interest in Medigap for value, and accordingly, operations were wound down in an orderly
manner. In doing so, the Company transferred to its operating entity, Medigap’s customer relationships and internally developed
and purchased software intangible assets, with net of amortization combined value of approximately $ 4,300,000 29,500 0 4,400,000 Settlement Agreement On June 30, 2023, the Company entered into a confidential
settlement agreement and mutual release (the “Settlement Agreement”) with certain Medigap affiliated entities and persons,
and the former owners of Medigap, whereby the Company would receive a settlement payment, net of costs, of $ 2,761,190 The following tables present the major components
of assets and liabilities included in discontinued operations on the condensed consolidated balance sheets. SCHEDULE
OF DISCONTINUED OPERATIONS ON CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS
December 31, 2023 December 31, 2022
Accounts receivable $ - $ 73,223
Accounts receivable, related parties - 3,595
Accounts receivable - 3,595
Other receivables - 5,388
Prepaid expense and other current assets - 3,792
Current Assets - Discontinued Operations $ - $ 85,998
Condensed consolidated balance sheets - Current Assets - Discontinued Operations $ - $ 85,998
Property and equipment, net - $ 24,116
Right-of-use assets - 163,129
Intangibles, net - 318,000
Goodwill - 4,825,634
Other Assets - Discontinued Operations $ - $ 5,330,879
Condensed consolidated balance sheets - Other Assets - Discontinued Operations $ - $ 5,330,877
Accounts payable and other accrued liabilities - $ 506,585
Chargeback reserve - 915,934
Current portion of leases payable - 178,117
Current Liabilities - Discontinued Operations $ - $ 1,600,636
Condensed consolidated balance sheets - Current Liabilities - Discontinued Operations $ - $ 1,600,636 The following table rolls forward Medigap’s
assets and liabilities from their carrying values pre-abandonment to their values post abandonment, and presents the impact of reclassifications,
impairments, and write-offs:
Medigap Related Assets Carrying Value Prior To Abandonment Asset and Liability Transfers Retained by the Company Asset Impairments and Liability Write-Offs Carrying Value as of December 31, 2023
Accounts receivable $ 56,398 $ - $ (56,398 ) $ -
Accounts receivable, related party 3,595 - (3,595 ) -
Accounts receivable 3,595 - (3,595 ) -
Other receivables 5,388 - (5,388 ) -
Current assets – Medigap $ 65,381 $ - $ (65,381 ) $ -
Property and equipment, net $ 22,378 $ - $ (22,378 ) $ -
Right-of-use assets 119,594 - (119,594 ) -
Intangibles, net 4,570,536 (4,258,214 ) 1 (312,322 ) -
Goodwill 4,825,634 - (4,825,634 ) -
Other assets - Medigap $ 9,538,142 $ (4,258,214 ) $ (5,279,928 ) $ -
Total assets - Medigap $ 9,603,523 $ (4,258,214 ) $ (5,345,309 ) $ -
Accounts payable and other accrued liabilities $ 4,157 $ - $ (4,157 ) $ -
Short term financing agreements 29,500 (29,500 ) - -
Chargeback reserve 831,725 - (831,725 ) 2 -
Current portion of leases payable 134,517 - (134,517 ) 3 -
Other liabilities 9,842 - (9,842 ) 3 -
Current liabilities - Medigap $ 1,009,741 $ (29,500 ) $ (980,241 ) $ -
Total liabilities - Medigap $ 1,009,741 $ (29,500 ) $ (980,241 ) $ -
Net assets and liabilities - Medigap $ 8,593,782 $ (4,228,714 ) $ (4,365,068 ) $ -
1 Includes customer relationships and internally developed and purchased software intangible assets that have continued value to the Company and have not been impaired as the fair value exceeds carrying cost.
2 Estimated liability write-off per net zero dollar estimated liability value.
3 Liability discharge pursuant to the Settlement Agreement. The following tables disaggregate the major classes
of pretax gain and loss as presented in discontinued operations in the condensed consolidated statements of operations.
Year Ended December 31, 2023 Year Ended December
31, 2022
Income
Commission income $ 744,030 $ 4,994,002
Expenses
Commission expense 110,639 604,042
Salaries and wages 454,663 1,973,579
General and administrative 129,363 508,342
Marketing and advertising 426,818 2,414,583
Depreciation and amortization 7,283 238,307
Other expenses (income) (3,902 ) (22,454 )
Total discontinued operations expenses before impairments and write-offs 1,124,864 5,716,399
Total discontinued operations income / (loss) before impairments and write-offs $ (380,834 ) $ (722,397 )
Gains and (losses) from recoveries and impairments / write-offs of discontinued operations assets and liabilities
Settlement Recovery, net of costs $ 2,761,190 -
Asset impairment losses
Accounts receivable 56,398 -
Accounts receivable, related parties 3,595 -
Other receivables 5,388 -
Property and equipment, net 22,378 -
Right-of-use assets 119,593 -
Intangibles, net 312,322 -
Goodwill 4,825,634 14,373,374
Total asset impairments 5,345,308 14,373,374
Liability write-off gains
Accounts payable and other accrued liabilities 4,154 -
Other payables 9,842 -
Chargeback reserve 831,725 -
Current portion of leases payable 134,517 -
Total liability write-off gains 980,238 -
Discontinued operations net asset and liability impairments / write-offs gains and (losses) 4,365,070 14,373,374
Net gains and (losses) from recoveries and impairments / write-offs from discontinued operations assets and liabilities (1,603,880 ) (14,373,374 )
Loss from discontinued operations before tax (1,984,714 ) (15,095,770 )
Consolidated statement of operations - Loss from discontinued operations before
tax $ (1,984,714 ) $ (15,095,770 ) Seasonality A
greater number of the Company’s Medicare-related health insurance plans are sold in the fourth quarter during the Medicare annual
enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage. The majority of the Company’s
individual and family health insurance plans are sold in the annual open enrollment period as defined under the federal Patient Protection
and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally
are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special
enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recently
Issued Accounting Pronouncements In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock
Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), to clarify the scope application
of profits interest and similar awards by adding illustrative guidance in ASC 718, Compensation - Stock Compensation In
December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 improves the transparency of income tax disclosures by
requiring, on an annual basis, consistent categories, and greater disaggregation of information in the rate reconciliation as well as
income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company for fiscal years beginning after December 15,
2024. Early adoption is permitted. The amendments in this update should be applied prospectively, however, retrospective application
is permitted. The Com |
