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LAKEWOOD, NJ - Reliance Global Group, Inc. (NASDAQ:RELI), a micro-cap insurance technology company with a market capitalization of $4.17 million, announced Tuesday it has signed a non-binding Letter of Intent (LOI) to sell its wholly owned subsidiary Fortman Insurance Agency for $5 million in cash. According to InvestingPro data, this sale could provide crucial liquidity for the company, which has been quickly burning through cash.
According to the company, the contemplated sale price represents a premium over the original acquisition cost. The transaction is subject to customary due diligence and negotiation of definitive documentation. With current annual revenue of $14.21 million and a gross profit margin of 15.49%, the company’s operational metrics suggest room for improvement.
Ezra Beyman, CEO of Reliance, stated that the potential sale "demonstrates our disciplined capital allocation strategy" and noted that the company acquired Fortman "at a compelling valuation, strengthened its operations, and are now positioned to realize a meaningful return."
The company plans to use proceeds from the sale to support its planned acquisition of Spetner Associates, which Reliance describes as a rapidly growing insurance platform. In previous announcements, the company indicated that Spetner has experienced growth in recent years and is expected to generate cash flow at both subsidiary and parent company levels. This strategic move comes as the company manages a total debt of $12.93 million and maintains a current ratio of 0.98.
Since acquiring Fortman, Reliance reports it has implemented operational enhancements, upgraded internal systems, and established a leadership team, resulting in a "well-capitalized, efficiently run agency with a growing customer base."
Reliance Global Group describes itself as an InsurTech company that leverages artificial intelligence and cloud-based technologies for the insurance agency industry. The company operates both business-to-business and business-to-consumer platforms, alongside retail insurance agencies throughout the United States. For a deeper understanding of RELI’s financial health and growth prospects, investors can access comprehensive analysis and additional insights through InvestingPro, which offers detailed research reports covering over 1,400 US stocks.
The announcement was made in a press release statement issued by the company.
In other recent news, Reliance Global Group reported a notable improvement in its first-quarter financial performance for 2025. The company’s net loss decreased by 68%, from $5.3 million in the first quarter of 2024 to $1.7 million in the same period of 2025. Additionally, the adjusted EBITDA turned positive, marking a significant 300% improvement to $145,000. Commission income saw a 4% increase, reaching $4.2 million. Reliance Global also launched Reliance Auto Leasing, a new service aimed at expanding its product offerings. In a strategic move, the company announced the anticipated acquisition of Spetner Associates, which is expected to enhance its market presence and agency network. Furthermore, Reliance Global has withdrawn its S-1 registration, halting plans for a public offering. The company did not specify reasons for this decision or outline alternative financing strategies. These developments indicate a strategic focus on growth and profitability.
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