Reliance Global Group, Inc. Commitments Disclosure

NOTE 14. COMMITMENTS AND CONTINGENCIES

Legal Contingencies

The Company is subject to various legal proceedings and claims, either asserted or unasserted, arising in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe the outcome of any of these matters will have a material adverse effect on our business, financial position, results of operations, or cash flows, and accordingly, no legal contingencies are accrued as of December 31, 2025 and 2024. Litigation relating to the insurance brokerage industry is not uncommon. As such the Company, from time to time may be subject to such litigation. No assurances can be given with respect to the extent or outcome of any such litigation in the future.

Spetner Associates, Inc. Transaction and Termination

On May 14, 2024, as amended and restated on September 6, 2024, and further amended on October 29, 2024 and February 20, 2025 (collectively, the “Stock Exchange Agreement”), the Company entered into an agreement to acquire 80% of the issued and outstanding common stock of Spetner Associates, Inc. (“Spetner”), a technology-enabled benefits enrollment company, for aggregate consideration of $16,050,000. The purchase price was to be paid in a combination of $6,500,000 in cash, shares of the Company’s common stock equal to 9.9% beneficial ownership at the time of issuance, and promissory notes for the remaining balance. The agreement also provided the Company with an option to acquire the remaining 20% interest based on a multiple of 10 times EBITDA.

In connection with the contemplated acquisition, the Company issued 140,064 shares and 157,000 shares of its common stock on October 29, 2024 and February 20, 2025, respectively, representing non-refundable deposits and prepayments totaling approximately $568,856 toward the initial purchase price. These amounts were initially recorded as prepaid expenses and other current assets.

On July 22, 2025, the Company received and accepted written notice of termination of the Stock Exchange Agreement. As a result of the termination, the Company does not expect to recover the shares previously issued as prepayments. Accordingly, the Company recognized an expense of approximately $568,856 within general and administrative expenses during the year ended December 31, 2025. No acquisition of Spetner was consummated, and the Company has no ongoing material obligations related to the terminated agreement.