SecProbe.io

CORRESP
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filename1.htm

August
10, 2023

VIA
EDGAR

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

100
F Street, N.E.

Washington,
D.C. 20549

Attention:
John Spitz, Staff Accountant

  Re:
  Reliance Global Group, Inc.

Form
10-K for Fiscal Year Ended December 31, 2021

Form 10-K for Fiscal Year Ended December 31, 2022

Form 10-Q for Fiscal Quarter Ended March
31, 2023

Response Dated May 25, 2023

File
No. 001-40020

Dear
Mr. Spitz:

This
letter is being furnished in response to the comments of the staff (the “Staff”) of the Division of Corporation Finance of
the Securities and Exchange Commission (the “Commission”) that was contained in the Staff’s letter dated July 13, 2023
(the “Comment Letter”), to Reliance Global Group, Inc. (the “Company”) with respect to the Company’s Annual
Report on Form 10-K for the year ended December 31, 2021, the Company’s Annual Report on Form 10-K for the year ended December
31, 2022 (the “2022 10-K”), and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2023, each as filed with the Commission (File No. 001-40020).

Set
forth below are the Company’s responses to the Staff’s comments contained in the Comment Letter. For ease of reference, the
Staff’s comments are reproduced below in italics and are followed by the Company’s responses.

Form
10-K for Fiscal Year Ended December 31, 2022

Item
9A. Controls and Procedures, page 37

1. We
                                            note you identified a material weakness in disclosure controls and procedures related to
                                            the calculation of earnings per share and concluded that they were ineffective at March 31,
                                            2022, June 30, 2022, September 30, 2022 and March 31, 2023 as disclosed in your Forms 10-Q/A
                                            or Form 10-Q. Considering this disclosure and the absence of disclosures about any changes
                                            in controls through March 31, 2023, please amend your Form 10-K to disclose similar information
                                            regarding the material weakness and change your conclusions regarding disclosure controls
                                            and procedures and internal control over financial reporting or tell us why your conclusions
                                            of effectiveness are appropriate.

  Response:
The Company acknowledges the Staff’s comment and has filed an amendment to its 2022 10-K (“Amendment No. 1”) that
includes disclosure in Item 9A regarding (i) the existence of a material weakness in disclosure controls and procedures as of December
31, 2022, and (ii) the conclusion of the Company’s principal executive officer and principal financial officer that, as of December
31, 2022, the Company’s disclosure controls and procedures were not effective. In particular, the Company has included the following
disclosure in Item 9A of Amendment No. 1 (on page 2 of Amendment No. 1):

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

August
10, 2023

Page
2

Item
9A. Controls and Procedures

Controls
and Procedure Requirements

Evaluation
of Disclosure Controls and Procedures

Disclosure
controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed
under the Exchange Act, such as this annual report, is recorded, processed, summarized, and reported within the time period specified
in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated
and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and
chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December
31, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of
December 31, 2022, our disclosure controls and procedures were not effective in all material respects.

The
Company determined it had a material weakness in its disclosure controls and procedures as it pertains to earnings per share (EPS) for
the fiscal year ended December 31, 2022. During the quarter ended March 31, 2023, the Company mitigated this deficiency by consulting
with qualified advisors that have in-depth EPS expertise. These advisors will assist the Company in the calculations and disclosures
of EPS for future reporting periods.

We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

August
10, 2023

Page
3

Management’s
Report on Internal Control Over Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange
Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.

All
internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore,
even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and
financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject
to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures
may deteriorate.

Management
assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making the assessment,
management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO – 2013) in Internal
Control-Integrated Framework. Based on its assessment, management concluded that, as of December 31, 2022, our Company’s internal
control over financial reporting was not effective in all material respects, due to the material weakness in disclosure controls and
procedures discussed above.

Changes
in Internal Control over Financial Reporting

There
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

August
10, 2023

Page
4

Report
of Independent Registered Public Accounting Firm, page F-1

2. Please
                                            amend your Form 10-K to include a signed audit report for the years ended December 31, 2022
                                            and December 31, 2021. Refer to Rule 2-02(a) of Regulation S-X.

Response:
The Company acknowledges the Staff’s comment. Although Mazars USA LLP (“Mazars”), the Company’s independent
registered public accounting firm, delivered to the Company a manually signed copy of its Report of Independent Registered Public Accounting
Firm (the “Audit Report”), the version of the 2022 10-K that was filed with the Commission inadvertently omitted Mazars’
conformed signature on the copy of the Audit Report included in Part II, Item 8 of the 2022 10-K. Therefore, in Amendment No. 1,
Part IV, Item 15 has been replaced in its entirety, solely to include Mazars’ conformed signature on the Audit Report. No changes
to the financial statements or notes have been made in Amendment No. 1.

Form
10-Q for Fiscal Quarter Ended March 31, 2023

Note
1. Summary of Business and Significant Accounting Policies – Discontinued Operations, page 12

3. Please
                                            tell us and revise future filings to describe the expected manner (e.g., sale or abandonment)
                                            and timing of the disposal of the Medigap Healthcare Insurance Company, LLC. Refer to ASC
                                            205-20-50-1.a.2.

Response:
The Company respectfully acknowledges the Staff’s comment. In the Company’s Quarterly Report on Form 10-Q for the period
ended June 30, 2023 as filed with the Commission on the date hereof (the “June 2023 10-Q”), the Company has disclosed that
it abandoned Medigap Healthcare Insurance Company, LLC and clarified the facts, circumstances, and manner of the disposal.

Below
is an excerpt of the Company’s the disclosure in the June 2023 10-Q which addresses the manner and timing of the
disposal:

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, as well as, its short-term financing arrangement of $29,500, and each are respectively classified in the intangible
assets and short term financing agreements accounts in the condensed consolidated balance sheets for the periods ended June 30, 2023
and December 31, 2022. These assets have continued value to the Company and have not been impaired as the fair value exceeds carrying
cost. Medigap’s remaining assets were considered to have no remaining asset value and were fully impaired. Certain liabilities
and estimated liabilities as outlined in the tables herein, were discharged and/or written-off in conjunction with the Settlement Agreement
(as defined below) because of them having a net zero dollar estimated liability value. Accordingly, the Company recognized a net
of estimated liability adjustments loss of approximately $4,400,000, and gain of approximately $10,000, presented in income (loss) from
discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2023. As part of the
abandonment, the Company cancelled third party contracts, settled outstanding vendor and other third-party obligations, ceased to enter
into new customer contracts via Medigap, and no further customer performance obligations existed. The Company does not expect
further continuing involvement with Medigap, and in accordance with ASC 205-20-45-9, no corporate overhead has been allocated to discontinued
operations.

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 of $2,900,000 and was released from all past and future Medigap obligations and liabilities. The settlement payment was received
in full by the Company in July 2023 and is recorded as income from discontinued operations in the condensed consolidated statements of
operations for the three and six months ended June 30, 2023.

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

August
10, 2023

Page
5

4. Please
                                            tell us and revise future filings to disclose the major classes of assets and liabilities
                                            presented as discontinued operations as of each period end presented and discuss any changes
                                            in disclosed consolidated balance sheet line items from December 31, 2022 to March 31, 2023.

Response:
The Company respectfully acknowledges this comment. In the June 2023 10-Q, the Company has disclosed the major classes of assets
and liabilities presented as discontinued operations as of each period end presented. Below is an excerpt of the Company’s disclosure
in the June 2023 10-Q that discusses the major changes assets and liabilities presented as discontinued operations as of each period
presented:

The
following tables present the major components of assets and liabilities included in discontinued operations on the condensed consolidated
balance sheets.

    6/30/2023
    12/31/2022

    Accounts
    receivable
      -
    $ 73,223

    Accounts
    receivable, related parties
           -
      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
      -
    $ 5,330,879

    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

Securities
and Exchange Commission

Division
of Corporation Finance, Office of Finance

August
10, 2023

Page
6

5. It
                                            appears you classify Medigap customer relationship intangible assets initially recognized
                                            as part of the January 2022 acquisition as “Other assets – discontinued operations”
                                            at December 31, 2022 but subsequently reclassify them to Intangibles, net at March 31, 2023.
                                            Please explain to us all the facts and circumstances related to classification and measurement
                                            of these customer relationship intangible assets at December 31, 2022 and March