Reliance Global Group, Inc.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should consider carefully the information disclosed in Part I, Item 1A, Risk Factors, contained in our Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time. As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Companys Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time. The following risk factors are applicable to our recently announced expansion into the technology sector through EZRA International Group LLC and life sciences sector through LifeSci Global Group LLC, as well as our qualification for continued listing on the Nasdaq Capital Market, and are being provided to supplement those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

We have received a notice of non-compliance withFailure to satisfy Nasdaq's s new minimum bid priceMarket Value of Listed Securities requirement, and our failure to regain compliance with Nasdaq'sits minimum bid price requirement or other continued listing requirements could result in athe delisting of our common stock.

Our common stock is currentIn July listed on T2026, the Nasdaq Capital Market.SEC approved Nasdaq imposess adoption of a number ofew continued listing rstandard requirements oning companies listed issuers, including requirements relatingon The Nasdaq Capital Market to corporate governance, minimum bid price, public float,maintain a minimum stockholders' equity, and the mMarket vValue of lListed sSecurities.

On December 12, 2025, the Company received a deficiency notice (the Bid Price Notice) from (MVLS) of $5.0 million. Under the Listing Qualifications staff of Nasdaq notifying the Company that, for the prionew rule, if a companys MVLS remains below $5.0 million for 30 consecutive business days, the closing bid price for the Company's common stock had been below $1.00 per share, and that the Company was therefore not inNasdaq may issue a Staff Delisting Determination without first providing a customary compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the Minimum Bid Price Requirement). The Bid Price Notice does not result in the immediate delisting of the Company'period. Although a company may appeal such determination, its common stock from Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been proviwould generally be suspended an initial period of 180 calendar days, or until June 10, 2026 (from trading on Nasdaq during the Initial Compliance Period), to regain compliance withappeal process.

Based on the Minimum Bid Price Requirement. To regain compliance, the closing bid current market price of the Company's our common stock must be at least $1.00 per share for a minimum, our Market Value of ten consListed Secutive business days during the Initial Compliance Period.

Ifrities has recently been below the Company does not regain compliance with the Minimum Bid Price Requirement dur $5.0 million threshold. Accordingly, the Initial Compliance Period, the Company may re can be eligible for an additional 180-calendar-day compliano assurance period, provided that the Companywe will satisfies Nasdaq'sy the MVLS continued listing requirement for market value of publicly held shares and all other initial listing standards for Tt within the Nasdaq Capital Market (other than the Minimum Bid Price Requirement) and notifiesapplicable period prescribed by Nasdaq of its intention to cure the deficiency, including, if necessary, by effecting a reverse stock split. There can be no assurance that the Company will be eligible for, or that Nasdaq will grant, an additional compliance period. If the Company is not granted an additionals rules or otherwise maintain compliance period, or if it appears to Nasdaq that the Company will not be able to cure the deficiency, with Nasdaq will provide notice that the Company's common stock is subject to dentinued listing, in which case the Company would have the right to appeal Nasdaq's determination to a Nasdaq Hearings Panel.

On May 7 standards.

On December 12, 20265, the Board approCompany received a reverse stock split ofnotice from the Company's outstandListing shares of common stock at a ratioQualifications staff of 1-for-40. The Company intends to effect the reverse stock split with the principal objective of regainingNasdaq Stock Market LLC (Nasdaq) that it was not in compliance with the MNasdaqs minimum Bbid Pprice Rrequirement prior to the expiration of the Initial Compliance Period ounder Listing Rule 5550(a)(2). On June 102, 2026. There can be no assurance, however, that, Nasdaq notified the reverse stock split will achieve its intended effect of increasing the market price of ourCompany that it had regained common stock to a level sufficient to satisfympliance with the Mminimum Bbid Pprice Rrequirement, that any such increase will be sustained for  and that the required ten consecutive business days during matter was closed. Nasdaq furthe Initial Compliance Period, or r noted that the Company will otherwise regain or maintain compliance with the Minimum Bid Price Requirement or any o, pursuant to Listing Rule 5810(c)(3)(A)(iv), because of ther Nasdaq continued listing requirement. Even if the  Companys prior reverse stock split causess, the closing bid price of our common stock to exceed $1.00 per share initially, the price Company may decline thereafter as a result of, among other factors, the dilutive effect of fnot be eligible for a future fincompliancings, market reaction to the reverse stock split, te period under the trading volatility of small-capitalization companies, and broader market conditions, any of which could cause us minimum bid price rule if it were to fall back out of become non-compliancet with the Minimum Bid Price Reat requirement.

In addition to the Minimum Bid Price Requirement, again.

Any delisting of our common stock from Nasdaq's continued listing stuld materially andards include requirements that we maintain a minimum stockholders' e adversely affect the liquity of $2.5 million (or alternativeldity a minimumnd market value of listed securitiesprice of $35 million or net inour come from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years), minimum public float, and corporate gomon stock, reduce analyst covernance stage andards including with respect to the independence of our directors and the composition of ostitutional investor interest, impair our Board committees. Recent and contemplated changeability to access to the composition of our Board of Directorapital markets, including the potential loss of indepeundence of one or more of our directors as a result of our acquisition activities, could affect our compliance with Nasdaq's corporate governance requirr financing arrangements, including the that requirement that our audit committee consist of at least three independent directors. We may not satisfy one or more of these continued listing standards in the future, and any failure to do so could result in  a Nasdaq listing (including under our receivexisting additional deficiency notices from Nasdaq and, ultimately, the delisting of our common stock.

Any perception that we may not comply with Nasdaq's continued listing t-the-market offering program which requirements, the public announcement or receipt of any deficiency notice, or a dees Nasdaq listing of our common stock by Nasdaq coul), and adversely affect our ability to attract new investors, decrease the liquidity of the outstanding shares of our common stock, reduce the price at which such shares trade, and increase the transaction costs inherent in trading such shares. A delistingbusiness, financial could also deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stockndition, and might deter certain institutions and  results of opersons from investing in our common stock.

ations. If our common stock were to be delisted from Nasdaq, trading of our common stock cit would be conducted in thelikely trade on an over-the-counter market, including on the OTC Markets or other quotation systems. Trawhere trading in the over-the-counter market is generally characterized by decreasedlower trading volume, greater price volatility, and s, reduced liquidity compared to trading on a national securities exchange. As a result, an investor may find it more difficult to dispose of, or obtain accurate quotations for, our common stock. A delisting of our common stock from Nasdaq could also materially adversely affect our ability to raise additional capital (including under our existing at-the-market offering, wider bid-ask spreads, and greater program and our equity line of credit with White Lion Capital, LLC, which require Nasdaq listing), could trigger default or other adverse consequences under our outstanding warrants or other agreements, could result in reduced analyst coverage and investor interest in our securities, could subject our common stock to penny stock rules under the Exchange Act, and could negice volatility than trading on a natively impact the perception of our financial condition and prospects. Any of these factors could cause the market price of our common stock to decline and could materially and adversely affect our business, financial condition, and results of operationsonal securities exchange.

Risks Related to Our Technology Investment Strategy and Enquantum

Our expansion into the technology sector through EZRA International Group and Scale51 represents a new line of business in which we have limited operating experience.

In January 2026, we launched EZRA International Group and introduced our Scale51 operating model, under which we intend to pursue majority ownership positions in technology-driven businesses. Operating, evaluating, and managing technology-focused businesses requires expertise that differs materially from the expertise required to operate our insurance brokerage and InsurTech businesses, and our management team has limited direct experience operating businesses in many of the technology subsectors we may target, including post-quantum cryptography, cybersecurity, artificial intelligence, and other emerging technology fields. Successful execution of our Scale51 strategy depends on our ability to identify suitable investment opportunities, conduct adequate technical and commercial diligence, negotiate transactions on favorable terms, secure required regulatory and third-party approvals, integrate or oversee acquired or portfolio companies, and recruit and retain personnel with relevant technical expertise. We may be unable to do any of these things effectively. If our Scale51 strategy proves unsuccessful, our financial condition, results of operations, and the market price of our common stock could be materially adversely affected.

Investments in early-stage technology companies, including Enquantum, are highly speculative and subject to a substantial risk of loss.

Enquantum is an early-stage company that has generated no revenue, has a shareholders' deficit, has current liabilities in excess of current assets, and is dependent on our continued milestone funding for its operations. Early-stage technology companies are subject to numerous risks, including the lengthy, expensive, and uncertain nature of technology development; the possibility that products or technologies will fail to perform as intended or fail to achieve commercial acceptance; reliance on a small number of key personnel; the need to secure and maintain intellectual property protection; competition from larger and better-capitalized companies and from alternative or substitute technologies; and dependence on additional capital, which may be unavailable on acceptable terms or at all. Many early-stage technology companies fail to achieve commercialization and ultimately cease operations. We may be required to write down or write off all or a substantial portion of our investment in Enquantum, and we may not realize any return on our investment.

The market for post-quantum cryptography and related technologies is unproven, and Enquantum's products may fail to achieve technical or commercial success.

Enquantum's business is focused on post-quantum cryptography and related data protection technologies. The market for post-quantum cryptography is at an early and evolving stage, and broader commercial adoption depends on a number of factors outside Enquantum's control, including the timing and pace of the development of cryptographically relevant quantum computers, the publication and adoption of post-quantum cryptographic standards by U.S. and foreign standards-setting bodies (including the National Institute of Standards and Technology), regulatory mandates affecting cryptographic transitions, and customer awareness of and willingness to invest in post-quantum protections. Enquantum's product candidates may fail to satisfy applicable standards, may be technically inferior to competing products or implementations developed by larger or better-resourced competitors, or may be rendered obsolete by alternative technologies or approaches. Even if Enquantum's technology proves technically sound, the market may not develop on the timeline or at the scale that Enquantum and we currently anticipate.

Enquantum's business is dependent on its ability to obtain, maintain, and enforce intellectual property rights, which is uncertain.

The value of our investment in Enquantum is substantially dependent on Enquantum's ability to obtain, maintain, defend, and enforce patent, trade secret, and other intellectual property protection for its quantum-encryption technologies, product candidates, and know-how. Enquantum's intellectual property positions involve complex legal, scientific, and factual questions, and we have allocated a substantial portion of the excess of our investment cost over Enquantum's net assets to Enquantum's intellectual property and in-process research and development. Enquantum may be unable to obtain meaningful patent protection in relevant jurisdictions, issued patents may be narrowed, invalidated, or held unenforceable, and competitors may develop products that design around Enquantum's patents. Enquantum may also be subject to claims that its products or technologies infringe third-party intellectual property rights, including from larger competitors with extensive patent portfolios in cryptography and security. Any failure to protect or defend Enquantum's intellectual property could materially adversely affect Enquantum's prospects, the value of our investment, and the recoverability of the basis difference allocated to Enquantum's intellectual property and in-process research and development.

We may not obtain a controlling interest in Enquantum on the timeline we currently anticipate, or at all.

We have entered into a Share Purchase Agreement contemplating the acquisition of up to 51% of Enquantum's fully diluted ordinary shares for aggregate consideration of approximately $2.1 million, payable in milestone-based tranches over approximately ten months and including a final control step-up tranche payable in shares of our common stock. Our ability to acquire a controlling interest in Enquantum is subject to satisfaction of specified milestones and other conditions, the continued availability of capital to fund the remaining tranches, the absence of disputes between the parties, and the absence of intervening regulatory or third-party developments. We may be unable to satisfy the conditions to one or more remaining tranches on a timely basis, or at all. Even if we acquire a controlling interest, we will be required to consolidate Enquantum as a majority-owned subsidiary under U.S. generally accepted accounting principles, which would materially change our consolidated financial statements and may introduce volatility into our reported results.

Our investment in Enquantum requires significant ongoing capital commitments that may exceed currently anticipated amounts.

Our remaining unfunded commitment under the Enquantum Share Purchase Agreement is approximately $1,458,000 in cash tranches, plus approximately $125,000 payable in shares of our common stock for the final control step-up tranche. Enquantum is dependent on our continued milestone funding for its operations, and Enquantum may require additional capital from us beyond our current commitments to fund its operations, complete development of its product candidates, or achieve commercialization. Any such additional funding requirements could be substantial and may exceed amounts we currently anticipate. We may not have sufficient capital to satisfy these funding needs, and any required external financing may not be available on acceptable terms or at all. To the extent we are unable or unwilling to provide additional funding to Enquantum, the value of our existing investment in Enquantum could be impaired and Enquantum's operations may be curtailed or cease entirely.

Our investment in Enquantum, an Israeli company, exposes us to cross-border legal, regulatory, geopolitical, and tax risks.

Enquantum is an Israeli company with operations in Israel. Our investment is therefore subject to a range of cross-border risks that we have not historically faced in our domestic insurance brokerage business, including the application of Israeli corporate, securities, intellectual property, employment, and tax laws and regulations to Enquantum and to our investment; restrictions on the export of cryptographic technology under U.S. and Israeli export control regimes; foreign currency exchange risks; political, economic, and military instability in Israel and the broader region, including ongoing armed conflicts and security risks affecting Israeli operations and personnel; and difficulties in enforcing contractual rights or judgments across jurisdictions. We rely on Israeli counsel and advisors with respect to matters of Israeli law, and our directors, officers, and U.S. counsel may have limited ability to independently evaluate Israeli legal, regulatory, and operational risks. Any of these risks, individually or in the aggregate, could materially adversely affect Enquantum's operations and the value of our investment.

Our minority position in Enquantum currently limits our ability to control or influence its strategic direction.

We currently hold a minority equity interest in Enquantum, representing approximately 29.34% of Enquantum's issued and outstanding shares as of April 21, 2026. We hold two of five seats on Enquantum's board of directors, but we do not control Enquantum, and key strategic, operational, financing, and personnel decisions affecting Enquantum may be made without our consent. Enquantum may pursue a strategy with which we disagree, may issue additional equity that dilutes our ownership interest, may enter into transactions on terms that we view as unfavorable, or may experience disputes among its equity holders or management. Until we acquire a controlling interest, our ability to direct Enquantum's affairs to realize our investment objectives will be limited.

The accounting treatment of our Enquantum investment is complex and subject to revision based on subsequent events.

We account for our investment in Enquantum under the equity method of accounting, with a substantial portion of our investment cost recognized as an indefinite-lived intangible basis difference allocated to Enquantum's quantum-encryption intellectual property and in-process research and development. Application of the relevant accounting standards to this investment requires significant judgment, and the carrying value of the investment is subject to evaluation for impairment whenever events or circumstances indicate the carrying value may not be recoverable. If we acquire a controlling interest in Enquantum, we will be required to apply business combination accounting under ASC 805, which would require, among other things, the remeasurement of our existing investment at fair value and recognition of any resulting gain or loss, the identification and fair value measurement of acquired assets and assumed liabilities, and the consolidation of Enquantum's operating results and financial position. Changes in our or Enquantum's circumstances, including changes in milestone achievement, financing terms, governance rights, intellectual property positions, or the financial condition of Enquantum, may require us to revise our accounting conclusions, recognize material impairment charges, or restate prior period financial statements.

Risks Related to Our Life Sciences Investment Strategy and LGG

Our expansion into the life sciences sector represents a new line of business in which we have limited operating experience.

Through LGG, we have entered the healthcare and life sciences sector, a field in which we have not previously operated and in which our management team has limited direct operating experience. The life sciences sector is highly specialized and differs materially from the insurance and digital asset businesses that have historically constituted our principal lines of business. Successfully evaluating, executing, and managing investments in healthcare-related companies requires scientific, clinical, regulatory, and commercial expertise that we may not possess internally and that we may be required to obtain through hires, advisors, or third-party consultants, any of which may be costly or unavailable on acceptable terms. Our lack of historical experience in the sector may impair our ability to identify suitable investment opportunities, conduct adequate diligence, anticipate sector-specific risks, or realize the anticipated benefits of our life sciences strategy. If our life sciences strategy proves unsuccessful, our financial condition, results of operations, and the market price of our common stock could be materially adversely affected.

Investments in early-stage life sciences companies, including Innervate, are highly speculative and subject to a substantial risk of loss.

LGG's initial investment is in Innervate, an early-stage life sciences company developing radiopharmaceutical product candidates. Early-stage life sciences companies are subject to numerous risks that are unique to the sector, including the lengthy, expensive, and uncertain nature of preclinical and clinical development; the need to obtain regulatory approval from the U.S. Food and Drug Administration and comparable foreign authorities before any product candidate may be commercialized; the possibility that product candidates will fail to demonstrate safety or efficacy at any stage of development; reliance on third-party manufacturers, contract research organizations, and clinical investigators; the need to secure and maintain patent and other intellectual property protection; potential product liability exposure; competition from larger and better-capitalized companies; and dependence on additional capital, which may be unavailable on acceptable terms or at all. Radiopharmaceutical products in particular are subject to specialized regulatory requirements relating to the handling, transportation, manufacture, and administration of radioactive materials. Many early-stage life sciences companies fail to bring any product to market and ultimately cease operations. We may be required to write down or write off all or a substantial portion of our investment in Innervate, and we may not realize any return on our investment.

LGG is a newly formed entity with no operating history, and we may not realize the anticipated benefits of our life sciences platform strategy.

LGG was formed in April 2026 and has no operating history. We expect LGG to serve as the platform through which we pursue additional investments in the healthcare and life sciences sector, but there can be no assurance that LGG will identify, complete, or successfully manage future investments, or that any such investments will generate returns. Our ability to deploy capital through LGG is dependent on, among other things, the availability of suitable investment opportunities, our continued willingness and ability to fund LGG, the performance of LGG's portfolio companies, and the cooperation of our minority partner in LGG. The formation of LGG and the establishment of related governance, accounting, and compliance infrastructure may also divert management attention and resources from our other lines of business. If LGG fails to achieve its strategic objectives, we may not recover the capital we have committed to LGG and our financial condition and results of operations could be materially and adversely affected.

We have committed capital to LGG and may be required to commit additional capital, which may not be available on favorable terms.

In connection with the formation of LGG, we entered into a promissory note providing for borrowings by LGG of up to $2.0 million, $500,000 of which had been advanced as of April 30, 2026. We may, in the future, be required or elect to provide additional debt or equity financing to LGG to fund follow-on investments in Innervate, to support new investments by LGG, or to fund LGG's operating expenses. Any such additional funding requirements could be substantial and may exceed amounts we currently anticipate. We may not have sufficient capital available to satisfy these funding needs from cash on hand, and any required external financing may not be available on acceptable terms, or at all. To the extent we are unable or unwilling to provide additional funding to LGG, the value of our existing investments in LGG and its portfolio companies could be impaired. Conversely, our funding of LGG may reduce the capital available for our other business lines and strategic priorities.

Our investment in LGG and Innervate involves significant related party transactions and conflicts of interest.

LGG is owned approximately 51% by us and approximately 49% by LifeSci Management Group LLC, an entity owned by certain members of our management and Board of Directors. As a result, members of our management and Board of Directors have direct and indirect economic interests in LGG that differ from those of our public stockholders. In addition, one of our directors serves as the chief executive officer of Innervate, the company in which LGG made its initial investment. These overlapping relationships create actual and potential conflicts of interest with respect to, among other matters, the negotiation of the terms of our funding arrangements with LGG, decisions regarding additional capital commitments to LGG, the selection, valuation, and timing of LGG investments, decisions concerning Innervate (including any future financings, strategic transactions, or exits), the allocation of business opportunities between us and LGG, and the management of LGG's portfolio. Although the formation of LGG, the related financing arrangements, and the Innervate investment were reviewed and approved by the independent and disinterested members of our Board of Directors, the existence of these conflicts may result in decisions that are less favorable to us than those that would be made in arm's-length transactions with unrelated third parties, and could expose us to litigation, regulatory scrutiny, or reputational harm. Future related party transactions involving LGG, its minority owner, or its portfolio companies may arise, and we cannot assure you that the procedures we have implemented will be adequate to mitigate the risks associated with such transactions.

Our minority ownership position in Innervate limits our ability to control or influence its strategic direction.

LGG holds a minority equity interest in Innervate. Although LGG has obtained certain additional rights in connection with its investment, LGG does not control Innervate, and key strategic, operational, financing, and personnel decisions affecting Innervate may be made without LGG's consent. Innervate may pursue a strategy with which we disagree, may issue additional equity that dilutes LGG's ownership interest, may enter into transactions on terms that we view as unfavorable, or may experience disputes among its equity holders or management. Our director's role as chief executive officer of Innervate does not assure that Innervate's actions will align with our interests, and any decisions made by that director in his capacity as an officer of Innervate are subject to fiduciary duties owed to Innervate and its other equity holders, which may diverge from his duties to us. The illiquid and privately held nature of LGG's investment in Innervate may also make it difficult or impossible for us to exit the investment on a timely basis or at a favorable price.

Consolidation of LGG, and any future consolidation of Innervate, may introduce volatility and complexity into our financial statements.

We expect to consolidate LGG in our financial statements as a majority-owned subsidiary, with the noncontrolling interest of LifeSci Management Group LLC reflected accordingly. As LGG's portfolio grows, our consolidated financial statements will reflect LGG's investment activity, including changes in the fair value of its portfolio investments and operating expenses, which may introduce volatility and complexity into our reported results. Application of the relevant accounting standards to LGG, its investments, and its capital structure requires significant judgment, and changes in our or LGG's circumstancesincluding changes in ownership percentages, governance rights, or the financial condition of portfolio companiesmay require us to revise our accounting conclusions, recognize impairment charges, or restate prior period financial statements. In addition, the integration of life sciences-related accounting, valuation, and disclosure processes into our financial reporting function may strain our internal controls over financial reporting, particularly given our status as a smaller reporting company.

Innervate's radiopharmaceutical product candidates are subject to specialized and overlapping regulatory regimes that increase the cost, complexity, and risk of development.

Radiopharmaceutical products are subject not only to the regulatory requirements applicable to pharmaceutical products generally, including the U.S. Food and Drug Administration's investigational new drug, new drug application, and biologics license application processes, but also to the requirements of the U.S. Nuclear Regulatory Commission, Agreement State radiation control programs, the U.S. Department of Transportation, and analogous foreign authorities governing the production, handling, storage, transportation, and administration of radioactive materials. These overlapping regimes can lengthen development timelines, increase costs, and create the risk of inconsistent or conflicting requirements. Failure to obtain or maintain any required license, registration, or authorization, or any violation of applicable radiation safety or transportation requirements, could delay or prevent the development or commercialization of Innervate's product candidates and adversely affect the value of LGG's investment.

Innervate depends on the availability of medical radioisotopes and specialized manufacturing infrastructure, the supply of which is limited and subject to disruption.

Radiopharmaceutical product candidates require medical radioisotopes, many of which are produced by a small number of nuclear reactors and cyclotrons worldwide and are subject to supply constraints, geopolitical risk, aging production infrastructure, and short half-lives that make stockpiling impractical. In addition, the manufacture, compounding, and distribution of radiopharmaceutical products require specialized facilities, equipment, and personnel that are not widely available. Disruptions in isotope supply or manufacturing capacity, the loss of a key supplier or contract manufacturer, or the inability to secure manufacturing capacity on commercially reasonable terms could delay clinical development, impair commercialization, or result in increased costs for Innervate, any of which could materially adversely affect the value of LGG's investment.

Even if Innervate's product candidates obtain regulatory approval, commercial success will depend on coverage, pricing, and reimbursement determinations that are outside Innervate's control.

The commercial viability of any approved radiopharmaceutical product depends on the willingness of government payors, including Medicare and Medicaid, and private third-party payors to provide adequate coverage and reimbursement. Coverage and reimbursement determinations for radiopharmaceutical products, particularly those administered in hospital outpatient or imaging settings, are subject to evolving payment methodologies, separate payment policies, bundling rules, and ongoing legislative and regulatory reform efforts in the United States and abroad. There can be no assurance that Innervate's product candidates, if approved, will receive favorable coverage or reimbursement, and inadequate reimbursement could limit market acceptance, pricing, and ultimately the value of LGG's investment.

Innervate's success depends on its ability to obtain, maintain, and enforce intellectual property rights, which is uncertain and expensive.

The value of LGG's investment in Innervate is substantially dependent on Innervate's ability to obtain, maintain, defend, and enforce patent and other intellectual property protection for its product candidates, technologies, and know-how. The patent positions of life sciences companies are highly uncertain and involve complex legal, scientific, and factual questions. Innervate may be unable to obtain meaningful patent protection in relevant jurisdictions, issued patents may be narrowed, invalidated, or held unenforceable, and competitors may develop products that design around Innervate's patents. Innervate may also be subject to claims that its product candidates infringe third-party intellectual property rights, which could result in injunctive relief, damages, or the need to obtain licenses on commercially unreasonable terms. Any failure to protect or defend Innervate's intellectual property could materially adversely affect Innervate's prospects and the value of LGG's investment.

Innervate is exposed to product liability and clinical trial liability risks that may not be adequately covered by insurance.

The development, testing, and any commercialization of radiopharmaceutical product candidates involves inherent risk of product liability claims, including claims arising from radiation exposure, adverse events in clinical trials, contamination, off-target effects, manufacturing defects, and the prescribing or administration of approved products. Such claims may result in substantial damages, regulatory action, the suspension or termination of clinical trials, recalls, reputational harm, and significant defense costs. Insurance coverage for clinical trial liability and product liability in the radiopharmaceutical sector may be limited, expensive, or unavailable, and Innervate may not maintain coverage that is adequate to address all potential claims. Any uninsured or underinsured liability could materially impair Innervate's operations and the value of LGG's investment.

Innervate is subject to a broad range of healthcare laws and regulations, violations of which could result in significant penalties.

Innervate's current and future operations may be subject to extensive U.S. federal and state, and analogous foreign, healthcare laws and regulations, including, among others, the federal Anti-Kickback Statute, the federal False Claims Act, the federal Physician Payments Sunshine Act, the Health Insurance Portability and Accountability Act, the Foreign Corrupt Practices Act, and laws governing the marketing and promotion of pharmaceutical products. These laws are subject to evolving interpretation and aggressive enforcement, and even unintentional violations may give rise to substantial civil and criminal penalties, exclusion from federal healthcare programs, corporate integrity obligations, and reputational harm. Any government investigation or enforcement action involving Innervate, even if ultimately resolved without findings of wrongdoing, could materially adversely affect Innervate and the value of LGG's investment.

The fair value of LGG's investment in Innervate is inherently uncertain and may be subject to material adjustment.

Innervate is a privately held company with no public trading market for its securities, and the fair value of LGG's investment will be determined based on management's estimates and judgments, including assumptions regarding Innervate's product development progress, capital needs, comparable company valuations, the rights and preferences of Innervate's various classes of equity, and broader market conditions. These valuation determinations are inherently subjective and may be required to be revised materially as a result of subsequent events, including the results of clinical or preclinical studies, regulatory developments, financing rounds at lower valuations (so-called down rounds), changes in market conditions, or new information regarding Innervate. Any downward adjustment in the fair value of LGG's investment could result in material non-cash charges to our consolidated results of operations.

Future investments by LGG may expose us to additional, and potentially different, life sciences-related risks.

We have stated our expectation that LGG will serve as a platform for additional investments in the healthcare and life sciences sector. Future investments may involve different therapeutic modalities, disease areas, regulatory pathways, geographies, or stages of development than the Innervate investment, and may expose us to risks that we have not previously encountered. Future investments may also involve additional related party considerations, larger capital commitments, the use of leverage, the issuance of equity or debt securities by us or our subsidiaries, or the assumption of contingent liabilities. We may be unable to identify suitable investments, complete acquisitions on acceptable terms, integrate or oversee acquired or portfolio companies, or realize the strategic and financial benefits we anticipate. Any failure to execute on LGG's investment strategy could materially adversely affect our financial condition, results of operations, and the market price of our common stock.

Our expansion into the life sciences sector, alongside our existing insurance and digital asset businesses, may adversely affect investor perceptions of our strategic focus and capital discipline.

Within a relatively short period, we have announced significant new strategic initiatives, including our digital asset treasury strategy and, through LGG, our expansion into the healthcare and life sciences sector. Investors, analysts, rating agencies, lenders, customers, and regulators may view these initiatives as evidence of strategic drift, lack of focus, or insufficient capital discipline, particularly when undertaken alongside related party arrangements and during a period in which we are addressing Nasdaq listing compliance matters. Negative perceptions could adversely affect our access to capital, the cost of capital, our relationships with counterparties, our ability to attract and retain personnel, and the market price of our common stock, regardless of the underlying performance of any individual business line.