Basically:
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In your Sonic actor, have a Hit event, check whether the collision is one you want to take damage for.
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If it is, subtract the rings from your Sonic actor’s ring count.
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Spawn an appropriate number of rings around your Sonic actor via a “SpawnActor” loop (probably best to set an upper limit on how many you spawn, probably).
If you want to make the rings bounce (or not):