Presurance Holdings, Inc 8-K/A, filed Oct 4, 2024
Presurance Holdings, Inc. (PRHI)
8-K/A
2024-10-04
For: 2024-08-30
View Original
Added on
April 09, 2026
About this 8-K/A
Presurance Holdings, Inc filed this 8-K/A on October 4, 2024, reporting on events of August 30, 2024.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event Reported): August 30, 2024
(Exact Name of Registrant as Specified in Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (248 ) 559-0840
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A (this “Amendment”) is being filed to provide revised pro forma financial information required by Item 9.01(b) of
Form 8-K with respect to the sale by Conifer Holdings, Inc., a Michigan corporation (the “Company”) of Conifer Insurance Services, Inc., a Michigan limited liability company and wholly owned subsidiary of the Company (“CIS”), to BSU Leaf Holdings
LLC, a Delaware limited liability company (“Buyer”), pursuant to the Interest Purchase Agreement, dated as of the closing date (the “CIS Agreement”), by and among the Company, Buyer and Buyer’s parent (the “Transaction”). The Transaction was
disclosed in a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on September 6, 2024 (the “Original Form 8-K”).
The Company is filing in this Amendment revised pro forma financial information related to the acquisition in Exhibit 99.2. The pro forma financial
information has been revised to present the sale of CIS as discontinued operations.
Unless otherwise indicated herein, the disclosures contained herein have not been updated to reflect events, results or developments that have occurred
after the filing of the Original Form 8-K, or to modify or update those disclosures affected by subsequent events. This Amendment should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission
subsequent to the Original Form 8-K, including any amendments to those filings.
| Item 9.01 |
Financial Statements and Exhibits.
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(d) Exhibits
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Interest Purchase Agreement dated August 30, 2024, by and among BSU Leaf Holdings LLC, Conifer Holdings, Inc., and Bishop Street Underwriters LLC.
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Press Release of Conifer Holdings, Inc., dated September 3, 2024 (furnished and not filed).
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Unaudited Pro Forma Condensed Combined Financial Statements.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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# Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule or exhibit
to the SEC upon its request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CONIFER HOLDINGS INC.
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Date: October 4, 2024
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By:
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/s/ Brian J. Roney
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Name:
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Brian J. Roney
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Title:
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Chief Executive Officer
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Exhibit 99.2
Unaudited Pro Forma Consolidated Financial Statements
On August 30, 2024, Conifer Holdings, Inc. (the “Company”), completed the sale of all of the issued and outstanding membership
interests of Conifer Insurance Services, LLC (“CIS”) (the “CIS Sale”). CIS comprised the Company’s managing general agency “MGA” business and was the legal entity used to implement the strategic shift to non risk-bearing revenue from an
underwriting-based model as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. This represents the Company’s entire Wholesale Agency segment. CIS will be reported as discontinued operations beginning in the
third quarter 10-Q of 2024. Additionally, the Company repaid debt and redeemed its preferred stock from the net proceeds from the sale of CIS on August 30, 2024. In connection with the sale of CIS, the Company also disposed of its equity method
investment in SSU on August 30, 2024.
The following unaudited pro forma consolidated financial statements and accompanying notes reflect the impact of the CIS Sale as if it occurred: a) on
June 30, 2024, for the unaudited pro forma consolidated balance sheet; and b) on January 1, 2022 for the unaudited pro forma consolidated statements of operations for the six months ended June 30, 2024 and the years ended December 31, 2023 and
2022. In accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, the transaction accounting adjustments for the CIS Sale and the other transactions described
above consist of those directly attributable to the disposal of CIS, the repayment of debt and the redemption of the preferred stock and the sale of our equity method investment in SSU.
The unaudited pro forma consolidated financial statements and accompanying notes are based on information currently available, are provided for
illustrative purposes only and are not intended to reflect what the Company’s actual results of operations or financial position would have been had the CIS Sale and other related transactions occurred on the dates indicated above, nor is it
necessarily indicative of the Company’s future results of operations or financial position after the occurrence of the transactions described above. Actual and future results may vary significantly from the results reflected in the unaudited pro
forma consolidated financial statements.
The unaudited pro forma consolidated financial statements have been derived from and should be read in conjunction with the historical unaudited
consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and the historical audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2023.
CONIFER HOLDINGS, INC. AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheets (unaudited)
(dollars in thousands)
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As of June 30, 2024
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||||||||||||||||||||||
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Historical
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Disposed CIS
(a)
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Transaction
Accounting
Adjustments
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Other
Adjust-
ments (m)
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Pro forma
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||||||||||||||||||
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Assets
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Investment securities:
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Debt securities, at fair value
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$
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119,371
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$
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—
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$
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—
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$
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—
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$
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119,371
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Equity securities, at fair value
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1,660
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—
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—
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—
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1,660
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Short-term investments, at fair value
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23,339
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—
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—
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—
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23,339
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Total investments
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144,370
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—
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—
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—
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144,370
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Cash and cash equivalents
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9,697
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(8,945
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)
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43,401
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(b)
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(13,400
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)
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(d)
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30,753
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Premiums and agents' balances receivable, net
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30,583
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(14,464
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)
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—
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—
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16,119
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Receivable from Affiliate
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1,174
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—
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—
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—
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1,174
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Reinsurance recoverables on unpaid losses
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74,358
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—
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—
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—
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74,358
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Reinsurance recoverables on paid losses
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8,614
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—
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—
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—
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8,614
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Prepaid reinsurance premiums
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13,494
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—
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—
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—
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13,494
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Deferred policy acquisition costs
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4,606
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—
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—
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—
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4,606
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Other assets
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6,038
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(2,023
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)
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—
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3,270
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(e)
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7,285
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Total assets
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$
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292,934
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$
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(25,432
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)
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$
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43,401
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$
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(10,130
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)
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$
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300,773
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Liabilities and Shareholders' Equity
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Liabilities:
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Unpaid losses and loss adjustment expenses
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$
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174,786
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$
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—
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$
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—
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$
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—
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$
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174,786
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Unearned premiums
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44,820
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—
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—
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—
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44,820
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Reinsurance premiums payable
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1,408
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—
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—
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—
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1,408
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Debt
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24,832
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—
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—
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(8,447
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)
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(f)
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16,385
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Funds held under reinsurance agreements
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23,602
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—
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—
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—
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23,602
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Premiums payable to other insureds
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19,299
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(19,288
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)
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—
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—
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11
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||||||||||||||||
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Accounts payable and accrued expenses
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5,352
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(3,415
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)
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250
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(b)
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—
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2,187
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|||||||||||||||
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Total liabilities
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294,099
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(22,703
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)
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250
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(8,447
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)
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263,199
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|||||||||||||||
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Commitments and contingencies
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—
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—
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—
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—
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—
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Shareholders' equity:
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||||||||||||||||||||||
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Preferred stock, no par value
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6,000
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—
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—
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(6,000
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)
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(g)
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—
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|||||||||||||||
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Common stock, no par value
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98,170
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—
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—
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—
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98,170
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Accumulated deficit
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(90,559
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)
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—
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40,422
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(c)
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4,317
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(h)
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(45,820
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)
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|||||||||||||
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Accumulated other comprehensive (loss)
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(14,776
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)
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—
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—
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—
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(14,776
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)
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|||||||||||||||
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Total shareholders' equity
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(1,165
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)
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—
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40,422
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(1,683
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)
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37,574
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|||||||||||||||
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Total liabilities and shareholders' equity
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$
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292,934
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$
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(22,703
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)
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$
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40,672
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$
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(10,130
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)
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$
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300,773
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||||||||||
CONIFER HOLDINGS, INC. AND SUBSIDIARIES
Pro Forma Statements of Operations (unaudited)
(dollars in thousands, except per share data)
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Six Months Ended June 30, 2024
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|||||||||||||||||
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Historical
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Disposed CIS
(i)
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Other Adjust-
ments (m)
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Pro forma
|
||||||||||||||
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Revenue and Other Income
|
|||||||||||||||||
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Gross earned premiums
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$
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63,613
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$
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—
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$
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—
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$
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63,613
|
|||||||||
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Ceded earned premiums
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(30,060
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)
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—
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—
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(30,060
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)
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|||||||||||
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Net earned premiums
|
33,553
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—
|
—
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33,553
|
|||||||||||||
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Net investment income
|
3,057
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(38
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)
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—
|
3,019
|
||||||||||||
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Net realized investment gains (losses)
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(118
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)
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—
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—
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(118
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)
|
|||||||||||
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Change in fair value of equity securities
|
(153
|
)
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—
|
—
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(153
|
)
|
|||||||||||
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Gain on Sale of CIS
|
—
|
—
|
—
|
—
|
|||||||||||||
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Agency commission income
|
13,167
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(13,170
|
)
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—
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(3
|
)
|
|||||||||||
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Other income
|
420
|
(124
|
)
|
—
|
296
|
||||||||||||
|
Total revenue and other income
|
49,926
|
(13,332
|
)
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—
|
36,594
|
||||||||||||
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Expenses
|
|||||||||||||||||
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Losses and loss adjustment expenses, net
|
25,801
|
—
|
—
|
25,801
|
|||||||||||||
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Policy acquisition costs
|
17,493
|
(10,738
|
)
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—
|
6,755
|
||||||||||||
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Operating expenses
|
8,751
|
(2,441
|
)
|
—
|
6,310
|
||||||||||||
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Interest expense
|
1,746
|
—
|
(696
|
)
|
(j)
|
1,050
|
|||||||||||
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Total expenses
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53,791
|
(13,179
|
)
|
(696
|
)
|
39,916
|
|||||||||||
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Income (loss) from continuing operations before income taxes
|
(3,865
|
)
|
(153
|
)
|
696
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(3,322
|
)
|
||||||||||
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Equity earnings (losses) in Affiliate, net of tax
|
286
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—
|
(286
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)
|
(k)
|
—
|
|||||||||||
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Income tax expense (benefit)
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(18
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)
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—
|
—
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(18
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)
|
|||||||||||
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Net income (loss) from continuing operations
|
$
|
(3,561
|
)
|
$
|
(153
|
)
|
$
|
410
|
$
|
(3,304
|
)
|
||||||
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Preferred stock dividends
|
315
|
—
|
(315
|
)
|
(l)
|
—
|
|||||||||||
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Net income (loss) from continuing operations allocable to common shareholders
|
(3,876
|
)
|
(153
|
)
|
725
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(3,304
|
)
|
||||||||||
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Earnings (loss) from continuing operations per common share, basic and diluted
|
$
|
(0.32
|
)
|
$
|
(0.01
|
)
|
$
|
0.06
|
$
|
(0.27
|
)
|
||||||
|
Weighted average common shares outstanding, basic and diluted
|
12,222,881
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12,222,881
|
12,222,881
|
12,222,881
|
|||||||||||||
CONIFER HOLDINGS, INC. AND SUBSIDIARIES
Pro Forma Statements of Operations (unaudited)
(dollars in thousands, except per share data)
|
Year Ended December 31, 2023
|
|||||||||||||||||
|
Historical
|
Disposed CIS
(i)
|
Other Adjust-
ments (m)
|
Pro forma
|
||||||||||||||
|
Revenue and Other Income
|
|||||||||||||||||
|
Gross earned premiums
|
$
|
146,572
|
$
|
—
|
$
|
—
|
$
|
146,572
|
|||||||||
|
Ceded earned premiums
|
(62,637
|
)
|
—
|
—
|
(62,637
|
)
|
|||||||||||
|
Net earned premiums
|
83,935
|
—
|
—
|
83,935
|
|||||||||||||
|
Net investment income
|
5,526
|
(24
|
)
|
—
|
5,502
|
||||||||||||
|
Net realized investment gains (losses)
|
(20
|
)
|
—
|
—
|
(20
|
)
|
|||||||||||
|
Change in fair value of equity securities
|
608
|
—
|
—
|
608
|
|||||||||||||
|
Gain from sale of renewal rights
|
2,335
|
(2,335
|
)
|
—
|
—
|
||||||||||||
|
Gain on CIS Sale
|
—
|
—
|
—
|
—
|
|||||||||||||
|
Gain on sale of Affiliate
|
—
|
—
|
—
|
—
|
|||||||||||||
|
Agency commission income
|
5,680
|
(5,680
|
)
|
—
|
—
|
||||||||||||
|
Other income
|
694
|
(138
|
)
|
—
|
556
|
||||||||||||
|
Total revenue and other income
|
98,758
|
(8,177
|
)
|
—
|
90,581
|
||||||||||||
|
Expenses
|
|||||||||||||||||
|
Losses and loss adjustment expenses, net
|
82,413
|
(33
|
)
|
—
|
82,380
|
||||||||||||
|
Policy acquisition costs
|
20,892
|
(5,680
|
)
|
—
|
15,212
|
||||||||||||
|
Operating expenses
|
17,891
|
(483
|
)
|
—
|
17,408
|
||||||||||||
|
Interest expense
|
3,206
|
—
|
(989
|
)
|
(j)
|
2,217
|
|||||||||||
|
Total expenses
|
124,402
|
(6,196
|
)
|
(989
|
)
|
117,217
|
|||||||||||
|
Income (loss) from continuing operations before income taxes
|
(25,644
|
)
|
(1,981
|
)
|
989
|
(26,636
|
)
|
||||||||||
|
Equity earnings (losses) in Affiliate, net of tax
|
(251
|
)
|
—
|
251
|
(k)
|
—
|
|||||||||||
|
Income tax expense (benefit)
|
9
|
(213
|
)
|
—
|
(204
|
)
|
|||||||||||
|
Net income (loss) from continuing operations
|
$
|
(25,904
|
)
|
$
|
(1,768
|
)
|
$
|
1,240
|
$
|
(26,432
|
)
|
||||||
|
Preferred stock dividends
|
19
|
—
|
(19
|
)
|
(l)
|
—
|
|||||||||||
|
Net income (loss) from continuing operations allocable to common shareholders
|
(25,885
|
)
|
(1,768
|
)
|
1,221
|
(26,432
|
)
|
||||||||||
|
Earnings (loss) from continuing operations per common share, basic and diluted
|
$
|
(2.12
|
)
|
$
|
(0.14
|
)
|
$
|
0.10
|
$
|
(2.16
|
)
|
||||||
|
Weighted average common shares outstanding, basic and diluted
|
12,220,511
|
12,220,511
|
12,220,511
|
12,220,511
|
|||||||||||||
CONIFER HOLDINGS, INC. AND SUBSIDIARIES
Pro Forma Statements of Operations (unaudited)
(dollars in thousands, except per share data)
|
Year Ended December 31, 2022
|
|||||||||||||||||
|
Historical
|
Disposed CIS (i)
|
Other Adjust- ments (m)
|
Pro forma
|
||||||||||||||
|
Revenue and Other Income
|
|||||||||||||||||
|
Gross earned premiums
|
$
|
135,401
|
$
|
—
|
$
|
—
|
$
|
135,401
|
|||||||||
|
Ceded earned premiums
|
(38,690
|
)
|
—
|
—
|
(38,690
|
)
|
|||||||||||
|
Net earned premiums
|
96,711
|
—
|
—
|
96,711
|
|||||||||||||
|
Net investment income
|
3,043
|
(15
|
)
|
—
|
3,028
|
||||||||||||
|
Net realized investment gains (losses)
|
(1,505
|
)
|
—
|
—
|
(1,505
|
)
|
|||||||||||
|
Change in fair value of equity securities
|
403
|
—
|
—
|
403
|
|||||||||||||
|
Gain from VSRM Transaction
|
8,810
|
(8,810
|
)
|
—
|
—
|
||||||||||||
|
Loss portfolio transfer risk fee
|
(5,400
|
)
|
—
|
—
|
(5,400
|
)
|
|||||||||||
|
Other gains (losses)
|
59
|
—
|
—
|
59
|
|||||||||||||
|
Other income
|
2,768
|
(1,621
|
)
|
—
|
1,147
|
||||||||||||
|
Total revenue and other income
|
104,889
|
(10,446
|
)
|
—
|
94,443
|
||||||||||||
|
Expenses
|
|||||||||||||||||
|
Losses and loss adjustment expenses, net
|
81,440
|
(203
|
)
|
—
|
81,237
|
||||||||||||
|
Policy acquisition costs
|
22,179
|
(2,432
|
)
|
—
|
19,747
|
||||||||||||
|
Operating expenses
|
18,789
|
(743
|
)
|
—
|
18,046
|
||||||||||||
|
Interest expense
|
2,971
|
—
|
1,173
|
(j)
|
4,144
|
||||||||||||
|
Total expenses
|
125,379
|
(3,378
|
)
|
1,173
|
123,174
|
||||||||||||
|
Income (loss) from continuing operations before income taxes
|
(20,490
|
)
|
(7,068
|
)
|
(1,173
|
)
|
(28,731
|
)
|
|||||||||
|
Equity earnings (losses) in subsidiary, net of tax
|
368
|
(368
|
)
|
—
|
—
|
||||||||||||
|
Income tax expense (benefit)
|
(9,441
|
)
|
(80
|
)
|
—
|
(9,521
|
)
|
||||||||||
|
Net income (loss) from continuing operations
|
$
|
(10,681
|
)
|
$
|
(7,356
|
)
|
$
|
(1,173
|
)
|
$
|
(19,210
|
)
|
|||||
|
Net income (loss) from continuing operations allocable to common shareholders
|
(10,681
|
)
|
(7,356
|
)
|
(1,173
|
)
|
(19,210
|
)
|
|||||||||
|
Earnings (loss) from continuing operations per common share, basic and diluted
|
$
|
(1.00
|
)
|
$
|
(0.69
|
)
|
$
|
(0.11
|
)
|
$
|
(1.80
|
)
|
|||||
|
Weighted average common shares outstanding, basic and diluted
|
10,692,090
|
10,692,090
|
10,692,090
|
10,692,090
|
|||||||||||||
Conifer Holdings, Inc.
Notes to Pro Forma Consolidated Financial Statements (unaudited)
| (a) |
Reflects the disposition of assets and liabilities of the
disposed CIS business as if the CIS Sale occurred on June 30, 2024.*
|
| (b) |
Reflects the aggregate purchase price at the closing of the CIS Sale of approximately $43.4 million in cash, which was comprised of a base purchase price of $45.0 million, adjusted for cash on hand, required minimum net working capital and deal expenses. An estimated $250,000 of unpaid deal expenses are reflected in Accounts payable and accrued expenses. The purchase price is
subject to a post-closing true-up mechanism which is expected to be determined within approximately 90 days from the date of the closing.
|
| (c) |
Reflects the estimated net gain on the CIS Sale of $40.4 million representing the net cash proceeds less the net assets of the disposed CIS business.*
|
| (d) |
Reflects the cash impact of other transactions that occur in concert with the CIS sale, including: A $6.4 million reduction for the Preferred Stock redemption, a $3.0 million increase in cash from
Sale of SSU, and a $10.0 million decrease in cash for paying off the $9.3 million outstanding balance on the Senior Secured Note, inclusive of a call premium of $753,000.
|
| (e) |
Reflects $3.5 million increase in other receivables for the installment payment owed to Company on the SSU sale and a $230,000 reduction from the write off of the book value of SSU.
|
| (f) |
Reflects the pay down of the Senior Secured Note, net of the write off of unamortized deferred issuance costs.
|
| (g) |
Reflects to redemption of the Preferred Stock
|
| (h) |
Reflects the $6.3 million estimated gain on sale of SSU, less the $803,000 write off of the unamortized deferred issuance costs from the Senior Secured Note, a $753,000 call premium from the Senior
Secured Note and a $397,000 redemption premium on the Preferred Stock.
|
| (i) |
Reflects the elimination of the results of the disposed CIS business as if the CIS Sale occurred on January 1, 2022.
|
| (j) |
Reflects the assumption that the Senior Secured Notes were paid off on January 1, 2022, resulting in elimination of interest expense and amortization of debt issuance costs on those notes in 2022,
2023 and 2024. In addition, it reflects a call premium of $1.2 million and the write off of deferred debt issuance costs of $862,000, in 2022.
|
| (k) |
Reflects the assumption that SSU would have been sold on January 1, 2022, resulting in the elimination of Equity Earnings from Affiliate in 2023 and 2024.
|
|
(l)
|
Reflects the assumption that the preferred shares would not have been issued in 2023 and not considered outstanding in 2024. In addition, the dividends of
$19,000 and $315,000 would not have been declared in 2023 and 2024, respectively.
|
| (m) |
The Other Adjustments column represents transactions that were not directly part of the CIS Sale but occurred in concert with the CIS Sale. This included the payoff of the Senior Secured Notes and
the redemption of the Preferred Stock.
|
* For the purposes of the unaudited pro forma consolidated balance the estimated gain recognized in accumulated deficit and related net gain on sale
recognized in the 2022 unaudited pro forma consolidated income statement is based on the net carrying value of CIS as of June 30, 2024, rather than as of the closing date of the transaction. As a result, the estimated gain, reflected herein may
differ materially from the actual gain on the sale of CIS as of the closing because of the differences in the carrying value of assets and liabilities at the closing date.