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Delaware
(State or other jurisdiction of incorporation or organization) |
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6311
(Primary Standard Industrial Classification Code Number)
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20-0362426
(I.R.S. Employer Identification Number) |
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☐ (Do not check if a smaller reporting company)
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Smaller reporting company
☒
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Emerging growth company
☐
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Annuity Direct Written Premium (SAP)
|
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($ in millions)
|
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| | |
2018
|
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2019
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LTM 6/30/20
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YTD 6/30/19
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YTD 6/30/20
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Annuity Direct Written Premium
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| | | $ | 0.0 | | | | | $ | 161.4 | | | | | $ | 270.6 | | | | | $ | 38.2 | | | | | $ | 147.4 | | |
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|
|
| | |
Six Months Ended
June 30, |
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Fiscal Year Ended
December 31, |
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2020
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2019
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2019
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2018
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(in thousands except per
share amounts) |
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(in thousands except per
share amounts) |
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Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount of deferred gain on reinsurance
|
| | | $ | 521 | | | | | $ | 1,853 | | | | | $ | 2,644 | | | | | $ | 118 | | |
Realized gains (losses)
|
| | | | 9,780 | | | | | | (3) | | | | | | 354 | | | | | | 48 | | |
Investment income
|
| | | | 843 | | | | | | 639 | | | | | | 121 | | | | | | 516 | | |
Other
|
| | | | 786 | | | | | | 79 | | | | | | 281 | | | | | | 194 | | |
Total revenues
|
| | | | 11,930 | | | | | | 2,568 | | | | | | 3,400 | | | | | | 876 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits
|
| | | | 2,180 | | | | | | 1,115 | | | | | | 2,702 | | | | | | 2,161 | | |
Other operational expenses
|
| | | | 3,852 | | | | | | 3,780 | | | | | | 6,073 | | | | | | 3,752 | | |
Total expenses
|
| | | | 6,032 | | | | | | 4,895 | | | | | | 8,775 | | | | | | 5,913 | | |
Income tax expense
|
| | | | (887) | | | | | | — | | | | | | (234) | | | | | | — | | |
Loss from discontinued operations
|
| | | | — | | | | | | — | | | | | | — | | | | | | (29) | | |
Net (loss) income
|
| | | $ | 5,011 | | | | | $ | (2,327) | | | | | $ | (5,609) | | | | | $ | (5,066) | | |
Net (loss) income per common share
|
| | | $ | 0.004 | | | | | $ | (0.02) | | | | | $ | (0.01) | | | | | $ | (0.22) | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
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Investments available for sale
|
| | | $ | 200,110 | | | | | $ | 117,242 | | |
Mortgage loans
|
| | | | 51,172 | | | | | | 13,810 | | |
Notes receivable
|
| | | | 5,488 | | | | | | — | | |
Other
|
| | | | 6,461 | | | | | | 7,550 | | |
Total investments
|
| | | | 263,231 | | | | | | 138,602 | | |
Cash and equivalents
|
| | | | 75,042 | | | | | | 43,716 | | |
Reinsurance recoverables
|
| | | | 43,356 | | | | | | 30,580 | | |
Other
|
| | | | 14,081 | | | | | | 7,020 | | |
Total assets
|
| | | | 395,709 | | | | | | 219,916 | | |
Benefit reserves
|
| | | | 16,435 | | | | | | 16,320 | | |
Deposit type contracts
|
| | | | 321,831 | | | | | | 171,169 | | |
Deferred gains on reinsurance
|
| | | | 11,487 | | | | | | 7,578 | | |
Other
|
| | | | 20,003 | | | | | | 10,690 | | |
Total liabilities
|
| | | | 369,756 | | | | | | 205,757 | | |
Total stockholders’ equity
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| | | $ | 25,953 | | | | | $ | 14,159 | | |
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Six Months Ended
June 30, |
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Year Ended
December 31, |
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2020
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2019
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2019
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Annuity Premiums (SAP) | | | | | | | | | | | | | | | | | | | |
Annuity direct written premiums
|
| | | $ | 147,486,013 | | | | | $ | 38,238,880 | | | | | $ | 161,364,568 | | |
Ceded premiums
|
| | | | (118,987,891) | | | | | | — | | | | | | (160,493,727) | | |
Net premiums retained
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| | | $ | 28,498,122 | | | | | $ | 38,238,888 | | | | | $ | 870,841 | | |
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Six Months Ended
June 30, |
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Year Ended
December 31, |
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2020
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2019
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2019
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Total revenue – GAAP
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| | | $ | 11,930,138 | | | | | $ | 2,568,248 | | | | | $ | 3,399,788 | | |
Adjustments: | | | | | | | | | | | | | | | | | | | |
Net realized (gains) losses on investments
|
| | | | (8,472,037) | | | | | | — | | | | | | — | | |
Deferred coinsurance ceding commission
|
| | | | 3,908,889 | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Adjusted revenue
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| | | $ | 7,366,990 | | | | | $ | 729,370 | | | | | $ | 7,077,984 | | |
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Six Months Ended
June 30, |
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Year Ended
December 31, |
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2020
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2019
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2019
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Net (loss) income attributable to Midwest Holding Inc. – GAAP
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| | | $ | 5,011,119 | | | | | $ | (2,326,870) | | | | | $ | (5,733,658) | | |
Adjustments:
|
| | | | | | | | | | | | | | | | | | |
Net realized (gains) losses on investments
|
| | | | (8,472,037) | | | | | | — | | | | | | — | | |
Deferred coinsurance ceding commission
|
| | | | 3,908,889 | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Total adjustments
|
| | | | (4,563,148) | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Income tax (expense) benefit adjustment(1)
|
| | | | — | | | | | | — | | | | | | — | | |
Adjusted net (loss) income
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| | | $ | 447,971 | | | | | $ | (4,165,748) | | | | | $ | (2,055,462) | | |
| | |
Actual at
June 30, 2020 (unaudited) |
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As Adjusted at
June 30, 2020 (unaudited) |
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Long term debt
|
| | | $ | — | | | | | $ | — | | |
Stockholders’ equity(1) | | | | | | | | | | | | | |
Preferred stock, $0.001 par value; 2,000,000 shares authorized; no shares issued and outstanding
|
| | | | — | | | | | | — | | |
Voting common stock, $0.001 par value; 20,000,000 shares authorized; 2,718,967 shares issued before the offering ( shares pro forma)(2); 2,000,000 non-voting common stock authorized; no non-voting common shares outstanding
|
| | | | 2,719 | | | | | | | | |
Additional paid in capital
|
| | | | 69,084,710 | | | | | | | | |
Accumulated deficit
|
| | | | (36,070,591) | | | | | | | | |
Accumulated other comprehensive loss
|
| | | | (7,064,120) | | | | | | | | |
Total stockholders’ equity
|
| | | | 25,952,718 | | | | | | | | |
Total capitalization
|
| | | $ | 25,952,718 | | | | | $ | | | |
|
Public offering price per share
|
| | | | | | | | | $ | | | |
|
Net tangible book value per share as of June 30, 2020
|
| | | $ | | | | | | | | | |
|
Increase in net tangible book value per share attributable to investors participating in this offering
|
| | | | | | | | | | | | |
|
As adjusted net tangible book value per share after giving effect to this offering
|
| | | | | | | | | | | | |
|
Dilution per share to investors in this offering
|
| | | | | | | | | $ | | |
| | |
Six Months Ended
June 30, |
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Fiscal Year Ended
December 31, |
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| | |
2020
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2019
|
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2019
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2018
|
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| | |
(in thousands except per
share amounts) (unaudited) |
| |
(in thousands except per
share amounts) |
| ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount of deferred gain on reinsurance
|
| | | $ | 521 | | | | | $ | 1,853 | | | | | $ | 2,644 | | | | | $ | 118 | | |
Realized gains (losses)
|
| | | | 9,780 | | | | | | (3) | | | | | | 354 | | | | | | 48 | | |
Investment income
|
| | | | 843 | | | | | | 639 | | | | | | 121 | | | | | | 516 | | |
Other
|
| | | | 786 | | | | | | 79 | | | | | | 281 | | | | | | 194 | | |
Total revenues
|
| | | | 11,930 | | | | | | 2,568 | | | | | | 3,400 | | | | | | 876 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits
|
| | | | 2,180 | | | | | | 1,115 | | | | | | 2,702 | | | | | | 2,161 | | |
Other operational expenses
|
| | | | 3,852 | | | | | | 3,780 | | | | | | 6,073 | | | | | | 3,752 | | |
Total expenses
|
| | | | 6,032 | | | | | | 4,895 | | | | | | 8,775 | | | | | | 5,913 | | |
Income tax expense
|
| | | | (887) | | | | | | — | | | | | | (234) | | | | | | — | | |
Loss from discontinued operations
|
| | | | — | | | | | | — | | | | | | — | | | | | | (28) | | |
Net (loss) income
|
| | | $ | 5,011 | | | | | $ | (2,327) | | | | | $ | (5,609) | | | | | $ | (5,066) | | |
Net (loss) income per common share
|
| | | $ | 0.004 | | | | | $ | (0.02) | | | | | $ | (0.01) | | | | | $ | (0.22) | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
| | |
(in thousands)
|
| |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Investments available for sale
|
| | | $ | 200,110 | | | | | $ | 117,242 | | | | | $ | 17,384 | | |
Mortgage loans
|
| | | | 51,172 | | | | | | 13,810 | | | | | | — | | |
Notes receivable
|
| | | | 5,488 | | | | | | — | | | | | | — | | |
Other
|
| | | | 6,461 | | | | | | 7,550 | | | | | | 44 | | |
Total investments
|
| | | | 263,231 | | | | | | 138,602 | | | | | | 17,428 | | |
Cash and equivalents
|
| | | | 75,042 | | | | | | 43,716 | | | | | | 2,833 | | |
Reinsurance recoverables
|
| | | | 43,356 | | | | | | 30,580 | | | | | | 23,101 | | |
Other
|
| | | | 14,081 | | | | | | 7,020 | | | | | | 40,557 | | |
Total assets
|
| | | | 395,709 | | | | | | 219,916 | | | | | | 66,491 | | |
|
| | |
June 30,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
| | |
(in thousands)
|
| |||||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | |
Benefit reserves
|
| | | | 16,435 | | | | | | 16,320 | | | | | | 16,013 | | |
Deposit type contracts
|
| | | | 321,831 | | | | | | 171,169 | | | | | | 7,235 | | |
Deferred gains on reinsurance
|
| | | | 11,487 | | | | | | 7,578 | | | | | | 3,900 | | |
Other
|
| | | | 20,003 | | | | | | 10,690 | | | | | | 41,980 | | |
Total liabilities
|
| | | | 369,756 | | | | | | 205,757 | | | | | | 69,128 | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | 1,500 | | |
Common stock
|
| | | | 1,362 | | | | | | 1,023 | | | | | | 23 | | |
Additional paid-in capital
|
| | | | 67,726 | | | | | | 53,473 | | | | | | 33,006 | | |
Accumulated deficit
|
| | | | (36,071) | | | | | | (41,082) | | | | | | (35,348) | | |
Accumulated other comprehensive (loss) income
|
| | | | (7,064) | | | | | | 620 | | | | | | (1,818) | | |
Noncontrolling interest
|
| | | | — | | | | | | 125 | | | | | | — | | |
Total stockholders’ equity
|
| | | $ | 25,953 | | | | | $ | 14,159 | | | | | $ | (4,137) | | |
|
| | |
Six Months Ended
June 30, |
| |
Year Ended
December 31, |
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2020
|
| |
2019
|
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2019
|
| |||||||||
| | |
(unaudited)
|
| | | | | | | |||||||||
Annuity Premiums (SAP) | | | | | | | | | | | | | | | | | | | |
Annuity direct written premiums
|
| | | | 147,486,013 | | | | | | 38,238,880 | | | | | $ | 161,364,568 | | |
Ceded written premiums
|
| | | | (118,987,891) | | | | | | — | | | | | | (160,493,727) | | |
Net written premiums retained
|
| | | $ | 28,498,122 | | | | | $ | 38,238,880 | | | | | $ | 870,841 | | |
| | |
Six Months Ended
June 30, |
| |
Year Ended
December 31, |
| ||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |||||||||
| | |
(unaudited)
|
| | | | | | | |||||||||
Total revenue – GAAP
|
| | | $ | 11,930,138 | | | | | $ | 2,568,248 | | | | | $ | 3,399,788 | | |
Adjustments: | | | | | | | | | | | | | | | | | | | |
Net realized (gains) on investments
|
| | | | (8,472,037) | | | | | | — | | | | | | — | | |
Deferred coinsurance ceding commission
|
| | | | 3,908,889 | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Adjusted revenue
|
| | | $ | 7,366,990 | | | | | $ | 729,370 | | | | | $ | 7,077,984 | | |
| | |
Six Months Ended
June 30, |
| |
Year Ended
December 31, 2019 |
| ||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | |||||||||
Net (loss) income attributable to Midwest Holding Inc. – GAAP
|
| | | $ | 5,011,119 | | | | | $ | (2,326,870) | | | | | $ | (5,733,658) | | |
Adjustments:
|
| | | | | | | | | | | | | | | | | | |
Net realized gains on investments
|
| | | | (8,472,037) | | | | | | — | | | | | | — | | |
Deferred coinsurance ceding commission
|
| | | | 3,908,889 | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Total adjustments
|
| | | | (4,563,148) | | | | | | (1,838,878) | | | | | | 3,678,196 | | |
Income tax (expense) benefit adjustment
|
| | | | — | | | | | | — | | | | | | — | | |
Adjusted net (loss) income
|
| | | $ | 447,971 | | | | | $ | (4,165,748) | | | | | $ | (2,055,462) | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Premiums
|
| | | $ | (152) | | | | | $ | 135,387 | | |
Investment income, net of expenses
|
| | | | 120,581 | | | | | | 515,888 | | |
Net realized gains (losses) on investments
|
| | | | 353,602 | | | | | | 47,824 | | |
Amortization of deferred gain on reinsurance
|
| | | | 2,643,801 | | | | | | 117,871 | | |
Other revenue
|
| | | | 281,956 | | | | | | 58,842 | | |
| | | | $ | 3,399,788 | | | | | $ | 875,812 | | |
| | |
MYGA
Premium(1) |
| |
FIA
Premium(1)(2) |
| ||||||
First quarter 2019
|
| | | $ | 8,292,617 | | | | | $ | — | | |
Second quarter 2019
|
| | | | 29,946,263 | | | | | | — | | |
Third quarter 2019
|
| | | | 41,261,292 | | | | | | — | | |
Fourth quarter 2019
|
| | | | 66,247,565 | | | | | | 15,616,831 | | |
Total issued for 2019
|
| | | $ | 145,747,737 | | | | | $ | 15,616,831 | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Fixed maturities
|
| | | $ | 292,453 | | | | | $ | 789,949 | | |
Other
|
| | | | 38,397 | | | | | | 44,614 | | |
Gross investment income
|
| | | | 330,850 | | | | | | 834,563 | | |
Less investment expenses
|
| | | | (210,269) | | | | | | (318,675) | | |
Investment income, net of expenses
|
| | | $ | 120,581 | | | | | $ | 515,888 | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Interest credited
|
| | | $ | 6,584 | | | | | $ | 47,936 | | |
Death and other benefits
|
| | | | 34,436 | | | | | | 93,646 | | |
Increase (decrease) in benefit reserves
|
| | | | 34,500 | | | | | | (27,121) | | |
Salaries and benefits
|
| | | | 2,701,314 | | | | | | 2,160,853 | | |
Other operating expenses
|
| | | | 5,997,955 | | | | | | 3,637,748 | | |
| | | | $ | 8,774,789 | | | | | $ | 5,913,062 | | |
|
| | |
December 31, 2019
|
| |
December 31, 2018
|
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| | |
Carrying
Value |
| |
Percent
of Total |
| |
Carrying
Value |
| |
Percent
of Total |
| ||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | 2,081,224 | | | | | | 1.1% | | | | | $ | 1,995,951 | | | | | | 9.9% | | |
Mortgage-backed securities
|
| | | | 798,608 | | | | | | 0.4 | | | | | | 1,004,051 | | | | | | 5.0 | | |
Asset-backed securities
|
| | | | 95,247,824 | | | | | | 52.2 | | | | | | — | | | | | | — | | |
States and political subdivisions – general obligation
|
| | | | 249,282 | | | | | | 0.1 | | | | | | 263,184 | | | | | | 1.3 | | |
States and political subdivisions – special revenue
|
| | | | 25,291 | | | | | | — | | | | | | 25,173 | | | | | | 0.1 | | |
Corporate
|
| | | | 18,839,632 | | | | | | 10.4 | | | | | | 14,095,824 | | | | | | 69.5 | | |
Total fixed maturity securities
|
| | | | 117,241,861 | | | | | | 64.2 | | | | | | 17,384,183 | | | | | | 85.8 | | |
Mortgage loans on real estate, held for investment
|
| | | | 13,810,041 | | | | | | 7.6 | | | | | | — | | | | | | — | | |
Derivatives
|
| | | | 575,294 | | | | | | 0.3 | | | | | | — | | | | | | — | | |
Investment escrow
|
| | | | 3,899,986 | | | | | | 2.1 | | | | | | — | | | | | | — | | |
Other invested assets
|
| | | | 2,468,947 | | | | | | 1.4 | | | | | | — | | | | | | — | | |
Preferred stock
|
| | | | 500,000 | | | | | | 0.3 | | | | | | — | | | | | | — | | |
Cash and cash equivalents
|
| | | | 43,716,205 | | | | | | 24.0 | | | | | | 2,832,567 | | | | | | 14.0 | | |
Policy loans
|
| | | | 106,014 | | | | | | 0.1 | | | | | | 43,843 | | | | | | 0.2 | | |
| | | | $ | 182,318,348 | | | | | | 100.0% | | | | | $ | 20,260,593 | | | | | | 100.0% | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||||||||||||||
| | |
Carrying
Value |
| |
Percent
|
| |
Carrying
Value |
| |
Percent
|
| ||||||||||||
AAA and U.S. Government
|
| | | $ | 2,885,004 | | | | | | 2.5% | | | | | $ | 3,045,768 | | | | | | 17.5% | | |
AA
|
| | | | 6,658,274 | | | | | | 5.7 | | | | | | 1,721,450 | | | | | | 9.9 | | |
A
|
| | | | 23,812,502 | | | | | | 20.3 | | | | | | 4,221,297 | | | | | | 24.3 | | |
BBB
|
| | | | 79,996,081 | | | | | | 68.2 | | | | | | 8,261,450 | | | | | | 47.5 | | |
Total investment grade
|
| | | | 113,351,861 | | | | | | 96.7 | | | | | | 17,249,965 | | | | | | 99.2 | | |
BB and other
|
| | | | 3,890,000 | | | | | | 3.3 | | | | | | 134,218 | | | | | | 0.8 | | |
Total
|
| | | $ | 117,241,861 | | | | | | 100.0% | | | | | $ | 17,384,183 | | | | | | 100.0% | | |
| | |
Six months ended June 30,
|
| | |||||||||||
| | |
2020
|
| |
2019
|
| | ||||||||
| | |
(unaudited)
|
| ||||||||||||
Insurance premiums
|
| | | $ | 51 | | | | | $ | (2,479) | | | | ||
Investment income, net of expenses
|
| | | | 843,136 | | | | | | 639,010 | | | | ||
Net realized gains (losses) on investments(1)
|
| | | | 9,780,139 | | | | | | (3,217) | | | | ||
Amortization of deferred gain on reinsurance
|
| | | | 520,707 | | | | | | 1,852,599 | | | | ||
Other revenue
|
| | | | 786,105 | | | | | | 82,335 | | | | ||
| | | | $ | 11,930,138 | | | | | $ | 2,568,248 | | | |
| | |
Six months ended June 30,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
MYGA
Premium(1) |
| |
FIA
Premium(1)(2) |
| |
MYGA
Premium(1) |
| |||||||||
| | |
(unaudited)
|
| |
(unaudited)
|
| ||||||||||||
First quarter
|
| | | $ | 31,565,506 | | | | | $ | 16,249,504 | | | | | $ | 8,292,617 | | |
Second quarter
|
| | | | 27,400,367 | | | | | | 72,270,636 | | | | | | 29,946,263 | | |
Total issued as of June 30, 2020 and 2019
|
| | | $ | 58,965,873 | | | | | $ | 88,520,140 | | | | | $ | 38,238,880 | | |
|
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(unaudited)
|
| |||||||||
Fixed maturities
|
| | | $ | 1,041,929 | | | | | $ | 631,118 | | |
Mortgage loans
|
| | | | — | | | | | | 9,656 | | |
Other
|
| | | | — | | | | | | 8,076 | | |
Gross investment income
|
| | | | 1,041,929 | | | | | | 648,850 | | |
Less: refund received on investment expenses
|
| | | | (198,793) | | | | | | (9,840) | | |
Investment income, net of expenses
|
| | | $ | 843,136 | | | | | $ | 639,010 | | |
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(unaudited)
|
| |||||||||
Interest credited
|
| | | $ | 83,150 | | | | | $ | 251,187 | | |
Death and other benefits
|
| | | | (3,087) | | | | | | 1,872 | | |
Amortization of deferred acquisition costs
|
| | | | 140,897 | | | | | | 21,865 | | |
Salaries and benefits
|
| | | | 2,179,830 | | | | | | 1,115,074 | | |
Other operating expenses
|
| | | | 3,630,800 | | | | | | 3,505,120 | | |
| | | | $ | 6,031,590 | | | | | $ | 4,895,118 | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||
| | |
Carrying
Value |
| |
Percent
of Total |
| |
Carrying
Value |
| |
Percent
of Total |
| ||||||||||||
| | |
(unaudited)
|
| | | | ||||||||||||||||||
Fixed maturity securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | 1,836,729 | | | | | | 0.5% | | | | | $ | 2,081,224 | | | | | | 1.1% | | |
Mortgage-backed securities
|
| | | | 721,769 | | | | | | 0.2 | | | | | | 798,608 | | | | | | 0.4 | | |
Asset-backed securities
|
| | | | 167,908,244 | | | | | | 49.8 | | | | | | 95,247,824 | | | | | | 52.2 | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||
| | |
Carrying
Value |
| |
Percent
of Total |
| |
Carrying
Value |
| |
Percent
of Total |
| ||||||||||||
| | |
(unaudited)
|
| | | | ||||||||||||||||||
States and political subdivisions – general obligation
|
| | | | 250,079 | | | | | | 0.1 | | | | | | 249,282 | | | | | | 0.1 | | |
States and political subdivisions – special revenue
|
| | | | 3,465,356 | | | | | | 1.0 | | | | | | 25,291 | | | | | | — | | |
Trust preferred
|
| | | | 2,124,478 | | | | | | 0.6 | | | | | | — | | | | | | — | | |
Corporate
|
| | | | 23,803,632 | | | | | | 7.0 | | | | | | 18,839,632 | | | | | | 10.4 | | |
Total fixed maturity securities
|
| | | | 200,110,287 | | | | | | 59.2 | | | | | | 117,241,861 | | | | | | 64.2 | | |
Mortgage loans on real estate, held for investment
|
| | | | 51,171,943 | | | | | | 15.1 | | | | | | 13,810,041 | | | | | | 7.6 | | |
Derivatives
|
| | | | 3,228,102 | | | | | | 1.0 | | | | | | 575,294 | | | | | | 0.3 | | |
Other invested assets
|
| | | | 3,090,964 | | | | | | 0.9 | | | | | | 2,468,947 | | | | | | 1.4 | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | 500,000 | | | | | | 0.3 | | |
Investment escrow
|
| | | | — | | | | | | — | | | | | | 3,899,986 | | | | | | 2.1 | | |
Notes receivable
|
| | | | 5,488,101 | | | | | | 1.6 | | | | | | — | | | | | | — | | |
Cash and cash equivalents
|
| | | | 75,041,902 | | | | | | 22.2 | | | | | | 43,716,205 | | | | | | 24.0 | | |
Policy Loans
|
| | | | 141,172 | | | | | | — | | | | | | 106,014 | | | | | | 0.1 | | |
| | | | $ | 338,272,471 | | | | | | 100.0% | | | | | $ | 182,318,348 | | | | | | 100.0% | | |
|
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||
| | |
Carrying
Value |
| |
Percent
|
| |
Carrying
Value |
| |
Percent
|
| ||||||||||||
| | |
(unaudited)
|
| | | | ||||||||||||||||||
AAA and U.S. Government
|
| | | $ | 2,335,428 | | | | | | 1.2% | | | | | $ | 2,885,004 | | | | | | 2.5% | | |
AA
|
| | | | 5,608,888 | | | | | | 2.8 | | | | | | 6,658,274 | | | | | | 5.7 | | |
A
|
| | | | 40,244,011 | | | | | | 20.1 | | | | | | 23,812,502 | | | | | | 20.3 | | |
BBB
|
| | | | 138,568,407 | | | | | | 69.2 | | | | | | 79,996,081 | | | | | | 68.2 | | |
Total investment grade
|
| | | | 186,756,734 | | | | | | 93.3 | | | | | | 113,351,861 | | | | | | 96.7 | | |
BB and other
|
| | | | 13,353,553 | | | | | | 6.7 | | | | | | 3,890,000 | | | | | | 3.3 | | |
Total
|
| | | $ | 200,110,287 | | | | | | 100.0% | | | | | $ | 117,241,861 | | | | | | 100.0% | | |
| | |
For the six months ended,
June 30, |
| |
For the year ended,
December 31, |
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
| | |
(unaudited)
|
| | | |||||||||||||||||||
Consolidated GAAP net income (loss)
|
| | | $ | 5,011,118 | | | | | | (2,326,870) | | | | | | (5,733,658) | | | | | | (5,065,534) | | |
Exclude: Midwest non insurance transactional entities
|
| | | | 827,860 | | | | | | (1,014,833) | | | | | | (1,209,873) | | | | | | 129,408 | | |
GAAP net income (loss) of statutory insurance entities
|
| | | $ | 4,183,258 | | | | | | (1,312,037) | | | | | | (4,523,785) | | | | | | (5,194,942) | | |
GAAP net income (loss) by statutory insurance entity:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
American Life
|
| | | $ | 3,569,924 | | | | | | (1,312,037) | | | | | | (4,523,785) | | | | | | (5,194,942) | | |
Seneca Re Protected Cell
|
| | | | 613,334 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | 4,183,258 | | | | | | (1,312,037) | | | | | | (4,523,785) | | | | | | (5,194,942) | | |
GAAP net income (loss) of American Life
|
| | | $ | 3,569,924 | | | | | | (1,312,037) | | | | | | (4,523,785) | | | | | | (5,194,942) | | |
Increase (decrease) due to: | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred acquisition costs
|
| | | | (9,697,787) | | | | | | (1,135,208) | | | | | | (6,000,656) | | | | | | 143,142 | | |
Coinsurance transactions
|
| | | | 21,775,316 | | | | | | (173,785) | | | | | | 13,862,116 | | | | | | 2,507,039 | | |
Carrying value of reserves
|
| | | | (4,650,078) | | | | | | (326,808) | | | | | | (1,798,627) | | | | | | (1,704,191) | | |
Gain on sale of investments, net of asset valuation reserve
|
| | | | (8,376,919) | | | | | | (16,267) | | | | | | (133,633) | | | | | | 164,276 | | |
Other
|
| | | | 104,257 | | | | | | (13,899) | | | | | | (87,530) | | | | | | (198,675) | | |
SAP net income (loss) of American Life
|
| | | $ | 2,724,713 | | | | | | (2,978,004) | | | | | | 1,317,885 | | | | | | (4,283,351) | | |
GAAP net income (loss) of Seneca Re Protected Cell
|
| | | $ | 613,334 | | | | | | — | | | | | | — | | | | | | — | | |
Increase (decrease) due to: | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred acquisitions costs
|
| | | $ | (2,586,037) | | | | | | — | | | | | | — | | | | | | — | | |
Coinsurance transactions
|
| | | | 26,977,374 | | | | | | — | | | | | | — | | | | | | — | | |
Carrying value of reserves
|
| | | | (26,317,717) | | | | | | — | | | | | | — | | | | | | — | | |
SAP net loss of Seneca Re Protected Cell
|
| | | | (1,313,046) | | | | | | — | | | | | | — | | | | | | — | | |
SAP net income (loss) of statutory insurance entities
|
| | | $ | 1,411,667 | | | | | | (2,978,004) | | | | | | 1,317,885 | | | | | | (4,283,351) | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Net cash (used in) or provided by for operating activities
|
| | | $ | 2,480,934 | | | | | $ | (4,911,603) | | | | | $ | (2,457,176) | | | | | $ | (20,369,748) | | |
Net cash provided (used in) by investing activities
|
| | | | (132,423,736) | | | | | | (25,904,372) | | | | | | (117,890,852) | | | | | | 1,862,609 | | |
Net cash provided by financing activities
|
| | | | 161,268,499 | | | | | | 38,257,632 | | | | | | 161,231,666 | | | | | | 20,388,179 | | |
Net increase in cash and cash equivalents
|
| | | | 31,325,697 | | | | | | 7,441,657 | | | | | | 40,883,638 | | | | | | 1,881,040 | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of period
|
| | | | 43,716,205 | | | | | | 2,832,567 | | | | | | 2,832,567 | | | | | | 951,527 | | |
End of period
|
| | | $ | 75,041,902 | | | | | $ | 10,274,224 | | | | | $ | 43,716,205 | | | | | $ | 2,832,567 | | |
Name
|
| |
Age
|
| |
Position
|
| |
Director/Officer Since
|
|
Mike Minnich | | | 48 | | | Executive Chairman, Director | | |
2019
|
|
A. Michael Salem | | | 39 | | | Chief Executive Officer, Director | | |
2019
|
|
Mark A. Oliver | | | 62 | | | President | | |
2010
|
|
Shyamal Somaroo | | | 50 | | | Chief Technology Officer | | |
2020
|
|
Debra K. Havranek | | | 64 | | | Principal Financial Officer and Treasurer | | |
2015
|
|
John T. Hompe | | | 59 | | | Director | | |
2015
|
|
Firman Leung | | | 62 | | | Director | | |
2016
|
|
Jack Theeler | | | 74 | | | Director | | |
2012
|
|
Sachin Goel | | | 39 | | | Director | | |
2019
|
|
Douglas K. Bratton | | | 61 | | | Director | | |
2020
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary
|
| |
Bonus
|
| |
Option Awards
|
| |
All Other
Compensation(2) |
| |
Total
|
| ||||||||||||||||||
Mike Minnich,
Executive Chairman, Director(1) |
| | | | 2019 | | | | | $ | 250,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,074(3) | | | | | $ | 253,074 | | |
| | | 2018 | | | | | | 125,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 125,000 | | | ||
A. Michael Salem,
CEO, Director(1) |
| | | | 2019 | | | | | $ | 250,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 250,000 | | |
| | | 2018 | | | | | | 125,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 125,000 | | | ||
Mark A. Oliver,
President(4) |
| | | | 2019 | | | | | $ | 250,000 | | | | | $ | 50,000 | | | | | $ | 7,300(5) | | | | | $ | 25,400(6) | | | | | $ | 332,700 | | |
| | | 2018 | | | | | | 305,729 | | | | | | 25,000 | | | | | | — | | | | | | 25,250(6) | | | | | | 355,979 | | |
| | |
Option Awards
|
| |||||||||||||||||||||
Name
|
| |
Number of Securities
Underlying Unexercised Options (#) Exercisable |
| |
Equity Incentive Plan
Awards: Number of Securities Underlying Unexercised Unearned Options(1) |
| |
Option
Exercise Price ($)(2) |
| |
Option
Expiration Date |
| ||||||||||||
Mark A. Oliver
|
| | | | — | | | | | | 6,000 | | | | | $ | 25.00 | | | | | | 07/17/2029 | | |
Name
|
| |
Year
|
| |
Fees Earned or
Paid in Cash |
| |
Stock Option
Awards(1) |
| |||||||||
Jack Theeler
|
| | | | 2019 | | | | | $ | 9,250 | | | | | $ | 91 | | |
Dana Stapleton(2)
|
| | | | 2019 | | | | | | 6,350 | | | | | $ | 91 | | |
John Hompe
|
| | | | 2019 | | | | | | 9,250 | | | | | $ | 91 | | |
Scott Morrison(2)
|
| | | | 2019 | | | | | | 9,250 | | | | | $ | 91 | | |
Sachin Goel(3)
|
| | | | 2019 | | | | | | 1,350 | | | | | $ | 91 | | |
Firman Leung
|
| | | | 2019 | | | | | | 7,350 | | | | | $ | 91 | | |
| | |
Voting Common Stock
|
| |||||||||||||||
Name
|
| |
Number of Shares
Beneficially Owned Prior to Offering |
| |
Percentage of Shares
Beneficially Owned |
| ||||||||||||
|
Before
Offering |
| |
After
Offering |
| ||||||||||||||
Named Executive Officers and Directors: | | | | | | | | | | | | | | | | | | | |
Michael Minnich(1)(3)
|
| | | | 760,129 | | | | | | 30.0% | | | | | | % | | |
A. Michael Salem(2)(3)
|
| | | | 600,077 | | | | | | 22.1% | | | | | | % | | |
Mark A. Oliver
|
| | | | 501 | | | | | | * | | | | | | * | | |
John T. Hompe
|
| | | | — | | | | | | * | | | | | | * | | |
Firman Leung
|
| | | | — | | | | | | * | | | | | | * | | |
Jack Theeler
|
| | | | 108 | | | | | | * | | | | | | * | | |
Sachin Goel(4)
|
| | | | 4,444 | | | | | | * | | | | | | * | | |
Douglas K. Bratton(5)
|
| | | | 444,444 | | | | | | 16.3% | | | | | | % | | |
Named Executive Officers and Directors as a Group (8 persons):
|
| | | | 1,209,626 | | | | | | 44.5% | | | | | | % | | |
Beneficial Owners of More than Five Percent: | | | | | | | | | | | | | | | | | | | |
Vespoint, LLC(3)
|
| | | | 600,076 | | | | | | 22.1% | | | | | | % | | |
Crestline Assurance Holdings LLC(5)
|
| | | | 444,444 | | | | | | 16.3% | | | | | | % | | |
Underwriter
|
| |
Number of Shares
|
|
Piper Sandler & Co.
|
| | | |
| | | | | |
Total
|
| |||
| | |
Per Share
|
| |
Without Option
|
| |
With Option
|
|
Public offering price
|
| | | | | | | | | |
Underwriting discounts and commissions
|
| | | | | | | | | |
Proceeds, before expenses, to us
|
| | | | | | | | | |
| | | | | F-2 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-9 | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
| | |
(Unaudited)
|
| | | | | | | | | | | | | |||
Assets | | | | | | | | | | | | | | | | | | | |
Investments, available for sale, at fair value fixed maturities
(amortized cost: $206,950,851, $116,676,312 and $19,226,841, respectively) (See Note 6) |
| | | $ | 200,110,287 | | | | | $ | 117,241,861 | | | | | $ | 17,384,183 | | |
Mortgage loans on real estate, held for investment
|
| | | | 51,171,943 | | | | | | 13,810,041 | | | | | | — | | |
Derivatives instruments (See Note 7)
|
| | | | 3,228,102 | | | | | | 575,294 | | | | | | — | | |
Other invested assets
|
| | | | 3,090,964 | | | | | | 2,468,947 | | | | | | — | | |
Preferred stock
|
| | | | — | | | | | | 500,000 | | | | | | — | | |
Investment escrow
|
| | | | — | | | | | | 3,899,986 | | | | | | — | | |
Notes receivable
|
| | | | 5,488,101 | | | | | | — | | | | | | — | | |
Policy loans
|
| | | | 141,172 | | | | | | 106,014 | | | | | | 43,843 | | |
Total investments
|
| | | | 263,230,569 | | | | | | 138,602,143 | | | | | | 17,428,026 | | |
Cash and cash equivalents
|
| | | | 75,041,902 | | | | | | 43,716,205 | | | | | | 2,832,567 | | |
Deferred acquisition costs, net
|
| | | | 3,968,748 | | | | | | — | | | | | | — | | |
Premiums receivable
|
| | | | 349,649 | | | | | | 355,959 | | | | | | 346,870 | | |
Accrued investment income
|
| | | | 3,471,429 | | | | | | 1,511,200 | | | | | | 200,708 | | |
Reinsurance recoverables (See Note 10)
|
| | | | 43,355,941 | | | | | | 30,579,524 | | | | | | 23,100,644 | | |
Intangible assets
|
| | | | 700,000 | | | | | | 700,000 | | | | | | 700,000 | | |
Property and equipment, net
|
| | | | 105,685 | | | | | | 85,395 | | | | | | 91,414 | | |
Operating lease right of use assets
|
| | | | 409,165 | | | | | | 470,132 | | | | | | 592,065 | | |
Other assets
|
| | | | 3,933,728 | | | | | | 241,580 | | | | | | 261,884 | | |
Assets associated with business held for sale (See Note 4)
|
| | | | 1,142,379 | | | | | | 3,653,748 | | | | | | 20,937,071 | | |
Total assets
|
| | | $ | 395,709,195 | | | | | $ | 219,915,886 | | | | | $ | 66,491,249 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Benefit reserves
|
| | | $ | 16,434,819 | | | | | $ | 16,319,912 | | | | | $ | 16,012,655 | | |
Policy claims
|
| | | | 232,923 | | | | | | 225,228 | | | | | | 270,785 | | |
Deposit-type contracts (See Note 13)
|
| | | | 321,830,976 | | | | | | 171,168,785 | | | | | | 7,234,927 | | |
Advance premiums
|
| | | | 646 | | | | | | 261 | | | | | | 490 | | |
Long-term debt
|
| | | | | | | | | | | | | | | | 18,938,705 | | |
Deferred gain on coinsurance transactions
|
| | | | 11,487,084 | | | | | | 7,578,195 | | | | | | 3,899,999 | | |
Lease liabilities (See Note 15): | | | | | | | | | | | | | | | | | | | |
Finance lease
|
| | | | — | | | | | | 1,860 | | | | | | 9,299 | | |
Operating lease
|
| | | | 460,791 | | | | | | 524,248 | | | | | | 646,519 | | |
Other liabilities
|
| | | | 18,167,460 | | | | | | 6,291,782 | | | | | | 1,062,087 | | |
Liabilities associated with business held for sale (See Note 4)
|
| | | | 1,141,778 | | | | | | 3,646,867 | | | | | | 21,052,733 | | |
Total liabilities
|
| | | | 369,756,477 | | | | | | 205,757,138 | | | | | | 69,128,199 | | |
Contingencies and Commitments (See Note 14) | | | | | | | | | | | | | | | | | | | |
Mezzanine Equity: | | | | | | | | | | | | | | | | | | | |
Preferred stock, Series C, $0.001 par value; authorized 1,500,000
shares as of December 31, 2018; none issued and outstanding as of June 30, 2020 and December 31, 2019 |
| | | | — | | | | | | — | | | | | | 1,500,000 | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | |
Common stock, $0.001 par value; authorized 1,970,000,000 shares; 1,361,557,779 issued and outstanding as of June 30, 2020 1,023,408,553 as of December 31, 2019 and 22,873,764 issued and outstanding on December 31, 2018
|
| | | | 1,361,786 | | | | | | 1,023,409 | | | | | | 22,874 | | |
Additional paid-in capital
|
| | | | 67,725,643 | | | | | | 53,472,988 | | | | | | 33,006,242 | | |
Accumulated deficit
|
| | | | (36,070,591) | | | | | | (41,081,710) | | | | | | (35,348,052) | | |
Accumulated other comprehensive (loss) income (See Note 1)
|
| | | | (7,064,120) | | | | | | 619,584 | | | | | | (1,818,014) | | |
Total Midwest Holding Inc.’s stockholders’ equity
|
| | | | 25,952,718 | | | | | | 14,034,271 | | | | | | (4,136,950) | | |
Noncontrolling interest
|
| | | | — | | | | | | 124,477 | | | | | | — | | |
Total stockholders’ equity
|
| | | | 25,952,718 | | | | | | 14,158,748 | | | | | | (4,136,950) | | |
Total liabilities, mezzanine, and stockholders’ equity
|
| | | $ | 395,709,195 | | | | | $ | 219,915,886 | | | | | $ | 66,491,249 | | |
|
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance premiums
|
| | | $ | 51 | | | | | $ | (2,479) | | | | | $ | (152) | | | | | $ | 135,387 | | |
Investment income, net of expenses
|
| | | | 843,136 | | | | | | 639,010 | | | | | | 120,581 | | | | | | 515,888 | | |
Net realized gains (losses) on investments (See Note 6)
|
| | | | 9,780,139 | | | | | | (3,217) | | | | | | 353,602 | | | | | | 47,824 | | |
Amortization of deferred gain on reinsurance
|
| | | | 520,707 | | | | | | 1,852,599 | | | | | | 2,643,801 | | | | | | 117,871 | | |
Miscellaneous income
|
| | | | 786,105 | | | | | | 82,335 | | | | | | 281,956 | | | | | | 58,842 | | |
Total revenues
|
| | | | 11,930,138 | | | | | | 2,568,248 | | | | | | 3,399,788 | | | | | | 875,812 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest credited
|
| | | | 83,150 | | | | | | 251,187 | | | | | | 6,584 | | | | | | 47,936 | | |
Benefits
|
| | | | (3,087) | | | | | | 1,872 | | | | | | 34,436 | | | | | | 93,646 | | |
Increase in benefit reserves
|
| | | | — | | | | | | — | | | | | | 34,500 | | | | | | (27,121) | | |
Amortization of deferred acquisition costs
|
| | | | 140,897 | | | | | | 21,865 | | | | | | — | | | | | | — | | |
Salaries and benefits
|
| | | | 2,179,830 | | | | | | 1,115,074 | | | | | | 2,701,314 | | | | | | 2,160,853 | | |
Other operating expenses
|
| | | | 3,630,800 | | | | | | 3,505,120 | | | | | | 5,997,955 | | | | | | 3,637,748 | | |
Total expenses
|
| | | | 6,031,590 | | | | | | 4,895,118 | | | | | | 8,774,789 | | | | | | 5,913,062 | | |
(Loss) gain from continuing operations before taxes (See note 9)
|
| | | | 5,898,548 | | | | | | (2,326,870) | | | | | | (5,375,001) | | | | | | (5,037,250) | | |
Income tax expense
|
| | | | (887,429) | | | | | | — | | | | | | (234,180) | | | | | | — | | |
Net (loss) gain from continued operations
|
| | | | 5,011,119 | | | | | | (2,326,870) | | | | | | (5,609,181) | | | | | | (5,037,250) | | |
Loss from discontinued operations
|
| | | | — | | | | | | — | | | | | | — | | | | | | (28,284) | | |
Net (loss) income
|
| | | | 5,011,119 | | | | | | (2,326,870) | | | | | | (5,609,181) | | | | | | (5,065,534) | | |
Less: Gain attributable to noncontrolling
interest |
| | | | — | | | | | | — | | | | | | (124,477) | | | | | | — | | |
Net (loss) income attributable to Midwest Holding
Inc. |
| | | | 5,011,119 | | | | | | (2,326,870) | | | | | | (5,733,658) | | | | | | (5,065,534) | | |
Comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrealized (losses) gains on investments arising during period, net of tax
|
| | | | 2,502,690 | | | | | | 1,711,156 | | | | | | 2,645,015 | | | | | | (1,258,971) | | |
Unrealized gains (losses) on foreign currency
|
| | | | (406,255) | | | | | | — | | | | | | 146,185 | | | | | | — | | |
Less: reclassification adjustment for net realized losses (gains) on investments
|
| | | | (9,780,139) | | | | | | 3,217 | | | | | | (353,602) | | | | | | (47,824) | | |
Other comprehensive (loss) income
|
| | | | (7,683,704) | | | | | | 1,714,373 | | | | | | 2,437,598 | | | | | | (1,306,795) | | |
Comprehensive loss
|
| | | $ | (2,672,585) | | | | | $ | (612,497) | | | | | $ | (3,296,060) | | | | | $ | (6,372,329) | | |
Net gain (loss) per common share | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | | $ | 0.004 | | | | | $ | (0.020) | | | | | $ | (0.010) | | | | | $ | (0.220) | | |
Diluted
|
| | | $ | 0.004 | | | | | $ | (0.019) | | | | | $ | (0.010) | | | | | $ | (0.005) | | |
| | |
Common
Stock |
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
AOCI*
|
| |
Noncontrolling
Interests |
| |
Total
Stockholders’ Equity (Deficit) |
| ||||||||||||||||||
Balance, December 31, 2017
|
| | | $ | 22,861 | | | | | $ | 33,006,255 | | | | | $ | (30,282,518) | | | | | $ | (511,219) | | | | | $ | — | | | | | $ | 2,235,379 | | |
Preferred stock conversion adjustment
|
| | | | 13 | | | | | | (13) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (5,065,534) | | | | | | — | | | | | | — | | | | | | (5,065,534) | | |
Unrealized losses on investments
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,306,795 | | | | | | — | | | | | | (1,306,795) | | |
Balance, December 31, 2018
|
| | | | 22,874 | | | | | | 33,006,242 | | | | | | (35,348,052) | | | | | | (1,818,014) | | | | | | — | | | | | | (4,136,950) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (5,733,658) | | | | | | — | | | | | | — | | | | | | (5,733,658) | | |
Xenith note interest waived
|
| | | | — | | | | | | 845,536 | | | | | | — | | | | | | — | | | | | | — | | | | | | 845,536 | | |
Xenith note conversion
|
| | | | 927,680 | | | | | | 18,172,320 | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,100,000 | | |
Class C preferred stock conversion
|
| | | | 72,855 | | | | | | 1,427,145 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,500,000 | | |
Employee stock options
|
| | | | — | | | | | | 21,745 | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,745 | | |
Change in equity of noncontrolling interests
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 124,477 | | | | | | 124,477 | | |
Unrealized gains on investments, net of taxes
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,291,413 | | | | | | — | | | | | | 2,291,413 | | |
Unrealized gains on foreign currency, net
of taxes |
| | | | — | | | | | | — | | | | | | — | | | | | | 146,185 | | | | | | — | | | | | | 146,185 | | |
Balance, December 31, 2019
|
| | | | 1,023,409 | | | | | | 53,472,988 | | | | | | (41,081,710) | | | | | | 619,584 | | | | | | 124,477 | | | | | | 14,158,748 | | |
Net income
|
| | | | — | | | | | | — | | | | | | 5,011,119 | | | | | | — | | | | | | — | | | | | | 5,011,119 | | |
Capital raise, net of $285,468 related expenses
|
| | | | 338,377 | | | | | | 14,603,156 | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,941,533 | | |
Employee stock options
|
| | | | — | | | | | | 25,022 | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,022 | | |
Purchase of remaining 49% of 1505 Capital LLC
|
| | | | — | | | | | | (375,523) | | | | | | — | | | | | | — | | | | | | (124,477) | | | | | | (500,000) | | |
Unrealized losses on investments
|
| | | | — | | | | | | — | | | | | | — | | | | | | (7,277,449) | | | | | | — | | | | | | (7,277,449) | | |
Unrealized losses on foreign currency
|
| | | | — | | | | | | — | | | | | | — | | | | | | (406,255) | | | | | | — | | | | | | (406,255) | | |
Balance, June 30, 2020 (unaudited)
|
| | | $ | 1,361,786 | | | | | $ | 67,725,643 | | | | | $ | (36,070,591) | | | | | $ | (7,064,120) | | | | | $ | — | | | | | $ | 25,952,718 | | |
|
| | |
Common
Stock |
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
AOCI*
|
| |
Noncontrolling
Interests |
| |
Total
Stockholders’ Equity (Deficit) |
| ||||||||||||||||||
Balance, December 31, 2018
|
| | | $ | 22,874 | | | | | $ | 33,006,242 | | | | | $ | (35,348,052) | | | | | $ | (1,818,014) | | | | | $ | — | | | | | $ | (4,136,950) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (2,326,870) | | | | | | — | | | | | | — | | | | | | (2,326,870) | | |
Xenith note interest waived
|
| | | | — | | | | | | 845,536 | | | | | | — | | | | | | — | | | | | | — | | | | | | 845,536 | | |
Xenith note conversion
|
| | | | 927,680 | | | | | | 18,172,320 | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,100,000 | | |
Class C preferred stock conversion
|
| | | | 72,855 | | | | | | 1,427,145 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,500,000 | | |
Change in equity of noncontrolling interests
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,846 | | | | | | 1,846 | | |
Unrealized gains on investments
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,714,373 | | | | | | — | | | | | | 1,714,373 | | |
Balance, June 30, 2019
|
| | | $ | 1,023,409 | | | | | $ | 53,451,243 | | | | | $ | (37,674,922) | | | | | $ | (103,641) | | | | | $ | 1,846 | | | | | $ | 16,697,935 | | |
|
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income
|
| | | $ | 5,011,119 | | | | | $ | (2,326,870) | | | | | $ | (5,733,658) | | | | | $ | (5,065,534) | | |
Adjustments to arrive at cash provided by operating activities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Net premium and discount on investments
|
| | | | 104,947 | | | | | | 49,751 | | | | | | 113,880 | | | | | | 102,285 | | |
Depreciation and amortization
|
| | | | 804,289 | | | | | | 32,254 | | | | | | 58,761 | | | | | | 147,761 | | |
Stock options
|
| | | | 25,022 | | | | | | — | | | | | | 21,745 | | | | | | — | | |
Net transfers to noncontrolling interest
|
| | | | | | | | | | | | | | | | 124,477 | | | | | | | | |
Amortization of deferred acquisition costs
|
| | | | 140,897 | | | | | | 21,865 | | | | | | — | | | | | | — | | |
Deferred acquisition costs capitalized
|
| | | | (4,118,436) | | | | | | (1,157,073) | | | | | | — | | | | | | — | | |
Net realized (gains) losses on investments
|
| | | | (9,780,139) | | | | | | 4,142 | | | | | | (353,602) | | | | | | 334,928 | | |
Deferred coinsurance ceding commission
|
| | | | 3,908,889 | | | | | | (1,838,878) | | | | | | 3,678,196 | | | | | | 2,944,572 | | |
Notes payable interest accrued
|
| | | | — | | | | | | 845,536 | | | | | | 845,536 | | | | | | — | | |
Commutation of assumed business
|
| | | | — | | | | | | — | | | | | | — | | | | | | (2,544,929) | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Reinsurance recoverables
|
| | | | (4,304,381) | | | | | | (404,451) | | | | | | (7,478,880) | | | | | | (707,419) | | |
Interest and dividends due and accrued
|
| | | | (1,960,229) | | | | | | (255,955) | | | | | | (1,310,492) | | | | | | 22,458 | | |
Premiums receivable
|
| | | | 6,310 | | | | | | (12,861) | | | | | | (9,089) | | | | | | 21,507 | | |
Policy liabilities
|
| | | | 3,958,101 | | | | | | 672,825 | | | | | | 2,963,219 | | | | | | 254,614 | | |
Other assets and liabilities
|
| | | | 8,678,265 | | | | | | (421,469) | | | | | | 4,745,274 | | | | | | 175,344 | | |
Other assets and liabilities – discontinued operations
|
| | | | 6,280 | | | | | | (120,419) | | | | | | (122,543) | | | | | | (16,055,335) | | |
Net cash (used in) or provided by for operating activities
|
| | | | 2,480,934 | | | | | | (4,911,603) | | | | | | (2,457,176) | | | | | | (20,369,748) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchases
|
| | | | (107,759,107) | | | | | | (24,117,739) | | | | | | (103,078,444) | | | | | | (8,382,284) | | |
Proceeds from sale or maturity
|
| | | | 18,409,038 | | | | | | 2,406,165 | | | | | | 5,780,475 | | | | | | 10,243,118 | | |
Mortgage loans on real estate, held for investment purchases
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Purchases
|
| | | | (35,531,866) | | | | | | (4,176,039) | | | | | | (15,036,179) | | | | | | — | | |
Proceeds from sale
|
| | | | 2,069,950 | | | | | | — | | | | | | 1,226,138 | | | | | | — | | |
Purchases of derivatives
|
| | | | (2,643,989) | | | | | | — | | | | | | (490,831) | | | | | | — | | |
Other invested assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Purchases
|
| | | | (7,011,102) | | | | | | — | | | | | | (20,533,761) | | | | | | (100,000) | | |
Proceeds from sale
|
| | | | 5,612,112 | | | | | | — | | | | | | 14,849,555 | | | | | | 104,892 | | |
Preferred stock purchased
|
| | | | — | | | | | | — | | | | | | (500,000) | | | | | | — | | |
Notes receivable
|
| | | | (5,488,101) | | | | | | — | | | | | | — | | | | | | — | | |
Net change in policy loans
|
| | | | (35,158) | | | | | | 589 | | | | | | (62,171) | | | | | | 9,630 | | |
| | |
Six months ended June 30,
|
| |
Year ended December 31,
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Net purchases of property and equipment
|
| | | | (45,513) | | | | | | (17,348) | | | | | | (45,634) | | | | | | (12,747) | | |
Net cash provided (used in) by investing
activities |
| | | | (132,423,736) | | | | | | (25,904,372) | | | | | | (117,890,852) | | | | | | 1,862,609 | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Finance lease
|
| | | | (111) | | | | | | (222) | | | | | | (444) | | | | | | (444) | | |
Proceeds from issuance of preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,500,000 | | |
Proceeds from issuance of notes payable
|
| | | | — | | | | | | — | | | | | | — | | | | | | 18,938,705 | | |
Capital contribution
|
| | | | 14,941,533 | | | | | | — | | | | | | — | | | | | | — | | |
1505 Capital LLC purchase
|
| | | | (500,000) | | | | | | — | | | | | | — | | | | | | — | | |
Net transfers to noncontrolling interest
|
| | | | — | | | | | | 1,846 | | | | | | — | | | | | | — | | |
Receipts on deposit-type contracts
|
| | | | 147,486,013 | | | | | | 38,267,011 | | | | | | 161,392,700 | | | | | | 650 | | |
Withdrawals on deposit-type contracts
|
| | | | (658,936) | | | | | | (11,003) | | | | | | (160,590) | | | | | | (50,732) | | |
Net cash provided by financing activities
|
| | | | 161,268,499 | | | | | | 38,257,632 | | | | | | 161,231,666 | | | | | | 20,388,179 | | |
Net increase in cash and cash equivalents
|
| | | | 31,325,697 | | | | | | 7,441,657 | | | | | | 40,883,638 | | | | | | 1,881,040 | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning
|
| | | | 43,716,205 | | | | | | 2,832,567 | | | | | | 2,832,567 | | | | | | 951,527 | | |
Ending
|
| | | $ | 75,041,902 | | | | | $ | 10,274,224 | | | | | $ | 43,716,205 | | | | | $ | 2,832,567 | | |
Supplemental Disclosure of Non-Cash Information
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Settlement of real estate and surplus notes:
|
| | | | — | | | | | | — | | | | | | — | | | | | | 493,648 | | |
Book value of real estate settled
|
| | | | — | | | | | | — | | | | | | — | | | | | | (876,400) | | |
Book value of surplus notes (including
interest) |
| | | | — | | | | | | — | | | | | | — | | | | | | 382,752 | | |
Book value of note payable
|
| | | | — | | | | | | (19,100,000) | | | | | | (19,100,000) | | | | | | — | | |
Common stock
|
| | | | — | | | | | | 927,680 | | | | | | 927,680 | | | | | | — | | |
Additional paid in capital
|
| | | | — | | | | | | 18,172,320 | | | | | | 18,172,320 | | | | | | — | | |
Conversion of preferred stock | | | | | | | | | | | | | | | | | | | | | | | | | |
Book value of preferred stock
|
| | | | — | | | | | | (1,500,000) | | | | | | (1,500,000) | | | | | | — | | |
Common stock
|
| | | | — | | | | | | 72,855 | | | | | | 72,855 | | | | | | — | | |
Additional paid in capital
|
| | | | — | | | | | | 1,427,145 | | | | | | 1,427,145 | | | | | | — | | |
| | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
|
| | |
As Converted Voting Common Stock
|
| |||||||||
| | |
Number
|
| |
Percentage
|
| ||||||
Previous* company shareholders
|
| | | | 22,873,764 | | | | | | 2.2% | | |
Note conversion ($500,000)
|
| | | | 24,284,825 | | | | | | 2.4% | | |
Note conversion ($100,000)
|
| | | | 4,856,965 | | | | | | 0.5% | | |
Note conversion ($1,000,000)
|
| | | | 48,569,650 | | | | | | 4.7% | | |
| | |
As Converted Voting Common
Stock |
| |||||||||
| | |
Number
|
| |
Percentage
|
| ||||||
Note conversion ($17,500,000)
|
| | | | 849,968,875 | | | | | | 83.1% | | |
Series C Preferred stock conversion
|
| | | | 72,854,474 | | | | | | 7.1% | | |
Total shares outstanding as of December 31, 2019
|
| | | | 1,023,408,553 | | | | | | 100.0% | | |
|
| | |
As of
June 30, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Carrying amounts of major classes of assets included as part of discontinued
operations: |
| | | | | | | | | | | | |
Policy loans
|
| | | $ | 42,129 | | | | | $ | 50,387 | | |
Reinsurance recoverables
|
| | | | 1,077,317 | | | | | | 3,569,849 | | |
Premiums receivable
|
| | | | 22,933 | | | | | | 33,512 | | |
Total assets held for sale in the Consolidated Balance Sheet
|
| | | $ | 1,142,379 | | | | | $ | 3,653,748 | | |
Carrying amounts of major classes of liabilities included as part of discontinued operations:
|
| | | | | | | | | | | | |
| | |
As of
June 30, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Benefit reserves
|
| | | $ | 620,941 | | | | | $ | 1,403,953 | | |
Policy claims
|
| | | | 24,231 | | | | | | 28,203 | | |
Deposit-type contracts
|
| | | | 486,486 | | | | | | 2,209,195 | | |
Advance premiums
|
| | | | 2,273 | | | | | | 2,226 | | |
Accounts payable and accrued expenses
|
| | | | 7,847 | | | | | | 3,290 | | |
Total liabilities held for sale in the Consolidated Balance Sheets
|
| | | $ | 1,141,778 | | | | | $ | 3,646,867 | | |
|
| | |
As of
December 31, 2019 |
| |
As of
December 31, 2018 |
| ||||||
Carrying amounts of major classes of assets included as part of discontinued operations:
|
| | | | | | | | | | | | |
Policy loans
|
| | | $ | 50,387 | | | | | $ | 366,849 | | |
Reinsurance recoverables
|
| | | | 3,569,849 | | | | | | 20,359,326 | | |
Premiums receivable
|
| | | | 33,512 | | | | | | 210,896 | | |
Total assets held for sale in the Consolidated Balance Sheet
|
| | | $ | 3,653,748 | | | | | $ | 20,937,071 | | |
Carrying amounts of major classes of liabilities included as part of discontinued operations:
|
| | | | | | | | | | | | |
Benefit reserves
|
| | | $ | 1,403,953 | | | | | $ | 9,799,834 | | |
Policy claims
|
| | | | 28,203 | | | | | | 127,666 | | |
Deposit-type contracts
|
| | | | 2,209,195 | | | | | | 11,050,139 | | |
Advance premiums
|
| | | | 2,226 | | | | | | 21,699 | | |
Accounts payable and accrued expenses
|
| | | | 3,290 | | | | | | 53,395 | | |
Total liabilities held for sale in the Consolidated Balance Sheets
|
| | | $ | 3,646,867 | | | | | $ | 21,052,733 | | |
| | |
Year ended
December 31, |
| |||
| | |
2018
|
| |||
Major line items constituting pretax loss of discontinued operations: | | | | | | | |
Premiums
|
| | | $ | 933,980 | | |
Death and other benefits
|
| | | | (421,448) | | |
Interest credited
|
| | | | (192,008) | | |
Increase in benefit reserves
|
| | | | (41,790) | | |
Amortization of deferred acquisition costs
|
| | | | (202,913) | | |
Other operating expenses
|
| | | | (104,105) | | |
Loss on discontinued operations
|
| | | $ | (28,284) | | |
| | | | | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Estimated
Fair Value |
| ||||||||||||
June 30, 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | | | | $ | 1,730,793 | | | | | $ | 105,936 | | | | | $ | — | | | | | $ | 1,836,729 | | |
Mortgage-backed securities
|
| | | | | | | 721,970 | | | | | | 6,445 | | | | | | 6,646 | | | | | | 721,769 | | |
Asset-backed securities
|
| | | | | | | 174,795,977 | | | | | | 1,459,587 | | | | | | 8,347,320 | | | | | | 167,908,244 | | |
States and political subdivisions – general obligations
|
| | | | | | | 238,408 | | | | | | 11,671 | | | | | | — | | | | | | 250,079 | | |
States and political subdivisions – special revenue
|
| | | | | | | 2,924,809 | | | | | | 540,547 | | | | | | — | | | | | | 3,465,356 | | |
Trust preferred
|
| | | | | | | 2,218,142 | | | | | | — | | | | | | 93,664 | | | | | | 2,124,478 | | |
Corporate
|
| | | | | | | 24,320,752 | | | | | | 626,580 | | | | | | 1,143,700 | | | | | | 23,803,632 | | |
Total fixed maturities
|
| | | | | | $ | 206,950,851 | | | | | $ | 2,750,766 | | | | | $ | 9,591,330 | | | | | $ | 200,110,287 | | |
Mortgage loans on real estate, held for investment
|
| | | | | | | 51,171,943 | | | | | | — | | | | | | — | | | | | | 51,171,943 | | |
Derivatives
|
| | | | | | | 3,134,820 | | | | | | 588,201 | | | | | | 494,919 | | | | | | 3,228,102 | | |
Other invested assets
|
| | | | | | | 3,090,964 | | | | | | — | | | | | | — | | | | | | 3,090,964 | | |
Notes receivable
|
| | | | | | | 5,488,101 | | | | | | — | | | | | | — | | | | | | 5,488,101 | | |
Policy loans
|
| | | | | | | 141,172 | | | | | | — | | | | | | — | | | | | | 141,172 | | |
| | | | | | | $ | 269,977,851 | | | | | $ | 3,338,967 | | | | | $ | 10,086,249 | | | | | $ | 263,230,569 | | |
December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | | | | | 2,091,710 | | | | | | 7,073 | | | | | | 17,559 | | | | | | 2,081,224 | | |
Mortgage-backed securities
|
| | | | | | | 819,678 | | | | | | — | | | | | | 21,070 | | | | | | 798,608 | | |
Asset-backed securities
|
| | | | | | | 95,006,241 | | | | | | 646,335 | | | | | | 404,752 | | | | | | 95,247,824 | | |
States and political subdivisions – general obligations
|
| | | | | | | 240,494 | | | | | | 8,788 | | | | | | — | | | | | | 249,282 | | |
States and political subdivisions – special revenue
|
| | | | | | | 25,112 | | | | | | 179 | | | | | | — | | | | | | 25,291 | | |
Corporate
|
| | | | | | | 18,493,077 | | | | | | 501,022 | | | | | | 154,467 | | | | | | 18,839,632 | | |
Total fixed maturities
|
| | | | | | | 116,676,312 | | | | | | 1,163,397 | | | | | | 597,848 | | | | | | 117,241,861 | | |
Mortgage loans on real estate, held for investment
|
| | | | | | | 13,810,041 | | | | | | — | | | | | | — | | | | | | 13,810,041 | | |
Derivatives
|
| | | | | | | 490,831 | | | | | | 87,684 | | | | | | 3,221 | | | | | | 575,294 | | |
Investment escrow
|
| | | | | | | 3,899,986 | | | | | | — | | | | | | — | | | | | | 3,899,986 | | |
Other invested assets
|
| | | | | | | 2,468,947 | | | | | | — | | | | | | — | | | | | | 2,468,947 | | |
Preferred stock
|
| | | | | | | 500,000 | | | | | | — | | | | | | — | | | | | | 500,000 | | |
Policy loans
|
| | | | | | | 106,014 | | | | | | — | | | | | | — | | | | | | 106,014 | | |
Total fixed maturities
|
| | | | | | $ | 137,952,131 | | | | | $ | 1,251,081 | | | | | $ | 601,069 | | | | | $ | 138,602,143 | | |
|
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Estimated
Fair Value |
| ||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | 2,112,816 | | | | | $ | 247 | | | | | $ | 117,112 | | | | | $ | 1,995,951 | | |
Mortgage-back securities
|
| | | | 1,068,976 | | | | | | — | | | | | | 64,925 | | | | | | 1,004,051 | | |
States and political subdivisions – general obligations
|
| | | | 265,473 | | | | | | — | | | | | | 2,289 | | | | | | 263,184 | | |
States and political subdivisions – special revenue
|
| | | | 25,231 | | | | | | — | | | | | | 58 | | | | | | 25,173 | | |
Corporate
|
| | | | 15,754,345 | | | | | | 14 | | | | | | 1,658,535 | | | | | | 14,095,824 | | |
Total fixed maturities
|
| | | $ | 19,226,841 | | | | | $ | 261 | | | | | $ | 1,842,919 | | | | | $ | 17,384,183 | | |
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| |
Credit
Rating |
| ||||||
June 30, 2020: | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | |
States and political subdivisions – general obligations
|
| | | | | | | | | | | | | | | |
Bellingham, Washington
|
| | | $ | 107,128 | | | | | $ | 118,028 | | | |
AA+
|
|
Longview, Washington Refunding
|
| | | | 131,280 | | | | | | 132,051 | | | |
Aa3
|
|
Total
|
| | | $ | 238,408 | | | | | $ | 250,079 | | | | | |
|
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| |
Credit
Rating |
| ||||||
December 31,2019: | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | |
States and political subdivisions – general obligations
|
| | | | | | | | | | | | | | | |
Bellingham, Washington
|
| | | $ | 107,709 | | | | | $ | 115,597 | | | |
AA+
|
|
Longview, Washington Refunding
|
| | | | 132,785 | | | | | | 133,685 | | | |
Aa3
|
|
Total
|
| | | $ | 240,494 | | | | | $ | 249,282 | | | | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||||||||||||||
| | |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| ||||||||||||||||||
Fixed Maturities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less than 12 months: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | — | | | | | $ | — | | | | | | — | | | | | $ | 1,518,772 | | | | | $ | 14,935 | | | | | | 9 | | |
Asset-backed securities
|
| | | | 115,541,627 | | | | | | 7,989,266 | | | | | | 66 | | | | | | 39,114,732 | | | | | | 404,752 | | | | | | 26 | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||||||||||||||
| | |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| ||||||||||||||||||
Mortgage-back securities
|
| | | | 72,535 | | | | | | 392 | | | | | | 3 | | | | | | 160,010 | | | | | | 4,844 | | | | | | 4 | | |
Trust preferred
|
| | | | 2,124,478 | | | | | | 93,664 | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | |
Corporate
|
| | | | 9,025,918 | | | | | | 892,092 | | | | | | 11 | | | | | | 2,800,815 | | | | | | 13,618 | | | | | | 4 | | |
Greater than 12 months:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | | — | | | | | | — | | | | | | — | | | | | | 353,834 | | | | | | 2,624 | | | | | | 2 | | |
Asset-backed securities
|
| | | | 12,329,718 | | | | | | 358,054 | | | | | | 6 | | | | | | — | | | | | | — | | | | | | — | | |
Mortgage-back securities
|
| | | | 234,404 | | | | | | 6,254 | | | | | | 5 | | | | | | 638,598 | | | | | | 16,226 | | | | | | 14 | | |
Corporate
|
| | | | 645,564 | | | | | | 251,608 | | | | | | 4 | | | | | | 2,201,658 | | | | | | 140,849 | | | | | | 13 | | |
Total fixed maturities
|
| | | $ | 139,974,244 | | | | | $ | 9,591,330 | | | | | | 96 | | | | | $ | 46,788,419 | | | | | $ | 597,848 | | | | | | 72 | | |
|
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| ||||||
Due in one year or less
|
| | | $ | 201,929 | | | | | $ | 202,962 | | |
Due after one year through five years
|
| | | | 10,172,450 | | | | | | 10,355,681 | | |
Due after five years through ten years
|
| | | | 52,847,487 | | | | | | 52,184,902 | | |
Due after ten years through twenty years
|
| | | | 129,141,495 | | | | | | 122,598,167 | | |
Due after twenty years
|
| | | | 14,587,490 | | | | | | 14,768,575 | | |
| | | | $ | 206,950,851 | | | | | $ | 200,110,287 | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||||||||||||||||||||||||||
| | |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| |
Estimated
Fair Value |
| |
Gross
Unrealized Loss |
| |
Number
of Securities(1) |
| ||||||||||||||||||
Fixed Maturities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less than 12 months: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | 1,518,772 | | | | | $ | 14,935 | | | | | | 9 | | | | | $ | 7,862 | | | | | $ | 430 | | | | | | 1 | | |
Asset-backed securities
|
| | | | 39,114,732 | | | | | | 404,752 | | | | | | 26 | | | | | | — | | | | | | — | | | | | | — | | |
Mortgage-back securities
|
| | | | 160,010 | | | | | | 4,844 | | | | | | 4 | | | | | | — | | | | | | — | | | | | | — | | |
Corporate
|
| | | | 2,800,815 | | | | | | 13,618 | | | | | | 4 | | | | | | 3,351,664 | | | | | | 315,617 | | | | | | 23 | | |
Greater than 12 months: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | | 353,834 | | | | | | 2,624 | | | | | | 2 | | | | | | 1,785,949 | | | | | | 116,682 | | | | | | 10 | | |
Mortgage-back securities
|
| | | | 638,598 | | | | | | 16,226 | | | | | | 14 | | | | | | 1,004,052 | | | | | | 64,925 | | | | | | 19 | | |
States and political subdivisions – general obligations
|
| | | | — | | | | | | — | | | | | | — | | | | | | 263,183 | | | | | | 2,289 | | | | | | 2 | | |
States and political subdivisions – special revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | 25,173 | | | | | | 58 | | | | | | 1 | | |
Corporate
|
| | | | 2,201,658 | | | | | | 140,849 | | | | | | 13 | | | | | | 10,628,745 | | | | | | 1,342,918 | | | | | | 58 | | |
Total fixed maturities
|
| | | $ | 46,788,419 | | | | | $ | 597,848 | | | | | | 72 | | | | | $ | 17,066,628 | | | | | $ | 1,842,919 | | | | | | 114 | | |
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| ||||||
Due in one year or less
|
| | | $ | 101,205 | | | | | $ | 100,958 | | |
Due after one year through five years
|
| | | | 2,649,457 | | | | | | 2,724,011 | | |
Due after five years through ten years
|
| | | | 21,925,465 | | | | | | 22,013,673 | | |
Due after ten years through twenty years
|
| | | | 84,210,270 | | | | | | 84,473,538 | | |
Due after twenty years
|
| | | | 7,789,915 | | | | | | 7,929,681 | | |
| | | | $ | 116,676,312 | | | | | $ | 117,241,861 | | |
| | |
Carrying
Value |
| |
Interest Income
Accrued |
| |
Interest Income
Earned |
| |||||||||
June 30, 2020: | | | | | | | | | | | | | | | | | | | |
Industrial
|
| | | $ | 500,000 | | | | | $ | 2,871 | | | | | $ | 16,340 | | |
Commercial mortgage loan – multi-family
|
| | | | 48,612,870 | | | | | | 890,188 | | | | | | 1,570,056 | | |
Other
|
| | | | 2,059,073 | | | | | | 205,297 | | | | | | 98,721 | | |
Total mortgage loans
|
| | | $ | 51,171,943 | | | | | $ | 1,098,356 | | | | | $ | 1,685,117 | | |
December 31, 2019: | | | | | | | | | | | | | | | | | | | |
Industrial
|
| | | $ | 500,000 | | | | | $ | — | | | | | $ | 15,889 | | |
Commercial mortgage loan – multi-family
|
| | | | 11,320,924 | | | | | | 116,860 | | | | | | 329,684 | | |
Other
|
| | | | 1,989,117 | | | | | | 195,168 | | | | | | 7,386 | | |
Total mortgage loans
|
| | | $ | 13,810,041 | | | | | $ | 312,028 | | | | | $ | 352,959 | | |
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Fixed maturities
|
| | | $ | 1,041,929 | | | | | $ | 631,118 | | |
Mortgage loans
|
| | | | — | | | | | | 9,656 | | |
Other
|
| | | | — | | | | | | 8,076 | | |
Gross investment income
|
| | | | 1,041,929 | | | | | | 648,850 | | |
Less: refund received on investment expenses (investment expense)
|
| | | | (198,793) | | | | | | (9,840) | | |
Investment income, net of expenses
|
| | | $ | 843,136 | | | | | $ | 639,010 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Fixed maturities
|
| | | $ | 292,453 | | | | | $ | 789,949 | | |
Other
|
| | | | 38,397 | | | | | | 44,614 | | |
Gross investment income
|
| | | | 330,850 | | | | | | 834,563 | | |
Less investment expenses
|
| | | | (210,269) | | | | | | (318,675) | | |
Investment (loss) income, net of expenses
|
| | | $ | 120,581 | | | | | $ | 515,888 | | |
| | | | | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||||||||||||||
Derivatives Not
Designated as Hedging Instruments |
| |
Location in the
Consolidated Statement of Balance Sheets |
| |
Notional
Amount |
| |
Number
of Contracts |
| |
Estimated
Fair Value |
| |
Notional
Amount |
| |
Number
of Contracts |
| |
Estimated
Fair Value |
| ||||||||||||||||||
Equity-indexed options
|
| | Derivatives | | | | $ | 86,093,121 | | | | | | 108 | | | | | $ | 3,228,102 | | | | | $ | 9,698,863 | | | | | | 24 | | | | | $ | 575,294 | | |
Equity-indexed embedded derivative
|
| |
Deposit-type contracts
|
| | | | 107,296,291 | | | | | | 724 | | | | | | 3,038,675 | | | | | | 10,720,324 | | | | | | 108 | | | | | | 576,634 | | |
| | |
June 30, 2020
|
| |||||||||||||||
Reinsurance Portfolio
|
| |
Book Value of
Assets |
| |
Market Value of
Assets |
| |
Total Return
Swap Value |
| |||||||||
Ironbound
|
| | | $ | 99,749,714 | | | | | $ | 93,088,880 | | | | | $ | 6,660,834 | | |
SDA
|
| | | | 21,116,007 | | | | | | 20,006,611 | | | | | | 1,109,396 | | |
US Alliance
|
| | | | 31,973,893 | | | | | | 31,272,086 | | | | | | 701,807 | | |
Total
|
| | | $ | 152,839,614 | | | | | $ | 144,367,577 | | | | | $ | 8,472,037 | | |
| | |
Quoted
In Active Markets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Estimated
Fair Value |
| ||||||||||||
June 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | — | | | | | $ | 1,836,729 | | | | | $ | — | | | | | $ | 1,836,729 | | |
Mortgage-backed securities
|
| | | | — | | | | | | 721,769 | | | | | | — | | | | | | 721,769 | | |
Asset-backed securities
|
| | | | — | | | | | | 167,908,244 | | | | | | — | | | | | | 167,908,244 | | |
States and political subdivisions – general obligations
|
| | | | — | | | | | | 250,079 | | | | | | — | | | | | | 250,079 | | |
States and political subdivisions – special revenue
|
| | | | — | | | | | | 3,465,356 | | | | | | — | | | | | | 3,465,356 | | |
Trust preferred
|
| | | | — | | | | | | 2,124,478 | | | | | | — | | | | | | 2,124,478 | | |
Corporate
|
| | | | — | | | | | | 23,803,632 | | | | | | — | | | | | | 23,803,632 | | |
Total fixed maturities
|
| | | | — | | | | | | 200,110,287 | | | | | | — | | | | | | 200,110,287 | | |
Mortgage loans on real estate, held for investment
|
| | | | — | | | | | | — | | | | | | 51,171,943 | | | | | | 51,171,943 | | |
Derivatives
|
| | | | — | | | | | | 3,228,102 | | | | | | — | | | | | | 3,228,102 | | |
Other invested assets
|
| | | | — | | | | | | — | | | | | | 3,090,964 | | | | | | 3,090,964 | | |
Notes receivable
|
| | | | — | | | | | | 5,488,101 | | | | | | — | | | | | | 5,488,101 | | |
Policy loans
|
| | | | — | | | | | | — | | | | | | 141,172 | | | | | | 141,172 | | |
Total Investments
|
| | | $ | — | | | | | $ | 208,826,490 | | | | | $ | 54,404,079 | | | | | $ | 263,230,569 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Embedded derivative for equity-indexed contracts
|
| | | $ | — | | | | | $ | 3,038,675 | | | | | $ | — | | | | | | 3,038,675 | | |
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | | — | | | | | | 2,081,224 | | | | | | — | | | | | | 2,081,224 | | |
Mortgage-backed securities
|
| | | | — | | | | | | 798,608 | | | | | | — | | | | | | 798,608 | | |
Asset-backed securities
|
| | | | — | | | | | | 95,247,824 | | | | | | — | | | | | | 95,247,824 | | |
States and political subdivisions – general obligations
|
| | | | — | | | | | | 249,282 | | | | | | — | | | | | | 249,282 | | |
States and political subdivisions – special revenue
|
| | | | — | | | | | | 25,291 | | | | | | — | | | | | | 25,291 | | |
Corporate
|
| | | | — | | | | | | 18,839,632 | | | | | | — | | | | | | 18,839,632 | | |
Total fixed maturities
|
| | | | — | | | | | | 117,241,861 | | | | | | — | | | | | | 117,241,861 | | |
Mortgage loans on real estate, held for investment
|
| | | | — | | | | | | — | | | | | | 13,810,041 | | | | | | 13,810,041 | | |
Derivatives
|
| | | | — | | | | | | 575,294 | | | | | | — | | | | | | 575,294 | | |
Investment escrow
|
| | | | — | | | | | | 3,899,986 | | | | | | — | | | | | | 3,899,986 | | |
Other invested assets
|
| | | | — | | | | | | — | | | | | | 2,468,947 | | | | | | 2,468,947 | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | 500,000 | | | | | | 500,000 | | |
Policy loans
|
| | | | — | | | | | | — | | | | | | 106,014 | | | | | | | | |
Total Investments
|
| | | $ | — | | | | | $ | 121,717,141 | | | | | $ | 16,885,002 | | | | | $ | 138,496,129 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Embedded derivative for equity-indexed contracts
|
| | | $ | — | | | | | $ | 576,634 | | | | | $ | — | | | | | | 576,634 | | |
| | |
Quoted
In Active Markets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Estimated
Fair Value |
| ||||||||||||
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | — | | | | | $ | 2,081,224 | | | | | $ | — | | | | | $ | 2,081,224 | | |
Mortgage-backed securities
|
| | | | — | | | | | | 798,608 | | | | | | — | | | | | | 798,608 | | |
Asset-backed securities
|
| | | | — | | | | | | 95,247,824 | | | | | | — | | | | | | 95,247,824 | | |
States and political subdivisions – general obligations
|
| | | | — | | | | | | 249,282 | | | | | | — | | | | | | 249,282 | | |
States and political subdivisions – special revenue
|
| | | | — | | | | | | 25,291 | | | | | | — | | | | | | 25,291 | | |
Corporate
|
| | | | — | | | | | | 18,839,632 | | | | | | — | | | | | | 18,839,632 | | |
Total fixed maturities
|
| | | | — | | | | | | 117,241,861 | | | | | | — | | | | | | 117,241,861 | | |
Mortgage loans on real estate, held for investment
|
| | | | — | | | | | | — | | | | | | 13,810,041 | | | | | | 13,810,041 | | |
Derivatives
|
| | | | — | | | | | | 575,294 | | | | | | — | | | | | | 575,294 | | |
Investment escrow
|
| | | | — | | | | | | 3,899,986 | | | | | | — | | | | | | 3,899,986 | | |
Other invested assets
|
| | | | — | | | | | | — | | | | | | 2,468,947 | | | | | | 2,468,947 | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | 500,000 | | | | | | 500,000 | | |
Total Investments
|
| | | $ | — | | | | | $ | 121,717,141 | | | | | $ | 16,778,988 | | | | | $ | 138,496,129 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Embedded derivative for equity-indexed contracts
|
| | | $ | — | | | | | $ | 576,634 | | | | | $ | — | | | | | | 576,634 | | |
December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations
|
| | | $ | — | | | | | $ | 1,995,951 | | | | | $ | — | | | | | $ | 1,995,951 | | |
Mortgage-back securities
|
| | | | — | | | | | | 1,004,051 | | | | | | — | | | | | | 1,004,051 | | |
States and political subdivisions – general obligations
|
| | | | — | | | | | | 263,184 | | | | | | — | | | | | | 263,184 | | |
States and political subdivisions – special revenue
|
| | | | — | | | | | | 25,173 | | | | | | — | | | | | | 25,173 | | |
Corporate
|
| | | | — | | | | | | 14,095,824 | | | | | | — | | | | | | 14,095,824 | | |
Total fixed maturities
|
| | | $ | — | | | | | $ | 17,384,183 | | | | | $ | — | | | | | $ | 17,384,183 | | |
| | |
June 30, 2020
|
| |||||||||||||||||||||||||||
| | | | | | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | |
Carrying
Amount |
| |
Quoted Prices in
Active Markets for Identical Assets and Liabilities (Level 1) |
| |
Significant Other
Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Fair
Value |
| |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 141,172 | | | | | $ | — | | | | | $ | — | | | | | $ | 141,172 | | | | | $ | 141,172 | | |
Cash
|
| | | | 75,041,902 | | | | | | 75,041,902 | | | | | | — | | | | | | — | | | | | | 75,041,902 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder deposits (Deposit-type contracts)
|
| | | | 321,830,976 | | | | | | — | | | | | | — | | | | | | 321,830,976 | | | | | | 321,830,976 | | |
| | |
December 31, 2019
|
| |||||||||||||||||||||||||||
| | | | | | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | |
Carrying
Amount |
| |
Quoted Prices in
Active Markets for Identical Assets and Liabilities (Level 1) |
| |
Significant Other
Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Fair
Value |
| |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 106,014 | | | | | $ | — | | | | | $ | — | | | | | $ | 106,014 | | | | | $ | 106,014 | | |
Cash
|
| | | | 43,716,205 | | | | | | 43,716,205 | | | | | | — | | | | | | — | | | | | | 43,716,205 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder deposits (Deposit-type contracts)
|
| | | | 171,168,785 | | | | | | — | | | | | | — | | | | | | 171,168,785 | | | | | | 171,168,785 | | |
| | |
Beginning
Balance As of December 31, 2019 |
| |
Additions
|
| |
Sales
|
| |
Valuation
Allowance |
| |
Ending
Balance As of June 30, 2020 |
| |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 106,014 | | | | | $ | 35,158 | | | | | $ | — | | | | | $ | — | | | | | $ | 141,172 | | |
Mortgage loans on real estate,
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
held for investment
|
| | | | 13,810,041 | | | | | | 39,431,852 | | | | | | 2,069,950 | | | | | | — | | | | | | 51,171,943 | | |
Other invested assets
|
| | | | 2,468,947 | | | | | | 7,011,102 | | | | | | 5,612,112 | | | | | | (776,973) | | | | | | 3,090,964 | | |
Preferred stock
|
| | | | 500,000 | | | | | | — | | | | | | — | | | | | | (500,000) | | | | | | — | | |
Total Investments
|
| | | $ | 16,885,002 | | | | | $ | 46,478,112 | | | | | $ | 7,682,062 | | | | | $ | (1,276,973) | | | | | $ | 54,404,079 | | |
| | |
December 31, 2019
|
| |||||||||||||||||||||||||||
| | | | | | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | |
Carrying
Amount |
| |
Quoted Prices in
Active Markets for Identical Assets and Liabilities (Level 1) |
| |
Significant Other
Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Fair
Value |
| |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 106,014 | | | | | $ | — | | | | | $ | — | | | | | $ | 106,014 | | | | | $ | 106,014 | | |
Cash
|
| | | | 43,716,205 | | | | | | 43,716,205 | | | | | | — | | | | | | — | | | | | | 43,716,205 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder deposits (Deposit-type contracts)
|
| | | | 171,168,785 | | | | | | — | | | | | | — | | | | | | 171,168,785 | | | | | | 171,168,785 | | |
| | |
December 31, 2018
|
| |||||||||||||||||||||||||||
| | | | | | | | |
Fair Value Measurements Using
|
| |||||||||||||||||||||
| | |
Carrying
Amount |
| |
Quoted Prices in
Active Markets for Identical Assets and Liabilities (Level 1) |
| |
Significant Other
Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Fair
Value |
| |||||||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 43,843 | | | | | $ | — | | | | | $ | — | | | | | $ | 43,843 | | | | | $ | 43,843 | | |
Cash
|
| | | | 2,832,567 | | | | | | 2,832,567 | | | | | | — | | | | | | — | | | | | | 2,832,567 | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policyholder deposits (Deposit-type contracts)
|
| | | | 7,234,927 | | | | | | — | | | | | | — | | | | | | 7,234,927 | | | | | | 7,234,927 | | |
Notes payable
|
| | | | 18,938,705 | | | | | | — | | | | | | — | | | | | | 18,938,705 | | | | | | 18,938,705 | | |
| | |
Beginning Balance
As of December 31, 2018 |
| |
Additions
|
| |
Sales
|
| |
Total gains
Included in Income |
| |
Ending Balance
As of December 31, 2019 |
| |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Policy loans
|
| | | $ | 43,843 | | | | | $ | 62,171 | | | | | $ | — | | | | | $ | — | | | | | $ | 106,014 | | |
Mortgage loans on real estate, held for investment
|
| | | | — | | | | | | 15,036,179 | | | | | | 1,226,138 | | | | | | — | | | | | | 13,810,041 | | |
Other invested assets
|
| | | | — | | | | | | 17,287,325 | | | | | | 14,849,555 | | | | | | 31,177 | | | | | | 2,468,947 | | |
Preferred stock
|
| | | | — | | | | | | 500,000 | | | | | | — | | | | | | — | | | | | | 500,000 | | |
Total Investments
|
| | | $ | 43,843 | | | | | $ | 32,885,675 | | | | | $ | 16,075,693 | | | | | $ | 31,177 | | | | | $ | 16,885,002 | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
Deferred tax assets: | | | | | | | | | | | | | | | | | | | |
Loss carryforwards
|
| | | $ | 781,003 | | | | | $ | 436,777 | | | | | | 1,429,458 | | |
Capitalized costs
|
| | | | 195,763 | | | | | | 221,918 | | | | | | 269,472 | | |
| | |
June 30,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
Stock option granted
|
| | | | 9,821 | | | | | | 4,566 | | | | | | — | | |
Unrealized losses on investments
|
| | | | 1,679,207 | | | | | | — | | | | | | 390,349 | | |
Policy acquisition costs
|
| | | | 3,686,674 | | | | | | 1,468,030 | | | | | | — | | |
Charitable contribution carryforward
|
| | | | 1,230 | | | | | | 1,020 | | | | | | — | | |
Property and equipment
|
| | | | 23,056 | | | | | | 15,508 | | | | | | — | | |
Benefit reserves
|
| | | | 435,780 | | | | | | 848,643 | | | | | | 192,858 | | |
Total deferred tax assets
|
| | | | 6,812,534 | | | | | | 2,996,462 | | | | | | 2,282,137 | | |
Less valuation allowance
|
| | | | (4,789,646) | | | | | | (2,618,741) | | | | | | (1,928,454) | | |
Total deferred tax assets, net of valuation allowance
|
| | | | 2,022,888 | | | | | | 377,721 | | | | | | 353,683 | | |
Deferred tax liabilities: | | | | | | | | | | | | | | | | | | | |
Unrealized losses on investments
|
| | | | 1,759,153 | | | | | | 116,088 | | | | | | — | | |
Due premiums
|
| | | | 78,242 | | | | | | 81,789 | | | | | | 117,144 | | |
Intangible assets
|
| | | | 147,000 | | | | | | 147,000 | | | | | | 147,000 | | |
Policy loans
|
| | | | 38,493 | | | | | | 32,844 | | | | | | 86,246 | | |
Property and equipment
|
| | | | — | | | | | | — | | | | | | 3,294 | | |
Total deferred tax liabilities
|
| | | | 2,022,888 | | | | | | 377,721 | | | | | | 353,683 | | |
Net deferred tax assets
|
| | | $ | — | | | | | $ | — | | | | | | — | | |
|
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Computed expected income tax benefit
|
| | | $ | 1,238,695 | | | | | $ | (488,643) | | |
Increase (reduction) in income taxes resulting from: | | | | | | | | | | | | | |
Meals, entertainment and political contributions
|
| | | | 2,930 | | | | | | 5,636 | | |
Change in valuation allowance
|
| | | | 21,682 | | | | | | 266,607 | | |
COD Interest
|
| | | | — | | | | | | 177,563 | | |
Other
|
| | | | (375,878) | | | | | | 38,837 | | |
Subtotal of increases
|
| | | | (351,266) | | | | | | 488,643 | | |
Tax expense (benefit)
|
| | | $ | 887,429 | | | | | $ | — | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Computed expected income tax benefit
|
| | | $ | (1,154,890) | | | | | $ | (1,063,749) | | |
Increase (reduction) in income taxes resulting from: | | | | | | | | | | | | | |
Meals, entertainment and political contributions
|
| | | | 6,170 | | | | | | 8,402 | | |
Change in loss carryforward due to 382 limitation
|
| | | | — | | | | | | 5,595,636 | | |
COD Interest
|
| | | | 177,563 | | | | | | — | | |
Other
|
| | | | 8,613 | | | | | | 39,143 | | |
Subtotal of increases
|
| | | | 192,346 | | | | | | 5,643,181 | | |
Tax benefit before valuation allowance
|
| | | | (962,544) | | | | | | 4,579,432 | | |
Change in valuation allowance
|
| | | | 1,196,724 | | | | | | (4,579,432) | | |
Net income tax expenses
|
| | | $ | 234,180 | | | | | $ | — | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||
Balance sheets: | | | | | | | | | | | | | |
Benefit and claim reserves ceded
|
| | | $ | 43,355,941 | | | | | $ | 30,579,524 | | |
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Statements of comprehensive (loss) income: | | | | | | | | | | | | | |
Premiums ceded
|
| | | $ | 453,108 | | | | | $ | 522,301 | | |
Benefits ceded
|
| | | | 47,078 | | | | | | 116,029 | | |
Commissions ceded
|
| | | | 5,721 | | | | | | 6,580 | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||
Balance sheets: | | | | | | | | | | | | | |
Benefit and claim reserves ceded
|
| | | $ | 30,579,524 | | | | | $ | 23,100,644 | | |
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Statements of comprehensive income: | | | | | | | | | | | | | |
Premiums assumed
|
| | | $ | — | | | | | $ | 10,268 | | |
Premiums ceded
|
| | | | 996,711 | | | | | | 848,374 | | |
Benefits assumed
|
| | | | — | | | | | | 92,792 | | |
Benefits ceded
|
| | | | 201,823 | | | | | | 141,896 | | |
Commissions assumed
|
| | | | — | | | | | | 18 | | |
Commissions ceded
|
| | | | 10,445 | | | | | | 54,346 | | |
Reinsurer
|
| |
AM Best
Rating |
| |
Recoverable
on Paid Losses |
| |
Recoverable
on Unpaid Losses |
| |
Recoverable on
Benefit Reserves/Deposit- type Contracts |
| |
Ceded
Due Premiums |
| |
Total Amount
Recoverable from Reinsurer |
| |||||||||||||||
Ironbound Reinsurance Company Limited
|
| |
NR
|
| | | $ | — | | | | | $ | — | | | | | $ | 7,323,291 | | | | | $ | — | | | | | $ | 7,323,291 | | |
Optimum Re Insurance Company
|
| |
A
|
| | | | — | | | | | | — | | | | | | 518,692 | | | | | | — | | | | | | 518,692 | | |
Sagicor Life Insurance Company
|
| |
A-
|
| | | | — | | | | | | 210,295 | | | | | | 11,224,669 | | | | | | 277,015 | | | | | | 11,157,949 | | |
SDA Annuity & Life Re
|
| |
NR
|
| | | | — | | | | | | — | | | | | | 3,995,718 | | | | | | — | | | | | | 3,995,718 | | |
US Alliance Life and Security
Company |
| |
NR
|
| | | | — | | | | | | — | | | | | | 20,418,664 | | | | | | 58,373 | | | | | | 20,360,291 | | |
| | | | | | | $ | — | | | | | $ | 210,295 | | | | | $ | 43,481,034 | | | | | $ | 335,388 | | | | | $ | 43,355,941 | | |
Reinsurer
|
| |
AM Best
Rating |
| |
Recoverable
on Paid Losses |
| |
Recoverable
on Unpaid Losses |
| |
Recoverable on
Benefit Reserves/Deposit- type Contracts |
| |
Ceded
Due Premiums |
| |
Total Amount
Recoverable from Reinsurer |
| |||||||||||||||
Ironbound Reinsurance Company Limited
|
| |
NR
|
| | | $ | — | | | | | $ | — | | | | | $ | 4,213,699 | | | | | $ | — | | | | | $ | 4,213,699 | | |
Optimum Re Insurance Company
|
| |
A
|
| | | | — | | | | | | — | | | | | | 489,770 | | | | | | — | | | | | | 489,770 | | |
Sagicor Life Insurance Company
|
| |
A-
|
| | | | — | | | | | | 130,538 | | | | | | 11,347,962 | | | | | | 270,273 | | | | | | 11,208,227 | | |
SDA Annuity & Life Re
|
| |
NR
|
| | | | — | | | | | | — | | | | | | 2,506,911 | | | | | | — | | | | | | 2,506,911 | | |
US Alliance Life and Security
Company |
| |
NR
|
| | | | — | | | | | | 23,000 | | | | | | 12,207,079 | | | | | | 69,162 | | | | | | 12,160,917 | | |
| | | | | | | $ | — | | | | | $ | 153,538 | | | | | $ | 30,765,421 | | | | | $ | 339,435 | | | | | $ | 30,579,524 | | |
| | | | | |
Six months ended June 30,
|
| |||||||||
| | | | | |
2020
|
| |||||||||
Reinsurer
|
| |
Effective Date
of Transaction |
| |
Ceding
Commission Paid |
| |
Expense
Allowances Paid(1) |
| ||||||
Ironbound Reinsurance Company Limited
|
| | July 2019 | | | | $ | 688,110 | | | | | $ | 679,076 | | |
SDA Annuity & Life Re
|
| | November 2019 | | | | | 868,729 | | | | | | 1,628,850 | | |
US Alliance Life and Security Company(2)
|
| | April 2020 | | | | | 2,272,784 | | | | | | 4,009,102 | | |
| | | | | | | $ | 3,829,623 | | | | | $ | 6,317,028 | | |
| | |
Six months ended June 30,
|
| |||||||||||||||||||||
| | |
2020
|
| |||||||||||||||||||||
Reinsurer
|
| |
Gross Ceding
Commission |
| |
Expense
Allowances(1) |
| |
Interest on
Ceding Commissions |
| |
Earned
Ceding Commission |
| ||||||||||||
Ironbound Reinsurance Company Limited
|
| | | $ | 688,110 | | | | | $ | 679,076 | | | | | $ | 110,022 | | | | | $ | 188,826 | | |
SDA Annuity & Life Re
|
| | | | 868,729 | | | | | | 1,628,850 | | | | | | 29,527 | | | | | | 18,341 | | |
US Alliance Life and Security Company(2)
|
| | | | 2,272,784 | | | | | | 4,009,102 | | | | | | 7,711 | | | | | | 10,465 | | |
| | | | $ | 3,829,623 | | | | | $ | 6,317,028 | | | | | $ | 147,260 | | | | | $ | 217,632 | | |
| | | | | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||
Reinsurer
|
| |
Effective Date
of Transaction |
| |
Deferred Ceding
Commission |
| |
Deferred Ceding
Commission |
| ||||||
US Alliance Life and Security Company(1)
|
| | September 2017 | | | | $ | 834,487 | | | | | $ | 858,675 | | |
Unified Life Insurance Company(1)
|
| | July 2018 | | | | | 304,007 | | | | | | 582,894 | | |
Ironbound Reinsurance Company Limited(2)
|
| | July 2019 | | | | | 5,752,126 | | | | | | 5,060,359 | | |
SDA Annuity & Life Re(2)
|
| | November 2019 | | | | | 2,156,377 | | | | | | — | | |
US Alliance Life and Security Company(3)
|
| | April 2020 | | | | | 2,440,087 | | | | | | 1,076,267 | | |
| | | | | | | $ | 11,487,084 | | | | | $ | 7,578,195 | | |
Date of Loan
|
| |
Loan
Principal Amount |
| |
Shares of Common
Stock into which Loans Were Converted |
| ||||||
June 28, 2018
|
| | | $ | 500,000 | | | | | | 24,284,825 | | |
June 28, 2018
|
| | | | 100,000 | | | | | | 4,856,965 | | |
October 10, 2018
|
| | | | 1,000,000 | | | | | | 48,569,650 | | |
December 7, 2018
|
| | | | 17,500,000 | | | | | | 849,968,875 | | |
Total
|
| | | $ | 19,100,000 | | | | | | 927,680,315 | | |
|
| | |
Shares
|
| |||
Non-vested at December 31, 2019
|
| | | | 8,950,000 | | |
Vested
|
| | | | 100,000 | | |
Non-vested at June 30, 2020
|
| | | | 8,850,000 | | |
| | |
June 30, 2020
|
| |
December 31, 2019
|
| ||||||
Beginning balance
|
| | | $ | 171,168,785 | | | | | $ | 7,234,927 | | |
US Alliance
|
| | | | 398,623 | | | | | | 657,986 | | |
Deposits received
|
| | | | 147,486,013 | | | | | | 161,392,700 | | |
Investment earnings (includes embedded derivative)
|
| | | | 3,436,491 | | | | | | 2,043,762 | | |
Withdrawals
|
| | | | (658,936) | | | | | | (160,590) | | |
Ending balance
|
| | | $ | 321,830,976 | | | | | $ | 171,168,785 | | |
|
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Beginning balance
|
| | | $ | 7,234,927 | | | | | $ | 8,314,297 | | |
US Alliance
|
| | | | 657,986 | | | | | | 804,187 | | |
Commutation of assumption agreement
|
| | | | — | | | | | | (1,881,411) | | |
Ironbound Reinsurance Company Limited
|
| | | | 1,839,551 | | | | | | — | | |
SDA Annuity & Life Re (includes MVA adjustment and embedded derivative)
|
| | | | 194,940 | | | | | | — | | |
Deposits received
|
| | | | 161,392,700 | | | | | | 650 | | |
Investment earnings (includes MVA adjustment and embedded derivative)
|
| | | | 9,271 | | | | | | 47,936 | | |
Withdrawals
|
| | | | (160,590) | | | | | | (50,732) | | |
Ending balance
|
| | | $ | 171,168,785 | | | | | $ | 7,234,927 | | |
Leases
|
| |
Classification
|
| |
As of
June 30, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Assets | | | | | | | | | | | | | | | | |
Noncurrent: | | | | | | | | | | | | | | | | |
Finance
|
| |
Office and other equipment, net of accumulated depreciation and amortization
|
| | | $ | — | | | | | $ | 2,913 | | |
Operating
|
| | Operating lease right-of-use assets | | | | | 409,165 | | | | | | 470,132 | | |
Total leased assets
|
| | | | | | $ | 409,165 | | | | | $ | 473,045 | | |
Liabilities | | | | | | | | | | | | | | | | |
Current: | | | | | | | | | | | | | | | | |
Finance lease
|
| | Finance lease liabilities | | | | $ | — | | | | | $ | 1,860 | | |
Noncurrent: | | | | | | | | | | | | | | | | |
Operating lease
|
| | Operating lease liabilities | | | | | 460,791 | | | | | | 524,248 | | |
Total leased liabilities
|
| | | | | | $ | 460,791 | | | | | $ | 526,108 | | |
| | | | | |
Six months ended June 30,
|
| |||||||||
Leases
|
| |
Classification
|
| |
2020
|
| |
2019
|
| ||||||
Operating
|
| | General and administrative expense | | | | $ | 4,577 | | | | | $ | 7,109 | | |
Finance lease cost: | | | | | | | | | | | | | | | | |
| | | Amortization expense | | | | | 2,913 | | | | | | 5,827 | | |
| | | Interest expense | | | | | 111 | | | | | | 222 | | |
| | |
Operating Leases
|
| |||
2020 (excluding six months ended June 30,2020)
|
| | | $ | 90,167 | | |
2021
|
| | | | 164,081 | | |
2022
|
| | | | 156,608 | | |
2023
|
| | | | 161,674 | | |
2024
|
| | | | 13,508 | | |
Total remaining lease payments
|
| | | $ | 586,038 | | |
| | |
Six months ended June 30,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash payments | | | | | | | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | (1,035) | | | | | $ | 42 | | |
Operating cash flows from finance leases
|
| | | | 4,657 | | | | | | 2,328 | | |
Financing cash flows from finance leases
|
| | | | (111) | | | | | | (222) | | |
| | |
As of
June 30, 2020 |
| |
As of
December 31, 2019 |
| ||||||
Weighted Average Remaining Lease Term | | | | | | | | | | | | | |
Finance lease
|
| | | | — | | | |
3 months
|
| |||
Operating lease
|
| |
2 years
|
| |
2.5 years
|
| ||||||
Weighted Average Discount Rate
|
| | | | | | | | | | | | |
Finance lease
|
| | | | 0% | | | | | | 6% | | |
Operating lease
|
| | | | 8% | | | | | | 8% | | |
Leases
|
| |
Classification
|
| |
As of
December 31, 2019 |
| |
As of
December 31, 2018 |
| ||||||
Assets | | | | | | | | | | | | | | | | |
Noncurrent: | | | | | | | | | | | | | | | | |
Finance
|
| |
Office and other equipment, net of accumulated
depreciation and amortization |
| | | $ | 2,913 | | | | | $ | 14,564 | | |
Operating
|
| | Operating lease right-of-use assets | | | | | 470,132 | | | | | | 592,065 | | |
Total leased assets
|
| | | | | | $ | 473,045 | | | | | $ | 606,629 | | |
Liabilities | | | | | | | | | | | | | | | | |
Current: | | | | | | | | | | | | | | | | |
Finance lease
|
| | Finance lease liabilities | | | | $ | 1,860 | | | | | $ | 9,299 | | |
Noncurrent: | | | | | | | | | | | | | | | | |
Operating lease
|
| | Operating lease liabilities | | | | | 524,248 | | | | | | 646,519 | | |
Total leased liabilities
|
| | | | | | $ | 526,108 | | | | | $ | 655,818 | | |
| | | | | |
Year ended December 31,
|
| |||||||||
Leases
|
| |
Classification
|
| |
2019
|
| |
2018
|
| ||||||
Operating
|
| | General and administrative expense | | | | $ | 13,797 | | | | | $ | 16,810 | | |
Finance lease cost: | | | | | | | | | | | | | | | | |
| | | Amortization expense | | | | | 11,651 | | | | | | 4,481 | | |
| | | Interest expense | | | | | 444 | | | | | | 444 | | |
| | |
Operating Leases
|
| |
Finance Lease
|
| ||||||
2020 (excluding year ended December 31, 2019)
|
| | | $ | 160,958 | | | | | $ | 2,133 | | |
2021
|
| | | | 164,081 | | | | | | — | | |
2022
|
| | | | 156,608 | | | | | | — | | |
2023
|
| | | | 161,674 | | | | | | — | | |
2024
|
| | | | 13,508 | | | | | | — | | |
Total remaining lease payments
|
| | | $ | 656,829 | | | | | $ | 2,133 | | |
|
| | |
Year ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash payments | | | | | | | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | (337) | | | | | $ | 4,306 | | |
Operating cash flows from finance leases
|
| | | | 4,657 | | | | | | (2,514) | | |
Financing cash flows from finance leases
|
| | | | (444) | | | | | | (444) | | |
| | |
Amount*
|
| |||
Securities and Exchange Commission Registration Fee
|
| | | $ | 5,455 | | |
FINRA Filing Fee
|
| | | | ** | | |
Printing and Engraving Expenses
|
| | | | ** | | |
Accounting Fees and Expenses
|
| | | | ** | | |
Legal Fees and Expenses
|
| | | | ** | | |
Miscellaneous
|
| | | | ** | | |
Total
|
| | | $ | ** | | |
|
Signature
|
| |
Title
|
|
|
/s/ Michael Minnich
Michael Minnich
|
| | Chairman of the Board | |
|
/s/ Debra K. Havranek
Debra K. Havranek
|
| | Vice President, Treasurer, Principal Financial Officer | |
|
/s/ A. Michael Salem
A. Michael Salem
|
| | Director, Chief Executive Officer | |
|
/s/ Douglas Bratton
Douglas Bratton
|
| | Director | |
|
/s/ Firman Leung
Firman Leung
|
| | Director | |
|
/s/ John T. Hompe
John T. Hompe
|
| | Director | |
|
/s/ Sachin Goel
Sachin Goel
|
| | Director | |
|
/s/ Jack Theeler
Jack Theeler
|
| | Director | |
Exhibit 4.1
.ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# VOTING COMMON STOCK PAR VALUE $0.001 VOTING COMMON STOCK Certificate Number ZQ00000000 THIS CERTIFIES THAT MIDWEST HOLDING INC. A DELAWARE CORPORATION ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David MR. SAMPLE & MRS. SAMPLE & Shares * * 000000 * * * * * * * * * * * * * * * * * * * * * 000000 * * * * * * * * * * * * * * * * * * * * * 000000 * * * * * * * * * * * * * * * * * * * * * 000000 * * * * * * * * * * * * * * * * * * * * * 000000 * * * * * * * * * * * * * * SEE REVERSE FOR CERTAIN DEFINITIONS MR. SAMPLE & MRS. SAMPLE Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander CUSIP 59833J 20 6 **** Mr. Alexander David Sample **** Mr. David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample is the owner of **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** ***ZERO HUNDRED THOUSAND 000000**Shares* **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0 00000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00 000**Shares****000 ZERO HUNDRED AND ZERO*** 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000* Shares****00000 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 **Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000* *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S THIS CERTIFICATE IS TRANSFERABLE IN CITIES DESIGNATED BY THE TRANSFER AGENT, AVAILABLE ONLINE AT www.computershare.com SHARES OF $0.001 PAR VALUE EACH OF THE VOTING COMMON STOCK OF Midwest Holding Inc. transferable only on the books of the Corporation by the holder hereof in person or by Attorney, upon surrender of this Certificate properly endorsed. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the Corporation. DATED DD-MMM-YYYY CUSIP/IDENTIFIER Holder ID Insurance Value Number of Shares DTC Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction XXXXXX XX X XXXXXXXXXX 1,000,000.00 123456 12345678 123456789012345 PO BOX 43004, Providence, RI 02940-3004 Num/No. Denom. Total 1 2 3 4 5 6 7 1 2 3 4 5 6 1 2 3 4 5 6 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 President Secretary COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, By AUTHORIZED SIGNATURE |
. MIDWEST HOLDING INC. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in commonUNIF GIFT MIN ACT - ............................................Custodian ................................................ (Cust)(Minor) TEN ENT - as tenants by the entiretiesunder Uniform Gifts to Minors Act ........................................................ (State) JT TEN-as joint tenants with right of survivorshipUNIF TRF MIN ACT - ............................................Custodian (until age ................................) (Cust) .............................under Uniform Transfers to Minors Act ................... (Minor)(State) Additional abbreviations may also be used though not in the above list. For value received, hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the Capital Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said Stock on the books of the within-named Corporation with full power of substitution in the premises. Dated: 20 Signature: Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state. |
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
1. | American Life & Security Corp., a Nebraska corporation |
2. | 1505 Capital LLC, a Delaware limited liability company |
3. | Seneca Reinsurance Company, LLC, a Vermont limited liability company |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the use in this Registration Statement on Form S-1 to be filed on or about November 3, 2020, of our report dated March 12, 2020, related to the consolidated financial statements of Midwest Holding, Inc. as of and for the year ended December 31, 2019, which appears in this Registration Statement of Midwest Holding, Inc. We also consent to the reference to our Firm under the caption “Experts” in this Form S-1.
/s/ Mazars USA LLP
Fort Washington, Pennsylvania
November 3, 2020
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Registration Statement on Form S-1 of Midwest Holding Inc. of our report dated April 30, 2019, relating to the consolidated financial statements of Midwest Holding Inc., appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the heading "Experts" in such Prospectus.
/s/ RSM US LLP
Chicago, Illinois
November 3, 2020
1 |