Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 20, 2022 | |
Cover [Abstract] | ||
Document type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 000-54627 | |
Entity registrant name | ATLAS FINANCIAL HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | E9 | |
Entity Tax Identification Number | 27-5466079 | |
Entity Address, Address Line One | 953 American Lane | |
Entity Address, Address Line Two | 3rd Floor | |
Entity Address, City or Town | Schaumburg | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60173 | |
City Area Code | 847 | |
Local Phone Number | 472-6700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,552,839 | |
Entity Central Index Key | 0001539894 | |
Current Fiscal Year End Date | --12-31 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Position - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 615 | $ 2,274 |
Restricted cash | 2,740 | 3,637 |
Premiums receivable (net of allowance of $225 and $225) | 11,068 | 11,397 |
Intangible assets, net | 953 | 983 |
Property and equipment, net | 2,149 | 2,503 |
Right-of-use asset | 32 | 237 |
Notes receivable | 18,017 | 18,017 |
Credit facility fee, net | 0 | 584 |
Other assets | 1,141 | 1,053 |
Assets held for sale | 7,500 | 7,500 |
Total assets | 44,215 | 48,185 |
Liabilities | ||
Premiums payable | 12,701 | 13,593 |
Lease liability | 32 | 224 |
Due to deconsolidated affiliates | 19,091 | 19,957 |
Notes payable, net | 33,763 | 33,102 |
Other liabilities and accrued expenses | 6,824 | 6,811 |
Total liabilities | 72,411 | 73,687 |
Commitments and contingencies (see Note 7) | ||
Shareholders' Deficit | ||
Additional paid-in capital | 84,535 | 83,086 |
Treasury stock, at cost: 255,505 shares of ordinary voting common shares at March 31, 2022 and December 31, 2021, respectively | (3,000) | (3,000) |
Retained deficit | (109,784) | (105,633) |
Accumulated other comprehensive income, net of tax | 0 | 0 |
Total shareholders' deficit | (28,196) | (25,502) |
Total liabilities and shareholders' deficit | 44,215 | 48,185 |
Ordinary Voting Common Shares | ||
Shareholders' Deficit | ||
Ordinary voting common shares, $0.003 par value, 800,000,001 shares authorized, shares issued: March 31, 2022 - 17,552,839 and December 31, 2021 - 15,052,839; shares outstanding: March 31, 2022 - 17,297,334 and December 31, 2021 - 14,797,334 | 53 | 45 |
Restricted voting common shares | ||
Shareholders' Deficit | ||
Restricted voting common shares, $0.003 par value, 33,333,334 shares authorized, shares issued and outstanding: March 31, 2022 and December 31, 2021 - 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement [Line Items] | ||
Premiums receivable, allowance | $ 225 | $ 225 |
Shareholders' Deficit | ||
Common stock, shares authorized (in shares) | 833,333,335 | |
Common stock, shares issued (in shares) | 17,552,839 | 15,052,839 |
Common stock, shares outstanding (in shares) | 17,297,334 | 14,797,334 |
Treasury stock, common stock, shares held (in shares) | 255,505 | 255,505 |
Ordinary Voting Common Shares | ||
Shareholders' Deficit | ||
Common stock, par value (USD per share) | $ 0.003 | $ 0.003 |
Common stock, shares authorized (in shares) | 800,000,001 | 800,000,001 |
Common stock, shares issued (in shares) | 17,552,839 | 15,052,839 |
Common stock, shares outstanding (in shares) | 17,297,334 | 14,797,334 |
Restricted Voting Common Shares | ||
Shareholders' Deficit | ||
Common stock, par value (USD per share) | $ 0.003 | $ 0.003 |
Common stock, shares authorized (in shares) | 33,333,334 | 33,333,334 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Commission income | $ 833 | $ 1,693 |
Net realized gains | 1 | 12 |
Other income | 752 | 636 |
Total revenue | 1,586 | 2,341 |
Acquisition costs | 579 | 894 |
Other underwriting expenses | 4,527 | 3,482 |
Amortization of intangible assets | 30 | 98 |
Interest expense, net | 601 | 569 |
Total expenses | 5,737 | 5,043 |
Loss from operations before income taxes | (4,151) | (2,702) |
Income tax benefit | 0 | 0 |
Loss from continuing operations | (4,151) | (2,702) |
Income from discontinued operations, net of tax | 0 | 152 |
Net loss | $ (4,151) | $ (2,550) |
Basic net income (loss) per share attributable to common shareholders | ||
Continuing operations (in dollars per share) | $ (0.28) | $ (0.22) |
Discontinued operations (in dollars per share) | 0 | 0.01 |
Net loss (in dollars per share) | (0.28) | (0.21) |
Diluted net income (loss) per share attributable to common shareholders | ||
Continuing operations (in dollars per share) | (0.28) | (0.22) |
Discontinued operations (in dollars per share) | 0 | 0.01 |
Net loss (in dollars per share) | $ (0.28) | $ (0.21) |
Basic weighted average common shares outstanding (in shares) | 14,964,001 | 12,023,655 |
Diluted weighted average common shares outstanding (in shares) | 14,964,001 | 12,023,655 |
Condensed Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (4,151) | $ (2,550) |
Other comprehensive loss: | ||
Changes in net unrealized investment losses | 0 | (13) |
Reclassification to net loss | 0 | (158) |
Other comprehensive loss | 0 | (171) |
Total comprehensive loss | $ (4,151) | $ (2,721) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders’ Deficit - USD ($) $ in Thousands | Total | Ordinary Voting Common Shares | Restricted Voting Common Shares | Additional Paid-In Capital | Treasury Stock | Retained Deficit | Accumulated Other Comprehensive Income |
Balance at beginning of period at Dec. 31, 2020 | $ (20,892) | $ 37 | $ 0 | $ 81,840 | $ (3,000) | $ (100,199) | $ 430 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (2,550) | (2,550) | |||||
Other comprehensive loss | (171) | (171) | |||||
Share-based compensation | 10 | 10 | |||||
Balance at end of period at Mar. 31, 2021 | (23,603) | 37 | 0 | 81,850 | (3,000) | (102,749) | 259 |
Balance at beginning of period at Dec. 31, 2021 | (25,502) | 45 | 0 | 83,086 | (3,000) | (105,633) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (4,151) | (4,151) | |||||
Shares issued on Credit Agreement | 1,075 | 8 | 1,067 | ||||
Equity component of Credit Agreement | 352 | 352 | |||||
Share-based compensation | 30 | 30 | |||||
Balance at end of period at Mar. 31, 2022 | $ (28,196) | $ 53 | $ 0 | $ 84,535 | $ (3,000) | $ (109,784) | $ 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||||
Net loss | $ (4,151) | $ (2,550) | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||
Income from discontinued operations, net of taxes | 0 | (152) | ||
Depreciation and amortization | 354 | 684 | ||
Share-based compensation expense | 30 | 10 | ||
Amortization of intangible assets | 30 | 98 | ||
Net realized gains | (1) | (12) | ||
Amortization of financing costs | 185 | 56 | ||
Net changes in operating assets and liabilities: | ||||
Premiums receivable, net | 329 | (444) | ||
Other assets | (88) | (383) | ||
Premiums payable | (892) | (1,461) | ||
Due to deconsolidated affiliates | (866) | (78) | ||
Other liabilities and accrued expenses | 13 | (1,271) | ||
Net cash flows used in operating activities - continuing operations | (5,057) | (5,503) | ||
Net cash flows used in operating activities - discontinued operations | 0 | (494) | ||
Net cash flows used in operating activities | (5,057) | (5,997) | ||
Proceeds from sale of: | ||||
Property, equipment and other | 1 | 12 | ||
Net cash flows provided by investing activities - continuing operations | 1 | 12 | ||
Net cash flows provided by investing activities - discontinued operations | 0 | 2,705 | ||
Net cash flows provided by investing activities | 1 | 2,717 | ||
Financing activities: | ||||
Proceeds from notes payable | 2,500 | 2,000 | ||
Repayment of notes payable | 0 | (195) | ||
Net cash flows provided by financing activities - continuing operations | 2,500 | 1,805 | ||
Net cash flows provided by financing activities - discontinued operations | 0 | 0 | ||
Net cash flows provided by financing activities | 2,500 | 1,805 | ||
Net change in cash and cash equivalents and restricted cash - continuing operations | (2,556) | (3,686) | ||
Cash and cash equivalents and restricted cash, beginning of period | $ 5,911 | $ 13,554 | ||
Less: cash and cash equivalents of discontinued operations - beginning of period | 0 | $ 3,029 | ||
Cash and cash equivalents and restricted cash of continuing operations, beginning of period | 5,911 | 10,525 | 10,525 | |
Cash and cash equivalents and restricted cash of continuing operations, end of period | 3,355 | 6,839 | $ 5,911 | |
Supplemental disclosure of cash information: | ||||
Cash (recovered) paid for income taxes | 0 | 0 | ||
Cash (recovered) paid for interest | $ 0 | $ 499 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Atlas Financial Holdings, Inc. (“Atlas”, “We”, “us”, “our” or the “Company”) commenced operations on December 31, 2010. The primary business of Atlas focuses on a managing general agency (“MGA”) strategy, primarily through our wholly owned subsidiary, Anchor Group Management, Inc. (“AGMI”). AGMI focuses on a niche market orientation for the “light” commercial automobile sector. This sector includes taxi cabs, limousine, livery, full-time transportation network companies (“TNC”) drivers/operators, and other specialty commercial auto operators. Automobile insurance products provide insurance coverage in three major areas: liability, accident benefits and physical damage. Atlas’ business is carried out through its subsidiaries: AGMI, UBI Holdings Inc. (“UBI Holdings”) and UBI Holdings’ wholly-owned subsidiaries, optOn Digital IP Inc. (“OOIP”) and optOn Insurance Agency Inc. (“optOn” and together with OOIP and UBI Holdings, “UBI”). Prior to a strategic transition, our core business was the underwriting and risk bearing of commercial automobile insurance policies, focusing on the “light” commercial automobile sector, through American Country Insurance Company (“American Country”), American Service Insurance Company, Inc. (“American Service”) and Gateway Insurance Company (“Gateway” and together with American Country and American Service, the “ASI Pool Companies”) and Global Liberty Insurance Company of New York (“Global Liberty” and together with the ASI Pool Companies, our “Insurance Subsidiaries”), along with our wholly owned MGA, AGMI. The ASI Pool Companies were placed into rehabilitation under the statutory control of the Illinois Department of Insurance during the second half of 2019 and were subsequently placed into liquidation and have been deconsolidated from our consolidated financial statements as of October 1, 2019 as a result of these actions. Other regulatory actions were taken in certain states, including restriction, suspension, or revocation of certain state licenses and certificates of authority held by the ASI Pool Companies preceding and following the initiation of rehabilitation. During the fourth quarter of 2019, the Company began actively pursuing the potential sale of Global Liberty, and as a result, Global Liberty was held for sale and thus classified as a discontinued operation from October 1, 2019 through September 30, 2021. Global Liberty was placed into liquidation by the New York Department of Financial Services in October 2021 and, as a result, it has been deconsolidated from our consolidated financial statements beginning October 2021. Atlas’ ordinary common shares are listed on the OTC Markets system under the symbol “AFHIQ” and is expected to return to “AFHIF” in the near future. Basis of Presentation These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Atlas and the entities it controls. Equity investments in entities that we do not consolidate, including corporate entities in which we have significant influence and partnership and partnership-like entities in which we have more than minor influence over operating and financial policies, are accounted for under the equity method unless we have elected the fair value option. All significant intercompany accounts and transactions have been eliminated. The results for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the full calendar year. The accompanying unaudited condensed consolidated financial statements, in accordance with Securities and Exchange Commission (“SEC”) rules for interim periods, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with Atlas’ Annual Report on Form 10-K for the year ended December 31, 2021, which provides a more complete understanding of the Company’s accounting policies, financial position, operating results, business properties, and other matters. Atlas has consistently applied the same accounting policies throughout all periods presented. Estimates and Assumptions The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and changes in estimates are recorded in the accounting period in which they are determined. Significant estimates in the accompanying financial statements include revenue recognition, evaluation of assets for impairment, valuation of financing instruments, and deferred tax asset valuation. Revenue Recognition Revenues from contracts with customers include both commission and fee income. The recognition and measurement of revenue is based on the assessments of individual contract terms. As an MGA, AGMI has contracts with various insurance carrier partners to write premiums for specific programs which determines AGMI’s commission income revenue. Each contract specifies what our performance obligations are as an MGA and what determines our commission income revenue, generally gross written premiums, net of cancellations and refunds, multiplied by an MGA commission percentage. Under these contracts there are a number of performance obligations; however, it is the bundle of these services and not a single obligation that results in the performance of the MGA under the contracts. The Company considers these performance obligations as a non-bifurcated bundle of services where the performance obligations are satisfied simultaneous to the point in time where AGMI issues a policy, or cancels a policy to an insured. The commission rate stated in the individual contract is the standalone selling price of these non-bifurcated services, which is allocated to the service bundle and not to any individual obligation under the various contracts. Seasonality Our insurance business is seasonal in nature. Our ability to generate commission income is also impacted by the timing of policy effective periods in the states in which we operate and products provided by our business partners. For example, January 1 st , March 1 st and July 1 st are common taxi cab renewal dates in jurisdictions that our companies have written business historically. Operating Segments |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Standards | New Accounting StandardsThere have been no recent pronouncements or changes in pronouncements during the three months ended March 31, 2022, as compared to those described in our Annual Report on Form 10-K for the twelve months ended December 31, 2021, that are of significance or potential significance to Atlas. Pertinent Accounting Standard Updates (“ASUs”) are issued from time to time by the Financial Accounting Standards Board (“FASB”) and are adopted by the Company as they become effective. All recently issued accounting pronouncements with effective dates prior to April 1, 2022 have been adopted by the Company. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets Intangible Assets by Major Asset Class ($ in ‘000s) Economic Useful Life Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net As of March 31, 2022 Trade name and trademark 15 years $ 1,800 $ 847 $ — $ 953 As of December 31, 2021 Trade name and trademark 15 years $ 1,800 $ 817 $ — $ 983 Customer relationship 10 years 2,700 1,770 930 — $ 4,500 $ 2,587 $ 930 $ 983 |
Loss From Continuing Operations
Loss From Continuing Operations per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss From Continuing Operations per Share | Loss From Continuing Operations per Share Computations of Basic and Diluted Loss per Common Share from Continuing Operations ($ in ‘000s, except share and per share amounts) Three months ended March 31, 2022 2021 Basic Loss from continuing operations before income taxes $ (4,151) $ (2,702) Income tax expense — — Net loss attributable to common shareholders from continuing operations $ (4,151) $ (2,702) Basic weighted average common shares outstanding 14,964,001 12,023,655 Loss per common share basic from continuing operations $ (0.28) $ (0.22) Diluted Basic weighted average common shares outstanding 14,964,001 12,023,655 Dilutive potential ordinary shares: Dilutive stock options outstanding — — Diluted weighted average common shares outstanding 14,964,001 12,023,655 Loss per common share diluted from continuing operations $ (0.28) $ (0.22) Common shares are defined as ordinary voting common shares, restricted voting common shares and participative restricted stock units (“RSUs”). Earnings per common share diluted is computed by dividing net loss by the weighted average number of common shares outstanding for each period plus the incremental number of shares added as a result of converting dilutive potential ordinary voting common shares, calculated using the treasury stock method. Atlas’ potential dilutive ordinary voting common shares consists of outstanding stock options to purchase ordinary voting common shares and warrants to purchase 2,387,368 ordinary voting common shares of Atlas for $0.69 per share (as indicated in the 13G filing by American Financial Group, Inc. dated January 20, 2022). The outstanding principal balance of the Term Loans (as defined herein) under the Credit Agreement (as defined herein) can be converted at any time into ordinary voting common shares, at the applicable Lender’s (as defined herein) discretion, at a rate of $0.35 per share, except that paid-in-kind interest included in the amount presented by a Lender for conversion may, at the Borrowers’ (as defined herein) discretion be paid in cash or converted into ordinary voting common shares at the same rate. As of May 10, 2022, no such conversion has taken place. |
Contracts with Customers
Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contracts with Customers | Contracts with Customers The revenue included as commission income was $833,000 and $1.7 million for the three months ended March 31, 2022 and 2021, respectively. The balance of receivables related to contracts with customers, which is recorded as part of premiums receivable on the condensed consolidated statements of financial position, as of March 31, 2022 and December 31, 2021: Components of Commission Receivables ($ in ‘000s) March 31, 2022 December 31, 2021 Commission receivable, beginning of period $ 2,551 $ 2,577 Commission revenue 833 5,923 Net change in cash received (994) (5,949) Commission receivable, end of period $ 2,390 $ 2,551 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Reconciliation of U.S. Statutory Marginal Income Tax Rate to the Effective Tax Rate - Continuing Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Amount % Amount % Provision for taxes at U.S. statutory marginal income tax rate $ (872) 21.0 % $ (568) 21.0 % Provision for deferred tax assets deemed unrealizable (valuation allowance) 588 (14.2) 560 (20.7) Nondeductible expenses — — 1 — Stock compensation 284 (6.8) 7 (0.3) Provision for income taxes for continuing operations $ — — % $ — — % Reconciliation of U.S. Statutory Marginal Income Tax Rate to the Effective Tax Rate - Discontinued Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Amount % Amount % Provision for taxes at U.S. statutory marginal income tax rate $ — — % $ 32 21.0 % Provision for deferred tax assets deemed unrealizable (valuation allowance) — — (32) (21.0) Provision for income taxes for discontinued operations $ — — % $ — — % Components of Income Tax Benefit - Continuing Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Current tax expense $ — $ — Components of Income Tax Benefit - Discontinued Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Current tax expense $ — $ — During 2013 and 2019, due to shareholder activity, “triggering events” as determined under Internal Revenue Code (“IRC”) Section 382 may have occurred. As a result, under IRC Section 382, the use of the Company’s net operating loss (“NOL”) and other carryforwards generated prior to the “triggering events” may be subject to a yearly limitation as a result of this “ownership change” for tax purposes, which is defined as a cumulative change of more than 50% during any three-year period by shareholders owning 5% or greater portions of the Company’s shares. Due to the mechanics of the Section 382 calculation when there are multiple triggering events, the Company’s losses will generally be limited based on the thresholds of the 2019 triggering event. The Company has established a valuation allowance against the NOLs that will expire unused as a result of the yearly limitation. Components of Deferred Income Tax Assets and Liabilities ($ in ‘000s) March 31, 2022 December 31, 2021 Gross deferred tax assets: Losses carried forward $ 7,581 $ 6,657 Investment in affiliates 28,250 28,250 Bad debts 47 47 Fixed assets 445 437 Stock compensation 43 320 Other 795 670 Valuation allowance (36,482) (35,894) Total gross deferred tax assets 679 487 Gross deferred tax liabilities: Intangible assets 200 206 Other 479 281 Total gross deferred tax liabilities 679 487 Net deferred tax assets $ — $ — Net Operating Loss Carryforward as of March 31, 2022 by Expiry ($ in ‘000s) Year of Occurrence Year of Expiration Amount 2011 2031 $ 1 2012 2032 70 2015 2035 1 2017 2037 12,085 2018 Indefinite 8,245 2019 Indefinite 5,241 2020 Indefinite 4,687 2021 Indefinite 1,372 2022 Indefinite 4,398 Total $ 36,100 Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which they can be utilized. When considering the extent of the valuation allowance on Atlas’ deferred tax assets, weight is given by management to both positive and negative evidence. GAAP states that a cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome in determining that a valuation allowance is not needed against deferred tax assets. Based on Atlas’ cumulative loss in recent years and certain deferred tax assets subject to a yearly limitation under Section 382 which will likely result in expiration before utilization, Atlas has recorded a valuation allowance of $36.5 million and $35.9 million for its gross future deferred tax assets as of March 31, 2022 and December 31, 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesIn the ordinary course of its business, Atlas is involved in legal proceedings, including lawsuits, regulatory examinations and inquiries. Atlas is exposed to credit risk on balances receivable from insureds and agents. Credit exposure to any one individual insured is not material. The policies placed with risk-taking partners are distributed by agents who may manage cash collection on its behalf pursuant to the terms of their agency agreement. Atlas has procedures to monitor and minimize its exposure to delinquent agent balances, including, but not limited to, reviewing agent account statements, processing policy cancellations for non-payment and other collection efforts deemed appropriate. As a managing agent, our ability to generate commission revenue is pursuant to contractual agreements with risk-taking partners. Our objective is to maintain long-term relationships with these risk-taking partners. Such relationships are dependent upon market conditions, business results, and other factors which may be outside of our control. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and Equipment Held ($ in ‘000s) March 31, 2022 December 31, 2021 Buildings 1 $ — $ — Land 1 — — Building improvements 1 — — Leasehold improvements 39 39 Internal use software 12,795 12,795 Computer equipment 1,839 1,842 Furniture and other office equipment 1,086 1,086 Total $ 15,759 $ 15,762 Accumulated depreciation and amortization (13,610) (13,259) Total property and equipment, net $ 2,149 $ 2,503 1 Held for sale Depreciation expense and amortization from continuing operations was $354,000 and $684,000 for the three months ended March 31, 2022 and 2021, respectively. For the year ended December 31, 2021, depreciation expense and amortization from continuing operations was $1.8 million. During 2016, Atlas purchased a building and land to serve as its new corporate headquarters to replace its former leased office space. Atlas’ Chicago area staff moved into this space in late October 2017 and occupies approximately 70,000 square feet in the building. An unrelated tenant occupies the remaining office space in the building, pursuant to a lease agreement with American Insurance Acquisition, Inc. (“American Acquisition”), a subsidiary of Atlas. Rental income related to this lease agreement was $123,000 and $119,000 for the three months ended March 31, 2022 and 2021, respectively. Depreciation expense related to the building and its improvements was $0 and $284,000 for the three months ended March 31, 2022 and 2021, respectively. The decrease in depreciation expense for the corporate headquarters is a result of the held for sale status of the corporate headquarters. On April 1, 2021, the Company transitioned the assets related to its corporate headquarters from long-lived asset held and used to long-lived assets held for sale. The Company has engaged an independent third party that is actively marketing the sale of the corporate headquarters including the land, building, building improvements and contents including furniture and fixtures. The Company engaged an independent third party that performed a valuation of the corporate headquarters and determined the fair market value as $7.5 million as of March 4, 2022. The valuation of the corporate headquarters resulted in a net realized loss totaling $7.0 million for the year ended December 31, 2021. Amortization expense recorded related to internal-use software projects in the post-implementation/operation stage was $302,000 for each of the three months ended March 31, 2022 and 2021. For the three months ended March 31, 2022 and 2021, the Company did not capitalize any projects in the application development stage. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation On January 6, 2011, Atlas adopted a stock option plan (“Stock Option Plan”) in order to advance the interests of Atlas by providing incentives to eligible persons defined in the plan. In the second quarter of 2013, a new equity incentive plan (“Equity Incentive Plan”) was approved by the Company’s common shareholders at the Annual General Meeting, and Atlas ceased to grant new stock options under the preceding Stock Option Plan. The Equity Incentive Plan is a securities based compensation plan, pursuant to which Atlas may issue restricted stock grants for ordinary voting common shares, restricted stock, stock grants for ordinary voting common shares, stock options and other forms of equity incentives to eligible persons as part of their compensation. The Equity Incentive Plan is considered an amendment and restatement of the Stock Option Plan, although outstanding stock options issued pursuant to the Stock Option Plan will continue to be governed by the terms of the Stock Option Plan. As of March 31, 2022, all outstanding stock options were issued under the Equity Incentive Plan. Stock Options Stock Option Activity Three months ended March 31, 2022 2021 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 1,197,500 $ 2.63 181,500 $ 13.51 Granted — — — — Exercised — — — — Canceled (290,500) 9.32 — — Outstanding, end of period 907,000 $ 0.49 181,500 $ 13.51 There are no stock options that are exercisable as of March 31, 2022. The stock option grants outstanding have a weighted average remaining life of 6.07 years and have a fair value of $0 as of March 31, 2022. On March 12, 2015, the Board of Directors of Atlas granted equity awards of (i) 200,000 restricted stock grants for ordinary voting common shares of the Company and (ii) 200,000 options to acquire ordinary voting common shares to the executive officers of the Company as part of the Company’s annual compensation process. The awards were made under the Company’s Equity Incentive Plan. The awards vest in five On April 22, 2021, the Company granted an aggregate of 1,016,000 options (“Options”) with an exercise price of $0.49 per common share of the Company to directors, managers, and executives pursuant to the Company’s Equity Incentive Plan. This exercise price is the average of the high bid and low asked prices on the date of the grant quoted on the OTC Bulletin Board Service. The Options granted to management vest in three equal installments, with each installment vesting on the 1st, 2nd and 3rd anniversary of the date of the grant. The Options granted to independent directors vested immediately upon the date of the grant. The Options will expire on the seventh anniversary of the date of the grant. In the event of a change of control of the Company, or should a director’s or employee’s service with the Company be terminated other than for cause or voluntary resignation, any unvested Options will immediately vest. During the first quarter of 2022, 109,000 Options were canceled because the Options were not exercised after voluntary terminations. The estimated fair values of the Options are amortized to expense over the Options’ vesting period. The Company estimated the fair value of the Options at the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: Expected risk-free interest rate 1.6 % Volatility 180.8 % Expected life (in years) 7.0 On December 31, 2018, the Company awarded restricted stock unit grants for ordinary voting common shares of the Company to its external directors pursuant to a director equity award agreement dated December 31, 2018. The awards, which were approved by the Company’s Board of Directors in March 2018, were valued at $40,000 per external director (“Aggregate Award”) and were made under the Company’s Equity Incentive Plan. The number of restricted stock units awarded was determined by dividing (A) the Aggregate Award by (B) the closing price of a Company ordinary voting common share at the close of market on April 4, 2018, which was $10.50 per share. For new directors, the Aggregate Award is proportionate to the director’s start date and priced as of that same day. During 2018, the Company awarded 17,524 RSU grants having an aggregate grant date fair value of $179,000. As of March 31, 2022, all of the RSU grants have vested. Restricted Shares Restricted Stock Grants for Ordinary Voting Common Shares and Restricted Share Unit Activity Three months ended March 31, 2022 2021 Number of Shares Weighted Average Fair Value at Grant Date Number of Shares Weighted Average Fair Value at Grant Date Non-vested, beginning of period $ — $ — $ 3,301 $ 10.22 Granted — — — — Vested — — (3,301) 0.12 Canceled — — — — Non-vested, end of period $ — $ — $ — $ — |
Other Employee Benefit Plans
Other Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2022 | |
Other Employee Benefit Plans [Abstract] | |
Other Employee Benefit Plans | Other Employee Benefit Plans Defined Contribution Plan Atlas has a defined contribution 401(k) plan covering all qualified employees of Atlas and its subsidiaries. Contributions to this plan are limited based on IRS guidelines. Atlas may match up to 100% of the employee contribution up to 2.5% of annual earnings, plus 50% of additional contributions up to 2.5% of annual earnings, for a total maximum expense of 3.75% of annual earnings per participant. Atlas’ matching contributions are discretionary. Employees are 100% vested in their own contributions and vest in Atlas contributions based on years of service equally over 5 years with 100% vested after 5 years. There were no Company contributions for either of the three months ended March 31, 2022 and 2021. The matching portion of this plan was suspended until further notice during the third quarter of 2020. Employee Stock Purchase Plan The Atlas Employee Stock Purchase Plan (“ESPP”) encourages employee interest in the operation, growth and development of Atlas and provides an additional investment opportunity to employees. Full time and permanent part time employees working more than 30 hours per week are allowed to invest up to 7.5% of adjusted salary in Atlas ordinary voting common shares. Atlas may match up to 100% of the employee contribution up to 2.5% of annual earnings, plus 50% of additional contributions up to 5% of annual earnings, for a total maximum expense of 5% of annual earnings per participant. Atlas’ matching contributions are discretionary. Atlas also pays all administrative costs related to this plan. Atlas incurred no costs related to the matching |
Share Capital and Mezzanine Equ
Share Capital and Mezzanine Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Share Capital and Mezzanine Equity | Share Capital and Mezzanine Equity Share Capital Share Capital Activity March 31, 2022 December 31, 2021 Shares Authorized 1 Shares Issued Shares Outstanding Amount Shares Issued Shares Outstanding Amount Ordinary voting common shares 800,000,001 17,552,839 17,297,334 $ 53 15,052,839 14,797,334 $ 45 Restricted voting common shares 33,333,334 — — — — — — Total common shares 833,333,335 17,552,839 17,297,334 $ 53 15,052,839 14,797,334 $ 45 During the three months ended March 31, 2022, the Company issued 2,500,000 ordinary voting common shares in connection with the Delayed Draws (as defined herein) pursuant to the Credit Agreement. During the year ended December 31, 2021, the Company issued 2,804,041 ordinary voting common shares of which 2,750,000 ordinary voting common shares were issued upon execution of the Credit Agreement, as a set-up fee for the Term Loan facility, 50,740 ordinary voting common shares were issued under the near term incentive program, and 3,301 ordinary voting common shares were issued as a result of the vesting of RSUs. Warrants The Schedule 13G/A filed by American Financial Group, Inc. a parent holding company, on January 20, 2022 states that as of December 31, 2021, it has sole power to vote and sole power to dispose of 2,387,368 ordinary voting common shares. These shares are represented by warrants to purchase 2,387,368 ordinary voting common shares until June 10, 2024, under a Warrant Agreement dated June 10, 2019 (the “Warrant Agreement”), at an initial exercise price of $0.69 per share, with both the number of ordinary voting common shares subject to the Warrant Agreement and the exercise price subject to adjustment as set forth in the Warrant Agreement. Convertible Senior Secured Delayed-Draw Credit Agreement The outstanding principal balance of the Term Loans can be converted at any time into ordinary voting common shares, at the applicable Lender’s discretion, at a rate of $0.35 per share, except that paid-in-kind interest included in the amount presented by a Lender for conversion may, at the Borrowers’ discretion, be paid in cash or converted into ordinary voting common shares at the same rate. As of May 20, 2022, no such conversion has taken place. Mezzanine Equity |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We currently lease certain equipment under non-cancelable operating lease agreements. Leases with an initial term of 12 months or less, which are immaterial to the Company, are not recorded in the condensed consolidated statement of financial position. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases to lease payments based on changes in index rates or usage, are not recorded in the condensed consolidated statements of financial position. Certain agreements include an option to extend or renew the lease term at our option. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercising those options. Lease payments are discounted using the implicit discount rate in the lease. If the implicit discount rate for the lease cannot be readily determined, the Company uses an estimate of its incremental borrowing rate. The Company did not have any contracts accounted for as finance leases as of March 31, 2022 or 2021. Lease Expense ($ in ‘000s) Three months ended March 31, 2022 2021 Operating leases $ 167 $ 169 Variable lease cost 9 92 Total $ 176 $ 261 Other Operating Lease Information ($ in ‘000s) Three months ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows $ 182 $ 261 Right-of-use assets obtained in exchange for new lease liabilities — — Total $ 182 $ 261 The following table presents the undiscounted contractual maturities of the Company’s operating lease liability: Contractual Operating Lease Liabilities ($ in ‘000s) As of March 31, 2022 Remainder of 2022 $ 19 2023 15 Total lease payments $ 34 Impact of discounting (2) Operating lease liability $ 32 Supplemental Balance Sheet Disclosures ($ in ‘000s) Lease Component Balance Sheet Classification As of March 31, 2022 Lease right-of-use asset Right-of-use asset $ 32 Weighted-average remaining lease term 1.3 years Weighted-average discount rate 6.0 % |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsAs of March 31, 2022, a member of the administrative agent for the Credit Agreement was a member of the Company’s Board of Directors. However, as of April 22, 2022, such director resigned from the Board. For more information on the Credit Agreement, see Note 14. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable Senior Unsecured Notes On April 26, 2017, Atlas issued $25 million of five-year 6.625% senior unsecured notes (the “Notes”) and received net proceeds of approximately $23.9 million after deducting underwriting discounts and commissions and other estimated offering expenses. The Notes were issued under an indenture and supplemental indenture that contained covenants that, among other things, limited: (i) the ability of Atlas to merge or consolidate, or lease, sell, assign or transfer all or substantially all of its assets; (ii) the ability of Atlas to sell or otherwise dispose of the equity securities of certain of its subsidiaries; (iii) the ability of certain of Atlas’ subsidiaries to issue equity securities; (iv) the ability of Atlas to permit certain of its subsidiaries to merge or consolidate, or lease, sell, assign or transfer all or substantially all of their respective assets; and (v) the ability of Atlas and its subsidiaries to incur debt secured by equity securities of certain of its subsidiaries. Interest on the Notes was payable quarterly on each January 26, April 26, July 26 and October 26. Pursuant to the supplemental indenture, Atlas could have, at its option, beginning with the interest payment date of April 26, 2020, and on any scheduled interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to, but excluding, the date of redemption. The Notes ranked senior in right of payment to any of Atlas’ existing and future indebtedness that is by its terms expressly subordinated or junior in right of payment to the senior unsecured notes. The Notes ranked equally in right of payment to all of Atlas’ existing and future senior indebtedness, but were effectively subordinated to any secured indebtedness to the extent of the value of the collateral securing such secured indebtedness. In addition, the Notes were structurally subordinated to the indebtedness and other obligations of Atlas’ subsidiaries. On August 31, 2021, the Company entered into a Restructuring Support Agreement (the “RSA”) with holders of approximately 48% of the aggregate principal amount of the Notes, and subsequently holders of approximately an additional 9.0% of the aggregate principal amount of the Notes acceded to the RSA for a total of approximately 57% (collectively, the “Supporting Noteholders”). Effective as of February 22, 2022, the Company entered into an amendment of the RSA with the requisite majority of Supporting Noteholders to extend the date by which the Note Restructuring must be completed to April 15, 2022. The RSA memorialized the agreed-upon terms for a restructuring of the Notes (the “Note Restructuring”). The RSA contemplated that the Note Restructuring would be effectuated through (i) the Scheme and (ii) a recognition proceeding with respect to the Scheme pursuant to chapter 15 of title 11 of the United States Code. On January 4, 2022, the Company filed a petition and summons for direction (the “Cayman Proceeding”) in the Grand Court of the Cayman Islands (the “Cayman Court”) regarding a scheme of arrangement pursuant to section 86 of Part IV of the Companies Act (2021 Revision) of the Cayman Islands (the “Scheme”) proposed by the Company related to the restructuring of the Company’s indebtedness under the Notes (the “Note Restructuring”). Pursuant to the summons for directions, the Company sought an order (the “Convening Order”) for the convening of a single meeting of a class of creditors affected by the Scheme (the “Scheme Meeting”). At the Scheme Meeting, the resolution was put forward that “... the Scheme of Arrangement, a copy of which has been tabled at this Scheme Meeting, be approved subject to any modification, addition or condition which the Grand Court of the Cayman Islands may this to fit or impose which would not directly or indirectly have a material adverse effect on the rights of the Scheme Creditors.” The aforementioned resolution was passed with an overwhelming majority: holders of 91.83% of the Notes in number and 99.34% par amount of those voting voted in favor of the Scheme and, on February 25, 2022, the Cayman Court sanctioned and approved the Scheme by entry of a sanction order (the “Sanction Order”). The Sanction Order was filed with and accepted by the Registrar of Companies, as required by the Cayman Court. On March 4, 2022, the Company filed a petition under chapter 15 of the United States Bankruptcy Code (the “Recognition Petition”), seeking that the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) enter an order recognizing the Cayman Proceeding as the foreign main or foreign nonmain proceeding and enforcing the Scheme within the territorial jurisdiction of the United States (the “Recognition and Enforcement Order”). On March 4, 2022, the Bankruptcy Court entered an order, which, among other things, scheduled a hearing before the Bankruptcy Court for March 30, 2022 (the “Recognition Hearing”), and, on the same day, the Bankruptcy Court entered the final and non-appealable Recognition and Enforcement Order, recognizing the Cayman Proceeding as the foreign main proceeding and enforcing the Scheme within the territorial jurisdiction of the United States, among other relief. Among other things, the Recognition and Enforcement Order provides that, pursuant to section 1145 of the Bankruptcy Code, once issued, the New Notes will be exempt from registration under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), and any applicable state and local securities laws and freely transferable, subject to certain limitations under section 1145(b) of the Bankruptcy Code with respect to any New Notes issued to “underwriters” as defined in section 2(a)(11) of the Securities Act. The procurement of the Recognition and Enforcement Order was the last in-court step in the Note Restructuring. The Recognition and Enforcement Order was effective immediately and enforceable upon entry, authorizing the Company take any action to implement and effectuate the Note Restructuring, including finalization of ancillary documents, among other things, in an effort to proceed toward closing the Note Restructuring in accordance with the Scheme and the RSA. Pursuant to the terms of the Note Restructuring, on April 14, 2022, the Restructuring Effective Date (as defined in the RSA) occurred, and the Company canceled the Notes and exchanged the Notes for the Company’s 6.625%/7.25% Senior Unsecured PIK Toggle Notes due 2027 (the “New Notes”). The New Notes have an interest rate of 6.625% per annum, if paid in cash, and 7.25% per annum, if paid in kind (“PIK”). As a result of the PIK feature, the New Notes were issued in denominations of $1 and each holder of a Note received, for each Note exchanged, New Notes in an aggregate principal amount equal to $25 plus the accrued but unpaid interest related to the exchanged Note. The terms of the New Notes are governed by an indenture, dated as of April 26, 2017 (the “Base Indenture”), between the Company and Wilmington Trust, National Association, as trustee, as supplemented by a First Supplemental Indenture thereto, dated as of April 26, 2017 (the “First Supplemental Indenture”), and a Second Supplemental Indenture thereto, dated as of April 14, 2022 (the Second Supplemental Indenture”), between the Company and the Trustee. The Company intends to utilize the extended maturity of the New Notes to execute on its technology and analytics driven MGA strategy, with the objective of creating value for all stakeholders. The New Notes were issued in reliance on the exemption to registration provided by section 1145 of the Bankruptcy Code, except with respect to those New Notes issued to an “underwriter” as defined in section 2(a)(11) of the Securities Act under section 1145(b) of the Bankruptcy Code that will be subject to certain restrictions upon resale, and the authorization of the Bankruptcy Court pursuant to the Recognition and Enforcement Order; however, the Company intends to use its best efforts to seek registration of the New Notes following the Note Restructuring subject to any applicable rules or restrictions that may apply. Interest on the New Notes is payable quarterly on each January 27, April 27, July 27 and October 27. Pursuant to the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture, Atlas may, beginning on April 14, 2025, or at any time thereafter, redeem the New Notes, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest thereon to, but excluding, the date of redemption. Additionally, pursuant to the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture, Atlas may, on any interest payment date, redeem the New Notes, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed in an amount not to exceed the excess of the outstanding principal amount of the New Notes as of such interest payment date (including, if applicable, any PIK interest accrued as of such interest payment date) over the original par amount of the New Notes outstanding on such interest payment date. For the avoidance of doubt, the amount which may be redeemed pursuant to the foregoing sentence shall not exceed the amount attributable to PIK Interest added to the principal amount of the then-outstanding New Notes. The New Notes will rank senior in right of payment to any of Atlas’ existing and future indebtedness that is by its terms expressly subordinated or junior in right of payment to the senior unsecured notes. The New Notes rank equally in right of payment to all of Atlas’ existing and future senior indebtedness, but are effectively subordinated to any secured indebtedness to the extent of the value of the collateral securing such secured indebtedness. In addition, the New Notes are structurally subordinated to the indebtedness and other obligations of Atlas’ subsidiaries. Mortgage On November 10, 2016, American Acquisition entered into a ten-year 5.0% fixed rate mortgage agreement with the Insurance Subsidiaries totaling $10.7 million with principal and interest payments due monthly. The mortgage is secured by the Company’s headquarters and was previously eliminated in consolidation. The mortgage balances payable at each of March 31, 2022 and December 31, 2021 were $8.0 million. The Company is evaluating alternatives to expedite the sale of the Company’s headquarters, which as disclosed in Note 8, as of the date of this report is currently held at the Company’s best estimate of fair value of $7.5 million, which may include a disposition without any financial benefit or incremental liability to the Company other than the elimination of ongoing building related operational expenses, some of which have been deferred. Paycheck Protection Program Loans On May 1, 2020, American Acquisition entered into a Paycheck Protection Program Promissory Note (a "PPP Note") with respect to a loan of $4,600,500 (the "First PPP Loan") from Fifth Third Bank, National Association (“Fifth Third”). The First PPP Loan was obtained pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The First PPP Loan had a maturity date of May 1, 2022 and interest at a rate of 1.0% per annum. On June 14, 2021, American Acquisition received notification from the SBA that the First PPP Loan principal and related interest has been forgiven. On February 7, 2021, American Acquisition entered into a PPP Note with respect to a loan of $2,000,000 (the “Second PPP Loan”) from Fifth Third. The Second PPP Loan was obtained pursuant to the SBA’s Paycheck Protection Program Second Draw Loans under the Small Business Act (“SB Act”) and is subject to the terms and conditions of the SB Act, the CARES Act and related legislation and regulations (collectively, the “PPP Rules”). The Company was eligible for the Second PPP Loan because our equity securities are not a National Markets System stock traded on a national securities exchange as defined by Section 6 of the Securities Exchange Act. The Second PPP Loan had a maturity date of February 7, 2026 and interest at a rate of 1.0% per annum. On December 10, 2021, American Acquisition received notification from the SBA that the Second PPP Loan Principal and related interest has been forgiven. Credit Agreement On September 1, 2021, the Company and certain of its subsidiaries, as borrowers (collectively, the “Borrowers”), entered into a Convertible Senior Secured Delayed-Draw Credit Agreement (as amended February 2, 2022 and March 25, 2022, (the “Credit Agreement”), agented by Sheridan Road Partners, LLC (in such capacity, the “Agent”), with certain Supporting Noteholders named therein as lenders (the “Lenders”), pursuant to which the Lenders made available to the Borrowers an aggregate principal amount up to $3,000,000 (the “Term Loans”). The Credit Agreement provides for an initial advance of $2 million in Term Loans and up to $1 million of additional delayed draws (the “Delayed Draws”) within 18 months of closing, in each case, subject to the satisfaction or waiver of certain funding conditions and the other terms and conditions set forth in the Credit Agreement. The Borrowers may use the proceeds of the Term Loans for payments of certain agreed upon permitted expenditures, which include expenses expected to be incurred in connection with the Note Restructuring. Interest will accrue on the funded Term Loans at 12.0% per annum and may be paid, at the Borrowers’ option, in cash or in kind; provided, that upon the occurrence and during the continuance of an event of default, the interest rate will be increased to 14.0% per annum and will be payable only in cash. The term of the Term Loan facility is 24 months. In October 2021 and January 2022, the Lenders advanced an aggregate of $2 million of the Term Loans and, in March 2022, the Lenders advanced $1 million of Delayed Draws under the Term Loans, in each case despite the fact that not all of the funding conditions had been met. As a set-up fee for the Term Loan facility, 2,750,000 ordinary voting common shares of the Company were issued to the Lenders upon execution of the agreement, and an additional 2,500,000 ordinary voting common shares were issued to the Lenders in March 2022, in connection with the Delayed Draws. The outstanding principal balance of the Term Loans can be converted at any time into ordinary voting common shares, at the applicable Lender’s discretion, at a rate of $0.35 per share, except that paid-in-kind interest included in the amount presented by a Lender for conversion may, at the Borrowers’ discretion, be paid in cash or converted into ordinary shares at the same rate. Under the Credit Agreement, the Borrowers have the option at any time to prepay the Term Loans in whole or in part subject to the payment of certain yield protection obligations. The Lenders have the right to demand prepayment, along with payment of certain yield protection obligations, upon the occurrence of an event of default, change of control, sale of certain assets of the Borrowers, a casualty event, eminent domain, or condemnation, in each case, subject to negotiated limitations. The Credit Agreement requires the satisfaction or waiver of certain funding conditions and that the Borrower comply with customary affirmative and negative covenants, including covenants governing and restricting indebtedness, liens, investments, sales of assets, distributions, and fundamental changes in the Borrowers’ organizational structure and line of business and maintaining certain levels of liquidity. The obligation of the Lenders to make any of the Term Loans is conditioned upon the grant to the Agent, on behalf of the Lenders, of a first priority perfected security interest in collateral consisting of substantially all of the assets of the Borrowers to secure the payment in full of the Term Loans and all other obligations under the Credit Agreement and related loan documentation. The collateral will include pledges of the equity of the Company’s direct and indirect subsidiaries American Acquisition, AGMI, Anchor Holdings Group, Inc., and UBI. Upon payment in full of the Term Loans, the Company will have no further obligations to the Agent and the Lenders under the Credit Agreement and other related loan documentation other than the obligation to register the ordinary shares issued pursuant to the Credit Agreement, and the security interests granted by the Borrowers in favor of the Agent, on behalf of the Lenders, will terminate. After the Delayed Draws in March 2022, Management engaged an independent third-party valuation firm which determined the fair value of the Credit Agreement conversion option using Black-Scholes modeling. The fair value of the liability portion was determined to be $2.0 million and was deducted from the $3.0 million draw amount. The equity component of the Credit Agreement will not be remeasured as long as it continues to meet the conditions for equity classification. The Company has recorded a fee related to the Credit Agreement which totaled $2.0 million, which was the fair value of the shares issued for the Credit Agreement. This non-cash fee had been recorded as an asset in the Company’s condensed consolidated statements of financial position until the full amount of the draws were received by the Company. The unamortized potion of the fee was transferred to a liability and is the unamortized debt discount. The amortization is being amortized on a straight-line basis over the contractual term of the Credit Agreement. During the three months ended March 31, 2022, the Company recorded amortization totaling $117,000. Liability and Equity Components of Credit Agreement ($ in ‘000s) March 31, 2022 Liability component: Principal amount $ 1,999 Unamortized debt discount (1,169) Net carrying amount $ 830 Carrying amount of equity component $ 432 Interest expense on notes payable was $601,000 and $569,000 for the three months ended March 31, 2022 and 2021, respectively. Notes Payable Outstanding ($ in ‘000s) March 31, 2022 December 31, 2021 6.625% Senior Unsecured Notes due April 26, 2022 $ 25,000 $ 25,000 12.0% Credit Agreement, net of discount, due August 31, 2023 830 224 5.0% Mortgage due November 10, 2026 7,950 7,950 Total outstanding borrowings 33,780 33,174 Unamortized issuance costs (17) (72) Total notes payable $ 33,763 $ 33,102 |
Deconsolidation and Discontinue
Deconsolidation and Discontinued Operations | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Deconsolidation and Discontinued Operations | Deconsolidation and Discontinued Operations Deconsolidation As part of the deconsolidation of the ASI Pool Companies during 2019, notes receivable from the estates of the ASI Pool Companies with an outstanding principal and accrued interest balances of $18.0 million are now presented on the condensed consolidated statements of financial position. On May 1, 2015, American Acquisition entered into subordinated surplus debentures (“Surplus Notes”) with the ASI Pool Companies that had a maturity date of April 30, 2020 carrying a variable interest equal to the corporate base rate as reported by the largest bank (measured in assets) with its head office located in Chicago, Illinois, in effect on the first business day of each month for the term of the Surplus Notes plus two percent per annum on the unpaid principal balance with a maximum variable interest rate for any month not to exceed the initial rate for the Surplus Notes by more than ten percent per annum. These Surplus Notes are subject to various terms and conditions as set forth by the Illinois Department of Insurance and require prior written approval for the payment of interest and/or the reduction in principal. These Surplus Notes could be used at some point to offset future amounts payable related to income tax settlements and various other intercompany settlements to the estates of the ASI Pool Companies. Effective October 1, 2021, Atlas no longer has statutory responsibility or authority over the financial activities of Global Liberty while still maintaining their indirect ownership of Global Liberty. The financial results of Global Liberty are included in the condensed consolidated statements of operations as a discontinued operation through September 30, 2021. There was no re-measurement of any retained interest since no future value was assigned to Global Liberty as a result of the liquidation. Discontinued Operations During the fourth quarter of 2019, the Company began actively pursuing the potential sale of Global Liberty, and as a result, Global Liberty was held for sale and thus classified as a discontinued operation through September 30, 2021 and the results of Global Liberty’s operations are reported separately for all periods presented. Global Liberty was not sold within the one year guidance as set forth by ASC 205-20-45-1E(d) to continue classifying Global Liberty as a discontinued operation. However, due to the confluence of events and circumstances beyond the Company’s control, ASC 205-20-45-1G(c) provides for an exception to the one year guidance which the Company believes fits its situation. As a result of the Company applying the exception guidance, Global Liberty remained as a discontinued operation through September 30, 2021. Global Liberty was placed into liquidation by the New York Department of Financial Services in October 2021 and, as a result, it has been deconsolidated from this reporting beginning October 1, 2021. Summary financial information for Global Liberty included in income from discontinued operations, net of tax in the condensed consolidated statements of operations for the three months ended March 31, 2021 is presented below: Income from Discontinued Operations ($ in ‘000s) Three months ended March 31, 2021 Net premiums earned $ 2,598 Net investment loss (64) Net realized gains 145 Total revenue 2,679 Net claims incurred 883 Acquisition costs 910 Other underwriting expenses 734 Total expenses 2,527 Income from operations before income taxes 152 Income tax benefit — Net income $ 152 Statement of Comprehensive Loss ($ in ‘000s) Three months ended March 31, 2021 Net income $ 152 Other comprehensive loss: Changes in net unrealized investments losses (13) Reclassification to net income (158) Other comprehensive loss (171) Total comprehensive loss $ (19) |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Going Concern Under ASC 205-40 Going Concern, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the condensed consolidated financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the condensed consolidated financial statements are issued. In complying with the requirements under ASC 205-40 to complete an evaluation without considering mitigating factors, the Company considered several conditions or events including (1) uncertainty around the continued impact of the COVID-19 pandemic on the Company’s operations and consolidated financial results, (2) the $25 million in aggregate principal amount of Notes that were scheduled to mature on April 26, 2022, which were recently exchanged for the New Notes, (3) recurring operating losses for fiscal periods through March 31, 2022, (4) the Company’s negative equity, and (5) the Company’s working capital limitations. The above conditions raise substantial doubt about the Company’s ability to continue as a going concern for the 12-month period following the date of the issuance of the March 31, 2022 interim financial statements. In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the condensed consolidated financial statements are issued. The successful restructuring and exchange of the Notes in early 2022 extended their maturity by five years and added a payment in kind feature for interest during the first two of those five years. Our future plans to mitigate the conditions above may include, without limitation, one or more of the following: (1) securing incremental capital with the objective of potentially repurchasing some or all of the New Notes at a discount to par, in the open market or otherwise, (2) securing equity or debt capital in private or public transactions, or (3) offering to exchange some or all of the New Notes for debt, equity and/or other securities or other consideration, through privately negotiated transactions or otherwise. The constraints and requirements related to the New Notes coupled with market conditions could create limitations with respect to such alternatives. Management believes that the Company’s capital requirements will depend on many factors, including the success of the Company’s business development efforts. Through March 31, 2022, cash flow from operations was negative as business continues to recover following the COVID-19 pandemic, and the Company expects that cash flow from operations, including holding company expenses, will be negative for the balance of the year. As a result, the Company will need to rely on cash on hand and incremental sources of capital to maintain its current infrastructure and headcount. The Company has been actively pursuing numerous additional sources of capital following the successful bond exchange. Subject to the availability of additional capital, the Company is considering alternatives, including a significant reduction in the size and scope of the organization or the sale of certain assets. Management believes the Company will most likely need to raise additional capital for working capital purposes based on the current business recovery trajectory. However, there is no assurance that such financing will be available. Should a significant reduction in the Company’s operations be deemed necessary to reduce operating expenses, there can be no assurances that we will be able to benefit from a market recovery in addition to maintaining our obligations relative to existing business. The conditions described above raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or will not have a significant dilutive effect on the Company’s existing shareholders. In the absence of the successful execution of one or more of the alternatives discussed above, we have therefore concluded that there is substantial doubt about our ability to continue as a going concern for the 12 month period following of the date of the issuance of the March 31, 2022 interim financial statements. The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our failure to continue as a going concern. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events On April 14, 2022, the Restructuring Effective Date occurred, and the Company canceled the Notes and exchanged the Notes for the New Notes. The New Notes have an interest rate of 6.625% per annum, if paid in cash, and 7.25% per annum, if paid in kind. As a result of the PIK feature, the New Notes were issued in denominations of $1 and each holder of a Note received, for each Note exchanged, New Notes in an aggregate principal amount equal to $25 plus the accrued but unpaid interest related to the exchanged Note. The terms of the New Notes are governed by the Base Indenture, as supplemented by the First Supplemental Indenture and the Second Supplemental Indenture. For more information on the Note Restructuring and the New Notes, see “Part I, Item 1, Note 14, Notes Payable” in the Notes to Condensed Consolidated Financial Statements. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Atlas and the entities it controls. Equity investments in entities that we do not consolidate, including corporate entities in which we have significant influence and partnership and partnership-like entities in which we have more than minor influence over operating and financial policies, are accounted for under the equity method unless we have elected the fair value option. All significant intercompany accounts and transactions have been eliminated. The results for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the full calendar year. |
Estimates and Assumptions | Estimates and Assumptions |
Revenue Recognition | Revenue RecognitionRevenues from contracts with customers include both commission and fee income. The recognition and measurement of revenue is based on the assessments of individual contract terms. As an MGA, AGMI has contracts with various insurance carrier partners to write premiums for specific programs which determines AGMI’s commission income revenue. Each contract specifies what our performance obligations are as an MGA and what determines our commission income revenue, generally gross written premiums, net of cancellations and refunds, multiplied by an MGA commission percentage. Under these contracts there are a number of performance obligations; however, it is the bundle of these services and not a single obligation that results in the performance of the MGA under the contracts. The Company considers these performance obligations as a non-bifurcated bundle of services where the performance obligations are satisfied simultaneous to the point in time where AGMI issues a policy, or cancels a policy to an insured. The commission rate stated in the individual contract is the standalone selling price of these non-bifurcated services, which is allocated to the service bundle and not to any individual obligation under the various contracts. |
Operating Segments | Operating Segments |
New Accounting Standards | New Accounting StandardsThere have been no recent pronouncements or changes in pronouncements during the three months ended March 31, 2022, as compared to those described in our Annual Report on Form 10-K for the twelve months ended December 31, 2021, that are of significance or potential significance to Atlas. Pertinent Accounting Standard Updates (“ASUs”) are issued from time to time by the Financial Accounting Standards Board (“FASB”) and are adopted by the Company as they become effective. All recently issued accounting pronouncements with effective dates prior to April 1, 2022 have been adopted by the Company. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible Assets by Major Asset Class ($ in ‘000s) Economic Useful Life Gross Carrying Amount Accumulated Amortization Accumulated Impairment Net As of March 31, 2022 Trade name and trademark 15 years $ 1,800 $ 847 $ — $ 953 As of December 31, 2021 Trade name and trademark 15 years $ 1,800 $ 817 $ — $ 983 Customer relationship 10 years 2,700 1,770 930 — $ 4,500 $ 2,587 $ 930 $ 983 |
Loss From Continuing Operatio_2
Loss From Continuing Operations per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Computations of Basic and Diluted Loss per Common Share from Continuing Operations ($ in ‘000s, except share and per share amounts) Three months ended March 31, 2022 2021 Basic Loss from continuing operations before income taxes $ (4,151) $ (2,702) Income tax expense — — Net loss attributable to common shareholders from continuing operations $ (4,151) $ (2,702) Basic weighted average common shares outstanding 14,964,001 12,023,655 Loss per common share basic from continuing operations $ (0.28) $ (0.22) Diluted Basic weighted average common shares outstanding 14,964,001 12,023,655 Dilutive potential ordinary shares: Dilutive stock options outstanding — — Diluted weighted average common shares outstanding 14,964,001 12,023,655 Loss per common share diluted from continuing operations $ (0.28) $ (0.22) |
Contracts with Customers (Table
Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable | The balance of receivables related to contracts with customers, which is recorded as part of premiums receivable on the condensed consolidated statements of financial position, as of March 31, 2022 and December 31, 2021: Components of Commission Receivables ($ in ‘000s) March 31, 2022 December 31, 2021 Commission receivable, beginning of period $ 2,551 $ 2,577 Commission revenue 833 5,923 Net change in cash received (994) (5,949) Commission receivable, end of period $ 2,390 $ 2,551 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of U.S. Statutory Marginal Income Tax Rate to the Effective Tax Rate - Continuing Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Amount % Amount % Provision for taxes at U.S. statutory marginal income tax rate $ (872) 21.0 % $ (568) 21.0 % Provision for deferred tax assets deemed unrealizable (valuation allowance) 588 (14.2) 560 (20.7) Nondeductible expenses — — 1 — Stock compensation 284 (6.8) 7 (0.3) Provision for income taxes for continuing operations $ — — % $ — — % Reconciliation of U.S. Statutory Marginal Income Tax Rate to the Effective Tax Rate - Discontinued Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Amount % Amount % Provision for taxes at U.S. statutory marginal income tax rate $ — — % $ 32 21.0 % Provision for deferred tax assets deemed unrealizable (valuation allowance) — — (32) (21.0) Provision for income taxes for discontinued operations $ — — % $ — — % |
Schedule of Components of Income Tax Expense (Benefit) | Components of Income Tax Benefit - Continuing Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Current tax expense $ — $ — Components of Income Tax Benefit - Discontinued Operations ($ in ‘000s) Three months ended March 31, 2022 2021 Current tax expense $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | Components of Deferred Income Tax Assets and Liabilities ($ in ‘000s) March 31, 2022 December 31, 2021 Gross deferred tax assets: Losses carried forward $ 7,581 $ 6,657 Investment in affiliates 28,250 28,250 Bad debts 47 47 Fixed assets 445 437 Stock compensation 43 320 Other 795 670 Valuation allowance (36,482) (35,894) Total gross deferred tax assets 679 487 Gross deferred tax liabilities: Intangible assets 200 206 Other 479 281 Total gross deferred tax liabilities 679 487 Net deferred tax assets $ — $ — |
Summary of Operating Loss Carryforwards | Net Operating Loss Carryforward as of March 31, 2022 by Expiry ($ in ‘000s) Year of Occurrence Year of Expiration Amount 2011 2031 $ 1 2012 2032 70 2015 2035 1 2017 2037 12,085 2018 Indefinite 8,245 2019 Indefinite 5,241 2020 Indefinite 4,687 2021 Indefinite 1,372 2022 Indefinite 4,398 Total $ 36,100 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and Equipment Held ($ in ‘000s) March 31, 2022 December 31, 2021 Buildings 1 $ — $ — Land 1 — — Building improvements 1 — — Leasehold improvements 39 39 Internal use software 12,795 12,795 Computer equipment 1,839 1,842 Furniture and other office equipment 1,086 1,086 Total $ 15,759 $ 15,762 Accumulated depreciation and amortization (13,610) (13,259) Total property and equipment, net $ 2,149 $ 2,503 1 Held for sale |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Stock Option Activity Three months ended March 31, 2022 2021 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 1,197,500 $ 2.63 181,500 $ 13.51 Granted — — — — Exercised — — — — Canceled (290,500) 9.32 — — Outstanding, end of period 907,000 $ 0.49 181,500 $ 13.51 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company estimated the fair value of the Options at the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: Expected risk-free interest rate 1.6 % Volatility 180.8 % Expected life (in years) 7.0 |
Schedule of Restricted Stock and Restricted Stock Units Activity | Restricted Stock Grants for Ordinary Voting Common Shares and Restricted Share Unit Activity Three months ended March 31, 2022 2021 Number of Shares Weighted Average Fair Value at Grant Date Number of Shares Weighted Average Fair Value at Grant Date Non-vested, beginning of period $ — $ — $ 3,301 $ 10.22 Granted — — — — Vested — — (3,301) 0.12 Canceled — — — — Non-vested, end of period $ — $ — $ — $ — |
Share Capital and Mezzanine E_2
Share Capital and Mezzanine Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stock by Class | Share Capital Activity March 31, 2022 December 31, 2021 Shares Authorized 1 Shares Issued Shares Outstanding Amount Shares Issued Shares Outstanding Amount Ordinary voting common shares 800,000,001 17,552,839 17,297,334 $ 53 15,052,839 14,797,334 $ 45 Restricted voting common shares 33,333,334 — — — — — — Total common shares 833,333,335 17,552,839 17,297,334 $ 53 15,052,839 14,797,334 $ 45 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | Lease Expense ($ in ‘000s) Three months ended March 31, 2022 2021 Operating leases $ 167 $ 169 Variable lease cost 9 92 Total $ 176 $ 261 Other Operating Lease Information ($ in ‘000s) Three months ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows $ 182 $ 261 Right-of-use assets obtained in exchange for new lease liabilities — — Total $ 182 $ 261 |
Lessee, Operating Lease, Liability, Maturity | The following table presents the undiscounted contractual maturities of the Company’s operating lease liability: Contractual Operating Lease Liabilities ($ in ‘000s) As of March 31, 2022 Remainder of 2022 $ 19 2023 15 Total lease payments $ 34 Impact of discounting (2) Operating lease liability $ 32 Supplemental Balance Sheet Disclosures ($ in ‘000s) Lease Component Balance Sheet Classification As of March 31, 2022 Lease right-of-use asset Right-of-use asset $ 32 Weighted-average remaining lease term 1.3 years Weighted-average discount rate 6.0 % |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt, Liability and Equity Components of Credit Agreement | Liability and Equity Components of Credit Agreement ($ in ‘000s) March 31, 2022 Liability component: Principal amount $ 1,999 Unamortized debt discount (1,169) Net carrying amount $ 830 Carrying amount of equity component $ 432 |
Summary of Outstanding Debt | Notes Payable Outstanding ($ in ‘000s) March 31, 2022 December 31, 2021 6.625% Senior Unsecured Notes due April 26, 2022 $ 25,000 $ 25,000 12.0% Credit Agreement, net of discount, due August 31, 2023 830 224 5.0% Mortgage due November 10, 2026 7,950 7,950 Total outstanding borrowings 33,780 33,174 Unamortized issuance costs (17) (72) Total notes payable $ 33,763 $ 33,102 |
Deconsolidation and Discontin_2
Deconsolidation and Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | Summary financial information for Global Liberty included in income from discontinued operations, net of tax in the condensed consolidated statements of operations for the three months ended March 31, 2021 is presented below: Income from Discontinued Operations ($ in ‘000s) Three months ended March 31, 2021 Net premiums earned $ 2,598 Net investment loss (64) Net realized gains 145 Total revenue 2,679 Net claims incurred 883 Acquisition costs 910 Other underwriting expenses 734 Total expenses 2,527 Income from operations before income taxes 152 Income tax benefit — Net income $ 152 Statement of Comprehensive Loss ($ in ‘000s) Three months ended March 31, 2021 Net income $ 152 Other comprehensive loss: Changes in net unrealized investments losses (13) Reclassification to net income (158) Other comprehensive loss (171) Total comprehensive loss $ (19) |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments (segment) | 1 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,500 | |
Accumulated Amortization | 2,587 | |
Accumulated Impairment | 930 | |
Net | $ 983 | |
Trade name and trademark | ||
Schedule of Intangible Assets [Line Items] | ||
Economic Useful Life | 15 years | 15 years |
Gross Carrying Amount | $ 1,800 | $ 1,800 |
Accumulated Amortization | 847 | 817 |
Accumulated Impairment | 0 | 0 |
Net | $ 953 | $ 983 |
Customer relationship | ||
Schedule of Intangible Assets [Line Items] | ||
Economic Useful Life | 10 years | |
Gross Carrying Amount | $ 2,700 | |
Accumulated Amortization | 1,770 | |
Accumulated Impairment | 930 | |
Net | $ 0 |
Loss From Continuing Operatio_3
Loss From Continuing Operations per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Basic | ||
Loss from continuing operations before income taxes | $ (4,151) | $ (2,702) |
Income tax expense | 0 | 0 |
Loss from continuing operations | $ (4,151) | $ (2,702) |
Basic weighted average common shares outstanding (in shares) | 14,964,001 | 12,023,655 |
Income (loss) per common share basic from continuing operations (in dollars per share) | $ (0.28) | $ (0.22) |
Diluted | ||
Basic weighted average common shares outstanding (in shares) | 14,964,001 | 12,023,655 |
Dilutive stock options outstanding (in shares) | 0 | 0 |
Diluted weighted average common shares outstanding (includes RSUs) (in shares) | 14,964,001 | 12,023,655 |
Loss per common share diluted from continuing operations (in dollars per share) | $ (0.28) | $ (0.22) |
Loss From Continuing Operatio_4
Loss From Continuing Operations per Share - Narrative (Details) - $ / shares | Mar. 31, 2022 | Sep. 01, 2021 | Jun. 10, 2019 |
Class of Warrant or Right [Line Items] | |||
Exercise price of warrants or rights (in dollars per share) | $ 0.69 | $ 0.69 | |
Conversion rate per share (in dollars per share) | $ 0.35 | $ 0.35 | |
Ordinary Voting Common Shares Warrants to Purchase | |||
Class of Warrant or Right [Line Items] | |||
Class of warrant or right, outstanding (in shares) | 2,387,368 |
Contracts with Customers (Detai
Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Commission income | $ 833 | $ 1,693 |
Contracts with Customers - Comm
Contracts with Customers - Commissions Revenue Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Commissions Receivable [Roll Forward] | ||
Commission receivable, beginning of year | $ 2,551 | $ 2,577 |
Commission revenue | 833 | 5,923 |
Net change in cash received | (994) | (5,949) |
Commission receivable, end of year | $ 2,390 | $ 2,551 |
Income Taxes - Rate Reconciliat
Income Taxes - Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Provision for taxes at U.S. statutory marginal income tax rate | $ (872) | $ (568) |
Provision for deferred tax assets deemed unrealizable (valuation allowance) | 588 | 560 |
Nondeductible expenses | 0 | 1 |
Stock compensation | 284 | 7 |
Income tax benefit | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Provision for taxes at U.S. statutory marginal income tax rate, percent | 21.00% | 21.00% |
Provision for deferred tax assets deemed unrealizable (valuation allowance), percent | (14.20%) | (20.70%) |
Nondeductible expenses, percent | 0.00% | 0.00% |
Stock compensation, percent | (6.80%) | (0.30%) |
Effective income tax rate | 0.00% | 0.00% |
Discontinued Operations | ||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Provision for taxes at U.S. statutory marginal income tax rate | $ 0 | $ 32 |
Provision for deferred tax assets deemed unrealizable (valuation allowance) | 0 | (32) |
Income tax benefit | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Provision for taxes at U.S. statutory marginal income tax rate, percent | 0.00% | 21.00% |
Provision for deferred tax assets deemed unrealizable (valuation allowance), percent | 0.00% | (21.00%) |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Current tax expense | $ 0 | $ 0 |
Discontinued Operations | ||
Operating Loss Carryforwards [Line Items] | ||
Current tax expense | $ 0 | $ 0 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Gross deferred tax assets: | ||
Losses carried forward | $ 7,581 | $ 6,657 |
Investment in affiliates | 28,250 | 28,250 |
Bad debts | 47 | 47 |
Fixed assets | 445 | 437 |
Stock compensation | 43 | 320 |
Other | 795 | 670 |
Valuation allowance | (36,482) | (35,894) |
Total gross deferred tax assets | 679 | 487 |
Gross deferred tax liabilities: | ||
Intangible assets | 200 | 206 |
Other | 479 | 281 |
Total gross deferred tax liabilities | 679 | 487 |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Carryforwards (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | $ 36,100 |
Carryforward Expiring in 2031 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 1 |
Carryforward Expiring in 2032 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 70 |
Carryforward Expiring in 2035 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 1 |
Carryforward Expiring in 2037 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 12,085 |
Carryforward Expiring Indefinite Originated In 2018 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 8,245 |
Carryforward Expiring Indefinite Originated In 2019 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 5,241 |
Carryforward Expiring Indefinite Originated In 2020 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 4,687 |
Carryforward Expiring Indefinite Originated In 2021 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 1,372 |
Carryforward Expiring Indefinite Originated In 2022 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | $ 4,398 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 36,482 | $ 35,894 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 15,759 | $ 15,762 |
Accumulated depreciation and amortization | (13,610) | (13,259) |
Total property and equipment, net | 2,149 | 2,503 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 0 | 0 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 0 | 0 |
Building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 0 | 0 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 39 | 39 |
Internal use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 12,795 | 12,795 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,839 | 1,842 |
Furniture and other office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 1,086 | $ 1,086 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Oct. 01, 2017ft² | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization of property and equipment | $ 354 | $ 684 | ||
Occupied area of corporate headquarters building (in sq ft) | ft² | 70 | |||
Rental income | 123 | 119 | ||
Assets held for sale | 7,500 | $ 7,500 | ||
Net realized loss | 7,000 | |||
Amortization of capitalized costs | 302 | 302 | ||
Capitalized costs | 0 | 0 | ||
Gain (loss) on disposition of fixed assets | (1) | (12) | ||
Corporate | ||||
Property, Plant and Equipment [Line Items] | ||||
Assets held for sale | 7,500 | |||
Building and building improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization of property and equipment | $ 0 | $ 284 | ||
Continuing Operations | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization of property and equipment | $ 1,800 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Outstanding Options and Restricted Shares (Details) - After December 31, 2013 - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Number of Options | ||
Outstanding, beginning of period (in shares) | 1,197,500 | 181,500 |
Granted in period (in shares) | 0 | 0 |
Exercised in period (in shares) | 0 | 0 |
Canceled in period (in shares) | (290,500) | 0 |
Outstanding, end of period (in shares) | 907,000 | 181,500 |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (in US dollars per share) | $ 2.63 | $ 13.51 |
Granted in period (in US dollars per share) | 0 | 0 |
Exercises in period (in US dollars per share) | 0 | 0 |
Canceled in period (in US dollars per share) | 9.32 | 0 |
Outstanding, ending balance (in US dollars per share) | $ 0.49 | $ 13.51 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | Apr. 22, 2021 | Mar. 12, 2015 | Mar. 31, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Apr. 04, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options, exercisable (in shares) | 0 | |||||||
Grants, weighted average remaining life | 6 years 25 days | |||||||
Options outstanding, intrinsic value | $ 0 | |||||||
Option awards canceled during period (shares) | 140,000 | |||||||
Share-based compensation expense | $ 30,000 | $ 10,000 | ||||||
Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option awards canceled during period (shares) | 53,500 | |||||||
March 12, 2015 | Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 5 years | |||||||
Award vesting rights, percentage | 20.00% | |||||||
April 22, 2021 | Directors, Managers, and Executives | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option awards canceled during period (shares) | 109,000 | |||||||
Options granted (in shares) | 1,016,000 | |||||||
Exercise price (in dollars per share) | $ 0.49 | |||||||
December 31, 2018 | Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share price (in dollars per share) | $ 10.50 | |||||||
Restricted Stock Grants | March 12, 2015 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted share awards, non-vested, fair value | $ 1,900,000 | |||||||
Restricted Stock Grants | March 12, 2015 | Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted during period (in shares) | 200,000 | |||||||
Restricted shares vested during period (shares) | 0 | 0 | ||||||
Option awards canceled during period (shares) | 181,500 | |||||||
Stock Option | March 12, 2015 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options, non-vested, fair value | $ 1,500,000 | |||||||
Stock Option | March 12, 2015 | Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted in period (in shares) | 200,000 | |||||||
Restricted Stock Units (RSUs) | December 31, 2018 | Director | Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted shares granted during period (in shares) | 17,524 | |||||||
Deferred compensation arrangement with individual, fair value (in shares) | $ 40,000 | |||||||
Share-based compensation arrangement by share-based payment award, aggregate grant date fair value | $ 179,000 | |||||||
Restricted share and restricted share units grants | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unearned share-based compensation expense | $ 0 |
Share-Based Compensation - Valu
Share-Based Compensation - Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Expected risk-free interest rate | 1.60% |
Volatility | 180.80% |
Expected life (in years) | 7 years |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Restricted Shares and Restricted Share Units (Details) - Restricted stock and restricted stock units (RSUs) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Number of Shares | ||
Non-vested, beginning of period (shares) | 0 | 3,301 |
Granted during period (shares) | 0 | 0 |
Vested during period (shares) | 0 | (3,301) |
Canceled during period (shares) | 0 | 0 |
Non-vested, end of period (shares) | 0 | 0 |
Weighted Average Fair Value at Grant Date | ||
Non-vested, beginning of period (USD per share) | $ 0 | $ 10.22 |
Granted during period (USD per share) | 0 | 0 |
Vested during period (USD per share) | 0 | 0.12 |
Canceled during period (USD per share) | 0 | 0 |
Non-vested, end of period (USD per share) | $ 0 | $ 0 |
Other Employee Benefit Plans -
Other Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Other Employee Benefit Plans [Abstract] | ||
Defined contribution plan, percent of employee contribution matched by employer, up to 2.5% annual earnings | 100.00% | |
Defined contribution plan, percent of additional employees annual earnings employer will match 50% | 2.50% | |
Defined contribution plan, percent of employer match on additional employee contributions, up to 2.5% annual earnings | 50.00% | |
Defined contribution plan employer additional contribution matching percent of employees gross pay | 2.50% | |
Defined contribution plan, employer matching contribution, maximum percent of employees' gross pay | 3.75% | |
Defined contribution plan, employee contribution vesting percentage | 100.00% | |
Defined contribution plan, employers matching contribution, vesting period | 5 years | |
Defined contribution plan, company contributions | $ 0 | $ 0 |
Other Employee Benefit Plans _2
Other Employee Benefit Plans - Employee Stock Purchase Plan (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | |
Other Employee Benefit Plans [Abstract] | ||
Employee stock purchase plan, hours of week threshold for investing in ordinary voting common shares | 30 hours | |
Employee stock purchase plan, maximum annual contribution percent of annual earnings per employee | 0.075 | |
Employee stock purchase plan, percent of employee contribution matched by employer, up to 2.5% annual earnings | 1 | |
Employee stock purchase plan, percent of employees annual earnings employer will match 100% | 2.50% | |
Employee stock purchase plan employer additional matching contribution on percent of employees gross pay | 50.00% | |
Employee stock purchase plan, percent of additional employees annual earnings employer will match 50% | 5.00% | |
Employee stock purchase plan, employer matching contribution, maximum percent of employee's gross pay | 5.00% | |
Employee stock purchase plan, company cost | $ 0 | $ 0 |
Share Capital and Mezzanine E_3
Share Capital and Mezzanine Equity - Schedule of Stock by Class (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 833,333,335 | |
Common stock, shares issued (in shares) | 17,552,839 | 15,052,839 |
Common stock, shares outstanding (in shares) | 17,297,334 | 14,797,334 |
Common stock, value, outstanding | $ 53 | $ 45 |
Ordinary Voting Common Shares | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 800,000,001 | 800,000,001 |
Common stock, shares issued (in shares) | 17,552,839 | 15,052,839 |
Common stock, shares outstanding (in shares) | 17,297,334 | 14,797,334 |
Common stock, value, outstanding | $ 53 | $ 45 |
Restricted Voting Common Shares | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 33,333,334 | 33,333,334 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Common stock, value, outstanding | $ 0 | $ 0 |
Share Capital and Mezzanine E_4
Share Capital and Mezzanine Equity - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | May 20, 2022 | Sep. 01, 2021 | Jun. 10, 2019 | |
Class of Stock [Line Items] | |||||
Ordinary voting common shares issued, RSU vesting (in shares) | 2,500,000 | ||||
Exercise price of warrants or rights (in dollars per share) | $ 0.69 | $ 0.69 | |||
Conversion rate per share (in dollars per share) | $ 0.35 | $ 0.35 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Paid-in-kind interest included in amount presented by lender for conversion | $ 0 | ||||
Ordinary Voting Common Shares | |||||
Class of Stock [Line Items] | |||||
Ordinary voting common shares issued, RSU vesting (in shares) | 2,804,041 | ||||
Ordinary Voting Common Shares, Sole Power to Dispose of | |||||
Class of Stock [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | 2,387,368 | ||||
Ordinary Voting Common Shares, Warrants to Purchase | |||||
Class of Stock [Line Items] | |||||
Class of warrant or right, outstanding (in shares) | 2,387,368 | ||||
Incentive Program | Ordinary Voting Common Shares | |||||
Class of Stock [Line Items] | |||||
Ordinary voting common shares issued, RSU vesting (in shares) | 50,740 | ||||
Restricted Stock Units (RSUs) | |||||
Class of Stock [Line Items] | |||||
Ordinary voting common shares issued, RSU vesting (in shares) | 3,301 | ||||
Restricted Stock Units (RSUs) | Incentive Program | |||||
Class of Stock [Line Items] | |||||
Ordinary voting common shares issued, RSU vesting (in shares) | 2,750,000 |
Leases - Lease Expenses (Detail
Leases - Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating leases | $ 167 | $ 169 |
Variable lease cost | 9 | 92 |
Total | $ 176 | $ 261 |
Leases - Other Operating Lease
Leases - Other Operating Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows | $ 182 | $ 261 |
Right-of-use assets obtained in exchange for new lease liabilities | 0 | 0 |
Total | $ 182 | $ 261 |
Leases - Contractual Operating
Leases - Contractual Operating Lease Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Remainder of 2022 | $ 19 | |
2023 | 15 | |
Total lease payments | 34 | |
Impact of discounting | (2) | |
Operating lease liability | $ 32 | $ 224 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Disclosures (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Right-of-use asset | $ 32 | $ 237 |
Weighted-average remaining lease term | 1 year 3 months 18 days | |
Weighted-average discount rate | 6.00% |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) | Sep. 01, 2021USD ($)$ / sharesshares | Apr. 26, 2017USD ($) | Nov. 10, 2016USD ($) | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Apr. 26, 2022USD ($) | Apr. 14, 2022USD ($) | Jan. 31, 2022USD ($) | Jan. 04, 2022 | Dec. 31, 2021USD ($) | Oct. 31, 2021USD ($) | Aug. 31, 2021 | Feb. 07, 2021USD ($) | May 01, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||||
Percentage of debt held in agreement before additional holders | 0.48 | |||||||||||||
Additional percentage of holders participating in agreement | 0.090 | |||||||||||||
Percentage of holders participating in agreement | 0.57 | |||||||||||||
Portion of debt used for restructuring activities | 0.9183 | |||||||||||||
Portion of debt used for restructuring activities, par amount | 0.9934 | |||||||||||||
Total outstanding borrowings | $ 33,780,000 | $ 33,174,000 | ||||||||||||
Assets held for sale | $ 7,500,000 | 7,500,000 | ||||||||||||
Own-share lending arrangement, shares, issued (in shares) | shares | 2,750,000 | |||||||||||||
Own-share lending arrangement, collateral shares, issued (in shares) | shares | 2,500,000 | |||||||||||||
Conversion rate per share (in dollars per share) | $ / shares | $ 0.35 | $ 0.35 | ||||||||||||
Amortization of financing costs | $ 185,000 | $ 56,000 | ||||||||||||
Interest expense on notes payable | 601,000 | $ 569,000 | ||||||||||||
Corporate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Assets held for sale | 7,500,000 | |||||||||||||
Subsequent Event | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Interest rate if paid in cash | 0.06625 | |||||||||||||
Interest rate if paid in kind | 0.0725 | |||||||||||||
Denominations issued | $ 1 | |||||||||||||
Aggregate principal amount | $ 25 | |||||||||||||
Paycheck Protection Plan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 4,600,500 | |||||||||||||
Debt instrument, interest rate, stated percentage | 1.00% | |||||||||||||
Second PPP Loan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 2,000,000 | |||||||||||||
Debt instrument, interest rate, stated percentage | 1.00% | |||||||||||||
Credit Agreement | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt issuance costs, net | 2,000,000 | |||||||||||||
Amortization of financing costs | 117,000 | |||||||||||||
Senior unsecured notes | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 25,000,000 | |||||||||||||
Debt instrument, term | 5 years | |||||||||||||
Debt instrument, interest rate, stated percentage | 6.625% | |||||||||||||
Amounts of funds accessed in period | $ 23,900,000 | |||||||||||||
Redemption price | 100.00% | |||||||||||||
Total outstanding borrowings | 25,000,000 | 25,000,000 | ||||||||||||
Senior unsecured notes | Subsequent Event | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 25,000,000 | |||||||||||||
Mortgage | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, interest rate, stated percentage | 5.00% | |||||||||||||
Total outstanding borrowings | 7,950,000 | |||||||||||||
Mortgage | Loan Agreement | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Total outstanding borrowings | 7,950,000 | $ 8,000,000 | ||||||||||||
Mortgage | Loan Agreement | American Insurance Acquisition | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 10,700,000 | |||||||||||||
Debt instrument, term | 10 years | |||||||||||||
Secured Debt | Credit Agreement | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 3,000,000 | |||||||||||||
Debt instrument, term | 24 months | |||||||||||||
Interest accrued to fund loan | 0.120 | |||||||||||||
Possible increased to interest accrued to fund loan | 0.140 | |||||||||||||
Fair value of liability portion | 1,999,000 | |||||||||||||
Debt Instrument, draws | 3,000,000 | |||||||||||||
Secured Debt | Credit Agreement | Debt Tranche Two | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 1,000,000 | |||||||||||||
Secured Debt | Credit Agreement | Agent | Debt Tranche One | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 2,000,000 | |||||||||||||
Secured Debt | Credit Agreement | Agent | Debt Tranche Four | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 1,000,000 | |||||||||||||
Secured Debt | Credit Agreement | Agent | Debt Tranche Three | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 2,000,000 | $ 2,000,000 |
Notes Payable - Liability and E
Notes Payable - Liability and Equity Components of Credit Agreement (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Line of Credit Facility [Line Items] | |
Carrying amount of equity component | $ 432 |
Credit Agreement | Secured Debt | |
Line of Credit Facility [Line Items] | |
Fair value of liability portion | 1,999 |
Unamortized debt discount | (1,169) |
Long-term debt | $ 830 |
Notes Payable - Debt Outstandin
Notes Payable - Debt Outstanding (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Feb. 07, 2021 | May 01, 2020 | Apr. 26, 2017 | Nov. 10, 2016 |
Line of Credit Facility [Line Items] | ||||||
Total outstanding borrowings | $ 33,780 | $ 33,174 | ||||
Unamortized issuance costs | (17) | (72) | ||||
Notes payable, net | 33,763 | 33,102 | ||||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Total outstanding borrowings | 830 | 224 | ||||
Paycheck Protection Plan | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 1.00% | |||||
Second PPP Loan | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 1.00% | |||||
6.625% Senior Unsecured Notes due April 26, 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Total outstanding borrowings | $ 25,000 | 25,000 | ||||
Debt instrument, interest rate, stated percentage | 6.625% | |||||
5.0% Mortgage due November 10, 2026 | ||||||
Line of Credit Facility [Line Items] | ||||||
Total outstanding borrowings | $ 7,950 | |||||
Debt instrument, interest rate, stated percentage | 5.00% |
Deconsolidation and Discontin_3
Deconsolidation and Discontinued Operations - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Notes receivable | $ 18,017 | $ 18,017 |
Interest Rate, increase on unpaid principal balance | 0.02 | |
Maximum variable interest rate | 0.10 |
Deconsolidation and Discontin_4
Deconsolidation and Discontinued Operations - Loss From Discontinued Operations, Net of Tax (Details) - Global Liberty - Discontinued operations, held-for-sale $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |
Net premiums earned | $ 2,598 |
Net investment loss | (64) |
Net realized gains | 145 |
Total revenue | 2,679 |
Net claims incurred | 883 |
Acquisition costs | 910 |
Other underwriting expenses | 734 |
Total expenses | 2,527 |
Income from operations before income taxes | 152 |
Income tax benefit | 0 |
Net income | 152 |
Changes in net unrealized investments losses | (13) |
Reclassification to net income | (158) |
Other comprehensive loss | (171) |
Total comprehensive loss | $ (19) |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Apr. 26, 2022 | Apr. 26, 2017 | |
Debt Instrument [Line Items] | |||
Following period | 12 months | ||
Senior unsecured notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 25,000,000 | ||
Senior unsecured notes | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 25,000,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event | Apr. 26, 2022 | Apr. 14, 2022USD ($) |
Subsequent Event [Line Items] | ||
Interest rate if paid in cash | 0.06625 | |
Interest rate if paid in kind | 0.0725 | |
Denominations issued | $ 1 | |
Aggregate principal amount | $ 25 |