Additional Proxy Soliciting Materials (definitive) (defa14a)
November 16 2020 - 5:06PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check
the appropriate box:
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[ ]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[ ]
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Definitive
Proxy Statement
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[X]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material under §240.14a-12
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1347
PROPERTY INSURANCE HOLDINGS, INC.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (check the appropriate box):
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[X]
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No fee required.
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[ ]
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction
applies:
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(2)
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Aggregate number of securities to which transaction
applies:
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(3)
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state
how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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[ ]
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Fee paid previously with preliminary
materials.
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[ ]
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Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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On
November 16, 2020, 1347 Property Insurance Holdings, Inc. (the “Company”) issued a press release, which includes a
discussion of the Company’s annual meeting to be held on December 14, 2020 (the “Annual Meeting”) and the Company’s
intended name change to FG Financial Group, Inc., which is one of the ballot items to be voted on at the Annual Meeting. Proxies
to be voted at the Annual Meeting may be solicited on our behalf by our directors, officers and employees telephonically, electronically
or by other means of communication, and by Alliance Advisors, LLC, whom we have hired to assist in the solicitation of proxies
for the Annual Meeting. Alliance Advisors, LLC will receive a fee of $5,000, plus reasonable out-of-pocket costs and expenses,
for its services.
The
press release dated November 16, 2020 is set forth below:
1347
PROPERTY INSURANCE HOLDINGS, INC. REPORTS THIRD QUARTER 2020 FINANCIAL RESULTS;
PLANS
TO CHANGE NAME TO FG FINANCIAL GROUP, INC.
Company
Formally Names Larry Swets, Jr. Chief Executive Officer
St.
Petersburg, FL – November 16, 2020 – 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH) (the “Company”),
a holding company which is implementing business plans to operate as a diversified holding company of reinsurance and investment
management businesses, today announced the filing of its financial results for its third fiscal quarter ended September 30, 2020
on Form 10-Q, which can be found at the SEC’s website at www.sec.gov, or at PIH’s corporate website: www.1347pih.com.
The company will hold its annual meeting on December 14,
2020, the details of which can be found in the annual proxy statement filed with the Securities and Exchange Commission on October
30, 2020. Among the ballot items to be voted on at the annual meeting is the intended name change of the company to FG Financial
Group, Inc. to better reflect the Company’s diversified holding company strategy. Upon approval of the name change, the
company expects to change the ticker of its common stock on the NASDAQ market to “FGF”, while the series A preferred
shares, also traded on the NASDAQ market, will trade with the ticker “FGFPP”.
Select
Q3 2020 Financial Results
Net
loss attributable to common shareholders was $9.9 million for the quarter, or $1.69 per diluted share. General and administrative
expenses in the quarter were $1.9 million. Major non-operating items contributing to the net loss included:
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●
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Non-cash
losses associated with the change in fair value of the Company’s investment in the common stock of FedNat Holding Company
(Nasdaq: FNHC) (“FedNat”) of $5.8 million.
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●
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Realized
losses of $2.1 million associated with the sale of 330,231 FNHC shares pursuant to a Share Repurchase and Cooperation Agreement
transaction entered into with Hale Partnership Capital Management, LLC, which yielded an increase of treasury shares of 1,130,512,
or $5.2 million.
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As
of September 30, 2020, key balance sheet items included:
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Cash
and cash equivalents of $15.2 million.
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Equity
securities, consisting of 1,442,871 shares of common stock of FedNat, with a cost basis of $20.8 million. As of September
30, 2020, the equity securities were valued at $9.1 million, compared with $19.6 million as of June 30, 2020, as the share
price declined during the period and the company reduced its holdings.
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●
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Limited
liability investments totaling $9.3 million, which primarily consists of $4.0 million to sponsor the launch of FG Special
Situations Fund, LP through Fundamental Global Asset Management (“FGAM”), and $4.6 million invested in FGI Metrolina
Property Income Fund, LP (“Metrolina”).
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●
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Book
value per common share of approximately $3.81.
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1347
Property Insurance Holdings, Inc.
November
16, 2020
Appointment
of Larry Swets, Jr. as Chief Executive Officer
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●
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The
Company has appointed the Interim Chief Executive Officer of the Company, Larry G. Swets Jr., to serve as the Company’s
Chief Executive Officer, effective November 10, 2020. Mr. Swets, who has served as a director of the Company since November
2013 and previously served as the Company’s Chairman from March 2017 to May 2018, had been appointed to serve as the
Company’s Interim Chief Executive Officer in June 2020.
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Other
Information
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●
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As
of November 11, 2020, the value of the Company’s investment in FedNat common stock was $9.3 million, resulting in a
pre-tax, unrealized holding gain, of $0.2 million for the period beginning October 1 and ending November 11, 2020.
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On
September 14, 2020 and September 28, 2020 the Company invested $2 million and $3 million, respectively into its joint venture,
FGAM, to capitalize FG Special Situations Fund Advisor, LLC (“Advisor”), a Delaware limited liability company
formed on September 2, 2020, and to sponsor the launch of FG Special Situations Fund, LP (the “Fund”), a Delaware
limited partnership formed on September 2, 2020. The Fund’s investment will be used by FG New America Investors, LLC
(the “Sponsor”) as part of a total of $8.6 million of risk capital used to launch FG New America Acquisition Corp
(NYSE: FGNA), a newly formed special purpose acquisition company which consummated its initial public offering on October
2, 2020.
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About
1347 Property Insurance Holdings, Inc.
1347
Property Insurance Holdings, Inc. is implementing business plans to operate as a diversified insurance, reinsurance and investment
management holding company and is incorporated in Delaware. The Company endeavors to make opportunistic and value-oriented investments
in insurance, reinsurance and related businesses. The Company’s principal business operations are conducted through its
subsidiaries and affiliates. The Company also provides investment management services to unaffiliated companies.
Forward
Looking Statements
This
press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be
identified by the use of forward-looking terminology such as “anticipate,” “believe,” “budget,”
“can,” “contemplate,” “continue,” “could,” “envision,” “endeavor,”
“estimate,” “expect,” “evaluate,” “forecast,” “goal,” “guidance,”
“indicate,” “intend,” “likely,” “may,” “might,” “outlook,”
“plan,” “possibly,” “potential,” “predict,” “probable,” “probably,”
“pro-forma,” “project,” “seek,” “should,” “target,” “view,”
“will,” “would,” “will be,” “will continue,” “will likely result”,
“change” or the negative thereof or other variations thereon or comparable terminology. In particular, discussions
and statements regarding the Company’s expectations as to its financial results and the Company’s future business
plans and initiatives are forward-looking in nature.
1347
Property Insurance Holdings, Inc.
November
16, 2020
We
have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe
these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties,
many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements
to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements,
and may impact our ability to implement and execute on our future business plans and initiatives. You should be aware that many
of the risks listed below were, and are expected to continue to be, exacerbated by the COVID-19 pandemic. Management cautions
that the forward-looking statements in this press release are not guarantees of future performance, and we cannot assume that
such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference
include, without limitation: risks associated with our limited business operations since the closing of the sale of all of the
issued and outstanding equity of three of the Company’s wholly-owned insurance subsidiaries to FedNat Holding Company (the
“Asset Sale”); risks associated with our inability to identify and realize business opportunities, and the undertaking
of any new such opportunities, following the Asset Sale; our ability to change our name and effect the required approvals to change
our name; our ability to spend or invest the net proceeds from the Asset Sale in a manner that yields a favorable return; general
conditions in the global economy, including the impact of health and safety concerns from the current COVID-19 pandemic and the
impact of governmental measures taken in response thereto; the uncertainty and difficulty in predicting the ultimate impact of
the COVID-19 pandemic on our business; our lack of operating history or established reputation in the reinsurance industry; our
inability to obtain or maintain the necessary approvals to operate reinsurance subsidiaries; risks associated with operating in
the reinsurance industry, including inadequately priced insured risks, credit risk associated with brokers we may do business
with, and inadequate retrocessional coverage; our inability to execute on our investment and investment management strategy, risks
associated with the Company’s investments and joint ventures; potential loss of value of investments; the risk of
becoming or being deemed an investment company; fluctuations in our short-term results as we implement our new business strategy;
risks of being unable to attract and retain qualified management and personnel to implement and execute on our business and growth
strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain
an effective system of internal controls; our limited operating history as a publicly traded company; the requirements of being
a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts
of interest between us and our controlling stockholders and different interests of controlling stockholders; potential conflicts
of interest between us and our directors and executive officers; the impact of the COVID-19 pandemic on the business of FedNat
Holding Company; continued volatility or further decline in the value of the shares of FedNat Holding Company common stock received
by us as consideration in the Asset Sale or limitations and restrictions with respect to our ownership of such shares; risks of
being a minority stockholder of FedNat Holding Company; and risks of our inability to continue to satisfy the continued listing
standards of the Nasdaq following completion of the Asset Sale.
Our
expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materialize, or if our
underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. You are
cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included in this press release
are made only as of the date hereof and do not necessarily reflect our outlook at any other point in time. We do not undertake
and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to
any such statements to reflect new information, future events or developments.
INVESTOR
RELATIONS:
The
Equity Group Inc.
Jeremy
Hellman, CFA
Vice
President
(212)
836-9626 / jhellman@equityny.com
1347
Property Insurance Holdings, Inc.
November
16, 2020
1347
PROPERTY INSURANCE HOLDINGS, INC.
Consolidated
Statements of Operations and Comprehensive Loss
($
in thousands, except share and per share data)
(Unaudited)
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Three months ended
September 30,
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Nine months ended
September 30,
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2020
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2019
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2020
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2019
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Revenue:
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Net investment income (loss)
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$
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(7,715
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)
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$
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523
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$
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(16,992
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)
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$
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1,257
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Other income
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25
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–
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79
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–
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Total revenue
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(7,690
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)
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523
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(16,913
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)
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1,257
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Expenses:
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General and administrative expenses
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1,900
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595
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4,210
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2,236
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Total expenses
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1,900
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595
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4,210
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2,236
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Loss from continuing operations before income tax benefit
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(9,590
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)
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(72
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)
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(21,123
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)
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(979
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)
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Income tax benefit
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–
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(12
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)
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(665
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)
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(162
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)
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Net loss from continuing operations
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(9,590
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)
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(60
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)
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(20,458
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)
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(817
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)
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Net loss from discontinued operations, net of income taxes
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–
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(3,475
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)
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–
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(7,152
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)
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Net loss
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$
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(9,590
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)
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$
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(3,535
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)
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$
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(20,458
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)
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$
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(7,969
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)
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Dividends declared on Series A Preferred Shares
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350
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350
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1,050
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1,050
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Loss attributable to common shareholders
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$
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(9,940
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)
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$
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(3,885
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)
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$
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(21,508
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)
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$
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(9,019
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)
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Basic and diluted loss per common share:
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Continuing operations
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$
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(1.69
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)
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$
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(0.07
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)
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$
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(3.58
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)
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$
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(0.31
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)
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Discontinued operations
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–
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(0.58
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)
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–
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(1.19
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)
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Loss per share attributable to common shareholders
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$
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(1.69
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)
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$
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(0.65
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)
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$
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(3.58
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)
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$
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(1.50
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)
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Weighted average common shares outstanding:
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Basic and diluted
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5,893,125
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6,015,753
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6,009,267
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6,013,771
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Consolidated Statement of Comprehensive Loss
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Net loss
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$
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(9,590
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)
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$
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(3,535
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)
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$
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(20,458
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)
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$
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(7,969
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)
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Unrealized gains on investments available for sale, net of income taxes
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–
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(92
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)
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–
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1,783
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Comprehensive loss
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$
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(9,590
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)
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$
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(3,627
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)
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$
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(20,458
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)
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$
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(6,186
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)
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1347
Property Insurance Holdings, Inc.
November
16, 2020
1347
PROPERTY INSURANCE HOLDINGS, INC.
Consolidated
Balance Sheets
($
in thousands, except share and per share data)
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September 30, 2020 (unaudited)
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December 31, 2019
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ASSETS
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Equity securities, at fair value (cost basis of $20,751 and $25,500, respectively)
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$
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9,119
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$
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29,487
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Limited liability investments (including $4,013 and $0 held by the Company’s consolidated
VIE)
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9,268
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4,005
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Cash and cash equivalents (including $50 and $0 held by the Company’s consolidated VIE)
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15,233
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28,509
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Current income taxes recoverable
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1,824
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1,265
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Other receivables and assets (including $937 and $0 held by the Company’s consolidated
VIE)
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1,512
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188
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Total assets
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$
|
36,956
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|
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$
|
63,454
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LIABILITIES
|
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Accounts payable
|
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$
|
480
|
|
|
$
|
400
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Deferred tax liability, net
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|
|
–
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|
|
106
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|
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Other liabilities
|
|
|
82
|
|
|
|
33
|
|
|
Total liabilities
|
|
$
|
562
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|
|
$
|
539
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SHAREHOLDERS’ EQUITY
|
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Series A Preferred Shares, $25.00 par value, 1,000,000 shares authorized, 700,000 shares issued and outstanding as of both periods
|
|
$
|
17,500
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|
|
$
|
17,500
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Common stock, $0.001 par value; 10,000,000 shares authorized; 6,238,875 and 6,217,307 shares issued as of September 30, 2020 and December 31, 2019, respectively, and 4,957,364 and 6,065,948 shares outstanding as of September 30, 2020 and December 31, 2019, respectively
|
|
|
6
|
|
|
|
6
|
|
|
Additional paid-in capital
|
|
|
46,917
|
|
|
|
46,754
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|
|
Accumulated deficit
|
|
|
(21,844
|
)
|
|
|
(336
|
)
|
|
|
|
|
42,579
|
|
|
|
63,924
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|
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Less: treasury stock at cost; 1,281,511 and 151,359 shares as of September 30, 2020 and December 31, 2019, respectively
|
|
|
(6,185
|
)
|
|
|
(1,009
|
)
|
|
Total shareholders’ equity
|
|
|
36,394
|
|
|
|
62,915
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Total liabilities and shareholders’ equity
|
|
$
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36,956
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|
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$
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63,454
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|
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