ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW
On June 13, 2019, the Audit Committee of the Board of Directors (the “Audit Committee”) of the Company concluded, after review and discussion with management, that certain of the Company’s previously issued financial statements should no longer be relied upon because of an error(s) in such financial statements. Specifically, the Audit Committee concluded that: (i) the audited consolidated financial statements for the year ended December 31, 2017; (ii) the Company’s previously issued unaudited consolidated financial statements for each of the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018; and (iii) management’s report on internal controls over financial reporting for the year ended December 31, 2017 should no longer be relied upon. Additionally, the opinion issued by BDO USA, LLP (“BDO”) on the Company’s consolidated financial statements for the year ended December 31, 2017 should no longer be relied upon. The Company has discussed the matters disclosed in this Item 4.02 with BDO, the Company’s independent accounting firm for the fiscal year ended December 31, 2017.
In light of the Audit Committee’s review, the Company's management evaluated the effectiveness of its internal control over financial reporting. Based on that evaluation, the Company’s management has concluded that, at December 31, 2018, the Company’s internal controls over financial reporting were not effective because of the existence of material weaknesses in internal control over financial reporting related to the accounting for (i) consolidation of certain limited liability investments that had previously been accounted for under the equity method of accounting; (ii) the reclassification of certain investments acquired from Mendota on October 18, 2018 from assets held for sale to equity investments, limited liability investments, limited liability investment, at fair value and other investments in the consolidated balance sheet; (iii) the reclassification of investment income related to these investments from loss from discontinued operations, net of taxes to net investment income (loss), net realized gains (losses) and gain (loss) on change in fair value of equity investments in the consolidated statement of operations; and (iv) equity-classified warrants. The Company is actively engaged in developing and implementing remediation plans designed to address these material weaknesses.
The Company expects that its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”) will contain a Note in which the Company’s consolidated balance sheet as of December 31, 2017, consolidated statement of operations for the year ended December 31, 2017 and consolidated statement of cash flows for the year ended December 31, 2017, all as previously reported in Exhibit 99.2 to the Company’s Form 8-K filed November 7, 2018, will be restated. The Company also expects to file, contemporaneously with the filing of its 2018 Form 10-K, Quarterly Reports on Form 10-Q/A for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018, in which the Company’s previously unaudited financial statements and other financial information contained in the Company’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018, will be restated. The Audit Committee and the Company do not expect to identify any material adjustments in the restated financial statements other than those discussed below.
The following are errors that the Audit Committee and the Company recently identified that will be corrected through the restatements, as further quantified in the affected financial statements and related footnotes presented below:
|
|
|
|
•
|
the consolidation of certain limited liability investments that had previously been accounted for under the equity method of accounting;
|
|
|
|
|
•
|
the reclassification of certain investments acquired from Mendota on October 18, 2018 from assets held for sale to equity investments, limited liability investments, limited liability investment, at fair value and other investments in the consolidated balance sheet; and
|
|
|
|
|
•
|
the reclassification of investment income related to these investments from loss from discontinued operations, net of taxes to net investment income (loss), net realized gains (losses) and gain (loss) on change in fair value of equity investments in the consolidated statement of operations.
|
The following are immaterial accounting adjustments that now will be recorded along with the restatement of the errors above, as further quantified in the affected financial statements and related footnotes presented below:
|
|
|
|
•
|
an increase to Extended Warranty segment revenue and operating income in the Company’s consolidated statement of operations for the period ended June 30, 2018, with an offsetting decrease to Extended Warranty segment revenue and operating income in the Company’s consolidated statement of operations for the year ended December 31, 2017;
|
|
|
|
|
•
|
a decrease to service fee and commission income in the consolidated statement of operations for the periods ended March 31, 2018 and June 30, 2018 and an increase to deferred service fees in the consolidated balance sheet related to the correction of our prior accounting for Professional Warranty Service Corporation’s (“PWSC”) homebuilder warranty service fees as a result of the initial adoption of ASU 2014-09;
|
|
|
|
|
•
|
a cumulative effect adjustment to increase accumulated deficit and increase deferred service fees as a result of the adoption of ASU 2014-09 effective January 1, 2018; and
|
|
|
|
|
•
|
the reclassification of equity-classified warrants and a beneficial conversion feature from Class A Preferred Stock to additional paid-in capital at December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018 related to the Company’s issuance of Class A Preferred Stock and Class C Warrants on February 3, 2014.
|
In addition to the errors and immaterial accounting adjustments listed above, certain other amounts will be reclassified in the consolidated statements of operations and consolidated balance sheet to conform to current presentation. Such reclassifications will have no impact on previously reported net loss or total shareholders' equity.
The impact of these errors, immaterial accounting adjustments and reclassifications on previously reported net loss for each of these periods is estimated to be an (increase) or decrease to net loss as follows:
|
|
|
|
|
|
|
|
|
Period
|
|
Amount in (millions)
|
|
|
Year ended December 31, 2017
|
|
$
|
(0.3
|
)
|
|
Three months ended March 31, 2018
|
|
$
|
(0.3
|
)
|
|
Three months ended June 30, 2018
|
|
$
|
(0.5
|
)
|
|
Three months ended September 30, 2018
|
|
$
|
1.1
|
|
Based on the information presently available, the following tables present the restated consolidated financial statements the Company expects to file; however, until such time as the restated consolidated financial statements have been filed, the potential remains that further adjustments may be identified.
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated balance sheet at December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
December 31, 2017
|
|
|
|
|
As Previously
Reported in Exhibit 99.2 to the Form 8-K filed November 7, 2018
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
|
|
$
|
14,541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,541
|
|
|
Equity investments, at fair value
|
|
4,476
|
|
|
113
|
|
(a)
|
—
|
|
|
4,589
|
|
|
Limited liability investments
|
|
4,922
|
|
|
26,864
|
|
(a),(b)
|
—
|
|
|
31,786
|
|
|
Limited liability investment, at fair value
|
|
5,771
|
|
|
4,543
|
|
(a)
|
—
|
|
|
10,314
|
|
|
Investments in private companies, at fair value
|
|
—
|
|
|
3,421
|
|
(b)
|
—
|
|
|
3,421
|
|
|
Real estate investments, at fair value
|
|
—
|
|
|
10,662
|
|
(b)
|
—
|
|
|
10,662
|
|
|
Other investments, at cost which approximates fair value
|
|
2,321
|
|
|
1,400
|
|
(a)
|
—
|
|
|
3,721
|
|
|
Short-term investments, at cost which approximates fair value
|
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|
Total investments
|
|
32,182
|
|
|
47,003
|
|
|
—
|
|
|
79,185
|
|
|
Cash and cash equivalents
|
|
20,774
|
|
|
112
|
|
(b)
|
—
|
|
|
20,886
|
|
|
Investment in investee
|
|
5,230
|
|
|
—
|
|
|
—
|
|
|
5,230
|
|
|
Accrued investment income
|
|
331
|
|
|
160
|
|
(b)
|
—
|
|
|
491
|
|
|
Service fee receivable
|
|
4,286
|
|
|
—
|
|
|
—
|
|
|
4,286
|
|
|
Other receivables
|
|
6,536
|
|
|
(48
|
)
|
(b)
|
—
|
|
|
6,488
|
|
|
Deferred acquisition costs, net
|
|
6,325
|
|
|
—
|
|
|
—
|
|
|
6,325
|
|
|
Property and equipment
|
|
108,008
|
|
|
—
|
|
|
—
|
|
|
108,008
|
|
|
Goodwill
|
|
80,112
|
|
|
—
|
|
|
—
|
|
|
80,112
|
|
|
Intangible assets
|
|
80,062
|
|
|
—
|
|
|
—
|
|
|
80,062
|
|
|
Other assets
|
|
4,302
|
|
|
—
|
|
|
—
|
|
|
4,302
|
|
|
Assets held for sale
|
|
136,452
|
|
|
(26,307
|
)
|
(a),(b)
|
—
|
|
|
110,145
|
|
|
Total Assets
|
|
$
|
484,600
|
|
|
$
|
20,920
|
|
|
$
|
—
|
|
|
$
|
505,520
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities
|
|
$
|
10,924
|
|
|
$
|
418
|
|
(b)
|
$
|
1,382
|
|
(c)
|
$
|
12,724
|
|
|
Income taxes payable
|
|
2,644
|
|
|
—
|
|
|
—
|
|
|
2,644
|
|
|
Deferred service fees
|
|
42,257
|
|
|
—
|
|
|
(1,138
|
)
|
(c),(d)
|
41,119
|
|
|
Unpaid loss and loss adjustment expenses
|
|
1,329
|
|
|
—
|
|
|
—
|
|
|
1,329
|
|
|
Bank loan
|
|
4,917
|
|
|
—
|
|
|
—
|
|
|
4,917
|
|
|
Notes payable
|
|
186,469
|
|
|
17,179
|
|
(b)
|
—
|
|
|
203,648
|
|
|
Subordinated debt, at fair value
|
|
52,105
|
|
|
—
|
|
|
—
|
|
|
52,105
|
|
|
Net deferred income tax liabilities
|
|
28,745
|
|
|
—
|
|
|
—
|
|
|
28,745
|
|
|
Liabilities held for sale
|
|
105,900
|
|
|
—
|
|
|
—
|
|
|
105,900
|
|
|
Total Liabilities
|
|
435,290
|
|
|
17,597
|
|
|
244
|
|
|
453,131
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A preferred stock
|
|
5,461
|
|
|
—
|
|
|
(1,998
|
)
|
(e)
|
3,463
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Additional paid-in capital
|
|
356,021
|
|
|
—
|
|
|
4,028
|
|
(e)
|
360,049
|
|
|
Accumulated deficit
|
|
(313,487
|
)
|
|
—
|
|
|
(2,250
|
)
|
(d),(e)
|
(315,737
|
)
|
|
Accumulated other comprehensive loss
|
|
(3,852
|
)
|
|
—
|
|
|
—
|
|
|
(3,852
|
)
|
|
Shareholders' equity attributable to common shareholders
|
|
38,682
|
|
|
—
|
|
|
1,778
|
|
|
40,460
|
|
|
Noncontrolling interests in consolidated subsidiaries
|
|
5,167
|
|
|
3,323
|
|
(b)
|
(24
|
)
|
(d)
|
8,466
|
|
|
Total Shareholders' Equity
|
|
43,849
|
|
|
3,323
|
|
|
1,754
|
|
|
48,926
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
484,600
|
|
|
$
|
20,920
|
|
|
$
|
—
|
|
|
$
|
505,520
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Year ended December 31,
|
|
|
|
|
As Previously
Reported in Exhibit 99.2 to the Form 8-K filed November 7, 2018 (p)
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service fee and commission income
|
|
$
|
30,807
|
|
|
$
|
—
|
|
|
$
|
(246
|
)
|
(d)
|
$
|
30,561
|
|
|
Rental income
|
|
13,384
|
|
|
—
|
|
|
—
|
|
|
13,384
|
|
|
Other income
|
|
684
|
|
|
—
|
|
|
—
|
|
|
684
|
|
|
Total revenues
|
|
44,875
|
|
|
—
|
|
|
(246
|
)
|
|
44,629
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
5,327
|
|
|
—
|
|
|
—
|
|
|
5,327
|
|
|
Loss and loss adjustment expenses
|
|
404
|
|
|
—
|
|
|
—
|
|
|
404
|
|
|
Commissions
|
|
3,086
|
|
|
—
|
|
|
—
|
|
|
3,086
|
|
|
Cost of services sold
|
|
6,535
|
|
|
—
|
|
|
—
|
|
|
6,535
|
|
|
General and administrative expenses
|
|
27,038
|
|
|
290
|
|
(b)
|
(34
|
)
|
(e)
|
27,294
|
|
|
Leased real estate segment interest expense
|
|
6,264
|
|
|
—
|
|
|
—
|
|
|
6,264
|
|
|
Total operating expenses
|
|
48,654
|
|
|
290
|
|
|
(34
|
)
|
|
48,910
|
|
|
Operating loss
|
|
(3,779
|
)
|
|
(290
|
)
|
|
(212
|
)
|
|
(4,281
|
)
|
|
Other revenues (expenses), net:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
968
|
|
|
4,337
|
|
(b),(f)
|
—
|
|
|
5,305
|
|
|
Net realized gains
|
|
306
|
|
|
—
|
|
|
—
|
|
|
306
|
|
|
Net change in unrealized loss on private company investments
|
|
—
|
|
|
(758
|
)
|
(b)
|
—
|
|
|
(758
|
)
|
|
Non-operating other income
|
|
697
|
|
|
—
|
|
|
—
|
|
|
697
|
|
|
Interest expense not allocated to segments
|
|
(4,977
|
)
|
|
(1,371
|
)
|
(b)
|
—
|
|
|
(6,348
|
)
|
|
Amortization of intangible assets
|
|
(1,152
|
)
|
|
—
|
|
|
—
|
|
|
(1,152
|
)
|
|
Contingent consideration benefit
|
|
212
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|
Loss on change in fair value of debt
|
|
(8,487
|
)
|
|
—
|
|
|
—
|
|
|
(8,487
|
)
|
|
Equity in net income of investee
|
|
2,115
|
|
|
—
|
|
|
—
|
|
|
2,115
|
|
|
Total other revenues (expenses), net
|
|
(10,318
|
)
|
|
2,208
|
|
|
—
|
|
|
(8,110
|
)
|
|
(Loss) income from continuing operations before income tax benefit
|
|
(14,097
|
)
|
|
1,918
|
|
|
(212
|
)
|
|
(12,391
|
)
|
|
Income tax benefit
|
|
(16,694
|
)
|
|
—
|
|
|
—
|
|
|
(16,694
|
)
|
|
Income (loss) from continuing operations
|
|
2,597
|
|
|
1,918
|
|
|
(212
|
)
|
|
4,303
|
|
|
Loss on liquidation of subsidiary, net of taxes
|
|
(494
|
)
|
|
—
|
|
|
—
|
|
|
(494
|
)
|
|
Loss from discontinued operations, net of taxes
|
|
(14,252
|
)
|
|
(2,054
|
)
|
(b),(f)
|
—
|
|
|
(16,306
|
)
|
|
Gain on disposal of discontinued operations, net of taxes
|
|
1,017
|
|
|
—
|
|
|
—
|
|
|
1,017
|
|
|
Net loss
|
|
(11,132
|
)
|
|
(136
|
)
|
|
(212
|
)
|
|
(11,480
|
)
|
|
Less: net income (loss) attributable to noncontrolling interests in consolidated subsidiaries
|
|
4,337
|
|
|
(136
|
)
|
|
(24
|
)
|
(d)
|
4,177
|
|
|
Less: dividends on preferred stock, net of tax
|
|
350
|
|
|
—
|
|
|
934
|
|
(e)
|
1,284
|
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(15,819
|
)
|
|
$
|
—
|
|
|
$
|
(1,122
|
)
|
|
$
|
(16,941
|
)
|
|
(Loss) earnings per share - continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.10
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
Diluted:
|
|
$
|
(0.10
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
Loss per share - discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.64
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
|
$
|
(0.73
|
)
|
|
Diluted:
|
|
$
|
(0.64
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
|
$
|
(0.73
|
)
|
|
Loss per share – net loss attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.73
|
)
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.79
|
)
|
|
Diluted:
|
|
$
|
(0.73
|
)
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.79
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,547
|
|
|
—
|
|
|
—
|
|
|
21,547
|
|
|
Diluted:
|
|
21,547
|
|
|
—
|
|
|
—
|
|
|
21,547
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated balance sheet at
March 31, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
March 31, 2018
|
|
|
|
|
As Previously
Reported
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
|
|
$
|
50,499
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,499
|
|
|
Equity investments, at fair value
|
|
6,472
|
|
|
—
|
|
|
—
|
|
|
6,472
|
|
|
Limited liability investments
|
|
25,749
|
|
|
6,728
|
|
(b)
|
—
|
|
|
32,477
|
|
|
Limited liability investment, at fair value
|
|
8,925
|
|
|
—
|
|
|
—
|
|
|
8,925
|
|
|
Investments in private companies, at fair value
|
|
—
|
|
|
3,421
|
|
(b)
|
—
|
|
|
3,421
|
|
|
Real estate investments, at fair value
|
|
—
|
|
|
10,662
|
|
(b)
|
—
|
|
|
10,662
|
|
|
Other investments, at cost which approximates fair value
|
|
3,316
|
|
|
—
|
|
|
—
|
|
|
3,316
|
|
|
Short-term investments, at cost which approximates fair value
|
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|
Total investments
|
|
95,112
|
|
|
20,811
|
|
|
—
|
|
|
115,923
|
|
|
Cash and cash equivalents
|
|
47,197
|
|
|
93
|
|
(b)
|
—
|
|
|
47,290
|
|
|
Investment in investee
|
|
5,331
|
|
|
—
|
|
|
—
|
|
|
5,331
|
|
|
Accrued investment income
|
|
358
|
|
|
181
|
|
(b)
|
—
|
|
|
539
|
|
|
Premium receivable
|
|
31,428
|
|
|
—
|
|
|
—
|
|
|
31,428
|
|
|
Service fee receivable
|
|
5,707
|
|
|
—
|
|
|
—
|
|
|
5,707
|
|
|
Other receivables
|
|
7,398
|
|
|
(50
|
)
|
(b)
|
—
|
|
|
7,348
|
|
|
Deferred acquisition costs, net
|
|
10,646
|
|
|
—
|
|
|
—
|
|
|
10,646
|
|
|
Property and equipment
|
|
107,166
|
|
|
—
|
|
|
—
|
|
|
107,166
|
|
|
Goodwill
|
|
80,112
|
|
|
—
|
|
|
—
|
|
|
80,112
|
|
|
Intangible assets
|
|
87,343
|
|
|
—
|
|
|
—
|
|
|
87,343
|
|
|
Other assets
|
|
15,202
|
|
|
—
|
|
|
—
|
|
|
15,202
|
|
|
Total Assets
|
|
$
|
493,000
|
|
|
$
|
21,035
|
|
|
$
|
—
|
|
|
$
|
514,035
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Unpaid loss and loss adjustment expenses
|
|
$
|
64,341
|
|
|
$
|
—
|
|
|
$
|
(2,683
|
)
|
(i), (n)
|
$
|
61,658
|
|
|
Unearned premiums
|
|
39,921
|
|
|
—
|
|
|
—
|
|
|
39,921
|
|
|
Notes payable
|
|
185,530
|
|
|
17,078
|
|
(b)
|
—
|
|
|
202,608
|
|
|
Bank loan
|
|
4,667
|
|
|
—
|
|
|
—
|
|
|
4,667
|
|
|
Subordinated debt, at fair value
|
|
53,458
|
|
|
—
|
|
|
—
|
|
|
53,458
|
|
|
Net deferred income tax liabilities
|
|
30,352
|
|
|
—
|
|
|
—
|
|
|
30,352
|
|
|
Deferred service fees
|
|
41,072
|
|
|
—
|
|
|
2,264
|
|
(c),(d),(g),(h), (n)
|
43,336
|
|
|
Income taxes payable
|
|
2,876
|
|
|
—
|
|
|
—
|
|
|
2,876
|
|
|
Accrued expenses and other liabilities
|
|
24,135
|
|
|
417
|
|
(b)
|
1,696
|
|
(c), (i)
|
26,248
|
|
|
Total Liabilities
|
|
446,352
|
|
|
17,495
|
|
|
1,277
|
|
|
465,124
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A preferred stock
|
|
5,469
|
|
|
—
|
|
|
(1,877
|
)
|
(e)
|
3,592
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Additional paid-in capital
|
|
356,313
|
|
|
—
|
|
|
4,028
|
|
(e)
|
360,341
|
|
|
Accumulated deficit
|
|
(356,273
|
)
|
|
123
|
|
(b)
|
(3,404
|
)
|
(d),(e),(g),(h)
|
(359,554
|
)
|
|
Accumulated other comprehensive income
|
|
35,844
|
|
|
—
|
|
|
—
|
|
|
35,844
|
|
|
Shareholders' equity attributable to common shareholders
|
|
35,884
|
|
|
123
|
|
|
624
|
|
|
36,631
|
|
|
Noncontrolling interests in consolidated subsidiaries
|
|
5,295
|
|
|
3,417
|
|
(b)
|
(24
|
)
|
(d)
|
8,688
|
|
|
Total Shareholders' Equity
|
|
41,179
|
|
|
3,540
|
|
|
600
|
|
|
45,319
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
493,000
|
|
|
$
|
21,035
|
|
|
$
|
—
|
|
|
$
|
514,035
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the
three
months ended
March 31, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Three months ended March 31,
|
|
|
|
|
As Previously
Reported
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
$
|
28,636
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,636
|
|
|
Service fee and commission income
|
|
10,557
|
|
|
—
|
|
|
(767
|
)
|
(g),(j), (o)
|
9,790
|
|
|
Rental income
|
|
3,348
|
|
|
—
|
|
|
—
|
|
|
3,348
|
|
|
Net investment income (loss)
|
|
(682
|
)
|
|
554
|
|
(b)
|
—
|
|
|
(128
|
)
|
|
Net realized gains
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
Gain on change in fair value of equity investments
|
|
1,176
|
|
|
—
|
|
|
—
|
|
|
1,176
|
|
|
Other income
|
|
2,660
|
|
|
—
|
|
|
—
|
|
|
2,660
|
|
|
Total revenues
|
|
45,708
|
|
|
554
|
|
|
(767
|
)
|
|
45,495
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
—
|
|
|
—
|
|
|
1,372
|
|
(k)
|
1,372
|
|
|
Loss and loss adjustment expenses
|
|
24,422
|
|
|
—
|
|
|
(1,276
|
)
|
(k), (o)
|
23,146
|
|
|
Commissions and premium taxes
|
|
5,443
|
|
|
—
|
|
|
(367
|
)
|
(j)
|
5,076
|
|
|
Cost of services sold
|
|
2,252
|
|
|
—
|
|
|
—
|
|
|
2,252
|
|
|
General and administrative expenses
|
|
11,337
|
|
|
8
|
|
(b)
|
(8
|
)
|
(e)
|
11,337
|
|
|
Leased real estate segment interest expense
|
|
1,552
|
|
|
—
|
|
|
—
|
|
|
1,552
|
|
|
Amortization of intangible assets
|
|
272
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
Total operating expenses
|
|
45,278
|
|
|
8
|
|
|
(279
|
)
|
|
45,007
|
|
|
Operating income (loss)
|
|
430
|
|
|
546
|
|
|
(488
|
)
|
|
488
|
|
|
Other expenses (revenues), net:
|
|
|
|
|
|
|
|
|
|
Interest expense not allocated to segments
|
|
1,386
|
|
|
331
|
|
(b)
|
—
|
|
|
1,717
|
|
|
Foreign exchange losses, net
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Loss on change in fair value of debt
|
|
919
|
|
|
—
|
|
|
—
|
|
|
919
|
|
|
Equity in net income of investee
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
Total other expenses, net
|
|
2,206
|
|
|
331
|
|
|
—
|
|
|
2,537
|
|
|
(Loss) income before income tax expense
|
|
(1,776
|
)
|
|
215
|
|
|
(488
|
)
|
|
(2,049
|
)
|
|
Income tax expense
|
|
251
|
|
|
—
|
|
|
—
|
|
|
251
|
|
|
Net (loss) income
|
|
(2,027
|
)
|
|
215
|
|
|
(488
|
)
|
|
(2,300
|
)
|
|
Less: net income attributable to noncontrolling interests in consolidated subsidiaries
|
|
135
|
|
|
94
|
|
(b)
|
—
|
|
|
229
|
|
|
Less: dividends on preferred stock, net of tax
|
|
129
|
|
|
—
|
|
|
129
|
|
(e)
|
258
|
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(2,291
|
)
|
|
$
|
121
|
|
|
$
|
(617
|
)
|
|
$
|
(2,787
|
)
|
|
(Loss) earnings per share – net (loss) income attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.11
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.13
|
)
|
|
Diluted:
|
|
$
|
(0.11
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.13
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
|
Diluted:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated balance sheet at
June 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
|
|
As Previously
Reported
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
|
|
$
|
11,361
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,361
|
|
|
Equity investments, at fair value
|
|
2,189
|
|
|
244
|
|
(a)
|
—
|
|
|
2,433
|
|
|
Limited liability investments
|
|
5,217
|
|
|
25,186
|
|
(a),(b)
|
—
|
|
|
30,403
|
|
|
Limited liability investment, at fair value
|
|
4,869
|
|
|
3,629
|
|
(a)
|
—
|
|
|
8,498
|
|
|
Investments in private companies, at fair value
|
|
—
|
|
|
3,266
|
|
(b)
|
—
|
|
|
3,266
|
|
|
Real estate investments, at fair value
|
|
—
|
|
|
10,662
|
|
(b)
|
—
|
|
|
10,662
|
|
|
Other investments, at cost which approximates fair value
|
|
1,916
|
|
|
1,400
|
|
(a)
|
—
|
|
|
3,316
|
|
|
Short-term investments, at cost which approximates fair value
|
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|
Total investments
|
|
25,703
|
|
|
44,387
|
|
|
—
|
|
|
70,090
|
|
|
Cash and cash equivalents
|
|
24,713
|
|
|
91
|
|
(b)
|
—
|
|
|
24,804
|
|
|
Investment in investee
|
|
4,947
|
|
|
—
|
|
|
—
|
|
|
4,947
|
|
|
Accrued investment income
|
|
161
|
|
|
125
|
|
(b)
|
—
|
|
|
286
|
|
|
Service fee receivable
|
|
5,173
|
|
|
—
|
|
|
—
|
|
|
5,173
|
|
|
Other receivables
|
|
7,907
|
|
|
(53
|
)
|
(b)
|
—
|
|
|
7,854
|
|
|
Deferred acquisition costs, net
|
|
6,662
|
|
|
—
|
|
|
—
|
|
|
6,662
|
|
|
Property and equipment
|
|
105,246
|
|
|
—
|
|
|
—
|
|
|
105,246
|
|
|
Goodwill
|
|
80,112
|
|
|
—
|
|
|
—
|
|
|
80,112
|
|
|
Intangible assets
|
|
79,519
|
|
|
—
|
|
|
—
|
|
|
79,519
|
|
|
Other assets
|
|
3,592
|
|
|
—
|
|
|
—
|
|
|
3,592
|
|
|
Assets held for sale
|
|
138,804
|
|
|
(23,697
|
)
|
(a),(b)
|
—
|
|
|
115,107
|
|
|
Total Assets
|
|
$
|
482,539
|
|
|
$
|
20,853
|
|
|
$
|
—
|
|
|
$
|
503,392
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities
|
|
$
|
10,946
|
|
|
$
|
417
|
|
(b)
|
1,386
|
|
(c), (i)
|
$
|
12,749
|
|
|
Income taxes payable
|
|
2,801
|
|
|
—
|
|
|
—
|
|
|
2,801
|
|
|
Deferred service fees
|
|
41,221
|
|
|
—
|
|
|
2,751
|
|
(c),(g),(h), (n)
|
43,972
|
|
|
Unpaid loss and loss adjustment expenses
|
|
5,209
|
|
|
—
|
|
|
(2,615
|
)
|
(i), (n)
|
2,594
|
|
|
Bank loan
|
|
4,417
|
|
|
—
|
|
|
—
|
|
|
4,417
|
|
|
Notes payable
|
|
184,567
|
|
|
16,976
|
|
(b)
|
—
|
|
|
201,543
|
|
|
Subordinated debt, at fair value
|
|
52,822
|
|
|
—
|
|
|
—
|
|
|
52,822
|
|
|
Net deferred income tax liabilities
|
|
28,796
|
|
|
—
|
|
|
—
|
|
|
28,796
|
|
|
Liabilities held for sale
|
|
112,866
|
|
|
—
|
|
|
—
|
|
|
112,866
|
|
|
Total Liabilities
|
|
443,645
|
|
|
17,393
|
|
|
1,522
|
|
|
462,560
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A preferred stock
|
|
5,477
|
|
|
—
|
|
|
(1,751
|
)
|
(e)
|
3,726
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Additional paid-in capital
|
|
356,609
|
|
|
—
|
|
|
4,028
|
|
(e)
|
360,637
|
|
|
Accumulated deficit
|
|
(364,917
|
)
|
|
(224
|
)
|
(b)
|
(3,799
|
)
|
(e),(g),(h)
|
(368,940
|
)
|
|
Accumulated other comprehensive loss
|
|
36,322
|
|
|
224
|
|
(b)
|
—
|
|
|
36,546
|
|
|
Shareholders' equity attributable to common shareholders
|
|
28,014
|
|
|
—
|
|
|
229
|
|
|
28,243
|
|
|
Noncontrolling interests in consolidated subsidiaries
|
|
5,403
|
|
|
3,460
|
|
(b)
|
—
|
|
|
8,863
|
|
|
Total Shareholders' Equity
|
|
33,417
|
|
|
3,460
|
|
|
229
|
|
|
37,106
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
482,539
|
|
|
$
|
20,853
|
|
|
$
|
—
|
|
|
$
|
503,392
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the
three
months ended
June 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Three months ended June 30, 2018
|
|
|
|
|
As Previously
Reported (p)
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service fee and commission income
|
|
$
|
9,479
|
|
|
$
|
—
|
|
|
(302
|
)
|
(d),(g), (o)
|
9,177
|
|
|
Rental income
|
|
3,341
|
|
|
—
|
|
|
4
|
|
(l)
|
3,345
|
|
|
Other income
|
|
108
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
Total revenues
|
|
12,928
|
|
|
—
|
|
|
(298
|
)
|
|
12,630
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
—
|
|
|
—
|
|
|
1,392
|
|
(k)
|
1,392
|
|
|
Loss and loss adjustment expenses
|
|
2,625
|
|
|
—
|
|
|
(1,324
|
)
|
(k), (o)
|
1,301
|
|
|
Commissions
|
|
932
|
|
|
—
|
|
|
(98
|
)
|
(j), (l)
|
834
|
|
|
Cost of services sold
|
|
1,464
|
|
|
—
|
|
|
—
|
|
|
1,464
|
|
|
General and administrative expenses
|
|
7,305
|
|
|
6
|
|
(b)
|
(26
|
)
|
(e),(l)
|
7,285
|
|
|
Leased real estate segment interest expense
|
|
1,546
|
|
|
—
|
|
|
—
|
|
|
1,546
|
|
|
Total operating expenses
|
|
13,872
|
|
|
6
|
|
|
(56
|
)
|
|
13,822
|
|
|
Operating loss
|
|
(944
|
)
|
|
(6
|
)
|
|
(242
|
)
|
|
(1,192
|
)
|
|
Other revenues (expenses), net:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
18
|
|
|
545
|
|
(a),(b)
|
—
|
|
|
563
|
|
|
Net realized (losses) gains
|
|
(1
|
)
|
|
133
|
|
(a)
|
—
|
|
|
132
|
|
|
Loss on change in fair value of equity investments
|
|
(248
|
)
|
|
(173
|
)
|
(a)
|
—
|
|
|
(421
|
)
|
|
Net change in unrealized loss on private company investments
|
|
—
|
|
|
(155
|
)
|
(b)
|
—
|
|
|
(155
|
)
|
|
Non-operating other income
|
|
973
|
|
|
—
|
|
|
—
|
|
|
973
|
|
|
Interest expense not allocated to segments
|
|
(1,519
|
)
|
|
(325
|
)
|
(b)
|
—
|
|
|
(1,844
|
)
|
|
Amortization of intangible assets
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
(271
|
)
|
|
Loss on change in fair value of debt
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
Gain on disposal of subsidiary
|
|
—
|
|
|
—
|
|
|
17
|
|
(m)
|
17
|
|
|
Equity in net income of investee
|
|
(385
|
)
|
|
—
|
|
|
—
|
|
|
(385
|
)
|
|
Total other revenues (expenses), net
|
|
(1,575
|
)
|
|
25
|
|
|
17
|
|
|
(1,533
|
)
|
|
(Loss) income from continuing operations before income tax benefit
|
|
(2,519
|
)
|
|
19
|
|
|
(225
|
)
|
|
(2,725
|
)
|
|
Income tax benefit
|
|
187
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
(Loss) income from continuing operations
|
|
(2,706
|
)
|
|
19
|
|
|
(225
|
)
|
|
(2,912
|
)
|
|
Income (loss) from discontinued operations, net of taxes
|
|
911
|
|
|
(322
|
)
|
(b)
|
5
|
|
(l)
|
594
|
|
|
Loss on disposal of discontinued operations, net of taxes
|
|
(6,611
|
)
|
|
—
|
|
|
(17
|
)
|
(m)
|
(6,628
|
)
|
|
Net loss
|
|
(8,406
|
)
|
|
(303
|
)
|
|
(237
|
)
|
|
(8,946
|
)
|
|
Less: net income (loss) attributable to noncontrolling interests in consolidated subsidiaries
|
|
108
|
|
|
43
|
|
(b)
|
25
|
|
(d)
|
176
|
|
|
Less: dividends on preferred stock, net of tax
|
|
130
|
|
|
—
|
|
|
134
|
|
(e)
|
264
|
|
|
Net loss attributable to common shareholders
|
|
$
|
(8,644
|
)
|
|
$
|
(346
|
)
|
|
$
|
(396
|
)
|
|
$
|
(9,386
|
)
|
|
Loss per share - continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.14
|
)
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.15
|
)
|
|
Diluted:
|
|
$
|
(0.14
|
)
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.15
|
)
|
|
Loss per share - discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.26
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.28
|
)
|
|
Diluted:
|
|
$
|
(0.26
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.28
|
)
|
|
Loss per share – net loss attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.40
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.43
|
)
|
|
Diluted:
|
|
$
|
(0.40
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.43
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
|
Diluted:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the
six
months ended
June 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Six months ended June 30, 2018
|
|
|
|
|
As Previously
Reported (p)
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service fee and commission income
|
|
$
|
19,670
|
|
|
$
|
—
|
|
|
(703
|
)
|
(d),(g), (o)
|
$
|
18,967
|
|
|
Rental income
|
|
6,682
|
|
|
—
|
|
|
11
|
|
(l)
|
6,693
|
|
|
Other income
|
|
321
|
|
|
—
|
|
|
—
|
|
|
321
|
|
|
Total revenues
|
|
26,673
|
|
|
—
|
|
|
(692
|
)
|
|
25,981
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
—
|
|
|
—
|
|
|
2,764
|
|
(k)
|
2,764
|
|
|
Loss and loss adjustment expenses
|
|
4,247
|
|
|
—
|
|
|
(2,600
|
)
|
(k), (o)
|
1,647
|
|
|
Commissions
|
|
1,817
|
|
|
—
|
|
|
(70
|
)
|
(j), (l)
|
1,747
|
|
|
Cost of services sold
|
|
3,716
|
|
|
—
|
|
|
—
|
|
|
3,716
|
|
|
General and administrative expenses
|
|
14,702
|
|
|
15
|
|
(b)
|
(49
|
)
|
(e),(l)
|
14,668
|
|
|
Leased real estate segment interest expense
|
|
3,098
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
|
Total operating expenses
|
|
27,580
|
|
|
15
|
|
|
45
|
|
|
27,640
|
|
|
Operating loss
|
|
(907
|
)
|
|
(15
|
)
|
|
(737
|
)
|
|
(1,659
|
)
|
|
Other revenues (expenses), net:
|
|
|
|
|
|
|
|
|
|
Net investment (loss) income
|
|
(613
|
)
|
|
822
|
|
(a),(b)
|
—
|
|
|
209
|
|
|
Net realized gains
|
|
9
|
|
|
136
|
|
(a)
|
—
|
|
|
145
|
|
|
Gain on change in fair value of equity investments
|
|
614
|
|
|
130
|
|
(a)
|
—
|
|
|
744
|
|
|
Net change in unrealized loss on private company investments
|
|
—
|
|
|
(155
|
)
|
(b)
|
—
|
|
|
(155
|
)
|
|
Non-operating other income
|
|
987
|
|
|
—
|
|
|
—
|
|
|
987
|
|
|
Interest expense not allocated to segments
|
|
(2,905
|
)
|
|
(656
|
)
|
(b)
|
—
|
|
|
(3,561
|
)
|
|
Amortization of intangible assets
|
|
(543
|
)
|
|
—
|
|
|
—
|
|
|
(543
|
)
|
|
Loss on change in fair value of debt
|
|
(1,061
|
)
|
|
—
|
|
|
—
|
|
|
(1,061
|
)
|
|
Gain on disposal of subsidiary
|
|
—
|
|
|
—
|
|
|
17
|
|
(m)
|
17
|
|
|
Equity in net loss of investee
|
|
(284
|
)
|
|
—
|
|
|
—
|
|
|
(284
|
)
|
|
Total other revenues (expenses), net
|
|
(3,796
|
)
|
|
277
|
|
|
17
|
|
|
(3,502
|
)
|
|
(Loss) income from continuing operations before income tax benefit
|
|
(4,703
|
)
|
|
262
|
|
|
(720
|
)
|
|
(5,161
|
)
|
|
Income tax benefit
|
|
438
|
|
|
—
|
|
|
—
|
|
|
438
|
|
|
(Loss) income from continuing operations
|
|
(5,141
|
)
|
|
262
|
|
|
(720
|
)
|
|
(5,599
|
)
|
|
Income (loss) from discontinued operations, net of taxes
|
|
1,318
|
|
|
(350
|
)
|
(b)
|
12
|
|
(l)
|
980
|
|
|
Loss on disposal of discontinued operations, net of taxes
|
|
(6,611
|
)
|
|
—
|
|
|
(17
|
)
|
(m)
|
(6,628
|
)
|
|
Net loss
|
|
(10,434
|
)
|
|
(88
|
)
|
|
(725
|
)
|
|
(11,247
|
)
|
|
Less: net income attributable to noncontrolling interests in consolidated subsidiaries
|
|
243
|
|
|
137
|
|
(b)
|
25
|
|
(d)
|
405
|
|
|
Less: dividends on preferred stock, net of tax
|
|
259
|
|
|
—
|
|
|
263
|
|
(e)
|
522
|
|
|
Net loss attributable to common shareholders
|
|
$
|
(10,936
|
)
|
|
$
|
(225
|
)
|
|
$
|
(1,013
|
)
|
|
$
|
(12,174
|
)
|
|
(Loss) earmings per share - continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.26
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.30
|
)
|
|
Diluted:
|
|
$
|
(0.26
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.30
|
)
|
|
Loss per share - discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.24
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.26
|
)
|
|
Diluted:
|
|
$
|
(0.24
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.26
|
)
|
|
Loss per share – net loss attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.50
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.56
|
)
|
|
Diluted:
|
|
$
|
(0.50
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.56
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
|
Diluted:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated balance sheet at
September 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
|
|
September 30, 2018
|
|
|
|
|
As Previously
Reported
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value
|
|
$
|
11,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,076
|
|
|
Equity investments, at fair value
|
|
1,334
|
|
|
243
|
|
(a)
|
—
|
|
|
1,577
|
|
|
Limited liability investments
|
|
6,230
|
|
|
22,985
|
|
(a),(b)
|
—
|
|
|
29,215
|
|
|
Limited liability investment, at fair value
|
|
4,529
|
|
|
3,453
|
|
(a)
|
—
|
|
|
7,982
|
|
|
Investments in private companies, at fair value
|
|
—
|
|
|
3,285
|
|
(b)
|
—
|
|
|
3,285
|
|
|
Real estate investments, at fair value
|
|
—
|
|
|
10,662
|
|
(b)
|
—
|
|
|
10,662
|
|
|
Other investments, at cost which approximates fair value
|
|
1,917
|
|
|
1,399
|
|
(a)
|
—
|
|
|
3,316
|
|
|
Short-term investments, at cost which approximates fair value
|
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|
Total investments
|
|
25,237
|
|
|
42,027
|
|
|
—
|
|
|
67,264
|
|
|
Cash and cash equivalents
|
|
23,591
|
|
|
93
|
|
(b)
|
—
|
|
|
23,684
|
|
|
Investment in investee
|
|
2,827
|
|
|
—
|
|
|
—
|
|
|
2,827
|
|
|
Accrued investment income
|
|
194
|
|
|
137
|
|
(b)
|
—
|
|
|
331
|
|
|
Service fee receivable
|
|
6,747
|
|
|
—
|
|
|
—
|
|
|
6,747
|
|
|
Other receivables
|
|
7,877
|
|
|
(54
|
)
|
(b)
|
—
|
|
|
7,823
|
|
|
Deferred acquisition costs, net
|
|
6,899
|
|
|
—
|
|
|
—
|
|
|
6,899
|
|
|
Property and equipment
|
|
104,196
|
|
|
—
|
|
|
—
|
|
|
104,196
|
|
|
Goodwill
|
|
73,928
|
|
|
—
|
|
|
—
|
|
|
73,928
|
|
|
Intangible assets
|
|
84,359
|
|
|
—
|
|
|
—
|
|
|
84,359
|
|
|
Other assets
|
|
2,560
|
|
|
—
|
|
|
—
|
|
|
2,560
|
|
|
Assets held for sale
|
|
133,365
|
|
|
(21,331
|
)
|
(a),(b)
|
—
|
|
|
112,034
|
|
|
Total Assets
|
|
$
|
471,780
|
|
|
$
|
20,872
|
|
|
$
|
—
|
|
|
$
|
492,652
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities
|
|
$
|
11,492
|
|
|
$
|
414
|
|
(b)
|
$
|
898
|
|
(c)
|
$
|
12,804
|
|
|
Income taxes payable
|
|
2,501
|
|
|
—
|
|
|
—
|
|
|
2,501
|
|
|
Deferred service fees
|
|
46,275
|
|
|
—
|
|
|
(898
|
)
|
(c)
|
45,377
|
|
|
Unpaid loss and loss adjustment expenses
|
|
2,292
|
|
|
—
|
|
|
—
|
|
|
2,292
|
|
|
Bank loan
|
|
4,167
|
|
|
—
|
|
|
—
|
|
|
4,167
|
|
|
Notes payable
|
|
183,561
|
|
|
16,873
|
|
(b)
|
—
|
|
|
200,434
|
|
|
Subordinated debt, at fair value
|
|
53,614
|
|
|
—
|
|
|
—
|
|
|
53,614
|
|
|
Net deferred income tax liabilities
|
|
28,472
|
|
|
—
|
|
|
—
|
|
|
28,472
|
|
|
Liabilities held for sale
|
|
107,076
|
|
|
—
|
|
|
—
|
|
|
107,076
|
|
|
Total Liabilities
|
|
439,450
|
|
|
17,287
|
|
|
—
|
|
|
456,737
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A preferred stock
|
|
5,486
|
|
|
—
|
|
|
(1,622
|
)
|
(e)
|
3,864
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Additional paid-in capital
|
|
354,141
|
|
|
—
|
|
|
4,028
|
|
(e)
|
358,169
|
|
|
Accumulated deficit
|
|
(369,771
|
)
|
|
(206
|
)
|
(b)
|
(2,406
|
)
|
(e)
|
(372,383
|
)
|
|
Accumulated other comprehensive loss
|
|
36,961
|
|
|
205
|
|
(b)
|
—
|
|
|
37,166
|
|
|
Shareholders' equity attributable to common shareholders
|
|
21,331
|
|
|
(1
|
)
|
|
1,622
|
|
|
22,952
|
|
|
Noncontrolling interests in consolidated subsidiaries
|
|
5,513
|
|
|
3,586
|
|
(b)
|
—
|
|
|
9,099
|
|
|
Total Shareholders' Equity
|
|
26,844
|
|
|
3,585
|
|
|
1,622
|
|
|
32,051
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
471,780
|
|
|
$
|
20,872
|
|
|
$
|
—
|
|
|
$
|
492,652
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the
three
months ended
September 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Three months ended September 30, 2018
|
|
|
|
|
As Previously
Reported (p)
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service fee and commission income
|
|
$
|
9,104
|
|
|
$
|
—
|
|
|
$
|
990
|
|
(g)
|
$
|
10,094
|
|
|
Rental income
|
|
3,341
|
|
|
—
|
|
|
—
|
|
|
3,341
|
|
|
Other income
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
Total revenues
|
|
12,428
|
|
|
—
|
|
|
990
|
|
|
13,418
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
1,442
|
|
|
—
|
|
|
—
|
|
|
1,442
|
|
|
Loss and loss adjustment expenses
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
Commissions
|
|
971
|
|
|
—
|
|
|
—
|
|
|
971
|
|
|
Cost of services sold
|
|
2,033
|
|
|
—
|
|
|
—
|
|
|
2,033
|
|
|
General and administrative expenses
|
|
5,410
|
|
|
2
|
|
(b)
|
(8
|
)
|
(e)
|
5,404
|
|
|
Leased real estate segment interest expense
|
|
1,540
|
|
|
—
|
|
|
—
|
|
|
1,540
|
|
|
Total operating expenses
|
|
11,377
|
|
|
2
|
|
|
(8
|
)
|
|
11,371
|
|
|
Operating income (loss)
|
|
1,051
|
|
|
(2
|
)
|
|
998
|
|
|
2,047
|
|
|
Other revenues (expenses), net:
|
|
|
|
|
|
|
|
|
|
Net investment (loss) income
|
|
(84
|
)
|
|
780
|
|
(a),(b)
|
—
|
|
|
696
|
|
|
Net realized losses
|
|
(414
|
)
|
|
—
|
|
|
—
|
|
|
(414
|
)
|
|
Gain on change in fair value of equity investments
|
|
337
|
|
|
—
|
|
|
—
|
|
|
337
|
|
|
Net change in unrealized gain on private company investments
|
|
—
|
|
|
19
|
|
(b)
|
—
|
|
|
19
|
|
|
Non-operating other income
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
Interest expense not allocated to segments
|
|
(1,571
|
)
|
|
(329
|
)
|
(b)
|
—
|
|
|
(1,900
|
)
|
|
Amortization of intangible assets
|
|
(1,356
|
)
|
|
—
|
|
|
—
|
|
|
(1,356
|
)
|
|
Loss on change in fair value of debt
|
|
(1,450
|
)
|
|
—
|
|
|
—
|
|
|
(1,450
|
)
|
|
Equity in net loss of investee
|
|
(339
|
)
|
|
—
|
|
|
—
|
|
|
(339
|
)
|
|
Total other revenues (expenses), net
|
|
(4,845
|
)
|
|
470
|
|
|
—
|
|
|
(4,375
|
)
|
|
(Loss) income from continuing operations before income tax benefit
|
|
(3,794
|
)
|
|
468
|
|
|
998
|
|
|
(2,328
|
)
|
|
Income tax benefit
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
|
(Loss) income from continuing operations
|
|
(3,647
|
)
|
|
468
|
|
|
998
|
|
|
(2,181
|
)
|
|
Income (loss) from discontinued operations, net of taxes
|
|
740
|
|
|
(323
|
)
|
(a),(b)
|
—
|
|
|
417
|
|
|
Loss on disposal of discontinued operations, net of taxes
|
|
(1,172
|
)
|
|
—
|
|
|
—
|
|
|
(1,172
|
)
|
|
Net (loss) income
|
|
(4,079
|
)
|
|
145
|
|
|
998
|
|
|
(2,936
|
)
|
|
Less: net income attributable to noncontrolling interests in consolidated subsidiaries
|
|
110
|
|
|
126
|
|
(b)
|
—
|
|
|
236
|
|
|
Less: dividends on preferred stock, net of tax
|
|
132
|
|
|
—
|
|
|
139
|
|
(e)
|
271
|
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(4,321
|
)
|
|
$
|
19
|
|
|
$
|
859
|
|
|
$
|
(3,443
|
)
|
|
(Loss) earnings per share - continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.18
|
)
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
(0.12
|
)
|
|
Diluted:
|
|
$
|
(0.18
|
)
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
(0.12
|
)
|
|
Loss per share - discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
Diluted:
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
(Loss) income per share – net (loss) income attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.20
|
)
|
|
$
|
—
|
|
|
$
|
0.04
|
|
|
$
|
(0.16
|
)
|
|
Diluted:
|
|
$
|
(0.20
|
)
|
|
$
|
—
|
|
|
$
|
0.04
|
|
|
$
|
(0.16
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
|
Diluted:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
The following table presents the effects of the error corrections, immaterial accounting adjustments and reclassifications on the Company’s consolidated statement of operations for the
nine
months ended
September 30, 2018
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
Nine months ended September 30, 2018
|
|
|
|
|
As Previously
Reported (p)
|
|
Correction of Errors
|
|
Immaterial Accounting Adjustments and Reclassifications
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service fee and commission income
|
|
$
|
28,938
|
|
|
$
|
—
|
|
|
123
|
|
(j)
|
$
|
29,061
|
|
|
Rental income
|
|
10,033
|
|
|
—
|
|
|
1
|
|
(l)
|
10,034
|
|
|
Other income
|
|
304
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
Total revenues
|
|
39,275
|
|
|
—
|
|
|
124
|
|
|
39,399
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Claims authorized on vehicle service agreements
|
|
4,206
|
|
|
—
|
|
|
—
|
|
|
4,206
|
|
|
Loss and loss adjustment expenses
|
|
1,628
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|
Commissions
|
|
2,843
|
|
|
—
|
|
|
(125
|
)
|
(j)
|
2,718
|
|
|
Cost of services sold
|
|
5,749
|
|
|
—
|
|
|
—
|
|
|
5,749
|
|
|
General and administrative expenses
|
|
20,078
|
|
|
18
|
|
(b)
|
(24
|
)
|
(e)
|
20,072
|
|
|
Leased real estate segment interest expense
|
|
4,638
|
|
|
—
|
|
|
—
|
|
|
4,638
|
|
|
Total operating expenses
|
|
39,142
|
|
|
18
|
|
|
(149
|
)
|
|
39,011
|
|
|
Operating income (loss)
|
|
133
|
|
|
(18
|
)
|
|
273
|
|
|
388
|
|
|
Other revenues (expenses), net:
|
|
|
|
|
|
|
|
|
|
Net investment (loss) income
|
|
(697
|
)
|
|
1,602
|
|
(a),(b)
|
—
|
|
|
905
|
|
|
Net realized (losses) gains
|
|
(405
|
)
|
|
136
|
|
(a)
|
—
|
|
|
(269
|
)
|
|
Gain on change in fair value of equity investments
|
|
951
|
|
|
130
|
|
(a)
|
—
|
|
|
1,081
|
|
|
Net change in unrealized loss on private company investments
|
|
—
|
|
|
(136
|
)
|
(b)
|
—
|
|
|
(136
|
)
|
|
Non-operating other income
|
|
1,019
|
|
|
—
|
|
|
—
|
|
|
1,019
|
|
|
Interest expense not allocated to segments
|
|
(4,476
|
)
|
|
(985
|
)
|
(b)
|
—
|
|
|
(5,461
|
)
|
|
Amortization of intangible assets
|
|
(1,899
|
)
|
|
—
|
|
|
—
|
|
|
(1,899
|
)
|
|
Loss on change in fair value of debt
|
|
(2,511
|
)
|
|
—
|
|
|
—
|
|
|
(2,511
|
)
|
|
Gain on disposal of subsidiary
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
Equity in net loss of investee
|
|
(623
|
)
|
|
—
|
|
|
—
|
|
|
(623
|
)
|
|
Total other revenues (expenses), net
|
|
(8,624
|
)
|
|
747
|
|
|
—
|
|
|
(7,877
|
)
|
|
(Loss) income from continuing operations before income tax expense
|
|
(8,491
|
)
|
|
729
|
|
|
273
|
|
|
(7,489
|
)
|
|
Income tax expense
|
|
291
|
|
|
—
|
|
|
—
|
|
|
291
|
|
|
(Loss) income from continuing operations
|
|
(8,782
|
)
|
|
729
|
|
|
273
|
|
|
(7,780
|
)
|
|
Income (loss) from discontinued operations, net of taxes
|
|
2,069
|
|
|
(672
|
)
|
(b)
|
—
|
|
|
1,397
|
|
|
Loss on disposal of discontinued operations, net of taxes
|
|
(7,800
|
)
|
|
—
|
|
|
—
|
|
|
(7,800
|
)
|
|
Net (loss) income
|
|
(14,513
|
)
|
|
57
|
|
|
273
|
|
|
(14,183
|
)
|
|
Less: net income attributable to noncontrolling interests in consolidated subsidiaries
|
|
353
|
|
|
263
|
|
(b)
|
25
|
|
(d)
|
641
|
|
|
Less: dividends on preferred stock, net of tax
|
|
391
|
|
|
—
|
|
|
402
|
|
(e)
|
793
|
|
|
Net loss attributable to common shareholders
|
|
$
|
(15,257
|
)
|
|
$
|
(206
|
)
|
|
$
|
(154
|
)
|
|
$
|
(15,617
|
)
|
|
(Loss) earnings per share - continuing operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.44
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.42
|
)
|
|
Diluted:
|
|
$
|
(0.44
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.42
|
)
|
|
Loss per share - discontinued operations:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.26
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
—
|
|
|
$
|
(0.29
|
)
|
|
Diluted:
|
|
$
|
(0.26
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
—
|
|
|
$
|
(0.29
|
)
|
|
Loss per share – net loss attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$
|
(0.70
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.72
|
)
|
|
Diluted:
|
|
$
|
(0.70
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.72
|
)
|
|
Weighted average shares outstanding (in ‘000s):
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
|
Diluted:
|
|
21,708
|
|
|
—
|
|
|
—
|
|
|
21,708
|
|
Kingsway Financial Services Inc.
Notes to Restated Consolidated Financial Statements
|
|
|
|
(a)
|
Relates to the correcting of errors resulting from the reclassification of certain investments acquired from Mendota on October 18, 2018 from assets held for sale to equity investments, limited liability investments, limited liability investment, at fair value and other investments.
|
|
|
|
|
(b)
|
Relates to the correcting of errors resulting from the consolidation of certain limited liability investments that had previously been accounted for under the equity method of accounting.
|
|
|
|
|
(c)
|
Reclassification of deposits held by PWSC from deferred service fees to accrued expenses and other liabilities to conform to current presentation. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(d)
|
Relates to the recording of an immaterial accounting adjustment resulting from an increase to Extended Warranty segment revenue and operating income in the Company’s consolidated statement of operations for the year ended December 31, 2018, with an offsetting decrease to Extended Warranty segment revenue and operating income in the Company’s consolidated statement of operations for the year ended December 31, 2017.
|
|
|
|
|
(e)
|
Relates to the recording of an immaterial accounting adjustment resulting from the reclassification of equity-classified warrants and a beneficial conversion feature from Class A preferred stock to additional paid-in capital related to the Company’s issuance of Class A preferred stock and Class C Warrants on February 3, 2014.
|
|
|
|
|
(f)
|
Relates to the correcting of errors resulting from the reclassification of investment income tied to the reclassification of certain investments acquired from Mendota on October 18, 2018, from loss from discontinued operations, net of taxes to net investment income (loss), net realized gains (losses) and gain (loss) on change in fair value of equity investments.
|
|
|
|
|
(g)
|
Relates to the recording of an immaterial accounting adjustment resulting from a decrease to service fee and commission income in the consolidated statement of operations and an increase to deferred service fees in the consolidated balance sheet related to the correction of our prior accounting for PWSC’s homebuilder warranty service fees as a result of the initial adoption of ASU 2014-09.
|
|
|
|
|
(h)
|
Relates to the recording of an immaterial accounting adjustment resulting from a cumulative effect adjustment to increase accumulated deficit and increase deferred service fees as a result of the adoption of ASU 2014-09.
|
|
|
|
|
(i)
|
Reclassification of Extended Warranty unpaid loss and loss adjustment expenses on vehicle service agreements to accrued expenses and other liabilities. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(j)
|
Reclassification to reduce Extended Warranty service fee and commission income, with a corresponding offset to Extended Warranty commission expense. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(k)
|
Reclassification of Extended Warranty loss and loss adjustment expenses related to vehicle service agreements to claims authorized on VSA’s. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(l)
|
Reclassification of revenue and expenses related to (i) Itasca Real Estate, LLC from income from discontinued operations, net of taxes to rental income and general and administrative expenses and (ii) IMS from commissions and general and administrative expenses to discontinued operations, net of taxes. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(m)
|
Reclassification of the gain on disposal of Itasca Real Estate, LLC from loss on disposal of discontinued operations, net of taxes to gain on disposal of subsidiary. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(n)
|
Reclassification of Extended Warranty deferred service fees on vehicle service agreements from unpaid loss and loss adjustment expenses to deferred service fees. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(o)
|
Reclassification of Extended Warranty re-estimation of deferred service fees on vehicle service agreements from loss and loss adjustment expenses to service fee and commission income. Such reclassification will have no impact on previously reported net loss or total shareholders' equity.
|
|
|
|
|
(p)
|
Reflects a change in presentation to conform to the financial statement presentation the Company intends to use beginning with the quarter ending December 31, 2018 as a result of the Company’s sale of Mendota on October 18, 2018. Such change in presentation will have no impact on previously reported net loss or total shareholders' equity.
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as “expects,” “believes,” “anticipates,” “intends,” “estimates,” “seeks” and variations and similar words and expressions are intended to identify such forward-looking statements; however, the absence of such words or similar expressions does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future performance, but reflect Company management’s current beliefs, based on information currently available. These statements include the Company’s expectations as to the timing and outcome of its audit and the filing of its 2018 Form 10-K. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.