Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Interim Operations
The following should be read in conjunction with the Management’s
Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and Till’s consolidated
financial statements for the year ended December 31, 2016 included in Till’s Annual Report on Form 10-K as filed with the
SEC (the “2016 Report”).
Cautionary Statement for Forward-Looking Information
Certain statements in this Quarterly Report on Form 10-Q (this “Report”)
of Till Capital Ltd. ("Till," "we," "us" or "our"), including statements in this MD&A,
are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that
involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events,
or performance (often, but not always, using phrases such as “expects” or “does not expect,” “is
expected,” “anticipates”, or “does not anticipate,” “plans,” “scheduled,”
“forecasts,” “estimates,” “believes,” “intends,” or variations of such words and
phrases or stating that certain actions, events, or results “may,” “could,” “would,” “might,”
or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements
and are intended to identify forward-looking statements. Those forward-looking statements are based on the beliefs of our management,
as well as on assumptions that such management believes to be reasonable, based on information currently available at the time
such statements were made. Forward-looking statements speak only as of the date they are made, and we assume no duty to, and do
not undertake to, update forward-looking statements.
Any or all forward-looking statements may turn out to be wrong,
and, accordingly, Till cautions readers not to place undue reliance on such statements. Till bases these statements on current
expectations and the current economic environment as of the date of this Report. They involve a number of risks and uncertainties
that are difficult to predict. These statements are not guarantees of future performance; actual results could differ materially
from those expressed or implied in the forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions
or by known or unknown risks and uncertainties that may be important in determining Till’s actual future results and financial
condition.
Factors that could cause actual results to differ materially from
any results projected, forecasted, estimated, or budgeted or that may materially and adversely affect our actual results include
but are not limited to (i) the cyclical nature of the insurance and reinsurance markets, (ii) fluctuations in the number and severity
of insurance claims, (iii) our ability to purchase reinsurance on favorable terms when required, (iv) changes in the legal and
regulatory environment in the U.S., Canada or Bermuda, (v) changes in insurance industry trends and significant industry developments,
(vi) the effect of emerging claim and coverage issues on our business, (vii) any suspension or revocation of RRL’s or Omega’s
reinsurance/insurance license, (viii) fluctuations in interest rates that could have an impact on our ability to generate investment
income, (ix) our ability to access capital when needed, and (x) changes in ratings by ratings agencies of Till and/or its insurance
company subsidiaries. For additional information, see pages 1-3 and Part I, Item 1A. Risk Factors in the 2016 Report.
Overview
Till is an insurance holding company domiciled in Bermuda. Through
Till’s two wholly-owned insurance subsidiaries, RRL and Omega, we provide property and casualty insurance and reinsurance
business. Till operates in a single segment, specifically insurance.
RRL, a Bermuda domiciled company, was organized to offer reinsurance
coverage to a select group of insurance companies, e.g., captive insurers, privately-held insurers, and other global insurers and
reinsurers. RRL entered into its initial reinsurance contracts effective December 31, 2014. Those initial reinsurance contracts
were novated in September 2015. RRL currently does not have any active reinsurance contracts in force. RRL intends to participate
in reinsurance contracts using the Multi-Strat Re platform to underwrite medium- to long-term property and casualty business, as
acceptable opportunities are identified. RRL’s primary sources of income are reinsurance premiums and investment income.
RRL also owns 64% of the outstanding shares of Silver Predator Corp., a Canadian-based junior mineral exploration company that
has historically been engaged in exploring for and developing economically viable silver, gold, and tungsten deposits in Canada
and the United States, with a focus on Nevada and Idaho.
Omega, a Canada domiciled company, underwrites direct and reinsurance
business. As a reinsurer, Omega provides assumption reinsurance to insurance companies that want to exit the Canadian market, and
to insurance companies that want to transfer all of their remaining claim liabilities on particular books of business; those arrangements
are commonly referred to as “run-off” or “loss portfolio transfer” assumption business. Omega also is a
primary insurer, direct writer, for insurance companies looking to write Canadian business, but lacking the appropriate Canadian
insurance licenses. In that capacity, Omega acts as the direct writer, or fronting company, for a specific insurance company and
typically will cede most or all of that fronted business to that insurer. Omega has three sources of revenue, namely, (i) premiums
on portfolio transfer transactions and fees related to managing Canadian branch offices in “run-off”, (ii) assumption
reinsurance, including servicing fees in certain transactions, and (iii) premiums on direct business.
Till’s other subsidiaries include Till Management Company
(“TMC”), Golden Predator US Holding Corp. (“GPUS”), and Focus. TMC provides investment advisory and investment
management services, and GPUS provides personnel services, financial accounting, corporate and compliance, and other back-office
support to Till and its subsidiaries, and Focus provides management services to Omega and consulting and management services to
third-party insurers.
The discussion of Till's financial condition and results of operations
that follows is intended to provide summarized information to assist the reader in understating Till's condensed consolidated financial
statements, as well as to provide explanations as regards the primary factors that accounted for those financial statement changes
from year to year and quarter to quarter. This discussion should be read in conjunction with Till's condensed consolidated financial
statements that appear in Part I, Item 1 of this Report.
Critical Accounting Estimates
When Till prepares its condensed consolidated financial statements
and accompanying notes in conformity with accounting principles generally accepted in the United States of America ("GAAP"),
Till must make estimates and assumptions about future events that affect the amounts reported. Certain of those estimates result
from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because Till continuously
evaluates those estimates and assumptions based on a variety of factors, actual results could materially differ from Till's estimates
and assumptions if changes in one or more factors require Till to make accounting adjustments. During the six months ended June
30, 2017, Till reassessed its critical accounting policies and estimates as disclosed within the 2016 Report; Till has made
no material changes or additions with regard to such policies and estimates.
Results of Operations - Three and six month periods ended June
30, 2017 compared with three and six month periods ended June 30, 2016
The following table summarizes Till’s consolidated results
of operations for the periods indicated:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Insurance premiums written
|
|
$
|
15,227,032
|
|
|
$
|
9,352,770
|
|
|
$
|
35,060,344
|
|
|
$
|
19,294,908
|
|
|
Insurance premiums ceded to reinsurers
|
|
|
(14,455,148
|
)
|
|
|
(9,182,235
|
)
|
|
|
(32,889,624
|
)
|
|
|
(18,799,337
|
)
|
|
Change in unearned premiums
|
|
|
(475,157
|
)
|
|
|
44,028
|
|
|
|
(1,580,593
|
)
|
|
|
(133,364
|
)
|
|
Net premiums earned
|
|
|
296,727
|
|
|
|
214,563
|
|
|
|
590,127
|
|
|
|
362,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income (loss), net
|
|
|
(342,410
|
)
|
|
|
1,203,104
|
|
|
|
622,941
|
|
|
|
1,248,392
|
|
|
Gain on sale of mineral interests and PP&E
|
|
|
1,070,835
|
|
|
|
—
|
|
|
|
1,075,335
|
|
|
|
43,000
|
|
|
Other revenue
|
|
|
114,135
|
|
|
|
124,356
|
|
|
|
274,305
|
|
|
|
294,129
|
|
|
Total Revenue
|
|
|
1,139,287
|
|
|
|
1,542,023
|
|
|
|
2,562,708
|
|
|
|
1,947,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses, net
|
|
|
264,955
|
|
|
|
177,466
|
|
|
|
582,986
|
|
|
|
388,804
|
|
|
General and administrative expenses
|
|
|
616,078
|
|
|
|
530,408
|
|
|
|
1,197,242
|
|
|
|
996,066
|
|
|
Salaries and benefits
|
|
|
296,447
|
|
|
|
289,163
|
|
|
|
592,292
|
|
|
|
845,026
|
|
|
Stock-based compensation
|
|
|
3,776
|
|
|
|
16,781
|
|
|
|
23,527
|
|
|
|
25,107
|
|
|
Mining related expenses and property impairment
|
|
|
17,601
|
|
|
|
13,104
|
|
|
|
28,633
|
|
|
|
24,521
|
|
|
Foreign exchange (gain) loss
|
|
|
26,380
|
|
|
|
3,325
|
|
|
|
22,020
|
|
|
|
(231,685
|
)
|
|
Interest and other (income) expense
|
|
|
1,633
|
|
|
|
(31,788
|
)
|
|
|
4,199
|
|
|
|
(26,239
|
)
|
|
Total Expenses
|
|
|
1,226,870
|
|
|
|
998,459
|
|
|
|
2,450,899
|
|
|
|
2,021,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity loss on equity method investment
|
|
|
(87,583
|
)
|
|
|
543,564
|
|
|
|
111,809
|
|
|
|
(73,872
|
)
|
|
Current income tax expense
|
|
|
(23,879
|
)
|
|
|
(121,193
|
)
|
|
|
(34,825
|
)
|
|
|
(176,954
|
)
|
|
Deferred income tax benefit
|
|
|
65,474
|
|
|
|
36,683
|
|
|
|
111,923
|
|
|
|
119,419
|
|
|
Loss on equity method investment
|
|
|
(34,597
|
)
|
|
|
(3,847
|
)
|
|
|
(50,283
|
)
|
|
|
(12,428
|
)
|
|
Net income (loss)
|
|
$
|
(80,585
|
)
|
|
$
|
455,207
|
|
|
$
|
138,624
|
|
|
$
|
(143,835
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of Till Capital Ltd.
|
|
|
(67,221
|
)
|
|
|
479,250
|
|
|
|
142,882
|
|
|
|
(162,706
|
)
|
|
Non-controlling interests
|
|
|
(13,364
|
)
|
|
|
(24,043
|
)
|
|
|
(4,258
|
)
|
|
|
18,871
|
|
|
Net income (loss)
|
|
$
|
(80,585
|
)
|
|
$
|
455,207
|
|
|
$
|
138,624
|
|
|
$
|
(143,835
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income (loss) per share of Till Capital Ltd.
|
|
$
|
(0.02
|
)
|
|
$
|
0.14
|
|
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
Weighted average number of shares outstanding
|
|
|
3,350,284
|
|
|
|
3,426,577
|
|
|
|
3,350,284
|
|
|
|
3,427,931
|
|
Comparison of the three month periods ended June 30, 2017 and
2016
Revenue
Insurance premiums written
Insurance premiums written increased from $9.4 million for the three
months ended June 30, 2016 to $15.2 million for the three months ended June 30, 2017. That increase in insurance premiums relates
primarily to a new insurance program at Omega and growth in other Omega insurance programs during the three months ended June 30,
2017 compared to the three months ended June 30, 2016.
Insurance premiums ceded to reinsurers
Insurance premiums ceded to reinsurers increased from $9.2 million
for the three months ended June 30, 2016 to $14.5 million for the three months ended June 30, 2017. That increase in insurance
premiums ceded to reinsurers relates primarily to a new insurance program at Omega and growth in other Omega insurance programs
during the three months ended June 30, 2017 compared to the three months ended June 30, 2016.
Change in unearned premiums
Change in unearned premiums increased from a decrease of $44,028
for the three months ended June 30, 2016 to an increase of $0.5 million for the three months ended June 30, 2017. That increase
in the change in unearned premiums relates primarily to a new insurance program at Omega and growth in other Omega insurance programs
during the three months ended June 30, 2017 compared to the three months ended June 30, 2016.
Investment income (loss), net
Investment income (loss), inclusive of net realized investment gains
and losses, decreased from $1.2 million for the three months ended June 30, 2016 to a loss of $0.3 million for the three months
ended June 30, 2017. That decrease in net investment income (loss) was due mostly to losses in trading of futures strategies during
the three months ended June 30, 2017 and larger gains in legacy natural resource investments for the three months ended June 30,
2016 as compared to the three months ended June 30, 2017.
Gain on sale of mineral interests and PP&E
Gain on sale of mineral interests and PP&E increased from $nil
for the three months ended June 30, 2016 to $1.1 million for the three months ended June 30, 2017. That increase in gain on sale
of mineral interests and PP&E was due mostly to the completion of an option agreement that resulted in the sale of a mineral
property during the three months ended June 30, 2017 compared to no sales of mineral interests and PP&E during the three months
ended June 30, 2016.
Total revenue
Total revenue decreased from $1.5 million for the three months ended
June 30, 2016 to $1.1 million for the three months ended June 30, 2017. That decrease in total revenue was due principally to decreased
investment income for the three months ended June 30, 2017 compared to the three months ended June 30, 2016, partially offset by
increased gain on sale of mineral interests and PP&E as well as increased net premiums earned for the three months ended June
30, 2017 compared to the three months ended June 30, 2016.
Expenses
Losses and loss adjustment expenses, net
Losses and loss adjustment expenses, net of amounts ceded to reinsurers,
increased from $0.2 million for the three months ended June 30, 2016 to $0.3 million for the three months ended June 30, 2017.
That increase in loss and loss adjustment expenses net of amounts ceded to reinsurers was due to higher adverse development on
prior-year claims mostly related to the hospitality program incurred in the three months ended June 30, 2017 as compared to the
three months ended June 30, 2016.
General and administrative expenses
General and administrative expenses increased from $0.5 million
for the three months ended June 30, 2016 to $0.6 million for the three months ended June 30, 2017. That increase in general and
administrative expenses was due to higher professional fees for the three months ended June 30, 2017 compared to the three months
ended June 30, 2016.
Net income (loss)
Net income decreased from $0.5 million for the three months ended
June 30, 2016 to a net loss of $0.1 million for the three months ended June 30, 2017. That decrease in net income was due principally
to decreased investment income for the three months ended June 30, 2017 compared to the three months ended June 30, 2016, partially
offset by increased gain on sale of mineral interests and PP&E as well as increased net premiums earned for the three months
ended June 30, 2017 compared to the three months ended June 30, 2016.
Comparison of the six month periods ended June 30, 2017 and 2016
Revenue
Insurance premiums written
Insurance premiums written increased from $19.3 million for the
six months ended June 30, 2016 to $35.1 million for the six months ended June 30, 2017. That increase in insurance premiums relates
primarily to a new insurance program at Omega and growth in other Omega insurance programs during the six months ended June 30,
2017 compared to the six months ended June 30, 2016.
Insurance premiums ceded to reinsurers
Insurance premiums ceded to reinsurers increased from $18.8 million
for the six months ended June 30, 2016 to $32.9 million for the six months ended June 30, 2017. That increase in insurance premiums
ceded to reinsurers relates primarily to a new insurance program at Omega and growth in other Omega insurance programs during the
six months ended June 30, 2017 compared to the six months ended June 30, 2016.
Change in unearned premiums
Change in unearned premiums increased from $0.1 million for the
six months ended June 30, 2016 to $1.6 million for the six months ended June 30, 2017. That increase in the change in unearned
premiums relates primarily to a new insurance program at Omega and growth in other Omega insurance programs during the six months
ended June 30, 2017 compared to the six months ended June 30, 2016.
Investment income (loss), net
Investment income (loss), inclusive of net realized investment gains
and losses, decreased from $1.2 million for the six months ended June 30, 2016 to $0.6 million for the six months ended June 30,
2017. That decrease in net investment income (loss) was due mostly to losses incurred in the trading of futures strategies for
the six month ended June 30, 2017 and larger gains in legacy natural resource investments for the six months ended June 30, 2016
as compared to the six months ended June 30, 2017.
Gain on sale mineral interests and PP&E
Gain on sale of mineral interests and PP&E increased from $43,000
for the six months ended June 30, 2016 to $1.1 million for the six months ended June 30, 2017. That increase in gain on sale of
mineral interests and PP&E was due mostly to the completion of an option agreement that resulted in the sale of a mineral property
during the six months ended June 30, 2017 compared to minor sales of mineral interests and PP&E during the six months ended
June 30, 2016.
Total revenue
Total revenue increased from $1.9 million for the six months ended
June 30, 2016 to $2.6 million for the six months ended June 30, 2017. That increase in total revenue was due principally to increased
gain on sale of mineral interests and PP&E as well as increased net premiums earned for the six months ended June 30, 2017
compared to the six months ended June 30, 2016, partially offset by decreased investment income for the six months ended June 30,
2017 compared to the six months ended June 30, 2016.
Expenses
Losses and loss adjustment expenses, net
Losses and loss adjustment expenses, net of amounts ceded to reinsurers,
increased from $0.4 million for the six months ended June 30, 2016 to $0.6 million for the six months ended June 30, 2017. That
increase in loss and loss adjustment expenses net of amounts ceded to reinsurers was due to higher adverse development on prior-year
claims mostly related to the hospitality program incurred in the six months ended June 30, 2017 as compared to the six months ended
June 30, 2016.
General and administrative expenses
General and administrative expenses increased from $1.0 million
for the six months ended June 30, 2016 to $1.2 million for the six months ended June 30, 2017. That increase in general and administrative
expenses was due to higher professional fees for the six months ended June 30, 2017 compared to the six months ended June 30, 2016.
Salaries and benefits
Salaries and benefits decreased from $0.8 million for the six months
ended June 30, 2016 to $0.6 million for the six months ended June 30, 2017. That decrease in salaries and benefits resulted principally
from a one-time payment to Till's former CFO during the six months ended June 30, 2016.
Foreign exchange (gain) loss
Foreign exchange (gain) loss decreased from a gain of $231,685 for
the six months ended June 30, 2016 to a loss of $22,020 for the six months ended June 30, 2017. That decrease in foreign exchange
gain is due primarily to payments received on the Canadian dollar denominated note receivable during the six months ended June
30, 2017. Foreign exchange gain for the six months ended June 30, 2016 was mainly associated with the Canadian dollar denominated
note receivable.
Net income (loss)
Net income increased from a net loss of $0.1 million for the six
months ended June 30, 2016 to net income of $0.1 million for the six months ended June 30, 2017. That increase in net income was
due principally to increased gain on sale of mineral interests and PP&E as well as increased net premiums earned for the six
months ended June 30, 2017 compared to the six months ended June 30, 2016, partially offset by decreased investment income, increased
expenses, and decreased foreign exchange gain for the six months ended June 30, 2017 compared to the six months ended June 30,
2016.
Financial Condition - June 30, 2017 compared with December 31,
2016
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Cash and cash equivalents
|
|
$
|
5,600,203
|
|
|
$
|
5,320,208
|
|
|
Investments
|
|
|
19,611,013
|
|
|
|
16,769,265
|
|
|
Unpaid losses and loss adjustment expenses ceded
|
|
|
7,884,515
|
|
|
|
7,058,004
|
|
|
Unearned premiums ceded
|
|
|
12,264,323
|
|
|
|
1,614,803
|
|
|
Premiums receivable and reinsurance recoverables
|
|
|
13,319,154
|
|
|
|
2,391,427
|
|
|
Deferred policy acquisition costs
|
|
|
1,796,052
|
|
|
|
498,889
|
|
|
Assets held for sale
|
|
|
4,542,646
|
|
|
|
4,543,239
|
|
|
Promissory note receivable
|
|
|
—
|
|
|
|
2,410,494
|
|
|
Other assets
|
|
|
1,366,838
|
|
|
|
1,848,801
|
|
|
Deferred income tax asset
|
|
|
695,076
|
|
|
|
583,153
|
|
|
Goodwill
|
|
|
3,084,184
|
|
|
|
2,980,819
|
|
|
Total assets
|
|
$
|
70,164,004
|
|
|
$
|
46,019,102
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unpaid losses and loss adjustment expenses
|
|
$
|
14,125,263
|
|
|
$
|
13,212,366
|
|
|
Unearned premiums
|
|
|
14,497,030
|
|
|
|
2,283,118
|
|
|
Reinsurance payables
|
|
|
12,545,864
|
|
|
|
3,193,409
|
|
|
Accounts payable and accrued liabilities
|
|
|
1,449,003
|
|
|
|
1,143,825
|
|
|
Other liabilities
|
|
|
1,962,834
|
|
|
|
397,103
|
|
|
Total liabilities
|
|
$
|
44,579,994
|
|
|
$
|
20,229,821
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
$
|
25,584,010
|
|
|
$
|
25,789,281
|
|
Cash and cash equivalents and investments
Cash and cash equivalents ($5.6 million) and investments ($19.6
million) totaled $25.2 million at June 30, 2017 as compared to cash and cash equivalents ($5.3 million) and investments ($16.8
million) that totaled $22.1 million at December 31, 2016. That increase in cash and cash equivalents resulted from the receipt
of payments on a note receivable, partially offset by the purchase of investments. The increase in investments resulted mostly
from net purchase of investments.
Unearned premiums ceded
Unearned premiums ceded totaled $12.3 million at June 30, 2017 as
compared to $1.6 million at December 31, 2016. That increase in unearned premiums ceded relates primarily to a new insurance program
at Omega during the six months ended June 30, 2017, growth in other Omega insurance programs, and fluctuations resulting from renewals
occurring during the six months ended June 30, 2017 for insurance policies renewed under Omega's insurance programs.
Premiums receivable and reinsurance recoverables
Premiums receivable and reinsurance recoverables totaled $13.3 million
at June 30, 2017 as compared to $2.4 million at December 31, 2016. That increase in premiums receivable and reinsurance recoverables
relates primarily to a new insurance program at Omega and growth in other Omega insurance programs during the six months ended
June 30, 2017.
Deferred policy acquisition costs ("DPAC")
DPAC totaled $1.8 million at June 30, 2017 as compared to $0.5 million
at December 31, 2016. That increase in DPAC relates primarily to a new insurance program at Omega and growth in Omega's other insurance
programs during the six months ended June 30, 2017.
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Balance, beginning of period
|
|
$
|
498,889
|
|
|
$
|
465,472
|
|
|
Acquisition costs deferred
|
|
|
7,708,127
|
|
|
|
11,110,040
|
|
|
Amortization of DPAC
|
|
|
(6,410,964
|
)
|
|
|
(11,076,623
|
)
|
|
Balance, end of period
|
|
$
|
1,796,052
|
|
|
$
|
498,889
|
|
Promissory note receivable
Promissory note receivable was full paid in the 2nd quarter of 2017
and totaled $nil at June 30, 2017 as compared to $2.4 million at December 31, 2016. That decrease in promissory note receivable
is due to receipt of payments on the promissory note during the six months ended June 30, 2017.
Reserve for unpaid losses and loss adjustment expenses
Reserve for unpaid losses and loss adjustment expenses totaled $14.1
million at June 30, 2017 as compared to $13.2 million at December 31, 2016. That increase in reserve for unpaid losses and loss
adjustment expenses is in the normal course of business and was due to incurred claims being higher than paid claims during the
six months ended June 30, 2017.
Unearned premiums
Unearned premiums totaled $14.5 million at June 30, 2017 as compared
to $2.3 million at December 31, 2016. That increase in unearned premiums relates primarily a new insurance program at Omega during
the six months ended June 30, 2017, significant growth in other Omega insurance programs, and fluctuations resulting from renewals
occurring during the six months ended June 30, 2017 for insurance policies renewed under Omega's insurance programs.
Reinsurance payables
Reinsurance payables totaled $12.5 million at June 30, 2017 as compared
to $3.2 million at December 31, 2016. That increase in reinsurance payables relates primarily to a new insurance program at Omega
and growth in Omega's other insurance programs during the six months ended June 30, 2017.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities totaled $1.4 million at
June 30, 2017 as compared to $1.1 million at December 31, 2016. That increase in accounts payable and accrued liabilities relates
primarily to increased securities sold-short as of June 30, 2017 compared to December 31, 2016.
Other liabilities
Other liabilities totaled $2.0 million at June 30, 2017 as compared
to $0.4 million at December 31, 2016 and is comprised of unearned commissions at Omega. That increase in other liabilities related
primarily to a new insurance program at Omega and growth in Omega's other insurance programs during the six months ended June 30,
2017.
Liquidity and Capital Resources
Cash Flows
|
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
2016
|
|
Net cash (used in) provided by:
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
(1,052,728
|
)
|
|
$
|
(1,518,449
|
)
|
|
Investing activities
|
|
|
(1,577,857
|
)
|
|
|
3,107,025
|
|
|
Financing activities
|
|
|
2,565,253
|
|
|
|
491,187
|
|
|
(Decrease) Increase in cash and cash equivalents
|
|
|
(65,332
|
)
|
|
|
2,079,763
|
|
|
Effects of foreign exchange
|
|
|
345,327
|
|
|
|
342,495
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
5,320,208
|
|
|
|
1,519,881
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
5,600,203
|
|
|
$
|
3,942,139
|
|
Operating activities
Net cash used in operating activities was $1.1 million for the six
months ended June 30, 2017 compared to $1.5 million for the six months ended June 30, 2016, a change of $0.4 million. That decrease
in cash used in operating activities in the six months ended June 30, 2017 compared to the six months ended June 30, 2016 is primarily
due to an increase in accounts payable and other liabilities of $2.1 million and an increase in unearned premium of $1.5M, partly
offset by an increase of premium receivable and reinsurance recoverables net of reinsurance payables of $2.1M, and an increase
in deferred policy and acquisition costs of $1.1M for the six months ended June 30, 2017 due primarily to a new insurance program
at Omega.
Investing activities
Net cash used in investing activities was $1.6 million for the six
months ended June 30, 2017 compared to net cash provided of $3.1 million for the six months ended June 30, 2016, a change of $4.7
million. That increase in cash used in investing activities is primarily the result of net purchases of investments of $2.9 million
for the six months ended June 30, 2017 compared to cash provided from the net sales of investments of $3.1 million for the six
months ended June 30, 2016.
Financing activities
Net cash provided by financing activities was $2.6 million for the
six months ended June 30, 2017 compared to $0.5 million for the six months ended June 30, 2016, an increase of $2.1 million. The
source of cash for the six months ended June 30, 2017 and 2016 was the receipt of $2.6 million and $0.5 million on the note receivable,
respectively.
Off-Balance Sheet Arrangements
As of June 30, 2017, Till did not have any off-balance sheet arrangements
as defined in Item 303(a)(4) of Regulation S-K.
Contractual Obligations
Not applicable.