Financial Performance - Net premiums earned for the six months ended June 30, 2022, were approximately $5.4 million, up from $1.1 million in the same period of 2021, driven by three new reinsurance agreements[197]. - Net investment loss for the three months ended June 30, 2022, was $(3.7) million, compared to a gain of $2.2 million in the same period of 2021[200]. - Net losses and loss adjustment expenses for the six months ended June 30, 2022, totaled $3.4 million, compared to $0.8 million for the same period in 2021[202]. - The company reported a net loss of $(9.3) million for the six months ended June 30, 2022, compared to a net income of $0.3 million in the same period of 2021[210]. - Other income decreased to $50,000 for the six months ended June 30, 2022, down from $79,000 in the same period of 2021[201]. Capital Structure - The company completed a public offering of 2,750,000 shares of common stock in June 2022 at a price of $1.58 per share, generating net proceeds of approximately $3.8 million[193]. - The company has 894,580 shares of 8.00% Cumulative Preferred Stock, Series A, outstanding as of June 30, 2022, with a total net proceeds of approximately $4.2 million from a public offering completed on May 21, 2021[188]. - The company holds 355,371 shares of FedNat common stock received from the sale of its insurance subsidiaries, with certain voting and transfer restrictions until December 2024[167]. - The company has a significant ownership stake of approximately 58.8% held by Fundamental Global GP, LLC and its affiliates as of June 30, 2022[166]. Cash Flow - Cash and cash equivalents at the end of the period were $12.8 million for the six months ended June 30, 2022, compared to $10.4 million for the same period in 2021[215]. - Net cash used by operating activities for the six months ended June 30, 2022, was approximately $(1.0) million, primarily due to the net loss and unrealized holding gains[216]. - For the six months ended June 30, 2021, net cash used by operating activities was approximately $5.9 million, primarily driven by a net income of approximately $473,000 adjusted downward by $4.0 million for unrealized gains on equity investments[217]. - A cash outflow of approximately $2.3 million was recorded for consolidated Fund investments in private placement securities, categorized as operating activities due to the investment company subsidiary's involvement[218]. - Net cash provided by investing activities was $76,000, mainly from the partial return of principal on investments for the six months ended June 30, 2021[219]. - Net cash provided by financing activities was $4.1 million, primarily resulting from the issuance of 194,580 shares of Series A Preferred Stock on May 21, 2021[219]. Corporate Strategy and Challenges - The company transitioned from an insurance holding company to focus on reinsurance and asset management after selling its insurance subsidiaries in December 2019[165]. - The company’s strategy includes opportunistic collateralized and loss-capped reinsurance, along with investments in SPACs and related businesses[165]. - The company has faced challenges in estimating critical accounting estimates due to the economic uncertainty from the COVID-19 pandemic[170]. Dividends - The company’s Board of Directors declared the second quarter 2022 dividend on the Series A Preferred Stock on August 11, 2022, at a rate of $2.00 per share per year[189]. General and Administrative Expenses - General and administrative expenses increased by $0.3 million to $4.0 million for the six months ended June 30, 2022, primarily due to staff expansion and professional fees[203].
FG Financial (FGF) - 2022 Q2 - Quarterly Report