Business Context and Reporting Period
International General Insurance Holdings Ltd. (IGI), a Bermuda-registered specialty commercial insurer and reinsurer, filed this Form 6-K on October 19, 2021 for October 2021. The filing amends previously published financial information for the quarters and periods ended March 31, June 30, and September 30, 2020.
The amendment follows the SEC’s April 12, 2021 guidance on accounting for SPAC warrants. IGI determined that the public and private warrants issued in connection with Tiberius Acquisition Corp. should have been recorded at fair value as derivative liabilities rather than as equity instruments.
Key Financial Metrics
| Period | Metric | Previously Reported | Adjustment | As Amended |
|---|---|---|---|---|
| Nine months ended September 30, 2020 | Profit before tax | $21.8 million | $(1.1) million | $20.7 million |
| Nine months ended September 30, 2020 | Profit for the period | $20.7 million | $(1.1) million | $19.6 million |
| Nine months ended September 30, 2020 | Basic and diluted EPS | $0.46 | $(0.03) | $0.43 |
| Nine months ended September 30, 2020 | Total equity | $379.6 million | $(10.3) million | $369.3 million |
| Nine months ended September 30, 2020 | Total liabilities | $829.6 million | $10.3 million | $839.9 million |
| Quarter ended September 30, 2020 | Profit before tax | $10.2 million | $(4.4) million | $5.8 million |
| Quarter ended September 30, 2020 | Profit for the period | $9.5 million | $(4.4) million | $5.1 million |
| Six months ended June 30, 2020 | Profit for the period | $11.2 million | $3.3 million | $14.5 million |
| Quarter ended June 30, 2020 | Profit for the period | $12.0 million | $1.4 million | $13.4 million |
| Quarter ended March 31, 2020 | Profit for the period | $(0.9) million | $1.9 million | $1.0 million |
The warrant reclassification eliminated the reported $12.2 million equity warrant balance and created derivative financial liabilities of $10.3 million at September 30, $5.9 million at June 30, and $7.3 million at March 31, 2020. The filing does not provide revenue, operating cash flow, free cash flow, debt, or liquidity balances.
Material Changes Versus Previously Reported Results
- For the nine months ended September 30, 2020, amended profit declined by $1.1 million and amended EPS declined by $0.03 per share.
- For the September 2020 quarter, amended profit declined by $4.4 million and EPS declined by $0.10 per share, reflecting a loss from the change in fair value of the derivative liability.
- For the six months ended June 30, 2020, amended profit increased by $3.3 million and EPS increased by $0.07, reflecting a gain in the fair value of the derivative liability.
- For the June 2020 quarter, amended profit increased by $1.4 million and EPS increased by $0.03.
- For the March 2020 quarter, amended profit increased from a $0.9 million loss to $1.0 million of profit, and EPS increased from $(0.02) to $0.03.
- Amended nine-month return on average shareholders’ equity was 7.7%, versus 8.0% previously reported; core operating return on average shareholders’ equity increased from 11.6% to 11.8%.
Outlook, Risks, and Unusual Items
The principal unusual item is the non-cash accounting reclassification and subsequent fair-value changes associated with the SPAC warrants. The filing does not provide new financial guidance or a specific operating outlook.
IGI identifies risks relating to demand, competition, profitable growth, employee retention, regulatory changes, legal proceedings, the COVID-19 pandemic, Nasdaq listing requirements, and other risks described in its 2020 Form 20-F. Forward-looking statements are subject to significant economic, competitive, industry, and other uncertainties.
Important Facts for Investors to Verify
- Confirm the amended warrant classification and derivative liability balances in the company’s subsequent annual and quarterly filings.
- Assess the effect of recurring or future warrant fair-value changes on reported earnings and per-share results.
- Review revenue, underwriting performance, cash flow, debt, capital adequacy, and liquidity in later filings, as these metrics are not provided here.
- Evaluate whether the warrant amendment affects Nasdaq listing status, capital structure, or contractual warrant terms.
- Review the risk factors in IGI’s Form 20-F for the year ended December 31, 2020 and subsequent SEC filings.