IGI to Restate Financial Statements in Response to the SEC Staff Statement for Warrants Issued by Special Purpose Acquisition Companies (SPACs)
October 15 2021 - 8:30AM
Business Wire
International General Insurance Holdings Ltd. (“IGI” or the
“Company”) (NASDAQ: IGIC) announced today that it will file
restated consolidated financial statements as of and for the year
ended December 31, 2020 and also amend its previously published
quarterly financial results for 2020 and 2021 as a result of
further consideration of a statement issued by the Securities and
Exchange Commission (“SEC”) (the “SEC Staff Statement”) on April
12, 2021, with respect to the accounting treatment for warrant
instruments issued by Special Purpose Acquisition Companies
(SPACs).
IGI has 12.75 million public warrants and 4.5 million private
warrants (collectively, the “Warrants”) outstanding. No Warrants
have been exercised or redeemed since originally issued. The impact
of the restatement on the consolidated financial statements will be
a decrease to net income of $4.4 million for the year ended
December 31, 2020, an increase in total liabilities of $13.6
million as of December 31, 2020, and a corresponding decrease to
total equity of $13.6 million as of December 31, 2020. The
restatement of the consolidated financial statements had no impact
on the Company’s liquidity, cash or cash equivalents, or cash flows
from operating, investing, and financing activities.
IGI Chairman and CEO Wasef Jabsheh said, “IGI is one of several
hundred U.S. public companies to restate or revise their financial
statements as a result of the SEC’s Staff Statement on warrant
accounting for SPACs. This restatement does not impact the
financial strength of IGI. We do not anticipate the restatement to
impact our previously communicated core operating income and core
operating earnings per share. We continue to remain confident in
the positive momentum IGI has achieved since we became a public
company in 2020.”
The SEC statement on “Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies”
highlighted potential accounting implications of certain terms that
are common in warrants issued in connection with the initial public
offerings of SPACs. Consistent with market practice for SPACs, the
IGI Warrants were recorded as equity instruments in the Company’s
consolidated statement of financial position as a result of the
Business Combination with Tiberius Acquisition Corp. (“Tiberius”)
which closed on March 17, 2020. Following subsequent dialogue with
the staff of the SEC, the Company has determined that, given the
circumstances of the transaction with Tiberius, the Warrants should
have been recorded at fair value as liabilities in the Company’s
consolidated statement of financial position, and not as
equity.
The Company intends to file as soon as practicable an amended
Annual Report on Form 20-F/A for the year ended December 31, 2020
to reflect the restatement.
In a press release issued on August 12, 2021, the Company
announced a reclassification of its private warrants as a
derivative liability instead of equity with the changes recorded in
income. After further analysis and discussion with the SEC staff,
IGI has determined that the public warrants should also be recorded
as a derivative liability. As a result of this restatement, the
Warrants will be reflected as liabilities at fair value on the
Company’s consolidated statement of financial position at December
31, 2020, and the change in the fair value of such liabilities in
the period is recognized as a gain or loss in the Company’s
consolidated statements of income.
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About IGI:
IGI is an international specialty risks commercial insurer and
reinsurer underwriting a diverse portfolio of specialty lines.
Established in 2001, IGI has a worldwide portfolio of energy,
property, general aviation, construction & engineering, ports
& terminals, marine cargo, marine trades, contingency,
political violence, financial institutions, general third-party
liability (casualty), legal expenses, professional indemnity,
D&O, surety, marine liability and reinsurance treaty business.
Registered in Bermuda, with operations in Bermuda, London, Malta,
Dubai, Amman, Labuan and Casablanca, IGI aims to deliver
outstanding levels of service to clients and brokers. IGI is rated
“A” (Excellent)/Stable by AM Best and “A-”/Stable by S&P Global
Ratings. For more information about IGI, please visit
www.iginsure.com.
---
Forward-Looking Statements:
This press release contains “forward-looking statements” within
the meaning of the “safe harbour” provisions of the Private
Securities Litigation Reform Act of 1995. The expectations,
estimates, and projections of the business of IGI may differ from
its actual results and, consequently, you should not rely on
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements contained in this press
release may include, but are not limited to, our expectations
regarding the performance of our business, our financial results,
our liquidity and capital resources, the outcome of our strategic
initiatives, our expectations regarding pricing and other market
conditions, and our growth prospects. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from the expected
results. Most of these factors are outside of the control of IGI
and are difficult to predict. Factors that may cause such
differences include, but are not limited to: (1) changes in demand
for IGI’s services together with the possibility that IGI may be
adversely affected by other economic, business, and/or competitive
factors globally and in the regions in which it operates; (2)
competition, the ability of IGI to grow and manage growth
profitably and IGI’s ability to retain its key employees; (3)
changes in applicable laws or regulations; (4) the outcome of any
legal proceedings that may be instituted against the Company; (5)
the potential effects of the COVID-19 pandemic; (6) the inability
to maintain the listing of the Company’s common shares or warrants
on Nasdaq; and (7) other risks and uncertainties indicated in IGI’s
annual report on Form 20-F for the year ended December 31, 2020,
including those under “Risk Factors” therein, and in the Company’s
other filings with the SEC. The foregoing list of factors is not
exclusive. In addition, forward-looking statements are inherently
based on various estimates and assumptions that are subject to the
judgment of those preparing them and are also subject to
significant economic, competitive, industry and other uncertainties
and contingencies, all of which are difficult or impossible to
predict and many of which are beyond the control of IGI. There can
be no assurance that IGI’s financial condition or results of
operations will be consistent with those set forth in such
forward-looking statements. You should not place undue reliance
upon any forward-looking statements, which speak only as of the
date made. IGI does not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in its
expectations or any change in events, conditions, or circumstances
on which any such statement is based.
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version on businesswire.com: https://www.businesswire.com/news/home/20211015005328/en/
IGI Contacts: Investors: Robin Sidders, Head of Investor
Relations T: + 44 (0) 2072 204937 M: + 44 (0) 7384 514785 Email:
robin.sidders@iginsure.com Media: Aaida Abu Jaber, AVP PR
& Marketing T: +96265662082 Ext. 407 M: +962770415540 Email:
aaida.AbuJaber@iginsure.com
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