Presurance Holdings, Inc.
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
PRHI$6.97+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001193125-26-221549
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0001193125-26-346778
Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 77 previous paragraphs and 105 current paragraphs.
40 unchanged; 24 reworded; 27 added; 13 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 7 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Reverse Stock Split
Current report
On June 1, 2026, the Company effected a 1-for-7 reverse stock split of the Company’s common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every 7 shares of the Company’s common stock issued and outstanding were automatically converted into one new share of common stock. Proportionate adjustments were made to the exercise prices and number of shares of common stock issuable upon exercise of the Company's outstanding stock options and warrants. The Reverse Stock Split did not decrease the number of authorized shares of common stock. No fractional shares were issued in connection with the Reverse Stock Split and any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole share. Shareholders who were otherwise entitled to receive fractional shares as a result of the Reverse Stock Split were paid cash in lieu thereof. All shares of the Company’s common stock, per-share data and related information included in the accompanying condensed consolidated financial statements have been retroactively adjusted as though the Reverse Stock Split had been effected prior to all periods presented in accordance with generally accepted accounting principles.
Current report
Adjusted operating income, a non-GAAP measure, was $1.3 million, or $0.35 per share during the second quarter of 2026, compared to a $2.1 million loss, or $1.19 per share for the same period in 2025. Adjusted operating income was $384,000, or $0.12 per share for the six months ended June 30, 2026, compared to an adjusted operating loss of $5.8 million, or $3.30 per share for the same period in 2025.
Current report
Our underwriting combined ratio was 69.5% and 121.1% for the three months ended June 30, 2026 and 2025, respectively. Our underwriting combined ratio was 86.4% and 131.2% for the six months ended June 30, 2026 and 2025, respectively.
Current report
The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and segment operating expenses to net earned premiums.
Current report
Gross written premiums decreased $8.0 million, or 38.0%, to $13.1 million for the three months ended June 30, 2026, compared to $21.1 million for the same period in 2025.
Current report
Net written premiums increased $15.3 million, to $16.7 million in the second quarter of 2026, compared to $1.4 million for the same period in 2025. The increase in net written premiums during the quarter was primarily due to the termination of the Company's quota share reinsurance agreement that ceded 50% of premiums on substantially all of its homeowners business on May 31, 2026. The termination of the agreement generated a negative $9.3 million of ceded written premiums in the second quarter of 2026. The quota share agreement that was entered into on June 1, 2025 resulted in $13.7 million of additional ceded written premiums in the second quarter of 2025, significantly reducing net written premiums. All homeowners unearned premiums were ceded under the quota share agreement on June 1, 2025. All ceded unearned premiums under the quota share agreement were reversed as of May 31, 2026.
Current report
Net earned premiums decreased $2.8 million, or 28.8%, to $6.8 million during the second quarter of 2026, compared to $9.6 million for the same period in 2025. This decrease was primarily related to the decrease in gross written premiums during the quarter.
Current report
Other Corporate Expenses
Current report
Other corporate expenses consist of expenses not allocated to segments. These expenses include public company costs, as well as other expenses such as legal and consulting expenses not directly relating to the insurance operations and expense related to the funds-withheld obligation. Other corporate expenses decreased by $460,000, or 27.8%, to $1.2 million for the three months ended June 30, 2026, compared to $1.7 million for the same period in 2025. The decrease in other corporate expenses was largely due to costs associated with the CIS earnout that were incurred in 2025 that were not incurred in 2026.
Current report
Summary of Operating Results
Current report
The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and segment operating expenses to net earned premiums.
Current report
Premiums
Current report
Summary of Premium Revenue
Current report
Gross written premiums decreased $12.7 million, or 34.1%, to $24.5 million for the six months ended June 30, 2026, compared to $37.3 million for the same period in 2025.
Current report
Net written premiums increased $10.5 million, or 85.9%, to $22.7 million for the six months ended June 30, 2026, compared to $12.2 million for the same period in 2025. The increase in net written premiums during the quarter was primarily due to the termination of the Company's quota share reinsurance agreement that ceded 50% of premiums on substantially all of its homeowners business on May 31, 2026. The termination of the agreement generated a negative $9.3 million of ceded written premiums for the six months ended June 30, 2026. The quota share agreement that was entered into on June 1, 2025 resulted in $13.7 million of additional ceded written premiums for the six months ended June 30, 2025, significantly reducing net written premiums. All homeowners unearned premiums were ceded under the quota share agreement on June 1, 2025. All ceded unearned premiums under the quota share agreement were reversed as of May 31, 2026.
Current report
Net earned premiums decreased $7.1 million, or 35.9%, to $12.7 million for the six months ended June 30, 2026, compared to $19.9 million for the same period in 2025. This decrease was primarily related to the decrease in gross written premiums during the quarter.
Current report
Losses and Loss Adjustment Expenses
Current report
Net losses and LAE decreased by $10.8 million, or 68.4%, to $5.0 million for the six months ended June 30, 2026, compared to $15.8 million for the same period in 2025. The decrease was mostly due to a significant reduction in net earned premiums as the commercial lines of business are in runoff and we focus on the specialty homeowners business. The Company also experienced $2.7 million of favorable development related to its legacy commercial lines business for the six months ended June 30, 2026.
Current report
Expense Ratio
Current report
Our expense ratio decreased by 4.4% for the six months ended June 30, 2026, to 47.1%, compared to 51.5% for the same period in 2025.
Current report
Segment Results
Current report
Segment Gain (Loss)
Current report
Other Corporate Expenses
Current report
Other corporate expenses consist of expenses not allocated to segments. These expenses include public company costs, as well as other expenses such as legal and consulting expenses not directly relating to the insurance operations and expense related to the funds-withheld obligation. Other corporate expenses remained flat at $1.9 million for the six months ended June 30, 2026 and 2025.
Current report
Investing Activities. Cash used in investing activities for the six months ended June 30, 2026 was $613,000, compared to $4.8 million of cash provided by investing activities for the same period in 2025. The $5.4 million increase in cash used by investing activities was primarily due to the Company not receiving any proceeds from the third contingent consideration from the CIS Sale for the six months ended June 30, 2026, compared to the Company receiving $10.0 million from the second contingent consideration from the CIS Sale for the same period in 2025.
Current report
See Note 13 ~Commitments and Contingenciesfor further information about the contingent consideration bonus expense.
Removed paragraphs (13)
Previous report
Nasdaq Minimum Bid Price Compliance
Previous report
As previously reported, on March 3, 2026, the Company received a letter (the “Notice”) from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that because the closing bid price of the Company’s common stock was below $1.00 per share for the prior 30 consecutive business days, the Company is not in compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Marketplace Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
Previous report
In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from March 3, 2026, or until August 31, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time before August 31, 2026, the closing bid price of the Company’s Common Stock closes at or above $1.00 per share for a minimum of 10 consecutive business days (which number of days may be extended by Nasdaq), Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement, and the matter would be resolved.
Previous report
The Notice also disclosed that in the event the Company does not regain compliance with the Minimum Bid Price Requirement by August 31, 2026, the Company may be eligible for additional time. To qualify for additional time, the Company would be required to meet the applicable market value of publicly held shares requirement for continued listing and all other applicable standards for initial listing on The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days. However, if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice that the Company’s securities will be subject to delisting.
Previous report
The Company intends to continue actively monitoring the closing bid price for the Company’s Common Stock between now and August 31, 2026, and will consider available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement. In June 2025, our shareholders approved an amendment to our articles of incorporation to effect a reverse stock split at a ratio between 1-for-2 and 1-for-12. Our board of directors has authority to select an exchange ratio within the approved range at any time prior to June 3, 2026. The Company’s board of directors intends to effect the reverse stock split only if it determines the reverse stock split to be in the best interests of our shareholders. Such a reverse stock split would likely put us in compliance with the Minimum Bid Price Requirement.
Previous report
If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement during the 180-day compliance period, secure a second period of 180 calendar days to regain compliance, or maintain compliance with the other Nasdaq listing requirements.
Previous report
Adjusted operating loss, a non-GAAP measure, was $2.8 million, or $0.16 per share during the first quarter of 2026, compared to $3.7 million, or $0.30 per share for the same period in 2025.
Previous report
Our underwriting combined ratio was 105.7% and 140.5% for the three months ended March 31, 2026 and 2025, respectively.
Previous report
The expense ratio is the ratio, expressed as a percentage, of policy acquisition costs and other underwriting expenses to net earned premiums and other income from underwriting operations.
Previous report
Gross written premiums decreased $4.7 million, or 29.1%, to $11.5 million for the three months ended March 31, 2026, compared to $16.2 million for the same period in 2025.
Previous report
Net written premiums decreased $4.8 million, or 44.0%, to $6.1 million in the first quarter of 2026, compared to $10.8 million for the same period in 2025. The decline in net written premiums during the quarter was primarily due to the $4.2 million of premiums ceded under a new 50% quota share agreement for our homeowners book of business effective June 1, 2025. At inception, we also ceded 50% of the homeowners unearned premiums. Our commercial lines business is in runoff, which also contributed to the decrease in net written premiums during the period.
Previous report
Net earned premiums decreased $4.4 million, or 42.6%, to $5.9 million during the first quarter of 2026, compared to $10.3 million for the same period in 2025. This decrease was consistent with the decrease in net written premiums during the quarter.
Previous report
Investing Activities. Cash provided by investing activities for the three months ended March 31, 2026 was $168,000, compared to $9.6 million of cash used in investing activities for the same period in 2025. The $9.8 million increase in cash provided by investing activities was primarily due to a $20.5 million increase in proceeds from maturities and redemptions of investments during the first quarter of 2026, compared to the same period in 2025. This was offset by a $3.4 million increase of cash used in purchases of investments during the first quarter of 2026, compared to the same period in 2025. Further, there was a $7.3 million decrease in proceeds from sales of investments in the first quarter of 2026, compared to the same period in 2025.
Reworded paragraphs (24)
Previous wording
On February 27, 2026, the Company issued 14,000,000 shares of common stock at a purchase price of $1.00 per share pursuant to a rights offering backstopped by Clarkston Companies, Inc. A portion of the proceeds were used to redeem the $7.5 million of the Company's outstanding Series B Preferred Stock and to contribute $3.0 million to TIC in February 2026. The remaining proceeds are being used for working capital and general corporate purposes.
Current wording
On February 27, 2026, the Company issued 2,000,000 shares of common stock at a purchase price of $7.00 per share pursuant to a rights offering backstopped by Clarkston Companies, Inc. A portion of the proceeds were used to redeem the $7.5 million of the Company's outstanding Series B Preferred Stock and to contribute $3.0 million to TIC in February 2026. The remaining proceeds are being used for working capital and general corporate purposes.
Previous wording
We are an insurance holding company that markets and services our product offerings through specialty commercial and specialty personal insurance business lines. Currently, we are authorized to write insurance as an excess and surplus lines carrier in 44 states, plus the District of Columbia. We are licensed to write insurance as an admitted carrier in 42 states, plus the District of Columbia. As of March 31, 2026, we offer only homeowners insurance products primarily in Texas, Illinois and Indiana.
Current wording
We are an insurance holding company that markets and services our product offerings through specialty commercial and specialty personal insurance business lines. Currently, we are authorized to write insurance as an excess and surplus lines carrier in 44 states, plus the District of Columbia. We are licensed to write insurance as an admitted carrier in 42 states, plus the District of Columbia. As of June 30, 2026, we offer only homeowners insurance products in Texas, Illinois and Indiana.
Previous wording
Through our personal insurance lines, we offer homeowners insurance and dwelling fire insurance products to individuals in several states. Our specialty homeowners insurance product line is primarily comprised of low-value dwelling insurance tailored for owners of lower valued homes, which we offer in Texas, Illinois and Indiana. Our commercial lines business is in runoff.
Current wording
Through our personal insurance lines, we offer homeowners insurance and dwelling fire insurance products to individuals in several states. Our specialty homeowners insurance product line is primarily comprised of low-value dwelling insurance tailored for owners of lower valued homes, which we offer in Texas, Illinois and Indiana. Our commercial lines of business are in runoff.
Previous wording
In certain circumstances, we are required to make estimates and assumptions that affect amounts reported in our condensed consolidated financial statements and related footnotes. We evaluate these estimates and assumptions periodically on an on-going basis based on a variety of factors. There can be no assurance, however, that actual results will not be materially different than our estimates and assumptions, and that reported results of operations will not be affected by accounting adjustments needed to reflect changes in these estimates and assumptions. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies and estimating methodologies, which are disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2026.
Current wording
In certain circumstances, we are required to make estimates and assumptions that affect amounts reported in our condensed consolidated financial statements and related footnotes. We evaluate these estimates and assumptions periodically on an on-going basis based on a variety of factors. There can be no assurance, however, that actual results will not be materially different than our estimates and assumptions, and that reported results of operations will not be affected by accounting adjustments needed to reflect changes in these estimates and assumptions. During the six months ended June 30, 2026, there were no material changes to our critical accounting policies and estimating methodologies, which are disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2026.
Previous wording
The Company's gross written premiums decreased $4.7 million, or 29.1%, to $11.5 million in the first quarter of 2026, compared to $16.2 million for the same period in 2025.
Current wording
The Company's gross written premiums decreased $8.0 million, or 38.0%, to $13.1 million in the second quarter of 2026, compared to $21.1 million for the same period in 2025.
Previous wording
The Company's personal lines gross written premiums decreased $2.6 million, or 18.7%, to $11.5 million in the first quarter of 2026, compared to $14.1 million for the same period in 2025.
Current wording
The Company's personal lines gross written premiums decreased $4.8 million, or 26.9%, to $13.1 million in the second quarter of 2026, compared to $17.9 million for the same period in 2025.
Previous wording
The Company reported net income of $2.6 million, or $0.15 per share in the first quarter of 2026, compared to net income of $522,000, or $0.04 per share for the same period in 2025.
Current wording
The Company reported net income of $2.5 million, or $0.68 per share in the second quarter of 2026, compared to net income of $2.1 million, or $1.17 per share for the same period in 2025. The Company recorded net income of $5.2 million, or $1.66 per share for the six months ended June 30, 2026, compared to net income of $2.6 million, or $1.47 per share for the same period in 2025.
Previous wording
The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums and other income from underwriting operations.
Current wording
The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums.
Previous wording
Personal lines gross written premiums decreased $2.6 million, or 18.7%, to $11.5 million in the first quarter of 2026, compared to $14.1 million for the same period in 2025. The decrease was due to underwriting changes that affected volume. Our main focus remains on prudent, steady growth in Texas.
Current wording
Personal lines gross written premiums decreased $4.8 million, or 26.9%, to $13.1 million in the second quarter of 2026, compared to $17.9 million for the same period in 2025. The decrease was due to underwriting changes that affected volume. Our main focus remains on prudent, steady growth in Texas.
Previous wording
Commercial lines gross written premiums were $(18,000) in the first quarter of 2026, compared to $2.0 million for the same period in 2025. The Company's commercial lines business is in runoff. The Company does not expect to write any commercial lines business in the near term.
Current wording
Commercial lines gross written premiums were essentially zero in the second quarter of 2026, compared to $3.2 million for the same period in 2025. The Company's commercial lines of business are in runoff. The Company does not expect to write any commercial lines business in the near term.
Previous wording
Net losses and LAE decreased by $6.0 million, or 64.1%, to $3.3 million during the first quarter of 2026, compared to $9.3 million for the same period in 2025. The decrease was mostly due to a significant reduction in net earned premiums as the commercial lines business is in runoff and we focus on the specialty homeowners business.
Current wording
Net losses and LAE decreased by $4.9 million, or 74.5%, to $1.7 million during the second quarter of 2026, compared to $6.6 million for the same period in 2025. The decrease was partially due to a reduction in net earned premiums as the commercial lines of business are in runoff and we focus on the specialty homeowners business. The Company also experienced $2.4 million of favorable development related to its legacy commercial lines business in the second quarter of 2026.
Previous wording
Our expense ratio is a measure of the efficiency and performance of the commercial and personal lines of business (our risk-bearing underwriting operations). It is calculated by dividing the sum of policy acquisition costs and other underwriting expenses by the sum of net earned premiums and other income of the underwriting business. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in Corporate for segment reporting purposes. The expense ratio excludes Corporate expenses. Due to the commercial lines business being in runoff, the expense ratios for commercial lines are not deemed to be meaningful.
Current wording
Our expense ratio is a measure of the efficiency and performance of the commercial and personal lines of business (our risk-bearing underwriting operations). It is calculated by dividing the sum of policy acquisition costs and other underwriting expenses by net earned premiums. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in Corporate for segment reporting purposes. The expense ratio excludes Corporate expenses. Due to the commercial lines of business being in runoff, the expense ratios for commercial lines are not deemed to be meaningful.
Previous wording
Our expense ratio decreased by 1.3% in the first quarter of 2026, to 49.5%, compared to 50.8% for the same period in 2025.
Current wording
Our expense ratio decreased by 7.4% in the second quarter of 2026, to 44.9%, compared to 52.3% for the same period in 2025.
Previous wording
Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes and underwriting reports. The Company offsets direct commissions with ceding commissions from reinsurers. The percentage of policy acquisition costs to net earned premiums and other income increased by 0.4% during the first quarter of 2026 to 26.3%, compared to 25.9% during the same period in 2025. Sycamore Specialty Underwriters, LLC ("SSU"), which is producing substantially all go-forward business, manages the policy issuance, premium collections and systems of the homeowners book of business. The reduction was partially due to a 1.0% reduction in the commission rate paid to SSU beginning on September 1, 2025.
Current wording
Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes and underwriting reports. The Company offsets direct commissions with ceding commissions from reinsurers. The percentage of policy acquisition costs to net earned premiums increased by 4.4% during the second quarter of 2026 to 28.3%, compared to 23.9% during the same period in 2025, due to the removal of the quota share reinsurance agreement effective May 31, 2026, which had provided for more ceding commission in the second quarter of 2025 than the same period in 2026.
Previous wording
Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums and other income decreased by 1.7% during the first quarter of 2026 to 23.2%, compared to 24.9% for the same period in 2025. The decrease in the ratio was mostly due to improved administrative cost efficiency.
Current wording
Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums decreased by 11.8% during the second quarter of 2026 to 16.6%, compared to 28.4% for the same period in 2025. The decrease in the ratio was mostly due to improved administrative cost efficiency.
Previous wording
At March 31, 2026, the Company had $57.9 million in cash, cash equivalents and short-term investments. Our principal sources of funds are insurance premiums, investment income and proceeds from maturities and sales of invested assets. These funds are primarily used to pay claims, commissions, employee compensation, taxes and other operating expenses, and service debt and mandatorily redeemable preferred stock.
Current wording
At June 30, 2026, the Company had $41.2 million in cash, cash equivalents and short-term investments. Our principal sources of funds are insurance premiums, investment income and proceeds from maturities and sales of invested assets. These funds are primarily used to pay claims, commissions, employee compensation, taxes and other operating expenses, and service debt and mandatorily redeemable preferred stock.
Previous wording
We conduct our business operations primarily through our Insurance Company Subsidiaries. Our Parent Company's ability to service debt and mandatorily redeemable preferred stock, and pay administrative expenses is primarily reliant upon our intercompany service fees paid by the Insurance Company Subsidiaries to the Parent Company for management, administrative, and information technology services provided to the Insurance Company Subsidiaries by the Parent Company. Secondarily, the Parent Company may receive dividends from the Insurance Company Subsidiaries; however, this is not the primary means in which the Parent Company supports its funding as state insurance laws restrict the ability of our Insurance Company Subsidiaries to declare dividends to the Parent Company. Generally, the limitations are based on the greater of statutory net income for the preceding year or 10% of statutory surplus at the end of the preceding year. There were no dividends paid from our Insurance Company Subsidiaries for the three months ended March 31, 2026 and 2025. We do not anticipate any dividends being paid to the Parent Company from our insurance subsidiaries in the near term.
Current wording
We conduct our business operations primarily through our Insurance Company Subsidiaries. The Parent Company's ability to service debt and mandatorily redeemable preferred stock and pay administrative expenses is primarily reliant upon our intercompany service fees paid by the Insurance Company Subsidiaries to the Parent Company for management, administrative, and information technology services provided to the Insurance Company Subsidiaries by the Parent Company. Secondarily, the Parent Company may receive dividends from the Insurance Company Subsidiaries; however, this is not the primary means by which the Parent Company supports its funding as state insurance laws restrict the ability of our Insurance Company Subsidiaries to declare dividends to the Parent Company. Generally, the limitations are based on the greater of statutory net income for the preceding year or 10% of statutory surplus at the end of the preceding year. There were no dividends paid from our Insurance Company Subsidiaries for the six months ended June 30, 2026 and 2025. We do not anticipate any dividends being paid to the Parent Company from our insurance subsidiaries in the near term.
Previous wording
To fund these additional contributions, PHI raised $7.5 million from the issuance of the Series B Preferred Stock in the first quarter of 2025, utilized proceeds from the second $10.0 million earnout from the CIS Sale, which were received in the second quarter of 2025 and raised $8.0 million from the issuance of the Series C Preferred Stock in December 2025. In February 2026, PHI completed a backstopped rights offering for $14.0 million utilizing a portion of the proceeds to redeem the $7.5 million Series B Preferred Stock and contribute the $3.0 million of cash to TIC in February 2026. WPIC no longer writes any business and TIC’s writings are significantly constrained by its diminished capital position.
Current wording
To fund these additional contributions, PHI raised $7.5 million from the issuance of the Series B Preferred Stock in the first quarter of 2025, utilized proceeds from the second $10.0 million earnout from the CIS Sale, which were received in the second quarter of 2025, and raised $8.0 million from the issuance of the Series C Preferred Stock in December 2025. In February 2026, PHI completed a backstopped rights offering for $14.0 million utilizing a portion of the proceeds to redeem the $7.5 million Series B Preferred Stock and contribute $3.0 million of cash to TIC in February 2026. WPIC no longer writes any business and TIC’s writings are significantly constrained by its diminished capital position.
Previous wording
As an effort to support TIC and WPIC, PHI received no intercompany service fees from the Insurance Company Subsidiaries during 2025 and only $500,000 in the first quarter of 2026. PHI has relied significantly on proceeds from sales of assets and capital raises over the last two years in order to ensure its ability to meet its obligations as they became due.
Current wording
As an effort to support TIC and WPIC, PHI received no intercompany service fees from the Insurance Company Subsidiaries during 2025 and only $800,000 and $1.3 million for the three and six months ended June 30, 2026, respectively. PHI has relied significantly on proceeds from sales of assets and capital raises over the last two years in order to ensure its ability to meet its obligations as they became due.
Previous wording
With the anticipated go-forward revenue from TIC and the potential receipt of a $10.0 million third earnout payment, management believes the Company has the ability to meet its obligations as they become due over the next twelve months.
Current wording
With future anticipated revenue from TIC and the receipt of the fully earned $10.0 million third earnout payment by August 31, 2026, management believes the Company has the ability to meet its obligations as they become due over the next twelve months.
Previous wording
Operating Activities. Cash used in operating activities for the three months ended March 31, 2026 was $8.3 million, compared to $15.3 million of cash used in operating activities for the same period in 2025. The $7.0 million decrease in cash used in operating activities was primarily due to a $13.6 million decrease in net losses paid during the first quarter of 2026, compared to the same period in 2025. This decrease was offset by a $6.8 million decrease in net premiums collected during the first quarter of 2026, compared to the same period in 2025.
Current wording
Operating Activities. Cash used in operating activities for the six months ended June 30, 2026 was $20.2 million, compared to $18.0 million for the same period in 2025. The $2.2 million increase in cash used in operating activities was primarily due to a $5.7 million decrease in net premiums collected during the first six months of 2026, compared to the same period in 2025. In addition, there was a $467,000 increase in interest paid during the first six months of 2026, compared to the same period in 2025. These were offset by a decrease of $10.5 million of net losses paid during the first six months of 2026, compared to the same period in 2025.
Previous wording
Financing Activities. Cash provided by financing activities for the three months ended March 31, 2026 was $6.2 million compared to $7.5 million for the same period in 2025. The $1.3 million decrease in cash provided by financing activities was attributed to the $7.5 million repayment of the Series B Preferred Stock during the first quarter of 2026. This was offset by $14.0 million of common stock issued during the first quarter of 2026. The Company also paid $252,000 related to common stock issuance costs during the first quarter of 2026.
Current wording
Financing Activities. Cash provided by financing activities for the six months ended June 30, 2026 was $6.2 million compared to $7.5 million for the same period in 2025. The $1.3 million decrease in cash provided by financing activities was attributed to the $7.5 million repayment of the Series B Preferred Stock during the six months of 2026. This was offset by $14.0 million of common stock issued during the first six months of 2026. The Company also paid $261,000 related to common stock issuance costs during the six months of 2026.
Previous wording
Our Insurance Company Subsidiaries are required to file quarterly and annual financial reports with state insurance regulators. These financial reports are prepared using statutory accounting practices promulgated by the Insurance Company Subsidiaries’ state of domiciliary, rather than GAAP. The Insurance Company Subsidiaries’ aggregate statutory capital and surplus (which is a statutory measure of equity) was $51.3 million and $42.6 million at March 31, 2026 and December 31, 2025, respectively.
Current wording
Our Insurance Company Subsidiaries are required to file quarterly and annual financial reports with state insurance regulators. These financial reports are prepared using statutory accounting practices promulgated by the Insurance Company Subsidiaries’ state of domiciliary, rather than GAAP. The Insurance Company Subsidiaries’ aggregate statutory capital and surplus, which is a statutory measure of equity, was $42.7 million and $42.6 million at June 30, 2026 and December 31, 2025, respectively.
Previous wording
Adjusted operating income or loss and adjusted operating income or loss per share are non-GAAP measures that represent net income or loss excluding net realized investment gains (losses), change in fair value of equity securities and change in fair value of contingent considerations. The most directly comparable financial GAAP measures to adjusted operating income and adjusted operating income per share are net income allocable to common shareholders and net income allocable to common shareholders per share, respectively. Adjusted operating income and adjusted operating income per share are intended as supplemental information and are not meant to replace net income allocable to common shareholders or net income allocable to common shareholders per share. Adjusted operating income and adjusted operating income per share should be read in conjunction with the GAAP financial results. Our definition of adjusted operating income may be different from that used by other companies. The following is a reconciliation of net income (loss) to adjusted operating income (loss) (dollars in thousands), as well as net income (loss) allocable to common shareholders per share to adjusted operating income (loss) per share:
Current wording
Adjusted operating income or loss and adjusted operating income or loss per share are non-GAAP measures that represent net income or loss excluding net realized investment gains (losses), change in fair value of equity securities, change in fair value of contingent considerations, contingent consideration bonus expense and additional accretion of warrants from Series B Preferred Stock payoff. The most directly comparable financial GAAP measures to adjusted operating income and adjusted operating income per share are net income allocable to common shareholders and net income allocable to common shareholders per share, respectively. Adjusted operating income and adjusted operating income per share are intended as supplemental information and are not meant to replace net income allocable to common shareholders or net income allocable to common shareholders per share. Adjusted operating income and adjusted operating income per share should be read in conjunction with the GAAP financial results. Our definition of adjusted operating income may be different from that used by other companies. The following is a reconciliation of net income (loss) to adjusted operating income (loss) (dollars in thousands), as well as net income (loss) allocable to common shareholders per share to adjusted operating income (loss) per share:
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
Results of Operations for the Six Months Ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
The following table summarizes our operating results for the periods indicated (dollars in thousands):
Current report — wording carried from elsewhere
The loss ratio is the ratio, expressed as a percentage, of net losses and loss adjustment expenses to net earned premiums.
Current report — wording carried from elsewhere
The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% indicates an underwriting profit. A combined ratio over 100% indicates an underwriting loss.
Current report — wording carried from elsewhere
Premiums are earned ratably over the term of the policy, whereas written premiums are reflected on the effective date of the policy. Almost all commercial lines and homeowners products have annual policies, under which premiums are earned evenly over one year. The resulting net earned premiums are impacted by the gross and ceded written premiums, earned ratably over the terms of the policies.
Current report — wording carried from elsewhere
Our premiums are presented below for the six months ended June 30, 2026 and 2025 (dollars in thousands):
Current report — wording carried from elsewhere
Personal lines gross written premiums decreased $7.5 million, or 23.3%, to $24.6 million for the six months ended June 30, 2026, compared to $32.0 million for the same period in 2025. The decrease was due to underwriting changes that affected volume. Our main focus remains on prudent, steady growth in Texas.
Current report — wording carried from elsewhere
Commercial lines gross written premiums were essentially zero for the six months ended June 30, 2026, compared to $5.2 million for the same period in 2025. The Company's commercial lines of business are in runoff. The Company does not expect to write any commercial lines business in the near term.
Current report — wording carried from elsewhere
The tables below detail our losses and loss adjustment expenses and loss ratios in our underwriting business for the six months ended June 30, 2026 and 2025 (dollars in thousands):
Current report — wording carried from elsewhere
Our expense ratio is a measure of the efficiency and performance of the commercial and personal lines of business (our risk-bearing underwriting operations). It is calculated by dividing the sum of policy acquisition costs and other underwriting expenses by net earned premiums. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in Corporate for segment reporting purposes. The expense ratio excludes Corporate expenses. Due to the commercial lines of business being in runoff, the expense ratios for commercial lines are not deemed to be meaningful.
Current report — wording carried from elsewhere
The table below provides the expense ratio by major component.
Current report — wording carried from elsewhere
Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes and underwriting reports. The Company offsets direct commissions with ceding commissions from reinsurers. The percentage of policy acquisition costs to net earned premiums increased by 2.5% for the six months ended June 30, 2026, to 27.4%, compared to 24.9% during the same period in 2025, due to the removal of the quota share reinsurance agreement effective May 31, 2026, which had provided for more ceding commission in the second quarter of 2025 than the same period in 2026.
Current report — wording carried from elsewhere
Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums decreased by 6.9% for the six months ended June 30, 2026, to 19.7%, compared to 26.6% for the same period in 2025. The decrease in the ratio was mostly due to improved administrative cost efficiency.
Current report — wording carried from elsewhere
We measure the performance of our consolidated results, in part, based on our underwriting gain or loss. The following table provides the underwriting gain or loss for the six months ended June 30, 2026 and 2025 (dollars in thousands):