Conifer Holdings Announces Senior Notes and Executive Changes

TL;DR

Conifer Holdings issued new debt and shuffled execs on Aug 30.

AI Summary

On August 30, 2024, Conifer Holdings, Inc. entered into a material definitive agreement related to the issuance of Senior Notes due 2028. The company also completed an acquisition or disposition of assets. Additionally, there were changes in directors and officers, including the appointment of new officers and the establishment of new compensatory arrangements.

Why It Matters

This filing indicates significant corporate actions, including new debt financing and changes in leadership, which could impact the company's financial structure and strategic direction.

Risk Assessment

Risk Level: medium — The issuance of new debt and changes in executive leadership introduce potential financial and operational risks.

Key Players & Entities

• Conifer Holdings, Inc. (company) — Registrant
• August 30, 2024 (date) — Date of earliest event reported
• Nine75SeniorNotesDue2028Member (company) — Related financial instrument

FAQ

Key Financial Figures

• $45 m — mpany received initial consideration of $45 million, subject to purchase price adjust
• $25.0 million — e amount of Earn-Out Payments capped at $25.0 million. The Company used a portion of the proc
• $6.5 million — ency, Inc. The total purchase price was $6.5 million with $3.0 million paid in cash at the t
• $3.0 million — al purchase price was $6.5 million with $3.0 million paid in cash at the time of the closing
• $3.5 million — in cash at the time of the closing and $3.5 million due throughout the balance of 2024. It
• $1,270,750 — gnation, Mr. Petcoff will receive up to $1,270,750 as a performance bonus (the "Performanc
• $635,375 — ce bonus (the "Performance Bonus") with $635,375 payable within 30 days of the Closing D
• $2.5 million — r ended June 30, 2024, had fallen below $2.5 million. and because it did not satisfy the alt

Filing Documents

• ef20035326_8k.htm (8-K) — 41KB
• ef20035326_ex2-1.htm (EX-2.1) — 565KB
• ef20035326_ex99-1.htm (EX-99.1) — 7KB
• ef20035326_ex99-2.htm (EX-99.2) — 440KB
• logo.jpg (GRAPHIC) — 32KB
• 0001140361-24-040472.txt ( ) — 1412KB
• cnfr-20240830.xsd (EX-101.SCH) — 4KB
• cnfr-20240830_def.xml (EX-101.DEF) — 17KB
• cnfr-20240830_lab.xml (EX-101.LAB) — 26KB
• cnfr-20240830_pre.xml (EX-101.PRE) — 19KB
• ef20035326_8k_htm.xml (XML) — 6KB

01 Entry into Material Agreement

Item 1.01 Entry into Material Agreement. The disclosure set forth below under Item 2.01 – Completion of Acquisition or Disposition of Assets is incorporated into this Item 1.01 by reference.

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. Sale of Conifer Insurance Services, Inc. On August 30, 2024 (the "Closing Date"), Conifer Holdings, Inc., a Michigan corporation (the "Company"), completed its sale of Conifer Insurance Services, Inc., a Michigan limited liability company and wholly owned subsidiary of the Company ("CIS"), to BSU Leaf Holdings LLC, a Delaware limited liability company ("Buyer"), pursuant to the Interest Purchase Agreement, dated as of the Closing Date (the "CIS Agreement"), by and among the Company, Buyer and Buyer's parent (the "Transaction"). As a result of the sale, the Company no longer has any insurance agency operations and it expects a significant decline in revenue. In connection with the sale, the Company received initial consideration of $45 million, subject to purchase price adjustments . In addition, during the three years ending on the third anniversary of the Closing Date, the Company is eligible under the CIS Agreement to receive up to three earn-out payments (each, an "Earn-Out Payment") based on performance thresholds of the gross revenue earned by CIS in the applicable quarter, with the aggregate amount of Earn-Out Payments capped at $25.0 million. The Company used a portion of the proceeds to repay its senior secured debt obligations and redeem all outstanding shares of Series A Preferred Stock. The unaudited pro forma consolidated financial information of the Company as of and for the six months ended June 30, 2024 and for the year ended December 31, 2023, in each case giving effect to sale of CIS, is attached hereto as Exhibit 99.2. The foregoing description of CIS Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the CIS Agreement, a copy of which is filed as Exhibit 2.1 attached hereto and incorporated herein by reference. As part of the CIS Agreement there is a transition services agreement to allow both parties to share resources for a

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On September 3, 2024, the Company issued a news release announcing the completion of the sale of CIS. The news release is being furnished as Exhibit 99.1 to this Form 8-K. The information and exhibit being furnished pursuant to this Item 7.01 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section 18, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in any such filing.

01 Other Events

Item 8.01 Other Events. As previously reported, on August 16, 2024, the Company received written notice from the Nasdaq Stock Market LLC ("Nasdaq") stating that the Company no longer complied with the minimum stockholders' equity requirement under Nasdaq Listing Rule 5550(b)(1) (the "Rule") for continued listing on The Nasdaq Stock Market LLC because the Company's stockholders' equity, as reported in the Company's Quarterly Report on Form 10-Q for the second quarter ended June 30, 2024, had fallen below $2.5 million. and because it did not satisfy the alternative continued listing standards. Based on the sale of CIS, and as of the date of this Current Report, the Company believes it satisfies the Rule because it now has stockholders' equity of at least $2.5 million. Nasdaq will continue to monitor the Company's ongoing compliance with the Rule and, if the Company's next periodic report does not evidence compliance with the Rule, the Company may be subject to delisting. There can be no assurance that the Company will be able to maintain compliance with the Rule.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits 2.1 # Interest Purchase Agreement dated August 30, 2024, by and among BSU Leaf Holdings LLC, Conifer Holdings, Inc., and Bishop Street Underwriters LLC. 99.1 Press Release of Conifer Holdings, Inc., dated September 3, 2024 (furnished and not filed). 99.2 Unaudited Pro Forma Condensed Combined Financial Statements. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). # Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon its request. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONIFER HOLDINGS INC. Date: September 6, 2024 By: /s/ Brian J. Roney Name: Brian J. Roney Title: Chief Executive Officer

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View this 8-K filing on SEC EDGAR