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Basis of Presentation and Accounting Policies (As Restated) | 6 Months Ended
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Jun. 30, 2024
Basis of Presentation and Accounting Policies [Abstract] |
Basis of Presentation and Accounting Policies (As Restated) | 2. Basis of Presentation and Accounting Policies (As Restated) Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All material intercompany transactions and balances have been eliminated. These financial statements should be read in conjunction with the financial statements and notes thereto included in our 2023 Annual Report. The Consolidated Balance Sheet at December 31, 2023, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of the interim unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements and the reported amounts of revenues, claims, and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the interim periods ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ended December 31, 2024. Our 2023 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition, and liquidity. The accounting policies and estimation processes described in the 2023 Annual Report were consistently applied to the unaudited consolidated financial statements as of and for the six months ended June 30, 2024 and 2023. Discontinued Operations On May 7, 2024, NI Holdings entered into a Stock Purchase Agreement (“Purchase Agreement”) to sell its subsidiary, Westminster, to Scott Insurance Holdings, a privately owned Maryland limited liability company. Scott Insurance Holdings is affiliated with John Scott, Sr., the father of the president of Westminster, John Scott, Jr. The sale closed on June 30, 2024. The Purchase Agreement included a cash purchase price of $10,500, subject to certain post-closing adjustments, including a post-closing payment to NI Holdings for the amount by which the ending statutory surplus balance for Westminster exceeded $20,000. The expected post-closing payment from Scott Insurance Holdings, is $1,772 and has been included as an adjustment to the purchase price for the calculation of the loss on the sale of Westminster. The sale of Westminster, which represented the majority of our Commercial segment in prior periods, represents a strategic shift that will have a major effect on our operations and financial results. Therefore, Westminster will be reported as discontinued operations in the Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows for all periods presented in this Form 10-Q/A. All current and prior periods reflected in this Form 10-Q/A have been presented as continuing and discontinued operations, unless otherwise noted. For additional information see Part I, Item 1, Note 19 “Discontinued Operations” of this Form 10-Q/A. Restatement The Company is amending and restating its consolidated financial statements on this Quarterly Report on Form 10-Q/A due to errors resulting from the incorrect accounting for, and presentation of, the previously announced sale of Westminster. Specifically, the Company failed to record certain receivables on Westminster’s closing balance sheet as well as the corresponding payable for Nodak Insurance for amounts owed to Westminster related to the final settlement of the intercompany reinsurance pooling agreement after the date of sale. Failure to include this receivable in Westminster’s closing net assets and liabilities also caused an understatement of the loss on sale of discontinued operations, which also understated the Company’s total net loss. The impact of the corrections related to this error on the consolidated financial statements as of and for the three- and six-month periods ended June 30, 2024, are as follows: Consolidated Balance Sheets (Unaudited)
|  | As of June 30, 2024 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Accrued expenses and other liabilities |  | $ | 24,368 |  |  | $ | 3,386 |  |  | $ | 27,754 |
Total liabilities |  | $ | 331,537 |  |  | $ | 3,386 |  |  | $ | 334,923 |
Retained earnings |  | $ | 197,827 |  |  | $ | (3,386 | ) |  | $ | 194,441 |
Total shareholders’ equity |  | $ | 239,450 |  |  | $ | (3,386 | ) |  | $ | 236,064 |
Consolidated Statements of Operations (Unaudited)
|  | Three Months Ended June 30, 2024 |  |  | Six Months Ended June 30, 2024 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |  |  | As Reported |  |  | Adjustment |  |  | As Restated |
Loss on sale of discontinued operations, net of taxes |  | $ | (7,762 | ) |  | $ | (3,386 | ) |  | $ | (11,148 | ) |  | $ | (7,762 | ) |  | $ | (3,386 | ) |  | $ | (11,148 | )
Net loss |  | $ | (16,236 | ) |  | $ | (3,386 | ) |  | $ | (19,622 | ) |  | $ | (9,817 | ) |  | $ | (3,386 | ) |  | $ | (13,203 | )
Loss per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.77 | ) |  | $ | (0.17 | ) |  | $ | (0.94 | ) |  | $ | (0.47 | ) |  | $ | (0.16 | ) |  | $ | (0.63 | )
Diluted |  | $ | (0.77 | ) |  | $ | (0.17 | ) |  | $ | (0.94 | ) |  | $ | (0.47 | ) |  | $ | (0.16 | ) |  | $ | (0.63 | )
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
|  | Three Months Ended June 30, 2024 |  |  | Six Months Ended June 30, 2024 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |  |  | As Reported |  |  | Adjustment |  |  | As Restated |
Net loss |  | $ | (16,236 | ) |  | $ | (3,386 | ) |  | $ | (19,622 | ) |  | $ | (9,817 | ) |  | $ | (3,386 | ) |  | $ | (13,203 | )
Comprehensive loss |  | $ | (16,950 | ) |  | $ | (3,386 | ) |  | $ | (20,336 | ) |  | $ | (11,931 | ) |  | $ | (3,386 | ) |  | $ | (15,317 | )
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)
|  | As of and for the Three Months Ended June 30, 2024 |  |  | As of and for the Six Months Ended June 30, 2024 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |  |  | As Reported |  |  | Adjustment |  |  | As Restated |
Net loss |  | $ | (16,236 | ) |  | $ | (3,386 | ) |  | $ | (19,622 | ) |  | $ | (9,817 | ) |  | $ | (3,386 | ) |  | $ | (13,203 | )
Retained earnings |  | $ | 197,827 |  |  | $ | (3,386 | ) |  | $ | 194,441 |  |  | $ | 197,827 |  |  | $ | (3,386 | ) |  | $ | 194,441 |
Total shareholders’ equity |  | $ | 239,450 |  |  | $ | (3,386 | ) |  | $ | 236,064 |  |  | $ | 239,450 |  |  | $ | (3,386 | ) |  | $ | 236,064 |
Consolidated Statements of Cash Flows (Unaudited)
|  | Six Months Ended June 30, 2024 |
|  | As Reported |  |  | Adjustment |  |  | As Restated |
Net income (loss) |  | $ | (9,817 | ) |  | $ | (3,386 | ) |  | $ | (13,203 | )
Net cash flows from operating activities – loss on sale of discontinued operations |  | $ | 15,865 |  |  | $ | 3,386 |  |  | $ | 19,251 |
Total adjustments |  | $ | 43,065 |  |  | $ | 3,386 |  |  | $ | 46,451 |
The notes to the consolidated financial statements as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations have also been amended as necessary as a result of the restatements outlined above. Recent Accounting Pronouncements Adopted For information regarding accounting pronouncements that the Company adopted during the periods presented, see Item II, Part 8, Note 2 “Recent Accounting Pronouncements” section of the 2023 Annual Report. Not Yet Adopted Improvements to Reportable Segment Disclosures – In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance related to improving disclosures for reportable segments primarily through enhanced disclosures about significant segment expenses that are provided to the chief operating decision maker (“CODM”). This guidance also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of the new standard on our consolidated financial statements, which is expected to result in enhanced disclosures. Improvements to Income Tax Disclosures – In December 2023, the FASB issued guidance related to improving income tax disclosures. This guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact of the new standard on our consolidated financial statements, which is expected to result in enhanced disclosures.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent + Details
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