UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________

 

FORM 10-K

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

Commission File Number 001-37402

Till Capital Ltd.

(Exact name of registrant as specified in its Charter)

 

Bermuda (State or Other Jurisdiction of Incorporation or Organization)

Not Applicable (I.R.S. Employer Identification Number)

Crawford House

50 Cedar Avenue

Hamilton, HM11, Bermuda

(Address of Principal Executive Offices, Including Zip Code)

 

(208) 635-5415

(Registrant’s Telephone Number, Including Area Code)

 

N/A

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

______________________

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Name of each exchange on which registered
Restricted voting shares, par value $0.001		The NASDAQ Stock Market LLC

 

Securities registered pursuant to Section 12(g) of the Act: Restricted voting shares, par value $0.001

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [x]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] No [x]

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [  ]

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer  [  ]		Accelerated filer  [  ]
Non-accelerated filer  [  ]	(Do not check if a smaller reporting company)	Smaller reporting company  [x]
		Emerging growth company  [x]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [x]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [x]

 

The aggregate market value of the registrant’s restricted voting shares held by stockholders who were not affiliates (as defined by regulations of the Securities and Exchange Commission) of the registrant was $13,133,113 at June 30, 2017 based on the closing price reported for such date on the NASDAQ Capital Market.

 

As of March 29, 2018, the registrant had 3,290,884 restricted voting shares outstanding.

 

 

 

 

 

TILL CAPITAL LTD.

ANNUAL REPORT ON FORM 10-K

Year Ended December 31, 2017

 

TABLE OF CONTENTS

 

 

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 8.	Financial Statements and Supplementary Data	28
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	66
Item 9A.	Controls and Procedures	66
Item 9B.	Other Information	66
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	67
Item 11.	Executive Compensation	70
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	73
Item 13.	Certain Relationships and Related Transactions, and Director Independence	74
Item 14.	Principal Accounting Fees and Services	75
PART IV
Item 15.	Exhibits, Financial Statements, and Schedules	76
Item 16.	Form 10-K Summary	76
Signatures		77
Exhibits to Form 10-K		78

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

Certain statements in this Annual Report on Form 10-K (this “Report”) of Till Capital Ltd. (“Till,” “we,” “us,” or “our”), including statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, of this Report, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include, but are not limited to, statements and information concerning (i) the potential benefit of the acquisition of Americas Bullion Royalty Corp. (“AMB”) on April 17, 2014 (the “Arrangement”), and the potential benefits of the Arrangement, (ii) statements relating to the business and future activities of, and developments related to, Till after the date of this Report, and (iii) Till’s market position and future financial or operating performance, goals, business and investment strategies, future growth, sufficiency of sources of liquidity and funding, stock repurchases, and other events or conditions that may occur in the future.

 

Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events, or performance (often, but not always, using phrases such as “expects” or “does not expect,” “is expected,” “anticipates,” or “does not anticipate,” “plans,” “scheduled,” “forecasts,” “estimates,” “believes,” “intends,” or variations of such words and phrases or stating that certain actions, events, or results “may,” “could,” “would,” “might,” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements and are intended to identify forward-looking statements. Those forward-looking statements are based on the beliefs of our management, as well as on assumptions that such management believes to be reasonable, based on information currently available at the time such statements were made. Forward-looking statements speak only as of the date they are made, and Till assumes no duty to undertake or to update forward-looking statements.

 

By their nature, forward-looking statements are based on assumptions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed, or implied, by the forward-looking statements. Forward-looking statements are subject to a variety of risks, uncertainties, and other factors that could cause actual events or results to differ from those expressed, or implied, by the forward-looking statements.

 

In addition to the factors discussed under Part 1, Item 1A, “Risk Factors,” and elsewhere in this Report, the reader should also consider the following list of general factors that, among others, could cause Till’s actual results and financial condition to differ materially from estimated results and financial condition.

 

Factors related to the regulatory and legal environment in which Till and its subsidiaries operate:

 

•

Governmental actions, including, but not limited to, implementation of new U.S. federal and state, Bermuda, and Canada laws and regulations, and court decisions interpreting existing laws and regulations or policy provisions;

 

•

Uncertainties related to regulatory approval of insurance rates, policy forms, insurance products, license applications, dividends from insurance subsidiaries, acquisitions or divestitures of businesses, and other matters within the purview of insurance regulators;

 

•

Till is subject to the risk of possibly becoming an investment company under U.S. federal securities law;

 

•

Insurance regulations to which Till’s subsidiaries are, or may become, subject, and potential changes thereto, could have a significant and negative effect on Till’s business;

 

•

Till is an “emerging growth company” and there is no certainty that Till will be able to maintain such status or if the reduced disclosure requirements applicable to emerging growth companies will make Till’s restricted voting shares less attractive to investors; and

 

•

Adverse outcomes in litigation or other legal or regulatory proceedings involving Till, its subsidiaries, or affiliates.

 

Factors related to insurance claims and related reserves in Till’s insurance businesses:

 

•

The number and severity of insurance claims;

 

•

Changes in facts and circumstances affecting assumptions used in determining loss and loss adjustment expense (“LAE”) reserves, including, but not limited to, the number and severity of insurance claims, changes in claim handling procedures, and closure and development patterns;

 

 

•

The impact of inflation on insurance claims, including, but not limited to, the effects on personal injury claims and property claims;

 

•

Developments related to insurance policy claims and coverage issues, including, but not limited to, interpretations or decisions by courts or regulators that may govern or influence losses incurred;

 

•

Orders, interpretations, or other actions by regulators that impact the reporting, adjustment, and payment of claims; and

 

•

Changes in the pricing or availability of reinsurance, or in the financial condition of reinsurers, and amounts recoverable therefrom.

 

Factors related to Till’s ability to compete:

 

•

Changes in ratings by rating agencies of Till and/or its insurance company subsidiaries with regard to credit, financial strength, claims-paying ability, and other areas on which those entities are or may be rated;

 

•

The level of success and costs incurred in realizing or maintaining economies of scale, implementing significant business initiatives, including those related to, but not limited to, expenses, claims, consolidations, reorganizations, technology, integration of acquired businesses, and divestitures of businesses;

 

•

Absolute and relative performance of Till’s products and services, including, but not limited to, the level of success achieved in designing and introducing new products;

 

•

The ability of Till to maintain availability of critical systems and manage technology initiatives cost-effectively to address insurance industry developments and regulatory requirements; and

 

•

Heightened competition, including, with respect to pricing, entry of new competitors, and alternative distribution channels, introduction of new technologies, refinements of existing products, and development of new products by current or future competitors.

 

Factors related to the business environment in which Till and its subsidiaries operate:

 

•

Changes in general economic conditions, including, but not limited to, performance of financial markets, interest rates, inflation, unemployment rates, and fluctuating values of certain investments held by Till that may be thinly traded or that are subject to other market considerations;

 

•

Till’s outstanding common shares (“Till Shares”) are not widely held, and, accordingly, the market for Till Shares may be more volatile and less liquid than the securities of other publicly traded companies.

 

•

Absolute and relative performance of investments held by Till;

 

•

Investments in junior and intermediate resource companies that may have a significantly higher degree of volatility risk than other types of investments;

 

•

Changes in insurance industry trends and significant industry developments;

 

•

Changes in consumer trends and significant consumer or product developments;

 

•

Changes in capital requirements, including the calculations thereof, used by regulators and rating agencies;

 

•

Regulatory, accounting, or tax changes that may affect the cost of, or demand for, Till’s products, services, or after-tax returns from Till’s investments;

 

•

Changes in distribution channels, methods, or costs resulting from changes in laws or regulations, lawsuits, or market forces;

 

 

•

Increased costs and risks related to cybersecurity and information technology, including, but not limited to, identity theft, data breaches, and system disruptions affecting services and actions taken to minimize the risks thereof; and

 

•

Failure to maintain the security of personal data that may result in lost business, reputational harm, legal costs, and regulatory penalties.

 

Other risks and uncertainties described from time to time in Till’s filings with the U.S. Securities and Exchange Commission (“SEC”):

 

Till cannot provide any assurances that the results contemplated in any forward-looking statements will be achieved, or will be achieved in any particular timetable, or that future events or developments will not cause such statements to be inaccurate. Till assumes no obligation to correct or update any forward-looking statements publicly for any changes in events or developments or in Till’s expectations or results subsequent to the date of this Report. Till advises the reader to consult any further disclosures Till makes on related subjects, if any, in its filings with the SEC.

 

 

 

 

 

 

 

PART I

 

Item 1. Business

 

In this Report, unless otherwise specified, all dollar amounts are expressed in United States dollars (“US$” or “$”) and any references to “Cdn$” and “Canadian dollars” are to the lawful currency of Canada. All references to “Till Shares” refer to Till’s restricted voting shares, par value $0.001.

 

Our Corporate History

 

Till Capital Ltd. was incorporated under the laws of Bermuda on August 20, 2012 under the name Resource Holdings Ltd. On March 19, 2014, we changed our name to Till Capital Ltd. in accordance with our bye-laws and Section 10 of the Bermuda Companies Act 1981, as amended (the “Companies Act”). Till Capital Ltd. is an exempted holding company with its principal place of business and registered office at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda, U.S. telephone number (208) 635-5415. Our registered agent is Compass Administration Services, Ltd.

 

On April 17, 2014, we acquired Americas Bullion Royalty Corp. (“AMB”) in a reverse takeover by way of a plan of arrangement (the “Arrangement”) under the British Columbia Business Corporations Act. Prior to the Arrangement, AMB was an exploration and development junior natural resource and mining company with royalty and exploration property holdings, and Till was an exempted holding company with no operations. Following completion of the Arrangement, we began to transition our business to primarily conduct reinsurance business through Resource Re Ltd. (“RRL”), our wholly-owned Bermuda-based subsidiary (a Class 3A insurance company in Bermuda). In support of that transition, through the Arrangement, we acquired an investment portfolio of cash, marketable securities, and illiquid securities from Kudu Partners L.P. (“Kudu”).

 

On May 15, 2015, Till acquired all of the issued and outstanding shares of Omega Insurance Holdings Inc. (“Holdings”), a privately held company based in Toronto, Canada, including its subsidiaries, Omega General Insurance Company (a fully licensed insurance company) (“Omega”) and Focus Group Inc. (“Focus”).

 

In the third quarter of 2017, Till initiated a plan to sell Holdings, including its subsidiaries, Omega and Focus. As a result of that decision, pursuant to U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), Holdings is required to be classified as held for sale and is also required to be considered a discontinued operation. However, during the potential sale process, Holdings, Omega, and Focus each continues to operate as a normal operation of Till.

 

Our Corporate Organization Chart

 

The following chart sets forth Till’s corporate structure as of March 29, 2018.

 

 

 

 

Our Business

 

Following completion of the Arrangement, we transitioned our business to primarily conduct reinsurance business through RRL, a wholly-owned subsidiary. In 2015, Till began the transition out of various investments in the natural resource sector. We also expanded into the insurance business through the acquisition of Holdings.

 

In the third quarter 2017, Till initiated a plan to sell Holdings. Till's management and Board of Directors believe the sale of Holdings will better position Till's operations for the benefit of its shareholders through other investments that include the possible financing of reinsurance contracts at RRL and other investments. Till has engaged an investment adviser to facilitate the sale of Holdings. There can be no assurance that the process will result in any transaction.

 

Overview of Insurance and Reinsurance Business

 

Insurance

 

Insurance is a business arrangement in which an insurance company agrees to indemnify another company or individual against the expenses associated with events that are unpredictable in advance with respect to their realization and/or their time of occurrence. The insurer charges a “premium” to the insured to cover its expected costs of the indemnity, including all expenses associated with the processing of covered claims, plus a margin for the insurer’s overhead costs, general and administrative (“G&A”) expenses, and profit. The premiums are determined by multiple factors, including actuarial estimates of the expected claims, the insurer’s overhead costs and G&A expenses, market conditions, and an assumed profit margin. Since there is generally some passage of time between when premiums are received and claim expenses are incurred, the premiums are typically invested in risk-appropriate securities to provide an investment return on insurance-related capital. The insurer profits when the composite premiums charged, combined with the insurer’s investment gains, exceed the insurer’s composite expenses. In the case that the latter composite expenses are larger than the composite premiums and investment income and gains, the insurer sustains a loss.

 

There are many different risk categories of insurance, having variable degrees of risk. In general, the spectrum of risks ranges from those having to do with events of higher frequency but lower severity, where claim expenses tend to be rather predictable, as compared to those having to do with infrequent and less predictable events that may have extreme claim costs when losses occur. The latter class of insurance is often denoted as “catastrophic” coverage. In general, the more predictable the claim costs and expenses are, the more stable the expected required reserve and related allocation of capital.

 

 

The insurance industry is highly-regulated, with specific licensing required for each class of insurance written. Insurance regulators monitor the fiscal performance of insurance companies under their charge and, in the U.S., Canada, and Bermuda, require those insurers to maintain certain levels of statutory capital and surplus. In addition, various regulators require company-specific calculated risk-based capital levels. Insurance regulators also establish limitations on the types of investments allowed in an insurer’s investment portfolio to minimize exposure to potential market losses. In combination with competitive pressures, those regulations and requirements result in the insurance industry being driven by the type of insurance being written, with the volatility in the expected returns generally being the lowest for higher-frequency, lower-severity classes of insurance, and the highest for catastrophic coverage.

 

Reinsurance

 

Reinsurance is an arrangement whereby one insurance company, the “reinsurer,” agrees to indemnify another insurance company, the “cedent,” for all or a portion of the insurance risks underwritten by the cedent. Reinsurance can benefit a cedent in a number of ways, including reducing exposure on individual or multiple risks, providing catastrophe protections from large or multiple losses, and providing surplus relief to assist the cedent in maintaining or managing its capital and surplus risk exposure. Reinsurance can also be used to help provide a cedent additional underwriting capacity by assuming all or a portion of the cedent’s contract risk through fronting and quota-share reinsurance arrangements that may permit the cedent to accept larger risks and/or to underwrite a greater number of risks without a corresponding increase in its capital.

 

Reinsurance is generally written on a treaty or facultative basis. Treaty reinsurance is an agreement whereby the reinsurer assumes a specified portion or category of risk under all qualifying policies issued by the cedent during the term of the agreement, usually one year. When a reinsurer writes reinsurance on a treaty basis, the reinsurer does not re-underwrite each individual risk and generally accepts the original underwriting decisions made by the cedent. Treaty reinsurance is typically written on either a proportional or excess of loss basis. A proportional reinsurance treaty is an arrangement whereby a reinsurer assumes a predetermined proportional share of the premiums and losses attributable to a specific book of business. An excess of loss treaty is an arrangement whereby a reinsurer assumes losses that exceed a specific retention of loss by the cedent. Facultative reinsurance, on the other hand, is underwritten on a risk-by-risk basis that allows the reinsurer to determine the pricing for each exposure.

 

A period of time, sometimes significant, normally elapses between the receipt of reinsurance premiums and the payment of reinsurance claims. While premiums are generally payable to the reinsurer at inception of the underlying coverage, claim payments typically occur later. The related claim process, generally, begins with the occurrence of an event causing an insured loss followed by (i) the reporting of the loss by the insured to its broker or agent; (ii) the reporting by the broker or agent to the insurer; (iii) the reporting by the insurer/cedent to its reinsurance intermediary or agent; (iv) the reporting by the reinsurance intermediary or agent to the reinsurer; (v) the cedent’s adjustment and payment of the loss; and (vi) the payment to the cedent by the reinsurer. During that elapsed time period, reinsurers generally are able to invest premiums pursuant to their investment management strategy to earn investment income along with net realized and unrealized investment gains and losses on investments.

 

Summary of Our Reinsurance and Insurance Business

 

RRL

 

RRL’s business strategy is to offer reinsurance coverage to a select group of insurance companies, e.g., captive insurers, privately-held insurers, and other global insurers and reinsurers. In addition to more traditional investments, RRL has an investment approach, ancillary to the reinsurance business, that includes alternative asset strategies.

 

Till may conduct certain reinsurance business through its wholly-owned subsidiary, RRL. RRL was incorporated in Bermuda in August 2012 and licensed as a Class 3A insurance company by the Bermuda Monetary Authority (“BMA”) in August 2013. Certain of the conditions of that license are summarized as follows:

 

•

RRL is to, at all times, meet and maintain the relevant solvency margin(s), liquidity, and other ratios applicable under Bermuda law;

 

•

Without obtaining the prior written approval of the BMA, RRL is not to:

 

•

Write any “long- term” business, as such expression is understood in Bermuda’s Insurance Act of 1978, as amended and its related regulations (the “Insurance Act”);

 

•

Enter into any contracts of retrocession other than with Multi-Strat Re Ltd., a Class 3A Bermuda insurance company; and

 

 

•

Declare and/or pay any dividends and/or make any capital contributions to RRL’s parent, shareholders, or affiliates.

 

RRL entered into its initial reinsurance contracts effective December 31, 2014 through Multi-Strat Re Ltd. (“Multi-Strat Re”). Those initial reinsurance contracts were novated in September 2015 and RRL currently has no reinsurance contracts in force. In the future, RRL may participate in reinsurance contracts using the Multi-Strat Re platform to underwrite medium- to long-term property and casualty business, as acceptable opportunities are identified.

 

RRL Reinsurance Business

 

RRL’s may offer property and casualty insurers the opportunity to cede a proportionate amount of their insurance risk with the objectives of achieving an underwriting profit and retaining most of the investment returns on the related premium- and reserve-related liability investment float. RRL may also underwrite loss portfolio transfers of prior business written by an insurer to provide adverse development protection. However, the downside risks on loss portfolio transfers are to be contractually capped relative to the premium collected.

 

Reinsurance Strategy

 

RRL has been a party to a quota-share retrocession agreement (the “Retrocession Agreement”) and a master services agreement (the “MSA”), collectively, the “Multi-Strat Agreements”, with Multi-Strat Re in respect of the reinsurance arrangements. Under the terms of the Multi-Strat Agreements, Multi-Strat Re is expected to assume risks from insurers, reinsurers, and captive insurers. Multi-Strat Re will, in turn, retrocede all of its premiums and risks to its pool of subscribing reinsurers, including RRL and reinsurers similar to RRL, based on the individual subscribing company’s acceptance of its subject risks and relative level of equity capital and appetite for reinsurance risks.

 

As part of its participation in the Multi-Strat Re program, RRL incurs two types of expenses in connection with its reinsurance underwriting, namely, (i) initial payments for sourcing premiums, including, but not limited to, brokerage, commissions, expert opinions, taxes, and pre-underwriting audits, and (ii) ongoing payments for claims handling and risk monitoring of business underwritten, including, but not limited to, audits, technical accounting and reporting, collateral administration, and underwriting renewals. Multi-Strat Re charges each reinsurer a retrocession commission on any premium at the time of binding and an annual administration fee for servicing the business underwritten. Multi-Strat Re also charges a performance fee based on the difference between the targeted underwriting profitability and the actual underwriting profitability, payable when the reinsurer is no longer at risk.

 

Annually, RRL may opt to maintain or increase the portion of its capital committed to the Multi-Strat Re program or withdraw from the program. If RRL elects to withdraw from the program, Multi-Strat Re is to consider, but is not obligated to, reallocate RRL’s portion of the reinsured book to the other Class 3A reinsurers, including other Multi-Strat Re participating reinsurers, provided that those other Class 3A reinsurers have the capacity and willingness to accept any such reallocation.

 

Under the MSA, Multi-Strat Re remains obligated to service the business underwritten and RRL remains obligated to pay the administrative servicing fee to Multi-Strat Re. Once RRL has hired senior staff, RRL may elect to continue to do business with Multi-Strat Re in conjunction with initiating its own insurance or reinsurance underwriting or RRL may ultimately withdraw from new business under the Multi-Strat Re program consistent with the Retrocession Agreement.

 

Underwriting

 

For all insurance business that is accepted by RRL from Multi-Strat Re, RRL relies on Multi-Strat Re to fulfill the role of underwriter for that business by adhering, at a minimum, to the underwriting guidelines set forth in the MSA.

 

The types of non-acceptable risks and exposures that RRL will not underwrite include, but are not limited to, (i) war and civil risks, (ii) nuclear risks, (iii) windstorms, earthquake, flood, and terrorism risks, (iv) cybersecurity exposures, (v) asbestos and environmental risks, and (vi) master policies issued to a risk group, association, or an organization that solicits its members under a mass marketing program. However, excluded risk exposures of an incidental nature may be included in business to be underwritten. RRL does not intend to underwrite life or health insurance.

 

Premium Payments

 

Premiums on business assumed by RRL are paid directly to an account in the name of Multi-Strat Re, to its agents in a fiduciary capacity, or into collateral accounts. Multi-Strat Re may not use those premiums except for certain purposes as specified in the MSA.

 

 

Claims Handling

 

All claim billings are reviewed to ensure that the billings are covered by the terms and conditions of the reinsurance agreements (period of coverage, limits, etc.). As a reinsurer, RRL does not intend to handle claims directly, but will retain the right to audit the cedent’s handling of claims.

 

Security and Funding

 

Every insurance obligation placed through the Multi-Strat platform by RRL is required to be collateralized to the aggregate limit reinsured by RRL using either Reinsurance Trust Agreements (“RTAs”) or Letters of Credit (“LOCs”) from banks rated “A-” or better.

 

Regulatory Considerations - Solvency II

 

Bermuda has been awarded full equivalence for commercial insurers (which criteria includes Class 3A insurers) under Europe’s Solvency II regime applicable to insurance companies, which regime came into effect on January 1, 2016. As a Class 3A insurance company, RRL is required to comply with Solvency II.

 

Solvency II is a European-based regulatory frame-work for regulation of the insurance industry, the key objectives of which are to (i) improve consumer protection by ensuring a uniform and enhanced level of policyholder protection across the European Union, (ii) modernize the insurance regulatory focus from compliance monitoring and capital to evaluating insurers’ risk profiles and the quality of their risk management and governance systems, (iii) increase harmonization of the various country regulatory regimes, and (iv) establish a regulatory framework that includes not just capital concerns, but a more comprehensive program of regulatory requirements for insurers, including licensing/authorizations, corporate governance, supervisory reporting, public disclosure, risk assessment and management, as well as the establishment of solvency and reserving criteria.  In summary, the Solvency II focus is comprised of three “pillars” that include financial requirements, governance and supervision, and reporting and disclosure.

 

Ratings

 

RRL may in the future apply for a rating from an insurance industry rating company, e.g., A.M. Best Company (“A.M. Best”), a company that provides credit ratings services for the insurance industry. If such a rating is obtained, RRL will strive to maintain capital levels consistent with an “A-” or better rating. There is no guarantee that such a rating will be obtained by RRL. Debt may be used as deemed prudent, consistent with maintaining such rating, though, in general, RRL expects to utilize a less leveraged asset mix than that used by many of its peers.

 

Holdings

 

Holdings Background

 

On May 15, 2015, Till completed the acquisition of Holdings, a privately-held insurance holding company domiciled in Toronto, Canada and its wholly-owned subsidiaries, Omega and Focus. In the second quarter of 2015, Till reported the purchase price of $14,062,970, an amount that represented 1.2 times Holdings’ book value as of the closing date, and included $751,880 for pending insurance transactions in process at the time. All payments were subject to a 5% hold-back to be paid to Holdings' shareholders based on Omega’s 2015 operating results, and adjusted to give effect to any adverse development above 10% in loss reserves as calculated from the closing date until December 31, 2015. One of the two pending insurance transactions was closed in the third quarter of 2015 and the other one was closed in October 2015. The final amount for the two pending insurance transactions was $730,994. Accordingly, the final purchase price for Holdings was approximately $14,042,000.

 

Holdings was incorporated in January 2004 under the Ontario Business Corporations Act. In September 2004, Holdings began operations by incorporating a wholly-owned subsidiary insurance company, Omega, under the Insurance Companies Act (Canada). In September 2004, Holdings acquired all of the assets and liabilities of Focus, an Ontario corporation, through the purchase of all of its outstanding shares. Focus was formed in 1985 and has been providing management and consulting services to the insurance industry for over 30 years. Focus also has significant experience and expertise in managing the operations of foreign insurance companies that want to operate in Canada without establishing a fully-staffed Canadian operation. Omega and Focus have two main target markets:

 

•

Managing “run-off” business of insurance companies that have decided to exit the Canadian market, in whole or in part. Omega and Focus provide operational services to facilitate the exit of those companies and the management of the financial and legal obligations of that business on a continuing basis, while being able to repatriate their surplus capital in a more-timely manner.

 

 

•

Providing those insurers that want to access the Canadian market an ability to do so in an efficient manner, through customized fronting arrangements and other means.

 

In October 2004, Omega received its order to commence insurance business from the Office of the Superintendent of Financial Institutions (“OSFI”), an independent agency of the Government of Canada. Omega is authorized to write all classes of insurance, other than life insurance, subject to the limitation that, in the case of policies that fall within classes other than property and liability, insurance approval has to be obtained from OSFI. At December 31, 2017, Omega was licensed in all provinces and territories in Canada. Omega’s insurance business focuses on property and casualty insurance. Omega earns income from underwriting insurance and reinsurance risks and fees from managing insurers in run-off.

 

Focus provides management services to Omega. Focus also has chief agency contracts with three foreign insurers and management contracts with two foreign insurers. Focus also provides ongoing and one-time consulting services in the areas of taxation, risk management, mergers and acquisitions, expert witness testimony, and claim reviews.

 

As a participant in the Canadian insurance industry, Omega is subject to significant regulations enacted by the Canadian federal and provincial governments, including capital and solvency standards, restrictions on certain types of investments, and periodic market conduct and financial examinations by regulators. Omega is a property and casualty insurance company that is regulated by OSFI. Omega has established procedures and controls to gain reasonable assurance that it is in compliance with all relevant laws, rules, and regulations.

 

Omega

 

Omega’s revenue is from three sources, namely, (i) premiums on portfolio transfer transactions and fees related to managing Canadian branch offices in “run off,” (ii) assumption reinsurance, including servicing fees in certain transactions, and (iii) premiums on direct insurance business. To manage its risk exposures, Omega purchases reinsurance for both its portfolio transfer and direct insurance businesses.

 

As a reinsurer, Omega provides assumption reinsurance to insurance companies that want to exit the Canadian market, and to insurance companies that want to transfer of all their remaining claim liabilities on particular books of business. Those arrangements are commonly referred to as “run-off” or “loss portfolio transfer” assumption business. Omega also provides support services on assumed risks.

 

Omega’s business also includes acting as the primary insurer, direct writer, for insurance companies seeking Canadian business, but lacking the appropriate Canadian insurance licenses. In that capacity, Omega acts as the direct writer, or fronting company, for a specific insurance company, and Omega typically will cede most or all of that direct, fronted, business to that insurer. Omega remains contingently liable for the payment of losses on such fronted business. Omega’s principal income on fronting business is a fee for the management of the business in Canada. If Omega retains any of that fronting business, Omega also retains a portion of the premium and retains the insurance risk on the portion retained by Omega. That business generally requires customized contractual arrangements to address the unique aspects of those markets and to define the specifics of the coverage. Omega tends to write Canadian insurance business that is non-traditional, also known as “boutique” insurance, where there are fewer competitors. Those classes of insurance typically require more extensive research regarding the insurance risks, as there may be less generally-available loss-related data on those non-traditional types of business.

 

Relationship between RRL and Omega

 

RRL and Omega are wholly-owned insurance subsidiary companies of Till, but operate independently of each other and maintain their distinct legal and governance structures.

 

Our Competitive Strengths

 

Till believes it is well positioned to take advantage and leverage potential opportunities in its businesses due to Till’s insurance and investment capabilities, and its ability to leverage the resources of its business partners. Those strengths include:

 

Industry Expertise

 

Till has internal resources that are strong in investment management and insurance operations, including, among others, product development, underwriting, claims management, reinsurance, and financial management. In addition, through the leveraging of our outside service providers, including actuarial, claims management, the Multi-Strat platform, and select investment advisors, Till is well positioned to actively monitor and manage our assets and liabilities as a whole, matching cash flows to produce a resilient business portfolio to optimize our long-term performance.

 

 

Development of Tailored Solutions for Clients

 

Our focus is on developing tailored solutions to best address our clients’ insurance and reinsurance needs. By delivering individualized solutions to cedents and insureds, we expect to attract new business and to structure arrangements that may be more advantageous to both our clients and us.

 

Investment Strategy

 

Till Management Company (“TMC”), a wholly-owned subsidiary of Till, oversees Till’s investment strategy and serves as an investment advisor to Till, RRL, Holdings, and Omega.

 

Till’s primary investments are its 100% ownership of RRL and Holdings, and ownership of mineral properties and mining royalties. Till may pursue acquisitions of other companies in the insurance industry or other sectors, but does not have any plans to do so at this time. Till’s investment strategy is designed to not only meet the regulatory requirements of RRL’s and Omega’s insurance business, but to also research investments that provide opportunity to leverage those investments with higher risks to benefit Till’s overall business and shareholder returns.

 

RRL’s Investment Guidelines

 

RRL’s investment policy is intended to achieve the highest portfolio yields consistent with its overall objectives, strategy, and parameters, including the maintenance of adequate liquidity to reasonably meet its obligations and liabilities. Those objectives take into account the “prudent person” objective of balancing a reasonably high and stable growth rate while avoiding undue risk of loss.

 

It is the responsibility of RRL’s investment advisor(s) to provide guidance and/or instructions for the purchase or sale of securities for RRL with accredited, reputable, and reliable brokers/traders/custodians in the investment community. All transactions are to be promptly and accurately recorded as they occur and appropriate reports are to be submitted to RRL by the advisors for review.

 

All investment transactions, along with the investment performance and adherence to RRL’s investment policy, are reviewed by the Board of Directors of RRL, or its designee, on a regular basis to ensure compliance with that investment policy and Bermudian laws and regulations.

 

At least annually, all RRL officers, advisors, and any others associated with the investment function confirm to the Board of Directors of RRL that they have no conflict of interest and undertake not to engage in any activity pursuant to the investment function that could produce a potential conflict of interest.

 

RRL reviews its investment portfolio together with its reinsurance operations on a periodic basis with its advisors to ensure that RRL has sufficient capital to withstand modeled losses on either or both of its investment and reinsurance portfolios.

 

RRL’s Investment Portfolio

 

The following table summarizes RRL’s investment portfolio at December 31, 2017:

 

Cash	$5.3 million
Marketable securities	$0.4 million
Control position:
Silver Predator Corp.	18.3 million shares (approx. 64% ownership)
IG Copper, LLC	243,910 units (approx. 3.5% ownership)
Other holdings - Royalty rights

 

 

 

RRL’s Investment in Silver Predator Corp.

 

Following the Arrangement, RRL owned approximately 55% of the issued and outstanding shares of Silver Predator Corp. (“SPD”) and had a $4.5 million collateralized note receivable from SPD (the “SPD Collateralized Note”). On July 31, 2014, SPD completed a non-brokered private placement of 19,000,000 common shares at Cdn$0.07 per share for proceeds of Cdn$1,330,000. In April 2015, SPD issued 29,028,000 of its common shares to RRL at a value of Cdn$0.05 per share as the first payment on the SPD Collateralized Note. At December 31, 2017, RRL owned approximately 64% of SPD’s issued and outstanding common shares.

 

SPD has historically been engaged in exploring for and developing economically viable silver, gold, and tungsten deposits in Canada and the United States, with a focus on Nevada and Idaho. SPD’s two core properties were the Springer tungsten mine and mill in Pershing County, Nevada (the “Springer Property”) and the Taylor mine and mill near Ely, Nevada (the “Taylor Property”). SPD also owns the Copper King property near Coeur d’Alene, Idaho, the Cornucopia property in Elko County, Nevada, and several additional properties in Nevada. SPD is not currently engaged in any mining or exploration activities; however, a drill program for its Copper King property is being considered for 2018.

 

In January 2017, SPD transferred 100% of its ownership of the Springer Property to RRL in exchange for the full release and satisfaction of the SPD Collateralized Note. The balance of that SPD Collateralized Note, at the date of transfer to RRL, amounted to $3.97 million. Following that transfer, RRL distributed 100% of its ownership of the Springer Property to its parent company Till Capital. The Springer Property is currently owned by Till's wholly-owned subsidiary Golden Predator US Holding Corp. ("GPUS").

 

Taylor Property

 

SPD owns a 100% interest in the Taylor Property, a gold and silver mining and mill project site located in White Pine County, Nevada, 17 miles south of Ely, Nevada. The property consists of 130 unpatented and patented lode claims and five unpatented mill site claims totaling approximately 2,166 acres, subject to a 2% net smelter royalty and a 1% net profits royalty. The Taylor Property was a high-grade underground silver producer during the late 1880s, and again in the 1960s. The most significant production history occurred from 1981 to 1984, when its then owner produced over five million ounces of silver from several open pits. The mine closed due to low silver prices, leaving significant current resources pre-stripped in close proximity to the existing mill. The mill opened again in 1989 to process ore from a nearby gold mine and continued in operation until 1991 when the nearby mine closed. To restart mining and production at the mine and mill, SPD will need to either modernize and expand the existing mill or build a new mill and design and build a new tailings facility. SPD will also need to conduct further exploration of the property to identify mineral reserves. SPD did not conduct any significant exploration on the Taylor Property in 2015, 2016, or 2017.

 

In April 2017, SPD entered into an option agreement (the “Taylor Agreement”) with Montego Resource Inc. (“Montego”) pursuant to which Montego has the right to acquire the Taylor Property from SPD.

 

Under the terms of the Taylor Agreement, Montego can acquire the Taylor Property in consideration for the completion of a series of cash payments totaling $1,200,000, issuing 2,500,000 common shares of Montego to SPD, and incurring expenditures of at least $700,000 on the Taylor Property. Upon completion of the payments, share issuances, and expenditures, Montego will hold a 100% interest in the Taylor Property, subject to a 2% net smelter returns royalty ("NSR") and a 1% net profit royalty that will be retained by SPD.

 

The payments, share issuances, and expenditures must be completed in accordance with the following schedule:

 

•

At Closing: $200,000 cash and 500,000 common shares

•

6 months from Closing: $100,000 cash and 300,000 common shares

•

12 months from Closing: $200,000 cash and 400,000 common shares and expenditures of $100,000

•

24 months from Closing: $300,000 cash and 500,000 common shares and expenditures of $250,000

•

36 months from Closing: $400,000 cash and 800,000 common shares and expenditures of $350,000

 

The closing occurred on April 20, 2017 on which date SPD had received $200,000 cash and 500,000 common shares of Montego initially valued at $156,309. On October 19, 2017 SPD received $100,000 cash and 300,000 common shares of Montego initially valued at $45,655 for the second installment from Montego on the Taylor Agreement.

 

Omega’s Investment Guidelines

 

Omega’s investment policy is intended to achieve the highest portfolio yields consistent with its overall objectives, strategy, and operational parameters, including the maintenance of adequate liquidity to reasonably meet its obligations and liabilities and regulatory guidelines. Those objectives take into account the “prudent person” objective of balancing a reasonable and stable income stream while avoiding undue risk of loss.

 

 

It is the responsibility of Omega’s Chief Executive Officer, or other persons so designated, to provide guidance and/or instructions for the purchase or sale of securities for Omega with accredited, reputable, and reliable investment advisors and brokers/traders in the Canadian and U.S. investment community, and to use a reputable Canadian custodial firm designated by Omega. All transactions are to be promptly and accurately recorded as they occur and appropriate reports are to be submitted to Omega for review.

 

All investment transactions are reviewed by Omega on a regular basis to ensure compliance with Omega’s investment policy and Canadian laws and regulations.

 

At least annually, all Omega officers, advisors, and any others associated with the investment function confirm to the Board of Directors of Omega that they have no conflict of interest and undertake not to engage in any activity pursuant to the investment function that could produce a potential conflict of interest.

 

Omega reviews its investment portfolio together with its insurance operations on a periodic basis with its advisors to ensure that Omega has sufficient capital to withstand modeled losses on either or both of its investment and insurance portfolios.

 

The following table summarizes Omega’s investment portfolio at December 31, 2017:

 

Cash and cash equivalents	$3.6 million
Canadian government term deposits and debt	$6.9 million
Exchange traded bond funds	$3.8 million

 

Springer Property

 

Until January 2017, SPD owned a 100% interest in the Springer Property, a non-operating former tungsten production facility located on the east flank of the Eugene Mountains, approximately 25 miles southwest of Winnemucca, Nevada. In addition to the former tungsten production facility, the project consists of 209 lode mineral claims, 25 placer claims, and fee lands for a total area of approximately 6,400 acres, including all mineral claims and fee lands, subject to a 2% net smelter royalty. The Springer production facility consists of a 1,360-foot vertical shaft and underground workings, a 1,200 ton per day mill with automated rod/ball mill grinding and flotation circuits, plus all water rights, and most permits necessary for operation of the facility. SPD has not conducted any significant exploration on the Springer Property for several years. As described previously, in January 2017, SPD transferred 100% of its ownership of the Springer Property to RRL. Following that transfer, RRL distributed the Springer Property to Till. Till, in turn, contributed, as capital, the Springer Property to Till's wholly-owned subsidiary GPUS.

 

In the second quarter of 2015, SPD announced its intention to realize value from assets by initiating a process to sell all, or part, of the tangible and intangible assets at some of its properties in Nevada. At that time, SPD disclosed that mining and production at the facility could be restarted with additional capital expenditures required for exploration to determine the existence of mineral reserves, modernization, and refurbishment. In 2017, Till engaged an investment adviser to facilitate the sale of the Springer Property. There can be no assurance that the process will result in any transaction.

 

Neither GPUS, nor Till, currently intend to allocate additional capital to restart mining, exploration, and production at the Springer Property.

 

Regulatory Matters

 

Bermuda Insurance Regulations

 

Bermuda Exchange Control Regulation

 

The BMA must give permission for all issuances and transfers of securities of Bermuda exempted companies like Till and RRL, unless the proposed transaction is exempted by the BMA’s written general permissions. In its policy statement, dated June 1, 2005, the BMA provides that, where any equity securities, including Till Shares, of a Bermuda company are listed on an appointed stock exchange, general permission is given for the issuance and subsequent transfer of any securities of such a company from and/or to a non-resident, for as long as any such equity securities of such company remain so listed. Till Shares are listed on the Toronto Stock Exchange-Venture (“TSX-V”) and on the NASDAQ Stock Market (“NASDAQ”); both the TSX-V and NASDAQ are deemed to be appointed stock exchanges under Bermuda law. Therefore, following the listing the Till Shares on the TSX-V, in April 2014, the general permission issued by the BMA resulted in Till Shares being freely transferable among persons who are residents and non-residents of Bermuda.

 

 

Although Till is incorporated in Bermuda, Till is classified as a non-resident of Bermuda for exchange control purposes by the BMA. Other than transferring Bermuda dollars out of Bermuda, there are no restrictions on our ability to transfer funds into and out of Bermuda or to pay dividends in currency other than Bermuda dollars to nonresidents of Bermuda who are holders of Till Shares.

 

The Insurance Act of 1978.

 

The Insurance Act and related regulations of Bermuda that regulate the insurance business of RRL provide that no person is to carry on any insurance business in or from within Bermuda unless registered as an insurer under the Insurance Act by the BMA. Under the Insurance Act, insurance business includes reinsurance business. The BMA is required by the Insurance Act to determine whether the applicant is a fit and proper body to be engaged in the insurance business and, in particular, whether it has, or has available to it, adequate knowledge and expertise. The registration of an applicant as an insurer is subject to its compliance with the terms of its registration and such other conditions as the BMA may impose from time to time.

 

The Insurance Act also imposes, on Bermuda insurance companies, various solvency and liquidity standards, auditing and reporting requirements, and grants to the BMA powers to supervise, investigate, and intervene in the affairs of those insurance companies. Certain significant aspects of the Bermuda insurance regulatory framework are set forth below.

 

RRL, like all Bermuda domiciled insurers, is required to maintain a principal office in Bermuda and to appoint and maintain a principal representative in Bermuda. Further, any registered insurer that is a Class 3A insurer or above is required to maintain a head office in Bermuda and direct and manage its insurance business from Bermuda.

 

Every registered Bermuda insurer must appoint an independent auditor who will annually audit and report on the statutory financial statements and the statutory financial return of the insurer, both of which, in the case of RRL, are required to be filed annually with the BMA. The independent auditor of RRL must be approved by the BMA and may be the same person or firm that audits RRL’s financial statements and reports for presentation to its shareholders. RRL’s independent auditor is Arthur Morris & Company Limited and has been approved by the BMA.

 

Generally, a Class 3A insurer must appoint an individual approved by the BMA to be its loss reserve specialist and annually submit an opinion of its approved loss reserve specialist with its statutory financial statements and return in respect of its loss and loss expense provisions. Ordinance Holdings Limited serves as the actuary for RRL and has been approved by the BMA.

 

A Bermuda insurer, such as RRL, has to prepare annual statutory financial statements and file a statutory financial return. The Insurance Act prescribes rules for the preparation and substance of such statutory financial statements (that include, in statutory form, a balance sheet, an income statement, a statement of capital and surplus, and notes related thereto). The insurer is required to give detailed information and analyses as regards premiums, claims, reinsurance, and investments. The statutory financial statements are not prepared in accordance with U.S. GAAP and are distinct from the financial statements prepared for presentation to the insurer’s shareholders under the Companies Act, which financial statements are to be prepared in accordance with U.S. GAAP. An insurer is required to submit the annual statutory financial statements as part of its annual statutory financial return. The statutory financial statements and the statutory financial return do not form part of the public records maintained by the BMA or the Bermuda Registrar of Companies.

 

Canada Insurance Regulation

 

Omega’s business is regulated through various federal and provincial regulators in Canada and in the provinces in which it operates. Omega’s insurance business is subject to regulation and supervision by OSFI under the Insurance Companies Act (Canada) and by insurance regulatory authorities of the provinces in which it is licensed to conduct business. That regulation and supervision is designed to protect policyholders and creditors rather than investors. Provincial insurance regulations pertain primarily to market conduct, and the authorities have latitude to effect change in the commercial operating environment.

 

OSFI has established, and monitors compliance with, required minimum capital levels and targeted capital levels for insurance companies such as Omega. OSFI also requires insurance companies, such as Omega, to establish, and adhere to, prudent investment and lending policies, standards, and procedures that are subject to certain limits. Further, there are various regulatory requirements, guidelines, and/or restrictions on dividends, capital, reinsurance, acquisitions, and divestitures that govern Omega’s business. In certain circumstances, prior regulatory approvals for certain transactions and products are required.

 

 

United States Insurance Regulation

 

Neither RRL nor Omega currently intend to do business in any jurisdiction in the United States. The insurance laws of each state of the United States and of many foreign countries regulate the sale of insurance and reinsurance within their jurisdictions by alien insurers and reinsurers, such as RRL and Omega that are organized under the laws of non-U.S. jurisdictions. RRL and Omega intend to conduct their respective business so as not to be subject to the licensing requirements of insurance regulators in the United States or elsewhere, other than their respective domicile countries, namely, Bermuda and Canada, respectively.

 

Competition

 

The insurance and reinsurance market is well established and very competitive with both mature and new companies participating in the marketplace. The market exhibits periodic cycles of soft and hard pricing that our insurance subsidiaries, RRL and Omega, consider in the underwriting of their insurance and reinsurance business.

 

Employees

 

At December 31, 2017, Till and its subsidiaries had a total of 18 full-time employees, ten employees are located in Canada and eight employees are located in the United States. There are also three part-time employees in Bermuda and one part-time employee in Canada.

 

Item 1A. Risk Factors

 

The following risks related to Till are in addition to the general risk factors set forth on pages 1-3 of this Report.

 

Insurance and Reinsurance Risks

 

•

The insurance and reinsurance markets are cyclical and we are subject to those cycles.

 

The insurance and reinsurance markets are cyclical and subject to unforeseen developments that may affect our operating results. Those developments could include trends of legal and regulatory decisions that could result in increasingly larger awards for certain types of losses, natural disasters, fluctuations in interest rates, changes in laws, changes in the investment environment that affect market prices of investments, inflationary pressures, and other events that affect the size of premiums or losses that companies and insurers experience. Prevailing market and economic conditions can affect the demand for insurance and reinsurance.

 

•

We may not be able to purchase reinsurance on favorable terms when required.

 

We may purchase reinsurance for our own account to mitigate the volatility of losses impacting our financial condition. From time to time, market conditions have limited, and in some cases have prevented, insurers and reinsurers from obtaining the types and amounts of reinsurance that they consider adequate for their business needs. If we are unable to purchase reinsurance on the terms we desire, we may be exposed to additional costs and/or insurance-related risks that could adversely affect our results of operations.

 

•

There are ever-changing legal and regulatory developments in the insurance and reinsurance industries that could adversely affect our business.

 

The insurance industry has experienced substantial volatility as a result of litigation, investigations, and regulatory activity by various insurance, government, and enforcement authorities concerning certain practices within the insurance industry. Those events have resulted in changes in the insurance and reinsurance markets and industry business practices. We cannot predict the potential effects, if any, that future litigation, investigations, and regulatory activity may have on the insurance and reinsurance industries that could materially affect our results of operation.

 

•

The effect of emerging claim and coverage issues on our business is uncertain.

 

As industry practices and legal, judicial, and regulatory conditions change, unexpected issues related to claims and coverage may emerge. Various provisions of our contracts, such as limitations or exclusions from coverage or choice of forum, may be difficult to enforce in the manner we intend, due to, among other things, disputes relating to coverage and choice of legal forum. Those issues may adversely affect our business by either extending coverage beyond the period that we intended or by increasing the number or size of claims. In some instances, those changes may not manifest themselves until many years after we have issued insurance or reinsurance contracts that are, or could be, affected by those changes.

 

 

•

We could face unanticipated losses from acts of terror and the continued threat of terrorism, as well as increased political instability that could have a material adverse effect on our financial condition and results of operations.

 

We could be exposed to unexpected losses on our reinsurance contracts resulting from terrorist activity, the continued threat of terrorism, and acts of civil or international hostility, both within the United States and abroad, political instability, and other politically-driven events, locally or globally. Those risks are inherently unpredictable and such events may indicate, or may result in, an increased frequency and severity of losses. It is difficult to predict the likelihood or timing of those types of events or to estimate the amount of loss that any given occurrence could cause.

 

•

Any suspension or revocation of RRL’s or Omega’s reinsurance/insurance license could materially affect our ability to do insurance and reinsurance business and to implement our business strategy.

 

RRL is licensed as a reinsurer only in Bermuda and Omega is licensed as an insurance provider only in Canada. The suspension or revocation of RRL’s or Omega’s licenses to do business as a reinsurance or insurance company in either of their respective jurisdictions, for any reason, would mean that RRL or Omega would not be able to enter into any new reinsurance or insurance contracts until the license revocation or suspension ended or until RRL or Omega became licensed in other jurisdictions.

 

•

RRL is unrated and may not be able to generate sufficient premiums to be profitable.

 

The reinsurance markets rely heavily on ratings whereby third-party rating agencies assess and rate the claims-paying ability of insurers and reinsurers based on criteria established by such rating agencies. The claims-paying ability ratings assigned by rating agencies to insurance and reinsurance companies represent independent opinions of financial strength and ability to meet policyholder obligations, and are not directed toward the protection of investors. Insured parties and brokers/intermediaries use those ratings as one measure by which to assess the financial strength and quality of insurers and reinsurers. Those ratings are often a key factor in the decision by an insured or a broker/intermediary as to whether to place business with a particular insurance or reinsurance provider. RRL may in the future apply for such a rating from A.M. Best. However, there is no guarantee that such a rating, or a rating from any rating agency, will be obtained, or that, if any such rating is obtained, it will be maintained.

 

•

Interest rates could increase significantly or we could be unable to generate sufficient investment income.

 

If interest rates move upward significantly, competitors may become more aggressive in their insurance product pricing to make up for any increase in underwriting losses with higher investment income and/or gains. Cedents could also insist on higher claims limits to compensate for the opportunity cost of investing the funds that they are using to pay premiums on products issued by RRL and Omega. RRL’s and Omega’s operating results may be adversely affected if significant changes in interest rates occur and competitive factors occur that result from such changes, e.g., product-pricing changes or reinsurance-related changes.

 

Operational Risks

 

•

Our operational structure is continually being developed and implemented.

 

We continue to develop and implement our operational structure and enterprise risk management framework, including risk exposure management, financial reporting, information technology, and internal controls, with which we conduct our business activities. There can be no assurance that the development of our operational structure or the implementation of our enterprise risk management framework will proceed smoothly or on our projected timetable.

 

•

We may not be able to recruit the quality or quantity of full-time management necessary to make us successful.

 

While outsourcing makes sense at our current size, an expansion of our business may require us to recruit additional full-time management and employees. If we are unable to do so, we could fail to grow, and our results of operations could be adversely affected.

 

•

We are reliant on key employees.

 

Various aspects of our business will depend on the services and skills of key personnel, including our Chief Executive Officer, Chief Investment Officer, and other key management personnel of Holdings. There can be no assurance that we will be able to attract and retain key personnel.

 

 

•

There are limitations in using predictive models.

 

We utilize predictive models to underwrite our insurance and reinsurance business and to calculate our reserves. Any substantial or repeated failures in the accuracy or reliability of such models could have a material adverse effect on our business, financial condition, and results of operation.

 

•

Till may require additional capital that may be unavailable when we need it.

 

Our future capital requirements depend on many factors, including our ability to establish reserves at levels sufficient to cover losses. We may need to raise additional funds through financings or curtail our growth and reduce our assets. Any equity or debt financing, if available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result.

 

•

We are subject to the jurisdiction of Bermuda work eligibility laws that may limit our ability to employ key employees.

 

We may be affected by Bermuda laws that require work permits for certain employees. Under Bermuda law, non-Bermudians (other than spouses of Bermudians) may not engage in any gainful occupation in Bermuda without an appropriate governmental work permit. Our success may depend in part on the continued services of key employees and contractors in Bermuda. A work permit may be granted or renewed after a showing that, after proper public advertisement, no Bermudian (or spouse of a Bermudian or a holder of a permanent resident’s certificate or holder of a working resident’s certificate) is available who meets the minimum standards reasonably required by the employer. If work permits are not obtained, or are not renewed, for our principal employees and contractors, we would lose their services, which event could materially affect our business.

 

•

There could be changes in the Bermuda or Canada laws and regulations that could adversely affect us.

 

Because we are organized in Bermuda, and also operate in Canada, we are subject to changes of law or regulation in those jurisdictions that may have an adverse impact on our operations, including imposition of tax liability or increased regulatory supervision. We are also exposed to changes in the political environment in Bermuda and Canada that could have an adverse impact on our operations.

 

•

Because Till currently qualifies as a “smaller reporting company,” our disclosure obligations are different than what is required for non-smaller reporting companies.

 

In addition to qualifying as an “emerging growth company,” Till currently qualifies as a “smaller reporting company”.  The “smaller reporting company” category includes companies that (i) have a common equity public float of less than $75 million or (ii) are unable to calculate their public float and have annual revenue of $50 million or less when entering the system.  A smaller reporting company prepares and files reports and registration statements with the Securities and Exchange Commission (“SEC”) using the same forms as are required for other SEC reporting companies; however, the information required to be disclosed may differ and may be less comprehensive than that required for other registrants.

 

•

As a result of the loss of our foreign private issuer status, Till currently is required to comply with the Exchange Act’s domestic reporting regime.

 

As of June 30, 2016, Till determined that it no longer qualified as a “foreign private issuer” as such term is defined in Rule 405 under the Securities Act. As a result, as of January 1, 2017, Till is required to comply with the provisions of U.S. securities laws applicable to U.S. domestic issuers, including without limitation, periodic disclosure and current reporting requirements of the Exchange Act that are applicable to U.S. domestic issuers, such as the filing of Forms 10-K, 10-Q, and 8-K that, in some cases, are more detailed and extensive than the forms Till has filed with the SEC in the past as a foreign private issuer. As a U.S. domestic issuer, Till is required to comply with the U.S. proxy rules and Regulation FD, and Till’s officers, directors, and principal shareholders are subject to the Section 16 beneficial ownership reporting and short-swing profit rules. In addition, Till is required to prepare its financial statements filed with the SEC in accordance with U.S. GAAP. As a result of such compliance with those additional securities laws, we could incur additional costs and could lose certain exemptions available to foreign private issuers.

 

•

We are exposed to foreign currency risk.

 

We are a multi-national company and have operations in Canada, Bermuda, and the United States. As a result, Till is exposed to foreign currency risk to the extent that exchange rates of foreign currencies are subject to adverse change over time. In particular, the U.S. dollar value of our foreign currency transaction settlements and the periodic conversion of the foreign-denominated earnings to U.S. dollars are each subject to foreign exchange rate movements. Consequently, the resulting impact of a movement in foreign currency exchange rates could materially and adversely affect our results of operations and/or financial condition.

 

 

Taxation Risks

 

•

U.S. holders who hold Till Shares may be subject to adverse U.S. tax consequences if Till is considered to be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes as contemplated in Section 1291 of the U.S. Internal Revenue Code (“IRC”).

 

Under Section 1291 of the IRC, a “U.S. holder” means a beneficial owner of shares of Till Shares who is, or that is, (i) a U.S. citizen or resident, (ii) a U.S. corporation, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust that it is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons, or has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

 

If Till is considered to be a PFIC, a U.S. holder who owns any Till Shares may be subject to adverse U.S. federal income tax consequences, including (i) a greater tax liability than might otherwise apply, (ii) an interest charge on certain taxes that are otherwise deferred by virtue of our non-U.S. status, (iii) recognizing gain from the sale of Till Shares as ordinary income (and potentially subject to an interest charge), and (iv) dividends received from us not constituting qualified dividend income (and therefore not eligible for the preferential rate of tax otherwise available to qualified dividend income). In such a case, U.S. holders that own an interest in Till will be required to file additional annual U.S. federal tax information returns.

 

For tax years through December 31, 2017, in general, Till would be a PFIC for a tax year if either (i) 75% or more of its income constitutes “passive income” or (ii) 50% or more of its assets (by value) produce or were held to produce “passive income,” based on the quarterly average of the fair market value of such assets. Passive income generally includes interest, dividends, and other investment income but does not include income derived in the active conduct of an insurance business by a corporation predominantly engaged in an insurance business (the “Active Insurance Company Exception”).

 

We do not believe that Till was classified as a PFIC for the tax years ended December 31, 2014, 2015, 2016, and 2017. No opinion of legal counsel or ruling from the U.S. Internal Revenue Service (“IRS”) concerning our status as a PFIC has been requested or obtained. Whether Till will be classified as a PFIC for the year ended December 31, 2017, or any prior tax years, will depend, in part, on whether Till was actively engaged in insurance activities that involved sufficient transfer of risk and whether our financial reserves were consistent with industry and regulatory standards. As such, Till can provide no assurance that it will not be deemed a PFIC for federal income tax purposes as contemplated in Section 1291 of the IRC.

 

Should Till be classified as a PFIC, a U.S. resident holder of Till Shares may be required to file an annual report with the IRS containing such information as the Treasury Regulations and/or other IRS guidance may require (e.g., IRS Form 8621). In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax.

 

If Till is classified as a PFIC, a U.S. holder may be able to mitigate certain of the adverse, or negative, tax consequences by making an election to treat Till as a “Qualified Electing Fund” or by making a mark-to-market election with respect to such U.S. holder’s ownership of Till Shares.

 

On December 22, 2017, the President of the United States signed the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act, among other things, replaces the PFIC test based on whether a corporation is predominately engaged in an insurance business with a test based on the corporation's insurance liabilities.

 

For tax years beginning after December 31, 2017, in general, Till would be a PFIC for a tax year if Till's applicable insurance liabilities constituted 25% or less of Till's assets as reported on Till's financial statement for that tax year. Applicable insurance liabilities include loss and loss adjustment expenses and certain reserves, but do not include unearned premium reserves.

 

Whether Till will be classified as a PFIC for the tax year ended December 31, 2018 or any subsequent tax years will depend, in part, on whether Till maintains applicable insurance liabilities in excess of 25% of Till's assets as reported on Till's financial statements. As such, Till can provide no assurance that it will not be deemed a PFIC for federal income tax purposes as contemplated in Section 1291 of the IRC.

 

•

Changes in U.S. federal income tax law could materially adversely affect an investment in Till Shares.

 

 

In the past, legislation has been introduced (but not enacted) in the U.S. Congress that was intended to eliminate certain perceived tax advantages of companies (including insurance companies) that have legal domiciles outside the United States but have certain U.S. connections. We are not able to predict if, when, or in what form any such legislation or guidance might be enacted or provided and whether any such legislation or guidance would have an effect on Till.

 

•

Till may be subject to U.S. federal income tax that could have an adverse effect on our financial condition and/or results of operations and on an investment in Till Shares.

 

If Till, Holdings, and/or RRL is considered to be engaged in a trade or business in the U.S., we could be subject to U.S. federal income tax and additional taxes on the portion of our earnings that are effectively connected to such U.S. trade or business. Alternatively, if Till, Holdings, and/or RRL is entitled to benefits under an applicable income tax treaty, and if such entity were considered engaged in a trade or business in the United States through a “permanent establishment” (as such term is defined pursuant to such applicable United States income tax treaty), then such entity could be subject to U.S. federal income tax on the portion of its earnings that are attributable to its permanent establishment in the U.S. If any portion of Till’s, Holdings’, and/or RRL’s earnings was determined to be subject to U.S. federal income tax, then such entity’s results of operations could be materially adversely affected.

 

Till and RRL are Bermuda companies, and Holdings is a Canadian company. We intend to manage our business so that each of these companies operates in such a manner that none of those companies should be treated as engaged in a U.S. trade or business and, thus, should not be subject to U.S. federal taxation (other than the U.S. federal excise tax on insurance and reinsurance premium income attributable to insuring or reinsuring U.S. risks and U.S. federal withholding tax on certain U.S. source investment income). However, there can be no assurance that the IRS will not contend that Till, Holdings, and/or RRL are engaged in a trade or business in the United States that would be subject to U.S. federal taxation.

 

No Till shareholder or combination of shareholders who attribute beneficial ownership to one another may hold more than 9.9% of the voting power of Till, regardless of whether any such person holds substantially more than 9.9% of the votes attaching to our issued and outstanding shares. However, if any one person, within the meaning of the IRC, owns in excess of 50% of the outstanding Till Shares, then the restriction on voting power will cease to apply. We are not able to predict what, if any, effect such an event may have on Till’s operations.

 

•

Till could become subject to Canadian federal income tax that could have an adverse effect on our financial condition and/or results of operations, and on an investment in Till Shares.

 

Till could become subject to Canadian federal income tax on its income or the income of RRL from all sources if Till and/or RRL were considered under Canadian law to be resident in Canada, or if either or both were considered to carry on a trade or business in Canada (as determined under Canadian law). Till intends to manage its business such that Canadian federal income tax would not apply to Till and/or RRL. However, there can be no assurance that the Canada Revenue Agency would agree with Till’s and/or RRL’s position. In such a case, Till and/or RRL could be subject to combined Canadian federal and provincial corporate tax on their income, and shareholder dividends paid by Till could be subject to, among others, Canadian withholding tax.

 

•

Changes to Bermuda tax policies could have an adverse effect on our financial position and/or results of operation.

 

Under current Bermuda law, Till is not subject to tax on income, profits, withholding, capital gains, or capital transfers. Furthermore, under the Exempted Undertakings Tax Protection Act 1966 (as amended), Till obtained from the Minister of Finance of Bermuda, an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain, or appreciation, or any tax in the nature of estate duty or inheritance tax, the imposition of any such tax will not be applicable to Till or our operations until March 2035.

 

•

Till, Holdings, or RRL may become subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act (“FATCA”) provisions.

 

As a general matter, FATCA was designed to require U.S. persons’ direct and indirect ownership of certain non-U.S. accounts and non-U.S. entities to be reported to the IRS. FATCA generally imposes a 30% withholding tax regime with respect to (i) certain U.S. source income (including interest and dividends) and gross proceeds from any sale or other disposition after December 31, 2018, of property that can produce U.S. source interest or dividends (“withholdable payments”) and (ii) “foreign pass-thru payments” made by foreign financial institutions (“FFIs”), or by non-financial foreign entities (“NFFEs”), after December 31, 2018 (or, if later, the date on which the final U.S. Treasury Regulations that define foreign pass-thru payments are published). Till, Holdings, and RRL intend to use reasonable efforts to avoid the imposition of a withholding tax under FATCA. There can be no certainty as to whether Till, Holdings, and/or RRL will be subject to the requirements imposed on FFIs or NFFEs under FATCA.

 

 

Other Risks

 

•

U.S. persons who own Till Shares may have more difficulty in protecting their interests than U.S. persons who are shareholders of a U.S. corporation.

 

Our bye-laws require that all shareholder suits are to be adjudicated in Bermuda and that all shareholders have to accept that condition when purchasing Till Shares. Our bye-laws also provide that shareholders waive all claims or rights of action that they might have against any director or officer for any act or failure to act in the performance of such director’s or officer’s duties, except with respect to any fraud or dishonesty of such director or officer.

 

The rights of shareholders under Bermuda law are also not as extensive as the rights of shareholders under legislation or judicial precedent in many Canadian or United States jurisdictions. Bermuda does not permit attorneys to act on behalf of clients on a contingency fee basis, so any shareholder or combination of shareholders must pay legal fees to press any grievance against us or our directors in a Bermuda court of law. Furthermore, Bermuda’s legal system requires the non-prevailing party to pay the legal fees of the prevailing party.

 

Item 1B. Unresolved Staff Comments

 

Not applicable.

 

Item 2. Properties

 

We lease office space at 13403 N. Government Way, Suite 212, in Hayden, Idaho, 50 Cedar Avenue, Hamilton HM11, Bermuda, and 34 King Street East, Suite 1200, Toronto, Ontario, Canada. In addition, see Part I, Item 1, “Business-Investment Strategy” of this Report for a description of certain properties owned by Till and our controlled subsidiary, SPD.

 

We believe that our existing properties are adequate to meet current needs and that suitable additional space will be available as needed to accommodate any expansion of operations and additional offices on commercially acceptable terms.

 

Item 3. Legal Proceedings

 

We are party to various litigation matters in the ordinary course of our business. We cannot estimate with certainty our ultimate legal and financial liability, if any, with respect to our pending litigation matters. However, we believe, based on our knowledge of such matters, that our ultimate liability with respect to those matters will not have a material adverse effect on our financial position, results of operations, or cash flows.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

 

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

 

Market Information

 

Till Shares are currently listed for trading on the (i) Toronto Stock Exchange-Venture (“TSX-V”) under the symbol “TIL” and on (ii) the NASDAQ Stock Market (“NASDAQ”) under the symbol “TIL”. The following table sets forth, for the quarterly periods indicated, the high and low sales price per Till Share as reported on the TSX-V and NASDAQ.

 

		TSX-V (Canadian Dollars)								NASDAQ (U.S. Dollars)
2017		High				Low				High				Low
4th Quarter (October 1 - December 31)		$	5.19			$	3.79			$	5.45			$	3.30
3rd Quarter (July 1 - September 30)		$	5.85			$	4.10			$	4.30			$	3.58
2nd Quarter (April 1 - June 30)		$	5.85			$	4.70			$	4.25			$	3.90
1st Quarter (January 1 - March 31)		$	5.56			$	4.95			$	4.21			$	3.91
2016
4th Quarter (October 1 - December 31)		$	5.78			$	4.15			$	4.39			$	3.87
3rd Quarter (July 1 - September 30)		$	6.00			$	3.92			$	5.00			$	3.08
2nd Quarter (April 1 - June 30)		$	5.34			$	3.88			$	4.44			$	2.98
1st Quarter (January 1 - March 31)		$	5.25			$	3.28			$	4.00			$	2.76

 

Shareholders

 

As of March 27, 2018, there were 64 shareholders of record of Till Shares. Because a number of Till Shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by those holders of record.

 

Dividends

 

Till has never declared or paid any cash dividend on Till Shares. Till currently intends to retain any earnings and does not expect to pay dividends in the foreseeable future.

 

Bermuda and Canada have restrictions as to the ability of our subsidiaries, RRL and Omega, respectively, to pay dividends to Till.

 

Recent Sales of Unregistered Securities

 

None.

 

Issuer Purchases of Equity Securities

 

None.

 

Item 6. Selected Financial Data

 

Not applicable.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Part II, Item 8, of this Report. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors, including those discussed in Forward-Looking Statements, “Risk Factors” in Part I, Item 1A, and elsewhere in this Report.

 

 

Overview

 

Till is an insurance holding company domiciled in Bermuda. Through two of Till’s wholly-owned subsidiaries, Resource Re Ltd. ("RRL") and Omega General Insurance Company ("Omega"), we provide property and casualty insurance and reinsurance. Till operates in a single segment, specifically insurance.

 

RRL, a Bermuda domiciled company, was organized to offer reinsurance coverage to a select group of insurance companies, e.g., captive insurers, privately-held insurers, and other global insurers and reinsurers. RRL entered into its initial reinsurance contracts effective December 31, 2014. Those initial reinsurance contracts were novated in September 2015. RRL currently does not have any active reinsurance contracts in force. RRL may participate in reinsurance contracts using the Multi-Strat Re platform to underwrite medium- to long-term property and casualty business, as acceptable opportunities are identified. RRL’s primary sources of income are reinsurance premiums and investment income. RRL also owns 64% of the outstanding shares of Silver Predator Corp., a Canadian-based junior mineral exploration company that has historically been engaged in exploring for and developing economically viable silver, gold, and tungsten deposits in Canada and the United States, with a focus on Nevada and Idaho. SPD is not currently engaged in any mining or exploration activities, however a drill program for its Copper King property is being considered for 2018.

 

Omega underwrites direct insurance and reinsurance business through its wholly-owned subsidiary Omega. As a reinsurer, Omega provides assumption reinsurance to insurance companies that want to exit the Canadian market, and to insurance companies that want to transfer all of their remaining claim liabilities on particular books of business; those arrangements are commonly referred to as “run-off” or “loss portfolio transfer” assumption business. Omega also is a primary insurer, direct writer, for insurance companies looking to write Canadian business, but lacking the appropriate Canadian insurance licenses. In that capacity, Omega acts as the direct writer, or fronting company, for a specific insurance company and typically will cede most or all of that fronted business to that insurer. Omega has three sources of revenue, namely, (i) premiums on portfolio transfer transactions and fees related to managing Canadian branch offices in “run-off”, (ii) assumption reinsurance, including servicing fees in certain transactions, and (iii) premiums on direct business.

 

Till’s other subsidiaries include Till Management Company (“TMC”), Golden Predator US Holding Corp. (“GPUS”), Omega Insurance Holdings, Inc. ("Holdings"), and Focus Group Inc. ("Focus"). TMC provides investment advisory and investment management services, GPUS provides personnel services, financial accounting, corporate and compliance, and other back-office support to Till and its subsidiaries, Holdings is the holding company for Omega and Focus, and Focus provides management services to Omega and consulting and management services to third-party insurers and others.

 

The discussion of Till's financial condition and results of operations that follows is intended to provide summarized information to assist the reader in understanding Till's condensed consolidated financial statements as of and for the year ended December 31, 2017, as well as to provide explanations as regards the primary factors for financial statement changes from year to year. This discussion should be read in conjunction with Till's audited consolidated financial statements that appear in Part II, Item 8. Financial Statements and Supplementary Data of this Report.

 

Assets and Liabilities Held for Sale and Discontinued Operations

 

In the third quarter of 2017, Till initiated a plan to sell its wholly-owned subsidiary Holdings, including its wholly-owned subsidiaries, Omega and Focus. Holdings was acquired by Till on May 15, 2015. Till's management and Board of Directors believe the sale of Holdings will better position Till's operations for the benefit of its shareholders including through the possible financing of reinsurance contracts at RRL and other investments.

 

Till has engaged an investment adviser to facilitate the sale of Holdings. There can be no assurance that the process will result in any transaction.

 

In accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), the assets and liabilities of Holdings have been classified as held for sale on Till's Balance Sheets and the operations attributed to Holdings have been classified as discontinued operations on Till's Statements of Income (Loss). As required by U.S. GAAP, a loss of $1,554,910 was realized in 2017 as a result of the decision to sell Holdings, including estimated costs related thereto.

 

Financial Data

 

The discussion of our financial condition and results of operations that follows is intended to provide summarized information to assist the reader in understating our consolidated financial statements, as well as to provide explanations as regards the primary factors that accounted for those financial statement changes between 2017 and 2016. This discussion should be read in conjunction with Till’s consolidated financial statements that appear in Item 8 of this Report.

 

 

Financial Highlights as of and for the Year Ended December 31, 2017 (rounded)

 

•

Total revenue was $973,000.

 

•

Expenses were $2,341,000.

 

•

Net loss was $3,828,000.

 

•

Cash and cash equivalents were $5,900,000.

 

•

Investments were $1,934,000.

 

•

Assets held for sale were $62,333,000.

 

•

Liabilities held for sale were $51,001,000.

 

•

Shareholders' equity was $22,002,000.

 

 

 

 

 

 

 

Results of Operations

 

The following table summarizes Till’s consolidated results of operations for 2017 and 2016:

 

		Year Ended December 31
		2017				2016
Revenue:
Investment income (loss), net		$	(295,020	)		$	2,373,190
Gain on sale of mineral interests and property, plant, and equipment ("PP&E")			1,217,540				369,694
Other revenue			50,000				40,000
Revenue			972,520				2,782,884
Expenses:
General and administrative expenses			1,545,691				1,698,492
Salaries and benefits			412,200				693,925
Stock-based compensation			28,096				28,839
Mining related expenses and property impairment			240,347				155,233
Foreign exchange (gain) loss			62,098				(263,514	)
Interest and other (income) expense			52,489				(26,253	)
Expenses			2,340,921				2,286,722
Income (loss) from continuing operations before loss on equity method investment and income tax (expense) benefit			(1,368,401	)			496,162
Loss on equity method investment			(84,176	)			(60,258	)
Income tax (expense) benefit			(128,972	)			244,138
Income (loss) from continuing operations			(1,581,549	)			680,042
Loss from discontinued operations
Loss from discontinued operations including loss on assets and liabilities held for sale			(1,663,218	)			(32,950	)
Income tax expense			(583,153	)			(156,552	)
Loss from discontinued operations			(2,246,371	)			(189,502	)
Net income (loss)			(3,827,920	)			490,540
Income (loss) attributable to:
Shareholders of Till Capital Ltd.			(3,736,753	)			508,244
Non-controlling interests			(91,167	)			(17,704	)
Net income (loss)		$	(3,827,920	)		$	490,540
Basic and diluted net income (loss) per share from continuing operations of Till Capital Ltd.		$	(0.47	)		$	0.20
Basic and diluted net loss per share from discontinued operations of Till Capital Ltd.		$	(0.67	)		$	(0.06	)
Basic and diluted net income (loss) per share of Till Capital Ltd.		$	(1.12	)		$	0.15

 

 

 

Consolidated Results of Operations for the Years Ended December 31, 2017 and 2016

 

Revenue

 

Investment income (loss), net

 

Investment income (loss), inclusive of net realized investment gains and losses, decreased from income of $2.4 million for 2016 to loss of $0.3 million for 2017. That decrease in net investment income (loss) was primarily due to losses related to futures trading during 2017, and large gains in natural resource investments during 2016 that did not occur during 2017.

 

Gain on sale of mineral interests and PP&E

 

Gain on sale of mineral interests and PP&E increased from $0.4 million in 2016 to $1.2 million in 2017. That increase in gain on sale of mineral interests and PP&E was due mostly to the completion of an option agreement that resulted in the sale of a mineral property during 2017 compared to smaller sales of mineral interests and PP&E during 2016.

 

Expenses

 

General and administrative expenses

 

The decrease in general and administrative expenses from $1.7 million in 2016 to $1.5 million in 2017 was primarily due to lower professional fees in 2017 as compared to 2016.

 

Salaries and benefits

 

The decrease in salaries and benefits from $0.7 million in 2016 to $0.4 million in 2017 relates principally to a 2016 one-time payment to Till's former chief financial officer.

 

Foreign exchange (gain) loss

 

The decrease in foreign exchange (gain) loss from a gain of $0.3 million in 2016 to a loss of $0.1 million in 2017 was due primarily to payments received on the Canadian dollar denominated note receivable during 2017. The foreign exchange gain in 2016 was primarily related to the Canadian dollar denominated note receivable.

 

Income tax (expense) benefit

 

The decrease in income tax (expense) benefit from a benefit of $0.2 million in 2016 to an expense of $0.1 million in 2017 was due primarily to Canadian withholding tax on non-arms-length interest payments from SPD to RRL in 2017.

 

Loss from discontinued operations

 

The increase in loss from discontinued operations from $0.2 million in 2016 to $2.2 million in 2017 was primarily due to a $1.0 million valuation loss resulting from measuring Holdings at its fair value less costs to sell at December 31, 2017, increased net insurance losses and loss adjustment expenses of $1.5 million in 2017 compared to $0.3 million in 2016, and an income tax expense of $0.6 million in 2017 primarily relating to the valuation of Holding's deferred tax assets at December 31, 2017.

 

 

Financial Condition

 

		December 31
		2017				2016
Cash and cash equivalents		$	5,899,628			$	2,020,265
Investments			1,933,610				4,061,781
Assets held for sale			62,333,450				32,769,610
Promissory note receivable			—				2,410,494
Other assets			1,116,389				2,146,344
Goodwill			2,218,634				2,980,819
Total assets		$	73,501,711			$	46,389,313
Liabilities held for sale		$	51,000,996			$	20,432,031
Accounts payable and accrued liabilities			499,016				168,001
Total liabilities		$	51,500,012			$	20,600,032
Total shareholders’ equity			22,001,699				25,789,281
Total liabilities and shareholders’ equity		$	73,501,711			$	46,389,313

 

Cash and cash equivalents and investments

 

Cash and cash equivalents ($5.9 million) and investments ($1.9 million) totaled $7.8 million at December 31 30, 2017 as compared to cash and cash equivalents ($2.0 million) and investments ($4.1 million) that totaled $6.1 million at December 31, 2016. That increase in cash and cash equivalents resulted from the receipt of payments on a note receivable and net sales of investments. The decrease in investments resulted mostly from sales of investments in the normal course of business.

 

Assets held for sale

 

The increase in assets held for sale from $32.8 million at December 31, 2016 to $62.3 million at December 31, 2017 relates to a new specialty insurance program underwritten by Omega during 2017, growth in other Omega insurance programs, and premiums written related to program renewals occurring during 2017.

 

Promissory note receivable

 

The Promissory note receivable was collected in the 2nd quarter of 2017. As such, there was no receivable at December 31, 2017 as compared to $2.4 million at December 31, 2016.

 

Other assets

 

The decrease in other assets from $2.1 million at December 31, 2016 to $1.1 million at December 31, 2017 is due primarily to a reduction in the carrying value of mineral properties resulting from the receipt of option payments and collection of a note receivable included in other assets during 2017.

 

Goodwill

 

The decrease in goodwill from $3.0 million at December 31, 2016 to $2.2 million at December 31, 2017 is primarily due to the loss realized as a result of Till's valuation of Holdings as assets and liabilities held for sale during 2017. Goodwill was reduced $1.0 million as part of the Holdings held for sale valuation, partially offset by foreign currency adjustment to goodwill in 2017.

 

 

Liabilities held for sale

 

The increase in liabilities held for sale from $20.4 million at December 31, 2016 to $51.0 million at December 31, 2017 is primarily related to Omega including a new specialty insurance program underwritten by Omega during 2017, growth in other Omega insurance programs, and premiums written related to program renewals occurring during 2017.

 

Cash Flows

 

		Year Ended December 31
		2017				2016
Net cash (used in) provided by:
Operating activities		$	(3,871,715	)		$	(6,697,839	)
Investing activities			4,593,641				10,012,013
Financing activities			3,005,253				267,652
Increase in cash and cash equivalents			3,727,179				3,581,826
Effects of foreign exchange			501,675				218,501
Change of cash in assets held for sale for discontinued operations			(349,491	)			(2,787,678	)
Cash and cash equivalents, beginning of year			2,020,265				1,007,616
Cash and cash equivalents, end of year		$	5,899,628			$	2,020,265

 

Operating activities

 

The decrease in net cash used in operating activities from $6.7 million in 2016 to $3.9 million in 2017 is primarily due to Omega's new specialty insurance program that did not exist in 2016.

 

Investing activities

 

The decrease in net cash provided by investing activities from $10.0 million in 2016 to $4.6 million in 2017 is primarily due to net proceeds from the net sale of investments of $3.1 million in 2017 compared to $10.5 million in 2016, partially offset by proceeds from the sale of mineral properties of $1.2 million in 2017 compared to $0.2 million in 2016.

 

Financing activities

 

The increase in net cash provided by financing activities from $0.3 million in 2016 to $3.0 million in 2017 is primarily due to the receipt of $2.9 million and $0.5 million on notes receivable during 2017 and 2016, respectively.

 

Critical Accounting Estimates

 

The preparation of Till’s consolidated financial statements requires judgments and estimates that may have a significant impact on its financial results. Note 3, under Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements, of this Annual Report contains a summary of Till’s significant accounting policies, most of which require the use of estimates and assumptions.

 

The information contained in Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Report includes a description of critical accounting estimates that is incorporated herein by reference.

 

Liquidity and Capital Resources

 

The information contained in Notes 20 and 21 to the Consolidated Financial Statements in Part II, Item 8, of this Report includes a description of the liquidity and capital resources that is incorporated by reference herein.

 

 

Off-Balance Sheet Arrangements

 

As of December 31, 2017, Till did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

 

Contractual Obligations

 

Not applicable.

 

Recently Issued Accounting Standards

 

The information contained in Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Report includes a description of recent accounting pronouncements, including Till’s expected dates of adoption and the estimated effects on Till’s results of operations and financial condition, and is incorporated by reference herein.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

 

 

 

 

Item 8. Financial Statements and Supplementary Data

 

Index to the Consolidated Financial Statements of Till Capital Ltd.

 

Page
Report of Independent Registered Public Accounting Firm	29
Consolidated Balance Sheets at December 31, 2017 and 2016	30
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Years Ended December 31, 2017 and 2016	31
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2017 and 2016	32
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017 and 2016	33
Notes to the Consolidated Financial Statements:
Note 1 - Nature of Operations	34
Note 2 - Basis of Presentation	34
Note 3 - Significant Accounting Policies	35
Note 4 - Assets and Liabilities Held For Sale	42
Note 5 - Promissory Note Receivable	43
Note 6 - Investments	44
Note 7 - Unpaid Losses, Loss Adjustment Expenses, and Amounts Ceded	50
Note 8 - Unearned Premiums	52
Note 9 - Deferred Policy Acquisition Costs	52
Note 10 - Property, Plant, and Equipment	53
Note 11 - Royalty and Mineral Interests	53
Note 12 - Other Assets	55
Note 13 - Accounts Payable and Accrued Liabilities	55
Note 14 - Income Taxes	55
Note 15 - Shareholders’ Equity	57
Note 16 - Income (Loss) Per Share	59
Note 17 - Discontinued Operations	59
Note 18 - Segment Data	60
Note 19 - Related Party Disclosures	60
Note 20 - Capital Management	61
Note 21 - Financial Risk Management	62
Note 22 - Quarterly Financial Information (Unaudited)	65
Note 23 - Contingencies	65

 

 

 

Board of Directors and Shareholders

Till Capital Ltd.

 

 

Opinion on the financial statements

 

We have audited the accompanying consolidated balance sheets of Till Capital Ltd. (a Bermuda corporation) and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

 

/s/ GRANT THORNTON LLP

 

We have served as the Company’s auditor since 2016.

 

Hartford, Connecticut

March 29, 2018

 

 

 

TILL CAPITAL LTD.

CONSOLIDATED BALANCE SHEETS

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

TILL CAPITAL LTD.

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

TILL CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

TILL CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

TILL CAPITAL LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

Not applicable.

 

Item 9A. Controls and Procedures

 

Disclosure Controls and Procedures

 

Till maintains a system of disclosure controls and procedures (as such term is defined under Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2017, our disclosure controls and procedures were effective.

 

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Those limitations include the possibility of human error, the circumvention or overriding of the controls and procedures, and reasonable resource constraints. Because we have designed our system of controls based on certain assumptions that we believe are reasonable as regards future events, our system of controls may not achieve its desired purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable, but not absolute, assurance of achieving their objectives.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Management’s Report on Internal Control Over Financial Reporting

 

Till’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined under Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Till’s management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017. In making that assessment, our management used the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management has concluded that Till maintained effective internal control over financial reporting as of December 31, 2017, based on the criteria established in COSO’s Internal Control – Integrated Framework (2013).

 

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Those limitations include the possibility of human error, the circumvention or overriding of the system, and reasonable resource constraints. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Item 9B. Other Information

 

Not applicable.

 

 

PART III

 

Item 10. Directors, Executive Officers, and Corporate Governance

 

Directors

 

Information regarding members of Till's board of directors is set forth in the biographies below.

 

Alan S. Danson, Chairman of the Board

Age: 78		Till Board Committees: Compensation; Corporate Governance & Nominating
Director of Till Since: August 2015		Independent Director

 

Mr. Danson is a private investor and volunteer board member of several non-profit organizations. Mr. Danson previously worked as an attorney in a Wall Street law firm, an investment banker on Wall Street, an investment manager and investment banker in Mexico City, a partner in a venture capital firm in Denver, Colorado, and an entrepreneurial manager in Colorado. He has served on boards of directors of private companies, public companies, and a regulated entity. Mr. Danson served, for 19 years, as an independent director of Founders Funds, a Denver-based family of actively managed equity mutual funds, becoming Chairman of that board in 2008. The fund family was acquired by Bank of New York Mellon and later was rolled into its Dreyfus family of funds. Between September 1995 and December 1999, Mr. Danson was an investor in and served as a board member of OptiMark Technologies, Inc., a developer of electronic markets, where he held the title of Senior Vice President and was instrumental in crafting several offering circulars and raising the company’s initial rounds of investment capital. From 1986 to 1995, Mr. Danson served as a board member and, through 1989, as President, of Integrated Medical Systems, Inc., a start-up provider of health care information and marketing services. The company was sold to Eli Lilly & Co. in December 1995. Between 1983 and 1986, Mr. Danson was a general partner of The Centennial Funds, the largest venture capital management company in the Rocky Mountain region and was active on both the fundraising and investment sides of the business. From 1972 to 1982, Mr. Danson lived and worked in Mexico, where he was a founding partner of a start-up brokerage and investment firm, Acciones y Valores de Mexico (“Accival”). He helped Accival capture and manage pension funds from Mexican subsidiaries of US companies, and also helped a variety of Mexico-based companies with their public offerings in Mexico. Accival was ultimately acquired by CitiGroup. Between 1966 and 1972, Mr. Danson worked as an investment banker on Wall Street, first for Bear, Stearns & Co. and subsequently for Wertheim & Co. He began his career as an attorney with the Wall Street law firm Winthrop Stimson Putnam & Roberts. Mr. Danson brings to the board of directors executive management and leadership skills, as well as in-depth knowledge of capital markets and financial analysis.

 

William A. Lupien, Director

Age: 76		Till Board Committees: None
Director of Till Since: June 2015		Chief Investment Officer of Till

 

Mr. Lupien has served as Chief Investment Officer of Till and Till Management Company, a wholly-owned subsidiary of Till, since April 2014. Mr. Lupien has been an innovator in the public financial markets for over 50 years. Mr. Lupien began his career at the California-based brokerage firm of Mitchum, Jones, & Templeton, Inc., a member of the New York Stock Exchange, in 1965, where he ultimately became President (1974-1980), and served as Chairman and Chief Executive Officer from 1988 to 1995. From 1980 to 1985, Mr. Lupien was also a general partner in Trading Company of the West. In 1983, as CEO and Chairman of Instinet Corporation, he successfully expanded the market reach of the world’s first electronic stock trading system. As Chairman and CEO of OptiMark Technologies Inc., he co-invented OptiMark’s patented trading system, designed for stock markets around the world. From 2005 to 2014, Mr. Lupien served as the investment manager of Kudu Partners LP. Mr. Lupien previously served on the Securities and Exchange Commission’s Advisory Committee dedicated to the development of a national market system and also served as a Governor of the Pacific Stock Exchange. He has also served as Chairman of Instinet (1983-1989), Mitchum, Jones, & Templeton (1989-1996), and OptiMark US Equities Inc. (1996-2001). Mr. Lupien’s board experience also includes serving as a Director of Energy Metals Corp., Gold One International Ltd., Midway Gold Corp., National Health Enterprises, Uranium One Inc., and Silver Predator Corp. (TSX.V: SPD), a junior mining exploration company and controlled publicly-held subsidiary of Till. He is the co-author, with Mr. David Nassar, of the book Market Evaluation and Analysis for Swing Trading, and is a co-author of several papers on trading technology and early-stage company evaluation. Mr. Lupien is also a co-inventor on multiple patents related to electronic securities trading. He is a graduate of San Diego State University and is the father-in-law of Till’s Chief Financial Officer, Brian Lupien. Mr. Lupien brings to the board of directors significant experience in the areas of leadership, business development, securities trading, and investment management and strategy.

 

 

Wayne Kauth, Director

Age: 84		Till Board Committees: Audit; Compensation; Corporate Governance & Nominating
Director of Till Since: December 2013		Independent Director

 

Mr. Kauth is a consultant on various insurance matters and has served on the board of Kemper Corporation, a New York Stock Exchange listed property and casualty and life and health insurer. Mr. Kauth is also a director of Omega Insurance Holding Inc. and Resource Re Ltd., wholly-owned subsidiaries of Till. Mr. Kauth is a retired partner with Ernst & Young LLP (“E&Y”), a multinational professional service firm where he practiced for 34 years and was the National Director of E&Y’s insurance practice in the U.S. He is currently an Accreditation Review Team Member for the National Association of Insurance Commissioners (“NAIC”). Mr. Kauth has previously served on a variety of insurance industry committees and task forces for the American Institute of Certified Public Accountants, the Illinois Society of CPAs, and the NAIC. Mr. Kauth is a Certified Public Accountant, a Certified Property and Casualty Underwriter, a Certified Life Underwriter, and a Fellow in the Life Management Institute. He holds both a BA and MBA from the University of Wisconsin. Mr. Kauth brings to the board of directors extensive, in-depth knowledge of the insurance industry, significant experience in financial statement preparation, financial reporting and analysis, governance, and risk management.

 

John T. (“Terry”) Rickard, Director

Age: 70		Till Board Committees: None
Director of Till Since: June 2015		Chief Executive Officer of Till

 

Dr. Rickard has served as Chief Executive Officer of Till since August 2016 and Interim Chief Executive Officer of Till from January 2016 to August 2016. Dr. Rickard has over 48 years of experience in advanced technology and financial organizations, all of it in management, oversight, and technology development positions. He is a Director of Till and also serves as the Director of Quantitative Research for Till Management Company, a wholly-owned subsidiary of Till, where he is responsible for designing computationally intelligent systems for automated trading and investment due diligence. He is a director of Resource Re Ltd., a wholly-owned subsidiary of Till. He is also the Chief Executive Officer and a Director of Silver Predator Corp. (TSX.V: SPD), a junior mining exploration company and controlled publicly-held subsidiary of Till. He is also the Chief Data Scientist for Meraglim, Inc., a private company in the business of global macro-economic predictive analytics. He has also served as an executive and a director at several private companies and was a director of Omega Insurance Holdings Inc., a wholly-owned subsidiary of Till. Dr. Rickard’s prior experience includes serving as President of MJT, Inc., a brokerage firm, and as President and, later, Chief Scientific Officer and a Director of OptiMark Technologies, Inc. Dr. Rickard co-invented the OptiMark transaction matching system and was instrumental in the development of that company from a start-up enterprise to an operating entity on the Pacific Stock Exchange, the Nasdaq market, and the Osaka Securities Exchange, including the securing of over $350 million in investment capital from major investors in the United States and internationally. He has authored or co-authored over 70 refereed technical publications in engineering, electronic market structure, matching algorithms, and trading strategies, and has co-authored 11 issued patents. He has served as an expert witness in multiple intellectual property litigations involving financial markets. He received the Ph.D. degree in Engineering Physics from the University of California, San Diego, in 1975, after completing B.S. and M.S. degrees in Electrical Engineering at Florida Institute of Technology in 1969 and 1971, respectively. Dr. Rickard brings to the board of directors extensive executive leadership skills and an in-depth knowledge of capital markets, investments strategies, and analytical expertise.

 

George J. Rohlinger, Director

Age: 51		Till Board Committees: Audit; Corporate Governance & Nominating
Director of Till Since: November 2016		Independent Director

 

Mr. Rohlinger is Executive Vice President of Corporate Development at Apogee Physicians where he has served since 2014. Prior to Apogee, from 2013 – 2014, Mr. Rohlinger assisted in the development of a business and capital plan that ultimately resulted in the formation of Ovation Fertility, a private-equity backed company where Mr. Rohlinger is a shareholder and an advisor to the Chief Executive Officer. From 2009 – 2013, Mr. Rohlinger was Chief Business Development Officer at OptimisCorp, a healthcare services and technology company, where Mr. Rohlinger led the successful development and launch of a software service and medical practice procedural improvements that resulted in 70% profit growth over a two-year period. Mr. Rohlinger also collectively has over 15 years of investment banking experience with involvement in transactions aggregating over $25 billion in value. Mr. Rohlinger holds a B.S. degree in Mathematics/Economics from the University of California, Los Angeles and a Master in Business Administration degree from Harvard Business School. Mr. Rohlinger brings to the board of directors extensive business development, executive leadership, and corporate finance and strategy skills.

 

Patricia M. Tilton, Director

Age: 61		Till Board Committees: Audit; Compensation; Corporate Governance & Nominating
Director of Till Since: November 2016		Independent Director

 

Ms. Tilton currently works as an independent consultant. Ms. Tilton is a Certified Public Accountant with strong professional experience in the financial industry, particularly in the insurance, mutual fund, and asset management industries. In addition to her financial expertise, she also has a strong background in operational, risk, regulatory, and governance matters. Ms. Tilton is a retired KPMG LLP Partner with over 30 years of experience in public accounting, including auditing, consulting, and forensics. Ms. Tilton retired in 2009 as a Forensics Partner and served as a Retired Partner Consultant from 2009 until 2011. Ms. Tilton currently works as an Accreditation Team Member of the National Association of Insurance Commissioners (NAIC). Ms. Tilton also serves on the Boards of Directors of Omega Insurance Holdings Inc. and Resource Re Ltd., wholly owned subsidiaries of Till, Silver Predator Corp., a junior mining exploration company and controlled publicly-held subsidiary of Till, and Thrivent Federal Credit Union. Previously Ms. Tilton was a director of Coffee House Press, Inc. a non-profit publishing company. She holds a B.S. in Accounting from Siena College. Ms. Tilton brings to the board of directors in-depth knowledge of the insurance and other financial services industries, extensive knowledge of financial statement presentation and financial reporting and analysis, governance, risk, strategy, and operational matters.

 

 

Executive Officers

 

Information regarding Till’s executive officers is set forth in the biographies below, except for Mr. Rickard, Chief Executive Officer, and Mr. William A. Lupien, Chief Investment Officer, whose biographies are presented above under “Directors”.

 

Brian P. Lupien, Chief Financial Officer

 

Mr. Lupien, 45, has been serving as Till’s Chief Financial Officer since March 2016. From April 2014 to March 2016, Mr. Lupien served as Treasurer of Till. From 2000 to April 2014, Mr. Lupien managed a private investment fund. A Certified Public Accountant, Mr. Lupien has experience in accounting and reporting responsibilities for a private investment fund and has worked as an audit manager for a variety of clients across multiple industries. A graduate of the University of California at Davis, Mr. Lupien earned his Bachelor of Science degree in 1995 majoring in Managerial Economics and gained his Certified Public Accountant designation in 2000. Brian Lupien is the son-in-law of Till’s Chief Investment Officer and director, William Lupien.

 

Weiying (“Mary”) Zhu, Treasurer and Controller

 

Ms. Zhu, 46, has been serving as Till’s Treasurer since March 2016 and as Controller of Till since April 2015. Ms. Zhu is a Certified Public Accountant (CPA) (since 1996) and Certified Treasury Professional (CTP) (since 2003) with over 20 years of experience in accounting and finance. Prior to joining Till, she served in various accounting and finance positions at Hecla Mining Company (1996 – 2015), a $1 billion market cap NYSE-listed precious metals mining company, of which 10 years was as Treasury Manager. Ms. Zhu holds a master’s degree in Accounting and a bachelor’s degree in International Finance.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Our directors, executive officers, and owners of more than 10% of Till Shares must file reports with the SEC under Section 16(a) of the Exchange Act regarding their ownership of and transactions in Till's common stock and securities related to Till's common stock. Based upon a review of these reports and inquiries we have made, we believe that all reports required to be filed by Till's directors, executive officers, and holders of more than 10% of Till Shares pursuant to Section 16(a) of the Exchange Act during 2017 were filed on a timely basis.

 

Ethical Business Conduct

 

The Board encourages and promotes a culture of ethical business conduct through communication and supervision as part of its overall stewardship responsibility. The Board has adopted a Corporate Conduct and Code of Ethics Policy (“Code”) to be followed by directors, officers, and employees of Till and its subsidiaries. The Code is also to be followed by Till’s agents, representatives, and consultants. The Board intends that it will review compliance with the Code on an annual basis until Till has grown to a size that warrants more frequent monitoring. The Code is available from the corporate governance section of our website at www.tillcap.com under the heading “Corporate—Governance”.

 

The Board encourages and promotes an overall culture of ethical business conduct by promoting compliance with applicable laws, rules, and regulations, providing guidance to directors, officers, and employees to assist them in recognizing and dealing with ethical issues, promoting a culture of open communication, honesty and accountability, promoting a safe work environment, and ensuring awareness of disciplinary action for violations of ethical business conduct. In addition, the Board, through its meetings and other informal discussions with management, encourages a culture of ethical business conduct and believes Till’s management team promotes a culture of ethical business conduct throughout Till’s operations, including through understanding and monitoring the activities of Till’s employees, consultants, and agents.

 

 

It is a requirement of applicable corporate law that directors and senior officers who have an interest in a transaction or agreement with Till promptly disclose that interest at any meeting of the Board at which the transaction or agreement is discussed and, in the case of directors, abstain from discussions and voting in respect to same if the interest is material. Those requirements are also contained in Till’s Articles of Incorporation that are made available to directors and senior officers of Till.

 

Unless otherwise previously approved by Till’s Corporate Governance & Nominating Committee, no director, officer, or employee of Till or its subsidiaries, or, to the extent practicable, any other person (or their associates) in a special relationship (within the meaning of applicable securities laws) with Till, may, at any time, purchase financial instruments, including prepaid variable forward contracts, instruments for the short sale or purchase or sale of call or put options, equity swaps, collars, or units of exchangeable funds that are based on fluctuations of Till’s debt or equity instruments and that are designed to or that may reasonably be expected to have the effect of hedging or offsetting a decrease in the market value of any Till securities.

 

Audit Committee

 

Our Board has established an Audit Committee, that is currently comprised of Wayne Kauth, Patricia Tilton, and George Rohlinger. Mr. Kauth serves as the Chairperson of the Audit Committee. The charter for the Audit Committee is available from the corporate governance section of our website at www.tillcap.com under the heading “Corporate—Governance”. The Audit Committee met four times during 2017.

 

The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. Till’s Board has affirmatively determined that all members of the Audit Committee are independent directors, as defined by NASDAQ Listing Rule 5605. Till’s Board has also affirmatively determined that all members of the Audit Committee meet the enhanced independence standards prescribed by NASDAQ Listing Rule 5605(c)(2)(A) and Exchange Act Rule 10A-3(b)(1) and that all members of the Audit Committee are “audit committee financial experts” (as defined in Item 407(d)(5) of Regulation S-K) and meet the financial sophistication requirement in NASDAQ Listing Rule 5605(c)(2)(A).

 

As described in Till’s Audit Committee charter, the Audit Committee has oversight responsibilities for, among other things, assessing the integrity of Till’s financial statements, Till’s compliance with legal and regulatory requirements, understanding Till’s accounting and financial reporting process, and the assessment of the independent auditors’ qualifications, independence, and performance of the financial statement audits. The Audit Committee meets at least quarterly, but more frequently if required.

 

Item 11. Executive Compensation

 

Overview

 

Till’s compensation policies and programs are designed to be competitive with similar companies of its size and to recognize and reward executive performance consistent with the success of Till’s business. Those policies and programs are intended to attract and retain capable and experienced people while complying with regulatory requirements. The Compensation Committee’s role and philosophy is to ensure that Till’s compensation goals and objectives, as applied to the actual compensation paid to Till’s executive officers, are aligned with Till’s overall business objectives and with shareholder interests.

 

The Compensation Committee considers a variety of factors when considering both compensation policies and programs, and individual compensation levels. Those factors include, among others, the long-range interests of Till and its shareholders, the implications of the risks associated with Till’s compensation policies and practices in light of the financial performance of Till, the overall financial and operating performance of Till, and the Compensation Committee’s assessment of each executive’s individual performance and contribution toward meeting corporate objectives.

 

One of the functions of the Compensation Committee is to assist the Board in fulfilling its responsibilities related to the compensation practices of Till’s executive officers. The Compensation Committee reviews the compensation levels, and any related recommendations for change or adjustment, of Till’s executive officers, and regularly reports to the Board regarding same. The Compensation Committee also reviews the objectives of the stock option and other stock-based compensation plans, and recommends to the Board compensation packages that consist of salaries, bonus considerations, Till’s Stock Option Plan, and option-based compensation, and considers any other matters that, in the Compensation Committee’s judgment, should be taken into account in reaching the recommendation to be made to the Board. No compensation consultant or advisor was retained in the most recently completed financial period.

 

Although the Board assumes responsibility for reviewing and monitoring the long-range compensation strategy for the senior management of Till, the Compensation Committee provides assistance and recommendations to the Board with respect to compensation matters. The Compensation Committee recommends the type and amount of compensation for our named executive officers (“NEOs”), subject to consideration and adoption by the Board. The Board also reviews with Till's management the compensation of certain other Till senior executives.

 

 

Philosophy and Objectives

 

The compensation program for Till’s senior management is designed so that the level and form of compensation achieves certain objectives, including:

 

•

attracting and retaining talented, qualified, and effective executives;

 

•

motivating the short- and long-term performance of those executives; and

 

•

aligning their interests with those of Till’s Shareholders.

 

In compensating its senior management, Till has employed a combination of base salary, bonuses, and equity participation through its Stock Option Plan.

 

Elements of the Compensation Program

 

The principal elements of compensation awarded to the NEOs are a cash salary and stock options. Till does not have a long-term incentive plan for its NEOs. The allocation between cash and noncash elements of Till’s compensation program is determined at the discretion of the Board. Annually, the Compensation Committee reviews the total compensation package of each of Till’s executives on an individual basis, against the backdrop of the compensation goals and objectives described herein, and makes recommendations to the Board concerning the individual components of the compensation awarded to the NEOs.

 

As a general rule, Till seeks to align its NEOs compensation with industry trends and companies that are similar in size and complexity.

 

Named Executive Officers

 

For 2017, Till's NEOs were:

 

John T. ("Terry") Rickard	Chief Executive Officer
William A. Lupien	Chief Investment Officer
Brian P. Lupien	Chief Financial Officer
Mary Zhu	Treasurer and Controller

 

Summary Compensation Table

 

Name and Principal Position		Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($) (1)				Non-Equity Incentive Plan Compensation ($)				Non-Qualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
John T. ("Terry") Rickard			2016				180,000				—				—				—				—				—				—				180,000
Chief Executive Officer			2017				180,000				15,000				—				—				—				—				—				195,000
William A. Lupien			2016				195,000				—				—				—				—				—				—				195,000
Chief Investment Officer			2017				195,000				144,000				—				—				—				—				—				339,000
Brian P. Lupien			2016				130,000				5,000				—				6,867				—				—				—				141,867
Chief Financial Officer			2017				130,000				15,000				—				—				—				—				—				145,000
Mary Zhu			2016				130,000				5,000				—				5,723				—				—				—				140,723
Treasurer and Controller			2017				130,000				7,000				—				—				—				—				—				137,000

 

(1)

With respect to each stock option grant, the amounts disclosed generally reflect the grant date fair value computed in accordance with FASB ASC Topic 718. Grant date fair value for each stock option was determined based on assumptions as set forth in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of this Report for the respective years in which the stock options were granted.

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table provides a summary of equity awards outstanding at December 31, 2017 for each of our NEOs.

 

		Option Awards
		Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Unexercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options				Option Exercise Price (1)				Option Expiration Date
John T. ("Terry") Rickard			27,500				—				—				Cdn$10.00 (US$7.97)			August 22, 2019
William A. Lupien			33,000				—				—				Cdn$10.00 (US$7.97)			August 22, 2019
Brian P. Lupien			4,000				—				—				Cdn$10.00 (US$7.97)			August 22, 2019
			3,000				3,000 (2)				—				Cdn$7.00 (US$5.58)			December 1, 2021
Mary Zhu			5,000				—				—				Cdn$7.00 (US$5.58)			May 13, 2020
			2,500				2,500 (3)				—				Cdn$7.00 (US$5.58)			December 1, 2021

 

(1)

Exchange rate to US dollars based on December 31, 2017 rate of US$1 = Cdn$1.2545.

(2)

1,500 options vest on each of June 1, 2018 and December 1, 2018.

(3)

1,250 options vest on each of June 1, 2018 and December 1, 2018.

 

2017 Director Compensation

 

Director Compensation Plan

 

Directors are compensated through the grant of stock options and the payment of director fees. From July 2015 through May 2016, all director fees were suspended. Following the reinstatement of director fees for independent directors in May 2016, our Board compensation program policy provides that:

 

•

Independent directors receive $2,000 per quarter.

 

•

The Chairperson of the Audit Committee receives an additional $500 per quarter.

 

•

The Chairman of the Board receives an additional $4,000 per annum.

 

There were no stock options granted to directors in 2017 or 2016. The grants of options are considered on the director appointment and annually thereafter.

 

 

Director Compensation

 

The table below provides information on the compensation of our non-management directors for the year ended December 31, 2017. As required by applicable SEC rules, the disclosure in this section covers all persons who at any time served as a director during 2017.

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Options Awards ($)				Non-Equity Incentive Plan Compensation ($)				Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Alan S. Danson			12,000				—				—				—				—				—				12,000
Wayne Kauth			10,000				—				—				2,000				—				—				12,000
Roger M. Loeb (1)			7,391				—				—				—				—				—				7,391
George J. Rohlinger			8,000				—				—				—				—				—				8,000
Patricia M. Tilton			8,000				—				—				2,000				—				—				10,000

 

(1)

Roger M. Loeb resigned from the Till Board of Directors on December 4, 2017.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

Equity Compensation Plan Information

 

The following table provides information as of December 31, 2017 with respect to compensation plans under which equity securities are authorized for issuance.

 

Plan Category		(A) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights				(B) Weighted-Average Exercise Price Per Share of Outstanding Options, Warrants, and Rights (1)		(C) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (A)
Equity compensation plans approved by Shareholders			117,500			Cdn$9.55 (US$7.61)			211,588

 

(1)

Exchange rate to US dollars based on December 31, 2017 rate of US$1 = Cdn$1.2545.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information regarding beneficial ownership of Till Shares outstanding as of March 29, 2018 by:

 

•

each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding Till Shares;

 

•

each of our directors;

 

•

each of our NEOs; and

 

•

all of our directors and executive officers as a group.

 

The percentage ownership information shown in the table is based on 3,290,884 Till Shares outstanding as of March 29, 2018. Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of more than 5% of outstanding Till Shares. We have determined beneficial ownership in accordance with the rules of the SEC. Those rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, those rules require inclusion of Till Shares issuable pursuant to the exercise of stock options or warrants that are either immediately exercisable or exercisable on or before May 28, 2018, which is 60 days after March 29, 2018. Those shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

 

 

We believe, based on the information provided to us, that the persons named in the table below have sole voting and investment power with respect to all Till Shares shown as beneficially owned by them other than as noted below. In addition, none of the Till Shares are pledged as security by the persons named in the table below.

 

Except as otherwise noted below, the address for each person or entity listed in the table is c/o Till Capital Ltd., 13403 N. Government Way, Suite 212, Hayden, Idaho 83835.

 

Name		Till Shares Owned as of March 29, 2018				Till Shares Holder has a Right to Acquire by May 28, 2018				Total Till Shares Beneficially Owned				Percentage of Till Shares Beneficially Owned
Alan S. Danson (1)			213,000				—				213,000				6.5	%
William A. Lupien (2)			84,815				33,000				117,815				3.5	%
Wayne Kauth			133,479				—				133,479				4.1	%
John T. ("Terry") Rickard (3)			268,666				27,500				296,166				8.9	%
George J. Rohlinger			—				—				—				—
Patricia M. Tilton			110,655				—				110,655				3.4	%
Brian P. Lupien			17,844				7,000				24,844				*
Mary Zhu			—				7,500				7,500				*
All directors and executive officers as a group (8 persons)			828,459				75,000				903,459				26.8	%

 

*

Represents less than 1%

 

(1)

Includes 213,000 Till Shares held by Danson Family Partnership LLLP. Mr. Danson in the general partner and has sole investment and voting power with respect to the shares held in that partnership.

 

(2)

Includes (i) 29,500 Till Shares held by Grant Davis Lupien Trust and (ii) 29,500 Till Shares held by Troy James Lupien Trust. Mr. Lupien is a Settlor of those trusts and has sole voting and investment power with respect to the shares held in those trusts.

 

(3)

Includes (i) 25,256 Till Shares held by Jessica Lynn Mullins Family Trust; (ii) 24,043 Till Shares held by John Tyler Rickard Family Trust and (iii) 25,456 Till Shares held by Marissa Lois Mullins Family Trust. Dr. Rickard is a Settlor of those trusts and has sole voting and investment power with respect to the shares held in those trusts.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence

 

Certain Relationships and Related Transactions

 

Since January 1, 2016, Till has not had any transactions to which it has been a participant that involved amounts that exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of Till’s total assets at December 31, 2016 and 2017, and in which any of Till’s directors, executive officers, or any other “related person” as defined in Item 404(a) of Regulation S-K had or will have a direct or indirect material interest. Till’s Audit Committee is responsible for approving related party transactions with management. Till’s Audit Committee operates under a written charter pursuant to which all related party transactions are reviewed for potential conflicts of interest. Such transactions must be approved by Till’s Audit Committee.

 

Director Independence

 

NASDAQ Listing Rules require that a majority of our Board be independent. Under the NASDAQ independence criteria, a director cannot be considered independent if he or she has one of the relationships specifically enumerated in the NASDAQ listing standards. The Board must also affirmatively determine that a director does not have a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has affirmatively determined that each of Messrs. Danson, Kauth, and Rohlinger and Ms. Tilton is independent under the NASDAQ Listing Rules.

 

 

Item 14. Principal Accounting Fees and Services

 

The following fees were paid to Grant Thornton U.S. and Grant Thornton Canada in 2017 and 2016, respectively:

 

		2017				2016
Audit fees (1)		$	411,529			$	305,189
Audit-related fees			—				—
Tax fees			—				—
All other fees (2)			7,008				—
Total		$	418,537			$	305,189

 

(1)

Audit fees are for services provided by the principal accountant for the audit of Till’s annual financial statements and services provided in connection with our regulatory filings.

(2)

For services relating to the preparation of an information memorandum regarding Holdings.

 

Our Audit Committee pre-approves all audit, audit-related, tax, and other services and associated fees performed by our independent registered public accountants prior to the engagement of the independent registered public accountants with respect to such services. All of the audit and other fees disclosed above were pre-approved by our Audit Committee.

 

 

 

 

 

 

 

 

PART IV

 

Item 15. Exhibits, Financial Statements, and Schedules

 

(a) Financial Statements and Schedules

 

The Consolidated Financial Statements of Till Capital Ltd. are filed herein as set forth under Part II, Item 8, of this Report.

 

Financial statement schedules have been omitted as they are either not required, not applicable, or the information is otherwise included in the Consolidated Financial Statements or notes thereto.

 

(b) Exhibits

 

The exhibits list immediately following the signature page is incorporated herein by reference as the list of exhibits is required as part of this Report.

 

Item 16. Form 10-K Summary

 

None.

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		TILL CAPITAL LTD.
		By:	/s/ John T. Rickard
			John T. Rickard
			Chief Executive Officer

 

Dated: March 29, 2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

 

Signature		Title	Date
/s/ John T. Rickard		Chief Executive Officer and Director	March 29, 2018
John T. Rickard		(Principal Executive Officer)
/s/ Brian P. Lupien		Chief Financial Officer	March 29, 2018
Brian P. Lupien		(Principal Financial Officer)
/s/ Weiying Zhu		Treasurer and Controller	March 29, 2018
Weiying Zhu
/s/ Alan S. Danson		Chairman of the Board	March 29, 2018
Alan S. Danson
/s/ Wayne Kauth		Director	March 29, 2018
Wayne Kauth
/s/ William A. Lupien		Director	March 29, 2018
William A. Lupien
/s/ George J. Rohlinger		Director	March 29, 2018
George J. Rohlinger
/s/ Patricia M. Tilton		Director	March 29, 2018
Patricia M. Tilton

 

 

 

EXHIBITS TO FORM 10-K

 

 

			Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit Number	Filing Date	Filed Herewith
2.1	Arrangement Agreement, dated as of February 18, 2014, between Americas Bullion Royalty Corp. and Resource Holdings Ltd.	20-F	000-55324	4.11	March 13, 2015
3.1	Memorandum of Association of Resource Holdings Ltd.	20-F	000-55324	1.1	March 13, 2015
3.2	Bye-laws of Till Capital Ltd.	20-F	000-55324	1.2	March 13, 2015
4.1	Specimen of Restricted Voting Share Certificate	10-K	001-37402	4.1	April 17, 2017
10.1	Administration Agreement, dated February 12, 2014, between Resource Re Ltd. and Cedar Management Limited	20-F	000-55324	4.6	March 13, 2015
10.2	Master Services Agreement, dated August 11, 2014, between Multi-Strat Re Ltd. and Resource Re Ltd.	20-F	000-55324	4.7	March 13, 2015
10.3	Quota Share Retrocession Agreement, dated August 11, 2014, between Multi-Strat Re Ltd. and Resource Re Ltd.	20-F	000-55324	4.8	March 13, 2015
10.4*	Stock Option Plan	20-F	000-55324	4.9	March 13, 2015
14	Code of Business Conduct and Ethics	20-F	000-55324	11.1	March 13, 2015
16	Letter, dated February 3, 2017 from Grant Thornton LLP, Toronto, Ontario, Canada	8-K	001-37402	16.1	February 3, 2017
21	Subsidiaries of Till Capital Ltd.	10-K	001-37402	21	April 17, 2017
23.1	Consent of Grant Thornton LLP					X
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the SarbanesOxley Act of 2002					X
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the SarbanesOxley Act of 2002					X
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X

 

* Management contract or compensatory plan or arrangement.

 

 

 

 

 

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