Registration No. 333-   

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SAFEPOINT HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware		6331		14-1957288
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Safepoint Holdings, Inc.

4010 Gunn Highway

Tampa, Florida 33618

(877)-858-7445

(Address, including zip code, and telephone number, including

area code, of Registrant’s principal executive offices)

 

 

David M. Flitman

Chief Executive Officer

Safepoint Holdings, Inc.

4010 Gunn Highway

Tampa, Florida 33618

(877)-858-7445

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Matthew B. Stern Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 (212) 728-8000		Marc D. Jaffe Jason M. Licht R. Charles Cassidy III Latham & Watkins LLP 1271 Avenue of the Americas New York, New York 10020 (212) 906-1200

 

 

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ☒		Smaller reporting company ☐
						Emerging growth company ☒

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. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, Dated May 8, 2026

    Shares

 

 

Safepoint Holdings, Inc.

Common Stock

 

 

This is an initial public offering of shares of common stock of Safepoint Holdings, Inc. We are offering     shares of common stock. The selling stockholders identified in this prospectus are offering an additional     shares of our common stock. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $    and $   . We have applied to list our common stock on the New York Stock Exchange (the “NYSE”) under the symbol “SFPT.”

We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, will be subject to reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”

See “Risk Factors” beginning on page 28 to read about factors you should consider before buying shares of our common stock.

 

 

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

		Per Share				Total
Initial public offering price		$				$
Underwriting discount(1)		$				$
Proceeds, before expenses, to Safepoint Holdings, Inc.(2)		$				$
Proceeds, before expenses, to the selling stockholders		$				$

(1)	See the section entitled “Underwriting” for additional information regarding compensation payable to the underwriters.

(2)	To the extent that the underwriters sell more than     shares of our common stock, the underwriters have the option to purchase up to an additional     shares of common stock from the selling stockholders at the initial public offering price less the underwriting discount.

 

 

The underwriters expect to deliver the shares against payment in New York, New York on      , 2026.

Joint Bookrunning Managers

 

Deutsche Bank Securities		Morgan Stanley

 

Keefe, Bruyette & Woods       A Stifel Company		Citizens Capital Markets		Piper Sandler		Truist Securities		William Blair

Co-Managers

 

Regions Securities LLC		Academy Securities		Huntington Capital Markets		Synovus		Wedbush Securities

Prospectus dated      , 2026.

TABLE OF CONTENTS

 

Prospectus Summary			1
Summary Consolidated Financial and Other Data			25
Risk Factors			28
Special Note Regarding Forward-Looking Statements			73
Use of Proceeds			75
Dividend Policy			76
Capitalization			77
Dilution			79
Management’s Discussion and Analysis of Financial Condition And Results of Operations			82
Business			128
Regulation			156
Management			167
Executive Compensation			174
Certain Relationships and Related Party Transactions			183
Principal and Selling Stockholders			187
Description of Capital Stock			189
Description of Certain Indebtedness			194
Shares Eligible for Future Sale			196
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders			199
Underwriting			204
Legal Matters			213
Change In Accountants			214
Experts			215
Where You Can Find Additional Information			216
Index to Consolidated Financial Statements			F-1

 

 

You should rely only on the information contained in this prospectus and any free writing prospectus that we may provide to you in connection with this offering. We, the selling stockholders and the underwriters, have not authorized anyone to provide you with different information or to make any other representations, and we, the selling stockholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information others may give you. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only under circumstances and in jurisdictions where it is lawful to do so. Neither we, the selling stockholders nor any of the underwriters are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: Neither we, the selling stockholders nor any of the underwriters have done anything that would permit this offering or the possession or distribution of this prospectus in any jurisdiction where action for those purposes is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside of the United States.

 

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TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or license the trademarks, service marks and trade names that we use in connection with the operation of our business, including our domain names. Solely for convenience, any trademarks, service marks and trade names referred to in this prospectus are presented without the “^®”, “SM” and “^™” symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. All trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners.

MARKET, RANKING, INDUSTRY AND OTHER DATA

The data included in this prospectus regarding markets, ranking and other industry information are based on published industry sources, and our own internal estimates are based on our management’s knowledge and experience in the markets in which we operate. Data regarding the industry in which we compete and our market position and market share within this industry are inherently imprecise and are subject to significant business, economic and competitive uncertainties beyond our control, but we believe they generally indicate size, position and market share within this industry. Our own estimates are based on information obtained from our customers, suppliers, trade and business organizations and other contacts in the markets in which we operate. We are responsible for all of the disclosure in this prospectus, and we believe these estimates to be accurate as of the date of this prospectus or such other date stated in this prospectus. While we believe that each of the publications used throughout this prospectus is prepared by reputable sources, neither we nor the underwriters have independently verified market and industry data from third-party sources. While we believe our internal company research and estimates are reliable, such research and estimates have not been verified by any independent source. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.” Neither we nor the underwriters can guarantee the accuracy or completeness of any such information contained in this prospectus.

USE OF NON-GAAP FINANCIAL INFORMATION

This prospectus contains certain financial measures and ratios that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). We refer to these measures as “non-GAAP financial measures.” We use these non-GAAP financial measures when planning, monitoring and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for our management and investors to facilitate operating performance comparisons from period to period.

The non-GAAP financial measures we use herein are defined by us as follows:

Adjusted general expense ratio is calculated by excluding the amortization of stock-based compensation and the amortization of intangible assets from general and administrative expenses. The total is then divided by managed premium. We believe using this ratio in conjunction with the closest corresponding GAAP metric provides greater insight into our cost structure and gives the reader a clearer view of what percentage of each premium dollar is

 

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spent on general expense. Adjusted general expense ratio should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of adjusted general expense ratio in accordance with GAAP.

Insurance Services EBITDA and EBITDA margin are non-GAAP metrics used by management, which we believe are useful to investors to measure the operational strength and performance of the Insurance Services segment. These metrics provide investors additional information about the Insurance Services segment’s profitability for certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items that are not core to the operations of the Insurance Services segment. By providing these measures, together with a reconciliation of the most directly comparable GAAP measure, we believe we are enhancing investors’ understanding of the Insurance Services segment, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Insurance Services EBITDA margin is calculated as Insurance Services EBITDA as a percentage of the Insurance Services total revenue. Insurance Services EBITDA and EBITDA margin should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP.

Managed premium is a non-GAAP financial measure used by management to provide useful information to investors to summarize the total volume of business being transacted under our management. Managed premium is defined as total amount of gross premiums written by our consolidated subsidiaries and other entities that we manage but do not consolidate under GAAP. Managed premium is calculated before the effects of reinsurance are added. By providing this measure, we believe that this allows investors to evaluate the full scale of our market presence and the efficiency of our customer acquisition and retention efforts. Managed premium should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP.

Net operating income to Safepoint shareholders is a non-GAAP financial measure used by management to evaluate the Company’s operating performance and to facilitate period-to-period comparability. Net operating income to Safepoint shareholders is defined as net income attributable to the controlling interest, excluding the impact of certain items to the controlling interest that management believes are not indicative of the Company’s core operating results. We calculate the tax impact only on adjustments that would be included in calculating our income tax expense using the estimated tax rate at which we received a deduction for these adjustments. Net operating income to Safepoint shareholders should not be considered in isolation or as a substitution for net income as reported in accordance with GAAP.

Return on equity to Safepoint shareholders is a non-GAAP financial measure used by management to provide useful information to investors about the profitability and capital efficiency available to our common stockholders. We define this non-GAAP as net income attributable to the controlling interest divided by the average of the beginning and ending shareholders’ equity, excluding non-controlling interests. We believe using return on equity to Safepoint shareholders in conjunction with the closest corresponding GAAP metric provides a meaningful representation of the profitability by excluding non-controlling interests. Return on equity to Safepoint shareholders should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity to Safepoint shareholders in accordance with GAAP.

 

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Adjusted Reciprocal Exchanges segment combined ratio is a non-GAAP metric used by management. While elements of the policyholder payments to the Reciprocal Exchanges contain premium and equity components, only the premium portion of the payment is included in the GAAP combined ratio. Management believes that including the entire policyholder payment to the Reciprocal Exchanges in the denominator of the Adjusted Reciprocal Exchanges segment combined ratio gives the reader a better understanding of the actual economics of the Reciprocal Exchanges segment. This metric is calculated by dividing the sum of the Reciprocal Exchanges’ losses and underwriting expenses by the sum of its net earned premiums and the net subscriber contributions received during the year. Subscriber contributions are not considered revenue under GAAP and do not represent earnings from underwriting activities. These funds are capital in nature and may be subject to withdrawal by subscribers under certain conditions. The Adjusted Reciprocal Exchanges segment combined ratio should not be considered in isolation or as a substitution for analysis of our results as reported in accordance with GAAP.

While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered supplemental in nature and is not meant to be a substitute for revenue or net income, in each case as recognized in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. For more information regarding these non-GAAP financial measures and a reconciliation of such measures to comparable GAAP financial measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures.”

GLOSSARY OF SELECTED INSURANCE AND OTHER TERMS

Admitted—Insurance issued by an insurer licensed to do business in the state in which the insured exposure is located. Admitted insurance companies are subject to various state laws that govern organization, capitalization, policy forms, rate approvals and claims handling.

Admitted insurer—Formally licensed to operate by the insurance regulatory authority in the state where the company operates. Admitted insurance companies are subject to various state laws that govern organization, capitalization, policy forms, rate approvals and claims handling.

AL DOI—Alabama Department of Insurance, the principal regulator for insurance companies domiciled in the State of Alabama, including Cajun following its redomestication effective July 31, 2025.

AM Best—A.M. Best Company, Inc., a nationally recognized statistical rating organization that, among other things, rates the financial strength and claims paying ability of insurance and reinsurance companies.

Attorneys-in-Fact—Cajun AIF and Manatee AIF, our wholly owned attorneys-in-fact for Cajun and Manatee, respectively. The primary function of an attorney-in-fact is to manage a reciprocal insurer in exchange for a fee.

BPO—Business process outsourcing entities.

Bylaws—The amended and restated bylaws of Safepoint to be effective immediately prior to the closing of this offering.

 

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Cajun—Cajun Underwriters Reciprocal Exchange, an Alabama domiciled reciprocal insurer managed by Cajun AIF. Cajun was originally domiciled in the State of Louisiana, and redomesticated to Alabama effective July 31, 2025.

Cajun AIF—Cajun Underwriters Risk Management, LLC is the attorney-in-fact for Cajun and is a wholly owned subsidiary of Safepoint Holdings.

Captives—Pompano Re Ltd., Canal Re Ltd., and Bobcat Re Ltd. which are our wholly owned Bermuda-based captive insurance companies that provide reinsurance to other members of the Safepoint group, including Safepoint Insurance, Cajun and Manatee. Canal Re Ltd. and Bobcat Re Ltd. are currently in the process of being run-off. Pompano Re Ltd. is currently our only Captive writing active business for members of the Safepoint group.

Carriers—The U.S. insurance company affiliates of Safepoint Holdings, consisting of Safepoint Insurance, Cajun and Manatee.

Case reserves—Losses and loss adjustment expense reserves established with respect to individual reported claims.

Cede; ceding company—When an insurance company purchases reinsurance for its liability from another party, it “cedes” business to the reinsurer and is referred to as the “ceding company.”

Certificate of Incorporation—The amended and restated certificate of incorporation of Safepoint to be effective immediately prior to the closing of this offering.

Certificates of authority—A license granted by a state insurance department to operate as an admitted insurance company in that state.

Combined ratio—The sum of the loss ratio and the expense ratio. The combined ratio of an insurance company is generally viewed as an indication of the underwriting profitability of that insurance company, but does not take into account the effect of investing activities on net income.

Commissions—The fee paid to an agent or a broker for placing insurance or reinsurance, generally determined as a percentage (which may be fixed or variable) of the written premium.

Controlling Interest—Reflects the portion of income or loss and the corresponding equity that is attributable to Safepoint under GAAP for certain entities.

Demotech—Demotech, Inc., a nationally recognized statistical rating organization that provides financial strength ratings to insurance companies, including each of Safepoint Insurance, Cajun and Manatee.

Direct premiums written—Premiums written by an insurer during a given period.

Dodd-Frank Act—Dodd-Frank Wall Street Reform and Consumer Protection Act.

Excess of Loss (“XOL”) reinsurance—Reinsurance that indemnifies the insured against all or a specified portion of losses in excess of a specified dollar or percentage loss ratio amount.

Excess and surplus (“E&S”)—Excess and surplus lines insurance, which is generally not subject to all of the requirements of admitted insurers, such as policy forms and rates approvals.

 

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Expense ratio—The ratio of underwriting, acquisition and other underwriting expenses net of commissions and other income to net earned premiums.

Facultative reinsurance—Facultative reinsurance is a specific reinsurance policy for which terms can be negotiated by the insurer and reinsurer on a specific risk.

FHCF—Florida Hurricane Catastrophe Fund, a state trust fund that provides reimbursements to residential property insurance companies for a portion of their catastrophic hurricane losses in the State of Florida.

Financial strength rating—The opinion of rating agencies regarding the financial ability of an insurance or reinsurance company to meet its financial obligations under its policies. It is generally necessary for insurers to maintain certain minimum financial strength ratings to continue writing business in the United States.

FLOIR—Florida Office of Insurance Regulation, the principal regulator for insurance companies domiciled in the State of Florida, including Safepoint Insurance and Manatee.

Florida Citizens—Florida Citizens Property Insurance Corporation.

GAAP—Generally Accepted Accounting Principles in the United States.

Gross written premiums—Total premiums recorded on the books of an insurer at the time an insurance policy is issued, before deductions for premiums ceded to reinsurers but excluding policy fees and subscriber contributions.

IBNR; incurred but not reported—Reserves for estimated loss and loss adjustment expenses that have been incurred by policyholders but not reported to the insurer or reinsurer, including unknown future developments on loss and loss adjustment expenses which are known to the insurer or reinsurer.

In-force—A policy is considered in-force during the entire time between the effective and expiration date. Note that a policy no longer in-force can still have open claims (and in some cases even IBNR claims) after the expiration date.

In-force premiums—Gross written premium for active insurance policies with coverage in effect as of the period end date. We view this as an important metric because it is an indicator of the size of our portfolio of in-force policies, as well as an indicator of the expected earned premium over the coming 12 months given our historical retention rates.

Incurred losses—The total losses sustained by an insurance company under a policy or policies, whether paid, unpaid or not reported.

Industry-loss warranties—Reinsurance contracts that provide coverage when insurance industry losses for a defined event exceed a certain pre-determined threshold.

KBRA—Kroll Bond Rating Agency, LLC, a nationally recognized statistical rating organization that provides financial strength ratings to insurance companies, including each of Safepoint Insurance, Cajun and Manatee.

LDI—Louisiana Department of Insurance, the principal regulator for insurance companies domiciled in the State of Louisiana, including Cajun until its redomestication from Louisiana to Alabama effective July 31, 2025.

 

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Loss adjustment expenses—The expenses of settling claims, including field adjusting, cost containment, legal defense and other fees and the portion of general expenses allocated to claim settlement costs. Also known as claim adjustment expense.

Loss development—Increases or decreases in previously recorded losses and loss adjustment expenses over a given period of time.

Loss ratio—A ratio calculated by dividing losses and loss adjustment expenses by net premiums earned.

Louisiana Citizens—Louisiana Citizens Property Insurance Company.

Managed premiums—The volume of premium payments we are actively collecting and managing from our current, active customer base, which includes premiums for Safepoint Insurance and the Reciprocal Exchanges.

Manatee—Manatee Insurance Exchange, a Florida domiciled reciprocal insurer managed by Manatee AIF.

Manatee AIF—Manatee Risk Management LLC is the attorney-in-fact for Manatee and is a wholly owned subsidiary of Safepoint Holdings.

MGA—An acronym for a managing general agent, which is a third-party agent that receives delegated underwriting authority from a primary insurance company to write insurance risk on its behalf. As used in this prospectus, the term “MGA” refers generically to agents receiving this delegation of underwriting authority, including managing general underwriters, managing general agents, and/or program managers and any other entity in relation to which the term “MGA” is used in this prospectus may not fall within the regulatory definition of a “managing general agent” in the jurisdictions in which it operates.

Model Holding Company Act and Regulation—NAIC’s Insurance Holding Company System Regulatory Act and Insurance Holding Company System Model Regulation.

NAIC—the National Association of Insurance Commissioners.

Net earned premiums—The earned portion of gross written premiums less the earned portion that is ceded to reinsurers during such period.

Net written premiums—Gross written premiums for a given period less premiums ceded to reinsurers during such period.

Non-admitted lines or excess and surplus lines—Policies generally not subject to regulations governing premium rates or policy language.

Non-Controlling Interest—Reflects the portion of income or loss and the corresponding equity that is not attributable to Safepoint under GAAP for certain entities which are consolidated for financial reporting, but are not owned by Safepoint shareholders.

P&C—Property and casualty insurance.

Peak zone—The specific peril and geographic area that produce the highest concentration of risk for an insurance company.

 

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Perils—This term refers to the causes of possible loss in property insurance and reinsurance, such as earthquake, wind-storm, fire, hail, etc.

Property insurance—Insurance that covers property when damage, theft or loss occurs.

Quota share reinsurance—A form of reinsurance in which the reinsurer assumes an agreed percentage of each risk being reinsured and shares all premiums and losses in accordance with the reinsured.

Reciprocal Exchanges—Cajun and Manatee, each of which is a reciprocal insurance exchange, sometimes referred to as a reciprocal insurer or reciprocal exchange. A reciprocal insurance exchange is an insurance company established as an unincorporated association composed of its subscribing policyholders. A reciprocal insurance exchange has no equity securities and, therefore, has no parent company or legal owner. Because of the contractual relationships between Safepoint Holdings and the Reciprocal Exchanges, we consolidate the Reciprocal Exchanges for financial reporting purposes under GAAP as is presented in this prospectus. The equity of the Reciprocal Exchanges is reported separately from our total equity on the consolidated balance sheets in the financial statement line item labeled non-controlling interest, with a refundable portion of the Reciprocal Exchanges’ subscriber contributions presented as temporary (mezzanine) equity on our consolidated balance sheet. Accordingly, because we have no direct economic equity interest in the Reciprocal Exchanges, our shareholders are largely insulated from the underwriting performance of the Reciprocal Exchanges and, accordingly, there is reduced variability in our financial results relative to a traditional risk-bearing insurance franchise.

Reinstatement premiums—A premium charged for the reinstatement of the amount of reinsurance coverage to its full amount reduced as a result of a reinsurance loss payment.

Reinsurance—The practice whereby one party, called the reinsurer, in consideration of a premium paid to it, agrees to indemnify another party, called the reinsured, for part or all of the liability assumed by the reinsured under a policy or policies of insurance which it has issued. The reinsured may be referred to as the original or primary insurer, the direct writing company, the ceding company or the cedent.

Reinsurance retention—The amount or portion of risk which an insurer or reinsurer retains or assumes for its own account. Losses, or a portion thereof, in excess of the retention level, are paid by the reinsurer. In proportional treaties, the retention may be a percentage of the original policy’s limit. In excess of loss business, the retention is all or a portion of a dollar amount of loss.

Return on equity—Net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

Safepoint Holdings—Safepoint Holdings, Inc., a Delaware corporation, which is our ultimate parent company and the registrant under this prospectus.

Safepoint Insurance—Safepoint Insurance Company, a Florida domiciled stock insurance company.

State guaranty funds—Funding mechanisms that are administered by a U.S. state to protect policyholders in the event that an insurance company defaults on benefit payments or becomes insolvent. The fund only protects beneficiaries of insurance companies that are licensed to sell in that state.

 

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SEC—Securities and Exchange Commission.

Statutory accounting principles (“SAP”)—Those accounting principles and practices which provide the framework for the preparation of insurance company financial statements, and the recording of transactions, in accordance with the rules and procedures adopted by regulatory authorities, generally emphasizing solvency considerations rather than a going-concern concept of accounting.

Surplus Notes—The outstanding surplus notes issued by Cajun and Manatee with an outstanding aggregate principal amount of approximately $66.8 million as of December 31, 2025. As of December 31, 2025 we own $46.8 million aggregate principal amount of the Surplus Notes (excluding any surplus notes held by the other Reciprocal Exchange). See “Description of Certain Indebtedness—Cajun Surplus Notes” and “Manatee Surplus Notes.”

Third-party administrators (“TPAs”)—Organizations that process insurance administration and/or claims for a separate entity.

Underwriting—The process of evaluating, defining, and pricing insurance risks including, where appropriate, the rejection of such risks and the acceptance of the obligation to pay the policyholder under the terms of the contract.

Unearned premiums—The portion of gross written premium that has not been earned.

 

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RISK FACTORS

An investment in our common stock involves a certain degree of risk. In deciding whether to invest, you should carefully consider the following risk factors, as well as the financial and other information contained in this prospectus, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. Any of the following risks could have an adverse or material effect on our business, financial condition, results of operations or prospects and cause the value of our stock to decline, which could cause you to lose all or part of your investment. Additional risks and uncertainties of which we are unaware, or that we currently deem immaterial also may become important factors that affect us.

Risks Related to Our Business and Industry

If the management fee rate earned by the Attorneys-in-Fact is reduced or if there is a significant decrease in the amount of premiums written by the Reciprocal Exchanges, our revenues and profitability could be materially adversely affected.

We are dependent upon management fees we earn from the Reciprocal Exchanges, which represented $158.2 million in revenue for the year ended December 31, 2025 (which is ultimately eliminated in consolidation for GAAP). In accordance with the attorney-in-fact agreements with the policyholders of the Reciprocal Exchanges, we currently earn an annual fee equal to 17% of the gross written premiums plus 3% of gross earned premiums of the Reciprocal Exchanges. Any reduction in the gross written premiums of the Reciprocal Exchanges and/or the management fee rate, whether as a result of insurance losses, a loss of financial strength ratings, a regulatory action, change in applicable law, whether or not described herein, could have a negative effect on our revenues and net income attributable to controlling interest.

We have exposure to unpredictable and severe catastrophes, including those caused by global climate change, which could reduce or eliminate our earnings and stockholders’ equity and limit our ability to underwrite new insurance policies.

Our insurance operations expose us to claims arising from unpredictable catastrophe events, such as hurricanes, tropical storms, severe thunderstorms, earthquakes, floods, wildfires, sink-holes, hail and other severe events. Furthermore, the actual occurrence, frequency and magnitude of such events are uncertain. Over the past several years, changing weather patterns and climatic conditions, such as rising average global temperatures, have added to the unpredictability and frequency of natural disasters in certain parts of the world, including the markets in which we operate. This may include catastrophes in markets where we have only recently begun to insure against loss, such as in California, where devastating wildfires have become a regular occurrence and have caused a significant amount of residential and commercial property loss and damage. Climate change may increase the frequency and severity of extreme weather events. This effect has led to conditions in the ocean and atmosphere, including warmer-than-average sea-surface temperatures and low wind shear that increase hurricane activity. Hurricane activity typically increases between June and November of each year, though the actual occurrence and magnitude of such events is uncertain. The occurrence of a natural disaster or other catastrophe loss could materially adversely affect our business, financial condition, and results of operations. Additionally, any increased frequency and severity of such weather events, including hurricanes, could have a material adverse effect on our ability to predict, quantify, reinsure and manage catastrophe risk, which may materially increase our losses resulting from such catastrophe events.

 

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The extent of losses from catastrophes is a function of both the frequency and severity of the insured events and the total amount of insured exposure in the areas affected. The frequency and severity of catastrophes are inherently unpredictable and the occurrence of one catastrophe does not make the occurrence of another catastrophe more or less likely. Increases in the replacement cost of insured property due to higher material and labor costs, increases in concentrations of insured property, the effects of inflation, and changes in cyclical weather patterns may increase the severity of claims from catastrophe events in the future. Claims from catastrophe events could reduce our earnings and cause substantial volatility in our results of operations for any fiscal quarter or year, which could materially adversely affect our financial condition, possibly to the extent of eliminating our total stockholders’ equity, and/or our financial strength ratings. Our ability to underwrite new insurance policies could also be materially adversely impacted.

Our loss reserves are estimates and may be inadequate to cover our actual liability for losses, causing our results of operations to be adversely affected.

We maintain reserves, also referred to as loss reserves, to cover estimated liabilities for unpaid losses and loss expenses, including legal and other fees as well as other claims settlement costs, for reported and unreported claims incurred as of the end of each accounting period. Loss reserves do not represent an exact calculation of liability. Rather, loss reserves represent an estimate of what the Company’s ultimate settlement and administration of claims is expected to cost. These estimates, which generally involve actuarial projections, are based on the assessment of facts and circumstances then known, as well as estimates of future trends in claims severity, frequency, judicial theories of liability and other factors. The variables described above are affected by both internal and external events, such as claims handling procedures, inflation, judicial and litigation trends and legislative changes. Additionally, there may be a significant delay between when a loss event occurs and the time it is reported to us. As a result, estimates of loss associated with specific claims can increase as new information emerges, and our projections and our estimates may be inaccurate, which in turn may cause our actual losses to exceed our loss reserves and cause the reserves for the claim to become inadequate. If our actual losses exceed our loss reserves, our financial results, our ability to expand our business and to compete in the property and casualty insurance industry may be negatively affected.

Factors that affect unpaid losses and loss adjustment expenses include the estimates made on a claim-by-claim basis known as “case reserves” coupled with bulk estimates known as “incurred but not yet reported” (or “IBNR”) loss reserves. Periodic estimates by management of the ultimate costs required to resolve all claims are based on our analysis of historical data and estimations of the impact of numerous factors such as (i) factual information for each claim; (ii) industry and company historical loss experience and development patterns; (iii) legislative enactments, judicial decisions, legal developments in the awarding of damages and changes in political attitudes; and (iv) trends in general economic conditions, including the effects of inflation. Management revises its estimates based on the results of its analysis. This process assumes that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for estimating the ultimate resolution of all claims. There is no precise method for subsequently evaluating the impact of any specific factor on the adequacy of the reserves, because the eventual redundancy or deficiency is affected by multiple factors.

Because of the inherent uncertainties in the reserving process, we cannot be certain that our reserves will be adequate to cover our actual losses and loss adjustment expenses. If our reserves for unpaid losses and loss adjustment expenses are less than actual losses and loss adjustment expenses, we will be required to increase our reserves with a corresponding reduction in our net income in the period in which the deficiency is identified. Future loss

 

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experience substantially in excess of our reserves for unpaid losses and loss adjustment expenses could substantially harm our results of operations and financial condition and financial strength ratings.

Our insurance company affiliates are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.

Our Carriers are subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, currently the laws of Florida for Safepoint Insurance and Manatee and Alabama for Cajun. Florida’s risk-based capital standards, based upon the NAIC’s Risk-Based Capital for Insurers Model Act, require Safepoint Insurance to report its results of risk-based capital calculations to the insurance regulatory commission of its state of domicile and the NAIC. These risk-based capital standards provide for different levels of regulatory attention depending upon the ratio of an insurance company’s total adjusted capital, as calculated in accordance with NAIC guidelines, to its authorized control level risk-based capital. Authorized control level risk-based capital is determined using the NAIC’s risk-based capital formula, which measures the minimum amount of capital that an insurance company needs to support its overall business operations.

An insurance company with total adjusted capital that is less than 200% of its authorized control level risk-based capital is at a company action level, which would require the insurance company to file a risk-based capital plan that, among other things, contains proposals of corrective actions the company intends to take that are reasonably expected to result in the elimination of the company action level event. Additional action level events occur when the insurer’s total adjusted capital falls below 150%, 100%, and 70% of its authorized control level risk-based capital. The lower the percentage, the more severe the regulatory response, including, in the event of a mandatory control level event (total adjusted capital falls below 70% of the insurer’s authorized control level risk-based capital), placing the insurance company into receivership.

In addition, our Carriers are required to maintain certain minimum capital and surplus and to limit their written premiums to specified multiples of its capital and surplus. Our Carriers could exceed these ratios if their volume increases faster than anticipated or if their surplus declines due to catastrophe or non-catastrophe losses or excessive underwriting and operational expenses.

Florida law requires a residential property writer to maintain surplus of the greater of $15.0 million or 10% of its liabilities. As of December 31, 2025, Safepoint Insurance held surplus of $108 million. Florida law also restricts the ratio of written premiums to policyholder surplus to 10 to 1 on a gross basis and 4 to 1 on a net of reinsurance basis. For the year ending December 31, 2025, Safepoint Insurance’s gross and net written premiums to policyholder surplus ratios were 1.0 to 1 and 0.58 to 1, respectively. For the year ending December 31, 2025, Manatee’s gross and net written premiums to policyholder surplus ratios were 5.9 to 1 and 1.9 to 1, respectively.

Alabama law requires reciprocal insurers domiciled in Alabama and transacting property and casualty insurance for less than five years to maintain a surplus of at least $1.25 million. As of December 31, 2025, Cajun held surplus of $58.4 million.

Any failure by Safepoint Insurance, Cajun or Manatee to meet the risk-based capital or minimum statutory capital requirements or the writings ratio limitations imposed by applicable state insurance regulations could subject it to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or rehabilitation or liquidation.

 

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Any changes in existing risk-based capital requirements, minimum statutory capital requirements, or applicable writings ratios may require us to increase our statutory capital levels, which we may be unable to do.

Because our insurance operations are geographically concentrated, any single catastrophic event, or a series of such events, or other condition affecting losses in the U.S. coastal states in which we operate could adversely affect our financial condition and results of operations.

Our insurance operations are geographically concentrated in Florida and the other U.S. gulf states. As of December 31, 2025, 94% of our policies (measured by in-force premium, excluding unaffiliated managed premium) insured customers in Florida and/or Louisiana. In addition, our business is geographically concentrated along the coast. Florida has 1300 miles of linear coast, Louisiana and Texas each have over 300 miles of linear coast. While 95% of our insurance portfolio (by policy count) insures risks within 50 miles of the coast, we employ catastrophe loss models to manage risk concentrations among other physical parameters. A single catastrophic event, or a series of such events, destructive weather patterns, general economic trends, regulatory developments or other conditions specifically affecting such states, particularly along the coastal areas, could have a disproportionately adverse impact on our business, financial condition and results of operations. Further, as compared to our competitors who operate on a wider geographic scale, any adverse changes in the regulatory environment affecting property and casualty insurance in Florida or Louisiana may expose us to more significant risks. In the event of such catastrophes, the laws and regulations of Florida and Louisiana, as well as of other states where we are regulated to do business, may restrict or prevent us from taking actions to reduce our exposure to losses related to such catastrophes. For example, we may be prevented from using non-renewals or cancellations to limit our exposure following a catastrophe, may be required to provide additional advance notice of non-renewals and cancellations, or may be subject to rate change delays or limits or may be prevented from exiting a market that has become unprofitable.

In addition, changes in the prevailing regulatory, legal, economic, political, demographic or competitive environment, and other conditions in such states could also make it less attractive for us to do business in those states and would have a more pronounced effect on our business than it would on other insurance companies that are more geographically diversified than we are.

Increased competition, competitive pressures, industry developments and market conditions could affect the growth of our business and adversely impact our financial results.

The property and casualty insurance industry in U.S. coastal states is highly competitive, and we believe it will remain highly competitive for the foreseeable future. We compete not only with other insurance corporations, but also with Florida Citizens, mutual companies, other underwriting organizations and alternative risk-sharing mechanisms. Our principal lines of business are written by numerous other insurance companies. We face competition from national and regional insurers, coastal specialists, new entrants and the residual market, such as Florida Citizens and Louisiana Citizens. Larger and more established national and regional insurance companies may have certain competitive advantages, including increased name recognition, increased loyalty of their customer base and reduced per policy acquisition costs. We compete for business not only on the basis of price, but also on the basis of financial strength, types of coverages offered, availability of coverage desired by customers, commission structure and quality of service to our policyholders and agents. We may have difficulty continuing to compete successfully on any of these bases in the future. Competition could limit our ability to retain existing business or to write new business at adequate rates, and such

 

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limitation may cause a material adverse effect on our results of operations and financial position. Because we are smaller than some of our competitors, we may lack the resources to increase or maintain our market share.

Further, the rapid evolution of AI and technology in general may alter the competitive landscape. While we expect to continue leveraging technology, data and analytics efficiently, it is possible that competitors will leverage AI and technology solutions more effectively, which may adversely impact our competitive position. Competitors could enter the insurance market and further accelerate these trends. Our competitive position could be adversely impacted if we are unable to deploy, in a cost-effective and competitive manner, technology or if our competitors collect and use data which we do not have the ability or access to utilize.

In addition, industry developments could further increase competition in our industry. These developments could include:

 

•

an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new companies attempt to enter the insurance business as a result of better premium pricing and/or policy terms;

 

•

an increase in programs in which state-sponsored entities provide property insurance in catastrophe-prone areas; and

 

•

changes in the regulatory and political climate.

These developments and others could make the property and casualty insurance marketplace more competitive by increasing the supply of insurance available. If competition limits our ability to write new business at adequate rates, our future results of operations would be adversely affected.

The insurance business is historically cyclical in nature, which may affect our financial performance and cause our operating results to vary from quarter to quarter and may not be indicative of future performance.

Historically, insurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints, volatility in investment results, general economic conditions and other factors. Increased pricing competition among insurers, which is sometimes referred to as a “soft market,” can adversely affect revenue and profitability levels. As insurers recognize this situation (which can occur at different times, for different products and for different companies), the historical reaction has been for insurers to raise their rates (sometimes referred to as a “hard market”) in an attempt to restore profitability to acceptable levels. As more insurers react in this way, profit levels in the industry may increase to a point where some insurers begin to lower their rates, starting the cycle over again. The ability to discern at any point in time whether we are in a “hard” or “soft” market is often difficult, as such a conclusion represents an assessment of innumerable data points including, among others, the operating results of, and the dynamic competitive actions taken by, us and many competitors in multiple markets involving a variety of products. Often, detailed information on our competitors becomes available on a delayed basis, and the nature of the market becomes apparent only in retrospect. Our ability to predict future competitive conditions is also constrained as a result.

The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result, the insurance

 

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business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels. Demand for insurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers and general economic conditions. All of these factors fluctuate and may contribute to price declines generally in the insurance industry.

We believe the coastal property insurance market is currently transitioning to a softer market cycle. However, we cannot predict with certainty whether market conditions will improve, remain constant or deteriorate. Negative market conditions may impair our ability to underwrite insurance at rates we consider appropriate and commensurate relative to the risk assumed. Additionally, negative market conditions could result in a decline in policies sold, an increase in the frequency of claims and premium defaults and an uptick in the frequency of falsification of claims. If we cannot underwrite insurance at appropriate rates, our ability to transact business will be materially and adversely affected. Any of these factors could lead to an adverse effect on our business, results of operations and financial condition.

Our success and ability to grow our business depends on retaining and expanding our customer base. If we fail to add new customers or retain current customers, our business, results of operations and financial condition could be harmed.

We believe that the growth of our business and revenue depends upon our ability to retain our existing customers and add new customers in our current geographic markets and in the markets in which we expand. While we have experienced significant customer growth since we commenced operations, we may not be able to maintain this growth and our customer base could shrink over time.

Our ability to attract new customers and retain existing customers depends on our ability to continue providing positive insurance-buying and claims-filing customer experiences, competitive pricing and adequate insurance coverage. In order to maintain this reputation, we may be required to incur significantly higher marketing expenses, costs related to improving our service, and lower margins in order to attract new customers and retain existing customers. If we fail to remain competitive on customer experience, pricing and insurance coverage options, our ability to grow our business and generate revenue by attracting and retaining customers may be adversely affected.

There are many factors that could negatively affect our ability to grow our customer base, including if:

 

•

we fail to effectively use search engines, social media platforms, content-based online advertising and other online sources for generating traffic to our website;

 

•

potential customers in a particular marketplace or more generally do not meet our underwriting guidelines;

 

•

our competitors mimic our digital platform or develop other innovative services, causing current and potential customers to purchase their insurance products instead of our products;

 

•

we lose customers to new market entrants and/or existing competitors;

 

•

we do not obtain regulatory approvals necessary for expansion into new markets or in relation to our products (such as line, form, underwriting and rating approvals) or such approvals contain conditions that impose restrictions on our operations (such as limitations on growth);

 

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•

our digital platform experiences disruptions;

 

•

we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate;

 

•

we fail to expand geographically;

 

•

we fail to offer new and competitive products;

 

•

customers have difficulty installing, updating or otherwise accessing our website on mobile devices or web browsers as a result of actions by us or third parties;

 

•

technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; or

 

•

we are unable to address customer concerns regarding the content, data privacy and security of our digital platform.

Our inability to overcome these challenges could impair our ability to attract new customers and retain existing customers, and could have a material adverse effect on our business, results of operations and financial condition.

Reinsurance coverage may not be available to us in the future at favorable rates or at all.

We purchase a significant amount of reinsurance from third parties that we believe enhances our business by reducing our exposure to potential catastrophe losses and reducing volatility in our underwriting performance, providing us with greater visibility into our future earnings. Reinsurance involves transferring, or ceding, a portion of our risk exposure on policies that we write to another insurer, the reinsurer, in exchange for a premium.

We primarily use treaty reinsurance, consisting of excess of loss (“XOL”) coverage from traditional reinsurers, collateralized reinsurers and capital markets investors, in the form of catastrophe bonds. Additionally, we buy program specific reinsurance coverage on a quota share, property per risk or a facultative basis. Treaty coverage refers to a reinsurance contract that is applied to a group or class of business where all the risks written meet the criteria for that class. Facultative coverage refers to a reinsurance contract on individual risks as opposed to a group or class of business. Our catastrophe XOL treaties are divided into multiple layers.

For the 2026-2027 reinsurance program, we procured approximately $2.6 billion of limit protection after a $103 million retention for the first named storm occurrence with losses above retention and, in the aggregate, we have purchased over $3.8 billion of limit protection for first and subsequent named storms. The majority of the 2026-2027 reinsurance program expires on April 30, 2027, other than our catastrophe bonds, which are multi-year contracts, with the exception of the policies issued pursuant to Florida Hurricane Catastrophe Funds, which expire on June 1, 2027. We typically do not purchase significant amounts of reinsurance coverage for catastrophe events other than hurricanes and other tropical storms, and our XOL coverage is generally purchased on a per occurrence rather than an aggregate basis. Therefore, although we attempt to manage our exposure to catastrophes through our underwriting process and the purchase of reinsurance protection, an especially severe catastrophe or series of catastrophes could exceed our reinsurance protection and would have a material adverse impact on our results of operations and financial condition.

The reinsurance market historically has been a cyclical market characterized by periods of sufficient or excess capital (soft market cycle) as well as shortages of capital (hard market cycle).

 

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Market conditions have limited, and in some cases prevented, insurers from obtaining the types and amounts of reinsurance they consider adequate for their business needs. As a result, we may not be able to purchase reinsurance in the areas and for the amounts we desire or on terms we deem acceptable or at all. A hard market cycle may increase our cost of reinsurance, force us to increase our loss retention, or limit the amount of reinsurance we are able to purchase, all of which would have an adverse impact on our business and results of operations. Although the reinsurance market is transitioning from a harder market cycle to a softer market cycle, the extent and duration of such softer reinsurance market conditions are unknown and could be reversed due to financial market events or catastrophe losses.

We may not be able to collect reinsurance amounts due to us from the reinsurers with which we have contracted.

Reinsurance is a method of transferring part of an insurance company’s risk under an insurance policy to another insurance company. To the extent that our reinsurers are unable to meet the obligations they assume under our reinsurance agreements, we remain liable for the entire insured loss. We use reinsurance arrangements to limit and manage the amount of risk we retain, to stabilize our underwriting results and to increase our underwriting capacity. Our ability to recover amounts due from reinsurers under the reinsurance treaties we currently have in effect is subject to the reinsurance company’s ability and willingness to pay and to meet its obligations to us. We attempt to select financially strong reinsurers with an AM Best or S&P rating of “A-” or better or we require the reinsurer to fully collateralize its exposure, such as in the case of our previous catastrophe bond issuances. While we monitor from time to time their financial condition, we also rely on our reinsurance broker and rating agencies in evaluating our reinsurers’ ability to meet their obligations to us. Any failure on the part of any one reinsurance company to meet its obligations to us could have a material adverse effect on our financial condition or results of operations.

All residential and commercial insurance companies that write property and casualty business in Florida, including Safepoint Insurance and Manatee, are required to obtain reinsurance through the Florida Hurricane Catastrophe Fund, and this coverage comprises a portion of our reinsurance program. The limit and retention of the FHCF’s reinsurance coverage is subject to upward or downward adjustment based on, among other things, submitted exposures to FHCF by all participants. We have also purchased private reinsurance alongside our FHCF layer to fill in gaps in coverage that may result from the adjustment of the limit or retention of our FHCF coverage; however, such private reinsurance will not cover any losses we may incur as a result of FHCF’s inability to pay the full amount of our claims. If a catastrophic event occurs in Florida, FHCF may not have sufficient funds to pay all of its claims from insurance companies in full or in a timely manner. This could result in significant financial, legal and operational challenges to our Company. In the event of a catastrophic loss, FHCF’s ability to pay may be dependent upon its ability to issue bonds in amounts that would be required to meet its reinsurance obligations. There can be no assurance that FHCF will be able to do this. While we believe FHCF currently has adequate capital and financing capacity to meet its reinsurance obligations, there can be no assurance that it will be able to meet its obligations in the future, and any failure to do so could have a material adverse effect on our liquidity, financial condition and results of operations.

The “Safepoint” brand may not become as widely known as incumbents’ brands or the brand may become tarnished.

Many of our competitors have brands that are well recognized. Since inception, we have spent a considerable amount of money and other resources to create brand awareness and build our reputation.

 

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We may not be able to build brand awareness, and our efforts at building, maintaining and enhancing our reputation could fail. There are many factors that, whether valid or not, could diminish confidence in our brand, which could adversely affect our reputation, business, results of operations and financial condition, including:

 

•

complaints or negative publicity about our business practices;

 

•

our marketing and advertising campaigns;

 

•

our compliance with applicable laws and regulations;

 

•

the integrity of the data that we provide to customers or business partners;

 

•

data privacy and security issues;

 

•

business practices or adverse financial developments;

 

•

perceptions of our corporate governance or social responsibility;

 

•

the conduct of our officers or employees;

 

•

the actions of a significant customer or other business with which we do business; or

 

•

other aspects of our business.

As we expand our product offerings and enter new markets, we must continue to establish our reputation in an expanded marketplace, and to the extent we are not successful in this endeavor, our business, results of operations and financial condition could be adversely affected. There can be no assurance that we will be able to maintain or enhance our reputation, and failure to do so could materially adversely affect our business, results of operations and financial condition. If we are unable to maintain or enhance consumer awareness of our brand cost-effectively, our business, results of operations and financial condition could be materially adversely affected.

The negative impacts of these or other events may be aggravated as consumers and other stakeholders increase their expectations regarding corporate conduct and responsibility. These impacts may be further complicated by the fact that their perceptions are formed through rapid and broad interactions using modern communication and social media tools over which we have no control. Any such event could decrease demand for our products, reduce our ability to recruit and retain employees and lead to greater regulatory scrutiny of our businesses.

We may not be able to manage our growth effectively.

We intend to grow our business in the future, which could require additional capital, technology development, and skilled personnel. To grow effectively, we must be able to meet our capital needs and expand our systems, technology, and internal controls effectively. We also must allocate our human resources optimally, including identifying, hiring, and retaining qualified employees, and effectively incorporate the components of any businesses we may acquire in our effort to achieve growth. The failure to manage our growth effectively could have a material adverse effect on our business, financial condition and results of operations.

Our success depends on our ability to accurately price the risks we underwrite.

Our results of operations and financial condition depend on our ability to underwrite and set premium rates accurately for a wide variety of risks. Rate adequacy is necessary to generate sufficient premiums to pay losses, loss adjustment expenses, reinsurance costs and underwriting expenses and to earn a profit. In order to price our products accurately, we must

 

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collect and properly analyze a substantial amount of data; develop, test and apply appropriate rating formulas; closely monitor and timely recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. Our ability to successfully perform these tasks, and as a result price our products accurately, is subject to a number of risks and uncertainties, some of which are outside our control, including:

 

•

the availability of sufficient reliable data and our ability to properly analyze available data;

 

•

regulatory delays in approving filed rate changes;

 

•

the uncertainties that inherently characterize estimates and assumptions;

 

•

our selection and application of appropriate rating and pricing techniques;

 

•

changes in legal standards, claim resolution practices, and restoration costs; and

 

•

legislatively imposed consumer initiatives.

In addition, we could underprice risks, which would negatively affect our profit margins. We could also overprice risks, which could reduce the number of policies we write and our competitiveness. In either event, our profitability could be materially and adversely affected.

If our customers were to claim that the policies they purchased failed to provide adequate or appropriate coverage, we could face claims that could harm our business, results of operations and financial condition.

Although we aim to provide adequate and appropriate coverage under each of our policies, customers could purchase policies that prove to be inadequate or inappropriate. If such customers were to bring a claim or claims alleging that we failed in our responsibilities to provide them with the type or amount of coverage that they sought to purchase, referred to as error and omission claims (“E&O claims”), we could be found liable, resulting in an adverse effect on our business, results of operations and financial condition. Errors and omissions could include failure, whether negligently or intentionally, to place coverage on behalf of clients, to provide complete and accurate information relating to the risks being insured against or to appropriately apply funds that we hold on a fiduciary basis. It is not always possible to prevent or detect errors and omissions, and the precautions we take may not be effective in all cases. E&O claims often involve substantial amounts of money and, accordingly, can involve significant defense costs. While we maintain insurance coverage to protect us against liability from E&O claims, such coverage may be insufficient or inadequate. Additionally, prices for this insurance and the scope and limits of the coverage terms available are dependent on our claims history as well as market conditions that are outside of our control. While we endeavor to purchase coverage that is appropriate to our assessment of our risk, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages or whether our errors and omissions insurance will cover such claims. In establishing liabilities for E&O claims, we utilize case level reviews by inside and outside counsel and an internal analysis to estimate potential losses. Liability for E&O claims is reviewed and adjusted as new developments warrant. Given the unpredictability of E&O claims and of litigation that could flow from them, it is possible that an adverse outcome in a particular matter could have a material adverse effect on our business, results of operations and financial condition or cash flow in a given quarterly or annual period.

The inherent uncertainty of models and our reliance on such models as a tool to evaluate risk may have an adverse effect on our financial results.

We license analytic and modeling software from third parties to facilitate our pricing, assess our risk exposure and determine our reinsurance needs. Given the inherent uncertainty of

 

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modeling techniques and the application of such techniques, these models and databases may not accurately address the emergence of a variety of matters which might impact our exposure to losses. These models may understate the exposures we are assuming and our financial results may be adversely impacted, perhaps significantly.

These uncertainties can include, but are not limited to, the following:

 

•

the models do not address all the possible hazard characteristics of a catastrophe peril (e.g., the precise path and wind speed of a hurricane);

 

•

the models may not accurately reflect the true frequency or severity of events;

 

•

the models may not accurately reflect a risk’s vulnerability or susceptibility to damage for a given event characteristic;

 

•

the models may not account for unusual or unprecedented catastrophe events;

 

•

the models may not adequately consider the impact of current inflation on the magnitude of modeled losses;

 

•

the models may not accurately represent loss potential to insurance or reinsurance contract coverage limits, terms and conditions; and

 

•

the models may not accurately reflect the impact on the economy of the area affected or the financial, judicial, political, or regulatory impacts on insurance claim payments during or following a catastrophe event.

As a result of these factors and contingencies, our reliance on assumptions and data used to evaluate our entire risk portfolio is subject to a high degree of uncertainty that could result in actual losses that are materially different from our modeled estimates and could adversely impact our financial results.

The inability of our claims department to effectively manage or remediate claims could adversely affect our insurance business, financial results and capital requirements.

We rely on our claims department to facilitate and oversee the claims adjustment process for our policyholders. Many factors could affect the ability of our claims department to effectively manage claims by our policyholders, including:

 

•

the accuracy of our adjusters as they make their assessments and submit their estimates of damages;

 

•

the training, background and experience of our claims representatives;

 

•

the ability of our claims department to ensure consistent, timely and accurate claims handling;

 

•

the ability of our claims department to translate the information provided by adjusters into acceptable claims resolutions;

 

•

the ability of our claims department to detect fraudulent claims;

 

•

the ability of our claims department to maintain and update its claims handling procedures and systems as they evolve over time based on claims and geographical trends in claims reporting; and

 

•

the ability of our claims department to contract capable third-party adjusters.

Any failure to effectively manage the claims adjustment process, including failure to pay claims accurately and timely, could lead to material litigation, undermine our reputation in the

 

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marketplace, impair our corporate image and negatively affect our financial results. In addition, if we do not train new claims adjusting employees effectively or if we lose a significant number of experienced claims adjusting employees, our claims department’s ability to handle an increasing workload as we grow could be adversely affected. In addition to potentially slowing growth in the affected markets, we could suffer decreased quality of claims work, which in turn could lower our operating margins.

The failure of third-party adjusters and claims administrators to properly evaluate claims could result in additional policy losses that affect our financial condition or damage our reputation.

Although the majority of our claims are administered in-house by our employees, we have outsourced certain aspects of our claims adjustment function to third-party adjusters and claims administrators, such as following large catastrophe events and for complex commercial claims. We therefore rely on these third-party adjusters to accurately evaluate claims that are made under policies that we underwrite. Many factors affect the ability of these third-party firms to adjust claims accurately, including the training and experience of their claims representatives, the culture of their respective claims organizations, the effectiveness of their management and their ability to develop or select and implement appropriate procedures and systems to support their claims functions. The actions of these third parties could result in additional losses being suffered by our insurance company subsidiaries or damage our reputation.

Any significant increase in the average time we process claims could undermine our reputation and position in the insurance marketplace. Any failure to pay claims accurately or timely could also lead to regulatory and administrative actions or material litigation, or result in damage to our reputation, any one of which could materially and adversely affect our business, results of operations and financial condition.

If our claims adjusting employees or third-party claims administrators are unable to effectively process our volume of our customers’ claims, our ability to grow our business while maintaining high levels of customer satisfaction could be compromised, which in turn could adversely affect our business, results of operations and financial condition.

If renewals of our existing policies or new business from repeat insureds do not meet expectations, our premiums written in future years and our future results of operations could be materially adversely affected.

Our insurance policies are written for a one-year term and are renewable. We make assumptions about the renewal of our prior year’s contracts and business from repeat insureds, including for purposes of determining the amount of reinsurance we purchase. If actual renewals and repeat business do not meet expectations or if we choose not to write on a renewal basis or accept repeat business because of pricing conditions, our premiums written in future years and our future operations would be materially adversely affected, and we may purchase reinsurance above the amount that we actually need.

We are exposed to the litigation environment in the State of Florida.

For many years, property insurers operating in Florida have faced a disproportionately high volume of litigated claims compared to other states. Several factors have contributed to this challenging environment, including the widespread use of “assignment of benefits” (“AOB”), a practice that allowed policyholders to transfer all or part of their insurance claim to contractors or other third parties, and the application of “one-way attorney fees,” which required insurers to pay the policyholder’s legal fees if the insured prevailed in litigation, even by a nominal amount.

 

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In addition to AOB-related litigation and the one-way attorney fee statute, the Florida insurance market has been burdened by claims inflation, fraud, and an overall elevated level of litigation. Fraudulent roofing claims, in particular, have significantly contributed to industry losses. As a result of these ongoing challenges, several insurers have ceased writing new homeowners policies in Florida, and others have encountered financial distress, leading some to enter liquidation, rehabilitation, or conservatorship.

Florida began addressing these issues with initial AOB reforms in 2019, culminating in the passage of Senate Bill 2-A in December 2022. These legislative changes represent meaningful progress in tackling long-standing industry concerns. The key provisions of the reforms include:

 

1.

a mandatory 10-day notice period before initiating litigation;

 

2.

elimination of the one-way attorney fee statute for policyholders;

 

3.

prohibition of post-loss benefit assignments for residential and commercial property insurance policies issued on or after January 1, 2023;

 

4.

a requirement that policyholders demonstrate a breach of contract before filing bad faith claims; and

 

5.

a reduction in the initial claim filing deadline to one year from the date of loss.

When combined with proactive measures previously implemented by Safepoint, these reforms have started to yield positive short-term results, particularly in improving our loss experience. However, the long-term success of these changes will depend on several factors, including whether the reforms remain intact, how they are interpreted by the courts and enforced by regulators, and how effectively we adapt our operational and procedural practices to align with the new legal framework. Additional considerations include the response of policyholders, public adjusters, vendors, and attorneys, as well as the impact of macroeconomic conditions—such as inflation—on claims costs and related expenses.

While we are encouraged by early indicators such as a reduction in litigation rates and view the reforms as a significant step toward stabilizing Florida’s property insurance market, the full medium- and long-term effects remain to be seen. Only time will reveal the extent of their impact on reducing litigation, fraud, and other systemic issues in the Florida insurance landscape.

We also cannot predict whether these legislative changes recently enacted in the state of Florida will persist and not be repealed in the future. Any repeal, in whole or in part, of the recent legislative changes in the state of Florida could materially and adversely affect our business, results of operations and financial condition. Furthermore, there can be no assurance that the regulatory requirements applicable to our business will not become more stringent in the future or result in materially higher costs than current requirements. Changes in the regulation of our business may reduce our profitability, limit our growth or otherwise adversely affect our business, results of operations and financial condition.

Our successful participation in the Florida Citizens and Louisiana Citizens depopulation programs depends on the continuation of such programs and our ability to select favorable policies to assume.

An important element of our strategy involves our continued participation in the Florida Citizens and Louisiana Citizens depopulation programs, which are insurers of last resort in the states of Florida and Louisiana, respectively. As of December 31, 2025, approximately 68% and 12% of our approximately 299,000 policies in force were assumed from Florida Citizens and Louisiana Citizens, respectively, including renewals. While we have experienced growth from

 

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Florida Citizens assumption transactions in the last few years, we do not anticipate significant growth remaining over the next 12 months. Florida Citizens maintained over 1.4 million policies in October 2023, and as of December 31, 2025 they have 0.4 million policies-in-force, a decline of 71.9% in approximately 27 months. The availability of assumption transactions from Florida Citizens tends to be cyclical in accordance with depopulation efforts and named storm frequency.

Our ability to participate in these programs is subject to a variety of factors, including continuation of such programs. There can be no assurance that Florida Citizens or Louisiana Citizens will decide to continue the depopulation program for a significant period of time, or at all. Any changes to curtail the depopulation programs, materially modify the terms of the programs as it relates to residential policies, or restrict our participation in the programs would hurt our growth prospects and would adversely impair our financial condition and results of operations.

When we enter into a take-out transaction with Florida Citizens or Louisiana Citizens, we have the opportunity to review information about the policies available for assumption. We undertake a robust selection process in which we analyze various aspects of each policy’s risk profile and, based on the results, select the policies we would like to assume. In this selection process, we review and rely upon the information collected by Florida Citizens or Louisiana Citizens, as applicable, when it initially wrote the policy and therefore, we are subject to the risk that such information is inaccurate, incomplete or fraudulent. Our successful participation in the depopulation program depends on our ability to select policies that will be accretive to our financial results. Our ability to successfully select such policies in future take-out transactions is expected to become more challenging as the total number of policies insured by Florida Citizens and Louisiana Citizens decreases, leaving a pool of remaining policies at Florida Citizens and Louisiana Citizens that is increasing less attractive to private insurers from an underwriting perspective. Our selection process involves many different considerations and uncertainties, and there can be no assurances that we will appropriately assess the risks associated with each policy. As a result, we may select unfavorable policies that could result in substantial losses, which may in turn adversely impact our financial condition and results of operations.

The market for attractive take-out opportunities is highly competitive and is subject to a bidding process. If competing private insurers offer a lower premium than us for the same policy, Florida Citizens and Louisiana Citizens are required to allocate that policy to the insurer who offers the lowest premium. In the past, certain of our peers have been able to offer lower premiums than us when pursuing the same take-out opportunities. Other carriers may also choose to re-enter or expand their business in Florida or Louisiana in light of potential attractive take-out opportunities and generally improving market conditions on the back of the legislative reforms in 2022. There is no guarantee that we will be able to renew these assumed policies, and a lack of renewals could have a material adverse effect on our business, results of operations and financial condition.

There can be no assurance that Florida Citizens and Louisiana Citizens will decide to continue their depopulation programs for a significant period of time, or at all. Our ability to grow our premium base may depend upon the availability of future policy assumptions and acquisitions upon acceptable terms. Opportunities to acquire large numbers of policies from Florida Citizens and Louisiana Citizens meeting our strict underwriting criteria have diminished over certain historical periods as a result of the volatility of the Florida property insurance market. We cannot provide assurance that such opportunities will increase in the future.

Additionally, there can be no guarantee that Florida Citizens and Louisiana Citizens will timely offer sizeable take-out opportunities to the private insurance market that would meet our

 

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underwriting and profitability criteria or continue the depopulation program at all. While Florida Citizens and Louisiana Citizens do replenish its policies after conducting take-outs, there is no guarantee that such replenishments will meet our underwriting and profitability criteria or provide attractive take-out opportunities for us in the future, and our financial condition may suffer as a result. In addition, there may be a negative perception regarding our depopulations from Florida Citizens and Louisiana Citizens or the desirability of the policies we assume, which could adversely affect the price of our common stock.

Our expansion within the United States will subject us to additional costs and risks and our plans may not be successful.

Our success depends in significant part on our ability to expand into additional markets in the United States. We have historically only had operations in the U.S. Gulf Coast states, and have only recently started operating outside of this region. As of the date hereof, we are legally permitted to write excess and surplus insurance in 49 states and are admitted to write insurance in 6 states. We have targeted expansion to more states, but we cannot guarantee that we will be able to provide coverage in other states in the near term or at all. Moreover, one or more states could revoke our ability to operate, or implement additional regulatory hurdles that could inhibit our ability to obtain or maintain our ability to operate in such states. In addition to requiring additional management attention to operations over a broad geographic area, operating in additional states may place strain on our finance, analytics, compliance, legal, engineering and operations teams. We may incur significant operating expenses and may not be successful in our expansion for a variety of reasons, including:

 

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the inability to obtain any required government approvals, licenses or other authorizations;

 

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difficulty with complying with varying laws and regulatory standards, including with respect to the insurance business and insurance distribution, capital and outsourcing requirements, data privacy, tax and local regulatory restrictions;

 

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competition from local incumbents that better understand the local market, may market and operate more effectively and may enjoy greater local affinity or awareness; and

 

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differing demand dynamics, which may make our product offerings less successful.

If we invest substantial time and resources to expand our operations and are unable to manage these risks effectively, our business, results of operations and financial condition could be adversely affected.

Expansion into new markets will require additional investments by us in both regulatory approvals and marketing. These incremental costs may include hiring additional personnel, as well as engaging third-party service providers and other research and development costs. If we fail to grow our geographic footprint or if geographic growth occurs at a slower rate than expected, our business, results of operations and financial condition could be materially and adversely affected.

If we are unable to expand our product offerings, our prospects for future growth may be adversely affected.

Our ability to attract and retain customers and therefore increase our revenue depends in part on our ability to successfully expand our product offerings. We have historically concentrated our efforts exclusively on the excess and surplus and casualty insurance markets in order to achieve our long-term goals. Our success in the excess and surplus and casualty

 

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insurance market depends on our deep understanding of this industry. To penetrate new vertical markets, we will need to develop a similar understanding of those new markets and products and the associated business challenges faced by participants in them. Developing this level of understanding may require substantial investments of time and resources, and we may not be successful. In addition to the need for substantial resources, insurance regulation could limit our ability to introduce new product offerings. Additionally, any new insurance products could take months to be approved by regulatory authorities, or may not be approved at all. If we fail to penetrate new vertical markets successfully, our revenue may grow at a slower rate than we anticipate and our business, results of operations and financial condition could be materially and adversely affected. In addition, our decision to expand our insurance product offerings beyond the excess and surplus and casualty insurance market would subject us to additional regulatory requirements specific to such insurance products, which, in turn, could require us to incur additional costs or devote additional resources to compliance.

Loss of key vendor relationships or failure of a vendor to protect personal information of our customers, claimants or employees could affect our operations.

We rely on services and products provided by many vendors. These include, for example, vendors of computer hardware and software and vendors of human resource benefits management services. There can be no assurance that any monitoring we have for general vendor risk, including with regard to the security and stability of our critical vendors will be successful, and we may fail to properly address and understand the risks and costs involved in the third-party relationships. In the event that one or more of our vendors suffers a bankruptcy or otherwise becomes unable to continue to provide products or services, or fails to protect the personal information of our customers, claimants or employees which is held by or accessible to such vendors, we may suffer operational impairments, financial losses and other liabilities.

We may be unable to attract and retain qualified employees.

We depend on our ability to attract and retain experienced underwriting and claims administration talent and other skilled employees who are knowledgeable about our business. If the quality of our underwriters, analysts and other personnel decreases, we may be unable to maintain our current competitive position in the specialized markets in which we operate and be unable to expand our operations, which could adversely affect our results. Greater computing power, machine learning, and AI are driving change in the insurance industry, which may also require us to attract and maintain talent with expertise in such areas.

We believe that our ability to grow and fully execute our business plan will depend in large part on our ability to attract and retain additional skilled and qualified personnel and to expand, train and manage our employees. We may not be successful in doing so, because the competition for experienced personnel in the insurance industry is intense due to the limited number of individuals who possess the skills and experience required by our industry.

We are dependent on key executives, the loss of whom could adversely affect our business.

Our future success depends to a significant extent on the efforts of our senior management, and we are highly dependent on the services of our founder and chief executive officer, David Flitman. We believe there are only a limited number of available and qualified executives with substantial experience in our industry. If we were to lose the services of one or more members of our senior management, there can be no assurance that we will be able to hire an adequate replacement to manage and operate our business within a reasonable period of time and on terms that are acceptable to us. Accordingly, the loss of the services of Mr. Flitman or one or

 

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more members of our senior management could delay or prevent us from fully implementing our business strategy and, consequently, significantly and negatively affect our business.

Additionally, we will be in default under our Credit Agreement in the event that Mr. Flitman is no longer the chief executive officer of the Company.

Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.

We believe that our company culture has been critical to our success. We not only seek to engender a trusting relationship between our brand and our customers, but also among our employees. Our ability to continue to cultivate and maintain this culture is essential to our growth and continued success. We face a number of challenges that may affect our ability to sustain our corporate culture, including:

 

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failure to identify, attract, reward and retain people in leadership positions in our organization who share and further our culture, values and mission;

 

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the increasing size and geographic diversity of our workforce, and our ability to promote a uniform and consistent culture across all our offices and employees;

 

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the market perception about our charitable contributions and social and political stances;

 

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competitive pressures to move in directions that may divert us from our mission, vision and values;

 

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the continued challenges of a rapidly evolving industry; and

 

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the increasing need to develop expertise in new areas of business that affect us.

Our unique culture is one of our core characteristics that helps us to attract and retain key personnel. If we are not able to maintain our culture, we might have to incur additional costs and find alternative methods to recruit key employees, which in turn could cause our business, results of operations and financial condition to be adversely affected.

We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.

Our future capital requirements depend on many factors, including our ability to write new business successfully and to establish premium rates and reserves at levels sufficient to cover losses. Many factors will affect the amount and timing of our capital needs, including our growth rate and profitability, changes to capital and surplus requirements, our claims experience, the availability and cost of reinsurance, market disruptions, and other unforeseeable developments. If we need to raise additional capital, equity or debt financing may not be available at all or may be available only on terms that are not favorable to us. In the case of equity financings, dilution to our stockholders could result. In the case of debt financings, we would be subject to covenants that restrict our ability to freely operate our business. If we cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating plans and our business, financial condition or results of operations could be materially adversely affected.

Our Credit Agreement contains restrictions and covenants that limit our flexibility in operating our business and expose us to additional risk and may adversely affect our financial condition and future financial results.

On February 18, 2025, Safepoint Holdings (as the borrower thereunder) and certain of its subsidiaries (as guarantors thereunder) entered into a Credit Agreement, which was

 

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subsequently amended and restated, as of May 5, 2026, (as amended and restated, the “Credit Agreement”) with the lenders from time to time party thereto, and Regions Bank as the administrative agent, pursuant to which we entered into a $200 million term loan, as well as commitments in respect of a $200 million delayed draw term loan facility (the “DDTL Facility”) and a $200 million revolving credit facility (the “Revolving Credit Facility”). As of May 8, 2026, there was approximately $200.0 million in outstanding borrowings under the Credit Agreement, and there remained available for future drawings $200.0 million under the DDTL Facility and $200.0 million under the Revolving Credit Facility. All borrowings under the Credit Agreement mature on May 5, 2031.

The Credit Agreement contains financial covenants, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions, and is secured by liens and security interests on substantially all of our assets (subject to customary exceptions) (such assets, collectively, the “collateral”). All of these covenants, restrictions, liens and security interests impact how we operate our business and may limit our flexibility in planning for, or reacting to, changes in our business and industry. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, any outstanding debt under the Credit Agreement may be declared immediately due and payable. Our assets or cash flow may not be sufficient to fully repay outstanding borrowings if accelerated upon an event of default. Furthermore, if we are unable to repay, refinance, or restructure the Credit Agreement and the outstanding borrowings thereunder, the lenders could proceed against the collateral granted to them to secure such indebtedness, which could force us into bankruptcy or liquidation. As a result, any default by us on our debt could have a materially adverse effect on our business, financial condition, and results of operations.

Any future financing arrangements entered into by us or any of our subsidiaries may contain similar restrictions or maintenance covenants. As a result of these covenants and restrictions, we and our subsidiaries are, and will be, limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we or our subsidiaries may incur could include more restrictive covenants. We cannot guarantee that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Additionally, we will be in default under our Credit Agreement, in the event that any person or related group (other than Mr. Flitman, Mr. Hoffman and any trust or other estate planning vehicles established by such individuals) becomes the beneficial owner, directly or indirectly, of 30% or more of the outstanding voting stock of the Company.

Our inability to maintain our financial stability ratings may have a material adverse effect on our competitive position, the marketability of our product offerings, and our liquidity, operating results and financial condition.

Financial stability ratings are important factors in establishing the competitive position of insurance companies and can have a significant effect on an insurance company’s business. Many insurance buyers, agents, brokers and secured lenders use the ratings assigned by rating agencies to assist them in assessing the financial stability and overall quality of the companies from which they are considering purchasing insurance or in determining the financial stability of the company that provides insurance. As of the date hereof, Safepoint Insurance has a financial stability rating of “A (Exceptional)” by Demotech, Inc. (“Demotech”) and “BBB+” by Kroll Bond Rating Agency (“KBRA”); Cajun and Manatee each have a financial stability rating of “A

 

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(Exceptional)” by Demotech and “BBB” by KBRA. Demotech’s financial stability ratings range from “A (unsurpassed)” to “M (moderate).” The Demotech ratings for each of Safepoint Insurance, Cajun and Manatee are the third highest financial stability rating of the four financial stability ratings utilized by Demotech. KBRA’s financial stability ratings range from “AAA” to “R.” The KBRA rating for Safepoint Insurance, Cajun and Manatee is the fourth-highest financial stability rating of the 11 financial stability ratings utilized by KBRA. KBRA may append -or + modifiers to ratings in categories “AA” through “CCC” to indicate, respectively, upper and lower risk levels within the broader category. These financial stability ratings provide an objective baseline for assessing solvency and should not be interpreted as (and are not intended to serve as) an assessment of, a recommendation to buy, sell, or hold, any securities of an insurance company or its parent holding company, including the shares of our common stock being offered by this prospectus.

Demotech and KBRA assign ratings that are intended to provide an independent opinion of an insurance company’s ability to meet its obligations to policyholders and such ratings are not evaluations directed to investors. Demotech and KBRA each periodically review our ratings and may revise them downward or revoke them at their sole discretion based primarily on their analyses of our balance sheet strength (including capital adequacy and loss and loss adjustment expense reserve adequacy), gross premium leverage, operating performance and business profile. Factors that could affect such analyses include but are not limited to:

 

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if we change our business practices from our organizational business plan in a manner that no longer supports Demotech’s and/or KBRA’s rating;

 

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if unfavorable financial, regulatory or market trends affect us, including excess market capacity;

 

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if our losses exceed our loss reserves;

 

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if we reduce our levels of capital or reinsurance or increase our gross premium leverage;

 

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if we have unresolved issues with government regulators;

 

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if we are unable to retain our senior management or other key personnel;

 

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if our investment portfolio incurs significant losses; or

 

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if Demotech and/or KBRA alters their respective capital adequacy assessment methodology in a manner that would adversely affect our ratings.

These and other factors could result in a downgrade of our rating. A downgrade of our rating could cause our current and future agents, retail brokers and insureds to choose other, more highly-rated competitors. A downgrade of this rating could also increase the cost or reduce the availability of reinsurance to us.

In addition, in view of the earnings and capital pressures recently experienced by many financial institutions, including insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such institutions, will increase the frequency and scope of their credit reviews, will request additional information from the companies that they rate and may increase the capital and other requirements employed in the rating organizations’ models for maintenance of certain ratings levels. It is possible that such reviews of us may result in adverse ratings consequences, which could have a material adverse effect on our financial condition and results of operations. A downgrade or withdrawal of any rating could severely limit or prevent us from writing new and renewal insurance policies.

 

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The effects of emerging claim and coverage issues on our business are uncertain.

Loss severity in the property and casualty insurance industry has continued to increase in recent years, principally driven by larger court judgments. In addition, many legal actions and proceedings have been brought on behalf of classes of complainants, which can increase the size of judgments. The propensity of policyholders and third-party claimants to litigate and the willingness of courts to expand causes of loss and the size of awards may render the loss reserves of Safepoint Insurance inadequate for current and future losses. In addition, as industry practices and social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance policies that are affected by the changes. As a result, the full extent of liability under our insurance policies may not be known at the time such policies are issued or renewed, and our financial position and results of operations may be adversely affected.

The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial condition or results of operations.

We utilize a number of strategies to mitigate our risk exposure including:

 

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employing proper underwriting procedures to accurately define, measure and manage risks;

 

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carefully evaluating the terms and conditions of our policies;

 

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undertaking geographic diversification within states and regions in which we operate; and

 

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maintaining higher levels of capital, ceding higher levels of insurance risk to reinsurance companies that we believe are financially stable and writing lower levels of gross premium leverage.

Our failure to properly execute any of the above risk mitigation strategies could have a material adverse effect on our financial condition and results of operations. Furthermore, there are inherent limitations in all of these strategies and even if we successfully execute all of the above risk mitigations strategies, no assurance can be given that one or more catastrophic event or series of unanticipated events will not result in loss levels which could have a material adverse effect on our financial condition or results of operations.

Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we assume or write could have a material adverse effect on our financial condition or our results of operations.

Various provisions of our policies, such as limitations or exclusions from coverage which are designed to limit our risks, may not be enforceable in the manner we intend. In addition, the policies we issue contain conditions requiring the prompt reporting of claims to us and our right to decline coverage in the event of a violation of that condition. While our insurance product exclusions and limitations reduce the loss exposure to us and help eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or limitation, or legislation could be enacted modifying or barring the use of such endorsements and limitations in a way that would adversely affect our loss experience, which could have a material adverse effect on our financial condition or results of operations.

 

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We rely on non-exclusive independent agents to write voluntary insurance policies for us, and if we are not able to attract and retain independent agents, our revenues would be negatively affected.

We write voluntary insurance policies through a network of independent agents, who are not exclusive to Safepoint. As of December 31, 2025, voluntary policies written through independent agents constituted approximately 20% of our total policies in force. We expect to increase the number of voluntary policies we write as our business expands, which will further increase our reliance on our network of independent agents. In fact, in the future, we may rely on independent agents to be the primary source for our property insurance policies. If any of our independent agents cease writing policies for us, or if any of our master agency agreements are terminated, we may suffer a reduction in the amount of products we are able to sell, which would negatively impact our results.

Many of our competitors also rely on non-exclusive independent agents. As a result, we must compete with other insurers for independent agents’ business. Our competitors may offer a greater variety of insurance products, higher financial strength ratings, lower premiums for insurance coverage, or higher commissions to their agents. If our products, pricing and commissions do not remain competitive, we may find it more difficult to attract business from independent agents to sell our products.

We may use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

Safepoint may utilize AI and machine learning in its business or incorporate AI into its products and services. Our current uses of AI include our recently designed and implemented Agency Relations Management System, which leverages modern cloud architecture to enhance the ease of doing business with Safepoint by streamlining communications and transactions with its network of independent insurance agencies. Additionally, Safepoint has made strategic investments in predictive analytics and advanced pricing models, including a state-of-the-art Generalized Linear Modeling, or GLM, software.

The AI used by Safepoint may not operate properly or as expected, which could cause Safepoint to write policies it may not have otherwise written, misprice policies, assume greater risks, or overpay customer claims, among other potential negative impacts on its business and operations. Safepoint’s existing competitors, new entrants, technology companies or other third parties may leverage AI to the benefit of their business or operations or may incorporate AI into their products and services more quickly or successfully than Safepoint, which could make Safepoint less competitive and negatively impact its results of operations. In addition, if the content, analyses, output or recommendations produced by or with the assistance of AI are unintentionally, or are alleged to be, deficient, inaccurate or misleading, Safepoint’s business, financial condition and results of operations may be adversely impacted. Further, the deployment of AI could pose the risk of misuse and exacerbate our information technology and cybersecurity risks. The relative newness of the technology, the speed at which it is being adopted, and the absence of laws, regulations or standards expressly governing its use increases this risk. Any such misuse could expose us to legal or regulatory risk, damage customer relationships, or cause reputational harm.

Regulation of AI and machine learning is complex and rapidly evolving worldwide as legislators, regulators, including the SEC and the Federal Trade Commission, and consumer advocacy groups are increasingly focusing on these powerful emerging technologies. The laws

 

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and regulations applicable to our business and AI are complex and subject to varying interpretations, with limited regulatory guidance at this time. It is not possible to predict all of the risks related to the use of AI, and changes in laws, rules, directives and regulations governing AI may adversely affect our ability to develop and use AI or subject us to legal liability. Moreover, any changes in laws, regulations, orders and industry standards governing the use of AI may be costly or impossible to comply with, and may result in claims, disputes, litigation or costs associated with any compliance failure or redesign of our platform or services to comply with such regulations.

Increased public attention to environmental, social and governance matters (“ESG”) may expose us to negative public perception, cause reputational harm, impose additional costs on our business or impact our share price.

In recent years, there has been an increased focus from shareholders, business partners, cedants, regulators, politicians, and the public in general on environmental, social and governance, or ESG, matters, including greenhouse gas emissions, carbon footprint and climate-related risks, renewable energy, fossil fuels, diversity, equity and inclusion, responsible sourcing and supply chain, human rights, and social responsibility. Increasing attention is being directed towards publicly traded companies in particular regarding ESG matters. A failure, or perceived failure, to respond to investor or customer expectations related to ESG concerns, including negative perceptions regarding the scope or sufficiency and transparency of our ESG approach and reporting on ESG matters, could cause harm to our business and reputation. Alternatively, there could be investor or customer backlash relating to ESG-related topics, which could cause harm to our business and reputation. Damage to our reputation as a result of our provision of policies to certain insureds or investments relating to certain industries could result in decreased demand for our insurance products and could have a material adverse effect on our business, operational results and financial results, as well as require additional resources to rebuild our reputation, competitive position and brand strength. Additionally, while we strive to manage our invested capital in a manner consistent with publicly established ESG guidelines, we may not meet certain shareholders’ criteria for such investments or the performance of such investments may be adversely impacted by laws (including certain U.S. state laws) that limit or discourage government-affiliated asset managers from ESG-driven investments or differ from what it may have been if not managed in a manner consistent with ESG guidelines.

We will be required by Section 404 of the Sarbanes-Oxley Act to evaluate the effectiveness of our internal control over financial reporting. If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a public company with SEC reporting obligations, we will be required to document and test our internal control over financial reporting and to report any material weaknesses in such internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements would not have been prevented or detected on a timely basis. Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and, beginning with our annual report for the fiscal year ending December 31, 2027, provide a management report on the internal control over financial reporting. As discussed below, we have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, and as a result, we may not

 

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detect errors on a timely basis and our financial statements may be materially misstated. We are in the process of designing, implementing and testing our internal control over financial reporting required to comply with this obligation, which will be time-consuming, costly, and complicated.

The occurrence of any of the following may cause investors to lose confidence in the accuracy and completeness of our financial reports and could negatively impact the price of our common stock:

 

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identification of additional material weaknesses in our internal control over financial reporting;

 

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our inability to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner;

 

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our inability to assert that our internal control over financial reporting are effective; or

 

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when we are no longer an emerging growth company, our independent registered public accounting firm’s inability to express an opinion as to the effectiveness of our internal control over financial reporting.

If any of the foregoing occurs, we may also become subject to investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities, as well as lawsuits by private plaintiffs.

We identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.

Safepoint’s management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Safepoint’s management has identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness identified by management relates to Safepoint’s failure to design and maintain an effective control environment due to the lack of sufficient oversight of activities related to internal control over financial reporting and an insufficient complement of personnel with an appropriate level of knowledge, experience and training in internal control over financial reporting commensurate with the financial reporting requirements of the Company. This material weakness contributed to an additional material weakness, as management did not design and maintain effective accounting policies, procedures, and controls over the financial close process to achieve completeness, accuracy, appropriate presentation and disclosure, and timeliness in financial accounting and reporting. Specifically, the Company did not design and maintain effective controls to (i) properly identify and eliminate all intercompany transactions, (ii) accurately present and disclose variable interest entities and related non-controlling interests, (iii) implement appropriate accounting policies and procedures over consolidated revenue recognition and (iv) present and disclose transactions or balances consistently in the appropriate financial statement line items. These material weaknesses resulted in the restatement, as well as a revision, of Safepoint’s consolidated financial statements as of and for

 

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the year ended December 31, 2024 and a restatement of the consolidated financial statements as of and for the year ended December 31, 2023. Additionally, these material weaknesses could result in a misstatement of our account balances or disclosures that would result in a material misstatement to Safepoint’s annual or interim financial statements that would not be prevented or detected.

Safepoint’s management has developed a plan to remediate the identified material weaknesses. This remediation plan includes the following:

 

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Safepoint is in the process of strengthening its internal resources, specifically within the finance and accounting function. This includes hiring additional financial and accounting personnel with significant experience in complex accounting matters.

 

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Safepoint plans to design and implement or enhance existing controls in the financial close process, to achieve completeness, accuracy, and timeliness in financial accounting and reporting, including identification and elimination of intercompany transactions.

 

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Safepoint has engaged a third party accounting firm to assist Safepoint’s management in analyzing, reviewing and formalizing Safepoint’s accounting policies over financial reporting as well as complex accounting transactions.

 

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Safepoint’s management will formally monitor, review and implement the recommendations provided by the third-party accounting firm.

Safepoint is in the process of implementing aspects of this remediation plan, however, the remediation measures will be ongoing. The material weaknesses will not be considered remediated until management completes and tests the design, implementation and operating effectiveness of the new or enhanced controls for a sufficient period of time.

At this time, Safepoint cannot predict the success of such efforts or the outcome of future assessments of the remediation efforts. Safepoint’s efforts may not remediate the identified material weaknesses in internal control over financial reporting, and may not prevent additional material weaknesses from being identified in the future. Failure to implement and maintain effective internal control over financial reporting could result in errors in Safepoint’s consolidated financial statements that could result in a revision or restatement of its consolidated financial statements, and could cause it to fail to meet its reporting obligations, any of which could diminish investor confidence in Safepoint, negatively impact the trading price of our common stock and cause a decline in its value.

Risks Related to the Economic Environment

Adverse economic factors, including recession, tariffs, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims, or a combination of these effects, which, in turn, could affect our growth and profitability.

Factors, such as general economic conditions, the volatility and strength of the capital markets, trade disputes, including the imposition of new or increased tariffs, and inflation can affect the business and economic environment. These same factors affect our ability to generate revenue and profits. In an economic downturn that is characterized by higher unemployment, declining spending, and reduced corporate revenue, the demand for insurance products is generally adversely affected, which directly affects our premium levels and profitability. Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write,

 

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and our opportunities to underwrite profitable business. In an economic downturn, our customers may have a lower appetite for insurance coverage, cancel or cease payment on existing insurance policies, modify their coverage, or not renew the policies they hold with us. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments. These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.

We underwrite a significant portion of our insurance in Florida, Louisiana and the other U.S. Gulf Coast states. An economic downturn that particularly impacts such states could have an adverse effect on our financial condition and results of operations.

Actual or perceived changes in general economic, market and political conditions and policies and interest rates could impact our ability to sell its products and its results of operations.

Actual or perceived stressed conditions, volatility and disruptions in financial asset classes or various capital markets and complications in international trade flows can have an adverse effect on our Company, both because such conditions may decrease the returns on, and value of, its investment portfolio and because its benefit and claim liabilities are sensitive to changing market factors. Market factors include interest rates, credit spreads, equity and commodity prices, economic uncertainty, derivative prices and availability, real estate markets, trade barriers (including tariffs imposed or threatened by the current U.S. presidential administration and any retaliation by affected countries), supply chain disruption, inflation, foreign exchange rates and controls and national and international political circumstances (including governmental instability, wars, terrorist acts or security operations, and other geopolitical events) and the volatility and returns in capital markets. Disruptions in one market or asset class can also spread to other markets or asset classes. The current U.S. presidential administration’s tendency to depart from previous U.S. policy without following normal processes creates uncertainty about future U.S. government actions, which may result in new economic and geopolitical risks that cannot be accurately predicted. Our business operations and results may also be affected by economic activity, such as the level of employment, business investment and spending, consumer spending and savings and the impact on the economy of epidemics and pandemics, and monetary and fiscal policies, such as U.S. fiscal imbalances and changes in U.S. trade policies, or of a prolonged shutdown of the U.S. government, or the failure to reach an agreement on federal debt limits from time to time.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a diversified portfolio of investments that is managed by a professional investment advisory management firm in accordance with our investment policy and routinely reviewed by our Board of Directors. Our investments are subject to general economic conditions and market risks as well as risks inherent to particular securities.

Our primary market risk exposures relate to changes in interest rates and credit quality considerations. Although interest rates have slightly decreased with recent rate cuts instituted by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and further cuts are expected to interest rates, they remain significantly elevated compared to levels in 2021. Future increases in interest rates could cause the values of our fixed-maturity securities portfolios to decline, with the magnitude of the decline depending on the duration of securities included in our portfolio and the amount by which interest rates increase. Some fixed maturity securities have call or prepayment options, which create possible reinvestment risk in declining

 

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rate environments. Other fixed maturity securities, such as mortgage-backed and asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

The value of our investment portfolio is subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed-maturities also have a significant negative effect on the market valuation of such securities.

Such factors could reduce our net investment income and result in realized investment losses. Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.

We also invest in marketable equity securities. These securities are carried on our balance sheet at fair market value and are subject to potential losses and declines in market value based on the performance of equity markets. Our equity invested assets totaled $0.1 million as of December 31, 2025.

Risks for all types of securities are managed through the application of our investment policy, which establishes investment parameters that include but are not limited to, maximum percentages of investment in certain types of securities and minimum levels of credit quality, which we believe are within applicable guidelines established by the National Association of Insurance Commissioners (“NAIC”), applicable insurance investment laws and regulations, and applicable insurance regulatory authorities.

Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

Our investment portfolio could also be adversely impacted by ratings downgrades, increased bankruptcies and credit spread widening caused by economic downturns or other events. Severe economic downturns could cause impairments in our fixed income portfolio. In addition, declines in fixed income yields would result in decreases in net investment income from future investment activity, including reinvestments.

We could be forced to sell investments to meet our liquidity requirements.

We invest the premiums we receive from our insureds until they are needed to pay policyholder claims or other expenses. Consequently, we seek to manage the duration of our investment portfolio based on the duration of our loss and loss adjustment expense reserves to ensure sufficient liquidity and avoid having to liquidate securities to fund claims. Risks such as inadequate loss and loss adjustment reserves, significant losses arising from catastrophic events or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. Such sales could result in significant realized losses depending on the conditions of the general market, interest rates and credit issues with individual securities existing at the time of the sale.

 

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Risks Related to Regulation of Our Insurance Operations

We are subject to extensive regulation which may reduce our profitability or limit our growth. Moreover, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may adversely affect our financial condition and results of operations.

We are subject to extensive state regulation. Each of our affiliated insurance companies (Safepoint Insurance, Cajun and Manatee) is subject to supervision and regulation that is primarily designed to protect their respective policyholders rather than our stockholders, and such regulation is imposed by both the state in which it is domiciled and the states in which it does business. In addition, our Bermuda-based captives, Pompano Re Ltd., Canal Re Ltd. and Bobcat Re Ltd., are subject to regulation in Bermuda.

State insurance regulations relate to, among other things, the approval of policy forms and premium rates, our conduct in the marketplace, our compliance with solvency and financial reporting requirements, certain transactions with our affiliates, and limitations on the amount of business we can write, the amount of dividends we can pay to stockholders, and the types of investments we can make. Insurance holding company regulations generally provide that transactions between an insurance company and its affiliates must be fair and reasonable, and, if material or in a specified category, they require prior notice and approval or non-disapproval by the insurance company’s domiciliary state regulator. Affiliate transactions must also be clearly and accurately disclosed in the records of the respective parties, with expenses and payments allocated between the parties in accordance with customary accounting practices. Many types of affiliate transactions are subject to these requirements, including transfers of assets, loans, agreements between a reciprocal insurer and its attorney-in-fact, reinsurance agreements, service and management agreements, certain dividend payments by the insurance company and certain other material transactions. If we are unable to obtain the requisite prior approval for a specific affiliate transaction, we would be precluded from taking the action, which could adversely affect our operations. These regulatory requirements may adversely affect or inhibit our ability to achieve some or all of our business objectives. In addition, regulatory authorities may conduct periodic examinations into insurers’ business practices. These reviews may reveal deficiencies in our insurance operations or differences between our interpretations of regulatory requirements and those of the regulators.

Insurance holding company laws and regulations also impose approval requirements for the acquisition of control of a domestic insurance company or its controlling person. Any person or entity desiring to acquire control of a U.S. domestic insurer, or a U.S. reciprocal insurer through the control of its attorney-in-fact, must generally receive prior approval from the insurer’s domestic regulator. State insurance laws typically include a rebuttable presumption that such control exists if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten percent or more (or, under Alabama law, five percent or more) of the voting securities of a domestic stock insurer or a controlling company, such as a reciprocal insurer’s attorney-in-fact. Moreover, state regulators may find that control exists in circumstances in which a person owns or controls less than such percentage of the voting securities and require regulatory approval in such circumstances as well. This restriction on acquisitions of control may inhibit our ability to grow our business or achieve our business objectives. These laws may discourage potential acquisition proposals for our company and may delay, deter or prevent a change of control of us, including through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be desirable.

 

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Further, regulatory authorities have relatively broad discretion to deny or revoke licenses for various reasons, including the violation of insurance laws and regulations. In some instances, we follow practices based on our interpretations of laws or regulations or practices that we believe may be generally followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us, which could adversely affect our ability to operate our business and could have a material adverse effect on our financial condition and results of operations.

At any given time, a number of financial, market conduct or other examinations or audits of the Carriers may be ongoing. It is possible that any examination or audit may result in payments of fines and penalties, payments to policyholders, or both, as well as changes in systems or procedures, or restrictions on business activities, any of which could have a material adverse effect on our business, financial condition and results of operations.

Changes in regulation may reduce our profitability and limit our growth.

As an insurance company, each of the Carriers is subject to the laws and regulations of the states in which it does business, including Florida and Alabama. The NAIC and state insurance regulators, as well as state legislatures, regularly reexamine existing laws and regulations, generally focusing on modifications to holding company and solvency regulations, interpretations of existing laws and the development of new laws. Compliance with solvency standards or financial condition regulations may increase our capital and reserve requirements, risk management costs, and reporting costs. State legislatures and insurance regulators may also change licensing, permit, or approval requirements, or take other actions harmful to us. They may also take actions that harm our customers and independent agents or their operations, which may affect our business relationship with them and their ability to purchase or distribute our products.

From time to time, states consider and/or enact laws that may alter or increase state authority to regulate insurance companies and insurance holding companies. States also consider and/or enact laws that impact the competitive environment and marketplace for property and casualty insurance. Safepoint Insurance and Manatee currently transact insurance in Florida, where the recent political environment has led to aggressive regulation of property and casualty insurance companies. We expect this to continue for the foreseeable future. These and other aspects of the political environment in jurisdictions where we operate may reduce our profitability, limit our growth, or otherwise adversely affect our operations.

We may incur costs to comply with laws and regulations and changes to these laws and regulations may increase our expenses and regulatory capital charges. Our failure to comply with our own policies or with regulatory requirements may harm our reputation or result in sanctions or legal claims.

During the past several years, various regulatory and legislative bodies have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events and insurance capacity and pricing. These regulations include (i) the creation of “market assistance plans” under which insurers are induced to provide certain coverages, (ii) restrictions on the ability of insurers to rescind or otherwise cancel certain

 

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policies in mid-term or to non-renew policies at their scheduled expirations, (iii) advance notice requirements or limitations imposed for certain policy non-renewals, (iv) limitations upon or decreases in rates permitted to be charged, (v) expansion of governmental involvement in the insurance market and (vi) increased regulation of insurers’ policy administration and claims handling practices.

In December 2025, the NAIC approved a Request for NAIC Model Law Development in support of the Reciprocal Exchanges (E) Working Group’s charge to clarify that fees charged from a reciprocal insurer’s attorney-in-fact are subject to fair and reasonable standards under the Model Holding Company Act and Regulation.

Currently, the federal government does not directly regulate the insurance business. However, in recent years the state insurance regulatory framework has come under increased federal scrutiny. Congress and some federal agencies from time to time investigate the current condition of insurance regulation in the United States to determine whether to impose federal regulation or to allow an optional federal charter, similar to banks. In addition, changes in federal legislation and administrative policies in several areas, including changes in the Gramm-Leach-Bliley Act, financial services regulation and federal taxation, can significantly impact the insurance industry and us.

We cannot predict with certainty the effect any enacted, proposed or future state or federal legislation or NAIC initiatives may have on the conduct of our business. Furthermore, there can be no assurance that the regulatory requirements applicable to our business will not become more stringent in the future or result in materially higher costs than current requirements, or that creation of a federal insurance regulatory system will not adversely affect our business or disproportionately benefit our competitors. Changes in the regulation of our business may reduce our profitability, limit our growth or otherwise adversely affect our operations.

We are periodically subject to examinations by our state insurance regulators, which could result in adverse examination findings and necessitate remedial actions.

The insurance regulators primarily responsible for the supervision and examination of the Carriers are FLOIR (as the domestic regulator of Safepoint Insurance and Manatee) and the AL DOI (as the domestic regulator of Cajun). Periodically, a domestic state regulator performs examinations of insurance companies under its jurisdiction to assess compliance with applicable laws and regulations, financial condition and the conduct of regulated activities. These examinations provide a significant opportunity for such regulators to review and scrutinize our business. If, as a result of an examination, the regulatory authority determines that our financial condition, capital resources or other aspects of any of our operations are less than satisfactory, or that we are in violation of applicable laws or regulations, it may require us to take one or more remedial actions or otherwise subject us to regulatory scrutiny, such as pursuant to an enforcement action. We cannot predict with precision the likelihood, nature or extent of any necessary remedial actions, if any, resulting from an examination, or the associated costs of such remedial actions or regulatory scrutiny. In addition, insurance regulators of other states in which we are licensed to operate may also conduct periodic financial examinations or other targeted investigations. Any regulatory or enforcement action or any regulatory order imposing remedial, injunctive or other corrective action against us resulting from these examinations could have a material adverse effect on our business, results of operations and financial condition.

State regulations limiting rate increases and requiring us to underwrite business in certain areas are beyond our control and may adversely affect our results of operations and financial condition.

From time-to-time states have passed legislation, and regulators have taken action, that has had the effect of limiting the ability of insurers to manage catastrophe risk, such as legislation

 

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prohibiting insurers from reducing exposures or withdrawing from catastrophe-prone areas, or mandating that insurers participate in residual markets. In addition, following catastrophes, there are sometimes legislative initiatives and court decisions which seek to expand insurance coverage for catastrophe claims beyond the original intent of the policies. Further, our ability to increase pricing to the extent necessary to offset rising costs of catastrophes requires approval of insurance regulatory authorities.

Our ability or willingness to manage our catastrophe exposure by raising prices, modifying underwriting terms or reducing exposure to certain geographies may be limited due to considerations of public policy, the evolving political environment and our ability to penetrate other geographic markets, which may have a material adverse effect on our results of operations, financial condition and cash flows. We cannot predict whether and to what extent new legislation and regulations that would affect our ability to manage our exposure to catastrophic events will be adopted, the timing of adoption or the effects, if any, they would have on our ability to manage our exposure to catastrophic events.

Additionally, we are required to participate in guaranty funds for insolvent insurance companies. The funds periodically assess losses against all insurance companies doing business in the state. Our operating results and financial condition could be adversely affected by any of these factors.

We rely on the use of credit scoring in pricing and underwriting certain of our insurance policies and any legal or regulatory requirements that restrict our ability to access credit score information could decrease the accuracy of our pricing and underwriting process and thus decrease our ability to be profitable.

We use credit scoring as a factor in pricing and underwriting decisions where allowed by state law. Consumer groups and regulators have questioned whether the use of credit scoring unfairly discriminates against some groups of people and are calling for laws and regulations to prohibit or restrict the use of credit scoring in underwriting and pricing. Laws or regulations that significantly curtail or regulate the use of credit scoring, if enacted in any of the states in which we operate, could impact the integrity of our pricing and underwriting processes, which could, in turn, materially and adversely affect our business, financial condition, results of operations and prospects, and make it harder for us to be profitable over time.

Litigation and legal proceedings filed by or against us could have a material adverse effect on our business, results of operations and financial condition.

Litigation and other proceedings may include, but are not limited to, complaints from or litigation by customers or reinsurers, related to alleged breaches of contract or otherwise. As our market share increases, competitors may pursue litigation to require us to change our business practices or offerings and limit our ability to compete effectively. As is typical in the insurance industry, we continually face risks associated with litigation of various types arising in the normal course of our business operations, including disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation. Although we are not currently involved in any material litigation with our customers, members of the insurance industry are often the target of class action lawsuits and other types of litigation, some of which involve claims for substantial amounts, and the outcomes of which are unpredictable. This litigation is based on a variety of issues, including insurance and claim settlement practices. In addition, because we use sophisticated data collection and analysis technologies, it is possible that customers or consumer groups could bring individual or class action claims alleging that our methods of collecting data and pricing risk are impermissibly discriminatory. We cannot predict with any certainty whether we will be involved in such

 

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litigation in the future or what impact such litigation would have on our business. If we were to be involved in litigation and it was determined adversely, it could require us to pay significant damages or to change aspects of our operations, either of which could have a material adverse effect on our financial results. Even claims without merit can be time-consuming and costly to defend and may divert management’s attention and resources away from our business and adversely affect our business, results of operations and financial condition. Additionally, routine lawsuits over claims that are not individually material could in the future become material if aggregated with a substantial number of similar lawsuits. In addition to increasing costs, a significant volume of customer complaints or litigation could adversely affect our brand and reputation, regardless of whether such allegations are valid or whether we are liable. We cannot predict with certainty the costs of defense, the costs of prosecution, insurance coverage or the ultimate outcome of litigation or other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation, and other proceedings, may harm our business and financial condition.

We expect our results of operations to fluctuate on a quarterly and annual basis. In addition, our operating results and operating metrics are subject to seasonality and volatility, which could result in fluctuations in our quarterly revenues and operating results or in perceptions of our business prospects.

Our revenue and results of operations could vary significantly from period to period and may fail to match expectations as a result of a variety of factors, some of which are outside of our control. Our results may vary as a result of fluctuations in the number of customers purchasing our insurance products and fluctuations in the timing and amount of our expenses. In addition, the insurance industry, and particularly homeowners and commercial residential insurance, are subject to their own cyclical trends and uncertainties, including extreme weather which is often seasonal and may result in volatility in claims reporting and payment patterns. Fluctuations and variability across the industry may affect our revenue. As a result of the potential variations in our revenue and results of operations, period-to-period comparisons may not be meaningful and the results of any one period should not be relied on as an indication of future performance. In addition, our results of operations may not meet the expectations of investors or public market analysts who follow us, which may adversely affect our stock price.

We may experience seasonal fluctuations in our revenues and resulting fluctuations in our rate of growth as a result of insurance spending patterns. Volatility in our key operating metrics or their rates of growth could have a negative impact on our financial results and investor perceptions of our business prospects and a failure to achieve our quarterly forecasts or to meet or exceed the expectations of research analysts or investors will cause our stock price to decline.

Changes in accounting practices and future pronouncements may materially affect our reported financial results.

Various authoritative accounting or regulatory entities, including the Financial Accounting Standards Board (“FASB”) and the SEC, may amend, expand and/or eliminate the financial accounting or reporting standards that govern the preparation of our consolidated financial statements or could reverse their previous interpretations or positions on how various financial accounting and/or reporting standards should be applied. Various FASB and SEC proposals are pending and subject to change. Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively. Our consolidated financial statements are prepared in accordance with Generally

 

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Accepted Accounting Principles (“GAAP”). The impact of changes in GAAP cannot be predicted but may affect the calculation of net income, stockholders’ equity, and other relevant financial statement line items.

In addition to compliance with GAAP on a consolidated basis, each of Safepoint Insurance and the Reciprocal Exchanges is required to comply with statutory accounting principles (“SAP”). SAP and various components of SAP are subject to constant review by the NAIC, its committees and their subgroups, and state insurance departments to address emerging issues and otherwise improve financial reporting. Various proposals are pending before NAIC committees or their subgroups, some of which, if enacted, could have negative effects on insurance industry participants. The NAIC continuously examines existing laws and regulations. We cannot predict whether or in what form such reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect us.

Changes to the U.S. tax laws and implementation of new tax policies could have a significant negative impact on the overall economy and our business.

Legislative or other actions related to taxes could have a negative effect on us, our investments, or our stockholders. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could have other adverse consequences. Stockholders are urged to consult with their tax advisors regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

Furthermore, the current administration has included as part of its agenda a potential reform of U.S. tax laws, including reducing the corporate tax rate, extending certain provisions of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), and imposing new tariffs. The combined impact of the extension of certain tax benefits pursuant to the TCJA and the implementation of new tariffs could potentially lead to increases in the U.S. deficit, inflation, and interest rates, all of which could contribute to increases in market interest rates and a decrease in U.S. economic growth with a possibility of a recession, all of which could negatively impact our business.

Applicable insurance laws may make it difficult to effect a change of control.

Under Florida and Alabama insurance holding company laws and regulations, no person may acquire control of a domestic insurer, such as a reciprocal insurer through the control of its attorney-in-fact, until written approval is obtained from the domiciliary state insurance commissioner, which in some states, including Alabama, requires a public hearing on the proposed acquisition. Such approval would be contingent upon the state insurance commissioner’s consideration of a number of factors including, among others, the financial strength of the proposed acquiror, the acquiror’s plans for the future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the acquisition of control. Florida and Alabama insurance laws and regulations pertaining to changes of control apply to both the direct and indirect acquisition of ten percent (under Florida law) or five percent (under Alabama law) or more of the voting stock of a domestic insurer or its controlling person. Accordingly, the acquisition of such percentage or more of our common stock would be considered a change of control of Safepoint Holdings and would trigger the applicable change of control filing requirements under state insurance holding company laws and regulations, absent a disclaimer of control filing and its acceptance by the domestic insurance regulator. These requirements may discourage potential acquisition proposals and

 

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may delay, deter or prevent a change of control of Safepoint Holdings, including through transactions that some or all of the stockholders of Safepoint Holdings might consider to be desirable.

Safepoint Holdings and its subsidiaries own approximately $47.0 million of surplus notes of Cajun and Manatee, and consequently, Safepoint Holdings is exposed to the ability of Manatee and Cajun to pay principal and interest on the surplus notes and to obtain regulatory approval to do so.

As of December 31, 2025, Safepoint Holdings and its subsidiaries own approximately $47.0 million of the total $67.0 million outstanding principal amount of surplus notes issued by Cajun and Manatee (the “Surplus Notes”) that is treated as equity on an insurance company’s balance sheet under statutory accounting principles. A surplus note is a type of subordinated debt security issued by a U.S.-regulated insurance company. Cajun and Manatee issued the Surplus Notes in order to raise capital to commence their respective insurance operations.

Each payment of interest on, principal of, and any redemption amount with respect to, the Surplus Notes by Cajun and Manatee, as applicable, requires the prior approval of the AL DOI (in the case of Cajun) and FLOIR (in the case of Manatee). The AL DOI and FLOIR have broad discretion to disapprove surplus note payments to protect the capital and surplus of the insurance company. If a payment of interest, principal or other amount due on the Surplus Notes is deferred, no interest will accrue on the deferred amount. As a result of our ownership of the Surplus Notes, we are exposed to the ability of Manatee and Cajun to pay principal and interest on the surplus notes and to obtain regulatory approval to do so.

The Surplus Notes are unsecured general obligations that are expressly subordinated in their right of payment to policyholders and other obligations of Cajun and Manatee, as applicable. As reciprocal insurers, Cajun and Manatee have no equity capital that is subordinated to (and therefore provides credit enhancement for) the Surplus Notes.

No public market exists for the Surplus Notes and none is expected to develop. In addition, the Surplus Notes have a fixed coupon rate that could be viewed as below the market rate for similar securities. As a result, if we are required to sell our interest in the Surplus Notes, the resulting price could be at a discount to our original purchase price, which could be significant.

Risks Related to Technology

Operational risk exposures, including with respect to our technology and telecommunications systems could adversely affect our business.

Operational exposures and losses can result from, among other things, errors, failure to document transactions properly or to obtain proper internal authorization, failure to comply with regulatory requirements, telecommunication and critical infrastructure or information technology failures, bad faith delayed claims payment, fraud and external events, such as political unrest, state emergency or industrial actions which could result in operational outage. Any such outage could have a material adverse effect on our business, financial condition, results of operations or prospects.

Our business is also highly dependent upon our information technology and telecommunications systems, including our commercial and personal underwriting systems. We rely on these systems to interact with brokers and insureds, to underwrite business, to prepare policies and process premiums, to perform actuarial and other modeling functions, to process claims and make claims payments, and to prepare internal and external financial statements

 

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and information. Some of these systems may include or rely on third-party systems not under our control or located on our premises. Events such as natural catastrophes, pandemics, terrorist attacks, industrial accidents, cyber-attacks or computer viruses may cause our systems to fail or be inaccessible for extended periods of time. While we have implemented business contingency plans and other reasonable plans to mitigate such risks to our systems, sustained or repeated system failures or service denials could severely limit our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or otherwise operate in the ordinary course of business.

A significant portion of our employees work remotely and travel outside of our primary offices on a regular basis. We believe remote work increases the need for our information technology and telecommunications systems to work properly and creates additional operational risk and difficulty should these systems fail.

Security breaches or cyber-attacks could expose the Company to liability and damage its reputation and business.

Our operations depend on the reliable and secure processing, storage, and transmission of confidential and other sensitive information, including personal information, in our computer systems and networks. Computer viruses, hackers, employee misconduct or malfeasance, and other hazards could expose our systems to security breaches, cyber-attacks or other disruptions.

Cyberthreats are constantly evolving and becoming more sophisticated and complex, making it increasingly difficult to detect and successfully defend against them. In addition, cyber-attackers (which may include individuals or groups, as well as nation-state and state-sponsored attackers, which can deploy significant resources to plan and carry out exploits) also develop and deploy viruses, worms, credential stuffing attack tools and other malicious software programs, some of which may be specifically designed to attack our products, information systems or networks. Outside parties have in the past and may in the future attempt to fraudulently induce our employees or users of our products or services to disclose sensitive, personal or confidential information via electronic spamming, phishing, social engineering or other tactics.

While we have implemented what we believe to be reasonable security measures and employee training designed to protect against breaches of security and other interference with our systems and networks, our systems and networks may be, and at times are, subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our proprietary information or our customers’ data and information, which in turn may result in legal claims, regulatory scrutiny and liability, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisors, reputational harm or other damage to our business. While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all related losses.

In addition, the trend toward general public notification of such incidents could exacerbate the harm to our business, financial condition and results of operations. Even if we successfully protect our technology infrastructure and the confidentiality of the sensitive data we hold, we could suffer harm to our business and reputation if attempted security breaches are publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems or within the supply chain, data thefts, physical system or network break-ins or unauthorized access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business, or the sensitive information stored thereon.

 

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We employ third-party licensed software for use in our business, and the inability to maintain these licenses, problems with the software we license, or increases to the cost of software licenses could adversely affect our business.

Multiple areas of our business rely on certain third-party software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software in the future. Unforeseen issues may arise in third-party software platforms which may have an adverse impact on our operations. Integration of new third-party software or modifications to our existing third-party software may require substantial investment of our time and resources. The inability to integrate or operate third-party software successfully or the inadequacy of third-party software may have a material adverse impact on our operations. In addition, the cost of third-party software is significant and we expect it to increase in the future. If we have issues with the functionality or expense of third-party software, we may not be able to find acceptable alternatives in a timely manner or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect our business.

Additionally, the software powering our technology systems incorporates software covered by open-source licenses. The terms of many open-source licenses have not been interpreted by U.S. courts, and there is a risk that the licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate our systems. In the event that portions of our proprietary software are determined to be subject to an open-source license, we could be required to publicly release the affected portions of our source code or re-engineer all or a portion of our technology systems, each of which could reduce or eliminate the value of our technology systems. Such risk could be difficult or impossible to eliminate and could adversely affect our business, financial condition, and results of operations.

Any failure to protect our intellectual property rights could impair our ability to protect our intellectual property, proprietary technology platform and brand, or we may be sued by third parties for alleged infringement of their proprietary rights.

Our success and ability to compete depend in part on our intellectual property, which includes our rights in our proprietary technology platform and our brand. We primarily rely on copyright, trade secret and trademark laws, and confidentiality agreements with our employees, customers, service providers, partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property may be inadequate. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Additionally, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability and scope of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and adversely impact our business.

Our success depends also in part on our not infringing on the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our industry. In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be infringing on such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our services, or require that we comply with other unfavorable terms. Even if we were to prevail in such a dispute, any litigation could be costly and time-consuming and divert the attention of our management and key personnel from our business operations.

 

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Any cloud provider service failure or control weakness could adversely affect our business.

We employ cloud-based services to host our applications and intend to expand our use. As we expand our use of cloud-based services, we will increasingly rely on third-party cloud providers to maintain appropriate controls and safeguards to protect confidential information we receive, including personal, personally identifiable, sensitive, confidential or proprietary data, and the integrity and continuous operation of our proprietary technology platform. While we conduct due diligence on these cloud providers with respect to their security and business controls, we may not have the visibility to effectively monitor the implementation and efficacy of these controls. Outside parties may be able to circumvent controls or exploit vulnerabilities, resulting in operational disruption, data loss, defects or a security event. Migrating to the cloud increases the risk of operational disruption should internet service be interrupted. While we have implemented business contingency and other plans to facilitate continuous internet access, sustained or concurrent service denials or similar failures could limit our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or otherwise operate our business. Any such event or failure could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to This Offering and Ownership of Our Common Stock

Our costs will increase significantly as a result of operating as a public company, and our management will be required to devote substantial time to complying with public company regulations.

As a public company, we expect to incur significant legal, accounting and other expenses that we did not incur as a private company. After completion of this offering, we will be subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition and therefore we will need to have the ability to prepare financial statements that comply with all SEC reporting requirements on a timely basis. In addition, we will be subject to other reporting and corporate governance requirements, including certain requirements and certain provisions of the Sarbanes-Oxley Act and the regulations promulgated thereunder, which will impose significant compliance obligations upon us. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and, to the extent that we are no longer an “emerging growth company” as defined in the JOBS Act, our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts.

The Sarbanes-Oxley Act and the Dodd-Frank Act, as well as related rules subsequently implemented by the SEC and the NYSE, have increased regulation of, and imposed enhanced disclosure and corporate governance requirements on, public companies. Our efforts to comply with these evolving laws, regulations and standards will increase our operating costs and divert management’s time and attention from revenue-generating activities. Further, if these laws, regulations and rules were to change substantially in the future, we might be unable to meet new requirements.

These changes will also place significant additional demands on our finance and accounting staff and on our financial accounting and information systems. We may need to hire additional legal, accounting and financial staff with appropriate public company reporting experience and technical accounting knowledge. Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses; investor relations

 

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expenses; increased directors’ fees and director and officer liability insurance costs; registrar and transfer agent fees and listing fees; as well as other expenses. As a public company, we will be required, among other things, to:

 

•

prepare and file periodic reports and distribute other stockholder communications, in compliance with the federal securities laws and requirements of the NYSE;

 

•

define and expand the roles and the duties of our board of directors and its committees;

 

•

institute more comprehensive compliance and investor relations functions; and

 

•

evaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.

We may not be successful in implementing these requirements and implementing them could materially adversely affect our business. The increased costs will decrease our net income and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or as executive officers.

In addition, if we fail to implement the required controls with respect to our internal accounting and audit functions, our ability to report our results of operations on a timely and accurate basis could be impaired. If we do not implement the required controls in a timely manner or with adequate compliance, we may be subject to sanctions or investigation by regulatory authorities, such as the SEC or the NYSE. Any such action could harm our reputation and the confidence of investors in, and clients of, our Company and could negatively affect our business and cause the price of our shares of common stock to decline.

An active trading market for our common stock may not develop and the market price for our common stock may decline below the initial public offering price.

Prior to this offering, there has not been a public market for our common stock. An active trading market for our common stock may never develop or be sustained, which could adversely impact your ability to sell your shares and could depress the market price of your shares. In addition, the public offering price for our common stock has been determined through negotiations among us and the representative of the underwriters and may not be indicative of prices that will prevail in the open market upon completion of this offering. Consequently, you may be unable to sell your shares of our common stock at prices equal to or greater than the price you paid for them.

Our operating results and stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment.

Our quarterly operating results are likely to fluctuate in the future as a publicly traded company. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. You should consider an investment in our common stock to be risky, and you should invest in our common stock only if

 

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you can withstand a significant loss and wide fluctuation in the market value of your investment. The market price of our common stock could be subject to significant fluctuations after this offering in response to the factors described in this “Risk Factors” section and other factors, many of which are beyond our control. Among the factors that could affect our stock price are:

 

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market conditions in the broader stock market;

 

•

actual or anticipated fluctuations in our quarterly financial and operating results;

 

•

introduction of new products or services by us or our competitors;

 

•

issuance of new or changed securities analysts’ reports or recommendations;

 

•

results of operations that vary from expectations of securities analysts and investors;

 

•

short sales, hedging and other derivative transactions in our common stock;

 

•

guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

 

•

strategic actions by us or our competitors;

 

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announcement by us, our competitors or our acquisition targets;

 

•

sales, or anticipated sales, of large blocks of our stock, including by our directors, executive officers and principal stockholders;

 

•

additions or departures in our Board of Directors, senior management or other key personnel;

 

•

regulatory, legal or political developments;

 

•

public response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

•

litigation and governmental investigations;

 

•

changing economic conditions;

 

•

changes in accounting principles;

 

•

any indebtedness we may incur or securities we may issue in the future;

 

•

default under agreements governing our indebtedness;

 

•

exposure to capital and credit market risks that adversely affect our investment portfolio or our capital resources;

 

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changes in our financial strength and credit ratings; and

 

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other events or factors, including those from natural disasters, war, actors of terrorism or responses to these events.

The securities markets have from time-to-time experienced extreme price and volume fluctuations that often have been unrelated or disproportionate to the operating performance of particular companies. As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial offering price. These broad market fluctuations, as well as general market, economic and political conditions, such as recessions, loss of investor confidence or interest rate changes, may negatively affect the market price of our common stock.

In addition, the stock markets, including the NYSE, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity

 

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securities of many companies. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend, divert management’s attention and resources, or harm our business.

Our Pre-IPO Significant Stockholders may exert significant influence over us, their interests in our business may be different than yours, and certain statutory provisions afforded to stockholders are not applicable to us.

David Flitman and Steven Hoffman (the “Pre-IPO Significant Stockholders”) will control approximately [•]% of the combined voting power of our common stock (or [•]% if the underwriters exercise their option to purchase additional shares of common stock in full) after the completion of this offering and the application of the net proceeds from this offering. This concentration of voting power with the Pre-IPO Significant Stockholders may have a negative impact on the price of our common stock. The Pre-IPO Significant Stockholders’ interests may not be fully aligned with yours, which could lead to actions that are not in your best interests. In addition, the Pre-IPO Significant Stockholders’ significant influence over us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of shares of our common stock might otherwise receive a premium for your shares over the then-current market price. Moreover, the Pre-IPO Significant Stockholders could seek to sell a significant amount of stock after the expiration of the 180-day lock-up period, which could negatively impact our stock price.

If you purchase shares of our common stock in our initial public offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in our initial public offering, you will experience substantial and immediate dilution in the as adjusted net tangible book value per share because the price that you pay will be substantially greater than the as adjusted net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. You will experience additional dilution upon exercise of outstanding warrants to purchase our common stock or upon the issuance of stock awards or in connection with other employee offerings made under the 2026 Equity Compensation Plans (which we intend to adopt in connection with this offering), as applicable.

Because we are a holding company and substantially all or a substantial portion of our operations are conducted by our insurance and service company subsidiaries, our ability to achieve liquidity at the holding company, including the ability to pay dividends and service our debt obligations, depends on our ability to obtain cash dividends or other permitted payments from our insurance and service company subsidiaries.

Because we are a holding company with no substantial business operations of our own, our ability to pay dividends to stockholders and meet our debt payment obligations is largely dependent on dividends and other distributions from Safepoint Insurance, the Captives and our other operating companies. Applicable state insurance laws restrict Safepoint Insurance’s ability to declare stockholder dividends and require insurance companies to maintain specified levels of statutory capital and surplus. Dividend payments are further limited to that part of available policyholder surplus which is derived from net profits on an insurer’s business. Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the maximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities that have

 

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jurisdiction over the payment of dividends by Safepoint Insurance may in the future adopt statutory provisions more restrictive than those currently in effect. We also rely on fees from Cajun and Manatee that are paid to our Attorneys-in-Fact and our agencies. From time to time these fees may be subject to examination and increased scrutiny by relevant regulators.

Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our financial condition, results of operations, capital requirements, general business conditions, legal, tax and regulatory limitations, contractual restrictions and other factors that our board of directors considers relevant. Consequently, in order for investors to realize any future gains on their investment, they may need to sell all or part of their holdings of our common stock after price appreciation, which may never occur.

Therefore, you may not receive a return on your investment in our common stock by receiving a payment of dividends. See “Dividend Policy.”

Substantial future sales of shares of our common stock by existing stockholders, or the perception that those sales may occur, could cause the market price of our common stock to decline.

Sales of substantial amounts of our common stock in the public market following this offering, or the perception that these sales could occur, could cause the market price of our common stock to decline. Based on shares outstanding as of [•], 2026, upon completion of this offering, we will have shares of our common stock outstanding (or shares, assuming full exercise of the underwriters’ option to purchase additional shares). All of the shares sold pursuant to this offering will be immediately tradable without restriction under the Securities Act unless held by “affiliates,” as that term is defined in Rule 144 under the Securities Act. The remaining    shares outstanding will be restricted securities within the meaning of Rule 144 under the Securities Act, but will be eligible for resale subject to applicable volume, manner of sale, holding period and other limitations of Rule 144 or pursuant to an exception from registration under Rule 701 under the Securities Act, subject in certain cases to the terms of lock-up agreements described below. Upon completion of this offering, we intend to file one or more registration statements under the Securities Act to register the shares of our common stock subject to Options outstanding under the 2024 Plan and to be issued under our 2026 Equity Compensation Plans, and, as a result, all shares of our common stock acquired upon the grant of Restricted Stock, settlement of restricted stock units or upon exercise of Options granted under our 2026 Plan, upon the exercise of Options granted under our 2024 Plan, or the purchase of securities pursuant to an offering made under the 2026 ESPP will also be freely tradable under the Securities Act, subject to the terms of the lock-up agreements, unless purchased by our affiliates. A total of    shares of common stock are reserved for issuance under 2026 Equity Compensation Plans.

In connection with this offering, we, our executive officers, the selling stockholders and certain other stockholders holding in the aggregate    shares of our common stock, have entered into lock-up agreements pursuant to which we and they have agreed not to sell any shares without the prior consent of Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC for 180 days after the date of this prospectus, subject to certain exceptions. Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC may, in their sole discretion and at any time without notice, release all or any portion of the securities subject to lock-up agreements entered into in connection with this offering. See “Underwriting.” Following the expiration of this 180-day lock-up period, these shares will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144. See “Shares Eligible for Future Sale” for a discussion of the shares of our common stock that may be sold into the

 

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public market in the future. As lock-up restrictions end, the market price of our common stock could decline if the holders of those shares sell them or are perceived by the market as intending to sell them.

In the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition and litigation settlement or employee arrangement or otherwise. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of our common stock to decline.

If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.

The market price for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If there is no coverage of our company by securities or industry analysts, the trading price for our shares would be negatively impacted. In the event we obtain securities or industry analyst coverage or if one or more of these analysts downgrades our shares or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our shares could decrease, which could cause our stock price or trading volume to decline.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because insurance companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

We are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

 

•

not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

 

•

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

 

•

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

 

•

not being required to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result,

 

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there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the last day of the fiscal year ending after the fifth anniversary of this offering, or, if earlier, (i) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (ii) the date on which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, we have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of our financials to those of other public companies more difficult. As a result of these elections, the information that we provide in this prospectus may be different than the information investors may receive from other public companies in which they hold equity interests. In addition, it is possible that some investors will find our common stock less attractive as a result of these elections, which may result in a less active trading market for our common stock and higher volatility in our share price.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.”

We have historically operated as a private company and have not been subject to the same financial and other reporting and corporate governance requirements as a public company. After this offering, we will be required to file annual, quarterly and other reports with the SEC. We will need to prepare and timely file financial statements that comply with SEC reporting requirements. We will also be subject to other reporting and corporate governance requirements, under the listing standards of the NYSE and the Sarbanes-Oxley Act, which will impose significant compliance costs and obligations upon us. The changes necessitated by becoming a public company will require a significant commitment of additional resources and management oversight, which will increase our operating costs. These changes will also place significant additional demands on our finance and accounting staff, some of whom may not have prior public company experience or experience working for a newly public company, and on our financial accounting and information systems. We may need to hire additional accounting and financial staff with appropriate public company reporting experience and technical accounting knowledge. Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses. As a public company, we will be required, among other things, to:

 

•

prepare and file periodic reports, and distribute other stockholder communications, in compliance with the federal securities laws and the NYSE rules;

 

•

define and expand the roles and the duties of our board of directors and its committees;

 

•

institute more comprehensive compliance, investor relations and internal audit functions; and

 

•

maintain effective disclosure controls and procedures and evaluate and maintain our system of internal control over financial reporting, and report on management’s

 

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assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.

In particular, upon completion of this offering, the Sarbanes-Oxley Act will require us to document and test the effectiveness of our internal control over financial reporting in accordance with an established internal control framework, and to report on our conclusions as to the effectiveness of our internal controls. Likewise, once we are no longer an emerging growth company, our independent registered public accounting firm will be required to provide an attestation report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. In addition, upon completion of this offering, we will be required under the Securities Exchange Act of 1934, as amended, or the Exchange Act, to maintain disclosure controls and procedures and internal control over financial reporting. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If we are unable to conclude that we have effective disclosure controls and procedures or internal control over financial reporting, investors could lose confidence in the reliability of our financial statements. This could result in a decrease in the market price of our common stock. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities.

Beginning with our annual report for the fiscal year ending December 31, 2027, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with those requirements applicable to companies that are not “emerging growth companies,” including Section 404 of the Sarbanes-Oxley Act.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion in the application of the net proceeds from the sale of shares by us in this offering, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from the sale of shares by us in this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply our net proceeds in ways that ultimately increase the value of your investment. The failure by our management to apply these funds effectively could harm our business. If we do not invest or apply the net proceeds from the sale of shares by us in this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

We may change our underwriting guidelines or our strategy without stockholder approval.

Our management has the authority to change our underwriting guidelines or our strategy without notice to our stockholders and without stockholder approval. As a result, we may make fundamental changes to our operations without stockholder approval, which could result in our pursuing a strategy or implementing underwriting guidelines that may be materially different from the strategy or underwriting guidelines described in the section entitled “Business” or elsewhere in this prospectus.

Future offerings of debt or equity securities, which may rank senior to our common stock, may adversely affect the market price of our common stock.

If we decide to issue debt securities in the future, which would rank senior to shares of our common stock, it is likely that they will be governed by an indenture or other instrument

 

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containing covenants restricting our operating flexibility. Additionally, any equity securities or convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common stock will bear the risk of our future offerings reducing the market price of our common stock and diluting the value of their shareholdings in us.

Anti-takeover provisions in our organizational documents could delay a change in management and limit our share price.

Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us even if such a change in control would increase the value of our common stock and prevent attempts by our stockholders to replace or remove our current Board of Directors or management.

We will have a number of anti-takeover devices that will be in place prior to the completion of this offering that will hinder takeover attempts and could reduce the market value of our common stock or prevent sale at a premium. Our anti-takeover provisions:

 

•

will permit the Board of Directors to establish the number of directors and fill any vacancies and newly created directorships;

 

•

will provide that our Board of Directors will be classified into three classes with staggered, three-year terms and that directors may only be removed for cause;

 

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will require super-majority voting to amend provisions in our certificate of incorporation and bylaws;

 

•

will include blank-check preferred stock, the preference rights and other terms of which may be set by the Board of Directors and could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise benefit our stockholders;

 

•

will eliminate the ability of our stockholders to call special meetings of stockholders;

 

•

will specify that special meetings of our stockholders can be called only by our Board of Directors, the chairman of our Board of Directors, or our chief executive officer;

 

•

will prohibit stockholder consent action by other than unanimous written consent;

 

•

will provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum;

 

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will prohibit cumulative voting in the election of directors; and

 

•

will establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

In addition, as a Delaware corporation, we will be subject to Section 203 of the Delaware General Corporation Law. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a period of time.

 

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Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following civil actions:

 

•

any derivative action or proceeding brought on our behalf;

 

•

any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, employees or agents or our stockholders;

 

•

any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware;

 

•

any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws; or

 

•

any action asserting a claim governed by the internal affairs doctrine.

Our certificate of incorporation and bylaws further provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act. Furthermore, this application to Securities Act claims and Section 22 of the Securities Act create concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provision, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. However, this exclusive forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. This choice of forum provision, if enforced, may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation and bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “would,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and strategy, our market opportunity and the potential growth of that market, our anticipated financial position, our liquidity and capital needs and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements included in this prospectus as a result of various factors, including, among others:

 

•

our exposure to catastrophic events;

 

•

the possibility that actual losses may exceed reserves;

 

•

the concentration of our business in Florida and Louisiana;

 

•

our failure to execute our growth strategy;

 

•

increased competition, competitive pressures, and market conditions;

 

•

the fluctuation in our results of operations;

 

•

increased costs of reinsurance, non-availability of reinsurance, and non-collectability of reinsurance;

 

•

our failure to accurately price the risks we underwrite;

 

•

inherent uncertainty of our models and our reliance on such models as a tool to evaluate risk;

 

•

the failure of our claims department to effectively manage or remediate claims;

 

•

lower policy renewal rates and failure of such renewals to meet our expectations;

 

•

modification of the Florida Citizens and Louisiana Citizens depopulation program and our inability to select favorable Florida Citizens and Louisiana Citizens policies to assume;

 

•

difficulties with technology, data security and/or outsourcing relationships;

 

•

the lack of significant redundancy in our operations;

 

•

loss of key vendor relationships;

 

•

our failure to attract and retain qualified employees and independent agents or our loss of key personnel;

 

•

failure of third-party adjusters and administrators to properly evaluate claims;

 

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•

our inability to generate investment income;

 

•

our inability to maintain our ratings with Demotech or KBRA;

 

•

the effects of emerging claim and coverage issues relating to legal, judicial, environmental and social conditions;

 

•

the failure of our risk mitigation strategies or loss limitation methods;

 

•

the failure to attract and retain independent agents;

 

•

changes in regulations and our failure to meet increased regulatory requirements;

 

•

changes in accounting practices;

 

•

increased costs as a result of being a public company; and

 

•

the failure to maintain effective internal controls in accordance with Sarbanes-Oxley.

We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results or revised expectations, except as required by law.

 

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $     million, based upon the assumed initial public offering price of $     per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares is exercised in full, we estimate that the net proceeds to be received by us will be approximately $     million, after deducting the estimated underwriting discounts and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of our common stock in this offering by the selling stockholders.

A $1.00 increase (decrease) in the assumed initial public offering price of $     per share would increase (decrease) the net proceeds that we receive from this offering by approximately $     million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million in the number of shares offered by us would increase (decrease) the net proceeds that we receive from this offering by approximately $     million, assuming that the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and thereby enable access to the public equity markets for us and our stockholders.

This expected use of net proceeds from this offering represents our intentions based on our current plans and business conditions, which could change in the future as our plans and business conditions evolve. As a result, our management will have broad discretion over the uses of the net proceeds from this offering and investors will be relying on the judgement of our management regarding the application of the net proceeds from this offering.

 

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DIVIDEND POLICY

We anticipate paying a quarterly cash dividend on our common stock of $     per share beginning in the third quarter of 2026. We anticipate paying aggregate cash dividends of $     million per annum on our common stock, resulting in an annual yield of [•]% based on a price of $     per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus. The declaration, amount and payment of any future dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant. Our future ability to pay cash dividends on our common stock may also be limited by the terms of any future debt securities, preferred stock or credit facility.

Our status as a holding company and a legal entity separate and distinct from our subsidiaries affects our ability to pay dividends and make other payments. As a holding company without substantial operations of our own, the principal sources of our funds are dividends and other payments from our subsidiaries. The ability of our insurance company subsidiary, Safepoint Insurance, to pay dividends to us is subject to dividend limits and minimum capital requirements under Florida insurance law. See “Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—Because we are a holding company and substantially all or a substantial portion of our operations are conducted by our insurance and service company subsidiaries, our ability to achieve liquidity at the holding company, including the ability to pay dividends and service our debt obligations, depends on our ability to obtain cash dividends or other permitted payments from our insurance and service company subsidiaries,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Regulation.” In addition, we do not own any equity securities in Cajun and Manatee and, therefore, are not entitled to dividends from such companies. Furthermore, our future ability to pay cash dividends may also be limited by the terms of the Credit Agreement and any future debt or preferred securities or future credit facility.

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2026 as follows:

 

•

on an actual basis; and

 

•

on an as adjusted basis to give effect to (1) the items described immediately above and (2) our issuance and sale of     shares of common stock in this offering at an assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and estimated offering expenses payable by us.

The as adjusted information below is illustrative only, and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this information in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus, the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information contained in this prospectus.

 

		As of March 31, 2026
		Actual				As Adjusted
		(In thousands, except per share data)
Cash and cash equivalents		$	650,028			$	—
Long-term debt		$	120,362			$	—
Stockholders’ equity:
Common stock, $0.001 par value per share, 5,000,000 shares authorized, 1,372,166 shares issued as of March 31, 2026, actual; [•] shares authorized, [•] shares issued or outstanding; [•] shares authorized, [•] shares issued and outstanding, as adjusted			[•]				—
Additional paid-in capital			144,319				—
Treasury Stock			(11,178	)
Accumulated other comprehensive income, net of taxes			2,158				—
Retained earnings			167,599				—
Total stockholders’ equity			302,898				—
Total capitalization		$	423,260				—

(1)

Each $1.00 increase (decrease) in the assumed initial public offering price of $     per share of common stock, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the as adjusted amount of each of total stockholders’ equity and total capitalization by approximately $     million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us at the assumed initial public offering price per share would increase (decrease) the pro forma as adjusted amount of each of total stockholders’ equity and total capitalization by approximately $     million, assuming that the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The outstanding share information in the table above is based on [•] shares of our common stock immediately prior to the closing of this offering and excludes:

 

•

[•] shares of common stock underlying Options outstanding under our 2024 Plan;

 

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•

[•] shares of common stock reserved for future issuance under our 2026 Plan, including for purposes of any grants to be made in connection with this offering and which will be increased by any shares of common stock that are underlying awards outstanding under the 2024 Plan (under which we will cease granting awards upon the adoption of the 2026 Plan) that are canceled, forfeited, or settled in cash. Further, the total number of shares of common stock reserved and available for delivery under the 2026 Plan will be increased on the first day of each of the fiscal years during the term of the 2026 Plan beginning with fiscal year 2027, in an amount equal to the lowest of (i) 3% of the Company’s outstanding shares of common stock on the last day of the immediately preceding fiscal year, (ii)   of the Company’s shares of common stock and (iii) such number of shares of common stock as determined by our board of directors; and

 

•

[•] shares of common stock reserved for future issuance under our 2026 ESPP. Further, the total number of shares of common stock available for issuance under the 2026 ESPP will be increased on the first day of each of the fiscal years during the term of the 2026 ESPP beginning with fiscal year 2027, in an amount equal to the lowest of (i) 1% of the Company’s outstanding shares of common stock on the last day of the immediately preceding fiscal year, (ii)   of the Company’s shares of common stock and (iii) such number of shares of common stock as determined by our board of directors.

 

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DILUTION

If you invest in our common stock in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the as adjusted net tangible book value per share of our common stock after this offering. As of March 31, 2026, we had a historical net tangible book value of      million, or $     per share of common stock. Our net tangible book value represents total tangible assets less total liabilities, all divided by the number of shares of common stock outstanding on such date. Our as adjusted net tangible book value (deficit) as of      was $     million, or $     per share.

[As adjusted net tangible book value per share represents the amount of our net tangible book value divided by the number of shares of our common stock outstanding as of March 31, 2026, after giving effect to the filing of our Certificate of Incorporation immediately prior to the closing of this offering.]

After giving further effect to the sale of      shares of common stock in this offering at an assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2026 would have been approximately $     million, or approximately $     per share. This represents an immediate increase in as adjusted net tangible book value of $     per share to existing stockholders and an immediate dilution in as adjusted net tangible book value of $     per share to new investors purchasing shares of common stock in this offering. Dilution per share to new investors is determined by subtracting as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this per share dilution:

 

Assumed initial public offering price per share							[•]
Net tangible book value per share as of March 31, 2026			[•]
Increase in net tangible book value per share attributable to this offering			[•]
As adjusted net tangible book value per share after this offering			[•]
Dilution per share to new investors in this offering							[•]

A $1.00 increase (decrease) in the assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease), our as adjusted net tangible book value per share after this offering by $    , and would increase (decrease) dilution per share to new investors in this offering by $    , in each case assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares offered by us would increase (decrease) our as adjusted net tangible book value per share after this offering by approximately $     per share and decrease (increase) the dilution to new investors by approximately $     per share, in each case assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and estimated offering expenses payable by us.

The following table summarizes, on an as adjusted basis as of March 31, 2026, the differences between the number of shares of common stock purchased from us, the total

 

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consideration paid and the average price per share paid by existing stockholders and to be paid by the new investors purchasing shares of common stock in this offering, at the assumed initial public offering price of common stock of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and estimated offering expenses payable by us.

 

Shares Purchased

Total Consideration

Average Price Per Share

Number

Percent

Amount

Percent

Existing Stockholders

[•]

[•]

[•]

[•]

[•]

Investors purchasing shares in this offering

[•]

[•]

[•]

[•]

[•]

Total

[•]

[•]

[•]

[•]

[•]

Sales by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to     , or approximately  % of the total shares of common stock outstanding after this offering, and will increase the number of shares held by new investors to     , or approximately  % of the total shares of common stock outstanding after this offering.

The table above assumes no exercise of the underwriters’ option to purchase additional shares in this offering. If the underwriters’ option to purchase additional shares is exercised in full, the number of shares of our common stock held by existing stockholders would be reduced to  % of the total number of shares of our common stock outstanding after this offering, and the number of shares of common stock held by new investors purchasing common stock in this offering would be increased to  % of the total number of shares of our common stock outstanding after this offering.

The number of shares of our common stock that will be outstanding after this offering is based on [•] shares of our common stock immediately prior to the closing of this offering and excludes:

 

•

[•] shares of common stock underlying Options outstanding under our 2024 Plan;

 

•

[•] shares of common stock reserved for future issuance under our 2026 Plan, including for purposes of any grants to be made in connection with this offering and which will be increased by any shares of common stock that are underlying awards outstanding under the 2024 Plan (under which we will cease granting awards upon the adoption of the 2026 Plan) that are canceled, forfeited, or settled in cash. Further, the total number of shares of common stock reserved and available for delivery under the 2026 Plan will be increased on the first day of each of the fiscal years during the term of the 2026 Plan beginning with fiscal year 2027, in an amount equal to the lowest of (i) 3% of the Company’s outstanding shares of common stock on the last day of the immediately preceding fiscal year, (ii)   of the Company’s shares of common stock and (iii) such number of shares of common stock as determined by our board of directors; and

 

•

[•] shares of common stock reserved for future issuance under our 2026 ESPP. Further, the total number of shares of common stock available for issuance under the 2026 ESPP will be increased on the first day of each of the fiscal years during the term of the 2026 ESPP beginning with fiscal year 2027, in an amount equal to the lowest of (i) 1% of the Company’s outstanding shares of common stock on the last day of the immediately preceding fiscal year, (ii)   of the Company’s shares of common stock and (iii) such number of shares of common stock as determined by our board of directors.

 

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To the extent any of the outstanding options are exercised or new option or other securities are issued under our equity incentive plans, you will experience further dilution as a new investor in this offering. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Furthermore, we may choose to issue common stock as part or all of the consideration in acquisitions as part of our planned growth strategy. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion of our historical results of operations and our liquidity and capital resources should be read together with the section entitled “Prospectus Summary—Summary Consolidated Financial and Other Data” and the consolidated financial statements and related notes that appear elsewhere in this prospectus. In addition to historical financial information, this prospectus contains “forward-looking statements.” You should review the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of this prospectus for factors and uncertainties that may cause our actual future results to be materially different from those in our forward-looking statements. Forward-looking statements in this prospectus are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements.

The results of operations for the periods presented are not necessarily indicative of the results that may be expected for any other future period. The following discussion should be read in conjunction with the annual consolidated financial statements and the notes thereto included in this prospectus. Unless the context indicates otherwise, the terms the “Company,” “we,” “our” and “us” are used to refer to Safepoint Holdings, Inc. and its subsidiaries, collectively.

Overview

Safepoint is an insurance underwriting services platform focused on delivering coastal property insurance predominantly in Florida, Louisiana and other U.S. Gulf Coast states. Safepoint is operated by highly experienced insurance professionals with a shared vision to solve problems for stakeholders in underserved or dislocated property insurance markets. Our business strategy, which has been developed and tested since our founding in 2013, combines sophisticated actuarial analytics, risk management expertise and a low-cost operating model to provide better value to our customers across market cycles. We also generate income through Safepoint Insurance, which directly assumes insurance risk, as well as Bermuda-based reinsurance Captives that provide supplemental reinsurance to Safepoint Insurance and the Reciprocal Exchanges.

We have the three operating segments listed below; however, we only generate revenue for the benefit of Safepoint shareholders through our Insurance Services and Risk-Bearing segments. While the Reciprocal Exchanges are an important value driver for our business as the primary source of our fee income streams in the Insurance Services segment, the economic results of the Reciprocal Exchanges are excluded from our net income attributable to controlling interest and shareholders equity attributable to controlling interest given the Reciprocal Exchanges are not legally owned by Safepoint:

 

•

Insurance Services—Our insurance services platform, which we refer to as Safepoint MGA, receives fees based on the premium managed for the Reciprocal Exchanges and BPOs.

 

•

Risk-Bearing Entities—Safepoint Insurance, an insurance company which writes personal and commercial policies for homeowners and small businesses; as well as our Bermuda-based reinsurance Captives that provide supplemental reinsurance to Safepoint Insurance and the Reciprocal Exchanges.

 

•

Reciprocal Exchanges—The Reciprocal Exchanges, which are insurance operations that we manage for a fee, but do not legally own.

 

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The following tables present selected financial information for each of the Company’s operating segments as well as the Company’s Key Operating and Financial Metrics for the three months ended March 31, 2026 and 2025 and the years ended December 31, 2025 and 2024:

 

		Three Months Ended March 31, 2026
		Insurance Services				Risk- bearing Entities				Reciprocal Exchanges1				Corporate & Other				Eliminations				Total
		($ in thousands)
Gross written premium		$	—			$	62,356			$	156,638			$	—			$	(34,860	)		$	184,134
Gross earned premium			—				102,907				198,317				—				(70,703	)			230,521
Earned revenue:
Net premiums earned		$	—			$	93,328			$	61,161			$	—			$	—			$	154,489
Policy fee income			1,374				1,762				1,294				—				(1,294	)			3,136
Policy administration income			28,667				—				—				—				(26,813	)			1,854
Claims management income			5,941				—				—				—				(5,941	)			—
Net investment income			72				4,638				3,045				1,026				(1,193	)			7,588
Other insurance related income			96				529				363				—				(39	)			949
Total revenue			36,150				100,257				65,863				1,026				(35,280	)			168,016
Expenses:
Losses and loss adjustment expenses			3,301				21,551				26,580				—				(5,941	)			45,491
Policy acquisition costs, net of ceding commission			—				29,105				26,427				—				(35,247	)			20,285
General and administrative expenses			9,555				6,832				901				9,889				(89	)			27,088
Interest expense			—				—				1,317				2,309				(1,143	)			2,483
Total expenses			12,856				57,488				55,225				12,198				(42,420	)			95,347
Income (loss) before income taxes		$	23,294			$	42,769			$	10,638			$	(11,172	)		$	7,140			$	72,669
Income tax expense																							17,250
Net income																							55,419
Net income of non-controlling interest																							7,386
Net income attributable to controlling interest																						$	48,033

 

1 =	The Reciprocal Exchanges receive a subscriber contribution of 10% of the policy premium which is recorded to additional paid-in capital as received. For the three months ended March 31, 2026, total contributions received were $15,007.

 

		Three Months Ended March 31, 2026
		($ in thousands)
(1)  Net operating income to Safepoint shareholders		$	48,755
(1)  Managed premium		$	989,916
Insurance Services revenue		$	36,150
(1)  Insurance Services EBITDA		$	23,553
(1)  Insurance Services EBITDA Margin			65.2	%
(1)  Adjusted general expense ratio			7.8	%
(1)(2)Return on equity to Safepoint shareholders			88.4	%

 

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		Three Months Ended March 31, 2026
		($ in thousands)
(1)  Adjusted Reciprocal Exchange combined ratio			70.8	%
Risk-bearing Entities loss ratio			23.1	%
Risk-bearing Entities expense ratio			38.5	%
Risk-bearing Entities combined ratio			61.6	%

(1)	Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measure in accordance with their most applicable U.S. GAAP measure.

(2)	For the three months ended March 31, 2026 and 2025, net income attributable to the controlling interest is annualized to arrive at return on equity to Safepoint shareholders.

 

		Three Months Ended March 31, 2025
		Insurance Services				Risk- bearing Entities				Reciprocal Exchanges1				Corporate & Other				Eliminations				Total
		($ in thousands)
Gross written premium		$	—			$	87,528			$	164,346			$	—			$	(68,549	)		$	183,325
Gross earned premium			—				103,216				142,786				—				(57,661	)			188,340
Earned revenue:
Net premiums earned		$	—			$	83,035			$	21,929			$	—			$	—			$	104,964
Policy fee income			796				517				1,114				—				(1,114	)			1,313
Policy administration income			27,692				—				—				—				(26,909	)			783
Claims management income			4,562				—				—				—				(4,562	)			—
Net investment income			60				2,580				2,336				572				(1,102	)			4,446
Other insurance related income			66				518				331				—				—				915
Total revenue			33,176				86,650				25,710				572				(33,687	)			112,421
Expenses:
Losses and loss adjustment expenses			2,119				23,323				19,705				—				(4,563	)			40,584
Policy acquisition costs, net of ceding commission			—				46,325				(9,967	)			—				(25,387	)			10,971
General and administrative expenses			7,871				3,832				459				1,713				(48	)			13,827
Interest expense			—				—				1,251				1,559				(1,054	)			1,756
Loss on debt extinguishment			—				—				—				8,873				—				8,873
Total expenses			9,990				73,480				11,448				12,145				(31,052	)			76,011
Income (loss) before income taxes		$	23,186			$	13,170			$	14,262			$	(11,573	)		$	(2,635	)		$	36,410
Income tax expense																							8,820
Net income																							27,590
Net income of non-controlling interest																							11,036
Net income attributable to controlling interest																						$	16,554

 

1 =	The Reciprocal Exchanges receive a subscriber contribution of 10% of the policy premium which is recorded to additional paid-in capital as received. For the three months ended March 31, 2025, total contributions received were $11,892.

 

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