SUMMARY

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To fully understand the Asset Sale, the Purchase Agreement and the other transactions contemplated by the Purchase Agreement, and for a more complete description of the legal terms of each of the foregoing, you are urged to carefully read this entire proxy statement and the annexes attached to this proxy statement. We have included page references in parentheses to direct you to the appropriate place in this proxy statement for a more complete description of the topics presented in this summary. In this proxy statement, the terms “Company,” “PIH,” “we,” “us” and “our” refer to 1347 Property Insurance Holdings, Inc., the term “Insurance Companies” refers to Maison Insurance Company, Maison Managers Inc. and ClaimCor, LLC, collectively, the terms “Board of Directors” and “Board” refer to the Board of Directors of the Company, and the terms “Buyer,” “FedNat” or “FNHC” refer to FedNat Holding Company, unless otherwise specified. This proxy statement is dated [●], 2019 and is first being mailed to our stockholders on or about [●], 2019.

The Parties (page 57)

1347 Property Insurance Holdings, Inc. The Company is a specialized property and casualty insurance holding company. We provide personal property insurance in coastal markets including those in Louisiana, Texas and Florida through our wholly-owned subsidiary, Maison Insurance Company. We were incorporated on October 2, 2012 in the State of Delaware. On November 19, 2013, we changed our legal name to 1347 Property Insurance Holdings, Inc., and on March 31, 2014, we completed an initial public offering of our common stock. Our common stock is traded on the Nasdaq Global Market tier of the Nasdaq Stock Market, LLC (“Nasdaq”) under the symbol “PIH.” Our principal executive offices are located at 1511 N. Westshore Blvd., Suite 870, Tampa, FL 33607; our telephone number is (813) 579-6213; and our website is www.1347pih.com.

Maison Insurance Company. Maison Insurance Company, a Louisiana corporation (“Maison”), provides property and casualty insurance to individuals in Louisiana, Texas and Florida. Maison’s current insurance offerings in Louisiana, Texas and Florida include homeowners insurance, manufactured home insurance and dwelling fire insurance. Maison writes both full peril property policies as well as wind/hail only exposures and produces new policies through a network of independent insurance agencies. Maison’s principal executive offices are located at 9100 Bluebonnet Centre Blvd., Suite 501, Baton Rouge, LA 70809; its telephone number is (855) 862-0436; and its website is www.maisonins.com.

Maison Managers, Inc. Maison Managers Inc., a Delaware corporation (“MMI”), serves as the Company’s management services subsidiary, known as a managing general agency, and provides underwriting, policy administration, claims administration, marketing, accounting and other management services to Maison. MMI contracts primarily with independent agencies for policy sales and services, and also contracts with an independent third-party for policy administration services. As a managing general agency, MMI is licensed by, and subject to, the regulatory oversight of the Louisiana Department of Insurance, the Texas Department of Insurance and the Florida Office of Insurance Regulation. MMI’s principal executive offices are located at 1511 N. Westshore Blvd., Suite 870, Tampa, FL 33607 and its telephone number is (813) 579-6213. MMI does not have a website.

ClaimCor, LLC. ClaimCor, LLC, a Florida limited liability company (“ClaimCor”), is a claims and underwriting technical solutions company. Maison processes claims made by our policyholders through ClaimCor, and also through various third-party claims adjusting companies during times of high volume, so that we may provide responsive claims handling service when catastrophic events occur that impact many of our policyholders. We have the ultimate authority over the claims handling process, while the agencies that we appoint have no authority to settle our claims or otherwise exercise control over the claims process. ClaimCor’s principal executive offices are located at 1511 N. Westshore Blvd., Suite 895, Tampa, FL 33607; its telephone number is (813) 579-6226; and its website is www.claimcorsolutions.com.

FedNat Holding Company. FedNat Holding Company, a Florida corporation (“FedNat” or “Buyer”), is an insurance holding company that controls substantially all aspects of the insurance underwriting, distribution and claims processes through its subsidiaries and contractual relationships with independent agents and general agents. FedNat, through its wholly-owned subsidiaries, is authorized to underwrite and/or place homeowners multi-peril, federal flood and other lines of insurance in Florida and other states. FedNat markets, distributes and services its own and third-party insurers’ products and other services through a network of independent and general agents. FedNat Insurance Company, FedNat’s largest wholly owned insurance subsidiary, is licensed as an admitted carrier to write specific lines of insurance by the state’s insurance departments in Florida, Louisiana, Texas, Georgia, South Carolina and Alabama. Monarch National Insurance Company, FedNat’s other insurance subsidiary, is licensed as an admitted carrier in Florida. FedNat’s principal executive offices are located at 14050 N.W. 14th Street, Suite 180, Sunrise, FL 33323; its telephone number is (800) 293-2532; and its website is www.fednat.com.

All website addresses are being provided as an inactive textual reference only.

The Purchase Agreement and Asset Sale (page 57)

On February 25, 2019, we, together with the Insurance Companies, entered into the Purchase Agreement with Buyer, pursuant to which we have agreed, subject to the terms and conditions set forth therein, including the approval of the Purchase Agreement by our stockholders at the Special Meeting, to sell to Buyer all of the issued and outstanding equity of the Insurance Companies, which under Delaware law constitutes the sale of substantially all of the assets of the Company (the “Asset Sale”). A copy of the Purchase Agreement is attached as Annex A to this proxy statement. You are encouraged to read the Purchase Agreement carefully and in its entirety.

All of the employees of the Insurance Companies are expected to become employees of Buyer as of the closing of the Asset Sale, either directly or by remaining employees of the Insurance Companies, other than John S. Hill, the Company’s Chief Financial Officer, and Brian D. Bottjer, the Company’s Controller, who the Company expects to hire as employees of the Company after the closing. Douglas N. Raucy, the Company’s current President and Chief Executive Officer and a director, and Dean E. Stroud, the Company’s current Vice President and Chief Underwriting Officer, have entered into employment agreements with Buyer, with the effectiveness of such agreements subject to the occurrence of the closing and continuous employment with the Company through the closing.

Consideration for the Asset Sale (page 56)

As consideration for the Asset Sale, Buyer will pay to us $51.0 million, consisting of $25.5 million in cash and $25.5 million in shares of Buyer’s common stock to be issued to the Company. The number of shares of Buyer’s common stock to be issued to us will be based on the weighted average closing price per share of Buyer’s common stock on the Nasdaq during the 20-trading day period immediately preceding the closing date of the Asset Sale. In addition, upon closing of the Asset Sale, up to $18.0 million of outstanding surplus note obligations payable by Maison to the Company, plus all accrued but unpaid interest (other than default rates of interest, penalties, late fees and other related charges), will be repaid to the Company.

The shares of Buyer common stock to be issued to the Company as consideration for the Asset Sale are expected to be issued pursuant to the terms and conditions of a Standstill Agreement to be entered into among the Company and Buyer at the closing of the Asset Sale. The shares will not be registered under the Securities Act of 1933, as amended (the “Securities Act”). In this regard, the shares will be issued by Buyer to the Company in a private placement, in reliance on the exemption set forth in Section 4(a)(2) of the Securities Act. Accordingly, these shares will be restricted securities under the Securities Act. We may not sell the Buyer shares acquired in the Asset Sale unless (i) the shares are registered under the Securities Act or are otherwise exempt from the registration requirements of the Securities Act pursuant to an available exemption and (ii) a sale or transfer of the shares is permitted by applicable U.S. state securities laws. We plan to enter into a Registration Rights Agreement at the closing with Buyer providing for the registration under the Securities Act of the resale of the shares pursuant to the terms and conditions set forth therein. See the section entitled “Ancillary Agreements” for more information on the Standstill Agreement and the Registration Rights Agreement.

Additional Closing Payment

If the closing of the Asset Sale occurs after June 30, 2019, the purchase price of the Asset Sale will be increased by the lesser of (i) the amount by which the net book value of the Insurance Companies exceeds $42 million (without considering the effect of the repayment of the surplus notes in effect at closing) and (ii) the amount by which Maison’s statutory surplus exceeds $29 million (after accounting for the full repayment of the surplus notes in effect at closing); but only if the Company is not able, due to regulatory restrictions, to cause the Insurance Companies to distribute such amount to the Company on the closing date of the Asset Sale.

Use of Proceeds and Future Operations (pages 56 and 75)

The Company, and not its stockholders, will receive the proceeds from the Asset Sale. We do not intend to liquidate following the Asset Sale. Our Board will evaluate alternatives for the use of the cash consideration, which are expected to include using a portion of the cash consideration to conduct the business of our reinsurance subsidiary, PIH Re Ltd. (“PIH Re”), and launching a new growth strategy focused on reinsurance, investment management and new investment opportunities. The Company may form an additional reinsurance subsidiary in a suitable jurisdiction.

Special Meeting of Stockholders of the Company (page 52)

Date, Time, Place and Purpose. The Special Meeting will be held at [●] on [●], 2019, at [●], local time. At the Special Meeting, the Company’s stockholders will be asked to consider and vote on:

Our stockholders must vote to approve the Asset Sale Proposal as a condition for the Asset Sale to occur. If our stockholders fail to approve the Asset Sale Proposal, the Asset Sale will not occur pursuant to the terms of the Purchase Agreement.

Record Date, Stockholders Entitled to Vote and Voting Power. The Board has fixed the close of business on [●], 2019 as the record date for the determination of the stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. Only Company stockholders of record at the record date are entitled to receive notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof. As of the close of business on [●], 2019, there were [●] shares of Company common stock outstanding and entitled to vote at the Special Meeting. Each holder of shares of Company common stock is entitled to one vote for each share of common stock owned at the record date.

Quorum. The presence at the Special Meeting, in person or by proxy, of the holders of a majority of the Company’s common stock entitled to vote at the Special Meeting will constitute a quorum, permitting action to be taken and the conduct of business at the Special Meeting. Abstentions and shares represented by a properly executed proxy card that is returned without voting instructions will be counted for purposes of determining the presence of a quorum. Broker non-votes, if any, will not count towards determining the presence of a quorum. Failure of a quorum to be present at the Special Meeting will necessitate an adjournment of the meeting and will subject us to additional expense.

Required Vote. The approval of the Asset Sale Proposal requires the affirmative vote of at least a majority of the outstanding shares of the Company’s common stock entitled to vote at the Special Meeting.

The Adjournment Proposal will be approved, regardless of whether a quorum is present at the Special Meeting, by the affirmative vote of a majority of the votes cast on the proposal at the Special Meeting by holders of shares of Company common stock.

Share Ownership of and Voting by Company Directors and Executive Officers and Fundamental Global Investors and Ballantyne. Each of the Company’s directors and executive officers and their affiliates is expected, as of the date of this proxy statement, to vote their shares of Company common stock “FOR” the Asset Sale Proposal and “FOR” the Adjournment Proposal, although, except as described below, none of our directors or executive officers or their affiliates has entered into any agreement requiring them to do so.

Fundamental Global Investors, LLC and its affiliates, or “Fundamental Global,” is the beneficial owner of 2,714,362 shares of Company common stock as of the record date, which includes 1,038,409 shares owned by Ballantyne Strong, Inc. (“Ballantyne”). D. Kyle Cerminara, Chairman of our Board, serves as Chief Executive Officer, Co-Founder and Partner of Fundamental Global, and Chairman of the board of directors and Chief Executive Officer of Ballantyne. Lewis M. Johnson, Co-Chairman of our Board, serves as President, Co-Founder and Partner of Fundamental Global, and as a member of the board of directors of Ballantyne. In connection with the Purchase Agreement, Fundamental Global and Ballantyne entered into Voting Agreements with Buyer, which are described in the section entitled “Ancillary Agreements — Voting Agreements.”

Details of the beneficial ownership of Company common stock of our directors and executive officers and their affiliates, including Fundamental Global and Ballantyne, are set out in the section of this proxy statement entitled “Security Ownership of Certain Beneficial Owners and Management.”

Solicitation of Proxies. We are soliciting proxies on behalf of our Board and will bear the costs of soliciting proxies. We have engaged [●] to assist in the solicitation of proxies and estimate that we will pay [●] a fee of approximately $[●]. We have also agreed to reimburse [●] for reasonable out-of-pocket expenses and disbursements incurred in connection with the proxy solicitation and to indemnify [●] against certain losses, costs and expenses. In addition, our directors, officers and employees may request the return of proxies in person, by telephone, by electronic mail, or otherwise, but no additional compensation will be paid to them.

Recommendation of the Board (page 62)

After careful consideration, our Board unanimously recommends that you vote “FOR” the Asset Sale Proposal and “FOR” the Adjournment Proposal. In reaching its decision to approve the Purchase Agreement and the Asset Sale and to recommend that you vote in the manner recommended above, our Board considered a wide range of material factors relating to the Purchase Agreement and the Asset Sale and consulted with management and outside financial and legal advisors. For more information on the factors considered by the Board, see “Proposal 1 – The Asset Sale Proposal – Reasons for the Asset Sale and Recommendation of Our Board.”

Opinion of Our Financial Advisor (page 64)

At a meeting held on February 25, 2019, our financial advisor, Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”), presented its analysis and oral opinion to our Board, and subsequently confirmed in a written opinion dated February 25, 2019, that, as of that date and based upon and subject to the assumptions, limitations, qualifications and other conditions stated in such written opinion, the consideration to be received by us in the Asset Sale pursuant to the terms of the Purchase Agreement is fair to us from a financial point of view.

We encourage you to read carefully and in its entirety the full text of Sandler O’Neill’s written opinion attached as Annex B to this proxy statement, which is subject to the assumptions, limitations, qualifications and other conditions contained in such opinion and is necessarily based on economic, capital markets and other conditions, and the information made available to Sandler O’Neill, as of the date of such opinion.

Interests of Our Executive Officers in the Asset Sale (page 91)

In considering the recommendation of our Board to vote “FOR” the Asset Sale Proposal, you should be aware that, aside from their interests as Company stockholders, certain of our executive officers may have interests in the Asset Sale that are different from, or in addition to, the interests of our stockholders generally.

Employment Agreements

Douglas N. Raucy, the Company’s current President and Chief Executive Officer and a director, and Dean E. Stroud, the Company’s current Vice President and Chief Underwriting Officer, have entered into employment agreements with Buyer, with the effectiveness of such agreements subject to the occurrence of the closing of the Asset Sale and continuous employment with the Company through the closing. It is expected that Messrs. Raucy and Stroud will resign from all positions that they hold with the Company and its subsidiaries (other than the Insurance Companies) as of the closing of the Asset Sale, including Mr. Raucy’s position as a director of the Company.

Acceleration of Equity Awards

The Compensation Committee of the Board may approve the accelerated vesting of restricted stock units previously issued by the Company to Messrs. Raucy and Stroud. If approved by the Compensation Committee, upon the closing of the Asset Sale, and subject to the continued employment of Messrs. Raucy and Stroud with the Company through the closing, 32,000 and 2,400 unvested restricted stock units held by Messrs. Raucy and Stroud, respectively, will vest in full, with each restricted stock unit representing one share of the Company’s common stock.

Retention Awards

The Compensation Committee may approve the payment of retention bonuses to certain employees in consideration for their ongoing employment with the Insurance Companies through the closing of the Asset Sale, including employees who also serve as executive officers of the Company.

Financing of the Asset Sale (page 56)

The $25.5 million cash consideration to be paid by Buyer to the Company, along with the replacement of the capital and surplus necessary to allow the repayment of the surplus note obligations owed by Maison to the Company that are to be repaid at the closing of the Asset Sale, are being funded from the proceeds of a private placement by Buyer of 10-year, senior unsecured notes with a fixed interest rate of 7.50%. The private placement closed on March 5, 2019.

The Purchase Agreement (page 76 and Annex A)

Representations and Warranties (page 76)

The Purchase Agreement contains customary representations and warranties that we, on the one hand, and Buyer, on the other hand, have made to one another as of specific dates relating to our respective businesses, financial condition and structure, as well as other matters pertinent to the Asset Sale.

Conditions to the Asset Sale (page 83)

The closing of the transactions contemplated by the Purchase Agreement, including the Asset Sale, is subject to customary conditions, including, among other things:

In addition, Buyer’s obligation to close the Asset Sale is subject to the Insurance Companies having a consolidated net book value of at least $42.0 million at the closing (without considering the effect of the repayment of the surplus notes), Maison having at the closing statutory surplus of at least $29.0 million after accounting for the full repayment of all of the surplus notes in effect at the closing, total capital and surplus assets equal to or greater than 300% of its total risk-based capital on all authorized control level risk-based capital requirements as of December 31, 2018, and there being no change to Maison’s “A” rating with Demotech, Inc. as of the closing, other than changes resulting from the execution of the Purchase Agreement or the circumstances of Buyer.

Go-Shop Period; Non-Solicitation; Change of Recommendation (page 84)

During the period beginning on the date of the Purchase Agreement and ending on March 27, 2019 (referred to as the “Go-Shop Period”), we have the right to solicit acquisition proposals and enter into discussions or negotiations with any person or group of persons and their representatives, their affiliates and their prospective equity and debt financing sources regarding any acquisition proposal.

Following the end of the Go-Shop Period, we are prohibited from initiating or soliciting any inquiries or the making of any proposal or offer that constitutes any acquisition proposal, engaging in any discussions or negotiations regarding any acquisition proposal, or providing any nonpublic information or data to any person in connection with the foregoing. Notwithstanding these restrictions, during the period from the end of the Go-Shop Period to the time our stockholders approve the Purchase Agreement, which we refer to as the “interim period,” if we receive an unsolicited bona fide written acquisition proposal from a third party that does not result from a violation of our non-solicitation obligations in the Purchase Agreement and our Board determines in good faith, based on information then available and after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes, or would reasonably be expected to result in, a superior proposal, and the failure to take such action would be reasonably likely to be inconsistent with the directors’ fiduciary duties under applicable law, then we have the right to, among other things, furnish nonpublic information to such third party and participate in discussions or negotiations with the third party regarding the acquisition proposal. We have agreed to promptly (and in any event within 24 hours) notify Buyer of the receipt of any acquisition proposal and provide certain information related thereto and keep Buyer reasonably informed of the status thereof.

During the interim period, the Board is also restricted from effecting a change of recommendation with respect to the Purchase Agreement unless, subject to the terms set forth in the Purchase Agreement, the Company receives an acquisition proposal that the Board determines in good faith, after consultation with its outside legal counsel and financial advisor, constitutes a superior proposal and failure to take such action would be reasonably likely to be inconsistent with the directors’ fiduciary duties under applicable law. Under the Purchase Agreement, Buyer generally has the opportunity to offer to amend or revise the terms of the Purchase Agreement in response to any such acquisition proposal before the Board effects a change of recommendation in response to any such acquisition proposal or terminates the Purchase Agreement to enter into a definitive agreement with respect to such acquisition proposal. Upon termination of the Purchase Agreement under circumstances relating to a change of recommendation, we may be required to pay a termination fee of $2.16 million to Buyer.

The terms “acquisition proposal,” “superior proposal” and “change of recommendation” are each defined in the section entitled “Purchase Agreement — Go-Shop Period; Non-Solicitation; Change of Recommendation.”

Closing of the Asset Sale (page 82)

The Company and Buyer have each agreed to use their commercially reasonable best efforts to cause the closing of the Asset Sale to occur on or before June 30, 2019. If the closing has not occurred on or before this date and the Purchase Agreement has not been terminated pursuant to its terms, then the Company and Buyer have each agreed to use their commercially reasonable best efforts to cause the closing to occur on or before December 31, 2019 but not before November 30, 2019.

Termination of the Purchase Agreement (page 87)

The Purchase Agreement may be terminated at any time prior to the closing of the Asset Sale by the mutual written consent of the parties. In addition, either the Company or Buyer may terminate the Purchase Agreement under certain circumstances, including if: (i) the closing has not been consummated on or before December 31, 2019, provided that the terminating party’s failure to comply with any provision of the Purchase Agreement is not the cause of the failure of the closing to occur on or before such date; (ii) any court or governmental entity has issued a final, non-appealable judgment, order, injunction, rule or decree, or taken any other final, non-appealable action restraining, enjoining or otherwise prohibiting any of the transactions contemplated by the Purchase Agreement; or (iii) any governmental entity required to grant regulatory approval of the consummation of the Asset Sale or the other transactions contemplated by the Purchase Agreement has denied such approval by final, non-appealable action.

The Company or Buyer may also terminate the Purchase Agreement under certain circumstances, including, in general, (i) in certain circumstances related to a change in recommendation by the Board or (ii) an uncured breach or failure to perform by the other party of any representation, warranty, covenant or agreement set forth in the Purchase Agreement, such that it results in the closing conditions of the non-breaching party not being satisfied within a certain period of time, or (iii) solely in the case of Buyer, the issuance of a final, non-appealable denial by a governmental entity denying the approval of the repayment of the surplus note obligations as required under the Purchase Agreement.

We may be required to pay a termination fee of $2.16 million to Buyer if the Purchase Agreement is terminated under circumstances related to a change of recommendation by the Board.

Indemnification (page 88)

The Company, on one hand, and Buyer, on the other hand, have agreed to indemnify the other party and certain of the other party’s affiliates against any and all losses incurred by the other party or certain of its affiliates arising out of, resulting from or relating to any breach of, or any inaccuracy in, any representation or warranty made by the indemnifying party in the Purchase Agreement or in any certificate delivered thereunder, any breach of any covenant of the indemnifying party contained in the Purchase Agreement and, solely in the case of the Company, any transaction expenses that were not paid in full by the Insurance Companies by the time of the closing of the Asset Sale. Except for losses related to fraud, the Company and Buyer are not required to indemnify an indemnitee with respect to any indemnification claims arising out of or relating to breaches of or inaccuracies in any representation or warranty (other than claims relating to an inaccuracy or breach of a fundamental representation (as defined in the Purchase Agreement)) unless and until the aggregate amount of the losses claimed exceeds $135,000, in which event the indemnitee will be entitled to recover losses in excess of such amount. Additionally, except for losses related to fraud, the Company and Buyer are not required to indemnify indemnitees with respect to any indemnification claims arising out of or relating to breaches of or inaccuracies in any representation or warranty by the indemnifying party to the extent that aggregate losses exceed $7.2 million (other than claims relating to an inaccuracy or breach of a fundamental representation), and in no event to the extent that such losses exceed the amount of the purchase price in the aggregate.

Other Ancillary Agreements (page 89)

In connection with the Purchase Agreement, the Company and Buyer plan to enter into a Reinsurance Capacity Right of First Refusal Agreement (the “Reinsurance ROFR Agreement”) at the closing of the Asset Sale pursuant to which the Company will have a right of first refusal to sell reinsurance coverage to the insurance company subsidiaries of Buyer, providing the Company with the right to provide reinsurance coverage on up to a maximum of 7.5% of annual in force limit of any layer in the catastrophe reinsurance program purchased by Buyer and its subsidiaries, subject to an annual aggregate in force maximum of all reinsurance coverage sold by the Company to Buyer and its subsidiaries of $15 million, on the terms and subject to the conditions set forth in the Reinsurance ROFR Agreement. In addition, at the closing, the Company and Buyer plan to enter into a five-year agreement, pursuant to which the Company will provide investment advisory services to Buyer for $100,000 per year.

Material U.S. Federal Income Tax Consequences (page 74)

The Asset Sale is a corporate action undertaken by the Company. Stockholders of the Company will not realize any gain or loss for U.S. federal income tax purposes as a result of the Asset Sale. The parties intend that the sale of the equity of the Insurance Companies be treated as a taxable sale of the underlying assets of each such entity for federal income tax purposes.

Regulatory Approvals (page 74)

The Company and Buyer have agreed to use commercially reasonable efforts to reasonably cooperate and use commercially reasonable efforts to obtain governmental consents and approvals and to make necessary filings with respect to the transactions contemplated by the Purchase Agreement, including all applications or other submissions with applicable regulators under U.S. state insurance laws. Applications or notifications in connection with the change in control of Maison that will occur as a result of the Asset Sale have been filed, pursuant to the Purchase Agreement, with the respective regulatory authorities. There is no assurance that the Company and Buyer will obtain all required regulatory approvals on a timely basis, if at all, or that these approvals will not include a restriction, condition, limitation or requirement that would trigger a burdensome condition (as defined in the Purchase Agreement) which, in such case, would permit the parties to refuse to close the transactions contemplated by the Purchase Agreement.

Other than the approvals and notifications described above, the Company and Buyer are not aware of any material regulatory approvals required to be obtained, or waiting periods required to expire, after the making of a filing. If the parties discover that other approvals or filings and waiting periods are necessary, they will seek to obtain or comply with them, although, as is the case with the regulatory approvals described above, there can be no assurance that they will be obtained on a timely basis, if at all.

Anticipated Accounting Treatment (page 75)

Under generally accepted accounting principles, upon completion of the Asset Sale, we will recognize net cash proceeds from the legal sale and transfer of the issued and outstanding equity of the Insurance Companies. Additionally we will recognize a corresponding reduction of assets and liabilities relating to the Insurance Companies, and we anticipate recording a gain from the Asset Sale.

No Appraisal or Dissenters’ Rights (page 74)

No appraisal rights or dissenters’ rights are available to our stockholders under Delaware law or our certificate of incorporation or bylaws in connection with the Asset Sale.

Risk Factors (page 44)

In evaluating the Asset Sale Proposal, in addition to the other information provided elsewhere in this proxy statement and its annexes, you should carefully consider the risk factors relating to the Asset Sale and our future operations that are discussed beginning on page 44 of this proxy statement.