10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018.

or

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

For the transition period from _________________________ to _________________________________

Commission File Number: 000-55627

US ALLIANCE CORPORATION
(Exact name of registrant as specified in its charter)

KANSAS	26-4824142
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4123 SW Gage Center Drive, Suite 240, Topeka, Kansas	66604
(Address of principal executive offices)	(Zip Code)

(785) 228-0200

(Registrant’s telephone number, including area code)

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

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

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.  ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $0.10 par value

7,468,262 shares outstanding

as of August 2, 2018

1

US ALLIANCE CORPORATION
FORM 10-Q
TABLE OF CONTENTS
Part I - Financial Information
Item	Item Description	Page
Item 1	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Comprehensive Loss	4
	Consolidated Statements of Changes in Shareholders' Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4	Controls and Procedures	28
Part II - Other Information
Item	Item Description	Page
Item 1	Legal Proceedings	29
Item 1A	Risk Factors	29
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3	Defaults Upon Senior Securities	29
Item 4	Mine Safety Disclosures	29
Item 5	Other Information	29
Item 6	Exhibits	30
	Signatures	30

2

ITEM 1.      FINANCIAL STATEMENTS

US Alliance Corporation

Consolidated Balance Sheets

	June 30, 2018			December 31, 2017
	(unaudited)
Assets
Investments:
Available for sale fixed maturity securities (amortized cost: $23,987,179 and $22,439,705 as of June 30, 2018 and December 31, 2017, respectively)	$	23,183,390		$	22,945,700
Available for sale equity securities (cost: $11,532,342 and $10,764,072 as of June 30, 2018 and December 31, 2017, respectively)		11,237,472			10,663,515
Policy loans		48,932			33,975
Total investments		34,469,794			33,643,190
Cash and cash equivalents		1,867,891			651,809
Investment income due and accrued		243,756			214,998
Reinsurance related assets		181,112			249,879
Deferred acquisition costs, net		2,871,727			2,963,057
Value of business acquired, net		590,449			600,601
Property, equipment and software, net		208,800			221,077
Goodwill		277,542			277,542
Other assets		132,114			166,184
Total assets	$	40,843,185		$	38,988,337
Liabilities and Shareholders' Equity
Liabilities:
Policy liabilities
Deposit-type contracts	$	15,113,995		$	13,448,891
Policyholder benefit reserves		13,012,475			11,488,979
Advance premiums		28,428			7,507
Total policy liabilities		28,154,898			24,945,377
Accounts payable and accrued expenses		96,027			98,382
Other liabilities		21,259			8,876
Total liabilities		28,272,184			25,052,635
Shareholders' Equity:
Common stock, $0.10 par value. Authorized 20,000,000 shares; issued and outstanding 7,453,287 and 7,310,939 shares as of June 30, 2018 and December 31, 2017, respectively		745,330			731,095
Additional paid-in capital		21,985,207			21,280,437
Accumulated deficit		(9,060,854	)		(8,481,268	)
Accumulated other comprehensive income (loss)		(1,098,682	)		405,438
Total shareholders' equity		12,571,001			13,935,702
Total liabilities and shareholders' equity	$	40,843,185		$	38,988,337

See Notes to Consolidated Financial Statements (unaudited).

3

US Alliance Corporation

Consolidated Statements of Comprehensive Loss

	Six Months Ended June 30,						Three Months Ended June 30,
	2018			2017			2018			2017
	(unaudited)						(unaudited)
Income:
Premium income	$	4,874,480		$	3,732,570		$	2,442,384		$	1,982,642
Net investment income		677,123			296,119			365,563			170,099
Net realized gain (loss) on sale of securities		(327	)		208,502			(327	)		16,097
Other income		15,994			39,455			6,748			19,253
Total income		5,567,270			4,276,646			2,814,368			2,188,091
Expenses:
Death claims		404,212			686,158			168,838			181,480
Policyholder benefits		2,315,779			2,187,150			1,188,097			1,191,959
Increase in policyholder reserves		1,507,612			576,548			710,976			445,127
Commissions, net of deferrals		319,978			265,434			167,821			141,143
Amortization of deferred acquisition costs		210,614			84,225			120,259			46,461
Amortization of value of business acquired		10,152			-			5,076
Salaries & benefits		543,340			383,143			268,492			204,951
Other operating expenses		835,169			608,435			361,637			322,669
Total expense		6,146,856			4,791,093			2,991,196			2,533,790
Net loss	$	(579,586	)	$	(514,447	)	$	(176,828	)	$	(345,699	)
Net loss per common share, basic and diluted	$	(0.08	)	$	(0.09	)	$	(0.02	)	$	(0.06	)
Unrealized net holding gains (losses) arising during the period		(1,504,447	)		468,246			(515,501	)		270,394
Reclassification adjustment for gains included in net income (loss)		327			(208,502	)		327			(16,097	)
Other comprehensive income (loss)		(1,504,120	)		259,744			(515,174	)		254,297
Comprehensive loss	$	(2,083,706	)	$	(254,703	)	$	(692,002	)	$	(91,402	)

See Notes to Consolidated Financial Statements (unaudited).

4

US Alliance Corporation

Consolidated Statements of Changes in Shareholders' Equity

Six Months Ended June 30, 2018 and 2017 (Unaudited)

								Accumulated
	Number of							Other
	Shares of		Common		Additional			Comprehensive			Accumulated
	Common Stock		Stock		Paid-in Capital			Income / (Loss)			Deficit			Total
Balance, December 31, 2016		5,565,943	$	556,595	$	18,017,163		$	239,461		$	(7,432,236	)	$	11,380,983
Common stock issued, $7 per share		58,120		5,812		401,028			-			-			406,840
Costs associated with common stock issued		-		-		(147,422	)		-			-			(147,422	)
Other comprehensive income		-		-		-			259,744			-			259,744
Net loss		-		-		-			-			(514,447	)		(514,447	)
Balance, June 30, 2017		5,624,063	$	562,407	$	18,270,769		$	499,205		$	(7,946,683	)	$	11,385,698
Balance, December 31, 2017		7,310,939	$	731,095	$	21,280,437		$	405,438		$	(8,481,268	)	$	13,935,702
Common stock issued, $7 per share		142,348		14,235		982,201			-			-			996,436
Costs associated with common stock issued		-		-		(277,431	)		-			-			(277,431	)
Other comprehensive income		-		-		-			(1,504,120	)		-			(1,504,120	)
Net loss		-		-		-			-			(579,586	)		(579,586	)
Balance, June 30, 2018		7,453,287	$	745,330	$	21,985,207		$	(1,098,682	)	$	(9,060,854	)	$	12,571,001

See Notes to Consolidated Financial Statements (unaudited).

5

US Alliance Corporation

Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2018			2017
	(unaudited)
Cash Flows from Operating Activities:
Net loss	$	(579,586	)	$	(514,447	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		17,610			17,169
Net realized gains on the sale of securities		327			(208,502	)
Amortization of investment securities, net		27,965			16,468
Deferred acquisition costs capitalized		(155,219	)		(144,069	)
Deferred acquisition costs amortized		210,614			84,225
Value of business acquired amortized		10,152			-
Interest credited on deposit type contracts		260,441			63,607
(Increase) decrease in operating assets:
Investment income due and accrued		(28,758	)		(6,101	)
Reinsurance related assets		68,767			(226	)
Other assets		34,070			(249,929	)
Increase (decrease) in operating liabilities:
Policyowner benefit reserves		1,523,496			797,659
Advance premiums		20,920			66,399
Other liabilities		12,383			(2,320	)
Accounts payable and accrued expenses		(2,355	)		73,984
Net cash provided by (used in) operating activities		1,420,827			(6,083	)
Cash Flows from Investing Activities:
Available-for-sale securities
Purchase of fixed income investments		(1,758,337	)		(2,100,968	)
Purchase of equity investments		(768,944	)		(3,124,648	)
Proceeds from fixed income sales and repayments		183,226			1,532,509
Proceeds from equity sales and repayments		-			1,299,640
Interest on policy loans		(1,156	)		-
Increase in policy loans		(13,801	)		-
Purchase of property, equipment and software		(5,334	)		(6,000	)
Net cash used in investing activities		(2,364,346	)		(2,399,467	)
Cash Flows from Financing Activities:
Receipts on deposit-type contracts		2,197,360			1,000,563
Withdrawals on deposit-type contracts		(756,764	)		(271,319	)
Proceeds received from issuance of common stock, net of costs of issuance		719,005			259,418
Net cash provided by financing activities		2,159,601			988,662
Net increase (decrease) in cash and cash equivalents		1,216,082			(1,416,888	)
Cash and Cash Equivalents:
Beginning		651,809			3,145,745
Ending	$	1,867,891		$	1,728,857

See Notes to Consolidated Financial Statements (unaudited).

6

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Note 1.     Description of Business and Significant Accounting Policies

Description of business: US Alliance Corporation (“the Company”) is a Kansas corporation located in Topeka, Kansas. The Company was incorporated April 24, 2009, as a holding company to form, own, operate and manage a life insurance company and its marketing and investment affiliates. On June 9, 2011, the wholly owned subsidiary, US Alliance Life and Security Company (“USALSC”) was incorporated. USALSC received its Certificate of Authority from the Kansas Insurance Department (KID) effective January 2, 2012. On April 23, 2012, US Alliance Investment Corporation (“USAIC”) and US Alliance Marketing Corporation (“USAMC”) were incorporated as wholly-owned subsidiaries of the Company to provide investment management and marketing services. On August 1, 2017, the Company merged with Northern Plains Capital Corporation (“Northern Plains”) with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company (“DCLIC”) which became a wholly owned subsidiary of US Alliance Life and Security Company.

The Company terminated its initial public offering on February 24, 2013. During the balance of 2013, the Company achieved approval of an array of life insurance and annuity products, began development of various distribution channels and commenced insurance operations and product sales. The Company sold its first insurance product on May 1, 2013. The Company continued to expand its product offerings and distribution channels throughout 2014 and 2015. On February 24, 2015, the Company commenced a warrant exercise offering set to expire on February 24, 2016. On February 24, 2016, the Company extended the offering until February 24, 2017 and made additional shares available for purchase. All outstanding warrants expired on April 1, 2016. The Company further extended this offering to February 24, 2019. During the 4^th quarter of 2017, the Company began a private placement offering to accredited investors in the state of North Dakota.

The Company began offering third party administrative (“TPA”) services in 2015. TPA agreements generate service fee income for the Company. The Company currently has one TPA agreement in place. The Company has been able to perform its TPA services using existing resources.

Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included.

The results of operation for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period or for any other future year. Certain financial information which is normally included in notes to financial statements prepared in accordance with US GAAP, but which are not required for interim reporting purposes, has been condensed or omitted. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s report on Form 10-K and amendments thereto for the year ended December 31, 2017.

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated from the consolidated financial statements.

Reclassifications: Certain reclassifications of a minor nature have been made to prior-period balances to conform to current-period presentation with no net impact to net loss/income or equity.

Area of Operation: US Alliance Life and Security Company is authorized to operate in the states of Kansas, North Dakota, Missouri, Oklahoma, and Nebraska. Dakota Capital Life Insurance Company is authorized to operate in the state of North Dakota.

7

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Common stock and earnings (loss) per share: The par value for common stock is $0.10 per share with 20,000,000 shares authorized. As of June 30, 2018, and December 31, 2017, the Company had 7,453,287 and 7,310,939 common shares issued and outstanding, respectively.

Earnings (loss) per share attributable to the Company’s common stockholders were computed based on the net loss and the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the quarters ended June 30, 2018 and 2017 were 7,389,200 and 5,596,489 shares, respectively. The weighted average number of shares outstanding during the six months ended June 30, 2018 and 2017 were 7,346,064 and 5,579,493 shares, respectively. Potential common shares are excluded from the computation when their effect is anti-dilutive. Basic and diluted net loss per common share is the same for the quarters and six months ended June 30, 2018 and 2017 because all warrants for common shares are anti-dilutive.

New accounting standards 

Revenue from Contracts with Customers

In May 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company's fee income related to providing services will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services.

The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when, or as, the entity satisfies a performance obligation.

In July 2015, the FASB deferred the effective date of the updated guidance on revenue recognition by one year to the quarter ending March 31, 2018.  As an emerging growth company, the Company has chosen to defer implementation of this accounting standard until the year ending December 31, 2019. The adoption of this guidance is not expected to have a material effect on the Company’s result of operations, financial position or liquidity.

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued updated guidance regarding financial instruments. This guidance intends to enhance reporting for financial instruments and addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The significant amendments in this update generally require equity investments to be measured at fair value with changes in fair value recognized in net income, require the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. This guidance also intends to enhance the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments.

This guidance is effective for fiscal years beginning after December 15, 2017. As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after December 15, 2018. The recognition and measurement provisions of this guidance will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and early adoption is not permitted. The Company is evaluating this guidance but expects the primary impact will be the recognition of unrealized gains and losses on available-for-sale equity securities in net income. Currently, all unrealized gains and losses on available-for-sale equity securities are recognized in other comprehensive income (loss).

8

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

The effect of the adoption of this guidance on the Company’s results of operations, financial position and liquidity is primarily dependent on the fair value of the available-for-sale equity securities in future periods and the existence of a deferred tax asset related to available-for-sale securities in future periods that have not yet been fully assessed.

Leases

In February 2016, the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than 12 months.  The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease).  Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows.  Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset.  Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease.   The accounting by lessors is not significantly changed by the updated guidance.  The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements.

The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied.  Early adoption is permitted.  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after December 15, 2019. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Contingent Put and Call Options in Debt Instruments

In March 2016, the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does not need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately.  The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted.  As an emerging growth company, the Company elected to defer implementation of this standard to fiscal years beginning after December 15, 2017. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity for the six months ended June 30, 2018.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued updated guidance for the accounting for credit losses for financial instruments.  The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

 The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value.  In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists.

The updated guidance is effective for reporting periods beginning after December 15, 2019.  Early adoption is permitted for reporting periods beginning after December 15, 2018.  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after December 15, 2020. The Company will not be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

9

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Classification of Certain Cash Receipts and Cash Payment

In August 2016, the FASB issued new guidance that clarifies the classification of certain cash receipts and cash payments in the statement of cash flows under eight different scenarios including, but not limited to: (i) debt prepayment or debt extinguishment costs; (ii) proceeds from the settlement of corporate-owned life insurance policies including bank-owned life insurance policies; (iii) distributions received from equity method investees; and (iv) separately identifiable cash flows and application of the predominance principle. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this guidance on its statement of cash flows.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act). In February 2018, FASB issued guidance to address certain issues related to the Tax Cuts and Jobs Act. This new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did not relate to accounting policies and procedures pertinent or material to the Company at this time.

10

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Note 2.  Investments

The amortized cost and fair value of available for sale and held to maturity investments as of June 30, 2018 and December 31, 2017 is as follows:

	June 30, 2018
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	275,896	$	-	$	(7,450	)	$	268,446
Corporate bonds		13,448,349		31,181		(770,236	)		12,709,294
Municipal bonds		6,165,877		124,831		(83,643	)		6,207,065
Redeemable preferred stock		99,560		-		(1,800	)		97,760
Mortgage backed and asset backed securities		3,997,497		9,276		(105,948	)		3,900,825
Total fixed maturities		23,987,179		165,288		(969,077	)		23,183,390
Equities:
Equities		11,532,342		59,447		(354,317	)		11,237,472
Total available for sale	$	35,519,521	$	224,735	$	(1,323,394	)	$	34,420,862

	December 31, 2017
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:
Fixed maturities:
US Treasury securities	$	271,620	$	-	$	(20,870	)	$	250,750
Corporate bonds		11,857,191		309,754		(10,720	)		12,156,225
Municipal bonds		6,134,323		230,842		(12,721	)		6,352,444
Redeemable preferred stock		99,560		960		-			100,520
Mortgage backed and asset backed securities		4,077,011		32,726		(23,976	)		4,085,761
Total fixed maturities		22,439,705		574,282		(68,287	)		22,945,700
Equities:
Equities		10,764,072		83,346		(183,903	)		10,663,515
Total available for sale	$	33,203,777	$	657,628	$	(252,190	)	$	33,609,215

The amortized cost and fair value of debt securities as of June 30, 2018 and December 31, 2017, by contractual maturity, are shown in the following table. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of June 30, 2018				As of December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
After one year through five years	$	809,137	$	793,989	$	612,088	$	617,562
After five years through ten years		1,757,227		1,714,964		1,910,307		1,945,454
More than 10 years		17,323,758		16,675,852		15,740,739		16,196,403
Redeemable preferred stocks		99,560		97,760		99,560		100,520
Mortgage backed and asset backed securities		3,997,497		3,900,825		4,077,011		4,085,761
	$	23,987,179	$	23,183,390	$	22,439,705	$	22,945,700

11

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Proceeds from the sale of securities, maturities, and asset paydowns for the first six months of 2018 and 2017 were $183,226 and $2,832,149 respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Six Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	227,463
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	208,502

Proceeds from the sale of securities, maturities, and asset paydowns for the three months ended June 30, 2018 and 2017 were $155,100 and $2,677,453 respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Three Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	35,058
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	16,097

12

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Gross unrealized losses by duration are summarized as follows:

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
June 30, 2018
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	(7,450	)	$	-	$	-		$	268,446	$	(7,450	)
Corporate bonds		10,910,971		(761,131	)		117,414		(9,105	)		11,028,385		(770,236	)
Municipal bonds		2,773,408		(68,959	)		185,316		(14,684	)		2,958,724		(83,643	)
Redeemable preferred stock		97,760		(1,800	)		-		-			97,760		(1,800	)
Mortgage backed and asset backed securities		2,714,113		(74,887	)		595,949		(31,061	)		3,310,062		(105,948	)
Total fixed maturities		16,764,698		(914,227	)		898,679		(54,850	)		17,663,377		(969,077	)
Equities:
Equities		8,721,253		(250,840	)		1,382,838		(103,477	)		10,104,091		(354,317	)
Total available for sale	$	25,485,951	$	(1,165,067	)	$	2,281,517	$	(158,327	)	$	27,767,468	$	(1,323,394	)

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2017
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	(20,870	)	$	-	$	-		$	250,750	$	(20,870	)
Corporate bonds		848,853		(5,733	)		121,718		(4,987	)		970,571		(10,720	)
Municipal bonds		735,257		(5,683	)		192,962		(7,038	)		928,219		(12,721	)
Mortgage backed and asset backed securities		2,056,887		(6,970	)		654,936		(17,006	)		2,711,823		(23,976	)
Total fixed maturities		3,891,747		(39,256	)		969,616		(29,031	)		4,861,363		(68,287	)
Equities:
Equities		7,971,440		(105,946	)		1,161,121		(77,957	)		9,132,561		(183,903	)
Total available for sale	$	11,863,187	$	(145,202	)	$	2,130,737	$	(106,988	)	$	13,993,924	$	(252,190	)

Unrealized losses occur from market price declines that may be due to a number of factors, including economic downturns, changes in interest rates, competitive forces within an industry, issuer specific events, operational difficulties, lawsuits, and market pricing anomalies caused by factors such as temporary lack of liquidity.

The total number of securities in the investment portfolio in an unrealized loss position as of June 30, 2018 was 128, which represented an unrealized loss of $1,323,394 of the aggregate carrying value of those securities. The 128 securities breakdown as follows: 87 bonds, 31 mortgage and asset backed securities, 4 preferred stocks, 2 high yield corporate bond funds, 2 preferred stock index funds, 1 senior loan fund, and 1 common stock. The Company determined that no securities were considered to be other-than-temporarily impaired as of June 30, 2018 and December 31, 2017.

Note 4.  Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement rate.

13

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

● Level 3 inputs are unobservable for the asset or liability and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Investments, available for sale: Fair values of available for sale fixed maturity securities are provided by a third party pricing service. The pricing service uses a variety of sources to determine fair value of securities. The Company’s fixed maturity securities are highly liquid, which allows for a high percentage of the portfolio to be priced through pricing sources. Fair values for equity securities are also provided by a third party pricing service and are derived from active trading on national market exchanges.

14

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Note 4.  Fair Value Measurements (Continued)

The following table presents the amounts of assets measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017:

	June 30, 2018
	Total		Level 1		Level 2		Level 3
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	268,446	$	-	$	-
Corporate bonds		12,709,294		-		12,509,294		200,000
Municipal bonds		6,207,065		-		6,207,065		-
Redeemable preferred stock		97,760		-		97,760		-
Mortgage backed and asset backed securities		3,900,825		-		3,900,825		-
Total fixed maturities		23,183,390		268,446		22,714,944		200,000
Equities:
Equities		11,237,472		11,237,472		-		-
Total	$	34,420,862	$	11,505,918	$	22,714,944	$	200,000

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	250,750	$	-	$	-
Corporate bonds		12,156,225		-		11,956,225		200,000
Municipal bonds		6,352,444		-		6,352,444		-
Redeemable preferred stock		100,520		-		100,520		-
Mortgage backed and asset backed securities		4,085,761		-		4,085,761		-
Total fixed maturities		22,945,700		250,750		22,494,950		200,000
Equities:
Equities		10,663,515		10,663,515		-		-
Total	$	33,609,215	$	10,914,265	$	22,494,950	$	200,000

The Company discloses the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for accrued interest. The methodologies for other financial assets and financial liabilities are discussed below:

Cash and cash equivalents: The carrying amounts approximate fair value because of the short maturity of these instruments.

Investment income due and accrued: The carrying amounts approximate fair value because of the short maturity of these instruments.

Policy loans: Policy loans are stated at unpaid principal balances. As these loans are fully collateralized by the cash surrender value of the underlying insurance policies, the carrying value of the policy loans approximates their fair value.

Policyholder deposits in deposit-type contracts: The fair value for policyholder deposits in deposit-type insurance contracts (accumulation annuities) is calculated using a discounted cash flow approach.  Cash flows are projected using actuarial assumptions and discounted to the valuation date using risk-free rates adjusted for credit risk and the nonperformance risk of the liabilities.

15

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

The estimated fair values of the Company’s financial assets and liabilities at June 30, 2018 and December 31, 2017 are as follows:

	June 30, 2018				December 31, 2017
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	1,867,891	$	1,867,891	$	651,809	$	651,809
Investment income due and accrued		243,756		243,756		214,998		214,998
Investments, at fair value		34,469,794		34,469,794		33,643,190		33,643,190
Total Financial Assets	$	36,630,373	$	36,630,373	$	34,509,997	$	34,509,997
Financial Liabilities:
Policyholder deposits in deposit-type contracts	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470
Total Financial Liabilities	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470

Note 5.  Income Tax Provision

No income tax expense or (benefit) has been reflected for the quarters ended June 30, 2018 and 2017 due to the lack of taxable net income generated by the Company and the 100% valuation allowance pertaining to the deferred tax asset. The difference between the reported amount of income tax expense and the amount expected based upon statutory rates is primarily due to the increase in the valuation allowance on deferred taxes.

The net operating loss carryforwards for the Company are $12,053,644 and $11,886,891 as of June 30, 2018 and December 31, 2017, respectively. The components of the deferred tax assets and liabilities due to book and tax differences are the following: fixed asset depreciation, net operating loss carryforward, net unrealized gains (losses) on investment securities, policyowner benefit reserves and deferred acquisition costs. The net deferred tax asset is offset 100 percent by the valuation allowance.

Note 6.  Subsequent Events

All of the effects of subsequent events that provide additional evidence about conditions that existed at the balance sheet date, including the estimates inherent in the process of preparing the consolidated financial statements, are recognized in the consolidated financial statements. The Company does not recognize subsequent events that provide evidence about conditions that did not exist at the balance sheet date but arose after, but before the consolidated financial statements are issued. In some cases, unrecognized subsequent events are disclosed to keep the consolidated financial statements from being misleading.

The Company has evaluated subsequent events through August 9, 2018, the date on which the consolidated financial statements were issued.

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in this Form 10-Q. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward looking statements.

Overview

US Alliance Corporation (“USAC”) was formed as a Kansas corporation on April 24, 2009 for the purpose of raising capital to form a new Kansas-based life insurance company. We presently conduct our business through our four wholly-owned subsidiaries: USALSC, a life insurance corporation; DCLIC, a life insurance corporation; USAMC, an insurance marketing corporation; and USAIC, an investment management corporation.

On January 2, 2012, USALSC was issued a Certificate of Authority to conduct life insurance business in the State of Kansas. We began third party administrative services in 2015.

On August 1, 2017, the Company merged with Northern Plains Capital Corporation (“Northern Plains”) with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company ("DCLIC") which became a wholly owned subsidiary of USALSC.

Critical Accounting Policies and Estimates

Our accounting and reporting policies are in accordance with GAAP. Preparation of the consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The following is an explanation of our accounting policies and the estimates considered most significant by management. These accounting policies inherently require significant judgment and assumptions and actual operating results could differ significantly from management’s estimates determined using these policies. We believe the following accounting policies, judgments and estimates are the most critical to the understanding of our results of operations and financial position. A detailed discussion of significant accounting policies is provided in this report in the Notes to Consolidated Financial Statements included with this quarterly report.

Valuation of Investments

The Company's principal investments are in fixed maturity and equity securities. Fixed maturity and equity securities, classified as available for sale, are carried at their fair value in the consolidated balance sheets, with unrealized gains or losses recorded in comprehensive income (loss). Our fixed income investment manager utilizes external independent third-party pricing services to determine the fair values of investment securities available for sale.

We have a policy and process in place to identify securities that could potentially have an impairment that is other-than-temporary. The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. We consider severity of impairment, duration of impairment, forecasted recovery period, industry outlook, financial condition of the issuer, issuer credit ratings and whether we intend to sell a security, or it is more likely than not that we would be required to sell a security, prior to the recovery of the amortized cost.

17

The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the income statement as an other-than-temporary impairment. As it relates to debt securities, if we do not expect to recover the amortized basis, do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the other-than-temporary impairment would be recognized. We would recognize the credit loss portion through earnings in the income statement and the noncredit loss portion in accumulated other comprehensive loss.

Deferred Acquisition Costs

Incremental direct costs, net of amounts ceded to reinsurers, that result directly from and are essential to a product sale and would not have been incurred by us had the sale not occurred, are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense.

Value of Business Acquired

Value of business acquired (VOBA) represents the estimated value assigned to purchased companies or insurance in force of the assumed policy obligations at the date of acquisition of a block of policies. At least annually, a review is performed of the models and the assumptions used to develop expected future profits, based upon management’s current view of future events. VOBA is reviewed on an ongoing basis to determine that the unamortized portion does not exceed the expected recoverable amounts. Management’s view primarily reflects our experience but can also reflect emerging trends within the industry. Short-term deviations in experience affect the amortization of VOBA in the period, but do not necessarily indicate that a change to the long-term assumptions of future experience is warranted. If it is determined that it is appropriate to change the assumptions related to future experience, then an unlocking adjustment is recognized for the block of business being evaluated. Certain assumptions, such as interest spreads and surrender rates, may be interrelated. As such, unlocking adjustments often reflect revisions to multiple assumptions. The VOBA balance is immediately impacted by any assumption changes, with the change reflected through the statements of comprehensive income as an unlocking adjustment in the amount of VOBA amortized. These adjustments can be positive or negative with adjustments reducing amortization limited to amounts previously deferred plus interest accrued through the date of the adjustment.

In addition, we may consider refinements in estimates due to improved capabilities resulting from administrative or actuarial system upgrades. We consider such enhancements to determine whether and to what extent they are associated with prior periods or simply improvements in the projection of future expected gross profits due to improved functionality. To the extent they represent such improvements, these items are applied to the appropriate financial statement line items in a manner similar to unlocking adjustments.

VOBA is also reviewed on an ongoing basis to determine that the unamortized portion does not exceed the expected recoverable amounts. If it is determined from emerging experience that the premium margins or gross profits are less than the unamortized value of business acquired, then the asset will be adjusted downward with the adjustment recorded as an expense in the current period.

Goodwill

Goodwill represents the excess of the amounts paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill is tested for impairment at least annually in the fourth quarter or more frequently if events or circumstances change that would indicate that a triggering event has occurred.

18

We assess the recoverability of indefinite-lived intangible assets at least annually or whenever events or circumstances suggest that the carrying value of an identifiable indefinite-lived intangible asset may exceed the sum of the future discounted cash flows expected to result from its use and eventual disposition. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Reinsurance

In the normal course of business, we seek to limit aggregate and single exposure to losses on risk by purchasing reinsurance. The amounts reported in the consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. We diversify our credit risks related to reinsurance ceded. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish our primary liability under the policies written. We regularly evaluate the financial condition of our reinsurers including their activities with respect to claim settlement practices and commutations, and establish allowances for uncollectible reinsurance recoverable as appropriate.

Future Policy Benefits

We establish liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by using a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Such liabilities are reviewed quarterly by an independent consulting actuary.

Income Taxes

Deferred tax assets are recorded based on the differences between the financial statement and tax basis of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments, insurance reserves, and deferred acquisition costs. A deferred tax asset valuation allowance is established when there is uncertainty that such assets would be realized. We have no uncertain tax positions that we believe are more-likely-than-not that the benefit will not to be realized.

Recognition of Revenues

   Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due.

Amounts received as payment for annuities are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of investment earnings of the deposits, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the Consolidated Statements of Cash Flows.

Merger

On May 23, 2017 the Company entered into a definitive merger agreement with Northern Plains Capital Corporation. The merger transaction (the "Merger") closed on July 31, 2017. Northern Plains shareholders received .5841 shares of US Alliance Corporation stock for each share of Northern Plains stock owned. USAC issued 1,644,458 shares of common stock to holders of Northern Plains shares.

New Accounting Standards

A detailed discussion of new accounting standards is provided in the Notes to Consolidated Financial Statements beginning on p. 7 of this quarterly report.

19

Discussion of Consolidated Results of Operations

Revenues. Insurance revenues are primarily generated from premium revenues and investment income. Insurance revenues for the six months ended June 30, 2018 and 2017 are summarized in the table below.

	Six Months Ended June 30,
	2018			2017
	(unaudited)
Income:
Premium income	$	4,874,480		$	3,732,570
Net investment income		677,123			296,119
Net realized gain (loss) on sale of securities		(327	)		208,502
Other income		15,994			39,455
Total income	$	5,567,270		$	4,276,646

Insurance revenues for the three months ended June 30, 2018 and 2017 are summarized in the table below.

	Three Months Ended June 30,
	2018			2017
	(unaudited)
Income:
Premium income	$	2,442,384		$	1,982,642
Net investment income		365,563			170,099
Net realized gain (loss) on sale of securities		(327	)		16,097
Other income		6,748			19,253
Total income	$	2,814,368		$	2,188,091

Premium revenue: Premium revenue for the first six months of 2018 was $4,874,480 compared to $3,732,570 in the first six months of 2017, an increase of $1,141,910. USALSC entered into a coinsurance transaction with American Life and Security Corporation (“ALSC”) effective September 30, 2017. This agreement, along with our acquisition of DCLIC and our organic growth, is the primary driver of the increase in premiums.

Premium revenue for the second quarter of 2018 was $2,442,384 compared to $1,982,642 in the second quarter of 2017, an increase of $459,742. The ALSC coinsurance agreement, along with our acquisition of DCLIC and our organic growth, is the primary driver of the increase in premiums.

Direct, assumed and ceded premiums for the six months ended June 30, 2018 and 2017 are summarized in the following table.

	Six Months Ended June 30,
	2018			2017
	(unaudited)
Direct	$	2,308,604		$	1,491,444
Assumed		2,849,479			2,315,400
Ceded		(283,603	)		(74,274	)
Total	$	4,874,480		$	3,732,570

20

Direct, assumed and ceded premiums for the three months ended June 30, 2018 and 2017 are summarized in the following table.

	Three Months ended June 30,
	2018			2017
	(unaudited)
Direct	$	1,169,237		$	748,350
Assumed		1,443,873			1,274,094
Ceded		(170,726	)		(39,802	)
Total	$	2,442,384		$	1,982,642

The Company is pursuing new product and distribution opportunities to increase premium production. The acquisition of DCLIC and the reinsurance agreement with ALSC will both increase future premiums.

Investment income, net of expenses: The components of net investment income for the six months ended June 30, 2018 and 2017 are as follows:

	Six Months Ended June 30,
	2018			2017
	(unaudited)
Fixed maturities	$	467,178		$	192,481
Equity securities		246,591			122,692
Cash and short term investments		2,961			1,493
		716,730			316,666
Less investment expenses		(39,607	)		(20,547	)
	$	677,123		$	296,119

Net investment income for the first six months of 2018 was $677,123, compared to $296,119 in 2017, an increase of $381,004. This increase in investment income is primarily a result of increased invested assets as a result of our premium income, the Merger with Northern Plains, and our coinsurance agreement with ALSC, as well as an improvement in our book yield.

The components of net investment income for the three months ended June 30, 2018 and 2017 are as follows:

	Three Months Ended June 30,
	2018			2017
	(unaudited)
Fixed maturities	$	237,534		$	99,745
Equity securities		145,886			80,246
Cash and short term investments		2,214			710
		385,634			180,701
Less investment expenses		(20,071	)		(10,602	)
	$	365,563		$	170,099

Net investment income for the second quarter of 2018 was $365,563 compared to $170,099 in 2017, an increase of $195,464. This increase in investment income is primarily a result of increased invested assets as a result of our premium income, the Merger with Northern Plains, and our coinsurance agreement with ALSC, as well as an improvement in our book yield.

21

Net realized losses on investments: Net realized losses on investments for the six months ended June 30, 2018 were $327, compared to gains of $208,502 in 2017, a decrease of $208,829. The decrease in realized gains is attributable to the repositioning of an equity portfolio from a market return focus to an income focus in 2017. There was not a similar activity in 2018. Realized gains and losses related to the sale of securities for the six months ended June 30, 2018 and 2017 are summarized as follows:

	Six Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	227,463
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	208,502

Net realized losses on investments for the three months ended June 30, 2018 were $327, compared to gains of $16,097 in 2017, a decrease of $16,424. The decrease in realized gains is attributable to fewer investment transactions in the second quarter of 2018. Realized gains and losses related to the sale of securities for the three months ended June 30, 2018 and 2017 are summarized as follows:

	Three Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	35,058
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	16,097

Other income: Other income for the six months ended June 30, 2018 was $15,994 compared to $39,455 in 2017, a decrease of $23,461. This decrease is due to the acquisition of DCLIC who was previously a third party administration client. Other income for the three months ended June 30, 2018 was $6,748 compared to $19,253 in 2017, a decrease of $12,505. [Same reason for decrease, or other factors?]

Expenses. Expenses for the six months ended June 30, 2018 and 2017 are summarized in the table below.

	Six Months Ended June 30,
	2018		2017
Expenses:	(unaudited)
Death claims	$	404,212	$	686,158
Policyholder benefits		2,315,779		2,187,150
Increase in policyholder reserves		1,507,612		576,548
Commissions, net of deferrals		319,978		265,434
Amortization of deferred acquisition costs		210,614		84,225
Amortization of value of business acquired		10,152		-
Salaries & benefits		543,340		383,143
Other operating expenses		835,169		608,435
Total expense	$	6,146,856	$	4,791,093

22

Expenses for the three months ended June 30, 2018 and 2017 are summarized in the table below.

	Three Months Ended June 30,
	2018		2017
Expenses:	(unaudited)
Death claims	$	168,838	$	181,480
Policyholder benefits		1,188,097		1,191,959
Increase in policyholder reserves		710,976		445,127
Commissions, net of deferrals		167,821		141,143
Amortization of deferred acquisition costs		120,259		46,461
Amortization of value of business acquired		5,076		-
Salaries & benefits		268,492		204,951
Other operating expenses		361,637		322,669
Total expense	$	2,991,196	$	2,533,790

Death and other benefits: Death benefits were $404,212 in the six months ended June 30, 2018 compared to $686,158 in 2017, a decrease of $281,946. This decrease is attributable to fewer pre-need claims paid during 2018. The majority of death claims paid from inception have been on pre-need policies. We expect these claims to grow as we continue to increase the size of our in-force pre-need business.

Death benefits were $168,838 in the three months ended June 30, 2018 compared to $181,480 in 2017, a decrease of $12,642. This decrease is attributable to fewer pre-need claims paid during 2018.

Policyholder benefits: Policyholder benefits were $2,315,779 in the six months ended June 30, 2018 compared to $2,187,150 in 2017, an increase of $128,629. The primary driver of this increase is the growth of interest credited on annuities assumed from ALSC and acquired with Dakota Capital Life.

Policyholder benefits were $1,188,097 in the three months ended June 30, 2018 compared to $1,191,959 in 2017, a decrease of $3,862. There was no significant change in the results when comparing the two quarters.

Increase in policyholder reserves: Policyholder reserves increased to $1,507,612 in the six months ended June 30, 2018, compared to $576,548 in 2017, an increase of $931,064. The increase in policyholder reserves is driven by the growth of our assumed and direct written business.

Policyholder reserves increased to $710,976 in the three months ended June 30, 2018, compared to $445,127 in 2017, an increase of $265,849. The increase in policyholder reserves is driven by the growth of our assumed and direct written business.

Commissions, net of deferrals: The Company pays commissions to the ceding company on a block of assumed policies as well as commissions to agents on directly written business. Commissions were $319,978 in the six months ended June 30, 2018, compared to $265,434 in 2017, an increase of $54,544. This increase is due to an increase in assumed premiums.

Commissions were $167,821 in the three months ended June 30, 2018, compared to $141,143 in 2017, an increase of $26,678. This increase is due to an increase in assumed premiums.

Amortization of deferred acquisition costs: The amortization of deferred acquisition costs was $210,614 in the six months ended June 30, 2018, compared to $84,225 in 2017, an increase of $126,389. The amortization increase is attributable to the growth of our DAC asset related to our reinsurance transaction with ALSC.

The amortization of deferred acquisition costs was $120,259 in the three months ended June 30, 2018, compared to $46,461 in 2017, an increase of $73,798. The amortization increase is attributable to the growth of our DAC asset related to our reinsurance transaction with ALSC.

Amortization of value of business acquired: The amortization of value of business acquired was $10,152 in the six months ended June 30, 2018. Our initial VOBA balance was established August 1, 2017 with acquisition of DCLIC. VOBA is being amortized straight-line over 30 years. The amortization of value of business acquired was $5,076 in the three months ended June 30, 2018.

23

Salaries and benefits: Salaries and benefits were $543,340 for the six months ended June 30, 2018, compared to $383,143 in 2017, an increase of $160,197. Staffing costs have increased due to additional employees acquired with the Northern Plains Merger and due to the growth of our customer service team.

Salaries and benefits were $268,492 for the three months ended June 30, 2018, compared to $204,951 in 2017, an increase of $63,541. Staffing costs have increased due to additional employees acquired with the Northern Plains Merger and due to the growth of our customer service team.

Other expenses: Other operating expenses were $835,169 in the six months ended June 30, 2018, compared to $608,435 in 2017, an increase of $226,734. Operating costs have increased due to expenses associated with the DCLIC acquisition, including additional auditing and actuarial fees and due to increased selling and marketing expenses and information technology costs.

Other operating expenses were $361,637 in the three months ended June 30, 2018, compared to $322,669 in 2017, an increase of $38,968. Operating costs have increased due to expenses associated with the DCLIC acquisition, including additional auditing and actuarial fees and due to increased selling and marketing expenses and information technology costs.

Net Loss: Our net loss was $579,586 in the six months ended June 30, 2018 compared to net loss of $514,447 in the same period of 2017, an increase of $65,139. This increase is primarily attributable to capital gains realized in 2017 and no similar gains in 2018. Our net loss per share decreased to $0.08 from $0.09 in 2017, basic and diluted.

Our net loss was $176,828 in the three months ended June 30, 2018 compared to net loss of $345,699 in the same period of 2017, a decrease of $167,871. This decrease is primarily attributable to the growth of our in-force and assumed business. Our net loss per share decreased to $0.02 from $0.06 in 2017, basic and diluted.

Discussion of Consolidated Balance Sheet

Assets. Assets have increased to $40,843,185 as of June 30, 2018, an increase of $1,854,848 from December 31, 2017. This is primarily the result of the growth of our business, offset by a decrease in the market value of our fixed income securities.

Available for sale fixed maturity securities: As of June 30, 2018, we had available for sale fixed maturity assets of $23,183,390, an increase of $237,690 from the December 31, 2017 balance of $22,945,700. The increase is driven by the purchase of additional assets. The increase is offset by higher interest rates, which lowers the market value of these securities.

Available for sale equity securities: As of June 30, 2018, we had available for sale equity assets of $11,237,472, an increase of $573,957 from the December 31, 2017 balance of $10,663,515. This growth is driven by purchases of equity securities with premium income.

Policy loans: As of June 30, 2018, our policy loans were $48,932, an increase of $14,957 from the December 31, 2017 balance of $33,975. The increase is the result of normal loan activity. All of our policy loans were the result of our coinsurance agreement with ALSC and we had no policy loans prior to this transaction.

Cash and cash equivalents: As of June 30, 2018, we had cash and cash equivalent assets of $1,867,891, an increase of $1,216,082 from the December 31, 2017 balance of $651,809. This increase is primarily the result of cash received from premium income.

Investment income due and accrued: As of June 30, 2018, our investment income due and accrued was $243,756 compared to $214,998 as of December 31, 2017. This increase is attributable to normal investment activity and the growth of our invested assets.

24

Reinsurance related assets: As of June 30, 2018, our reinsurance related assets were $181,112, a decrease of $68,767 from the December 31, 2017 balance of $249,879. This decrease was driven by a reduction in the amounts receivable on our reinsurance business.

Deferred acquisition costs, net: As of June 30, 2018, our deferred acquisition costs were $2,871,727, a decrease of $91,330 from the December 31, 2017 balance of $2,963,057. The decrease is the result of amortization of costs deferred on our coinsurance agreement with ALSC.

Value of business acquired, net: As of June 30, 2018 our value of business acquired asset was $590,449, a decrease of $10,152 from the December 31, 2017 balance of $600,601. This asset was established in the third quarter of 2017 as a result of our acquisition of DCLIC. The decrease is the result of amortization of the asset.

Goodwill: As of June 30, 2018, our goodwill was $277,542 and was unchanged from the December 31, 2017 balance. Goodwill was established as a result of our merger with Northern Plains and we had no previous goodwill balances.

Property, equipment and software, net: As of June 30, 2018 our property, equipment and software assets were $208,800, a decrease of $12,277 from the December 31, 2017 balance of $221,077. This decrease is a result of normal amortization during the period, offset by equipment purchased in the second quarter.

Other assets: As of June 30, 2018, our other assets were $132,114, a decrease of $34,070 from the December 31, 2017 balance of $166,184. This decrease was the result of a reduction in our pre-paid assets.

Liabilities. Our total liabilities were $28,272,184 as of June 30, 2018, an increase of $3,219,549 from our December 31, 2017 liability of $25,052,635. This increase is driven by an increase in our policyholder liabilities.

Policy liabilities: Our total policy liabilities as of June 30, 2018 were $28,154,898, an increase of $3,209,521 from the December 31, 2017 balance of $24,945,377. This increase is the result new policy sales and the growth of our in-force policies.

Accounts payable and accrued expenses: As of June 30, 2018, our accounts payable and accrued expenses were $96,027, a decrease of $2,355 from the December 31, 2017 balance of $98,382. This decrease is the result of normal operating activity.

Shareholders’ Equity. Our shareholders’ equity was $12,571,001 as of June 30, 2018, a decrease of $1,364,701 from our December 31, 2017 shareholders’ equity of $13,935,702. The reduction in shareholders’ equity was driven by a reduction in other comprehensive income and our net loss during the period.

25

Investments and Cash and Cash Equivalents

Our overall investment philosophy is reflected in the allocation of our investments. We emphasize investment grade debt securities with smaller holdings in equity securities and other investments. The following table shows the carrying value of our investments by investment category and cash and cash equivalents, and the percentage of each to total invested assets as of June 30, 2018 and December 31, 2017.

	June 30, 2018					December 31, 2017
	Fair		Percent			Fair		Percent
	Value		of Total			Value		of Total
	(unaudited)
Fixed maturities:
US Treasury securities	$	268,446		0.7	%	$	250,750		0.7	%
Corporate bonds		12,709,294		35.0	%		12,156,225		35.6	%
Municipal bonds		6,207,065		17.1	%		6,352,444		18.5	%
Redeemable preferred stocks		97,760		0.3	%		100,520		0.3	%
Mortgage backed and asset backed securities		3,900,825		10.8	%		4,085,761		11.9	%
Total fixed maturities		23,183,390		63.9	%		22,945,700		67.0	%
Equities:
Equities		11,237,472		31.0	%		10,663,515		31.1	%
Total equities		11,237,472		31.0	%		10,663,515		31.1	%
Cash and cash equivalents		1,867,891		5.1	%		651,809		1.9	%
Total	$	36,288,753		100.0	%	$	34,261,024		100.0	%

The total value of our investments and cash and cash equivalents increased to $36,288,753 as of June 30, 2018 from $34,621,024 at December 31, 2017, an increase of $1,667,729. Increases in investments are primarily attributable to premiums and annuity deposits received by USALSC and DCLIC.

The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of June 30, 2018 and December 31, 2017.

	June 30, 2018					December 31, 2017
	Fair		Percent			Fair		Percent
	Value		of Total			Value		of Total
	(unaudited)					(unaudited)
AAA and U.S. Government	$	1,182,298		5.1	%	$	1,185,345		5.2	%
AA		7,900,026		34.1	%		8,225,461		35.8	%
A		4,665,458		20.1	%		4,961,276		21.6	%
BBB		8,987,781		38.7	%		8,108,313		35.3	%
BB		247,827		1.1	%		265,305		1.2	%
Not Rated - Private Placement		200,000		0.9	%		200,000		0.9	%
Total	$	23,183,390		100.0	%	$	22,945,700		100.0	%

Reflecting the high quality of securities maintained by us, 97.9% of all fixed maturity securities were investment grade as of December 31, 2017. As of June 30, 2018, 98.0% of all fixed maturity securities were investment grade.

26

The amortized cost and fair value of debt securities as of June 30, 2018 and December 31, 2017, by contractual maturity, are shown below. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of June 30, 2018				As of December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
After one year through five years	$	809,137	$	793,989	$	612,088	$	617,562
After five years through ten years		1,757,227		1,714,964		1,910,307		1,945,454
More than 10 years		17,323,758		16,675,852		15,740,739		16,196,403
Redeemable preferred stocks		99,560		97,760		99,560		100,520
Mortgage backed and asset backed securities		3,997,497		3,900,825		4,077,011		4,085,761
	$	23,987,179	$	23,183,390	$	22,439,705	$	22,945,700

Market Risk of Financial Instruments

We hold a diversified portfolio of investments that primarily includes cash, bonds and equity securities. Each of these investments is subject to market risks that can affect their return and their fair value. A majority of the investments are fixed maturity securities including debt issues of corporations, US Treasury securities, or securities issued by government agencies. The primary market risks affecting the investment portfolio are interest rate risk, credit risk, and equity risk.

Interest Rate Risk

Interest rate risk arises from the price sensitivity of investments to changes in interest rates. Interest represents the greatest portion of an investment's return for most fixed maturity securities in stable interest rate environments. The changes in the fair value of such investments are inversely related to changes in market interest rates. As interest rates fall, the interest and dividend streams of existing fixed-rate investments become more valuable and fair values rise. As interest rates rise, the opposite effect occurs.

We attempt to mitigate our exposure to adverse interest rate movements through laddering the maturities of the fixed maturity investments and through maintaining cash and other short term investments to assure sufficient liquidity to meet our obligations and to address reinvestment risk considerations. Due to the composition of our book of insurance business, management believes it is unlikely that we would encounter large surrender activity due to an interest rate increase that would force the disposal of fixed maturities at a loss.

Credit Risk

We are exposed to credit risk through counterparties and within the investment portfolio. Credit risk relates to the uncertainty associated with an obligor's ability to make timely payments of principal and interest in accordance with the contractual terms of an instrument or contract. We manage our credit risk through established investment policies and guidelines which address the quality of creditors and counterparties, concentration limits, diversification practices and acceptable risk levels. These policies and guidelines are regularly reviewed and approved by senior management and USAC's Board of Directors.

Liquidity and Capital Resources

Since inception, our operations have been financed primarily through the sale of voting common stock. Our operations have not been profitable and have generated significant operating losses since we were incorporated in 2009.

27

In addition to capital raising, premium income, deposits to policyholder account balances, and investment income are the primary sources of funds while withdrawals of policyholder account balances, investment purchases, policy benefits in the form of claims, and operating expenses are the primary uses of funds. To ensure we will be able to pay future commitments, the funds received as premium payments and deposits are invested in primarily fixed income securities. Funds are invested with the intent that the income from investments, plus proceeds from maturities, will in the future meet our ongoing cash flow needs. The approach of matching asset and liability durations and yields requires an appropriate mix of investments. Our investments consist primarily of marketable debt securities that could be readily converted to cash for liquidity needs. Cash flow projections and cash flow tests under various market interest scenarios are also performed annually to assist in evaluating liquidity needs and adequacy.

Net cash provided by operating activities was $1,420,827 for the six months ended June 30, 2018. The primary sources of cash from operating activities were premiums and deposits received from policyholders. The primary uses of cash for operating activities were for payments of commissions to agents and settlement of policy liabilities. Net cash used in investing activities was $2,364,346. The primary use of cash was the purchase of available for sale securities. Cash provided by financing activities was $2,159,601. The primary sources of cash were receipts on deposit-type contracts and issuance of common stock.

At June 30, 2018, we had cash and cash equivalents totaling $1,867,891. We believe that our existing cash and cash equivalents will be sufficient to fund the anticipated operating expenses and capital expenditures for the foreseeable future. We have based this estimate upon assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. The growth of our insurance subsidiary is uncertain and will require additional capital if it continues to grow.

Impact of Inflation

Insurance premiums are established before the amount of losses, or the extent to which inflation may affect such losses and expenses, are known. We attempt, in establishing premiums, to anticipate the potential impact of inflation. If, for competitive reasons, premiums cannot be increased to anticipate inflation, this cost would be absorbed by us. Inflation also affects the rate of investment return on the investment portfolio with a corresponding effect on investment income.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   As a “smaller reporting company”, the Company is not required to provide disclosure pursuant to this item.

ITEM 4.    CONTROLS AND PROCEDURES

We have established disclosure controls and procedures to ensure, among other things, material information relating to our Company, including our consolidated subsidiaries, is made known to our officers who certify our financial reports and to the other members of our senior management and the Board of Directors.

As required by Exchange Act Rule 13a-15(b), management of the Company, including the Chief Executive Officer and the Executive Vice President of US Alliance Life and Security Company conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e). Based upon an evaluation at the end of the period, the Chief Executive Officer and the Executive Vice President of US Alliance Life and Security Company concluded that the disclosure controls and procedures are effective in timely alerting them to material information relating to us and our consolidated subsidiaries required to be disclosed in our periodic reports under the exchange act.

There were no changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the six months ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s control over financial reporting.

28

Part II – Other Information

ITEM 1. LEGAL PROCEEDINGS

We are involved in litigation incidental to our operations from time to time. We are not presently a party to any legal proceedings other than litigation arising in the ordinary course of business, and we are not aware of any claims that could materially affect our financial position or results of operation.

ITEM 1A. RISK FACTORS

   As a “smaller reporting company”, the Company is not required to provide disclosure pursuant to this item.

ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the quarter ended June 30, 2018, the Company issued 75,124 shares of common stock, for aggregate consideration of $525,868, pursuant to an offering to residents of the state of Kansas that was registered with the Kansas Securities Commissioner.

The offering of shares in the above described transaction was self-underwritten and sold through agents of the Company licensed to sell securities in Kansas. Proceeds from the sale of common stock were used to finance the growth of the Company’s life insurance subsidiary and to provide working capital for the Company. The offer and sale of common stock was exempt from registration under Section 3(a)11 of the Securities Act of 1933 for securities offered and sold on a wholly intrastate basis. The shares of common stock were sold only to bona fide residents of the state of Kansas.

During the quarter ended June 30, 2018, the Company issued 21,006 shares of common stock, for aggregate consideration of $147,042, pursuant to a private placement offering to residents of the state of North Dakota (the “North Dakota Offering”).  Proceeds from the sale of shares in the North Dakota were used to finance the growth of DCLIC and to provide working capital for the Company. The North Dakota Offering and sales of shares thereunder were not registered with the SEC in reliance on an exemption for registration under Rule 506(b) of Regulation D under this Securities Act of 1933 (“Reg D”).  Shares were sold only to “accredited investors”, as that term is defined in Rule 501 of Reg D, and were not sold by any means of general advertisement or solicitation. 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 None

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

None.

29

ITEM 6. EXHIBITS

3.1	Articles of Incorporation of US Alliance Corporation (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed on May 2, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.1)
3.2.1	Bylaws of US Alliance Corporation (filed as Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed on May 2, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.2).

3.2.2	Amendment to Bylaws of US Alliance Corporation dated June 4, 2018 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on June 7, 2018 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.2.2.
31.1	Certification of Chief Executive Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of the Chief Executive Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of the Principal Financial Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS** XBRL Instance

101.SCH** XBRL Taxonomy Extension Schema

101.CAL** XBRL Taxonomy Extension Calculation

101.DEF** XBRL Taxonomy Extension Definition

101.LAB** XBRL Taxonomy Extension Labels

101.PRE** XBRL Taxonomy Extension Presentation

**XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized

    US Alliance Corporation       

              (Registrant)

Date

By  /s/ Jack H. Brier                                                                                        

      Jack H. Brier, President and Chairman

30

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER'S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jack H. Brier, certify that:

1. I have reviewed this quarterly report on Form 10-Q of US Alliance Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Jack H. Brier

Jack H. Brier

President and Chief Executive Officer

Date: August 9, 2018

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeff Brown, certify that:

1. I have reviewed this quarterly report on Form 10-Q of US Alliance Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Jeff Brown

Jeff Brown

Chief Operating Officer and Vice-President of US Alliance Life and Security Company, a wholly-owned subsidiary of US Alliance Corporation

Date: August 9, 2018

EX-32.1

Exhibit 32.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of US Alliance Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jack H. Brier, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jack H. Brier

Jack H. Brier

President and Chief Executive Officer

Date: August 9, 2018

EX-32.2

Exhibit 32.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of US Alliance Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeff Brown, Chief Operating Officer and Vice-President of US Alliance Life and Security Company, a wholly-owned subsidiary of US Alliance Corporation, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeff Brown

Jeff Brown

Chief Operating Officer and Vice-President of US Alliance Life and Security Company, a wholly-owned subsidiary of US Alliance Corporation

Date: August 9, 2018

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 02, 2018
Document Information [Line Items]
Entity Registrant Name	US Alliance Corp
Entity Central Index Key	0001463913
Trading Symbol	usac
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		7,468,262
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Assets
Available for sale securities	$ 34,420,862	$ 33,609,215
Policy loans	48,932	33,975
Total investments	34,469,794	33,643,190
Cash and cash equivalents	1,867,891	651,809
Investment income due and accrued	243,756	214,998
Reinsurance related assets	181,112	249,879
Deferred acquisition costs, net	2,871,727	2,963,057
Value of business acquired, net	590,449	600,601
Property, equipment and software, net	208,800	221,077
Goodwill	277,542	277,542
Other assets	132,114	166,184
Total assets	40,843,185	38,988,337
Liabilities:
Deposit-type contracts	15,113,995	13,448,891
Policyholder benefit reserves	13,012,475	11,488,979
Advance premiums	28,428	7,507
Total policy liabilities	28,154,898	24,945,377
Accounts payable and accrued expenses	96,027	98,382
Other liabilities	21,259	8,876
Total liabilities	28,272,184	25,052,635
Shareholders' Equity:
Common stock, $0.10 par value. Authorized 20,000,000 shares; issued and outstanding 7,453,287 and 7,310,939 shares as of June 30, 2018 and December 31, 2017, respectively	745,330	731,095
Additional paid-in capital	21,985,207	21,280,437
Accumulated deficit	(9,060,854)	(8,481,268)
Accumulated other comprehensive income (loss)	(1,098,682)	405,438
Total shareholders' equity	12,571,001	13,935,702
Total liabilities and shareholders' equity	40,843,185	38,988,337
Fixed Maturities [Member]
Assets
Available for sale securities	23,183,390	22,945,700
Equities, Including Equity Securities and Other Equity Investments [Member]
Assets
Available for sale securities	$ 11,237,472	$ 10,663,515

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Available for sale securities, amortized cost	$ 35,519,521	$ 33,203,777
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	7,453,287	7,310,939
Common stock, shares outstanding (in shares)	7,453,287	7,310,939
Fixed Maturities [Member]
Available for sale securities, amortized cost	$ 23,987,179	$ 22,439,705
Equities, Including Equity Securities and Other Equity Investments [Member]
Available for sale securities, amortized cost	$ 11,532,342	$ 10,764,072

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income:
Premium income	$ 2,442,384	$ 1,982,642	$ 4,874,480	$ 3,732,570
Net investment income	365,563	170,099	677,123	296,119
Net realized gain (loss) on sale of securities	(327)	16,097	(327)	208,502
Other income	6,748	19,253	15,994	39,455
Total income	2,814,368	2,188,091	5,567,270	4,276,646
Expenses:
Death claims	168,838	181,480	404,212	686,158
Policyholder benefits	1,188,097	1,191,959	2,315,779	2,187,150
Increase in policyholder reserves	710,976	445,127	1,507,612	576,548
Commissions, net of deferrals	167,821	141,143	319,978	265,434
Amortization of deferred acquisition costs	120,259	46,461	210,614	84,225
Amortization of value of business acquired	5,076		10,152
Salaries & benefits	268,492	204,951	543,340	383,143
Other operating expenses	361,637	322,669	835,169	608,435
Total expense	2,991,196	2,533,790	6,146,856	4,791,093
Net loss	$ (176,828)	$ (345,699)	$ (579,586)	$ (514,447)
Net loss per common share, basic and diluted (in dollars per share)	$ (0.02)	$ (0.06)	$ (0.08)	$ (0.09)
Unrealized net holding gains (losses) arising during the period	$ (515,501)	$ 270,394	$ (1,504,447)	$ 468,246
Reclassification adjustment for gains included in net income (loss)	327	(16,097)	327	(208,502)
Other comprehensive income (loss)	(515,174)	254,297	(1,504,120)	259,744
Comprehensive loss	$ (692,002)	$ (91,402)	$ (2,083,706)	$ (254,703)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2016	5,565,943
Balance at Dec. 31, 2016	$ 556,595	$ 18,017,163	$ 239,461	$ (7,432,236)	$ 11,380,983
Common stock issued, $7 per share (in shares)	58,120
Common stock issued, $7 per share	$ 5,812	401,028			406,840
Costs associated with common stock issued		(147,422)			(147,422)
Other comprehensive income			259,744		259,744
Net loss				(514,447)	(514,447)
Balance (in shares) at Jun. 30, 2017	5,624,063
Balance at Jun. 30, 2017	$ 562,407	18,270,769	499,205	(7,946,683)	11,385,698
Balance (in shares) at Dec. 31, 2017	7,310,939
Balance at Dec. 31, 2017	$ 731,095	21,280,437	405,438	(8,481,268)	13,935,702
Common stock issued, $7 per share (in shares)	142,348
Common stock issued, $7 per share	$ 14,235	982,201			996,436
Costs associated with common stock issued		(277,431)			(277,431)
Other comprehensive income			(1,504,120)		(1,504,120)
Net loss				(579,586)	(579,586)
Balance (in shares) at Jun. 30, 2018	7,453,287
Balance at Jun. 30, 2018	$ 745,330	$ 21,985,207	$ (1,098,682)	$ (9,060,854)	$ 12,571,001

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2018	Jun. 30, 2017
Common Stock [Member]
Common stock, price per share (in dollars per share)	$ 7	$ 7

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities:
Net loss	$ (579,586)	$ (514,447)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	17,610	17,169
Net realized gains on the sale of securities	327	(208,502)
Amortization of investment securities, net	27,965	16,468
Deferred acquisition costs capitalized	(155,219)	(144,069)
Deferred acquisition costs amortized	210,614	84,225
Value of business acquired amortized	10,152
Interest credited on deposit type contracts	260,441	63,607
(Increase) decrease in operating assets:
Investment income due and accrued	(28,758)	(6,101)
Reinsurance related assets	68,767	(226)
Other assets	34,070	(249,929)
Increase (decrease) in operating liabilities:
Policyowner benefit reserves	1,523,496	797,659
Advance premiums	20,920	66,399
Other liabilities	12,383	(2,320)
Accounts payable and accrued expenses	(2,355)	73,984
Net cash provided by (used in) operating activities	1,420,827	(6,083)
Cash Flows from Investing Activities:
Purchase of fixed income investments	(1,758,337)	(2,100,968)
Purchase of equity investments	(768,944)	(3,124,648)
Proceeds from fixed income sales and repayments	183,226	1,532,509
Proceeds from equity sales and repayments		1,299,640
Interest on policy loans	(1,156)
Increase in policy loans	(13,801)
Purchase of property, equipment and software	(5,334)	(6,000)
Net cash used in investing activities	(2,364,346)	(2,399,467)
Cash Flows from Financing Activities:
Receipts on deposit-type contracts	2,197,360	1,000,563
Withdrawals on deposit-type contracts	(756,764)	(271,319)
Proceeds received from issuance of common stock, net of costs of issuance	719,005	259,418
Net cash provided by financing activities	2,159,601	988,662
Net increase (decrease) in cash and cash equivalents	1,216,082	(1,416,888)
Cash and Cash Equivalents:
Beginning	651,809	3,145,745
Ending	$ 1,867,891	$ 1,728,857

XML

Note 1 - Description of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Business Description and Accounting Policies [Text Block]

Note

1.

     Description of Business and Significant Accounting Policies

Description of business

: US Alliance Corporation (“the Company”) is a Kansas corporation located in Topeka, Kansas. The Company was incorporated

April 24, 2009,

as a holding company to form, own, operate and manage a life insurance company and its marketing and investment affiliates. On

June 9, 2011,

the wholly owned subsidiary, US Alliance Life and Security Company (“USALSC”) was incorporated. USALSC received its Certificate of Authority from the Kansas Insurance Department (KID) effective

January 2, 2012.

On

April 23, 2012,

US Alliance Investment Corporation (“USAIC”) and US Alliance Marketing Corporation (“USAMC”) were incorporated as wholly-owned subsidiaries of the Company to provide investment management and marketing services. On

August 1, 2017,

the Company merged with Northern Plains Capital Corporation (“Northern Plains”) with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company (“DCLIC”) which became a wholly owned subsidiary of US Alliance Life and Security Company.

The Company terminatedits initial public offering on

February 24, 2013.

During the balance of

2013,

the Company achieved approval of an array of life insurance and annuity products, began development of various distribution channels and commenced insurance operations and product sales. The Company sold its

first

insurance product on

May 1, 2013.

The Company continued to expand its product offerings and distribution channels throughout

2014

and

2015.

On

February 24, 2015,

the Company commenced a warrant exercise offering set to expire on

February 24, 2016.

On

February 24, 2016,

the Company extended the offering until

February 24, 2017

and made additional shares available for purchase. All outstanding warrants expired on

April 1, 2016.

The Company further extended this offering to

February 24, 2019.

During the

4

th

quarter of

2017,

the Company began a private placement offering to accredited investors in the state of North Dakota.

The Company began offering

third

party administrative (“TPA”) services in

2015.

TPA agreements generate service fee income for the Company. The Company currently has

one

TPA agreement in place. The Company has been able to perform its TPA services using existing resources.

Basis of presentation

: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included.

The results of operation for the

three

and

six

months ended

June 30, 2018

are

not

necessarily indicative of the results to be expected for the year ending

December 31, 2018

or for any other interim period or for any other future year. Certain financial information which is normally included in notes to financial statements prepared in accordance with US GAAP, but which are

not

required for interim reporting purposes, has been condensed or omitted. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s report on Form

10

-K and amendments thereto for the year ended

December 31, 2017.

Principles of consolidation

: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated from the consolidated financial statements.

Reclassifications:

Certain reclassifications of a minor nature have been made to prior-period balances to conform to current-period presentation with

no

net impact to net loss/income or equity.

Area of Operation

: US Alliance Life and Security Company is authorized to operate in the states of Kansas, North Dakota, Missouri, Oklahoma, and Nebraska. Dakota Capital Life Insurance Company is authorized to operate in the state of North Dakota.

Common stock and earnings (loss) per share:

The par value for common stock is

$0.10

per share with

20,000,000

shares authorized. As of

June 30, 2018,

and

December 31, 2017,

the Company had

7,453,287

and

7,310,939

common shares issued and outstanding, respectively.

Earnings (loss) per share attributable to the Company’s common stockholders were computed based on the net loss and the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the quarters ended

June 30, 2018

and

2017

were

7,389,200

and

5,596,489

shares, respectively. The weighted average number of shares outstanding during the

six

months ended

June 30, 2018

and

2017

were

7,346,064

and

5,579,493

shares, respectively. Potential common shares are excluded from the computation when their effect is anti-dilutive. Basic and diluted net loss per common share is the same for the quarters and

six

months ended

June 30, 2018

and

2017

because all warrants for common shares are anti-dilutive.

New accounting standards

Revenue from Contracts with Customers

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are

not

within the scope of this updated guidance, the Company's fee income related to providing services will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services.

The following steps are applied in the updated guidance: (

1

) identify the contract(s) with a customer; (

2

) identify the performance obligations in the contract; (

3

) determine the transaction price; (

4

) allocate the transaction price to the performance obligations in the contract and (

5

) recognize revenue when, or as, the entity satisfies a performance obligation.

In

July 

2015,

the FASB deferred the effective date of the updated guidance on revenue recognitionby

one

year to the quarter ending

March 

31,

2018.

  As an emerging growth company, the Company has chosen to defer implementation of this accounting standard until the year ending

December 31, 2019.

The adoption of this guidance is

not

expected to have a material effect on the Company’s result of operations, financial position or liquidity.

Recognition and Measurement of Financial Assets and Financial Liabilities

In

January 2016,

the FASB issued updated guidance regarding financial instruments. This guidance intends to enhance reporting for financial instruments and addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The significant amendments in this update generally require equity investments to be measured at fair value with changes in fair value recognized in net income, require the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. This guidance also intends to enhance the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments.

This guidance is effective for fiscal years beginning after

December 15, 2017.

As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2018.

The recognition and measurement provisions of this guidance will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and early adoption is

not

permitted. The Company is evaluating this guidance but expects the primary impact will be the recognition of unrealized gains and losses on available-for-sale equity securities in net income. Currently, all unrealized gains and losses on available-for-sale equity securities are recognized in other comprehensive income (loss).

The effect of the adoption of this guidance on the Company’s results of operations, financial position and liquidity is primarily dependent on the fair value of the available-for-sale equity securities in future periods and the existence of a deferred tax asset related to available-for-sale securities in future periods that have

not

yet been fully assessed.

Leases

In

February 

2016,

the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than

12

months.  The updated guidance retains the

two

classifications of a lease as either an operating or finance lease (previously referred to as a capital lease).  Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows.  Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset.  Operating leases will recognize lease expense (with

no

separate recognition of interest expense) on a straight-line basis over the term of the lease.   The accounting by lessors is

not

significantly changed by the updated guidance.  The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements.

The updated guidance is effective for reporting periods beginning after

December 

15,

2018,

and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied.  Early adoption is permitted.  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2019.

The adoption of this guidance is

not

expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Contingent Put and Call Options in Debt Instruments

In

March 

2016,

the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does

not

need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately.  The updated guidance is effective for reporting periods beginning after

December 

15,

2016.

  Early adoption is permitted.  As an emerging growth company, the Company elected to defer implementation of this standard to fiscal years beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material effect on the Company’s results of operations, financial position or liquidity for the

six

months ended

June 30, 2018.

Measurement of Credit Losses on Financial Instruments

In

June 

2016,

the FASB issued updated guidance for the accounting for credit losses for financial instruments.  The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

 The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value.  In addition, the length of time a security has been in an unrealized loss position will

no

longer impact the determination of whether a credit loss exists.

The updated guidance is effective for reporting periods beginning after

December 

15,

2019.

  Early adoption is permitted for reporting periods beginning after

December 

15,

2018.

  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2020.

The Company will

not

be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

Classification of Certain C

ash

R

eceipts and

Cash P

ayment

In

August 2016,

the FASB issued new guidance that clarifies the classification of certain cash receipts and cash payments in the statement of cash flows under

eight

different scenarios including, but

not

limited to: (i) debt prepayment or debt extinguishment costs; (ii) proceeds from the settlement of corporate-owned life insurance policies including bank-owned life insurance policies; (iii) distributions received from equity method investees; and (iv) separately identifiable cash flows and application of the predominance principle. This guidance is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. Early adoption is permitted. As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2018.

The Company is currently evaluating the impact of this guidance on its statement of cash flows.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

On

December 22, 2017,

the U.S. federal government enacted a tax bill,

H.R.1,

An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year

2018

(Tax Cuts and Jobs Act). In

February 2018,

FASB issued guidance to address certain issues related to the Tax Cuts and Jobs Act. This new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. This guidance is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is

not

expected to have a material effect on the Company’s results of operations, financial position or liquidity.

All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did

not

relate to accounting policies and procedures pertinent or material to the Company at this time.

XML

Note 2 - Investments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Investment [Text Block]

Note

2

.  Investments

The amortized cost and fair value of available for sale and held to maturity investments as of

June 30, 2018

and

December

31,

2017

is as follows:

	June 30, 2018
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	275,896	$	-	$	(7,450	)	$	268,446
Corporate bonds		13,448,349		31,181		(770,236	)		12,709,294
Municipal bonds		6,165,877		124,831		(83,643	)		6,207,065
Redeemable preferred stock		99,560		-		(1,800	)		97,760
Mortgage backed and asset backed securities		3,997,497		9,276		(105,948	)		3,900,825
Total fixed maturities		23,987,179		165,288		(969,077	)		23,183,390
Equities:
Equities		11,532,342		59,447		(354,317	)		11,237,472
Total available for sale	$	35,519,521	$	224,735	$	(1,323,394	)	$	34,420,862

	December 31, 2017
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:
Fixed maturities:
US Treasury securities	$	271,620	$	-	$	(20,870	)	$	250,750
Corporate bonds		11,857,191		309,754		(10,720	)		12,156,225
Municipal bonds		6,134,323		230,842		(12,721	)		6,352,444
Redeemable preferred stock		99,560		960		-			100,520
Mortgage backed and asset backed securities		4,077,011		32,726		(23,976	)		4,085,761
Total fixed maturities		22,439,705		574,282		(68,287	)		22,945,700
Equities:
Equities		10,764,072		83,346		(183,903	)		10,663,515
Total available for sale	$	33,203,777	$	657,628	$	(252,190	)	$	33,609,215

The amortized cost and fair value of debt securities as of

June 30, 2018

and

December 31, 2017,

by contractual maturity, are shown in the following table. Equity securities do

not

have stated maturity dates and therefore are

not

included in the following maturity summary. Actual maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties.

	As of June 30, 2018				As of December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
After one year through five years	$	809,137	$	793,989	$	612,088	$	617,562
After five years through ten years		1,757,227		1,714,964		1,910,307		1,945,454
More than 10 years		17,323,758		16,675,852		15,740,739		16,196,403
Redeemable preferred stocks		99,560		97,760		99,560		100,520
Mortgage backed and asset backed securities		3,997,497		3,900,825		4,077,011		4,085,761
	$	23,987,179	$	23,183,390	$	22,439,705	$	22,945,700

Proceeds from the sale of securities, maturities, and asset paydowns for the

first

six

months of

2018

and

2017

were

$183,226

and

$2,832,149

respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Six Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	227,463
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	208,502

Proceeds from the sale of securities, maturities, and asset paydowns for the

three

months ended

June 30, 2018

and

2017

were

$155,100

and

$2,677,453

respectively. Realized gains and losses related to the sale of securities are summarized as follows:

	Three Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	35,058
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	16,097

Gross unrealized losses by duration are summarized as follows:

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
June 30, 2018
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	(7,450	)	$	-	$	-		$	268,446	$	(7,450	)
Corporate bonds		10,910,971		(761,131	)		117,414		(9,105	)		11,028,385		(770,236	)
Municipal bonds		2,773,408		(68,959	)		185,316		(14,684	)		2,958,724		(83,643	)
Redeemable preferred stock		97,760		(1,800	)		-		-			97,760		(1,800	)
Mortgage backed and asset backed securities		2,714,113		(74,887	)		595,949		(31,061	)		3,310,062		(105,948	)
Total fixed maturities		16,764,698		(914,227	)		898,679		(54,850	)		17,663,377		(969,077	)
Equities:
Equities		8,721,253		(250,840	)		1,382,838		(103,477	)		10,104,091		(354,317	)
Total available for sale	$	25,485,951	$	(1,165,067	)	$	2,281,517	$	(158,327	)	$	27,767,468	$	(1,323,394	)

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2017
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	(20,870	)	$	-	$	-		$	250,750	$	(20,870	)
Corporate bonds		848,853		(5,733	)		121,718		(4,987	)		970,571		(10,720	)
Municipal bonds		735,257		(5,683	)		192,962		(7,038	)		928,219		(12,721	)
Mortgage backed and asset backed securities		2,056,887		(6,970	)		654,936		(17,006	)		2,711,823		(23,976	)
Total fixed maturities		3,891,747		(39,256	)		969,616		(29,031	)		4,861,363		(68,287	)
Equities:
Equities		7,971,440		(105,946	)		1,161,121		(77,957	)		9,132,561		(183,903	)
Total available for sale	$	11,863,187	$	(145,202	)	$	2,130,737	$	(106,988	)	$	13,993,924	$	(252,190	)

Unrealized losses occur from market price declines that

may

be due to a number of factors, including economic downturns, changes in interest rates, competitive forces within an industry, issuer specific events, operational difficulties, lawsuits, and market pricing anomalies caused by factors such as temporary lack of liquidity.

The total number of securities in the investment portfolio in an unrealized loss position as of

June 

30,

2018

was

128,

which represented an unrealized loss of

$1,323,394

of the aggregate carrying value of those securities. The

128

securities breakdown as follows:

87

bonds,

31

mortgage and asset backed securities,

4

preferred stocks,

2

high yield corporate bond funds,

2

preferred stock index funds,

1

senior loan fund, and

1

common stock. The Company determined that

no

securities were considered to be other-than-temporarily impaired as of

June 30, 2018

and

December 31, 2017.

XML

Note 4 - Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

4

.

 

Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement rate.

● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

● Level 3 inputs are unobservable for the asset or liability and reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Investments, available for sale

: Fair values of available for sale fixed maturity securities are provided by a

third

party pricing service. The pricing service uses a variety of sources to determine fair value of securities. The Company’s fixed maturity securities are highly liquid, which allows for a high percentage of the portfolio to be priced through pricing sources. Fair values for equity securities are also provided by a

third

party pricing service and are derived from active trading on national market exchanges.

The following table presents the amounts of assets measured at fair value on a recurring basis as of

June 30, 2018

and

December 31, 2017:

	June 30, 2018
	Total		Level 1		Level 2		Level 3
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	268,446	$	-	$	-
Corporate bonds		12,709,294		-		12,509,294		200,000
Municipal bonds		6,207,065		-		6,207,065		-
Redeemable preferred stock		97,760		-		97,760		-
Mortgage backed and asset backed securities		3,900,825		-		3,900,825		-
Total fixed maturities		23,183,390		268,446		22,714,944		200,000
Equities:
Equities		11,237,472		11,237,472		-		-
Total	$	34,420,862	$	11,505,918	$	22,714,944	$	200,000

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	250,750	$	-	$	-
Corporate bonds		12,156,225		-		11,956,225		200,000
Municipal bonds		6,352,444		-		6,352,444		-
Redeemable preferred stock		100,520		-		100,520		-
Mortgage backed and asset backed securities		4,085,761		-		4,085,761		-
Total fixed maturities		22,945,700		250,750		22,494,950		200,000
Equities:
Equities		10,663,515		10,663,515		-		-
Total	$	33,609,215	$	10,914,265	$	22,494,950	$	200,000

The Company discloses the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are

not

measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for accrued interest. The methodologies for other financial assets and financial liabilities are discussed below:

Cash and cash equivalents

: The carrying amounts approximate fair value because of the short maturity of these instruments.

Investment income due and accrued:

 The carrying amounts approximate fair value because of the short maturity of these instruments.

Policy loans

:Policy loans are stated at unpaid principal balances. As these loans are fully collateralized by the cash surrender value of the underlying insurance policies, the carrying value of the policy loans approximates their fair value.

Policyholder deposits in deposit-type contracts

: The fair value for policyholder deposits in deposit-type insurance contracts (accumulation annuities) is calculated using a discounted cash flow approach.  Cash flows are projected using actuarial assumptions and discounted to the valuation date using risk-free rates adjusted for credit risk and the nonperformance risk of the liabilities.

The estimated fair values of the Company’s financial assets and liabilities at

June 30, 2018

and

December 31, 2017

are as follows:

	June 30, 2018				December 31, 2017
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	1,867,891	$	1,867,891	$	651,809	$	651,809
Investment income due and accrued		243,756		243,756		214,998		214,998
Investments, at fair value		34,469,794		34,469,794		33,643,190		33,643,190
Total Financial Assets	$	36,630,373	$	36,630,373	$	34,509,997	$	34,509,997
Financial Liabilities:
Policyholder deposits in deposit-type contracts	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470
Total Financial Liabilities	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470

XML

Note 5 - Income Tax Provision

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

5

.  Income Tax Provision

No

income tax expense or (benefit) has been reflected for the quarters ended

June 30, 2018

and

2017

due to the lack of taxable net income generated by the Company and the

100%

valuation allowance pertaining to the deferred tax asset. The difference between the reported amount of income tax expense and the amount expected based upon statutory rates is primarily due to the increase in the valuation allowance on deferred taxes.

The net operating loss carryforwards for the Company are

$12,053,644

 and

$11,886,891

as of

June 30, 2018

and

December 31, 2017,

respectively. The components of the deferred tax assets and liabilities due to book and tax differences are the following: fixed asset depreciation, net operating loss carryforward, net unrealized gains (losses) on investment securities, policyowner benefit reserves and deferred acquisition costs. The net deferred tax asset is offset

100

percent by the valuation allowance.

XML

Note 6 - Subsequent Events

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

Note

6

.

 

Subsequent Events

All of the effects of subsequent events that provide additional evidence about conditions that existed at the balance sheet date, including the estimates inherent in the process of preparing the consolidated financial statements, are recognized in the consolidated financial statements. The Company does

not

recognize subsequent events that provide evidence about conditions that did

not

exist at the balance sheet date but arose after, but before the consolidated financial statements are issued. In some cases, unrecognized subsequent events are disclosed to keep the consolidated financial statements from being misleading.

The Company has evaluated subsequent events through

August 9, 2018,

the date on which the consolidated financial statements were issued.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of presentation

: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included.

The results of operation for the

three

and

six

months ended

June 30, 2018

are

not

necessarily indicative of the results to be expected for the year ending

December 31, 2018

or for any other interim period or for any other future year. Certain financial information which is normally included in notes to financial statements prepared in accordance with US GAAP, but which are

not

required for interim reporting purposes, has been condensed or omitted. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s report on Form

10

-K and amendments thereto for the year ended

December 31, 2017.

Consolidation, Policy [Policy Text Block]

Principles of consolidation

: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated from the consolidated financial statements.

Reclassification, Policy [Policy Text Block]

Reclassifications:

Certain reclassifications of a minor nature have been made to prior-period balances to conform to current-period presentation with

no

net impact to net loss/income or equity.

Area of Operation, Policy [Policy Text Block]

Area of Operation

: US Alliance Life and Security Company is authorized to operate in the states of Kansas, North Dakota, Missouri, Oklahoma, and Nebraska. Dakota Capital Life Insurance Company is authorized to operate in the state of North Dakota.

Earnings Per Share, Policy [Policy Text Block]

Common stock and earnings (loss) per share:

The par value for common stock is

$0.10

per share with

20,000,000

shares authorized. As of

June 30, 2018,

and

December 31, 2017,

the Company had

7,453,287

and

7,310,939

common shares issued and outstanding, respectively.

Earnings (loss) per share attributable to the Company’s common stockholders were computed based on the net loss and the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the quarters ended

June 30, 2018

and

2017

were

7,389,200

and

5,596,489

shares, respectively. The weighted average number of shares outstanding during the

six

months ended

June 30, 2018

and

2017

were

7,346,064

and

5,579,493

shares, respectively. Potential common shares are excluded from the computation when their effect is anti-dilutive. Basic and diluted net loss per common share is the same for the quarters and

six

months ended

June 30, 2018

and

2017

because all warrants for common shares are anti-dilutive.

New Accounting Pronouncements, Policy [Policy Text Block]

New accounting standards

Revenue from Contracts with Customers

In

May 2014,

the Financial Accounting Standards Board (“FASB”) issued updated guidance to clarify the principles for recognizing revenue. While insurance contracts are

not

within the scope of this updated guidance, the Company's fee income related to providing services will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services.

The following steps are applied in the updated guidance: (

1

) identify the contract(s) with a customer; (

2

) identify the performance obligations in the contract; (

3

) determine the transaction price; (

4

) allocate the transaction price to the performance obligations in the contract and (

5

) recognize revenue when, or as, the entity satisfies a performance obligation.

In

July 

2015,

the FASB deferred the effective date of the updated guidance on revenue recognitionby

one

year to the quarter ending

March 

31,

2018.

  As an emerging growth company, the Company has chosen to defer implementation of this accounting standard until the year ending

December 31, 2019.

The adoption of this guidance is

not

expected to have a material effect on the Company’s result of operations, financial position or liquidity.

Recognition and Measurement of Financial Assets and Financial Liabilities

In

January 2016,

the FASB issued updated guidance regarding financial instruments. This guidance intends to enhance reporting for financial instruments and addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The significant amendments in this update generally require equity investments to be measured at fair value with changes in fair value recognized in net income, require the use of an exit price notion when measuring the fair value of financial instruments for disclosure purposes and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. This guidance also intends to enhance the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments.

This guidance is effective for fiscal years beginning after

December 15, 2017.

As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2018.

The recognition and measurement provisions of this guidance will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption and early adoption is

not

permitted. The Company is evaluating this guidance but expects the primary impact will be the recognition of unrealized gains and losses on available-for-sale equity securities in net income. Currently, all unrealized gains and losses on available-for-sale equity securities are recognized in other comprehensive income (loss).

The effect of the adoption of this guidance on the Company’s results of operations, financial position and liquidity is primarily dependent on the fair value of the available-for-sale equity securities in future periods and the existence of a deferred tax asset related to available-for-sale securities in future periods that have

not

yet been fully assessed.

Leases

In

February 

2016,

the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than

12

months.  The updated guidance retains the

two

classifications of a lease as either an operating or finance lease (previously referred to as a capital lease).  Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows.  Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset.  Operating leases will recognize lease expense (with

no

separate recognition of interest expense) on a straight-line basis over the term of the lease.   The accounting by lessors is

not

significantly changed by the updated guidance.  The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements.

The updated guidance is effective for reporting periods beginning after

December 

15,

2018,

and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied.  Early adoption is permitted.  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2019.

The adoption of this guidance is

not

expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Contingent Put and Call Options in Debt Instruments

In

March 

2016,

the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does

not

need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately.  The updated guidance is effective for reporting periods beginning after

December 

15,

2016.

  Early adoption is permitted.  As an emerging growth company, the Company elected to defer implementation of this standard to fiscal years beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material effect on the Company’s results of operations, financial position or liquidity for the

six

months ended

June 30, 2018.

Measurement of Credit Losses on Financial Instruments

In

June 

2016,

the FASB issued updated guidance for the accounting for credit losses for financial instruments.  The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

 The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value.  In addition, the length of time a security has been in an unrealized loss position will

no

longer impact the determination of whether a credit loss exists.

The updated guidance is effective for reporting periods beginning after

December 

15,

2019.

  Early adoption is permitted for reporting periods beginning after

December 

15,

2018.

  As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2020.

The Company will

not

be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

Classification of Certain C

ash

R

eceipts and

Cash P

ayment

In

August 2016,

the FASB issued new guidance that clarifies the classification of certain cash receipts and cash payments in the statement of cash flows under

eight

different scenarios including, but

not

limited to: (i) debt prepayment or debt extinguishment costs; (ii) proceeds from the settlement of corporate-owned life insurance policies including bank-owned life insurance policies; (iii) distributions received from equity method investees; and (iv) separately identifiable cash flows and application of the predominance principle. This guidance is effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. Early adoption is permitted. As an emerging growth company, the Company has elected to defer implementation of this standard to fiscal years beginning after

December 15, 2018.

The Company is currently evaluating the impact of this guidance on its statement of cash flows.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

On

December 22, 2017,

the U.S. federal government enacted a tax bill,

H.R.1,

An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year

2018

(Tax Cuts and Jobs Act). In

February 2018,

FASB issued guidance to address certain issues related to the Tax Cuts and Jobs Act. This new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. This guidance is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is

not

expected to have a material effect on the Company’s results of operations, financial position or liquidity.

All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did

not

relate to accounting policies and procedures pertinent or material to the Company at this time.

XML

Note 2 - Investments (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Available-for-sale Securities [Table Text Block]

	June 30, 2018
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	275,896	$	-	$	(7,450	)	$	268,446
Corporate bonds		13,448,349		31,181		(770,236	)		12,709,294
Municipal bonds		6,165,877		124,831		(83,643	)		6,207,065
Redeemable preferred stock		99,560		-		(1,800	)		97,760
Mortgage backed and asset backed securities		3,997,497		9,276		(105,948	)		3,900,825
Total fixed maturities		23,987,179		165,288		(969,077	)		23,183,390
Equities:
Equities		11,532,342		59,447		(354,317	)		11,237,472
Total available for sale	$	35,519,521	$	224,735	$	(1,323,394	)	$	34,420,862

	December 31, 2017
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:
Fixed maturities:
US Treasury securities	$	271,620	$	-	$	(20,870	)	$	250,750
Corporate bonds		11,857,191		309,754		(10,720	)		12,156,225
Municipal bonds		6,134,323		230,842		(12,721	)		6,352,444
Redeemable preferred stock		99,560		960		-			100,520
Mortgage backed and asset backed securities		4,077,011		32,726		(23,976	)		4,085,761
Total fixed maturities		22,439,705		574,282		(68,287	)		22,945,700
Equities:
Equities		10,764,072		83,346		(183,903	)		10,663,515
Total available for sale	$	33,203,777	$	657,628	$	(252,190	)	$	33,609,215

Investments Classified by Contractual Maturity Date [Table Text Block]

	As of June 30, 2018				As of December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(unaudited)
Amounts maturing in:
After one year through five years	$	809,137	$	793,989	$	612,088	$	617,562
After five years through ten years		1,757,227		1,714,964		1,910,307		1,945,454
More than 10 years		17,323,758		16,675,852		15,740,739		16,196,403
Redeemable preferred stocks		99,560		97,760		99,560		100,520
Mortgage backed and asset backed securities		3,997,497		3,900,825		4,077,011		4,085,761
	$	23,987,179	$	23,183,390	$	22,439,705	$	22,945,700

Realized Gain (Loss) on Investments [Table Text Block]

	Six Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	227,463
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	208,502

	Three Months Ended June 30,
	(unaudited)
	2018			2017
Gross gains	$	530		$	35,058
Gross losses		(857	)		(18,961	)
Net security gains (losses)	$	(327	)	$	16,097

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
June 30, 2018
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	(7,450	)	$	-	$	-		$	268,446	$	(7,450	)
Corporate bonds		10,910,971		(761,131	)		117,414		(9,105	)		11,028,385		(770,236	)
Municipal bonds		2,773,408		(68,959	)		185,316		(14,684	)		2,958,724		(83,643	)
Redeemable preferred stock		97,760		(1,800	)		-		-			97,760		(1,800	)
Mortgage backed and asset backed securities		2,714,113		(74,887	)		595,949		(31,061	)		3,310,062		(105,948	)
Total fixed maturities		16,764,698		(914,227	)		898,679		(54,850	)		17,663,377		(969,077	)
Equities:
Equities		8,721,253		(250,840	)		1,382,838		(103,477	)		10,104,091		(354,317	)
Total available for sale	$	25,485,951	$	(1,165,067	)	$	2,281,517	$	(158,327	)	$	27,767,468	$	(1,323,394	)

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2017
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	(20,870	)	$	-	$	-		$	250,750	$	(20,870	)
Corporate bonds		848,853		(5,733	)		121,718		(4,987	)		970,571		(10,720	)
Municipal bonds		735,257		(5,683	)		192,962		(7,038	)		928,219		(12,721	)
Mortgage backed and asset backed securities		2,056,887		(6,970	)		654,936		(17,006	)		2,711,823		(23,976	)
Total fixed maturities		3,891,747		(39,256	)		969,616		(29,031	)		4,861,363		(68,287	)
Equities:
Equities		7,971,440		(105,946	)		1,161,121		(77,957	)		9,132,561		(183,903	)
Total available for sale	$	11,863,187	$	(145,202	)	$	2,130,737	$	(106,988	)	$	13,993,924	$	(252,190	)

XML

Note 4 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	June 30, 2018
	Total		Level 1		Level 2		Level 3
	(unaudited)
Available for sale:
Fixed maturities:
US Treasury securities	$	268,446	$	268,446	$	-	$	-
Corporate bonds		12,709,294		-		12,509,294		200,000
Municipal bonds		6,207,065		-		6,207,065		-
Redeemable preferred stock		97,760		-		97,760		-
Mortgage backed and asset backed securities		3,900,825		-		3,900,825		-
Total fixed maturities		23,183,390		268,446		22,714,944		200,000
Equities:
Equities		11,237,472		11,237,472		-		-
Total	$	34,420,862	$	11,505,918	$	22,714,944	$	200,000

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Available for sale:
Fixed maturities:
US Treasury securities	$	250,750	$	250,750	$	-	$	-
Corporate bonds		12,156,225		-		11,956,225		200,000
Municipal bonds		6,352,444		-		6,352,444		-
Redeemable preferred stock		100,520		-		100,520		-
Mortgage backed and asset backed securities		4,085,761		-		4,085,761		-
Total fixed maturities		22,945,700		250,750		22,494,950		200,000
Equities:
Equities		10,663,515		10,663,515		-		-
Total	$	33,609,215	$	10,914,265	$	22,494,950	$	200,000

Fair Value, by Balance Sheet Grouping [Table Text Block]

	June 30, 2018				December 31, 2017
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	1,867,891	$	1,867,891	$	651,809	$	651,809
Investment income due and accrued		243,756		243,756		214,998		214,998
Investments, at fair value		34,469,794		34,469,794		33,643,190		33,643,190
Total Financial Assets	$	36,630,373	$	36,630,373	$	34,509,997	$	34,509,997
Financial Liabilities:
Policyholder deposits in deposit-type contracts	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470
Total Financial Liabilities	$	15,113,995	$	13,617,789	$	13,448,891	$	12,508,470

XML

Note 1 - Description of Business and Significant Accounting Policies (Details Textual) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Common Stock, Par or Stated Value Per Share	$ 0.10		$ 0.10		$ 0.10
Common Stock, Shares Authorized	20,000,000		20,000,000		20,000,000
Common Stock, Shares, Issued, Total	7,453,287		7,453,287		7,310,939
Weighted Average Number of Shares Outstanding, Basic and Diluted	7,389,200	5,596,489	7,346,064	5,579,493
Common Stock, Shares, Outstanding, Ending Balance	7,453,287		7,453,287		7,310,939

XML

Note 2 - Investments (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Proceeds from Sale, Maturity and Collection of Investments, Total	$ 155,100	$ 2,677,453	$ 183,226	$ 2,832,149
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	128		128
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax, Total	$ 1,323,394		$ 1,323,394		$ 252,190
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities, Total			$ 0		$ 0
Fixed Income Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	87		87
Collateralized Mortgage Backed Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	31		31
Preferred Stock [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	4		4
Corporate Debt Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	2		2
Preferred Stock Index Fund [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	2		2
Senior Loan Fund [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	1		1
Common Stock [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Total	1		1

XML

Note 2 - Investments - Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Investments (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Cost or Amortized Cost	$ 35,519,521	$ 33,203,777
Gross Unrealized Gains	224,735	657,628
Gross Unrealized Losses	(1,323,394)	(252,190)
Investments in available-for-sale securities, at fair value	34,420,862	33,609,215
Fixed Maturities [Member]
Cost or Amortized Cost	23,987,179	22,439,705
Gross Unrealized Gains	165,288	574,282
Gross Unrealized Losses	(969,077)	(68,287)
Investments in available-for-sale securities, at fair value	23,183,390	22,945,700
Equity Securities [Member]
Cost or Amortized Cost	11,532,342	10,764,072
Gross Unrealized Gains	59,447	83,346
Gross Unrealized Losses	(354,317)	(183,903)
Investments in available-for-sale securities, at fair value	11,237,472	10,663,515
US Treasury Securities [Member] | Fixed Maturities [Member]
Cost or Amortized Cost	275,896	271,620
Gross Unrealized Gains
Gross Unrealized Losses	(7,450)	(20,870)
Investments in available-for-sale securities, at fair value	268,446	250,750
Corporate Debt Securities [Member] | Fixed Maturities [Member]
Cost or Amortized Cost	13,448,349	11,857,191
Gross Unrealized Gains	31,181	309,754
Gross Unrealized Losses	(770,236)	(10,720)
Investments in available-for-sale securities, at fair value	12,709,294	12,156,225
US States and Political Subdivisions Debt Securities [Member] | Fixed Maturities [Member]
Cost or Amortized Cost	6,165,877	6,134,323
Gross Unrealized Gains	124,831	230,842
Gross Unrealized Losses	(83,643)	(12,721)
Investments in available-for-sale securities, at fair value	6,207,065	6,352,444
Redeemable Preferred Stock [Member] | Fixed Maturities [Member]
Cost or Amortized Cost	99,560	99,560
Gross Unrealized Gains		960
Gross Unrealized Losses	(1,800)
Investments in available-for-sale securities, at fair value	97,760	100,520
Collateralized Mortgage Backed Securities [Member] | Fixed Maturities [Member]
Cost or Amortized Cost	3,997,497	4,077,011
Gross Unrealized Gains	9,276	32,726
Gross Unrealized Losses	(105,948)	(23,976)
Investments in available-for-sale securities, at fair value	$ 3,900,825	$ 4,085,761

XML

Note 2 - Investments - Amortized Cost and Fair Value of Debt Securities By Contractual Maturity (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
After one year through five years, amortized cost	$ 809,137	$ 612,088
After one year through five years, fair value	793,989	617,562
After five years through ten years, amortized cost	1,757,227	1,910,307
After five years through ten years, fair value	1,714,964	1,945,454
More than 10 years, amortized cost	17,323,758	15,740,739
More than 10 years, fair value	16,675,852	16,196,403
Total, amortized cost	23,987,179	22,439,705
Total, fair value	23,183,390	22,945,700
Redeemable Preferred Stock [Member]
Debt securities, amortized cost	99,560	99,560
Debt securities, fair value	97,760	100,520
Collateralized Mortgage Backed Securities [Member]
Debt securities, amortized cost	3,997,497	4,077,011
Debt securities, fair value	$ 3,900,825	$ 4,085,761

XML

Note 2 - Investments - Realized Gains and Losses Related to the Sale of Securities (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Gross gains	$ 530	$ 35,058	$ 530	$ 227,463
Gross losses	(857)	(18,961)	(857)	(18,961)
Net security gains (losses)	$ (327)	$ 16,097	$ (327)	$ 208,502

XML

Note 2 - Investments - Gross Unrealized Losses (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Available-for-sale securities, less than 12 months, fair value	$ 25,485,951	$ 11,863,187
Available-for-sale securities, less than 12 months, unrealized loss	(1,165,067)	(145,202)
Available-for-sale securities, greater than 12 months, fair value	2,281,517	2,130,737
Available-for-sale securities, greater than 12 months, unrealized loss	(158,327)	(106,988)
Available-for-sale securities, fair value	27,767,468	13,993,924
Available-for-sale securities, unrealized loss	(1,323,394)	(252,190)
Fixed Maturities [Member]
Available-for-sale securities, less than 12 months, fair value	16,764,698	3,891,747
Available-for-sale securities, less than 12 months, unrealized loss	(914,227)	(39,256)
Available-for-sale securities, greater than 12 months, fair value	898,679	969,616
Available-for-sale securities, greater than 12 months, unrealized loss	(54,850)	(29,031)
Available-for-sale securities, fair value	17,663,377	4,861,363
Available-for-sale securities, unrealized loss	(969,077)	(68,287)
Fixed Maturities [Member] | US Treasury Securities [Member]
Available-for-sale securities, less than 12 months, fair value	268,446	250,750
Available-for-sale securities, less than 12 months, unrealized loss	(7,450)	(20,870)
Available-for-sale securities, greater than 12 months, fair value
Available-for-sale securities, greater than 12 months, unrealized loss
Available-for-sale securities, fair value	268,446	250,750
Available-for-sale securities, unrealized loss	(7,450)	(20,870)
Fixed Maturities [Member] | Corporate Debt Securities [Member]
Available-for-sale securities, less than 12 months, fair value	10,910,971	848,853
Available-for-sale securities, less than 12 months, unrealized loss	(761,131)	(5,733)
Available-for-sale securities, greater than 12 months, fair value	117,414	121,718
Available-for-sale securities, greater than 12 months, unrealized loss	(9,105)	(4,987)
Available-for-sale securities, fair value	11,028,385	970,571
Available-for-sale securities, unrealized loss	(770,236)	(10,720)
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member]
Available-for-sale securities, less than 12 months, fair value	2,773,408	735,257
Available-for-sale securities, less than 12 months, unrealized loss	(68,959)	(5,683)
Available-for-sale securities, greater than 12 months, fair value	185,316	192,962
Available-for-sale securities, greater than 12 months, unrealized loss	(14,684)	(7,038)
Available-for-sale securities, fair value	2,958,724	928,219
Available-for-sale securities, unrealized loss	(83,643)	(12,721)
Fixed Maturities [Member] | Redeemable Preferred Stock [Member]
Available-for-sale securities, less than 12 months, fair value	97,760
Available-for-sale securities, less than 12 months, unrealized loss	(1,800)
Available-for-sale securities, greater than 12 months, fair value
Available-for-sale securities, greater than 12 months, unrealized loss
Available-for-sale securities, fair value	97,760
Available-for-sale securities, unrealized loss	(1,800)
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member]
Available-for-sale securities, less than 12 months, fair value	2,714,113	2,056,887
Available-for-sale securities, less than 12 months, unrealized loss	(74,887)	(6,970)
Available-for-sale securities, greater than 12 months, fair value	595,949	654,936
Available-for-sale securities, greater than 12 months, unrealized loss	(31,061)	(17,006)
Available-for-sale securities, fair value	3,310,062	2,711,823
Available-for-sale securities, unrealized loss	(105,948)	(23,976)
Equity Securities [Member]
Available-for-sale securities, less than 12 months, fair value	8,721,253	7,971,440
Available-for-sale securities, less than 12 months, unrealized loss	(250,840)	(105,946)
Available-for-sale securities, greater than 12 months, fair value	1,382,838	1,161,121
Available-for-sale securities, greater than 12 months, unrealized loss	(103,477)	(77,957)
Available-for-sale securities, fair value	10,104,091	9,132,561
Available-for-sale securities, unrealized loss	$ (354,317)	$ (183,903)

XML

Note 4 - Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Investments in available-for-sale securities, at fair value	$ 34,420,862	$ 33,609,215
Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	34,420,862	33,609,215
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value	11,505,918	10,914,265
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	22,714,944	22,494,950
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value	200,000	200,000
Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value		100,520
Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value
Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value		100,520
Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member]
Investments in available-for-sale securities, at fair value	23,183,390	22,945,700
Fixed Maturities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	23,183,390	22,945,700
Fixed Maturities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value	268,446	250,750
Fixed Maturities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	22,714,944	22,494,950
Fixed Maturities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value	200,000	200,000
Fixed Maturities [Member] | US Treasury Securities [Member]
Investments in available-for-sale securities, at fair value	268,446	250,750
Fixed Maturities [Member] | US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	268,446	250,750
Fixed Maturities [Member] | US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value	268,446	250,750
Fixed Maturities [Member] | US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Corporate Debt Securities [Member]
Investments in available-for-sale securities, at fair value	12,709,294	12,156,225
Fixed Maturities [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	12,709,294	12,156,225
Fixed Maturities [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	12,509,294	11,956,225
Fixed Maturities [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value	200,000	200,000
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member]
Investments in available-for-sale securities, at fair value	6,207,065	6,352,444
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	6,207,065	6,352,444
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	6,207,065	6,352,444
Fixed Maturities [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Redeemable Preferred Stock [Member]
Investments in available-for-sale securities, at fair value	97,760	100,520
Fixed Maturities [Member] | Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	97,760
Fixed Maturities [Member] | Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	97,760
Fixed Maturities [Member] | Redeemable Preferred Stock [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member]
Investments in available-for-sale securities, at fair value	3,900,825	4,085,761
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	3,900,825	4,085,761
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value	3,900,825	4,085,761
Fixed Maturities [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value
Equity Securities [Member]
Investments in available-for-sale securities, at fair value	11,237,472	10,663,515
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Investments in available-for-sale securities, at fair value	11,237,472	10,663,515
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investments in available-for-sale securities, at fair value	11,237,472	10,663,515
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investments in available-for-sale securities, at fair value
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investments in available-for-sale securities, at fair value

XML

Note 4 - Fair Value Measurements - Estimated Fair Values of the Company's Financial Assets and Liabilities (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Reported Value Measurement [Member]
Financial Assets:
Cash and cash equivalents	$ 1,867,891	$ 651,809
Investment income due and accrued	243,756	214,998
Investments, at fair value	34,469,794	33,643,190
Total Financial Assets	36,630,373	34,509,997
Financial Liabilities:
Policyholder deposits in deposit-type contracts	15,113,995	13,448,891
Total Financial Liabilities	15,113,995	13,448,891
Estimate of Fair Value Measurement [Member]
Financial Assets:
Cash and cash equivalents	1,867,891	651,809
Investment income due and accrued	243,756	214,998
Investments, at fair value	34,469,794	33,643,190
Total Financial Assets	36,630,373	34,509,997
Financial Liabilities:
Policyholder deposits in deposit-type contracts	13,617,789	12,508,470
Total Financial Liabilities	$ 13,617,789	$ 12,508,470

XML

Note 5 - Income Tax Provision (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Tax Expense (Benefit), Total	$ 0	$ 0
Deferred Tax Assets, Valuation Allowance, Percentage	100.00%	100.00%
Operating Loss Carryforwards, Total	$ 12,053,644		$ 11,886,891