Subsequent events have been evaluated through May 14, 2020, which is the date the consolidated and combined financial statements were available to be issued.

The Company’s operations and business have experienced disruptions due to the conditions surrounding the COVID-19 pandemic spreading throughout the United States. These disruptions include, but are not limited to, office closures and difficulties in maintaining operational continuance during remote operations required by illness, social quarantining, and work from home orders currently in force. The Company’s management has devoted substantial time and attention to assessing the potential impact of COVID-19 and those events on the Company’s operations and financial position and developing operational and financial plans to address those matters.

As a result of the COVID-19 pandemic, the Company anticipates that premiums will decrease due to policy endorsements associated with doctors electing to work part time, take a leave of absence or retire. In addition, our insureds may elect to temporarily change specialties. For example, a doctor may choose to drop from orthopedic surgery to office-only status due to the lack of elective surgeries. The Company has received notification for such requests from our policyholders which will go into effect on June 30, 2020.

In terms of collections, prior to the pandemic, the Company’s policy was to cancel any insurance policies for which premiums had not been received within 60 days subsequent to policy effective date, with notice of intent to cancel sent to the insured after 30 days post-inception date. As a result of COVID-19, the Company has updated this policy and suspended cancellations of insurance contracts resulting from non-payment of premium until June 30, 2020 for invoices due after April 1, 2020. Through May 11, 2020, the amount of premium payment deferrals is about $817,000.

With respect to claims, Positive Insurance Company’s policyholder base mainly consists of physicians, their corporations and medical groups. During the COVID-19 pandemic, on-site visits to doctors have declined and been replaced by an increase in telehealth/virtual office visits. Since the COVID-19 pandemic resulted in government-issued work from home orders, the Company has seen the number of new claims reported begin to decrease.

The Company’s investment portfolio has experienced significant fluctuations in fair value as a result of the market volatility due to the COVID-19 pandemic. The following tables reflect the changes in our investment portfolio since December 31, 2019.

	Amortized Cost/Cost		Gross Unrealized Gains, Net			Fair Value
May 8, 2020 (Unaudited)
U.S. government	$	9,172,746	$	190,297		$	9,363,043
States, territories, and possessions		1,091,178		47,775			1,138,953
Subdivisions of states, territories, and possessions		12,313,961		358,989			12,672,950
Industrial and miscellaneous		68,391,118		1,727,660			70,118,778
Total fixed maturity securities		90,969,003		2,324,721			93,293,724
Equity securities		6,446,067		(66,457	)		6,379,610
Short-term investments		2,231,703		(9	)		2,231,694
Total investments		99,646,773		2,258,255			101,905,028
Cash and cash equivalents		19,924,270		-			19,924,270
	$	119,571,043	$	2,258,255		$	121,829,298

	Amortized Cost/Cost		Gross Unrealized Gains, Net		Fair Value
December 31, 2019
U.S. government	$	10,689,829	$	61,733	$	10,751,562
States, territories, and possessions		1,096,638		46,385		1,143,023
Subdivisions of states, territories, and possessions		12,440,863		382,002		12,822,865
Industrial and miscellaneous		69,445,114		1,585,478		71,030,592
Total fixed maturity securities		93,672,444		2,075,598		95,748,042
Equity securities		6,602,462		1,154,504		7,756,966
Short-term investments		1,169,472		-		1,169,472
Total investments		101,444,378		3,230,102		104,674,480
Cash and cash equivalents		20,988,081		-		20,988,081
	$	122,432,459	$	3,230,102	$	125,662,561

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The CARES Act includes certain income tax-related law changes that the Company believes will have a material effect on its deferred income taxes in 2020. The most significant effect on the Company’s deferred income taxes is expected to be due to changes in the Federal net operating loss carryback provisions which will allow the Company to carryback NOLs originating in 2018 and 2019 to prior tax years with corporate income tax rates of 34% (as opposed to forward to future tax years with corporate income tax rates of 21%). The Company estimates that this change will result in additional Federal income tax refunds of approximately $1.1 million during 2020 and will reduce the Company’s NOL by about $3.1 million, or about $650,000 tax-effected.