Auditor gives adverse opinion on company’s financial statements
Independent auditor, Grant Thornton, has given an adverse opinion on the financial statements of a Bermuda reinsurance company, Annuity and Life Re (Holdings), an investment holding company.
The reinsurer did not consolidate the financial statements of Holdings subsidiary, Multivir Inc, because the investment is fully impaired in the group’s consolidated financial statements and the group has documented plans to dispose of it, the auditor said.
Holdings recorded net income for the 2023 year of $563,077 (2022: net loss of $1,937,212).
The financial statements include the accounts of Holdings and its wholly owned subsidiary, Annuity and Life Reassurance, Ltd, a Class C Bermuda insurer.
ALRE has not written any long-term business since December 31, 2005 and does not intend to continue writing any long-term business in the near future.
Multivir is a Houston cancer researcher, a clinical trial stage biotech focused on gene therapy drugs for oncology patients. Its focus is “to develop transforming immune therapies targeting cancer’s most fundamental molecular defects.” It had a number of active and planned clinical trials.
The basis for the adverse opinion states: “Had Multivir Inc been consolidated, many elements in the accompanying consolidated financial statements would have been materially affected.
“The effects on the consolidated financial statements of the failure to consolidate have not been determined.”
Because of the significance of the issues involved, the opinion of auditors is that the consolidated financial statements do not present fairly, the consolidated financial position of Annuity and Life Re (Holdings), Ltd, and the results of its operations and its cash flows under US generally accepted accounting principles, as of December 31, 2023 and 2022.
The notes to the company’s consolidated financial statements, filed with the Bermuda Stock Exchange, includes under the Loan Receivable section: “During the year, management deemed that the loans of Multivir Inc were impaired and has recorded an allowance of $100,000 (2022: $51,500) for the principal and $869,019 (2022: $864,299) for the interest.
Holdings owned 97 per cent of the issued ordinary shares of Multivir Inc at the end of the financial year.
Holdings has a Class 3A Insurance License from the Bermuda Monetary Authority, through its wholly owned subsidiary, Annuity and Life Reassurance Ltd and operates as a multi-strategy reinsurer, primarily focused on property catastrophe reinsurance.
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