The purchase of our common shares involves significant risks, including the potential loss of all or part of your investment, and other significant factors. These risks could materially affect our business, financial condition and results of operations and cause a decline in the book value and/or market value of our common stock. We have organized the discussion of risks using topic headings for convenience only. Many of the risks discussed under one topic heading are integrally related to risks discussed under another topic heading. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See “Special Note Regarding Forward-Looking Statements.” You should carefully consider all of the risks described in this prospectus, in addition to all of the other information contained in this prospectus, especially our Business section and the Management Discussion and Analysis section and conduct such due diligence as you consider appropriate, before you make an investment in our common shares.

The performance of our insurance operations will be inconsistent from year to year. Fluctuations in revenues and profitability will result from a variety of factors, including:

In particular, we seek to underwrite insurance contracts and make investments that will give us a return on equity over the long term that is better than the insurance industry overall. In our Life Insurance segment, we focus primarily on arranging and managing highly customized life insurance policies for business owners and high net worth individuals, or HNWIs, and family groups. Similarly, our Business Insurance segment focuses on risk management and financing services, including formation and operation of captive insurance companies for small and medium-sized businesses. We seek to transfer the majority of the risks we assume from our clients to third party insurers and reinsurers. Most of our economic returns from the Business Insurance segment are related to our services that arrange for self-insurance or risk transfer to third parties, rather than earning premiums for risks transferred to us from our clients. We believe that this approach is likely to result in higher profit margins than the traditional industry practice of retaining risks on-balance sheet. If our belief is incorrect, we will underperform the industry and our results will not compare favorably with other insurance companies.

Because we sell fewer life insurance policies with higher premiums and face amounts than other companies, our new business acquisition costs can be very high compared to the volume of business written. Our cost of acquiring a Business Insurance client can be high compared to the expected profits from the client over time. If we do not retain the new client for multiple years, we may not recover our client acquisition costs. Finally, we depend on our insurance and reinsurance counterparties to honor claims made by us on behalf of our clients who have experienced a loss covered by their policy issued by one of our

Our Life Insurance products are designed to offer clients and their beneficiaries financial benefits, including efficient tax treatment of inter-generational transfers of family wealth. The effectiveness of our products in facilitating tax-efficient inter-generational wealth transfer depends upon:

If our products do not perform as expected, our clients may seek to recover damages from us and our reputation in the marketplace will suffer.

Persons seeking to purchase PPLI from our Puerto Rico and Cayman Islands subsidiaries must complete additional steps in the transaction that add complexity compared to purchasing ordinary life insurance products sold by a company in their home jurisdiction. In order to purchase a PPLI product from us, a client will typically:

This purchase process is time-consuming and requires participation by the client that is more extensive than ordinary life insurance products. We rely on specialized advisors and expeditors to assist potential clients in completing these tasks. This process and complexity make it difficult for our products to compete with traditional life insurance policies offered by locally regulated companies, which are often highly-rated carriers with worldwide operations and brand name recognition.

Recognizing, in connection with the sale of the PPLI policies, that activities may take place in foreign countries which could be subject to local laws, failure to ensure that the marketing and sales activities related thereto comply with the laws of such jurisdictions could result in compliance issues, including but not limited to, imposition of sanctions and fines. Additionally, many jurisdictions may prohibit or restrict the sale of PPLI policies by insurers not authorized to transact insurance in such jurisdiction, even if sale of the policy is not intended to be made to residents of such jurisdictions. Therefore, if discussions of the PPLI product and related transactions by the insured or person seeking to purchase the PPLI policy and

In certain instances where we have issued or may issue policies to residents of certain jurisdictions, there is a risk that premium income arising from these policies could be deemed income earned by us in the country of the insured/policy owner, and potentially subject us to income tax in that country.

The insurance industry is highly competitive. We compete with major insurers and reinsurers, many of which have substantially greater financial, marketing and management resources than we do. Competition in the types of business that we underwrite is based on many factors, including:

Competitors in our Life Insurance business include very large life insurance companies such as Old Mutual, Prudential, Zurich and others. We also compete against specialist PPLI companies such as Crown Global, Investors Preferred Life and Lombard International. Many of our competitors are established and authorized to conduct business in jurisdictions where our prospective clients reside. Business Insurance competitors include large insurance intermediaries, including Aon, Marsh, Willis and other brokers; independent captive managers, including Ryan, Strategic Risk Services and USA Risk; and large property casualty insurance companies including AIG, Chubb, Travelers, Liberty Mutual, Markel, W.R. Berkeley, CNA, Hartford, and others. Reinsurers include Chubb, General Re Corporation (a subsidiary of Berkshire Hathaway, Inc.), Hannover Re Group, Munich Reinsurance Company, PartnerRe Ltd., Swiss Reinsurance Company, and XL Capital Ltd. Although we often purchase reinsurance from large global insurance companies or otherwise serve as a conduit to the global insurance market for our clients, these large companies can and will do business directly with our customers. We also compete with smaller insurance brokers and agencies, and other niche insurers from time to time.

We cannot assure you that we will be able to compete successfully in the insurance markets. Our failure to compete effectively would significantly and negatively affect our financial condition and results of operations and may increase the likelihood that we may be deemed to be a PFIC or an investment company. See “Risk Factors—Risks Relating to Regulation and Compliance—We are subject to the risk of possibly becoming an investment company under U.S. federal securities law” and “Tax Considerations—U.S. Federal Income Taxation—Passive Foreign Investment Companies (PFIC).”

We also utilize non-traditional reinsurance or risk transfer for certain types of life insurance policies we issue to businesses and business owners resident in Canada, where an affiliate of the purchaser assumes some or all of the actual insurance risk. These self-insurance elements incorporated into some of our policy structures add additional collectability risk to our reinsurance coverages. We believe that our traditional reinsurance counterparties are of the highest quality and pay our valid claims in a timely manner. We also believe that our non-traditional reinsurance and risk transfer is well documented and will perform as expected in the event of a covered claim or event that would trigger a payment due to us. However, there is no assurance that we will be able to collect 100% of what is owed to us by a reinsurer or other risk transfer counterparty, and we may incur substantial losses in the event of an insolvency of one of our reinsurers or risk transfer counterparties.

Our Business Insurance segment operates primarily in the P&C insurance markets. The P&C industry is cyclical. At certain times, the captive insurance risk management programs we sponsor on behalf of our clients may not be competitive in the marketplace. Recently, the availability of property/catastrophe insurance at historically low premium rates has reduced the demand for captive insurance programs for businesses located in hurricane-prone locations. This competition from traditional insurance markets impacts our ability to gain new clients and to retain existing clients.

The P&C insurance industry’s profitability may be adversely affected by various factors, including but not limited to: unpredictable developments, including courts granting increasingly larger awards for certain damages; natural disasters (such as catastrophic hurricanes, windstorms, tornados, earthquakes and floods); fluctuations in interest rates; changes in the investment environment that affect market prices of investments; and inflationary pressures. Although we do not issue insurance contracts that directly expose us to catastrophic events, the effects of cyclicality may be amplified by catastrophic events could significantly and negatively affect our results of operations.

Our Business Insurance segment may be exposed to these events though its facilitation of risk pooling for our captive insurance management clients and through its ordinary activities and limited underwriting participation. Through its United Kingdom subsidiary, Advantage DCP Ltd, or ADCP, Advantage has $3.7 million held as a collateral deposit with Lloyd’s as of March 31, 2018. We refer to the funds that are held as a collateral deposit with Lloyd’s as our Funds at Lloyd’s. To participate in Lloyd’s syndicates, Advantage is required by Lloyd’s to have a duly incorporated United Kingdom company that Advantage operates solely for this purpose. The losses incurred by each syndicate exposes Advantage to losses, limited to its percentage participation in each syndicate. The maximum amount at risk by the company is limited to its collateral deposit.

We are not currently rated by an independent ratings agency. Purchasers of insurance and their professional advisors use ratings from independent ratings agencies as an important means of assessing the financial strength and quality of insurers and reinsurers. We believe, based on published criteria, that the net proceeds of this offering will help us to obtain an “A” category rating from an independent third party ratings agency such as KBRA or A.M. Best. Because we believe an “A” category rating will facilitate our expansion into new referral channels and will be a tangible demonstration of our capital strength to our clients, obtaining a lower rating, or over time not having or maintaining a rating from KBRA, A.M. Best, or another recognized ratings service, will materially detract from our ability to add new clients, retain existing clients and otherwise grow our business.

Our future success depends to a significant extent on the efforts of our senior management and other key personnel to implement our business strategy. We believe there are only a limited number of available, qualified executives with substantial experience in our niche segments of the insurance industry. In addition, we will need to add personnel, including salespersons, an actuary and underwriters, to implement our business strategy. The loss of the services of one or more of the members of our senior management or other key personnel, or our inability to hire and retain other key personnel, could delay or prevent us from fully implementing our business strategy and, consequently, significantly and negatively affect our business.

We do not currently maintain key person life insurance with respect to any of our senior management, including our CEO. If any member of senior management dies or becomes incapacitated, or leaves the company to pursue employment opportunities elsewhere, we would be solely responsible for locating an adequate replacement for such senior management and for bearing any related cost. To the extent that we are unable to locate an adequate replacement or are unable to do so within a reasonable period of time, our business may be significantly and negatively affected.

We are not licensed or admitted as an insurer or reinsurer in any jurisdiction other than Puerto Rico, the Cayman Islands, Vermont and the United Kingdom. Certain jurisdictions, including the United States, do not permit insurance companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their statutory financial statements unless appropriate security measures are implemented. Consequently, certain clients will require us to obtain a letter of credit or provide other collateral through funds withheld or trust arrangements. We are also required to post letters of credit in favor of the U.S. Treasury for our Puerto Rico subsidiary that has made an irrevocable election to be taxed as a U.S. company under Section 953(d) of the Code. When we obtain a letter of credit facility, we are customarily required to provide collateral to the letter of credit provider in order to secure our obligations under the facility. Our ability to provide collateral, and the costs at which we provide collateral, are primarily dependent on the composition of our investment portfolio.

Typically, letters of credit are collateralized with cash or investment-grade fixed income securities. Banks may be willing to accept assets held in our investment portfolio as collateral, but on terms that may be less favorable to us than insurance companies that invest solely or predominantly in investment-grade fixed income securities. The inability to renew, maintain or obtain letters of credit collateralized by our investment portfolio assets may significantly limit the amount of insurance we can write or require us to modify our investment strategy.

We may need additional letter of credit capacity as we grow, and if we are unable to obtain letter of credit capacity or are unable to do so on commercially acceptable terms we may need to liquidate all or a portion of our investment portfolio and invest in an investment-grade fixed income portfolio or other forms of investment acceptable to our clients and banks as collateral, which could significantly and negatively affect our ability to implement our business strategy.

We are prohibited by law from marketing our life insurance policies in the United States and other jurisdictions where our clients and potential clients reside. Most of our new Life Insurance business is sourced through referrals from independent financial advisors, trust and estates experts and other third-party intermediaries. Our Business Insurance captive management services similarly are dependent on referrals by independent insurance brokers and financial advisors. If we are unable to pay our intermediaries a competitive fee for their services or we are unable to retain or attract specialized advisors or expeditors, our ability to attract new clients may be adversely affected.

Our payment of advisory fees to third-party intermediary advisors may not be linked to the marketing of the PPLI policies in a specific jurisdiction where such payment is not permitted. In addition, an intermediary licensed as an insurance agent in the country where the solicitation arises runs the risk of losing its license if its activities incident to the sale of a PPLI policy are deemed to violate that country’s law. Although we may determine not to pay an advisory fee to a third-party intermediary that fails to comply with applicable laws and regulations, we do not have control over these intermediaries. Nonetheless, our referral relationships with a third-party intermediary might be interpreted by a regulator as an agency relationship, which might make us liable for the intermediaries’ actions. In addition, if an intermediary is deemed to be soliciting insurance on our behalf from a location in which we are not licensed, we may be subject to regulatory sanction. If a regulatory authority seeks to hold us liable for, or we otherwise are subject to regulatory sanction as a result of, an intermediary’s actions, our business strategy and results of operations could be adversely affected.

If our key Puerto Rico or Cayman Islands domiciles become objectionable to intermediaries, or otherwise become less favorable than other jurisdictions, we may lose referrals. Client perception of financial services products and services obtained from low-tax or zero tax domiciles such as the Cayman Islands is sometimes negative, which could have the effect of reducing client demand. Furthermore, we believe that our ability to underwrite new insurance policies through our Puerto Rico-licensed insurance subsidiaries has been harmed by the Commonwealth of Puerto Rico’s default on its bond obligations and its ongoing financial insolvency process, which causes clients and prospective clients concern over the stability of the jurisdiction and the unknown risks of purchasing insurance from companies regulated by a bankrupt government. These negative perceptions could impede our ability to retain current clients and obtain additional business, whether through intermediaries or otherwise, and as a result, could adversely affect our business strategy and results of operations.

We may need to raise additional capital in the future through public or private equity or debt offerings or otherwise in order to, among other things:

Additional capital may not be available on terms favorable to us, or at all. Further, any additional capital raised through the sale of equity could dilute your ownership interest in our company. Additional capital raised through the issuance of debt may result in creditors having rights, preferences and privileges senior or otherwise superior to those of our common shares.

Our Life Insurance business relies on the availability of long-term life reinsurance in order for us to underwrite new insurance policies. We also rely upon the continuing performance of our life reinsurance

Catastrophes such as hurricanes, earthquakes, hailstorms, tsunamis and other disasters that are expected to occur infrequently but render high losses present risks that could materially adversely affect our results of operations. Although we do not directly participate in any low frequency/high severity catastrophe risk, our Business Insurance segment is exposed to these events though its facilitation of risk pooling for our captive insurance management clients and through its ordinary activities and limited underwriting participation. In particular, our underwriting of risks in the Lloyd’s insurance market gives us exposure to these types of risks. Our risk from Lloyd’s underwriting is limited to the value of our Funds at Lloyd’s, which was $3.7 million as of March 31, 2018.

We have located our headquarters and a substantial portion of our business operations in the Commonwealth of Puerto Rico. On May 3, 2017, the Puerto Rico government and the PROMESA oversight board filed for a form of bankruptcy in the U.S. District Court in Puerto Rico under Title III of PROMESA. The Title III provision allows for a court debt restructuring process similar to U.S. bankruptcy protection. This is the first time that any state or territory of the United States has ever filed for relief that is expected to be comparable to bankruptcy relief because of the absence, until PROMESA, of any legal authority for such a relief. Consequently, it is uncertain what impact this filing will have on our financial condition or results of operations. Continuing economic decline or other adverse political developments, natural disasters (including hurricanes), and other events could affect, among other things, our customer base, our cost of operations, our ability to provide services and our physical locations, property and equipment and could have a material adverse effect on our business, financial condition and results of operations.

Our businesses and relationships with policyholders are dependent upon our ability to maintain the confidentiality of our and our policyholders’ and beneficiaries’ proprietary business and confidential information. We retain confidential information in our information systems and in cloud-based systems. We rely on commercial technologies and third parties to maintain the security of those systems. Anyone who is able to circumvent our security measures and penetrate our information systems, or the cloud-based systems we use, could access, view, misappropriate, alter or delete any information in the systems, including personally identifiable policyholder and beneficiary information and proprietary business information. It is possible that an employee, contractor or representative could, intentionally or unintentionally, disclose or misappropriate personal information or other confidential information. Our employees, intermediaries and other vendors may use portable computers or mobile devices which may contain similar information to that

Our business is highly dependent upon the effective operation of our information systems. We also have arrangements in place with outside vendors and other service providers through which we share and receive information. We rely on these systems throughout our business for a variety of functions, including processing claims and applications, providing information to customers and third-party distribution firms, performing actuarial analyses and modeling, performing operational tasks and maintaining financial records. Our information systems and those of our outside vendors and service providers may be vulnerable to physical or cyber-attacks, computer viruses or other computer related attacks, programming errors and similar disruptive problems. In some cases, such physical and electronic break-ins, cyber-attacks or other security breaches may not be immediately detected. A cyber-attack or other security breach could materially and adversely affect our business given the confidential information we gather about our policyholders and beneficiaries. In addition, we could experience a failure of one or more of these systems, our employees or agents could fail to monitor and implement enhancements or other modifications to a system in a timely and effective manner, or our employees or agents could fail to complete all necessary data reconciliation or other conversion controls when implementing a new software system or implementing modifications to an existing system. The failure of these systems for any reason could cause significant interruptions to our operations, which could result in a material adverse effect on our business, results of operations or financial condition.

In February 2018, we discovered a potential breach of our internal electronic records storage system that occurred in October 2017. This breach has not had a material adverse effect on our results of operations or financial condition, and we have not established any reserves for any potential future liabilities with respect to this breach. However, there can be no assurance that we will not learn of new facts with respect to the breach that would cause us to establish such reserves or that we will experience a material adverse effect with respect to our financial condition or results of operations in the future as a result of new developments with respect to this breach or as a result of any future breach.

We are acquiring two individual blocks of life insurance totaling approximately 148 individual contracts through our acquisition of the Argus business. Following completion of the acquisition, we will transfer the administration of these policies to our systems, including systems we license or otherwise obtain from third-party service providers. We may not be able to transfer the Argus policies to our systems in a timely and effective manner, causing higher than anticipated costs to integrate the business acquired. In particular, if we neglect to apply required AML procedures due to errors in our internal compliance operations during the policy administration transition, we will expose our company to regulatory sanctions and penalties. In addition, if we make policy administration errors or otherwise deliver poor service to policy owners and their advisors due to integration errors or delays, we may suffer customer attrition and reputational damage.

We invest our surplus in lower-rated loans directly or indirectly through loan accumulation facilities, loan funds, and in CLO securities. All of our CLO investments are in the most subordinated classes of these securities consisting of mezzanine and equity tranches backed by lower-rated loans and bonds. In the past, CLO securities have experienced significant price volatility and periods of extended market illiquidity. If the issuers of loans and bonds that we hold default on their payment obligations, and the recovery rates on our defaulted investments are low as a percentage of our principal investment, we will experience meaningful investment losses.

Because we seek to earn extra interest income as compensation for purchasing less liquid investments, if we are required to liquidate our portfolio within a short time period we will likely experience material losses upon the sale of the portfolio investments. Also, there is no assurance that we will be able to find a buyer for some or all of our portfolio investments in a short period of time, during periods of market dislocation or economic recession resulting in elevated default rates of loans, loan accumulation facilities and loan funds held by CLOs.

At certain times, new issue volumes of loans and CLO securities are low. We may be forced to purchase investments in the secondary market at prices that we consider to be high if there is not sufficient new issue volume to meet market demand. If we invest our assets in risky products, they may lose value and have a material adverse effect on our business.

Most of our general account investments are in the most subordinated tranche of CLO securities referred to as “CLO Equity”. CLO Equity does not have secured claims on the collateral held by the issuer, but are entitled to any residual value of the collateral after all senior claims are paid. It is possible that there will be no residual value to CLO Equity following payment of senior claims following liquidation of the CLO. CLO Equity tranches represent most of our CLO investment portfolio, which constitutes most of our general account investments. We may also invest in other deeply subordinated tranches of CLO securities that are senior to CLO Equity but subordinated to all other tranches known as “CLO mezzanine”. If the issuers of loans and bonds that underlie the CLO securities we hold default on their payment obligations, the value of our CLO investments will be diminished, potentially by a significant amount. Our potential losses are limited to our cost basis in the CLO securities.

We have invested in the past and may invest in the future in newly formed CLOs or other assets with no or limited investment history or performance record upon which GSO or the company will be able to evaluate their likely performance. The company’s investments in entities with no or limited operating history are subject to all of the risks and uncertainties associated with investments in a new business, including the risk that such entities will not achieve target returns. Consequently, our profitability and the value of our common shares could be adversely affected.

CLOs typically will have no significant assets other than the Collateral (typically participations in first-lien floating rate senior secured bank loan credit facilities rated by one or more rating agencies). Accordingly, payments on CLO securities are and will be made solely from the cash flows from the Collateral, net of all management fees and other expenses. Payments to the company as a holder of CLO Equity and/or CLO mezzanine securities are and will be met only after payments due on the senior notes of a CLO (and, where appropriate, the mezzanine notes) from time to time have been made in full. Moreover, we may be in a first loss or subordinated position with respect to realized losses on the Collateral, as 100% of our CLO portfolio is currently in a first loss position.

The company’s current investment guidelines require all general account investments of its Life Insurance subsidiaries to be denominated in U.S. Dollars. However, the company invests in securities, the underlying assets of which may be denominated in currencies other than the U.S. Dollar. Accordingly, the value of such assets may be affected, favorably or unfavorably, by fluctuations in currency rates. To reduce the impact on a CLO of currency fluctuations and the volatility of returns which may result from currency exposure, the manager of such CLO may be allowed by the terms of the CLO to hedge against exchange rate fluctuations for the purposes of efficient portfolio management. Hedging strategies involve risk and may not be successful in reducing the exposure of any particular CLO to currency fluctuations or other perceived risks and therefore may have an adverse impact on the value of the common shares of the company.

We issue life insurance policies denominated in currencies other than the U.S. Dollar, notably the Canadian dollar and British pounds sterling. Our business practice is to transfer the currency exchange rate risk of these policies to a third party through traditional or non-traditional reinsurance. In the event that a counterparty fails to perform on its obligations to us when we are required to pay a death benefit for a policy denominated in a foreign currency, we will be obliged to purchase the foreign currency required to pay the death benefit. Depending on the timing of the default of the reinsurance counterparty and the foreign currency exchange rate in effect immediately before the date of payment to the policy beneficiary, we may experience a gain or loss from the foreign exchange transaction executed to fund the required benefit payment.

We are also exposed to currency risk through our United Kingdom subsidiary ADCP. As of March 31, 2018, we had $3.7 million of Funds at Lloyd’s, which are held in British pounds sterling and are translated to U.S. Dollars at the prevailing exchange rate on the last business day of each reporting period. Because our access to the Funds at Lloyd’s is restricted and we do not hedge the exchange rate risk, our earnings are subject to volatility caused by changes in value of British pounds sterling compared to U.S. Dollars.

CLO Equity and mezzanine securities represent a leveraged investment with respect to the underlying Collateral. Therefore, changes in the market value of such CLO securities could be greater than the change in the market value of the underlying Collateral, which themselves are subject to credit, liquidity, interest rate and currency risk. Any changes in market values of our investments that we designate as available-for-sale investments are reflected in our statements of comprehensive income as other comprehensive income. Thus, a decline in the market price of a CLO investment would result in lower reported earnings for the period in which the price decline occurs. Similarly, our reported earnings may appear more favorable based on unrealized gains attributable to other comprehensive income. If our earnings are unpredictable due to high levels of price volatility in our investment portfolio, it is likely to have a negative effect on the market value of our common shares.

As defined under GAAP, fair value of a CLO is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be

Early prepayments may also give rise to increased re-investment risk with respect to certain investments, as we may realize excess cash earlier than expected. If we are unable to reinvest such cash in a new investment with an expected rate of return at least equal to that of the investment repaid, this may reduce our net income and, consequently, could have an adverse impact on our ability to pay dividends or provide capital to our operating subsidiaries to support growth.

We hold investments in CLOs holding Collateral comprised primarily of first-lien floating rate senior secured bank credit facilities rated by one or more rating agencies. Most of the senior floating-rate loans held in our CLOs calculate the interest owed to us on a monthly or quarterly basis, using an underlying index such as LIBOR to determine the applicable interest rate for the next monthly or quarterly interest calculation period. Borrowers may also have the right to select an alternative index, such as 1-month LIBOR or the Prime Rate reported by the Federal Reserve Bank of New York. Because the liabilities of our CLO investments typically are indexed to 3-month LIBOR, we are exposed to interest rate risk and mismatches between the CLO funding costs and the interest received from the Collateral. Some loan agreements also include minimum rates known as LIBOR floors, which may also create mismatches between CLO funding costs and interest income. We are also exposed to credit risk that may arise from rapid increases in interest rates that would lead to borrowers defaulting on loan obligations because of failures to meet interest expense coverage ratio covenants or other events of default under credit agreements caused directly or indirectly by high interest rates. As such, significant changes in interest rates could adversely affect our financial condition and results of operations.

Recently, individual CLOs have experienced a significant decrease in the overall interest rate margin of the Collateral held compared to the underlying interest rate index, such as 3-month LIBOR. This narrowing of the interest rate spread earned from Collateral reduces the earnings of the CLO and amounts available to distribute to holders of the CLO’s equity tranche. CLO managers seek to mitigate this narrowing effect, often referred to as weighted average spread compression, by refinancing the CLO’s debt to reduce its interest rate margin. If our CLO managers are unable to mitigate weighted average spread compression by matching the reduction in interest rate margin on Collateral with corresponding decreases in their CLO’s funding costs, then our distributions will be reduced and we may not realize the total returns expected from the specific CLO at the time of initial investment, which could adversely affect our financial condition and results of operations.

CLO managers may, within certain limitations, sell Collateral held by the CLO and purchase replacement Collateral. If these transactions result in a net loss, the magnitude of the loss from the perspective of the holders of CLO Equity would be increased by the leveraged nature of the investment, which in turn could adversely affect our financial condition and results of operations.

In the past, we have participated in a credit facility provided by a major bank to accumulate and hold bank loans to be contributed to newly-formed CLOs. Loan accumulation facilities of this type are often referred to as CLO warehouse facilities. We believe that our warehouse participation is a key competitive advantage in our ability to obtain attractive investment terms for the purchase of CLO securities created using the loans accumulated in the warehouse facility. If we decide to enter into a new facility, we may not be able to enter into a new CLO warehouse facility on favorable terms, or at all. If we are unable to continue our participation in CLO warehouse investments, our ability to purchase new CLO investments at attractive prices is likely to be limited.

Participation in CLO warehouse investments requires us to enter into credit agreements that contain covenants and other requirements of us. Complying with these covenants could adversely affect our ability to respond to changes in our business and manage our operations. Our ability to comply with any required covenants and other provisions in our existing and any future funding facility may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events beyond our control. A failure by us to comply with the financial ratios and restrictive covenants contained in a warehouse facility could result in an event of default. Upon

We are not regulated by NAIC and our operating subsidiaries are not required to file statutory statements with NAIC. Neither our underwriting nor investment activities are regulated by NAIC. We are not required to calculate or publish risk-based capital ratios for our operating subsidiaries nor are we required to manage to any risk-based capital. Any comparisons to other insurance companies in the United States will be more difficult as a result. We have eight licensed insurance subsidiaries and one banking subsidiary that are subject to minimum capital requirements fixed by statute or regulation in Puerto Rico, the Cayman Islands, Montana and Vermont. In addition, in order to maintain any rating we receive from a ratings agency and to avoid a potential ratings downgrade, we are required to maintain capital in amounts and in proportion to the amounts held at the time the rating was issued. Because our operating subsidiaries generally do not require risk-based capital ratios for regulatory purposes, we are not limited with respect to our investment alternatives. We are able to invest in less liquid, lower-rated debt securities than other insurance companies in the United States. Our insurance contracts are not regulated by NAIC and therefore the pricing and terms of contracts are not subject to approval by NAIC commissioners. In addition, our life insurance policies issued in Puerto Rico and the Cayman Islands offer statutory protections for segregation of policyholder funds that are not allowed under NAIC regulations and related state laws. As a result, comparisons to U.S.-based insurance companies may be difficult.

The sale and purchase of products that may be structured in such a way as to not contain sufficient risk transfer to meet the requirement of SFAS 113 to be accounted for as insurance, or loss mitigation insurance products, have become the focus of investigations by the SEC and numerous state Attorneys General. In addition, the Internal Revenue Service issued Notice 2016-66 which subjects sponsors of captive insurers electing to be taxed under Section 831(b) of the Code to additional disclosure requirements about the nature, origin and operations of the insurance structures. Our captive insurance clients generally are obligated to report information to the Internal Revenue Service under Notice 2016-66. In a recent case involving a captive insurance company making such an election, Avrahami v. Commissioner (149 T.C. No. 7 (2017)), the Tax Court held that policies issued by the captive insurance company did not qualify as insurance for federal income tax purposes, and therefore no deduction was allowed for payments of premiums to the captive insurance company. It is possible that we or our clients may become subject to the ongoing inquiries into captive insurance structures by the IRS, SEC or certain Attorneys General. In addition, we cannot predict at this time what effect the current regulatory activity will have on the insurance industry or our business or what, if any, changes may be made to laws and regulations regarding the industry and taxation of our clients. It is possible future regulatory developments and tax law changes will negatively impact our ability to use certain risk financing features in our products and, accordingly, our ability to operate our business pursuant to our existing strategy. Moreover, any reclassification of our life insurance policies as deposit liabilities rather than insurance contracts could call into question whether we are exempt from the Investment Company Act.

Certain of our operating subsidiaries could be considered Foreign Financial Institutions, or FFIs, in accordance with FATCA. On November 29, 2013, the governments of the Cayman Islands and the United States signed a Model 1B intergovernmental agreement and a new tax information exchange agreement to facilitate the automatic exchange of information under FATCA. This means that FFIs in the Cayman

We are incorporated under the laws of Puerto Rico and intend to operate in a manner that will not cause us to be treated as engaging in a U.S. trade or business and will not cause us to be subject to current U.S. federal income taxation on our net income. Certain of our subsidiaries are located in the United States and are subject to federal income taxation and one of our Puerto Rico subsidiaries has made an irrevocable election to be taxed as a U.S. domestic corporation under Section 953(d) of the Code. However, because the standards for being engaged in a U.S. trade or business are not clear, we cannot assure you that the IRS will not successfully assert that we are engaged in a trade or business in the United States and thus are subject to current U.S. federal income taxation for all our income. The U.S. Congress recently enacted broad changes to U.S. tax laws that generally apply to tax years beginning in 2018. These changes included provisions that could affect whether we are classified as a PFIC and that could subject our shareholders to current taxation on our income. However, the new law did not change the standards for determining whether we are engaged in a U.S. trade or business. While the recent tax reform did not include changes that subject us to U.S. taxation on our net income, we can give no assurances that such changes won’t be made in the future.

Passive Foreign Investment Company (PFIC). Significant potential adverse U.S. federal income tax consequences generally apply to any U.S. person (as defined below in “Certain U.S. Tax Considerations”) who owns shares in a PFIC. We cannot assure you that our company will not be a PFIC for 2018 or any future taxable year.

In general, we would be deemed a PFIC for a taxable year if 75% or more of our gross income constitutes “passive income” or 50% or more of our assets produce, or are held for the production of, “passive income.” Passive income generally includes interest, dividends and other investment income but does not include income derived in the active conduct of an insurance business by a “qualifying insurance corporation,” such exclusion being referred to as the “Insurance Company Exception.” The Insurance Company Exception is intended to ensure that a bona fide insurance company’s income is not treated as passive income, except to the extent such income is attributable to financial reserves in excess of the reasonable needs of the insurance business. We believe that we are currently operating and intend to continue operating our business with financial reserves at a level that should not cause us to be deemed a PFIC, although we cannot assure you the IRS will not successfully challenge this conclusion. Moreover, our expectation with respect to 2018 is based on the amount of risk that we expect to underwrite during the remainder of the year. We cannot assure you that we will be able to underwrite a sufficient amount of risk for later years to prevent Advantage and/or any of its subsidiaries from being a PFIC in subsequent years.

To be considered a “qualifying insurance corporation” we must operate in such a way that we would be treated as an insurance company for U.S. federal income tax purposes if we were a domestic corporation and our applicable insurance liabilities (including loss and loss adjustment expenses and certain reserves) must exceed 25% of our total assets for the subject tax year. The 25% test is a new rule and there is no guidance as to what constitutes an applicable insurance liability for this purpose, thus the application of the test is uncertain. In all events, sufficient risk must be transferred under an insurance company’s contracts with its insureds in order to be treated as an insurance company for federal income tax purposes. Whether our insurance contracts possess adequate risk transfer for purposes of determining whether income under our contracts is insurance income is subjective in nature and there is very little authority on this issue. However, because we are and may continue to be engaged in certain structured risk and other non-traditional insurance markets, we cannot assure you that the IRS will not successfully challenge the level of risk transfer under our reinsurance contracts for purposes of the Insurance Company Exception. The IRS has notified taxpayers in IRS Notice 2003-34 that it intends to scrutinize the activities of certain insurance companies located outside of the United States, including reinsurance companies that invest a significant portion of their assets in alternative investment strategies, to determine whether such companies qualify for the Insurance Company Exception in the PFIC rules. We cannot assure you that the IRS will not successfully challenge our interpretation of the scope of the Insurance Company Exception and our

The consequences of our company being treated as a PFIC and certain elections designed to mitigate such consequences are discussed in more detail under the heading “Certain U.S. Tax Considerations.” If you are a U.S. person, we advise you to consult your own tax advisor concerning the potential tax consequences to you under the PFIC rules.

Controlled Foreign Corporation. A U.S. Person who owns 10% or more of the voting power of all classes of our voting stock or total value of our stock, a “U.S. 10% Shareholder,” may be subject to the CFC rules. Under the CFC rules, each U.S. 10% Shareholder must annually include in his personal income a pro rata share of the CFC’s “subpart F income,” even if no distributions are made. In general, a foreign insurance company will be treated as a CFC only if U.S. 10% Shareholders collectively own more than 25% of the total combined voting power or total value of the company’s shares. We believe that the anticipated dispersion of our common shares among holders and the restrictions placed on transfer, issuance or repurchase of our common shares (including the ownership limitations described below), will generally prevent shareholders who acquire common shares from being U.S. 10% Shareholders. In addition, because our certificate of incorporation prevents any person from holding 9.9% or more of the total combined voting power of our shares (whether held directly, indirectly, or constructively), unless such provision is waived by the unanimous consent of our board of directors, we believe no persons holding common shares should be viewed as U.S. 10% Shareholders of a CFC for purposes of the CFC rules. We cannot assure you, however, that these rules will not apply to you. If you are a U.S. person we strongly urge you to consult your own tax advisor concerning the CFC rules.

If a U.S. shareholder is treated as disposing of shares in a foreign insurance corporation that has RPII and in which U.S. persons own 25% or more of the voting power or value of the company’s capital stock, any gain from the disposition will generally be treated as a dividend to the extent of the U.S. shareholder’s portion of the corporation’s undistributed earnings and profits that were accumulated during the period that the U.S. shareholder owned the shares. In addition, the shareholder will be required to comply with certain reporting requirements, regardless of the amount of shares owned by the direct or indirect U.S. shareholder.

GILTI Tax. Effective January 1, 2018, U.S. law requires a U.S. person who owns 10% or more of the shares of a CFC (by vote or value) to include in income a pro rata share of low-taxed income earned by the CFC (more technically, “global intangible low-taxed income” or “GILTI”), without regard to whether the income is actually distributed. This income will be treated in the same manner as Subpart F income (discussed above). Accordingly, a U.S. shareholder would increase its basis in the CFC stock by the amount

In general, GILTI is the excess of a CFCs’ net income over a statutorily prescribed return on tangible assets. The net income of a CFC generally includes all income of the CFC, with certain exceptions, including for Subpart F income and income effectively connected with a U.S. trade or business. We expect that substantially all of our income will be Subpart F income or effectively connected income. Further, we have taken steps to reduce the risk that any of our shareholders will become U.S. 10% Shareholders. Under these circumstances, we do not expect any of our shareholders will have a GILTI inclusion or, if they do, that the inclusion would be a significant amount. However, we cannot assure you that the composition of our income will remain the same or that the anticipated dispersion of our shares will be such that none of our shareholders would be a U.S. 10% Shareholder. Further, we cannot assure you that the IRS will not successfully challenge the classification of our income as Subpart F or effectively connected income or that U.S. law won’t change to render the classification so changed. Therefore, we cannot assure you that you will not be subject to federal income tax on undistributed income in the form of a GILTI inclusion.

BEAT Tax. As part of the Tax Reform and Jobs Act of 2017, the United States enacted a base erosion and anti-abuse tax (“BEAT”) that applies to domestic corporations that are part of a multinational group with at least $500 million of annual domestic (including effectively connected amounts earned by foreign affiliates) gross receipts and that have made base erosion payments that exceed certain thresholds. The targeted base erosion payments generally are amounts paid or incurred by a domestic corporation to foreign related parties for which a deduction is allowable. The new law specifically includes cross-border reinsurance payments as base erosion payments. This category includes any premium or other consideration paid that is taken into account as a reduction in either life insurance gross income under section 803(a)(1)(B) or insurance company taxable income under section 832(b)(4)(A) of the U.S. Internal Revenue Code. Our domestic affiliates, including our Puerto Rican affiliate that has elected to be treated as a domestic corporation, do not make deductible payments to non-U.S. members of our group at present. Moreover, we do not expect that our annual U.S. gross receipts will exceed $500 million this year. Accordingly, we do not expect to be subject to the BEAT this year. However, we cannot assure you that we would not be subject to BEAT in the future. Were we to incur BEAT taxes our overall tax burden would increase with a corresponding decline in profitability.

The company has not yet identified the specific investments that it will make using the net proceeds of this offering. There can be no assurance that suitable investment opportunities will materialize, prove attractive or be sufficient in quantity or size to permit the company to invest any cash raised in the offering in a timely matter, or at all.

Until such time as GSO is able to identify, invest our assets in and monitor a suitable number of investments and implement the various aspects of the company’s investment strategy, its funds may not be fully invested and as a result, returns to shareholders may be adversely affected.

The objective of the due diligence process is to identify attractive investment opportunities based on the facts and circumstances surrounding an investment. When conducting due diligence and making an assessment regarding an investment, our external investment adviser will be required to rely on resources available to it, including information provided by the originator of the investment.

Accordingly, there can be no assurance that the due diligence investigation that our external investment adviser carries out with respect to any investment opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating any such investment opportunity. Moreover, there can be no assurance that such an investigation will result in an investment being successful.

In addition, if the investment management agreement is terminated, GSO may be entitled to a termination fee which includes a performance fee calculated on a basis that includes unrealized appreciation of certain investments. Such fee may be greater than if such fee were based solely on the actual realized returns of such investments.

For further details of these and other conflicts of interest involving other parties that may affect us, please see the section entitled “Certain Relationships and Related Party Transactions—Conflicts of Interest” and our investment management agreement with GSO which is filed as an exhibit to the registration statement of which this prospectus is a part.

The provision of investment management services is regulated in the United States, and the external investment adviser is subject to regulation and supervision by the SEC (which has the authority to review and investigate the conduct of the external investment adviser and its employees). Changes to law, regulations or regulatory guidance (including changes in interpretation or implementation thereof), or any failure by the external investment adviser or its employees to comply with such laws, regulations or guidance, whether or not relating to the management of our portfolio, could adversely impact the external investment adviser and its affiliates, and thereby could adversely affect the company and the value of its common shares. Although the external investment adviser has implemented systems and controls requiring employees to comply with these laws, regulations and guidance, there can be no assurance that all employees will abide by these and, if any were to fail to do so, that such failure would not have an adverse effect on the company.

Prior to this offering, there has not been a public market for our common shares, and an active market for our common shares may not develop or be sustained after this offering, which could depress the market price of our common shares and could affect your ability to sell your shares. In the absence of an active public trading market, you may not be able to liquidate your investment in our common shares. An inactive market may also impair our ability to raise capital by selling our common shares, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies or businesses by using our common shares as consideration. In addition, the market price of our common shares may fluctuate significantly in response to various factors, most of which are beyond our control. The initial public offering price per share was determined by negotiations among us, and the representatives of the underwriters and therefore, that price may not be indicative of the market price of our common shares after this offering. In particular, we cannot assure you that you will be able to resell your shares at or above the initial public offering price. The stock markets have experienced volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common shares. In addition to the factors discussed elsewhere in this prospectus, the factors that could affect our share price are:

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act requires

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal controls, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our common stock to decline. In addition, we could become subject to investigations by NYSE, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

As such, we currently have one material weakness and two significant deficiencies in our internal control over financial reporting that, if not corrected, could result in material misstatements of our financial statements.

A deficiency in internal control over financial reporting exists when the design and operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for the oversight of our financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our material weakness was the result of our accounting for our participation in the Lloyd’s risk pool. See “Business—Business Insurance—Lloyd’s Underwriting.” First, we determined that we did not have adequate controls to assert the correct value of our Funds at Lloyd’s deposit in U.S. Dollars, our reporting currency, as required by ASU 830-20. This resulted in a reduction of our net income and equity by approximately $0.8 million in 2016 and our first, second and third quarters of 2017 by increasing (decreasing) net income and equity by approximately $0.04 million, ($0.01 million) and $0.2 million, respectively. We have restated our financial statements to reflect the proper amounts. The restatement of first, second and third quarter 2016 financial statements resulted in a decrease to net income and equity by approximately ($0.1 million), ($0.2 million) and ($0.1 million), respectively, and our opening retained earnings balance for 2016 by approximately ($0.2 million). In response, we have changed our method of accounting for foreign currency translation adjustments related to our Funds at Lloyd’s to conform to the requirements of ASU 830-20.

In addition, we did not operate effectively to prevent or detect errors in the quarterly reporting of our insurance underwriting participation in Lloyd’s syndicates, resulting in an overstatement of our underwriting performance in 2017 by approximately $0.5 million. We also did not have controls in place to enable us to correctly assert the reinsurance-to-close amounts required to be in reserves or assets of the company, resulting in an adjustment of approximately $1.8 million to increase assets and reserves assumed.

To remediate this issue, we have made changes to our accounting processes to help ensure that none of the facts contributing to the material weakness are repeated. In particular, we have refined the method used to account for our Lloyd’s participation and have designed and implemented controls over the estimation and accounting process during the year-end financial close process for future reporting periods.

To remediate this issue, we have revised our process for obtaining required third-party actuarial reports that will resolve the delay that we experienced in 2017. The new process will add a second third-party actuary to our process for preparing information to be submitted to the primary third-party actuarial services provider. The new process also will change the date of the actuarial measurement from December 31 to September 30, with a “bring down” report for December 31 within the timeframe of our desired financial statement close process. We also intend to hire a full-time actuary subsequent to the completion of this offering.

In addition, we discovered a significant deficiency that our control to support the recovery of our deferred income tax asset did not operate effectively. We were unable to support our assertion, based on available evidence, that it is more likely than not that all or some portion of the deferred tax asset will be realized. This resulted in an adjustment to reduce the deferred income tax asset and net income in 2017 by approximately $0.3 million. We reevaluated our process relating to recoverability of our deferred income tax asset to conform to the requirements of ASC 740 for future periods.

The actions that we are taking are subject to ongoing review by our management as well as Audit Committee oversight. Although we plan to complete these remediation processes as quickly as possible, we cannot at this time estimate how long it will take. Further, our efforts may not be successful in remediating our material weakness and significant deficiency, nor can there be any assurances that we will not have additional material weaknesses and significant deficiencies in the future. Moreover, there can be no assurances that our auditors will agree with our management regarding the effectiveness of our remediation efforts.

In addition, we will incur additional costs in improving our internal control over financial reporting. If we are unable to successfully remediate these issues, or if we identify additional issues, we may not detect errors on a timely basis. This could harm our operating results, cause us to fail to meet our SEC reporting obligations or NYSE listing requirements on a timely basis, adversely affect our reputation, cause our stock price to decline or result in inaccurate financial reporting or material misstatements in our annual or interim financial statements.

AVI is a holding company that exists for the purpose of facilitating investments in licensed insurance companies operating across multiple jurisdictions. AVI’s primary subsidiaries are insurance companies that hold substantially all of its assets and conduct substantially all of its operations. Accordingly, AVI’s ability to pay dividends is dependent on the ability of its subsidiaries to make cash or other assets available to it, by dividend or otherwise. Dividends or distributions that may be paid by AVI’s insurance subsidiaries to it are limited or restricted by applicable insurance law and/or regulation. AVI’s subsidiaries may not be able to, or may not be permitted to, make distributions to enable AVI to meet its obligations and pay dividends.

AVI’s Puerto Rico insurance company subsidiaries may pay dividends to AVI subject to the restrictions set forth in Chapter 61 of the Puerto Rico Insurance Code. Generally, international insurance companies must be in compliance with applicable liquidity and premium indices in order to declare and pay dividends. Class 5 international life and disability insurance companies, in addition to paying dividends to persons other than policyholders, must at the time a dividend is paid have actuarially certified assets used in the conduct of its business which exceed its total liabilities. Furthermore, the amount of any dividend declared by a Class 5 life and disability international insurance company at any time may not exceed, in the aggregate (i) such excess in assets used to conduct its Class 5 insurance business over liabilities and (ii) other funds available for the payment of dividends which result from any part of its business other than the business conducted pursuant to its Class 5 authority. AVI’s banking subsidiary, AIBC, on the other hand, is

AVI’s Cayman Islands insurance company subsidiaries may pay dividends to AVI without restriction, provided the subsidiary is in good standing with its regulator CIMA. In addition, the payment of any dividend from a CIMA-regulated company must not cause the company to become insolvent or otherwise cause material harm to the company as a result of the dividend payment. For example, payment of a dividend in an amount that would cause the paying company to fail to meet minimum capital requirements is effectively prohibited by Cayman Islands regulation. See ‘‘Regulation—Cayman Islands.’’

AVI anticipates paying regular cash dividends on its common shares following this offering. Any decision to declare and pay dividends in the future will be made at the discretion of AVI’s board of directors and will depend on, among other things, AVI’s results of operations, financial condition, cash requirements, contractual restrictions and other factors that AVI’s board of directors may deem relevant. If AVI does not pay dividends, a return on investment in AVI’s common stock will be dependent upon the appreciation of the price of AVI’s common stock on the open market.

This prospectus contains forward-looking statements that are subject to certain risks and uncertainties. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “seek,” “assume,” “believe,” “may,” “will,” “should,” “could,” “would,” “likely” and other words and terms of similar meaning, including the negative of these or similar words and terms, in connection with any discussion of the timing or nature of future operating or financial performance or other events. However, not all forward-looking statements contain these identifying words. Forward-looking statements appear in a number of places throughout this prospectus and give our current expectations and projections relating to our financial condition, results of operations, plans, strategies, objectives, future performance, business and other matters.

These statements include forward-looking statements both with respect to us specifically and the insurance and reinsurance industry generally. These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These statements are based on certain assumptions and analyses made by us in light of our expertise and perception of historical trends, current conditions and expected future developments, as well as other factors believed to be appropriate in the circumstances. A number of important factors could cause actual results or conditions to differ materially from those contained or implied by the forward-looking statements, including the risks discussed in “Risk Factors.” Whether actual results and developments will conform to our expectations and conditions or not is subject to a number of risks and uncertainties that could cause actual results to differ materially from our expectations, including, but not limited to:

Accordingly, all of the forward-looking statements made in this prospectus are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. You should not place undue reliance on the forward-looking statements included in this prospectus or that may be made elsewhere from time to time by us, or on our behalf. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified in this prospectus which could cause actual results to differ before you make an investment decision.

The following table sets forth our cash and capitalization as of March 31, 2018, on an actual, pro forma for our acquisition of the Argus business and pro forma as adjusted basis to reflect the issuance and sale by us of             shares of common stock in this offering at an assumed initial public offering price of  $      per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, and our payment of estimated underwriting discounts and commissions and our estimated offering expenses.

The following table should be read in conjunction with the information under “Use of Proceeds,” “Selected Historical Consolidated Financial and Operating Information,” “Unaudited Pro Forma Condensed Combined Financial Statements,” “Reconciliation of Book Value per Share to GAAP” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included in this prospectus.

If you invest in our common stock, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the net tangible book value per share of common stock upon completion of this offering. The following table illustrates this per share dilution to new investors:

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

The following adjustments have been reflected in the unaudited pro forma condensed combined income statement: