1025-00001 · Client 1025 · Administrative

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Contract analysis Extract to table

CALDERWOOD & HARKNESS LLP

1301 Avenue of the Americas New York, New York 10019

INTERNAL MEMORANDUM — NOT FOR DISTRIBUTION

TO: Matter File — 1025-00001

FROM: Natasha Forbes

DATE: August 2, 2021

RE: Matter Status Summary — Quorum Insurance Holdings Corp. Follow-On Offering / Dormancy Record

This memorandum constitutes the formal matter status summary and dormancy record for the above-referenced engagement. It is prepared for purposes of the firm's internal matter management and records retention protocols and is intended to provide a comprehensive reference in the event that the engagement is reactivated at a future date. This memorandum is not intended for distribution to the client, opposing counsel, underwriters, or any third party, and it is protected by the attorney work product doctrine. All information contained herein is current as of the date set forth above unless otherwise noted.

1. MATTER IDENTIFICATION

The following information identifies the client, the matter, and the principal corporate and regulatory details relevant to this engagement:

Client: Quorum Insurance Holdings Corp. (Nasdaq: QIHC)

Matter Number: 1025-00001

Matter Type: Follow-On Offering (Capital Markets — Equity)

Governing Law: Delaware (corporate governance); federal securities laws (offering, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder)

Matter Opened: May 10, 2021

Current Status: DORMANT (effective June 28, 2021)

The following additional identifying information is provided for cross-reference and file management purposes:

The client is a publicly traded holding company organized under the laws of the State of Delaware, principally engaged in the underwriting of specialty insurance and casualty lines through its regulated insurance subsidiaries, and in the development and licensing of proprietary insurance technology solutions. The Company's common stock has been listed on the Nasdaq Global Select Market since its initial public offering in 2018.

2. ENGAGEMENT TEAM

The following Calderwood & Harkness LLP professionals were assigned to this matter during the active engagement period. All team members are resident in the firm's New York office.

Firm Office: Calderwood & Harkness LLP, 1301 Avenue of the Americas, New York, NY 10019

Billing Rates (Applicable to This Matter):

• Partners: $1,250 per hour

• Associates: $725 per hour

The engagement is subject to a negotiated fee cap of $175,000.00 for professional fees (exclusive of disbursements), as set forth in the executed engagement letter dated May 10, 2021. No paralegal or staff attorney time was billed to this matter during the active engagement period. No outside or contract attorneys were utilized.

Robert Adeyemi served as the primary relationship partner and maintained direct communications with the Company's General Counsel, Yusuf A. Okafor, and with the underwriter's deal team throughout the engagement period. Jennifer Kwon provided supervisory review of key transaction documents and participated in internal team discussions regarding deal structure and pricing considerations. Natasha Forbes served as the day-to-day lead associate responsible for drafting and coordinating the preliminary prospectus supplement, underwriting agreement, and ancillary transaction documents, and for managing the due diligence process. Eric Johannsen provided support on due diligence review, document drafting, and research on regulatory and insurance-related matters.

3. TRANSACTION SUMMARY

3.1 Overview of Proposed Offering

Quorum Insurance Holdings Corp. ("QIH" or the "Company") proposed a registered follow-on offering of shares of its common stock, par value $0.01 per share (the "Offering"). The proposed transaction was structured as a firm commitment underwriting in which the Company would sell newly issued shares of common stock directly to the public through a sole book-running manager. The Offering was structured as a 100% primary offering; no selling stockholders were contemplated, and no shares held by existing stockholders were to be included in the Offering.

The Offering was to be made pursuant to the Company's effective shelf registration statement on Form S-3 (File No. 333-248710), which was declared effective by the Securities and Exchange Commission (the "SEC") on September 18, 2020. The specific terms of the Offering were to be set forth in a prospectus supplement to be filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended. As discussed in greater detail in Section 5 below, the prospectus supplement reached advanced draft stage but was never filed with the SEC.

The Company's primary motivation for the Offering was to raise additional equity capital to fund general corporate purposes, including potential acquisitions of specialty insurance books of business and continued investment in the Company's proprietary InsurTech platform, QuorumEdge. Management and the board of directors determined that market conditions in the spring of 2021 presented a favorable window for a capital raise, given the Company's strong financial performance in fiscal year 2020 and in the first quarter of 2021.

3.2 Deal Economics

The key economic terms of the proposed Offering, as discussed and tentatively agreed upon by the Company, Trellis Peak Advisors LLC (as financial advisor to the Company), and Greystone Harwick & Co., LLC (as sole book-running manager), were as follows:

The pricing terms set forth above were indicative and subject to final negotiation and market conditions at the time of pricing. The $15.00 per share estimated offering price was established based on preliminary conversations between the Company, its financial advisor, and the underwriter and reflected then-current trading levels, comparable offering discounts in the insurance sector, and the Company's anticipated demand profile. The 5.50% underwriting discount was consistent with market practice for follow-on offerings of this size in the insurance vertical.

3.3 Intended Use of Proceeds

As set forth in the draft preliminary prospectus supplement, the Company intended to use the net proceeds from the Offering for the following purposes:

• General corporate purposes, including working capital, operating expenses, and other general corporate needs as determined by management in its discretion;

• Potential acquisitions of specialty insurance books of business, consistent with the Company's stated growth strategy of expanding its specialty lines underwriting capacity through targeted bolt-on acquisitions, with a particular focus on professional liability, cyber liability, and management liability lines;

• Continued investment in QuorumEdge, the Company's proprietary InsurTech platform operated through its wholly owned subsidiary, QuorumEdge Technology Solutions, Inc., which provides data analytics, automated underwriting, and claims management solutions to the Company's insurance subsidiaries and, on a limited basis, to third-party carriers.

No specific acquisition targets were identified in the draft prospectus supplement, and management retained full discretion over the allocation of net proceeds among the foregoing purposes.

3.4 Key Parties

The following parties were involved or engaged in connection with the proposed Offering:

Issuer:

Quorum Insurance Holdings Corp. 200 Constitution Plaza, Suite 3100 Hartford, CT 06103

• Chief Executive Officer: Martin R. Calloway

• Chief Financial Officer: Diana L. Prescott

• General Counsel & Corporate Secretary: Yusuf A. Okafor

• Chair of the Board of Directors: Helen M. Strickland

Sole Book-Running Manager / Underwriter:

Greystone Harwick & Co., LLC 399 Park Avenue, 28th Floor New York, NY 10022

• Head of Equity Capital Markets: David C. Reinhardt

• Deal Captain: Sarah P. Langford

Issuer's Counsel:

Calderwood & Harkness LLP 1301 Avenue of the Americas New York, NY 10019

• Responsible Partner: Robert Adeyemi

• Lead Associate: Natasha Forbes

Underwriter's Counsel:

Duval & Pressler LLP 1185 Avenue of the Americas, 34th Floor New York, NY 10036

• Lead Partner: Gregory R. Tannenbaum

• Working Associate: Megan S. Cavallo

Financial Advisor to the Issuer:

Trellis Peak Advisors LLC 55 East 52nd Street, Suite 2200 New York, NY 10055

• Managing Director: Alan W. Ng

Independent Auditors:

Carver, Bain & Associates LLP One Federal Street, Suite 3600 Boston, MA 02110

• Engagement Partner: Rebecca H. Trask, CPA

Transfer Agent & Registrar:

Continental Transfer & Trust Co. 17 Ashbury Asset Advisors New York, NY 10004

Directors' and Officers' Insurance Carrier:

Veridian Risk Assurance Corp. 600 Travis Street, Suite 4500 Houston, TX 77002

Largest Institutional Shareholder:

Birchwood Capital Partners, L.P. Approximate holdings: ~4,270,000 shares (~11.2% of outstanding common stock as of the most recent proxy filing)

3.5 Material Subsidiaries

QIH conducts its business through the following material operating subsidiaries:

(a) Quorum Specialty Insurance Company. Domiciled in Connecticut; Connecticut Department of Insurance entity number 47832. Quorum Specialty is the Company's primary regulated insurance subsidiary and underwrites professional liability, cyber liability, and management liability lines of business. Quorum Specialty is an admitted carrier in all fifty states and the District of Columbia.

(b) Quorum National Casualty Co. Domiciled in Delaware; Delaware Department of Insurance entity number 10591. Quorum National operates as an excess and surplus lines casualty insurer and writes on a non-admitted basis in select jurisdictions. Quorum National focuses on hard-to-place casualty risks and specialty programs.

(c) QuorumEdge Technology Solutions, Inc. Incorporated in Delaware; wholly owned subsidiary of QIH. QuorumEdge is a fintech/InsurTech platform subsidiary that develops and operates the Company's proprietary QuorumEdge technology suite, including data analytics, automated underwriting decision engines, and digital claims management tools. QuorumEdge is not a regulated insurer and does not underwrite insurance policies.

Each of the foregoing subsidiaries is wholly owned, directly or indirectly, by Quorum Insurance Holdings Corp. No minority interests or joint venture arrangements exist with respect to any material subsidiary.

3.6 Lock-Up. The proposed Offering contemplated a 90-day lock-up period commencing on the date of pricing. The lock-up would apply to all directors, executive officers, and holders of 5% or more of the Company's outstanding common stock, including Birchwood Capital Partners, L.P. Under the terms of the draft lock-up agreement (which was circulated on June 7, 2021 but never executed), each locked-up party would agree not to, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock during the lock-up period, without the prior written consent of Greystone Harwick & Co., LLC. The form of lock-up agreement was based on Greystone Harwick's standard form, with limited negotiation expected from Birchwood Capital Partners, L.P. regarding customary carve-outs for existing 10b5-1 trading plans.

3.7 Issuer Financial Highlights

The Company's most recently reported financial results as of the date on which the engagement became active were as follows:

The Company's financial results for fiscal year 2020 and Q1 2021 reflected continued growth in gross written premium across the Company's specialty lines, favorable loss development, and increasing contribution from QuorumEdge licensing revenues. These results were among the factors that supported management's and the board's determination that the spring of 2021 was an opportune time to pursue a follow-on offering.

4. TRANSACTION TIMELINE

The following table sets forth a detailed chronology of all material events in connection with the proposed Offering, from the effectiveness of the underlying shelf registration statement through the preparation of this dormancy record:

5. STATUS OF WORK PRODUCT

The following table catalogues each principal document or deliverable associated with the proposed Offering, together with its current status and the date of the last draft or action:

Important Notes Regarding Status of Work Product:

No documents were filed with the SEC in connection with the proposed Offering. No prospectus supplement was filed pursuant to Rule 424(b) or any other provision. No closing occurred, and no underwriting agreement was executed. No legal opinion or negative assurance letter was delivered by Calderwood & Harkness LLP to the underwriter or any other party. No comfort letter was finalized or delivered by Carver, Bain & Associates LLP. No lock-up agreements were executed by any director, executive officer, or stockholder. No shares were issued, no proceeds were received, and no transfer agent instructions were delivered.

All draft documents remain in the form described above and are preserved in the firm's document management system under Matter No. 1025-00001 in their last-circulated state. No further revisions have been made since the dates indicated, and no further revisions should be made unless the engagement is formally reactivated.

6. REASON FOR DORMANCY

The proposed Offering was placed on hold due to a sustained decline in the trading price of QIH common stock during the period from mid-May through late June 2021, which rendered the contemplated offering price not achievable and made execution of the Offering inadvisable from both the Company's and the underwriter's perspective. The relevant circumstances are summarized as follows:

(a) The Company's common stock closed at $16.00 per share on May 7, 2021 — the reference date used by the Company, its financial advisor, and the underwriter for purposes of establishing the estimated public offering price of $15.00 per share (representing an approximately 6.25% discount to market). This pricing assumption was central to the deal economics set forth in Section 3.2 above.

(b) Beginning in mid-May 2021, QIH's share price experienced a sustained decline attributable to a combination of factors, including broader market softness in the insurance sector, profit-taking by institutional holders following a strong Q1 earnings release, and sector-wide concerns regarding potential catastrophe losses in the upcoming Atlantic hurricane season.

(c) By June 14, 2021, QIH's share price had declined to $13.85 per share at the close of trading on Nasdaq, representing a decline of approximately 13.4% from the May 7, 2021 reference price. At this price level, the contemplated offering price of $15.00 per share was above the prevailing market price and therefore not achievable. Pricing discussions between the Company, Trellis Peak Advisors, and Greystone Harwick were paused on that date.

(d) The Company's share price continued to decline through late June 2021, reaching approximately $13.10 per share by June 28, 2021.

(e) Greystone Harwick & Co., LLC communicated to the Company and to Trellis Peak Advisors that it was not willing to proceed with the Offering at current market levels. Greystone Harwick indicated that, given the magnitude of the share price decline and the lack of a visible near-term catalyst for recovery, it was not in a position to support a book-building effort at a price that would be attractive to the Company.

(f) The Company elected to shelve the Offering rather than reduce the offering size or reprice the transaction at a lower price per share. Management determined that a significantly lower offering price would result in greater dilution to existing stockholders without achieving the Company's capital-raising objectives, and that it was preferable to defer the Offering until market conditions improved.

(g) On June 28, 2021, QIH and Greystone Harwick & Co., LLC mutually agreed to pause the Offering pending improvement in market conditions. This decision was communicated to Calderwood & Harkness by Yusuf A. Okafor on or about that date.

(h) On July 15, 2021, Yusuf Okafor confirmed to Robert Adeyemi by telephone that the Company views the Offering as shelved indefinitely but is not formally terminating the Calderwood & Harkness engagement or the Greystone Harwick underwriting arrangement. Okafor indicated that the Company may revisit the Offering in Q4 2021 or early 2022 if the stock price recovers to levels that would support the originally contemplated economics, or if the Company identifies a near-term acquisition opportunity that warrants accelerating the capital raise.

(i) No formal termination letter has been exchanged between any of the parties. The Calderwood & Harkness engagement letter and the Greystone Harwick underwriting engagement letter remain in effect as of the date of this memorandum.

7. KEY OUTSTANDING ITEMS IF REVIVED

In the event that the Company elects to reactivate the Offering, the following items will need to be addressed. This checklist is intended to serve as a comprehensive reference for the engagement team and should be reviewed and updated at the time of any reactivation to account for intervening developments:

(a) Shelf Registration Statement Validity

The Company's shelf registration statement on Form S-3 (File No. 333-248710) was declared effective by the SEC on September 18, 2020. Under current SEC rules, the shelf registration statement is valid for a period of three years from the date of initial effectiveness — i.e., through September 18, 2023. Accordingly, if the Offering is revived on or before September 18, 2023, the existing shelf registration statement may be used as the basis for the Offering, subject to confirmation that the shelf remains effective, that the Company is current in its Exchange Act reporting obligations, and that no post-effective amendments are required.

If the Offering is revived after September 18, 2023, the shelf registration statement will have expired, and the Company will be required to file a new shelf registration statement on Form S-3 (or, if the Company no longer meets the eligibility requirements for Form S-3, on Form S-1) or a post-effective amendment, which must be declared effective by the SEC prior to commencement of the Offering.

Additionally, the engagement team should confirm at the time of revival that the Company continues to satisfy the eligibility requirements for use of Form S-3, including the public float and reporting history requirements.

(b) Financial Information Update

All financial information, risk factors, and business descriptions contained in the draft preliminary prospectus supplement must be updated to reflect the most recent fiscal year and interim period financial statements available at the time of revival. The prospectus supplement incorporates by reference the Company's filings under the Securities Exchange Act of 1934, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements. All such incorporated documents must be current at the time the prospectus supplement is filed, and any material developments occurring after the date of the last incorporated filing must be disclosed in the prospectus supplement or in a Current Report on Form 8-K filed prior to or concurrently with the filing of the prospectus supplement.

The engagement team should also review and update all risk factor disclosure, management's discussion and analysis, and any forward-looking statements to reflect current conditions and developments in the Company's business, financial condition, and results of operations.

A new or updated bring-down comfort letter must be obtained from Carver, Bain & Associates LLP covering the most recent audited annual financial statements and any unaudited interim financial statements included or incorporated by reference in the prospectus supplement. The draft comfort letter received on May 21, 2021 will be stale and cannot be relied upon. The engagement team should coordinate with Rebecca H. Trask at Carver, Bain & Associates to initiate the comfort letter process sufficiently in advance of the anticipated pricing date and should confirm the scope and timing of any circle-up and change-period procedures.

(d) Board Authorization

The Board of Directors adopted resolutions on June 2, 2021 authorizing the Offering. Depending on the elapsed time between the date of those resolutions and the date of revival, a reaffirmation resolution or an entirely new board authorization may be appropriate or required. The engagement team should review the original resolutions to determine whether they contain any time limitations or conditions that may have expired or lapsed. In addition, the engagement team should confirm whether any changes in the composition of the Board of Directors have occurred since June 2, 2021, and whether any new directors require orientation regarding the proposed Offering or have any conflicts of interest that need to be addressed.

(e) Lock-Up Agreements

The form of lock-up agreement circulated on June 7, 2021 was never executed by any party. Upon revival, the lock-up agreements must be recirculated to, and executed by, all directors, executive officers, and holders of 5% or more of the Company's outstanding common stock, including Birchwood Capital Partners, L.P. The engagement team should confirm the then-current list of persons subject to the lock-up requirement by reviewing the Company's most recent proxy statement, Section 16 filings, and Schedule 13D/13G filings. The lock-up period, terms, and any carve-outs should be re-confirmed with Greystone Harwick.

(f) Underwriter Re-Engagement

The engagement team should re-engage with Greystone Harwick & Co., LLC to confirm that Greystone Harwick remains willing to serve as sole book-running manager for the Offering and to negotiate updated pricing, discount rate, offering size, and allocation terms reflecting then-current market conditions and the Company's financial performance. If Greystone Harwick is unwilling or unable to proceed, the Company and its financial advisor should evaluate whether a replacement underwriter is appropriate. In either case, the underwriting agreement must be revised and finalized to reflect current terms, and a new or updated underwriting engagement letter may be required.

(g) Due Diligence Update

A comprehensive due diligence update will be required upon revival. At a minimum, the following steps should be taken:

• Conduct a new management due diligence session with the Company's senior executive team and a bring-down due diligence review covering all material developments since the May 19, 2021 due diligence session;

• Review all SEC filings, press releases, investor presentations, and other public disclosures made by the Company during the dormancy period;

• Review all material contracts entered into, amended, or terminated during the dormancy period;

• Review the status of all litigation, arbitration, regulatory proceedings, and governmental investigations involving the Company or its subsidiaries;

• Review the financial condition, statutory surplus, risk-based capital (RBC) ratios, and dividend capacity of Quorum Specialty Insurance Company and Quorum National Casualty Co.;

• Obtain updated certificates of good standing from the Company's state of incorporation (Delaware) and from each jurisdiction in which the Company's insurance subsidiaries are domiciled (Connecticut and Delaware);

• Obtain an updated capitalization table and stockholder list reflecting any changes in the Company's capital structure or significant stockholder positions;

• Review any changes in the insurance regulatory environment, including any new or proposed legislation, regulations, or regulatory guidance affecting the Company's insurance subsidiaries; and

• Review the status of the QuorumEdge platform and any material developments in the Company's InsurTech business.

(h) 10b5-1 and Negative Assurance Updates

The draft 10b5-1 representation letter circulated on June 7, 2021 must be updated and executed by the Company's CEO (Martin R. Calloway) and CFO (Diana L. Prescott) at the time of pricing. The 10b5-1 representation letter should confirm that the Company is not in possession of material nonpublic information at the time of the Offering. In addition, the legal opinion and negative assurance letter to be delivered by Calderwood & Harkness LLP to the underwriter must be updated to reflect the current state of facts and applicable law at the time of delivery. The legal opinion outline circulated on June 7, 2021 should be revised as necessary.

(i) Conflicts Re-Check

A conflicts re-check should be run at Calderwood & Harkness LLP at the time of revival to confirm that no new conflicts of interest have arisen during the dormancy period with respect to any of the parties to the transaction, including the Company, the underwriter, underwriter's counsel, and any significant stockholders. The conflicts re-check should cover any new client engagements, lateral hires, and investment positions that may have been established during the dormancy period.

(j) FINRA Filing

The engagement team should confirm whether any prior FINRA Corporate Financing Department materials filed or prepared in connection with the Offering remain current or whether re-submission is required. If Greystone Harwick filed or prepared any materials with FINRA's Corporate Financing Department regarding the proposed underwriting terms, those materials may need to be updated to reflect revised offering terms, changes in compensation arrangements, or other developments. Coordination with Greystone Harwick and Duval & Pressler will be necessary.

(k) Nasdaq Listing Application

A supplemental listing application must be prepared and filed with the Nasdaq Stock Market for the additional shares of common stock to be issued in the Offering. The supplemental listing application should reflect the number of shares to be offered (including shares subject to the greenshoe option) and should be filed sufficiently in advance of the anticipated pricing date to allow for Nasdaq review and approval.

8. FINANCIAL SUMMARY

8.1 Professional Fees

The following table summarizes all professional fees incurred in connection with this matter through the date of the final invoice:

8.2 Disbursements. The following table summarizes all disbursements incurred in connection with this matter through the date of the final invoice:

8.3 Totals.

8.4 Invoice Information

The following additional billing and remittance information is provided for reference:

• Invoice Date: July 30, 2021

• Invoice Number: Refer to firm billing records

• Payment Terms: Net 30 days from date of invoice

• Payment Status: To be updated upon receipt of payment

• Remittance Bank: Harborview Trust & Savings Bank

• Account Number: 4478-2201-6693

• ABA Routing Number: 021-307-884

Note: No additional professional fees or disbursements will be incurred in connection with this matter unless and until the engagement is formally reactivated by the client and the engagement team. Time incurred in preparing this dormancy record has been recorded as a firm administrative matter and has not been billed to the client.

9. FILE LOCATION

All documents, correspondence, work product, and other materials relating to this matter are maintained and preserved as follows:

(a) Electronic Files. All electronic documents, drafts, correspondence, memoranda, research, and other electronic work product are maintained in the firm's document management system (Vireo Data Systems) under Matter No. 1025-00001. All electronic work product has been indexed and preserved as-is per Robert Adeyemi's directive of July 15, 2021. No documents should be modified, deleted, or moved without the prior approval of the Responsible Partner.

(b) Physical Files. To the extent any physical files, hard-copy documents, or original executed documents exist in connection with this matter, they are located in the New York office, Capital Markets filing area, Cabinet 14-C. The executed engagement letter (original) is maintained in the physical file.

(c) Retention. All files — electronic and physical — should be retained in accordance with the firm's standard records retention policy and the terms of the engagement letter. Given the possibility that this engagement may be reactivated, no files should be culled, archived off-site, or destroyed without the prior written approval of Robert Adeyemi.

This dormancy record concludes the matter status summary for Matter No. 1025-00001.

Prepared by:

________________________________________

Natasha Forbes Associate, Capital Markets Calderwood & Harkness LLP 1301 Avenue of the Americas New York, NY 10019

Date: August 2, 2021

CONFIDENTIAL — INTERNAL MEMORANDUM — ATTORNEY WORK PRODUCT — NOT FOR DISTRIBUTION

Calderwood & Harkness LLP — Matter No. 1025-00001 — Quorum Insurance Holdings Corp. Follow-On Offering — Dormancy Record

Field	Detail
Client EIN	82-3741956
Client CIK	0001784203
CUSIP (Common Stock)	74917R108
Ticker Symbol	QIHC
Exchange	Nasdaq Global Select Market
Client Headquarters	200 Constitution Plaza, Suite 3100, Hartford, CT 06103
State of Incorporation	Delaware
Registered Agent	CT Statutory Agent Services LLC, 1209 Orange Street, Wilmington, DE 19801
Par Value (Common Stock)	$0.01 per share
Role	Name	Practice Group
Responsible Partner	Robert Adeyemi	Capital Markets
Billing Partner	Jennifer Kwon	Capital Markets
Lead Associate	Natasha Forbes	Capital Markets
Working Associate	Eric Johannsen	Capital Markets
Parameter	Detail
Primary shares offered (base deal)	3,000,000 shares of common stock
Estimated public offering price	$15.00 per share
Discount to market	Approximately 6.25% discount to the May 7, 2021 closing price of $16.00 per share
Aggregate gross proceeds (base deal)	$45,000,000
Over-allotment option (greenshoe)	Up to 450,000 additional shares (15% of base offering), exercisable by the underwriter within 30 days of pricing
Maximum offering size (with greenshoe)	3,450,000 shares × $15.00 per share = $51,750,000
Underwriting discount	5.50% of gross proceeds = $2,475,000 (base deal); $2,846,250 (if greenshoe fully exercised)
Net proceeds to issuer (before expenses, base deal)	$42,525,000
Estimated offering expenses (excluding underwriting discount)	$385,000 (including legal fees, accounting fees, printing costs, SEC and FINRA filing fees, transfer agent fees, and miscellaneous expenses)

Net proceeds to issuer (after expenses, base deal)	$42,140,000
Pre-offering shares outstanding	38,125,000 shares
Post-offering shares outstanding (base deal, no greenshoe)	41,125,000 shares
Post-offering shares outstanding (full greenshoe)	41,575,000 shares
Approximate market capitalization (May 2021)	~$610,000,000 (based on $16.00 closing price and 38,125,000 shares outstanding)
Period	Total Revenue	Net Income
Fiscal Year 2020 (audited)	$487.3 million	$31.6 million
Q1 2021 (unaudited)	$131.8 million	$9.4 million
Date	Event
September 18, 2020	The SEC declares effective QIH's shelf registration statement on Form S-3 (File No. 333-248710), permitting the Company to offer and sell, from time to time, an indeterminate amount of securities, including common stock, preferred stock, debt securities, warrants, and units, at prices and on terms to be determined at the time of offering.
May 10, 2021	Calderwood & Harkness engagement opens. Engagement letter executed by Robert Adeyemi on behalf of the firm and by Yusuf A. Okafor on behalf of the Company. Initial organizational call held among the engagement team, the Company (Calloway, Prescott, Okafor), Trellis Peak Advisors (Ng), and Greystone Harwick (Reinhardt, Langford). Preliminary transaction timeline, deal structure, and key workstreams discussed.
May 12, 2021	Underwriting engagement letter between QIH and Greystone Harwick & Co., LLC executed, establishing Greystone Harwick as sole book-running manager for the proposed Offering and setting forth the indicative terms of the underwriting arrangement, including the proposed discount and greenshoe structure.
May 14, 2021	First draft of the preliminary prospectus supplement circulated by Calderwood & Harkness to the Company, underwriter's counsel (Duval & Pressler), and auditors (Carver, Bain & Associates) for review. Due diligence request list delivered to the Company (Okafor). The request list encompassed customary categories, including organizational documents, board minutes, material contracts, litigation and regulatory matters, insurance subsidiary financial condition, capitalization, and stockholder information.
May 19, 2021	Management due diligence call held. Participants included Calloway (CEO), Prescott (CFO), and Okafor (GC) on behalf of the Company; Langford (Greystone Harwick) on behalf of the underwriter; Tannenbaum and Cavallo (Duval & Pressler) on behalf of underwriter's counsel; Adeyemi and Forbes (Calderwood & Harkness) on behalf of issuer's counsel. The session covered the Company's business, financial condition, results of operations, risk factors, regulatory compliance, litigation, insurance subsidiary capital adequacy, and QuorumEdge platform development.
May 20, 2021	Due diligence session memorandum completed by Natasha Forbes and reviewed by Robert Adeyemi. Memorandum summarized all topics discussed, management representations, open items, and follow-up requests.
May 21, 2021	Carver, Bain & Associates LLP delivers draft comfort letter to Calderwood & Harkness and Duval & Pressler. The draft comfort letter covered the Company's audited financial statements for fiscal year 2020 and the unaudited interim financial statements for Q1 2021, including customary circle-up, tick-and-tie, and change-period procedures.
May 25, 2021	Revised preliminary prospectus supplement circulated, reflecting comments received from the Company, underwriter, and underwriter's counsel. Working draft of the underwriting agreement circulated by Calderwood & Harkness for review and comment.
June 2, 2021	Board of Directors of QIH holds a meeting at which the board authorizes the Offering and adopts resolutions approving (i) the issuance and sale of up to 3,450,000 shares of common stock (including shares subject to the greenshoe option), (ii) the terms of the underwriting arrangement, (iii) the form and filing of the prospectus supplement, and (iv) related matters, including authorization of officers to execute transaction documents.
June 7, 2021	Draft 10b5-1 representation letter, form of lock-up agreement, and legal opinion outline circulated by Calderwood & Harkness to the Company, underwriter, and underwriter's counsel.
June 14, 2021	QIH share price declines to $13.85 per share at close of trading on Nasdaq. This represents a decline of approximately 13.4% from the May 7, 2021 closing price of $16.00 per share and renders the contemplated offering price of $15.00 per share not achievable. Pricing discussions between the Company, Trellis Peak Advisors, and Greystone Harwick paused.
June 28, 2021	Greystone Harwick & Co., LLC and QIH mutually agree to pause the Offering pending improvement in market conditions. QIH share price at close of trading on this date was approximately $13.10 per share. No formal termination letter exchanged; the parties agreed to revisit the Offering if and when market conditions improve.
July 15, 2021	Internal Calderwood & Harkness email from Robert Adeyemi to the engagement team confirming that the matter has been placed on hold pursuant to the mutual decision of the Company and underwriter. Adeyemi directs that all electronic work product be indexed and preserved as-is and that no further time be billed to the matter unless the engagement is reactivated. Adeyemi also reports that Yusuf Okafor confirmed by telephone that the Company views the Offering as shelved indefinitely but is not formally terminating the engagement or the underwriting arrangement.
July 30, 2021	Final invoice issued to the Company in the amount of $95,645.00, covering all professional fees and disbursements incurred through the date of the matter hold.
August 2, 2021	This dormancy record prepared by Natasha Forbes.
Document	Status	Date of Last Draft / Action

Engagement Letter (Calderwood & Harkness / QIH)	Executed	May 10, 2021
Preliminary Prospectus Supplement	Draft (not filed with the SEC)	May 25, 2021
Underwriting Agreement	Working draft (not executed)	May 25, 2021
Board Resolutions (Authorization of Offering)	Adopted by the Board of Directors	June 2, 2021
Form of Lock-Up Agreement	Draft (not executed by any party)	June 7, 2021
Due Diligence Request List	Delivered to Company	May 14, 2021
Due Diligence Session Memorandum	Completed	May 20, 2021
10b5-1 Representation Letter	Draft (not executed)	June 7, 2021
Legal Opinion Outline	Draft (not finalized or delivered)	June 7, 2021
Comfort Letter (Carver, Bain & Associates LLP)	Draft received from auditors (not finalized)	May 21, 2021
Timekeeper	Hours	Rate	Amount
Robert Adeyemi (Partner)	18.6	$1,250/hr	$23,250.00
Jennifer Kwon (Partner)	4.2	$1,250/hr	$5,250.00
Natasha Forbes (Associate)	49.8	$725/hr	$36,105.00
Eric Johannsen (Associate)	38.4	$725/hr	$27,840.00
Total Professional Fees	111.0	$92,445.00
Category	Amount
EDGAR Filing / Conversion Services (Pinnacle Filing Solutions, Inc.)	$1,850.00
Westmark Data Systems / Legal Research	$975.00
Courier / Delivery	$215.00
Conference Call Services	$160.00
Total Disbursements	$3,200.00
Item	Amount
Total professional fees billed	$92,445.00
Total disbursements billed	$3,200.00

Total invoiced	$95,645.00
Fee cap per engagement letter (professional fees only)	$175,000.00
Remaining under fee cap	$82,555.00 ($175,000.00 − $92,445.00)

CALDERWOOD & HARKNESS LLP
1301 Avenue of the Americas New York, New York 10019
INTERNAL MEMORANDUM — NOT FOR DISTRIBUTION
TO: Matter File — 1025-00001
FROM: Natasha Forbes
DATE: August 2, 2021
RE: Matter Status Summary — Quorum Insurance Holdings Corp. Follow-On Offering / Dormancy Record
This memorandum constitutes the formal matter status summary and dormancy record for the above-referenced engagement. It is prepared for purposes of the firm's internal matter management and records retention protocols and is intended to provide a comprehensive reference in the event that the engagement is reactivated at a future date. This memorandum is not intended for distribution to the client, opposing counsel, underwriters, or any third party, and it is protected by the attorney work product doctrine. All information contained herein is current as of the date set forth above unless otherwise noted.
1. MATTER IDENTIFICATION
The following information identifies the client, the matter, and the principal corporate and regulatory details relevant to this engagement:
Client: Quorum Insurance Holdings Corp. (Nasdaq: QIHC)
Matter Number: 1025-00001
Matter Type: Follow-On Offering (Capital Markets — Equity)
Governing Law: Delaware (corporate governance); federal securities laws (offering, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder)
Matter Opened: May 10, 2021
Current Status: DORMANT (effective June 28, 2021)
The following additional identifying information is provided for cross-reference and file management purposes:
The client is a publicly traded holding company organized under the laws of the State of Delaware, principally engaged in the underwriting of specialty insurance and casualty lines through its regulated insurance subsidiaries, and in the development and licensing of proprietary insurance technology solutions. The Company's common stock has been listed on the Nasdaq Global Select Market since its initial public offering in 2018.
2. ENGAGEMENT TEAM
The following Calderwood & Harkness LLP professionals were assigned to this matter during the active engagement period. All team members are resident in the firm's New York office.
Firm Office: Calderwood & Harkness LLP, 1301 Avenue of the Americas, New York, NY 10019
Billing Rates (Applicable to This Matter):
•  Partners: $1,250 per hour
•  Associates: $725 per hour
The engagement is subject to a negotiated fee cap of $175,000.00 for professional fees (exclusive of disbursements), as set forth in the executed engagement letter dated May 10, 2021. No paralegal or staff attorney time was billed to this matter during the active engagement period. No outside or contract attorneys were utilized.
Robert Adeyemi served as the primary relationship partner and maintained direct communications with the Company's General Counsel, Yusuf A. Okafor, and with the underwriter's deal team throughout the engagement period. Jennifer Kwon provided supervisory review of key transaction documents and participated in internal team discussions regarding deal structure and pricing considerations. Natasha Forbes served as the day-to-day lead associate responsible for drafting and coordinating the preliminary prospectus supplement, underwriting agreement, and ancillary transaction documents, and for managing the due diligence process. Eric Johannsen provided support on due diligence review, document drafting, and research on regulatory and insurance-related matters.
3. TRANSACTION SUMMARY
3.1 Overview of Proposed Offering
Quorum Insurance Holdings Corp. ("QIH" or the "Company") proposed a registered follow-on offering of shares of its common stock, par value $0.01 per share (the "Offering"). The proposed transaction was structured as a firm commitment underwriting in which the Company would sell newly issued shares of common stock directly to the public through a sole book-running manager. The Offering was structured as a 100% primary offering; no selling stockholders were contemplated, and no shares held by existing stockholders were to be included in the Offering.
The Offering was to be made pursuant to the Company's effective shelf registration statement on Form S-3 (File No. 333-248710), which was declared effective by the Securities and Exchange Commission (the "SEC") on September 18, 2020. The specific terms of the Offering were to be set forth in a prospectus supplement to be filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended. As discussed in greater detail in Section 5 below, the prospectus supplement reached advanced draft stage but was never filed with the SEC.
The Company's primary motivation for the Offering was to raise additional equity capital to fund general corporate purposes, including potential acquisitions of specialty insurance books of business and continued investment in the Company's proprietary InsurTech platform, QuorumEdge. Management and the board of directors determined that market conditions in the spring of 2021 presented a favorable window for a capital raise, given the Company's strong financial performance in fiscal year 2020 and in the first quarter of 2021.
3.2 Deal Economics
The key economic terms of the proposed Offering, as discussed and tentatively agreed upon by the Company, Trellis Peak Advisors LLC (as financial advisor to the Company), and Greystone Harwick & Co., LLC (as sole book-running manager), were as follows:
The pricing terms set forth above were indicative and subject to final negotiation and market conditions at the time of pricing. The $15.00 per share estimated offering price was established based on preliminary conversations between the Company, its financial advisor, and the underwriter and reflected then-current trading levels, comparable offering discounts in the insurance sector, and the Company's anticipated demand profile. The 5.50% underwriting discount was consistent with market practice for follow-on offerings of this size in the insurance vertical.
3.3 Intended Use of Proceeds
As set forth in the draft preliminary prospectus supplement, the Company intended to use the net proceeds from the Offering for the following purposes:
•  General corporate purposes, including working capital, operating expenses, and other general corporate needs as determined by management in its discretion;
•  Potential acquisitions of specialty insurance books of business, consistent with the Company's stated growth strategy of expanding its specialty lines underwriting capacity through targeted bolt-on acquisitions, with a particular focus on professional liability, cyber liability, and management liability lines;
•  Continued investment in QuorumEdge, the Company's proprietary InsurTech platform operated through its wholly owned subsidiary, QuorumEdge Technology Solutions, Inc., which provides data analytics, automated underwriting, and claims management solutions to the Company's insurance subsidiaries and, on a limited basis, to third-party carriers.
No specific acquisition targets were identified in the draft prospectus supplement, and management retained full discretion over the allocation of net proceeds among the foregoing purposes.
3.4 Key Parties
The following parties were involved or engaged in connection with the proposed Offering:
Issuer:
Quorum Insurance Holdings Corp. 200 Constitution Plaza, Suite 3100 Hartford, CT 06103
•  Chief Executive Officer: Martin R. Calloway
•  Chief Financial Officer: Diana L. Prescott
•  General Counsel & Corporate Secretary: Yusuf A. Okafor
•  Chair of the Board of Directors: Helen M. Strickland
Sole Book-Running Manager / Underwriter:
Greystone Harwick & Co., LLC 399 Park Avenue, 28th Floor New York, NY 10022
•  Head of Equity Capital Markets: David C. Reinhardt
•  Deal Captain: Sarah P. Langford
Issuer's Counsel:
Calderwood & Harkness LLP 1301 Avenue of the Americas New York, NY 10019
•  Responsible Partner: Robert Adeyemi
•  Lead Associate: Natasha Forbes
Underwriter's Counsel:
Duval & Pressler LLP 1185 Avenue of the Americas, 34th Floor New York, NY 10036
•  Lead Partner: Gregory R. Tannenbaum
•  Working Associate: Megan S. Cavallo
Financial Advisor to the Issuer:
Trellis Peak Advisors LLC 55 East 52nd Street, Suite 2200 New York, NY 10055
•  Managing Director: Alan W. Ng
Independent Auditors:
Carver, Bain & Associates LLP One Federal Street, Suite 3600 Boston, MA 02110
•  Engagement Partner: Rebecca H. Trask, CPA
Transfer Agent & Registrar:
Continental Transfer & Trust Co. 17 Ashbury Asset Advisors New York, NY 10004
Directors' and Officers' Insurance Carrier:
Veridian Risk Assurance Corp. 600 Travis Street, Suite 4500 Houston, TX 77002
Largest Institutional Shareholder:
Birchwood Capital Partners, L.P. Approximate holdings: ~4,270,000 shares (~11.2% of outstanding common stock as of the most recent proxy filing)
3.5 Material Subsidiaries
QIH conducts its business through the following material operating subsidiaries:
(a) Quorum Specialty Insurance Company. Domiciled in Connecticut; Connecticut Department of Insurance entity number 47832. Quorum Specialty is the Company's primary regulated insurance subsidiary and underwrites professional liability, cyber liability, and management liability lines of business. Quorum Specialty is an admitted carrier in all fifty states and the District of Columbia.
(b) Quorum National Casualty Co. Domiciled in Delaware; Delaware Department of Insurance entity number 10591. Quorum National operates as an excess and surplus lines casualty insurer and writes on a non-admitted basis in select jurisdictions. Quorum National focuses on hard-to-place casualty risks and specialty programs.
(c) QuorumEdge Technology Solutions, Inc. Incorporated in Delaware; wholly owned subsidiary of QIH. QuorumEdge is a fintech/InsurTech platform subsidiary that develops and operates the Company's proprietary QuorumEdge technology suite, including data analytics, automated underwriting decision engines, and digital claims management tools. QuorumEdge is not a regulated insurer and does not underwrite insurance policies.
Each of the foregoing subsidiaries is wholly owned, directly or indirectly, by Quorum Insurance Holdings Corp. No minority interests or joint venture arrangements exist with respect to any material subsidiary.
3.6 Lock-Up.  The proposed Offering contemplated a 90-day lock-up period commencing on the date of pricing. The lock-up would apply to all directors, executive officers, and holders of 5% or more of the Company's outstanding common stock, including Birchwood Capital Partners, L.P. Under the terms of the draft lock-up agreement (which was circulated on June 7, 2021 but never executed), each locked-up party would agree not to, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock during the lock-up period, without the prior written consent of Greystone Harwick & Co., LLC. The form of lock-up agreement was based on Greystone Harwick's standard form, with limited negotiation expected from Birchwood Capital Partners, L.P. regarding customary carve-outs for existing 10b5-1 trading plans.
3.7 Issuer Financial Highlights
The Company's most recently reported financial results as of the date on which the engagement became active were as follows:
The Company's financial results for fiscal year 2020 and Q1 2021 reflected continued growth in gross written premium across the Company's specialty lines, favorable loss development, and increasing contribution from QuorumEdge licensing revenues. These results were among the factors that supported management's and the board's determination that the spring of 2021 was an opportune time to pursue a follow-on offering.
4. TRANSACTION TIMELINE
The following table sets forth a detailed chronology of all material events in connection with the proposed Offering, from the effectiveness of the underlying shelf registration statement through the preparation of this dormancy record:
5. STATUS OF WORK PRODUCT
The following table catalogues each principal document or deliverable associated with the proposed Offering, together with its current status and the date of the last draft or action:
Important Notes Regarding Status of Work Product:
No documents were filed with the SEC in connection with the proposed Offering. No prospectus supplement was filed pursuant to Rule 424(b) or any other provision. No closing occurred, and no underwriting agreement was executed. No legal opinion or negative assurance letter was delivered by Calderwood & Harkness LLP to the underwriter or any other party. No comfort letter was finalized or delivered by Carver, Bain & Associates LLP. No lock-up agreements were executed by any director, executive officer, or stockholder. No shares were issued, no proceeds were received, and no transfer agent instructions were delivered.
All draft documents remain in the form described above and are preserved in the firm's document management system under Matter No. 1025-00001 in their last-circulated state. No further revisions have been made since the dates indicated, and no further revisions should be made unless the engagement is formally reactivated.
6. REASON FOR DORMANCY
The proposed Offering was placed on hold due to a sustained decline in the trading price of QIH common stock during the period from mid-May through late June 2021, which rendered the contemplated offering price not achievable and made execution of the Offering inadvisable from both the Company's and the underwriter's perspective. The relevant circumstances are summarized as follows:
(a) The Company's common stock closed at $16.00 per share on May 7, 2021 — the reference date used by the Company, its financial advisor, and the underwriter for purposes of establishing the estimated public offering price of $15.00 per share (representing an approximately 6.25% discount to market). This pricing assumption was central to the deal economics set forth in Section 3.2 above.
(b) Beginning in mid-May 2021, QIH's share price experienced a sustained decline attributable to a combination of factors, including broader market softness in the insurance sector, profit-taking by institutional holders following a strong Q1 earnings release, and sector-wide concerns regarding potential catastrophe losses in the upcoming Atlantic hurricane season.
(c) By June 14, 2021, QIH's share price had declined to $13.85 per share at the close of trading on Nasdaq, representing a decline of approximately 13.4% from the May 7, 2021 reference price. At this price level, the contemplated offering price of $15.00 per share was above the prevailing market price and therefore not achievable. Pricing discussions between the Company, Trellis Peak Advisors, and Greystone Harwick were paused on that date.
(d) The Company's share price continued to decline through late June 2021, reaching approximately $13.10 per share by June 28, 2021.
(e) Greystone Harwick & Co., LLC communicated to the Company and to Trellis Peak Advisors that it was not willing to proceed with the Offering at current market levels. Greystone Harwick indicated that, given the magnitude of the share price decline and the lack of a visible near-term catalyst for recovery, it was not in a position to support a book-building effort at a price that would be attractive to the Company.
(f) The Company elected to shelve the Offering rather than reduce the offering size or reprice the transaction at a lower price per share. Management determined that a significantly lower offering price would result in greater dilution to existing stockholders without achieving the Company's capital-raising objectives, and that it was preferable to defer the Offering until market conditions improved.
(g) On June 28, 2021, QIH and Greystone Harwick & Co., LLC mutually agreed to pause the Offering pending improvement in market conditions. This decision was communicated to Calderwood & Harkness by Yusuf A. Okafor on or about that date.
(h) On July 15, 2021, Yusuf Okafor confirmed to Robert Adeyemi by telephone that the Company views the Offering as shelved indefinitely but is not formally terminating the Calderwood & Harkness engagement or the Greystone Harwick underwriting arrangement. Okafor indicated that the Company may revisit the Offering in Q4 2021 or early 2022 if the stock price recovers to levels that would support the originally contemplated economics, or if the Company identifies a near-term acquisition opportunity that warrants accelerating the capital raise.
(i) No formal termination letter has been exchanged between any of the parties. The Calderwood & Harkness engagement letter and the Greystone Harwick underwriting engagement letter remain in effect as of the date of this memorandum.
7. KEY OUTSTANDING ITEMS IF REVIVED
In the event that the Company elects to reactivate the Offering, the following items will need to be addressed. This checklist is intended to serve as a comprehensive reference for the engagement team and should be reviewed and updated at the time of any reactivation to account for intervening developments:
(a) Shelf Registration Statement Validity
The Company's shelf registration statement on Form S-3 (File No. 333-248710) was declared effective by the SEC on September 18, 2020. Under current SEC rules, the shelf registration statement is valid for a period of three years from the date of initial effectiveness — i.e., through September 18, 2023. Accordingly, if the Offering is revived on or before September 18, 2023, the existing shelf registration statement may be used as the basis for the Offering, subject to confirmation that the shelf remains effective, that the Company is current in its Exchange Act reporting obligations, and that no post-effective amendments are required.
If the Offering is revived after September 18, 2023, the shelf registration statement will have expired, and the Company will be required to file a new shelf registration statement on Form S-3 (or, if the Company no longer meets the eligibility requirements for Form S-3, on Form S-1) or a post-effective amendment, which must be declared effective by the SEC prior to commencement of the Offering.
Additionally, the engagement team should confirm at the time of revival that the Company continues to satisfy the eligibility requirements for use of Form S-3, including the public float and reporting history requirements.
(b) Financial Information Update
All financial information, risk factors, and business descriptions contained in the draft preliminary prospectus supplement must be updated to reflect the most recent fiscal year and interim period financial statements available at the time of revival. The prospectus supplement incorporates by reference the Company's filings under the Securities Exchange Act of 1934, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and proxy statements. All such incorporated documents must be current at the time the prospectus supplement is filed, and any material developments occurring after the date of the last incorporated filing must be disclosed in the prospectus supplement or in a Current Report on Form 8-K filed prior to or concurrently with the filing of the prospectus supplement.
The engagement team should also review and update all risk factor disclosure, management's discussion and analysis, and any forward-looking statements to reflect current conditions and developments in the Company's business, financial condition, and results of operations.
(c) Comfort Letter
A new or updated bring-down comfort letter must be obtained from Carver, Bain & Associates LLP covering the most recent audited annual financial statements and any unaudited interim financial statements included or incorporated by reference in the prospectus supplement. The draft comfort letter received on May 21, 2021 will be stale and cannot be relied upon. The engagement team should coordinate with Rebecca H. Trask at Carver, Bain & Associates to initiate the comfort letter process sufficiently in advance of the anticipated pricing date and should confirm the scope and timing of any circle-up and change-period procedures.
(d) Board Authorization
The Board of Directors adopted resolutions on June 2, 2021 authorizing the Offering. Depending on the elapsed time between the date of those resolutions and the date of revival, a reaffirmation resolution or an entirely new board authorization may be appropriate or required. The engagement team should review the original resolutions to determine whether they contain any time limitations or conditions that may have expired or lapsed. In addition, the engagement team should confirm whether any changes in the composition of the Board of Directors have occurred since June 2, 2021, and whether any new directors require orientation regarding the proposed Offering or have any conflicts of interest that need to be addressed.
(e) Lock-Up Agreements
The form of lock-up agreement circulated on June 7, 2021 was never executed by any party. Upon revival, the lock-up agreements must be recirculated to, and executed by, all directors, executive officers, and holders of 5% or more of the Company's outstanding common stock, including Birchwood Capital Partners, L.P. The engagement team should confirm the then-current list of persons subject to the lock-up requirement by reviewing the Company's most recent proxy statement, Section 16 filings, and Schedule 13D/13G filings. The lock-up period, terms, and any carve-outs should be re-confirmed with Greystone Harwick.
(f) Underwriter Re-Engagement
The engagement team should re-engage with Greystone Harwick & Co., LLC to confirm that Greystone Harwick remains willing to serve as sole book-running manager for the Offering and to negotiate updated pricing, discount rate, offering size, and allocation terms reflecting then-current market conditions and the Company's financial performance. If Greystone Harwick is unwilling or unable to proceed, the Company and its financial advisor should evaluate whether a replacement underwriter is appropriate. In either case, the underwriting agreement must be revised and finalized to reflect current terms, and a new or updated underwriting engagement letter may be required.
(g) Due Diligence Update
A comprehensive due diligence update will be required upon revival. At a minimum, the following steps should be taken:
•  Conduct a new management due diligence session with the Company's senior executive team and a bring-down due diligence review covering all material developments since the May 19, 2021 due diligence session;
•  Review all SEC filings, press releases, investor presentations, and other public disclosures made by the Company during the dormancy period;
•  Review all material contracts entered into, amended, or terminated during the dormancy period;
•  Review the status of all litigation, arbitration, regulatory proceedings, and governmental investigations involving the Company or its subsidiaries;
•  Review the financial condition, statutory surplus, risk-based capital (RBC) ratios, and dividend capacity of Quorum Specialty Insurance Company and Quorum National Casualty Co.;
•  Obtain updated certificates of good standing from the Company's state of incorporation (Delaware) and from each jurisdiction in which the Company's insurance subsidiaries are domiciled (Connecticut and Delaware);
•  Obtain an updated capitalization table and stockholder list reflecting any changes in the Company's capital structure or significant stockholder positions;
•  Review any changes in the insurance regulatory environment, including any new or proposed legislation, regulations, or regulatory guidance affecting the Company's insurance subsidiaries; and
•  Review the status of the QuorumEdge platform and any material developments in the Company's InsurTech business.
(h) 10b5-1 and Negative Assurance Updates
The draft 10b5-1 representation letter circulated on June 7, 2021 must be updated and executed by the Company's CEO (Martin R. Calloway) and CFO (Diana L. Prescott) at the time of pricing. The 10b5-1 representation letter should confirm that the Company is not in possession of material nonpublic information at the time of the Offering. In addition, the legal opinion and negative assurance letter to be delivered by Calderwood & Harkness LLP to the underwriter must be updated to reflect the current state of facts and applicable law at the time of delivery. The legal opinion outline circulated on June 7, 2021 should be revised as necessary.
(i) Conflicts Re-Check
A conflicts re-check should be run at Calderwood & Harkness LLP at the time of revival to confirm that no new conflicts of interest have arisen during the dormancy period with respect to any of the parties to the transaction, including the Company, the underwriter, underwriter's counsel, and any significant stockholders. The conflicts re-check should cover any new client engagements, lateral hires, and investment positions that may have been established during the dormancy period.
(j) FINRA Filing
The engagement team should confirm whether any prior FINRA Corporate Financing Department materials filed or prepared in connection with the Offering remain current or whether re-submission is required. If Greystone Harwick filed or prepared any materials with FINRA's Corporate Financing Department regarding the proposed underwriting terms, those materials may need to be updated to reflect revised offering terms, changes in compensation arrangements, or other developments. Coordination with Greystone Harwick and Duval & Pressler will be necessary.
(k) Nasdaq Listing Application
A supplemental listing application must be prepared and filed with the Nasdaq Stock Market for the additional shares of common stock to be issued in the Offering. The supplemental listing application should reflect the number of shares to be offered (including shares subject to the greenshoe option) and should be filed sufficiently in advance of the anticipated pricing date to allow for Nasdaq review and approval.
8. FINANCIAL SUMMARY
8.1 Professional Fees
The following table summarizes all professional fees incurred in connection with this matter through the date of the final invoice:
8.2 Disbursements.  The following table summarizes all disbursements incurred in connection with this matter through the date of the final invoice:
8.3 Totals.  
8.4 Invoice Information
The following additional billing and remittance information is provided for reference:
•  Invoice Date: July 30, 2021
•  Invoice Number: Refer to firm billing records
•  Payment Terms: Net 30 days from date of invoice
•  Payment Status: To be updated upon receipt of payment
•  Remittance Bank: Harborview Trust & Savings Bank
•  Account Number: 4478-2201-6693
•  ABA Routing Number: 021-307-884
Note: No additional professional fees or disbursements will be incurred in connection with this matter unless and until the engagement is formally reactivated by the client and the engagement team. Time incurred in preparing this dormancy record has been recorded as a firm administrative matter and has not been billed to the client.
9. FILE LOCATION
All documents, correspondence, work product, and other materials relating to this matter are maintained and preserved as follows:
(a) Electronic Files. All electronic documents, drafts, correspondence, memoranda, research, and other electronic work product are maintained in the firm's document management system (Vireo Data Systems) under Matter No. 1025-00001. All electronic work product has been indexed and preserved as-is per Robert Adeyemi's directive of July 15, 2021. No documents should be modified, deleted, or moved without the prior approval of the Responsible Partner.
(b) Physical Files. To the extent any physical files, hard-copy documents, or original executed documents exist in connection with this matter, they are located in the New York office, Capital Markets filing area, Cabinet 14-C. The executed engagement letter (original) is maintained in the physical file.
(c) Retention. All files — electronic and physical — should be retained in accordance with the firm's standard records retention policy and the terms of the engagement letter. Given the possibility that this engagement may be reactivated, no files should be culled, archived off-site, or destroyed without the prior written approval of Robert Adeyemi.
This dormancy record concludes the matter status summary for Matter No. 1025-00001.
Prepared by:
________________________________________
Natasha Forbes Associate, Capital Markets Calderwood & Harkness LLP 1301 Avenue of the Americas New York, NY 10019
Date: August 2, 2021
CONFIDENTIAL — INTERNAL MEMORANDUM — ATTORNEY WORK PRODUCT — NOT FOR DISTRIBUTION
Calderwood & Harkness LLP — Matter No. 1025-00001 — Quorum Insurance Holdings Corp. Follow-On Offering — Dormancy Record
Field | Detail
Client EIN | 82-3741956
Client CIK | 0001784203
CUSIP (Common Stock) | 74917R108
Ticker Symbol | QIHC
Exchange | Nasdaq Global Select Market
Client Headquarters | 200 Constitution Plaza, Suite 3100, Hartford, CT 06103
State of Incorporation | Delaware
Registered Agent | CT Statutory Agent Services LLC, 1209 Orange Street, Wilmington, DE 19801
Par Value (Common Stock) | $0.01 per share
Role | Name | Practice Group
Responsible Partner | Robert Adeyemi | Capital Markets
Billing Partner | Jennifer Kwon | Capital Markets
Lead Associate | Natasha Forbes | Capital Markets
Working Associate | Eric Johannsen | Capital Markets
Parameter | Detail
Primary shares offered (base deal) | 3,000,000 shares of common stock
Estimated public offering price | $15.00 per share
Discount to market | Approximately 6.25% discount to the May 7, 2021 closing price of $16.00 per share
Aggregate gross proceeds (base deal) | $45,000,000
Over-allotment option (greenshoe) | Up to 450,000 additional shares (15% of base offering), exercisable by the underwriter within 30 days of pricing
Maximum offering size (with greenshoe) | 3,450,000 shares × $15.00 per share = $51,750,000
Underwriting discount | 5.50% of gross proceeds = $2,475,000 (base deal); $2,846,250 (if greenshoe fully exercised)
Net proceeds to issuer (before expenses, base deal) | $42,525,000
Estimated offering expenses (excluding underwriting discount) | $385,000 (including legal fees, accounting fees, printing costs, SEC and FINRA filing fees, transfer agent fees, and miscellaneous expenses)
Net proceeds to issuer (after expenses, base deal) | $42,140,000
Pre-offering shares outstanding | 38,125,000 shares
Post-offering shares outstanding (base deal, no greenshoe) | 41,125,000 shares
Post-offering shares outstanding (full greenshoe) | 41,575,000 shares
Approximate market capitalization (May 2021) | ~$610,000,000 (based on $16.00 closing price and 38,125,000 shares outstanding)
Period | Total Revenue | Net Income
Fiscal Year 2020 (audited) | $487.3 million | $31.6 million
Q1 2021 (unaudited) | $131.8 million | $9.4 million
Date | Event
September 18, 2020 | The SEC declares effective QIH's shelf registration statement on Form S-3 (File No. 333-248710), permitting the Company to offer and sell, from time to time, an indeterminate amount of securities, including common stock, preferred stock, debt securities, warrants, and units, at prices and on terms to be determined at the time of offering.
May 10, 2021 | Calderwood & Harkness engagement opens. Engagement letter executed by Robert Adeyemi on behalf of the firm and by Yusuf A. Okafor on behalf of the Company. Initial organizational call held among the engagement team, the Company (Calloway, Prescott, Okafor), Trellis Peak Advisors (Ng), and Greystone Harwick (Reinhardt, Langford). Preliminary transaction timeline, deal structure, and key workstreams discussed.
May 12, 2021 | Underwriting engagement letter between QIH and Greystone Harwick & Co., LLC executed, establishing Greystone Harwick as sole book-running manager for the proposed Offering and setting forth the indicative terms of the underwriting arrangement, including the proposed discount and greenshoe structure.
May 14, 2021 | First draft of the preliminary prospectus supplement circulated by Calderwood & Harkness to the Company, underwriter's counsel (Duval & Pressler), and auditors (Carver, Bain & Associates) for review. Due diligence request list delivered to the Company (Okafor). The request list encompassed customary categories, including organizational documents, board minutes, material contracts, litigation and regulatory matters, insurance subsidiary financial condition, capitalization, and stockholder information.
May 19, 2021 | Management due diligence call held. Participants included Calloway (CEO), Prescott (CFO), and Okafor (GC) on behalf of the Company; Langford (Greystone Harwick) on behalf of the underwriter; Tannenbaum and Cavallo (Duval & Pressler) on behalf of underwriter's counsel; Adeyemi and Forbes (Calderwood & Harkness) on behalf of issuer's counsel. The session covered the Company's business, financial condition, results of operations, risk factors, regulatory compliance, litigation, insurance subsidiary capital adequacy, and QuorumEdge platform development.
May 20, 2021 | Due diligence session memorandum completed by Natasha Forbes and reviewed by Robert Adeyemi. Memorandum summarized all topics discussed, management representations, open items, and follow-up requests.
May 21, 2021 | Carver, Bain & Associates LLP delivers draft comfort letter to Calderwood & Harkness and Duval & Pressler. The draft comfort letter covered the Company's audited financial statements for fiscal year 2020 and the unaudited interim financial statements for Q1 2021, including customary circle-up, tick-and-tie, and change-period procedures.
May 25, 2021 | Revised preliminary prospectus supplement circulated, reflecting comments received from the Company, underwriter, and underwriter's counsel. Working draft of the underwriting agreement circulated by Calderwood & Harkness for review and comment.
June 2, 2021 | Board of Directors of QIH holds a meeting at which the board authorizes the Offering and adopts resolutions approving (i) the issuance and sale of up to 3,450,000 shares of common stock (including shares subject to the greenshoe option), (ii) the terms of the underwriting arrangement, (iii) the form and filing of the prospectus supplement, and (iv) related matters, including authorization of officers to execute transaction documents.
June 7, 2021 | Draft 10b5-1 representation letter, form of lock-up agreement, and legal opinion outline circulated by Calderwood & Harkness to the Company, underwriter, and underwriter's counsel.
June 14, 2021 | QIH share price declines to $13.85 per share at close of trading on Nasdaq. This represents a decline of approximately 13.4% from the May 7, 2021 closing price of $16.00 per share and renders the contemplated offering price of $15.00 per share not achievable. Pricing discussions between the Company, Trellis Peak Advisors, and Greystone Harwick paused.
June 28, 2021 | Greystone Harwick & Co., LLC and QIH mutually agree to pause the Offering pending improvement in market conditions. QIH share price at close of trading on this date was approximately $13.10 per share. No formal termination letter exchanged; the parties agreed to revisit the Offering if and when market conditions improve.
July 15, 2021 | Internal Calderwood & Harkness email from Robert Adeyemi to the engagement team confirming that the matter has been placed on hold pursuant to the mutual decision of the Company and underwriter. Adeyemi directs that all electronic work product be indexed and preserved as-is and that no further time be billed to the matter unless the engagement is reactivated. Adeyemi also reports that Yusuf Okafor confirmed by telephone that the Company views the Offering as shelved indefinitely but is not formally terminating the engagement or the underwriting arrangement.
July 30, 2021 | Final invoice issued to the Company in the amount of $95,645.00, covering all professional fees and disbursements incurred through the date of the matter hold.
August 2, 2021 | This dormancy record prepared by Natasha Forbes.
Document | Status | Date of Last Draft / Action
Engagement Letter (Calderwood & Harkness / QIH) | Executed | May 10, 2021
Preliminary Prospectus Supplement | Draft (not filed with the SEC) | May 25, 2021
Underwriting Agreement | Working draft (not executed) | May 25, 2021
Board Resolutions (Authorization of Offering) | Adopted by the Board of Directors | June 2, 2021
Form of Lock-Up Agreement | Draft (not executed by any party) | June 7, 2021
Due Diligence Request List | Delivered to Company | May 14, 2021
Due Diligence Session Memorandum | Completed | May 20, 2021
10b5-1 Representation Letter | Draft (not executed) | June 7, 2021
Legal Opinion Outline | Draft (not finalized or delivered) | June 7, 2021
Comfort Letter (Carver, Bain & Associates LLP) | Draft received from auditors (not finalized) | May 21, 2021
Timekeeper | Hours | Rate | Amount
Robert Adeyemi (Partner) | 18.6 | $1,250/hr | $23,250.00
Jennifer Kwon (Partner) | 4.2 | $1,250/hr | $5,250.00
Natasha Forbes (Associate) | 49.8 | $725/hr | $36,105.00
Eric Johannsen (Associate) | 38.4 | $725/hr | $27,840.00
Total Professional Fees | 111.0 | $92,445.00
Category | Amount
EDGAR Filing / Conversion Services (Pinnacle Filing Solutions, Inc.) | $1,850.00
Westmark Data Systems / Legal Research | $975.00
Courier / Delivery | $215.00
Conference Call Services | $160.00
Total Disbursements | $3,200.00
Item | Amount
Total professional fees billed | $92,445.00
Total disbursements billed | $3,200.00
Total invoiced | $95,645.00
Fee cap per engagement letter (professional fees only) | $175,000.00
Remaining under fee cap | $82,555.00 ($175,000.00 − $92,445.00)

CALDERWOOD & HARKNESS LLP

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