FY 2024 --12-31 false 0001463913 0 0 1 2 0 0 1 0 0 0 0 0 4 false false false false false true true true true true 00014639132024-01-012024-12-31 thunderdome:item iso4217:USD 0001463913us-gaap:RestrictedStockMember2024-12-31 utr:Y 0001463913us-gaap:RestrictedStockMember2024-01-012024-12-31 xbrli:shares 0001463913us-gaap:RestrictedStockMemberusac:The2024PlanMemberusac:DirectorSchmidtMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberusac:The2024PlanMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberusac:The2024PlanMembersrt:DirectorMember2024-01-012024-12-31 iso4217:USDxbrli:shares 0001463913us-gaap:RestrictedStockMember2023-12-31 0001463913usac:MutualCapitalInvestmentFundLPMember2024-12-31 0001463913usac:MutualCapitalInvestmentFundLPMember2022-11-22 00014639132023-01-012023-12-31 0001463913stpr:MT2023-01-012023-12-31 0001463913stpr:MT2024-01-012024-12-31 0001463913stpr:KS2023-01-012023-12-31 0001463913stpr:KS2024-01-012024-12-31 0001463913stpr:MT2023-12-31 0001463913stpr:MT2024-12-31 0001463913stpr:KS2023-12-31 0001463913stpr:KS2024-12-31 xbrli:pure 0001463913usac:MontanaDepartmentOfInsuranceMemberusac:USAllianceLifeAndSecurityCompanyUSALSCMember2024-12-31 0001463913usac:NorthDakotaInsuranceDepartmentMember2023-12-31 0001463913usac:NorthDakotaInsuranceDepartmentMember2024-12-31 0001463913srt:FederalHomeLoanBankOfTopekaMemberusac:MortgageBackedSecuritiesAndUsTreasuriesMember2024-12-31 0001463913srt:FederalHomeLoanBankOfTopekaMember2024-12-31 0001463913srt:FederalHomeLoanBankOfTopekaMember2024-10-31 0001463913srt:FederalHomeLoanBankOfTopekaMember2024-10-012024-10-31 0001463913srt:FederalHomeLoanBankOfTopekaMember2019-12-31 0001463913srt:FederalHomeLoanBankOfTopekaMemberus-gaap:FederalHomeLoanBankAdvancesMember2019-01-012019-12-31 0001463913srt:FederalHomeLoanBankOfTopekaMember2019-10-312019-10-31 00014639132023-12-31 00014639132024-12-31 0001463913us-gaap:DomesticCountryMember2023-12-31 0001463913us-gaap:DomesticCountryMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0001463913us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-31 0001463913us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-31 0001463913us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-31 0001463913us-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:OtherInvestedAssetsMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:OtherInvestedAssetsMember2024-01-012024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2024-01-012024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2024-01-012024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-01-012024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:OtherInvestedAssetsMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:PreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommonStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberusac:TermLoansMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:RedeemablePreferredStockMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-12-31 0001463913us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-12-31 0001463913us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2024-12-31 0001463913usac:ReinsurerMember2023-01-012023-12-31 0001463913usac:ReinsurerMember2024-01-012024-12-31 0001463913usac:ReinsurerMember2023-12-31 0001463913usac:ReinsurerMember2024-12-31 0001463913us-gaap:CashAndCashEquivalentsMember2023-01-012023-12-31 0001463913us-gaap:CashAndCashEquivalentsMember2024-01-012024-12-31 0001463913usac:OtherInvestedAssetsMember2023-01-012023-12-31 0001463913usac:OtherInvestedAssetsMember2024-01-012024-12-31 0001463913us-gaap:EquitySecuritiesMember2023-01-012023-12-31 0001463913us-gaap:EquitySecuritiesMember2024-01-012024-12-31 0001463913us-gaap:MortgagesMember2023-01-012023-12-31 0001463913us-gaap:MortgagesMember2024-01-012024-12-31 0001463913us-gaap:FixedMaturitiesMember2023-01-012023-12-31 0001463913us-gaap:FixedMaturitiesMember2024-01-012024-12-31 0001463913usac:GeneralAllowanceMemberus-gaap:RealEstateLoanMember2023-12-31 0001463913usac:SpecificAllowanceMemberus-gaap:RealEstateLoanMember2024-12-31 0001463913usac:GeneralAllowanceMemberus-gaap:RealEstateLoanMember2023-01-012023-12-31 0001463913usac:SpecificAllowanceMemberus-gaap:RealEstateLoanMember2024-01-012024-12-31 0001463913usac:GeneralAllowanceMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RealEstateLoanMember2022-12-31 0001463913usac:SpecificAllowanceMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RealEstateLoanMember2023-12-31 0001463913usac:GeneralAllowanceMemberus-gaap:RealEstateLoanMember2022-12-31 0001463913usac:SpecificAllowanceMemberus-gaap:RealEstateLoanMember2023-12-31 0001463913us-gaap:FinancialAssetPastDueMember2024-12-31 utr:D 0001463913usac:DebtToValueRatio10To20PercentMember2023-12-31 0001463913usac:DebtToValueRatio10To20PercentMember2024-12-31 0001463913usac:DebtToValueRatio20To30PercentMember2023-12-31 0001463913usac:DebtToValueRatio20To30PercentMember2024-12-31 0001463913usac:DebtToValueRatio30To40PercentMember2023-12-31 0001463913usac:DebtToValueRatio30To40PercentMember2024-12-31 0001463913usac:DebtToValueRatio40To50PercentMember2023-12-31 0001463913usac:DebtToValueRatio40To50PercentMember2024-12-31 0001463913usac:DebttovalueRatio50To60PercentMember2023-12-31 0001463913usac:DebttovalueRatio50To60PercentMember2024-12-31 0001463913usac:DebtToValueRatio60To70PercentMember2023-12-31 0001463913usac:DebtToValueRatio60To70PercentMember2024-12-31 0001463913usac:DebtToValueRatio70To80PercentMember2023-12-31 0001463913usac:DebtToValueRatio70To80PercentMember2024-12-31 0001463913srt:RetailSiteMember2023-12-31 0001463913srt:RetailSiteMember2024-12-31 0001463913srt:IndustrialPropertyMember2023-12-31 0001463913srt:IndustrialPropertyMember2024-12-31 0001463913srt:MultifamilyMember2023-12-31 0001463913srt:MultifamilyMember2024-12-31 0001463913usac:MultipropertyMember2023-12-31 0001463913usac:MultipropertyMember2024-12-31 0001463913usac:LodgingMember2023-12-31 0001463913usac:LodgingMember2024-12-31 0001463913usac:MixedUseMember2023-12-31 0001463913usac:MixedUseMember2024-12-31 0001463913usac:CondominiumMember2023-12-31 0001463913usac:CondominiumMember2024-12-31 0001463913us-gaap:PreferredStockMember2024-12-31 0001463913usac:TermLoansMember2024-12-31 0001463913us-gaap:MortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:FixedIncomeSecuritiesMember2024-12-31 0001463913us-gaap:CommercialMortgageBackedSecuritiesMember2023-12-31 0001463913usac:TermLoansMember2023-12-31 0001463913us-gaap:RedeemablePreferredStockMember2023-12-31 0001463913us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-31 0001463913us-gaap:CorporateDebtSecuritiesMember2023-12-31 0001463913us-gaap:USTreasurySecuritiesMember2023-12-31 0001463913us-gaap:CommercialMortgageBackedSecuritiesMember2024-12-31 0001463913us-gaap:RedeemablePreferredStockMember2024-12-31 0001463913us-gaap:USStatesAndPoliticalSubdivisionsMember2024-12-31 0001463913us-gaap:CorporateDebtSecuritiesMember2024-12-31 0001463913us-gaap:USTreasurySecuritiesMember2024-12-31 0001463913us-gaap:RealEstateLoanMember2023-01-012023-12-31 0001463913us-gaap:RealEstateLoanMember2024-01-012024-12-31 0001463913us-gaap:MortgageBackedSecuritiesMember2023-12-31 0001463913CriticalIllnessMember2024-01-012024-12-31 0001463913GroupDisabilityMember2024-01-012024-12-31 0001463913GroupAccidentalDeathAndDismembermentMember2024-01-012024-12-31 0001463913GroupLifeProductsMember2024-01-012024-12-31 0001463913AccidentalDeathBenefitRiderMember2024-01-012024-12-31 0001463913TermLifeProductsMember2024-01-012024-12-31 0001463913WholeLifeProductsMember2024-01-012024-12-31 0001463913usac:PolicyholderBenefitReservesMember2023-12-31 0001463913usac:PolicyholderBenefitReservesMember2024-12-31 0001463913usac:PremiumDepositFundDepositTypeContractsMember2023-12-31 0001463913usac:PremiumDepositFundDepositTypeContractsMember2024-12-31 0001463913usac:PremiumDepositFundDepositTypeContractsMember2023-01-012023-12-31 0001463913usac:PremiumDepositFundDepositTypeContractsMember2024-01-012024-12-31 0001463913usac:PremiumDepositFundDepositTypeContractsMember2022-12-31 0001463913usac:DeferredAnnuityDepositTypeContractsMember2023-12-31 0001463913usac:DeferredAnnuityDepositTypeContractsMember2024-12-31 0001463913usac:DeferredAnnuityDepositTypeContractsMember2023-01-012023-12-31 0001463913usac:DeferredAnnuityDepositTypeContractsMember2024-01-012024-12-31 0001463913usac:LewerCompaniesMemberusac:DeferredAnnuityDepositTypeContractsMember2023-01-012023-12-31 0001463913usac:LewerCompaniesMemberusac:DeferredAnnuityDepositTypeContractsMember2024-01-012024-12-31 0001463913usac:DeferredAnnuityDepositTypeContractsMember2022-12-31 0001463913usac:FurnitureAndEquipmentMember2023-12-31 0001463913usac:FurnitureAndEquipmentMember2024-12-31 0001463913us-gaap:ComputerEquipmentMember2023-12-31 0001463913us-gaap:ComputerEquipmentMember2024-12-31 0001463913usac:FurnitureAndEquipmentMembersrt:MaximumMember2024-12-31 0001463913us-gaap:ComputerEquipmentMembersrt:MaximumMember2024-12-31 00014639132022-12-31 0001463913usac:LewerMemberusac:DeferredAnnuityDepositTypeContractsMember2023-01-012023-12-31 0001463913usac:LewerMemberusac:DeferredAnnuityDepositTypeContractsMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMember2023-01-012023-12-31 0001463913usac:LewerMember2023-01-012023-12-31 0001463913usac:LewerMember2024-01-012024-12-31 0001463913us-gaap:RetainedEarningsMember2024-12-31 0001463913us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-31 0001463913us-gaap:AdditionalPaidInCapitalMember2024-12-31 0001463913us-gaap:CommonStockMember2024-12-31 0001463913us-gaap:RetainedEarningsMember2024-01-012024-12-31 0001463913us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-12-31 0001463913us-gaap:AdditionalPaidInCapitalMember2024-01-012024-12-31 0001463913us-gaap:CommonStockMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberus-gaap:RetainedEarningsMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberus-gaap:AdditionalPaidInCapitalMember2024-01-012024-12-31 0001463913us-gaap:RestrictedStockMemberus-gaap:CommonStockMember2024-01-012024-12-31 0001463913us-gaap:RetainedEarningsMember2023-12-31 0001463913us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-31 0001463913us-gaap:AdditionalPaidInCapitalMember2023-12-31 0001463913us-gaap:CommonStockMember2023-12-31 0001463913us-gaap:RetainedEarningsMember2023-01-012023-12-31 0001463913us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-31 0001463913us-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-31 0001463913us-gaap:CommonStockMember2023-01-012023-12-31 0001463913srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2023-12-31 0001463913srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2023-12-31 0001463913srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-31 0001463913srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2023-12-31 0001463913srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommonStockMember2023-12-31 0001463913us-gaap:RetainedEarningsMember2022-12-31 0001463913us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-31 0001463913us-gaap:AdditionalPaidInCapitalMember2022-12-31 0001463913us-gaap:CommonStockMember2022-12-31 00014639132025-03-01 00014639132024-06-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2024

☐Transition Report Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934

For the transition period from ________ to __________

Commission File Number 000-55627

US ALLIANCE CORPORATION

	Kansas	26-4824142
	State of Incorporation	IRS Employer Identification Number

	1303 SW First American Place, Suite 200 Topeka, Kansas 66604	(785) 228-0200
	Address, including zip code, of principal executive offices	Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.10 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☑
			Emerging growth company ☐

Table of Contents

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

As of March 1, 2025 the aggregate market value of voting and non-voting common equity held by non-affiliates of US Alliance could not be calculated as no established public trading market for our equity exists.

Table of Contents

Applicable only to registrants involved in bankruptcy proceedings during the preceding five years

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

No established public trading market for our common stock currently exists. As of March 1, 2025, 7,748,922 shares of our common stock were outstanding.

Documents Incorporated By Reference

Information required by Part III of this Annual Report on Form 10-K is incorporated by reference to portions of our definitive proxy statement for our 2025 annual meeting of stockholders which we will file with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, 2024.

Table of Contents

TABLE OF CONTENTS

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	11

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative And Qualitative Disclosures About Market Risk	25
Item 8.	Financial Statements and Supplementary Data	25
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	25
Item 9A.	Controls and Procedures	25
Item 9B.	Other Information	26

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	26
Item 11.	Executive Compensation	26
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions and Director Independence	26
Item 14.	Principal Accountant Fees and Services	26

PART IV
Item 15.	Exhibits and Financial Statement Schedules	27
	Exhibit Index	27
	Signatures	31

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report, and the Annual Report to Shareholders of which this report is a part, contain forward-looking statements within the meaning of the U.S. federal securities laws. You can identify forward-looking statements by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects,” “may,” “will” or “should,” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties, and similar references to future periods.

We base these and other forward-looking statements on our current expectations and assumptions regarding our business, the economy and other future conditions; however, our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Forward-looking statements, which by their nature relate to the future, are subject to inherent uncertainties, risks and changes in circumstances which we cannot easily predict. Important factors that could cause actual results to differ materially and adversely from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory, and health conditions.

Any forward-looking statement made by us in this report speaks only as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

Table of Contents

PART I

ITEM 1.

BUSINESS.

Overview and History - US Alliance Corporation ("USAC") was formed as a Kansas corporation on April 24, 2009 to raise capital to form a new Kansas-based life insurance company. Our offices are located at 1303 SW First American Place, Suite 200, Topeka, Kansas 66604. Our telephone number is 785-228-0200 and our website address is www.usalliancecorporation.com.

USAC has four wholly-owned operating subsidiaries. US Alliance Life and Security Company ("USALSC") was incorporated June 9, 2011, to serve as our life insurance company. US Alliance Marketing Corporation ("USAMC") was incorporated April 23, 2012, to serve as a marketing resource. US Alliance Investment Corporation ("USAIC") was incorporated April 23, 2012 to serve as investment manager for USAC and its subsidiaries. Dakota Capital Life Insurance Company (“DCLIC”), was acquired on August 1, 2017 when USAC merged with Northern Plains Capital Corporation (“NPCC”) and was merged into USALSC on December 31, 2023. US Alliance Life and Security Company - Montana ("USALSC-Montana"), was acquired December 14, 2018. USALSC-Montana is a wholly-owned subsidiary of USALSC. Unless the context otherwise indicates, references in this registration statement to "we", "us", "our", or the "Company" refer collectively to USAC and its subsidiaries.

We initially capitalized our subsidiaries with proceeds from intrastate public offering(s) registered by qualification with the office of Kansas Securities Commissioner.

USALSC received a Certificate of Authority from the Kansas Insurance Department ("KID") effective January 2, 2012, and sold its first insurance product on May 1, 2013. USALSC re-domesticated to North Dakota in 2023. USALSC currently offers the following eight product categories:

Solid Solutions Term Life Series®, Registered Trademark No. 4,740,828. This simplified issue term life insurance product is designed to provide coverage with a face value of $250,000 or less. This product features limited underwriting and is offered with 10, 20, 25, and 30 year terms.

Sound Solutions Term Life Series®, Registered Trademark No. 4,740,827. This is a fully underwritten term life insurance product designed to provide coverage for higher face amounts. This product features multiple risk classifications and is offered with 15, 20, 25 and 30 year terms.

Pioneer Whole Life. This is a traditional whole life insurance product designed to provide permanent coverage with a limited premium paying period. This product is sold with death benefits typically ranging from $25,000 to $100,000.

Legacy Juvenile Series®, Registered Trademark No. 4,577,835. This product is term life insurance to age 25 available for purchase on children up to the age of 16 in an amount of $10,000 or $20,000 with a one-time premium payment.

American Annuity Series®, Registered Trademark No. 4,582,074. This product is a flexible premium deferred annuity with initial rates guaranteed for five years by company practice.

Thoughtful Pre-Need Series®, Registered Trademark No. 4,620,073. This series of products includes a single or multiple pay premium pre-need whole life insurance policy sold by funeral directors who are licensed by the KID in conjunction with a preplanned funeral. This product is typically sold with smaller death benefits than our traditional Pioneer Whole Life.

Group Products. This is a series of group non-medical insurance products developed for the small group marketplace. These products are sold to employers and provide benefits for their employees. Our group suite of products includes group term life insurance, group long term disability, and group short term disability.

Critical Illness. This individual policy provides cash benefits to the insured should certain defined illnesses or injuries occur.

Table of Contents

USALSC-Montana is not marketing products at this time.

Our single pay life products (which include our Juvenile and Pre-Need products) accounted for 68% of 2024 direct premium revenue. Our individual life and Critical Illness products (which include Term Life and Whole Life products) accounted for 16% of 2024 direct premium revenue. Our group products accounted for 16% of 2024 direct written premiums.

USALSC seeks opportunities to develop and market additional products.

Our business model also seeks the acquisition by USAC and/or its subsidiaries of other insurance and insurance related companies, including third-party administrators, marketing organizations, and rights to blocks of insurance business through reinsurance or other transactions.

Material Agreements and Partners - Effective January 1, 2013, USALSC entered into a reinsurance agreement with Unified Life Insurance Company (“ULIC”) to assume 20% of a certain block of health insurance policies. This agreement renews annually unless either party provides written notice of its intent not to renew at least 120 days prior to the expiration of the then-current term. The agreement provides for monthly settlement. For the year ended December 31, 2024, USALSC assumed premiums of $4,806,183.

On September 1, 2015, USALSC entered into an agreement to provide certain insurance administrative functions, data processing systems, daily operational services, management consulting, and marketing development to DCLIC. This agreement had an initial term of 60 months (beginning on September 1, 2015), continues month to month after the initial 60 month period, and requires 90-day advance written notice to terminate. In addition, the agreement requires that certain products will be exclusively administered by USALSC and administrative services with respect to such products may not be transferred without our consent. The agreement provides for monthly settlement. On August 1, 2017, DCLIC became a wholly-owned subsidiary of USALSC as described below. Subsequent to the acquisition of DCLIC, this agreement became an intra-company agreement and is eliminated as a part of the consolidation of the financial statements of the companies. On December 31, 2023, DCLIC was merged into USALSC.

On August 1, 2017 the Company acquired NPCC pursuant to a Plan and Agreement of Merger dated May 23, 2017, under which Alliance Merger Sub, Inc. (“Acquisition”), a wholly owned subsidiary of the Company, merged with and into Northern Plains (“Merger”) with Acquisition being the surviving company. Pursuant to the agreement, the Company exchanged .5841 shares of the Company’s common stock for each share of Northern Plains common stock, or 1,644,458 shares. Subsequent to the merger, Acquisition was merged into the Company and DCLIC was contributed to USALSC.

On September 30, 2017, USALSC entered into a coinsurance agreement with American Life and Security Corporation ("ALSC”) to assume 100% of a certain block of life insurance policies (the "2017 ALSC Agreement”). USALSC is also the servicer of this block of policies. USALSC paid a ceding commission of $1,850,000 and received $7,153,663 from ALSC. The 2017 ALSC Agreement will remain in effect until all liabilities associated with this block of policies have been satisfied.

On December 14, 2018, USALSC acquired Great Western Life Insurance Company ("GWLIC") pursuant to a Stock Purchase agreement entered into on October 11, 2018 with Great Western Insurance Company, a wholly-owned subsidiary of American Enterprise Group, Inc. USALSC paid $500,000 to acquire all outstanding shares of GWLIC. Subsequent to the acquisition, GWLIC was renamed US Alliance Life and Security Company – Montana.

On April 15, 2020, with an effective date of January 1, 2020, USALSC entered into a second coinsurance agreement with ALSC (the “2020 ALSC Agreement”) to assume a quota share percentage of a block of annuity policies. As of December 31, 2024, the Company had $42.8 million in assumed annuity deposits under the 2020 ALSC Agreement.

On December 31, 2020, USALSC and ALSC agreed to terminate a portion of the 2017 ALSC Agreement, pursuant to an amendment to the 2017 ALSC Agreement. USALSC transferred assets of $9,282,836 and received a ceding commission of $927,000. On December 31, 2020, USALSC and ALSC agreed to terminate a portion of the 2017 ALSC Agreement, pursuant to an amendment to the 2017 ALSC Agreement. USALSC transferred assets of $9,282,836 and received a ceding commission of $927,000.

On December 31, 2020, DCLIC entered into an assumption agreement with ALSC where it acquired a certain block of life insurance policies (the “ALSC Assumption Agreement”). Under the ALSC Assumption Agreement, DCLIC becomes directly liable to the policyholders of this block of business. DCLIC received assets equaling $9,282,836 and paid a ceding commission of $927,000 to ALSC.

On December 31, 2023 USALSC entered into a coinsurance agreement to acquire a block of life and annuity policies from Lewer Life Insurance Company.

USAC uses the actuarial firm of Miller & Newberg to provide valuation, pricing and illustration actuarial services for its insurance subsidiaries.

Table of Contents

Investments – USAC and USAIC contracted in 2013 with New England Asset Management, Inc. (“NEAM”), a Berkshire Hathaway subsidiary, to manage the investments of USALSC and a portion of the investments of USAC. USALSC and USALSC-Montana have investment management agreements with USAIC, who has a sub-advisory agreement with NEAM. USALSC-Montana was added to this agreement on December 14, 2018. The investment parameters are determined by North Dakota law, the NDID, and the Montana Insurance Department, as well as the internal investment policies of USALSC, USALSC-Montana and USAC.

As a part of its 2020 ALSC Agreement, USALSC contracted with 1505 Capital LLC to provide investment services on the assets, including mortgage loan participations, supporting this agreement.

USAC internally manages a portfolio of equities within its investment policy guidelines (as modified from time to time, "Investment Policy"), which consider type of investments and investment instruments, and establishes diversification benchmarks to help manage investment risk. USAC's investment in its subsidiaries is managed outside of its Investment Policy.

The USAC Investment Policy may be modified by USAC's Board of Directors (the "Board" or "Board of Directors") in compliance with applicable law.

The following summarizes USAC’s Investment Policy, effective September 13, 2018 as amended:

Approved Investment Instruments. We may invest in the following approved investment classes in accordance with the restrictions and subject to the benchmark ranges set forth in our Investment Policy and described below:

United States Government Securities — bonds or other evidences of indebtedness that are fully guaranteed or insured by the U.S. Government or any agency or instrumentality thereof.

Securities of the District of Columbia, State, Insular or Territorial Possession Government of the United States —bonds or other evidences of indebtedness, without limitation, of the District of Columbia, State, or any political subdivision of such, or Insular or Territorial Possession of the United States.

Canadian Government, Provincial and Municipal Obligations —bonds or other evidences of indebtedness issued by the Dominion of Canada, or by any Province thereof, or by any municipality, agency or instrumentality thereof.

Fixed Income Obligations — bonds or other evidence of indebtedness issued, assumed or guaranteed by a corporation.

Equity Interests - preferred stocks, common stocks, mutual funds, exchange traded funds, master limited partnerships and other securities representing equity ownership interests in a corporation, provided that we may not own more than 2% of any corporation, mutual fund, exchange traded fund, master limited partnership or other equity security.

Real Estate - real estate for use in the operations of the Company, which we refer to as "Home Office Real Estate," or for the production of income. We may also invest in shares of beneficial interest in or obligations issued by a Real Estate Investment Trust qualified under pertinent sections of the United States Internal Revenue Code.

Mortgage Loans - first-lien mortgage loans on commercial or residential property with loan to value of no greater than 80% at the time of purchase.

Mortgage - Backed Securities - mortgage-backed securities issued by the Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), or a private entity. Any such securities must be rated investment grade by Moody's, S&P or Fitch.

Asset-Backed Securities - asset-backed securities designated as investment grade by Moody's, S&P or Fitch or the equivalent rating by another nationally recognized statistical rating organization.

Certificates of Deposit, Time Deposits, Overnight Bank Deposits, Banker's Acceptances and Repurchase Agreements - certificates of deposit, time deposits, overnight bank deposits, banker's acceptances issued by federally insured banks with maturities of 270 days or less from the date of acquisition, repurchase agreements with acceptable collateral and maturities of 270 days or less from date of acquisition.

Table of Contents

Commercial Paper - commercial paper of US corporations that are rated at least "A-2" by S&P or "P-2" by Moody's or the equivalent rating of another nationally recognized statistical rating organization if S&P or Moody's cease publishing ratings of these securities, and have maturities of 270 days or less from the date of acquisition.

Money Market Accounts or Funds - money market accounts or funds that meet the following criteria:

■

A substantial portion of the assets of the money market account or fund must be comprised of certain qualifying investments instruments;

■

Issuers of the fund or account's investments must have a combined capital and surplus in excess of $500,000,000;

■

Maturities of 270 days or less from the date of acquisition;

■

Have net assets of not less than $500,000,000; and

■

Have the highest rating available of S&P, Moody's, or Fitch, or carry an equivalent rating by a nationally recognized statistical rating organization if the named rating agencies cease publishing ratings of investments.

Diversification. Our portfolio is constructed to diversify risk with respect to asset class, geographical location, quality, maturity, business sector and individual issuer and issue concentrations.

Benchmarks. We benchmark the allocation of our investments based on the criteria set forth in the table below to help assure our investments are appropriately diversified. The benchmarks may change to respond to market conditions. Based on market conditions and other considerations, investments in the approved investment instruments described are maintained in the following ranges:

% of Portfolio Cost Value
Asset Class	Minimum			Maximum
Cash/Short Term		0	%		100	%
Investment Grade Fixed Income		20	%		100	%
High Yield Fixed Income		0	%		15	%
Equity		0	%		50	%
Mortgage and Mortgage related		0	%		50	%
Real Estate (including REITs)		0	%		20	%

The Executive Committee of our Board of Directors may modify the above benchmark ranges at any time deemed appropriate based on current conditions. Any such modifications will be subject to approval by the full Board of Directors at its next regularly scheduled meeting. USALSC's, and USALSC-Montana’s investment policy, as a regulated insurance entity, contains additional investment limitations as required by law.

Reporting. The President, CEO, or their respective designees provide monthly reports to the Board of Directors reflecting the securities purchased and sold during the quarter, securities held at the end of the quarter, current benchmarks and an overall evaluation of the portfolio's investment performance.

Table of Contents

Marketing and Distribution - USALSC uses independent consultants and referrals to market their products and build distribution channels among funeral homes, banks, accountants, independent insurance agencies, agents, insurance brokerage firms, business owners and other distribution channels as opportunities arise. USALSC works with other insurance companies who have captive or non-captive agents to broaden their product offerings.

Employees - As of December 31, 2024, USAC and its subsidiaries have thirteen full-time employees and three part-time employees.

Reports to Security Holders - We provide reports to our stockholders, along with our audited year-end financial statements. In addition, all periodic reports and other information we file with the U.S. Securities and Exchange Commission (the “SEC”) are available for inspection and copying at the public reference facilities of the Securities and Exchange Commission located at 100 F Street N E, Washington, D C 20549.

Copies of such material may be obtained by mail from the Public Reference Section of the Securities and Exchange Commission, 100 F Street, N E, Washington, D.C. 20549, at prescribed rates.

Information on the operation of the Public Reference Room may be obtained by calling the SEC at l-800-SEC-0330. In addition, the Commission maintains a World Wide Website on the Internet at: http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. You may also find this information on our website (http://www.usalliancecorporation.com).

Implications of Having Been an Emerging Growth Company and Loss of Emerging Growth Company Status – We ceased being an emerging growth company on December 31, 2022, the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering in 2017. Under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We elected to use this extended transition period to comply with new or revised accounting standards that have different effective dates for public and private companies during the period in which we were an emerging growth company. As a result, our financial statements while we were an emerging growth company may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As a result of our ceasing to qualify as an emerging growth company, beginning in the fiscal year 2023, we are no longer able to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to SEC reporting companies. Specifically, we are now required to:

• Comply with requirements that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

• Submit certain executive compensation matters to stockholder non-binding advisory votes;

• Submit for stockholder approval golden parachute payments not previously approved;

• Disclose certain executive compensation related items, although we remain subject to the scaled disclosure requirements of a smaller reporting company with respect to executive compensation disclosure.

Because the worldwide market value of our common stock held by non-affiliates, or public float, is below $250 million, we continue to qualify as a “smaller reporting company” as defined under the Exchange Act. Although we are no longer an emerging growth company, certain reduced disclosure and other requirements continue to be available to us because we are a smaller reporting company. As a smaller reporting company we are not required to:

• Have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; and

• Present more than two years of audited financial statements in our registration statements and annual reports on Form 10-K and present any selected financial data in such registration statements and annual reports.

The additional compliance and reporting requirements resulting from the loss of our emerging growth company status may increase our legal and financial compliance costs and may result in an increase in demands on management resources. However, our continuing status as a smaller reporting company will reduce some of the additional expense and management attention necessary to be dedicated to such increased compliance obligations.

Table of Contents

ITEM 1A.

RISK FACTORS.

Risks Associated with an Investment in USAC Stock

We face many significant risks in the operating of our business and may face significant unforeseen risks as well. Our significant material risks are set forth below:

SHARE OWNERSHIP RISK - An investment in our voting common stock is speculative. Shares of our voting common stock constitute a high-risk investment in a business that has experienced profit in 5 of the last 6 years with accumulated losses of $10,018,342 since inception. No assurance or guaranty can be given that any of the benefits envisioned by our business plan will prove to be available to our stockholders, nor can any assurance or guaranty be given as to the actual amount of financial return, if any, which may result from ownership of our voting Common Stock. The entire value of the shares of USAC Common Stock may be lost.

OPERATING RISK - We faced the risks inherent in our business, including limited ability to raise additional capital, challenging product markets, limited revenues, as well as competition from better-capitalized and more seasoned companies. We have no control over general economic conditions, competitors’ products or their pricing, customer demand, costs of marketing or advertising, hacking of our administrative systems, and any impact from artificial intelligence. While we have been profitable for 5 of the last 6 years, there can be no assurance that our profitability will continue. The likelihood of future success must be considered in light of our history of operations with the cumulative accumulated operating losses. These risks make it difficult to predict our future revenues or results of operations accurately. Recent changes to accounting guidance and regulatory pronouncements increase our operating results' volatility. As a result, our financial results fluctuate. The Company evaluates the financial condition of its reinsurers to minimize its exposure to losses from reinsurer insolvencies. Management believes any liabilities arising from this contingency would not be material to the Company’s financial position.

BREACH OF INTERNAL CONTROLS/FRAUD – Internal controls are established on all aspects of the business. If internal controls are breached, fraud, incorrect payment of funds, incorrect claim processing, or other material issues within the Company could result. Fraud from internal or external sources will hurt profitability and strain and limit financial resources needed for company to grow.

GENERATIVE AI RISK – Generative AI challenges quality and accuracy; repeatability; data privacy; auditability; copyright; data quality; fraudulent use; skill of prompt engineering to derive useful outputs; as well as ethical considerations regarding bias, transparency, accessibility, accountability, and regulation. The Company continues to monitor this evolving risk.

CYBER ATTACK—A variety of cyber attacks can leave any Company vulnerable to data loss or theft, system shutdown, and a large-scale timeframe of being unable to conduct business-related activities.

Table of Contents

DEFICIENCY OF INTERNAL CONTROLS OVER FINANCIAL REPORTING—A deficiency of internal controls could leave assets vulnerable to accidental loss or loss from fraud. The integrity of the information used to make accurate business decisions could be compromised, and the business may not be in compliance with many federal, state, and local laws and regulations affecting its operation.

STRUCTURAL RISK/SYSTEMS RISK – The loss of primary, secondary, and backup power systems at the office or at cloud data facilities, failure of networking devices, file servers, server crashes, or undiagnosed errors masked by automated failure detection systems can lead to catastrophic failure of core systems and large scale downtime events.

REINSURANCE RELATIONSHIP RISK – The Company relies upon its reinsurers to provide expertise, financial strength, and growth opportunities and they play a key role in the success of the Company. The loss of a key reinsurance relationship could impact the future success of the Company.

LIQUIDITY RISK – While USAC is considered a “public company” by the SEC, there is no public market for USAC Common Stock and no assurance that one will develop or be sustained or that USAC Common Stock will become publicly traded. Our securities are not listed for trading on any national securities exchange, nor are bid or asked quotations reported in any over-the-counter quotation service, and we do not intend to seek any such listing in the foreseeable future.

PROFITABILITY - As is common among small life insurance companies, we have historically incurred significant losses. As of December 31, 2024 we had a consolidated accumulated deficit of $10.0 million. These losses were attributable primarily to costs of administration, volatility in net investment gains and losses, the substantial costs of writing new life insurance (which are deferred and amortized in accordance with our deferred acquisition policy) and include first year commissions payable to insurance agents, medical and investigation expenses as well as other expenses incidental to the issuance of new policies as well as with the reserves required to be established for each policy. However, the Company has been profitable in 2019, 2020, 2021, 2023, and 2024.

DIVIDENDS - We have not paid a cash dividend on USAC Common Stock and do not anticipate paying a cash dividend in the foreseeable future. We intend to retain available funds to be used to expand operations. The success of any investment in USAC Common Stock will depend upon any future appreciation of its value, which will depend on the success of our life insurance subsidiaries. We cannot guarantee that our common stock will appreciate in value or achieve or maintain a value equal to the price at which shares were purchased. Further, a market may never develop to sell shares of USAC Common Stock.

CAPITAL RISK - The law requires adequate capital and surplus calculated following statutory accounting principles prescribed by state insurance regulatory authorities to meet regulatory requirements. The amount of capital and surplus required is based on certain “risk-based capital” standards established by statute and regulation and administered by regulators. The “risk-based capital” system establishes a framework for evaluating the adequacy of the minimum amount of capital and surplus, calculated following statutory accounting principles, necessary for an insurance company to support its overall business operations. If we fail to maintain the required capital levels, our ability to conduct business would be compromised. Recent regulatory changes to bond classifications and other rules increase volatility and cause immediate changes to our required capital.

DILUTION RISK - In February 2010, we filed a prospectus with the Kansas Securities Commission to register shares of USAC Common Stock and warrants to purchase USAC Common Stock. In February 2015, we filed a Prospectus with the Kansas Securities Commission to register the common stock to be issued upon the exercise of the warrants, and in January 2016, filed a Supplement to the Prospectus to register an additional 1,500,000 shares of USAC Common Stock. This offering has been renewed annually by post-effective amendments to the original 2015 offering. We also commenced a private placement of USAC Common Stock in North Dakota in 2017. Both offerings were terminated in the second quarter of 2024. Any additional offerings of USAC securities that we may conduct in the future will reduce the ownership percentage of existing shareholders and be accretive to existing stockholder book value.

KEY EXECUTIVE RISK - The loss of services from a key executive could adversely affect our ability to execute our business plan. This could hamper profitability, response time, productivity, image, reputation, and confidence. USAC has entered into employment agreements with its principal executive officer and principal financial officer. Still, such agreements cannot guarantee that such officers may not separate from the Company during the terms of their respective employment agreements or thereafter. The death or disability of either of our executive officers would also harm the Company.

Table of Contents

SEC REGISTRATION - USAC is a “public company” as defined by the Securities and Exchange Commission. As such, we incur significant legal, accounting, and other expenses under the Exchange Act and the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC. These rules impose various requirements on public companies, including establishing and maintaining effective disclosure and financial controls and appropriate corporate governance practices. Our board, management, and other personnel must devote a substantial amount of time to these compliance requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and are time-consuming and costly.

LOSS OF EMERGING GROWTH COMPANY STATUS - The Company ceased to be deemed an “emerging growth company” as of December 31, 2022. As a result, the costs and demands placed upon management may increase, as beginning with the fiscal year ended December 31, 2023, the Company is now required to comply with additional disclosure and accounting requirements. However, as long as the aggregate value of the Company’s common stock held by non-affiliates remains less than $250 million, the Company will qualify as a “smaller reporting company” as well as a “non-accelerated filer” eligible for relief from certain disclosure and reporting requirements. This will reduce some of the additional expense and management attention necessary for compliance.

Smaller reporting companies can provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and have certain other reduced disclosure obligations.

POTENTIAL ACQUISITION RISK - In addition to our organic growth, we pursue strategic acquisitions of insurance-related companies that meet our acquisition criteria. However, suitable acquisition candidates may not be available on terms and conditions that are economically beneficial to us. In pursuing acquisitions, we compete with other companies, who may have greater financial and other resources than us. Further, if we succeed in consummating acquisitions, our business, financial condition, and results of operations may be negatively affected.

●

An acquired business may not achieve anticipated revenues, earnings, or cash flows;

●

We may assume liabilities that were not disclosed or exceed estimates;

●

We may be unable to integrate acquired businesses successfully and realize anticipated economic, operational, and other benefits in a timely manner;

●

Acquisitions could disrupt our ongoing business, distract our management, and divert our financial and human resources;

●

We may experience difficulties operating in markets in which we have no or only limited direct experience, and

●

There is the potential for loss of customers and key employees of any acquired company.

MARKETING STRATEGY RISK - Premium written depends primarily on our products, product pricing and ability to choose and timely and adequately train and motivate agents, producers, and brokers to sell our products.

Large life companies with greater financial resources, longer business histories, and possibly more products present significant competition to smaller insurance companies. These larger companies also generally have large distribution capabilities, which makes it difficult to build our company.

Independent agents are not required to sell the Company’s products and are free to sell products from other licensed companies. We are committed to working to educate and incentivize independent agents to sell our products.

Table of Contents

THE COMPANY’S INVESTMENTS ARE SUBJECT TO MARKET AND CREDIT RISKS - Our invested assets are subject to customary risks of credit defaults and changes in fair value and/or market value. Factors that may affect the overall default rate on and fair value of the Company’s invested assets include interest rate levels and changes, availability, and cost of liquidity, financial market performance, regulatory pronouncements, and general economic conditions.

NO INSURANCE RATING RISK – USACSC and USALSC-Montana have not been rated by a rating agency. The lack of a rating could result in loss of faith from producers, E&O carriers and consumers seeking products from a rated company, as well as a negative impact on ability to compete with rated companies.

Insurance ratings reflect the rating agencies’ opinion of an insurance company’s history, financial strength, operating performance, and ability to meet its obligations to policyholders. There can be no assurance that a rating agency will rate USALSC or USALSC-Montana or that any rating, if and when received, will be favorable.

Risks Associated with Companies in the Life Insurance Industry, including USAC and its subsidiaries

GENERAL REGULATORY RISK -All insurance operations are subject to government regulation in each state where they conduct business. Such regulatory authority is vested in state agencies having broad administrative power dealing with all aspects of the insurance business, including premium rates, policy forms, and capital adequacy, and is concerned with the protection of policyholders rather than stockholders. Among other matters, the regulations require prior approval of acquisitions of insurance companies, solvency standards, licensing of insurers and their agents, investment restrictions, deposits of securities for the benefit of policyholders, approval of policy forms and premium rates, periodic examinations, and reserves for unearned premiums, losses, and other matters.

Compliance with insurance regulation is costly and time-consuming, requiring the filing of detailed annual reports, and the business and accounts are subject to examination by the applicable state insurance regulator.

Increased scrutiny has been placed upon the insurance regulatory framework during the past several years, and certain state legislatures have considered or enacted laws that alter, and in many cases increase, state authority to regulate insurance companies and insurance holding company systems. The National Association of Insurance Commissioners (“NAIC”) and state insurance regulators reexamine existing laws and regulations on an ongoing basis and focus on insurance company investments and solvency issues, risk-based capital guidelines, interpretations of existing laws, the development of new laws, the implementation of non-statutory guidelines and the circumstances under which dividends may be paid. Future NAIC initiatives and other regulatory changes may have a material adverse impact on the insurance industry. There is no assurance that the regulatory requirements of the insurance departments of their respective state of domicile or a similar department in any other state in which they may wish to transact business can be satisfied.

Individual state guaranty associations assess insurance companies to pay benefits to policyholders of insolvent or failed insurance companies. The amount of any future assessments to be made from known insolvencies cannot be predicted.

REGULATORY FACTORS RISK – Broad insurance laws in the states where we do business give insurance regulators broad regulatory authority. Combined with the Dodd-Frank Wall Street Reform and Consumer Protection Act, this authority can allow regulators to interpret and implement additional rules that may take several years to complete. The ultimate outcome of regulatory rulemaking proceedings cannot be predicted with certainty, and the regulations promulgated could have a material impact on consolidated financial results or financial conditions.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”) reshaped financial regulations in the United States by creating new regulators, regulating new markets and firms, and providing additional enforcement powers to regulators. Virtually all major areas of the Reform Act remain subject to regulatory interpretation and implementation rules requiring rulemaking. The ultimate outcome of the regulatory rulemaking proceedings cannot be predicted. The regulations promulgated could have a material impact on consolidated financial results or financial condition.

COMPETITION RISK - Large life insurance companies that have greater financial resources, longer business histories, and may have more products present significant competition to smaller insurance companies. These larger companies also generally have large distribution opportunities, making product distribution difficult in building a small company.

ASSUMPTION RISK - In the life insurance business, assumptions about expected mortality, lapse rates, and other factors are made when developing the pricing and other terms of life insurance products. These assumptions are based on industry experience and are reviewed and revised regularly by an outside actuary to reflect actual experience on a current basis. Variation of actual experience from that assumed in developing such terms may affect a product’s profitability or sales volume and adversely impact revenues.

Table of Contents

LIABILITY RISK—Underestimating future policy benefits results in incurring additional expenses when a company becomes aware of the inadequacy. As a result, the ability to achieve profits would suffer.

INTEREST RATE RISK—Spread is the difference between the amounts that the insurance company is required to pay under the contracts and the amounts it can earn on its investments intended to support its obligations under the contracts. Interest rate fluctuations affect an insurance company’s ability to pay policyholder benefits with operating and investment cash flows, cash on hand, and other cash sources. Annuity products expose the risk that interest rate changes will reduce spread. Spread is a key component of net income.

To the extent that interest rates credited are less than those generally available in the marketplace, policyholder lapses, policy loans and surrenders, and withdrawals of life insurance policies and annuity contracts may increase as contract holders seek to purchase products with higher returns. This process may result in cash outflows requiring that an insurance subsidiary sell investments at a time when the prices of those investments are adversely affected by the increase in market interest rates, which may result in realized investment losses.

Increases in market interest rates may negatively affect profitability in periods of increasing interest rates. The ability to replace invested assets with higher-yielding assets is needed to fund higher crediting rates, which may be necessary to keep interest-sensitive products competitive.

LAPSE AND WITHDRAWAL RISK - Policy lapses above those actuarially anticipated would have a negative impact on financial performance. Profitability would be reduced if lapse and surrender rates exceed the assumptions upon which the insurance policies were priced. Policy sales costs are deferred and recognized over the life of a policy. Excess policy lapses cause the immediate expensing or amortizing of deferred policy sales costs. In addition, some of our policies allow holders to withdraw all or some of the policy’s value, and withdrawals beyond those anticipated could impact our business.

OPERATIONAL RISK - In the insurance industry, successful incorporation and functionality of the internal audit function, the evolution of financial and administrative internal controls to safeguard human, facility, and financial assets electronically, including anti-fraud initiatives and compliance with anti-money laundering requirements as well as an effective disaster recovery program and effective business continuity programs, are necessary.

TAX LAW RISK - Congress considers legislation that could adversely affect the sale of life insurance products compared with other financial products. There can be no assurance as to whether such adverse legislation will be enacted or, if passed, whether such legislation would contain provisions with possible adverse effects on any annuity and life insurance products we and our operating subsidiaries develop.

Under the Internal Revenue Code, income taxes payable by policyholders on investment earnings is deferred during the accumulation period of certain life insurance and annuity products. This favorable tax treatment may give certain insurance products a competitive advantage over other non-insurance products. To the extent that the Internal Revenue Code may be revised to reduce the tax-deferred status of life insurance and annuity products or to increase the tax-deferred status of competing products, insurance companies would be adversely affected with respect to their ability to sell products. Also, depending on grandfathering provisions, the surrenders of existing annuity contracts and life insurance policies might increase. In addition, life insurance products are often used to fund estate tax obligations. We cannot predict what future tax initiatives may be proposed with respect to the estate tax or other taxes that may adversely affect us.

REINSURANCE RISK -In order to manage the risk of financial exposure to adverse underwriting results, reinsurers accept a portion of the risk of other insurance companies. However, the direct insurer remains liable with respect to ceded insurance should any reinsurer fail to meet the obligations assumed by the reinsurer.

COVID-19 RISK - The outbreak and world-wide spread of the COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption in financial market, and the prolonged impact of COVID-19 could affect various aspects of our business. Following the initial outbreak of the virus, virtually all of USAC's operations were performed by employees working remotely. We have returned to in-office work, other than occasional temporary office closures due to exposures, and four employees who work remotely due to their geographic locations. While we have not experienced significant disruptions to our business, we have experienced higher claims on our insurance products which may be due in part to the COVID-19 pandemic. In addition, our investment portfolio may be adversely affected as a result of uncertainty surrounding the pandemic and its outcome.

Table of Contents

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 1C.

CYBERSECURITY.

Risk management is an essential component of our culture and business model. Guarding against the specific risks posed by cybersecurity threats has been and will continue to be very dynamic in nature, requiring that we remain agile and aware of internal and external changes. We recognize that cybersecurity threats can be among the most critical risks facing large companies. As a result, cybersecurity is treated as a Board-level matter and overseen by the Board. However, both the Board and management have an integral role in the identification, assessment and management of cybersecurity risk.

Management engages third parties with relevant expertise in assessing and managing cybersecurity threats. As a general matter, we take a proactive approach to assessing and monitoring cybersecurity-specific risks that is oriented around monitoring emerging external threats, ensuring controls are in place to identify and manage risk within our technology environment and creating a culture of vigilance across the organization. Annually we hire a third party to test for and resolve weaknesses and vulnerabilities within our systems and applications by using network and infrastructure vulnerability testing.

Our awareness and training program creates a risk-aware culture to ensure employees understand cybersecurity threats and are accountable for completing required training. We have an enterprise incident management plan that provides a framework for preparing for, managing and responding to cybersecurity incidents that may arise.

No risks from any known cybersecurity incidents have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. For further discussion related to how cybersecurity risks may impact our performance in the future, see Item 1A. “Risk Factors.”

ITEM 2.

PROPERTIES.

USAC and its subsidiaries share offices located at 1303 SW First American Place, Suite 200, Topeka, Kansas 66604 in a building purchased by DCLIC on November 15, 2020.

ITEM 3.

LEGAL PROCEEDINGS

Neither the Company nor any of its principals is presently engaged in any material pending litigation that might adversely impact its net assets.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a)

Market Information

There is no established trading market for our voting common stock. Our securities are not listed for trading or quoted on any national securities exchange nor are bid or asked quotations reported in any over-the-counter quotation system.

As of December 31, 2024, we had issued and outstanding 7,748,922 shares of our voting common stock. No other equity securities of the Company have been issued.

Table of Contents

(b)

Holders of Record

As of March 1, 2025, there are approximately 3,00 holders of record of our voting common stock.

(c)

Dividends

We have not paid dividends on USAC Common Stock and do not anticipate paying dividends in the foreseeable future. We intend to retain any future earnings for reinvestment into our business.

(d)

Securities Authorized for Issuance Under Equity Compensation Plans

During the year ended December 31, 2024, the Company issued 250,000 shares of restricted stock to members of its Board of Directors under individual Restricted Stock Agreements ("RSAs") as part of the Company's compensation program. Thes awards are intended to align the interests of the Board with those of the Company’s shareholders and to retain experienced leadership. A summary of the Company’s non-vested restricted stock awards as of December 31, 2024 and changes for the year then ended is presented below:

Plan category (1)	Number of securities to be issued upon vesting (lapse of restrictions)			Weighted-average grant date fair value		Number of securities available for future issuance under equity compensation plans (2)
						N/A
Individual compensation arrangement (restricted stock award)		250,000	(2)	$	1.00

(1) Individual restricted stock awards were authorized by the Board and not submitted for approval by the Company's shareholders.

(2) 50,000 shares of restricted stock issued to Jennifer Schmidt were forfeited upon her resignation for the Company's Board of Directors in accordance with the terms of her RSA.

(3) The Company has issued restricted stock to its Directors under individual Restricted Stock Agreements and has not adopted any equity compensation plans.

The terms of the RSAs provide that the restricted shares awarded to the Company's Directors vest equally in 20% increments over each of the following five fiscal years, beginning with the year ended December 31, 2024 and continuing through December 31, 2029. Any unvested shares of restricted stock are subject to forfeiture in the event of termination of service before the shares have vested, except in cases of death, disability, or a change in control of the Company.

(e)

Recent Sales of Unregistered Securities

During the year ended December 31, 2024, the Company did not issue any shares pursuant to an offering to residents of the state of Kansas that was registered with the Kansas Securities Commissioner (the “Kansas Offering”). This offering was terminated in the second quarter of 2024.

During the year ended December 31, 2024, the Company did not issue any shares pursuant to a private placement offering to accredited investor residents of the state of North Dakota (the “North Dakota Offering”). This offering was terminated in the second quarter of 2024.

ITEM 6.

[Reserved.]

Table of Contents

ITEM 7.

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

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included in this Form 10-K. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, including those relating to the Covid-19 pandemic, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward looking statements.

Overview

USAC was formed as a Kansas corporation on April 24, 2009 to raise capital to form a new Kansas-based life insurance company. We presently conduct our business through our four wholly-owned subsidiaries: USALSC, a life insurance corporation; USALSC-Montana, a life insurance corporation; USAMC, an insurance marketing corporation; and USAIC, an investment management corporation

On January 2, 2012, USALSC was issued a Certificate of Authority to conduct life insurance business in the State of Kansas. We began third-party administrative services in 2015. USALSC re-domesticated to North Dakota in 2023. USALSC is currently authorized to conduct business in 18 states.

On August 1, 2017, the Company merged with Northern Plains Capital Corporation with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company which became a wholly owned subsidiary of USALSC. In 2023, Dakota Capital Life Insurance Company was merged into USALSC.

On December 14, 2018, the Company acquired Great Western Life Insurance Company. Great Western Life Insurance Company was renamed US Alliance Life and Security Company – Montana and is a subsidiary of USALSC.

The Company assumes business under reinsurance treaties. On January 1, 2013, the Company entered into an agreement to assume 20% of a certain block of health insurance policies from Unified Life Insurance Company. On September 30, 2017, the Company entered into an agreement (the “2017 ALSC Agreement”) t to assume 100% of a certain block of life insurance policies from American Life & Security Company (“ALSC”). On April 15, 2020, with an effective date of January 1, 2020, the Company entered into an agreement with ALSC (the “2020 ALSC Agreement “) to assume a quota share percentage of a block of annuity policies. Effective December 31, 2020 USALSC entered into an agreement with ALSC, which provided for ALSC to recapture all reserves previously ceded to USALSC with respect to a portion of the 2017 ALSC Agreement.

On December 31, 2023 USALSC entered into an agreement with Lewer Life Insurance LLIC to assume a block of life and annuity policies.

Mergers and Acquisitions

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

On October 11, 2018 the Company entered into a stock purchase agreement with Great Western Insurance Company to acquire Great Western Life Insurance Company. The transaction closed on December 14, 2018. USALSC paid $500,000 to acquire all of the outstanding shares of GWLIC.

Effective December 31, 2020, DCLIC acquired a block of life insurance policies according to the terms of an assumption agreement with ALSC. The Company acquired fixed maturity securities and cash of $9,181,100, assumed liabilities of $10,972,785 and recorded VOBA of $2,163,541.

On December 31, 2023, DCLIC was merged into its parent company, USALSC.

Table of Contents

Critical Accounting Policies and Estimates

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

Valuation of Investments

The Company's principal investments are in fixed maturity, mortgages, and equity securities. Fixed maturity, classified as available for sale, are carried at their fair value in the consolidated balance sheets, with unrealized gains or losses recorded in comprehensive income (loss). Our fixed income investment manager utilizes external independent third-party pricing services to determine the fair values of investment securities available for sale. Equity securities are carried at their fair value in the consolidated balance sheets, with unrealized gains or losses recorded in net income. Mortgages, including mortgage loan participations, are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances.

The recognition of credit losses on debt securities is dependent on the facts and circumstances related to the specific security. If we determine a credit loss exists, the difference between amortized cost and fair value is recognized in the consolidated statements of comprehensive income. Our membership in the Federal Home Loan Bank (“FHLB”) provides additional liquidity which further reduces the likelihood that we would be required to sell a security prior to recovery for liquidity purposes.

Mortgage loans on real estate, including mortgage loan participations, are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances. Interest income is accrued on the principal amount of the mortgage loans based on its contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. The Company accrues interest on loans until probable the Company will not receive interest or the loan is 90 days past due. Interest income, amortization of premiums, accretion of discounts and prepayment fees are reported in investment income, net of related expenses in the consolidated statements of comprehensive income.

A mortgage loan is considered to be impaired when, based on the current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement.

Valuation allowances on mortgage loans are established based upon inherent losses expected by management to be realized in connection with future dispositions or settlement of mortgage loans, including foreclosures. The Company establishes valuation allowances for estimated impairments on an individual loan basis as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan’s original effective interest rate, the value of the loan’s collateral if the loan is in the process of foreclosure or is otherwise collateral-dependent, or the loan’s market value if the loan is being sold. These evaluations are revised as conditions change and new information becomes available. In addition to historical experience, management considers qualitative factors that include the impact of changing macro-economic conditions, which may not be currently reflected in the loan portfolio performance, and the quality of the loan portfolio.

Any interest accrued or received on the net carrying amount of the impaired loan will be included in investment income or applied to the principal of the loan, depending on the assessment of the collectability of the loan. Mortgage loans deemed to be uncollectible or that have been foreclosed would be charged off against the valuation allowances and subsequent recoveries, if any, are credited to the valuation allowances. Changes in valuation allowances are reported in net investment gains (losses) on the consolidated statements of comprehensive income.

Other invested assets include collateral loans and private credit investments. The collateral loans and private credit investments are carried at fair value. The inputs used to measure these assets are classified as Level 3 within the fair value hierarchy.

Limited partnership interests consist of an investment in Mutual Capital Investment Fund. Limited partnerships interests are carried at net asset value as determined by a third-party valuation.

Table of Contents

Deferred Acquisition Costs

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

Future Policy Benefits

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

New Accounting Standards

A detailed discussion of new accounting standards is provided in the Notes to Consolidated Financial Statements beginning on p. F-8 of this annual report.

Table of Contents

Discussion of Consolidated Results of Operations

Total Income. Insurance revenues are primarily generated from premium revenues and investment income. Total income for the years ended December 31, 2024 and 2023 are summarized in the table below.

	Twelve Months Ended December 31,
	2024		2023
Income:
Premium income	$	15,338,053	$	13,131,574
Net investment income		7,597,762		6,412,669
Net investment gains (losses)		283,423		1,016,561
Other income		553,035		353,254
Total income		23,772,273		20,914,058

Our 2024 total income increased to $23,772,273, an increase of $2,858,215 or 14% from the 2023 total income of $20,914,058. The increase is driven by increases in premium income and net investment income. The Company records unrealized gains and losses on equity securities in total income in accordance with accounting standards. This standard continues to result in increased volatility in total income.

The following graph summarizes our five-year trend of total income:

Premium income: Premium income for 2024 was $15,338,053 compared to $13,131,574 in 2023, an increase of $2,260,479 or 17%. The increase was driven by an increase in direct single and recurring premiums. Even though it is a reduction in revenue, ceded premium increases reflect the growth of our group policy premiums as we focused on small companies to assist them with their employee benefits.

Table of Contents

Direct, assumed and ceded premiums for the years ended December 31, 2024 and 2023 are summarized in the following table:

	Years Ended December 31,
	2024			2023

Direct	$	11,928,460		$	9,988,176
Assumed		4,956,205			4,543,477
Ceded		(1,546,612	)		(1,400,079	)
Total	$	15,338,053		$	13,131,574

The Company continuously searches for new product and distribution opportunities to continue to increase premium production on a direct and assumed basis.

Investment income, net of expenses: The components of net investment income for the years ended December 31, 2024 and 2023 are as follows:

	Years Ended December 31,
	2024			2023
Fixed maturities	$	5,985,869		$	4,712,515
Mortgages		1,680,515			1,678,623
Equity securities		313,416			686,999
Other invested assets		197,760			218,784
Cash and cash equivalents		322,841			129,188
		8,500,401			7,426,109
Less investment expenses		(902,639	)		(1,013,440	)
	$	7,597,762		$	6,412,669

Net investment income for 2024 was $7,597,762, compared to $6,412,669 in 2023, an increase of $1,185,093, or 18%. This increase is due to improved yields.

Net investment gains (losses): Accounting standards require that the unrealized gains and losses on equity securities be reported as income on the consolidated statements of comprehensive income. For the years ended December 31, 2024 and 2023, net investment gains are summarized in the following table.

	Years Ended December 31,
	2024			2023
Recognized gains (losses) on sale of investments	$	13,031		$	(757,601	)
Change in allowance for credit loss recognized in earnings		(34,041	)		128,729
Unrealized net gains (losses) recognized in earnings		8,414			1,711,411
Embedded Derivative		296,019			(65,978	)
Net investment gains (losses)	$	283,423		$	1,016,561

Net investment gains for 2024 were $283,423 compared to $1,016,561 in 2023, a decrease of $733,138 or 72%. The decrease was driven by a reduction in unrealized gains recognized in income.

Table of Contents

Realized gains (losses): Realized gains and losses related to the sale of securities for the years ended December 31, 2024 and 2023 are summarized as follows:

	Years Ended December 31,
	2024			2023
Gross gains	$	201,481		$	14,399
Gross losses		(188,450	)		(772,000	)
Realized gains (losses)	$	13,031		$	(757,601	)


Fixed maturity securities		-			-
Mortgage loans on real estate		(34,041	)		128,729
(Increase) Decrease in allowance for credit losses	$	(34,041	)	$	128,729

Other income: Other income for the year ended December 31, 2024 was $553,035 compared to $353,254 in 2023, an increase of $199,781 or 57%. The increase was the result of implementation fees for a third-party administration agreement.

Expenses. Expenses for the year ended December 31, 2024 and 2023 are summarized in the table below.

	Twelve Months Ended December 31,
	2024		2023
Expenses:
Death claims	$	3,983,405	$	3,432,119
Policyholder benefits		6,883,283		6,342,303
Increase in policyholder reserves		5,566,210		4,589,538
Commissions, net of deferrals		947,548		837,560
Amortization of deferred acquisition costs		1,440,520		1,407,503
Amortization of value of business acquired		92,420		92,420
Salaries & benefits		1,701,745		1,627,644
Other operating expenses		2,624,371		1,959,242
Total expense	$	23,239,502	$	20,288,329

The following chart and graph summarizes our five-year expense trend:

	Increase in		Other						% of Operating
	Policyholder		Policy-related		Operating		Total		Expense to
Year	Reserves		Expenses		Expenses		Expenses		Total Expense
2020		3,359,609		8,964,121		3,649,000		15,972,730		23	%
2021		4,063,488		10,627,532		3,244,412		17,935,432		18	%
2022		4,207,703		11,623,423		3,480,212		19,311,338		18	%
2023		4,589,538		12,111,905		3,586,886		20,288,329		18	%
2024		5,566,210		13,347,176		4,326,116		23,239,502		19	%

Table of Contents

Increases in policyholder reserves represents funds that we maintain and invest for the future benefit of our policyholders. Other policy-related expenses represent the other expenses associated with fulfilling our obligations to our policyholders and producers. Operating expenses represent the costs to operate the company and consists of salaries and benefits and other operating expenses.

Death claims: Death benefits were $3,983,405 in the year ended December 31, 2024 compared to $3,432,119 for 2023, an increase of $551,286 or 16%. This increase is attributable to our growing block of in-force pre-need life insurance policies. We expect these claims to grow as we continue to increase the size of our in-force business.

Policyholder benefits: Policyholder benefits were $6,883,283 in the year ended December 31, 2024 compared to $6,342,303 in 2023, an increase of $540,980 or 9%. The primary driver of this increase is growing interest credited on our annuity contracts.

Increase in policyholder reserves: Policyholder reserves increased $5,566,210 in the year ended December 31, 2024, compared to $4,589,538 in 2023, an increase of $976,672 or 21%. The growth in reserves is the result of increased pre-need in-force policies.

Commissions, net of deferrals: The Company pays commissions to the ceding company on a block of assumed policies as well as commissions to agents on directly written business. Commissions, net of deferrals, were $947,548 in the year ended December 31, 2024, compared to $837,560 in 2023, an increase of $109,988 or 13%. This increase is due to an increase in and changing mix of premiums.

Amortization of deferred acquisition costs: The amortization of deferred acquisition costs ("DAC") was $1,440,520 in the year ended December 31, 2024, compared to $1,407,503 in 2023, an increase of $33,017 or 2%. The increase is driven by normal adjustments to DAC amortization, which occur over the life of a policy.

Amortization of value of business acquired: The amortization of value of business acquired (“VOBA”) was $92,420 in the years ended December 31, 2024 and 2023, respectively. VOBA is being amortized straight-line over 30 years.

Salaries and benefits: Salaries and benefits were $1,701,745 for the year ended December 31, 2024, compared to $1,627,644 in 2023, an increase of $74,101 or 5%. The increase was driven by increased employee compensation costs and additional team members.

Other expenses: Other operating expenses were $2,624,371 in the year ended December 31, 2024, compared to $1,959,242 in 2023, an increase of $665,129 or 34%. The increase is driven by increased audit and actuarial expenses which are responsible for over 70% of the other expense increase.

Table of Contents

Federal income tax(expense) benefit: In the year ended December 31, 2024, the Company recognized federal income tax expense $61,793. In the year ended December 31, 2023, the Company recognized a deferred income tax benefit of $852,347. These are the result of changes in the deferred tax asset and deferred tax asset valuation allowance and due to current income tax expense.

Net Income: Our net income was $470,978 in the year ended December 31, 2024 compared to net income of $1,478,076 in 2023, a decrease of $1,007,098. Our net income per share was $0.06 compared to net income per share of $0.19 in 2023, basic and diluted.

The following graph illustrates our five-year trend of net income (loss) per share:

Discussion of Consolidated Balance Sheet

Assets. Assets have increased to $131,293,982 as of December 31, 2024, an increase of $5,209,346 or 5% from December 31, 2023 assets of $126,084,636. This is primarily the result of an increase in fixed maturity securities and mortgage loans.

Available for sale fixed maturity securities: As of December 31, 2024, we had available for sale fixed maturity assets of $79,578,179, an increase of $5,068,659 or 7% from the December 31, 2023 balance of $74,509,520. The increase is driven by new purchases.

Equity securities, at fair value: As of December 31, 2024, we had equity assets of $3,876,085, an increase of $290,200 or 8% from the December 31, 2023 balance of $3,585,885. This increase is driven by purchases of equity securities and improved market values.

Limited partnership interests: As of December 31, 2024, we had limited partnership interests of $428,170, an increase of 38,343 or 10% from the December 31, 2023 balance of $389,827. This is related to our investment in the Mutual Capital Investment Fund.

Mortgage loans on real estate: As of December 31, 2024, we had mortgage loans on real estate of $25,192,749, an increase of $5,575,496 or 28% from the December 31, 2023 balance of $19,617,253. The increase results from acquiring new mortgage loan participations.

Other invested assets: As of December 31, 2024, we had other invested assets of $1,109,606, a decrease of $1,130,077 or 51% from the December 31, 2023 balance of $2,239,683. The decrease was driven by maturities.

Policy loans: As of December 31, 2024, our policy loans were $31,745, an increase of $5,613 or 22% from the December 31, 2023 balance of $26,132. The increase is a result of new policy loan activity.

Table of Contents

Real estate, net of depreciation: As of December 31, 2024, we had real estate assets of $1,652,553 related to our home office building, a decrease of $34,115 or 2% from the December 31, 2023 balance of $1,686,668. The decrease is the result of building depreciation.

Cash and cash equivalents: As of December 31, 2024, we had cash and cash equivalent assets of $6,903,783, a decrease of $2,078,355 or 23% from the December 31, 2023 balance of $8,982,138. This decrease was the result of cash being redeployed into invested assets.

Investment income due and accrued: As of December 31, 2024, our investment income due and accrued was $954,324 compared to $1,878,620 as of December 31, 2023, a decrease of $924,296 or 49%. This decrease is attributable to a reduction in accrued income due to interest payments.

Reinsurance related assets: As of December 31, 2024, our reinsurance related assets were $522,142 compared to $1,039,274 as of December 31, 2023, a decrease of $517,132 or 50%. This decrease is the result of changes in the net settlement due to/from ALSC under our 2020 ALSC Agreement.

Deferred acquisition costs, net: As of December 31, 2024, our deferred acquisition costs were $3,908,636 compared to $4,751,497 as of December 31, 2023, a decrease of $842,861 or 18%. The decrease is the result of the amortization of DAC related to our 2020 ALSC Agreement.

Value of business acquired, net: As of December 31, 2024 our value of business acquired asset was $2,333,553 compared to $2,425,973 as of December 31, 2023, a decrease of $92,420 or 4%. The decrease is the result of amortization of VOBA.

Property, equipment and software, net: As of December 31, 2024 our property, equipment and software assets were $136,353, a decrease of $1,903 or 1% from the December 31, 2023 balance of $138,256. This decrease is the result of depreciation partially offset by the purchase of computers in 2024.

Goodwill: As of December 31, 2024 and December 31, 2023, our goodwill was $277,542. Goodwill was established as a result of our merger with NPCC. We have determined that there has been no impairment to our goodwill balance.

Deferred tax asset, net of valuation allowance: The Company had a net deferred tax asset of $3,747,111 as of December 31, 2024, a decrease of $141,796 or 4% from the December 31, 2023 balance of $3,888,907. The decrease is the result of deferred federal income tax expense.

Other assets: As of December 31, 2024, our other assets were $459,102, a decrease of $41,528 or 8% from the December 31, 2023 balance of $500,630. This decrease is the result of normal business activity.

Liabilities. Our total liabilities were $120,663,564 as of December 31, 2024, an increase of $4,910,005 or 4% from our December 31, 2023 liabilities of $115,753,559. This increase is driven by an increase in our policy liabilities.

Policy liabilities: Our total policy liabilities as of December 31, 2024 were $118,188,150 compared to $112,563,626 as of December 31, 2023, an increase of $5,624,524 or 5%. This increase is the result of the growth of our in-force business.

Accounts payable and accrued expenses: As of December 31, 2024, our accounts payable and accrued expenses were $1,133,521 compared to $2,053,363 as of December 31, 2023, a decrease of $919,842 or 45%. The decrease is driven by reduced investment fees payable.

Federal Home Loan Bank advance: As of December 31, 2024 the Company’s outstanding advances were $1,250,000 compared to $1,000,000 as of December 31, 2023, an increase of $250,000 or 25%.

Other liabilities: As of December 31, 2024, we had other liabilities of $91,893 compared to $136,570 as of December 31, 2023, a decrease of $44,677 or 33%. The decrease is the result of normal business activity.

Shareholders’ Equity. Our shareholders’ equity was $10,630,418 as of December 31, 2024, an increase of $299,341 or 3% from our December 31, 2023 shareholders’ equity of $10,331,077. The increase in shareholders’ equity was driven by our net income.

Table of Contents

Investments

Our investment philosophy is reflected by the allocation of our investments. We emphasize investment grade debt securities with smaller holdings in equity securities, mortgages and other investments. The following table shows the carrying value of our investments by investment category and cash and cash equivalents, and the percentage of each to total invested assets as of December 31, 2024 and December 31, 2023.

	December 31, 2024					December 31, 2023
	Carrying		Percent			Carrying		Percent
	Value		of Total			Value		of Total
Fixed maturities:
US Treasury securities	$	711,377		0.6	%	$	724,668		0.7	%
Corporate bonds		21,491,820		18.1	%		17,813,362		16.0	%
Municipal bonds		4,741,149		4.0	%		5,636,093		5.1	%
Redeemable preferred stocks		2,411,234		2.0	%		3,305,569		3.0	%
Term Loans		12,788,304		10.8	%		17,052,420		15.4	%
Mortgage backed and asset backed securities		37,434,295		31.4	%		29,977,408		27.0	%
Total fixed maturities		79,578,179		66.9	%		74,509,520		67.1	%
Mortgage loans		25,192,749		21.2	%		19,617,253		17.7	%
Other invested assets		1,109,606		0.9	%		2,239,683		2.0	%
Limited partnership interests		428,170		0.4	%		389,827		0.4	%
Equities:
Common stock		2,395,195		2.0	%		2,116,356		1.9	%
Preferred stock		1,480,890		1.2	%		1,469,529		1.3	%
Total equities		3,876,085		3.3	%		3,585,885		3.2	%
Real estate, net of depreciation		1,652,553		1.4	%		1,686,668		1.5	%
Cash and cash equivalents		6,903,783		5.8	%		8,982,138		8.1	%
Total	$	118,741,125		100.0	%	$	111,010,974		100.0	%

The total value of our investments and cash and cash equivalents increased to $118,741,125 as of December 31, 2024 from $111,010,974 at December 31, 2023, an increase of $7,730,151 or 7%. Increases in investments are primarily attributable to premium income and improved market values.

The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of December 31, 2024 and December 31, 2023.

	December 31, 2024					December 31, 2023
	Fair		Percent			Fair		Percent
	Value		of Total			Value		of Total

AAA and U.S. Government	$	5,470,235		6.9	%	$	4,259,281		5.7	%
AA		10,469,465		13.1	%		11,274,407		15.1	%
A		15,174,048		19.1	%		18,479,331		24.8	%
BBB		35,807,023		45.0	%		33,714,311		45.3	%
BB		4,378,680		5.5	%		3,033,357		4.1	%
B		90,675		0.1	%		-		0.0	%
Not Rated - Private Placement		8,188,053		10.3	%		3,748,833		5.0	%
Total	$	79,578,179		100.0	%	$	74,509,520		100.0	%

Table of Contents

The amortized cost and fair value of debt securities as of December 31, 2024 and 2023, by contractual maturity, are shown below. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of December 31, 2024				As of December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	2,329,228	$	2,329,228	$	152,840	$	147,835
After one year through five years		18,590,098		18,290,098		16,397,124		16,461,777
After five years through ten years		2,032,061		1,967,540		6,371,607		6,112,389
More than 10 years		20,606,740		17,025,901		21,488,624		18,504,542
Redeemable preferred stocks		2,562,893		2,411,234		3,622,572		3,305,569
Mortgage backed and asset backed securities		37,664,287		37,434,295		30,621,025		29,977,408
Total amortized cost and fair value	$	83,785,307	$	79,578,179	$	78,653,792	$	74,509,520

Market Risk of Financial Instruments

We hold a diversified portfolio of investments that primarily includes cash, bonds, equity securities, mortgage loans, and other invested assets. Each of these investments is subject to market risks that can affect their return and their fair value. The primary market risks affecting the investment portfolio are interest rate risk, credit risk, and equity risk.

Interest Rate Risk

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

We work to mitigate our exposure to adverse interest rate movements through laddering the maturities of the fixed maturity investments and through maintaining cash and other short-term investments to assure sufficient liquidity to meet our obligations and to address reinvestment risk considerations. Due to the composition of our book of insurance business, we believe it is unlikely that we would encounter large surrender activity due to an interest rate increase that would force the disposal of fixed maturities at a loss. Additionally, USALSC is a member of the FHLB of Topeka, which provides access to liquidity and further reduces the likelihood of disposing of fixed maturities at a loss.

Credit Risk

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

Table of Contents

Liquidity and Capital Resources

Premium income, deposits to policyholder account balances, investment income, and capital raising are the primary sources of funds while withdrawals of policyholder account balances, investment purchases, policy benefits in the form of claims, and operating expenses are the primary uses of funds. To ensure we will be able to pay future commitments, the funds received as premium payments and deposits are invested in primarily fixed income securities. Funds are invested with the intent that the income from investments, plus proceeds from maturities, will in the future meet our ongoing cash flow needs. The approach of matching asset and liability durations and yields requires an appropriate mix of investments. Our investments consist primarily of marketable debt securities that could be readily converted to cash for liquidity needs. Cash flow projections and cash flow tests under various market interest scenarios are also performed annually to assist in evaluating liquidity needs and adequacy. The Company has one past due loan with principal in the amount of $755,663 and accrued interest of $14,005. The Company does not anticipate this to have a material impact on our financial condition or liquidity. As a member of the Federal Home Loan Bank, USALSC has immediate access to additional cash liquidity, if needed.

Net cash provided by operating activities was $9,175,556 for the year ended December 31, 2024. The primary sources of cash from operating activities were premiums received from policyholders as well as investment income. The primary uses of cash for operating activities were for payments of commissions to agents and settlement of policy liabilities. Net cash used in investing activities was $9,471,842. The primary uses of cash was purchases of fixed maturity, mortgage, and equity investments. Cash used by financing activities was $1,782,069. The primary uses of cash were withdrawals on deposit-type contracts.

At December 31, 2024, we had cash and cash equivalents totaling $6,903,783. We believe that our existing cash and cash equivalents are sufficient to fund the anticipated operating expenses and capital expenditures for the foreseeable future. We have based this estimate upon assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. The growth of USALSC, our primary insurance subsidiary, is uncertain and may require additional capital as it continues to grow.

Cash flow from insurance activities is a non-GAAP financial measure. Cash flow from insurance activities combines cash flow from operations with the net cash received from deposit type contracts to show the impact of our insurance operations on our cash flows. Cash flow from deposit type contracts is primarily made up of funds received into our annuity products. The following table reconciles cash flow from operations to cash flow from insurance activities:

	Cash Flow		Net Cash Flow			Cash Flow
	From		From Deposit			from Insurance
Year	Operations		Type Contracts			Activities
2020		2,099,401		4,592,576		$	6,691,977
2021		3,411,873		2,050,078		$	5,461,951
2022		4,787,903		2,145,995		$	6,933,898
2023		7,441,585		(3,942,581	)	$	3,499,004
2024		9,175,556		(2,034,236	)	$	7,141,320

The following chart and graph illustrate our five-year trend of cash flow from insurance activities:

Table of Contents

Impact of Inflation

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

Off-Balance Sheet Arrangements

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

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements are included as part of this reporting beginning on page F-1.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Crowe LLP ("Crowe") served as the Company's auditor for the years end December 31, 2024 and 2023. There are not and have not been any disagreements between USAC and its auditor, Crowe, LLP, on any matter of accounting principles, practices or financial statement disclosure.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls

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

There were no changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. The Company’s system is designed to provide reasonable assurance to management and our Board of Directors regarding preparation of reliable published financial statements and safeguarding of our assets.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Intergrated Framework (2013).

There are inherent limitations to the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective internal control over financial reporting controls can only provide reasonable assurance of achieving their control objectives.

This annual report does not include an audit attestation report from our registered public accounting firm on the Company’s internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm due to the rules of the SEC for non-accelerated filers.

Table of Contents

ITEM 9B.

OTHER INFORMATION

(a) During the twelve months ended December 31, 2024, none our directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

(b) The Company has not adopted an insider trading policy governing the purchase, sale, or other disposition of the Company's securities by its officers, directors, and significant shareholders. The Company believes such a policy is not necessary as there is no trading market for the Company's securities.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is set forth under the captions “Proposal One-Election of Directors,” “Corporate Governance,” “Executive Officers” and “Beneficial Ownership Reporting Compliance” in our definitive proxy statement to be filed in connection with our 2025 annual stockholders’ meeting (“2025 Proxy Statement”) and is incorporated herein by reference.

ITEM 11.

EXECUTIVE COMPENSATION

The information required by this item is set forth under the captions “Director and Management Compensation” in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is set forth under the captions “Security Ownership” in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this item is set forth under the captions “Certain Relationships and Related Parties” in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is set forth under the caption “Principal Accountant Fees and Services” in our 2025 Proxy Statement and is incorporated herein by reference.

Table of Contents

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(1)

Consolidated financial statements:

The list of financial statements filed with this Annual Report on Form 10-K is provided on page F-1.

FINANCIAL STATEMENT SCHEDULES

We have omitted schedules required by applicable SEC accounting regulations because they are either not required under the related instructions, are inapplicable, or we present the required information in the financial statements or notes thereto.

Exhibit Index

2.1	Plan and Agreement of Merger amount Northern Plains Capital Corporation, US Alliance Corporation and Acquisition Merger Sub, Inc., filed as Exhibit 2.1 to the Company's Registration Statement on Form S-4 filed on June 1, 2017 (File No. 333-218389), is incorporated herein by reference as Exhibit 2.1.

2.2	Amendment dated May 21, 2017 to Plan and Agreement of Merger among Northern Plains Capital Corporation, US Alliance Corporation and Acquisition Merger Sub, Inc., filed as Exhibit 2.2 to the Company's Registration Statement on Form S-4 filed on June 1, 2017 (File No. 333-218389), is incorporated herein by reference as Exhibit 2.2.

2.3	Stock Purchase Agreement dated October 11, 2018 between Great Western Insurance Company and US Alliance Life and Security Company, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 16, 2018 (File No. 000-55627), is incorporated herein by reference as Exhibit 2.3.

2.4	Articles of Merger dated December 29, 2023 merging Dakota Capital Life Insurance Company with and into US Alliance Life and Security Company, filed as Exhibit 2.4 to the Company’s Annual Report on Form 10-K filed on April 1, 2024 (File No. 000-55627) is incorporated herein by reference as Exhibit 2.4.

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

3.1.1	First Amendment to the Articles of Incorporation of US Alliance Corporation, filed as Exhibit 3.1.1 to the Company’s Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.1.1.

3.1.2	Second Amendment to the Articles of Incorporation of US Alliance Corporation, filed as Exhibit 3.1.2 to the Company’s Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.1.2.

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

3.2.1	Amendment No. 1 to the Bylaws of US Alliance Corporation, filed as Exhibit 3.2.1 to the Company’s Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.2.1.

4.1	Form of Warrant to Purchase Common Shares of US Alliance Corporation, filed as Exhibit 4.1 to the Company’s Registration Statement on Form 10 filed on May 2, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 4.1.

Table of Contents

4.2	Description of US Alliance Corporation’s Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed on February 2, 2020, (File No. 000-55627), is incorporated herein by reference as Exhibit 4.2.

4.3	Restricted Stock Agreement dated December 11, 2024 between US Alliance Corporation, Inc. and John Helms, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 18, 2024 (filed No. 000-55627, is incorporated herein by reference as Exhibit 4.3

4.4	Restricted Stock Agreement dated December 11, 2024 between US Alliance Corporation, Inc. and William Graves, filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 18, 2024 (filed No. 000-55627, is incorporated herein by reference as Exhibit 4.4

4.5	Restricted Stock Agreement dated December 11, 2024 between US Alliance Corporation, Inc. and James Poolman, filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 18, 2024 (filed No. 000-55627, is incorporated herein by reference as Exhibit 4.5.

4.6	Restricted Stock Agreement dated December 11, 2024 between US Alliance Corporation, Inc. and Juliann Mazachek, filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 18, 2024 (filed No. 000-55627, is incorporated herein by reference as Exhibit 4.6.

10.1	Automatic Yearly Term Reinsurance Agreement between US Alliance Life and Security Company and General Re Life Insurance Corporation, filed as Exhibit 10.2 to the amended Company's Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.1.

10.2	Group Long Term and Short Term Disability Reinsurance Agreement between US Alliance Life and Security Company and Reliance Standard Life Insurance Company, DBA Custom Disability Solutions, filed as Exhibit 10.3 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.2.

10.3	Automatic Reinsurance Agreement between US Alliance Life and Security Company and Optimum Re Insurance Company (schedules omitted), filed as Exhibit 10.4 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.3.

10.4	Bulk Reinsurance Agreement between US Alliance Life and Security Company and Optimum Re Insurance Company, filed as Exhibit 10.5 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.5.

10.5	Group Medical Reinsurance Agreement between US Alliance Life and Security Company and Unified Life Insurance Company, filed as Exhibit 10.6 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.5.

10.6.1	Investment Management Agreement between US Alliance Investment Corporation and General Re - New England Asset Management, Inc., filed as Exhibit 10.7.1 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.6.1.

10.6.2	Subadvisory Investment Management Agreement between US Alliance Investment Corporation and General Re - New England Asset Management, Inc., filed as Exhibit 10.17.2 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.6.2.

10.7	Third Party Insurance Services Agreement between US Alliance Life and Security Company and Dakota Capital Life Insurance Company, as amended, filed as Exhibit 10.8 to the Company's amended Registration Statement on Form 10 filed June 29, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.7.

10.8	Critical Illness Reinsurance Treaty, Effective 9/1/16 between US Alliance Life and Security Company and General Re Life Corporation, filed as Exhibit 10.9 to the Company's Annual Report on Form 10-K filed February 17, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.8.

10.9	Critical Illness Reinsurance Treaty, Effective 9/1/16 between US Alliance Life and Security Company and Unified Life Insurance Company, filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K filed February 17, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.9.

10.10	Coinsurance Agreement between US Alliance Life and Security Company and American Life & Security Company of Nebraska effective as of September 30, 2017, filed as Exhibit 10.11 to the Company Annual Report filed on February 21, 2018 (File No. 000-55627) is incorporated herein by reference as Exhibit 10.10

Table of Contents

10.10.1	Amendment No. 1 to ALSC 2017 Coinsurance Agreement effective as of June 1, 2020, filed as Exhibit 10.10.1 to the Company's Annual Report on Form 10-K filed on February 23, 2021 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.10.1.

10.10.2	Second Amendment to ALSC 2017 Coinsurance Agreement effective as of December 31, 2020, filed as Exhibit 10.10.2 to the Company's Annual Report on Form 10-K filed on February 23, 2021 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.10.2.

10.11*	Employment Agreement dated June 4, 2018 between US Alliance Corporation and Jeffrey Brown, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2018 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.11.

10.12	Coinsurance Agreement effective January 1, 2020 between US Alliance Life and Security Company and American Life & Security Corporation, filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q filed on May 12, 2020, (File No. 000-55627), is incorporated herein by reference as Exhibit 10.12.

10.13	Commercial Real Estate Contract dated November 16, 2020 between Dakota Life Insurance Company and Trinity Life Insurance Company, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 20, 2020, (File No. 000-55627), is incorporated herein by reference as Exhibit 10.13.

10.14	Assumption Reinsurance Agreement effective December 31, 2020 between Dakota Life Insurance Company and American Life & Security Corporation, filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K filed on February 23, 2021 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.14.

10.15*	Employment Agreement dated March 15, 2021 between US Alliance Corporation and Jeffrey Brown, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 18, 2021 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.15.

10.15.1*	Amendment to Employment Agreement dated April 12, 2024 between US Alliance Corporation and Jeffrey Brown, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 12, 2024 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.15.1.

10.16*	Employment Agreement dated September 28, 2021 between US Alliance Corporation and Jack Brier, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 1, 2021 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.16.

10.16.1*	Amendment to Employment Agreement dated January 1, 2023 between US Alliance Corporation and Jack Brier, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 6, 2023 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.16.1.

10.16.2*	Amendment to Employment Agreement dated December 16, 2024 between US Alliance Corporation and Jack Brier, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 16, 2024 (File No. 000-55627), is incorporated herein by reference as Exhibit 10.16.2.

10.21	Life Insurance and Annuity Reinsurance and Administration Agreement dated December 31, 2023 between US Alliance Life and Security Company and Lewer Life Insurance LLIC, filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K (File No. 000-55627), is incorporated herein by reference as Exhibit 10.21.

21.1**	List of Subsidiaries

24.1	Power of Attorney (contained in the signature page herein)

31.1**	Certification of Chief Executive Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**	Certification of Principal Financial Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certifications of the Chief Executive Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	Certifications of the Principal Financial Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Contents

101.INS***	Inline XBRL Instance

101.SCH***	Inline XBRL Taxonomy Extension Schema

101.CAL***	Inline XBRL Taxonomy Extension Calculation

101.DEF***	Inline XBRL Taxonomy Extension Definition

101.LAB***	Inline XBRL Taxonomy Extension Labels

101.PRE***	Inline XBRL Taxonomy Extension Presentation

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management or Compensatory Contract

** Filed herewith

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

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		US ALLIANCE CORPORATION
		(Registrant)

Date: March 17, 2025	By:	/s/ Jack H. Brier
		Jack H. Brier
		President and Chairman
		(principal executive officer)

Table of Contents

POWER OF ATTORNEY

Know all people by these presents, that each person whose signature appears below constitutes and appoints Jack H. Brier his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person, hereby confirming all that said attorneys-in-fact and agents or either of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities indicated on February 1, 2025.

Signature	Title

/S/ Jack H. Brier	President and Chairman
Jack H. Brier

/S/ Jeff Brown	Vice-President, Principal Financial Officer and Treasurer
Jeff Brown

/S/ Jim Poolman	Director
Jim Poolman

/S/ John Helms	Director
John Helms

/S/ William Graves	Director
William Graves

/S/ JuliAnn Mazachek	Director
JuliAnn Mazachek

Table of Contents

US Alliance Corporation

Consolidated Financial Statements

December 31, 2024 and 2023

(With Independent Auditor’s Report Thereon)

Table of Contents

Contents

Report of Independent Registered Public Accounting Firm (PCAOB ID 173)	F-1



Consolidated Financial Statements

Consolidated Balance Sheets	F-3
Consolidated Statements of Comprehensive Loss	F-4
Consolidated Statements of Changes in Shareholders’ Equity	F-5
Consolidated Statements of Cash Flows	F-6
Supplemental Cash Flow Information	F-7

Notes to Consolidated Financial Statements	F-8 – F-32

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and the Board of Directors of US Alliance Corporation

Topeka, Kansas

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of US Alliance Corporation (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-1

Table of Contents

Valuation of Level 3 Investments – Refer to Notes 1 and 4 to the Financial Statements

Investments in certain fixed maturity securities and other invested assets classified as available-for-sale are reported in the financial statements. These investments are classified under Level 3 in the fair value hierarchy and their fair values are based on unobservable inputs that reflect management’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Management utilized a third-party pricing service in developing their fair value estimates. These Level 3 investments had an estimated fair value of $25,325,303, as of December 31, 2024. We considered the fair value of Level 3 fixed maturity securities and other invested assets as a critical audit matter because of the unobservable inputs used by management to estimate fair value and the high degree of measurement uncertainty. Auditing these inputs required especially subjective judgment and the audit effort was extensive, including the use of our fair value specialist to assist in fully evaluating the inputs.

How the Critical Audit Matter Was Addressed in the Audit:

Our audit procedures related to the valuation of Level 3 fixed maturity securities and other invested assets determined using discounted cash flow techniques included, among others, the following:

• We tested the accuracy and completeness of relevant security attributes, including structure, maturity dates and interest rates, used in the determination of Level 3 fair values.

• With the involvement of our fair value specialists, we developed independent fair value estimates for a sample of securities and compared our estimates to the Company’s estimates and evaluated differences. We developed our estimate by evaluating the observable and unobservable inputs used by management or developing independent inputs.

Valuation of Reserves for Deposit Type Contracts and Policyholder Benefit Liabilities and Amortization of Deferred Acquisition Costs – Refer to Note 1 to the Financial Statements

The Company’s management sets assumptions in (1) recording the reserves for deposit type contracts and policyholder benefit liabilities and (2) determining amortization of deferred acquisition costs. The most significant assumptions include mortality and morbidity. These assumptions are determined based upon published mortality tables, adjusted for changes in experience. We considered auditing these assumptions as a critical audit matter because of the inherent uncertainty of these significant assumptions and auditing the development of these assumptions involved especially subjective auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit:

Our audit procedures related to management’s judgments regarding the assumptions used in the development of the reserves for deposit type contracts and policyholder benefit liabilities and the amortization of deferred acquisition costs included the following, among others:

• We tested the underlying data used in the development of the assumptions as well as in the determination of the reserves for deposit type contracts and policyholder benefit liabilities and the amortization of deferred acquisition costs.

• We evaluated management’s selected actuarial assumptions, including testing the accuracy and completeness of the supporting experience studies.

• With the assistance of our actuarial specialists, we evaluated management’s judgments regarding the assumptions used in the development of reserves for deposit type contracts and policyholder benefit liabilities and the amortization of deferred acquisition

costs.

• We evaluated whether the assumptions used were consistent with evidence obtained in other areas of the audit.

/s/ Crowe LLP

We have served as the Company's auditor since 2023.

Dallas, Texas

March 17, 2025

F-2

Table of Contents

US Alliance Corporation

Consolidated Balance Sheets

	December 31, 2024			December 31, 2023
Assets
Investments:
Available for sale fixed maturity securities (amortized cost: $83,785,307 and $78,653,792, net of allowances for credit losses of $0 and $0, as of December 31, 2024 and December 31, 2023, respectively)	$	79,578,179		$	74,509,520
Equity securities, at fair value		3,876,085			3,585,885
Limited partnership interests		428,170			389,827
Mortgage loans on real estate (net of allowance for credit losses of $55,685 and $21,644 as of December 31, 2024 and December 31, 2023, respectively)		25,192,749			19,617,253
Other invested assets		1,109,606			2,239,683
Policy loans		31,745			26,132
Real estate, net of depreciation		1,652,553			1,686,668
Total investments		111,869,087			102,054,968

Cash and cash equivalents		6,903,783			8,982,138
Investment income due and accrued		954,324			1,878,620
Reinsurance related assets		522,142			1,039,274
Deferred acquisition costs, net		3,908,636			4,751,497
Value of business acquired, net		2,333,553			2,425,973
Property, equipment and software, net		136,353			138,256
Goodwill		277,542			277,542
Federal and state income tax receivable		182,349			146,831
Deferred tax asset, net of valuation allowance		3,747,111			3,888,907
Other assets		459,102			500,630
Total assets	$	131,293,982		$	126,084,636


Liabilities and Shareholders' Equity
Liabilities:
Policy liabilities
Deposit-type contracts	$	77,940,378		$	78,063,888
Policyholder benefit reserves		39,898,138			34,233,185
Dividend accumulation		100,885			114,842
Advance premiums		248,749			151,711
Total policy liabilities		118,188,150			112,563,626

Accounts payable and accrued expenses		1,133,521			2,053,363
Federal Home Loan Bank advance		1,250,000			1,000,000
Other liabilities		91,893			136,570
Total liabilities		120,663,564			115,753,559

Shareholders' Equity:
Common stock, $0.10 par value. Authorized 20,000,000 shares; issued and outstanding 7,748,922 and 7,748,922 shares as of
December 31, 2024 and December 31, 2023		774,893			774,893
Additional paid-in capital		22,966,657			22,964,490
Accumulated deficit		(10,020,956	)		(10,491,934	)
Accumulated other comprehensive loss		(3,090,176	)		(2,916,372	)
Total shareholders' equity		10,630,418			10,331,077

Total liabilities and shareholders' equity	$	131,293,982		$	126,084,636

See Notes to Consolidated Financial Statements.

F-3

Table of Contents

US Alliance Corporation

Consolidated Statements of Comprehensive Income

	Twelve Months Ended December 31,
	2024			2023
Income:
Premium income	$	15,338,053		$	13,131,574
Net investment income		7,597,762			6,412,669
Net investment gains (losses)		283,423			1,016,561
Other income		553,035			353,254
Total income		23,772,273			20,914,058

Expenses:
Death claims		3,983,405			3,432,119
Policyholder benefits		6,883,283			6,342,303
Increase in policyholder reserves		5,566,210			4,589,538
Commissions, net of deferrals		947,548			837,560
Amortization of deferred acquisition costs		1,440,520			1,407,503
Amortization of value of business acquired		92,420			92,420
Salaries & benefits		1,701,745			1,627,644
Other operating expenses		2,624,371			1,959,242
Total expense		23,239,502			20,288,329

Net income before tax	$	532,771		$	625,729

Current federal income tax expense		(25,646	)		-
Deferred federal income tax (expense) benefit		(36,147	)		852,347
Total federal income tax (expense) benefit		(61,793	)		852,347

Net Income	$	470,978		$	1,478,076

Net income per common share, basic and diluted	$	0.06		$	0.19

Unrealized net holding (losses) gains arising during the period, net of tax		(213,036	)		924,225
Reclassification adjustment for losses included in net income		39,232			523

Other comprehensive (loss) income		(173,804	)		924,748

Comprehensive income	$	297,174		$	2,402,824

See Notes to Consolidated Financial Statements.

F-4

Table of Contents

US Alliance Corporation

Consolidated Statements of Changes in Shareholders’ Equity

Twelve Months Ended December 31, 2024 and 2023

								Accumulated
	Number of							Other
	Shares of		Common		Additional			Comprehensive			Accumulated
	Common Stock		Stock		Paid-in Capital			Loss			Deficit			Total
Balance, December 31, 2022		7,746,922	$	774,693	$	22,955,458		$	(3,841,120	)	$	(11,819,637	)	$	8,069,394
Common stock issued, $7 per share		2,000		200		13,800			-			-			16,000
Costs associated with common stock issued		-		-		(4,768	)		-			-			(4,768	)
Other comprehensive income		-		-		-			924,748			-			924,748
Cumulative effect of changes in accounting principal		-		-		-			-			(150,373	)		(150,373	)
Net Income		-		-		-			-			1,478,076			1,478,076
Balance, December 31, 2023		7,748,922	$	774,893	$	22,964,490		$	(2,916,372	)	$	(10,491,934	)	$	10,331,077
Other comprehensive loss		-		-		-			(173,804	)		-			(173,804	)
Stock based compensation on restricted stock awards		-		-		2,167			-			-			2,167
Net income		-		-		-			-			470,978			470,978
Balance, December 31, 2024		7,748,922	$	774,893	$	22,966,657		$	(3,090,176	)	$	(10,020,956	)	$	10,630,418

See Notes to Consolidated Financial Statements.

F-5

Table of Contents

US Alliance Corporation

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2024			2023
Cash Flows from operating activities:
Net income	$	470,978		$	1,478,076
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		79,713			23,107
Net losses realized on the sale of securities and net credit losses recognized in operations		21,010			628,872
Unrealized gains on equity securities		(8,414	)		(1,711,411	)
Change in fair value of embedded derivative		(296,019	)		65,978
(Accretion) amortization of investment securities, net		(606,487	)		(302,156	)
Deferred acquisition costs capitalized		(597,659	)		(529,998	)
Deferred acquisition costs amortized		1,440,520			1,407,503
Value of business acquired amortized		92,420			92,420
Interest credited on deposit type contracts		1,910,726			1,778,460
(Increase) decrease in operating assets:
Investment income due and accrued		924,296			207,745
Reinsurance related assets		813,151			(847,747	)
Deferred tax assets, net of valuation allowance		141,796			(852,347	)
Other assets		6,010			(28,355	)
Increase (decrease) in operating liabilities:
Policyowner benefit reserves		5,664,953			4,597,352
Dividend accumulation		(13,957	)		(6,845	)
Advance premiums		97,038			(17,071	)
Other liabilities		(44,677	)		275
Accounts payable and accrued expenses		(919,842	)		1,457,727
Net cash provided by operating activities		9,175,556			7,441,585


Cash Flows from investing activities:
Purchase of fixed income investments		(22,557,297	)		(12,940,382	)
Purchase of equity investments		(499,182	)		(627,591	)
Purchase of mortgage investments		(15,792,479	)		(6,615,666	)
Purchase of other invested assets		(230,914	)		(898,961	)
Proceeds from fixed income sales and repayments		17,050,777			4,995,304
Proceeds from equity sales		1,383,796			4,763,365
Proceeds from mortgage repayments		10,078,024			11,112,833
Proceeds from other invested assets		1,144,741			547,952
Increase in policy loans		(5,613	)		8,848
Assumed reinsurance from Lewer		-			1,416,508
Purchase of property, equipment and software		(43,695	)		(379,815	)
Net cash (used in) provided by investing activities		(9,471,842	)		1,382,395

Cash Flows from financing activities:
Receipts on deposit-type contracts		5,984,026			4,383,636
Withdrawals on deposit-type contracts		(8,018,262	)		(8,326,217	)
Repayment of FHLB advance		(1,000,000	)		-
Proceeds from FHLB advance		1,250,000			-
Restricted stock awards		2,167			-
Proceeds received from issuance of common stock, net of costs of issuance		-			9,232
Net cash used in financing activities		(1,782,069	)		(3,933,349	)

Net increase (decrease) in cash and cash equivalents		(2,078,355	)		4,890,631

Cash and Cash Equivalents:
Beginning		8,982,138			4,091,507
Ending	$	6,903,783		$	8,982,138

See Notes to Consolidated Financial Statements.

F-6

Table of Contents

US Alliance Corporation

Supplemental Cash Flow Information

	Years Ended December 31,
	2024		2023
Supplemental Disclosure of Non-Cash Information
Deposit-type contract liabilities assumed from Lewer	$	-	$	1,192,659

F-7

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies

Description of business: US Alliance Corporation ("USAC") was formed as a Kansas corporation on April 24, 2009 to raise capital to form a new Kansas-based life insurance company. Our offices are located at 1303 SW First American Place, Suite 200, Topeka, Kansas 66604. Our telephone number is 785-228-0200 and our website address is www.usalliancecorporation.com.

USAC has four wholly-owned operating subsidiaries. US Alliance Life and Security Company ("USALSC") was formed June 9, 2011, to serve as our life insurance company. US Alliance Marketing Corporation ("USAMC") was formed April 23, 2012, to serve as a marketing resource. US Alliance Investment Corporation ("USAIC") was formed April 23, 2012 to serve as investment manager for USAC. Dakota Capital Life Insurance Company (“DCLIC”), was acquired on August 1, 2017 when USAC merged with Northern Plains Capital Corporation (“NPCC”) and was merged into USALSC on December 31, 2023. US Alliance Life and Security Company - Montana (USALSC-Montana), was acquired December 14, 2018. USALSC-Montana is a wholly-owned subsidiary of USALSC. Unless the context indicates otherwise, references herein to the "Company" refer to USAC and its consolidated subsidiaries.

The Company terminated its initial public offering on February 24, 2013. During the balance of 2013, the Company achieved approval of an array of life insurance and annuity products, began development of various distribution channels and commenced insurance operations and product sales. The Company sold its first insurance product on May 1, 2013. The Company continued to expand its product offerings and distribution channels throughout 2014 and 2015. On February 24, 2015, the Company commenced a warrant exercise offering set to expire on February 24, 2016. On February 24, 2016, the Company extended the offering until February 24, 2017 and made additional shares available for purchase. All outstanding warrants expired on April 1, 2016. The Company further extended this offering to February 24, 2024. During the 4th quarter of 2017, the Company began a private placement offering to accredited investors in the state of North Dakota. Both offerings were terminated in the second quarter of 2024.

USALSC received a Certificate of Authority from the Kansas Insurance Department ("KID") effective January 2, 2012, and sold its first insurance product on May 1, 2013. In 2023, USALSC re-domesticated to North Dakota with approval of the North Dakota Insurance Department ("NDID").

USALSC seeks opportunities to develop and market additional products.

The Company’s business model also anticipates the acquisition by USAC and/or USALSC of other insurance and insurance related companies, including third-party administrators, marketing organizations, and rights to other blocks of insurance business through reinsurance or other transactions.

Basis of presentation: The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America.

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

Area of Operation: US Alliance Life and Security Company is authorized to operate in the states of Kansas, North Dakota, Missouri, Nebraska, Oklahoma, Wyoming, South Dakota, Montana, Kentucky, Utah, Alabama, Ohio, Mississippi, New Mexico, Texas, Arizona, Nevada, and Idaho. USALSC-Montana is authorized to operate in the state of Montana.

F-8

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

Investments: Investments in available-for-sale securities are carried in the consolidated financial statements at fair value. Net unrealized holding gains (losses), net of applicable income taxes, on fixed maturity securities are included in accumulated other comprehensive income. Bond premiums and discounts are amortized using the scientific-yield method over the term of the bonds. Net unrealized holding gains (losses) on equity securities are included as a component of net investment gains (losses).

Realized gains and losses on securities sold during the year are determined using the specific identification method and included in investment income as a component of net investment gains (losses). Investment income is recognized as earned.

For available for sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis. If either of the criteria is met, the security's amortized cost basis is written down to fair value through income. For debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a ratings agency, and adverse conditions specifically related to the security. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss).

Mortgage Loans on Real Estate: Mortgage loans on real estate are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances. Interest income is accrued on the principal amount of the mortgage loans based on its contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. The Company accrues interest on loans until probable the Company will not receive interest or the loan is 90 days past due. Interest income, amortization of premiums, accretion of discounts and prepayment fees are reported in investment income, net of related expenses in the consolidated statements of comprehensive income.

Any changes in the loan valuation allowances are reported in net investment losses. The Company establishes a valuation allowance to provide for the risk of credit losses inherent in our mortgage loan portfolios. The valuation allowance is maintained at a level believed adequate by management to absorb estimated expected credit losses. The valuation allowances for each of our mortgage loan portfolios are estimated by deriving probability of default and recovery rate assumptions based on the characteristics of the loans in each portfolio, historical economic data and loss information, and current and forecasted economic conditions. Key loan characteristics impacting the estimate for our commercial mortgage loan portfolio include the current state of the borrower’s credit quality, which considers factors such as loan-to-value (“LTV”) ratios, loan performance, underlying collateral type, delinquency status, time to maturity, and original credit scores.

Our mortgage loans may be subject to loan modifications. Loan modifications may be granted to borrowers experiencing financial difficulty and could include principal forgiveness, interest rate reduction, an other-than-significant delay or a term extension. The Company considers the following factors in determining whether or not a borrower is experiencing financial difficulty: borrower is in default; borrower has declared bankruptcy; there is growing concern about the borrower's ability to continue as a going concern; borrower has insufficient cash flows to service debt; borrower's inability to obtain funds from other sources; and there is a breach of financial covenants by the borrower. A loan modification typically does not result in a change in valuation allowance as it is already incorporated into the allowance methodology. However, if the Company grants a borrower experiencing financial difficulty principal forgiveness, the amount of principal forgiven would be written off, which would reduce the amortized cost of the loan and result in an adjustment to the valuation allowance.

F-9

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

Other Invested Assets: Other invested assets include collateral loans and private credit investments. The collateral loans and private credit investments are carried at fair value. The inputs used to measure these assets are classified as Level 3 within the fair value hierarchy.

Embedded Derivatives:The Company has entered into coinsurance funds withheld arrangement which contains an embedded derivative. Under ASC 815, the Company assesses whether the embedded derivative is clearly and closely related to the host contract. The Company bifurcates embedded derivatives from the host instrument for measurement purposes when the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract and a separate instrument with the same terms would qualify as a derivative instrument. The counterparty to the coinsurance arrangement is also the investment manager and manages foreign currency risk within the coinsured portfolio using derivative instruments. In accordance with the coinsurance agreement, the counterparty allocates a proportion of the derivative activity it manages to the Company, which is settled quarterly as part of the reinsurance settlement.

Policy loans: Policy loans are stated at aggregate unpaid principal balances.

Investment Real Estate: Real estate is stated at cost, less allowances for depreciation and, as appropriate, provisions for possible losses.

Cash and cash equivalents: For purposes of the statement of cash flows, the Company considers demand deposits and highly liquid investments with original maturities of three months or less when purchased to be cash and cash equivalents. The Company maintains its cash balances in one financial institution located in Topeka, Kansas. The FDIC insures aggregate balances, including interest-bearing and noninterest-bearing accounts, of $250,000 per depositor per insured institution. The Company’s financial institution is a member of a network that participates in the Insured Cash Sweep (ICS) program. By participating in ICS, the Company’s deposits in excess of the insured limit are apportioned and placed in demand deposit accounts at other financial institutions in amounts under the insured limit. As a result, the Company can access insurance coverage from multiple financial institutions while working directly with one. The Company had no amounts uninsured as of December 31, 2024. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

F-10

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

Reinsurance: In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on risks by purchasing reinsurance. The amounts reported in the consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Estimated losses on reinsurance recoverable balances are calculated by quantitative analysis using a rating-based method to estimate expected credit losses for reinsurance recoverable. The analysis is based on industry historical loss experience and forecasted environmental factors management believes to be relevant, which primarily include probability of default, loss given default and exposure at default. There were no allowances as of December 31, 2024 and 2023.

Deferred acquisition costs: The Company capitalizes and amortizes over the life of the premiums produced incremental direct costs that result directly from and are essential to the contract acquisition transaction and would not have been incurred by the Company had the contract acquisition not occurred. An entity may defer incremental direct costs of contract acquisition that are incurred in transactions with independent third parties or employees as well as the portion of employee compensation and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts. Additionally, an entity may capitalize as a deferred acquisition cost only those advertising costs meeting the capitalization criteria for direct-response advertising. Acquisition costs are amortized over the premium paying period using the net level premium method. Traditional life insurance products are treated as long duration contracts, which generally remain in force for the lifetime of the insured.

The following table provides information about deferred acquisition costs for the years ended December 31, 2024 and 2023, respectively.

	Year ended			Year ended
	December 31,			December 31,
	2024			2023

Balance at beginning of period	$	4,751,497		$	5,629,002
Capitalization of commissions, sales and issue expenses		597,659			529,998
Amortization net of interest		(1,440,520	)		(1,407,503	)
Balance at end of period	$	3,908,636		$	4,751,497

Value of business acquired: Value of business acquired (VOBA) represents the estimated value assigned to purchased companies or insurance in- force of the assumed policy obligations at the date of acquisition of a block of policies. At least annually, a review is performed of the models and the assumptions used to develop expected future profits, based upon management’s current view of future events. VOBA is reviewed on an ongoing basis to determine that the unamortized portion does not exceed the expected recoverable amounts. Management’s view primarily reflects our experience but can also reflect emerging trends within the industry. Short-term deviations in experience affect the amortization of VOBA in the period, but do not necessarily indicate that a change to the long-term assumptions of future experience is warranted. If it is determined that it is appropriate to change the assumptions related to future experience, then an unlocking adjustment is recognized for the block of business being evaluated. Certain assumptions, such as interest spreads and surrender rates, may be interrelated. As such, unlocking adjustments often reflect revisions to multiple assumptions. The VOBA balance is immediately impacted by any assumption changes, with the change reflected through the statements of comprehensive income as an unlocking adjustment in the amount of VOBA amortized. These adjustments can be positive or negative with adjustments reducing amortization limited to amounts previously deferred plus interest accrued through the date of the adjustment. VOBA is amortized on a straight-line method over 30 years.

F-11

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

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

Property, equipment and software: Property, equipment and software are stated at cost less accumulated depreciation. Expenditures for additions and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to income currently. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income.

Depreciation is computed by the straight-line method over the estimated useful lives of the assets. Computer equipment is depreciated over no longer than a 5-year period. Furniture and equipment are depreciated over no longer than a 10-year period. Major categories of depreciable assets and the respective book values as of December 31, 2024 and 2023 are represented below.

	Year Ended			Year Ended
	December 31,			December 31,
	2024			2023
Computer	$	59,404		$	36,822
Furniture and equipment		155,979			154,667
Accumulated depreciation		(79,030	)		(53,233	)
Balance at end of period	$	136,353		$	138,256

Goodwill: Goodwill represents the excess of the amounts paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. Goodwill is tested for impairment at least annually in the fourth quarter or more frequently if events or circumstances change that would indicate that a triggering event has occurred. We assess the recoverability of indefinite-lived intangible assets at least annually or whenever events or circumstances suggest that the carrying value of an identifiable indefinite-lived intangible asset may exceed the sum of the future discounted cash flows expected to result from its use and eventual disposition. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Income taxes: The Company is subject to U.S. federal and state taxes. The provision for income taxes is based on income as reported in the consolidated financial statements. The income tax provision is calculated using the asset and liability method. Deferred income taxes are recorded based on the differences between the financial statement and tax basis of assets and liabilities at the enacted rates expected to apply to taxable income in the years in which the differences are expected to reverse. A valuation allowance is established for the amount of any deferred tax asset that exceeds the amount of the estimated future taxable income needed to utilize the future tax benefits.

F-12

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

All of the Company’s tax returns are subject to U.S. federal, state and local income tax examinations by tax authorities. The Company had no known uncertain tax benefits included in its provision for income taxes as of December 31, 2024 and 2023. The Company’s policy is to recognize interest and penalties (if applicable) as an element of the provision for income taxes in the consolidated statements of income.

The tax years which remain subject to examination by taxing authorities are the years ended December 31, 2021 through 2024.

Pre-paid expenses: The Company recognizes pre-paid expenses as the expenses are incurred. Pre-paid expenses consist of systems consulting hours, insurance, and pre-paid benefit expense. Systems consulting hours are charged as they are incurred on projects. Insurance expenses are charged straight line over the life of the contract. Benefit expenses are charged as they are incurred.

Deposit-type contracts: Deposit-type contracts consist of amounts on deposit associated with deferred annuity contracts and premium deposit funds. The deferred annuity contracts credit interest based upon a fixed interest rate set by the Company. The Company has the ability to change this rate annually subject to minimums established by law or administrative regulation.

Liabilities for deferred annuity deposit-type contracts are included without reduction for potential surrender charges. This liability is equal to the accumulated account deposits, plus interest credited, and less policyholder withdrawals. The following table provides information about deferred annuity deposit-type contracts for the years ended December 31, 2024 and 2023.

	Year end			Year end
	December 31,			December 31,
	2024			2023

Balance at beginning of period	$	77,928,817		$	78,880,542
Acquired from Lewer Companies		-			1,192,659
Deposits received		5,956,592			4,373,807
Interest credited		1,907,674			1,775,438
Withdrawals		(7,989,015	)		(8,293,629	)
Balance at end of period	$	77,804,068		$	77,928,817

The premium deposit funds credit interest based upon a fixed interest rate set by the Company. The Company has the ability to change this rate subject to minimums established by law or administrative regulation.

F-13

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

Liabilities for premium deposit fund deposit-type contracts are included without reduction for potential surrender charges. This liability is equal to the accumulated account deposits, plus interest credited, and less withdrawals. The following table provides information about premium deposit fund deposit-type contracts for the years ended December 31, 2024 and 2023.

	Year end			Year end
	December 31,			December 31,
	2024			2023

Balance at beginning of period	$	135,071		$	154,808
Deposits received		27,434			9,829
Interest credited		3,052			3,022
Withdrawals		(29,247	)		(32,588	)
Balance at end of period	$	136,310		$	135,071

Benefit reserves: The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Mortality and interest rate assumptions include provisions for adverse deviation and are locked in at the year of issue.

Policy claims: Policy claims are based on reported claims plus estimated incurred but not reported claims developed from trends of historical data applied to current exposure. The Company’s current estimate of incurred but not reported claims as of December 31, 2024 and 2023 is $187,527 and $152,739 and is included as a part of policyholder benefit reserves.

Revenue recognition and related expenses: Revenues on traditional life insurance products consist of direct premiums reported as earned when due. Premium income includes reinsurance assumed and is reduced by premiums ceded.

Amounts received as payment for annuity contracts without life contingencies are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for contract-holder services, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the Consolidated Statements of Cash Flows.

Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts.

Leases: The Company, as lessor, has entered into an operating lease agreement for office space. The Company recognizes lease income for operating leases on a straight-line basis over the lease term. At contract inception, the Company defers any initial direct costs and amortizes the costs over the life of the lease on the same basis as lease income.

Restricted stock awards: Restricted stock award shares are measured at fair market value on the date of grant and stock-based compensation expense is recognized on a straight-line basis over the vesting period with a corresponding offset credited to additional paid-in-capital.

Common stock and earnings per share: The par value for common stock is $0.10 per share with 20,000,000 shares authorized. As of December 31, 2024 and 2023 the company had 7,748,922 and 7,748,922 common shares issued and outstanding, respectively.

Earnings per share attributable to the Company’s common stockholders were computed based on the net income and the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the years ended December 31, 2024 and 2023 were 7,748,922 and 7,747,618 shares, respectively. Potential common shares are excluded from the computation when their effect is anti-dilutive. Basic and diluted net gain per common share is the same for the years ended December 31, 2024 and 2023.

F-14

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

Comprehensive Income: Comprehensive income is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses from marketable fixed maturity securities classified as available for sale, net of applicable taxes.

Risk and uncertainties: Certain risks and uncertainties are inherent in the Company’s day-to-day operations and in the process of preparing its consolidated financial statements. The more significant of those risks and uncertainties, as well as the Company’s method for mitigating the risks, are presented below and throughout the notes to the consolidated financial statements.

Use of Estimates: The preparation of consolidated financial statements in conformity with US GAAP, generally accepted accounting principles in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

	- Regulatory Factors:	The insurance laws North Dakota, Montana, and our other authorized states give insurance regulators broad regulatory authority, including powers to (i) grant and revoke licenses to transact business; (ii) regulate and supervise trade practices and market conduct, (iii) establish guaranty associations; (iv) license agents; (v) approve policy forms; (vi) approve premium rates for some lines of business; (vii) establish reserve requirements; (viii) prescribe the form and content of required financial statements and reports; (ix) determine the reasonableness and adequacy of statutory capital and surplus; and (x) regulate the type and amount of permitted investments.

		The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Reform Act") reshapes financial regulations in the United States by creating new regulators, regulating new markets and firms, and providing new enforcement powers to regulators. Virtually all major areas of the Reform Act continue to be subject to regulatory interpretation and implementation rules requiring rulemaking that may take several years to complete. The ultimate outcome of the regulatory rulemaking proceedings cannot be predicted with certainty. The regulations promulgated could have a material impact on consolidated financial results or financial condition.

	- Reinsurance:	In order to manage the risk of financial exposure to adverse underwriting results, the Company reinsures a portion of its individual and group life risks with other insurance companies. The Company retains $35,000 on its Whole Life products and $25,000 on its term life products. The Company also reinsures 100% of the risk on its individual accidental death benefit rider. The Company retains 25% of the risk for each covered life on its group life product to a maximum of $100,000 on any individual person. The Company retains 25% of the risk for each covered life on its group accidental death and dismemberment product to a maximum of $25,000 on any individual person. The Company also has catastrophic reinsurance coverage to protect against three or more group life deaths resulting from a single event. The Company also reinsures 90% of the risk on its group disability products. The Company reinsurers 66% of the risk on its critical illness product. Optimum Re Insurance Company (a subsidiary of Optimum Group), General Reinsurance Corporation (a subsidiary of Berkshire Hathaway), Reliance Standard Life Insurance Company (a subsidiary of Tokio Marine Holdings), Hartford Life and Accident Company, and Unified Life Insurance Company provide reinsurance for USALSC. The Company evaluates the financial condition of its reinsurers to minimize its exposure to losses from reinsurer insolvencies. Management believes that any liabilities arising from this contingency would not be material to the Company’s financial position.

F-15

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

	- Interest Rate Risk:	Interest rate fluctuations could impair an insurance company's ability to pay policyholder benefits with operating and investment cash flows, cash on hand and other cash sources. Annuity products expose the risk that changes in interest rates will reduce any spread, or the difference between the amounts that the insurance company is required to pay under the contracts and the amounts the insurance subsidiary is able to earn on its investments intended to support its obligations under the contracts. Spread is a key component of revenues.

		To the extent that interest rates credited are less than those generally available in the marketplace, policyholder lapses, policy loans and surrenders, and withdrawals of life insurance policies and annuity contracts may increase as contract holders seek to purchase products with perceived higher returns. This process may result in cash outflows requiring that an insurance subsidiary sell investments at a time when the prices of those investments are adversely affected by the increase in market interest rates, which may result in realized investment losses.

		Increases in market interest rates may also negatively affect profitability in periods of increasing interest rates. The ability to replace invested assets with higher yielding assets needed to fund the higher crediting rates that may be necessary to keep interest sensitive products competitive. The Company therefore may have to accept a lower spread and thus lower profitability or face a decline in sales and greater loss of existing contracts.

		Conversely, in a period of prolonged low interest rates it is difficult to invest assets and earn the rate of return necessary to support insurance products.

		Policy lapses in excess of those actuarially anticipated would have a negative impact on our financial performance.

		Profitability could be reduced if lapse and surrender rates exceed the assumptions upon which the insurance policies were priced. Policy sales costs are deferred and recognized over the life of a policy. Excess policy lapses, however, cause the immediate expensing or amortizing of deferred policy sales costs.

	- Investment Risk:	Our invested assets are subject to customary risks of defaults and changes in market values. Factors that may affect the overall default rate on, and market value of, the invested assets include interest rate levels, financial market performance, and general economic conditions.

	- Assumptions Risk:	In the life insurance business, assumptions as to expected mortality, lapse rates and other factors in developing the pricing and other terms of life insurance products are made. These assumptions are based on industry experience and are reviewed and revised regularly by an outside actuary to reflect actual experience on a current basis. However, variation of actual experience from that assumed in developing such terms may affect a product's profitability or sales volume and in turn adversely impact our revenues.

F-16

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 1.

Description of Business and Significant Accounting Policies (Continued)

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

New accounting standards:

Improvements to Income Tax Disclosures

In December 2023, the FASB issued Accounting Standards Update 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 is intended to improve the effectiveness of income tax disclosures by requiring, among other things, the disclosure on an annual basis of: (i) specific categories in the rate reconciliation; and (ii) additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires disclosure (on an annual basis) of the following information about income taxes paid: (i) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; and (ii) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). ASU 2023-09 is effective for annual periods beginning January 1, 2026 (this is public company date, you are an SRC), to be applied prospectively with an option for retrospective application (with early adoption permitted). The adoption of ASU 2023-09 will modify our disclosures but will not have an impact on our financial position or results of operations.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 ("Improvements to Reportable Segment Disclosures") which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The adoption of this ASU modified our disclosures but did not have an impact on our financial position or results of operations. Refer to in Note 10 of the consolidated financial statements for the disclosure.

Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB issued ASU 2018-12 "Financial Services-Insurance (Topic 944) - Targeted Improvements to the Accounting for Long-Duration Contracts". This update is aimed at improving the Codification related to long-duration contracts, which will improve the timeliness of recognizing changes in the liability for future policy benefits, simplify accounting for certain market-based options, simplify the amortization of deferred acquisition costs, and improve the effectiveness of required disclosures. These updates were originally required to be applied retrospectively to the earliest period presented in the financial statements for periods beginning after December 15, 2020. The FASB recently delayed the effective date of ASU 2018-12 to periods beginning after December 15, 2024 for smaller reporting companies, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the Company's financial condition and results of operations.

In December 2022, the FASB issued amendments ASU 2022-05 to ASU 2018-12 "Targeted Improvements for Long-Duration Contracts" that originally required an insurance entity to apply a retrospective transition method as of the beginning of the earliest period presented or the beginning of the prior fiscal year if early adoption was elected. This updated guidance reduces implementation costs and complexity associated with the adoption of targeted improvements in accounting for long-duration contracts that have been derecognized in accordance with ASU 2018-12 before the delayed effective date. Without the amendments in this ASU, an insurance entity would be required to reclassify a portion of gains or losses previously recognized in the sale or disposal of insurance contracts or legal entities because of the adoption of a new accounting standard.

Because there is no effect on an insurance entity's future cash flows, this reclassification may not be useful to users of financial information. The amendments in this guidance are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the effect this standard will have on our Consolidated Financial Statements.

Measurement of Credit Losses on Financial Instruments

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

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

The updated guidance was effective for reporting periods beginning after December 15, 2019. Early adoption was permitted for reporting periods beginning after December 15, 2018. The Company qualified as an emerging growth company prior to December 31, 2022 and as such, had elected to defer implementation of this standard to fiscal years beginning after December 15, 2022. The adoption of this guidance is reflected in the Consolidated Statements of Changes in Shareholders Equity and was not material.

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

F-17

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments

Fixed Maturity

The amortized cost and fair value of available for sale investments as of December 31 is as follows:

	December 31, 2024
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:	(unaudited)
Fixed maturities:
US Treasury securities	$	799,543	$	-	$	(88,166	)	$	711,377
Corporate bonds		24,370,244		111,868		(2,990,292	)		21,491,820
Municipal bonds		5,416,888		-		(675,739	)		4,741,149
Redeemable preferred stock		2,562,893		36		(151,695	)		2,411,234
Term loans		12,971,452		28,936		(212,084	)		12,788,304
Mortgage backed and asset backed securities		37,664,287		715,541		(945,533	)		37,434,295
Total available for sale	$	83,785,307	$	856,381	$	(5,063,509	)	$	79,578,179

	December 31, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Available for sale:
Fixed maturities:
US Treasury securities	$	790,976	$	-	$	(66,308	)	$	724,668
Corporate bonds		20,234,444		95,085		(2,516,167	)		17,813,362
Municipal bonds		6,207,596		4,044		(575,547	)		5,636,093
Redeemable preferred stock		3,622,572		1,699		(318,702	)		3,305,569
Term loans		17,177,179		162,011		(286,770	)		17,052,420
Mortgage backed and asset backed securities		30,621,025		520,599		(1,164,216	)		29,977,408
Total available for sale	$	78,653,792	$	783,438	$	(4,927,710	)	$	74,509,520

The amortized cost and fair value of debt securities as of December 31, 2024 and 2023, by contractual maturity, is as follows. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of December 31, 2024				As of December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	2,329,128	$	2,329,128	$	152,840	$	147,835
After one year through five years		18,590,098		18,590,098		16,397,124		16,461,777
After five years through ten years		2,032,061		1,967,540		6,371,607		6,112,389
More than 10 years		20,606,740		17,025,901		21,488,624		18,504,542
Redeemable preferred stocks		2,562,893		2,411,234		3,622,572		3,305,569
Mortgage backed and asset backed securities		37,664,287		37,434,295		30,621,025		29,977,408
Total amortized cost and fair value	$	83,785,307	$	79,578,179	$	78,653,792	$	74,509,520

F-18

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments (continued)

Proceeds from the sale of securities, maturities, and asset paydowns in 2024 and 2023 were $29,657,388 and $21,419,454, respectively. With the implementation of CECL, changes in the allowance for credit losses is included in net gains (losses). Realized gains and losses related to the sale of securities and net credit losses recognized in income are summarized as follows:

	Years Ended December 31,
	2024			2023
Gross gains	$	201,481		$	14,399
Gross losses		(188,450	)		(772,000	)
Realized gains (losses)	$	13,031		$	(757,601	)


Fixed maturity securities		-			-
Mortgage loans on real estate		(34,041	)		128,729
(Increase) Decrease in allowance for credit losses	$	(34,041	)	$	128,729

Gross unrealized losses by duration are summarized as follows:

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2024
Available for sale:
Fixed maturities:
US Treasury securities	$	444,105	$	(7,244	)	$	267,272	$	(80,922	)	$	711,377	$	(88,166	)
Corporate bonds		1,959,130		(52,671	)		12,336,095		(2,937,621	)		14,295,225		(2,990,292	)
Municipal bonds		1,190,019		(56,801	)		3,551,130		(618,938	)		4,741,149		(675,739	)
Redeemable preferred stock		-		-			2,337,770		(151,695	)		2,337,770		(151,695	)
Term loans		-		-			2,609,831		(212,084	)		2,609,831		(212,084	)
Mortgage backed and asset backed securities		10,201,273		(241,577	)		4,708,468		(703,956	)		14,909,741		(945,533	)
Total fixed maturities	$	13,794,527	$	(358,293	)	$	25,810,566	$	(4,705,216	)	$	39,605,093	$	(5,063,509	)

	Less than 12 months					Greater than 12 months					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
December 31, 2023
Available for sale:
Fixed maturities:
US Treasury securities	$	724,668	$	(66,308	)	$	-	$	-		$	724,668	$	(66,308	)
Corporate bonds		262,673		(863	)		15,653,914		(2,515,304	)		15,916,587		(2,516,167	)
Municipal bonds		523,744		(4,792	)		4,825,568		(570,755	)		5,349,312		(575,547	)
Redeemable preferred stock		-		-			3,182,131		(318,702	)		3,305,569		(318,702	)
Term loans		3,739,859		(174,955	)		3,534,621		(111,815	)		7,274,480		(286,770	)
Mortgage backed and asset backed securities		9,549,515		(219,946	)		6,228,220		(944,270	)		15,777,735		(1,164,216	)
Total fixed maturities	$	14,800,459	$	(466,864	)	$	33,547,892	$	(4,460,846	)	$	48,348,351	$	(4,927,710	)

Unrealized losses occur from market price declines due to changes in interest rates. The total number of available for sale fixed maturity securities in the investment portfolio in an unrealized loss position as of December 31, 2024 was 212, which represented an unrealized loss of $5,063,509 of the aggregate carrying value of those securities. The 212 securities breakdown as follows: 118 bonds, 77 mortgage and asset backed securities, 6 term loans, and 11 redeemable preferred stock. Management does not intend to sell and it is likely that management will not be required to sell before their anticipated recovery.

F-19

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments (continued)

Mortgage Loans on Real Estate

The Company has invested in various mortgage loans through participation agreements with the original issuing entity. The Company’s mortgage loans by property type as of December 31, 2024 and December 31, 2023 are summarized as follows:

	December 31, 2024			December 31, 2023
Commercial mortgage loans by property type
Condominium	$	-		$	377,621
Mixed use		2,159,630			-
Lodging		2,486,961			-
Multi-property		2,188,704			8,923,604
Multi-family		3,202,740			2,855,008
Industrial		1,800,000			1,000,000
Retail/Office		13,410,399			6,482,664
Total commercial mortgages	$	25,248,434		$	19,638,897
Allowance for credit losses		(55,685	)		(21,644	)
Carrying value	$	25,192,749		$	19,617,253

The Company’s mortgage loans by loan-to-value ratio as of December 31, 2024 and December 31, 2023 are summarized as follows:

	December 31, 2024			December 31, 2023
Loan to value ratio
Over 70 to 80%	$	892,800		$	7,123,604
Over 60 to 70%		6,399,210			3,137,953
Over 50 to 60%		10,215,293			2,322,273
Over 40 to 50%		1,820,562			2,327,436
Over 30 to 40%		3,231,865			377,621
Over 20 to 30%		2,188,704			2,689,619
Over 10 to 20%		500,000			1,660,391
Total	$	25,248,434		$	19,638,897

Allowance for credit losses		(55,685	)		(21,644	)
Carrying value	$	25,192,749		$	19,617,253

The Company’s mortgage loans by maturity date as of December 31, 2024 and December 31, 2023 are summarized as follows:

	December 31, 2024			December 31, 2023
Maturity Date
One year or less	$	6,566,055		$	14,599,568
After one year through five years		18,682,379			5,039,329
Total	$	25,248,434		$	19,638,897

Allowance for credit losses		(55,685	)		(21,644	)
Carrying value	$	25,192,749		$	19,617,253

F-20

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments (continued)

The Company individually evaluates its commercial mortgage loan portfolio for the establishment of a specific loan loss allowance. A mortgage loan requires a specific allowance when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. If the Company determines that the value of any specific mortgage loan requires an allowance, the carrying amount of the mortgage loan will be reduced to its fair value, based upon the present value of expected future cash flows from the loan discounted at the loan's effective interest rate, or the fair value of the underlying collateral less estimated costs to sell. The Company had one mortgage loan on non-accrued status and delinquent as of December 31, 2024 with a principal amount of $755,663 that is secured by real estate. The loan was originated on March 28, 2022 and has an original maturity date of April 10, 2024. We no longer accrue interest on this asset. It previously carried an interest rate of 6.95%. As of the reporting date, the borrower is 265 days past due on payments. Specifically, the borrower has missed payments for the following periods:

- Payment due on April 10, 2024 - $755,663 Principal Amount

- Payment due on December 31, 2024 - $14,005 Accrued Interest Amount

The total amount of past due payments is $769,668, which includes principal and accrued interest. The Company has assessed the collectability of the loan, which requires an evaluation of the borrower’s payment history, current financial condition, and the underlying collateral value. As part of this assessment, the Company has determined that the loan is potentially impaired. The fair value of the collateral is estimated to exceed the outstanding balance of the loan. Therefore, no allowance for credit losses has been recognized as of the reporting date.

The Company is in ongoing discussions with the borrower regarding a potential loan modification. The Company continues to monitor the situation closely and will reassess the loan’s classification and the need for an allowance for credit losses as new information becomes available. There were no other mortgage loans with delinquent payments as of December 31, 2024. The Company had no such loans as of December 31, 2023.

The Company analyzes our commercial mortgage loan portfolio for the need of a general loan allowance for expected credit losses on all other loans on a quantitative and qualitative basis by grouping assets with similar risk characteristics when there is not a specific expectation of a loss for an individual loan. The amount of the general loan allowance is based upon management's evaluation of the collectability of the loan portfolio, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. The Company does not measure a credit loss allowance on accrued interest receivable as we write off any uncollectible accrued interest receivable balance to net investment income in a timely manner. The Company did not charge off any uncollectible accrued interest receivable on our commercial mortgage loan portfolio during the years ended December 31, 2024 and December 31, 2023.

The Company's commercial mortgage loans are pooled by risk rating and property collateral type and an estimated loss ratio is applied against each risk pool. The loss ratios are generally based upon historical loss experience for each risk pool and are adjusted for current and forecasted economic factors management believes to be relevant and supportable. Economic factors are forecasted for two years with immediate reversion to historical experience.

The following table presents a roll-forward of our general valuation allowances for our commercial mortgage loan portfolio:

	General Allowance
	December 31, 2024		December 31, 2023
Beginning allowance balance	$	21,644	$	-
Cumulative adjustment for changes in accounting principals		-		150,373
Charge-offs		-		-
Recoveries		-		-
Change in provision for credit losses		34,041		(128,729	)
Ending Allowance	$	55,685	$	21,644

The general allowance is for the group of loans discussed above which are collectively evaluated for impairment. The change in provision for credit losses is recorded in net investment gains (losses).

Charge-offs include allowances that have been established on loans that were satisfied either by taking ownership of the collateral or by some other means such as discounted pay-off or loan sale. When ownership of the property is taken it is recorded at the lower of the loan's carrying value or the property's fair value (based on appraised values) less estimated costs to sell. The real estate owned is recorded as a component of other investments and the loan is recorded as fully paid, with any allowance for credit loss that has been established charged off. Fair value of the real estate is determined by third party appraisal. Recoveries are situations where the Company has received a payment from the borrower in an amount greater than the carrying value of the loan (principal outstanding less specific allowance). The Company did not own any real estate related to our mortgage participations during the years ended December 31, 2024 and 2023.

F-21

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments (continued)

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of fixed maturities, AFS in an unrealized loss position if the Company intends to sell or it is more likely than not that the Company will be required to sell the fixed maturity before a recovery in value. A corresponding charge is recorded in net realized losses equal to the difference between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

For fixed maturity securities where a credit loss has been identified and no intent-to-sell impairment has been recorded, the Company will record an allowance for credit loss ("ACL") for the portion of the unrealized loss related to a credit loss. Any remaining unrealized loss on a fixed maturity after recording an ACL is the non-credit amount is recorded in OCI. The ACL is the excess of the amortized cost over the greater of the Company's best estimate present value of the expected future cash flows or the security's fair value. Cash flows are discounted at the effective yield that is used to record interest income. The ACL cannot exceed the unrealized loss and, therefore, it may fluctuate with the changes in the fair value of the fixed maturity if the fair is greater than the Company's best estimate of the present value of expected future cash flows. The initial ACL and any subsequent changes are recorded in net realized gains and losses. The ACL is written off against amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible.

Developing the Company's best estimate of expected future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions regarding the future performance. The Company's considerations include a) changes in the financial condition of the issuer and/or the underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) credit ratings, (d) payment structure of the security, and (e) the extent to which the fair value has been less than the amortized cost of the security. For non-structured securities, assumptions included, but are not limited to, economic and industry specific trends and fundamentals, instrument specific developments including changes in credit ratings, industry earnings multiples and the issuer's ability to restructure, access capital markets, and execute asset sales. As of December 31, 2024 and 2023, the Company did not have a valuation allowance for fixed maturity securities.

Investment Income, Net of Expenses

The components of net investment income for the years ended December 31, 2024 and 2023 are as follows:

	Years Ended December 31,
	2024			2023
Fixed maturities	$	5,985,869		$	4,712,515
Mortgages		1,680,515			1,678,623
Equity securities		313,416			686,999
Other invested assets		197,760			218,784
Cash and cash equivalents		322,841			129,188
		8,500,401			7,426,109
Less investment expenses		(902,639	)		(1,013,440	)
	$	7,597,762		$	6,412,669

F-22

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 2.

Investments (continued)

Net Investment Gains (losses)

Net investment gains (losses) for the years ended December 31, 2024 and 2023 are summarized as follows:

	Years Ended December 31,
	2024			2023
Recognized gains (losses) on sale of investments	$	13,031		$	(757,601	)
Change in allowance for credit loss recognized in earnings		(34,041	)		128,729
Unrealized net gains (losses) recognized in earnings		8,414			1,711,411
Embedded Derivative		296,019			(65,978	)
Net investment gains (losses)	$	283,423		$	1,016,561

Note 3.

Derivative Instruments

Accounting for Derivative Instruments

See Note 1 for a detailed description of the accounting treatment for derivative instruments, including embedded derivatives.

Types of Derivatives used by the Company

The Company’s derivatives consist of a reinsurance contract allocated hedge.

Summary of Derivative Positions

The fair value of the Company’s derivative financial instruments on the consolidated balance sheets is as follows:

December 31, 2024

December 31, 2023

Derivative

Balance

Asset

Liability

Asset

Liability

Reported In

Derivatives:

Embedded derivatives:

Reinsurance contract allocated hedge

713,114

673,681

Reinsurance related assets

F-23

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 3.

Derivative Instruments (continued)

The following table shows the change in the fair value of the derivative financial instruments in the consolidated statements of comprehensive income (loss):

	Year Ending		Year Ending			Balance
	December 31, 2024		December 31, 2023			Reported In
Derivatives:
Embedded derivatives:
Change in reinsurance contract allocated hedge	$	296,019	$	(65,978	)	Net investment gains (losses)

Note 4.

Fair Value Measurements

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

●

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

●

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

●

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

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

Equity securities: Fair values for equity securities are also provided by a third party pricing service and are derived from active trading on national market exchanges.

Embedded derivative: The fair value of the reinsurance related assets represents the Company’s allocation of the fair value of the corresponding derivative instruments used in the hedge which are based on the quoted market prices of the underlying derivate instruments. The fair value of the underlying assets for both embedded derivatives are generally based upon market observable inputs with industry standard valuation techniques. The valuation also requires certain significant inputs, which are generally not observable and accordingly, the valuation is considered Level 3 in the fair value hierarchy. The Company’s utilization of a credit-valuation adjustment did not have a material effect on the change in fair value of the embedded derivatives for the years ended December 31, 2024 and December 31, 2023.

F-24

Table of Contents

US Alliance Corporation

Notes to Consolidated Financial Statements

Note 4.

Fair Value Measurements (continued)

The table below presents the amounts of assets measured at fair value on a non-recurring basis as of December 31, 2024 and 2023:

	December 31, 2024
	Total		Level 1		Level 2		Level 3

Fixed maturities:
US Treasury securities	$	711,377	$	711,377	$	-	$	-
Corporate bonds		21,491,820		-		21,322,220		169,600
Municipal bonds		4,741,149		-		4,741,149		-
Redeemable preferred stock		2,411,234		-		2,411,234		-
Term loans		12,788,304		-		-		12,788,304
Mortgage backed and asset backed securities		37,434,295		-		37,090,545		343,750
Total fixed maturities		79,578,179		711,377		65,565,148		13,301,654
Equities:
Common stock		2,395,195		2,271,495		123,700		-
Preferred stock		1,480,890		-		1,480,890		-
Total equities		3,876,085		2,271,495		1,604,590		-
Other invested assets		1,109,606		-		-		1,109,606
Reinsurance contract allocated hedge		713,114		-		-		713,114
Limited partnership interests		428,170		-		-		428,170
Total	$	85,705,154	$	2,982,872	$	67,169,738	$	15,552,544

	December 31, 2023
	Total		Level 1		Level 2		Level 3

Fixed maturities:
US Treasury securities	$	724,668	$	724,668	$	-	$	-
Corporate bonds		17,813,362		-		17,643,762		169,600
Municipal bonds		5,636,093		-		5,636,093		-
Redeemable preferred stock		3,305,569		-		3,305,569		-
Term loans		17,052,420		-		-		17,052,420
Mortgage backed and asset backed securities		29,977,408		-		29,489,908		487,500
Total fixed maturities		74,509,520		724,668		56,075,332		17,709,520
Equities:
Common stock		2,116,356		2,017,756		98,600		-
Preferred stock		1,469,529		-		1,469,529		-

US Alliance Corp 10-K