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What changed in KINGSWAY FINANCIAL SERVICES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KINGSWAY FINANCIAL SERVICES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+298 added−294 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-17)

Top changes in KINGSWAY FINANCIAL SERVICES INC's 2025 10-K

298 paragraphs added · 294 removed · 198 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

49 edited+20 added−17 removed29 unchanged
Biggest changePrivate Placement On September 24, 2024, the Company closed on a private placement for aggregate proceeds totaling $8.3 million, resulting from the sale and issuance of 330,000 shares of a new series of Class B Preferred Stock, par value $0.01 per share ("Class B Preferred Stock") for a purchase price of $25.00 per share.
Biggest changePrivate Placements During 2025, the Company closed on two separate private placements to accredited investors for aggregate proceeds totaling $8.0 million, resulting from the sale and issuance of 320,000 shares of redeemable preferred stock with a par value $0.01 per share for a purchase price of $25.00 per share, including 240,000 shares of a newly created class of preferred stock designated Class C Preferred Stock, for aggregate proceeds of $6.0 million and 80,000 shares of a newly created class of preferred stock designated Class D Preferred Stock, for aggregate proceeds of $2.0 million.
INVESTMENTS The Company manages its investments to support its liabilities, preserve capital, maintain adequate liquidity and maximize after-tax investment returns within acceptable risks: ● The fixed maturities portfolios are managed by a third-party firm and are comprised predominantly of high-quality fixed maturities with relatively short durations. ● Equity, limited liability and other investments a re generally overseen by corporate. ● Limited liability investment, at fair value and investments in private companies are generally overseen by corporate, who engages third-party managers for certain holdings.
INVESTMENTS The Company manages its investments to support its liabilities, preserve capital, maintain adequate liquidity and maximize after-tax investment returns within acceptable risks: ● The fixed maturities portfolios are managed by a third-party firm and are comprised predominantly of high-quality fixed maturities with relatively short durations. ● Limited liability investments a re generally overseen by corporate. ● Limited liability investment, at fair value and investments in private companies are generally overseen by corporate, who engages third-party managers for certain holdings.
Financial information about Kingsway's reportable business segments for the years ended December 31, 2024 and December 31, 2023 is contained in the following sections of this 2024 Annual Report: (i ) Note 22, "Segmented Information," to the Consolidated Financial Statements; and (ii) "Results of Continuing Operations" section of MD&A.
Financial information about Kingsway's reportable business segments for the years ended December 31, 2025 and December 31, 2024 is contained in the following sections of this 2025 Annual Report: (i ) Note 22, "Segmented Information," to the Consolidated Financial Statements; and (ii) "Results of Continuing Operations" section of MD&A.
IWS distributes and markets its product s in 26 states and the District of Columbia. IWS focuses exclusively on the automotive finance market with its core VSA and related product offerings, while much of its competition in the credit union channel has a less targeted product approach.
IWS distributes and markets its product s in 28 states and the District of Columbia. IWS focuses exclusively on the automotive finance market with its core VSA and related product offerings, while much of its competition in the credit union channel has a less targeted product approach.
DDI provides mobile monitors to the hospital which automatically connect to the hospital’s WiFi, and then conducts 24/7 monitoring for patients requiring the service. This is intended to allow inpatient rehabilitation hospitals to keep the patient on-site, reducing ambulatory costs and improving continuity of care.
DDI provides mobile monitors to the hospital which automatically connect to the hospital’s WiFi, and then conducts 24/7 monitoring for patients requiring the service. This allows inpatient rehabilitation hospitals to keep the patient on-site, reducing ambulatory costs and improving continuity of care.
DDI provides outsourced 24 hours a day and 7 days per week ("24/7") cardiac telemetry services for long-term acute care ("LTAC") and inpatient rehabilitation hospitals. Outsourcing cardiac monitoring is intended to allow hospitals to eliminate personnel callouts and human resources issues, remove distractions from onsite operations, and free up facility staff to assist directly with patient care.
DDI provides outsourced 24 hours a day and 7 days per week ("24/7") cardiac telemetry services for general acute care, long-term acute care ("LTAC") and inpatient rehabilitation hospitals. Outsourcing cardiac monitoring allows hospitals to eliminate personnel callouts and human resources issues, remove distractions from onsite operations, and free up facility staff to assist directly with patient care.
Penn and Prime solely focuses on the suite of VSA and GAP products it offers, which allows the proper attention required for healthy profitability and risk management. PWI markets, sells and administers VSAs to used car buyers in all fifty states, primarily through a network of approved automobile dealer partners.
Penn solely focuses on the suite of VSA products it offers, which allows the proper attention required for healthy profitability and risk management. PWI markets, sells and administers VSAs to used car buyers in 47 states, primarily through a network of approved automobile dealer partners.
Healthcare Services SNS provides healthcare staffing services to acute healthcare facilities on a contract or per diem basis in the United States, primarily in California. Today, SNS is primarily focused on providing temporary registered nurses and allied healthcare professionals to hospitals. SNS offers its services across two different practices: ● Travel Staffing.
Healthcare Staffing and Monitoring Services SNS provides healthcare staffing services to acute healthcare facilities on a contract or per diem basis in the United States, primarily in California. SNS is focused on providing temporary registered nurses to hospitals; however, SNS maintains contracts to provide allied healthcare professionals to hospitals. SNS offers its services across two different practices: ● Travel Staffing.
Trinity competes on two important facets: its belief that it provides superior customer service relative to its competitors and its ability, through the support of its insurance company partners, to provide warranty solutions to a wider range of HVAC, standby generator, commercial LED lighting and commercial refrigeration equipment customers than that of its competitors. 6 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Trinity competes on two important facets: its belief that it provides superior customer service relative to its competitors and its ability, through the support of its insurance company partners, to provide warranty solutions to a wider range of HVAC, standby generator, commercial LED lighting and commercial refrigeration equipment customers than that of its competitors.
DDI has been operating for over 10 years and currently has a presence in 39 states and Puerto Rico. DDI offers its services as follows: ● LTAC. DDI connects to the hospital’s existing installed telemetry system and outsources the telemetry department for the hospital 24/7. ● Inpatient R ehabilitation Hospitals.
DDI has been operating for over 15 years and currently has a presence in 42 states and Puerto Rico. DDI offers its services as follows: ● General Acute Care and LTAC Hospitals. DDI connects to the hospital’s existing installed telemetry system and outsources the telemetry department for the hospital 24/7. ● Inpatient R ehabilitation Hospitals.
("SNS") ● Systems Products International, Inc. ("SPI") Kingsway Search Xcelerator's r evenue is derived from the provision of various services. Business Services CSuite is a professional services firm that provides experienced chief financial officer and other finance professionals to its clients through a variety of flexible offerings.
("SPI") Kingsway Search Xcelerator's r evenue is derived from the provision of various services and equipment sales. Business Services CSuite is a professional services firm that provides experienced chief financial officer and other finance professionals to its clients through a variety of flexible offerings.
Healthcare Services SNS primarily relies on word-of-mouth and seasoned healthcare recruiters to recruit nurses to help meet the demands of the hospitals, and SNS actively market its services through third-party lead generation channels to better meet the hospitals’ clinician demand.
Healthcare Staffing and Monitoring Services SNS primarily relies on word-of-mouth to recruit nurses to help meet the demands of the hospitals, and SNS actively markets its services through third-party lead generation channels to better meet the hospitals’ clinician demand.
IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unio ns in 26 states and the District of Columbia to their members , with customers in all fifty states .
("PWI") ● Trinity Warranty Solutions LLC ("Trinity") IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unio ns in 28 states and the District of Columbia to their members , with customers in all fifty states .
Penn offers a limited product line of vehicle service agreements with unlimited miles offerings that have an average term of twelve to twenty-four months. ● PWI serves as the co ntract administrator and originator in all states, except for Alaska, Florida and Washington.
Penn offers a limited product line of vehicle service agreements with unlimited miles offerings that have an average term of twelve to twenty-four months. ● PWI serves as the co ntract administrator and originator in all states in which it operates.
Trinity claims on warranty products are managed by the insurance companies with which Trinity partners. Trinity may, at times, act as a third-party administrator of such claims; however, at no time does Trinity bear the loss of claims on warranty products.
Trinity claims on warranty products are managed by the insurance companies with which Trinity partners. Trinity may, at times, act as a third-party administrator of such claims; however, at no time does Trinity bear the loss of claims on warranty products. 8 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Geminus goes to market through its subsidiaries, Penn and Prime, which market their products primarily through independent automotive dealerships and franchise automotive dealerships. Penn and Prime enter into dealer wholesale agreements that allow the dealer to resell Penn and Prime vehicle service agreements at a retail rate that varies by state as they earn potential commission on the remarketing.
Geminus goes to market through its subsidiary, Penn, who markets its products primarily through independent automotive dealerships and franchise automotive dealerships. Penn enters into dealer wholesale agreements that allow the dealer to resell Penn vehicle service agreements at a retail rate that varies by state as they earn potential commission on the remarketing.
The average term of a VSA is b etween four and five years. ● Geminus goes to market through its subsidiaries, Penn and Prime. Penn and Prime serve as the administrator on all contracts they originate and its VSAs range from three months to sixty months and/or 3,000 miles to 200,000 miles.
The average term of a VSA is b etween four and five years. ● Geminus goes to market through its subsidiary, Penn. Penn serves as the administrator on all contracts they originate and its VSAs range from three months to ninety-six months and/or 3,000 miles to 250,000 miles.
Kingsway conducts its business through two reportable segments - Extended Warranty and Kingsway Search Xcelerator - that conduct their business and distribute their products and services in the United States.
The Company owns or controls subsidiaries primarily in the business services and extended warranty industries. Kingsway conducts its business through two reportable segments - Kingsway Search Xcelerator and Extended Warranty - that conduct their business and distribute their products and services primarily in the United States.
Across all states, PWI has an extensive menu of VSAs with terms starting at three months to ninety-six months and mileage bands up to 200,000 miles. Products range from basic Powertrain to the Exclusionary product ("Premier"). The average term of a VSA is twenty-four to thirty-six months.
Across the states in which it operates, PWI has an extensive menu of VSAs with terms starting at three months to ninety-six months and mileage bands up to 250,000 miles. Products range from basic Powertrain to the Exclusionary product ("Premier"). The average term of a VSA is twenty-four to thirty-six months. 7 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Many of its competitors have a comprehensive menu of products and services available to offer the independent and franchise dealers. Penn and Prime's typical competitor’s approach to market is by working through employees or agents with a variety of different product offerings.
Penn operates within a highly competitive environment where product pricing and options are important. Many of its competitors have a comprehensive menu of products and services available to offer the independent and franchise dealers. Penn's typical competitor’s approach to market is by working through employees or agents with a variety of different product offerings.
Working to keep the customer's IT infrastructure operating at peak performance with proactive support and timely repairs. ● Helpdesk Support. Delivering responsive, expert assistance designed to resolve the customer's IT challenges quickly and efficiently. 7 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Supplying cutting-edge technology and hardware tailored to the customer's business needs. ● Service and Maintenance. Working to keep the customer's IT infrastructure operating at peak performance with proactive support and timely repairs. ● Helpdesk Support. Delivering responsive, expert assistance designed to resolve the customer's IT challenges quickly and efficiently. 5 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The closing purchase price was financed with a combination of debt financing provided by Signature Bank and cash on hand. Steel Bridge Acquisition, LLC and Image Solutions, subsidiaries of Kingsway, borrowed a total of $7.75 million, in the form of a term loan, and established a $0.5 million revolver (together, the “Image Solutions Loan”) that was undrawn at close.
The closing purchase price was financed with a combination of debt financing provided by Mainstreet Bank and cash on hand. Longhorns Acquisition LLC and Roundhouse, subsidiaries of Kingsway, borrowed a total of $11.0 million, in the form of a term loan, and established a $0.5 million revolver that was undrawn at close.
Larger competitors may have access to broader resources and pricing advantages, while smaller providers may target niche markets, impacting Image Solutions' ability to expand its client base.
Additionally, competition from both regional and national managed service providers poses a constant challenge. Larger competitors may have access to broader resources and pricing advantages, while smaller providers may target niche markets, impacting Image Solutions' ability to expand its client base.
As a seller of warranty products, Trinity markets and administers product warranty contracts for certain new and used products in the HVAC, standby generator, commercial LED lighting and commercial refrigeration industries throughout the United States. Trinity acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts.
HVAC Trinity sells HVAC, standby generator, commercial LED lighting and commercial refrigeration warranty products. As a seller of warranty products, Trinity markets and administers product warranty contracts for certain new and used products in the HVAC, standby generator, commercial LED lighting and commercial refrigeration industries throughout the United States.
Penn also sells and administers a guaranteed asset protection product ("GAP") in states where Penn is approved. The business models are supported by an internal sales and operations team. PWI markets, sells and administers vehicle service agreements to used car buyers in all fifty states via independent used car and franchise networks of approved automobile and motorcycle dealer partners.
PWI markets, sells and administers vehicle service agreements to used car buyers in 47 states via independent used car and franchise networks of approved automobile and motorcycle dealer partners. PWI’s business model is supported by an internal sales and operations team.
The Company acquired Image Solutions for aggregate cash consideration of $20.4 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. Further information is containe d in Note 4 , "Acquisitions ," to the Consolidated Financial Statements.
The Company acquired Roundhouse for aggregate consideration consisting of cash and phantom equity awards to the selling stockholders, of approximately $22.7 million, less certain escrowed amounts for purposes of indemnification claims. Further information is containe d in Note 4 , "Acquisitions ," to the Consolidated Financial Statements.
For further descriptions of the Company's investments, see "Investments" and "Significant Accounting Policies and Critical Estimates" in MD&A a nd Note 7, "Investments," and Note 23, "Fair Value of Financial Instruments," t o the Consolidated Financial Statements.
For further descriptions of the Company's investments, see "Investments" and "Significant Accounting Policies and Critical Estimates" in MD&A a nd Note 7, "Investments," and Note 23, "Fair Value of Financial Instruments," t o the Consolidated Financial Statements. REGULATORY ENVIRONMENT Kingsway Search Xcelerator Certain, but not all, states regulate nursing registries and supplemental healthcare staffing agencies.
Image Solutions actively promotes its services by partnering with local businesses, sponsoring regional events, and participating in industry-focused conferences. These efforts are strategically aimed at building relationships with small and medium-sized enterprises seeking reliable technology solutions. Additionally, competition from both regional and national managed service providers poses a constant challenge.
Ravix and CSuite receives most of their new business as a result of business networking activities, referrals from service providers and former clients. Image Solutions actively promotes its services by partnering with local businesses, sponsoring regional events, and participating in industry-focused conferences. These efforts are strategically aimed at building relationships with small and medium-sized enterprises seeking reliable technology solutions.
KINGSWAY SEARCH XCELERATOR SEGMENT Kingsway Search Xcelerator includes the following subsidiaries of the Company (collectively, “ Kingsway Search Xcelerator ” ), and includes the Company’s unique CEO Accelerator program. ● CSuite Financial Partners, LLC ("CSuite") ● Digital Diagnostics Imaging, Inc. ("DDI") ● Image Solutions, LLC ("Image Solutions") ● Ravix Group, Inc. ("Ravix") ● Secure Nursing Service Inc.
KINGSWAY SEARCH XCELERATOR SEGMENT Kingsway Search Xcelerator includes the following subsidiaries of the Company (collectively, “ Kingsway Search Xcelerator ” ), and includes the Company’s unique CEO Accelerator program. ● Advanced Plumbing & Drain, LLC (d/b/a AAA Advanced Plumbing & Drain, "Advanced Plumbing") ● CSuite Financial Partners, LLC ("CSuite") ● Digital Diagnostics, Inc.
Trinity does not guaranty the performance underlying the warranty contracts it sells. 5 Table of Contents KINGSWAY FINANCIAL SERVICES INC. Trinity also provides equipment breakdown and maintenance support services to companies across the United States.
Trinity acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts. Trinity does not guaranty the performance underlying the warranty contracts it sells. Trinity also provides equipment breakdown and maintenance support services to companies across the United States.
Geminus primarily sells and administers vehicle service agreements to used car buyers across the United States, through its subsidiaries, The Penn Warranty Corporation ("Penn") and Prime Auto Care Inc. ("Prime"). Penn and Prime distribute these products in 46 and 34 states, respectively, via independent used car dealerships and franchised car dealerships.
Geminus primarily sells and administers vehicle service agreements to used car buyers across the United States, mainly through its subsidiary, The Penn Warranty Corporation ("Penn"). Penn distributes these products in 46 states via independent used car dealerships and franchised car dealerships. The business models are supported by an internal sales and operations team.
Provides specialized expertise in areas of technical accounting, such as initial public offerings, SEC reporting and international consolidation; ● Human Resources. Offers human resources, workforce management, and compliance support; and ● Advisory Services. Focuses on managing clients through liquidations and assignment for the benefit of the creditors.
Offers services oriented around day-to-day financial stewardship of its clients, such as bookkeeping, accounting, financial reporting and analysis and strategic finance. ● Technical Accounting. Provides specialized expertise in areas of technical accounting, such as initial public offerings, SEC reporting and international consolidation; ● Human Resources. Offers human resources, workforce management, and compliance support; and ● Advisory Services.
Image Solutions provides comprehensive information technology ("IT") managed services primarily in North Carolina, Kansas, Georgia, Kentucky and Tennessee. Image Solutions' services encompass a full suite of IT solutions including: ● Equipment Sales. Supplying cutting-edge technology and hardware tailored to the customer's business needs. ● Service and Maintenance.
Focuses on managing clients through liquidations and assignment for the benefit of the creditors. Image Solutions provides comprehensive information technology ("IT") managed services primarily in North Carolina, Kansas, Georgia, Kentucky and Tennessee. Image Solutions' services encompass a full suite of IT solutions including: ● Equipment Sales.
Data solutions and claims groups within the individual operating subsidiaries track loss performance monthly to alert the operating subsidiaries' management teams to the potential need to adjust forms or rates. For the Kingsway Search Xcelerator companies, reviews of billing rates and product prices are performed regularly and rates can be adjusted to reflect prevailing marketing expectations.
Data solutions and claims groups within the individual operating subsidiaries track loss performance monthly to alert the operating subsidiaries' management teams to the potential need to adjust forms or rates.
These offerings include project and interim staffing engagements, and contingent search services for permanent placements for its clients throughout the United States. Ravix provides outsourced finance and human resources consulting services to its clients on a fractional basis for both projects with definitive endpoints and ongoing engagements of indeterminate length for customers throughout the United States.
Ravix provides outsourced finance and human resources consulting services to its clients on a fractional basis for both projects with definitive endpoints and ongoing engagements of indeterminate length for customers throughout the United States. All services are delivered by employees who are located primarily in the United States. Ravix offers its services across four different practices: ● Operational Accounting.
PWI’s business model is supported by an internal sales and operations team and partners with American Auto Shield ("AAS") in three states with a "white label" agreement. Trinity sells heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and commercial refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States.
Trinity sells heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and commercial refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States.
REGULATORY ENVIRONMENT Extended Warranty Vehicle service agreements are regulated in all states in the United States, and IWS, Geminus and PWI are subject to these regulations. Most states utilize the approach of the Uniform Service Contract Act that was adopted by the National Association of Insurance Commissioners in the early 1990's.
Most states utilize the approach of the Uniform Service Contract Act that was adopted by the National Association of Insurance Commissioners in the early 1990's.
The common shares of Kingsway are listed on the NYSE under the trading symbol "KFS." Kingsway is a holding company with operating subsidiaries located in the United States. The Company owns or controls subsidiaries primarily in the extended warranty and business services industries.
The common shares of Kingsway are listed on the NYSE under the trading symbol "KFS." Kingsway is a holding company with operating subsidiaries located in the United States and is the only publicly-traded US company employing the Search Fund model to acquire and build great businesses.
The Image Solutions Loan has a variable interest rate equal to the greater of the Prime Rate plus 0.50%, or 7.25%. The Image Solutions Loan requires monthly payments of principal and interest. The revolver matures on September 26, 2026 and the term loan matures on September 26, 2030.
The Roundhouse term loan requires monthly payments of principal and interest and has a variable interest rate equal to the greater of the one-month term Secured Overnight Financing Rate ("SOFR") plus 3.3%, or 5.0%. The Roundhouse term loan and revolver mature on July 1, 2035.
The Company currently has four full-t ime Searchers as of December 31, 2024. The Company intends to maintain this level – and potentially expand it – as business opportunities permit. PRICING AND PRODUCT MANAGEMENT Responsibility for pricing and product management rests with the Company's individual operating subsidiaries in Extended Warranty and Kingsway Search Xcelerator .
The Company currently has three full-t ime Searchers as of December 31, 2025. The Company intends to maintain this level – and potentially expand it – as business opportunities permit. EXTENDED WARRANTY SEGMENT Extended Warranty includes the following subsidiaries of the Company (collectively, "Extended Warranty"): ● IWS Acquisition Corporation ("IWS") ● Geminus Holding Company, Inc. ("Geminus") ● PWI Holdings, Inc.
The dealer base is serviced by the Company's employees located throughout the United States in close geographical proximity to the dealers they serve. Penn and Prime distribute and market their products in 46 and 34 states, respectively.
The dealer base is serviced by the Company's employees located throughout the United States in close geographical proximity to the dealers they serve. Penn distributes and markets its products in 46 states. Penn focuses exclusively on the automotive finance market with its core VSA related product offerings, while much of its competition is employee based or agent centric.
We believe the skills and experience of our employees are an essential driver of our business and important to our future prospects.
At December 31, 2025, 29 of our employees were represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good. We believe the skills and experience of our employees are an essential driver of our business and important to our future prospects.
The CEO Accelerator focuses on identifying and acquiring privately-held businesses with EBITDA between $1 and $3 million where the owner/operator is looking to transition from day-to-day operating responsibilities. The CEO Accelerator utilizes the proven framework and characteristics of the Search Fund acquisition model and targets industries and companies with pre-defined characteristics.
As an example, our first Searcher, who was hired in May 2020, identified Ravix as a potential acquisition, which the Company closed on in October 2021. The CEO Accelerator focuses on identifying and acquiring privately-held businesses with EBITDA between $1 and $3 million where the owner/operator is looking to transition from day-to-day operating responsibilities.
Certain, but not all, states regulate the sale of HVAC and equipment warranty contracts. Trinity is licensed as a service contract provider in those states where it is required. Certain, but not all, states regulate nursing registries and supplemental healthcare staffing agencies. SNS is licensed as a nursing registry in those states where it is required.
Certain, but not all, states regulate the sale of HVAC and equipment warranty contracts. Trinity is licensed as a service contract provider in those states where it is required. HUMAN CAPITAL MANAGEMENT At December 31, 2025, the Company employe d 607 per sonnel supporting its operations, consisting of approximately 569 full-time employees and 38 part-time employees.
Because the SPI product is a business to business software solution, SPI's target market is a subset of a larger travel market; therefore, competition is limited.
Because the SPI product is a business to business software solution, SPI's target market is a subset of a larger travel market; therefore, competition is limited. Electric Motor Solutions Roundhouse has primarily grown through word-of-mouth referrals, but also actively markets its services through traditional channels, including email marketing and sales calls.
Vertical Market Software SPI provides software products created exclusively to serve the management needs of all types of shared-ownership properties throughout the United States, Europe, Asia, Mexico and the Caribbean. Marketing, Distribution and Competition No Kingsway Search Xcelerator customer or group of af filiated customers accounts for 10% or m ore of the Company's consolidated revenues.
Marketing, Distribution and Competition No Kingsway Search Xcelerator customer or group of af filiated customers accounts for 10% or m ore of the Company's consolidated revenues. Business Services CSuite and Ravix actively market their services via sponsorships of industry events and conferences targeted at private equity and venture capital.
The Class B Preferred Stock ranks senior to the Company's common shares. Each share of Class B Preferred Stock is convertible into 2.6316 common shares at any time at the option of the holder prior to September 24, 2031.
Each share of redeemable preferred stock is convertible into 2.6316 common shares at any time at the option of the holder. Further information is containe d in Note 18, " Redeemable Preferred Stock," to the Consolidated Financial Statements. Common Stock Sale On June 24, 2025, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with certain third-parties.
All of the dollar amounts in this 2024 Annual Report are expressed in U.S. dollars.
All of the dollar amounts in this 2025 Annual Report are expressed in U.S. dollars. GENERAL DEVELOPMENT OF BUSINESS Acquisition of M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing) On March 14, 2025, the Company acquired 100% of the outstanding membership interests of M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing Service, "Bud's Plumbing").
Further information is containe d in Note 5 , "Disposal and Discontinued Operations," to the Consolidated Financial Statements.
Further information is containe d in Note 4 , "Acquisitions ," to the Consolidated Financial Statements. The closing purchase price was financed with a combination of debt financing provided by Newburyport Bank and cash on hand.
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FILER STATUS On the last business day of the second quarter in 2023, the aggregate market value of the Company’s shares of common stock held by non-affiliate stockholders was between $75 million and $250 million and the Company’s revenue for the year ended December 31, 2023 was more than $100 million.
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The Company owns and operates a collection of high-quality B2B and B2C services companies that are asset-light, growing, and that have recurring revenues. Kingsway seeks to compound long-term shareholder value on a per share basis via its decentralized management model, its talented team of operators, and its tax-advantaged corporate structure.
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As a result, the Company was deemed to be an accelerated filer as defined in Rule 12b-2 under the Exchange Act as of January 1, 2024.
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Bud's Plumbing, based in Evansville, Indiana, is a provider of various plumbing installation, service and repair services to residential and commercial customers. Bud's Plumbing is included in the Kingsway Search Xcelerator segment. The Company acquired Bud's Plumbing for aggregate consideration consisting of cash and a seller note, of approximately $5.0 million, less certain escrowed amounts for purposes of indemnification claims.
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Due to the change in filer status, the Company is no longer exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and the Company’s independent registered public accounting firm has evaluated and reported on the effectiveness of internal control over financial reporting at December 31, 2024.
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The closing purchase price was paid with cash on hand. Further information is containe d in Note 4 , "Acquisitions ," to the Consolidated Financial Statements. Acquisition of Roundhouse Electric & Equipment Co., Inc. On July 1, 2025, the Company acquired 100% of the outstanding equity interests of Roundhouse Electric & Equipment Co., Inc. ("Roundhouse").
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GENERAL DEVELOPMENT OF BUSINESS Acquisition of Image Solutions, LLC On September 26, 2024, the Company acquired 100% of the outstanding membership interests of Image Solutions, LLC ("Image Solutions"). Image Solutions, based in Fletcher, North Carolina, is an information technology managed services provider. Image Solutions is included in the Kingsway Search Xcelerator segment.
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Roundhouse, based in Odessa, Texas, is a provider of industrial-scale electric motor maintenance, repair, testing, and sales solutions primarily to midstream natural gas pipeline operators and utilities across the Permian Basin. Roundhouse is included in the Kingsway Search Xcelerator segment.
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Sale of VA Lafayette, LLC On August 16, 2024, the Company completed the sale of its subsidiary, VA Lafayette, LLC ("VA Lafayette"), to an entity associated with a current holder of the Company's Class B Preferred Stock (the sale occurred prior to negotiations regarding the issuance of the Class B Preferred Stock).
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Acquisition of AAA Flexible Pipe Cleaning Corporation (d/b/a AAA Advanced Plumbing & Drain) On August 1, 2025, the Company (through its newly formed subsidiary, Advanced Plumbing & Drain LLC) acquired substantially all of the assets and certain specified liabilities of AAA Flexible Pipe Cleaning Corporation (d/b/a AAA Advanced Plumbing & Drain, "Advanced Plumbing").
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VA Lafayette owned a single asset, real estate property, which was subject to a mortgage (the "LA Mortgage").
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Advanced Plumbing, based in Cleveland, Ohio, is a provider of various plumbing installation, service and repair services to residential and commercial customers. Advanced Plumbing is included in the Kingsway Search Xcelerator segment.
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The purchase price paid by the purchaser at the closing consisted of $1.3 million in cash plus the assumption of the unpaid principal balance as of the closing of the LA Mortgage of approximately $11.8 million, netting cash proceeds of $1.1 million to Kingsway after expenses.
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The Company acquired Advanced Plumbing for aggregate consideration consisting of cash, a seller note and contingent consideration, of approximately $3.7 million, less certain escrowed amounts for purposes of indemnification claims. The closing purchase price was paid with cash on hand. Further information is contained in Note 4 , "Acquisitions ," to the Consolidated Financial Statements.
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Subject to certain adjustments set forth in the certificate of designations for the Class B Preferred Stock, the maximum number of common shares issuable upon conversion of the Class B Preferred Stock is 868,421 common shares. Further information is containe d in Note 19, " Redeemable Class B Preferred Stock," to the Consolidated Financial Statements.
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Acquisition of Efficient Plumbing, LLC (d/b/a Southside Plumbing) On August 14, 2025, the Company acquired 80% of the outstanding membership interests of Efficient Plumbing, LLC (d/b/a Southside Plumbing, "Southside Plumbing"). Southside Plumbing, based in Omaha, Nebraska, is a provider of various plumbing installation, service and repair services to residential and commercial customers.
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EXTENDED WARRANTY SEGMENT Extended Warranty includes the following subsidiaries of the Company (collectively, "Extended Warranty"): ● IWS Acquisition Corporation ("IWS") ● Geminus Holding Company, Inc. ("Geminus") ● PWI Holdings, Inc. ("PWI") ● Trinity Warranty Solutions LLC ("Trinity") 4 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
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Southside Plumbing is included in the Kingsway Search Xcelerator segment. 4 Table of Contents KINGSWAY FINANCIAL SERVICES INC. The Company acquired Southside Plumbing for aggregate consideration consisting of cash, a seller note and contingent consideration, of approximately $4.6 million, less certain escrowed amounts for purposes of indemnification claims.
Removed
In those states, PWI partners with American Auto Shield ("AAS") in a white label relationship where the VSAs are branded PWI, are originated and administered by AAS, with PWI generating fee income on every contract sold.
Added
Kingsway Plumbing Holdco LLC ("KPH"), a subsidiary of Kingsway, and its subsidiaries, Bud's Plumbing, Advanced Plumbing and Southside Plumbing, borrowed a total of $3.75 million, in the form of a term loan, and established a $0.5 million revolver that was undrawn at close.
Removed
In addition to marketing vehicle service agreements, IWS and Geminus also administer and broker a GAP product through their distribution channels. GAP generally covers a consumer's out-of-pocket amount, related to an automobile loan or lease, if the vehicle is stolen or damaged beyond repair.
Added
The KPH term loan requires monthly payments of interest, has an annual fixed interest rate of 7.5% and matures on August 14, 2032. Monthly principal payments on the KPH term loan begin September 14, 2026. The revolver matures on August 14, 2026.
Removed
IWS earns a commission when a consumer purchases a GAP certificate but does not take on any insurance risk. HVAC Trinity sells HVAC, standby generator, commercial LED lighting and commercial refrigeration warranty products.
Added
Pursuant to the Purchase Agreement, the Company sold an aggregate of 1,336,264 shares of its Common Stock, par value $0.01 per share for aggregate gross proceeds of $15.7 million. The purchase price for each share of Common Stock was $11.75 per share. Net proceeds to the Company were $15.6 million after deducting offering expenses.
Removed
Penn and Prime focus exclusively on the automotive finance market with its core VSA and GAP related product offerings, while much of its competition is employee based or agent centric. Penn and Prime operate within a highly competitive environment where product pricing and options are important.
Added
("DDI") ● Efficient Plumbing, LLC (d/b/a Southside Plumbing, "Southside Plumbing") ● Image Solutions, LLC ("Image Solutions") ● M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing Service, "Bud's Plumbing") ● Ravix Group, Inc. ("Ravix") ● Roundhouse Electric & Equipment Co., Inc. ("Roundhouse") ● Secure Nursing Service Inc. ("SNS") ● Systems Products International, Inc.
Removed
All services are delivered by employees who are located primarily in the United States. Ravix offers its services across four different practices: ● Operational Accounting. Offers services oriented around day-to-day financial stewardship of its clients, such as bookkeeping, accounting, financial reporting and analysis and strategic finance. ● Technical Accounting.
Added
These offerings include project, fractional, and interim staffing of senior finance professionals, CFO mentoring, board advisory services, and executive search services for permanent placements for its clients throughout the United States.
Removed
Business Services CSuite and Ravix actively markets their services via sponsorships of industry events and conferences targeted at private equity and venture capital. Ravix and CSuite receives most of their new business as a result of business networking activities, referrals from service providers and former clients.
Added
Vertical Market Software SPI provides software products created exclusively to serve the management needs of all types of shared-ownership properties globally. Electric Motor Solutions Roundhouse is a provider of industrial-scale electric motor solutions, including field maintenance, in-shop repair, testing, and new motor sales. The Company's primary customers are midstream natural gas pipeline operators and utilities across the Permian Basin.
Removed
As an example, our first Searcher, who was hired in May 2020, identified Ravix as a potential acquisition, which the Company closed on in October 2021. 8 Table of Contents KINGSWAY FINANCIAL SERVICES INC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

42 edited+28 added−7 removed79 unchanged
Biggest changeWe have generated net operating loss carryforwards for U.S. income tax purposes, but our ability to use these net operating losses could be limited by our inability to generate future taxable income. Our U.S. businesses have generated consolidated net operating loss carryforwards ("U.S. NOLs") for U.S. federal income tax purposes of approximately $622.3 million as o f December 31, 2024.
Biggest changeOur U.S. businesses have generated consolidated net operating loss carryforwards ("U.S. NOLs") for U.S. federal income tax purposes of approximately $628.0 million as o f December 31, 2025. These U.S. NOLs can be available to reduce income taxes that might otherwise be incurred on future U.S. taxable income and would have a positive effect on our cash flow.
These effects, individually or in the aggregate, may adversely impact our businesses, financial condition, operating results and cash flows, and such adverse impacts may be material.
As such, these effects, individually or in the aggregate, may adversely impact our businesses, financial condition, operating results and cash flows, and such adverse impacts may be material.
As of December 31, 2024, we had $15.0 million principal value of outstanding recourse subordinated debt in the form of trust preferred securities, with a redemption date of May 2033. Additionally, we incurred indebtedness in connection with our acquisitions of PWI Holdings, Inc. and its various subsidiaries (collectively, "PWI") on December 1, 2020, Ravix Financial, Inc.
As of December 31, 2025, we had $15.0 million principal value of outstanding recourse subordinated debt in the form of trust preferred securities, with a redemption date of May 2033. Additionally, we incurred indebtedness in connection with our acquisitions of PWI Holdings, Inc. and its various subsidiaries (collectively, "PWI") on December 1, 2020, Ravix Financial, Inc.
Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if the conflict between Russia and Ukraine continues for a long period of time, or if other countries, including the U.S., become further involved in the conflict and any other military conflicts, we could face material adverse effects on our business, financial condition, results of operations and/or liquidity.
Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if the conflict between Russia and Ukraine continues for a long period of time or if serious conflict arises elsewhere, or if other countries, including the U.S., become further involved in the conflict and any other military conflicts, we could face material adverse effects on our business, financial condition, results of operations and/or liquidity.
COMPLIANCE RISK If we fail to comply with applicable insurance and securities laws or regulatory requirements, our business, results of operations, financial condition or cash flow could be adversely affected. As a publicly traded holding company listed on the New York Stock Exchange, we are subject to numerous laws and regulations.
COMPLIANCE RISK If we fail to comply with insurance, securities or other applicable laws or regulatory requirements, our business, results of operations, financial condition or cash flow could be adversely affected. We are subject to numerous laws and regulations, including those applicable to us as a publicly traded holding company listed on the New York Stock Exchange.
We have outstanding shares of Class B Preferred Stock which have, and we may issue additional shares of preferred stock in the future which have, rights and preferences that are senior to the rights of our common stock.
We have outstanding shares of Class B Preferred Stock, Class C Preferred Stock and Class D Preferred Stock which will have, and we may issue additional shares of preferred stock in the future which have, rights and preferences that are senior to the rights of our common stock.
It is not possible to predict the future effect of changing federal, state and provincial law or regulation (or the interpretation or application thereof) on our operations, and there can be no assurance that laws and regulations enacted in the future will not be more restrictive than existing laws and regulations. Our business is subject to risks related to litigation.
It is not possible to predict the future effect of changing federal, state and provincial law or regulation (or the interpretation or application thereof) on our operations, and there can be no assurance that laws and regulations enacted in the future will not be more restrictive than existing laws and regulations.
As of December 31, 2024, our investments includ ed $37.0 million o f fixed maturities, at fair value. General economic conditions can adversely affect the markets for interest rate-sensitive instruments, including the extent and timing of investor participation in such markets, the level and volatility of interest rates and, consequently, the fair value of fixed maturities.
As of December 31, 2025, our investments includ ed $36.8 million o f fixed maturities, at fair value. General economic conditions can adversely affect the markets for interest rate-sensitive instruments, including the extent and timing of investor participation in such markets, the level and volatility of interest rates and, consequently, the fair value of fixed maturities.
Our ability to achieve our investment objectives is affected by general economic conditions that are beyond our control and our own liquidity needs for operating purposes. We may not be able to realize our investment objectives, which could adversely affect our results of operations, financial condition and available cash resources.
Our ability to achieve our investment objectives is affected by general economic conditions that are beyond our control and our own liquidity needs for operating purposes. We may not be able to realize our investment objectives, which could adversely affect our results of operations, financial condition and available cash resources. 10 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Change management may result in disruptions to the operations of the business or may cause employees to act in a manner that is inconsistent with our objectives. Any of these events could negatively affect our performance. We may not always achieve the expected cost savings and other benefits of our initiatives. 13 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Change management may result in disruptions to the operations of the business or may cause employees to act in a manner that is inconsistent with our objectives. Any of these events could negatively affect our performance. We may not always achieve the expected cost savings and other benefits of our initiatives.
The consequence of this limitation would be the potential loss of a significant future cash flow benefit because we would no longer be able to substantially offset future taxable income with U.S. NOLs. There can be no assurance that such ownership change will not occur in the future. 12 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The consequence of this limitation would be the potential loss of a significant future cash flow benefit because we would no longer be able to substantially offset future taxable income with U.S. NOLs. There can be no assurance that such ownership change will not occur in the future.
Any of these circumstances could adversely affect our reputation, business, financial condition, results of operation and cash flows. 15 Table of Contents KINGSWAY FINANCIAL SERVICES INC. Our success depends on our ability to price accurately the risks we underwrite. Our results of operation or financial condition depend on our ability to price accurately for a wide variety of risks.
Any of these circumstances could adversely affect our reputation, business, financial condition, results of operation and cash flows. Our success depends on our ability to price accurately the risks we underwrite. Our results of operation or financial condition depend on our ability to price accurately for a wide variety of risks.
Over the past several years, we have restructured our operating insurance subsidiaries, including exiting states and lines of business, placing subsidiaries into voluntary run-off, terminating managing general agent relationships, hiring a new management team, selling Mendota and CMC and acquiring PWI, Ravix, CSuite, SNS, SPI, DDI and Image Solutions with the objective of focusing on our Extended Warranty and Kingsway Search Xcelerator segments, creating a more effective and efficient operating structure and focusing on profitability.
Over the past several years, we have restructured our operating insurance subsidiaries, including exiting states and lines of business, placing subsidiaries into voluntary run-off, terminating managing general agent relationships, hiring a new management team, selling Mendota and CMC and acquiring various companies with the objective of focusing on our Kingsway Search Xcelerator and Extended Warranty segments, creating a more effective and efficient operating structure and focusing on profitability.
We cannot assure that the deferred service fees of the companies that we acquire are or will be adequate. Extended Warranty's reliance on credit unions and dealers, as well as our overall reliance on automobile sales could adversely affect our ability to maintain business.
We cannot assure that the deferred service fees of the companies that we acquire are or will be adequate. 13 Table of Contents KINGSWAY FINANCIAL SERVICES INC. Extended Warranty's reliance on credit unions and dealers, as well as our overall reliance on automobile sales could adversely affect our ability to maintain business.
The demand for qualified professionals often outpaces supply, particularly in competitive markets, which could hinder Image Solutions’ ability to scale its operations or maintain service quality. This could significantly and adversely impact Image Solutions' growth trajectory, operational performance, and financial outcomes.
The demand for qualified professionals often outpaces supply, particularly in competitive markets, which could hinder Image Solutions’ ability to scale its operations or maintain service quality. This could significantly and adversely impact Image Solutions' growth trajectory, operational performance, and financial outcomes. 14 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
("Ravix") on October 1, 2021, CSuite Financial Partners, LLC ("CSuite") on November 1, 2022, Secure Nursing Service Inc. ("SNS") on November 18, 2022, Digital Diagnostics Inc. ("DDI") on October 26, 2023 and Image Solutions, LLC on September 26, 2024.
("Ravix") on October 1, 2021, CSuite Financial Partners, LLC ("CSuite") on November 1, 2022, Secure Nursing Service Inc. ("SNS") on November 18, 2022, Digital Diagnostics Inc. ("DDI") on October 26, 2023, Image Solutions, LLC ("Image Solutions") on September 26, 2024, Roundhouse Electric & Equipment Co., Inc.
In connection with our operations in the ordinary course of business, at times we are named as defendants in various actions for damages and costs allegedly sustained by the plaintiffs.
Our business is subject to risks related to litigation. In connection with our operations in the ordinary course of business, at times we are named as defendants in various actions for damages and costs allegedly sustained by the plaintiffs.
Our outstanding recourse subordinate debt as of December 31, 2024 of $15.0 million principal value bears interest directly related to CME Term SOFR and our outstanding acquisition financing of $44.6 million related to the acquisitions of PWI, Ravix, CSuite, SNS, DDI and Image Solutions bears interest directly related to either SOFR or the Prime Rate.
Our outstanding recourse subordinate debt as of December 31, 2025 of $15.0 million principal value bears interest directly related to CME Term SOFR and $51.9 m illion of our outstanding acquisition financing related to the acquisitions of PWI, Ravix, CSuite, SNS, DDI, Image Solutions and Roundhouse bears interest directly related to either SOFR or the Prime Rate.
The covenants under our debt agreements could limit our ability to plan for or react to market conditions or to meet our capital needs. No assurances can be given that we will be able to maintain compliance with these covenants. 10 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The covenants under our debt agreements could limit our ability to plan for or react to market conditions or to meet our capital needs. No assurances can be given that we will be able to maintain compliance with these covenants.
The value of collateral could fall below the levels required under these agreements putting the subsidiary or subsidiaries in breach of the agreements which could expose us to damages or otherwise adversely impact our business, financial condition, operating results or cash flows.
The value of collateral could fall below the levels required under these agreements putting the subsidiary or subsidiaries in breach of the agreements which could expose us to damages or otherwise adversely impact our business, financial condition, operating results or cash flows. Worldwide armed conflicts and the related implications may negatively impact our operations.
As of December 31, 2024, our investments also included $0.7 million of limited liability investments, $2.9 million of limited liability investment, at fair value and $0.7 million of investments in private companies, at adjusted cost . The se investments are less liquid than fixed maturities.
As of December 31, 2025, our investments also included $0.6 million of limited liability investments, $3.5 million of limited liability investment, at fair value and $0.6 million of investments in private companies, at adjusted cost . The se investments are less liquid than fixed maturities.
Also, almost all of our U.S. NOLs have expiration dates. There can be no assurance that, if and when we generate taxable income in the future from operations or the sale of assets or businesses, we will generate such taxable income before our U.S. NOLs expire. We have generated U.S. NOLs, but our ability to preserve and use these U.S.
There can be no assurance that, if and when we generate taxable income in the future from operations or the sale of assets or businesses, we will generate such taxable income before our U.S. NOLs expire. 11 Table of Contents KINGSWAY FINANCIAL SERVICES INC. We have generated U.S. NOLs, but our ability to preserve and use these U.S.
Pandemics, including the emergence of new COVID-19 variants, may lead to adverse United States domestic and global macroeconomic effects, including adverse impacts on various industries' supply chains and automobile sales, consumer demand for our products and services, our ability to access capital, and may otherwise adversely impact the operation of our businesses, cause substantial disruption to our employees, distribution channels, investors, tenants, and customers through self-isolation, travel limitations, business restrictions, and/or other means.
These effects may include adverse impacts on various industries' supply chains and automobile sales, consumer demand for our products and services, and our ability to access capital, and may otherwise adversely impact the operation of our businesses, cause substantial disruption to our employees, distribution channels, investors, tenants, and customers through self-isolation, travel limitations, business restrictions, and/or other means.
If our disaster recovery plans do not work as anticipated, or if the third-party vendors to which we have outsourced certain information technology or other services fail to fulfill their obligations to us, our operations may be adversely affected.
If our disaster recovery plans do not work as anticipated, or if the third-party vendors to which we have outsourced certain information technology or other services fail to fulfill their obligations to us, our operations may be adversely affected. Additionally, our third-party vendors face various cybersecurity threats and also may suffer cybersecurity incidents or other security breaches.
Failures of our information technology systems could also lead to violations of privacy laws, regulations, trade guidelines or practices related to our customers and employees.
Failures of our information technology systems could also lead to violations of privacy laws, regulations, trade guidelines or practices related to our customers and employees. 15 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Investors are advised to consider these factors along with the other information included in this 2024 Annual Report and to consult any further disclosures Kingsway makes in its filings with the SEC.
Investors are advised to consider these factors along with the other information included in this 2025 Annual Report and to consult any further disclosures Kingsway makes in its filings with the SEC. 9 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Although we have remediated material weaknesses previously identified, we can provide no assurance that additional material weaknesses in our internal control over financial reporting will not be identified in the future and that such material weaknesses, if identified, will not result in material misstatements in our consolidated financial statements STRATEGIC RISK The achievement of our strategic objectives is highly dependent on effective change management.
Although we have remediated material weaknesses previously identified, we can provide no assurance that additional material weaknesses in our internal control over financial reporting will not be identified in the future and that such material weaknesses, if identified, will not result in material misstatements in our consolidated financial statements.
The introduction of new regulatory provisions could materially raise the costs associated with hiring temporary employees such as per diem and travel nurses. For example, a state could impose sales taxes or increase sales tax rates on temporary healthcare staffing services.
SNS may experience increased costs that reduce its revenue and profitability if applicable government regulations change. The introduction of new regulatory provisions could materially raise the costs associated with hiring temporary employees such as per diem and travel nurses. For example, a state could impose sales taxes or increase sales tax rates on temporary healthcare staffing services.
Financial disruption or a prolonged economic downturn could materially and adversely affect the credit, investment and financial markets which, in turn, could materially adversely affect our business, results of operations or financial condition .
There can be no assurance that market conditions will not deteriorate in the future. Financial disruption or a prolonged economic downturn could materially and adversely affect the credit, investment and financial markets which, in turn, could materially adversely affect our business, results of operations or financial condition .
These U.S. NOLs can be available to reduce income taxes that might otherwise be incurred on future U.S. taxable income and would have a positive effect on our cash flow. There can be no assurance that we will generate the taxable income in the future necessary to utilize these U.S. NOLs and realize the positive cash flow benefit.
There can be no assurance that we will generate the taxable income in the future necessary to utilize these U.S. NOLs and realize the positive cash flow benefit. Also, almost all of our U.S. NOLs have expiration dates.
Our business, financial condition and results of operations could be materially and adversely affected by changes in international and national economic and industry conditions . The COVID-19 pandemic created significant disruption and uncertainty in the global economy and negatively impacted our business and results of operations and financial condition.
Our business, financial condition and results of operations could be materially and adversely affected by public health crises and changes in international and national economic and industry conditions .
We market and distribute our warranty products and equipment breakdown and maintenance support services through a limited number of customers and clients across the United States.
We market and distribute our warranty products and equipment breakdown and maintenance support services through a limited number of customers and clients across the United States. Loss of all or a substantial portion of our existing customers and clients could have a material adverse effect on our business, results of operations or financial condition.
For example, delays, higher than expected costs or unsuccessful implementation of new information technology systems could adversely affect our operations.
Further, changes or modifications to our information technology systems could cause disruption to our operations or cause challenges with respect to our compliance with laws, regulations or other applicable standards. For example, delays, higher than expected costs or unsuccessful implementation of new information technology systems could adversely affect our operations.
CSuite’s business opportunities outside of search are correlated with M&A activities. Clients will often engage CSuite’s financial executive services to prepare a business for a transaction or to assist with post-acquisition implementation. Accordingly, a major contraction of M&A activity could have a material effect on our business, results of operations or financial condition.
CSuite ’ s focus on serving private equity backed businesses creates exposure to general mergers and acquisitions ("M&A") activity. CSuite’s business opportunities outside of search are correlated with M&A activities. Clients will often engage CSuite’s financial executive services to prepare a business for a transaction or to assist with post-acquisition implementation.
Market volatility may also make it more difficult to value certain of our investments if trading becomes less frequent and the liquidity of such investment declines. Disruptions, uncertainty and volatility in the global credit markets may also adversely affect our ability to obtain financing for future acquisitions.
Any such economic, business, financial or political conditions may make it more difficult for us to accurately forecast and plan our future business activities. Market volatility may also make it more difficult to value certain of our investments if trading becomes less frequent and the liquidity of such investment declines.
Ravix's concentration in venture-capital-funded startups creates exposure to the venture capital funding cycles . Ravix focuses on venture-capital-funded companies, often in Silicon Valley, as its clients and receives a significant portion of its referrals from service providers focused on servicing the same market.
Ravix focuses on venture-capital-funded companies, often in Silicon Valley, as its clients and receives a significant portion of its referrals from service providers focused on servicing the same market. Accordingly, a major contraction of available venture capital funding into companies or industries that Ravix services could have a material adverse effect on our business, results of operations or financial condition.
The COVID-19 pandemic has led to, and a future adverse change in market condition could lead to, instability in the global credit markets, including heightened credit risk, reduced valuation of investments and decreased economic activity.
A severe or prolonged economic weakness and uncertainty, both in the U.S. and worldwide, could lead to instability in the global credit markets, including heightened credit risk, reduced valuation of investments and decreased economic activity.
As of December 31, 2024, we ha ve $44.6 million principal value of such acquisition financing outstanding; however, such acquisition financing is non-recourse to other Kingsway entities.
("Roundhouse") on July 1, 2025 and Efficient Plumbing, LLC (d/b/a Southside Plumbing, "Southside Plumbing") on August 14, 2025. As of December 31, 2025, we ha ve $55.7 million principal value of such acquisition financing outstanding; however, such acquisition financing is non-recourse to other Kingsway entities.
If financing is available, it may only be available at an unattractive cost of capital, which would decrease our profitability or result in our inability to consummate such acquisitions. There can be no assurance that market conditions will not deteriorate in the future. 11 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Disruptions, uncertainty and volatility in the global credit markets may also adversely affect our ability to obtain financing for future acquisitions. If financing is available, it may only be available at an unattractive cost of capital, which would decrease our profitability or result in our inability to consummate such acquisitions.
Our information technology systems facilitate our ability to monitor, operate and control our operations. Changes or modifications to our information technology systems could cause disruption to our operations or cause challenges with respect to our compliance with laws, regulations or other applicable standards.
Our information technology systems facilitate our ability to monitor, operate and control our operations.
Moreover, events such as the closure of SVB and SB, in addition to other global macroeconomic conditions, may cause further turbulence and uncertainty in the capital markets. We are party to a Settlement Agreement that may require us to make cash payments from time to time, which payments could materially adversely affect our business, results of operations or financial condition.
Moreover, events such as the closure of SVB and SB, in addition to other global macroeconomic conditions, may cause further turbulence and uncertainty in the capital markets. We have generated net operating loss carryforwards for U.S. income tax purposes, but our ability to use these net operating losses could be limited by our inability to generate future taxable income.
Accordingly, a major contraction of available venture capital funding into companies or industries that Ravix services could have a material adverse effect on our business, results of operations or financial condition. SNS may experience increased costs that reduce its revenue and profitability if applicable government regulations change.
Accordingly, a major contraction of M&A activity could have a material effect on our business, results of operations or financial condition. Ravix's concentration in venture-capital-funded startups creates exposure to the venture capital funding cycles .
Removed
Any such economic, business, financial or political conditions may make it more difficult for us to accurately forecast and plan our future business activities. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from U.S. and European leaders. These events may escalate and have created increasingly volatile global economic conditions.
Added
Public health crises, epidemics and pandemics, including a pandemic similar in nature to COVID-19 that created significant disruption and uncertainty in the global economy, negatively impacted our business and results of operations and financial condition, and may lead to adverse United States domestic and global macroeconomic effects.
Removed
In May 2016, Aegis Security Insurance Company ("Aegis") filed a complaint for breach of contract and declaratory relief against the Company in the Eastern District of Pennsylvania alleging, among other things, that we breached a contractual obligation to indemnify Aegis for certain customs bond losses incurred by Aegis under the indemnity and hold harmless agreements provided by us to Aegis for certain customs bonds reinsured by Lincoln General Insurance Company ("Lincoln General") during the period of time that Lincoln General was a subsidiary of the Company.
Added
Current conflicts around the world, including in Ukraine and in the Middle East, and related sanctions have damaged and disrupted, and could continue to damage or disrupt, international commerce and the global economy. For example, Russia’s ongoing invasion and military attacks on Ukraine have triggered significant economic and trade sanctions, export controls, and other restrictions targeting Russia and Belarus.
Removed
Lincoln General was placed into liquidation in November 2015 and Aegis subsequently invoked its rights to indemnity under the indemnity and hold harmless agreements.
Added
Given the evolving nature of these conflicts, the related sanctions, potential governmental actions and economic impact, such potential effects remain uncertain. International trade policies, including tariffs, sanctions and trade barriers, may adversely affect our business, financial condition, results of operations and prospects.
Removed
Effective January 20, 2020, we entered into a Settlement Agreement with Aegis with respect to such litigation pursuant to which we agreed to pay Aegis a one-time settlement amount of $0.9 million and to reimburse Aegis for 60% of future losses that Aegis may sustain in connection with such customs bonds, up to a maximum reimbursement amount of $4.8 million.
Added
Beginning in our fiscal year 2025, significant new and expanded tariffs, reciprocal tariffs and other trade restrictions have been imposed with selective tariff exemptions impacting global trade. Current or future tariffs or other restrictive trade measures may adversely impact both our product and services and our operational expenses.
Removed
From 2020 to 2024, the Company made reimbursement payments to Aegis totaling $1.7 million in connection with the Settlement Agreement. The timing and severity of our future payments pursuant to this Settlement Agreement are not reasonably determinable.
Added
Such cost increases may reduce our margins and require us to increase prices, which could harm our competitive position, reduce customer demand and damage customer relationships.
Removed
No assurances can be given, however, that we will not be required to perform under this Settlement Agreement in a manner that has a material adverse effect on our business, results of operations or financial condition.
Added
Trade disputes, trade restrictions, tariffs and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations.
Removed
Loss of all or a substantial portion of our existing customers and clients could have a material adverse effect on our business, results of operations or financial condition. 14 Table of Contents KINGSWAY FINANCIAL SERVICES INC. CSuite ’ s focus on serving private equity backed businesses creates exposure to general mergers and acquisitions ("M&A") activity.
Added
Further, as new laws, regulations, treaties, executive orders, directives, enforcement priorities and similar initiatives and programs are adopted and implemented, we are required to comply or potentially face market access limitations or restrictions on our products entering certain jurisdictions or our ability to provide services within certain jurisdictions, sanctions or other penalties.
Added
Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop AI-specific governance programs, which could entail significant costs or limit our ability to incorporate certain AI capabilities into our products and services.
Added
There is also uncertainty in the legal and regulatory landscape for artificial intelligence technologies and any laws, regulations, or industry standards adopted in response to the emergence of artificial intelligence technologies may be burdensome, could entail significant costs, and may restrict or impede our ability to successfully deploy artificial intelligence technologies efficiently and effectively. 12 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Added
STRATEGIC RISK The achievement of our strategic objectives is highly dependent on effective change management.
Added
Revenue and growth of certain of our business lines depend on sustained customer retention and repeat work; the loss of key customers or reduced repeat business could harm results.
Added
While many of our businesses have historically experienced strong customer retention and integration into client workflows, including Roundhouse and our plumbing subsidiaries, performance depends on continuing to win repeat work and renew service activity across their customer bases.
Added
Adverse changes in customer preferences, increased competition, customer consolidation, or dissatisfaction with service quality, turnaround time, or response times could cause customers to reduce spending or switch to competitors. Because many services are mission-critical and time-sensitive, service failures, delays, safety incidents, or performance issues could lead to the loss of customers and reputational harm.
Added
Roundhouse faces regional and industry-specific risks given concentration in the Permian Basin and customer segment of midstream natural gas pipeline operators and utilities. Roundhouse’s revenues and operating results may be affected by regional economic conditions, customer capital spending, and operational activity levels in the Permian Basin and related energy and utility markets.
Added
Any reduction in natural gas infrastructure spending, pipeline maintenance activity, or other adverse developments affecting Roundhouse’s customer base could materially and adversely affect Roundhouse’s revenue, profitability, and cash flows. Roundhouse ’ s business includes equipment sales that may be subject to supply chain constraints, delivery delays, and pricing pressures.
Added
Roundhouse sells new electric motors, often ordered to customer specifications, and may provide installation. Equipment sales may be impacted by supplier lead times, availability of components, transportation constraints, and vendor pricing changes.
Added
Delays in sourcing or delivering motors or other electrical equipment could delay customer projects and revenue recognition, while cost inflation or inability to pass through price increases could pressure margins. Supply disruptions could also impair Roundhouse’s ability to meet customer expectations and maintain customer relationships.
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Roundhouse faces inherent health, safety, and operational risks associated with providing mission-critical field services at customer sites. Roundhouse performs on-site services such as preventative maintenance, infrared scans, VLF cable testing, and vibration analysis, as well as installation services. Field work and industrial service environments inherently carry risks of employee injury, property damage, service interruption, and other incidents.
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Accidents or safety incidents—whether caused by Roundhouse, customers, subcontractors, or third parties—could result in litigation, higher insurance costs, reputational damage, operational disruptions, and regulatory scrutiny, any of which could materially adversely affect results.
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Certain of our business operations rely on the availability of skilled labor and effective execution in field services and shop repair; labor shortages, wage inflation, or operational disruptions could reduce margins and impair service levels.
Added
Roundhouse’s business includes field maintenance and testing and in-shop motor repair activities, and our plumbing subsidiaries’ business includes installation and repair services, both of which require specialized technical skills and rapid response. The ability to recruit, train, and retain qualified technicians and other personnel is critical to operating performance.
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A constrained labor market, increasing wage rates, higher employee turnover, or an inability to maintain adequate staffing levels could lead to longer turnaround times, reduced service quality, missed deadlines, or the inability to accept additional work, each of which could materially adversely affect our financial performance.
Added
Our skilled trades operations involve inherent safety risks that could result in worker injuries, property damage, regulatory liabilities and increased operating costs. The services provided by certain of our business lines routinely involve hazardous conditions, including work in confined spaces, at heights, around heavy machinery, and with potentially dangerous materials.
Added
Any injuries to our employees or subcontractors, incidents of property damage, worker compensation claims or citations from regulatory authorities could result in increased insurance premiums, litigation, regulatory enforcement actions, project delays, reputational harm and increased operating costs. Changes in the skilled trade customer demand or customer concentration in certain markets could adversely affect our results of operations.
Added
A limited number of customers or markets may represent a significant portion of our revenue. The loss of one or more key customers, reduced demand from significant customer segments or adverse changes in customer buying patterns could materially and adversely impact our financial condition and results of operations.
Added
These information systems and other digital technology are subject to the risk of increasingly sophisticated cybersecurity attacks, incursions or other incidents such as unauthorized access to data and systems, loss or destruction of data, computer viruses, or other malicious code, phishing and cyberattacks, and other similar events.
Added
These incidents could arise from numerous sources outside our control, including fraud or malice on the part of third parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, human error, complications encountered as existing systems are maintained, repaired, replaced or upgraded, or outbreaks of hostilities or terrorist acts.
Added
Given the rapidly evolving nature of cybersecurity incidents, there can be no assurance that the controls we have designed and implemented to prevent or limit the effects of cybersecurity incidents or attacks will be sufficient in preventing or limiting the effects of all such incidents or attacks or that we will be able to avoid a material impact to our systems should such incidents or attacks occur.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed9 unchanged
Biggest changeIf not material, the Audit Committee will bring it to the attention of the Board of Directors at its next regularly scheduled meeting. Senior management (currently the Chief Financial Officer) receives reports from IT leadership at the parent company and each subsidiary.
Biggest changeIf not material, the Audit Committee will bring it to the attention of the Board of Directors at its next regularly scheduled meeting. 16 Table of Contents KINGSWAY FINANCIAL SERVICES INC. Senior management (currently the Chief Financial Officer) receives reports from IT leadership at the parent company and each subsidiary.
It is the responsibility of each subsidiary to communicate any items required by the IT policy to the parent company. 16 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
It is the responsibility of each subsidiary to communicate any items required by the IT policy to the parent company.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeThe latest expiration date of the existing leases is in May 2029. The Company leases a facility for its corporate office with an aggregate square footage of approximately 3,219 a t one location in one state. The expiration date of the existing lease is in February 2028. The properties described above are in good condition.
Biggest changeExtended Warranty leases facilities with an aggregate square footage of approximately 16,825 at four l ocations in three states. The latest expiration date of the existing leases is in March 2032. The Company leases a facility for its corporate office with an aggregate square footage of approximately 3,219 a t one location in one state.
Item 2. Properties Leased Properties Extended Warranty leases facilities with an aggregate square footage of approximately 22,936 at five l ocations in three states. The latest expiration date of the existing leases is in March 2032. Kingsway Search Xcelerator leases facilities with an aggregate square footage of approxim ately 11,717 at five loca tions in four states.
Item 2. Properties Leased Properties Kingsway Search Xcelerator leases facilities with an aggregate square footage of approxim ately 146,637 at ten loca tions in eight states. The latest expiration date of the existing leases is in June 2035. The facilities consist of office space, as well as storage and warehousing spaces.
We consider our office facilities suitable and adequate for our current levels of operations.
The expiration date of the existing lease is in February 2028. The properties described above are in good condition. We consider our office facilities suitable and adequate for our current levels of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−1 removed8 unchanged
Biggest changeSee Note 20 ," Shareholders' Equity ," fo r further discussion of the share repurchase program. There were no repurchases by us of our securities during the quarter ended December 31, 2024. Item 6. Reserved.
Biggest changeAs amended, the share repurchase program expired on March 21, 2025; however, in January 2025 the Company fully utilized the authorized amount. See Note 20 ," Shareholders' Equity ," fo r further discussion of the share repurchase program. There were no repurchases by us of our securities during the quarter ended December 31, 2025.
Securities Authorized for Issuance under Equity Compensation Plans The information required related to securities authorized for issuance under equity compensation plans is incorporated herein by reference to the Proxy Statement for our 2024 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after the end of our fiscal year ended December 31, 2024.
Securities Authorized for Issuance under Equity Compensation Plans The information required related to securities authorized for issuance under equity compensation plans is incorporated herein by reference to the Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed with the SEC no later than 120 days after the end of our fiscal year ended December 31, 2025.
Recent Sales of Unregistered Securities During the year ended December 31, 2024 and through the date of this 2024 Annual Report, the Company issued equity securities that were not registered under the Securities Act of 1933, as amended (the "Securities Act"), as described below. These transactions did not involve any underwriters, underwriting discounts or commissions, or any public offering.
Recent Sales of Unregistered Securities During the years ended December 31, 2025 and December 31, 2024, the Company issued equity securities that were not registered under the Securities Act of 1933, as amended (the "Securities Act"), as described below. These transactions did not involve any underwriters, underwriting discounts or commissions, or any public offering.
Issuer Purchases of Equity Securities On March 21, 2023, the Company's Board of Directors approved a security repurchase program under which the Company is authorized to repurchase up to $10.0 million of its currently issued and outstanding securities through March 22, 202 4.
Issuer Purchases of Equity Securities On March 21, 2023, the Company's Board of Directors approved a security repurchase program under which the Company is authorized to repurchase up to $10.0 million of its currently issued and outstanding securities through March 22, 2024. On March 22, 2024, the Company entered into a one year extension of its existing share repurchase program.
NYSE High - US$ Low - US$ 2024 Quarter 4 $ 9.55 $ 8.17 Quarter 3 8.78 7.69 Quarter 2 9.29 7.86 Quarter 1 9.34 8.01 2023 Quarter 4 $ 8.61 $ 6.46 Quarter 3 9.01 7.55 Quarter 2 9.16 8.09 Quarter 1 10.27 7.85 Shareholders of Record As of March 14, 2025 th e closing sales price of our common shares as reported by the NYSE was $7.29 per share.
NYSE High - US$ Low - US$ 2025 Quarter 4 $ 16.13 $ 12.30 Quarter 3 16.57 13.36 Quarter 2 14.32 7.57 Quarter 1 8.31 7.29 2024 Quarter 4 $ 9.55 $ 8.17 Quarter 3 8.78 7.69 Quarter 2 9.29 7.86 Quarter 1 9.34 8.01 Shareholders of Record As of March 11, 2026 the closing sales price of our common shares as reported by the NYSE was $11.00 per share.
As of March 17, 2025 , we had 27,537,151 common shares issued and outstanding. As of March 17, 2025 , th ere we r e 10 shareholders of r ecord of our common stock.
As of March 12, 2026 , we had 28,946,664 common shares issued and outstanding. As of March 12, 2026 , th ere we r e 13 shareholders of record of our common stock.
Removed
On March 22, 2024, the Company entered into a one year extension of its existing share repurchase program. As amended, the share repurchase program will now expire on March 21, 2025; however, all the authorized amount was fully utilized as of the end of January 2025.
Added
On May 8, 2025, the Company entered into certain Subscription Agreements pursuant to which the Company issued and sold in a private placement to accredited investors in the aggregate 80,000 shares of a newly created class of preferred stock designated Class D Preferred Stock, with a liquidation preference of $25.00 per share ("Class D Preferred Stock"), for aggregate proceeds of $2.0 million.
Added
Certain members of the Company's Board of Directors invested a total of $2.0 million in the Class D Preferred Stock private placement transaction.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+50 added−71 removed62 unchanged
Biggest changeRESULTS OF CONTINUING OPERATIONS A reconciliation of total segment operating income to net (loss) income for the years ended December 31, 2024 and December 31, 2023 is presented in Table 1 below: Table 1 Segment Operating Income for the Years Ended December 31, 2024 and December 31, 2023 For the years ended December 31 (in thousands of dollars) 2024 2023 Change Segment operating income Extended Warranty 5,942 6,983 (1,041 ) Kingsway Search Xcelerator 5,662 5,252 410 Total segment operating income 11,604 12,235 (631 ) Net investment income 1,432 1,804 (372 ) Net realized gains 1,557 761 796 Net (loss) gain on equity investments (3 ) 3,397 (3,400 ) Gain on change in fair value of limited liability investments, at fair value 342 78 264 Net change in unrealized gain on private company investments — 63 (63 ) Impairment losses on investments — (229 ) 229 Loss on change in fair value of derivative asset option contracts — (1,366 ) 1,366 Interest expense (4,790 ) (6,250 ) 1,460 General and administrative expenses and other revenue not allocated to segments, net (8,892 ) (12,823 ) 3,931 Amortization of intangible assets (6,304 ) (5,909 ) (395 ) Impairment of goodwill and intangible assets (2,848 ) — (2,848 ) Loss on change in fair value of debt (198 ) (68 ) (130 ) Gain on disposal of subsidiary — 342 (342 ) (Loss) gain on extinguishment of debt (160 ) 31,616 (31,776 ) (Loss) income from continuing operations before income tax benefit (8,260 ) 23,651 (31,911 ) Income tax benefit (147 ) (1,899 ) 1,752 (Loss) income from continuing operations (8,113 ) 25,550 (33,663 ) Income from discontinued operations, net of taxes 438 450 (12 ) Loss on disposal of discontinued operations, net of taxes (620 ) (1,988 ) 1,368 Net (loss) income (8,295 ) 24,012 (32,307 ) Segment Operating Income, (Loss) Income from Continuing Operations and Ne t (Loss) I ncome For the year ended December 31, 2024, we reported segment operating income o f $11.6 million compared to $12.2 million for the year ended December 31, 2023. 24 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Biggest changeRESULTS OF CONTINUING OPERATIONS A reconciliation of total segment operating income to net loss for the years ended December 31, 2025 and December 31, 2024 is presented in Table 1 below: Table 1 Segment Operating Income For the years ended December 31 (in thousands of dollars) 2025 2024 Change Segment operating income: KSX $ 7,787 $ 5,662 $ 2,125 Extended Warranty 1,154 5,942 (4,788 ) Total segment operating income 8,941 11,604 (2,663 ) Net investment income 1,627 1,432 195 Net realized and unrealized investment gains 714 1,896 (1,182 ) General and administrative expenses and other revenue not allocated to segments, net (10,962 ) (9,250 ) (1,712 ) Interest expense (5,449 ) (4,790 ) (659 ) Amortization of intangible assets (8,169 ) (6,304 ) (1,865 ) Impairment of goodwill and intangible assets (706 ) (2,848 ) 2,142 Loss from continuing operations before income tax benefit (14,004 ) (8,260 ) (5,744 ) Income tax benefit (3,752 ) (147 ) (3,605 ) Loss from continuing operations (10,252 ) (8,113 ) (2,139 ) Income from discontinued operations, net of taxes (a) — 438 (438 ) Loss on disposal of discontinued operations, net of taxes (a) — (620 ) 620 Net loss $ (10,252 ) $ (8,295 ) $ (1,957 ) (a) The income from discontinued operations and the loss on disposal of discontinued operations is related to VA Lafayette.
If the decline in fair value is due to credit factors and the Company does not expect to receive cash flows sufficient to support the entire amortized cost basis, the credit loss is reported in the consolidated statements of operations in the period that the declines are evaluated.
If the decline in fair value is due to credit factors and the Company does not expect to receive cash flows sufficient to support the entire amortized cost basis, the credit loss is reported in the consolidated statements of operations in the period that the declines are evaluated.
Such future actions include, but are not limited to, issuance of equity securities and distributions from the Extended Warranty and Kingsway Search Xcelerator operating companies subject to certain loan covenants that may be in place at each operating company.
Such future actions include, but are not limited to, issuance of equity securities and distributions from the Kingsway Search Xcelerator and Extended Warranty operating companies subject to certain loan covenants that may be in place at each operating company.
Further information regarding our detailed analysis and factors considered in establishing an impairment loss on an investment is discussed within the "Significant Accounting Policies and Critical Estimates" section of MD&A. The Company's fixed maturities are subject to declines in fair value below amortized cost that may result in the recognition of impairment losses in net (loss) income.
Further information regarding our detailed analysis and factors considered in establishing an impairment loss on an investment is discussed within the "Significant Accounting Policies and Critical Estimates" section of MD&A. The Company's fixed maturities are subject to declines in fair value below amortized cost that may result in the recognition of impairment losses in net loss.
Revenues and expenses presented in the consolidated statements of operations are not subtotaled by segment; however, this information is available in total and bysegment in Note 22, "Segmented Information," to the Consolidated Financial Statements, regarding reportable segment information. The nearest comparable U.S.
Revenues and expenses presented in the consolidated statements of operations are not subtotaled by segment; however, this information is available in total and by segment in Note 22, "Segmented Information," to the Consolidated Financial Statements, regarding reportable segment information. The nearest comparable U.S.
Factors considered in the determination of whether or not an impairment loss is recognized in net (loss) income include a current intention or need to sell the security or an indication that a credit loss exists.
Factors considered in the determination of whether or not an impairment loss is recognized in net loss include a current intention or need to sell the security or an indication that a credit loss exists.
On February 7, 2025, Ravix, Ravix LLC and CSuite entered into a fourth amendment to the 2021 Ravix Loan that provides for: (1) a new 2025 term loan in the principal amount of $9.1 million, with a maturity date of February 7, 2031 (the "2025 Ravix Loan"); and (2) extending the maturity date of the 2022 Revolver to February 7, 2027.
On February 7, 2025, Ravix, Ravix LLC and CSuite entered into a fourth amendment to the Ravix term loan that provides for: (1) a new 2025 term loan in the principal amount of $9.1 million, with a maturity date of February 7, 2031; and (2) extending the maturity date of the revolver to February 7, 2027.
The following summarizes the impacts: Impact of Rate Change on Fair Value 2024 Result 2023 Result SOFR: increase causes fair value to increase; decrease causes fair value to decrease Decrease to fair value Increase to fair value Risk free rate: increase causes fair value to decrease; decrease causes fair value to increase Increase to fair value Increase to fair value The other primary variable affecting the fair value of debt calculation is the passage of time, which will always have the effect of increasing the fair value of debt.
The following summarizes the impacts: Impact of Rate Change on Fair Value 2025 Result 2024 Result SOFR: increase causes fair value to increase; decrease causes fair value to decrease Decrease to fair value Decrease to fair value Risk free rate: increase causes fair value to decrease; decrease causes fair value to increase Increase to fair value Increase to fair value The other primary variable affecting the fair value of debt calculation is the passage of time, which will always have the effect of increasing the fair value of debt.
For Extended Warranty, the Company estimates the fair value using a valuation technique based on observed market capitalization multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA") for a group of publicly traded insurance services and insurance brokerage companies, an approach that the Company views as a technique consistent with the objective of measuring fair value consistent with prior years’ assessments performed.
Management's Discussion and Analysis For Extended Warranty, the Company estimates the fair value using a valuation technique based on observed market capitalization multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA") for a group of publicly traded insurance services and insurance brokerage companies, an approach that the Company views as a technique consistent with the objective of measuring fair value consistent with prior years’ assessments performed.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management's discussion and analysis ("MD&A") of our financial condition and results of operations should be read together with the Consolidated Financial Statements included in Part II, Item 8 of this 2024 Annual Report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management's discussion and analysis ("MD&A") of our financial condition and results of operations should be read together with the Consolidated Financial Statements included in Part II, Item 8 of this 2025 Annual Report.
Future minimum lease payments in Table 3 include payments on leases for office space that are included in total lease liabilities in Note 13," Leases," to the Consolidated Financial Statements, as well as payments for short-term leases and equipment leases.
Future minimum lease payments in Table 3 include payments on leases for office space that are included in total lease liabilities in Note 12," Leases," to the Consolidated Financial Statements, as well as payments for short-term leases and equipment leases.
Based upon the impairment assessments performed at November 30, 2024 , the Company recorded an impairment charge of $0.7 million during 2024 related to the Argo Management reporting unit. No impairment charges were recorded against goodwill for the Company's other reporting units in 2024, as the estimated fair values of the Company's other reporting units exceeded their respective carrying values.
Based upon the quantitative assessment performed at November 30, 2024, the Company recorded an impairment charge of $0.7 million during 2024 related to the Argo Management reporting unit. No impairment charges were recorded against goodwill for the Company's other reporting units in 2024, as the estimated fair values of the Company's other reporting units exceeded their respective carrying values.
As of the report date, there is some uncertainty as to whether the Company will be in compliance with the covenants in future periods, and if not, when the Company will be able to cure any potential violations.
As of the report date, there is some uncertainty as to whether the companies will be in compliance with the covenants in future periods, and if not, when the companies will be able to cure any potential violations.
NON U.S.-GAAP FINANCIAL MEASURE Throughout this 2024 Annual Report, we present our operations in the way we believe will be most meaningful, useful and transparent to anyone using this financial information to evaluate our performance. In addition to the U.S. GAAP presentation of net income, we present segment operating income a s a non-U.S.
NON U.S.-GAAP FINANCIAL MEASURE Throughout this 2025 Annual Report, we present our operations in the way we believe will be most meaningful, useful and transparent to anyone using this financial information to evaluate our performance. In addition to the U.S. GAAP presentation of net loss, we present segment operating income a s a non-U.S.
GAAP measure to total segment operating income is operating income that, in addition to total segment operating income, includes corporate general and administrative expenses and excludes segment non-operating other revenue (expense). SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ESTIMATES The preparation of consolidated financial statements in conformity with U.S.
GAAP measure to total segment operating income is operating (loss) income that, in addition to total segment operating income, includes corporate general and administrative expenses and excludes segment non-operating other revenue, net. SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ESTIMATES The preparation of consolidated financial statements in conformity with U.S.
The determination of fair value of the Subsidiary Restricted Awards is subjective and involves significant estimates and assumptions of whether the awards will achieve performance thresholds. The fair value of the Subsidiary Restricted Awards is estimated using either the Black-Scholes option pricing model and/or the Monte Carlo simulation model to derive certain inputs.
Management's Discussion and Analysis The determination of fair value of the Subsidiary Restricted Awards is subjective and involves significant estimates and assumptions of whether the awards will achieve performance thresholds. The fair value of the Subsidiary Restricted Awards is estimated using either the Black-Scholes option pricing model and/or the Monte Carlo simulation model to derive certain inputs.
Management's Discussion and Analysis The Company’s most critical accounting policies are those that are most important to the portrayal of its financial condition and results of operations, and that require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.
The Company’s most critical accounting policies are those that are most important to the portrayal of its financial condition and results of operations, and that require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.
Objective positive evidence is necessary to support a conclusion that a valuation allowance is not needed for all or a portion of a company's deferred income tax asset balances when significant negative evidence exists. Cumulative losses are the most compelling form of negative evidence considered by management in this determination.
Management's Discussion and Analysis Objective positive evidence is necessary to support a conclusion that a valuation allowance is not needed for all or a portion of a company's deferred income tax asset balances when significant negative evidence exists. Cumulative losses are the most compelling form of negative evidence considered by management in this determination.
Valuation of Fixed Maturity Investments For fixed maturity investments, we use observable inputs such as quoted prices for similar assets in active markets; quoted prices for identical or similar assets in markets that are inactive; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data.
Management's Discussion and Analysis Valuation of Fixed Maturity Investments For fixed maturity investments, we use observable inputs such as quoted prices for similar assets in active markets; quoted prices for identical or similar assets in markets that are inactive; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data.
Management's Discussion and Analysis Holding Company Liquidity The liquidity of the holding company is managed separately from its subsidiaries. The obligations of the holding company primarily consist of holding company operating expenses; transaction-related expenses; investments; stock repurchases; and any other extraordinary demands on the holding company.
Holding Company Liquidity The liquidity of the holding company is managed separately from its subsidiaries. The obligations of the holding company primarily consist of holding company operating expenses; transaction-related expenses; investments; stock repurchases; and any other extraordinary demands on the holding company.
Based upon these quantitative assessments, the Company recorded impairment charges of $2.1 million during 2024 related to the SNS, CSuite and Ravix indefinite-lived trade names. The fair value of the SNS, CSuite and Ravix trade names were estimated using the relief-from-royalty method.
Based upon these quantitative assessments, the Company recorded impairment charges of $0.7 million and $2.1 million during 2025 and 2024, respectively, related to the CSuite, Ravix and SNS indefinite-lived trade names. The fair value of the CSuite, Ravix and SNS trade names were estimated using the relief-from-royalty method.
Subordinated Debt The Company's subordinated debt is measured and reported at fair value. At December 31, 2024, the carrying value of the subordinated deb t is $13.4 million. T he fair value of the subordinated debt is calculated using a model based on significant market observable inputs and inputs developed by a third-party.
Subordinated Debt The Company's subordinated debt is measured and reported at fair value. At December 31, 2025, the carrying value of the subordinated deb t is $13.7 million. T he fair value of the subordinated debt is calculated using a model based on significant market observable inputs and inputs developed by a third-party.
Segment Operating Income Segment operati ng income represents on e measure of the pretax profitability of our segments and is derived by subtracting direct segment expenses from direct segment revenues.
Management's Discussion and Analysis Segment Operating Income Segment operati ng income represents on e measure of the pretax profitability of our segments and is derived by subtracting direct segment expenses from direct segment revenues.
The net realized gains for 2024 primarily relate to realized gains recognized by Argo Holdings and a net realized gain related to the sale of one of the private company investments.
The net realized gains for 2024 primarily relate to realized gains recognized by Argo Holdings Fund I, LLC ("Argo Holdings") and a net realized gain related to the sale of one of the private company investments.
Management's Discussion and Analysis IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 26 sta tes and the District of Columbia to their members, with customers in all fifty states.
IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 28 sta tes and the District of Columbia to their members, with customers in all fifty states.
As a result of the analysis performed, the Company recorded no impairment losses related to available-for-sale fixed maturity investments or other investments during the year ended December 31, 2024. See "Investments" s ection below an d Note 7, "Investments," to the Consolidated Financial Statements for further information.
As a result of the analysis performed, the Company recorded no impairment losses related to available-for-sale fixed maturity investments during the years ended December 31, 2025 and December 31, 2024. See "Investments" s ection below an d Note 7, "Investments," to the Consolidated Financial Statements for further information.
While refunds vary depending on the term and type of product offered, historically refunds have averaged 5.83% to 12.00% of t he original amount of the vehicle service agreement fee. Revenues recorded by the Company are net of variable consideration related to refunds and the associated refund liability is included in accrued expenses and other liabilities.
While refunds vary depending on the term and type of product offered, historically refunds have averaged 6.65% to 10.10% of t he original amount of the vehicle service agreement fee. Revenues recorded by the Company are net of variable consideration related to refunds and the associated refund liability is included in accrued expenses and other liabilities.
Management's Discussion and Analysis Fair Value Assumptions for Subsidiary Stock-Based Compensation Awards Certain of the Company's subsidiaries have made grants of restricted stock awards or restricted unit awards (together "Subsidiary Restricted Awards").
Fair Value Assumptions for Subsidiary Stock-Based Compensation Awards Certain of the Company's subsidiaries have made grants of restricted stock awards or restricted unit awards (together "Subsidiary Restricted Awards").
The SNS Loan contains a number of covenants, including, but not limited to, a leverage ratio and a fixed charge ratio and limits on annual capital expenditures, all of which are as defined in and calculated pursuant to the SNS Loan that, among other things, restrict SNS’s ability to incur additional indebtedness, create liens, make dividends and distributions, engage in mergers, acquisitions and consolidations, make certain payments and investments and dispose of certain assets.
Bank Loans Our bank loans contain a number of covenants, including, but not limited to, a leverage ratio and a fixed charge ratio and limits on annual capital expenditures, all of which are as defined in and calculated pursuant to the respective loan that, among other things, restrict the borrowing company’s ability to incur additional indebtedness, create liens, make dividends and distributions, engage in mergers, acquisitions and consolidations, make certain payments and investments and dispose of certain assets.
To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of operations. As of December 31, 2024, the Company maintains a valuation allowan ce of $130.7 million .
To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of operations. As of December 31, 2025, the Company maintains a valuation allowan ce of $129.4 million .
In determining whether a valuation allowance is needed, management considers all available positive and negative evidence affecting specific deferred income tax asset balances, including the Company's historical and anticipated future performance, the reversal of deferred income tax liabilities, and the availability of tax planning strategies.
In determining whether a valuation allowance is needed, management considers all available positive and negative evidence affecting specific deferred income tax asset balances, including the Company's historical and anticipated future performance, the reversal of deferred income tax liabilities, and the availability of tax planning strategies. 21 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
For the reporting units within Kingsway Search Xcelerator, the Company estimates the fair value using a valuation technique based on observed market capitalization multiples of EBITDA from its recent acquisitions of similar businesses.
For the reporting units within Kingsway Search Xcelerator, the Company estimates the fair value using a valuation technique based on observed market capitalization multiples of EBITDA from its recent acquisitions of similar businesses. 22 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Compensation expense is recognized on a straight-line basis for awards subject to market conditions regardless of whether the market condition is satisfied, provided that the requisite service has been provided. Forfeitures are recognized in the period that Subsidiary Restricted Awards are forfeited.
Compensation expense is recognized on a straight-line basis for awards subject to market conditions regardless of whether the market condition is satisfied, provided that the requisite service has been provided. Forfeitures are recognized in the period that Subsidiary Restricted Awards are forfeited. 23 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
GAAP financial measure, which we believe is valuable in managing our business and drawing comparisons to our peers. Below is a definition of our non-U.S. GAAP measure and its relationship to U.S. GAAP.
GAAP financial measure, which we believe is valuable in managing our business and drawing comparisons to our peers. Below is a definition of our non-U.S. GAAP measure and its relationship to U.S. GAAP. 19 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Therefore, changes in the underlying interest rates used would cause the fair value to be impacted, but only impacts the income statement (or comprehensive income/loss for the portion related to credit risk) and does not impact cash flows. 23 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Therefore, changes in the underlying interest rates used would cause the fair value to be impacted, but only impacts the income statement (or comprehensive income/loss for the portion related to credit risk) and does not impact cash flows.
In determining our provision for income taxes, we interpret tax legislation in a variety of jurisdictions and make assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of deferred income taxes. 21 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
In determining our provision for income taxes, we interpret tax legislation in a variety of jurisdictions and make assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of deferred income taxes.
Revenue is recognized when performance obligations are satisfied. Certain of the Company’s contracts with customers include obligations to provide multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately from one another requires judgment.
Certain of the Company’s contracts with customers include obligations to provide multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately from one another requires judgment. Revenue from software license and support contains multiple distinct performance obligations that are accounted for separately.
Factors that could trigger a quantitative impairment review include, but are not limited to, significant under performance relative to historical or projected future operating results and significant negative industry or economic trends. 22 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Factors that could trigger a quantitative impairment review include, but are not limited to, significant under performance relative to historical or projected future operating results and significant negative industry or economic trends.
Refer t o Note 2 , " Summary of Significant Accounting Policies ," to the Consolidated Financial Statements for information about our revenue recognition accounting policies.
Refer t o Note 2 , " Summary of Significant Accounting Policies ," to the Consolidated Financial Statements for information about our revenue recognition accounting policies. 20 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
At December 31, 2024, we held cash and cash equivalents, restricted cash and investments with a carrying value of $54.5 million. Our operations typically invest in U.S. dollar-denominated instruments to mitigate their exposure to currency rate fluctuations. Table 2 below summarizes the carrying value of investments, including cash and cash equivalents and restricted cash, at the dates indicated.
Our operations typically invest in U.S. dollar-denominated instruments to mitigate their exposure to currency rate fluctuations. Table 2 below summarizes the carrying value of investments, including cash and cash equivalents and restricted cash, at the dates indicated.
The holding company cash amounts are reflected in the cash and cash equivalents o f $5.5 million and $9.1 million rep orted at December 31, 2024 and December 31, 2023, respectively, on the Company’s consolidated balance sheets.
The holding company cash amounts are reflected in the cash, cash equivalents and restricted cash o f $16.3 million and $13.1 million rep orted at December 31, 2025 and December 31, 2024, respectively, on the Company’s consolidated balance sheets.
The Company's goodwill and indefinite-lived intangible assets are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. 26 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The Company's goodwill and indefinite-lived intangible assets are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. S ee Note 9, "Intangible Assets," t o the Consolidated Financial Statements, for further discussion. 25 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Image Solutions provides comprehensive information technology managed services, including equipment sales, service, and helpdesk support to customers primarily in North Carolina, Kansas, Georgia, Kentucky and Tennessee.
DDI currently has a presence in 42 states and Puerto Rico. Image Solutions provides comprehensive information technology managed services, including equipment sales, service, and helpdesk support to customers primarily in North Carolina, Kansas, Georgia, Kentucky and Tennessee.
Revenue Recognition Service fee and commission revenue represents vehicle service agreement fees, guaranteed asset protection products ("GAP") commissions, maintenance support service fees, warranty product commissions, business services consulting revenue, healthcare services revenue and software license and support revenue. Revenue is based on terms of various agreements with credit unions, consumers and businesses.
Revenue Recognition Service fee and other revenue represents vehicle service agreement fees, maintenance support service fees, warranty product commissions, business services consulting revenue, healthcare services revenue, software license and support revenue, motor sales and repair service revenue and skilled trades repair and service revenue. Revenue is based on terms of various agreements with credit unions, consumers and businesses.
Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, The Penn Warranty Corporation ("Penn") and Prime Auto Care, Inc. ("Prime"). Penn and Prime distribute these products in 46 and 34 states, respectively, via independent used car dealerships and franchised car dealerships.
Geminus primarily sells vehicle service agreements to used car buyers across the United States, mainly through its subsidiary, The Penn Warranty Corporation ("Penn"). Penn distributes these products in 46 states via independent used car dealerships and franchised car dealerships.
TABLE 2 Carrying value of investments, including cash and cash equivalents and restricted cash As of December 31 (in thousands of dollars, except for percentages) Type of investment 2024 % of Total 2023 % of Total Fixed maturities: U.S. government, government agencies and authorities 13,354 24.5 % 12,997 21.9 % States, municipalities and political subdivisions 2,775 5.1 % 2,783 4.7 % Mortgage-backed 9,886 18.1 % 9,253 15.6 % Asset-backed 1,326 2.4 % 1,210 2.0 % Corporate 9,622 17.7 % 10,230 17.2 % Total fixed maturities 36,963 67.9 % 36,473 61.4 % Equity investments — — % 79 0.1 % Limited liability investments 650 1.2 % 812 1.4 % Limited liability investment, at fair value 2,859 5.2 % 3,496 5.9 % Investments in private companies 696 1.3 % 854 1.4 % Other investments — — % 6 0.0 % Short-term investments 169 0.3 % 161 0.3 % Total investments 41,337 75.9 % 41,881 70.5 % Cash and cash equivalents 5,493 10.1 % 9,098 15.4 % Restricted cash 7,643 14.0 % 8,400 14.1 % Total 54,473 100.0 % 59,379 100.0 % Investment Impairment The Company performs a quarterly analysis of its investments to determine if declines in fair value may result in the recognition of impairment losses in net (loss) income.
TABLE 2 Carrying value of investments, including cash and cash equivalents and restricted cash As of December 31 (in thousands of dollars, except for percentages) Type of investment 2025 % of Total 2024 % of Total Fixed maturities: U.S. government, government agencies and authorities 13,491 23.3 % 13,354 24.5 % States, municipalities and political subdivisions 1,771 3.1 % 2,775 5.1 % Mortgage-backed 9,818 17.0 % 9,886 18.1 % Asset-backed 1,364 2.4 % 1,326 2.4 % Corporate 10,321 17.8 % 9,622 17.7 % Total fixed maturities 36,765 63.5 % 36,963 67.9 % Limited liability investments 649 1.1 % 650 1.2 % Limited liability investment, at fair value 3,476 6.0 % 2,859 5.2 % Investments in private companies 575 1.0 % 696 1.3 % Short-term investments 178 0.3 % 169 0.3 % Total investments 41,643 71.9 % 41,337 75.9 % Cash and cash equivalents 8,306 14.3 % 5,493 10.1 % Restricted cash 7,965 13.8 % 7,643 14.0 % Total 57,914 100.0 % 54,473 100.0 % Investment Impairment The Company performs a quarterly analysis of its investments to determine if declines in fair value may result in the recognition of impairment losses in net loss.
The Company identifies the contract with its customers and then identifies the performance obligations in the contracts. The transaction price is determined based on the amount we expect to be entitled to in exchange for providing the promised services to the customer. The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis.
The transaction price is determined based on the amount we expect to be entitled to in exchange for providing the promised services to the customer. The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when performance obligations are satisfied.
Kingsway Search Xcelerator The Kingsway Search Xcelerator revenue increased to $40.5 million for the year ended December 31, 2024 compared wit h $35.0 million for the year ended December 31, 2023. Kingsway Search Xcelerator operating income was $5.7 million for the year ended December 31, 2024 compared with $5.3 million for the year ended December 31, 2023.
Kingsway Search Xcelerator The Kingsway Search Xcelerator revenue increased to $64.2 million for the year ended December 31, 2025 compared with $40.5 million for the year ended December 31, 2024. Kingsway Search Xcelerator operating income was $7.8 million for the year ended December 31, 2025 compared with $5.7 million for the year ended December 31, 2024.
Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of the goodwill impairment charge, or both.
Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of the goodwill impairment charge, or both. Based upon the assessment performed at November 30, 2025 , no impairment charges were recorded against goodwill in 2025.
As part of the acquisition of Image Solutions on September 26, 2024, Image Solutions became a wholly owned subsidiary of Steel Bridge Acquisition, LLC ("SB LLC"), and together they borrowed from a bank a principal amount of $7.75 million in the form of a term loan, and established a $0.5 million revolver to finance the acquisition of Image Solutions (together, the "Image Solutions Loan").
As part of the acquisition of Roundhouse on July 1, 2025, Roundhouse became a wholly owned subsidiary of Longhorns Acquisition LLC ("Longhorns LLC"), and together they borrowed from a bank a principal amount of $11.0 million in the form of a term loan, and established a $0.5 million revolver to finance the acquisition of Roundhouse.
The Company's Extended Warranty and Kingsway Search Xcelerator subsidiaries fund their obligations primarily through service fee and commission revenue. 30 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The Company's Kingsway Search Xcelerator and Extended Warranty subsidiaries fund their obligations primarily through service fee and other revenue.
Management's Discussion and Analysis At March 31, 2024, June 30, 2024, September 30, 2024 and November 30, 2024 , the Company determined that certain trade names should be further examined under a quantitative approach due to actual revenue coming in lower than previous projections.
At each quarter end of the first through third quarters of 2025 and 2024 and at November 30, 2025 and November 30, 2024 , the Company determined that certain trade names should be further examined under a quantitative approach due to actual revenue coming in lower than previous projections.
Management's Discussion and Analysis Cash Flows from Continuing Operations During 2024, the Company report ed $0.6 million of net cash provided by operating activities from continuing operations, primarily due to o perating income from the Extended Warranty and Kingsway Search Xcelerator segments.
During 2024, the Company reported $0.6 million of net cash provided by operating activities from continuing operations, primarily due to operating income from the Extended Warranty and Kingsway Search Xcelerator segments. During 2025, the net cash used in investing activities from continuing operations was $29.6 million.
Revenue from GAP commissions and software license and support contain multiple distinct performance obligations that are accounted for separately. Judgment is required to determine the standalone selling price ("SASP") for each distinct performance obligation. Revenue is allocated to each performance obligation based on the relative SASP.
Judgment is required to determine the standalone selling price ("SASP") for each distinct performance obligation. Revenue is allocated to each performance obligation based on the relative SASP. SASP are not directly observable in the software license and support contracts for the separate performance obligations.
At December 31, 2024 and December 31, 2023, the gross unrealized losses for fixed maturities amounted to $1.2 million and $1.7 million, and there were no unrealized losses attributable to non-investment grade fixed maturities.
At December 31, 2025 and December 31, 2024, the gross unrealized losses for fixed maturities amounted to $0.5 million and $1.2 million, and there were no unrealized losses attributable to non-investment grade fixed maturities. 26 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The Company performs a quarterly analysis of its available for-sale fixed maturity investments and other investments to determine if an impairment loss has occurred.
The Company performs a quarterly analysis of its available for-sale fixed maturity investments to determine if an impairment loss has occurred. There were no impairment losses recorded related to investments for the years ended December 31, 2025 and December 31, 2024.
Customers either pay in full at the inception of a warranty contract or commission product sale, or when consulting, healthcare and software license and support services are billed, or on terms subject to the Company’s customary credit reviews. The Company’s revenue recognition policy follows guidance from ASC 606, Revenue from Contracts with Customers, which utilizes a five-step revenue recognition framework.
Customers either pay in full at the inception of a warranty contract or commission product sale, or when consulting, healthcare, software license and support, motor sales and repair and skilled trades services are billed, or on terms subject to the Company’s customary credit reviews.
The 2024 and 2023 income tax benefit is primarily related to: • An income tax benefit of $0.2 million and zero in 2024 and 2023 , respectively, for the partial release of the Company’s deferred income tax valuation allowance associated with business interest expense with an indefinite life; • An income tax expense of $0.1 million and an income tax benefit of $2.1 million in 2024 and 2023 , respectively, for the change in the Company’s deferred tax valuation allowance related to acquired deferred tax liabilities; • An income tax benefit of $0.2 million and an income tax expense of $0.2 million in 2024 and 2023 , respectively, relating to a change in indefinite life deferred income tax liabilities; and • An income tax expense of $0.2 million and an income tax benefit of less than $0.1 million in 2024 and 2023 , respectively, for state income taxes. 27 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
The 2025 and 2024 income tax benefit is primarily related to: • An income tax benefit of $1.2 million and $0.2 million in 2025 and 2024 , respectively, associated with interest expense and net operating loss carryforwards generating indefinite life deferred tax assets utilizable against indefinite life deferred tax liabilities ; • An income tax benefit of $2.7 million and income tax expense $0.1 million in 2025 and 2024 , respectively, for the change in the Company’s deferred tax valuation allowance related to acquired deferred tax liabilities; • An income tax expense of less than $0.1 million and income tax benefit of $0.2 million in 2025 and 2024 , respectively, relating to a change in valuation allowance due to the change in indefinite life deferred income tax liabilities; and • An income tax expense of $0.1 million and $0.2 million in 2025 and 2024 , respectively, for state income taxes.
No impairment charges were recorded against goodwill in 2023. Additional information regarding our goodwill is included in Note 8, "Goodwill," to the Consolidated Financial Statements. Fair Value Assumptions for Subordinated Debt Obligations Our subordinated debt is measured and reported at fair value.
Additional information regarding our contingent consideration liabilities is included in Note 23 , "Fair Value of Financial Instruments," to the Consolidated Financial Statements. Fair Value Assumptions for Subordinated Debt Obligations Our subordinated debt is measured and reported at fair value.
Extended Warranty The Extended Warranty service fee and commission revenue increased 1.0% (or $0.7 million) to $68.9 million for the year ended December 31, 2024 compared with $68.2 million for the year ended December 31, 2023, while cash sales were up 3.6% in 2024.
Extended Warranty The Extended Warranty revenue increased 2.8% (or $1.9 million) to $70.8 million for the year ended December 31, 2025 compared with $68.9 million for the year ended December 31, 2024, while cash sales were up 9.2% in 2025 (and 12.4% in the second half of 2025 compared with the prior year).
At December 31, September 30, June 30 and March 31, 2024, the Company was in default under the SNS Loan due to debt covenant violations related to the leverage and fixed charge ratios. The Company has entered into an amendment to the SNS Loan that waives the events of default for the fiscal quarter ended December 31, 2024.
Also, as of September 30, 2025 and December 31, 2025, DDI was in default under its loan due to a debt covenant violation related to the fixed charge ratio. Each of the companies has entered into an amendment to its respective loan that waives the events of default for the fiscal quarter ended December 31, 2025.
INVESTMENTS Portfolio Composition The following is an overview of how we account for our various investments: • Investments in fixed maturities are classified as available-for-sale and are reported at fair value. • Equity investments are reported at fair value. • Limited liability investments are accounted for under the equity method of accounting.
The following is an overview of how we account for these investments: • Investments in fixed maturities are classified as available-for-sale and are reported at fair value. • Limited liability investment, at fair value represents the underlying investments of the Company’s consolidated entity, Argo Holdings.
A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized.
The ultimate realization of the deferred income tax asset balance is dependent upon the generation of future taxable income during the periods in which the Company's temporary differences reverse and become deductible. A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized.
The amount of excess cash flow which the Company is entitled to retain is dependent upon the leverage ratio (as defined in the 2020 KWH Loan document): Percent of excess cash flow If leverage ratio is retained by the Company Greater than 1.75:1.00 50% Less than 1.75:1.00 but greater than 0.75:1.00 75% Less than 0.75:1.0 100% The holding company’s liquidity, defined as the amount of cash in the bank accounts of Kingsway Financial Services Inc. and Kingsway America Inc., was $0.9 million and $4.3 million at December 31, 2024 and December 31, 2023, respectively, which excludes future actions available to the holding company that could be taken to generate liquidity.
The holding company’s liquidity, defined as the amount of cash in the bank accounts of Kingsway Financial Services Inc. and Kingsway America Inc., was $1.0 million and $0.9 million at December 31, 2025 and December 31, 2024, respectively, which excludes future actions available to the holding company that could be taken to generate liquidity.
Changes in estimates are recorded in the accounting period in which they are determined. 19 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Changes in estimates are recorded in the accounting period in which they are determined.
Included are primarily expenses associated with our corporate holding company, as well as revenue and expenses associated with our various other investments that are accounted for on a consolidated basis.
Included are primarily expenses associated with our corporate holding company, expenses associated with our Operator-in-Residence who search for our next acquisition, revenue and expenses associated with our various other investments that are accounted for on a consolidated basis, loss on change in fair value of debt and loss on extinguishment of debt.
Pursuant to satisfying the covenants under the 2020 KWH Loan, distributions to the holding company in an aggregate amount not to exceed $1.5 million in any 12-month period are permitted.
Pursuant to satisfying the covenants under the KWH bank loan, distributions to the holding company in an aggregate amount not to exceed $1.5 million in any 12-month period are permitted. Also, the holding company is permitted to receive a portion of the excess cash flow (as defined in the loan document) generated by the KWH subsidiaries in the previous year.
We saw an increase in claims paid at our auto Extended Warranty companies, primarily due to inflationary pressures on the cost of parts and labor; however, the year-over-year increase was lower in the second half of 2024 than the first half. The total number of claims was down 4.6% in 2024 compared to 2023.
During the year ended December 31, 2025, there was a 4.4% increase in claims paid at our auto Extended Warranty companies, primarily due to inflationary pressures on the cost of parts and labor, but not due to a spike in the number of claims; however, the year-over-year increase was lower than that experienced in 2024.
Income Tax Benefit Income tax benefit for 2024 was $0.1 million compared to $1.9 million in 2023.
Management's Discussion and Analysis Income Tax Benefit Income tax benefit for 2025 was $3.8 million compared to $0.1 million in 2024.
We perform a quarterly analysis of our investments classified as available-for-sale fixed maturity investments and other investments to determine if an impairment loss has occurred.
A consistent and systematic process is followed for determining and recording an impairment loss, including the evaluation of securities in an unrealized loss position and securities with an allowance for credit losses. We perform a quarterly analysis of our investments classified as available-for-sale fixed maturity investments to determine if an impairment loss has occurred.
Extended Warranty includes the following subsidiaries of the Company: IWS Acquisition Corporation ("IWS"), Geminus Holding Company, Inc. ("Geminus"), PWI Holdings, Inc. ("PWI") and Trinity Warranty Solutions LLC ("Trinity"). Throughout this 2024 Annual Report, the term "Extended Warranty" is used to refer to this segment. 18 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
("Geminus"), PWI Holdings, Inc. ("PWI") and Trinity Warranty Solutions LLC ("Trinity"). Throughout this 2025 Annual Report, the term "Extended Warranty" is used to refer to this segment.
Management's Discussion and Analysis See Note 15 , "Income Taxes," t o the Consolidated Financial Statements, for additional detail of the income tax benefit rec orded for the years ended December 31, 2024 and December 31, 2023, respectively.
See Note 14 , "Income Taxes," t o the Consolidated Financial Statements, for additional detail of the income tax benefit rec orded for the years ended December 31, 2025 and December 31, 2024, respectively. INVESTMENTS Portfolio Composition Our investments consist primarily of fixed maturities and limited liability investment, at fair value.
PWI’s business model is supported by an internal sales and operations team and partners wit h American Auto Shield in three states with a white label agreement. Trinity sells heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and commercial refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States.
Trinity sells heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and commercial refrigeration warranty products and provides equipment breakdown and maintenance support services to companies across the United States.
Impairment of Goodwill and Intangible Assets Impairment of goodwill and intangible assets was $2.8 million in 2024 compared to zero in 2023.
Impairment of Goodwill and Intangible Assets Impairment of goodwill and intangible assets was $0.7 million in 2025 (tradenames at CSuite, Ravix and SNS) compared to $2.8 million in 2024 (Argo goodwill impairment of $0.7 million; remainder tradenames at CSuite, Ravix and SNS).
Interest payments on outstanding debt in Table 3 related to the subordinated debt, the 2024 KWH Loan, the 2021 Ravix Loan, the 2022 Ravix Loan, the SNS Loan, the DDI Loan and the Image Solutions Loan assume the variable rates remain constant throughout the projection period.
Interest payments on outstanding debt in Table 3 related to the subordinated debt and the Company's bank loans with variable interest rates, assume the variable rates at December 31, 2025 remain constant throughout the projection period.
Penn also sells and administers a guaranteed asset protection product ("GAP") in states where Penn is approved. PWI markets, sells and administers vehicle service agreements to used car buyers in all fifty states via independent used car and franchise network of approved automobile and motorcycle dealer partners.
PWI markets, sells and administers vehicle service agreements to used car buyers in 47 states via independent used car and franchise network of approved automobile and motorcycle dealer partners. PWI’s business model is supported by an internal sales and operations team.
CSuite is a professional services firm that provides experienced chief financial officer and other finance professionals to its clients through a variety of flexible offerings. These offerings include project and interim staffing engagements, and contingent search services for permanent placements for its clients throughout the United States.
Throughout this 2025 Annual Report, the term "Kingsway Search Xcelerator" or "KSX" is used to refer to this segment. CSuite is a professional services firm that provides experienced chief financial officer and other finance professionals to its clients through a variety of flexible offerings.
Fixed maturity investments are exposed to various risks, such as interest rate risk, credit risk and overall market volatility risk. Accordingly, it is reasonably possible that changes in the fair values of the Company’s investments reported at fair value will occur in the near term and such changes could materially affect the amounts reported in the consolidated financial statements.
Accordingly, it is reasonably possible that changes in the fair values of the Company’s investments reported at fair value will occur in the near term and such changes could materially affect the amounts reported in the consolidated financial statements. Impairment Assessment of Investments The establishment of an impairment loss on an investment requires a number of judgments and estimates.
The difference between the end of the reporting period of the limited liability investments and that of the Company is no more than three months. • Limited liability investment, at fair value represents the underlying investments of the Company’s consolidated entity, Argo Holdings.
The difference between the end of the reporting period of the limited liability investment, at fair value and that of the Company is no more than three months. At December 31, 2025, we held cash and cash equivalents, restricted cash and investments with a carrying value of $57.9 million.
Ravix provides outsourced financial services and human resources consulting for short or long duration engagements for customers throughout the United States. SNS provides healthcare staffing services to acute healthcare facilities on a contract or per diem basis in the United States, primarily in California.
Ravix provides outsourced financial services and human resources consulting to its clients on a fractional basis for both projects with definitive endpoints and ongoing engagements of indeterminate length for short or long duration engagements for customers throughout the United States.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act; therefore, pursuant to Regulation S-K, we are not required to make disclosures under this Item. 32 Table of Contents KINGSWAY FINANCIAL SERVICES INC.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act; therefore, pursuant to Regulation S-K, we are not required to make disclosures under this Item. 29 Table of Contents KINGSWAY FINANCIAL SERVICES INC.

Other KFS 10-K year-over-year comparisons