# Kestrel Group Ltd (KG) Informational only - not investment advice. CIK: 0002055116 SIC: 6331 Fire, Marine & Casualty Insurance SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Insurance Carriers](/major-group/63/) > [SIC 6331 Fire, Marine & Casualty Insurance](/industry/6331/) Latest 10-K filed: 2026-03-13 SEC page: https://www.sec.gov/edgar/browse/?CIK=2055116 Filing source: https://www.sec.gov/Archives/edgar/data/2055116/000162828026017506/kg-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Net income | 46725000 | USD | 2025 | 2026-03-13 | | Assets | 1009955000 | USD | 2025 | 2026-03-13 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002055116.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2024 | 2025 | | --- | ---: | ---: | | Net income | -1,291,000 | 46,725,000 | | Diluted EPS | -0.47 | 8.08 | | Operating cash flow | -1,267,000 | -96,141,000 | | Dividends paid | 0.00 | 40,000,000 | | Assets | 5,510,000 | 1,009,955,000 | | Liabilities | 904,000 | 881,671,000 | | Stockholders' equity | 4,606,000 | 128,284,000 | | Cash and cash equivalents | 4,286,000 | 7,801,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2024 | 2025 | | --- | ---: | ---: | | Return on equity | -28.03% | 36.42% | | Return on assets | -23.43% | 4.63% | | Liabilities / equity | 0.20 | 6.87 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002055116.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2025-Q2 | 2025-06-30 | 5,555,000 | 69,927,000 | 15.05 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 17,445,000 | -5,053,000 | -0.65 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 10,208,000 | -17,755,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 10,193,000 | -7,431,000 | -0.96 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/2055116/000162828026032898/kg-20260331.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-08 Report date: 2026-03-31 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Form 10-Q" or this "Report"). References in this Form 10-Q to the terms "we", "us", "our", "the Company", "Kestrel" or other similar terms mean the consolidated operations of Kestrel Group Ltd and its subsidiaries, unless the context requires otherwise. References in this Form 10-Q to the term "Kestrel Group" means Kestrel Group Ltd only. Certain reclassifications have been made for 2025 to conform to the 2026 presentation and have no impact on consolidated net income and total equity previously reported. Note on Forward-Looking Statements This Quarterly Report on Form 10-Q includes anticipated benefits of the business combination and integration of Maiden Holdings Ltd. and Kestrel Group LLC, projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. These projections and statements are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 and are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. These projections and statements may address, among other things, our strategy for growth, product development, financial results and reserves. Our actual results and financial condition may differ, possibly materially, from these projections and statements and therefore you should not place undue reliance on them.  Factors that could cause our actual results and financial condition to differ, possibly materially, from those in the specific projections and statements are discussed throughout the Management's Discussion and Analysis of Financial Condition and Results of Operations and in "Risk Factors" in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025 that was filed with the U.S. Securities and Exchange Commission ("SEC") on March 13, 2026, however, those factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law. 48 Overview Introductory Note On May 27, 2025, Kestrel Group LLC (“Kestrel LLC”) and Maiden Holdings, Ltd. (“Maiden”) completed their previously announced combination ("Combination"), forming a new, publicly listed specialty program group operating under the name Kestrel Group Ltd (“Kestrel Group” or "Parent Company"). Maiden shares ceased trading on the NASDAQ Capital Market ("Nasdaq") at close of market on May 27, 2025. Kestrel Group shares began trading on the Nasdaq at open of market on May 28, 2025 under the ticker symbol “KG”. Upon the closing of the Transactions (the “Closing”), Maiden and Kestrel LLC are now wholly owned subsidiaries of the Company, which was rebranded as Kestrel Group and renamed “Kestrel Group Ltd” ("Kestrel" or the "Company"). The Combination creates a capital light, fee-based insurance platform with the ability to selectively deploy underwriting capacity to optimize shareholder returns, with a commitment to innovation, client service and long-term relationships. Kestrel specializes in providing fronting services to insurance program managers, managing general agencies (MGAs), reinsurers, and reinsurance brokers. Kestrel facilitates insurance transactions utilizing its exclusive management contracts with four insurance carriers, all of which are rated A- “Excellent” by A.M. Best. These contracts enable Kestrel to offer both admitted and surplus lines in all U.S. states. Kestrel LLC generally does not assume significant underwriting risk and produces lines of business such as casualty, workers’ compensation, catastrophe-exposed property, and non-catastrophe-exposed property, with diverse risk durations, sizes, and product types. Kestrel continues to write business through its exclusive use of A.M. Best A- FSC XV insurance carriers Sierra Specialty Insurance Company, Rochdale Insurance Company, Park National Insurance Company and Republic Fire and Casualty Insurance Company (collectively, “AmTrust Insurance Companies”), all subsidiaries of AmTrust Financial Services, Inc. (“AmTrust”). Kestrel currently retains an option to acquire the AmTrust Insurance Companies for a period of up to three years after closing from AmTrust. AmTrust is a significant shareholder of Kestrel. Please see Note 10. Related Party Transactions for further information regarding the Company's relationship with AmTrust. As of March 31, 2026, Maiden Reinsurance Ltd. ("Maiden Reinsurance") owns 22.1% of the Company's total issued and outstanding common shares which is eliminated for accounting and financial reporting purposes on the Company's condensed consolidated financial statements. On April 29, 2025, former Maiden shareholders approved the proposal to remove the 9.5% voting limitation at the Company's special general meeting of its shareholders (the "Special Meeting"). The ownership of common shares by Maiden Reinsurance was made in compliance with Maiden Reinsurance's investment policy and approved by the Vermont Department of Financial Regulation ("Vermont DFR"). Current Operations Our business consists of two reportable segments: Program Services and Legacy Reinsurance. Our Program Services segment consists of a cohesive suite of products and services offered by Kestrel that are integrated and interdependent. Kestrel’s revenue is highly concentrated because of the capacity distribution agreements with an individual customer. Capacity distribution fees are collected from program managers or MGAs for providing support services and granting contractual access to our insurance carrier network and are considered a single performance obligation. Support services provided for these insurance and reinsurance brokerage arrangements include compliance and regulatory reporting and administrative support which culminate in the placement of bound insurance coverage. Kestrel considers these arrangements a single revenue stream. Our Legacy Reinsurance segment consists of primarily reinsurance business previously produced by Maiden, which had been segregated into two reportable segments: AmTrust Reinsurance and Diversified Reinsurance. Business formerly classified in the AmTrust Reinsurance segment is now described as "AmTrust Reinsurance Legacy Business" while business formerly classified in the Diversified Reinsurance segment is referred to as "Diversified Reinsurance Legacy Business" within this new segment. AmTrust Reinsurance Legacy Business includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd. (“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries, AEL and AIU DAC, both of which are in run-off effective as of January 1, 2019, as discussed in Note 10. Related Party Transactions of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information". In addition, the Company has a retroactive reinsurance agreement and a commutation agreement that further reduces its exposure and limits the potential volatility related to AmTrust liabilities, which are discussed in Note 8. Reinsurance of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information". Diversified Reinsurance legacy business comprises a run-off portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe, as well as transactions entered into by Genesis Legacy Solutions ("GLS") as described in Note 1. Basis of Presentation under Legacy Reinsurance Operations. The Company does not presently underwrite prospective reinsurance risks but may consider selectively deploying underwriting capacity to optimize shareholder returns in support of the Company's Program Services operations. Business Strategy Our strategic focus centers on growing the fee income component of our Program Services business, which will increase our earnings before interest, taxes, depreciation and amortization ("EBITDA") while effectively managing the continuing run- 49 off of the legacy Maiden alternative asset and reinsurance portfolios. Our focus on growing our fee business may consider selectively deploying underwriting capacity to optimize shareholder returns in support of this business. We continue to actively pursue with our existing partners reinsurance mechanisms that would selectively deploy the Company’s underwriting capacity and facilitate and accelerate the growth of our Program Services segment. We believe this will create the greatest risk-adjusted shareholder returns in order to increase EBITDA and book value for our common shareholders, both near and long-term. Our assessment is that these areas of strategic focus would enhance our profitability through increased returns, which would also increase the likelihood of fully utilizing the significant net operating loss ("NOL") carryforwards, as described further below, which would increase both GAAP book value and create additional common shareholder value. The recognition of the deferred tax asset on our Condensed Consolidated Balance Sheet remains a leading priority for the Company to increase its GAAP book value. As a result of the Combination, as of March 31, 2026, we hold $221.0 million in alternative investments which include equity securities, equity method investments and other investments in a wide variety of asset classes. Please refer to the "Liquidity and Capital Resources" section on "Other Investments, Equity Method Investments and Equity Investments" for further information on these alternative asset classes and a detailed discussion of their investment returns. Recent developments and trends in financial markets, particularly as regards private assets, indicate that it may take longer than expected to achieve those returns and we have factored that into future capital allocation decisions. Prior to the Combination, Maiden had determined that this asset management strategy did not serve its longer-term strategic goals, which had shifted to a focus on developing or acquiring fee income oriented insurance operations and had ceased making commitments to these alternative asset classes and had begun to dispose of these investments. Subsequent to the Combination, we have continued to pursue this objective and seek to find appropriate opportunities to dispose of these assets and believe this is a high priority in support of focusing our efforts on growing our Program Services business. Accordingly, we expect our alternative investment portfolio to be reduced in future periods as we believe it is critical to reposition our balance sheet and increase our liquidity in support of the current initiatives being pursued. We have not made, and do not expect to make any such new commitments to alternative investments at this time. While we believe that the Combination will increase the likelihood of achieving our stated objectives, there can be no assurance that the r [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K and Item 1, "Business - General Overview". Except as explicitly described as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to the Company's continuing operations except for net income (loss) and net income available to Kestrel common shareholders. Amounts in tables may not reconcile due to rounding differences. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk and uncertainties. Please see the "Special Note About Forward-Looking Statements" in this Annual Report on Form 10-K for more information on factors that could cause actual results to differ materially from the results described in or implied by any forward-looking statements contained in this discussion and analysis. You should review the "Risk Factors" set forth in this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein. Overview On May 27, 2025, Kestrel Group LLC (“Kestrel LLC”) and Maiden Holdings, Ltd. (“Maiden”) completed their previously announced combination ("Combination"), forming a new, publicly listed specialty program group operating under the name Kestrel Group Ltd (“Kestrel Group” or "Parent Company"). The Combination was previously announced on December 30, 2024. Maiden shares ceased trading on the NASDAQ Capital Market ("Nasdaq") at close of market on May 27, 2025. Kestrel Group shares began trading on the Nasdaq at open of market on May 28, 2025 under the ticker symbol “KG”. Upon the closing of the Transactions (the “Closing”), Maiden and Kestrel LLC are now wholly owned subsidiaries of the Parent Company, which was rebranded as Kestrel Group and renamed “Kestrel Group Ltd” ("Kestrel"). The Combination creates a capital light, fee-based insurance platform with the ability to selectively deploy underwriting capacity to optimize shareholder returns, with a commitment to innovation, client service and long-term relationships. Business Strategy Our strategic focus centers on growing the fee income component of our Program Services business, which will increase our pre-tax income while effectively managing the continuing run-off of the legacy Maiden alternative asset and reinsurance portfolios. Our focus on growing our fee business may include but may consider selectively deploying underwriting capacity to optimize shareholder returns in support of this business. We continue to actively pursue with our existing partners reinsurance mechanisms that would selectively deploy the Company’s underwriting capacity and facilitate and accelerate the growth of our Program Services segment and to optimize shareholder returns. We believe this will create the greatest risk-adjusted shareholder returns in order to increase pre-tax income and book value for our common shareholders, both near and long-term. Our assessment is that these areas of strategic focus would enhance our profitability through increased returns, which would also increase the likelihood of fully utilizing the significant net operating loss ("NOL") carryforwards, as described further below, which would increase both GAAP book value and create additional common shareholder value. The recognition of the deferred tax asset on our consolidated balance sheet remains a leading priority for the Company to increase its GAAP book value. As a result of the Combination, as of December 31, 2025, we own $218.6 million into alternative investments which include equity securities, equity method investments and other investments in a wide variety of asset classes. Please refer to the "Liquidity and Capital Resources" section on "Other Investments, Equity Method Investments and Equity Investments" for further information on these alternative asset classes and a detailed discussion of their investment returns. Recent developments and trends in financial markets, particularly the ongoing volatility in interest rates and the associated economic uncertainty as a result of those and other fiscal and monetary policy changes, indicate that it may take longer than expected to achieve those returns and we expect that to factor into future capital allocation decisions. Prior to the Combination, Maiden had determined that this asset management strategy did not serve its longer-term strategic goals, which had shifted to a focus on developing or acquiring fee income oriented insurance operations and had ceased making commitments to these alternative asset classes and had begun to dispose of these investments. Subsequent to the Combination, we have continued to pursue this objective and seek to find appropriate opportunities to dispose of these assets and believe this is a high priority in support of focusing our efforts on growing our Program Services business. Accordingly, we expect our alternative investment portfolio to be reduced in future periods as we believe it is critical to reposition our balance sheet and increase our liquidity in support of the current initiatives being pursued. We have not made, and do not expect to make any such additional commitments to alternative investments at this time. While we believe that the Combination with Maiden will increase the likelihood of achieving our stated objectives, there can be no assurance that the run-off of its insurance liabilities will run-off at levels that will allow us to achieve those goals. As a result, we continue to pursue finality solutions to resolve the AmTrust liabilities not covered by the LPT/ADC Agreement, including through third-parties. There can be no guarantee that we will execute such finality solutions and these solutions could involve significant charges to execute and we are actively evaluating the potential costs and benefits of such solutions, to the extent they are available to the Company. 41 The Company does not presently underwrite prospective reinsurance risks but may consider selectively deploying underwriting capacity to optimize shareholder returns in support of the Company's Program Services operations. Please refer to Item 1. "Business - Our Reportable Segments" section for further discussion on our reportable segments. 2025 and 2024 Financial Highlights For the Year Ended December 31, 2025 2024 Change Summary Consolidated Statement of Income Data: ($ in thousands except per share data) Net income (loss) from continuing operations $ 49,538  $ (1,291) $ 50,829  Loss from discontinued operations, net of income tax (2,813) —  (2,813) Net income (loss) 46,725  (1,291) 48,016  Basic and diluted earnings (loss) per common share: Net income (loss) attributable to Kestrel common shareholders(2) 8.08  (0.47) 8.55  Gross premiums written 6,091  —  6,091  Net premiums earned 12,673  —  12,673  Fee revenue 6,076  3,634  2,442  Underwriting and fee (loss) income(3) (7,481) 1,080  (8,561) Net investment results(9) 15,324  213  15,111  Non-GAAP measures: Non-GAAP operating loss(1) (13,819) (1,291) (12,528) Non-GAAP diluted operating loss per common share(1) (2.41) (0.47) (1.94) Non-GAAP operating return on average common shareholders' equity(1) (20.8) % (24.7) % 3.9  At December 31, 2025 2024 Change Consolidated Financial Condition ($ in thousands except per share data) Total investments and cash and cash equivalents(4) $ 398,752  $ 4,286  $ 394,466  Total assets 1,009,955  5,510  1,004,445  Reserve for loss and LAE 637,169  —  637,169  Senior notes - principal amount 262,361  —  262,361  Shareholders' equity 128,284  4,606  123,678  Total capital resources(5) 390,645  4,606  386,039  Ratio of debt to total capital resources(8) 67.2  % —  % 67.2  Book Value calculations: Book value per common share(6) $ 16.57  $ 1.67  $ 14.90  Diluted book value per common share(7) 16.28  1.67  14.61  (1)Non-GAAP operating loss, non-GAAP diluted operating loss per common share and non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures. See "Key Financial Measures" for additional information. (2)Please refer to "Notes to Consolidated Financial Statements - Note 12. Earnings per Common Share" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for the calculation of basic and diluted earnings per common share. (3)Underwriting and fee (loss) income is a non-GAAP measure and is calculated as net premiums earned plus fee revenue, less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. See "Key Financial Measures" for additional information. (4)Total investments and cash and cash equivalents includes both restricted assets and unrestricted assets. (5)Total capital resources is the sum of the Company's principal amount of debt and shareholders' equity. See "Key Financial Measures" for additional information. (6)Book value per common share is calculated using common shareholders’ equity divided by the number of common shares outstanding. See "Key Financial Measures" for additional information. (7)Diluted book value per common share is calculated by dividing common shareholders' equity, adjusted for assumed proceeds from the exercise of dilutive options, divided by the number of outstanding common shares plus dilutive options and restricted shares (assuming exercise of all dilutive share based awards). (8)Ratio of debt to total capital resources is calculated using the total principal amount of debt divided by the sum of total capital resources. (9)Net investment results include the sum of net investment income, net realized and unrealized gains (losses), and interest in income (loss) of equity method investments. 42 Key Financial & Operating Measures Revenues As part of the Combination, our primary focus for revenue growth is the Program Services segment. Our Program Services segment consists of a cohesive suite of products and services offered by Kestrel that are integrated and interdependent. Kestrel recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. Revenue is measured as the amount of consideration Kestrel expects to receive in exchange for providing services to customers and is generally governed by a capacity distribution agreement as a specified percentage of the premium. Capacity distribution fees are collected from program managers or MGAs for the placement of an effective insurance policy on behalf of the Company's customer. These agreements may also include other provisions, such as minimum fee arrangements or cancellation provisions, which may impact revenue recognition. Our Legacy Reinsurance segment revenue consists of legacy reinsurance premiums previously produced by Maiden which has derived most of our revenues from premiums on reinsurance contracts, net of any reinsurance or retrocessional coverage purchased and to a minor extent from premiums from insurance policies. Reinsurance premiums are a function of the amount and types of policies and contracts written, as well as prevailing market prices. Our prices are determined before our ultimate costs, which may extend far into the future, are known. As a result of the Combination, our gross and net premiums written continue to be materially lower and our net investment income may increasingly become a larger portion of our total revenues. The Company's revenues also include income generated from our investment portfolio. The Company's investment portfolio is comprised of AFS fixed maturity investments and alternative investments including private equities, private equity and credit funds, privately held investments, equity method investments and other non-fixed income investments. In accordance with U.S. GAAP, our fixed maturity investments are carried at fair market value and any unrealized gains and losses are included in AOCI as a separate component of shareholders' equity. If unrealized losses are considered to be other-than-temporarily impaired due to a credit-related event, such impairment losses are recognized within earnings as a realized loss under total other-than-temporary impairment losses. Equity and other investments include limited partnerships, joint ventures and start-up insurance entities which are carried at fair market value with any unrealized gains or losses included in earnings under net realized gains (losses) on investment. Our collateralized investments in direct lending entities are carried at fair market value. Any indication of impairment is recognized through unrealized gains (losses) immediately within net income. Expenses Our expenses currently consist largely of net loss and LAE, commission and other acquisition expenses, general and administrative expenses, interest and amortization expenses, foreign exchange and other gains or losses, the latter of which includes on a non-recurring basis any gains or losses from the disposal of subsidiaries. Net loss and LAE has three main components: (1) losses paid, which are actual cash payments to insureds, net of recoveries from reinsurers; (2) change in outstanding loss or case reserves, which represent cedants' best estimate of the likely settlement amount for known claims, less the portion that can be recovered from reinsurers; and (3) change in IBNR reserves, which we establish to respond to changes in the values of claims that have been reported to us but are not yet settled, as well as claims that have occurred but have not yet been reported to us. The portion recoverable from reinsurers is deducted from the gross estimated loss. Commission and other acquisition expenses include commissions, brokerage fees and insurance taxes. Commissions and brokerage fees are usually calculated as a percentage of premiums and depend on the market and line of business and can, in certain instances, vary based on loss sensitive features of reinsurance contracts. Commission and other acquisition expenses are reported after: (1) deducting commissions received on ceded reinsurance; (2) deducting the part of commission and other acquisition expenses relating to unearned premiums; and (3) including the amortization of previously deferred commission and other acquisition expenses. General and administrative expenses include personnel expenses (including share-based compensation expense), audit fees, rent expenses, legal and professional fees, information technology costs and other general operating expenses. General and administrative expenses are allocated to the reportable segments on an actual basis except salaries and benefits where management’s judgment is applied; however general corporate expenses are not allocated to the segments. Non-GAAP Financial Measures In addition to our key financial measures presented in accordance with GAAP in the Consolidated Balance Sheets and Consolidated Statements of Income and Comprehensive Income, management uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined and calculated differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP financial measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The calculation of some of these key financial measures including the reconciliation of non-GAAP financial measures to the nearest GAAP measure and relevant discussions are found within Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations". These non-GAAP financial measures are summarized as follows: 43 Non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) per common share: Management believes that the use of non-GAAP operating earnings and non-GAAP diluted operating earnings per common share enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how management analyzes performance. Management also believes that these measures generally follow industry practice therefore allowing the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. Non-GAAP operating earnings should not be viewed as a substitute for U.S. GAAP net income. Non-GAAP operating earnings (loss) is an internal performance measure used by management as these measures focus on the underlying fundamentals of the Company's operations by excluding, on a recurring basis: (1) net realized investment gains (losses); (2) foreign exchange and other gains (losses); (3) interest in income (loss) of equity method investments; and (4) amortization of intangible assets. It also excludes on a non-recurring basis: (1) loss from discontinued operations, net of income tax; (2) the bargain purchase gain resulting from the Combination on May 27, 2025, (3) the change in fair value of the earn out liability; (4) litigation costs from GLS related arbitration; (5) restructuring and severance costs; and (6) costs incurred due to the Combination on May 27, 2025. We excluded net realized investment gains (losses), interest in income (loss) of equity method investments, and foreign exchange and other gains (losses) as we believe these are influenced by market opportunities and other factors. We do not believe amortization of intangible assets, the net loss from our discontinued operations, the bargain purchase gain on the Combination, the change in fair value of the earn out liability, litigation costs from GLS related arbitration; restructuring and severance costs; and costs incurred due to the Combination on May 27, 2025 are representative of our ongoing and future business.We believe all of these amounts are substantially independent of our business and any potential future underwriting process, therefore their inclusion would distort the analysis of underlying trends in our operations. Underwriting income (loss) and fee income is a non-GAAP measure and is calculated as net premiums earned plus fee revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. For purposes of these non-GAAP operating measures, the fee-generating business which is included in our Program Services segment, is considered part of the underwriting operations of the Company. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is a widely used performance indicator in the insurance industry. A reconciliation of the Company's underwriting results can be found in the Company's Consolidated Financial Statements in the "Notes to Consolidated Financial Statements Note 3. Segment Information" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. The Company does not present certain non-GAAP measures such as combined ratio and its related components in this Annual Report on Form 10-K for the year ended December 31, 2025, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data. While an important metric of success, underwriting and fee income does not reflect all components of profitability, as it does not recognize the impact of investment income earned on premiums between the time premiums are received and the time loss payments are ultimately paid to clients. Because we do not manage our cash and investments by segment, investment income and interest expense are not allocated to the reportable segments. Certain general and administrative expenses are generally allocated to segments based on actual costs incurred. Non-GAAP Operating Return on Average Common Equity ("Non-GAAP Operating ROACE"): Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using non-GAAP operating earnings available to common shareholders (as defined above) divided by average common shareholders' equity. Book Value per Common Share and Diluted Book Value per Common Share: Book value per common share and diluted book value per common share are non-GAAP measures. Management uses growth in both of these metrics as a prime measure of the value we are generating for our common shareholders, because management believes that growth in each metric ultimately results in growth in the Company’s common share price. These metrics are impacted by the Company’s net income and external factors, such as interest rates, which can drive changes in unrealized gains or losses on our fixed income investment portfolio, as well as common share repurchases. Ratio of Debt to Total Capital Resources: Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of total capital resources. Alternative investments is the total of the Company's holdings of equity securities, other investments and equity method investments as reported on the Company's Consolidated Balance Sheets. Operating Metrics Premium produced is an operating metric determined by management as a byproduct of the program services fees it earns and is paid by clients. Premium produced is equal to the premium written by an MGA or capacity provider, and management believes this measure is important in understanding the underlying production trends of its Program Services business and the fees it earns. Where available, the Company utilizes underlying premium produced as reported by its clients. Where the premium produced was not directly observable, the Company derived the premium produced by grossing up the known fee component using the applicable contractual fee percentage, including its arrangements with its insurance carrier partners. 44 Critical Accounting Policies and Estimates It is important to understand our accounting policies in order to understand our financial position and results of operations. The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The following presents a discussion of those accounting policies and estimates that management believes are the most critical to its operations and require the most difficult, subjective and complex judgment. If actual events differ significantly from the underlying assumptions and estimates used by management, there could be material adjustments to prior estimates that could potentially adversely affect the Company’s results of operations, financial condition and liquidity. These critical accounting policies and estimates should be read in conjunction with Notes to Consolidated Financial Statements: Note 2. Significant Accounting Policies included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report Form 10-K for a full understanding of the Company’s accounting policies. Reserve for Loss and LAE General: The amount of time that elapses before a claim is reported to the cedant and then subsequently reported to the reinsurer is commonly referred to in the industry as the reporting tail. Lines of business for which claims are reported quickly are commonly referred to as short-tailed lines; and lines of business for which a longer period of time elapses before claims are reported to the reinsurer are commonly referred to as long-tailed lines. In general, for reinsurance, the time lags are longer than for primary business due to the delay that occurs between the cedant becoming aware of a loss and reporting the information to its reinsurer(s). The delay varies by reinsurance market (country of cedant), type of treaty, whether losses are paid by the cedant and the size of the loss. The delay could vary from a few weeks to a year or sometimes longer. Because a significant amount of time can elapse, particularly on longer-tail lines of business written on an excess of loss basis, between the assumption of risk, the occurrence of a loss event, the reporting of the event to an insurance company (the primary company or the cedant), the subsequent reporting to the reinsurance company ("the reinsurer") and the ultimate payment of the claim on the loss event by the reinsurer, the Company’s liability for unpaid loss and LAE ("loss reserves") is based largely upon estimates. The Company categorizes loss reserves into two types of reserves: reported outstanding loss reserves ("case reserves") and IBNR reserves. Case reserves represent, for each individual claim, an estimate of unpaid losses, either by the Company’s cedants or the Company’s claims handling professionals, and recorded by the Company. IBNR reserves represent a provision for claims that have been incurred but not yet reported to the Company, as well as future loss development on losses already reported, in excess of the case reserves. The Company updates its estimates for each of the aforementioned categories primarily on a quarterly basis using information received from its cedants. For excess of loss treaties, cedants generally are required to report losses that either (i) exceed 50% of their retention; or (ii) have a reasonable probability of exceeding the retention; or (iii) meet defined reporting criteria. All excess of loss reinsurance claims that are reserved are reviewed on a periodic basis. In addition, reserves for loss and LAE are reviewed every quarter for each cedant. For proportional treaties, cedants are required to give a periodic statement of account, generally monthly or quarterly. These periodic statements typically include information regarding premiums written, premiums earned, unearned premiums, ceding commissions, brokerage amounts, applicable taxes, paid losses and reported outstanding losses. They can be submitted up to ninety days after the close of the reporting period. Some proportional treaties have specific language requiring earlier notice of serious claims. For all lines, the Company’s objective is to reasonably estimate ultimate loss and LAE. Total loss reserves are then calculated by subtracting losses paid. Similarly, IBNR reserves are calculated by subtracting case reserves from total loss reserves. IBNR is the estimated liability for: (1) changes in the values of claims that have been reported to us but are not yet settled; (2) claims that have occurred but have not yet been reported; and (3) claims that are closed but subsequently reopened. Each claim is settled individually based upon its merits, and particularly for longer-tailed lines of business, it is not unusual for a claim to take several years after being initially reported to be settled and paid, especially if legal action is involved. These claims may also require changes in anticipated future payments due to changes in medical conditions or changes in expected inflationary pressures. As a result, the reserve for loss and LAE includes significant estimates for IBNR reserves. The reserve for IBNR is generally estimated by management based on various factors, including actuarial analysis and actual loss experience to date. Our actuaries employ standard actuarial methodologies to determine estimated ultimate loss reserves. In selecting management's best estimate of loss and LAE reserves, we consider the range of results produced by many actuarial methods and the appropriateness of those estimates. These actuarial methodologies are described in Notes to Consolidated Financial Statements: Note 9. Reserve for Loss and Loss Adjustment Expenses included under Item 8 "Financial Statement and Supplementary Data". The composition of the reserve for loss and LAE by type at December 31, 2025 was as follows: December 31, 2025 ($ in thousands) Reserve for reported loss and LAE $ 312,567  Reserve for losses incurred but not reported 324,602  Reserve for loss and LAE $ 637,169  45 The loss reserves in the table above exclude the impact of the LPT/ADC Agreement and other reinsurance recoverable on unpaid losses. While management believes that our case reserves and IBNR are sufficient to cover losses assumed by us, there can be no assurance that losses will not deviate from our reserves, possibly by material amounts. The analysis of the appropriateness of the reserve for IBNR is reviewed quarterly, with adjustments made as appropriate. To the extent that actual reported losses exceed expected losses, the carried estimate of the ultimate losses may be increased (i.e. unfavorable reserve development), and to the extent actual reported losses are less than our expectations, the carried estimate of ultimate losses may be reduced (i.e. favorable reserve development). We record any changes in our loss reserve estimates and the related reinsurance recoverable in the periods in which they are determined. Loss reserves do not represent an exact calculation of liability. Rather, loss reserves are estimates of what we reasonably expect the ultimate resolution and administration of claims will cost. These estimates are based on actuarial projections and on our assessment of currently available data, as well as estimates of future trends in claims severity and frequency, judicial theories of liability and other factors. Loss reserve estimates are refined as experience develops and as claims are reported and resolved. In addition, the relatively long periods between when a loss occurs and when it may be reported to our claims department for our casualty reinsurance lines of business also increase the uncertainties of reserve estimates in such lines. With the guidance of the methods described in "Notes to Consolidated Financial Statements - Note 9. Reserve for Loss and Loss Adjustment Expenses" included under Item 8 "Financial Statement and Supplementary Data" of this Annual Report on Form 10-K, actuarial judgment is applied in the determination of ultimate losses. In general, the Company’s segments have varying levels of seasoning with which the Company has direct experience and as a result, differing methods are utilized to estimate loss and LAE reserves within each segment. In our Legacy Reinsurance segment, we hold books of Diversified Legacy Reinsurance business that have been in runoff for several years, as well as books of business that have been underwritten only during the last few years. In general, we utilize the Expected Loss Ratio ("ELR") approach at the onset of reserving an account, the Bornhuetter-Ferguson ("BF") method for business with less but maturing loss experience, and then, as the experience matures, the Loss Development ("LD") method is utilized. The runoff book of business primarily uses the LD method due to its maturity and the amount of experience which has emerged over the years. For proportional business, the Company relies heavily on the actual contract experience, whereas for excess of loss business, there will be more usage of industry and/or Company specific benchmark assumptions in the reserving process. Maiden underwrote AmTrust Legacy Reinsurance business from July 1, 2007 until Maiden Reinsurance and AII agreed to terminate the remaining business subject to the AmTrust Quota Share and European Hospital Liability Quota Share, both on a run-off basis, effective January 1, 2019. A large portion of the exposure in the underlying book of business has significant seasoning, and allows for a significant amount of credibility in using parameters derived from historical experience to calculate reserve estimates. Some segments of the book are a result of recent acquisitions or newer markets for AmTrust. These segments require a greater level of assumptions and professional judgment in deriving reserve levels, which inherently implies a wider range of reasonable estimates. In addition, changes to case reserving and claims settlement practices by AmTrust have required the use of methods which adjust historical paid and incurred losses to reflect the current basis. As a result, the AmTrust book of business relies primarily on the LD method due to maturity. The LD method can be based on AmTrust historical information, which in some cases is adjusted to reflect historical operational changes. The LD method can also be derived from industry sources. Actuarial judgment is being used as to the data used to implement the LD method. The Frequency-Severity ("FS") method is also considered for segments of the AmTrust book for which claim count information is available. Additional data detailing items such as the class of business, state of occurrence, claim counts, and the frequency and severity of claims is available in many instances, further enhancing the loss reserve analysis. Significant Assumptions Employed in the Estimation of Reserve for Loss and LAE: The most significant assumptions used at December 31, 2025 to estimate the reserve for loss and LAE within our reporting segments are as follows: •the information developed from internal and independent external sources can be used to develop meaningful estimates of the likely future performance of business bound by the Company; •historic loss development and trend experience may be used to predict future loss development and trends; •no significant emergence of losses or types of losses that are not represented in the information supplied to the Company by its brokers, ceding companies and insureds will occur; and •the Company is able to identify and properly adjust for changes to case reserving, claims settlement rates, legislative changes and the impact of claims inflation in the underlying data. The four assumptions above significantly influence the Company’s determination of initial expected loss ratios and expected loss reporting and payment patterns that are the key inputs which impact potential variability in the estimate of the reserve for loss and LAE and are applicable to each of the Company’s business segments. These factors are combined with the actuarial judgment exercised by our reserving actuaries. While there can be no assurance that any of the above assumptions will prove to be correct, we believe that this process represents a realistic and appropriate basis for estimating the reserve for loss and LAE. Loss emergence factors and expected loss ratios used in the reserving process are based on a blend of our own direct experience, cedant experience and industry benchmarks, when appropriate. The benchmarks selected were those that we believe are most similar to our underwriting business. Factors Creating Uncertainty in the Estimation of the Reserve for Loss and LAE: While management does not include an explicit or implicit provision for uncertainty in its reserve for loss and LAE, certain of the Company’s business lines are by their nature subject to additional uncertainties, which are discussed in detail below. In addition, the Company’s reserves are subject 46 to additional factors which add to the uncertainty of estimating reserve for loss and LAE. Time lags in the reporting of losses can also introduce further ambiguity to the process of estimating reserve for loss and LAE. The inherent uncertainty of estimating the Company’s reserve for loss and LAE increases principally due to: •the lag in time between the time claims are initially reported to the ceding company and the time they are ultimately reported through one or more reinsurance broker intermediaries to the Company; •the differing case reserving practices among ceding companies; •changes to characteristics of a claim over time, such as future medical needs or assessment of liability; •the diversity of loss development patterns among different types of reinsurance treaties or contracts; •the Company’s need to rely on its ceding companies for loss information, which also exposes the Company to changes in the reserving philosophy of the ceding company and the adequacy of its underlying case reserves; •changes in internal ceding company operations such as alterations in claims handling procedures; and •the Company's ability to properly parameterize the reserving analysis for each type of exposure, including those that may be unique to the Company or the industry. To verify the accuracy and completeness of the information provided to us by our ceding company counterparties, the Company’s actuaries, accountants and claims personnel perform claims reviews, and at times also accounting and financial audits, of the Company’s ceding companies. Any material findings are communicated to the ceding companies and utilized in the establishment or revision of the Company’s case reserves and related IBNR reserve. On occasion, these reviews reveal that the ceding company’s reported loss and LAE do not comport with the terms of the contract held with the Company. In such events, the Company strives to resolve the outstanding differences in an amicable fashion. The large majority of such differences are resolved in this manner. In the infrequent instance where an amicable solution is not feasible, the Company’s policy is to vigorously defend its position in litigation or arbitration. At December 31, 2025, the Company was not involved in any material claims litigation or arbitration proceeding other than the following: on November 26, 2025, the Company reported that a subsidiary of Genesis Legacy Solutions, Inc. (“GLS”), pursuant to the terms of the reinsurance contract, is currently engaged in an arbitration with one of its ceding companies. Under the subject reinsurance agreement, GLS provides the ceding company in question with (i) reinsurance premium protection (“RPP”) coverage with aggregate limits of approximately $25.0 million, and (ii) adverse development coverage (“ADC”) with remaining aggregate limits of $25.5 million. GLS is asserting that the cedant has committed multiple breaches of the reinsurance agreement, along with other material misrepresentations. Based on these assertions, GLS is seeking full rescission of the reinsurance agreement and related relief, including the ability to recoup losses previously paid, and has denied payment of certain invoices for contractual performance pending the outcome of this arbitration. Due to the large volume of potential transactions that must be recorded in the insurance and reinsurance industry, backlogs in the recording of the Company’s business activities can also impair the accuracy of its loss and LAE reserve estimates. At December 31, 2025, there were no significant backlogs related to the processing of policy or contract information in any of our reporting segments. The Company assumes in its loss and LAE reserving process that, on average, the time period between the recording of expected losses and the reporting of actual losses are predictable when measured in the aggregate and over time. The time period over which all losses are expected to be reported to the Company varies significantly by line of business. This period can range from a few quarters for some lines, such as property, to many years for some casualty lines of business. To the extent that actual reported losses are reported more quickly or more slowly than expected, the Company may adjust its estimate of ultimate loss accordingly. Potential Volatility in the Reserve for Loss and LAE: In addition to the factors creating uncertainty in the Company’s estimate of loss and LAE, the Company’s estimated reserve for loss and LAE can change over time because of unexpected changes in the external environment. Potential changing external factors include: •changes in the inflation rate for goods and services related to the covered damages; •changes in the general economic environment that could cause unanticipated changes in claim frequency or severity; •changes in the litigation environment regarding the representation of plaintiffs and potential plaintiffs; •changes in the judicial and/or arbitration environment regarding the interpretation of policy and contract provisions relating to the determination of coverage and/or the amount of damages awarded for certain types of claims; •changes in the social environment regarding the general attitude of juries in the determination of liability and damages; •changes in the legislative environment regarding the definition of damages; •new types of injuries caused by new types of injurious activities or exposures; and •assessment of changes in ceding company case reserving and reporting patterns. The change in loss reserve estimates from the prior year is referred to as Prior Year Development ("PPD"). We experienced net adverse PPD of $0.1 million for the year ended December 31, 2025 in our Legacy Reinsurance segment. 47 Please refer to “Notes to Consolidated Financial Statements - Note 9. Reserve for Loss and Loss Adjustment Expenses” included under Item 8. "Financial Statements and Supplementary Data" of this Form 10-K for further details. The Company conducts an analysis of reserves for loss and LAE, and in addition to selecting a best point estimate, makes a selection of a range of reasonable reserves. This range is based on a combination of objective and subjective data, including the underlying characteristics of the exposure, the volatility in historical emergence, the credibility of the information available to estimate the reserve for loss and LAE, and professional actuarial judgment. The size of the range is related to the level of confidence associated with the point estimate, as well as the amount of uncertainty inherent in the characteristics of the exposure being evaluated. Based on this range of reasonable reserves, our required reserves could increase by approximately $78.6 million, or 12.3%, of our consolidated gross loss and LAE reserves, excluding the impact of the LPT/ADC Agreement. If the LPT/ADC Agreement was considered, our required reserves could increase by approximately $37.2 million, or 21.2% of our consolidated net loss and LAE reserves. For the range of reasonable reserves, we have assumed what we believe is an appropriate confidence level. However, the range is not intended to be a measurement of all possible future outcomes, and there can be no assurance that our claim obligation will not vary outside of this range. Premiums and Commissions and Other Acquisition Expenses For pro-rata contracts and excess-of-loss contracts where no deposit or minimum premium is specified in the contract, premium written is recognized based on estimates of ultimate premiums provided by the ceding companies. Initial estimates of premium written are recognized in the inception period of the underlying risks. Subsequent adjustments, based on reports of actual premium by the ceding companies, or revisions in estimates, are recorded in the period in which they are determined. Reinsurance premiums assumed are generally earned on a pro rata basis over the terms of the underlying policies or reinsurance contracts. Contracts and policies written on a "losses occurring" basis cover claims that may occur during the term of the contract or policy, which is typically twelve months. Accordingly, the premium is earned evenly over the contract term. Contracts which are written on a "risks attaching" basis cover claims from all underlying insurance policies written during the terms of such contracts. Premiums earned on such contracts extend beyond the original term of the reinsurance contract, typically resulting in recognition of premiums earned over a twenty-four-month period. Reinsurance premiums on specialty risk and extended warranty are earned based on the estimated program coverage period. These estimates are based on the expected distribution of coverage periods by contract at inception, because a single contract may contain multiple coverage period options and these estimates are revised based on the actual coverage period selected by the original insured. Unearned premiums represent the portion of premiums written which is applicable to the unexpired term of the contract or policy in force. These premiums can be subject to estimates based upon information received from ceding companies and any subsequent differences arising on such estimates are recorded in the period in which they are determined. The Company provides proportional and non-proportional reinsurance coverage to cedants (insurance companies). Cedants' actual premiums are unknown at the time they enter into reinsurance agreement so treaties are based upon estimates of those premiums at the time the treaties are written and are typically adjusted as premiums are known. Reporting delays are inherent in the reinsurance industry and vary in length by type of treaty. As delays can vary from a few weeks to a year or sometimes longer, the Company produces accounting estimates to report premiums and commission and other acquisition expenses until it receives the cedants’ actual results. Under proportional treaties, the Company shares proportionally in both the premiums and losses of the cedant and pays the cedant a commission to cover the cedants' acquisition expenses. Under this type of treaty, the Company’s ultimate premiums written and earned and acquisition expenses are not known at the inception of the treaty and must be estimated until the cedant reports its actual results to the Company. Under non-proportional treaties, the Company is typically exposed to loss events in excess of a predetermined dollar amount or loss ratio and receives a deposit or minimum premium, which is subject to adjustment depending on the premium volume written by the cedant. Reported premiums written and earned and commission and other acquisition expenses on proportional treaties are generally based upon reports received from cedants and brokers, supplemented by the Company’s own estimates of premiums written and commission and other acquisition expenses for which ceding company reports have not been received. Premium and acquisition expense estimates are determined at the individual treaty level based upon contract provisions. The determination of estimates requires a review of the Company’s experience with cedants, a thorough understanding of the individual characteristics of each line of business and the ability to project the impact of current economic indicators on the volume of business written and ceded by the Company’s cedants. Estimates for premiums and commission and other acquisition expenses are updated continuously as new information is received from the cedants. Differences between such estimates and actual amounts are recorded in the period in which estimates are changed or the actual amounts are determined. Assessing whether or not a reinsurance contract meets the condition for risk transfer requires judgment. The determination of risk transfer is critical to reporting premiums written and is based, in part, on the use of actuarial and pricing models and assumptions. If we determine that a reinsurance contract does not transfer sufficient risk, we account for the contract as a deposit liability rather than a premium written. Acquisition expenses represent the costs of writing business that vary with, and are primarily related to, the production of the business. Acquisition expenses that are related to successful contracts are deferred and recognized as expense over the same period in which the related premiums are earned. Only certain expenses incurred in the successful acquisition of new and renewal insurance contracts are capitalized. Those expenses include incremental direct costs of contract acquisition that result 48 directly from and are essential to the contract transaction and would not have been incurred had the contract transaction not occurred. All other acquisition-related expenses, such as costs incurred for soliciting business, administration, and unsuccessful acquisition or renewal efforts are charged to expense as incurred. Administrative expenses, including rent, depreciation, occupancy, equipment, and all other general overhead expenses are considered indirect and are expensed as incurred. The Company considers anticipated investment income in determining the recoverability of deferred costs and believes they are fully recoverable. A premium deficiency is recognized if the sum of anticipated losses and LAE, unamortized acquisition expenses and anticipated investment income exceed unearned premium. If in future periods the premium deficiency exhausts the remaining deferred acquisition costs, the Company would have to further establish a premium deficiency liability for any forecasted deficiencies estimated in the remaining unearned premium. Retroactive Reinsurance Retroactive reinsurance policies provide indemnification for losses and LAE with respect to past loss events. For GLS run-off business in our Legacy Reinsurance segment, we use the balance sheet accounting approach for assumed loss portfolio transfers, whereby at the inception of the contract there are no premiums or losses recorded in earnings. At the inception of a run-off retroactive reinsurance contract, if the estimated undiscounted ultimate losses payable are in excess of the premiums received, a deferred charge asset is recorded for the excess; whereas, if the premiums received are in excess of the estimated undiscounted ultimate losses payable, a deferred gain liability is recorded for the excess, such that we do not record any gain or loss at the inception of these retroactive reinsurance contracts. The premium consideration that we charge the ceding companies under retroactive reinsurance contracts may be lower than the undiscounted estimated ultimate losses payable due to the time value of money. After receiving the premium consideration in full from our cedents at the inception of the contract, we invest the premium received over an extended period of time, thereby generating investment income. We expect to generate profits from these retroactive reinsurance contracts when taking into account the premium received and expected investment income, less contractual obligations and expenses. Deferred charge assets will be recorded in other assets (if and when applicable), and deferred gain liabilities are recorded in other liabilities, and amortized over the estimated claim payment period of the related contract with the periodic amortization reflected in earnings as a component of losses and LAE. The amortization of deferred charge assets and deferred gain liabilities is adjusted at each reporting period to reflect new estimates of the amount and timing of remaining loss and LAE payments. Changes in the estimated amount and timing of payments of unpaid losses may have an effect on the unamortized deferred charge assets and deferred gain liabilities and the amount of periodic amortization. Reinsurance Recoverable on Unpaid Losses and Loss Expenses Reinsurance recoverable balances are reviewed for impairment on a quarterly basis and are presented net of an allowance for expected credit losses. A case-specific allowance for expected credit losses against reinsurance recoverables that the Company deems unlikely to be collected in full, is estimated based on the Company's analysis of amounts due, historical delinquencies and write-offs. In addition, a default analysis is used to estimate an allowance for expected credit losses on the remainder of the reinsurance recoverable balance. The principal components of the default analysis are reinsurance recoverable balances by reinsurer and default factors applied to estimate uncollectible amounts based on reinsurers’ credit ratings and the length of collection periods. The default factors are based on a model developed by a major rating agency. The default analysis considers both current and forecasted economic conditions in the determination of the credit loss allowance. The Company records credit loss expenses for reinsurance recoverable in net incurred losses and LAE in the consolidated statements of income. Any adjustment to the allowance for expected credit losses is recognized in the period in which it is determined. Write-offs of reinsurance recoverable balances, together with associated allowances for expected credit losses, are recognized in the period in which balances are deemed uncollectible. The Company does not have a history of significant write-offs. As of December 31, 2025, the total allowance for expected credit losses on the Company's reinsurance recoverable on unpaid losses was $1.7 million which is discussed in the Notes to Consolidated Financial Statements: Note 8. Reinsurance under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Fair Value of Financial Instruments Please refer to "Notes to Consolidated Financial Statements - Note 5. Fair Value of Financial Instruments" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion on the fair value methodology and valuation techniques used by the Company to determine the fair value of the financial instruments held at December 31, 2025. Revenue Recognition - Fee Revenue In accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, Kestrel recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good or service to a customer. Revenue is measured as the amount of consideration Kestrel expects to receive in exchange for providing services to customers and is generally governed by a capacity distribution agreement as a specified percentage of the premium. Capacity distribution fees are collected from program managers or MGAs for the placement of an effective insurance policy on behalf of the Company's customer. These agreements may also include other provisions, such as minimum fee arrangements or cancellation provisions, which may impact revenue recognition. The establishment and maintenance of an authorized program on behalf of our customer, as well as the resulting placement of effective insurance policies, are considered a single performance obligation. The customer obtains control over the services 49 promised by the Company at the effective date of bound insurance coverage. The Company recognizes revenue when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. Except for contractual arrangements with minimum annual fees, the effective date of bound insurance coverage is considered the point in time when Kestrel’s performance obligation is met. Control passes to the customer at the effective date of bound insurance coverage, at which point the customer has accepted the services. Please refer to "Notes to Consolidated Financial Statements: Note 2. Significant Accounting Policies" included under Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for further information. Intangible Assets Please refer to "Notes to Consolidated Financial Statements: Note 2. Significant Accounting Policies" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion of the fair value of intangible assets which includes two components acquired as a result of the Combination: •Value of business acquired ("VOBA"): The value of business acquired replaced deferred acquisition costs in the fair value accounting required under ASC 805. The VOBA asset reflects the expected profit or loss embedded in the unearned premium carried at the closing date and will be amortized over the earning pattern of the unearned premium reserve. The fair value of VOBA was determined after taking into consideration certain key assumptions, including the estimated cost of capital, investment yield, loss ratio and related expenses. Please see details for the VOBA in Note 17. Business Combination in the Notes to the Consolidated Financial Statements included under Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K which is recorded as part of Intangible Assets on the Consolidated Balance Sheets. •Fair value adjustment to historical loss reserves and LAE and reinsurance recoverable on unpaid losses: The adjustment to record the estimated fair value of the reserve for loss and LAE and reinsurance recoverable on unpaid losses that were acquired under the Combination. This amount reflects a decrease to adjust to the present value of loss and LAE and reinsurance recoverable based on estimated payout patterns, partially offset by an increase in net loss and LAE to the estimated market-based risk margin. The risk margin represents the estimated cost of capital required by a market participant to assume the net loss and LAE. The fair value of the net reserve for loss and LAE was determined using certain key assumptions, including the estimated cost of capital and investment yield. This is amortized based on the claims settlement and timing of reinsurance recovery payments. Please see details for the fair value discount on reserves and recoverables in Note 17. Business Combination in the Notes to the Consolidated Financial Statements included under Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K which is recorded as part of Intangible Assets on the Consolidated Balance Sheets. Allowance for expected credit losses associated with AFS fixed maturities and other investments Please refer to "Notes to Consolidated Financial Statements: Note 2. Significant Accounting Policies" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion on the impairment evaluation performed by the Company on its investment portfolio. For the year ended December 31, 2025, the Company did not recognize any impairment or allowance for expected credit losses on its AFS investment securities in its results of operation. Please see Notes to Consolidated Financial Statements: Note 4. Investments included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for further details. 50 Results of Operations As a result of the completion of the Combination Agreement on May 27, 2025, the Company acquired Maiden's operations, which includes significant underwriting and investment activities, as well as operating expenses and interest expense associated with Maiden's debt. Maiden's results of operations are reported herein for the period May 28, 2025 to December 31, 2025 and significantly impact the comparisons to operating results in the year ended December 31, 2024. Because the 2024 results of operations do not include the operations of Maiden, the year-over-year comparisons are not directly comparable and are of limited value. The following table sets forth our Consolidated Statement of Income data for the years ended December 31, 2025 and 2024: For the Year Ended December 31, 2025 2024 ($ in thousands) Gross premiums written $ 6,091  $ —  Net premiums written $ 6,209  $ —  Net premiums earned $ 12,673  $ —  Fee revenue, net 6,076  3,634  Net loss and LAE (8,992) —  Commission and other acquisition expenses (3,131) —  General and administrative expenses(1) (14,107) (2,554) Underwriting loss and fee income(2) (7,481) 1,080  Other general and administrative expenses(1) (14,955) (2,554) Net investment income 8,343  213  Net realized and unrealized investment gains 6,957  —  Gain on bargain purchase 68,306  —  Foreign exchange and other losses, net (1,723) —  Interest and amortization expenses (9,865) —  Income tax expense (68) (30) Interest in income of equity method investments 24  —     Net income (loss) from continuing operations 49,538  (1,291) Loss from discontinued operations, net of income tax (2,813) —  Net income attributable to Kestrel common shareholders $ 46,725  $ (1,291) (1)Underwriting related general and administrative expenses is a non-GAAP measure. Please refer to "General and Administrative Expenses" below for additional information related to these corporate expenses and the reconciliation to those presented in our Consolidated Statements of Income. (2)Underwriting loss is a non-GAAP measure and is calculated as net premiums earned plus fee revenue, less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. (3)The Company does not present certain non-GAAP measures such as combined ratio and its related components in its results of operation, as it believes that as the run-off of its reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate our financial results. Net income attributable to Kestrel common shareholders Net income from continuing operations for the year ended December 31, 2025 was $49.5 million compared to a net loss of $1.3 million in 2024. Net income from continuing operations for the year ended December 31, 2025 was substantially the result of a gain on bargain purchase of $68.3 million from the completion of the Combination on May 27, 2025 as discussed in Note 17. Business Combination included in Part II. Item 8. Financial Statements and Supplementary Data. Excluding the gain on bargain purchase, the Company incurred a net loss of $21.6 million for the year ended December 31, 2025 compared to a net loss of $1.3 million for 2024. This was largely due to an underwriting loss of $10.3 million from the Legacy Reinsurance segment, along with higher operating costs, interest expense of $11.3 million on the Senior Notes and net foreign exchange losses; this was partially offset by higher Program Services fee income, net investment income and net unrealized gains from investment activities. The Legacy Reinsurance segment underwriting loss of $10.3 million for the year ended December 31, 2025 was due to: •On a current accident year basis, the segment had an underwriting loss of $10.2 million for the year ended December 31, 2025, primarily due to a current year underwriting loss of $6.0 million for Diversified Reinsurance Legacy business and a current year underwriting loss of $4.2 million for the AmTrust Reinsurance Legacy business. 51 •Net adverse PPD of $0.1 million for the year ended December 31, 2025 consisting of net adverse PPD of $0.8 million for Diversified Reinsurance legacy business partly offset by net favorable PPD of $0.7 million for AmTrust Reinsurance legacy business; •The underwriting loss for Legacy Reinsurance segment included $6.2 million in non-recurring charges relating to the Diversified Reinsurance Legacy business as follows: •Legal and professional fees of $2.6 million for the GLS arbitration proceedings as discussed in Note 11. Commitments, Contingencies and Guarantees of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information"; •Severance and terminated costs associated with headcount reductions totaling $3.1 million; and •Net charges of $0.5 million associated with commutation of an IIS-related reinsurance contract. •The loss above includes amortization of $1.9 million for the fair value adjustment on the discount on acquired net loss reserves due to the Combination which is recurring and amortized over the remaining claims settlement period. The underwriting loss in the Legacy Reinsurance segment was offset by the following segment and investment results: •Program Services segment produced fee income of $2.8 million for the year ended December 31, 2025 compared to fee income of $1.1 million in 2024. Fee revenue increased to $6.1 million for the year ended December 31, 2025 compared to $3.6 million for 2024 resulting from higher premium produced by both new and existing client programs. •combined income from investment activities of $15.3 million for the year ended December 31, 2025 compared to $0.2 million in 2024 primarily due to: •net investment income increased to $8.3 million for the year ended December 31, 2025 compared to $0.2 million that was earned in 2024; •realized and unrealized investment gains of $7.0 million for the year ended December 31, 2025 compared to $0.0 million in 2024; and •interest in income of equity method investments of $24.0 thousand for the year ended December 31, 2025 compared to $0.0 million in 2024. •corporate general and administrative expenses increased to $15.0 million for the year ended December 31, 2025 compared to $2.6 million in 2024. Corporate expenses for the year ended December 31, 2025 included $2.7 million for non-recurring corporate insurance, legal expenses and Combination-related costs. Excluding non-recurring expenses, our corporate expenses for the year ended December 31, 2025 increased by $9.7 million compared to 2024, which were primarily the result of our Combination with Maiden; and •foreign exchange and other losses of $1.7 million for the year ended December 31, 2025 compared to $0.0 million in 2024, largely due to significant weakening of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro. Net Premiums Written Net premiums written by our reportable segment, reconciled to the total consolidated net premiums written for the year ended December 31, 2025 are detailed below: For the Year Ended December 31, 2025 ($ in thousands) Total Diversified Reinsurance Legacy Business $ 7,444  AmTrust Reinsurance Legacy Business (1,235) Total Legacy Reinsurance Segment(1) $ 6,209  (1) Legacy Reinsurance segment results only include the post-combination period of May 28, 2025 to December 31, 2025. Net premiums written for the year ended December 31, 2025 of $6.2 million was split as follows: •Premiums written in the Diversified Reinsurance legacy business was $7.4 million for the year ended December 31, 2025. As discussed in Note 16. Assets Held for Sale of the Notes to Consolidated Financial Statements in Part II Item 8. "Financial Statements and Supplementary Data", Maiden LF and Maiden GF are no longer writing new business and non-underwriting related assets and liabilities are shown as held-for-sale in our consolidated financial statements. •Premiums written in the AmTrust Reinsurance legacy business was $(1.2) million for the year ended December 31, 2025 due to negative premium adjustments in the AmTrust Quota Share, being terminated effective January 1, 2019. Please refer to the analysis of the Diversified Reinsurance Legacy Business and AmTrust Reinsurance Legacy Business in our Legacy Reinsurance segment for further details. 52 Net Premiums Earned Net premiums earned for the year ended December 31, 2025 was $12.7 million. Net premiums earned in our reportable segment, reconciled to the total consolidated net premiums earned, for the year ended December 31, 2025 are detailed as follows: For the Year Ended December 31, 2025 ($ in thousands) Total Diversified Reinsurance Legacy Business $ 7,765  AmTrust Reinsurance Legacy Business 4,908  Total Legacy Reinsurance Segment(1) $ 12,673  (1) Legacy Reinsurance segment results only include the post-combination period of May 28, 2025 to December 31, 2025. Net premiums earned by Diversified Reinsurance legacy business for the year ended December 31, 2025 was $7.8 million. Maiden LF and Maiden GF are no longer writing new business and the non-underwriting related assets and liabilities are shown as held-for-sale in our consolidated financial statements as discussed above. Net premiums earned under AmTrust Reinsurance legacy business for the year ended December 31, 2025 was $4.9 million. This was earned entirely under the AmTrust Quota Share. Please refer to the analysis of Diversified Reinsurance and AmTrust Reinsurance under our Legacy Reinsurance segment results discussed further below for additional information. Fee Revenue  Fee Revenue is primarily produced by our Program Services segment. Revenue is measured as the amount of consideration Kestrel expects to receive in exchange for providing services to its customer and is generally governed by its managed service agreement. This agreement outlines the structure of an authorized program for which Kestrel oversees the placement of effective insurance policies in exchange for a fee. These agreements may also include other provisions, such as minimum fee arrangements or cancellation provisions, which may impact revenue recognition. Capacity distribution fees are collected from program managers or MGAs for the placement of effective insurance policies on behalf of our customer, which is considered a single performance obligation. Support services provided for these insurance and reinsurance brokerage arrangements include compliance and regulatory reporting and administrative support which culminate in the placement of bound insurance coverage. Fee revenue earned for the year ended December 31, 2025 increased to $6.1 million compared to $3.6 million during 2024. Fee revenue increased by $2.4 million compared to 2024 driven by increased premium volume produced by new and existing client programs. Please see the discussion regarding our Program Services segment further below for additional details. Net Investment Income Net investment income for the year ended December 31, 2025 increased by $8.1 million, compared to 2024 due to inclusion of Maiden's legacy fixed income and alternative investment portfolios in connection with the Combination on May 27, 2025. Annualized average book yields increased to 5.6% for the year ended December 31, 2025, compared to 4.3% in 2024. Net interest income from our net loan receivable from related party was $3.6 million for the year ended December 31, 2025. The net loan receivable from related party had an average balance of $98.7 million and carried a weighted average interest rate of 6.0% for the year ended December 31, 2025. Floating rate investments comprised 53.8% of our total fixed income investments at December 31, 2025 compared to 0.0% at December 31, 2024. The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the years ended December 31, 2025 and 2024: For the Year Ended December 31, ($ in thousands) 2025 2024 Average aggregate fixed income assets, at cost (1) $ 140,772  $ 4,920  Annualized investment book yield 5.6  % 4.3  % (1)Fixed income assets include available-for-sale ("AFS") securities, cash and restricted cash, funds withheld receivable, and net loan receivable from related party. These amounts are an average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. Net Realized and Unrealized Investment Gains Net realized and unrealized investment gains of $7.0 million were recognized for the year ended December 31, 2025. Net unrealized gains for the year ended December 31, 2025 reflect fair value adjustments from Maiden's legacy alternative investments portfolio acquired under the Combination. 53 Net realized and unrealized investment gains for the year ended December 31, 2025 are summarized in the table below by investment category: For the Year Ended December 31, 2025 ($ in thousands) Net realized gains: Fixed maturity securities $ 9  Total net realized gains 9  Net unrealized gains: Other investments 6,345  Equity securities 603  Total net unrealized gains 6,948  Net realized and unrealized investment gains $ 6,957  Please refer to the Investment Results section in Liquidity and Capital Resources for further information on the net realized and unrealized investment gains on the Company's fixed maturity securities and the alternative investment portfolio. Net Loss and LAE Net loss and LAE incurred for the year ended December 31, 2025 were $9.0 million. Net incurred losses were impacted by net adverse PPD of $0.1 million for the year ended December 31, 2025. Excluding the impact of PPD, current year losses were $8.8 million for the year ended December 31, 2025. Net incurred losses included $1.0 million of charges associated with the commutation of a reinsurance contract in the IIS business were included in Legacy Reinsurance underwriting results for the year ended December 31, 2025. The cessation of active reinsurance underwriting on prospective risks included the termination of the AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019. The net prior year loss development is discussed in greater detail in the Legacy Reinsurance segment discussion and analysis and is entirely associated with the run-off of terminated reinsurance contracts in the Legacy Reinsurance operations. Commission and Other Acquisition Expenses Commission and other acquisition expenses incurred for the year ended December 31, 2025 were $3.1 million. Please see the Legacy Reinsurance segment analysis below for further information. General and Administrative Expenses General and administrative expenses include both segment and corporate expenses segregated for analytical purposes as a component of underwriting income. Total general and administrative expenses incurred for the year ended December 31, 2025 increased by $24.0 million, compared to 2024 primarily due to the inclusion of Maiden's general and administrative operating expenses subsequent to May 27, 2025. General and administrative expenses for the years ended December 31, 2025 and 2024 were comprised of: For the Year Ended December 31, ($ in thousands) 2025 2024 General and administrative expenses – segments $ 14,107  $ 2,554  General and administrative expenses – corporate 14,955  2,554  Total general and administrative expenses $ 29,062  $ 5,108  Segment expenses included legal and professional fees of $2.6 million related to GLS arbitration proceedings as discussed in Note 11. Commitments, Contingencies and Guarantees of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information". In addition, $3.1 million of severance and termination costs. Excluding non-recurring segment expenses, our adjusted segment general and administrative expenses for the year ended December 31, 2025 were $8.4 million. Corporate expenses for the year ended December 31, 2025 included $2.7 million for certain non-recurring expenses relating to corporate insurance, corporate legal matters and Combination-related costs. Excluding non-recurring expenses, our adjusted corporate expenses in the year ended December 31, 2025 increased by $9.7 million compared to 2024. Corporate expenses also included vesting of certain stock-based awards of $0.9 million for the year ended December 31, 2025 compared to $0.1 million incurred in 2024. As noted above, our corporate and segment expenses significantly increased primarily due to the Combination with Maiden during the year ended December 31, 2025. 54 Interest and Amortization Expenses Total interest and amortization expenses incurred for the year ended December 31, 2025 were $9.9 million which included: •Interest expense of $11.3 million on the outstanding senior notes issued by Maiden in 2016 and Maiden Holdings North America, Ltd. ("Maiden NA") in 2013 ("Senior Notes") in the year ended December 31, 2025 that were acquired upon completion of the merger; and •Amortization expense of $0.7 million for the fair value adjustment on the Senior Notes in the year ended December 31, 2025. The difference between the principal amount of the acquired Senior Notes and their fair market value at closing of the Combination is being amortized over those securities' remaining life; partially offset by: •Amortization of the fair value adjustment of $2.2 million for the net loan receivable from related party in the year ended December 31, 2025. Please refer to Part II, Item 8. Notes to Consolidated Financial Statements: Note 7. Long-Term Debt for further details on the Senior Notes. The weighted average effective interest rate for the Senior Notes was 11.7% for the year ended December 31, 2025. Gain on Bargain Purchase As discussed in Part II, Item 8. Notes to Consolidated Financial Statements: Note 17. Business Combination included in this Form 10-K, the gain on bargain purchase of $68.3 million is the differential between the fair value of net assets of Maiden acquired on May 27, 2025 as a result of the Combination and the equity consideration effectively transferred to Maiden shareholders on that date. The fair value of net acquired assets of Maiden had a decrease of $5.3 million from the provisional fair value on May 27, 2025 due to updated information for certain underlying investment assets in the fourth quarter of 2025 and was recorded against the estimated gain on bargain purchase recognized for the year ended December 31, 2025. Change in Earn out Liability Pursuant to terms of the Combination, former Kestrel shareholders are eligible to earn additional contingent consideration up to the lesser of (x) 2.75 million common shares of Kestrel Group and (y) $45.0 million payable in common shares of Kestrel Group, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to the closing and any extensions of such businesses or related or ancillary businesses existing thereafter subsequent to completion of the transaction through May 31, 2028 ("Performance Period"). During the year ended December 31, 2025, there was no earn out liability recognized by the Company based upon current estimates of Kestrel business for the Performance Period, including the performance of the Program Services business through December 31, 2025. Foreign Exchange and Other Gains (Losses) Foreign currency fluctuations are primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets in our Legacy Reinsurance segment. Net foreign exchange and other losses of $1.7 million were realized for the year ended December 31, 2025, compared to $0.0 million in 2024. This included a revaluation gain of $0.9 million on a contingent receivable held in relation to an equity investment in the insurance distribution industry that was sold prior to the Combination. Under ASC 805, the earn out consideration for this contingent receivable is adjusted to fair value at each reporting period with any changes in fair value reported immediately in net income through foreign exchange and other gains and losses. Foreign exchange losses of $2.6 million for the year ended December 31, 2025 were attributable to weakening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro. Our non-USD denominated liabilities at December 31, 2025 included net loss reserves of $286.4 million. Our foreign currency asset exposures at December 31, 2025 included $97.9 million of fixed maturity euro denominated bonds managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $33.5 million of real estate investments denominated in Canadian dollars, as well as $11.0 million of funds withheld receivable denominated in euro. Income Tax Expense The Company recognized an income tax expense of $0.1 million for the year ended December 31, 2025 compared to an income tax expense of $30.0 thousand recognized for 2024. The income tax expense for 2025 and 2024 was largely generated on the operating results of our international subsidiaries from continuing operations. The effective rate of income tax was 0.1% for the year ended December 31, 2025 compared to an income tax rate of (2.4)% for the year ended December 31, 2024. The effective tax rate on the Company's net income (loss) differs from the statutory rate of zero percent under Bermuda law due to tax on foreign operations, primarily the U.S. and Sweden. 55 Underwriting Results by Reportable Segment Program Services Segment The segment results for Program Services for the year ended December 31, 2025 were as follows: For the Year Ended December 31, ($ in thousands) 2025 2024 Premium produced(1) $ 188,345  $ 103,841  Fee revenue $ 6,076  $ 3,634  General and administrative expenses (3,246) (2,554) Fee income $ 2,830  $ 1,080  (1) Premium produced by client programs is an operating metric determined by management as a byproduct of the program services fees it earns and is paid by clients; please see Key Financial & Operating Measures for further explanation. Program Services segment results for the year ended December 31, 2025 increased by $1.8 million or 162.0%, compared to 2024 due to increased premium volume produced by new and existing client programs. Program services revenue is presently highly concentrated because of capacity distribution agreements with two Program Services clients representing 72.1% and 21.2% of total fee revenue earned in 2025, respectively (93.3% and 0.0% of fee revenue in 2024, respectively). The first Program Services client is a large, diversified capacity provider and our relationship with this client presently includes more than ten separate sub-programs (nine of which produced revenue in 2025). No individual sub-program is greater than 35% of total earned fee revenue for 2025. Legacy Reinsurance Segment The following table details the underwriting results for the two components of our Legacy Reinsurance segment which is comprised of Diversified Reinsurance Legacy Business and the AmTrust Reinsurance Legacy Business. The underwriting results for our Legacy Reinsurance segment for the year ended December 31, 2025 were as follows: For the Year Ended December 31, 2025 ($ in thousands) Gross premiums written $ 6,091  Net premiums written $ 6,209  Net premiums earned $ 12,673  Net loss and LAE (8,992) Commission and other acquisition expenses (3,131) General and administrative expenses (10,861) Underwriting loss $ (10,311) The underwriting loss above includes a series of non-recurring charges and other significant expenses as follows: •Legal and professional fees of $2.6 million for GLS arbitration proceedings as discussed in Note 11. Commitments, Contingencies and Guarantees of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information"; •Severance and terminated costs associated with headcount reductions totaling $3.1 million; •Net charges of $0.5 million associated with the commutation of a reinsurance contract in our IIS business, including amounts related to reconciliation of the underlying data relating to that contract; and •Amortization expense of $1.9 million related to the fair value adjustment on the discount on acquired net loss reserves due to the reverse acquisition accounting for the Combination. These costs are recurring and will be amortized based on the claims settlement period and timing of reinsurance recovery payments in the future. Excluding non-recurring charges and expenses of $6.2 million, the adjusted underwriting loss was $4.1 million for the year ended December 31, 2025. This was principally the result of an underwriting loss of $3.5 million from AmTrust Reinsurance Legacy Business. 56 Diversified Reinsurance Legacy Business: The underwriting results for Diversified Reinsurance legacy business for the year ended December 31, 2025 were as follows: For the Year Ended December 31, 2025 ($ in thousands) Gross premiums written $ 7,326  Net premiums written $ 7,444  Net premiums earned $ 7,765  Net loss and LAE (3,844) Commission and other acquisition expenses (3,015) General and administrative expenses (7,716) Underwriting loss $ (6,810) Underwriting loss by Diversified Reinsurance Legacy business unit during the year ended December 31, 2025 is detailed in the table below: For the Year Ended December 31, 2025 ($ in thousands) International $ (2,918) GLS (3,733) Other run-off lines (159) Underwriting loss $ (6,810) The underwriting loss above includes a series of non-recurring charges and other significant expenses as follows: •Legal and professional fees of $2.6 million for GLS arbitration proceedings as discussed in Note 11. Commitments, Contingencies and Guarantees of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information"; •Severance and terminated costs associated with headcount reductions totaling $3.1 million; •Net charges of $0.5 million associated with the commutation of a reinsurance contract in our IIS business, including amounts related to reconciliation of the underlying data relating to that contract; and •Amortization expense of $0.3 million related to the fair value adjustment on the discount on acquired net loss reserves due to the reverse acquisition accounting for the Combination. These costs are recurring and will be amortized based on the claims settlement period and timing of reinsurance recovery payments in the future. Excluding non-recurring charges and expenses of $6.2 million, the adjusted underwriting loss was $0.6 million for the year ended December 31, 2025, which reflects the ongoing run-off of the Company’s international operations. Premiums — As discussed in the "Overview" section, Maiden LF and Maiden GF are not writing any new business due to the AmTrust Renewal Rights Agreements which cover certain programs of Maiden LF and Maiden GF's primary business written in Sweden, Norway, other Nordic countries, the United Kingdom and Ireland. Maiden LF and Maiden GF are presently the principal operating subsidiaries of the Company’s IIS platform; therefore we will continue to experience limited premium written going forward regarding Diversified Reinsurance Legacy Business. Please refer to Note 16. Assets Held for Sale of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information" for more details. Net Loss and LAE — Net loss and LAE of $3.8 million were incurred in the year ended December 31, 2025 primarily due to business written in our IIS platform. The net incurred losses were impacted by net adverse PPD of $0.8 million for the year ended December 31, 2025 primarily due to $1.0 million of losses incurred associated with the commutation of a reinsurance contract in the IIS business including amounts related to reconciliation of the underlying data relating to that contract. Commission and Other Acquisition Expenses — Commission and other acquisition expenses of $3.0 million were incurred in the year ended December 31, 2025. This is driven by lower premiums written and earned by Maiden LF and GF as they are not writing any new business as discussed in Note 16. Assets Held for Sale of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information". General and Administrative Expenses — General and administrative expenses of $7.7 million were incurred in the year ended December 31, 2025. Non-recurring expenses included legal and professional fees of $2.6 million related to the GLS arbitration proceedings as discussed in Note 11. Commitments, Contingencies and Guarantees of the Notes to Consolidated Financial Statements under Part II Item 8. "Financial Statements and Supplementary Information". It also included severance costs of $3.1 million associated with certain headcount reductions and $0.3 million of amortization on the fair value adjustment of the discount on acquired net reserves for losses and LAE due to reverse acquisition accounting for the Combination in 2025. 57 AmTrust Reinsurance Legacy Business: The underwriting results for AmTrust Reinsurance Legacy Business for the year ended December 31, 2025 were as follows: For the Year Ended December 31, 2025 ($ in thousands) Gross premiums written $ (1,235) Net premiums written $ (1,235) Net premiums earned $ 4,908  Net loss and LAE (5,148) Commission and other acquisition expenses (116) General and administrative expenses (3,145) Underwriting loss $ (3,501) The underwriting results for the year ended December 31, 2025 reflect an underwriting loss of $4.2 million for the current accident year, emanating from the ongoing unprofitable run-off of certain multiple year policies. These current year results exclude $0.7 million in favorable PPD. The current accident year underwriting loss includes $1.7 million of amortization on the fair value adjustment of the discount on acquired net reserves for losses and LAE due to reverse acquisition accounting for the Combination. These costs are recurring and will be amortized over the remaining settlement period of underlying claims and timing of reinsurance recovery payments. Premiums - The negative written premiums for the year ended December 31, 2025 reflect adjustments primarily for Specialty Risk and Extended Warranty business in the AmTrust Quota Share. There was no premium activity in the European Hospital Liability Quota Share in 2025. The termination of the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019 has resulted in no new business written under these reinsurance agreements since 2018. The table below provides detail by line of business on net premiums earned for AmTrust Reinsurance Legacy Business in the year ended December 31, 2025: For the Year Ended December 31, 2025 Net Premiums Earned ($ in thousands) Small Commercial Business $ (80) Specialty Program (1) Specialty Risk and Extended Warranty 4,989  Total AmTrust Reinsurance Legacy Business $ 4,908  Net Loss and LAE — Net loss and LAE of $5.1 million were incurred for the year ended December 31, 2025. Net incurred losses for the year ended December 31, 2025 were impacted by net favorable PPD of $0.7 million. Excluding the impact of favorable PPD, current year losses were $5.8 million for the year ended December 31, 2025 incurred in the AmTrust Quota Share. The table below shows total PPD for the AmTrust Reinsurance Legacy Business for the year ended December 31, 2025: For the Year Ended December 31, 2025 Prior Year Loss Development adverse (favorable) ($ in thousands) AmTrust Quota Share $ (760) LPT/ADC Agreement and other runoff (4,304) European Hospital Liability Quota Share 4,412  Total AmTrust Prior Year Development $ (652) Net incurred losses for the year ended December 31, 2025 included favorable PPD of $0.7 million. Net favorable PPD was largely due to an increase of $4.3 million in loss recoveries anticipated under the LPT/ADC Agreement, and net favorable development $0.8 million experienced on Worker's Compensation and other lines in the AmTrust Quota Share; partially offset by adverse PPD of $4.4 million from European Hospital Liability business for claims adjustments on certain death claims. Commission and Other Acquisition Expenses — Commission and other acquisition expenses of $0.1 million were incurred in the year ended December 31, 2025. General and Administrative Expenses — General and administrative expenses of $3.1 million were incurred in the year ended December 31, 2025 and includes $1.7 million of amortization on the fair value adjustment of the discount on acquired net reserves for losses and LAE due to reverse acquisition accounting for the Combination. 58 Liquidity and Capital Resources Liquidity Kestrel Group is a holding company and transacts no business of its own. We therefore rely on cash flows in the form of dividends, advances, loans and other permitted distributions from our subsidiary companies to pay expenses and make dividend payments on our common shares. The jurisdictions in which our operating subsidiaries are licensed to write business impose regulations requiring companies to maintain or meet statutory solvency and liquidity requirements and also place restrictions on the declaration and payment of dividends and other distributions. As a result of the Combination on May 27, 2025, the Company has acquired significant investable assets and additional sources of investment income from Maiden as discussed in Part II, Item 8. Notes to Consolidated Financial Statements "Note 4. Investments" and "Note 17. Business Combination" included in this Form 10-K. As of December 31, 2025, the Company had investable assets of $496.6 million compared to $4.3 million as of December 31, 2024. Investable assets include the combined total of our fixed maturity investments, alternative investments, cash and restricted cash (including cash equivalents), net loan receivable from a related party and funds withheld receivable. As discussed in "Item 1. Business", Maiden Reinsurance is regulated by the Vermont DFR. We are actively engaged with the Vermont DFR regarding Maiden Reinsurance's longer term business plan, including its investment policy, changes to which require prior regulatory approval as stipulated by Vermont law or the Vermont DFR for any active underwriting, capital management or other strategic initiatives, including our Combination with Kestrel. Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR, including GLS activities and its amended investment policy made in the year ended December 31, 2025. Maiden Reinsurance's Investment Policy, as approved and as amended by the Vermont DFR in the second quarter of 2025, maintains our established investment management and governance practices. The amended Investment Policy however includes significant modifications to this policy as follows: 1) Maiden Reinsurance will not purchase any additional affiliated securities, including common shares of the Company or senior notes issued by Maiden Holdings or Maiden NA; and 2) Maiden Reinsurance will make no new commitments for alternative assets, consistent with the practice it had already adopted ahead of this policy amendment. Maiden Reinsurance expects to fulfill its remaining commitments to existing investments, which total $24.8 million in unfunded commitments as of December 31, 2025. Under the conditions stipulated in the Vermont DFR approval for the Combination, Maiden Reinsurance (as the lender) is no longer permitted to include the corresponding related party loan receivable from Maiden Holdings (and related accrued interest) as an admitted asset for statutory capital and reporting purposes. As a result, Maiden Reinsurance's surplus as regards policyholders and ratio of risk-based capital to total adjusted capital was significantly reduced, which remains sufficient to not only support the dividends related to the Combination and recurring annual dividends (which require prior approval by the Vermont DFR) but our ability to selectively underwrite business in support of our Program Services segment in the future. At December 31, 2025, Maiden Reinsurance had statutory capital and surplus of $258.0 million, exceeding the amounts required to be maintained of $55.0 million at December 31, 2025. Under its license as an affiliated reinsurer under the captive licensing laws in the State of Vermont, Maiden Reinsurance requires the approval of the Vermont DFR for the payment of any dividends. In May 2025, the Vermont DFR approved: 1) an annual dividend program to be paid by Maiden Reinsurance to Maiden NA, which requires prior approval by the Vermont DFR prior to payment of dividends under the program; and 2) an extraordinary dividend of $40.0 million which formed the basis for the cash consideration received by the Company's shareholders pursuant to the terms of the Combination. In 2025, the Vermont DFR approved all dividend requests under the current dividend program. During the year ended December 31, 2025, Maiden Reinsurance paid dividends of $28.8 million to Maiden NA as part of the approved annual dividend program. During the year ended December 31, 2025, Maiden NA did not pay any dividends to Maiden Holdings. On February 25, 2026, the Vermont DFR approved a dividend request for $7.5 million paid by Maiden Reinsurance to Maiden NA on February 27, 2026. Maiden Holdings has two Swedish domiciled operating subsidiaries, Maiden LF and Maiden GF, which are both subject to regulation and supervision by the Swedish Finansinspektionen ("Swedish FSA"). As discussed in "Item 1. Business", we have entered into an agreement to sell Maiden LF and Maiden GF, which is pending regulatory approval. At December 31, 2025, Maiden LF and Maiden GF had statutory capital and surplus of $7.1 million and $6.2 million, respectively, exceeding the amounts required to be maintained of $4.7 million and $3.2 million, respectively, at December 31, 2025. Maiden LF and Maiden GF are subject to statutory and regulatory restrictions under the Swedish FSA that limit the maximum amount of annual dividends or distributions paid by Maiden LF and Maiden GF to Maiden Holdings. At December 31, 2025, Maiden LF and Maiden GF are not allowed to pay dividends or distributions without the permission of the Swedish FSA. During the year ended December 31, 2025, Maiden LF and Maiden GF did not pay any dividends to Maiden Holdings. Maiden Holdings’ wholly owned U.K. subsidiary, Maiden Global Holdings, Ltd. ("Maiden Global"), is a reinsurance services and holding company. Maiden Global is subject to regulation by the U.K. FCA. At December 31, 2025, Maiden Global is allowed to pay dividends or distributions not exceeding $1.2 million. Maiden Global paid dividends of $1.6 million to Maiden Holdings during the year ended December 31, 2025. We may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce unrestricted liquidity. Further, we and our insurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our unrestricted liquidity. 59 Operating, investing and financing cash flows Our sources of funds may consist of fee revenue, premium receipts net of commissions and brokerage, investment income, net proceeds from capital raising activities, and proceeds from sales, maturities, pay downs and redemption of investments. Cash is used primarily to pay loss and LAE, ceded reinsurance premium, general and administrative expenses, and interest expense, with the remainder of cash in excess of our operating requirements made available to our investment managers for investment in accordance with our investment policy, as well as for potential capital management such as repurchasing our shares. During the year ended December 31, 2025, we experienced negative operating cash flows as we continue to run off the AmTrust Reinsurance Legacy Business reserves as shown in the cash flows table further below. We currently expect a trend of positive investing cash flows into 2026, and we will use funds from cash and investment portfolios, fee revenue, premiums, investment income and proceeds from investment sales and redemptions to meet our expected claims payments and operational expenses. Claim payments are principally from the run-off of existing reserves for losses and LAE. A significant portion of those liabilities are collateralized and claim payments will be funded by using this collateral which should provide sufficient funding to fulfill those obligations. The Company’s management believes our current sources of liquidity are adequate to meet its cash requirements for the next twelve months as we generally expect negative operating cash flows to be sufficiently offset by positive investing cash flows. The cash consideration and related significant professional expenses associated with completing the Combination, however utilized substantial amounts of Maiden's current unrestricted liquidity. While we continue to expect our cash flows to be sufficient to meet our cash requirements to operate our business, as our reinsurance liabilities continue to run-off, our balance sheet increasingly consists of more illiquid investments which we are seeking to dispose of in exchange for more liquid assets. Our inability to monetize these illiquid assets on a timely basis while fulfilling our ongoing obligations may restrain our liquidity further and we may need to consider alternative measures to ensure we continue to fulfill those obligations. Further, while we are no longer making new alternative asset commitments, Maiden's historical asset management strategy which was part of the Combination can be impacted by both investment specific and broader financial market conditions and may not produce the expected liquidity and cash flows these investments are designed to achieve, or the timing thereof may also be impacted by those factors. At December 31, 2025, unrestricted cash, cash equivalents and fixed maturity investments were $16.3 million compared to $4.3 million held at December 31, 2024, an increase of $12.0 million during the year ended December 31, 2025. This was a result of the Combination on May 27, 2025, in which the Company acquired significant investable assets owned by Maiden. Please see the related discussion on cash flows from investing and financing activities below. The table below summarizes our operating, investing and financing cash flows for the years ended December 31, 2025 and 2024: For the Year Ended December 31, 2025 2024 ($ in thousands) Operating activities $ (96,141) $ (1,267) Investing activities 146,945  —  Financing activities (40,000) —  Effect of exchange rate changes on foreign currency cash 392  —  Total increase (decrease) in cash, restricted cash, and cash equivalents $ 11,196  $ (1,267) Cash Flows from Operating Activities Cash flows used in operating activities for the year ended December 31, 2025 were $96.1 million compared to cash flows used in operating activities of $1.3 million for the year ended December 31, 2024. The increase in cash used in operating cash flows was due to claim payments for ongoing runoff of reinsurance liabilities related to the acquired Maiden legacy reserves on May 27, 2025. Cash Flows from Investing Activities Cash flows provided by investing activities consist of proceeds from sales and maturities of investments net of payments for investments acquired. Cash provided by investing activities was $146.9 million for the year ended December 31, 2025 compared to net cash used in investing activities of $0.0 million for 2024. Cash flows provided by investing activities for the year ended December 31, 2025 was primarily due to $79.8 million of cash acquired from the purchase of the Maiden business under the Combination which closed on May 27, 2025. For the year ended December 31, 2025, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $52.4 million. The size of the fixed income investment portfolio continues to diminish as claims payments are made in the runoff of existing loss reserves for the terminated AmTrust Quota Share and the European Hospital Liability Quota Share reinsurance agreements in our Legacy Reinsurance segment. Cash flows from investing activities for year ended December 31, 2025 included purchases of alternative investments which exceeded proceeds from the sales and redemptions. The net purchases of $7.7 million for alternative investments during the year ended December 31, 2025 were primarily due to pre-existing commitments for private equity fund investments in our alternative investment portfolio that was acquired in the Combination with Maiden on May 27, 2025. 60 Cash Flows from Financing Activities Cash flows used in financing activities were $40.0 million for the year ended December 31, 2025 compared to $0.0 million during 2024, the result of cash dividends paid to Kestrel equity holders pursuant to the terms of the Combination which was completed on May 27, 2025. No other dividends on common shares were paid for the years ended December 31, 2025 and 2024. Restrictions, Collateral and Specific Requirements As previously noted, as a result of the completion of the Combination with Maiden on May 27, 2025, the Company has acquired significant investable assets and additional sources of investment income in addition to considerable loss reserves and unearned premiums under legacy reinsurance contracts as discussed in Part II, Item 8. Notes to Consolidated Financial Statements Note 4. Investments, Note 9. Reserve for Loss and Loss Adjustment Expenses and Note 17. Business Combination included in this Form 10-K. Pursuant to the terms of the underlying reinsurance contracts associated with these liabilities, Maiden Reinsurance is required in certain instances to provide collateral in various forms as security against performance to satisfy those obligations. Those collateral obligations remained with Maiden Reinsurance after completion of the Combination. Maiden Reinsurance is generally required to post collateral security with respect to any reinsurance liabilities it assumes from ceding insurers domiciled in the U.S. to obtain credit on their U.S. statutory financial statements with respect to reinsurance recoverables due to them. Consequently, cash and cash equivalents and investments are pledged in favor of ceding companies to comply with relevant insurance regulations or contractual requirements. At December 31, 2025, the Company had letters of credit outstanding of $37.1 million for collateral purposes which are secured by cash and fixed maturity investments with a fair value of $41.8 million. At December 31, 2025 and 2024, restricted cash and cash equivalents and fixed maturity investments used as collateral were $163.9 million and $0.0 million, respectively. This collateral represents 91.0% and 0.0% of the fair value of total fixed maturity investments and cash, restricted cash and cash equivalents at December 31, 2025 and 2024, respectively. The following table provides additional information on restricted cash and fixed maturities used as collateral at December 31, 2025: December 31, 2025 ($ in thousands) Restricted Cash & Equivalents Fixed Maturities Total Diversified Reinsurance $ 7,670 $ 52,350 $ 60,020 AmTrust Reinsurance 1,379 102,368 103,747 Other 97 — 97 Total $ 9,146 $ 154,718 $ 163,864 As a % of Consolidated Balance Sheet captions 100.0% 94.8% 95.1% On January 1, 2025, Maiden Reinsurance and AmTrust amended the terms of the loan agreement provided by Maiden Reinsurance to AmTrust International Insurance, Ltd. (“AII”). Under the new terms, an Amended and Restated Loan Agreement was entered into effective January 1, 2025 (“AR Loan Agreement”), by which the principal amount of the collateral loan will be repaid (subject to satisfying stipulated collateral funding requirements) on or before the extended maturity date of January 1, 2033 pursuant to the repayment schedule set forth in the AR Loan Agreement. The principal amount equals (a) $152.4 million minus (b) the amount of payments and any prepayments made by or on behalf of AmTrust from time to time. Interest is payable at a rate equivalent to the Fed Funds rate plus 150 basis points per annum under the terms of the AR Loan Agreement. Maiden Reinsurance and AmTrust also entered into a new Loan Agreement (“Premium Repayment Loan Agreement”), dated December 31, 2024, by which Maiden Reinsurance will repay AII the principal amount of $24.3 million representing settlement of a dispute over cessions of uncollectible ceded premiums made by AII to Maiden Reinsurance, payable by Maiden Reinsurance in quarterly installments through the maturity date of December 31, 2032. This settlement is netted against the loan receivable from related party on the Consolidated Balance Sheets at December 31, 2025. AmTrust may offset any amount payable against any amount due and unpaid by Maiden Reinsurance, under any agreement between AmTrust or its affiliate and Maiden Reinsurance or its affiliate, including without limitation, the European Hospital Liability Quota Share, dated April 1, 2011, as amended. Interest is payable at a rate equivalent to the Fed Funds rate plus 150 basis points per annum under the terms of the Premium Repayment Loan Agreement. At December 31, 2025, Maiden Reinsurance's net loan receivable of $86.9 million due from AmTrust is net of the premium repayment loan which satisfies its collateral requirements with AII. Please refer to Note 10. Related Party Transactions included under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for details. Collateral arrangements with ceding insurers may subject our assets to security interests or require that a portion of our assets be pledged to, or otherwise held by, third parties. Although the investment income derived from these assets, while held in trust, accrues to our benefit, the investment of these assets is governed by the terms of the letter of credit facilities or the investment regulations of the state or territory of domicile of the ceding insurer, which may be more restrictive than the investment regulations applicable to the Company under U.S. law in the State of Vermont. The restrictions may result in lower investment yields on these assets, which may adversely affect our profitability. 61 We do not anticipate that restrictions on liquidity resulting from restrictions on the payments of dividends by our subsidiary companies or from assets committed in trust accounts or those assets used to collateralize letter of credit facilities will have a material impact on our ability to carry out our normal business activities. Cash and Investments As a result of the completion of the Combination on May 27, 2025, the Company has acquired significant investable assets and additional sources of investment income as discussed in Part II, Item 8. Notes to Consolidated Financial Statements "Note 4. Investments" and Note 17. Business Combination included in this Form 10-K. As a result, the substantial majority of our current investments are held by Maiden Reinsurance, whose amended investment policy was approved by the Vermont DFR, as noted. As of December 31, 2025, Maiden Reinsurance also owned 22.4% of our total outstanding common shares which is eliminated for accounting and financial reporting purposes on our consolidated financial statements. Treasury shares include 2,237,534 common shares owned by Maiden Reinsurance which are not treated as outstanding common shares on the Consolidated Balance Sheet at December 31, 2025. The market value of our common shares held by Maiden Reinsurance was $22.9 million at December 31, 2025. The voting power of Maiden Reinsurance, with respect to its common shares, was previously capped at 9.5% pursuant to the Maiden's bye-laws; however Maiden's shareholders approved the proposal to remove the 9.5% voting limitation on all shareholders at its Special Meeting on April 29, 2025. Accordingly, our fixed income investment portfolio is invested in liquid, investment-grade fixed maturity securities which are all designated as AFS at December 31, 2025. Further, prior to the Combination, Maiden Reinsurance’s investment policy had expanded to include a wide range of asset classes to enhance the income and total returns its investment portfolio produces, which had been approved by the Vermont DFR. We categorize these investments as alternative investments which include "Other Investments", "Equity Securities", and "Equity Method Investments" on our Consolidated Balance Sheets as discussed in "Note 2. Significant Accounting Policies" included under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. As of December 31, 2025 and 2024, our cash and investments consisted of the following captions: At December 31, 2025 2024 ($ in thousands) Fixed maturities, available-for-sale, at fair value $ 163,167  $ —  Equity investments, at fair value 11,748  —  Equity method investments 33,532  —  Other investments 173,358  —  Total investments 381,805  —  Cash and cash equivalents 7,801  4,286  Restricted cash and cash equivalents 9,146  —  Total Investments and Cash (including cash equivalents) $ 398,752  $ 4,286  In addition to the discussion on Cash and Cash Equivalents and Fixed Maturities that follows herein, please see "Notes to Consolidated Financial Statements - Note 4. Investments" included under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for further discussion on our AFS fixed income securities. The net purchases of other investments for the year ended December 31, 2025 were due to transactions executed after the completion of the Combination. Other than investment purchases due to pre-existing commitments for private equity funds, we have not made and do not expect to make new commitments to alternative investments in the foreseeable future. For existing investment commitments, please see the Notes to Consolidated Financial Statements Note 11. Commitments, Contingencies and Guarantees under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Under Maiden's approved investment policy, alternative investments could include, but are not limited to, privately held investments, private equities, private credit lending funds, fixed-income funds, equity funds, real estate (including joint ventures and limited partnerships) and other non-fixed-income investments. For further details on our alternative investments, in addition to the discussion of the investments herein, please see "Notes to Consolidated Financial Statements Note 4(b). Other Investments, Equity Securities and Equity Method Investments" included under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Our investment performance is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, foreign exchange risk, liquidity risk and credit and default risk. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. An increase in interest rates could result in significant losses, realized or unrealized, in the value of our investment portfolio. A portion of our portfolio consists of alternative investments that subject us to restrictions on redemption, which may limit our ability to withdraw funds for some period of time after the initial investment. The values of, and returns on, such investments may also be more volatile. 62 We believe the legacy Maiden alternative investment portfolio assumed in the Combination provides diversification against our fixed-income investments and an opportunity for improved risk-adjusted return. However, we believe this portfolio is not suitable for our plans to expand our Program Services segment and in addition to the changes in our investment policy as described above, we are actively seeking to dispose of these assets to further improve our liquidity position and strengthen our ability to grow. Further, the returns of these alternative investments may be more volatile and we may experience significant unrealized gains or losses in any particular quarter or year. While we believe the ultimate returns produced by these investments will exceed our cost of capital, in particular our cost of debt capital, it is too soon to determine if the actual returns will achieve this objective and it may be an extended period of time before that determination can be made. We may utilize and pay fees to various companies to provide investment advisory and/or management services related to these investments. These fees, which would be predominantly based upon the amount of assets under management, are included in net investment income. In addition, costs associated with evaluating, analyzing and monitoring these investments may require additional expenditures than traditional marketable securities. Cash & Cash Equivalents At December 31, 2025, we consider the levels of cash and cash equivalents held to be within our targeted ranges. As noted previously, the cash consideration and related significant professional expenses associated with completing the Combination, however utilized substantial amounts of Maiden's current unrestricted liquidity. In addition, during periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods. Fixed Maturity Investments The average yield and average duration of our fixed maturity investments, by asset class, and our cash and cash equivalents (both restricted and unrestricted) are as follows at December 31, 2025 and 2024, respectively : December 31, 2025 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield(1) Average duration(2) ($ in thousands) U.S. treasury bonds $ 43,662  $ 11  $ —  $ 43,673  3.9  % 0.1  U.S. agency bonds – mortgage-backed 20,823  795  —  21,618  4.7  % 6.1  Non-U.S. government bonds 27,417  —  (142) 27,275  1.4  % 0.9  Collateralized loan obligations 62,593  52  (21) 62,624  3.1  % 0.3  Corporate bonds 7,977  2  (2) 7,977  0.7  % 1.6  Total fixed maturity investments 162,472  860  (165) 163,167  3.0  % 1.1  Cash and cash equivalents 16,947  —  —  16,947  —  % 0.0  Total $ 179,419  $ 860  $ (165) $ 180,114  2.7  % 1.0  December 31, 2024 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield(1) Average duration(2) ($ in thousands) Cash and cash equivalents $ 4,286  $ —  $ —  $ 4,286  4.3  % 0.0  Total $ 4,286  $ —  $ —  $ 4,286  4.3  % 0.0  (1)    Average yield is calculated by dividing annualized investment income for each sub-component of fixed maturity securities and cash and cash equivalents (including amortization of premium or discount) by amortized cost. (2)    Average duration in years. During the year ended December 31, 2025, the yield on the 10-year U.S. Treasury bond decreased by 40 basis points to 4.18%. The 10-year U.S. Treasury rate is the key risk-free determinant in the fair value of many of the fixed income securities in our portfolio. The decrease in risk-free rates for the year ended December 31, 2025 generated net unrealized gains of $0.7 million on our AFS fixed maturity investment portfolio which increased our book value per common share by $0.09 during the year. Current outlooks for global monetary policy have become more uncertain in recent months, as a combination of significant changes in U.S. fiscal and trade policy while simultaneously, labor market conditions are noticeably weakening. The impacts of these policies and conditions on both U.S. and global economic outlooks and inflation appear to be causing central banks to adopt a generally less restrictive monetary policy stance primarily through interest rate cuts. However, a range of conflicting economic indicators is also resulting in some uncertainty that this policy stance will be verified. Should interest rates continue to fall, the impact on our investment portfolios, in particular our fixed maturity assets, is to produce less income and thus weaken our financial condition. Associated increases in the values of our fixed maturity investments may be more limited given the significant share of fixed maturity investments that we hold that are floating rate securities. 63 Interest rate risk is the price sensitivity of a security to changes in interest rates. Credit spread risk is the price sensitivity of a security to changes in credit spreads. As noted, the fair value of our fixed maturity investments will fluctuate with changes in interest rates and credit spreads. We attempt to maintain adequate liquidity in our fixed maturity investments portfolio with a strategy designed to emphasize the preservation of our invested assets and provide sufficient liquidity for the prompt payment of claims and contract liabilities. Because we collateralize a significant portion of our insurance liabilities, unanticipated or large increases in interest rates could require us to utilize significant amounts of unrestricted cash and fixed maturity securities to provide additional collateral, which could impact our asset and capital management strategy described herein. We also monitor the duration and structure of our investment portfolio as discussed below. As of December 31, 2025, the aggregate hypothetical change in fair value from an immediate 100 basis points increase in interest rates, assuming credit spreads remain constant, in our fixed maturity investments portfolio would decrease the fair value of that portfolio by $3.0 million. Actual shifts in interest rates may not change by the same magnitude across the maturity spectrum or on an individual security and, as a result, the impact on the fair value of our fixed maturity securities may be materially different from the resulting change in value described above. To limit our exposure to unexpected interest rate increases which would reduce the value of our fixed income securities and reduce our shareholders' equity, we attempt to maintain the duration of our fixed maturity investment portfolio combined with our cash and cash equivalents, both restricted and unrestricted, within a reasonable range of the duration of our loss reserves. At December 31, 2025, these respective durations in years were as follows: December 31, 2025 Fixed maturity investment portfolio and cash and cash equivalents 1.0 Fixed maturity investment portfolio (excluding cash) 1.1  Reserve for loss and LAE - gross of LPT/ADC Agreement reserves 6.2 Reserve for loss and LAE - net of LPT/ADC Agreement reserves 2.7 During the year ended December 31, 2025, the weighted average duration of our fixed maturity investment portfolio was 1.1 years while the duration for reserve for loss and LAE was 6.2 years. The differential in duration between these assets and liabilities may fluctuate over time and, in the case of our fixed maturities, historically has been affected by factors such as market conditions, changes in asset mix and prepayment speeds in the case of both Agency MBS and commercial mortgage-backed securities held. At December 31, 2025, the duration of loss reserves net of the LPT/ADC Agreement was higher than the duration of our fixed maturity investment portfolio. To limit our exposure to unexpected interest rate increases that could reduce the value of our fixed maturity securities and reduce our shareholders' equity, the Company holds floating rate securities whose fair values are less sensitive to interest rates. At December 31, 2025, 53.8% of our fixed income investments were comprised of floating rate securities which are detailed in the table below: December 31, 2025 2024 ($ in thousands) Fair Value % of Total Fair Value % of Total Floating rate securities Collateralized loan obligations $ 62,624  22.5  % $ —  —  % Total floating rate AFS fixed maturities at fair value 62,624  22.5  % —  —  % Loan to related party(2) 86,883  31.3  % —  —  % Total floating rate securities $ 149,507  53.8  % $ —  —  % Total fixed income investments at fair value (1) $ 277,953  $ 4,286  (1) Total fixed income investments at fair value include AFS fixed maturities, cash and restricted cash, funds withheld receivable, and net loan receivable from related party. At December 31, 2025, 100.0% of the Company’s U.S. agency bond holdings are mortgage-backed. Total U.S. agency MBS comprise 13.2% of our fixed maturity investment portfolio at December 31, 2025. Given their relative size to our total investments, if faster prepayment patterns were to occur over an extended period of time, this could potentially limit the growth in our investment income in certain circumstances or reduce the total amount of investment income we earn. 64 The fair value of our U.S. Agency MBS holdings at December 31, 2025 were as follows: December 31, 2025 ($ in thousands) Fair Value % of Total FNMA – fixed rate $ 13,184  61.0  % FHLMC – fixed rate 5,951  27.5  % GNMA - variable rate 1,965  9.1  % FGLMC – fixed rate 518  2.4  % Total U.S. agency bonds $ 21,618  100.0  % At December 31, 2025, 100.0% of our fixed maturity investments consisted of investment grade securities. We define a security as being below investment grade if it has an S&P credit rating of BB+ or equivalent, or less. Please see "Part II, Item 8 - Notes to Consolidated Financial Statements Note 4. Investments" for additional information on the credit rating of our fixed income portfolio. Credit ratings in the table below are assigned by S&P, or an equivalent rating agency. The security holdings by sector and financial strength rating of our corporate bond holdings at December 31, 2025 were as follows: Ratings December 31, 2025 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds Corporate bonds ($ in thousands) Financial Institutions —  % 93.6  % 6.4  % —  % $ 7,977  100.0  % Total Corporate bonds —  % 93.6  % 6.4  % —  % $ 7,977  100.0  % Ratings(1) December 31, 2024 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds The table below includes the Company’s two remaining corporate holdings at fair value and as a percentage of all fixed income securities held as at December 31, 2025. The Company's corporate holdings are 100.0% euro denominated, with 100.0% in the Financial Institutions sector: December 31, 2025 Fair Value % of Total AFS Holdings Rating(1) ($ in thousands) Chubb Ina Holdings Inc., 1.55%, Due 3/15/2028 $ 7,466  4.6  % A American Tower Corp, 1.0%, Due 1/15/2032 511  0.3  % BBB+ Total $ 7,977  4.9  % (1)    Ratings as assigned by S&P, or equivalent At December 31, 2025, 100.0% of our non-U.S. dollar ("non-USD") denominated securities were invested in euro denominated bonds. The net increase in non-USD denominated fixed maturities reflects the acquisition of euro denominated corporate bonds in the Combination with Maiden for the year ended December 31, 2025. At December 31, 2025, the Company's non-U.S. government issuers have a rating of A or higher by Fitch Ratings and/or Moody's Rating. The Company does not employ any credit default protection against any of the fixed maturities held in non-USD denominated currencies at December 31, 2025. At December 31, 2025, we held the following non-USD denominated securities: December 31, 2025 ($ in thousands) Fair Value % of Total Non-USD denominated collateralized loan obligations $ 62,624  64.0  % Non-USD denominated corporate bonds 7,977  8.1  % Non-USD government bonds 27,275  27.9  % Total non-USD denominated securities $ 97,876  100.0  % 65 For our non-U.S. dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments by ratings at December 31, 2025: Ratings(1) at December 31, 2025 ($ in thousands) Fair Value % of Total A+, A, A- $ 7,466  93.6  % BBB+, BBB, BBB- 511  6.4  % Total non-U.S. dollar denominated corporate bonds $ 7,977  100.0  % (1)     Ratings as assigned by S&P, or equivalent Other Investments, Equity Investments and Equity Method Investments Our alternative investments are categorized as other investments, equity securities and equity method investments as reported on our consolidated balance sheets. These include private equity funds, private credit funds, investments in limited partnerships, as well as investments in direct lending entities and investments in technology-oriented insurance related businesses known as insurtechs. Private equity investments consist of direct investments in privately held entities, investments in private equity funds and private equity co-investments with sponsoring entities. Private credit investments consist of loans and other debt securities of privately held entities or investment sponsors. Our alternative investments as of December 31, 2025 consisted of the following asset categories: December 31, 2025 ($ in thousands) Carrying Value % of Total Privately held common stocks $ 4,838  2.2  % Privately held preferred stocks 6,910  3.2  % Total equity securities 11,748  5.4  % Real estate investments 33,532  15.3  % Total equity method investments 33,532  15.3  % Private equity funds 31,732  14.5  % Private credit funds 192  0.1  % Privately held equity investments 9,248  4.2  % Investment in direct lending entities 53,275  24.4  % Equity method investments with fair value option elected 78,911  36.1  % Total other investments 173,358  79.3  % Total alternative investments $ 218,638  100.0  % Our allocation to alternative investments increased to 54.8% of total cash and investments as of December 31, 2025 reflecting assets acquired in the Combination. In addition to the categories described above, we also evaluate our alternative investments by the following asset classes: December 31, 2025 ($ in thousands) Carrying Value % of Total Private Equity $ 16,514  7.5  % Private Credit 192  0.1  % Alternatives 83,044  38.0  % Venture Capital 27,940  12.8  % Real Estate 90,948  41.6  % Total alternative investments $ 218,638  100.0  % 66 For further details on these alternative investments, please see "Notes to Consolidated Financial Statements: Note 4(b) Other Investments, Equity Securities and Equity Method Investments" included under Part II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Within these asset classes, our portfolio broadly consists of the following types of investments: •Private Equity – this asset class consists of both fund investments with leading private equity sponsors and direct equity investments in private companies, sometimes in conjunction with our private equity fund sponsors. As of December 31, 2025, $4.3 million or 26.3% of investments in the private equity asset class consisted of investments in private equity funds and $12.2 million or 73.7% consisted of direct equity investments in private companies. •Private Credit - this asset class consists of both fund investments with leading private credit sponsors and direct credit investments in private companies, sometimes in conjunction with our private credit fund sponsors. Private credit investments in both funds and on a direct basis will typically be secured lending arrangements with non-rated entities, often with additional protective provisions to enhance the security and returns of these investments. As of December 31, 2025, the private credit asset class included $0.2 million or 100.0% in direct investments in debt securities of private companies. •Alternatives – this asset class consists of structured financing arrangements which typically have incentive features to enhance the Company’s returns. As part of these arrangements, the Company requires collateral or bankruptcy-remote structures to protect its investments. As of December 31, 2025, $81.2 million or 97.8% of investments in the alternatives asset class were direct investments and $1.9 million or 2.2% of the alternatives asset class were invested in funds. One investment in a collateralized direct lending entity of $53.3 million represents 64.2% of this asset class and is carried at fair market value and is discussed further in "Note 4. Investments" included in Part II Item 8. "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for the year ended December 31, 2025. Prior to the Combination, Maiden had carried the investment in a collateralized direct lending entity at cost less an allowance for expected credit losses. •Venture Capital – this asset class consists of both fund investments with venture capital firms focused primarily on “insurtech” or “fintech” early-stage investments as well as direct investments in start-up companies in this sector, including equity investments in individual companies made in conjunction with our venture capital fund sponsors. As of December 31, 2025, $15.0 million or 53.7% of investments in the venture capital asset class consisted of investments in funds and $12.9 million or 46.3% consisted of direct equity investments in start-up companies. As of December 31, 2025, $14.2 million or 50.7% of our venture capital investments were invested in funds or companies that would be considered “insurtech” investments. •Real Estate – this asset class consists of long-term equity investments in three real estate projects. Two are multi-family residential development projects near major urban centers where workforce housing demand continues to be strong. One investment is a minority stake as a limited partner with a leading property developer with a highly successful track record, where the Company will earn returns from both operating income from rentals and future sales of properties. As of December 31, 2025, the fair value of this project is $51.0 million and we expect investment returns to commence in earnest in 2026 and beyond. The second multi-family residential investment is a majority stake with general partner rights wherein the Company is providing the capital backing to an experienced and successful developer in the subject market, while also taking minority equity stakes in individual projects. To date, this development project has secured five properties in attractive locations and is currently in the zoning and planning stages. As of December 31, 2025, the Company has $33.5 million invested in this project and has commenced earning limited amounts of fee income from this project. As part of its investment, the Company has also provided certain loan guarantees which are discussed in more detail in Note 11. Commitments, Contingencies and Guarantees included in Part II Item 8. "Financial Statements and Supplementary Data". We expect fee and operating income and gains from future sales of properties to commence in earnest in 2027 and beyond. Finally, the Company has a minority equity stake in an iconic office building in a major city in the U.S., with an attractive and growing tenant roll. As of December 31, 2025, the Company has $6.4 million invested in this project and to date has earned preferred returns and received certain distributions. In addition to preferred returns, the Company expects to receive future distributions of operating income from this investment. As noted, certain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties. In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future. For further details on these financial guarantees, see Notes to Consolidated Financial Statements: Note 11. Commitments, Contingencies and Guarantees included under Part II Item 8 "Financial Statements and Supplementary Data of this Annual Report on Form 10-K. 67 Investment Results Our investment portfolio returns increased to $15.3 million included in earnings for 2025 compared to $0.2 million in 2024. The alternative investment portfolio produced a positive net return of 6.9% during 2025. This was largely due to the acquisition of Maiden's AFS fixed income and alternative investment portfolios in connection with the Combination. The Company earned unrealized gains on the alternative investment portfolio, as well as interest income on the net loan receivable from related party and the AFS fixed income portfolio. The following table summarizes our investment results for the years ended December 31, 2025 and 2024, respectively: For the Year Ended December 31, 2025 2024 Net investment income ($ in thousands) Fixed income investments(1) $ 7,437  $ —  Cash and restricted cash 470  213  Other investments, including equities 557  —  Investment expenses (121) —  Total net investment income 8,343  213  Net realized gains (losses): Fixed income assets(1) 9  —  Total net realized gains 9  —  Net unrealized gains: Other investments, including equities 6,948  —  Total net unrealized gains 6,948  —  Interest in income of equity method investments: Interest in income of equity method investments 24  —  Total interest in income of equity method investments 24  —  Total investment return included in earnings (A) $ 15,324  $ 213  Other comprehensive income: Unrealized gains on AFS fixed maturities and equity method investments excluding foreign exchange (B) $ 695  $ —  Total investment return = (A) + (B) $ 16,019  $ 213  Annualized income from fixed income assets(2) $ 7,907 $ 213 Average aggregate fixed income assets, at cost(2) 140,772 4,920 Annualized investment book yield 5.6  % 4.3  % Average aggregate invested assets, at fair value(3) $ 250,439 $ 4,920 Investment return included in net earnings 6.1  % 4.3  % Total investment return 6.4  % 4.3  % 1.Fixed income investments include AFS securities as well as funds withheld receivable, and net loan receivable from related party. Gross and net investment returns for these assets only include the post-Combination period of May 28, 2025 to December 31, 2025. 2.Fixed income assets include AFS portfolio, cash and restricted cash, funds withheld receivable, and net loan receivable from related party. 3.Average aggregate invested assets include all investments (AFS and alternative investments), cash and restricted cash, net loan to related party and funds withheld receivable and is computed as an average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. 4.Gross and net investment returns for other investments, including equities, only include the post-Combination period of May 28, 2025 to December 31, 2025. 68 The following table details total investment returns for our fixed income investments for the years ended December 31, 2025 and 2024, respectively: Fixed Income Investments(1) For the Year Ended December 31, ($ in thousands) 2025 2024 Gross investment income $ 7,907  $ 213  Net realized gains 9  —  Change in AOCI (3) 695  —  Gross investment returns $ 8,611  $ 213  Average invested assets, at fair value (4) $ 141,120 $ 4,920 Gross Investment Returns 6.1  % 4.3  % Investment expenses $ 91  $ —  Net investment returns $ 8,520  $ 213  Net Investment Returns 6.0  % 4.3  % Our net investment returns increased to 6.0% for the year ended December 31, 2025 compared to 4.3% in 2024, reflecting the increased in invested assets from the Combination. Our portfolio includes floating rate investments that comprised 53.8% of our fixed income investments at December 31, 2025. The net loan receivable from related party had a balance of $86.9 million with an average yield that increased to 6.0% during the year ended December 31, 2025 as the loan was acquired in the Combination with Maiden on May 27, 2025. Please refer to "Notes to Consolidated Financial Statements - Note 4. Investments" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for further detail on investment returns from fixed income investments held by the Company at December 31, 2025 and 2024. The following table details total investment returns for our alternative investments for the year ended December 31, 2025: Alternative Investments(2) For the Year Ended December 31, ($ in thousands) 2025 Gross investment income $ 581  Net unrealized gains 6,948  Gross investment returns(5) $ 7,529  Average invested assets, at fair value (4) $ 109,319 Gross Investment Returns 6.9  % Investment expenses $ 30  Net investment returns $ 7,499  Net Investment Returns 6.9  % 1.Fixed income investments includes AFS securities as well as cash, restricted cash, funds withheld receivable, and net loan receivable from related party. 2.Alternative investments includes other investments, equity securities, and equity method investments. 3.Change in AOCI excludes unrealized foreign exchange gains and losses. 4.Average invested assets is the average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. 5.Gross and net investment returns for alternative investments only include the post-Combination period of May 28, 2025 to December 31, 2025. 69 The following table details total investment returns for alternative investments by asset class at December 31, 2025: December 31, 2025 Private Equity Private Credit Alternative Assets Venture Capital Real Estate Total ($ in thousands) Gross investment income $ — $ — $ — $ — $ 581 $ 581 Net realized and unrealized gains 121 99 1,593 (397) 5,532 6,948 Total Investment Return $ 121 $ 99 $ 1,593 $ (397) $ 6,113 $ 7,529 Average Investments $8,257 $96 $ 41,522 $ 13,970 $ 45,474 $ 109,319 Gross Investment Returns 1.5  % 103.1  % 3.8  % (2.8) % 13.4  % 6.9  % Other Balance Sheet Changes The following table summarizes the Company's other material balance sheet changes at December 31, 2025 and 2024. Substantially all of the increases in the balance sheet items below relate to the completion of the Combination with Maiden on May 27, 2025, as discussed in Part II, Item 8. Financial Statements and Supplementary Data. Notes to Consolidated Financial Statements: Note 4. Investments and Note 17. Business Combination included in this Form 10-K: December 31, 2025 2024 Change ($ in thousands) Reinsurance balances receivable, net $ 724  $ —  $ 724  Reinsurance recoverable on unpaid losses 461,197  —  461,197   Net loan receivable from related party 86,883  —  86,883  Intangible assets 9,347  —  9,347  Funds withheld receivable 10,956  —  10,956  Other Assets 17,631  1,224  16,407  Reserve for loss and LAE 637,169  —  637,169  Unearned premiums 17,406  —  17,406  Accrued expenses and other liabilities 51,572  904  50,668  Senior Notes, net 174,402  —  174,402  NOL Carryforwards We believe the Combination and our ability to increase pre-tax income will create opportunities to utilize Maiden's NOL carryforwards that totaled $467.8 million at December 31, 2025. Approximately $388.7 million of these NOL carryforwards expire in various years beginning in 2029. As of December 31, 2025, $79.1 million or 16.9% of Maiden's NOL carryforwards have no expiry date under the relevant U.S. tax law. The NOL carryforwards combined with additional net deferred tax assets ("DTA") primarily related to Maiden's insurance liabilities result in net U.S. DTA (before valuation allowance) of $140.3 million or $18.12 per common share at December 31, 2025. Maiden's net U.S. DTA of $140.3 million is not presently recognized on the Company's consolidated balance sheet as a full valuation allowance is carried against it. Kestrel LLC has NOL carryforwards of $5.3 million that have no expiry date. Additionally, Kestrel LLC has net DTA of $10.1 million or $1.31 per common share at December 31, 2025, which mainly relates to tax basis intangibles, is not presently recognized on the Company's consolidated balance sheets as a full valuation allowance is carried against it. At this time, the Company believes it is necessary to maintain a full valuation allowance against both net DTA's as more evidence is needed regarding the utilization of these losses. As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net DTA. For further details on the NOL carryforwards, please see Notes to Consolidated Financial Statements: Note 13. Income Taxes included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10–K. 70 Capital Resources During the year ended December 31, 2025, book value per common share increased to $16.57 and diluted book value per common share increased to $16.28, compared to $1.67 at December 31, 2024. This was due to the Combination completed on May 27, 2025, which produced substantially all of the increase in shareholders' equity for the year ended December 31, 2025. The following table shows the movement in our capital resources at December 31, 2025 and 2024: December 31, 2025 2024 Change ($ in thousands) Common shares at par value $ 100  $ 27  $ 73  Additional paid-in capital 177,534  10,107  167,427  Accumulated other comprehensive income 916  —  916  Retained earnings (accumulated deficit) 1,197  (5,528) 6,725  Treasury shares, at cost (51,463) —  (51,463) Total Kestrel shareholders' equity 128,284  4,606  123,678  Senior Notes - principal amount 262,361  —  262,361  Total capital resources $ 390,645  $ 4,606  $ 386,039  Total capital resources increased by $386.0 million compared to December 31, 2024 due to the following items: •retained earnings increased by $6.7 million due to net income of $46.7 million for the year ended December 31, 2025 partly offset by a $40.0 million cash distribution to shareholders at closing of the Combination; •additional paid-in capital increased by $167.4 million primarily due to common shares issued as consideration for the Combination of $166.5 million as well as stock based compensation expense of $0.9 million; •AOCI increased by $0.9 million driven by: (1) net unrealized gains on investment of $0.7 million mainly from our AFS fixed maturity portfolio relating to market price movements in the year ended December 31, 2025; and (2) an increase in foreign currency translation adjustments of $0.2 million during the year ended December 31, 2025 due to the impact of the U.S. dollar depreciation on the re-measurement of net assets denominated in British pound and euro; and •treasury shares increased by $51.5 million due to the common shares issued to Maiden Reinsurance in respect of the Combination which are not treated as outstanding common shares on the Consolidated Balance Sheet.. Please refer to Notes to Consolidated Financial Statements: Note 6. Shareholders' Equity included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion of the equity instruments issued by the Company at December 31, 2025 and 2024. Book value and diluted book value per common share at December 31, 2025 and 2024 were computed as follows: December 31, 2025 2024 ($ in thousands except share and per share data) Ending common shareholders’ equity $ 128,284  $ 4,606  Numerator for diluted book value per common share calculation $ 128,284  $ 4,606  Common shares outstanding 7,741,943  2,749,996  Shares issued from assumed conversion of dilutive options and restricted shares 136,197  —  Denominator for diluted book value per common share calculation 7,878,140  2,749,996  Book value per common share $ 16.57  $ 1.67  Diluted book value per common share 16.28  1.67  Common Shares Please see Notes to Consolidated Financial Statements - Note 6. Shareholders' Equity" under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for information on common share transactions. Treasury shares include 2,237,534 common shares owned by Maiden Reinsurance which are not treated as outstanding common shares on the Consolidated Balance Sheet at December 31, 2025. These affiliated shares are not included in the computation of consolidated book value per share and earnings per share on the Company's consolidated financial statements. 71 Senior Notes At December 31, 2025, Kestrel Group had outstanding publicly-traded senior notes which were issued in 2016 ("2016 Senior Notes") by its now wholly owned subsidiary Maiden and outstanding publicly-traded senior notes which were issued in 2013 ("2013 Senior Notes") by its now wholly owned subsidiary, Maiden NA, collectively referred to as the Company's outstanding senior notes ("Senior Notes"). The Senior Notes are unsecured and unsubordinated obligations of the Company. On May 27, 2025 in connection with the Combination, (i) Maiden, as issuer, the Company, as guarantor, and Wilmington Trust, National Association, as trustee, entered into a second supplemental indenture (the “Second Supplemental Indenture”) to that certain indenture dated as of June 14, 2016, providing that the Company will fully and unconditionally guarantee Maiden’s 6.625% Senior Notes due 2046 and (ii) Maiden NA, as issuer, the Company, as guarantor, and Wilmington Trust Company, as trustee, entered into a fourth supplemental indenture (together with the Second Supplemental Indenture, the “Supplemental Indentures”) to that certain indenture dated as of June 24, 2011, providing that the Company fully and unconditionally guarantee MHNA’s 7.75% Senior Notes due 2043. The Company did not enter into any short-term borrowing arrangements during the year ended December 31, 2025. Please refer to "Notes to Consolidated Financial Statements - Note 7. Long-Term Debt" included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for a discussion of the Senior Notes issued by the Company. Please refer to Note 11. Commitments, Contingencies and Guarantees included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K regarding ongoing litigation regarding the 2013 Senior Notes. Maiden Holdings does not have any significant operations or assets other than ownership of the shares of our subsidiaries. The dividends and other permitted distributions from Maiden NA (and its subsidiaries) are our sole source of funds to meet ongoing cash requirements, including debt service payments. Factors that may affect payments to holders of the 2013 Senior Notes include restrictions on the payments of dividends by Maiden Reinsurance to Maiden NA which provides the sole source of income for interest payments on the 2013 Senior Notes. In 2025, the Vermont DFR approved an annual dividend program from Maiden Reinsurance to Maiden NA, but required prior approval of quarterly dividends before payment. To date the Vermont DFR has approved all dividend requests under this program. Subsequent to these approvals, plus the approval for the $40.0 million extraordinary dividend to provide for consideration to the Kestrel shareholders pursuant to the terms of the Combination Agreement, Maiden Reinsurance paid total dividends of $137.5 million to Maiden NA as of December 31, 2025. The summarized financial information below has been presented on a combined basis for the issuer Maiden NA and the guarantor Maiden Holdings, excluding all other subsidiaries. Intercompany balances and transactions between Maiden NA and Maiden Holdings, whose information is presented above on a combined basis, were eliminated. Any investment by Maiden NA or Maiden Holdings in subsidiaries that are not issuers or guarantors is not presented in the financial information below. Intercompany balances with subsidiaries that are not issuers or guarantors and any related party transactions were separately disclosed and are not included in the total assets and total liabilities presented for Maiden NA and Maiden Holdings. The net loss for Maiden NA and Maiden Holdings was due to interest and amortization expenses on the Senior Notes as well as general and administrative expenses. The net income in Maiden NA also reflects investment income earned for the respective period. Summarized financial information of Maiden NA and Maiden Holdings as of December 31, 2025 and for the year ended December 31, 2025 was as follows: Maiden NA Maiden Holdings ($ in thousands) Total assets $ 12,527  $ 2,356  Total liabilities 111,299  81,068  Amounts due from subsidiaries (not included in total assets above) 37  5,898  Amounts due to subsidiaries (not included in total liabilities above) 20,354  4,487  Related party loan payable (not included in total liabilities above) —  331,532  Total revenue 7,782  (1,989) Net income (loss) 878  (22,290) With respect to the related party loan payable for Maiden above, under the conditions stipulated in the Vermont DFR approval for the Combination, Maiden Reinsurance (as the lender) is no longer permitted to include the corresponding related party loan receivable from Maiden Holdings (and related accrued interest) as an admitted asset for statutory capital and reporting purposes. As a result, Maiden Reinsurance's ratio of risk-based capital to total adjusted capital was significantly reduced, which remains sufficient to not only support the dividends related to the Combination and recurring annual dividends (which require prior approval by the Vermont DFR) but our ability to selectively underwrite business in support of our Program Services segment in the future. 72 The ratio of Debt to Total Capital Resources at December 31, 2025 and 2024 was computed as follows: December 31, 2025 2024 ($ in thousands) Senior notes - principal amount $ 262,361  $ —  Shareholders’ equity 128,284  4,606  Total capital resources $ 390,645  $ 4,606  Ratio of debt to total capital resources 67.2  % —  % Off-Balance Sheet Arrangements Certain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties. In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future as further described in the "Notes to Consolidated Financial Statements - Note 11. Commitments, Contingencies and Guarantees " included under Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Any loss for which the Company could be liable would be contingent on the default of a loan by the real estate joint venture entity for which the Company provided a financial guarantee to a lender. While the Company has committed to aggregate limits as to the amount of guarantees it will provide as part of its limited partnerships, guarantees are only provided on an individual transaction basis and are subject to the terms and conditions of each transaction mutually agreed by the parties involved. The Company is not bound to such guarantees without its express authorization. As discussed above, at December 31, 2025, guarantees of $73.2 million have been provided to lenders by the Company on behalf of the real estate joint venture, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote. Therefore, no liability has been accrued under ASC 450-20. 73 Non-GAAP Financial Measures As defined and described in the Key Financial Measures section, management uses certain key financial measures, some of which are non-GAAP measures, to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these financial measures, which may be defined differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are discussed below. Non-GAAP operating loss and Non-GAAP diluted operating loss per share attributable to common shareholders Non-GAAP operating loss was $13.8 million for the year ended December 31, 2025, compared to a non-GAAP operating loss of $1.3 million for the year ended December 31, 2024. The non-GAAP operating loss of $13.8 million for the year ended December 31, 2025 was primarily driven by interest expense of $9.9 million and the Legacy Reinsurance segment underwriting loss of $4.1 million excluding the non-recurring expenses in the table below. Non-GAAP operating loss and Non-GAAP diluted operating loss per share attributable to common shareholders can be reconciled to the nearest U.S. GAAP financial measure as follows: For the Year Ended December 31, 2025 2024 ($ in thousands except per share data) Net income (loss) attributable to Kestrel common shareholders $ 46,725  $ (1,291) Add (subtract): Net realized and unrealized investment gains (6,957) —  Amortization of intangible assets 2,517  —  Foreign exchange and other losses 1,723  —  Interest in income of equity method investments (24) —  Change in bargain purchase gain (68,306) —  Net loss from discontinued operations 2,813  —  Litigation costs from GLS related arbitration 2,575  —  Restructuring and severance costs 3,107  —  Costs incurred due to the Combination 2,008  —  Non-GAAP operating loss $ (13,819) $ (1,291) Diluted earnings (loss) per share attributable to common shareholders $ 8.08  $ (0.47) Add (subtract): Net realized and unrealized investment gains (1.19) —  Amortization of intangible assets 0.44  —  Foreign exchange and other losses 0.32  —  Interest in income of equity method investments —  —  Change in bargain purchase gain (11.90) —  Net loss from discontinued operations 0.50  —  Litigation costs from GLS related arbitration 0.45  —  Restructuring and severance costs 0.54  —  Costs incurred due to the Combination 0.35  —  Non-GAAP diluted operating loss per share attributable to common shareholders $ (2.41) $ (0.47) 74 Non-GAAP Operating ROACE Non-GAAP Operating ROACE for the years ended December 31, 2025 and 2024 was as follows: For the Year Ended December 31, and at December 31, 2025 2024 ($ in thousands) Non-GAAP operating loss $ (13,819) $ (1,291) Opening adjusted common shareholders’ equity 4,606  5,837  Ending adjusted common shareholders’ equity 128,284  4,606  Average adjusted common shareholders’ equity 66,445  5,222  Non-GAAP Operating ROACE (20.8) % (24.7) % 75 Currency and Foreign Exchange We conduct business in a variety of foreign (non-U.S.) currencies, exclusively in our Legacy Reinsurance segment, the principal exposures being the euro and the British pound. Assets and liabilities denominated in foreign currencies are exposed to changes in currency exchange rates. Our reporting currency is the U.S. dollar, and exchange rate fluctuations relative to the U.S. dollar may materially impact our results and financial position. Our principal exposure to foreign currency risk is our obligation to settle claims in foreign currencies. In addition, to minimize this risk, we maintain and expect to continue to maintain a portion of our investment portfolio in investments denominated in currencies other than the U.S. dollar. We may employ various strategies (including hedging) to manage our exposure to foreign currency exchange risk. To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be adversely effected. At December 31, 2025, no such hedges or hedging strategies were in force or had been entered into. We measure monetary assets and liabilities denominated in foreign currencies at period end exchange rates, with the resulting foreign exchange gains and losses recognized in the Consolidated Statements of Income. Revenues and expenses in foreign currencies are converted at average exchange rates during the year. The effect of the translation adjustments for foreign operations is included in AOCI. Net foreign exchange losses were $2.6 million during the year ended December 31, 2025 compared to net foreign exchange losses of $0.0 million during 2024. The foreign exchange losses for the year ended December 31, 2025 was due to significant depreciation in the value of the U.S. dollar relative to the euro and the British pound regarding uncertainty around international trade and associated U.S. tariff policy. These losses were primarily unrealized and resulted from the effects of revaluation of our net insurance liabilities that are required to be settled in foreign currencies at each balance sheet date. At December 31, 2025, the increase in foreign currency translation adjustments of $0.2 million in the year ended December 31, 2025 was primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets. Our non-USD denominated liabilities at December 31, 2025 included reserves for net loss and LAE of $286.4 million in our Legacy Reinsurance segment. Our foreign currency asset exposures at December 31, 2025 include $97.9 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy, $33.5 million of equity method real estate investments denominated in Canadian dollars, as well as $11.0 million of funds withheld receivable based in euro. Effects of Inflation The anticipated effects of inflation are considered explicitly in the pricing of the insured exposures, which are used as the initial estimates of reserves for loss and LAE. In addition, inflation is also implicitly accounted for in subsequent estimates of loss and LAE reserves, as the expected rate of emergence is in part predicated upon the historical levels of inflation that impact ultimate claim costs. To the extent inflation causes these costs, particularly medical treatments and litigation costs, to vary from the assumptions made in the pricing or reserving estimates, the Company will be required to change the reserve for loss and LAE with a corresponding change in its earnings in the period in which the variance is identified. The actual effects of inflation on the results of operations of the Company cannot be accurately known until claims are ultimately settled. We continue to monitor inflationary impacts resulting from recent government stimulus, sharp increases in demand, labor force and supply chain disruptions, among other factors, on our loss cost trends. Our reserves predominantly consist of workers’ compensation, general liability, and hospital liability business. These long tailed lines of business have been subject to the longer term trend of social inflation, but we have not observed significant impacts for the recently elevated levels of inflation. We proactively analyze available data and we incorporate trends into our loss reserving assumptions to ensure we are considerate of current and future economic conditions. Governmental policy responses to inflation have increased interest rates in recent years which, in the short term, have contributed to unrealized gains on our fixed income investments, particularly on our fixed maturity securities. While general economic inflation has eased in recent quarters, there remains uncertainty around the rate and direction of inflation and interest rates and we continue to monitor our liquidity, capital and potential earnings impact of these changes but remain focused on our asset allocation decisions as described in our "Business Strategy" section of Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview". Inflation may also result in increased wage pressures for our operating expenses, as we remain focused on being a competitive employer in our market. Currently, while salaries and incentive compensation costs comprise less than one-half of our total general and administrative expenses, continuing inflation and tight labor conditions could have a material impact on our net operating results. Recent Accounting Pronouncements Refer to Notes to Consolidated Financial Statements: Note 2. Significant Accounting Policies included under Item 8. "Financial Statement and Supplementary Data", of this Annual Report on Form 10-K for a discussion on recently adopted accounting pronouncements. 76