KINGSWAY FINANCIAL SERVICES INC

Previous wording

On the last business day of the second quarter in 2023, the aggregate market value of the Company’s shares of common stock held by non-affiliate stockholders was between $75 million and $250 million and the Company’s revenue for the year ended December 31, 2023 was more than $100 million. As a result, the Company will be deemed an accelerated filer as defined in Rule 12b-2 under the Exchange Act as of January 1, 2024. Due to the change in filer status, the Company will no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Current wording

On the last business day of the second quarter in 2023, the aggregate market value of the Company’s shares of common stock held by non-affiliate stockholders was between $75 million and $250 million and the Company’s revenue for the year ended December 31, 2023 was more than $100 million. As a result, the Company is deemed to be an accelerated filer as defined in Rule 12b-2 under the Exchange Act as of January 1, 2024. Due to the change in filer status, the Company will no longer be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and the Company’s independent registered public accounting firm will evaluate and report on the effectiveness of internal control over financial reporting.

Previous wording

IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in25 states and the District of Columbia to their members, with customers in all fifty states.

Current wording

IWS is a licensed motor vehicle service agreement company and is a provider of after-market vehicle protection services distributed by credit unions in 24 states and the District of Columbia to their members, with customers in all fifty states.

Previous wording

Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, The Penn Warranty Corporation ("Penn") and Prime Auto Care, Inc. ("Prime"). Penn and Prime distribute these products in 47 and 37 states, respectively, via independent used car dealerships and franchised car dealerships.

Current wording

Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, The Penn Warranty Corporation ("Penn") and Prime Auto Care, Inc. ("Prime"). Penn and Prime distribute these products in 46 and 37 states, respectively, via independent used car dealerships and franchised car dealerships.

Previous wording

Segment operating income repr esents one measure of the pretax profitability of our segments and is derived by subtracting direct segment expenses from direct segment revenues. Revenues and expenses are presented in the unaudited consolidated statements of operations, but are not subtotaled by segment; however, this information is available in total and by segment in Note 19, "Segmented Information," to the unaudited consolidated interim financial statements, regarding reportable segment information. The nearest comparable U.S. GAAP measure to total segment operating income is (loss) income from continuing operations before income tax expense that, in addition to segment operating income, includes net investment income, net realized gains, net (loss) gain on equity investments, loss on change in fair value of limited liability investments, at fair value, loss on change in fair value of derivative asset option contracts, interest expense, other revenue and expenses not allocated to segments, net, amortization of intangible assets, impairment of intangible assets, (loss) gain on change in fair value of debt and gain on extinguishment of debt. A reconciliation of total segment operating income to (loss) income from continuing operations before income tax expense for thethree months ended March 31, 2024 and March 31, 2023 is presented below in Table 1 of the "Results of Continuing Operations" section of Management's Discussion and Analysis.

Current wording

Segment operating income represents one measure of the pretax profitability of our segments and is derived by subtracting direct segment expenses from direct segment revenues. Revenues and expenses are presented in the unaudited consolidated statements of operations, but are not subtotaled by segment; however, this information is available in total and by segment in Note 19, "Segmented Information," to the unaudited consolidated interim financial statements, regarding reportable segment information. The nearest comparable U.S. GAAP measure to total segment operating income is (loss) income from continuing operations before income tax expense that, in addition to segment operating income, includes net investment income, net realized gains, net (loss) gain on equity investments, gain (loss) on change in fair value of limited liability investments, at fair value, impairment losses, loss on change in fair value of derivative asset option contracts, interest expense, other revenue and expenses not allocated to segments, net, amortization of intangible assets, impairment of intangible assets, loss on change in fair value of debt and (loss) gain on extinguishment of debt. A reconciliation of total segment operating income to (loss) income from continuing operations before income tax expense for the three and six months ended June 30, 2024 and June 30, 2023 is presented below in Table 1 of the "Results of Continuing Operations" section of Management's Discussion and Analysis.

Previous wording

A reconciliation of total segment operating income to net (loss) income for the three months ended March 31, 2024 and March 31, 2023 is presented in Table 1 below:

Current wording

A reconciliation of total segment operating income to net (loss) income for the three and six months ended June 30, 2024 and June 30, 2023 is presented in Table 1 below:

Previous wording

In the first quarter of 2024, we reported segment operating income of $2.4 million, a decrease of $0.6 million from the same period in 2023. See further discussion below related to the decrease for the three months ended March 31, 2024.

Current wording

In the second quarter of 2024, we reported segment operating income of $2.7 million, a decrease of $0.3 million from the same period in 2023 ($5.1 million year to date, a decrease of $0.9 million compared to prior year to date). See further discussion below related to the decrease for the three and six months ended June 30, 2024.

Previous wording

In thefirst quarter of 2024, we reported loss from continuing operations of $2.1 million compared to income from continuing operations of $27.7 million in thefirst quarter of 2023. The loss from continuing operations for the three months ended March 31, 2024 is primarily due to:

Current wording

In the second quarter of 2024, we reported loss from continuing operations of $2.4 million compared to $1.8 million in the second quarter of 2023. The loss from continuing operations for the three months ended June 30, 2024 is primarily due to:

Previous wording

See Note 11, "Debt" and Note 10, "Derivatives,"to the unaudited consolidated interim financial statements, for further discussion of therepurchase of the trust preferred debt andtrust preferred debt repurchase options.

Current wording

See Note 11, "Debt" and Note 10, "Derivatives," to the unaudited consolidated interim financial statements, for further discussion of the repurchase of the trust preferred debt and trust preferred debt repurchase options.

Previous wording

In thefirst quarter of 2024, we reported anet lossof$2.3 million compared to net income of$27.8 million in thefirst quarter of 2023. In addition to the items described above impacting (loss) income from continuing operations, the net (loss) income includes:

Current wording

In the second quarter of 2024, we reported a net loss of $2.2 million compared to $1.7 million in the second quarter of 2023 (net loss of $4.5 million year to date compared to net income of $26.2 million prior year to date). In addition to the items described above impacting (loss) income from continuing operations, the net (loss) income includes:

Previous wording

For the three months ended March 31, 2024, the loss on disposal of discontinued operations is the result of adjusting the net carrying value of VA Lafayette to be equal to the estimated selling price. As discussed in Note 5, "Acquisitions and Discontinued Operations," to the unaudited consolidated interim financial statements, during the fourth quarter of 2022, the Company committed to a plan sell VA Lafayette. During the second quarter of 2024, the Company entered into a letter of intent for the sale of VA Lafayette. As part of recognizing the business as held for sale, the Company is required to measure VA Lafayette at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during the first quarter of 2024, the Company recognized an estimated non-cash, loss on disposal of$0.4 million, which is included in loss on disposal of discontinued operations, net of taxes in the consolidated statements of operations. The loss was determined by comparing the expected cash consideration received for the sale of VA Lafayette with the net assets of VA Lafayette.

Current wording

For the six months ended June 30, 2024, the loss on disposal of discontinued operations is the result of adjusting the net carrying value of VA Lafayette to be equal to the estimated selling price. As discussed in Note 5, "Acquisitions and Discontinued Operations," to the unaudited consolidated interim financial statements, during the fourth quarter of 2022, the Company committed to a plan sell VA Lafayette. During the second quarter of 2024, the Company entered into a letter of intent for the sale of VA Lafayette. As part of recognizing the business as held for sale, the Company is required to measure VA Lafayette at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during the first quarter of 2024, the Company recognized an estimated non-cash, loss on disposal of $0.4 million, which is included in loss on disposal of discontinued operations, net of taxes in the consolidated statements of operations. The loss was determined by comparing the expected cash consideration received for the sale of VA Lafayette with the net assets of VA Lafayette.

Previous wording

The Extended Warranty service fee and commission revenue was $16.7 million for the three months ended March 31, 2024 compared with $16.7 million for the three months ended March 31, 2023.

Current wording

The Extended Warranty service fee and commission revenue was $17.1 million for the three months ended June 30, 2024 compared with $17.0 million for the three months ended June 30, 2023 ($33.8 million year to date compared to $33.7 million prior year to date).

Previous wording

The Extended Warranty operating income was $1.1 million for the three months ended March 31, 2024 compared with $1.4 million for the three months ended March 31, 2023. We saw an increase in claims paid at our auto Extended Warranty companies – both sequentially and year over year – primarily due to continued inflationary pressures on the cost of parts and labor.

Current wording

The Extended Warranty operating income was $1.2 million for the three months ended June 30, 2024 compared with $1.4 million for the three months ended June 30, 2023 ($2.3 million year to date compared to $2.8 million prior year to date). We saw an increase in claims paid at our auto Extended Warranty companies – both sequentially and year over year – primarily due to continued inflationary pressures on the cost of parts and labor.

Previous wording

The Kingsway Search Xcelerator revenue decreased to $9.5 million for the three months ended March 31, 2024 compared to $9.7 million for the three months ended March 31, 2023. Kingsway Search Xcelerator operating income was$1.3 million for the three months ended March 31, 2024 compared to $1.6 million for the three months ended March 31, 2023. Revenue and operating income were primarily impacted by the following:

Current wording

The Kingsway Search Xcelerator revenue increased to $9.3 million for the three months ended June 30, 2024 compared to $9.2 million for the three months ended June 30, 2023 (a decrease to $18.8 million year to date compared to $18.9 million prior year to date). Kingsway Search Xcelerator operating income was $1.4 million for the three months ended June 30, 2024 compared to $1.6 million for the three months ended June 30, 2023 ($2.8 million year to date compared to $3.2 million prior year to date). Revenue and operating income were primarily impacted by the following:

Previous wording

Net investment income was$0.3 million in thefirst quarter of 2024 compared to$0.7 million in thefirst quarter of 2023. The decrease in net investment income for the three months ended March 31, 2024 primarily relates to the decrease in investment income from cash equivalents, as a result of a decrease in the cash equivalents balance.

Current wording

Net investment income was $0.3 million in the second quarter of 2024 compared to $0.3 million in the second quarter of 2023 ($0.6 million year to date compared to $1.1 million prior year to date). The decrease in investment income for the six months ended June 30, 2024 primarily relates to less income from cash equivalents, as a result of a decrease in the cash equivalents balance (in the first quarter of 2023 the Company was holding cash that was used to repurchase some of its subordinated debt) and more equity pick-up loss related to limited liability investments. These decreases were partially offset by an increase in investment income from fixed maturities and interest income related to the significant financing component for certain SPI contracts.

Previous wording

Net realized gains were$0.1 million in thefirst quarter of 2024 compared to$0.2 million in thefirst quarter of 2023. The net realized gains for the three months ended March 31, 2024 primarily relate to realized gains recognized by Argo Holdings Fund I, LLC ("Argo Holdings"). The net realized gains for the three months ended March 31, 2023 primarily relate to realized gains recognized by Argo Holdings and distributions received from one of the Company’s investments in private companies in which its carrying value previously had been written down to zero as a result of prior distributions.

Current wording

Net realized gains were $0.3 million in the second quarter of 2024 compared to $0.1 million in the second quarter of 2023 ($0.4 million year to date compared to $0.3 million prior year to date). The net realized gains for the three months ended June 30, 2024 and June 30, 2023 and the six months ended June 30, 2024 primarily relate to realized gains recognized by Argo Holdings Fund I, LLC ("Argo Holdings"). The net realized gains for the six months ended June 30, 2023 primarily relate to realized gains recognized by Argo Holdings and net realized gains on sales of limited liability investments.

Previous wording

Loss on equity investments was less than $0.1 million in the first quarter of 2024 compared to a gain of $1.1 million in the first quarter of 2023 . The gain for the three months ended March 31, 2023 relates to unrealized gains on equity investments held. During the first quarter of 2023, the Company held warrants in Limbach Holdings, Inc. ("Limbach"). During the first quarter of 2023, the underlying common stock price of Limbach increased, resulting in an increase in the fair value of the warrants held. During the third quarter of 2023, the Company sold all of its investment in Limbach.

Current wording

Gain on equity investments was zero in the second quarter of 2024 compared to $1.7 million in the second quarter of 2023 (loss of less than $0.1 million year to date compared to a gain of $2.8 million prior year to date). The gain for the three and six months ended June 30, 2023 relates to the Company's former investment in Limbach Holdings, Inc. ("Limbach"). Prior to the second quarter of 2023, the Company held warrants in Limbach. During the first quarter of 2023, the underlying common stock price of Limbach increased, resulting in an increase in the fair value of the warrants held at March 31, 2023. During the second quarter of 2023, the Company completed a cashless exercise of its Limbach warrants. The change in fair value for the second quarter of 2023 is a result of the increased common stock price of Limbach as of June 30, 2023. During the third quarter of 2023, the Company sold all of its investment in Limbach.

Previous wording

Loss on change in fair value of derivative asset option contracts was zero in the first quarter of 2024 compared to $1.4 million in the first quarter of 2023. The derivative contract related to three trust preferred debt repurchase option agreements the Company entered into during the third quarter of 2022. The Company exercised the repurchase options during the first quarter of 2023.

Current wording

Loss on change in fair value of derivative asset option contracts was zero for the three months ended June 30, 2024 and June 30, 2023 (zeroyear to date compared to $1.4 million prior year to date). The derivative contract related to three trust preferred debt repurchase option agreements the Company entered into during the third quarter of 2022. The Company exercised the repurchase options during the first quarter of 2023.

Previous wording

Other revenue and expenses not allocated to segments, net was a net expense of $1.7 million in the first quarter of 2024 compared to $2.6 million in the first quarter of 2023. Included are revenue and expenses associated with our various other investments that are accounted for on a consolidated basis and expenses associated with our corporate holding company.

Current wording

Other revenue and expenses not allocated to segments, net was a net expense of $2.1 million in the second quarter of 2024 compared to $3.8 million in the second quarter of 2023 ($3.8 million year to date compared to $6.4 million prior year to date). Included are revenue and expenses associated with our various other investments that are accounted for on a consolidated basis and expenses associated with our corporate holding company.

Previous wording

The decreasein net expense for the three months ended March 31, 2024 is primarily attributable to a management fee paid to the external manager of a previously consolidated entity in the first quarter of 2023 and lower salary and acquisition related expenses, partially offset by expense related to the Ravix contingent consideration liability during the three months ended March 31, 2024 compared to the same period in 2023.

Current wording

The decrease in net expense for the three months ended June 30, 2024 is primarily attributable to a management fee paid to the external manager of a previously consolidated entity in the second quarter of 2023; as well as lower salary-related expenses, stock-based compensation expenses and expense related to the Ravix contingent consideration liability during the three months ended June 30, 2024 compared to the same period in 2023.

Previous wording

Impairment of intangible assets was $0.5 million in the first quarter of 2024 compared to zero in the first quarter of 2023. The Company's indefinite-lived intangible assets consist of trade names, which are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. At March 31, 2024, the Company determined that certain of its trade name intangible assets should be further examined under a quantitative approach. Based upon this assessment, the Company recorded an impairment charge of $0.5 million related to the SNS and CSuite indefinite-lived trade names. The reduction in value is primarily due to higher discount rates and reduction in projected revenue.

Current wording

Impairment of intangible assets was $0.7 million in the second quarter of 2024 compared to zero in the second quarter of 2023 ($1.2 year to date compared to zero prior year to date). The Company's indefinite-lived intangible assets consist of trade names, which are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. At both March 31, 2024 and June 30, 2024, the Company determined that certain of its trade name intangible assets should be further examined under a quantitative approach due to actual revenue coming in lower than previous projections. Based upon this assessment, the Company recorded an impairment charge of $0.7 million during the second quarter of 2024 ($1.2 million for the year to date), related to the SNS and CSuite indefinite-lived trade names. The reduction in value is primarily due to higher discount rates and reduction in projected revenue.

Previous wording

Loss on change in fair value of debt was$0.1 million in thefirst quarter of 2024 compared to a gain of$0.3 million in thefirst quarter of 2023. During the first quarter of 2023, the Company repurchased TruPs debt having a principal amount of $75.5 million. The change in fair value related to the repurchased TruPs debt was a gain of $0.3 million and the change in fair value related to the remaining TruPs debt instrument was less than $0.1 million during thethree months ended March 31, 2023.

Current wording

During the first quarter of 2023, the Company repurchased TruPs debt having a principal amount of $75.5 million. The change in fair value related to the repurchased TruPs debt was a gain of $0.3 million and the change in fair value related to the remaining TruPs debt instrument was a loss of $0.3 million during the six months ended June 30, 2023.

Previous wording

The (loss) gain forthree months ended March 31, 2024 and March 31, 2023 reflects changes in the fair value of the subordinated debt resulting primarily from changes in interest rates used (not related to instrument-specific credit risk). The following summarizes the impacts:

Current wording

The loss for the three and six months ended June 30, 2024 and June 30, 2023 reflects changes in the fair value of the subordinated debt resulting primarily from changes in interest rates used (not related to instrument-specific credit risk). See "Debt" section below for further information.

Previous wording

For the three months ended March 31, 2023, gain on extinguishment of debt consists of a $31.6 million gain related to the repurchase of TruPs debt having a principal amount of $75.5 million. The gain on extinguishment of debt results from removing the fair value of the debt, trust preferred debt repurchase options, deferred interest payable and accumulated other comprehensive income related to the repurchased TruPs from the Company's consolidated balance sheet at the repurchase date. See Note 11 "Debt," to the unaudited consolidated interim financial statements, for further discussion.

Current wording

For the six months ended June 30, 2023, gain on extinguishment of debt consists of a $31.6 million gain related to the repurchase of TruPs debt having a principal amount of $75.5 million. The gain on extinguishment of debt results from removing the fair value of the debt, trust preferred debt repurchase options, deferred interest payable and accumulated other comprehensive income related to the repurchased TruPs from the Company's consolidated balance sheet at the repurchase date.

Previous wording

Income tax expense for thefirst quarter of 2024 was$0.1 million compared to$0.7 million in thefirst quarter of 2023. For the three months ended March 31, 2024 and March 31, 2023, the Company reported income tax expense primarily due to state tax expense. See Note 14, "Income Taxes," to the unaudited consolidated interim financial statements, for additional detail of the income tax expense recorded for the three months ended March 31, 2024 and March 31, 2023.

Current wording

Income tax expense for the second quarter of 2024 was $0.1 million compared to $0.2 million in the second quarter of 2023 ($0.2 million year to date compared to $0.9 million prior year to date). For the three and six months ended June 30, 2024 and June 30, 2023, the Company reported income tax expense primarily due to state tax expense. See Note 14, "Income Taxes," to the unaudited consolidated interim financial statements, for additional detail of the income tax expense recorded for the three and six months ended June 30, 2024 and June 30, 2023.

Previous wording

At March 31, 2024, we held cash and cash equivalents, restricted cash and investments with a carrying value of $61.9 million. Our U.S. operations typically invest in U.S. dollar-denominated instruments to mitigate their exposure to currency rate fluctuations.

Current wording

At June 30, 2024, we held cash and cash equivalents, restricted cash and investments with a carrying value of $58.8 million. Our U.S. operations typically invest in U.S. dollar-denominated instruments to mitigate their exposure to currency rate fluctuations.

Previous wording

At March 31, 2024 and December 31, 2023, the gross unrealized losses for fixed maturities amounted to $1.7 million and $1.7 million, respectively, and there were no unrealized losses attributable to non-investment grade fixed maturities.

Current wording

At June 30, 2024 and December 31, 2023, the gross unrealized losses for fixed maturities amounted to $1.6 million and $1.7 million, respectively, and there were no unrealized losses attributable to non-investment grade fixed maturities.

Previous wording

See Note 11, "Debt,"to the Consolidated Financial Statements for a detailed discussion of the Company’s debt instruments. Changes related to the Company’s debt duringthe first quarter of 2024 are further described below.

Current wording

See Note 11, "Debt," to the Consolidated Financial Statements for a detailed discussion of the Company’s debt instruments. Changes related to the Company’s debt during the six months ended June 30, 2024 are further described below.

Previous wording

During the first quarter of 2024, the Company borrowed $3.5 million under the KWH Delayed Draw Term Loan ("DDTL"), $0.5 million under the KWH Loan revolver and $0.2 million under the SNS Loan Revolver.

Current wording

During the first quarter of 2024, the Company borrowed $3.5 million under the KWH Delayed Draw Term Loan ("DDTL"), $0.5 million under the KWH Loan revolver and $0.2 million under the SNS Loan Revolver. During the second quarter of 2024, the SNS Loan Revolver of $0.2 million was repaid.

Previous wording

The SNS Loan contains a number of covenants, including, but not limited to, a leverage ratio and a fixed charge ratio and limits on annual capital expenditures, all of which are as defined in and calculated pursuant to the SNS Loan that, among other things, restrict SNS’s ability to incur additional indebtedness, create liens, make dividends and distributions, engage in mergers, acquisitions and consolidations, make certain payments and investments and dispose of certain assets. At March 31, 2024 the Company is in default under the SNS Loan due to debt covenant violations related to the leverage and fixed charge ratios. The Company has received an amendment to the SNS Loan that waives the events of default for the fiscal quarter ended March 31, 2024. As of the report date, there is some uncertainty as to whether the Company will be in compliance with the covenants in future periods, and if not, when the Company will be able to cure any potential violations. A default may permit the lender to declare the amounts owed under the SNS Loan immediately due and payable, exercise their rights with respect to collateral securing the obligation, and/or exercise any other rights and remedies available.

Current wording

The SNS Loan contains a number of covenants, including, but not limited to, a leverage ratio and a fixed charge ratio and limits on annual capital expenditures, all of which are as defined in and calculated pursuant to the SNS Loan that, among other things, restrict SNS’s ability to incur additional indebtedness, create liens, make dividends and distributions, engage in mergers, acquisitions and consolidations, make certain payments and investments and dispose of certain assets. At June 30, 2024 and March 31, 2024, the Company was in default under the SNS Loan due to debt covenant violations related to the leverage and fixed charge ratios. The Company has entered into an amendment to the SNS Loan that waives the events of default for the fiscal quarter ended June 30, 2024. As of the report date, there is some uncertainty as to whether the Company will be in compliance with the covenants in future periods, and if not, when the Company will be able to cure any potential violations. A default may permit the lender to declare the amounts owed under the SNS Loan immediately due and payable, exercise their rights with respect to collateral securing the obligation, and/or exercise any other rights and remedies available.

Previous wording

Of the$0.1 million increase in fair value of the Company’s subordinated debt between December 31, 2023 and March 31, 2024, less than $0.1 million is reported as decreasein fair value of debt attributable to instrument-specific credit risk in the Company's unaudited consolidated statements of comprehensive (loss) income and$0.1 million is reported as loss onchange in fair value of debt in the Company’s unaudited consolidated statements of operations.

Current wording

Of the $0.1 million increase in fair value of the Company’s subordinated debt between December 31, 2023 and June 30, 2024, less than $0.1 million is reported as decrease in fair value of debt attributable to instrument-specific credit risk in the Company's unaudited consolidated statements of comprehensive loss and $0.1 million is reported as loss on change in fair value of debt in the Company’s unaudited consolidated statements of operations.

Previous wording

See Note 4, "Recently Issued Accounting Standards," to theunaudited consolidated interim financial statements, for discussion of certain accounting standards that may be applicable to the Company's current and future consolidated financial statements.

Current wording

See Note 4, "Recently Issued Accounting Standards," to the unaudited consolidated interim financial statements, for discussion of certain accounting standards that may be applicable to the Company's current and future consolidated financial statements.

Previous wording

During thethree months ended March 31, 2024, the Company reported$0.2 million of net cash provided by operating activities from continuing operations, primarily due to operating income from the Extended Warranty and Kingsway Search Xcelerator segments. During thethree months ended March 31, 2023, the Company reported$22.8 million of net cash used in operating activities from continuing operations, primarily due to payment of deferred interest on the trust preferred debt instruments that were repurchased during the first quarter of 2023 ($16.1 million), payment of deferred interest on the remaining trust preferred debt instrument ($5.0 million), partially offset by operating income from the Extended Warranty and Kingsway Search Xcelerator segments.

Current wording

During the six months ended June 30, 2024, the Company reported $0.5 million of net cash provided by operating activities from continuing operations, primarily due to operating income from the Extended Warranty and Kingsway Search Xcelerator segments. During the six months ended June 30, 2023, the Company reported $24.7 million of net cash used in operating activities from continuing operations, primarily due to outflows related to the payment of management fees to the managers of Net Lease and Flowers ($1.8 million), an indemnity payment to the buyer of Mendota related to loss and loss adjustment expenses ($2.0 million) and payment of deferred interest on the remaining trust preferred debt instrument; partially offset by operating income from the Extended Warranty and Kingsway Search Xcelerator segments.

Previous wording

During thethree months ended March 31, 2024, the net cash used in investing activities from continuing operations was$0.2 million. This use of cash is primarily attributed to purchases of fixed maturities and property and equipment, net in excess of proceeds from sales and maturities of fixed maturities and sales of equity securities. During thethree months ended March 31, 2023, the net cash provided by investing activities from continuing operations was $6.3 million. This source of cash was primarily attributed to a distribution received by Net Lease from one of its limited liability investment companies of $5.2 million, as well as proceeds from sales and maturities of fixed maturities in excess of purchases of fixed maturities.

Current wording

During the six months ended June 30, 2024, the net cash provided by investing activities from continuing operations was $0.9 million. This source of cash is primarily attributed to distributions received by Argo Holdings from two of its underlying limited liability investment companies, partially offset by purchases of fixed maturities and property and equipment, net in excess of proceeds from sales and maturities of fixed maturities and sales of equity securities. During the six months ended June 30, 2023, the net cash provided by investing activities from continuing operations was $15.1 million. This source of cash was primarily attributed to distributions received by Net Lease from one of its limited liability investment companies of $13.3 million, as well as proceeds from sales and maturities of fixed maturities in excess of purchases of fixed maturities.

Previous wording

During thethree months ended March 31, 2024, the net cash provided by financing activities from continuing operations was$2.5 million. This source of cash was primarily attributed to principal proceeds from bank loans of $4.2 million, partially offset by principal repayment on bank loans of$1.6 million. During thethree months ended March 31, 2023, the net cash used in financing activities from continuing operations was$40.9 million. This use of cash was primarily attributed to the repurchase of five of the TruPs for $40.3 million, principal repayment on bank loans of$3.3 million and distributions to noncontrolling interest holders of$3.6 million, partially offset by cash proceeds from the exercise of warrants of $6.3 million.

Current wording

During the six months ended June 30, 2024, the net cash used in financing activities from continuing operations was $1.0 million. This use of cash was primarily attributed to principal repayment on bank loans of $16.6 million, taxes paid related to net share settlements of restricted stock awards of $1.8 million, cash paid for repurchases of common stock of $1.0 million and distributions to noncontrolling interest holders of $0.7 million, partially offset by principal proceeds from bank loans of $19.1 million. During the six months ended June 30, 2023, the net cash used in financing activities from continuing operations was $43.9 million. This use of cash was primarily attributed to the repurchase of five of the TruPs for $40.3 million, principal repayment on bank loans of $4.8 million, distributions to noncontrolling interest holders of $3.6 million and cash paid for repurchase of warrants of $1.6 million, partially offset by cash proceeds from the exercise of warrants of $6.6 million.

Previous wording

The holding company’s liquidity, defined as the amount of cash in the bank accounts of Kingsway Financial Services Inc. and Kingsway America Inc., was$2.3 millionand$4.3 million at March 31, 2024 and December 31, 2023, respectively, which excludes future actions available to the holding company that could be taken to generate liquidity. Such future actions include, but are not limited to, distributions from the Extended Warranty and Kingsway Search Xcelerator operating companies subject to certain loan covenants that may be in place at each operating company. The holding company cash amounts are reflected in the cash and cash equiv alents of $12.1 million and $9.1 million reported at March 31, 2024 and December 31, 2023, respectively, on the Company’s consolidated balance sheets.

Current wording

The holding company’s liquidity, defined as the amount of cash in the bank accounts of Kingsway Financial Services Inc. and Kingsway America Inc., was $2.3 million and $4.3 million at June 30, 2024 and December 31, 2023, respectively, which excludes future actions available to the holding company that could be taken to generate liquidity. Such future actions include, but are not limited to, distributions from the Extended Warranty and Kingsway Search Xcelerator operating companies subject to certain loan covenants that may be in place at each operating company. The holding company cash amounts are reflected in the cash and cash equivalents of $9.6 million and $9.1 million reported at June 30, 2024 and December 31, 2023, respectively, on the Company’s consolidated balance sheets.