Mount Logan Capital Inc.

(All amounts in thousands, except share and per share data, and except where noted)

Note 1. Organization

Mount Logan, together with its consolidated subsidiaries (the “Company”) is a diversified alternative asset management and insurance solutions platform operating through two business segments: Asset Management and Insurance Solutions. Our Asset Management segment is conducted by Mount Logan Management LLC (“ML Management”), our SEC-registered investment adviser, which manages a significant portion of our Assets Under Management (“AUM”) across our various managed funds supported by permanent and semi-permanent capital bases. ML Management also directly manages the capital of our wholly-owned insurance company, Ability Insurance Company (“Ability”), for the benefit of policyholders. The Company’s Insurance Solutions segment is conducted by Ability, a Nebraska domiciled insurer, which specializes in reinsuring annuity products for the increasing number of individuals seeking to fund retirement needs and represents all of our insurance solutions operations.

On September 12, 2025 (the “Closing Date”), the Company completed a business combination with 180 Degree Capital Corp. ("TURN") and Mount Logan Capital Inc. ("Legacy Mount Logan"), accounted for as a reverse acquisition with Legacy Mount Logan as the accounting acquirer. Accordingly, the Company's condensed consolidated financial statements present the historical results of Legacy Mount Logan prior to September 12, 2025, and those of the combined company thereafter. Refer to Note 3. Business combinations and Asset Acquisitions for more information about the reverse acquisition and the financial reporting impacts.

Unless the context otherwise requires, all references to the “Company,” “Mount Logan,” or “we” refer to (i) the Company on or after the Closing Date, and (ii) Legacy Mount Logan prior to the Closing Date.

Note 2. Summary of significant accounting policies

Basis of presentation and Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements (“Condensed Consolidated Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain disclosures included in the annual audited Consolidated Financial Statements have been condensed or omitted as they are not required for interim Condensed Consolidated Financial Statements. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These Condensed Consolidated Financial Statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 19, 2026.

The Condensed Consolidated Financial Statements reflect all adjustments, both normal and recurring which, in the opinion of management, are necessary for the fair presentation of the Company’s Condensed Consolidated Financial Statements for the periods presented.

The results of the Company and its subsidiaries are presented on a consolidated basis. All intercompany transactions and balances are eliminated on consolidation.

The Company's Asset Management and Insurance Solutions segments possess distinct characteristics, and as a result are presented separately from each other. The Company believes that separate presentation provides a more informative view of the Company’s consolidated financial position and results of operations than an aggregated presentation and that reporting insurance solutions separately is appropriate given, among other factors, the relative significance of Ability's policy liabilities, which do not provide recourse to the remaining assets of Mount Logan.

For a summary of our significant accounting policies, see Note 2. Summary of significant accounting policies included in our Annual report on Form 10-K for the year ended December 31, 2025. During the three and nine months ended September 30, 2026, there were no material updates to our significant accounting policies.

The number of shares issued and outstanding, earnings per share, additional paid-in capital, dividends paid per share and all references to share quantities of the Company have been retrospectively adjusted to reflect the Company’s existing capital structure post merger with TURN. Refer to Note 3. Business combinations and Asset Acquisitions for further detail.

Due to rounding, numbers presented throughout these Condensed Consolidated Financial Statements may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Recently issued accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. This ASU requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU requires presentation in a tabular format of each pertinent expense category on the face of the income statement, such as employee compensation, depreciation, amortization of intangible assets, and other applicable expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Clarifying the Effective Date. ASU 2024-03 will be effective for public business entities for annual reporting periods beginning after December 15, 2026 (for all other entities - December 15, 2027) and interim reporting periods beginning after December 15, 2027 (for all other entities - December 15, 2028) with early adoption permitted, as clarified in ASU 2025-01. The Company is currently evaluating the impact of adopting ASU 2024-03 on its Condensed Consolidated Financial Statements.

In May 2025, the FASB issued ASU 2025–03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025–03”). This ASU requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business to consider factors to determine which entity is the accounting acquirer. When considering those factors, the reporting entity may determine that a transaction in which the legal acquiree is a VIE represents a reverse acquisition. The update will be effective for all entities for annual periods (and interim periods in annual reporting periods) beginning after December 15, 2026. The Company is currently evaluating the impact of adopting this ASU on its Condensed Consolidated Financial Statements.

Note 3. Business combinations and Asset Acquisitions

Acquisition of 180 Degree Capital

On September 12, 2025, the Company completed its Business Combination with TURN, accounted for as a reverse acquisition under ASC 805, with Legacy Mount Logan as the accounting acquirer. The measurement period for the Business Combination ended during the three and nine months ended September 30, 2026, and purchase accounting for the transaction is final. There is no contingent consideration or indemnification asset associated with the transaction. See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for further detail regarding the business combination and discussion of the $4.5 million bargain purchase gain recognized in “Gain on acquisition” in the consolidated statements of operations.

Yieldstreet Alternative Income Fund Inc. Transition Services and Sub-advisory Agreements

On March 18, 2026, ML Management, a wholly-owned subsidiary of the Company, entered into a Transition Services Agreement (the "TSA") and a Sub-Advisory Agreement with Willow Asset Management LLC ("Willow"), in connection with an Agreement and Plan of Reorganization among Opportunistic Credit Interval Fund ("SOFIX"), Yieldstreet Alternative Income Fund Inc. ("YS AIF"), ML Management, and Willow, pursuant to which SOFIX acquired the assets and assumed the liabilities of YS AIF. The transactions closed on August 24, 2026 (the "YS AIF Transaction Closing Date").

Under the TSA, Willow granted ML Management an exclusive, worldwide license to certain books, records, and data files relating to YS AIF (the "YS AIF assets"), together with transition services over a two-year period following the YS AIF Transaction Closing Date, for aggregate consideration of $5.0 million, consisting of $2.0 million in cash paid at Closing, $1.0 million in MLCI restricted shares issued to Willow at Closing, and up to $2.0 million payable as rebates against fees otherwise due to ML Management under the Sub-Advisory Agreement, described below.

Under the Sub-Advisory Agreement, ML Management acts as non-discretionary sub-adviser to a legacy private credit portfolio managed by Willow, unrelated to the YS AIF assets, in exchange for a sub-advisory fee.

The Company evaluated the TSA and the Sub-Advisory Agreement as a single unit of account for accounting purposes, as the agreements were executed contemporaneously, contain cross-referenced termination and payment provisions, and a portion of the TSA consideration is structurally settled through fees generated under the Sub-Advisory Agreement, consistent with the indicators in ASC 805-10-25-20 through 25-21.

The Company concluded the YS AIF assets acquired under the TSA do not meet the definition of a business under ASC 805-10-55-3A through 55-9, as no workforce, substantive process, or output-generating capability transferred to the Company. Accordingly, the transaction is accounted for as an asset acquisition under ASC 805-50. Total consideration was allocated between (i) an intangible asset, representing the YS AIF assets and the associated license, and (ii) the transition services, on a relative-fair-value basis in accordance with ASC 805-50-30-3. The transition services are expensed as consumed over the two-year service period. The intangible asset was valued using an income approach, as no observable market exists for a comparable asset. The asset is tested for impairment annually, and more frequently if events or changes in circumstances indicate that it is more likely than not impaired, and the indefinite-life determination is reassessed each reporting period.

The 302,115 shares (valued at $1.0 million as of the YS AIF Transaction Closing Date) in MLCI restricted shares issued to Willow is accounted for under ASC 718 as consideration for the YS AIF assets, license, and transition services received, measured at grant-date fair value as of the YS AIF Transaction Closing Date, without a discount for lack of marketability associated with the shares' two-year lock-up period, and allocated between the intangible asset and transition services consistent with the allocation described above.

The Company may pay up to $2.0 million in additional TSA consideration in the form of rebates against Sub-Advisory Fees otherwise payable by Willow, recognized incrementally as each $0.25 million tranche becomes probable and estimable, with the resulting adjustment to the cost basis of the acquired assets recognized as a cumulative catch-up adjustment in the period of recognition. This consideration is not accounted for as a reduction of the amount of Sub-Advisory Fee revenue under ASC 606 as the payment is for a distinct service, the fair value of the distinct services are reasonably estimable, and the total consideration payable to Willow does not exceed the fair value of the distinct services received. As of September 30, 2026, none of the rebate had been recognized as additional consideration.

As of September 30, 2026, the carrying value of the intangible asset recognized in connection with this transaction was $2.8 million, and it is not impaired as of September 30, 2026. See Note 11. Goodwill and intangible assets, Intangible assets for further detail.

Separately, on August 24, 2026, restricted stock units with an aggregate value of approximately $0.6 million were issued as inducement grants to six former Willow employees who became employees of BCPA and provide services to the Company under the existing staffing and servicing agreements between the Company and BCPA. The awards were granted in connection with the Sub-Advisory Agreement with Willow under the Nasdaq Listing Rule 5635(c)(4) inducement exemption and are not consideration under the TSA. The awards vest in equal annual installments over three years beginning on the first anniversary of the grant date, subject to continued service, and the related compensation expense is recognized under ASC 718 on a straight-line basis over the vesting period. See Note 22. Related Parties for additional information regarding the staffing and servicing agreements between the Company and BCPA.

Alternative Credit Income Fund (“ACIF”) completed merger with BC Partners Lending Corporation (“BCPL”)

Overview

The Company holds a 24.99% equity interest in Sierra Crest Investment Management LLC ("SCIM"), accounted for under the equity method. The remaining 75.01% of SCIM is owned by BC Partners. Prior to September 29, 2026, SCIM served as the investment manager of ACIF, and the Company was entitled to 100% of the economics of the ACIF management arrangement through a pass-through of SCIM's results. The Company also held a promissory note receivable from SCIM (the "SCIM Note") with a principal balance of $13.6 million, an allowance for credit losses of $0.3 million, accrued interest receivable of $3.8 million, and carried a payable to SCIM of $7.2 million representing the cumulative excess of ACIF expenses over revenues borne by the Company (the "ACIF Economics Payable").

Effective September 29, 2026, ACIF merged with and into BC Partners Lending Corporation ("BCPL") (the "ACIF Merger"). In connection with the ACIF Merger, (i) SCIM and BC Partners Advisors L.P. ("BCPA"), the investment adviser to BCPL, entered into a Revenue Share Agreement under which BCPA pays 29.88% of the management and incentive fees it receives under its investment advisory agreement with BCPL, net of the allocable compensation costs of the BCPL sales force, (the "Revenue Share Amount"); and (ii) SCIM and Mount Logan Capital US Holdings LLC ("MLC USH"), a wholly owned consolidated subsidiary of the Company, entered into an Assignment and Cancellation Agreement (the "Cancellation Agreement") under which SCIM's rights to the Revenue Share Amount were assigned to MLC USH in exchange for the cancellation of the SCIM Note, and the accrued interest receivable and the ACIF Economics Payable were settled against each other. The Revenue Share Agreement continues until mutually terminated by the parties and terminates automatically upon termination of the investment advisory agreement between BCPA and BCPL.

The Company evaluated the Merger Agreement, the Revenue Share Agreement and the Cancellation Agreement together because they were negotiated as a package, are interdependent, and share a single commercial objective. Each component was accounted for under the applicable guidance, as described below.

Cancellation of the SCIM Note and Recognition of the Revenue Share Amount

The Company accounted for the cancellation of the SCIM Note as an extinguishment of a financial asset in exchange for the acquisition of an intangible asset, measured under the asset acquisition cost guidance in ASC 805-50-30-2. The Revenue Share Amount was recorded at $12.2 million, the fair value of the SCIM Note at September 29, 2026, which the Company determined was more clearly evident than the fair value of the Revenue Share Amount. The fair value of the SCIM Note was determined with the assistance of an independent valuation specialist using the income approach with significant unobservable inputs including the discount rate and expected recovery, and is a Level 3 measurement. The Company derecognized the SCIM Note at its net carrying amount of $13.3 million (principal of $13.6 million less allowance for credit losses of $0.3 million) and recognized a loss of $1.1 million in Net realized and change in unrealized gains (losses) from investment activities in the three and nine months ended September 30, 2026. The exchange was a non-cash transaction.

Settlement of Accrued Interest and the ACIF Economics Payable

Under the Cancellation Agreement, the $3.8 million of accrued interest receivable on the SCIM Note was settled against an equal portion of the $7.2 million ACIF Economics Payable. No gain or loss was recognized on the settlement. The remaining balance of $3.4 million (the "Remaining CIF Payable") continues to be recorded as a liability to a related party. The Remaining CIF Payable is repaid, at least quarterly, from one-third of the Revenue Share Amount received by the Company until paid in full, and may be prepaid at the Company's option. The repayment amounts and timing depend on fees earned by BCPA and are not fixed or determinable; accordingly, no interest has been imputed. The Remaining CIF Payable is presented gross and is not offset against the Revenue Share Amount.

Revenue Share Amount Intangible Asset

The Revenue Share Amount is an intangible asset, because it is not a fixed claim on the cash of BCPA and the Company provides no goods or services to ACIF, BCPL, BCPA or SCIM in exchange for it. It is therefore not accounted for as revenue from a contract with a customer, and it does not meet the definition of a derivative because it has no notional amount or payment provision. The Company determined that the asset has an indefinite useful life because the Revenue Share Agreement can be terminated only by mutual agreement or upon termination of the BCPL advisory agreement, which has no stated end date and continues subject to annual approval by the BCPL board of directors or shareholders. The asset is tested for impairment annually, and more frequently if events or changes in circumstances indicate that it is more likely than not impaired, and the indefinite-life determination is reassessed each reporting period. At September 30, 2026, the carrying amount of the asset was $12.2 million, and no impairment was recorded.

Amounts received under the Revenue Share Agreement are recognized in Other income (loss), net as earned, beginning in the fourth quarter of 2026, consistent with the recognition of the BCIC profit share interest revenue received by the Company.

Related Party Transactions

BC Partners provides the Company's personnel and administrative services under staffing and administrative agreements and is an affiliate of the Company, but the Company and BC Partners are not under common control. BCPL and BCPA are affiliates of BC Partners. Each component of the ACIF Merger is therefore a related party transaction. At September 30, 2026, the Company reported the following related party balances arising from the ACIF Merger: Revenue Share Amount intangible asset of $12.2 million; and Remaining CIF Payable due to SCIM of $3.4 million.

Note 4. Net realized and change in unrealized gains (losses) from investment activities

The table below summarizes the net realized and change in unrealized gains (losses) from investment activities:

(1) Includes $0.2 million of unrealized gains on purchase receivables that are presented in other assets on the condensed consolidated statements of financial position. Refer to Note 17. Other assets and Accrued expenses and other liabilities for further detail.

(1) Includes $0.3 million of unrealized gains on purchase receivables that are presented in other assets on the condensed consolidated statements of financial position. Refer to Note 17. Other assets and Accrued expenses and other liabilities for further detail.

Note 5. Net investment income

Net investment income for the Insurance Solutions segment is comprised primarily of Interest income and Dividend income. The table below summarizes Net investment income:

Note 6. Investments

The following table outlines the carrying value of the Company’s investments:

Financial assets

The following tables summarize the measurement categories of financial assets held by the Company as of September 30, 2026, and December 31, 2025:

(1)The MLC US Holdings Credit Facility (as hereinafter defined) is collateralized by assets held by MLC US Holdings, including assets totaling $15.2 million as of September 30, 2026.

(2)Other invested assets primarily include structured securities and loan receivables.

(1)The MLC US Holdings Credit Facility (as hereinafter defined) is collateralized by assets held by MLC US Holdings, including assets totaling $34.8 million as of December 31, 2025.

(2)Other invested assets primarily include structured securities and loan receivables.

Available-for-sale – Insurance Solutions

The following table represents the cost or amortized cost, gross unrealized gains, gross unrealized losses, and fair value of available-for-sale (“AFS”) investments by asset type:

(1)There is no allowance for credit losses for AFS investments as of September 30, 2026 and December 31, 2025.

The maturity distribution for AFS securities is as follows:

Actual maturities can differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table provides information about AFS securities for which an allowance for credit losses has not been recorded, aggregated by asset category and length of time the securities have been continuously in an unrealized loss position:

Unrealized gains and losses can arise from changes in interest rates or other factors, including changes in credit spreads. The Company had gross unrealized losses on below investment grade AFS securities of $6.0 million and $4.0 million as of September 30, 2026 and December 31, 2025, respectively. The single largest unrealized loss on AFS securities was $1.9 million and $1.2 million as of September 30, 2026 and December 31, 2025, respectively. The Company had 273 and 313 positions in an unrealized loss position as of September 30, 2026 and December 31, 2025, respectively.

As of September 30, 2026 and December 31, 2025, AFS securities in an unrealized loss position for 12 months or more consisted of 164 and 207 debt securities, respectively. These debt securities primarily relate to Corporate and U.S. state, municipal and political subdivisions securities, which have depressed values due primarily to an increase in interest rates since the purchase of these securities. Unrealized losses were not recognized in net income on these debt securities since the Company neither intends to sell the securities nor does it believe that it is more likely than not that it will be required to sell these securities before recovery of their cost or amortized cost basis. For securities with significant declines in value, individual security level analysis was performed utilizing underlying collateral default expectations, market data, and industry analyst reports.

Mortgage and corporate loans carried at amortized cost

Mortgage and corporate loans consist of the following:

The maturity distribution for commercial real estate, multi-family mortgage loans and corporate loans were as follows as of September 30, 2026:

Actual maturities could differ from contractual maturities, because borrowers may have the right to prepay (with or without prepayment penalties) and loans may be refinanced.

The carrying value by credit risk and loan type were as follows:

The following tables summarize the activity related to the allowance for credit losses for the three and nine months ended September 30, 2026 and 2025:

The following tables present an analysis of past-due loans:

The Company designates individually evaluated loans on nonaccrual status as collateral-dependent loans, as well as other loans that management of the Company designates as having higher risk. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses.

The following represents total nonaccrual loans:

The following represents accrued interest receivables written off:

The following table represents the portfolio of mortgage and corporate loans by origination year as of September 30, 2026 and December 31, 2025:

The following represents the carrying value of collateral-dependent loans of the Company as of September 30, 2026 and December 31, 2025:

The Company maintains a separate reserve for credit losses on off-balance sheet credit exposures, including unfunded loan commitments, which is included under the line item entitled “Accrued expenses and other liabilities” on the Condensed Consolidated Statements of Financial Position. The reserve for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses in the income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The unfunded off-balance sheet credit line commitments for corporate loans accounted for as held for investments (“HFI”) was $nil for Asset Management and $3.8 million for Insurance Solutions as of September 30, 2026 (December 31, 2025: $1.4 million and $4.3 million, for Asset Management and Insurance Solutions, respectively).

The liability for credit losses on off-balance sheet credit exposures for these loans included in Accrued expenses and other liabilities was less than $0.1 million for both Asset Management and Insurance Solutions as of both September 30, 2026 and December 31, 2025. Refer to Note 24. Commitments and contingencies for additional information of the Company’s investment commitments.

Note 7. Derivatives

The Company uses derivative instruments to manage interest rate risk. See Note 9. Fair value measurements for information about the fair value hierarchy for derivatives.

The following table presents the notional amount and fair value of freestanding derivative instruments:

Derivatives designated as hedges

Cash flow hedges

The Company uses interest rate swaps to convert floating-rate interest receipts on its loan portfolio to fixed-rate interest receipts to reduce exposure to interest rate changes. The interest rate swaps will expire by October 2036. During the three and nine months ended September 30, 2026 and September 30, 2025, the Company reported losses of $8.1 million and $10.7 million and gains of $0.5 million in Other Comprehensive Income (“OCI”) associated with these hedges, respectively. There were no amounts deemed ineffective during the three and nine months ended September 30, 2026 and September 30, 2025. As of September 30, 2026 and September 30, 2025, a gain of $1.5 million and a loss of less than $0.1 million is expected to be reclassified into income as part of earnings within the next 12 months, respectively.

Embedded derivatives

The Company has embedded derivatives which are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance agreements structured on a modified coinsurance (“Modco”) or funds withheld basis. The fair value of the embedded derivative liability is $38.9 million and $29.7 million as of September 30, 2026 and December 31, 2025, respectively.

Credit risk

The Company may be exposed to credit-related losses in the event of counterparty nonperformance on derivative financial instruments. Generally, the current credit exposure of the Company’s derivative contracts is the fair value at the reporting date less any collateral received from the counterparty.

The Company manages credit risk related to derivatives by entering into transactions with creditworthy counterparties. Where possible, the Company maintains collateral arrangements and uses master netting agreements that provide for a single net payment from one counterparty to another at each due date and upon termination. The Company has also established counterparty exposure limits, where possible, in order to evaluate if there is sufficient collateral to support the net exposure. Collateral arrangements typically require the posting of collateral in connection with its derivative instruments. Collateral agreements often contain posting thresholds, some of which may vary depending on the posting party’s financial strength ratings.

There is no difference between the current presentation of the fair value of the interest rate swaps and the presentation of fair value of the interest rate swaps after the application of any right of offset, as of September 30, 2026.

Note 8. Variable interest entities

Consolidated variable interest entities (“VIEs”) include collateralized loan obligations (“CLOs”) managed by the Company. The assets of consolidated VIEs are not available to creditors of the Company, and the investors in these consolidated VIEs have no recourse against the assets of the Company.

Revenues of consolidated VIEs - Insurance Solutions

The following summarizes the Condensed Consolidated Statements of Operations activity of the consolidated VIEs:

Unconsolidated VIEs

The Company holds variable interests in certain VIEs for which it is not the primary beneficiary. The Company’s variable interests include equity interests, loans, and beneficial interests in CLOs and other entities, which are recorded within “Investments” in the Condensed Consolidated Statements of Financial Position. The following table presents the Company’s maximum exposure to losses relating to these VIEs for which the Company has a variable interest, but is not the primary beneficiary. The Company has exposure beyond the carrying value of its variable interests due to unfunded commitments on loans.

Note 9. Fair value measurements

The following tables summarize the valuation of assets and liabilities measured at fair value by fair value hierarchy. Investments classified as Equity Method for which the Fair Value Option (“FVO”) has not been elected have been excluded from the table below.

The availability of observable inputs can vary depending on the financial asset and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires additional judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. The variability and availability of the observable inputs affected by the factors described above may cause transfers between Levels 1, 2, and 3, as discussed further below.

Transfers between level 1 and level 2

The Company records transfers of assets between Level 1 and Level 2 at their fair values at the end of each reporting period. Assets are transferred out of Level 1 when they are no longer transacted with sufficient frequency and volume in an active market. Conversely, assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an active market. During the three and nine months ended September 30, 2026 and September 30, 2025, there were no assets transferred between Level 1 and Level 2.

Transfers between level 1 or 2 and level 3

The Company records transfers of assets between Level 1 or 2 and Level 3 at the end of each reporting period. Assets are transferred into Level 3 when there is a lack of observable valuation inputs.

Conversely, assets are transferred out of Level 3 when valuation inputs become observable. Whether the assets are transferred into Level 1 or 2 will depend on whether the prices are unadjusted and quoted in an active market.

The following tables summarize changes in the Company’s investment portfolio measured and reporting at fair value for which Level 3 inputs were used in determining fair value:

(1)Transfers into Level 3 are due to decrease in the quantity and reliability of broker quotes obtained. Transfers out of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained. Transfers are assumed to have occurred at the end of the period.

(1)Transfers into Level 3 are due to a decrease in the quantity and reliability of broker quotes obtained. Transfers out of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained. Transfers are assumed to have occurred at the end of the period.

The valuation techniques and significant unobservable inputs used in Level 3 valuations were as follows:

(1)For debt securities where the recent transaction price does not estimate fair value, the Company determines the fair value utilizing a yield analysis.

(1)For debt securities where the recent transaction price does not estimate fair value, the Company determines the fair value utilizing a yield analysis.

The Company typically determines the fair value of its performing Level 3 debt investments utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to the expected life, portfolio company performance since close, and other terms and risks associated with an investment. Among other factors, a determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of the Company’s investment within each portfolio company’s capital structure.

Significant unobservable inputs include an illiquidity spread as well as a credit spread, both of which increase the discount rate. These rates are initially set at a level such that the loan valuation equals the initial purchase cost of the loan and are subsequently adjusted at each valuation date to reflect management’s current assessment of market conditions as well as of loan-specific credit and illiquidity risk. Discount rates are subject to adjustment based on both management’s current assessment of market conditions and the economic performance of individual investments. The significant unobservable inputs used in the fair value measurement of the Company’s Level 3 debt securities primarily include current market yields, including relevant market indices, but may also include quotes from brokers, dealers, and pricing services as indicated by comparable investments.

Financial instruments not carried at fair value

The following tables present carrying amounts and fair values of the Company’s financial assets and liabilities which are not carried at fair value as of September 30, 2026 and December 31, 2025:

Fair value option

The following table presents the net realized and unrealized gains (losses) on financial instruments for which the FVO was elected:

The following table presents information for loans which the Company elected the FVO.

As of September 30, 2026 and December 31, 2025, there were no loans accounted for at fair value under the FVO which were 90 days or more past-due or in non-accrual status.

The following table presents the estimated amount of gains (losses) included in earnings attributable to changes in instrument-specific credit risk on corporate loans for which the Company elected the FVO.

The portion of gains and losses attributable to changes in instrument-specific credit risk is estimated by identifying loans with changes in credit ratings meeting certain criteria.

Note 10. Revenue from service contracts

The following table summarizes the Company’s revenue from service contracts for Asset Management:

(1)Servicing fees were a net expense for the Company as reimbursements to Sierra Crest Investment Management (“SCIM”) for certain costs and the specified investment advisory fee retained by SCIM exceeded the net economic benefit derived under the Alternative Credit Income Fund (“ACIF”) advisory agreement, for the three and nine months ended September 30, 2026 and September 30, 2025. Servicing fees are included within Administration and servicing fees in the Condensed Consolidated Statements of Operations.

Note 11. Goodwill and intangible assets

Goodwill

The carrying amount of goodwill by reportable segment was $1.0 million for Asset Management as of both September 30, 2026 and December 31, 2025, which is included within “Other assets” in the Condensed Consolidated Statements of Financial Position. The carrying amount of goodwill was $30.2 million for Insurance Solutions as of both September 30, 2026 and December 31, 2025.

The table below presents the changes in the carrying amount of goodwill by reporting unit in Insurance Solutions as of September 30, 2026 and December 31, 2025.

(1)Accumulated impairment losses include the $25.5 million impairment loss recognized in relation to the LTC reporting unit during the year ended December 31, 2025 and there was no impairment loss recognized during the nine months ended September 30, 2026

Intangible assets

During the three months ended September 30, 2026, the Company recognized an intangible asset of $2.8 million and $12.2 million in connection with the TSA and the Revenue Share Amount, respectively, as described in Note 3. Business combinations and Asset Acquisitions. The Rebate mechanism associated to the TSA will result in cumulative catch-up amortization adjustments to the cost basis of this indefinite-lived asset in future periods as each $0.25 million tranche becomes probable and estimable.

Intangible assets consist of the following as of September 30, 2026 and December 31, 2025:

(1)On July 15, 2025, the merging of Logan Ridge Finance Corporation (“Logan Ridge”) into Portman Ridge Finance Corporation (“Portman Ridge” or “Portman”) closed, with the new combined entity renamed to BCIC. Upon the close of this merger, the Company’s investment management agreement with Logan Ridge was terminated, resulting in an impairment loss for the full carrying amount of the investment management agreement. Upon termination of the investment management agreement with Logan Ridge, the Company acquired a profit-sharing agreement with the owner of SCIM, which is the manager of BCIC, for no cash consideration. The acquisition of the profit-sharing agreement is presented as a gain that offsets the accumulated impairment loss on the Logan Ridge investment management agreement, in “Amortization and impairment of intangible assets” on the consolidated statements of operations for the year ended December 31, 2025. The profit-sharing agreement was determined to be an indefinite-lived intangible asset given the Company expects SCIM to be the investment manager of BCIC indefinitely, and for the owner of SCIM to hold its equity in SCIM indefinitely.

The following table represents estimated intangible amortization expense as of September 30, 2026:

Note 12. Debt obligations

MLC US Holdings Credit Facility

The MLC US Holdings Credit Facility matures on August 20, 2027 and is secured by assets held by MLC US Holdings and guaranteed by the Company. On January 27, 2026, the Company repaid $22.5 million of the outstanding balance using proceeds from the Exchange Listed Notes described below, resulting in a partial extinguishment and a $0.5 million write-off of unamortized transaction costs, recognized within "loss on extinguishment of debt" in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2026. On April 7, 2026, the Company entered into a Guaranty assuming Legacy Mount Logan's obligations as guarantor under the facility. The Company was in compliance with all debt covenants as of September 30, 2026.

Seller notes

On October 29, 2021, the Company completed the Ability Acquisition through in part the issuance of an unsecured promissory note of $15.0 million, which bears interest at 5.0% per annum and is payable by October 29, 2031.

Unsecured debentures

The Company's unsecured debentures bear interest at 8.85% PIK with Initial Debenture Units carrying attached common share purchase warrants exercisable at C$11.61 per share, as adjusted for the Business Combination. On April 17, 2026, a subsidiary of the Company issued a further 5,597 Additional Initial Debentures for aggregate proceeds of $5.6 million, used to repay $2.3 million and $3.0 million in principal (plus accrued interest) of Ability surplus notes held by Sentinel Security Life Insurance Company and Atlantic Coast Life Insurance Company, respectively. These Additional Initial Debentures mature January 26, 2032 and carry no attached warrants.

Exchange listed notes

On January 26, 2026, the Company issued $40 million in aggregate principal amount of senior unsecured notes (“Exchange Listed Notes”) that bear interest at 8.0% per year and will mature on January 31, 2031. Transaction costs of $2.3 million were capitalized and will be accreted through the interest expense over the life of the debt. Net proceeds were used to repay $22.5 million of outstanding indebtedness under the MLC US Holdings Credit Facility, with remaining proceeds for general corporate purposes.

Debt obligations consisted of the following as of September 30, 2026 and December 31, 2025:

(1)The MLC US Holdings Credit Facility is secured by all assets and interests in assets and proceeds owned and acquired by MLC US Holdings.

(2)The warrants issued with the Initial Debenture Units are recorded in equity at fair value upon issuance and therefore are not required to be subsequently remeasured at fair value on an ongoing basis.

(1)The MLC US Holdings Credit Facility is secured by all assets and interests in assets and proceeds owned and acquired by MLC US Holdings.

(2)The warrants issued with the Initial Debenture Units are recorded in equity at fair value upon issuance and therefore are not required to be subsequently remeasured at fair value on an ongoing basis.

The scheduled principal repayments are as follows:

For the three months ended September 30, 2026, interest expense, including the amortization of debt issuance costs and PIK interest, was $2.2 million (September 30, 2025 –$2.0 million). For the nine months ended September 30, 2026, interest expense, including the amortization of debt issuance costs and PIK interest, was $6.4 million (September 30, 2025 – $5.9 million).

Debt obligations

Ability has the following surplus notes outstanding as of September 30, 2026 and December 31, 2025:

For the three and nine months ended September 30, 2026 and September 30, 2025, interest paid was $0.3 million and $1.2 million and $0.3 million and $1.0 million, respectively.

Refer to Note 9. Fair value measurements for fair value of financial liabilities carried at amortized cost.

The surplus notes are subordinated in right of payment of all indebtedness, policy claims, and other creditor claims, and payments of interest or principal require prior authorization by the Director of the Nebraska Department of Insurance. On April 17, 2026, the Company repaid $5.3 million of surplus notes, including $2.3 million owed to SSL and $3.0 million owed to Atlantic Coast Life Insurance Company (“ACL”).

Note 13. Deferred acquisition costs

The following table presents the rollforward of deferred acquisition costs (“DAC”) as of September 30, 2026 and September 30, 2025:

(1)Amortization for the nine months ended September 30, 2026 included $0.7 million associated with the 50% recapture of the SSL MYGA block liabilities. See Note 15. Interest sensitive contract liabilities for further details.

Significant methodologies and assumptions

The Company amortizes DAC related to long-duration contracts on a straight-line basis, at the individual contract level over the expected term of the related contract.

The amortization expense for DAC is included in the Amortization of deferred acquisition costs in the Condensed Consolidated Statements of Operations. The estimated future amortization expense related to DAC for the future years is as follows:

Note 14. Future policy benefits and related reinsurance recoverable

Future policy benefits comprise substantially all obligations to insureds in the Company’s insurance operations. A summary of future policy benefits and reinsurance recoverable are presented below.

(1)The Company has a coinsurance or Modco with funds withheld arrangement with its two reinsurers. The Modco agreement with Nichol International Reinsurance (S.A.C), Ltd. (formerly known as Vista Life and Casualty Reinsurance Company) dictates that the assets held as collateral are held with the legal right of offset to the related insurance contract liabilities. Therefore, the collateral held for this agreement is netted against the reserves under this contract. The agreement with Front Street Re does not have the legal right of offset therefore the reserves are not presented net of the collateral held, instead they are in the line item “Funds held under reinsurance contracts” in the Condensed Consolidated Statements of Financial Position.

The following tables summarize balances of and changes in future policy benefits reserves:

(1)Net future policy benefit reserves excludes $2.2 million and $4.4 million as of September 30, 2026 and September 30, 2025, respectively, of Medico assumed reserves which are 100% ceded.

(2)Reinsurance recoverables, net of allowance for credit losses excludes $2.2 million and $4.4 million of reinsurance recoverable as of September 30, 2026 and September 30, 2025, respectively.

In the first nine months of 2026, the underlying cash flow assumptions remained unchanged for the Medico block. For the Guardian block, claim‑handling costs were separated from maintenance costs and the claim reserve assumption was also updated. These assumption updates resulted in a total of $4.2 million decrease on a gross basis in the liability for future policy benefits for the nine months ended September 30, 2026. The effect of actual variances from expected experience for the nine months ended September 30, 2026 observed a $4.2 million increase on a gross basis in the liability for future policy benefits, mainly driven by lower than expected premium receipts and higher claims.

In the first nine months of 2025, the underlying cash flow assumptions remained unchanged. The effect of actual variances from expected experience for the nine months ended September 30, 2025 observed a $14.0 million increase on a gross basis in the liability for future policy benefits, mainly driven by lower than expected premium receipts and higher claims.

The following tables provides the amount of undiscounted and discounted expected future gross premiums and expected future benefits and expenses for the LTC line of business:

(1)Discount was determined using the current discount rate as of September 30, 2026 and September 30, 2025.

The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits:

Note 15. Interest sensitive contract liabilities

The following table shows the outstanding Interest sensitive contract liabilities which represents the policyholder balances for MYGA product line:

(1)Other represents decrease in interest sensitive contract liabilities resulting from SSL’s recapture of 50% of the quota share on the Recaptured Business, effective September 1, 2026. Refer to“Reinsurance Recapture”for further detail.

(2)For benefits that are payable in the event of death, the net amount at risk is defined as the current death benefit which is equal to the current account balances at the Condensed Consolidated Statements of Financial Position date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the Condensed Consolidated Statements of Financial Position date.

Reinsurance Recapture

Effective September 1, 2026, Sentinel Security Life Insurance Company (“SSL”) recaptured 50% of the quota share liability previously reinsured by Ability Insurance Company (“Ability”) on contracts issued and approved from July 1, 2022 through June 30, 2024 (the “Recaptured Business”). The remaining 50% of the quota share on those contracts ceded under the Reinsurance Agreement between SSL and Ability, remains in force on its existing terms.

Statutory reserves attributable to the Recaptured Business were $141.4 million as of August 31, 2026, of which $70.7 million related to the recaptured 50%. Ability transferred assets from the trust account maintained under the Reinsurance Agreement to SSL with an aggregate fair value of $68.3 million including $6.6 million in cash . This amount represents the recaptured statutory reserves, net of a recapture fee of $2.4 million retained by the Company. The recapture fee was settled by netting against the assets transferred and was not paid separately in cash.

The Company derecognized the related reinsurance liabilities included in interest sensitive contract liabilities of $70.2 million. Because the interest sensitive contract liabilities were $0.6 million lower than the corresponding statutory reserves, the derecognition resulted in a loss of $0.6 million. Together with the $2.4 million recapture fee earned, Ability recognized a net gain of $1.8 million, included in other income within insurance segment revenue for the three months ended September 30, 2026.

MYGA policyholder account balances totaled $281.3 million and $363.3 million, as of September 30, 2026, and September 30, 2025, respectively. The decrease in policyholder account balance for the nine months ended September 30, 2026 was primarily attributable to the decrease in reserves due to the SSL recapture of $70.2 million and surrenders, withdrawals, benefits and product charges of $26.1 million which was partially offset by interest credited of $12.6 million. For the nine months ended September 30, 2025 the increase in policyholder account balances was primarily attributable to $43.0 million of deposits due to the assumption of the NSG MYGA block and $12.0 million interest credited. This increase was partially offset by surrenders, withdrawals, benefits and product charges of $26.6 million for the nine months ended September 30, 2025. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 2% and 7% at both September 30, 2026 and September 30, 2025.

Note 16. Reinsurance

The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its LTC line of business and also as a provider of reinsurance for the LTC and MYGA lines of business. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth.

Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse the Company for the ceded amount in the event a claim is paid. Cessions under reinsurance agreements do not discharge the Company’s obligation as the primary insurer. In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreements, Reinsurance recoverable balances could become uncollectible.

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks.

Reinsurance recoverable

The Company reinsures its business through three reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company uses collateral for its reinsurance recoverable with funds withheld accounts. These reinsurance recoverable balances are stated net of allowance for expected credit loss of $0.8 million as of September 30, 2026 and $1.1 million as of December 31, 2025. The Company had $411.6 million and $456.7 million of net ceded reinsurance recoverable as of September 30, 2026 and December 31, 2025, respectively. The Company had $28.5 million and $41.3 million of unsecured Reinsurance recoverable balances as of September 30, 2026 and December 31, 2025, respectively.

The amounts in the Condensed Consolidated Statements of Financial Position include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:

The amounts in the Condensed Consolidated Statements of Operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:

(1)The provision for credit losses for reinsurance recoverables for the three and nine months ended September 30, 2026 was $(0.3) million. It was $(0.1) million and less than $0.1 million for the three and nine months ended September 30, 2025, respectively.

Note 17. Other assets and Accrued expenses and other liabilities

Other assets consist of the following:

(1)Represents amounts due from third-parties for investment sales for which a cash settlement has not occurred.

(2)All purchase receivables were acquired during the fourth quarter of 2025 and the first quarter of 2026. For the three months ended September 30, 2026, $0.5 million repayments were received on these receivables which reduced cost, and there were $0.2 million unrealized gains from fair value movements. For the nine months ended September 30, 2026, $0.8 million repayments were received on these receivables which reduced cost, and there were $0.3 million unrealized gains from fair value movements.

Accrued expenses and other liabilities consist of the following:

(1)As part of its acquisition of TURN in connection with the Business Combination on September 12, 2025, the Company acquired benefit plans which TURN historically administered which provide medical and dental insurance for retirees and their spouses who, at the time of their retirement, attained certain years of service at a certain age. As of September 30, 2026, the Company had $0.4 million accumulated post-retirement benefit obligation. These plans were terminated prior to the acquisition date and provide medical benefits to former employees who are grandfathered under the plan’s former terms. The net periodic post-retirement benefit cost includes service cost and interest cost on the accumulated post-retirement benefit obligation. Unrecognized actuarial gains and losses will be recognized as net periodic benefit cost within general, administrative and other expenses under the Asset Management segment. Unamortized prior service cost was fully amortized prior to the acquisition date. Refer to Note 3. Business combinations and Asset Acquisitions for more information on the Company’s acquisition of TURN.

(2)Represents amounts owed to third-parties for investment purchases for which a cash settlement has not occurred.

Note 18. Income taxes

Prior to the Domestication of Legacy Mount Logan to the United States on September 12, 2025, Legacy Mount Logan was subject to income tax in Canada, including on income earned through its US subsidiaries. Following the Domestication and the completion of the Business Combination, the Company is subject to U.S. federal, state, and local income taxes.

The Company’s income tax provision totaled nil and $2.3 million for the three months ended September 30, 2026 and 2025, respectively, and totaled nil and $2.3 million for the nine months ended September 30, 2026 and 2025, respectively. The Company’s effective income tax rate was approximately 0% and (20.72)% for the three months ended September 30, 2026 and 2025, respectively, and 0% and (12.45)% for the nine months ended September 30, 2026 and 2025, respectively.

The Company recorded a full valuation allowance against its net deferred tax assets, reflecting management's conclusion — based on cumulative losses and Section 382 limitations on loss and capital-loss carryforwards acquired from TURN — that the related deferred tax assets are not more-likely-than-not to be realized.

Each reporting period, the Company assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize its deferred tax assets. There were no changes in the assessment of the realizability of the Company's deferred tax assets during the nine months ended September 30, 2026.

The Company had no material uncertain tax positions as of September 30, 2026.

Note 19. Equity

Common shares

The number of shares issued and outstanding, earnings per share, additional paid-in capital, dividends paid per share and all references to share quantities of the Company have been retrospectively adjusted to reflect the Company’s existing capital structure post merger with TURN. Refer to Note 3. Business combinations and Asset Acquisitions for further detail.

The Company is authorized to issue 150 million common shares, par value $0.001 per share. The common shares are not redeemable or convertible. Dividends are declared by the Company’s Board of Directors (the “Board”) at its discretion. Historically, the board of directors of Legacy Mount Logan has declared dividends on a quarterly basis and the amount could vary from quarter to quarter.

As of September 30, 2026, there were 11,490,883 common shares issued and outstanding (December 31, 2025 – 12,786,770). The Company repurchased 1,590,601 shares through a tender offer, a former officer returned 7,401 shares to the Company for withholding tax, and the Company issued 302,115 shares for the acquisition of the TSA associated with the Yieldstreet asset acquisition (refer to Note 3. Business combinations and Asset Acquisitions) during the nine months ended September 30, 2026. The Company issued 382,809 shares (net of tax) in respect of vested RSUs (inclusive of Dividend Equivalent Units (“DEUs”)), 4,101 shares in satisfaction of debt obligations owed in connection with the provision of certain consulting services, 637,880 common shares for the minority investment in Runway Growth Capital LLC (“Runway”), 122,308 common shares for the further investment in a Canadian fixed income manager, and 5,666,700 shares for the reverse acquisition of TURN during the nine months ended September 30, 2025. Subsequent to the Business Combination, during the three months ended September 30, 2025, the Company repurchased 160,637 common shares for an aggregate cost of $1.4 million. These repurchases are included in both the three- and nine-month periods ended September 30, 2025. There were no other transactions with shareholders for the three and nine months ended September 30, 2026 and 2025.

Dividends

Dividends to the Company's shareholders are recorded on the declaration date. The payment of any cash dividend to shareholders of the Company in the future will be at the discretion of the Board and will depend on, among other things, the financial condition, capital requirements and earnings of the Company, and any other factors that the Board may consider relevant.

The following table reflects the distributions declared on the common shares of the Company during the nine months ended September 30, 2026 and September 30, 2025:

(1)Dividends were issued and paid in CAD until the December 2025 dividend payment which was issued and paid in USD. For reporting purposes, CAD dividend amounts recorded in equity were translated to USD using the daily exchange rate on the date of declaration. Going forward, the Company expects to declare and pay dividends in USD.

Warrants

On January 26, 2024, Legacy Mount Logan issued 50 common share purchase warrants (each, a “Debenture Warrant”) for each of the 18,752 initial debenture units that were issued on a non-brokered private placement (refer to Note 12. Debt obligations for further detail). Following the completion of the Business Combination, every 4.22 Debenture Warrants entitle the holder to receive, upon exercise, one share of the Company's common stock at an exercise price of C$11.61 per share. As of September 30, 2026, an aggregate of up to 222,079 shares of the Company's common stock were issuable upon the exercise of the 937,600 Debenture Warrants outstanding (December 31, 2025 — 222,079). The Debenture Warrants are exercisable for a period of 8 years.

The Arrangement Warrants expired unexercised on October 19, 2025 and none were outstanding as of September 30, 2026 or December 31, 2025.

Each Debenture Warrant was exercisable to acquire one common share of Legacy Mount Logan at a price of C$2.75 per share for a period of eight (8) years from the issuance thereof, provided that the Debenture Warrants were not exercisable during the first twelve (12) months following the issuance. Accordingly, an aggregate of up to 222,079 shares of the Company are issuable upon the exercise of the 937,600 outstanding Debenture Warrants as of September 30, 2026 (December 31, 2025 - 222,079).

Accumulated other comprehensive income (loss)

Note 20. Equity based compensation

On May 30, 2019, the Company’s shareholders approved (i) a stock option plan (the “2019 Option Plan”) and (ii) a restricted share unit plan (the “2019 RSU Plan”), which were amended and re-approved by shareholders of the Company on June 7, 2024 to, among other things, increase the rolling limit thereunder from 10% to 15% of the common shares then issued and outstanding. Following the approval of Legacy Mount Logan shareholders on August 22, 2025 and the closing of the Business Combination, on November 5, 2025, the Board approved and ratified the 2025 Omnibus Incentive Plan (the “2025 Plan”). The effective date of the 2025 Plan was September 12, 2025 and upon its effectiveness, the 2019 Option Plan and 2019 RSU Plan were terminated and no further awards will be granted under either the 2019 Option Plan or the 2019 RSU Plan.

The Company awarded 922,302 RSUs with a grant date fair value of $2.8 million during the nine months ended September 30, 2026, under the 2025 Plan. The Company awarded 652,135 RSUs with a grant date fair value of $1.2 million during the nine months ended September 30, 2025, under the 2019 RSU Plan, which all accelerated and fully vested upon the closing of the Business Combination.

For the three months ended September 30, 2026 and 2025, the Company recorded equity-based compensation expense related to RSUs awarded under the 2025 Plan and 2019 RSU Plan of $0.4 million and $2.1 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recorded equity-based compensation expense related to RSUs awarded under the 2025 Plan and 2019 RSU Plan of $0.5 million and $2.8 million, respectively. As of September 30, 2026, there was $2.3 million of total unrecognized equity-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average term of 1.20 years . The Company has elected to account for forfeitures as they occur. Expense is recognized on a straight line basis over the life of the award.

A summary of the status of service-vesting awards granted under the 2025 Plan for the nine months ended September 30, 2026 is presented below:

There were no options or awards issued or outstanding under the 2019 Option Plan as of September 30, 2026 (December 31, 2025 – nil)

Note 21. Earnings per share

Basic earnings per share is calculated by dividing net income or loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated in the same manner, with further adjustments made to reflect the dilutive impact of instruments convertible into the Company’s common shares.

The Company has granted RSUs that provided the right to receive, subject to vesting during continued employment, shares of common stock pursuant to the RSU Plan. Any dividend equivalent paid to an employee on RSUs were returned to the Company upon forfeiture of the award by the employee. Unvested RSUs that are entitled to forfeitable dividend equivalents do not qualify as participating securities and are excluded in the Company’s basic and diluted earnings per share computations. Vested RSUs qualify as participating securities and are included in the Company’s diluted earnings per share computation.

The Company also has issued warrants which are exercisable to acquire one common share at a defined exercise price.

The following table sets forth the computation of basic and diluted income (loss) per common share for the three and nine months ended September 30, 2026 and September 30, 2025:

(1)For the three and nine months ended September 30, 2025, both the Arrangement Warrants and the Debenture Warrants were anti-dilutive and are excluded from the calculation of diluted earnings per share. The Arrangement Warrants expired on October 19, 2025. For the three and nine months ended September 30, 2026, the Debenture Warrants were anti-dilutive and are excluded from the calculation of diluted earnings per share.

(2)For the three and nine months ended September 30, 2026 and 2025, RSUs granted and unvested were anti-dilutive and are excluded from the calculation of diluted earnings per share.

The following table summarizes the anti-dilutive securities that are excluded from the computation of diluted income (loss) per share:

The basic and diluted weighted average number of shares issued, anti-dilutive securities, and earnings per share have been retrospectively adjusted to reflect the equivalent number of shares issued to holders of the Company following the Business Combination.

Note 22. Related parties

Servicing Agreement

BC Partners Advisors L.P. (“BCPA”) provides administrative services to the Company under a servicing agreement, and is reimbursed for an allocable portion of compensation paid to the Company's Chief Financial Officer and associated management personnel, and out-of-pocket expenses. For the three and nine months ended September 30, 2026, the Company incurred administrative fees of $1.8 million and $6.1 million (September 30, 2025 – $1.5 million and $3.9 million). As of September 30, 2026, administrative fees payable to BCPA was $3.2 million (December 31, 2025 – $1.7 million).

Staffing and Resource Agreement

Under a Staffing and Resource Agreement, BCPA makes available certain personnel and other resources to support the Company's investment advisory operations. Personnel provided by BCPA are not employees of the Company. The Company pays BCPA a quarterly service fee calculated as a percentage of fee-earning assets under management and may pay equity-based compensation to BCPA or its designees. For the three and nine months ended September 30, 2026, the Company incurred fees payable to BCPA of $1.0 million and $3.0 million (September 30, 2025 – $nil). As of September 30, 2026, fees payable to BCPA was $2.0 million (December 31, 2025 – $1.0 million).

Transactions with Affiliates - servicing fees

Through MLC US Holdings, the Company provides administrative services to SCIM in respect of the management of Alternative Credit Income Fund ("ACIF") in exchange for a servicing fee, under which the Company receives the net economic benefit derived by SCIM under the ACIF advisory agreement, subject to certain retained amounts and expense reimbursements. For the three and nine months ended September 30, 2026, the Company incurred servicing fees of $0.8 million and $2.3 million (September 30, 2025 – $0.4 million and $1.5 million).

The Company, through MLC US Holdings, holds a promissory note issued to SCIM maturing October 30, 2040, bearing interest at 8.0% per annum. As of September 30, 2026, the outstanding principal value of the note was $nil (December 31, 2025 – $13.6 million). For the three and nine months ended September 30, 2026, total interest income was $0.3 million and $0.8 million (September 30, 2025 – $0.3 million and $0.8 million). As of September 30, 2026, accrued interest income receivable was $nil (December 31, 2025 – $3.0 million).

After the ACIF Merger, the Company will no longer provide administrative services to SCIM in respect of ACIF and therefore the Company will no longer receive the net economic benefit derived by SCIM under the ACIF advisory agreement. The promissory note issued to SCIM will no longer be outstanding and the Company will not be entitled to receive the outstanding principal value of the note or the accrued interest receivable at the time of the ACIF Merger.

Transactions with Affiliates - profit sharing interest

MLCSC Holdings LLC, a wholly-owned subsidiary of the Company, is entitled to 16.03% of BCPA's distributions from SCIM under a Profit-Sharing Agreement with BCPSC Holdings LLC, a wholly-owned subsidiary of BCPA and the majority owner of SCIM. The Company holds a 24.99% minority ownership interest in SCIM. The Profit-

Sharing Agreement is carried as an indefinite-lived intangible asset of $8.2 million. Income earned is recorded within "Other income (loss), net". For the three and nine months ended September 30, 2026, income earned was $0.2 million and $0.8 million (September 30, 2025 – 0.3 million).

After the ACIF Merger, the Company will be entitled to a 29.88% share of the revenues from BCPL in the form of the Revenue Share Amount. The Revenue Share Amount is an intangible asset recorded at $12.2 million as of September 30, 2026. The Company will remit one third of the Revenue Share Amount it receives from BCPL every quarter to SCIM in order to pay for the Remaining CIF Payable that remains after netting the $3.8 million and $7.2 million of accrued interest receivable and ACIF Economics Payable, respectively, as of the 9 months ended September 30, 2026.

Potential Conflicts of Interest

The Company's senior management team is comprised of substantially the same personnel as the senior management team of BCPA, and such personnel may serve in similar or other capacities for BCPA or to future investment vehicles affiliated with BC Partners. As a result, such personnel provide investment advisory services to the Company and certain investment vehicles considered affiliates of BC Partners.

Other Transactions with BCPA or their Affiliates

The Servicing Agent, BCPA, may, from time to time, pay amounts owed by the Company to third-party providers of goods or services, and the Company will subsequently reimburse the Servicing Agent for such amounts paid on its behalf. Amounts payable to the Servicing Agent are settled in the normal course of business without any formal payment terms. As of September 30, 2026, operating expenses reimbursable to BC Partners for amounts paid on behalf of the Company was $5.9 million (December 31, 2025 – $4.5 million).

The Company may, from time to time, enter into transactions in the normal course of operations with entities that are considered affiliates involved in the credit business of BCPA (“BCPA Credit Affiliates”). As of September 30, 2026, Asset Management held investments with affiliates of BCPA Credit Affiliates totaling $10.2 million (December 31, 2025 – $25.4 million), and Insurance Solutions held investments with affiliates of BCPA Credit Affiliates totaling $16.0 million (December 31, 2025 – $20.9 million). On these investments, Asset Management recognized (i) interest income of $0.3 million and $0.8 million for the three and nine months ended September 30, 2026 (September 30, 2025 - $0.3 million and $0.8 million) respectively, (ii) earnings on equity method investments of $0.1 million and $0.7 million for the three and nine months ended September 30, 2026 (September 30, 2025 - $0.5 million and $0.8 million) respectively, and (iii) dividend income on equity securities of less than $0.1 million for both the three and nine months ended September 30, 2026 (September 30, 2025 – less than $0.1 million) respectively. On these investments, Insurance Solutions recognized (i) interest income of $0.4 million and $1.3 million for the three and nine months ended September 30, 2026 and $nil and $0.9 million for the three and nine months ended September 30, 2025, respectively, and (ii) dividend income of less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2026 and less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively.

Further, for the three and nine months ended September 30, 2026, the Company incurred expenses of $1.6 million and $5.0 million (September 30, 2025 - $1.8 million and $5.3 million) respectively to an affiliate, for third party administrative services relating to Ability for administering its long-term care block of business. As of September 30, 2026, there was a payable to this affiliate of $0.5 million (December 31, 2025 – $0.6 million).

Note 23. Segments

The Company conducts its business through two reportable segments: Asset Management and Insurance Solutions. The Company defines operating segments by type of product and business line. The Asset Management segment comprises all fee generating activities. The Insurance Solutions segment consists of two product lines within the insurance business, LTC and MYGA.

Segment information is utilized by the Company’s chief operating decision maker (“CODM”) to assess performance and to allocate resources. The Company’s Chief Executive Officer (“CEO”) is the CODM, who is also solely responsible for decisions related to the allocation of resources on a Company-wide basis.

For each segment, the CODM uses the key measure of Segment Income to allocate resources (including employees, financial or capital resources) to that segment in the annual budget and forecasting process. The performance is measured by the Company’s CODM on an unconsolidated basis because the CODM makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and data that exclude the effects of consolidation. Each reportable segment is then responsible for managing its operating results, developing products, defining strategies for services and distributions based on the profile and needs of its business and market.

Segment Income

Segment Income is the key performance measure used by the CODM in evaluating the performance of the asset management and insurance solutions segments. The CODM uses Segment Income to make key operating decisions such as the following:

•decisions related to the allocation of resources such as staffing decisions, including hiring and locations for deployment of the new hires;

•decisions related to capital deployment such as providing capital to facilitate growth for the business and/or to facilitate expansion into new businesses; and

•decisions related to expenses, such as determining annual discretionary bonuses and equity-based compensation awards to its employees and/or service providers.

Segment Income is a measure of profitability and has certain limitations in that it does not take into account certain items included under U.S. GAAP. Segment Income is the sum of (i) Fee Related Earnings and (ii) Spread Related Earnings (“SRE”). Segment Income excludes the effects of the consolidation of each segment, taxes and related payables, and other items unique to deriving each segment’s performance metric as explained respectively below.

Segment Income may not be comparable to similarly titled measures used by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. We use Segment Income as a measure of operating performance, not as a measure of liquidity. Segment Income should not be considered in isolation or as a substitute for net income or other income data prepared in accordance with U.S. GAAP. The use of Segment Income without consideration of related U.S. GAAP measures is not adequate due to the adjustments described above. Management compensates for these limitations by using Segment Income as a supplemental measure to U.S. GAAP results, to provide a more complete understanding of our performance as management measures it. A reconciliation of Segment Income to its most directly comparable U.S. GAAP measure of income (loss) before income tax provision can be found in this footnote.

Fee Related Earnings

Fee Related Earnings (“FRE”) is a component of Segment Income that is used to assess the performance of the Asset Management segment. FRE is the sum of (i) management fees, (ii) performance fees received from certain managed funds, (iii) advisory and transactions fees, (iv) equity investment earnings related to fee generating vehicles, (v) interest income attributable to investment management activity, and (vi) other fee-related income derived from the Company’s profit-sharing agreement over a fee-generating vehicle less (a) fee-related compensation, excluding equity-based compensation, and (b) other associated operating expenses, which excludes amortization of acquisition-related intangible assets and interest and other credit facility expenses.

FRE excludes non-fee generating revenues and expenses, transaction-related charges, equity-based compensation costs, the amortization of intangible assets, the operating results of VIEs that are included in the Condensed Consolidated Financial Statements, and any other non-recurring income and expenses. In addition, FRE excludes interest and other financing costs related to the Company not attributable to any specific segment, and corporate overhead expenses incurred to support the operations of the business rather than directly fee-related. Management considers these types of costs corporate in nature, and are included only for reconciliation purposes to income (loss) before income tax (provision) benefit.

During the third quarter of 2026, the Company revised its definition of FRE to include a proportionate share of operating income on asset management investments held at fair value. Previously, these amounts were excluded from FRE. This change has been applied to all periods presented in the Segment Income table below, and prior period amounts have been recast to conform to the current presentations. The change had no impact on the Company’s condensed consolidated financial statements.

SRE is a component of Segment Income that is used to assess the performance of the Insurance Solutions segment, excluding certain market volatility, which consists of realized and unrealized investment gains (losses), other income and certain general, administrative & other expenses. For the Insurance Solutions segment, SRE equals the sum of

(i) the net investment earnings on Insurance Solutions segment’s net invested assets, excluding net realized gains (losses) on the sale of investments, and investment earnings on funds held under reinsurance contracts and Modco agreements, less (ii) cost of funds (as described below), (iii) compensation and benefits, (iv) interest expense and (v) operating expenses.

Cost of funds includes liability costs associated with the crediting cost on MYGA liabilities as well as other liability costs. Other liability costs include DAC amortization, the cost of liabilities associated with LTC, net of reinsurance, which includes change in reserves, premiums, actual claim experience including related expenses and certain product charges related to MYGA.

During the third quarter of 2026, the Company revised its definition of SRE to exclude net realized gains (losses) on the sale of investments from net investment earnings on Insurance Solutions segment’s net invested assets. Previously these amounts were included in SRE. This change has been applied to all periods presented in the Segment Income table below, and prior period amounts have been recast to conform to the current presentations. The change had no impact on the Company’s condensed consolidated financial statements.

The following presents financial data for the Company’s reportable segments and the reconciliation of Segment Income to Income (loss) before taxes reported in the Condensed Consolidated Statements of Operations:

(1)Represents interest income on a loan asset related to a fee generating vehicle.

(2)Represents corporate overhead allocated to each segment.

(3)Represents costs incurred by the insurance segment for purposes of U.S. GAAP reporting including one-time upfront cost associated with the new initiatives but not the day-to-day operations of the insurance company.

The following presents financial data for the Company’s reportable segments and the reconciliation of Segment Revenue to total revenue reported in the Condensed Consolidated Statements of Operations:

The following presents financial data for the Company’s reportable segments and the reconciliation of the Company’s total reportable segment assets to total assets reported in the Condensed Consolidated Statements of Financial Position:

Note 24. Commitments and contingencies

Investment commitments

In the normal course of business, the Company may enter into commitments to fund investments, which are not reflected in the Condensed Consolidated Financial Statements. There were nil and $45.8 million of outstanding investment commitments as of September 30, 2026 for Asset Management and Insurance Solutions, respectively (December 31, 2025 – $1.4 million and $49.5 million).

Contingent liabilities and litigation

The Company may be subject to lawsuits in the normal course of business. Insurance in particular is a highly regulated industry and lawsuits related to claim payments should be expected in the normal course of business. In the Asset Management business certain types of investment vehicles, especially those offered to individual investors, may subject the Company to a variety of risks, including new and greater levels of public and regulatory scrutiny, regulation, risk of litigation and reputation risk, which could materially and adversely affect the Company. Other potential lawsuits include allegations of mis-selling in the Insurance Solutions segment, among others. The Company considers this risk to be less likely given that Ability currently does not directly write insurance policies.

Ability at different times may receive notifications of the insolvency of various insurance companies. It is expected that such insolvencies would result in a Guaranty Fund Assessment against Ability at some future date. At this time, the Company is unable to estimate the possible amounts, if any, of such assessments as no data is available from the National Organization of Life and Health Guaranty Associations in the United States. Accordingly, the Company is unable to determine the impact, if any, that such assessments may have on its financial position or results of operations.

Ability is subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This category of business litigation typically involves, among other things, allegations of underwriting errors or misconduct and litigation related to regulatory activity. These nonclaims litigation matters are considered when determining general expense accruals are necessary. As of September 30, 2026 there were no litigation related expense accruals. Potential legal and regulatory actions are subject to inherent uncertainties, and future events could change management’s assessment of the probability or estimated amount of potential losses from pending or threatened legal and regulatory matters. A future adverse ruling by the courts in any pending cases could have a material adverse impact on the financial condition of Ability. Based on management’s best assessment at this time, Ability is adequately reserved for these cases as of September 30, 2026.

Note 25. Capital management and regulatory requirements

The Company’s capital structure consists of equity and debt. In order to maintain or adjust the capital structure, the Company actively manages its equity as capital and may adjust the amount of debt borrowings, dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets. The Company's capital management framework takes into account the requirements of the Company as a whole as well as the needs and requirements of each of its subsidiaries. The Company’s officers and senior management are responsible for managing the Company’s capital and do so through quarterly portfolio management meetings and regular review of financial information.

As of September 30, 2026, the Company was in compliance with all financial covenants in its debt facilities. These include restrictions on the distribution capacity from MLC US Holdings to the Company.

Insurance capital requirements

Ability is subject to risk-based capital ("RBC") standards and other minimum capital and surplus requirements imposed by the Nebraska Department of Insurance. Regulatory action is triggered at an RBC ratio of 200% or below, and Ability must maintain a ratio in excess of 300% to reinsure new business. Ability's RBC ratio, tested annually as of Ability's fiscal year-end, was 501% as of December 31, 2025.

Insurance subsidiary dividend restrictions

Under Nebraska law, dividends payable from Ability's unassigned funds during any twelve-month period without prior approval of the Nebraska Department of Insurance are limited to the greater of 10% of Ability's surplus per the prior year-end statutory financial statement, or 100% of net gain from operations for the prior calendar year. Any dividend in excess of this limitation requires approval of the Insurance Director. During the three and nine months ended September 30, 2026 and 2025, Ability could not pay any dividends to its parent absent regulatory approval.

Ability’s statutory statements are presented on the basis of accounting practices determined by the Nebraska Department of Insurance (“NEDOI”). The NEDOI recognizes only permits and/or prescribes certain statutory accounting practices determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under insurance law. The amount of dividends that Ability may pay in a twelve-month period, without prior regulatory approval, is restricted by the laws of Nebraska.

Note 26. Concentration of Risks

Our current operations subject us to the following concentrations of risk:

Historically, we have assumed our MYGA products, which is a part of our insurance operations, from two insurance companies, ACL and SSL. We have made a decision to no longer assume business from ACL and SSL as of June 30, 2024. However, the Company will continue to earn investment income from the cash proceeds of the existing MYGA contracts and the holders will continue to be a diversified base of numerous individuals. Effective March 31, 2025, Ability entered a new reinsurance treaty for additional MYGA with National Security Group (“NSG”), further diversifying its reinsurance partners. Effective September 1, 2026, Sentinel Security Life Insurance Company (“SSL”) recaptured 50% of the quota share liability previously reinsured by the Company. See Note 15. Interest sensitive contract liabilitiesfor further details.

Certain concentrations of credit risk related to reinsurance recoverable exist on LTC business, with the insurance organizations listed in the table below:

(1)Includes credit loss allowance of $0.8 million and $1.1 million as of September 30, 2026 and December 31, 2025 respectively, held against reinsurance recoverable.

Further, our Insurance Solutions segment has the following investment concentration risk:

(1)Other consists of nominal investments primarily in Bermuda, Canada, and United Kingdom.

(2)Other consists of nominal investments primarily in Ireland and Canada.

(1)Other consists of nominal investments primarily in Bermuda, Canada, and United Kingdom.

(2)Other consists of nominal investments primarily in Ireland and Canada.

The Asset Management segment does not have meaningful investment concentration risk.

Note 27. Subsequent events

Management of the Company has evaluated subsequent events through the date these financial statements were issued. Based upon this evaluation, management has determined there were no items requiring adjustment of the financial statements. Management does note the following:

On October 20, 2026, the Company announced it had entered into a definitive agreement to become the new investment advisor to the Alternative Fund Advisors, LLC (“AFA”) Asset Based Lending Fund (“Fund”) (the “Transaction”). In connection with the Transaction, the Company and AFA, who is the Fund’s current investment advisor, have entered into an Asset Purchase Agreement (“APA”) pursuant to which the Company will acquire certain business records, intellectual property, and goodwill of AFA related to the management of the Fund which contains about $230 million of assets under management. The Company is expecting to pay $0.3 million in cash at closing and will make deferred cash installment payments to AFA based on the AUM of the Fund specified future dates. The Fund will be the Company’s second evergreen credit interval fund, complementing the Company’s Opportunistic Credit Interval Fund. The Transaction is expected to close in January 2027.

On November 3, 2026, the Board declared a cash dividend in the amount of $0.03 per common share to be paid on November 30, 2026 to shareholders of record on November 19, 2026.