Company: MHLA
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001412100-25-000011
Chunk: 97

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 97
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 such holders’ tax advisors regarding the possible classification of Maiden as a PFIC and the resulting U.S. federal income tax considerations. 

The ability of Bermuda NewCo’s subsidiaries to use net operating loss carryforwards and other tax attributes may be limited in connection with the combination with Kestrel or other transactions.

As of December 31, 2024, Maiden and certain of its subsidiaries had U.S. federal net operating losses of approximately $459.6 million. These net operating losses will carry forward to offset a portion of future taxable income, if any, until such unused losses expire, if at all.

Under Sections 382 and 383 of Code, these federal net operating loss carryforwards, certain losses incurred following the combination with Kestrel, and other tax attributes may become subject to an annual limitation in the event of certain changes in Bermuda NewCo’s ownership. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Bermuda NewCo’s, or its subsidiaries’, ability to utilize net operating loss carryforwards, certain losses incurred following the transaction, and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including potential changes in connection with the combination with Kestrel or other transactions. Similar rules may apply under state tax laws. Such limitations could result in increased future income tax liability to Bermuda NewCo or its subsidiaries, and Bermuda NewCo’s or its subsidiaries’ future cash flows could be adversely affected. 

To preserve Bermuda NewCo’s and its subsidiaries’ ability to utilize their tax attributes without limitation, Bermuda NewCo has taken actions to attempt to prevent an “ownership change” from occurring, including adopting provisions that limit or discourage shareholders from acquiring 5% or more of Bermuda NewCo or, in the case of shareholders that already own 5% or more of Bermuda NewCo, from increasing their ownership. Bermuda NewCo may take further actions in the future. There can be no assurances that such actions will be available, or if such actions are available, whether Bermuda NewCo will decide to undertake any such actions. Moreover, there can be no assurances that any existing or future actions will be effective in preventing an “ownership change” pursuant to Section 382 of the Code.

Bermuda NewCo expects to be a tax