Company: KG
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028251
Chunk: 301

Company: Kestrel Group Ltd
Filing Date: 2025-03-26
Form: 424B3
Chunk 301
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 Additionally, Class B units have a participation hurdle of $10 million. This hurdle must be met before Class B unit holders begin to participate in profit distributions.

Once the recoupment and participation threshold conditions are satisfied, profits will be distributed among all unit holders according to their respective interests. This structure ensures that initial investors are prioritized in profit distributions, while also providing an opportunity for Class B unit holders to participate in the Company’s financial success once certain financial milestones are achieved. The Company does not have any dilutive equity instruments.

As neither the Company’s undistributed or distributed earnings have exceeded the B Units’ hurdles for any periods presented, no earnings were allocated to the B Units in the computation of earnings per unit.

#### Fair Value
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a three-level hierarchy for fair value measurements based on the observability of inputs to the valuation of an asset or liability as of the measurement date.

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Level 1: Quoted prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.**

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Level 3: Unobservable inputs for the asset or liability, reflecting management’s own assumptions about the assumptions market participants would use in pricing the asset or liability.**

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value of financial instruments is determined using various valuation techniques, including the market approach, income approach, and cost approach, as appropriate. Changes in fair value measurements are recorded in the period in which they occur.

#### Advertising
Advertising costs are recorded in the consolidated statement of operations in the period in which they are incurred.

#### Interest income
Interest income is recorded in the consolidated statements of operations in other income in the period in which it is earned and represents interest earned on the Company’s money market accounts.

#### Equity-Based Compensation
**The Company estimates the fair value of equity-based awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the five-year vesting period using the straight-line attribution method. These amounts are reduced by an