Company: KG
Filing Date: 2025-03-10
Form Type: S-4
Source: 0001104659-25-021993
Chunk: 93

Company: Kestrel Group Ltd
Filing Date: 2025-03-10
Form: S-4
Chunk 93
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 to the sale consideration are classified as held-for-sale on the consolidated balance sheet as of December 31, 2024.

Under the accounting guidance contained in Accounting Standards Codification Topic 205, a business that, upon acquisition, meets the held-for-sale criteria is not analyzed under the strategic shift test. Instead, it is reported in discontinued operations automatically based on its held-for-sale classification. The strategic

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shift test does not apply because the acquired businesses were not previously part of the acquiring entity and would be classified as held-for-sale on the acquisition date. As the historical audited consolidated statement of operations of Maiden for the year ended December 31, 2024, includes the operations of Maiden GF and Maiden LF for the full period presented, pro forma adjustments were added to exclude the operations of Maiden GF and Maiden LF for the year ended December 31, 2024. The unaudited pro forma condensed consolidated combined financial statements exclude the results of operations of Maiden GF and Maiden LF because those businesses will not be considered part of acquiring entity’s continuing operations. 3. Accounting Treatment for the Transaction Bermuda NewCo will be the legal acquiror of Kestrel. However, for accounting purposes, the transaction will be treated as a reverse acquisition and accounted for using the acquisition method in accordance with Accounting Standards Codification Topic 805, Business Combinations . As such, Maiden will be treated as the “acquired” company for accounting purposes. This determination is primarily based on the fact that, subsequent to the consummation of the transaction, former Kestrel equityholders will have a majority of the voting rights of the combined company assuming the shares held by Maiden Re are treated as controlled by the Bermuda NewCo board of directors and former Kestrel equityholders will have the ability to nominate a majority of the members of the board of directors of the combined company. Accordingly, for financial reporting purposes, the net assets of Kestrel will be stated at historical carrying values and its consolidated financial statements will be presented as the predecessor to the combined company in the historical financial statements following the consummation of the transaction. The assets and liabilities of Maiden will be recorded at their fair values measured as of the acquisition date. Any excess of the estimated fair values of the net assets acquired over the purchase price is recorded as a gain on bargain purchase. Based on the preliminary estimated fair values of the assets acquired and liabilities assumed, the bargain purchase gain will be recognized in this transaction. The