Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 259

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 259
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 Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration.Kestrel’s principal executive offices are presently located at 8333 Douglas Avenue, Suite 1360 in Dallas, Texas. The Dallas office is leased through Ledbetter Interests, Ltd., an entity affiliated with Terry Ledbetter, who is the Company's Executive Chairman, pursuant to a Lease Agreement dated October 23, 2019. Kestrel Service Corporation, Kestrel’s wholly owned subsidiary, reimburses Terry Ledbetter via an expense reimbursement provision under his employment agreement for the use of this leased office space. This Lease Agreement expires January 31, 2026 and will not be renewed. Kestrel also leases office space for the corporate office in Austin, Texas, through Kestrel Service Corporation, that expires in 2027. The Austin office will be the principal executive office effective February 1, 2026. Lease payments have an escalating fee schedule, which range from a 3% to 4% increase each year. Termination of the lease is generally prohibited unless there is a violation under the lease agreement. Neither of these leases meet the minimum threshold for lease liability recognition and therefore these rent payments are expensed as incurred. Maiden also leases office space in a building in New York City that commenced in April 2024, which created a significant right-of-use asset and lease liability upon completion of leasehold improvements for the ten-year operating lease. This lease comprises the entire lease liabilty and right-of-use asset that was recognized on the consolidated balance sheet at June 30, 2025.As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 7.1%, representing its secured incremental borrowing rate, in calculating the present value of the lease liability. At June 30, 2025, the Company's future lease obligations of $2,160 (2024 - $244) were calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using its secured incremental borrowing rate. This amount has been recognized on the Condensed Consolidated Balance Sheet as a lease liability within accrued expenses and other liabilities with the right-of-use asset presented as part of other assets. At June 30, 2025, the Company's right-of-use lease asset was $1,584 (2024 - $223).The Company has made an accounting policy election not to include renewal, termination, or