Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 258

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 8
Chunk 258
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 the Company incurring any losses pertaining to project level financing guarantees was determined to be remote. Therefore, no liability has been accrued under ASC 450-20.Other Contingent CommitmentsAs a result of the Combination Agreement, Kestrel Equityholders are entitled to receive in contingent consideration up to the lesser of (x) an aggregate number of Kestrel Group common shares equal to $45.0 million divided by certain volume weighted average prices of such shares, subject to the achievement of certain EBITDA milestones by the businesses that Kestrel conducted immediately prior to closing and any extensions of such businesses or related or ancillary businesses existing thereafter, subject to other terms and conditions as set forth in the combination agreement and (y) 2.75 million common shares of Kestrel Group. On June 30, 2025, the fair value of this contingent consideration was $2,679 which is reported on its own line in the Condensed Consolidated Balance Sheets. The change in fair value of the earn out liability was an increase of $2,679 for the three and six months ended June 30, 2025, respectively, and was recorded in the condensed consolidated statements of net income during the reporting period.

 45

KESTREL GROUP LTD NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(in thousands of U.S. dollars, except share and per share data)

11. Commitments,  Contingencies and Guarantees (continued)At June 30, 2025, the Company holds a contingent receivable in the insurance distribution industry.  Pursuant to the terms of the investment agreement, the Company will receive a series of distributions. The Company currently estimates that the net present value of these potential distributions is $14,347 which has been classified as receivable and reported in Other Assets on the condensed consolidated balance sheets at June 30, 2025. Under ASC 805, the earn out consideration for this receivable will be adjusted to fair value at each reporting period with any changes in fair value reported immediately in net income.c)Operating Lease CommitmentsThe Company leases office spaces and equipment under various operating leases expiring in various years through 2034. The Company's leases are currently classified as operating leases and none of them have non-lease components. For operating leases that have a lease term of more than twelve months, and whose lease payments are above a certain threshold, the Company recognizes a lease liability and a right-of-use asset in the