# EDGAR Filing Document

**Accession Number:** 0001463913
**File Stem:** 0001437749-25-035028
**Filing Date:** 2025-11
**Character Count:** 134982
**Document Hash:** 5d091bc5df6d55a7ceee3847053caeb1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-035028.hdr.sgml**: 20251114

**ACCESSION NUMBER**: 0001437749-25-035028

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 56

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251114

**DATE AS OF CHANGE**: 20251114

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** US Alliance Corp
- **CENTRAL INDEX KEY:** 0001463913
- **STANDARD INDUSTRIAL CLASSIFICATION:** LIFE INSURANCE [6311]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 264824142
- **STATE OF INCORPORATION:** KS
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55627
- **FILM NUMBER:** 251482145

**BUSINESS ADDRESS:**
- **STREET 1:** 4123 SW GAGE CENTER DRIVE
- **STREET 2:** SUITE 240
- **CITY:** TOPEKA
- **STATE:** KS
- **ZIP:** 66604
- **BUSINESS PHONE:** 816-460-5807

**MAIL ADDRESS:**
- **STREET 1:** 4123 SW GAGE CENTER DRIVE
- **STREET 2:** SUITE 240
- **CITY:** TOPEKA
- **STATE:** KS
- **ZIP:** 66604

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** U. S. Alliance Corp
- **DATE OF NAME CHANGE:** 20090512

?xml version='1.0' encoding='ASCII'? usac20250930_10q.htm

[**Table of Contents**](#toc)

**UNITED STATES**

 **SECURITIES AND EXCHANGE COMMISSION**

 **Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2025.**

or

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from to

**Commission File Number: 000-55627**

**US ALLIANCE CORPORATION**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Kansas** | **26-4824142** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

---

| | |
|:---|:---|
| **1303 SW First American Pl, Suite 200, Topeka, Kansas** | **66604** |
| (Address of principal executive offices) | (Zip Code) |

---

**(785) 228-0200**

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Large accelerated<br> filer | ☐ | Accelerated<br> filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting<br> company | ☑ | Emerging growth<br> company | ☐ |

---

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the exchange act. ☐

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock, $0.10 par value

7,748,922 shares outstanding

as of November 1, 2025

------

[**Table of Contents**](#toc)

**US ALLIANCE CORPORATION**

**FORM 10-Q**

**TABLE OF CONTENTS**

**Part I - Financial Information**

---

| | | |
|:---|:---|:---|
| **Item** | **Item Description** | **Page** |
| Item 1 | [<u>Financial Statements</u>](#bs) | <u>[3](#bs)</u> |
|  | [<u>Consolidated Balance Sheets</u> <u>(unaudited)</u>](#bs) | <u>[3](#bs)</u> |
|  | [<u>Consolidated Statements of Comprehensive Income (Loss)</u> <u>(unaudited)</u>](#ci) | <u>[4](#ci)</u> |
|  | [<u>Consolidated Statements of Changes in Shareholders' Equity</u> <u>(unaudited)</u>](#es) | <u>[5](#es)</u> |
|  | [<u>Consolidated Statements of Cash Flows</u> <u>(unaudited)</u>](#cf) | <u>[6](#cf)</u> |
|  | [<u>Notes to Consolidated Financial Statements</u>](#notes) | <u>[7](#notes)</u> |
| Item 2 | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#mda) | <u>[23](#mda)</u> |
| Item 3 | [<u>Quantitative and Qualitative Disclosures About Market Risk</u>](#qqd) | <u>[35](#qqd)</u> |
| Item 4 | [<u>Controls and Procedures</u>](#cp) | <u>[35](#cp)</u> |
| **Part II - Other Information** | **Part II - Other Information** | **Part II - Other Information** |
| **Item** | **Item Description** |  |
| Item 1 | [<u>Legal Proceedings</u>](#lp) | <u>[35](#lp)</u> |
| Item 1A | [<u>Risk Factors</u>](#rf) | <u>[35](#rf)</u> |
| Item 2 | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#uses) | <u>[35](#uses)</u> |
| Item 3 | [<u>Defaults Upon Senior Securities</u>](#duss) | <u>[35](#duss)</u> |
| Item 4 | [<u>Mine Safety Disclosures</u>](#msd) | <u>[35](#msd)</u> |
| Item 5 | [<u>Other Information</u>](#oi) | <u>[35](#oi)</u> |
| Item 6 | [<u>Exhibits</u>](#ex) | <u>[36](#ex)</u> |
|  | [<u>Signatures</u>](#sigs) | <u>[37](#sigs)</u> |

---

------

[**Table of Contents**](#toc)

**US Alliance Corporation**

**Consolidated Balance Sheets** 

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
|  | **(unaudited)** |  |
| **Assets** |  |  |
| Investments: |  |  |
| Available for sale fixed maturity securities (amortized cost: $80,179,352 and $83,785,307, net of allowances for credit losses of $0 and $0, as of September 30, 2025 and December 31, 2024, respectively) | $**76918671** | $79578179 |
| Equity securities, at fair value | **3298835** | 3876085 |
| Limited partnership interests | **1160515** | 428170 |
| Mortgage loans on real estate (net of allowance for credit losses of $106,085 and $55,685 as of September 30, 2025 and December 31, 2024, respectively) | **24733459** | 25192749 |
| Other invested assets | **1234463** | 1109606 |
| Policy loans | **40547** | 31745 |
| Real estate, net of depreciation | **1611623** | 1652553 |
| Total investments | **108998113** | 111869087 |
| Cash and cash equivalents | **8085240** | 6903783 |
| Investment income due and accrued | **803589** | 954324 |
| Reinsurance related assets | **794925** | 522142 |
| Deferred acquisition costs, net | **3753316** | 3908636 |
| Value of business acquired, net | **2264238** | 2333553 |
| Property, equipment and software, net | **126334** | 136353 |
| Goodwill | **277542** | 277542 |
| Federal and state income tax receivable | **178087** | 182349 |
| Deferred tax asset, net of valuation allowance | **3841260** | 3747111 |
| Other assets | **730754** | 459102 |
| **Total assets** | $**129853398** | $131293982 |
| **Liabilities and Shareholders' Equity** |  |  |
| Liabilities: |  |  |
| Policy liabilities |  |  |
| Deposit-type contracts | $**70519264** | $77940378 |
| Policyholder benefit reserves | **44791195** | 39898138 |
| Dividend accumulation | **101242** | 100885 |
| Advance premiums | **252242** | 248749 |
| Total policy liabilities | **115663943** | 118188150 |
| Accounts payable and accrued expenses | **1713125** | 1133521 |
| Federal Home Loan Bank advance | **1250000** | 1250000 |
| Other liabilities | **46958** | 91893 |
| **Total liabilities** | **118674026** | 120663564 |
| Shareholders' Equity: |  |  |
| Common stock, $0.10 par value. Authorized 20,000,000 shares; issued and outstanding 7,748,922 and 7,748,922 shares as of September 30, 2025 and December 31, 2024 | **774893** | 774893 |
| Additional paid-in capital | **22996315** | 22966657 |
| Accumulated deficit | **(10466251)** | (10020956) |
| Accumulated other comprehensive loss | **(2125585)** | (3090176) |
| **Total shareholders' equity** | **11179372** | 10630418 |
| **Total liabilities and shareholders' equity** | $**129853398** | $131293982 |

---

See Notes to Consolidated Financial Statements.

------

[**Table of Contents**](#toc)

**US Alliance Corporation**

**Consolidated Statements of Comprehensive Income (loss)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | 2024 | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| Income: |  |  |  |  |
| Premium income | $**12982213** | $11299100 | $**4428002** | $3544213 |
| Net investment income | **5366335** | 5306212 | **1650945** | 1310732 |
| Net investment (losses) gains | **(66088)** | 568778 | **263690** | 56118 |
| Other income | **375601** | 455741 | **157046** | 80473 |
| **Total income** | **18658061** | 17629831 | **6499683** | 4991536 |
| Expenses: |  |  |  |  |
| Death claims | **3935880** | 2938512 | **1185854** | 815287 |
| Policyholder benefits | **5611283** | 5292687 | **1688433** | 1530753 |
| Increase in policyholder reserves | **4545016** | 3962363 | **1762710** | 1474839 |
| Commissions, net of deferrals | **720065** | 654809 | **274927** | 218441 |
| Amortization of deferred acquisition costs | **1007517** | 1046775 | **344151** | 349402 |
| Amortization of value of business acquired | **69315** | 69315 | **23105** | 23105 |
| Salaries & benefits | **1248947** | 1140240 | **430717** | 431837 |
| Other operating expenses | **1988437** | 2058170 | **636459** | 623378 |
| **Total expenses** | **19126460** | 17162871 | **6346356** | 5467042 |
| **Net (loss) income before tax** | $**(468399)** | $466960 | $**153327** | $(475506) |
| **Current federal income tax expense** | **-** |  |  |  |
| **Deferred federal income tax benefit (expense)** | **23104** | (114298) | **(17800)** | 103134 |
| **Total federal income tax benefit** | **23104** | **(114298)** | **(17800)** | **103134** |
| **Net (loss) income** | $**(445295)** | $**352662** | $**135527** | $**(372372)** |
| **Net (loss) income per common share, basic and diluted** | $**(0.06)** | $**0.05** | $**0.02** | $**(0.05)** |
| Unrealized net holding gains arising during the period, net of tax | **897540** | 1476857 | **633556** | 1634813 |
| Reclassification adjustment for losses included in net income | **67051** | 165907 | **(85056)** | 120845 |
| Other comprehensive income | **964591** | 1642764 | **548500** | 1755658 |
| **Comprehensive income** | $**519296** | $**1995426** | $**684027** | $**1383286** |

---

See Notes to Consolidated Financial Statements.

------

[**Table of Contents**](#toc)

**US Alliance Corporation**

**Consolidated Statements of Changes in Shareholders' Equity**

**Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Accumulated |  |  |
|  | Number of |  |  | Other |  |  |
|  | Shares of | Common | Additional | Comprehensive | Accumulated |  |
|  | Common Stock | Stock | Paid-in Capital | Loss | Deficit | Total |
| **Balance, December 31, 2023** | **7748922** | $**774893** | $**22964490** | $**(2916372)** | $**(10491934)** | $**10331077** |
| Other comprehensive income |  |  |  | 1642764 |  | 1642764 |
| Net income |  |  |  |  | 352662 | 352662 |
| **Balance, September 30, 2024** | **7748922** | **774893** | **22964490** | **(1273608)** | **(10139272)** | **12326503** |
| **Balance, December 31, 2024** | **7748922** | $**774893** | $**22966657** | $**(3090176)** | $**(10020956)** | $**10630418** |
| Other comprehensive income |  |  |  | 964591 |  | 964591 |
| Stock based compensation on Restricted Stock Awards |  |  | 29658 |  |  | 29658 |
| Net loss |  |  |  |  | (445295) | (445295) |
| **Balance, September 30, 2025** | **7748922** | $**774893** | $**22996315** | $**(2125585)** | $**(10466251)** | $**11179372** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Accumulated |  |  |
|  | Number of |  |  | Other |  |  |
|  | Shares of | Common | Additional | Comprehensive | Accumulated |  |
|  | Common Stock | Stock | Paid-in Capital | Income / (Loss) | Deficit | Total |
| **Balance, June 30, 2024** | **7748922** | $**774893** | $**22964490** | $**(3029266)** | $**(9766900)** | $**10943217** |
| Other comprehensive income |  |  |  | 1755658 |  | 1755658 |
| Net loss |  |  |  |  | (372372) | (372372) |
| **Balance, September 30, 2024** | **7748922** | $**774893** | $**22964490** | $**(1273608)** | $**(10139272)** | $**12326503** |
| **Balance, June 30, 2025** | **7748922** | $**774893** | $**22986429** | $**(2674085)** | $**(10601778)** | $**10485459** |
| Other comprehensive income |  |  |  | 548500 |  | 548500 |
| Stock based compensation on Restricted Stock Awards |  |  | 9886 |  |  | 9886 |
| Net income |  |  |  |  | 135527 | 135527 |
| **Balance, September 30, 2025** | **7748922** | $**774893** | $**22996315** | $**(2125585)** | $**(10466251)** | $**11179372** |

---

See Notes to Consolidated Financial Statements.

------

[**Table of Contents**](#toc)

**US Alliance Corporation**

**Consolidated Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** |
| Cash Flows from operating activities: |  |  |
| Net (loss) income | $**(445295)** | $352662 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| Depreciation and amortization | **62169** | 59364 |
| Net losses realized on the sale of securities and net credit losses recognized in operations | **405568** | 171776 |
| Unrealized losses on equity securities | **(599275)** | (1006400) |
| Change in fair value of embedded derivative | **259795** | 265846 |
| (Accretion) amortization of investment securities, net | **(221337)** | (497386) |
| Deferred acquisition costs capitalized | **(852198)** | (430088) |
| Deferred acquisition costs amortized | **1007518** | 1046775 |
| Value of business acquired amortized | **69315** | 69315 |
| Interest credited on deposit type contracts | **1452084** | 1479337 |
| (Increase) decrease in operating assets: |  |  |
| Investment income due and accrued | **150735** | 883515 |
| Reinsurance related assets | **(532578)** | 57697 |
| Deferred tax assets, net of valuation allowance | **(94149)** | 460377 |
| Other assets | **(267390)** | (1113994) |
| Increase (decrease) in operating liabilities: |  |  |
| Policyowner benefit reserves | **4893057** | 4042362 |
| Dividend accumulation | **357** | (14756) |
| Advance premiums | **3493** | 28455 |
| Other liabilities | **(44935)** | 20190 |
| Accounts payable and accrued expenses | **579604** | (1047323) |
| **Net cash provided by operating activities** | **5826538** | 4827724 |
| Cash Flows from investing activities: |  |  |
| Purchase of fixed income investments | **(8046537)** | (12099066) |
| Purchase of equity investments | **(902927)** | (341452) |
| Purchase of mortgage investments | **(4177613)** | (13296032) |
| Purchase of other invested assets | **(32699)** | (165197) |
| Proceeds from fixed income sales and repayments | **11651675** | 9172094 |
| Proceeds from equity sales | **1505945** | 1229759 |
| Proceeds from mortgage repayments | **4220637** | 7096806 |
| Proceeds from other invested assets | **-** | 39431 |
| Increase in policy loans | **(8802)** | (4846) |
| Purchase of property, equipment and software | **(11220)** | (43695) |
| **Net cash provided by (used in) investing activities** | **4198459** | (8412198) |
| Cash Flows from financing activities: |  |  |
| Receipts on deposit-type contracts | **4290736** | 5039078 |
| Withdrawals on deposit-type contracts | **(13163934)** | (5944736) |
| Restricted stock awards | **29658** |  |
| **Net cash used in financing activities** | **(8843540)** | (905658) |
| **Net increase (decrease) in cash and cash equivalents** | **1181457** | (4490132) |
| Cash and Cash Equivalents: |  |  |
| Beginning | **6903783** | 8982138 |
| Ending | $**8085240** | $4492006 |

---

See Notes to Consolidated Financial Statements.

------

[**Table of Contents**](#toc)

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

---

| | |
|:---|:---|
| **Note 1.** | **Description of Business and Significant Accounting Policies** |

---

<u>Description of business</u>: US Alliance Corporation ("USAC") was formed as a Kansas corporation on April 24, 2009 to raise capital to form a new Kansas-based life insurance company. Our offices are located at 1303 SW First American Place, Suite 200, Topeka, Kansas 66604. Our telephone number is 785-228-0200 and our website address is <u>www.usalliancecorporation.com</u>.

USAC has four wholly-owned operating subsidiaries. US Alliance Life and Security Company ("USALSC") was formed June 9, 2011, to serve as our life insurance company. US Alliance Marketing Corporation ("USAMC") was formed April 23, 2012, to serve as a marketing resource. US Alliance Investment Corporation ("USAIC") was formed April 23, 2012 to serve as investment manager for USAC. Dakota Capital Life Insurance Company ("DCLIC"), was acquired on August 1, 2017 when USAC merged with Northern Plains Capital Corporation ("NPCC") and was merged into USALSC on December 31, 2023. US Alliance Life and Security Company - Montana (USALSC-Montana), was acquired December 14, 2018. USALSC-Montana is a wholly-owned subsidiary of USALSC. Unless the context indicates otherwise, references herein to the "Company" refer to USAC and its consolidated subsidiaries.

The Company terminated its initial public offering on February 24, 2013. During the balance of 2013, the Company achieved approval of an array of life insurance and annuity products, began development of various distribution channels and commenced insurance operations and product sales. The Company sold its first insurance product on May 1, 2013. The Company continued to expand its product offerings and distribution channels throughout 2014 and 2015. On February 24, 2015, the Company commenced a warrant exercise offering set to expire on February 24, 2016. On February 24, 2016, the Company extended the offering until February 24, 2017 and made additional shares available for purchase. All outstanding warrants expired on April 1, 2016. The Company further extended this offering to February 24, 2024. During the 4th quarter of 2017, the Company began a private placement offering to accredited investors in the state of North Dakota. Both offerings were terminated in the second quarter of 2024.

USALSC received a Certificate of Authority from the Kansas Insurance Department ("KID") effective January 2, 2012, and sold its first insurance product on May 1, 2013. In 2023, USALSC re-domesticated to North Dakota with approval of the North Dakota Insurance Department ("NDID").

USALSC seeks opportunities to develop and market additional products.

The Company's business model also anticipates the acquisition by USAC and/or USALSC of other insurance and insurance related companies, including third-party administrators, marketing organizations, and rights to other blocks of insurance business through reinsurance or other transactions.

<u>Basis of presentation</u>: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included.

The results of operation for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ended December 31, 2025 or for any other interim period or for any other future year. Certain financial information which is normally included in notes to financial statements prepared in accordance with US GAAP, but which are not required for interim reporting purposes, has been condensed or omitted. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in USAC's report on Form 10-K and amendments thereto for the year ended December 31, 2024.

<u>Principles of consolidation</u>: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated from the consolidated financial statements.

<u>Area of Operation:</u> US Alliance Life and Security Company is authorized to operate in the states of Kansas, North Dakota, Missouri, Nebraska, Oklahoma, Wyoming, South Dakota, Montana, Kentucky, Utah, Alabama, Ohio, Mississippi, New Mexico, Texas, Arizona, Nevada, and Idaho. USALSC-Montana is authorized to operate in the state of Montana.

<u>Common stock and income (loss) per share:</u> The par value for common stock is $0.10 per share with 20,000,000 shares authorized. As of September 30, 2025, and December 31, 2024, USAC had 7,748,922 common shares issued and outstanding.

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[**Table of Contents**](#toc)

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

Income (loss) per share attributable to USAC's common stockholders were computed based on the net income (loss) and the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding during the nine months ended September 30, 2025 and 2024 were 7,748,922 shares. The weighted average number of shares outstanding during the three months ended September 30, 2025 and 2024 were 7,748,922 shares. Potential common shares are excluded from the computation when their effect is anti-dilutive. There was no difference between basic and diluted net loss per common share for the three and nine months ended September 30, 2025 and 2024.

<u>New accounting standards</u>:

*Improvements to Income Tax Disclosures*

In December 2023, the FASB issued Accounting Standards Update 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 is intended to improve the effectiveness of income tax disclosures by requiring, among other things, the disclosure on an annual basis of: (i) specific categories in the rate reconciliation; and (ii) additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires disclosure (on an annual basis) of the following information about income taxes paid: (i) the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes; and (ii) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). ASU 2023-09 is effective for annual periods beginning January 1, 2026, to be applied prospectively with an option for retrospective application (with early adoption permitted). The adoption of ASU 2023-09 will modify our disclosures but will not have an impact on our financial position or results of operations.

*Improvements to Reportable Segment Disclosures*

In November 2023, the FASB issued ASU 2023-07 ("Improvements to Reportable Segment Disclosures") which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The adoption of this ASU modified our disclosures but did not have an impact on our financial position or results of operations. Refer to Note 7 of the consolidated financial statements for the disclosure.

*Targeted Improvements to the Accounting for Long-Duration Contracts*

In August 2018, the FASB issued ASU 2018-12 "Financial Services-Insurance (Topic 944) - Targeted Improvements to the Accounting for Long-Duration Contracts". This update is aimed at improving the Codification related to long-duration contracts, which will improve the timeliness of recognizing changes in the liability for future policy benefits, simplify accounting for certain market-based options, simplify the amortization of deferred acquisition costs, and improve the effectiveness of required disclosures. These updates were originally required to be applied retrospectively to the earliest period presented in the financial statements for periods beginning after December 15, 2020. The FASB delayed the effective date of ASU 2018-12 to fiscal years beginning after December 15, 2024 and interim periods for fiscal years beginning after December 31, 2025 for smaller reporting companies, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the Company's financial condition and results of operations.

In December 2022, the FASB issued amendments ASU 2022-05 to ASU 2018-12 "Targeted Improvements for Long-Duration Contracts" that originally required an insurance entity to apply a retrospective transition method as of the beginning of the earliest period presented or the beginning of the prior fiscal year if early adoption was elected. This updated guidance reduces implementation costs and complexity associated with the adoption of targeted improvements in accounting for long-duration contracts that have been derecognized in accordance with ASU 2018-12 before the delayed effective date. Without the amendments in this ASU, an insurance entity would be required to reclassify a portion of gains or losses previously recognized in the sale or disposal of insurance contracts or legal entities because of the adoption of a new accounting standard.

Because there is no effect on an insurance entity's future cash flows, this reclassification may not be useful to users of financial information. The amendments in this guidance are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. While our evaluation is ongoing, preliminary analysis indicates the adoption of LDTI is expected to result in an increase in accumulated other comprehensive income (AOCI) primarily due to the requirement to update discount rate assumptions used in measuring the liability for future policy benefits, and an increase to retained earnings, reflecting adjustments to remove the provision for adverse developments (PAD) for mortality assumptions, and an increase in the amortization period of deferred acquisition costs on single premium contracts. The actual impacts may differ from preliminary analysis. The adoption will not affect statutory capital, cash flows, or the underlying economics of our business. We anticipate that the most significant effect of LDTI will be increased volatility in other comprehensive income going forward, as discount rate changes will be recognized through AOCI. Additional disclosures will be provided upon adoption.

All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did not relate to accounting policies and procedures pertinent or material to the Company at this time.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments** |

---

**Fixed Maturity**

The amortized cost and fair value of available for sale investments as of September 30, 2025 and December 31, 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30 2025** | **September 30 2025** | **September 30 2025** | **September 30 2025** |
|  | **Cost or** | **Gross** | **Gross** |  |
|  | **Amortized** | **Unrealized** | **Unrealized** |  |
|  | **Cost** | **Gains** | **Losses** | **Fair Value** |
|  | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| **Available for sale:** |  |  |  |  |
| **Fixed maturities:** |  |  |  |  |
| **US Treasury securities** | $**807508** | $**531** | $**(73357)** | $**734682** |
| **Corporate bonds** | **22307750** | **253241** | **(2504263)** | **20056728** |
| **Municipal bonds** | **5775816** | **1580** | **(507023)** | **5270373** |
| **Redeemable preferred stock** | **2140013** | **1469** | **(125320)** | **2016162** |
| **Term loans** | **9379677** | **14574** | **(165756)** | **9228495** |
| **Mortgage backed and asset backed securities** | **39768588** | **670766** | **(827123)** | **39612231** |
| **Total available for sale** | $**80179352** | $**942161** | $**(4202842)** | $**76918671** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Cost or** | **Gross** | **Gross** |  |
|  | **Amortized** | **Unrealized** | **Unrealized** |  |
|  | **Cost** | **Gains** | **Losses** | **Fair Value** |
| **Available for sale:** |  |  |  |  |
| **Fixed maturities:** |  |  |  |  |
| **US Treasury securities** | $**799543** | $**-** | $**(88166)** | $**711377** |
| **Corporate bonds** | **24370244** | **111868** | **(2990292)** | **21491820** |
| **Municipal bonds** | **5416888** | **-** | **(675739)** | **4741149** |
| **Redeemable preferred stock** | **2562893** | **36** | **(151695)** | **2411234** |
| **Term loans** | **12971452** | **28936** | **(212084)** | **12788304** |
| **Mortgage backed and asset backed securities** | **37664287** | **715541** | **(945533)** | **37434295** |
| **Total available for sale** | $**83785307** | $**856381** | $**(5063509)** | $**79578179** |

---

The amortized cost and fair value of debt securities as of September 30, 2025 and December 31, 2024, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | As of September 30, 2025 | As of September 30, 2025 | As of December 31, 2024 | As of December 31, 2024 |
|  | Amortized Cost | Fair Value | Amortized Cost | Fair Value |
|  | (unaudited) | (unaudited) |  |  |
| Amounts maturing in: |  |  |  |  |
| One year or less | $- | $- | $2329128 | $2329128 |
| After one year through five years | 14012095 | 14094849 | 18590198 | 18410081 |
| After five years through ten years | 4744891 | 4650391 | 2032061 | 1967540 |
| More than 10 years | 19513765 | 16545038 | 20606740 | 17025901 |
| Redeemable preferred stocks | 2140013 | 2016162 | 2562893 | 2411234 |
| Mortgage backed and asset backed securities | 39768588 | 39612231 | 37664287 | 37434295 |
| Total amortized cost and fair value | $80179352 | $76918671 | $83785307 | $79578179 |

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

In June 2016, the FASB issued ASC 326 ("Current Expected Credit Loss (CECL)"). The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. mortgage loans and reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected. Changes in the allowance for credit losses are included in net losses.

Proceeds from the sale of securities, maturities, and asset paydowns for the nine months ended September 30, 2025 and 2024 were $17,378,257 and $17,538,090, respectively. Realized gains and losses related to the sale of securities and net credit losses recognized in income are summarized as follows:

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Gross gains | $**168416** | $48824 |
| Gross losses | **(523584)** | (188450) |
| Net security losses | $**(355168)** | $(139626) |
| Mortgage loans on real estate | **(50400)** | (32150) |
| (Increase) Decrease in allowance for credit losses | $**(50400)** | $(32150) |

---

Proceeds from the sale of securities, maturities, and asset paydowns for the three months ended September 30, 2025 and 2024 were $9,744,576 and $4,480,697, respectively. Realized gains and losses related to the sale of securities and net credit losses recognized in income are summarized as follows:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Gross gains | $**168416** | $26754 |
| Gross losses | **(22694)** | (121426) |
| Net security losses | $**145722** | $(94672) |
| Fixed maturity securities | **-** | **116563** |
| Mortgage loans on real estate | **(39677)** | (23013) |
| (Increase) Decrease in allowance for credit losses | $**(39677)** | $93550 |

---

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

Gross unrealized losses by duration are summarized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Less than 12 months** | **Less than 12 months** | **Greater than 12 months** | **Greater than 12 months** | **Total** | **Total** |
|  | **Fair** | **Unrealized** | **Fair** | **Unrealized** | **Fair** | **Unrealized** |
|  | **Value** | **Loss** | **Value** | **Loss** | **Value** | **Loss** |
| **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| **Available for sale:** |  |  |  |  |  |  |
| **Fixed maturities:** |  |  |  |  |  |  |
| **US Treasury securities** | $**49545** | $**(6)** | $**283028** | $**(73351)** | $**332573** | $**(73357)** |
| **Corporate bonds** | **395893** | **(16427)** | **12590926** | **(2487836)** | **12986819** | **(2504263)** |
| **Municipal bonds** | **1124067** | **(17522)** | **3770436** | **(489501)** | **4894503** | **(507023)** |
| **Redeemable preferred stock** | **-** | **-** | **1392723** | **(125320)** | **1392723** | **(125320)** |
| **Term loans** | **1560887** | **(10060)** | **5413557** | **(155696)** | **6974444** | **(165756)** |
| **Mortgage backed and asset backed securities** | **8722207** | **(146442)** | **6138873** | **(680681)** | **14861080** | **(827123)** |
| **Total fixed maturities** | $**11852599** | $**(190457)** | $**29589543** | $**(4012385)** | $**41442142** | $**(4202842)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Less than 12 months** | **Less than 12 months** | **Greater than 12 months** | **Greater than 12 months** | **Total** | **Total** |
|  | **Fair** | **Unrealized** | **Fair** | **Unrealized** | **Fair** | **Unrealized** |
|  | **Value** | **Loss** | **Value** | **Loss** | **Value** | **Loss** |
| **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **Available for sale:** |  |  |  |  |  |  |
| **Fixed maturities:** |  |  |  |  |  |  |
| **US Treasury securities** | $**444105** | $**(7244)** | $**267272** | $**(80922)** | $**711377** | $**(88166)** |
| **Corporate bonds** | **1959130** | **(52671)** | **12336095** | **(2937621)** | **14295225** | **(2990292)** |
| **Municipal bonds** | **1190019** | **(56801)** | **3551130** | **(618938)** | **4741149** | **(675739)** |
| **Redeemable preferred stock** | **-** | **-** | **2337770** | **(151695)** | **2337770** | **(151695)** |
| **Term loans** | **-** | **-** | **2609831** | **(212084)** | **2609831** | **(212084)** |
| **Mortgage backed and asset backed securities** | **10201273** | **(241577)** | **4708468** | **(703956)** | **14909741** | **(945533)** |
| **Total fixed maturities** | $**13794527** | $**(358293)** | $**25810566** | $**(4705216)** | $**39605093** | $**(5063509)** |

---

Unrealized losses occur from market price declines due to changes in interest rates. The total number of available for sale fixed maturity securities in the investment portfolio in an unrealized loss position as of September 30, 2025 was 187, which represented an unrealized loss of $4,202,842 of the aggregate carrying value of those securities. The 187 securities breakdown as follows: 107 bonds, 64 mortgage and asset backed securities, 9 term loans, and 7 redeemable preferred stock. Management does not intend to sell and it is likely that management will not be required to sell before their anticipated recovery. Unrealized losses on fixed maturities are almost exclusively related to changes in interest rates and will be recovered if the securities are not sold prior to maturity.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

**Mortgage Loans on Real Estate**

The Company has invested in various mortgage loans through participation agreements with the original issuing entity. The Company's mortgage loans by property type as of September 30, 2025 and December 31, 2024 are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | September 30, 2025 | December 31, 2024 |
|  | (unaudited) |  |
| Commercial mortgage loans by property type |  |  |
| Mixed use | $3161662 | $2159630 |
| Lodging | 2457215 | 2486961 |
| Multi-property | 613764 | 2188704 |
| Multi-family | 3147098 | 3202740 |
| Industrial | 1800000 | 1800000 |
| Retail/Office | 13659805 | 13410399 |
| Total commercial mortgages | $24839544 | $25248434 |
| Allowance for credit losses | (106085) | (55685) |
| Carrying value | $24733459 | $25192749 |

---

The Company's mortgage loans by loan-to-value ratio as of September 30, 2025 and December 31, 2024 are summarized as follows:

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| | | |
|:---|:---|:---|
|  | September 30, 2025 | December 31, 2024 |
|  | (unaudited) |  |
| Loan to value ratio |  |  |
| Over 70 to 80% | $892800 | $892800 |
| Over 60 to 70% | 7692306 | 6399210 |
| Over 50 to 60% | 7700000 | 10215293 |
| Over 40 to 50% | 4116941 | 1820562 |
| Over 30 to 40% | 3734472 | 3231865 |
| Over 20 to 30% |  | 2188704 |
| Over 10 to 20% | 703025 | 500000 |
| Total | $24839544 | $25248434 |
| Allowance for credit losses | (106085) | (55685) |
| Carrying value | $24733459 | $25192749 |

---

The Company's mortgage loans by maturity date as of September 30, 2025 and December 31, 2024 are summarized as follows:

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| | | |
|:---|:---|:---|
|  | September 30, 2025 | December 31, 2024 |
|  | (unaudited) |  |
| Maturity Date |  |  |
| One year or less | $9187766 | $6566055 |
| After one year through five years | 15651778 | 18682379 |
| Total | $24839544 | $25248434 |
| Allowance for credit losses | (106085) | (55685) |
| Carrying value | $24733459 | $25192749 |

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

The Company evaluates commercial mortgage loans on a collective basis when similar risk characteristics exist and on an individual basis when such characteristics are not present. For individually evaluated loans where it is determined that it is not probable that all amounts due under the contractual terms will be collected, the Company measures expected credit losses based on the present value of expected future cash flows, discounted at the loan's original effective interest rate. If repayment is expected to be provided solely through the sale or operation of the collateral, expected credit losses are measured based on the fair value of the collateral, adjusted for estimated costs to sell when appropriate. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the loans to present the net carrying value expected to be collected. Changes in the allowance are recognized through earnings as credit loss expense. Loans are written off against the allowance when deemed uncollectible.

The Company recorded realized losses by writing down two mortgage loans during the nine-month period ending September 30, 2025. The first mortgage loan has a principal amount of $755,663 that is secured by real estate. The loan originated on March 28, 2022 and has an original maturity date of April 10, 2024. We no longer accrue interest on this asset. It previously carried an interest rate of 6.95%. As of the reporting date, the borrower is 538 days past due on payments. Specifically, the borrower has missed payments for the following periods:

- Payment due on April 10, 2024 - $755,663 Principal Amount

As of the reporting date, the loan has past due payments totaling $755,663, which includes both principal and accrued interest. In accordance with FASB ASC 326, the Company has evaluated the loan for expected credit losses by considering the borrower's historical payment behavior, current financial condition, and the fair value of the collateral securing the loan. Based on this assessment, the loan is determined to be collateral-dependent, as repayment is expected to be provided primarily through the operation or sale of the underlying collateral. The fair value of the collateral, net of estimated selling costs where applicable, is $226,540 less than the loan's amortized cost basis. Accordingly, an allowance for credit losses in the amount of $226,540 has been recorded as of the reporting date.

The second mortgage loan has a principal amount of $778,547 that is secured by real estate. This asset represents a pool of individual loans. The loan was originated on October 22, 2020 and has various maturity dates and interest rates. We no longer accrue interest on this asset. As of the reporting date, there are 16 loans. Five out of the 16 loans are delinquent with total outstanding loan amount of $177,233, and 6 real estate owned properties with outstanding loan amount of $385,645. Specifically, the borrower has missed payments totaling $562,878. No interest is being accrued on these loans.

The Company has evaluated the loan for expected credit losses in accordance with FASB ASC 326. This evaluation considered the borrower's historical payment performance, current financial condition, and the value of the collateral securing the loan. As part of this assessment, the Company determined that the loan is collateral-dependent, as repayment is expected to be provided primarily through the operation or sale of the underlying collateral. The fair value of the collateral, net of estimated costs to sell when applicable, is $193,473 less than the amortized cost basis of the loan. As a result, an allowance for credit losses of $193,473 has been recorded as of the reporting date to reflect the expected loss.

Additionally, the Company had one mortgage loan participation with a specific allowance of $250,000 as of March 31, 2025. This allowance was reversed based upon an updated third-party appraisal of the property which showed the collateral value exceeded the amortized cost basis of the loan. The mortgage loan has a principal amount of $1,000,000 that is secured by real estate. The loan was originated on November 4, 2022 and has an original maturity date of December 1, 2025. The loan has been extended an additional three months. We no longer accrue interest on this asset. It previously carried an interest rate of 8%. Payments due in the second quarter have been modified to a reduced interest rate of 5% with the lost interest capitalized into the principal of the loan. It is uncertain if the borrower will be able to continue to make payments.

The Company has evaluated the loan for expected credit losses in accordance with FASB ASC 326. As part of this assessment, the Company considered relevant information about the borrower's current financial condition, historical payment performance, and the value of the collateral securing the loan. Based on this evaluation, the loan is determined to be collateral-dependent, and repayment is expected to be derived primarily from the operation or sale of the collateral. The fair value of the collateral, net of estimated costs to sell when applicable, exceeds the amortized cost basis of the loan by 40%. As such, no allowance for credit losses has been recorded as of the reporting date.

The amount of the general loan allowance is based upon management's evaluation of the collectability of the loan portfolio, historical loss experience, delinquencies, credit concentrations, underwriting standards and national and local economic conditions. The Company does not measure a credit loss allowance on accrued interest receivable as we write off any uncollectible accrued interest receivable balance to net investment income in a timely manner. The Company did not charge off any uncollectible accrued interest receivable on our commercial mortgage loan portfolio during the three and nine months ended September 30, 2025 and 2024.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

The Company's commercial mortgage loans are pooled by risk rating and property collateral type and an estimated loss ratio is applied against each risk pool. The loss ratios are generally based upon historical loss experience for each risk pool and are adjusted for current and forecasted economic factors management believes to be relevant and supportable. Economic factors are forecasted for two years with immediate reversion to historical experience.

The following table presents a roll-forward of our general and specific valuation allowances for our commercial mortgage loan portfolio:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|  | Specific Allowance | General Allowance | Specific Allowance | General Allowance |
|  | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
| Beginning allowance balance | $**-** | $55685 | $**-** | $21644 |
| Cumulative adjustment for changes in accounting principals | **-** |  | **-** |  |
| Charge-offs | **(420013)** |  | **-** |  |
| Recoveries | **-** |  | **-** |  |
| Change in provision for credit losses | 420013 | 50400 |  | 32150 |
| Ending Allowance | $- | $106085 | $- | $53794 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended September 30, 2025 | Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2024 |
|  | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
|  | Specific Allowance | General Allowance | Specific Allowance | General Allowance |
|  | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
| Beginning allowance balance | $**-** | $66408 | $**-** | $30781 |
| Cumulative adjustment for changes in accounting principals | **-** |  | **-** |  |
| Charge-offs | **-** |  | **-** |  |
| Recoveries | **-** |  | **-** |  |
| Change in provision for credit losses | **-** | 39677 | **-** | 23013 |
| Ending Allowance | $- | $106085 | $- | $53794 |

---

The following table presents a breakdown of our mortgage loans by aging category:

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| | | | |
|:---|:---|:---|:---|
|  | As of September 30, 2025 | As of September 30, 2025 | As of September 30, 2025 |
|  | Outstanding Balance | Allowance for Credit<br> Losses | Net Carrying Amount |
|  | (unaudited) | (unaudited) | (unaudited) |
| **Aging Category** |  |  |  |
| Not past due (Current) | $23696657 | $(106023) | $23590634 |
| 1-30 days past due | **-** |  |  |
| 31-60 days past due | **-** |  |  |
| 61-90 day past due | **-** |  |  |
| Over 90 days past due | 1142887 | (62) | 1142825 |
| Mortgage loan carrying value | $24839544 | $(106085) | $24733459 |

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

**Investment Income, Net of Expenses**

The components of net investment income for the nine months ended September 30, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | Nine Months Ended September 30, | Nine Months Ended September 30, |
|  | 2025 | 2024 |
|  | (unaudited) | (unaudited) |
| Fixed maturities | $**4150095** | $4366080 |
| Mortgages | **1587153** | 915208 |
| Equity securities | **198266** | 239092 |
| Other invested assets | **95330** | 253174 |
| Cash and cash equivalents | **138031** | 255426 |
|  | **6168875** | 6028980 |
| Less investment expenses | **(802540)** | (722768) |
|  | $**5366335** | $5306212 |

---

The components of net investment income for the three months ended September 30, 2025 and 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | Three Months Ended September 30, | Three Months Ended September 30, |
|  | 2025 | 2024 |
|  | (unaudited) | (unaudited) |
| Fixed maturities | $**1295763** | $1477931 |
| Mortgages | **547416** | 8689 |
| Equity securities | **63763** | 74947 |
| Other invested assets | **33217** | 194360 |
| Cash and cash equivalents | **30070** | 60851 |
|  | **1970229** | 1816778 |
| Less investment expenses | **(319284)** | (506046) |
|  | $**1650945** | $1310732 |

---

**Net Investment Gains (losses)**

Net investment gains (losses) for the nine months ended September 30, 2025 and 2024 are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Recognized losses on sale of investments | $**64845** | $(139626) |
| Realized loss on mortgage loan participation write downs | **(420013)** |  |
| Change in allowance for credit loss recognized in earnings | **(50400)** | (32150) |
| Unrealized net gains recognized in earnings | **599275** | 1006400 |
| Embedded derivative | **(259795)** | (265846) |
| Net investment gains (losses) | $**(66088)** | $568778 |

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[**Table of Contents**](#toc)

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 2.** | **Investments (continued)** |

---

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Recognized losses on sale of investments | $**145722** | $(94672) |
| Realized loss on mortgage loan participation write downs | **-** |  |
| Change in allowance for credit loss recognized in earnings | **(39677)** | 93550 |
| Unrealized net gains recognized in earnings | **23477** | 419301 |
| Embedded derivative | **134168** | (362061) |
| Net investment gains | $**263690** | $56118 |

---

---

| | |
|:---|:---|
| **Note 3.** | **Derivative Instruments** |

---

<u>Types of Derivatives used by the Company</u>

The Company's derivatives consist of a reinsurance contract allocated hedge.

<u>Summary of Derivative Positions</u>

The fair value of the Company's derivative financial instruments on the consolidated balance sheets is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |  |
|  | **Derivative** | **Derivative** | **Derivative** | **Derivative** | **Balance** |
|  | **Asset** | **Liability** | **Asset** | **Liability** | **Reported In** |
|  | **(unaudited)** | **(unaudited)** |  |  |  |
| Derivatives: |  |  |  |  |  |
| Embedded derivatives: |  |  |  |  |  |
| Reinsurance contract allocated hedge | $**86777** | $**-** | $**713114** | $- | Reinsurance related assets |

---

The following table shows the change in the fair value of the derivative financial instruments in the consolidated statements of comprehensive income (loss) for the nine and three months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ending** | **Nine Months Ending** | **Balance** |
|  | **September 30, 2025** | **September 30, 2024** | **Reported In** |
|  | **(unaudited)** | **(unaudited)** |  |
| Derivatives: |  |  |  |
| Embedded derivatives: |  |  |  |
| Change in reinsurance contract allocated hedge | $**(259795)** | $(265846) | Net investment gains (losses) |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ending** | **Three Months Ending** | **Balance** |
|  | **September 30, 2025** | **September 30, 2024** | **Reported In** |
|  | **(unaudited)** | **(unaudited)** |  |
| Derivatives: |  |  |  |
| Embedded derivatives: |  |  |  |
| Change in reinsurance contract allocated hedge | $**134168** | $(362061) | Net investment gains (losses) |

---

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 4.** | **Fair Value Measurements** |

---

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement rate.

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

● Level 3 inputs are unobservable for the asset or liability and reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

<u>Fixed maturity securities</u>: Fair values of available for sale fixed maturity securities are provided by a third party pricing service. The pricing service uses a variety of sources to determine fair value of securities. The Company's fixed maturity securities are highly liquid, which allows for a high percentage of the portfolio to be priced through pricing sources.

<u>Equity securities:</u> Fair values for equity securities are also provided by a third party pricing service and are derived from active trading on national market exchanges.

<u>Embedded derivative</u>: The fair value of the reinsurance related assets represents the Company's allocation of the fair value of the corresponding derivative instruments used in the hedge which are based on the quoted market prices of the underlying derivate instruments. The fair value of the underlying assets for both embedded derivatives are generally based upon market observable inputs with industry standard valuation techniques. The valuation also requires certain significant inputs, which are generally not observable and accordingly, the valuation is considered Level 3 in the fair value hierarchy. The Company's utilization of a credit-valuation adjustment did not have a material effect on the change in fair value of the embedded derivatives for the three and nine months ended September 30, 2025 and 2024.

<u>Limited partnership interests</u>: Limited partnership interests are carried at net asset value which approximates fair value.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

---

| | |
|:---|:---|
| **Note 4.** | **Fair Value Measurements (continued)** |

---

The table below presents the amounts of assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
|  | **(unaudited)**  | **(unaudited)**  | **(unaudited)**  | **(unaudited)**  |
| **Fixed maturities:** |  |  |  |  |
| **US Treasury securities** | $**734682** | $**734682** | $**-** | $**-** |
| **Corporate bonds** | **20056728** | **-** | **19901128** | **155600** |
| **Municipal bonds** | **5270373** | **-** | **5270373** | **-** |
| **Redeemable preferred stock** | **2016162** | **-** | **2016162** | **-** |
| **Term loans** | **9228495** | **-** | **-** | **9228495** |
| **Mortgage backed and asset backed securities** | **39612231** | **-** | **39282231** | **330000** |
| **Total fixed maturities** | **76918671** | **734682** | **66469894** | **9714095** |
| **Equities:** |  |  |  |  |
| **Common stock** | **1841856** | **1714156** | **127700** | **-** |
| **Preferred stock** | **1456979** | **-** | **1456979** | **-** |
| **Total equities** | **3298835** | **1714156** | **1584679** | **-** |
| **Other invested assets** | **1234463** | **-** | **-** | **1234463** |
| **Reinsurance contract allocated hedge** | **86777** | **-** | **-** | **86777** |
| **Limited partnership interests** | **1160515** | **-** | **-** | **1160515** |
| **Total** | $**82699261** | $**2448838** | $**68054573** | $**12195850** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **Fixed maturities:** |  |  |  |  |
| **US Treasury securities** | $**711377** | $**711377** | $**-** | $**-** |
| **Corporate bonds** | **21491820** | **-** | **21322220** | **169600** |
| **Municipal bonds** | **4741149** | **-** | **4741149** | **-** |
| **Redeemable preferred stock** | **2411234** | **-** | **2411234** | **-** |
| **Term loans** | **12788304** | **-** | **-** | **12788304** |
| **Mortgage backed and asset backed securities** | **37434295** | **-** | **37090545** | **343750** |
| **Total fixed maturities** | **79578179** | **711377** | **65565148** | **13301654** |
| **Equities:** |  |  |  |  |
| **Common stock** | **2395195** | **2271495** | **123700** | **-** |
| **Preferred stock** | **1480890** | **-** | **1480890** | **-** |
| **Total equities** | **3876085** | **2271495** | **1604590** | **-** |
| **Other invested assets** | **1109606** | **-** | **-** | **1109606** |
| **Reinsurance contract allocated hedge** | **713114** | **-** | **-** | **713114** |
| **Limited partnership interests** | **428170** | **-** | **-** | **428170** |
| **Total** | $**85705154** | $**2982872** | $**67169738** | $**15552544** |

---

No transfers occurred between levels during the nine months ended September 30, 2025.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

---

| | |
|:---|:---|
| **Note 4.** | **Fair Value Measurements (continued)** |

---

The reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | Mortgage |  | Other |
| **For the Nine Months Ended September 30, 2025** | Corporate | Backed | Term | Invested |
| (unaudited) | Bonds | Securities | Loans | Assets |
| Fair value, beginning of period | $169600 | $343750 | $12788304 | $1109606 |
| Principal payment | (14000) |  | (4439819) |  |
| Acquisition |  |  | 793722 | 32699 |
| Investment related gains (losses), net |  | (13750) | 86288 | 92158 |
| Fair value, end of period | $155600 | $330000 | $9228495 | $1234463 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | Mortgage |  | Other |
| **For the Three Months Ended September 30, 2025** | Corporate | Backed | Term | Invested |
| (unaudited) | Bonds | Securities | Loans | Assets |
| Fair value, beginnig of period | $169600 | $328750 | $10926748 | $1109606 |
| Principal payment | (14000) |  | (2165619) |  |
| Acquisition |  |  | 497165 | 32699 |
| Investment related gains (losses), net |  | 1250 | (29799) | 92158 |
| Fair value, end of period | $155600 | $330000 | $9228495 | $1234463 |

---

The Company discloses the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed on the previous page. The estimated fair value approximates carrying value for accrued interest. The methodologies for other financial assets and financial liabilities are discussed below:

<u>Cash and cash equivalents</u>: The carrying amounts approximate fair value because of the short maturity of these instruments.

<u>Investment income due and accrued:</u> The carrying amounts approximate fair value because of the short maturity of these instruments.

<u>Mortgage loans on real estate:</u> Mortgage loans are carried at their unpaid principal value as that is considered the fair market values for these loans. The fair values of mortgage loans on real estate are calculated using discounted expected cash flows using competitive market interest rates currently being offered for similar loans. The inputs utilized to determine fair value of all mortgage loans are unobservable market data (competitive market interest rates); therefore, fair value of mortgage loans falls into Level 3 in the fair value hierarchy.

<u>Limited partnership interests</u>: Limited partnership interests are carried at net asset value which approximates fair value.

<u>Reinsurance contract allocated hedge</u>: The carrying value of funds withheld at interest approximates fair value as funds are specifically identified in the agreement. The fair value of the specified funds is based on the fair value of the underlying assets that are held by the ceding company. The ceding company uses a variety of sources and pricing methodologies, which are not transparent to the Company and may include significant unobservable inputs to value the securities held in distinct portfolios, therefore the valuation of these funds withheld assets are considered Level 3 in the fair value hierarchy.

<u>Policy loans</u>: Policy loans are stated at unpaid principal balances. As these loans are fully collateralized by the cash surrender value of the underlying insurance policies, the carrying value of the policy loans approximates their fair value.

<u>Federal Home Loan Bank Advances:</u> FHLB advances are stated at the outstanding principal balances and the carrying value approximates fair value.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 4.** | **Fair Value Measurements (continued)** |

---

<u>Policyholder deposits in deposit-type contracts</u>: The fair value for policyholder deposits deposit-type insurance contracts (accumulation annuities) is calculated using a discounted cash flow approach. Cash flows are projected using actuarial assumptions and discounted to the valuation date using risk-free rates adjusted for credit risk and the nonperformance risk of the liabilities.

The estimated fair values of the Company's financial assets and liabilities at September 30, 2025 and December 31, 2024 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** |  |  |  |
|  | **(unaudited)** | **(unaudited)** |  |  |  |
|  | **Carrying Value** | **Fair Value** | Level 1 | Level 2 | Level 3 |
| Financial Assets: |  |  |  |  |  |
| Cash and cash equivalents | $**8085240** | $**8085240** | $8085240 | $- | $- |
| Mortgage loans on real estate | **24733459** | **24733459** |  |  | 24733459 |
| Limited partnership interests | **1160515** | **1160515** |  |  | 1160515 |
| Investment income due and accrued | **803589** | **803589** |  |  | 803589 |
| Reinsurance contract allocated hedge | **86777** | **86777** |  |  | 86777 |
| Policy loans | **40547** | **40547** |  |  | 40547 |
| Total Financial Assets (excluding available for sale investments) | $**34910127** | $**34910127** | $8085240 | $- | $26824887 |
| Financial Liabilities: |  |  |  |  |  |
| Federal Home Loan Bank advance | $**1250000** | $**1250000** | $- | $- | $1250000 |
| Policyholder deposits in deposit-type contracts | **70519264** | **57551490** |  |  | 57551490 |
| Total Financial Liabilities | $**71769264** | $**58801490** | $- | $- | $58801490 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** |  |  |  |
|  | **Carrying Value** | **Fair Value** | Level 1 | Level 2 | Level 3 |
| Financial Assets: |  |  |  |  |  |
| Cash and cash equivalents | $**6903783** | $**6903783** | $6903783 | $- | $- |
| Mortgage loans on real estate | **25192749** | **25192749** |  |  | 25192749 |
| Limited partnership interests | **428170** | **428170** |  |  | 428170 |
| Investment income due and accrued | **954324** | **954324** |  |  | 954324 |
| Reinsurance contract allocated hedge | **713114** | **713114** |  |  | 713114 |
| Policy loans | **31745** | **31745** |  |  | 31745 |
| Total Financial Assets (excluding available for sale investments) | $**34223885** | $**34223885** | $6903783 | $- | $27320102 |
| Financial Liabilities: |  |  |  |  |  |
| Federal Home Loan Bank advance | $**1250000** | $**1250000** | $- | $- | $1250000 |
| Policyholder deposits in deposit-type contracts | **77940378** | **64945983** |  |  | 64945983 |
| Total Financial Liabilities | $**79190378** | $**66195983** | $- | $- | $66195983 |

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 5.** | **Income Tax Provision** |

---

The Company uses the estimated effective tax rate ("ETR") method in computing the interim tax provision. Certain items, including those deemed unusual, infrequent, or that cannot be reliably estimated, are treated as discrete items and excluded from the estimated annual ETR ("AETR"). In these cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the AETR, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions and are recorded in the period in which the change occurs. The AETR is revised, as necessary, at the end of successive interim reporting periods.

The Company's effective income tax rate was 4.9% for the nine months ended September 30, 2025, compared with 26.9% for the same period in 2024. The ETR differs from the statutory rate of 21% primarily due to tax favored investments (i.e., tax-exempt interest and the dividends received deduction) offset by an increase the valuation allowance associated with capital loss carryforwards. The change in the ETR for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due to the relationship of taxable income to consolidated pre-tax income (loss). The ETR differs for the nine months ended September 30, 2025 from the full year-ended December 31, 2024 ETR of 11.5% due to the prior year release and current year increase in valuation allowance associated with net operating losses and favorable prior period adjustments.

The Company is required to evaluate the recoverability of its deferred tax assets and establish a valuation allowance, if necessary, to reduce its deferred tax asset to an amount that is more likely than not to be realizable. Considerable judgment and the use of estimates are required when determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. When evaluating the need for a valuation allowance, the Company considers many factors, including: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of temporary differences; the length of time carryovers can be utilized; and any tax planning strategies the Company would employ to avoid a tax benefit from expiring unused.

As of September 30, 2025, based on all available evidence, we concluded that a valuation allowance should remain on a portion of the deferred tax asset related to capital loss carryforwards that are not more-likely-than-not to be realized. For the nine months ended September 30, 2025, the Company recorded an increase of approximately $59,000 to the valuation allowance associated with capital loss carryforwards. The expense was recorded in the income tax expense. At September 30, 2025, and December 31, 2024, the Company has recorded a total valuation allowance of approximately $368,000 and $309,000, respectively, associated with the life insurance net operating losses subject to limitations under IRC section 382 and capital loss carryforwards.

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| | |
|:---|:---|
| **Note 6.**  | **Contingencies and Commitments** |

---

Investment Commitments

The Company entered into a subscription agreement with Mutual Capital Investment Fund, LP on November 11, 2022. The agreement set forth a capital commitment of $2,000,000. As of September 30, 2025, the Company had funded $1,032,329 of this commitment. The dates of future capital calls is unknown and the initial investment period for capital calls is five years.

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| | |
|:---|:---|
| **Note 7.** | **Operating Segments** |

---

The Company operates as a single reportable segment, defined by our comprehensive business model that encompasses writing direct business and opportunistically assuming reinsurance through wholly owned subsidiaries, namely USALSC and DCLIC (which was merged into USALSC in 2023). On a direct basis, the Company underwrites a diverse range of insurance products, including term life, whole life, group life, short- and long-term disability, critical illness, juvenile term, annuities, and preneed products. Additionally, the Company assumes annuities and life policies on a coinsurance basis.

Our products are underwritten opportunistically across various channels without differentiation in profitability evaluation by product type or whether they were written directly or assumed. This cohesive strategy allows for a streamlined assessment of our overall performance.

The Company's chief executive officer and chief financial officer employ a consistent set of financial metrics and performance indicators. This approach renders it impractical to separate operations into distinct segments. Key performance indicators utilized by the chief operating decision makers (CODMs) include cash flow from insurance activities, total income, operating expenses as a percentage of total expenses, and net income per share.

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US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)

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| | |
|:---|:---|
| **Note 7.** | **Operating Segments (continued)** |

---

Resource allocation is centralized, with all major decisions made at the corporate level rather than by separate divisions. This ensures a unified approach to managing resources and strategic initiatives across the organization.

The Company's financial results are reported collectively, as the financial performance of our operations does not vary significantly among different areas of the business. For instance, the Company does not bifurcate its investment portfolio by product type, further underscoring the integrated nature of our operations.

The CODMs assess the performance of the Company and allocate resources based on net income, which is also reported on the consolidated income statement. The measure of the Company's single segment assets is reflected in total consolidated assets on the balance sheet.

Since we operate as one segment, segment revenue, profit and loss and expenses are the same as presented in the consolidated statements of comprehensive income.

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| | |
|:---|:---|
| **Note 8.** | **Subsequent Events** |

---

All of the effects of subsequent events that provide additional evidence about conditions that existed at the balance sheet date, including the estimates inherent in the process of preparing the consolidated financial statements, are recognized in the consolidated financial statements. The Company does not recognize subsequent events that provide evidence about conditions that did not exist at the balance sheet date but arose after, but before the consolidated financial statements are issued. In some cases, unrecognized subsequent events are disclosed to keep the consolidated financial statements from being misleading.

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**ITEM 2. MANAGEMENT**'**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included in this Form 10-Q. In connection with, and because we desire to take advantage of, the* "*safe harbor*" *provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, including those relating to the COVID-19 pandemic, and many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward looking statements.*

***Overview***

USAC was formed as a Kansas corporation on April 24, 2009 to raise capital to form a new Kansas-based life insurance company. We presently conduct our business through our four wholly-owned subsidiaries: USALSC, a life insurance corporation; USALSC-Montana, a life insurance corporation; USAMC, an insurance marketing corporation; and USAIC, an investment management corporation

On January 2, 2012, USALSC was issued a Certificate of Authority to conduct life insurance business in the State of Kansas. We began third-party administrative services in 2015. USALSC re-domesticated to North Dakota in 2023. USALSC is currently authorized to conduct business in 18 states.

On August 1, 2017, the Company merged with Northern Plains Capital Corporation with the Company being the ultimate surviving entity. As a result of this merger, the Company acquired Dakota Capital Life Insurance Company which became a wholly owned subsidiary of USALSC. In 2023, Dakota Capital Life Insurance Company was merged into USALSC.

On December 14, 2018, the Company acquired Great Western Life Insurance Company. Great Western Life Insurance Company was renamed US Alliance Life and Security Company – Montana and is a subsidiary of USALSC.

The Company assumes business under reinsurance treaties. On January 1, 2013, the Company entered into an agreement to assume 20% of a certain block of health insurance policies from Unified Life Insurance Company. On September 30, 2017, the Company entered into an agreement (the "2017 ALSC Agreement") to assume 100% of a certain block of life insurance policies from American Life & Security Company ("ALSC"). On April 15, 2020, with an effective date of January 1, 2020, the Company entered into an agreement with ALSC (the "2020 ALSC Agreement ") to assume a quota share percentage of a block of annuity policies. Effective December 31, 2020, USALSC entered into an agreement with ALSC, which provided for ALSC to recapture all reserves previously ceded to USALSC with respect to a portion of the 2017 ALSC Agreement.

On December 31, 2023, USALSC entered into an agreement with Lewer Life Insurance LLIC to assume a block of life and annuity policies.

***Mergers and Acquisitions***

On May 23, 2017, the Company entered into a definitive merger agreement with Northern Plains Capital Corporation. The merger transaction closed on August 1, 2017. NPCC shareholders received .5841 shares of US Alliance Corporation stock for each share of NPCC stock owned. USAC issued 1,644,458 shares of common stock to holders of NPCC shares.

On October 11, 2018, the Company entered into a stock purchase agreement with Great Western Insurance Company to acquire Great Western Life Insurance Company. The transaction closed on December 14, 2018. USALSC paid $500,000 to acquire all of the outstanding shares of GWLIC.

Effective December 31, 2020, DCLIC acquired a block of life insurance policies according to the terms of an assumption agreement with ALSC. The Company acquired fixed maturity securities and cash of $9,181,100, assumed liabilities of $10,972,785 and recorded VOBA of $2,163,541.

On December 31, 2023, DCLIC was merged into its parent company, USALSC.

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***Critical Accounting Policies and Estimates***

Our accounting and reporting policies are in accordance with GAAP. Preparation of the consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The following is an explanation of our accounting policies and the estimates considered most significant by management. These accounting policies inherently require significant judgment and assumptions and actual operating results could differ significantly from management's estimates determined using these policies. We believe the following accounting policies, judgments and estimates are the most critical to the understanding of our results of operations and financial position. A detailed discussion of significant accounting policies is provided in this report in the Notes to Consolidated Financial Statements included with this quarterly report.

***Valuation of Investments***

The Company's principal investments are in fixed maturity, mortgages, and equity securities. Fixed maturity, classified as available for sale, are carried at their fair value in the consolidated balance sheets, with unrealized gains or losses recorded in comprehensive income (loss). Our fixed income investment manager utilizes external independent third-party pricing services to determine the fair values of investment securities available for sale. Equity securities are carried at their fair value in the consolidated balance sheets, with unrealized gains or losses recorded in net income. Mortgages, including mortgage loan participations, are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances.

The recognition of credit losses on debt securities is dependent on the facts and circumstances related to the specific security. If we determine a credit loss exists, the difference between amortized cost and fair value is recognized in the consolidated statements of comprehensive income. Our membership in the Federal Home Loan Bank ("FHLB") provides additional liquidity which further reduces the likelihood that we would be required to sell a security prior to recovery for liquidity purposes.

Mortgage loans on real estate, including mortgage loan participations, are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances. Interest income is accrued on the principal amount of the mortgage loans based on its contractual interest rate. Amortization of premiums and discounts is recorded using the effective yield method. The Company accrues interest on loans until probable the Company will not receive interest or the loan is 90 days past due. Interest income, amortization of premiums, accretion of discounts and prepayment fees are reported in investment income, net of related expenses in the consolidated statements of comprehensive income.

A mortgage loan is considered to be impaired when, based on the current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement.

The Company evaluates commercial mortgage loans on a collective basis when similar risk characteristics exist and on an individual basis when such characteristics are not present. For individually evaluated loans where it is determined that it is not probable that all amounts due under the contractual terms will be collected, the Company measures expected credit losses based on the present value of expected future cash flows, discounted at the loan's original effective interest rate. If repayment is expected to be provided solely through the sale or operation of the collateral, expected credit losses are measured based on the fair value of the collateral, adjusted for estimated costs to sell when appropriate. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the loans to present the net carrying value expected to be collected. Changes in the allowance are recognized through earnings as credit loss expense. Loans are written off against the allowance when deemed uncollectible.

Any interest accrued or received on the net carrying amount of the impaired loan will be included in investment income or applied to the principal of the loan, depending on the assessment of the collectability of the loan. Mortgage loans deemed to be uncollectible or that have been foreclosed would be charged off against the valuation allowances and subsequent recoveries, if any, are credited to the valuation allowances. Changes in valuation allowances are reported in net investment gains (losses) on the consolidated statements of comprehensive income.

Other invested assets include collateral loans and private credit investments. The collateral loans and private credit investments are carried at fair value. The inputs used to measure these assets are classified as Level 3 within the fair value hierarchy.

Limited partnership interests consist of an investment in Mutual Capital Investment Fund. Limited partnerships interests are carried at net asset value as determined by a third-party valuation.

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***Deferred Acquisition Costs***

Incremental direct costs, net of amounts ceded to reinsurers, that result directly from and are essential to a product sale and would not have been incurred by us had the sale not occurred, are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense.

***Future Policy Benefits***

We establish liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by using a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Such liabilities are reviewed quarterly by an independent consulting actuary.

***New Accounting Standards***

A detailed discussion of new accounting standards is provided in Note 1 to Consolidated Financial Statements beginning on p. 7 of this quarterly report.

**Discussion of Consolidated Results of Operations**

<u>Total Income.</u> Insurance revenues are primarily generated from premium revenues and investment income. Total income for the nine months ended September 30, 2025 and 2024 are summarized in the table below.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** |
| Income: |  |  |
| Premium income | $**12982213** | $11299100 |
| Net investment income | **5366335** | 5306212 |
| Net investment (losses) gains | **(66088)** | 568778 |
| Other income | **375601** | 455741 |
| **Total income** | $**18658061** | $**17629831** |

---

In the first nine months of 2025, total income increased to $18,658,061, an increase of $1,028,230 or 6% from the 2024 first nine months total income of $17,629,831. The increase is driven by increased premium income. The Company records unrealized gains and losses on equity securities in total income in accordance with accounting standards. These standards continue to result in increased volatility in total income.

Total income for the three months ended September 30, 2025 and 2024 are summarized in the table below.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** |
| Income: |  |  |
| Premium income | $**4428002** | $3544213 |
| Net investment income | **1650945** | 1310732 |
| Net investment gains (losses) | **263690** | 56118 |
| Other income | **157046** | 80473 |
| **Total income** | $**6499683** | $**4991536** |

---

In the three months ended September 30, 2025, total income increased to $6,499,683, an increase of $1,508,147 or 30% from the total income of $4,991,536 for the same period in 2024. The increase was driven by higher premium income.

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*Premium income:* Premium income for the first nine months of 2025 was $12,982,213 compared to $11,299,100 in the first nine months of 2024, an increase of $1,683,113 or 15%. The increase was driven by an increase in direct single and recurring premiums. Even though it is a reduction in revenue, ceded premium increases reflect the growth of our group policy premiums as we target small companies to assist them with their employee benefits.

Direct, assumed and ceded premiums for the nine months ended September 30, 2025 and 2024 are summarized in the following table.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
|  | **(unaudited)** | **(unaudited)** |
| Direct | $**10516058** | $8722136 |
| Assumed | **4045315** | 3754250 |
| Ceded | **(1579160)** | (1177286) |
| Total | $**12982213** | $11299100 |

---

The Company continuously searches for new product and distribution opportunities to continue to increase premium production on a direct and assumed basis.

Premium income for the three months ended September 30, 2025 was $4,428,002 compared to $3,544,213 in the same period of 2024, an increase of $883,789 or 25%. The increase was driven by an increase in direct single and recurring premiums.

Direct, assumed and ceded premiums for the three months ended September 30, 2025 and 2024 are summarized in the following table.

---

| | | |
|:---|:---|:---|
|  | **Three Months ended September 30,** | **Three Months ended September 30,** |
|  | **2025** | **2024** |
|  | **(unaudited)** | **(unaudited)** |
| Direct | $**3862001** | $2966996 |
| Assumed | **1166045** | 1009148 |
| Ceded | **(600044)** | (431931) |
| Total | $**4428002** | $3544213 |

---

*Investment income, net of expenses:* The components of net investment income for the nine months ended September 30, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | Nine Months Ended September 30, | Nine Months Ended September 30, |
|  | 2025 | 2024 |
|  | (unaudited) | (unaudited) |
| Fixed maturities | $**4150095** | $4366080 |
| Mortgages | **1587153** | 915208 |
| Equity securities | **198266** | 239092 |
| Other invested assets | **95330** | 253174 |
| Cash and cash equivalents | **138031** | 255426 |
|  | **6168875** | 6028980 |
| Less investment expenses | **(802540)** | (722768) |
|  | $**5366335** | $5306212 |

---

Net investment income for the first nine months of 2025 was $5,366,335, compared to $5,306,212 for the same period in 2024, an increase of $60,123 or 1%. The increase in investment income is a result of increased mortgage loan income.

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The components of net investment income for the three months ended September 30, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | Three Months Ended September 30, | Three Months Ended September 30, |
|  | 2025 | 2024 |
|  | (unaudited) | (unaudited) |
| Fixed maturities | $**1295763** | $1477931 |
| Mortgages | **547416** | 8689 |
| Equity securities | **63763** | 74947 |
| Other invested assets | **33217** | 194360 |
| Cash and cash equivalents | **30070** | 60851 |
|  | **1970229** | 1816778 |
| Less investment expenses | **(319284)** | (506046) |
|  | $**1650945** | $1310732 |

---

Net investment income for the three months ended September 30, 2025 was $1,650,945, compared to $1,310,732 for the same period in 2024, an increase of $340,213 or 26%. This increase in investment income is a result of increased mortgage loan income.

*Net investment gains (losses):* Accounting standards require that the unrealized gains and losses on equity securities be reported as income on the consolidated statements of comprehensive income (loss). For the nine months ended September 30, 2025 and 2024, net investment gains are summarized in the following table.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Recognized losses on sale of investments | $**64845** | $(139626) |
| Realized loss on mortgage loan participation write downs | **(420013)** |  |
| Change in allowance for credit loss recognized in earnings | **(50400)** | (32150) |
| Unrealized net gains recognized in earnings | **599275** | 1006400 |
| Embedded derivative | **(259795)** | (265846) |
| Net investment gains (losses) | $**(66088)** | $568778 |

---

For the three months ended September 30, 2025 and 2024, net investment gains are summarized in the following table.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Recognized losses on sale of investments | $**145722** | $(94672) |
| Realized loss on mortgage loan participation write downs | **-** |  |
| Change in allowance for credit loss recognized in earnings | **(39677)** | 93550 |
| Unrealized net gains recognized in earnings | **23477** | 419301 |
| Embedded derivative | **134168** | (362061) |
| Net investment gains | $**263690** | $56118 |

---

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Realized gains and losses related to the sale of securities for the nine months ended September 30, 2025 and 2024 are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Gross gains | $**168416** | $48824 |
| Gross losses | **(523584)** | (188450) |
| Net security losses | $**(355168)** | $(139626) |
| Mortgage loans on real estate | **(50400)** | (32150) |
| (Increase) Decrease in allowance for credit losses | $**(50400)** | $(32150) |

---

Realized gains and losses related to the sale of securities for the three months ended September 30, 2025 and 2024 are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | (unaudited) | (unaudited) |
|  | **2025** | 2024 |
| Gross gains | $**168416** | $26754 |
| Gross losses | **(22694)** | (121426) |
| Net security losses | $**145722** | $(94672) |
| Fixed maturity securities | **-** | **116563** |
| Mortgage loans on real estate | **(39677)** | (23013) |
| (Increase) Decrease in allowance for credit losses | $**(39677)** | $93550 |

---

*Other income:* Other income for the nine months ended September 30, 2025 was $375,601 compared to $455,741 for the same period in 2024, a decrease of $80,140. The decrease was the result of reinsurance allowances received in 2024 which did not reoccur in 2025. Other income for the three months ended September 30, 2025 was $157,046 compared to $80,473 for the same period in 2024, an increase of $76,573. The increase was the result of reinsurance allowances on new products issued in 2025.

<u>Expenses</u>. Expenses for the nine months ended September 30, 2025 and 2024 are summarized in the table below.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** |
| Expenses: |  |  |
| Death claims | $**3935880** | $2938512 |
| Policyholder benefits | **5611283** | 5292687 |
| Increase in policyholder reserves | **4545016** | 3962363 |
| Commissions, net of deferrals | **720065** | 654809 |
| Amortization of deferred acquisition costs | **1007517** | 1046775 |
| Amortization of value of business acquired | **69315** | 69315 |
| Salaries & benefits | **1248947** | 1140240 |
| Other operating expenses | **1988437** | 2058170 |
| **Total expenses** | $**19126460** | $17162871 |

---

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Expenses for the three months ended September 30, 2025 and 2024 are summarized in the table below.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | 2024 |
|  | **(unaudited)** | **(unaudited)** |
| Expenses: |  |  |
| Death claims | $**1185854** | $815287 |
| Policyholder benefits | **1688433** | 1530753 |
| Increase in policyholder reserves | **1762710** | 1474839 |
| Commissions, net of deferrals | **274927** | 218441 |
| Amortization of deferred acquisition costs | **344151** | 349402 |
| Amortization of value of business acquired | **23105** | 23105 |
| Salaries & benefits | **430717** | 431837 |
| Other operating expenses | **636458** | 623378 |
| **Total expenses** | $**6346355** | $5467042 |

---

*Death claims:* Death benefits were $3,935,880 in the nine months ended September 30, 2025 compared to $2,938,512 for the same period in 2024, an increase of $997,368 or 34%. This increase is attributable to our growing block of in-force pre-need life insurance policies. We expect these claims to grow as we continue to increase the size of our in-force business.

Death benefits were $1,185,854 in the three months ended September 30, 2025, compared to $815,287 for the same period in 2024, an increase of $370,567 or 45%. This increase is attributable to our growing block of in-force pre-need life insurance policies. We expect these claims to grow as we continue to increase the size of our in-force business.

*Policyholder benefits:* Policyholder benefits were $5,611,283 in the nine months ended September 30, 2025 compared to $5,292,687 for the same period in 2024, an increase of $318,596 or 6%. The primary driver of this increase is an increase in assumed benefits.

Policyholder benefits were $1,688,433 in the three months ended September 30, 2025 compared to $1,530,753 for the same period in 2024, an increase of $157,680 or 10%. The primary driver of this increase is an increase in assumed benefits.

*Increase in policyholder reserves:* Policyholder reserves increased $4,545,016 in the nine months ended September 30, 2025, compared to $3,962,363 for the same period in 2024, an increase of $582,653 or 15%. The increase in reserve growth is driven by increased premiums.

Policyholder reserves increased $1,762,710 in the three months ended September 30, 2025, compared to $1,474,839 for the same period in 2024, an increase of $287,871 or 20%. The increase in reserve growth is driven by increased premiums.

*Commissions, net of deferrals:* The Company pays commissions to the ceding company on a block of assumed policies as well as commissions to agents on directly written business. Commissions, net of deferrals, were $720,065 in the nine months ended September 30, 2025, compared to $654,809 for the same period in 2024, an increase of $65,256 or 10%. This increase is due to an increase in and changing mix of premiums.

Commissions, net of deferrals, were $274,927 in the three months ended September 30, 2025, compared to $218,441 for the same period in 2024, an increase of $56,486 or 26%. This increase is due to an increase in and changing mix of premiums.

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*Amortization of deferred acquisition costs:* The amortization of deferred acquisition costs ("DAC") was $1,007,517 in the nine months ended September 30, 2025, compared to $1,046,775 for the same period in 2024, a decrease of $39,258 or 4%. The decrease is driven by a reduction in amortization on assumed business.

The amortization of deferred acquisition costs ("DAC") was $344,151 in the three months ended September 30, 2025, compared to $349,402 for the same period in 2024, a decrease of $5,251 or 2%. The decrease is driven by a reduction in amortization on assumed business.

*Amortization of value of business acquired:* The amortization of value of business acquired ("VOBA") was $69,315 in the nine months ended September 30, 2025 and 2024, respectively. VOBA is being amortized straight-line over 30 years. The amortization VOBA was $23,105 in the three months ended September 30, 2025 and 2024, respectively.

*Salaries and benefits:* Salaries and benefits were $1,248,947 for the nine months ended September 30, 2025, compared to $1,140,240 for the same period in 2024, an increase of $108,707 or 10%. The increase was driven by increased employee benefit costs and fluctuations in staffing levels.

Salaries and benefits were $430,717 for the three months ended September 30, 2025, compared to $431,837 for the same period in 2024, a decrease of $1,120 or 0.3%. The decrease was driven by fluctuations in staffing levels.

*Other expenses:* Other operating expenses were $1,988,437 in the nine months ended September 30, 2025, compared to $2,058,170 for the same period in 2024, a decrease of $69,733 or 3%. The decrease is driven by a decrease in audit costs.

Other operating expenses were $636,458 in the three months ended September 30, 2025, compared to $623,378 for the same period in 2024, an increase of $13,080 or 2%. The increase is driven by increased information technology costs.

*Federal income tax expenses:* Federal income tax benefit of $23,104 was recorded for the nine months ended September 30, 2025 compared to tax expense of $114,298 for the same period in 2024.

Federal income tax expense of $17,800 was recorded for the three months ended September 30, 2025 compared to a benefit of $103,134 for the same period of 2024.

*Net Income:* Our net loss was $445,295 in the nine months ended September 30, 2025 compared to net income of $352,662 for the same period in 2024, a decrease of $797,957. Our net loss per share was $0.06 compared to net income per share of $0.05 in 2024, basic and diluted. Our net income was $135,528 in the three months ended September 30, 2025 compared to net loss of $372,372 for the same period in 2024, an increase of $507,900. Our net income per share was $0.02 compared to net loss per share of $0.05 in 2024, basic and diluted.

**Discussion of Consolidated Balance Sheet**

<u>Assets</u>. Assets have decreased to $129,853,398 as of September 30, 2025, a decrease of $1,440,584 or 1% from December 31, 2024 assets of $131,293,892. This is primarily the result of a decrease in fixed maturity securities and cash and cash equivalents driven by planned surrenders of deposit-type contracts.

*Available for sale fixed maturity securities*: As of September 30, 2025, we had available for sale fixed maturity assets of $76,918,671, a decrease of $2,659,508 or 3% from the December 31, 2024 balance of $79,578,179. The decrease is driven by maturities during the first half of the year.

*Equity securities, at fair value*: As of September 30, 2025, we had equity assets of $3,298,835, a decrease of $577,250 or 15% from the December 31, 2024 balance of $3,876,085. This decrease is driven by the sale of equity securities.

*Limited partnership interests*: As of September 30, 2025, we had limited partnership interests of $1,160,515, an increase of $732,345 or 171% from our December 31, 2024 balance of $428,170. This is driven by additional investments in the Mutual Capital Investment Fund.

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*Mortgage loans on real estate*: As of September 30, 2025, we had mortgage loans on real estate of $24,733,459, a decrease of $459,290 or 2% from the December 31, 2024 balance of $25,192,749. The decrease is the result of mortgage loan participations maturing.

*Other invested assets:* As of September 30, 2025, we had other invested assets of $1,234,463, an increase of $124,857 or 11% from the December 31, 2024 balance of $1,109,606.

*Policy loans:* As of September 30, 2025, our policy loans were $40,547, an increase of $8,802 or 28% from the December 31, 2024 balance of $31,745. The increase is a result of normal policy loan activity.

*Real estate, net of depreciation:* As of September 30, 2025, we had real estate assets of $1,611,623 related to our home office building, a decrease of $40,930 or 2% from the December 31, 2024 balance of $1,652,553. The decrease is the result of depreciation.

*Cash and cash equivalents*: As of September 30, 2025, we had cash and cash equivalent assets of $8,085,240, an increase of $1,181,457 or 17% from the December 31, 2024 balance of $6,903,783. This increase was the result of cash being prepared for deployment into invested assets.

*Investment income due and accrued*: As of September 30, 2025, our investment income due and accrued was $803,589 compared to $954,324 as of December 31, 2024, a decrease of $150,735 or 16%. This decrease is attributable to investment activity.

*Reinsurance related assets*: As of September 30, 2025, our reinsurance related assets were $794,925 compared to $522,142 as of December 31, 2024, an increase of $272,783 or 52%. This increase is the result of changes in the net settlement due to/from ALSC under our 2020 ALSC Agreement.

*Deferred acquisition costs, net*: As of September 30, 2025, our deferred acquisition costs were $3,753,316 compared to $3,908,636 as of December 31, 2024, a decrease of $155,320 or 4%. The decrease is the result of amortization on our assumed annuity block of business.

*Value of business acquired, net*: As of September 30, 2025 our value of business acquired asset was $2,264,238 compared to $2,333,553 as of December 31, 2024, a decrease of $69,315 or 3%. The decrease is the result of amortization of VOBA.

*Property, equipment and software, net*: As of September 30, 2025 our property, equipment and software assets were $126,334, a decrease of $10,019 from the December 31, 2024 balance of $136,353. The decrease is the result of depreciation.

*Goodwill*: As of September 30, 2025 and December 31, 2024, our goodwill was $277,542. Goodwill was established as a result of our merger with NPCC. We have determined that there has been no impairment to our goodwill balance.

*Deferred tax asset, net of valuation allowance:* The Company had a net deferred tax asset of $3,841,260 as of September 30, 2025, an increase of $94,149 from the December 31, 2024 balance of $3,747,111. The increase is the result of deferred federal income tax benefits.

*Other assets*: As of September 30, 2025, our other assets were $730,754, an increase of $271,652 or 59% from the December 31, 2024 balance of $459,102. The increase is a result of additional pre-paid expenses.

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<u>Liabilities</u>. Our total liabilities were $118,674,026 as of September 30, 2025, a decrease of $1,989,538 or 2% from our December 31, 2024 liabilities of $120,663,564. The decrease is driven by a decrease in our deposit-type contract liabilities.

*Policy liabilities*: Our total policy liabilities as of September 30, 2025 were $115,663,943 compared to $118,188,150 as of December 31, 2024, a decrease of $2,524,207 or 2%. This decrease is the result of surrenders of deposit-type contracts.

*Accounts payable and accrued expenses*: As of September 30, 2025, our accounts payable and accrued expenses were $1,713,125 compared to $1,133,521 as of December 31, 2024, an increase of $579,604 or 51%. The increase is driven by reinsurance settlement payables.

*Federal Home Loan Bank advance*: As of September 30, 2025 and December 31, 2024, respectively, the Company has outstanding advances of $1,250,000 with the Federal Home Loan Bank of Topeka.

*Other liabilities*: As of September 30, 2025, we had other liabilities of $46,958 compared to $91,893 as of December 31, 2024, a decrease of $44,935. The decrease is the result of changes in investment-related payables.

<u>Shareholders</u><u>'</u> <u>Equity</u>. Our shareholders' equity was $11,179,372 as of September 30, 2025, an increase of $548,954 or 5% from our December 31, 2024 shareholders' equity of $10,630,418. The increase in shareholders' equity was driven by improved market values on our fixed maturity securities.

**Investments**

Our investment philosophy is reflected in the allocation of our investments. We emphasize investment grade debt securities with smaller holdings in equity securities, mortgages and other investments. The following table shows the carrying value of our investments by investment category and cash and cash equivalents, and the percentage of each to total invested assets as of September 30, 2025 and December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
|  | Carrying | Percent | Carrying | Percent |
|  | Value | of Total | Value | of Total |
|  | (unaudited) | (unaudited) |  |  |
| Fixed maturities: |  |  |  |  |
| US Treasury securities | $734682 | 0.6% | $711377 | 0.6% |
| Corporate bonds | 20056728 | 17.1% | 21491820 | 18.1% |
| Municipal bonds | 5270373 | 4.5% | 4741149 | 4.0% |
| Redeemable preferred stocks | 2016162 | 1.7% | 2411234 | 2.0% |
| Term Loans | 9228495 | 7.9% | 12788304 | 10.8% |
| Mortgage backed and asset backed securities | 39612231 | 33.7% | 37434295 | 31.4% |
| Total fixed maturities | 76918671 | 65.6% | 79578179 | 66.9% |
| Mortgage loans | 24733459 | 21.1% | 25192749 | 21.2% |
| Other invested assets | 1234463 | 1.1% | 1109606 | 0.9% |
| Limited partnership interests | 1160515 | 1.0% | 428170 | 0.4% |
| Equities: |  |  |  |  |
| Common stock | 1841856 | 1.6% | 2395195 | 2.0% |
| Preferred stock | 1456979 | 1.2% | 1480890 | 1.2% |
| Total equities | 3298835 | 2.8% | 3876085 | 3.3% |
| Real estate, net of depreciation | 1611623 | 1.4% | 1652553 | 1.4% |
| Cash and cash equivalents | 8085240 | 6.9% | 6903783 | 5.8% |
| Total | $117042806 | 100.0% | $118741125 | 100.0% |

---

The total value of our investments and cash and cash equivalents decreased to $117,042,806 as of September 30, 2025 from $118,741,125 at December 31, 2024, a decrease of $1,698,319 or 1%. Decreases in investments are primarily attributable to annuity surrenders.

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The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of September 30, 2025 and December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
|  | Fair | Percent | Fair | Percent |
|  | Value | of Total | Value | of Total |
|  | (unaudited) | (unaudited) |  |  |
| AAA and U.S. Government | $8351626 | 10.9% | $5470235 | 6.9% |
| AA | 15165879 | 19.7% | 10469465 | 13.1% |
| A | 12446897 | 16.2% | 15174048 | 19.1% |
| BBB | 26472422 | 34.4% | 35807023 | 45.0% |
| BB | 4364266 | 5.7% | 4378680 | 5.5% |
| B | 63446 | 0.1% | 90675 | 0.1% |
| Not Rated - Private Placement | 10054135 | 13.1% | 8188053 | 10.3% |
| Total | $76918671 | 100.0% | $79578179 | 100.0% |

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The amortized cost and fair value of debt securities as of September 30, 2025 and December 31, 2024, by contractual maturity, are shown below. Equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | As of September 30, 2025 | As of September 30, 2025 | As of December 31, 2024 | As of December 31, 2024 |
|  | Amortized Cost | Fair Value | Amortized Cost | Fair Value |
|  | (unaudited) | (unaudited) |  |  |
| Amounts maturing in: |  |  |  |  |
| One year or less | $- | $- | $2329128 | $2329128 |
| After one year through five years | 14012095 | 14094849 | 18590198 | 18410081 |
| After five years through ten years | 4744891 | 4650391 | 2032061 | 1967540 |
| More than 10 years | 19513765 | 16545038 | 20606740 | 17025901 |
| Redeemable preferred stocks | 2140013 | 2016162 | 2562893 | 2411234 |
| Mortgage backed and asset backed securities | 39768588 | 39612231 | 37664287 | 37434295 |
| Total amortized cost and fair value | $80179352 | $76918671 | $83785307 | $79578179 |

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**Market Risk of Financial Instruments**

We hold a diversified portfolio of investments that primarily includes cash, bonds, equity securities, mortgage loans, and other invested assets. Each of these investments is subject to market risks that can affect their return and their fair value. The primary market risks affecting the investment portfolio are interest rate risk, credit risk, and equity risk.

*<u>Interest Rate Risk</u>*

Interest rate risk arises from the price sensitivity of investments to changes in interest rates. Interest represents the greatest portion of an investment's return for most fixed maturity securities in stable interest rate environments. The changes in the fair value of such investments are inversely related to changes in market interest rates. As interest rates fall, the interest and dividend streams of existing fixed-rate investments become more valuable and fair values rise. As interest rates rise, the opposite effect occurs.

We work to mitigate our exposure to adverse interest rate movements through laddering the maturities of the fixed maturity investments and through maintaining cash and other short-term investments to assure sufficient liquidity to meet our obligations and to address reinvestment risk considerations. Due to the composition of our book of insurance business, we believe it is unlikely that we would encounter large surrender activity due to an interest rate increase that would force the disposal of fixed maturities at a loss. Additionally, USALSC is a member of the FHLB of Topeka, which provides access to liquidity and further reduces the likelihood of disposing of fixed maturities at a loss.

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*<u>Credit Risk</u>*

We are exposed to credit risk through counterparties and within the investment portfolio. Credit risk relates to the uncertainty associated with an obligor's ability to make timely payments of principal and interest in accordance with the contractual terms of an instrument or contract. We manage our credit risk through established investment policies and guidelines which address the quality of creditors and counterparties, concentration limits, diversification practices and acceptable risk levels. These policies and guidelines are regularly reviewed and approved by senior management and USAC's Board of Directors.

**Liquidity and Capital Resources**

Premium income, deposits to policyholder account balances, investment income, and capital raising are the primary sources of funds while withdrawals of policyholder account balances, investment purchases, policy benefits in the form of claims, and operating expenses are the primary uses of funds. To ensure we will be able to pay future commitments, the funds received as premium payments and deposits are invested in primarily fixed income securities. Funds are invested with the intent that the income from investments, plus proceeds from maturities, will in the future meet our ongoing cash flow needs. The approach of matching asset and liability durations and yields requires an appropriate mix of investments. Our investments consist primarily of marketable debt securities that could be readily converted to cash for liquidity needs. Cash flow projections and cash flow tests under various market interest scenarios are also performed annually to assist in evaluating liquidity needs and adequacy. As a member of the Federal Home Loan Bank, USALSC has immediate access to additional cash liquidity, if needed.

Net cash provided by operating activities was $5,826,538 for the nine months ended September 30, 2025. The primary sources of cash from operating activities were premiums received from policyholders as well as investment income. The primary uses of cash for operating activities were for payments of commissions to agents and settlement of policy liabilities. Net cash provided by investing activities was $4,198,459. The primary uses of cash was purchases of fixed maturity, mortgage, and equity investments and the primary sources of cash was from maturities and paydowns of assets. Cash used by financing activities was $8,843,540. The primary uses of cash were withdrawals on deposit-type contracts.

As of September 30, 2025, we had cash and cash equivalents totaling $8,085,240. We believe that our existing cash and cash equivalents are sufficient to fund the anticipated operating expenses and capital expenditures for the foreseeable future. We have based this estimate upon assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. The growth of USALSC, our primary insurance subsidiary, is uncertain and may require additional capital as it continues to grow.

**Impact of Inflation**

Insurance premiums are established before the amount of losses, or the extent to which inflation may affect such losses and expenses, are known. We attempt, in establishing premiums, to anticipate the potential impact of inflation. If, for competitive reasons, premiums cannot be increased to anticipate inflation, this cost would be absorbed by us. Inflation also affects the rate of investment return on the investment portfolio with a corresponding effect on investment income.

**Off-Balance Sheet Arrangements**

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a "smaller reporting company", the Company does not provide disclosure pursuant to this item.

**ITEM 4. CONTROLS AND PROCEDURES**

We have established disclosure controls and procedures to ensure, among other things, material information relating to our Company, including our consolidated subsidiaries, is made known to our officers who certify our financial reports and to the other members of our senior management and the Board of Directors.

As required by Exchange Act Rule 13a-15(b), management of the Company, including the Chief Executive Officer and the Vice President conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e). Based upon an evaluation at the end of the period, the Chief Executive Officer and the Vice President concluded that the disclosure controls and procedures are effective in timely alerting them to material information relating to us and our consolidated subsidiaries required to be disclosed in our periodic reports under the Exchange Act.

There were no changes to the Company's internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the three and nine months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's control over financial reporting.

**Part II** – **Other Information**

**ITEM 1. LEGAL PROCEEDINGS**

We are involved in litigation incidental to our operations from time to time. We are not presently a party to any legal proceedings other than litigation arising in the ordinary course of business, and we are not aware of any claims that could materially affect our financial position or results of operation.

**ITEM 1A. RISK FACTORS**

As a "smaller reporting company", the Company is not required to provide disclosure pursuant to this item.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

None

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None

**ITEM 4. MINE SAFETY DISCLOSURES**

Not Applicable

**ITEM 5. OTHER INFORMATION**

None.

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**ITEM 6. EXHIBITS**

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| | |
|:---|:---|
| 3.1 | [<u>Articles of Incorporation of US Alliance Corporation (filed as Exhibit 3.1 to the Company</u><u>'</u><u>s Registration Statement on Form 10 filed on May 2, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.1)</u>](http://www.sec.gov/Archives/edgar/data/1463913/000146391316000004/usalliance1004292016ex1.htm) |
| 3.1.1 | [<u>First Amendment</u> <u>to Articles of Incorporation of US Alliance Corporation, filed as Exhibit 3.1.1 to the Company's Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference a Exhibit 3.1.1.</u>](http://www.sec.gov/Archives/edgar/data/1463913/000143774917011055/ex3-11.htm) |
| 3.1.2 | [<u>Second Amendment to Articles of Incorporation of US Alliance Corporation, filed as Exhibit 3.1.2</u> <u>to the Company's Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.1.2.</u>](http://www.sec.gov/Archives/edgar/data/1463913/000143774917011055/ex3-12.htm) |
| 3.2 | [<u>Bylaws of US Alliance Corporation (filed as Exhibit 3.2 to the Company</u><u>'</u><u>s Registration Statement on Form 10 filed on May 2, 2016 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.2).</u>](http://www.sec.gov/Archives/edgar/data/1463913/000146391316000004/usalliance1004292016ex2.htm) |
| 3.2.1 | [<u>Amendment No. 1. to the bylaws of US Alliance Corporation, filed as Exhibit 3.2 to the Company's Current Report on Form 8-K filed on June 9, 2017 (File No. 000-55627), is incorporated herein by reference as Exhibit 3.2.1.</u>](http://www.sec.gov/Archives/edgar/data/1463913/000143774917011055/ex3-2.htm) |
| 31.1\* | [<u>Certification of Chief Executive Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](ex_884118.htm) |
| 31.2\* | [<u>Certification of Principal Financial Officer of US Alliance Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</u>](ex_884119.htm) |
| 32.1\* | [<u>Certifications of the Chief Executive Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</u>](ex_884120.htm) |
| 32.2\* | [<u>Certifications of the Principal Financial Officer of US Alliance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](ex_884121.htm) |
| 101.INS\*\* | Inline XBRL Instance |
| 101.SCH\*\* | Inline XBRL Taxonomy Extension Schema |
| 101.CAL\*\* | Inline XBRL Taxonomy Extension Calculation |
| 101.DEF\*\* | Inline XBRL Taxonomy Extension Definition |
| 101.LAB\*\* | Inline XBRL Taxonomy Extension Labels |
| 101.PRE\*\* | Inline XBRL Taxonomy Extension Presentation |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\*\*XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

\* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized

---

| | |
|:---|:---|
|  | US Alliance |
|  | Corporation |
|  | (Registrant) |
| Date | November 14, 2025 |
| By | /s/ Jack H. Brier |
|  | Jack H. Brier, President and Chairman |

---

## Exhibit 31.1

**Exhibit 31.1**

**PRINCIPAL EXECUTIVE OFFICER'S CERTIFICATION** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Jack H. Brier, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of US Alliance Corporation (the "registrant");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Jack H. Brier |
| Jack H. Brier |
| President and Chief Executive Officer |

---

Date: November 14, 2025

## Exhibit 31.2

**Exhibit 31.2**

**PRINCIPAL FINANCIAL OFFICER**'**S CERTIFICATION** 

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Jeff Brown, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of US Alliance Corporation (the "registrant");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Jeff Brown |
| Jeff Brown |
| Vice-President and Principal Financial Officer |

---

Date: November 14, 2025

## Exhibit 32.1

**Exhibit 32.1**

**PRINCIPAL EXECUTIVE OFFICER**'**S CERTIFICATION** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of US Alliance Corporation (the "Company") on Form 10-Q for the period ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jack H. Brier, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Jack H. Brier |
| Jack H. Brier |
| President and Chief Executive Officer |

---

Date: November 14, 2025

## Exhibit 32.2

**Exhibit 32.2**

**PRINCIPAL FINANCIAL OFFICER**'**S CERTIFICATION** 

**PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of US Alliance Corporation (the "Company") on Form 10-Q for the period ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeff Brown Vice-President and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Jeff Brown |
| Jeff Brown |
| Vice-President and Principal Financial Officer |

---

Date: November 14, 2025