$KG

Kestrel Group Ltd

CIK:0002055116|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Revenues
Gross premiums written	$ 1,435	$ 1,096	$ 4,090	$ 1,096
Net premiums written	1,436	1,095	4,090	1,095
Change in unearned premiums	2,038	1,327	2,541	1,327
Net premiums earned	3,474	2,422	6,631	2,422
Fee revenue	3,742	544	6,862	1,351
Net investment income	2,454	1,542	5,062	1,576
Net realized and unrealized investment (losses) gains	(2,984)	1,058	(1,645)	1,058
Total revenues	6,686	5,566	16,910	6,407
Expenses
Net loss and loss adjustment expenses	1,515	(5,961)	3,770	(5,961)
Commission and other acquisition expenses	983	394	2,456	394
General and administrative expenses	10,493	5,493	22,737	6,636
Interest and amortization expenses	4,177	1,519	8,073	1,519
Change in fair value of earn out liability	0	2,679	0	2,679
Gain on bargain purchase	0	(73,590)	0	(73,590)
Foreign exchange and other (gains) losses	(2,278)	5,102	(4,498)	5,102
Total expenses	14,890	(64,364)	32,538	(63,221)
Net (loss) income before income taxes	(8,204)	69,930	(15,628)	69,628
Less: income tax (benefit) expense	(112)	3	(106)	95
Interest in income of equity method investments	10	0	9	0
Net (loss) income	$ (8,082)	$ 69,927	$ (15,513)	$ 69,533
Basic (loss) earnings per share attributable to Kestrel shareholders (in dollars per share)	$ (1.03)	$ 15.05	$ (1.99)	$ 18.80
Diluted (loss) earnings per share attributable to Kestrel shareholders (in dollars per share)	$ (1.03)	$ 15.05	$ (1.99)	$ 18.80
Weighted average number of common shares - basic (in shares)	7,824,030	4,635,406	7,788,420	3,692,701
Weighted average number of common shares - diluted (in shares)	7,824,030	4,635,406	7,788,420	3,692,701

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025	Dec. 31, 2025
Cash flows from operating activities
Net (loss) income	$ (8,082)	$ 69,927	$ (15,513)	$ 69,533
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Other non-cash (income) expenses including credit losses, depreciation, amortization, leases			(427)	2,768
Gain on bargain purchase	0	(73,590)	0	(73,590)
Interest in income of equity method investments	(10)	0	(9)	0
Net realized and unrealized investment (losses) gains	2,984	(1,058)	1,645	(1,058)
Share-based compensation expense			2,620	239
Foreign exchange and other (gains) losses	(2,278)	5,102	(4,498)	5,102
Changes in assets – (increase) decrease:
Reinsurance balances receivable, net			(4,921)	93
Reinsurance recoverable on unpaid losses			5,019	(3,586)
Accrued investment income			161	(789)
Funds withheld receivable			3,324	(668)
Other assets			(3,477)	4
Changes in liabilities – increase (decrease):
Reserve for loss and loss adjustment expenses			(31,398)	(25,090)
Unearned premiums			(2,566)	(1,327)
Accrued expenses and other liabilities			9,089	7,631
Net cash used in operating activities			(40,951)	(20,738)
Cash flows from investing activities:
Purchases of fixed maturities			(75,658)	(23,889)
Purchases of other investments			(3,463)	(1,380)
Purchases of equity method investments			(1,023)	(490)
Proceeds from sales of fixed maturities	10,365	7,312	48,482	7,312
Proceeds from maturities, paydowns and calls of fixed maturities			49,484	26,670
Proceeds from sale and redemption of other investments			1,779	141
Proceeds from sale and redemption of equity method investments			0	163
Cash acquired from purchase of business			0	93,515
Net loan receivable from related party			19,567	0
Others, net			(14)	(1)
Net cash provided by investing activities			39,154	102,041
Cash flows from financing activities:
Repurchase of common shares			(486)	0
Dividends paid – Kestrel equityholders			0	(40,000)
Net cash used in financing activities			(486)	(40,000)
Effect of exchange rate changes on foreign currency cash, restricted cash and cash equivalents			(629)	661
Net (decrease) increase in cash, restricted cash and cash equivalents			(2,912)	41,964
Cash, restricted cash and cash equivalents, beginning of period			29,190	4,286	$ 4,286
Cash, restricted cash and cash equivalents, end of period	26,278	46,250	26,278	46,250	29,190
Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets:
Cash and cash equivalents, end of period	16,062	31,533	16,062	31,533	20,044
Restricted cash and cash equivalents, end of period	10,216	14,717	10,216	14,717	9,146
Total cash, restricted cash and cash equivalents, end of period	$ 26,278	$ 46,250	$ 26,278	$ 46,250	$ 29,190

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Investments:
Fixed maturities: available-for-sale, at fair value (Amortized cost: 2026: $144,533; 2025: $168,991)	$ 144,624	$ 169,665
Equity securities: at fair value (Cost: 2026: $11,145; 2025: $11,145)	11,748	11,748
Equity method investments	33,413	33,532
Other investments	173,280	173,358
Total investments	363,065	388,303
Cash and cash equivalents	16,062	20,044
Restricted cash and cash equivalents	10,216	9,146
Accrued investment income	4,900	5,063
Reinsurance balances receivable, net (includes $0 and $2 from related parties in 2026 and 2025, respectively. Allowance for expected credit losses: 2026 - $14; 2025 - $14)	5,590	724
Reinsurance recoverable on unpaid losses: (Allowance for expected credit losses: 2026: $1,613; 2025: $1,740)	412,121	461,197
Intangible assets	7,676	9,347
Funds withheld receivable: (Allowance for expected credit losses: 2026: $2; 2025: $2)	6,417	10,956
Other assets	24,116	18,292
Total assets	919,606	1,009,955
LIABILITIES
Reserve for loss and loss adjustment expenses (includes $478,831 and $554,507 from related parties in 2026 and 2025, respectively)	554,341	637,169
Unearned premiums (includes $14,835 and $17,227 from related parties in 2026 and 2025, respectively)	14,837	17,406
Accrued expenses and other liabilities (includes $25,163 and $16,443 from related parties in 2026 and 2025, respectively)	61,419	52,694
Senior notes - principal amount	262,361	262,361
Less: unamortized fair value adjustment	87,312	87,959
Senior notes, net	175,049	174,402
Total liabilities	805,646	881,671
Commitments and Contingencies
EQUITY
Common shares ($0.01 par value; 2026: 10,108,600 and 2025: 9,979,477 shares issued; 2026: 7,824,030 and 2025: 7,741,943 shares outstanding)	101	100
Additional paid-in capital	180,153	177,534
Accumulated other comprehensive (loss) income	(29)	916
(Accumulated deficit) retained earnings	(14,316)	1,197
Treasury shares, at cost (2026: 2,284,570 shares, 2025: 2,237,534 shares)	(51,949)	(51,463)
Total shareholders’ equity	113,960	128,284
Total liabilities and equity	919,606	1,009,955
Related Party
Investments:
Net loan receivable from related party	$ 69,443	$ 86,883