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Business Combinations and Asset Acquisitions | 9 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2024 | Dec. 31, 2024
Business Combination and Asset Acquisition [Abstract] |  |
Business Combination Disclosure | 3. BUSINESS COMBINATION On July 31, 2024, Ambac completed the acquisition of 60% of Beat Capital Partners ("Beat") for a purchase price of $281 of which approximately $252 was paid in cash and the remainder was satisfied through the issuance of 2,216,023 shares of Company Common Stock. The acquisition was accounted for as a business combination. The Company is in the process of finalizing the estimation of the fair value of acquired assets and assumed liabilities. Accordingly, the Company’s preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the process, which would also likely impact the Company’s allocation of the purchase price to Goodwill. In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, changes if any, to the preliminary estimates and allocation will be reported in the Company’s financial statements as an adjustment to the opening balance sheet. The following table summarizes the consideration transferred to acquire Beat and the estimated fair values of the identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest, at the acquisition date:
Fair value of consideration transferred: |  |
Cash |  | $ | 252 |
Common shares |  | 29 |
Total consideration |  | 281 |
Recognized amounts of assets acquired, liabilities assumed and noncontrolling interests: |  |
Cash and equivalents |  | 8 |
Short-term investments |  | 29 |
Commission receivables |  | 5 |
Contract assets |  | 43 |
Other assets |  | 11 |
Intangible assets |  | 312 |
Goodwill |  | 350 |
Advanced commissions |  | (49) |
Premium payable |  | (6) |
Deferred tax liability |  | (74) |
Other liabilities |  | (20) |
Redeemable noncontrolling interest |  | (179) |
Nonredeemable noncontrolling interests |  | (148) |
Total |  | 281 |
Goodwill was recorded to reflect the excess purchase consideration over net assets acquired and primarily consists of the future economic benefits that we expect to receive as a result of the acquisition, driven by the value of Beat's potential future distribution and carrier relationships, and synergies with other Ambac business operations. All of the $350 goodwill was assigned to the Insurance Distribution segment. The goodwill is not deductible for tax purposes. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions at the time of acquisition and are subject to updating as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The fair value of the redeemable non-controlling interest of $179 on the acquisition date was estimated based on the non-controlling interest’s respective share of Beat's enterprise value, adjusted for the value of Ambac's call option to purchase, and the minority owners' put option to sell to Ambac, respectively, the remaining 40% membership interest in Beat. Please refer to the Redeemable Noncontrolling Interest section of Note 1. Business and Basis of Presentation, for further information regarding the terms of the call and put option, as well as the redeemable noncontrolling interest balance sheet classification. The fair value of the nonredeemable noncontrolling interest of $148 represents the aggregate noncontrolling interest share in certain Beat operating units which are minority owned by the units' respective management teams. There are no put or call options associated with these minority interests and as such, the aggregate amount is classified as nonredeemable noncontrolling interest on the balance sheet. The following table sets forth the estimated fair values of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
|  | Fair Value |  | Useful Life - Years
Customer relationships |  | $ | 303 |  |  | 10.0
Trademarks |  | 8 |  |  | 10.0
Total |  | $ | 312 |  |  |
The customer relationships intangible represents existing relationships Beat maintains with a variety of brokers and distributors across its product lines. It excludes the value of potential future distribution relationships that may be developed, which is included in goodwill. The trade name intangible represents the rights to the Beat Capital Partners brand name which is well known in the marketplace in which Beat competes. The overall weighted average useful life of the identified amortizable intangible assets acquired is 5.5 years. At September 30, 2024, future amortization of Beat's acquired finite-lived intangible assets for the year 2024 (three months) through 2028 and thereafter will be:
Year |  | Estimated Expense
2024 |  | $ | 8 |
2025 |  | 31
2026 |  | 31
2027 |  | 31
2028 |  | 31
Thereafter |  | 174
Total |  | $ | 306 |
The acquired business contributed revenues of $8 and net income of $(2) to Ambac for the period from August 1, 2024 to September 30, 2024. The following unaudited pro forma summary presents consolidated information of Ambac as if the business combination had occurred on January 1, 2023.
|  | Nine Months Ended September 30,
Pro forma |  | 2024 |  | 2023
Revenues |  | $ | 362 |  |  | $ | 238 |
Net income (loss) |  | $ | 18 |  |  | $ | 4 |
Ambac did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net income. These pro forma amounts have been calculated after applying Ambac's accounting policies and adjusting the results of Beat to reflect amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from January 1, 2023, with the consequential tax effects. In 2024, Ambac incurred $26 of acquisition-related costs. These expenses are included in general and administrative expense on Ambac's consolidated statement of comprehensive income for the nine months ended September 30, 2024. In the table above, these expenses are reflected in the pro forma net income for the nine months ended September 30, 2023. | 3. BUSINESS COMBINATION On July 31, 2024, Ambac completed the acquisition of 60% of Beat Capital Partners ("Beat") for a purchase price of $281 of which approximately $252 was paid in cash and the remainder was satisfied through the issuance of 2,216,023 shares of Company Common Stock. The acquisition was accounted for as a business combination. The Company is in the process of finalizing the estimation of the fair value of acquired assets and assumed liabilities. Accordingly, the Company’s preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the process, which would also likely impact the Company’s allocation of the purchase price to Goodwill. In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, changes if any, to the preliminary estimates and allocation will be reported in the Company’s financial statements as an adjustment to the opening balance sheet. The following table summarizes the consideration transferred to acquire Beat and the estimated fair values of the identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest, at the acquisition date:
Fair value of consideration transferred: |  |
Cash |  | $ | 252 |
Common shares |  | 29 |
Total consideration |  | 281 |
Recognized amounts of assets acquired, liabilities assumed and noncontrolling interests: |  |
Cash and equivalents |  | 8 |
Short-term investments |  | 29 |
Commission receivables |  | 5 |
Contract assets |  | 43 |
Other assets |  | 11 |
Intangible assets |  | 312 |
Goodwill |  | 350 |
Advanced commissions |  | (49) |
Premium payable |  | (6) |
Deferred tax liability |  | (74) |
Other liabilities |  | (20) |
Redeemable noncontrolling interest |  | (179) |
Nonredeemable noncontrolling interests |  | (148) |
Total |  | 281 |
Goodwill was recorded to reflect the excess purchase consideration over net assets acquired and primarily consists of the future economic benefits that we expect to receive as a result of the acquisition, driven by the value of Beat's potential future distribution and carrier relationships, and synergies with other Ambac business operations. All of the $350 goodwill was assigned to the Insurance Distribution segment. The goodwill is not deductible for tax purposes. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions at the time of acquisition and are subject to updating as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The fair value of the redeemable non-controlling interest of $179 on the acquisition date was estimated based on the non-controlling interest’s respective share of Beat's enterprise value, adjusted for the value of Ambac's call option to purchase, and the minority owners' put option to sell to Ambac, respectively, the remaining 40% membership interest in Beat. Please refer to the Redeemable Noncontrolling Interest section of Note 1. Business and Basis of Presentation, for further information regarding the terms of the call and put option, as well as the redeemable noncontrolling interest balance sheet classification. The fair value of the nonredeemable noncontrolling interest of $148 represents the aggregate noncontrolling interest share in certain Beat operating units which are minority owned by the units' respective management teams. There are no put or call options associated with these minority interests and as such, the aggregate amount is classified as nonredeemable noncontrolling interest on the balance sheet. The following table sets forth the estimated fair values of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:
|  | Fair Value |  | Useful Life - Years
Customer relationships |  | $ | 303 |  |  | 10.0
Trademarks |  | 8 |  |  | 10.0
Total |  | $ | 312 |  |  |
The customer relationships intangible represents existing relationships Beat maintains with a variety of brokers and distributors across its product lines. It excludes the value of potential future distribution relationships that may be developed, which is included in goodwill. The trade name intangible represents the rights to the Beat Capital Partners brand name which is well known in the marketplace in which Beat competes. The overall weighted average useful life of the identified amortizable intangible assets acquired is 5.5 years. At September 30, 2024, future amortization of Beat's acquired finite-lived intangible assets for the year 2024 (three months) through 2028 and thereafter will be:
Year |  | Estimated Expense
2024 |  | $ | 8 |
2025 |  | 31
2026 |  | 31
2027 |  | 31
2028 |  | 31
Thereafter |  | 174
Total |  | $ | 306 |
The acquired business contributed revenues of $8 and net income of $(2) to Ambac for the period from August 1, 2024 to September 30, 2024. The following unaudited pro forma summary presents consolidated information of Ambac as if the business combination had occurred on January 1, 2023.
|  | Nine Months Ended September 30,
Pro forma |  | 2024 |  | 2023
Revenues |  | $ | 362 |  |  | $ | 238 |
Net income (loss) |  | $ | 18 |  |  | $ | 4 |
Ambac did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net income. These pro forma amounts have been calculated after applying Ambac's accounting policies and adjusting the results of Beat to reflect amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from January 1, 2023, with the consequential tax effects. In 2024, Ambac incurred $26 of acquisition-related costs. These expenses are included in general and administrative expense on Ambac's consolidated statement of comprehensive income for the nine months ended September 30, 2024. In the table above, these expenses are reflected in the pro forma net income for the nine months ended September 30, 2023.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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