Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2025

Accounting Policies [Abstract]

Basis of Presentation

The Company has prepared the accompanying consolidated financial statements in accordance with accounting

principles generally accepted in the United States of America (“GAAP”), and the Securities and Exchange

Commission. References to the Accounting Standard Codification (“ASC”) and the Accounting Standard Updates

(“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates issued by the Financial

Accounting Standards Board (“FASB”) as the source of the authoritative GAAP. In the opinion of management, all

adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in

these consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as

well as variable interest entities (“VIE”) in which the Company is determined to be the primary beneficiary. All

intercompany balances and transactions have been eliminated in consolidation.

Consolidation of Variable Interest Entities

For entities in which the Company has variable interests, the Company first evaluates whether the entity meets the

definition of a VIE or a voting interest entity (“VOE”). If the entity is a VIE, the Company focuses on identifying

whether it has the power to direct the activities that most significantly impact the VIE’s economic performance and

whether it has the obligation to absorb losses or the right to receive benefits from the VIE. If the Company is the

primary beneficiary of a VIE, the assets, liabilities, and results of operations of the variable interest entity will be

included in the Company’s consolidated financial statements. If the entity is a VOE, the Company evaluates whether

it has the power to control the VOE through a majority voting interest or through other arrangements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated

financial statements and the reported amounts of revenues and expenses during the reporting period. As a result,

actual results could differ from those estimates. Management evaluates estimates on an ongoing basis when updated

information related to such estimates becomes available. The most significant areas that require management

judgment are the estimate of unpaid losses and loss adjustment expenses, evaluation of reinsurance recoverable,

evaluation of ceding commission, and valuation of investments.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits with financial institutions and other highly-liquid short-term

investments with original maturities of three months or less. These amounts are carried at cost, which approximates

fair value. Any net negative cash balances with any individual financial institution in which conditions for the right

of set off are met are excluded from cash and cash equivalents. These amounts represent outstanding checks or

drafts not yet cleared by the financial institution and are reclassified to liabilities and presented as book overdraft in

the consolidated balance sheets.

Restricted Cash and Cash Equivalents

Restricted cash represents cash deposits held by certain states in which the Company’s insurance subsidiary

conducts business to meet regulatory requirements and is not available for immediate business use.

Investments

Fixed Maturity Securities

The Company currently classifies all of its investments in debt securities and short-term investments as available-

for-sale and reports them at fair value. Short-term investments consist of investments in interest-bearing assets with

original maturities of 12 months or less. The Company records subsequent changes in value through the date of

disposition as unrealized holding gains and losses, net of taxes, and includes them as a component of accumulated

other comprehensive income until reclassified to earnings upon sale. Realized gains and losses on the sale of

investments are determined using the specific-identification method and included in earnings. The Company

amortized any premium or discount on fixed maturities over the remaining maturity period of the related securities

using the effective interest method and reports the amortization in net investment income. The Company recognizes

dividends and interest income when earned.

Quarterly, the Company performs an assessment of investments to determine if any are impaired as the result of a

credit loss. An investment is impaired when the fair value of the investment declines to an amount less than the cost

or amortized cost of that investment. For each fixed-income security in an unrealized loss position, if the intent is to

sell the security or that it is more likely than not that the Company will be required to sell the security before

recovery of the cost or amortized cost basis for reasons such as liquidity needs, contractual or regulatory

requirements, the security’s entire decline in fair value is recorded in earnings. If the intent is not to sell the security

or it is more likely than not that the Company will be required to sell the security, the Company will evaluate

whether any impairment is attributable to credit-related factors. Such evaluation includes consideration of factors

such as:

•Failure of the issuer of the security to make scheduled interest or principal payments

•Downgrades in the security’s credit rating since acquisition by 3 or more notches

•Adverse conditions specifically related to the security, an industry, or geographic area

•Changes in the financial condition of the issuer of the security

•The payment structure of the security and the likelihood of the issuer being able to make payments

that increase in the future

Upon determination of a credit-related impairment, an allowance for credit losses (ACL) will be recognized and is

measured as the amount by which the security’s amortized cost basis exceeds the entity’s best estimate of the present

value of cash flows expected to be collected. The allowance is limited to the difference between the amortized cost

basis and the security’s fair value. Subsequent recovery of any previously recorded impairment will be recognized

through reversal of the ACL.

Deferred Transaction Costs

Deferred transaction costs consist of direct incremental legal, accounting, and consulting fees relating to the

Company’s IPO. The deferred transaction costs were offset against the IPO proceeds upon the completion of the

offering in accordance with ASC 340-10-S99-1.

Restricted Stock

The restricted stock awards (“RSAs”) are subject to a service condition and are accounted for as equity under ASC

Topic 718, Compensation—Stock Compensation. The RSAs are valued based on the fair value of the underlying

award, which is the closing price of the Company’s Common Stock on the date of grant. The Company recognizes

the compensation cost for the RSAs on a straight-line basis over the awards’ vesting period as general and

administrative expenses within the Company’s consolidated statements of operations and comprehensive income.

All related RSAs issued to date have vested immediately. The Company recognizes any award forfeitures when they

occur.

In connection with the RSAs, the Company satisfies employee tax withholding obligations related to the vesting of

restricted stock by withholding a portion of the shares otherwise issuable to employees. The shares withheld are

immediately retired and are not held as treasury stock. As a result, both the number of shares issued and outstanding

are reduced by the number of shares withheld and retired. The cash paid to tax authorities for these withheld shares

is classified as a financing activity in the consolidated statements of cash flows.

The restricted stock units (“RSUs”) are subject to service-based vesting conditions and are accounted for as equity

under ASC Topic 718, Compensation—Stock Compensation. RSUs are valued based on the fair value of the

underlying award, which is the closing price of the Company’s Common Stock on the date of the grant. The

Company recognizes the compensation cost for RSUs on a straight-line basis over the awards’ three-year vesting

period as general and administrative expenses within the Company’s consolidated statements of operations and

comprehensive income. The Company recognizes any RSU forfeitures when they occur. The RSUs contain a

contractual right to participate in dividends and other distributions paid by the Company.

Earnings Per Share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-

average common shares outstanding during the period. Diluted earnings per share is computed by dividing the

Company’s net income available to shareholders, by the weighted average number of shares outstanding during the

period plus the impact of all potentially dilutive shares, such as preferred shares, unvested shares and options. The

dilutive impact of share options and unvested shares is determined by applying the treasury stock method and the

dilutive impact of any preferred shares is determined by applying the “if converted” method. The Company did not

have any dilutive instruments in 2024, and therefore, diluted earnings per share is equal to basic earnings per share.

During 2025, approximately 208 shares were considered dilutive, primarily related to RSUs subject to a three-year

straight-line vesting schedule. The impact of these dilutive shares was immaterial and did not change diluted

earnings per share when rounded.

In connection with the Corporate Contribution described in Note 1 — “Nature of Operations and Basis of

Presentation,” all outstanding units were exchanged for shares of Common Stock, and all share and earnings per

share amounts have been retroactively adjusted as if the exchange occurred at the beginning of the earliest period

presented.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants as of the measurement date (an exit price). ASC 820, Fair Value Measurements and

Disclosures (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of

inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors,

including the type of investment, characteristics specific to the investment, market conditions and other factors. The

hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities

(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the hierarchy are as follows:


Level 1:		Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.

Level 2:		Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3:		Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation.

When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy

within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is

significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or

liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of

an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not

necessarily correspond to the perceived risk of that asset or liability.

For securities priced using a matrix price, a practical expedient approach is used where matrix priced assets are

assigned as Level 2 in the fair value hierarchy for these matrix priced securities since the fair values are based on

market-based information which considers yield and maturity.

Cash and cash equivalents, and restricted cash approximate fair value and are therefore excluded from the leveling

table seen in Note 5 – “Fair Value Measurements.” The cost basis is determined to approximate fair value due to the

short-term duration of the financial instruments.

Premiums Receivable

Generally, premiums are collected prior to or during the policy period as permitted under the Company’s payment

plans. Premium receivables include amounts due from policyholders and agents for billed and uncollected

premiums. Credit risk is minimized through the effective administration of policy payment plans whereby the rules

governing policy cancellation minimize circumstances in which the Company extends insurance coverage without

having received the corresponding premiums. The Company performs a policy-level evaluation to determine the

extent the premium receivable balance exceeds the unearned premium balance. For these policies, an allowance for

credit losses is estimated based on the length of collection periods, the creditworthiness of the insured, and historical

experience. Cancellations are issued for policies with premiums outstanding for a period greater than is contractually

permitted.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation is

determined using the straight-line method over the estimated useful lives as follows: furniture, seven years; vehicle

fleet, seven years; leasehold improvements, seven years; and computer equipment, three years. Leasehold

improvements are amortized over the shorter of the lease term or the asset’s useful life, which is seven years.

Internally developed software is amortized over its estimated useful life of three years. Costs for internally

developed software are capitalized during the application development stage. Expenditures for maintenance and

repairs that do not improve or extend the life of the respective assets are expensed as incurred. The Company

reviews its property and equipment for impairment annually and/or whenever changes in circumstances indicate that

the carrying amount may not be recoverable.

Premium Revenue

Premium revenue is earned on a daily pro rata basis over the contract period of the related insurance policies that are

in force and is included in direct premiums earned. The portion of premiums not earned at the end of the year is

recorded as unearned premiums. Premiums collected prior to the policy effective date are recorded as advance

premiums on the consolidated balance sheets.

Policy Fees

Policy fees, which represent managing general agency (MGA) fees paid by policyholders to the Company’s

managing general agency subsidiary, AIMGA (through the Company’s insurance subsidiary, AIIC) on all new and

renewal insurance policies, are recognized as income at policy inception date, which coincides with the completion

of the AIMGA’s performance obligation (upon completion of the placement of the policy).

Deferred Policy Acquisition Costs, Net of Ceding Commissions

Direct acquisition expenses, which primarily consist of commissions and premium taxes and other acquisition costs

that vary with, and are directly related to the successful acquisition of insurance contracts, net of ceding

commissions, are deferred and amortized to expense in proportion to the premium earned, generally over a period of

one year. Ceding commissions from reinsurance agreements are recorded as a reimbursement for acquisition costs.

If the amount of unearned ceding commission exceeds the amount of deferred acquisition costs of the business

ceded, the net amount is recorded as a separate liability.

Reinsurance

Reinsurance is used to reduce the exposure to losses arising from direct insurance policies, manage capacity and

protect capital resources. However, the Company remains liable for all losses it incurs to the extent that any

reinsurer is unable or unwilling to make timely payments under its reinsurance agreements. To minimize exposure to

losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon

placement of the reinsurance and periodically thereafter. In addition to considering a reinsurer’s financial condition,

the collectability of the reinsurance recoverable is evaluated regularly based on other factors. Such factors include

the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other

relevant factors.

The accounting for reinsurance contracts depends on whether the reinsurance contract reinsures short-duration or

long-duration insurance contracts, whether the reinsurance contract meets certain risk transfer conditions, and

whether the reinsurance contract is prospective or retrospective. When the ceding company is indemnified by the

reinsurer against the loss or liabilities (i.e., risk transfer), reinsurance accounting is required.

In establishing an allowance for credit losses related to reinsurance recoverables, the Company has elected to use a

probability of default and loss-given default model. This model is applied to pools of recoverables that share similar

risk characteristics, including risk ratings and availability of collateral. Management evaluates assumptions used

within the allowance for credit loss analysis on a quarterly basis considering changes in credit ratings, probability of

default rates, and changes in reinsurance recoverables balances. Management utilizes the aforementioned analysis of

assumptions to estimate a range of possible current expected credit losses for the exposed population of reinsurance

recoverables. As of December 31, 2025 and December 31, 2024, the exposure from this analysis was not considered

material.

Reinsurance recoverables include reinsurance recoverables on paid losses and reinsurance recoverables on unpaid

losses. Reinsurance recoverables on paid losses represent amounts currently due from reinsurers. Reinsurance

recoverables on unpaid losses represent amounts that will be collectible from reinsurers once the losses are paid to

the insured. Reinsurance recoverables on unpaid losses are estimated in a manner consistent with the Company’s

estimate of unpaid losses and loss adjustment expenses associated with the insured business.

Reinsurance premiums, commissions, and expense reimbursements related to reinsured business are accounted for

on a basis consistent with the basis used in accounting for the original policies issued and the terms of the

reinsurance contracts. Ceded reinsurance premiums are reported as a reduction of premium earned and are

recognized over the remaining policy period based on the reinsurance protection provided. Ceded reinsurance

premiums applicable to reinsurance ceded for unearned premiums are reported as prepaid reinsurance premiums in

the consolidated balance sheets and represents the unexpired portion of premiums ceded to reinsurers. Ceded

reinsurance policies are reflected as reinsurance payable. Ceded losses and loss adjustment expenses (“LAE”) are

also accounted for on a basis consistent with those used in accounting for the original policies issued and the terms

of the relevant reinsurance agreement and are recorded as reductions to losses and LAE incurred. Ceding

commissions received in connection with reinsurance are accounted for as a reduction of deferred policy acquisition

costs. Ceded premiums on the catastrophe bonds are treated similar to multi-year treaties.

Premium Deficiency Reserve

If the sum of existing policies’ expected losses and LAE, deferred policy acquisition costs and policy maintenance

costs (such as costs to store records and costs incurred to collect premiums and pay commissions) exceeds the

related unearned premiums, a premium deficiency is determined to exist. The Company does not consider

anticipated investment income in determining if a premium deficiency exists. In this event, deferred policy

acquisition costs are immediately expensed to the extent necessary to eliminate the premium deficiency. If the

premium deficiency exceeds deferred policy acquisition costs, a liability is accrued for the excess deficiency. No

accruals for premium deficiency were considered necessary as of December 31, 2025 and December 31, 2024.

Liability for Unpaid Losses and Loss Adjustment Expenses

Liability for unpaid losses and LAE represent management’s best estimate of the ultimate cost of settling all unpaid

reported and unreported losses and LAE, net of salvage and subrogation recoveries. The liability for unpaid losses

and LAE include: (i) the accumulation of individual case estimates for claims and claim adjustment expenses

reported prior to the close of the accounting period; (ii) actuarial estimates of claims incurred but not yet reported

(“IBNR”); and (iii) estimates of expenses for investigating and adjusting claims based on experience of the

Company and the industry. The Company estimates and accrues its right to subrogate reported or estimated claims

against other parties. Subrogated claims are recorded at amounts estimated to be received from the subrogated

parties, net of related costs and netted against the reserves for unpaid loss and LAE.

The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and

complex process. Inherent in the estimates of ultimate claims and subrogation are expected trends in loss severity,

frequency, payment patterns and other factors (including known and anticipated regulatory and legal developments,

changes in social attitude, inflation, and economic conditions) that may vary as claims are settled. In addition, the

Company’s policyholders are subject to adverse weather conditions, such as hurricanes, tornadoes and tropical

storms. Although considerable variability is inherent in such estimates, management believes that the reserves for

losses and LAE are reasonably stated. The estimates prior to the balance sheet date are continually monitored and

reviewed, and as settlements are made or reserves adjusted as experience develops or new information becomes

known, the differences are reported in current operations. Salvage and subrogation recoveries are estimated based on

a review of the level of historical salvage and subrogation recoveries. The Company does not discount its unpaid

loss and LAE reserves. Unpaid loss and LAE reserves are recorded net of reinsurance.

Long-Term Debt

Long-term debt includes the Company’s surplus notes. Surplus notes are generally classified as a liability recorded

on the consolidated balance sheets at carrying value.

Stock-Based Compensation

The Company measures stock-based compensation at the grant date based on the fair value of the award and

recognizes stock-based compensation over the requisite vesting period on a straight-line basis in accordance with

ASC Topic 718, Compensation—Stock Compensation. The Company recognizes any award forfeitures as they

occur.

Guaranty Fund and Residual Market Pool Assessments

Insurance companies are required to participate in guaranty funds for insolvent insurance companies and other

statutory insurance entities. The guaranty funds and other statutory entities periodically levy assessments against all

applicable insurance companies doing business in the state and the amounts and timing of those assessments are

unpredictable.

The Company’s insurance subsidiary is subject to assessments by the Florida Insurance Guaranty Association

(“FIGA”), a residual market pool, and a state catastrophe reinsurance pool. The activities of this fund and these

pools include collecting funds from solvent insurance companies to cover losses resulting from the insolvency or

rehabilitation of other insurance companies or deficits generated by Citizens Property Insurance Corporation

(“Citizens”) and the Florida Hurricane Catastrophe Fund (“FHCF”). The Company’s policy is to recognize its

obligation for guaranty fund and residual market pool assessments when it has the information available to

reasonably estimate its liabilities. The Company accrues a liability for estimated insurance assessments as direct

premiums are written. To recover assessments which are paid in advance to the guaranty fund or other insurance-

related entity, the Company recoups such assessments from policyholders in the form of a policy surcharge. Once

the recoupment period begins, the entire recoupment amount is recorded as an asset in the consolidated balance

sheets. For assessments that are collected from policyholders in advance of payment to the guaranty fund, the

Company records a liability in the consolidated balance sheets to reflect the amounts collected but unremitted.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts

in financial institutions and the Company’s investment portfolios. At December 31, 2025 and December 31, 2024,

the Company’s cash deposits at any one bank generally exceed the Federal Deposit Insurance Corporation’s $250

coverage limit for insured deposit accounts. For those banks where the Company’s deposits exceed $250, the

Company regularly reviews the financial reports and credit ratings of the banks for any indication of financial stress.

The Company determined that no indication of financial stress was evident in any bank where Company deposits

exceeded $250 at December 31, 2025 and December 31, 2024.

To manage exposure to credit risk in its investment portfolios, the Company focuses primarily on higher-quality,

fixed-income securities, reviews the credit strength of all entities in which it invests, limits its exposure in any one

investment, and monitors portfolio quality, taking into account credit ratings assigned by recognized credit-rating

organizations.

Additionally, reinsurance agreements potentially subject the Company to concentrations in credit risk. The Company

remains liable for claim payments in the event that any reinsurer is unable to meet its obligations under the

reinsurance agreements. Failure of reinsurers to honor their obligations could result in losses to the Company. The

Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from

similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to

significant losses from reinsurer insolvencies. The Company contracts with a number of reinsurers to secure its

annual reinsurance coverage, which generally becomes effective either January 1st, April 1st or June 1st of each

year. As of December 31, 2025 and December 31, 2024, 12% and 41% of the Company’s premiums recoverable

were related to one reinsurer.

The Company also faces concentration risk related to geography. Because the Company conducts the majority of its

business in Florida, the financial results depend on the regulatory, legal, economic and weather conditions in

Florida.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of

deferred tax assets (“DTA”) and deferred tax liabilities (“DTL”) for the expected future tax consequences of events

that have been included in the financial statements. Under this method, the Company determines DTAs and DTLs

on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted

tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on

DTAs and DTLs is recognized in income in the period that includes the enactment date.

The Company recognizes DTAs to the extent that it is believed that these assets are more likely than not to be

realized. In making such a determination, the Company considers all available positive and negative evidence,

including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning

strategies, carryback potential if permitted under the tax law, and results of recent operations. If determined that the

Company would be able to realize DTAs in the future in excess of their net recorded amount, the Company would

make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”) on the basis

of a two-step process in which (i) the Company will determine whether it is more likely than not that the tax

positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that

meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that

is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company

recognizes interest and penalties related to tax positions in income tax expense.

Leases

The Company leases office space and vehicles under operating lease agreements that have initial terms ranging from

two to seven years. The Company determines if an arrangement is or contains a lease at inception, which is the date

on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The

Company evaluates contracts entered into to determine whether the contract involves the use of an asset. The

Company then evaluates whether it controls the use of the asset, which is determined by assessing whether it obtains

substantially all economic benefits from the use of the asset, and whether it has the right to direct the use of the

asset. The Company also considers whether its service arrangements include the right to control the use of an asset.

If these criteria are met and a lease has been identified, the Company accounts for the contract under the

requirements of ASC 842, Leases (“ASC 842”). The Company elects not to record any lease with a term of 12

months or less on the consolidated balance sheets. For such short-term leases, the Company recognizes the lease

payments in expense on a straight-line basis over the lease term. The Company has no leases with variable lease

payments.

If the contract is or contains a lease and the Company has the right to control the use of the identified asset, the right-

of-use (“ROU”) asset and the lease liability is measured from the lease component of the contract and recognized on

the consolidated balance sheets. For leases in which an implicit rate is not provided in the contract, the Company

uses an incremental borrowing rate (IBR) based on the information available at the lease commencement date in

determining the present value of lease payments. Since AIIG does not currently have any outstanding debt, which

could provide an indication of the Company’s borrowing rate, management relied on an estimated credit rating and

determined IBR based on available market data. The Company excludes options to extend or terminate a lease from

its recognition as part of ROU assets and lease liabilities until those options are known and/or executed. The

Company recognizes the ROU assets and lease liability over the lease term as the present value of all remaining

payments, discounted by the rate determined at commencement on the consolidated balance sheets. Operating leases

are included in right-of-use assets – operating leases and lease liabilities – operating leases on the consolidated

balance sheets.

Profit Participation Plan

The Company historically had a Profit Participation Plan (“PPP”) that was terminated upon the IPO, whereby certain

key employees were granted the right to receive cash distributions from the Company based on specific participation

ratios and hurdle values determined at the time of grant. The hurdle value was based on the Board of Directors

determination of the GAAP book value of equity for the Company. The Company has determined that these

distributions fell under ASC 718. The award agreement stipulated that cash distributions would only be made if the

Company made a cash distribution to unitholders and the equity value for the Company remained in excess of the

hurdle value after the distribution to unitholders took place. The distribution was also subject to approval of the

Board of Directors.

As the payment for the PPP was not certain until the Board of Directors approved the payment amounts, the

Company determined that the liability and compensation cost would not be recognized until the date that the Board

of Directors declared the distributions effective each year. As such, the liability would be measured based on the

amount expected to be paid as of the end of the reporting period after the recognition threshold was achieved and the

liability was relieved through payment of the distribution.

For the comparative historical periods presented, it was determined in accordance with ASC Topic 260, Earnings

Per Share (“ASC 260”), that the participants of the PPP were able to participate in undistributed earnings with

Common Stock based on a predetermined formula on a nonforfeitable basis, thus representing a participating

security. The Company applies the two-class method to allocate income between the common stockholders and the

PPP participants.

Statutory Accounting

The Company’s insurance subsidiary is highly regulated and prepares and files financial statements in conformity

with the statutory accounting practices prescribed and permitted by the Florida Office of Insurance Regulation (the

“FLOIR”) and the National Association of Insurance Commissioners (“NAIC”), which differ from GAAP. The

FLOIR requires insurance companies domiciled in Florida to prepare statutory financial statements in accordance

with the NAIC Accounting Practices and Procedures Manual (the “Manual”), as modified by the FLOIR.

Accordingly, the admitted assets, liabilities and capital and surplus as of December 31, 2025 and December 31, 2024

and the results of operations and cash flows, for the years ended December 31, 2025 and December 31, 2024 for

their regulatory filings have been prepared in accordance with statutory accounting principles as promulgated by the

FLOIR and the NAIC. The statutory accounting principles are designed primarily to demonstrate the ability to meet

obligations to policyholders and claimants.

Emerging Growth Company

The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups (JOBS)

Act. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued subsequent to the

enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this

extended transition period for complying with certain new or revised accounting standards that have different

effective dates for public and private companies until the earlier of the date the Company (i) is no longer an EGC or

(ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, the

consolidated financial statements may or may not be comparable to companies that comply with new or revised

accounting pronouncements as of public companies’ effective dates.

Recently Issued and Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued and Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable

Segment Disclosures, which amended the guidance in ASC 280, Segment Reporting, to require a public entity to

disclose significant segment expenses and other segment items on an annual and interim basis and to provide in

interim periods all disclosures about a reportable segment’s profit of loss and assets that are currently required

annually. Public entities with a single reportable segment are required to provide the new disclosures and all the

disclosures required under ASC 280. The guidance is applied retrospectively to all periods presented in financial

statements, unless it is impracticable. The guidance applies to all public entities and is effective for fiscal years

beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 for its 2024 year-end. The adoption of the ASU did not have a material impact

on the consolidated financial statements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amended the

guidance in ASC 740 to enhance the transparency and decision-usefulness of income tax disclosures, particularly in

the rate reconciliation table and disclosures about income taxes paid. The guidance applies to all entities subject to

income taxes and permits either prospective or retrospective application. For public business entities, the new

requirements will be effective for annual periods beginning after December 15, 2024. The Company adopted ASU

2023-09 on a prospective basis beginning with the year ended December 31, 2025. The adoption did not have a

material impact on the Company’s consolidated financial condition or results of operations, but resulted in additional

income tax disclosures in the consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income –

Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disaggregated disclosure of income

statement expenses, such as employee compensation and depreciation, for public business entities. The ASU does

not change the expense captions an entity presents on the face of the income statement; rather, it requires

disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the

consolidated financial statements. The ASU also requires disclosure of a qualitative description of the amounts

remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is

effective for all public business entities for fiscal years beginning after December 15, 2026 and interim periods

within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company will adopt the

guidance on December 31, 2027, and is currently assessing the impact of this ASU on the consolidated financial

statements and related disclosures.

In October 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software

(Subtopic 350-40): Accounting for and Disclosure of Internally Developed Software, which provides updated

guidance on the recognition, measurement, and disclosure of costs incurred in connection with internally developed

software. The new standard is intended to align accounting practices for software that is developed in-house with

recent advancements in technology and current industry practices. ASU 2025-06 is effective for annual reporting

periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is

permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements

and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope

Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle

requiring entities to disclose events since the end of the last annual reporting period that have a material impact on

the entity. ASU 2025-11 is effective for annual reporting periods beginning after December 15, 2027 and interim

periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of

ASU 2025-11 on its consolidated financial statements and related disclosures.