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Note 5 - Disposal and Discontinued Operations | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | NOTE 5 DISPOSAL AND DISCONTINUED OPERATIONS
(a) | Disposal
On July 29, 2022, the Company sold Professional Warranty Service Corporation ("PWSC"), an 80% majority-owned, indirect subsidiary of the Company. The purchase price was subject to customary adjustments for net working capital. During the year ended December 31, 2023, the Company recorded an additional gain on disposal of PWSC of $0.3 million related to working capital adjustments and release of escrowed amounts withheld for purposes of indemnification claims.
(b) | Discontinued Operations
Leased Real Estate Segment The Company’s subsidiaries, VA Lafayette, LLC ("VA Lafayette") and CMC, which included CMC’s subsidiaries Texas Rail Terminal LLC and TRT, comprised the Company's entire Leased Real Estate segment prior to the fourth quarter of 2022. Each of CMC, through indirect wholly owned subsidiary, TRT, and VA Lafayette own a single asset, which is real estate property. On December 29, 2022, TRT sold its assets and at December 31, 2022, VA Lafayette was classified as held for sale. In accordance with ASU No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal is categorized as a discontinued operation if the disposal group is a component of an entity or group of components that meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale, and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. Leased Real Estate was a component of Kingsway since its operations and cash flows can be clearly distinguished, both operationally and for financial reporting purposes, from the rest of the reporting entity. A component of an entity may consist of multiple disposal groups and does not need to be disposed of in a single transaction. The disposal of the Leased Real Estate segment represents a strategic shift that will have a major effect on the Company's operations and financial results, as the disposal of the Leased Real Estate assets was in excess of 20% of the entity's total assets. As a result, the assets, liabilities, operating results and cash flows related to Leased Real Estate have been classified as discontinued operations in the consolidated financial statements for all periods presented. VA Lafayette During the fourth quarter of 2022, the Company began executing a plan to sell its subsidiary, VA Lafayette. VA Lafayette owns the LA Real Property, that is subject to a long-term lease and the LA Mortgage. During the second quarter of 2024, the Company entered into a letter of intent for the sale of VA Lafayette. On August 16, 2024, the Company completed the sale of VA Lafayette to an entity associated with a current holder of the Company's Class B Preferred Stock (the sale occurred prior to negotiations regarding the issuance of the Class B Preferred Stock). Refer to Note 24, "Related Parties," for further disclosure. The purchase price paid by the purchaser at the closing consisted of $1.3 million in cash plus the assumption of the unpaid principal balance, as of the closing, of the LA Mortgage of approximately $11.8 million, netting cash proceeds of $1.1 million to Kingsway after expenses. During the third quarter of 2024, the Company recognized a loss on disposal of $0.2 million, which is included in loss on disposal of discontinued operations, net of taxes in the consolidated statements of operations for the year ended December 31, 2024. As part of recognizing the business as held for sale, the Company was required to measure VA Lafayette at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during the first quarter of 2024 and the fourth quarter of 2023, the Company recognized an estimated non-cash, loss on disposal of $0.4 million and $2.0 million, respectively, which is included in loss on disposal of discontinued operations, net of taxes in the consolidated statements of operations for the years ended December 31, 2024 and December 31, 2023, respectively. The losses are a result of adjusting the net carrying value of VA Lafayette to be equal to the estimated selling price and were determined by comparing the expected cash consideration received for the sale of VA Lafayette with the net assets of VA Lafayette. Summary financial information for Leased Real Estate included in income from discontinued operations, net of taxes in the consolidated statements of operations for the years ended December 31, 2024 and December 31, 2023 is presented below:
(in thousands) |  | Years ended December 31, |
|  | 2024 |  |  | 2023 |
Income from discontinued operations, net of taxes: |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |
Rental revenue |  | $ | 890 |  |  | $ | 1,251 |
Total revenues |  |  | 890 |  |  |  | 1,251 |
Expenses: |  |  |  |  |  |  |  |
Cost of services sold |  |  | 136 |  |  |  | 199 |
General and administrative expenses |  |  | 128 |  |  |  | 254 |
Leased real estate segment interest expense |  |  | 218 |  |  |  | 361 |
Total expenses |  |  | 482 |  |  |  | 814 |
Non-operating other revenue |  |  | 30 |  |  |  | 13 |
Income from discontinued operations before income tax expense |  |  | 438 |  |  |  | 450 |
Income tax expense |  |  | — |  |  |  | — |
Income from discontinued operations, net of taxes |  | $ | 438 |  |  | $ | 450 |
For the years ended December 31, 2024 and December 31, 2023, all of the pre-tax income from discontinued operations disclosed in the table above is attributable to the controlling interest. The carrying amounts of the major classes of assets and liabilities of Leased Real Estate presented as held for sale at December 31, 2023 are as follows:
(in thousands) |  | December 31, 2023 |
Assets |  |  |  |
Cash and cash equivalents |  | $ | 612 |
Property and equipment, net |  |  | 16,171 |
Intangible assets, net |  |  | 2,748 |
Loss on write-down of disposal group |  |  | (1,779 | )
Assets held for sale |  | $ | 17,752 |
Liabilities |  |  |  |
Accrued expenses and other liabilities |  | $ | 885 |
Notes payable |  |  | 15,229 |
Liabilities held for sale |  | $ | 16,114 |
Loss on disposal of discontinued operations, net of taxes, related to Leased Real Estate, in the consolidated statements of operations for the years ended December 31, 2024 and December 31, 2023 is comprised of the following:
(in thousands) |  | Years ended December 31, |
|  | 2024 |  |  | 2023 |
Loss on disposal of discontinued operations before income tax benefit |  |  | (620 | ) |  |  | (1,988 | )
Income tax benefit |  |  | — |  |  |  | — |
Loss on disposal of discontinued operations, net of taxes |  | $ | (620 | ) |  | $ | (1,988 | )

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