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Note 4 - Acquisitions | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | NOTE 4 ACQUISITIONS During the years ended December 31, 2024 and December 31, 2023, the Company incurred acquisition expenses related to business combinations of $0.5 million and $0.7million, respectively, which are included in general and administrative expenses in the consolidated statements of operations. Image Solutions, LLC On September 26, 2024, the Company acquired 100% of the outstanding membership interests of Image Solutions, LLC ("Image Solutions") for aggregate cash consideration of $20.4 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. Image Solutions, based in Fletcher, North Carolina, is an information technology managed services provider. As further discussed in Note 22, "Segmented Information," Image Solutions is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s sixth acquisition under its novel CEO Accelerator program and further expands the Company’s portfolio of businesses with recurring revenue and low capital intensity. This acquisition was accounted for as a business combination using the acquisition method of accounting. The purchase price was provisionally allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition and are subject to adjustment during a measurement period subsequent to the acquisition date, not to exceed one year, as permitted under U.S. GAAP. The Company expects to complete its purchase price allocation within the next six months. These estimates, allocations and calculations are subject to change as we obtain further information; therefore, the final fair values of the assets acquired and liabilities assumed could change from the estimates included in these consolidated financial statements. Refer to Note 9, "Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $6.5 million represents the premium paid over the fair value of the net tangible and intangible assets acquired, which the Company paid to grow its portfolio of companies and acquire an assembled workforce. The goodwill is not deductible for tax purposes. The following table summarizes the preliminary allocation of the Image Solutions purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | September 26, 2024 |
Purchase Price |  | $ | 20,354 |
Cash and cash equivalents |  | $ | 293 |
Service fee receivable |  |  | 575 |
Other receivables |  |  | 160 |
Property and equipment, net |  |  | 85 |
Intangible asset not subject to amortization - trade name |  |  | 1,500 |
Intangible asset subject to amortization - customer relationships |  |  | 11,100 |
Other assets - inventory and prepaid expenses |  |  | 954 |
Total assets |  | $ | 14,667 |
Accrued expenses and other liabilities |  | $ | 799 |
Total liabilities |  | $ | 799 |
Total identifiable assets and liabilities |  | $ | 13,868 |
Excess purchase price allocated to goodwill |  | $ | 6,486 |
The preliminary fair value of the acquired service fee receivable of $0.6 million is equivalent to its gross contractual amount. The consolidated statements of operations include the earnings of Image Solutions from the date of acquisition. From the date of acquisition through December 31, 2024, Image Solutions earned revenue of $2.5 million and had a net loss of $0.1 million. Systems Products International, Inc. On September 7, 2023, the Company acquired 100% of the outstanding equity interests of Systems Products International, Inc. ("SPI") for aggregate cash consideration of $2.8 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. SPI, based in Miami, Florida, is a vertical market software company, created exclusively to serve the management needs of all types of shared-ownership properties. As further discussed in Note 22, "Segmented Information," SPI is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s fourth acquisition under its novel CEO Accelerator program and its first in the vertical market software space and further expands the Company’s portfolio of businesses with recurring revenue and low capital intensity. This acquisition was accounted for as a business combination using the acquisition method of accounting. The purchase price was provisionally allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition and are subject to adjustment during a measurement period subsequent to the acquisition date, not to exceed one year as permitted under U.S. GAAP. During the second quarter of 2024, the Company finalized its fair value analysis of the assets acquired and liabilities assumed with the assistance of a third party. The Company records measurement period adjustments in the period in which the adjustments occur. During the second quarter of 2024, the Company recorded measurement period adjustments that increased goodwill by $0.3 million compared to the amount recorded at December 31, 2023. The measurement period adjustment primarily reflects changes in the estimated value of the contract asset of $0.3 million. Refer to Note 9, "Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The final goodwill recorded of $0.4 million represents the premium paid over the fair value of the net tangible and intangible assets acquired, which the Company paid to grow its portfolio of companies and acquire an assembled workforce. The goodwill is not deductible for tax purposes. The following table summarizes the allocation of the SPI purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | September 7, 2023 |
Purchase price |  | $ | 2,800 |
Cash and cash equivalents |  | $ | 121 |
Restricted cash |  |  | 6 |
Service fee receivable |  |  | 381 |
Intangible asset not subject to amortization - trade name |  |  | 120 |
Intangible asset subject to amortization - customer relationships |  |  | 1,000 |
Intangible asset subject to amortization - developed technology |  |  | 600 |
Other assets - contract asset and prepaid expenses |  |  | 1,447 |
Total assets |  | $ | 3,675 |
Accrued expenses and other liabilities |  | $ | 126 |
Deferred service fees |  |  | 423 |
Net deferred income tax liabilities |  |  | 689 |
Total liabilities |  | $ | 1,238 |
Total identifiable assets and liabilities |  | $ | 2,437 |
Excess purchase price allocated to goodwill |  | $ | 363 |
The consolidated statements of operations include the earnings of SPI from the date of acquisition. From the date of acquisition through December 31, 2023, SPI earned revenue of $0.8 million and had a net income of $0.4 million. Digital Diagnostics Imaging, Inc. On October 26, 2023, the Company acquired 100% of the outstanding equity interests of Digital Diagnostics Imaging, Inc. ("DDI") for aggregate cash consideration of approximately $11.0 million, less certain escrowed amounts for purposes of indemnification claims. The final purchase price was subject to a working capital true-up of less than $0.1 million that was settled during the second quarter of 2024. DDI, based in Wall, New Jersey, is a provider of fully managed outsourced cardiac telemetry services. As further discussed in Note 22, "Segmented Information," DDI is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s fifth acquisition under its novel CEO Accelerator program and further expands the Company’s portfolio of businesses with recurring revenue and low capital intensity. This acquisition was accounted for as a business combination using the acquisition method of accounting. The purchase price was provisionally allocated to the assets acquired and liabilities ass umed based on their estimated fair values at the date of acquisition and are subject to adjustment during a measurement period subsequent to the acquisition date, not to exceed one year as permitted under U.S. GAAP. During the second quarter of 2024, the Company finalized its fair value analysis of the assets acquired and liabilities assumed with the assistance of a third party. The Company records measurement period adjustments in the period in which the adjustments occur. During the second quarter of 2024, the Company recorded a measurement period adjustment that increased goodwill by $0.2 million compared to the amount recorded at December 31, 2023. The measurement period adjustments primarily relate to a decrease in the estimated fair value of property and equipment of $0.4 million, partially offset by an increase to the customer relationships intangible asset of $0.2 million. Refer to Note 9 , " Intangible Assets ," for further disclosure of the intangible assets related to this acquisition. The final goodwill recorded of $4.9 million represents the premium paid over the fair value of the net tangible and intangible assets acquired, which the Company paid to grow its portfolio of companies and acquire an assembled workforce. The goodwill is not deductible for tax purposes. The following table summarizes the allocation of the DDI purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | October 26, 2023 |
Purchase price |  | $ | 10,983 |
Cash and cash equivalents |  | $ | 124 |
Service fee receivable |  |  | 495 |
Property and equipment, net |  |  | 799 |
Right-of-use asset |  |  | 145 |
Intangible asset not subject to amortization - trade name |  |  | 260 |
Intangible asset subject to amortization - customer relationships |  |  | 6,700 |
Other assets |  |  | 7 |
Total assets |  | $ | 8,530 |
Accrued expenses and other liabilities |  | $ | 214 |
Income taxes payable |  |  | 141 |
Lease liability |  |  | 145 |
Net deferred income tax liabilities |  |  | 1,966 |
Total liabilities |  | $ | 2,466 |
Total identifiable assets and liabilities |  | $ | 6,064 |
Excess purchase price allocated to goodwill |  | $ | 4,919 |
The consolidated statements of operations include the earnings of DDI from the date of acquisition. From the date of acquisition through December 31, 2023, DDI earned revenue of $0.9 million and had net income of $1.5 million, primarily related to a tax benefit recognized for the partial release of the Company’s deferred tax valuation allowance related to the acquired deferred tax liabilities. Unaudited Pro Forma Summary The following unaudited pro forma summary presents the Company's consolidated financial statements for the years ended December 31, 2024 and December 31, 2023 as if Image Solutions and DDI had been acquired on January 1 of the year prior to the acquisitions. The pro forma summary is presented for illustrative purposes only and does not purport to represent the results of our operations that would have actually occurred had the acquisitions occurred as of the beginning of the period presented or project our results of operations as of any future date or for any future period, as applicable. The pro forma results primarily include purchase accounting adjustments related to the acquisitions of Image Solutions and DDI, interest expense and the amortization of debt issuance costs and discounts associated with the related financing obtained in connection with the Image Solutions and DDI acquisitions (see Note 12, "Debt"), tax related adjustments and acquisition-related expenses. The pro forma effects of the SPI acquisition were not material to the Company’s consolidated statements of operations for the year ended December 31, 2023.
(in thousands, except per share data) |  | Years ended December 31, |
|  | 2024 |  |  | 2023 |
Revenues |  | $ | 116,224 |  |  | $ | 116,504 |
(Loss) income from continuing operations attributable to common shareholders |  | $ | (9,747 | ) |  | $ | 22,942 |
Basic (loss) earnings per share - continuing operations |  | $ | (0.36 | ) |  | $ | 0.89 |
Diluted (loss) earnings per share - continuing operations |  | $ | (0.36 | ) |  | $ | 0.87 |

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