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Note 5 - Acquisitions and Discontinued Operations | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Business Combination, Disposal and Discontinued Operations Disclosure [Text Block] | NOTE 5 ACQUISITIONS AND DISCONTINUED OPERATIONS
(a) | Business Combinations
Roundhouse Electric & Equipment Co., Inc. On July 1, 2025, the Company acquired 100% of the outstanding equity interests of Roundhouse Electric & Equipment Co., Inc. ("Roundhouse") for aggregate consideration consisting of cash and phantom equity awards to the selling stockholders, of approximately $23.5 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. Roundhouse, based in Odessa, Texas, is a provider of industrial-scale electric motor maintenance, repair, testing, and sales solutions primarily to midstream natural gas pipeline operators and utilities across the Permian Basin. As further discussed in Note 20, "Segmented Information," Roundhouse is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s eighth 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 8, "Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $9.1 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 preliminary fair value of the acquired service fee receivable of $4.3 million is equivalent to its gross contractual amount. The estimated fair value of the seller phantom equity awards at the acquisition date of $3.3 million was determined based on the economic value of the phantom equity as of the acquisition date, which was derived from the fair value of Roundhouse, net of any debt, and is recorded in accrued expenses and other liabilities in the consolidated balance sheet at September 30, 2025. See Note 21, "Fair Value of Financial Instruments," for further discussion related to the seller phantom equity awards. The following table summarizes the preliminary purchase price of Roundhouse:
(in thousands) |  |  |  |
Preliminary purchase price: |  | July 1, 2025 |
Cash paid at closing |  | $ | 20,201 |
Seller phantom equity awards |  |  | 3,328 |
Total purchase price |  | $ | 23,529 |
The following table summarizes the preliminary allocation of the Roundhouse purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | July 1, 2025 |
Preliminary purchase price |  | $ | 23,529 |
Cash and cash equivalents |  | $ | 333 |
Service fee receivable |  |  | 4,259 |
Other receivables |  |  | 12 |
Property and equipment, net |  |  | 2,355 |
Intangible asset not subject to amortization - trade name |  |  | 1,220 |
Intangible asset subject to amortization - customer relationships |  |  | 11,000 |
Other assets - inventory and prepaid expenses |  |  | 882 |
Total assets |  | $ | 20,061 |
Accrued expenses and other liabilities |  | $ | 2,584 |
Income taxes payable |  |  | 91 |
Net deferred income tax liabilities |  |  | 2,927 |
Total liabilities |  | $ | 5,602 |
Total identifiable assets and liabilities |  | $ | 14,459 |
Excess purchase price allocated to goodwill |  | $ | 9,070 |
The unaudited consolidated statements of operations include the earnings of Roundhouse from the date of acquisition. From the date of acquisition through September 30, 2025, Roundhouse earned revenue of $4.9 million and had net income of $3.0 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. During the three and nine months ended September 30, 2025, the Company incurred expenses related to the acquisition of Roundhouse of $0.5 million, which are included in general and administrative expenses in the unaudited consolidated statements of operations for the three and nine months ended September 30, 2025. AAA Flexible Pipe Cleaning Corporation (d/b/a AAA Advanced Plumbing & Drain) On August 1, 2025, the Company (through its newly formed subsidiary, Advanced Plumbing & Drain LLC) acquired substantially all of the assets and certain specified liabilities of AAA Flexible Pipe Cleaning Corporation (d/b/a AAA Advanced Plumbing & Drain, "Advanced Plumbing") for aggregate consideration consisting of cash, a seller note and contingent consideration, of approximately $3.9 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. The Company will also pay additional contingent consideration, only to the extent earned, in an aggregate amount of up to $1.5 million, which is subject to certain conditions, including growth in adjusted EBITDA for Advanced Plumbing during the three-year period following the acquisition date. Advanced Plumbing, based in Cleveland, Ohio, is a provider of various plumbing installation, service and repair services to residential and commercial customers. As further discussed in Note 20, "Segmented Information," Advanced Plumbing is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s ninth acquisition under its novel CEO Accelerator program and the second business operated under the Kingsway Skilled Trades platform 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 8,"Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $0.6 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 preliminary fair value of the acquired service fee receivable of $0.5 million is equivalent to its gross contractual amount. The estimated fair value of the contingent consideration obligation at the acquisition date of $0.8 million was determined using a Monte Carlo simulation based on forecasted future results, and is recorded in accrued expenses and other liabilities in the consolidated balance sheets. See Note 21, "Fair Value of Financial Instruments," for further discussion related to the contingent consideration. The following table summarizes the preliminary purchase price of Advanced Plumbing:
(in thousands) |  |  |  |
Preliminary purchase price: |  | August 1, 2025 |
Cash paid at closing |  | $ | 2,652 |
Seller note |  |  | 420 |
Contingent consideration |  |  | 790 |
Total purchase price |  | $ | 3,862 |
The following table summarizes the preliminary allocation of the Advanced Plumbing purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | August 1, 2025 |
Preliminary purchase price |  | $ | 3,862 |
Cash and cash equivalents |  | $ | 23 |
Service fee receivable |  |  | 503 |
Other receivables |  |  | 6 |
Property and equipment, net |  |  | 610 |
Intangible asset not subject to amortization - trade name |  |  | 1,600 |
Intangible asset subject to amortization - customer relationships |  |  | 1,100 |
Other assets - inventory |  |  | 143 |
Total assets |  | $ | 3,985 |
Accrued expenses and other liabilities |  | $ | 717 |
Total liabilities |  | $ | 717 |
Total identifiable assets and liabilities |  | $ | 3,268 |
Excess purchase price allocated to goodwill |  | $ | 594 |
The unaudited consolidated statements of operations include the earnings of Advanced Plumbing from the date of acquisition. From the date of acquisition through September 30, 2025, Advanced Plumbing earned revenue of $1.2 million and had net loss of less than $0.1 million. During the three and nine months ended September 30, 2025, the Company incurred expenses related to the acquisition of Advanced Plumbing of $0.2 million, which are included in general and administrative expenses in the unaudited consolidated statements of operations for the three and nine months ended September 30, 2025. Efficient Plumbing, LLC (d/b/a Southside Plumbing) On August 14, 2025, the Company acquired 80% of the outstanding membership interests of Efficient Plumbing, LLC (d/b/a Southside Plumbing, "Southside Plumbing") for aggregate consideration consisting of cash, a seller note and contingent consideration, of approximately $4.7 million, less certain escrowed amounts for purposes of indemnification claims and working capital adjustments. The Company will also pay additional contingent consideration, only to the extent earned, in an aggregate amount of up to $1.125 million, which is subject to certain conditions, including growth in adjusted EBITDA for Southside Plumbing during the three-year period following the acquisition date. The 20% noncontrolling interest in Southside Plumbing is redeemable by the holder of the noncontrolling interest and includes a put option redemption feature that is outside of the Company’s control; therefore, the 20% interest is treated as redeemable noncontrolling interest and is presented outside of permanent equity in the consolidated balance sheets. See Note 17, "Redeemable Noncontrolling Interest," for further discussion related to the redeemable noncontrolling interest. Southside Plumbing, based in Omaha, Nebraska, is a provider of various plumbing installation, service and repair services to residential and commercial customers. As further discussed in Note 20, "Segmented Information," Southside Plumbing is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s tenth acquisition under its novel CEO Accelerator program and the third business operated under the Kingsway Skilled Trades platform 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 three 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 8,"Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $2.6 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 preliminary fair value of the acquired service fee receivable of $0.3 million is equivalent to its gross contractual amount. The estimated fair value of the contingent consideration obligation at the acquisition date of $0.2 million was determined using a Monte Carlo simulation based on forecasted future results, and is recorded in accrued expenses and other liabilities in the consolidated balance sheets. The fair value of the 20% redeemable noncontrolling interest in Southside Plumbing at the date of acquisition of $0.9 million was estimated by applying a market approach. See Note 21, "Fair Value of Financial Instruments," for further discussion related to the contingent consideration and redeemable noncontrolling interest. The following table summarizes the preliminary purchase price of Southside Plumbing:
(in thousands) |  |  |  |
Preliminary purchase price: |  | August 14, 2025 |
Cash paid at closing |  | $ | 4,040 |
Seller note |  |  | 420 |
Contingent consideration |  |  | 190 |
Total purchase price |  | $ | 4,650 |
The following table summarizes the preliminary allocation of the Southside Plumbing purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  | August 14, 2025 |
Preliminary purchase price |  | $ | 4,650 |
Cash and cash equivalents |  | $ | 94 |
Service fee receivable |  |  | 334 |
Property and equipment, net |  |  | 1,087 |
Intangible asset not subject to amortization - trade name |  |  | 1,100 |
Intangible asset subject to amortization - customer relationships |  |  | 1,000 |
Other assets - inventory and prepaid expenses |  |  | 58 |
Total assets |  | $ | 3,673 |
Accrued expenses and other liabilities |  | $ | 685 |
Total liabilities |  | $ | 685 |
Total identifiable assets and liabilities |  | $ | 2,988 |
Redeemable noncontrolling interest |  | $ | 925 |
Excess purchase price allocated to goodwill |  | $ | 2,587 |
The unaudited consolidated statements of operations include the earnings of Southside Plumbing from the date of acquisition. From the date of acquisition through September 30, 2025, Southside Plumbing earned revenue of $0.5 million and had net loss of $0.2 million. During the three and nine months ended September 30, 2025, the Company incurred expenses related to the acquisition of Southside Plumbing of $0.2 million, which are included in general and administrative expenses in the unaudited consolidated statements of operations for the three and nine months ended September 30, 2025. M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing) On March 14, 2025, the Company acquired 100% of the outstanding membership interests of M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing Service, "Bud's Plumbing") for aggregate consideration consisting of cash and a seller note, of approximately $5.0 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 paid during the second quarter of 2025. Bud's Plumbing, based in Evansville, Indiana, is a provider of various plumbing installation, service and repair services to residential and commercial customers. As further discussed in Note 20, "Segmented Information," Bud's Plumbing is included in the Kingsway Search Xcelerator segment. This acquisition was the Company’s seventh acquisition under its novel CEO Accelerator program and the first business operated under the Kingsway Skilled Trades platform 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 third quarter of 2025, the Company finalized its fair value analysis of the assets acquired and liabilities assumed with the assistance of a third party. Refer to Note 8,"Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $1.0 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 purchase price of Bud's Plumbing:
(in thousands) |  |  |  |
Purchase price: |  | March 14, 2025 |
Cash paid at closing |  | $ | 3,829 |
Working capital adjustment |  |  | 31 |
Seller note |  |  | 1,100 |
Total purchase price |  | $ | 4,960 |
The following table summarizes the allocation of the Bud's Plumbing purchase price and the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
(in thousands) |  |  |  |
|  |  | March 14, 2025 |
Purchase price |  | $ | 4,960 |
Cash and cash equivalents |  | $ | 308 |
Service fee receivable |  |  | 46 |
Property and equipment |  |  | 173 |
Intangible asset not subject to amortization - trade name |  |  | 3,100 |
Intangible asset subject to amortization - customer relationships |  |  | 500 |
Other assets - inventory and prepaid expenses |  |  | 226 |
Total assets |  | $ | 4,353 |
Accrued expenses and other liabilities |  | $ | 388 |
Total liabilities |  | $ | 388 |
Total identifiable assets and liabilities |  | $ | 3,965 |
Excess purchase price allocated to goodwill |  | $ | 995 |
The fair value of the acquired service fee receivable of less than $0.1 million is equivalent to its gross contractual amount. The unaudited consolidated statements of operations include the earnings of Bud's Plumbing from the date of acquisition. From the date of acquisition through September 30, 2025, Bud's Plumbing earned revenue of $3.7 million and had net income of $0.1 million. During the three and nine months ended September 30, 2025, the Company incurred expenses related to the acquisition of Bud's Plumbing of $0.1 million and $0.5 million, respectively, which are included in general and administrative expenses in the unaudited consolidated statements of operations for the three and nine months ended September 30, 2025. The seller note was due to mature on April 1, 2030; however, on August 7, 2025, the seller note was repaid in full to the seller of Bud's Plumbing in exchange for shares of Kingsway common stock. See Note 18, "Shareholders' Equity," for further discussion of the exchange. 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. The final purchase price was subject to a working capital true-up due to the Company of $0.3 million that was finalized during the third quarter of 2025. Image Solutions, based in Fletcher, North Carolina, is an information technology managed services provider. As further discussed in Note 20, "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. During the third quarter of 2025, 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 nine months ended September 30, 2025, the Company recorded a measurement period adjustment that increased goodwill by $0.1 million compared to the amount recorded at December 31, 2024. The measurement period adjustment primarily reflects changes in the estimated fair value of inventory. Refer to Note 8,"Intangible Assets," for further disclosure of the intangible assets related to this acquisition. The goodwill of $6.3 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 purchase price of Image Solutions:
(in thousands) |  |  |  |
Purchase price: |  | September 26, 2024 |
Cash paid at closing |  | $ | 20,354 |
Working capital adjustment |  |  | (309 | )
Total purchase price |  | $ | 20,045 |
The following table summarizes the 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 |  | $ | 20,045 |
Cash and cash equivalents |  | $ | 293 |
Service fee receivable |  |  | 575 |
Other receivables |  |  | 160 |
Property and equipment |  |  | 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 |  |  | 870 |
Total assets |  | $ | 14,583 |
Accrued expenses and other liabilities |  | $ | 799 |
Total liabilities |  | $ | 799 |
Total identifiable assets and liabilities |  | $ | 13,784 |
Excess purchase price allocated to goodwill |  | $ | 6,261 |
The fair value of the acquired service fee receivable of $0.6 million is equivalent to its gross contractual amount. Unaudited Pro Forma Summary - 2025 Acquisitions The following unaudited pro forma summary presents the Company's consolidated financial statements for the three and nine months ended September 30, 2025 and September 30, 2024 as if Roundhouse, Bud's Plumbing, Advanced Plumbing and Southside Plumbing had been acquired on January 1, 2024. 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 acquisition of Roundhouse, Bud's Plumbing, Advanced Plumbing and Southside Plumbing, interest expense and the amortization of debt issuance costs and discounts associated with the related financing obtained in connection with the Roundhouse and Southside Plumbing acquisitions (see Note 10, "Debt,"), tax related adjustments and acquisition-related expenses.
(in thousands, except per share data) |  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenues |  | $ | 38,314 |  |  | $ | 35,405 |  |  | $ | 115,396 |  |  | $ | 103,628 |
Loss from continuing operations attributable to common shareholders |  | $ | (4,671 | ) |  | $ | (2,796 | ) |  | $ | (9,752 | ) |  | $ | (6,370 | )
Basic loss per share - continuing operations |  | $ | (0.16 | ) |  | $ | (0.10 | ) |  | $ | (0.35 | ) |  | $ | (0.23 | )
Diluted loss per share - continuing operations |  | $ | (0.16 | ) |  | $ | (0.10 | ) |  | $ | (0.35 | ) |  | $ | (0.23 | )
Unaudited Pro Forma Summary - 2024 Acquisition The following unaudited pro forma summary presents the Company's consolidated financial statements for the three and nine months September 30, 2024 as if Image Solutions had been acquired on January 1, 2023. 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 acquisition 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 acquisition of Image Solutions, interest expense and the amortization of debt issuance costs and discounts associated with the related financing obtained in connection with the Roundhouse and Image Solutions acquisitions (see Note 10, "Debt,") and acquisition-related expenses.
(in thousands, except per share data) |  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2024 |  |  | 2024 |
Revenues |  | $ | 29,326 |  |  | $ | 86,584 |
Loss from continuing operations attributable to common shareholders |  | $ | (3,104 | ) |  | $ | (8,025 | )
Basic loss per share - continuing operations |  | $ | (0.11 | ) |  | $ | (0.29 | )
Diluted loss per share - continuing operations |  | $ | (0.11 | ) |  | $ | (0.29 | )
(b) | Discontinued Operations
Leased Real Estate Segment The Company’s subsidiaries, VA Lafayette, LLC ("VA Lafayette") and CMC Industries Inc. ("CMC"), which included CMC’s subsidiaries Texas Rail Terminal LLC and TRT Leaseco, LLC ("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 could 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 operating results and cash flows related to Leased Real Estate have been classified as discontinued operations in the unaudited consolidated interim 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 22, "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. 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, the Company recognized an estimated non-cash, loss on disposal of $0.4 million, which is included in loss on disposal of discontinued operations, net of taxes in the consolidated statements of operations for the nine months ended September 30, 2024. The loss is a result of adjusting the net carrying value of VA Lafayette to be equal to the estimated selling price and was 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 unaudited consolidated statement of operations for the three and nine months ended September 30, 2024 is presented below:
(in thousands) |  |  | Three months ended September 30, |  |  |  | Nine months ended September 30, |
|  | 2024 |  |  | 2024 |
Income from discontinued operations, net of taxes: |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |
Rental revenue |  | $ | 157 |  |  | $ | 890 |
Total revenues |  |  | 157 |  |  |  | 890 |
Expenses: |  |  |  |  |  |  |  |
Cost of services sold |  |  | 31 |  |  |  | 136 |
General and administrative expenses |  |  | 8 |  |  |  | 128 |
Leased real estate segment interest expense |  |  | 43 |  |  |  | 218 |
Total expenses |  |  | 82 |  |  |  | 482 |
Non-operating other revenue |  |  | 6 |  |  |  | 31 |
Income from discontinued operations before income tax expense |  |  | 81 |  |  |  | 439 |
Income tax expense |  |  | — |  |  |  | — |
Income from discontinued operations, net of taxes |  | $ | 81 |  |  | $ | 439 |
For the three and nine months ended September 30, 2024, all of the pre-tax income from discontinued operations disclosed in the table above is attributable to the controlling interest. Loss on disposal of discontinued operations, net of taxes, related to Leased Real Estate, in the unaudited consolidated statement of operations for the three and nine months ended September 30, 2024 is comprised of $0.2 million and $0.6 million, respectively, of loss on disposal of discontinued operations before income tax benefit and income tax benefit of zero.

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