Kingsway (KWY) risk factors, FY2024 10-K

FINANCIAL RISK

1. 01As of December 31, 2024, we had $15.0 million principal value of outstanding recourse subordinated debt in the form of trust preferred securities, with a redemption date of May 2033
2. 02Increases in interest rates would increase the cost of servicing our outstanding recourse debt and could adversely affect our results of operation
3. 03Our operations are restricted by the terms of our debt indentures, which could limit our ability to plan for or react to market conditions or meet our capital needs
4. 04KINGSWAY FINANCIAL SERVICES INC
5. 05We may not be able to realize our investment objectives, which could significantly reduce our earnings and liquidity
6. 06Our business, financial condition and results of operations could be materially and adversely affected by changes in international and national economic and industry conditions
7. 07Financial disruption or a prolonged economic downturn could materially and adversely affect the credit, investment and financial markets which, in turn, could materially adversely affect our business, results of operations or financial condition
8. 08Our cash, cash equivalents and investments could be adversely affected if the financial institutions in which we hold our cash, cash equivalents and investments fail
9. 09We are party to a Settlement Agreement that may require us to make cash payments from time to time, which payments could materially adversely affect our business, results of operations or financial condition
10. 10We have generated net operating loss carryforwards for U.S. income tax purposes, but our ability to use these net operating losses could be limited by our inability to generate future taxable income
11. 11Expiration of our tax benefit preservation plan could increase the probability that we will experience an ownership change as defined under Section 382
12. 12We have outstanding preferred stock with rights senior to our common stock, and may issue additional preferred stock in the future
13. 13As a publicly traded holding company listed on the New York Stock Exchange, we are subject to numerous laws and regulations. These laws and regulations delegate regulatory, supervisory and administrative powers to federal, provincial or state regulators
14. 14Our business is subject to risks related to litigation
15. 15Material weaknesses in our internal control over financial reporting could result in material misstatements in our consolidated financial statements

STRATEGIC RISK

1. 16The achievement of our strategic objectives is highly dependent on effective change management
2. 17We may experience difficulty continuing to retain our holding company staff
3. 18The highly competitive environment in which we operate could have an adverse effect on our business, results of operations or financial condition
4. 19From time to time, we engage in discussions concerning acquisition opportunities and, as a result of such discussions, may enter into acquisition transactions

OPERATIONAL RISK

1. 20Our Extended Warranty subsidiaries' deferred service fees may be inadequate, which would result in a reduction in our net income and could adversely affect our financial condition
2. 21Extended Warranty's reliance on credit unions and dealers, as well as our overall reliance on automobile sales could adversely affect our ability to maintain business
3. 22Our reliance on a limited number of warranty and maintenance support clients and customers could adversely affect our ability to maintain business
4. 23CSuite’s focus on serving private equity backed businesses creates exposure to general mergers and acquisitions ("M&A") activity
5. 24Ravix's concentration in venture-capital-funded startups creates exposure to the venture capital funding cycles
6. 25SNS may experience increased costs that reduce its revenue and profitability if applicable government regulations change
7. 26Healthcare is a regulated industry and modifications, inaccurate interpretations or violations of any applicable statutory or regulatory requirements may result in material costs or penalties as well as litigation and could reduce SNS’ revenue and profitability
8. 27SNS’ profitability could be adversely impacted if SNS is unable to adjust its nurse pay rates as the bill rates decline
9. 28SNS may be unable to recruit and retain enough quality nurses to meet the demand
10. 29Image Solutions may be unable to recruit and retain enough quality IT professionals to meet the demand
11. 30Our success depends on our ability to price accurately the risks we underwrite
12. 31changes in applicable legal liability standards and in the civil litigation system generally
13. 32Our business depends upon key employees, and if we are unable to retain the services of these key employees or to attract and retain additional qualified personnel, our business could be adversely affected