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☑ KINGSWAY REPORTS THIRD QUARTER 2021 RESULTS Itasca , Illinois ( November 4 , 2021 ) - ( NYSE : KFS ) Kingsway Financial Services Inc. ( “ Kingsway ” or the “ Company ” ) today announced its operating results for the three and nine months ended September 30 , 2021 , which includes the following highlights : • • • Net loss improved to ( $ 0.2 ) million for the three months ended September 30 , 2021 , from a net loss of ( $ 1.1 ) million for the same period in 2020 , despite the fact the Company recorded a non - cash , current period cumulative adjustment to net loss of $ 0.5 million in the September 2021 quarter relating to its finalization of the purchase accounting for PWI ( see further discussion below ) Non - GAAP adjusted income grew to $ 2.1 million for the three months ended September 30 , 2021 , compared to a non- GAAP adjusted loss of ( $ 0.4 ) million for the same period in 2020 Extended Warranty segment operating income increased to $ 1.4 million for the three months ended September 30 , 2021 compared to $ 1.2 million for the same period in 2020 , despite the fact the Company recorded a non - cash , current period cumulative reduction to revenue of $ 1.9 million in the September 2021 quarter relating to its finalization of the purchase accounting for PWI ( see further discussion below ) Extended Warranty segment non - GAAP adjusted EBITDA improved to $ 1.5 million for the three months ended June 30 , 2021 , from $ 1.4 million for the same period in 2020 , despite the fact the Company recorded a non - cash , current period cumulative reduction to service fee and commission revenue of $ 1.9 million in the September 2021 quarter relating to its finalization of the purchase accounting for PWI ( see further discussion below ) Cash provided by operating activities was $ 3.5 million for the three months ended September 30,2021 , compared to $ 1.4 million for the three months ended September 30,2020 . The Company's non - GAAP metrics do not adjust for the service fee and commission revenue impacts of the finalization of the PWI purchase accounting as discussed below . John T. Fitzgerald , Chief Executive Officer , stated , " We reported a strong quarter highlighted by operating improvements within our extended warranty businesses . Subsequent to the quarter end , we added another high - quality , asset - light business with the acquisition of Ravix Financial Inc. through our CEO accelerator program . We have made considerable progress in growing our business while simultaneously monetizing legacy assets and reducing non - strategic expenses . " Financial Review for the Three Months Ended September 30 , 2021 Finalization of PWI Purchase Accounting During the September 30 , 2021 quarter , the Company finalized its purchase accounting for the acquisition of PWI , which resulted in a number of one - time charges , including a reduction to service fee and commission revenue and an increase in amortization expense , both of which were partially offset by an associated tax benefit . The acquisition of a company that carries deferred service fees ( aka " deferred revenue " ) usually results in a reduction of that deferred revenue once it is fair valued under U.S. GAAP purchase accounting . The resulting reduction in deferred revenue reduces the amount of revenue recognized post acquisition . The Company recorded the following during the current quarter relating to the final purchase accounting for PWI : • A non - cash current period cumulative reduction to service fee and commission revenue of $ 1.9 million , resulting from a $ 3.6 million reduction to the amount of deferred revenue acquired from PWI ○ The remainder of the $ 3.6 million reduction will result in lower service fee and commission revenue being recognized in future periods • $ 19.6 million of separately identifiable intangible assets relating to acquired customer relationships ( $ 15 million ) and trade name ( $ 4.6 million ) , as well as a non - cash , current period cumulative charge of $ 1.9 million for the amortization relating to the acquired customer relationships • A $ 3.3 million tax benefit due to the recognition of deferred tax liabilities and the resulting release of the Company's valuation allowance on its overall deferred tax assets • Goodwill of $ 20.6 million