Exhibit 99.2

ANNUAL LETTER TO SHAREHOLDERS OF KINGSWAY FINANCIAL SERVICES INC.

February 28, 2022

Dear Fellow Shareholder,

I am pleased to be sharing this letter with you in connection with the issuance of our 2021 Annual Report.

I’m proud of the considerable forward progress we made as a company in the past year. Some of the highlights include:

In short, we laid more bricks on our foundation: a portfolio of high-quality, asset-light businesses; a decentralized operating structure with low overhead; a unique, disciplined and tax-advantaged approach to capital allocation; and a commitment to developing world-class talent, continuous improvement and accountability for results.

In our 2019 annual letter, we offered a reconciliation from net loss to non-GAAP adjusted net income (loss) and expressed a desire to measure our progress by this metric. Since then, we have highlighted non-GAAP adjusted net income (loss) in each of our earnings releases. Non-GAAP adjusted net income (loss) captures our view of the ‘economic earnings’ of the business by adjusting for non-cash items as well as extraordinary and certain non-recurring items. Since assuming the CEO role in 2018, we have made annual progress in improving non-GAAP adjusted net income (loss). 2021 saw a significant acceleration of that progress.

Net income improved to $1.9 million in 2021 from a net loss of ($5.4) million in 2020.

After adjusting net income (loss) for the items above, Kingsway had non-GAAP adjusted net income of $11.7 million for 2021 as compared to a non-GAAP adjusted net loss of $0.6 million in 2020.

The following items are excluded in the walk from GAAP net income (loss) to non-GAAP adjusted net income (loss): gain or loss on sale of non-core investments; change in the fair value of investments, debts, and earn-outs; significant litigation, acquisition and disposition expenses; employee related items such as termination, recruiting, and stock-based compensation expense; other non-recurring items; and amortization expense. Refer to Appendix I for a full list of items.

I would also like to point out the Company’s improving operating cash flows. While the Company reported cash used in operating activities of ($5.9) million for the twelve months ended December 21, 2021, this included a $10.6 million payment made related to the monetization of future rental proceeds from the Company’s Leased Real Estate segment, with the corresponding inflow recorded in cash provided by financing activities. This compares to cash provided by operating activities of $1.7 million in 2020, and cash used by operating activities of ($0.8) million in 2019.

See further discussion below regarding the monetization.

We exited 2021 a much better company than when we entered.

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As I mentioned in the 2018 Letter (my first), I would like these letters to serve as a reference point for you and me to assess how we are running the company. I’d like to reiterate for you our achievements towards our stated organizational priorities.

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2021 SEGMENT RESULTS

Extended Warranty

As noted earlier, the Extended Warranty segment generated operating income of $12.6 million and non-GAAP adjusted EBITDA of $13.0 million in 2021, compared to $6.6 million and $13.0 million, respectively, in 2020. For a detailed reconciliation of segment operating income to non-GAAP adjusted EBITDA, refer to Appendix I.

While we made diligent attempts, we didn’t acquire a new extended warranty business in 2021. There is a limited universe of good companies in the space and far fewer still that come up for sale. When they do, they generally elicit a very competitive auction. As a result, barring a unique set of circumstances, these businesses currently trade for prices far higher than we would like to pay (and still hit our ROIC targets for our shareholders). Our search continues.

IWS Acquisition Corporation (“IWS”)

IWS is a licensed motor vehicle service agreement (“VSA”) company and is a provider of after-market vehicle protection services distributed by credit unions in 26 states and the District of Columbia to their members. IWS generated operating income of $4.3 million and non-GAAP adjusted EBITDA of $4.5 million in 2021 as compared to $1.7 million and $2.1 million in 2020, respectively. 2021 results included a benefit from PPP forgiveness of $0.8 million.

New and used automobile loans comprise approximately one-third of credit union loan volume, and those car owners recognize the value of IWS’ protection products. IWS' focus continues to be on adding new distribution partners with further penetration of the credit union channel.

Trinity Warranty Solutions LLC (“Trinity”)

Trinity sells warranty products and provides maintenance support to consumers and businesses in the HVAC, standby generator, commercial LED lighting and refrigeration industries. Trinity distributes its warranty products through original equipment manufacturers, HVAC distributors and commercial and residential contractors. Trinity distributes its maintenance support directly through corporate owners of retail spaces throughout the United States.

Trinity continued its shift in focus towards growing the higher margin warranty products segment. That said, Trinity experienced a nice rebound in its maintenance support segment in 2021 as their customers were able to reopen their locations. Trinity generated operating income of $1.4 million and non-GAAP adjusted EBITDA of $1.4 million as compared to $1.0 million and $1.0 million in 2020, respectively. 2020 results included a benefit from PPP forgiveness of $0.4 million.

Professional Warranty Service Corporation (“PWSC”)

PWSC sells new home warranty products and provides administration services to homebuilders and homeowners across the United States. PWSC distributes its products and services utilizing an in-house sales team as well as insurance brokers and insurance carriers throughout all states except Alaska and Louisiana.

PWSC generated operating income of $2.6 million and non-GAAP adjusted EBITDA of $2.6 million in 2021 as compared to $1.5 million and $1.6 million in 2020, respectively. 2021 results included a benefit from PPP forgiveness of $0.6 million.

PWSC continues to make significant investments in new products and channel development. We anticipate these investments contributing to increased revenues and profitability in the future.

Geminus Holding Company Inc. (“Geminus”)

Geminus primarily sells vehicle service agreements to used car buyers across the United States, through its subsidiaries, The Penn Warranty Corporation ("Penn") and Prime Auto Care, Inc. ("Prime"). Penn and Prime distribute these products in 32 and 40 states, respectively, via independent used car dealerships and franchised car dealerships.

Geminus was negatively impacted by the prevailing shortage of used vehicles available for sale at its dealership customers. Geminus generated operating income of $2.6 million and non-GAAP adjusted EBITDA of $2.7 million in 2021 as compared $1.6 million and $1.8 million in 2020, respectively. 2021 results included a benefit from PPP forgiveness of $0.8 million. We estimate that the application of purchase accounting in accordance with U.S. GAAP reduced revenues at Geminus by $0.3 million and $0.8 million in 2021 and 2020, respectively, and reduced operating earnings by $0.2 million and $0.5 million in 2021 and 2020, respectively. See also Appendix I for a further explanation regarding the impacts of purchase accounting.

PWI Holdings Inc. (“PWI”)

On December 1, 2020, Kingsway closed the acquisition of PWI. PWI, through its subsidiaries Preferred Warranties, Inc., Superior Warranties, Inc., Preferred Warranties of Florida, Inc., and Preferred Nationwide Reinsurance Company, Ltd., markets, sells and administers vehicle service agreements in all fifty states, primarily through a network of independent and franchised automobile dealership partners.

PWI was also negatively impacted by the prevailing shortage of used vehicles available for sale at its dealership customers. PWI generated operating income of $1.8 million and non-GAAP adjusted EBITDA of $1.9 million in 2021. For the one month after acquisition in 2020, PWI generated operating income of $0.7 million and non-GAAP adjusted EBITDA of $0.8 million. We estimate that the application of purchase accounting in accordance with U.S. GAAP reduced revenues at PWI by $2.2 million in 2021, and reduced operating earnings by $0.8 million in 2021 (we had a slight benefit in 2020 due to reduced DAC amortization). See also Appendix I for a further explanation regarding the impacts of purchase accounting.

Kingsway Search Xcelerator

We launched the Kingsway Search Xcelerator (“KSX”) as a platform to partner with great entrepreneurs to acquire a portfolio of fantastic businesses utilizing elements of the proven search fund model. Someone recently described it as a talent factory. I like the ring of that. Our acquired businesses are able to utilize Kingsway’s significant tax advantages. We then apply operational and strategic support. In doing so, we believe we can compound our invested capital at high rates of return over a long time horizon.

Ravix Financial, Inc.

On October 1, 2021, the Company acquired 100% of the outstanding equity interests of Ravix. Based in in San Jose, California, Ravix provides outsourced financial services and human resources consulting for short and long duration engagements. Ravix is a great example of the type of businesses we seek to acquire in KSX. We partnered with a terrific entrepreneur to acquire a company with a strong financial profile and favorable industry trends, a sticky and diverse customer base, and significant opportunities for growth. We sourced the opportunity directly with the owner/operator and acquired the business at a reasonable valuation.

The acquisition was financed with a combination of debt financing provided by Avidbank, and cash on hand. We borrowed a total of $6.0 million, in the form of a term loan, and established a $1.0 million revolver (together, the "Ravix Loan") that was undrawn at close. The Ravix Loan has a variable interest rate, with the current annual interest rate equal to 3.75%. The Ravix Loan requires monthly principal and interest payments and the term loan matures on October 1, 2027.

For the three months ended December 31, 2021, Ravix generated operating income of $0.5 million and non-GAAP adjusted EBITDA of $0.6 million.

Real Estate

CMC Industries, Inc. (“CMC”)

CMC, through its subsidiary, TRT LeaseCo, LLC (“TRT LeaseCo”), owns a 192 acre parcel of land in Texas (the “Real Property”) that is leased on a triple net basis to BNSF Railway Company (“BNSF”). We own 81% of the company, which is consolidated for accounting and tax purposes. The property is subject to two non-recourse mortgages, which are recorded as notes payable in our consolidated balance sheets. BNSF has an option to purchase the property for $150 million at the end of the initial lease term in May 2034 which also coincides with the maturity of the mortgages. We have a balloon payment of $68 million on the mortgage debt at maturity.

In June of 2021, the Company borrowed $15.0 million, at an interest rate of 3.2%, against future rental proceeds that were not being used to service the existing mortgage and received a $2.7 dividend from the proceeds of this monetization. As a result of this monetization, the Company paid $11.7 million in management and guarantee fees as per agreements reached as part of the CMC Settlement explained below.

In March 2021, DGI, TRT LeaseCo and various other entities affiliated with each of them entered into a settlement agreement with respect to litigation and certain other matters. For more information regarding the terms of the settlement, please see Note 25 to the consolidated financial statements within our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

2021 Real Estate Segment operating income was $0.9 million, which includes a $2.9 million expense recorded during the second quarter of 2021 to write-off an indemnification receivable (which is exactly offset by a tax benefit of $2.9 million in net income). In 2020, operating loss was ($0.5) million.

RoeCo Lafayette, LLC

On December 30, 2021, the Company acquired 100% of the outstanding membership interests of RoeCo for cash consideration of approximately $2.6 million (including transaction costs).  RoeCo owns real property consisting of approximately 6.5 acres and a 29,224 square foot single-tenant medical office building located in the State of Louisiana (the "LA Real Property"). The LA Real Property serves as a medical and dental clinic for the Department of Veteran Affairs and is subject to a long-term lease. The LA Real Property is also subject to a mortgage in the principal amount of $13.5 million at the date of acquisition.

This acquisition represents a great opportunity to invest in credit tenant commercial real estate and use our significant net operating loss carryforwards to build value.

Because we closed the acquisition at year-end, there is no recorded revenue or expense in 2021.

Asset Management

Argo Management Group LLC (“Argo”)

Argo is the manager of a small fund dedicated to investing in search funds and their target company acquisitions. As of this writing, the fund has investments in 6 active searchers and 11 operating companies. The fund is now fully invested. We believe that search funds are a compelling asset class and our experience and investment results have been strong. Additionally, managing the fund allows us access and exposure to a steady stream of exceedingly bright and entrepreneurial young managers. We view our exposure to the search fund universe as strategic to Kingsway and a nice complement to our Search Xcelerator Program.

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CONCLUDING THOUGHTS

We made significant progress in pursuit of our organizational priorities in 2021. We are pleased to have demonstrated a solid year of execution and forward momentum for your company. We also recognize that we have more wood to chop. We are excited to continue to build value for you, our shareholders. I would like to reiterate that management and your Board are anchored to the following principles as we pursue these goals:

We have a long-term perspective. By that, I mean we use a 20-year time horizon to guide our decision-making process in much the same way that a sole proprietor would. We use a long-term approach to investments and acquisitions, as well as incentive structures.

Our job is to compound intrinsic value per share. We are not focused on size – generating more revenues or having more employees. We are focused on growing the value of the things we own (as measured by earnings and cash flow). We regard our equity capital as ‘precious’ – not to be wasted or treated carelessly.

We are aligned with our shareholders. As of this writing, the Board and management own approximately 55% of our current shares outstanding. We eat what we cook.

We believe we have a concrete plan in place to grow the value of our Company over the long term. We finished 2021 in a much better position than we started, and we enter 2022 with confidence in our future. We look forward to continuing to demonstrate our progress to you our valued shareholder!

Respectfully,

John T. Fitzgerald

Shareholder, Director, President and CEO

This Annual Letter to Shareholders of Kingsway Financial Services Inc. (“Kingsway”) should be read in conjunction with Kingsway’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission on February 28, 2022.

Forward-Looking Statements

This shareholder letter includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as “expects,” “believes,” “anticipates,” “intends,” “estimates,” “seeks” and variations and similar words and expressions are intended to identify such forward-looking statements; however, the absence of any such words and expressions does not mean that a statement is a not a forward-looking statement. Such forward-looking statements relate to future events or future performance, but reflect Kingsway management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the section entitled “Risk Factors” in Kingsway’s 2021 Annual Report on Form 10-K. Except as expressly required by applicable securities law, Kingsway disclaims any intention or obligation to update or revise any forward- looking statements whether as a result of new information, future events or otherwise.

APPENDIX I TO

ANNUAL LETTER TO SHAREHOLDERS OF KINGSWAY FINANCIAL SERVICES INC.

The Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, when presented in conjunction with comparable GAAP measures, provide useful information about the Company’s operating results and enhances the overall ability to assess the Company’s financial performance. The Company uses non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA allow investors to make a more meaningful comparison between the Company’s core business operating results over different periods of time. The Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provide useful information about the Company’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by the factors listed below, the Company believes that non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA can provide useful additional basis for comparing the current performance of the underlying operations being evaluated.

The Company utilizes non-GAAP adjusted net income (loss) to evaluate Kingsway Financial Services Inc. at the total consolidated company level for the reasons explained above. The following is an explanation of the items excluded from non-GAAP adjusted net income (loss) but included in net income (loss):

•    Adjustments relating to realized and unrealized gains and losses. The Company excludes the following realized and non-cash unrealized gains and losses:

o    (Gain) Loss on sale of non-core investments; Change in fair value of investments. As fully explained in its 2021 Annual Report on Form 10-K, the Company holds investments in several businesses that are not essential to the Company’s strategy in the extended warranty, asset management or real estate industries. These investments arose as a result of decisions made by prior management, and the Company has been monetizing these investments in the most beneficial manner in order to redirect the capital into its ongoing business operations. Until these investments can be monetized, the Company will continue to record realized and non-cash unrealized gains and losses. Accordingly, the Company believes that excluding these items assists management and investors in making period-to-period comparisons of operating performance. Investors should note that these items will recur in future periods until these investments are fully monetized.

o    Change in fair value of debt. The Company records its subordinated debt at fair value and changes to fair value (net of the portion of the change attributable to instrument-specific credit risk) are recorded as unrealized gains or losses. The change in fair value of debt will vary from period-to-period based upon specific market conditions at the time the valuation is performed. As such, the Company has excluded this item (i) because it is not directly attributable to the performance of the Company’s business operations and, accordingly, the exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that the change in fair value of debt will recur in future periods, so long as the Company continues to hold the subordinated debt.

o    Equity in net loss of investee. Represents the Company’s holdings of Itasca Capital Limited (“ICL”) common stock until the Company disposed of its holdings in the fourth quarter of 2019. Given that the Company owned more than 20% of the outstanding common stock of ICL, the Company accounted for its investment under the equity method of accounting. This required the Company to record its portion of ICL’s net income or loss into the Company’s statement of operations every quarter. The Company was also required to review its investment on a regular basis for indicators of impairment and record impairment charges should its assessment find that its investment is other-than-temporarily impaired. Because this item was not directly attributable to the performance of the Company’s business operations, it has been excluded from non-GAAP adjusted net income (loss) in order to assist management and investors in making period-to-period comparisons of operating performance.

o    Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant and modification of stock-based awards to employees. The Company believes that excluding the effect of stock-based compensation from non-GAAP adjusted net income (loss) assists management and investors in making period-to-period comparisons in the Company’s operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of its business operations and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards. Additionally, the Company believes that excluding stock-based compensation from non-GAAP adjusted net income (loss) assists management and investors in making meaningful comparisons between the Company’s operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future.

o    Discontinued operations related items. The Company recorded income from discontinued operations, net of taxes and loss on disposal of discontinued operations, net of taxes primarily due to the sale of the Mendota group of companies in 2018. As these items are not directly attributable to the performance of the Company’s ongoing business operations, their exclusion assists management and investors in making period-to-period comparisons of operating performance.

o    Amortization. Amortization expense is a non-cash expense relating to intangible assets arising from acquisitions that are expensed over the estimated useful life of the related assets. The Company excludes amortization expense from non-GAAP adjusted net income (loss) because it believes that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of its business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Accordingly, the Company believes that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense will recur in future periods.

o    Other Items. The Company engages in other activities and transactions that can impact its net income (loss). In recent periods, these other items included, but were not limited to: (i) employee termination charges; (ii) redomestication expenses; (iii) certain litigation expenses; (iv) acquisition and disposition related expenses; (v) extraordinary audit and audit-related expenses; (vi) loss on the extinguishment of debt; (vii) expenses associated with the CMC Settlement Agreement and (viii) change in fair value of earn-out. The Company excludes these other items from non-GAAP adjusted net income (loss) because it believes these items or transactions are not directly attributable to the performance of its business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that some of these other items may recur in future periods.

The Company utilizes non-GAAP adjusted EBITDA to evaluate its Extended Warranty and KSX reportable segments for the reasons explained above. The Company notes that the exclusions from non-GAAP adjusted net income (loss) explained above are not applicable to its Extended Warranty and KSX reportable segments as those items are not recorded into those segments' operating income. The following is an explanation of the adjustments made to Extended Warranty and KSX reportable segments' operating income in order to arrive at non-GAAP adjusted EBITDA:

•    Gain (loss) on sale of investments; investment income (Extended Warranty). Part of the Extended Warranty reportable segment operations is required to hold investments in trust in order to sell its products. As such, those investments generate ongoing income as well as gains and losses (realized and unrealized). However, these items are not recorded as part of the Extended Warranty reportable segment operating income. As these items are directly attributable to the performance of the Company’s business operations, they are included in non-GAAP adjusted EBITDA.

•    Employee costs (KSX). Costs associated with employees assisting during a transition period that are not expected to be replaced once the transition period has ended (approximately one year from acquisition date).  As these are costs related to a specific transition period and are not attributable to the long term operations of the business, they are included added back to non-GAAP adjusted EBITDA.

•    Depreciation (Extended Warranty and KSX). Depreciation expense is a non-cash expense relating to capital expenditures that are expensed on a straight-line basis over the estimated useful life of the related assets. The Company excludes depreciation from non-GAAP adjusted EBITDA because it believes that the amount of such expenses in any specific period may not directly correlate to the underlying performance of its business operations. Accordingly, the Company believes that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of tangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense will recur in future periods.

Finalization of PWI Purchase Accounting

As previously reported 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 September 30, 2021 quarter relating to the final purchase accounting for PWI:

To summarize, the non-cash, current period cumulative adjustments recorded during the September 30, 2021 quarter were:

Refer to the attached schedules for a summary of the income statement impacts.

It is important to note that deferred revenue acquired as part of future acquisitions will not incur a reduction as a result of applying purchase accounting (assuming the deferred revenue was previously accounted for in accordance with U.S. GAAP). This is due to the fact that on October 28, 2021, the FASB issued Accounting Standards Update No. 2021-08 (the “ASU”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Among other things, the ASU would result in acquiring companies recording deferred revenue acquired at its book value, assuming the deferred revenue had been recorded in accordance with U.S. GAAP prior to the acquisition. The ASU will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and early adoption is permitted. The Company adopted this ASU during the fourth quarter of 2021.

The Company notes that had the ASU been applicable to the PWI acquisition, the Company would not have recorded the $3.6 million reduction to deferred revenue and would not have recorded the $1.9 million reduction to service fee and commission revenue during the third quarter of 2021.

Kingsway Financial Services Inc.

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Income (Loss)

(in thousands)

(UNAUDITED)

Kingsway Financial Services Inc.

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Loss

(in thousands)

(UNAUDITED)

Kingsway Financial Services Inc.

Reconciliation of Extended Warranty Segment Operating Income to Non-GAAP Adjusted EBITDA

and Pro Forma Non-GAAP Adjusted EBITDA

(in thousands)

(UNAUDITED)

(1)    Three months ended 9/30/2021 and twelve months ended 12/31/2021 includes a $1.9 million non-cash, current period cumulative reduction to service fee and commission revenue relating to the finalization of the PWI purchase accounting.

(2)    Includes one month of PWI operating income for the three months ended December 31, 2020 and excludes PWI for prior periods. Also includes a benefit of $2.2 million and $0.4 million from PPP loan forgiveness for the three months ended March 31, 2021 and December 31, 2020, respectively.

(3)     Investment income arising as part of Extended Warranty segment’s minimum holding requirements

(4)     Realized Gains (losses) resulting from investments held in trust as part of Extended Warranty segment’s minimum holding requirements

(5)     Includes amounts related to PWI prior to acquisition (October 2019 through November 2020).

Kingsway Financial Services Inc.

Impact of Purchase Accounting on the Consolidated Statements of Operations

(in thousands)

(UNAUDITED)

Note:  the reduction in service fee and commission revenue recognized in the above table is not added back to the Company's non-GAAP metrics. 

(1)  Of the $1.9 million recorded in the 9/30/2021 quarter, $0.5 million pertains to 6/30/2021, $0.7 million pertains to 3/31/2021, and $0.3 million pertains to 12/31/2020.

(2)  In accordance with U.S. GAAP, any deferred acquisition costs (“DAC”) as of the purchase date are set to zero; therefore, future periods benefit from this amount of DAC amortization not being recorded.

Kingsway Financial Services Inc.

Reconciliation of Kingsway Search Xcelerator (“KSX”) Segment Operating Income to Non-GAAP Adjusted EBITDA

(in thousands)

(UNAUDITED)

(1)     Costs associated with employees assisting during a transition period and are not expected to be replaced once transition period has ended (approximately one year from acquisition date).