On May 9, 2024, the Company entered into the Sale Agreement with Forza in which ACIC agreed to sell and Forza agreed to acquire 100% of the issued and outstanding stock of IIC. Forza’s application to acquire IIC was approved by the NYDFS on February 13, 2025 and the sale closed on April 1, 2025. The Company received cash proceeds totaling $25,679,000 from the sale resulting in a loss on disposal of $247,000, net of tax impact. The Company also recognized a $1,348,000 loss, net of tax impact, on IIC's fixed maturity portfolio, which was included in accumulated other comprehensive loss on the Company's Consolidated Balance Sheets prior to the sale. The total tax benefit related to the sale and realized loss on fixed maturity portfolio was $528,000.

The results from IIC's discontinued operations for the three and nine months ended September 30, 2025 and 2024 are presented below.

IIC Results from Discontinued Operations


	Three Months Ended September 30,					Nine Months Ended September 30,
	2025 (2)		2024			2025			2024
REVENUE:
Gross premiums written	$	—	$	12,402		$	13,120		$	31,261
Change in gross unearned premiums		—		(3,140	)		(3,336	)		(4,689	)
Gross premiums earned		—		9,262			9,784			26,572
Ceded premiums earned		—		(2,256	)		(2,528	)		(7,025	)
Net premiums earned		—		7,006			7,256			19,547
Net investment income		—		539			538			1,563
Net realized investment losses		—		(13	)		(2	)		(66	)
Other revenue		—		18			16			49
Total revenue		—		7,550			7,808			21,093
EXPENSES:
Losses and loss adjustment expenses		—		4,448			3,179			13,767
Policy acquisition costs		—		2,052			1,906			6,234
General and administrative expenses		—		454			546			2,009
Total expenses		—		6,954			5,631			22,010
Income (loss) before income taxes		—		596			2,177			(917	)
Provision (benefit) for income taxes(1)		—		146			540			(1,238	)
Income from discontinued operations, net of tax	$	—	$	450		$	1,637		$	321

(1) Includes $1,007,000 in tax benefit related to discontinued operations outside of IIC stand-alone results for the nine months ended September 30, 2024.

(2) Excludes loss on sale and realization of unrealized losses on fixed maturity portfolio, the details of which are described above and are not operational results related to IIC.

The major classes of IIC assets and liabilities transferred as a result of the sale as of the date of sale and December 31, 2024 are presented below.

IIC Major Classes of Assets and Liabilities Sold and Disposed


	April 1, 2025		December 31, 2024
ASSETS
Fixed maturities, available-for-sale	$	40,925	$	38,523
Other investments		988		978
Cash and cash equivalents		21,206		22,897
Accrued investment income		297		317
Premiums receivable, net		3,174		1,606
Reinsurance recoverable on paid and unpaid losses, net		265		259
Ceded unearned premiums		2,004		4,075
Deferred policy acquisition costs, net		4,462		3,647
Intangible assets, net		775		775
Other assets		488		166
Total assets	$	74,584	$	73,243

LIABILITIES
Unpaid losses and loss adjustment expenses	$	21,391	$	21,499
Unearned premiums		23,574		20,238
Reinsurance payable on premiums		—		3,966
Payments outstanding		2,223		3,091
Accounts payable and accrued expenses		101		1,058
Operating lease liability		65		69
Other liabilities		1,402		21
Total liabilities	$	48,756	$	49,942

During the first quarter of 2024, due to a change in circumstances, the Company evaluated its capitalized software, previously classified as held for disposal at December 31, 2023. As a result of this evaluation, it was determined that the use case of the software by the Company shifted. The Company reclassified this asset and the associated amortization expense in 2024 in accordance with GAAP guidance, resulting in amortization expense for the capitalized software being captured in continuing operations prospectively. The value of this capitalized software at the time of reclassification was $8,095,000. There were no other non-cash transactions during the nine months ended September 30, 2025 and 2024.