Consent of Independent Auditors

We consent to the incorporation by reference in Registration Statement No. 333-271708 on Form S-3 and Registration Statement Nos. 33-41204, as amended by Amendment No. 1 (333-04888), 333-14925, 333-109327, 333-200146, 333-206518, 333-212110, 333-214720, 333-218011, 333-231464, 333-231467 and 333-289100 on Form S-8 of Brown & Brown, Inc. of our report dated July 28, 2025, relating to the consolidated financial statements of RSC Topco, Inc. and Subsidiaries as of and for the years ended December 31, 2024 and 2023 appearing in this Current Report on Form 8-K/A of Brown & Brown, Inc.

/s/ Ernst & Young LLP

Boston, Massachusetts

October 8, 2025

RSC Topco, Inc. and Subsidiaries

Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

With Report of Independent Auditors

RSC Topco, Inc. and Subsidiaries

Consolidated Financial Statements

For The Years Ended December 31, 2024 and 2023

Report of Independent Auditors

Management and Board of Directors of

RSC Topco, Inc. and Subsidiaries

Opinion

We have audited the consolidated financial statements of RSC Topco, Inc. and Subsidiaries (the “Company”), which comprise the consolidated balance sheets as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, shareholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the incurred and paid claims development, net of reinsurance, prior to the most recent year disclosed in Note 9 be presented to supplement the financial statements. Such information is the responsibility of management and, although not a part of the financial statements, is required by the Financial Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the

financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

July 28, 2025

RSC Topco, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Per Share and Share Values)

The accompanying notes are an integral part of these consolidated financial statements.

RSC Topco, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(In Thousands)

The accompanying notes are an integral part of these consolidated financial statements.

RSC Topco, Inc. and Subsidiaries

Consolidated Statements of Shareholders' Equity

(In Thousands, Except Share Values)

The accompanying notes are an integral part of these consolidated financial statements.

RSC Topco, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)

The accompanying notes are an integral part of these consolidated financial statements.

RSC Topco, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)

The accompanying notes are an integral part of these consolidated financial statements.

1. Description of the Business

RSC Topco, Inc. together with its consolidated subsidiaries, including Accession Risk Management Group, Inc., (the “Company”) provides insurance brokerage, wholesale brokerage, insurance programs, and professional services serving a wide range of medium size domestic and international commercial businesses. The Company’s corporate headquarters are located in Boston, Massachusetts, with additional sales offices located throughout the United States and Canada.

The Company primarily operates as an agent or broker. Within this space, the Company’s business is divided into Risk Strategies (“RSC”) and One80 Intermediaries (“One80”). RSC operates as a retail brokerage, risk management and reinsurance placement business primarily focused on property and casualty and employee benefits for small and middle-market businesses and individuals across a variety of industries. One80 operates as an alternative distribution and underwriting management business, offering specialized insurance solutions to insurers and other insurance agents and brokers.

While our business is primarily brokerage and professional services, we operate various ancillary insurance operations, including reinsurance companies that assume underwriting risk and series captive insurance companies (“SCICs”), primarily for the purpose of facilitating additional underwriting capacity and generating incremental revenues. The premiums and underwriting exposure related to the Company’s SCIC insurance operations are fully ceded to the client-owned captive cells such that SCIC operations have no underwriting risk on a net written basis.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2024 and 2023. All significant intercompany balances and transactions have been eliminated in consolidation.

The consolidated financial statements and notes have been prepared in conformity with Rule 3-05 of Regulation S-X promulgated under the Securities Act of 1933, as amended (the Securities Act).

Revenue Recognition

See Note 3. Revenue Recognition for a detailed discussion regarding the Company’s revenue recognition policies.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include cash on hand, demand deposits, money market funds, and debt securities with an original maturity of 90 days or less at the date of acquisition.

Cash and cash equivalents are maintained at financial institutions and may exceed federally insured limits. Cash equivalents as of December 31, 2024 and 2023, consist of money market funds of approximately $79,500 and $19,153, respectively.

Restricted Cash

The Company’s policy is to restrict cash on the Consolidated Balance Sheets when required under contract or legislation, or when due to carriers under agency agreements. Restricted cash represents unremitted net insurance premiums and insured clients’ claim funds held in a fiduciary capacity until disbursed by the Company. The unremitted net insurance premiums and insured clients’ claim funds held will be disbursed to the appropriate insurance carriers and insured clients, respectively, within a period of less than one year from the Consolidated Balance Sheets date and are included in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

In addition, the restricted cash includes cash drawn on long-term debt to fund acquisitions and purchase agreement obligations. Accordingly, restricted cash has been classified in the Consolidated Balance Sheets as a current asset. In accordance with ASC 230, Statement of Cash Flows, the Company presents changes in total of cash and restricted cash in the statement of cash flows.

Cash Receipts and Cash Payments

In accordance with ASC 230, the Company presents contingent payments on acquisitions that are up to the acquisition date fair value in financing activities on the Consolidated Statements of Cash Flows, those payments in excess of the acquisition date fair value are presented in operating activities.

Premiums, Commissions, and Fees Receivable

In its capacity as an insurance agent and broker, the Company typically collects premiums from insured clients and, after deducting its authorized commissions, remits the net premiums to the appropriate insurance carriers. Accordingly, as reported in the Consolidated Balance Sheets, Premiums, commissions, and fees receivable, net represents premiums and commissions receivable from the insured.

Under certain arrangements, insurance companies collect the premiums directly from the insured and remit the applicable commissions to the Company. Accordingly, these commissions are also included in Premiums, commissions, and fees receivable, net within the Consolidated Balance Sheets. Fees are primarily receivables due from customers after services have been performed and are also included in Premiums, commissions, and fees receivable, net.

In the Company's capacity as an insurer, Premiums, commissions, and fees receivable, net represents premium balances currently due from policyholders and fronting insurance carriers.

An allowance for credit losses on accounts receivable is established through a charge to Other expenses. See Note 7. Allowance for Credit Losses.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting and measures all assets acquired and liabilities assumed, including contingent consideration and all contractual contingencies, at fair value as of the acquisition date. The Company expenses direct transaction costs as incurred and records a liability for contingent consideration at the measurement date with subsequent re-measurements recorded in the Consolidated Statements of Operations and Comprehensive Loss. Results of operations of the acquired companies are included in the consolidated financial statements from their respective acquisition dates. Acquisitions may have purchase agreement obligations based on financial targets developed by management for the acquired entities.

The amounts recorded as purchase agreement obligations, are primarily based upon the estimated future operating results of the acquired entities over a period of time and are measured at fair value as of the acquisition date based on a probability-weighted approach derived from an assessment with respect to the likelihood of achieving the defined criteria. Subsequent changes in the estimated purchase agreement obligations, including the accretion of discount, are recorded in the Consolidated Statements of Operations and Comprehensive Loss.

Goodwill

In applying the acquisition method of accounting for business combinations, the excess of purchase price of an acquisition over the fair value of the identifiable tangible and intangible assets is assigned to goodwill. We test goodwill for impairment annually or more frequently when events or changes in circumstances indicate the fair value of a reporting unit may be less than its carrying amount. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations.

The process for evaluating potential impairment of goodwill is highly subjective and requires significant judgment. If the fair value of a reporting unit is less than its carrying amount, an impairment loss is recorded to the extent that fair value of the reporting unit is less than its carrying amount.

The goodwill impairment test performed by the Company for the year ended December 31, 2024, did not result in any impairment charges.

During the year ended December 31, 2023, the Company observed adverse claims development affecting the reporting unit associated with its insurance operations. Therefore, the Company performed a quantitative goodwill impairment test and recorded a goodwill impairment loss of $26,840 in Other expenses in the Consolidated Statements of Operations and Comprehensive Loss. The Company performed a qualitative assessment of its other reporting units as part of its annual goodwill impairment analysis and concluded it was more likely than not that

the fair value of these reporting units exceeded their respective carrying amounts. Accordingly, there was no indication of impairment and a quantitative impairment test for these reporting units was not performed. See Note 5. Goodwill for additional information.

Intangible Assets

In applying the acquisition method of accounting for business combinations, intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. If an event has occurred, the Company compares the carrying amount of the asset to the estimated future undiscounted cash flows expected to result from the use of the asset. To the extent that the estimated future undiscounted cash flows are less than the carrying amount of the asset, the asset is permanently written down to its estimated fair market value and an impairment loss is recognized. No impairments were recognized during the years ended December 31, 2024 and 2023.

Amortization of these intangible assets is computed using the straight-line method over the estimated useful lives as follows:

Property and Equipment

Property and equipment acquired in the normal course of business are recorded at cost. Property and equipment acquired in connection with business combinations are recorded at fair value based upon management estimates at the time of acquisition. All property and equipment are presented net of accumulated depreciation. Additions and improvements are capitalized, and ordinary repairs and maintenance are expensed as incurred. The cost and accumulated depreciation of property and equipment retired or sold are removed from the consolidated balance sheets and any resulting gains or losses are included in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

The Company capitalizes certain costs to develop, purchase or modify software for the internal use of the Company. These costs are amortized on a straight-line basis over periods ranging from 3 to 5 years. Costs incurred during the preliminary project stage and post implementation stage are expensed as incurred. Costs incurred during the application development stage are capitalized. Costs related to updates and enhancements are only capitalized if they will result in additional functionality.

Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows:

Impairment of Long-Lived Assets

The Company considers whether there has been any impairment in the value of its long-lived assets, primarily property and equipment and finite-lived intangible assets. The Company evaluates whether certain events have occurred that would require the Company to assess the related assets for impairment. If an event has occurred, the Company then compares the carrying amount of the asset to the estimated future undiscounted cash flows expected to result from the use of the asset. To the extent that the estimated future undiscounted cash flows are less than the carrying amount of the asset, the asset is permanently written down to its estimated fair market value and an impairment loss is recognized. No impairments were recognized during the years ended December 31, 2024 and 2023.

Fair Value Measurements

The Company measures the fair value of assets and liabilities on a recurring and nonrecurring basis in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, which defines fair value and establishes a framework for measuring fair value. This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:

The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics and other market factors. An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company.

Leases

Under ASC 842, Leases, the Company determines if an arrangement is or contains a lease at inception. Under ASC 842, Leases, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. We also consider whether its service arrangements include the right to control the use of an asset.

Operating leases are primarily for office space and are included in Other long-term assets, Other liabilities, and Other long-term liabilities on our Consolidated Balance Sheets. Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right of use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Many of the Company’s lease agreements contain renewal options; however, the Company does not recognize right of use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. Certain lease agreements contain rent escalation clauses, abatements, capital improvement funding or other lease concessions.

For operating leases with a term of one year or less, the Company has elected to not recognize a lease liability or right of use asset on our Consolidated Balance Sheets. Lease payments are recognized as expense on a straight-line basis over the lease term. Short-term lease expenses are immaterial to our Consolidated Statements of Operations and Comprehensive Loss and Consolidated Statements of Cash Flows.

The Company’s leases may include a non-lease component representing additional services transferred, such as common area maintenance for real estate. The Company has made an accounting policy election to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Non-lease components that are variable in nature are recorded in variable lease expense in the period incurred.

The Company uses its incremental borrowing rate to determine the present value of lease payments, as the Company’s leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgment is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease.

Debt Issuance Costs

Costs associated with the Company’s term debt are recorded against the Company’s long-term debt (i.e., contra-debt) and are amortized on a straight-line basis, which approximates the effective interest method. Costs associated with the Company’s revolving credit facilities and delayed draw term loans are capitalized as a deferred charge within Other long-term assets and are amortized on a straight-line basis over the facilities’ terms. Costs associated with delayed draw term loans are reclassified against long-term debt (i.e., contra-debt) as the Company draws upon the delayed draw term loans and are amortized on a straight-line basis which approximates the effective interest method.

Deferred Policy Acquisition Costs

The Company capitalizes deferred policy acquisitions costs (“DACs”), which consist primarily of commissions and premium taxes that are directly related to the successful acquisition by our insurance company subsidiary of new or renewal insurance contracts. DACs are amortized on a pro-rata amortization method and systematic allocation approach over the terms of the policies to which they relate, which is generally one year. DACs are also reduced by ceding commissions paid by reinsurance companies which represent recoveries of acquisition costs. DACs are periodically reviewed for recoverability and adjusted if necessary. DACs were $1,374 and $407 as of December 31, 2024 and 2023, respectively, and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

Premium deficiency testing is performed annually and generally reviewed quarterly. Such testing involves the use of assumptions including the anticipation of investment income to determine if anticipated future policy premiums are adequate to recover all DAC and related claims, benefits, and expenses. To the extent a premium deficiency exists, it is recognized immediately by a charge to the Consolidated Statements of Operations and Comprehensive Loss and a corresponding reduction in DAC. If the premium deficiency is greater than unamortized DAC, a loss (and related liability) is recorded for the excess deficiency.

Losses and Loss Adjustment Expense Reserves

Certain of the Company’s insurance operations retain net insurance risk by underwriting short duration contracts which primarily include property and casualty, and group accident and health policies. The Company’s consolidated SCICs, which do not retain any net insurance risk, primarily provide property and casualty coverage.

The liability for unpaid losses and loss adjustment expenses (“LAE”) reported includes losses calculated based upon loss projections utilizing actuarial studies of historical and industry data. These reserves include specific case reserves and management’s estimate of the amounts for losses incurred but not reported (“IBNR”). IBNR is reviewed regularly using a variety of actuarial techniques. Management believes that its aggregate liability for unpaid losses and LAE at year-end represents its best estimate, based upon the available data, of the amount necessary to cover the ultimate cost of losses, based upon actuarial analyses prepared by consulting actuaries. However, because of the limited population of insured risks, limited historical data, economic conditions, judicial decisions, legislation, and other reasons, actual loss experience may not conform to the assumptions used in determining the estimated amounts for such liability at the balance sheet date. Accordingly, the ultimate liability could vary significantly. As adjustments to these estimates become necessary, such adjustments are reflected in current operations. The approach and methods for developing these estimates and for recording the resulting liability are continually reviewed. Any adjustments to this reserve are recognized in Other expenses in the Consolidated Statements of Operations and Comprehensive Loss. Losses and loss adjustment expenses, less related reinsurance is charged to expense as incurred and included in Other expenses in the Consolidated Statements of Operations and Comprehensive Loss.

In establishing reserves, management considers facts currently known, historical claims information, industry average loss data, and the present state of laws and coverage litigation. However, the process of establishing loss reserves is a complex and imprecise science that reflects significant judgmental factors.

Reinsurance

The Company assumes reinsurance from other insurance companies. In addition, the Company cedes insurance risk to other insurance companies. The Company’s SCICs are created for clients to insure their risks and reduce future costs of their insurance programs. In these arrangements, the Company acts as a fronting insurer and enters into reinsurance treaties, under which the Company has ceded all of the liabilities to client-owned captive cells. The Company structures its SCIC operations to have no underwriting risk on a net written basis.

The Company remains liable to policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize the Company’s exposure to significant losses from reinsurer insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers. Reinsurance recoverable is presented net of an allowance for credit losses.

Reinsurance premiums assumed are recorded on an accrual basis and are included in income on a pro-rata basis over the lives of the policies with the unearned portion being recorded as unearned premiums in the Consolidated Balance Sheets. Reinsurance premiums ceded are similarly pro-rata over the terms of the treaties with the unearned portion being recorded as deferred reinsurance premiums ceded in the Consolidated Balance Sheets. Ceded losses incurred reduce net loss and loss adjustment expenses incurred over the applicable periods of the reinsurance contracts with third-party reinsurers.

As of December 31, 2024 and 2023, the Company’s reinsurers are all captive cells related to the SCIC operations.

Concentration of Credit Risk

During the years presented within the Consolidated Statements of Operations and Comprehensive Loss, no single customer accounted for greater than 10% of the Company’s revenues. As of December 31, 2024 and 2023, no single customer accounted for greater than 10% of the Company’s Premiums, commissions, and fees receivable, net.

Financial instruments which potentially subject the Company to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit, fixed-maturity securities, and receivable balances in the course of collection.

Additionally, our insurance carrier subsidiaries have exposure and remain liable in the event of insolvency of their reinsurers. Management and its reinsurance intermediaries regularly assess the credit quality and ratings of its reinsurer counterparties. For the year ended December 31, 2024, two reinsurers represented 91.2% in the aggregate, of our total reinsurance balance due. For the year ended December 31, 2023, two reinsurers represented 89.4% in the aggregate, of our total reinsurance balance due. Further, the Company may hold collateral (in the form of funds withheld, trusts and letters of credit) as security under the reinsurance agreements.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the use of the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases based on provision of the enacted tax laws. The effects of future changes in tax laws or rates are not anticipated. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. Carryforwards primarily include items such as net operating losses, which can be carried forward subject to certain limitations.

The Company follows the provisions of the accounting standard for uncertainty in income taxes which prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The consolidated financial statements reflect expected future tax consequences of such positions presuming the taxing authorities have full knowledge of the position and all relevant facts, but without considering time values. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as part of pre-tax expense.

As of December 31, 2024 and 2023, the Company had $6,600 in unrecognized tax benefits.

Stock-Based Compensation

The Company follows the guidance of ASC 718, Compensation – Stock Compensation. The guidance requires the Company to recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options granted. As the Company did not have a public market for its stock as of December 31, 2024 and 2023, management determined the volatility for awards granted based on a review of reported data for a peer group of companies.

The expected life of options has been determined using the simplified method. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. The Company accounts for forfeitures as they occur.

Advertising and Marketing

Costs related to advertising and promotions are charged to Professional services in the Consolidated Statements of Operations and Comprehensive Loss, as incurred. Advertising and marketing expense was approximately $6,000 and $5,600 for the years ended December 31, 2024 and 2023, respectively.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which includes amendments that further enhance tax disclosures, primarily related to the rate reconciliation, and required disclosure of income taxes paid by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is still assessing the effect of this update on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03: Disaggregation of Income Statement Expenses, which requires disclosures about the nature of expenses presented on the face of the income statement. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in the consolidated financial statements.

The Company has assessed other accounting pronouncements issued or effective through the issuance date of these consolidated financial statements and for the year ended December 31, 2024, and deemed they were not applicable to the Company or are not anticipated to have a material effect on the consolidated financial statements.

3. Revenue Recognition

Brokerage and Professional Services

The Company recognizes revenue related to brokerage and professional services in accordance with ASC 606, Revenue from Contracts with Customers. The core principle of ASC 606 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Commissions and Fees

The Company receives compensation for brokerage and professional services through commissions and fees. Commission rates and fees vary in amount and can depend upon a number of factors, including the type of insurance coverage provided, the particular insurer, and the capacity in which the broker acts and negotiates with clients. For the majority of the insurance brokerage arrangements, advice and services provided that culminate in the placement of an effective policy are considered a single performance obligation. The timing and method of revenue recognition are dependent upon the type of insurance and brokerage services being provided.

Revenue for property and casualty policy placement is generally recognized on the policy effective date, at which point control over the services provided by the Company has transferred to the client and the client has accepted the services. In many cases, fee compensation may be negotiated in advance, based on the type of risk, coverage required, and service provided by the Company and ultimately, the extent of the risk placed into the insurance market or retained by the client. An allowance for estimated policy cancellations is established through a charge to revenues. The trends and comparisons of revenue from one period to the next can be affected by changes in premium rate levels, fluctuations in client risk retention and increases or decreases in the value of risks that have been insured, as well as new and lost business, and the volume of business from new and existing clients.

Revenue for employee benefits related policy placement is generally recognized over the life of the policy to depict the transfer of control of the services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services using output measures, including units delivered or time elapsed, to provide a faithful depiction of the progress towards completion of the performance obligation. An allowance for estimated policy cancellations is established through a charge to revenues.

Additionally, the Company provides captive management services, actuarial, construction safety and other types of consulting work. Most of this consulting work consists of a single performance obligation, which is either recognized over time as control is transferred continuously to customers, or as of a point in time when control is transferred to the customer. Typically, revenue is recognized over time using an input measure of passage of time or time expended to date. The hours incurred represent services rendered and thereby faithfully depict the transfer of control to the customer.

Contingency and Profit-Share

In addition to commissions and fees from its clients, the Company is also eligible for certain contingent commissions and profit-share from insurers based on the attainment of specified metrics (i.e., volume and loss ratio measures) relating to the Company’s placements.

Revenue for contingent commissions and profit-share from insurers is estimated based on historical evidence of the achievement of the respective contingent metrics and recorded as the underlying policies that contribute to the achievement of the metric are placed. Due to the uncertainty of the amount of contingent consideration that will be received, the estimated revenue is constrained to an amount that is probable to not have a significant reversal of revenue. Contingent consideration is generally received in the first half of the subsequent year.

Insurance

Through its consolidated insurance subsidiaries, the Company is authorized to write various forms of property and casualty insurance. The Company accounts for insurance-related revenues under ASC 944, Financial Services-Insurance. Insurance revenues primarily relate to premiums, which are recognized as revenue over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the reporting period and to be earned over the remaining term of these policies, is deferred and reported either as unearned premium for direct and assumed premium or deferred reinsurance premiums ceded for ceded premium.

The following tables present revenues disaggregated by revenue source:

Contract Balances

The following schedule provides contract assets and contract liabilities information from contracts with customers accounted for under ASC 606.

Under ASC 606, certain costs to obtain or fulfill a contract that were previously expensed as incurred have been capitalized. The Company capitalizes the incremental costs to obtain contracts primarily related to commissions or sales bonus payments. These deferred costs are classified as Other long-term assets on the accompanying Consolidated Balance Sheets and amortized over the expected life of the underlying customer relationships.

The Company also capitalizes certain pre-placement costs that are considered fulfillment costs that meet the following criteria: these costs (1) relate directly to a contract, (2) enhance resources used to satisfy the Company’s performance obligation and (3) are expected to be recovered through revenue generated by the contract. These

costs are classified as Prepaid expenses and other current assets on the accompanying Consolidated Balance Sheets and amortized at a point in time when the associated revenue is recognized. Contract assets increased during the year ended December 31, 2024 due to growth in our business and from businesses acquired in the current year.

Deferred revenue (contract liabilities) primarily relates to advance consideration received from customers under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within Other liabilities in the accompanying Consolidated Balance Sheet.

Remaining Performance Obligations

We have applied the practical expedient not to present unsatisfied performance obligations for contracts with an original expected length of one year or less.

4. Acquisitions

The Company completed 11 and 33 acquisitions during the years ended December 31, 2024 and 2023, respectively. The results of operations of the acquired companies are included in the consolidated financial statements from the acquisition dates through December 31, 2024. The Company acquired 100% of the voting equity interest of all equity deals. The purchase price for each acquisition was determined based on the Company’s expectations of future earnings and cash flows. The purchase price was allocated to tangible assets, liabilities, and identifiable intangible assets acquired, based on their estimated fair values. The excess of purchase price over the aggregate fair values of the net assets acquired has been recorded as goodwill. Goodwill acquired through asset purchases is amortizable for tax purposes, while the goodwill acquired through equity purchases is not.

As detailed below, the acquisition costs associated with certain acquisitions include shareholder equity, usually issued through common stock. The value ascribed to the equity issued, as defined in the purchase agreements, was calculated on the acquisition dates by the Company. Most acquisitions include a potential contingent payment (purchase agreement obligation adjustment) which requires additional consideration to be paid by the Company to the sellers based on future revenues or earnings before interest, tax, depreciation and amortization (“EBITDA”). Management records subsequent changes in these estimated purchase agreement obligation adjustments, including the accretion of the discount, in the Consolidated Statements of Operations and Comprehensive Loss.

The purchase agreement obligation adjustment is calculated based upon the Company’s projections of the acquired company’s revenue and EBITDA growth, as applicable, and subsequently developing a range of potential purchase agreement obligation adjustments, with the resulting liability recorded being based upon a probability-weighted analysis of these potential outcomes as noted in Note 2. Summary of Significant Accounting Policies. Amounts are generally payable from one to three years after the acquisition date depending upon stipulations within the respective acquisition agreements.

Transaction-related costs associated with each acquisition were expensed within Professional services in the Consolidated Statements of Operations and Comprehensive Loss.

Year ended December 31, 2024

Details surrounding each of the Company’s acquisitions are outlined in the table below: