Kingstone Companies, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Kingstone Companies, Inc. filed its 2023 10-K, detailing financial obligations including senior notes and warrants, and operational limits on advances.</b>

AI Summary

KINGSTONE COMPANIES, INC. (KINS) filed a Annual Report (10-K) with the SEC on April 1, 2024. Kingstone Companies, Inc. reported its 2023 fiscal year-end results on Form 10-K. The company's principal amount of 2017 Notes was paid on the maturity date of December 30, 2022, totaling $8,455,000. The company issued 12.0% Senior Notes due December 30, 2024, with an aggregate principal amount of approximately $19,950,000. Three-year warrants were issued for the purchase of 969,525 shares of Common Stock at an exercise price of $1.00 per share. Advances are limited to 5% of KICO's net admitted assets and are due within one year.

Why It Matters

For investors and stakeholders tracking KINGSTONE COMPANIES, INC., this filing contains several important signals. The filing provides a comprehensive overview of Kingstone's financial position and debt structure as of the end of the 2023 fiscal year. Details on outstanding notes and warrants offer insight into the company's capital structure and potential future equity dilution.

Risk Assessment

Risk Level: medium — KINGSTONE COMPANIES, INC. shows moderate risk based on this filing. The company has outstanding senior notes and warrants, indicating potential financial obligations and equity dilution risks.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand the company's financial health and future prospects.

Key Numbers

• 20231231 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 20240401 — Filing Date (FILED AS OF DATE)
• 19,950,000 — Principal Amount of Senior Notes (12.0% Senior Notes due December 30, 2024)
• 969,525 — Number of Shares for Warrants (three-year warrants for the purchase of an aggregate of 969,525 shares)
• 1.00 — Warrant Exercise Price (exercisable at an exercise price of $1.00 per share)
• 8,455,000 — Principal Amount of 2017 Notes Paid (remaining $8,455,000 principal amount of the 2017 Notes)
• 5% — Advance Limit (Advances are limited to 5% of KICO's net admitted assets)

Key Players & Entities

• KINGSTONE COMPANIES, INC. (company) — FILER
• DCAP GROUP INC (company) — FORMER COMPANY
• EXTECH CORP (company) — FORMER COMPANY
• 12.0% Senior Notes due December 30, 2024 (dollar_amount) — aggregate approximate principal amount of $19,950,000
• Common Stock (company) — purchase of an aggregate of 969,525 shares

FAQ

Risk Factors

• Debt Obligations [medium — financial]: The company has outstanding senior notes and warrants, which represent significant financial obligations and potential equity dilution.
• Advance Limitations [low — operational]: Advances are restricted to 5% of net admitted assets and must be repaid within one year, impacting liquidity and operational flexibility.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K filing.
• 2024-04-01: 10-K Filing Date — Date the annual report was officially submitted to the SEC.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share KINS Nasdaq Cap
• $345,000,000 — s catastrophe reinsurance coverage from $345,000,000 to $325,000,000, which, at the time, eq
• $325,000,000 — insurance coverage from $345,000,000 to $325,000,000, which, at the time, equated to more th
• $21,545,000 — es in the aggregate principal amount of $21,545,000 of the $30,000,000 aggregate principal
• $30,000,000 — principal amount of $21,545,000 of the $30,000,000 aggregate principal amount of 2017 Note
• $19,950,000 — 24 in the aggregate principal amount of $19,950,000 (the "2022 Notes"). Catastrophe Reinsu
• $500,000,000 — s catastrophe reinsurance coverage from $500,000,000 to $345,000,000, which, at the time, eq
• $200.2 m — 023, our gross written premiums totaled $200.2 million, a decrease of 0.5% from the $201
• $201.2 million — .2 million, a decrease of 0.5% from the $201.2 million in gross written premiums for the year

Filing Documents

• kins_10k.htm (10-K) — 4297KB
• kins_ex10a.htm (EX-10.A) — 92KB
• kins_ex10j.htm (EX-10.J) — 15KB
• kins_ex10o.htm (EX-10.O) — 14KB
• kins_ex10p.htm (EX-10.P) — 14KB
• kins_ex10q.htm (EX-10.Q) — 14KB
• kins_ex10r.htm (EX-10.R) — 14KB
• kins_ex10s.htm (EX-10.S) — 16KB
• kins_ex23.htm (EX-23) — 2KB
• kins_ex31a.htm (EX-31.A) — 9KB
• kins_ex31b.htm (EX-31.B) — 9KB
• kins_ex32.htm (EX-32) — 4KB
• kins_ex97.htm (EX-97) — 32KB
• kins_10kimg33.jpg (GRAPHIC) — 50KB
• 0001654954-24-004054.txt (&nbsp;) — 16465KB
• kins-20231231.xsd (EX-101.SCH) — 120KB
• kins-20231231_lab.xml (EX-101.LAB) — 583KB
• kins-20231231_cal.xml (EX-101.CAL) — 78KB
• kins-20231231_pre.xml (EX-101.PRE) — 496KB
• kins-20231231_def.xml (EX-101.DEF) — 281KB
• kins_10k_htm.xml (XML) — 3860KB

Forward-Looking Statements

Forward-Looking Statements 3 PART I Item 1. Business. 4 Item 1A. Risk Factors. 21 Item 1B. Unresolved Staff Comments. 32 Item 1C. Cybersecurity. 32 Item 2. Properties. 34 Item 3. Legal Proceedings. 34 Item 4. Mine Safety Disclosures. 34 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 35 Item 6. Reserved. 36 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 36 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 71 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. 71 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 71 Item 9A.

Controls and Procedures

Controls and Procedures. 72 Item 9B. Other Information. 72 Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections. 72 PART III Item 10. Directors, Executive Officers and Corporate Governance. 73 Item 11.

Executive Compensation

Executive Compensation. 78 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 83 Item 13. Certain Relationships and Related Transactions, and Director Independence. 85 Item 14. Principal Accountant Fees and Services. 86 PART IV Item 15. Exhibits and Financial Statement Schedules. 87 Item 16. Form 10-K Summary. 89

Signatures

Signatures 90 2 Table of Contents PART I

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K (the "Annual Report") contains forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The events described in forwardlooking statements contained in this Annual Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated results or other consequences of our plans or strategies, projected or anticipated results from acquisitions to be made by us, or projections involving anticipated revenues, earnings, costs or other aspects of our operating results. The words "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions are intended to identify forwardlooking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Factors which may cause actual results and outcomes to differ materially from those contained in the forward-looking statements include, but are not limited to, the risks and uncertainties discussed in Part I Item 1A ("Risk Factors") of this Annual Report. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forwardlooking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forwardlooking statements. We undertake no obligation to publicly update or revise any forwardlooking statements, whether from new information, future events or otherwise except as required by law. 3 Table of Contents

BUSINESS

ITEM 1. BUSINESS . (a) Business Development General As used in this Annual Report, references to the "Company," "we," "us," or "our" refer to Kingstone Companies, Inc. ("Kingstone") and its subsidiaries. We offer property and casualty insurance products through our wholly-owned subsidiary, Kingstone Insurance Company ("KICO"). KICO is a New York domiciled carrier writing business through retail and wholesale agents and brokers. KICO is actively writing personal lines and commercial auto insurance in New York, and in 2023 was the 15th largest writer of homeowners insurance in New York. KICO is also licensed in the states of New Jersey, Rhode Island, Massachusetts, Connecticut, Pennsylvania, New Hampshire, and Maine. For the years ended December 31, 2023 and 2022, respectively, 88.3% and 80.6% of KICO's direct written premiums came from the New York policies. We refer to our New York business as our "Core" business and the business outside of New York as our "non-Core" business. In addition, through our subsidiary, Cosi Agency, Inc. ("Cosi"), a multi-state licensed general agency, we access alternative distribution channels. See "Distribution" below for a discussion of our distribution channels. Cosi receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies. Cosi retains the profit between the commission revenue received and the commission expense paid. Net Cosi revenue is deducted against commission expense and Cosi-related expenses are included in other operating expenses. Cosi-related operating expenses are not included in our stand-alone insurance underwriting business and, accordingly, its expenses are not included in the calculation of our combined ratio as described below. Recent Developments Developments During 2023 Catastrophe Reinsurance Coverage Effective July 1, 2023, KICO decreased the top limit of its catastrophe reinsurance coverage from $345,000,000 to $325,000,000, which, at the

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View this 10-K filing on SEC EDGAR