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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to _________

Commission File Number 0-1665


KINGSTONE COMPANIES, INC.
(Exact name of registrant as specified in its charter)


Delaware						36-2476480
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

120 Wood Road

Kingston, NY 12401

(Address of principal executive offices)

(845) 802-7900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	KINS	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of November 6, 2025, there were 14,147,428 shares of the registrant’s common stock outstanding.

Table of Contents

KINGSTONE COMPANIES, INC.

INDEX

PAGE

PART I — FINANCIAL INFORMATION

Item 1 —

Financial Statements

Condensed Consolidated Balance Sheets at September 30, 2025 (Unaudited) and December 31, 2024

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) for the three months and nine months ended September 30, 2025 and 2024

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three months and nine months ended September 30, 2025 and 2024

Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2025 and 2024

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2 —

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

Item 3 —

Quantitative and Qualitative Disclosures About Market Risk

Item 4 —

Controls and Procedures

PART II — OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3 —

Defaults Upon Senior Securities

Item 4 —

Mine Safety Disclosures

Forward-Looking Statements

This Quarterly Report contains forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The events described in forward‑looking statements contained in this Quarterly 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 forward‑looking 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 our Annual Report on Form 10-K for the year ended December 31, 2024, Part I, Item 2 of this Quarterly Report and Part II, Item 1A of this Quarterly Report.

Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward‑looking 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 forward‑looking statements. We undertake no obligation to publicly update or revise any forward‑looking statements, whether from new information, future events or otherwise except as required by law.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Table of Contents


KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
	September 30, 2025		December 31, 2024
	(unaudited)
Assets
Fixed-maturity securities, held-to-maturity, at amortized cost (fair value of $5,174,675 at September 30, 2025 and $5,959,265 at December 31, 2024)	$	6,043,708	$	7,047,342
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $261,180,534 at September 30, 2025 and $202,308,158 at December 31, 2024)	252,640,428		186,893,438
Equity securities, at fair value (cost of $13,546,654 at September 30, 2025 and $13,527,554 at December 31, 2024)	10,409,833		10,296,505
Other investments	4,889,148		4,380,656
Total investments	273,983,117		208,617,941
Cash and cash equivalents	26,772,302		28,669,441
Premiums receivable, net of allowance for credit losses of $477,154 at September 30, 2025, 2025 and $402,290 at December 31, 2024	18,252,649		21,766,988
Reinsurance receivables, net	60,019,060		69,322,436
Prepaid reinsurance	2,142,329		—
Deferred policy acquisition costs	25,377,781		24,732,371
Intangible assets	500,000		500,000
Property and equipment, net	7,861,007		9,283,970
Deferred income taxes, net	4,138,144		5,597,920
Other assets	9,543,853		6,424,776
Total assets	$	428,590,242	$	374,915,843

Liabilities
Loss and loss adjustment expense reserves	$	141,194,246	$	126,210,428
Unearned premiums	140,041,140		134,701,733
Advance premiums	7,711,957		3,503,063
Reinsurance balances payable	5,690,029		10,509,121
Deferred ceding commission revenue	7,562,417		11,541,239
Accounts payable, accrued expenses and other liabilities	12,152,437		10,570,388
Income taxes payable	1,832,290		—
Debt, net (current $1,278,094 and long-term $3,474,590 at September 30, 2025, current $6,849,257 and long-term $4,322,163 at December 31, 2024)	4,752,684		11,171,420
Total liabilities	320,937,200		308,207,392
Commitments and Contingencies (Note 11)	$	—	$	—
Stockholders' Equity
Preferred stock, $0.01 par value; authorized 2,500,000 shares	$	—	$	—
Common stock, $0.01 par value; authorized 20,000,000 shares; issued 15,671,553 shares at September 30, 2025 and 14,448,205 shares at December 31, 2024; outstanding 14,147,428 shares at September 30, 2025 and 12,924,080 shares at December 31, 2024	156,715		144,482
Capital in excess of par	99,264,372		89,063,326
Accumulated other comprehensive loss	(6,744,530)		(12,175,476)
Retained earnings (accumulated deficit)	20,544,492		(4,755,874)
Stockholders' equity before treasury stock	113,221,049		72,276,458
Treasury stock, at cost, 1,524,125 shares at September 30, 2025 and 1,524,125 at December 31, 2024	(5,568,007)		(5,568,007)
Total stockholders' equity	107,653,042		66,708,451
Total liabilities and stockholders' equity	$	428,590,242	$	374,915,843

See accompanying notes to condensed consolidated financial statements.

Table of Contents

KINGSTONE COMPANIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues
Net premiums earned	$	47,925,053	$	33,407,194	$	137,663,376	$	92,530,708
Ceding commission revenue	4,900,401		4,741,676		10,940,648		13,870,748
Net investment income	2,499,071		1,649,673		6,847,934		4,917,129
Net gains on investments	182,122		826,522		590,594		1,319,307
Realized gain on sale of real estate	—		—		1,965,989		—
Other income	145,843		146,663		437,503		401,128
Total revenues	55,652,490		40,771,728		158,446,044		113,039,020

Expenses
Loss and loss adjustment expenses	21,232,324		13,027,597		66,334,564		45,125,492
Commission expense	10,308,092		9,004,254		30,250,601		25,088,546
Other underwriting expenses	8,358,432		6,894,590		23,491,221		18,675,720
Other operating expenses	1,330,258		1,241,572		3,519,475		2,820,620
Depreciation and amortization	644,653		619,056		1,881,880		1,835,503
Interest expense	72,609		900,583		377,137		2,884,181
Total expenses	41,946,368		31,687,652		125,854,878		96,430,062

Income from operations before taxes	13,706,122		9,084,076		32,591,166		16,608,958
Income tax expense	2,833,647		2,105,931		6,583,699		3,689,197
Net income	10,872,475		6,978,145		26,007,467		12,919,761

Other comprehensive income, net of tax
Gross decrease in net unrealized losses on available-for-sale-securities	2,760,803		4,533,334		6,862,488		4,082,771

Reclassification adjustment for net realized losses included in net income	6,322		3,939		12,126		11,468
Net decrease in net unrealized losses	2,767,125		4,537,273		6,874,614		4,094,239
Income tax expense related to items of other comprehensive income	(581,096)		(952,827)		(1,443,668)		(859,789)
Other comprehensive income, net of tax	2,186,029		3,584,446		5,430,946		3,234,450

Comprehensive income	$	13,058,504	$	10,562,591	$	31,438,413	$	16,154,211

Earnings per common share:
Basic	$	0.77	$	0.61	$	1.88	$	1.16
Diluted	$	0.74	$	0.55	$	1.82	$	1.05

Weighted average common shares outstanding
Basic	14,142,374		11,404,360		13,849,283		11,142,043
Diluted	14,601,241		12,581,128		14,303,326		12,249,576


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Three months ended September 30, 2025


	Preferred Stock			Common Stock			Capital in Excess of Par		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount		Total
Balance, July 1, 2025	-	$	-	15,661,240	$	156,612	$	98,840,728	$	(8,930,559)	$	10,379,118	1,524,125	$	(5,568,007)	$	94,877,892
Stock-based compensation	-	-		-	-		430,173		-		-		-	-		430,173
Vesting of restricted stock awards	-	-		6,978	70		(70)		-		-		-	-		-
Exercise of stock options	-	-		3,335	33		7,470		-		-		-	-		7,503
Offering costs on previously issued common stock	-	-		-	-		(13,929)		-		-		-	-		(13,929)
Dividends	-	-		-	-		-		-		(707,101)		-	-		(707,101)
Net income	-	-		-	-		-		-		10,872,475		-	-		10,872,475
Decrease in net unrealized losses on available-for-sale securities, net of tax	-	-		-	-		-		2,186,029		-		-	-		2,186,029
Balance, September 30, 2025	-	$	-	15,671,553	$	156,715	$	99,264,372	$	(6,744,530)	$	20,544,492	1,524,125	$	(5,568,007)	$	107,653,042


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Three months ended September 30, 2024


	Preferred Stock			Common Stock			Capital in Excess of Par		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount		Total
Balance, July 1, 2024	-	$	-	12,536,129	$	125,361	$	76,042,147	$	(12,624,559)	$	(17,172,694)	1,471,406	$	(5,567,481)	$	40,802,774
Stock-based compensation	-	-		-	-		359,170		-		-		-	-		359,170
Vesting of restricted stock awards	-	-		211,391	2,114		(2,114)		-		-		-	-		-
Shares deducted from restricted stock awards for payment of withholding taxes	-	-		(106,687)	(1,067)		(951,644)		-		-		-	-		(952,711)
Exercise of stock options	-	-		37,959	380		(28)		-		-		35,248	(352)		-
Exercise of warrants	-	-		60,557	606		(606)		-		-		-	-		-
Issuance of common stock, net of offering costs of $360,670	-	-		1,079,601	10,796		8,887,112		-		-		-	-		8,897,908
Net income	-	-		-	-		-		-		6,978,145		-	-		6,978,145
Decrease in net unrealized losses on available-for-sale securities, net of tax	-	-		-	-		-		3,584,446		-		-	-		3,584,446
Balance, September 30, 2024	-	$	-	13,818,950	$	138,190	$	84,334,037	$	(9,040,113)	$	(10,194,549)	1,506,654	$	(5,567,833)	$	59,669,732


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Nine months ended September 30, 2025


	Preferred Stock			Common Stock			Capital in Excess of Par		Accumulated Other Comprehensive Loss		(Accumulated Deficit) Retained Earnings		Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount		Total
Balance, January 1, 2025	-	$	-	14,448,205	$	144,482	$	89,063,326	$	(12,175,476)	$	(4,755,874)	1,524,125	$	(5,568,007)	$	66,708,451
Stock-based compensation	-	-		-	-		1,241,040		-		-		-	-		1,241,040
Vesting of restricted stock awards	-	-		223,204	2,232		(2,232)		-		-		-	-		-
Shares deducted from restricted stock awards for payment of withholding taxes	-	-		(35,942)	(359)		(548,141)		-		-		-	-		(548,500)
Exercise of stock options	-	-		52,321	523		64,068		-		-		-	-		64,591
Shares deducted from exercise of stock options for payment of withholding taxes	-	-		(868)	(9)		(14,296)		-		-		-	-		(14,305)
Issuance of common stock, net of offering costs of $338,063	-	-		612,999	6,130		9,464,323		-		-		-	-		9,470,453
Exercise of warrants	-	-		371,634	3,716		(3,716)		-		-		-	-		-
Dividends	-	-		-	-		-		-		(707,101)		-	-		(707,101)
Net income	-	-		-	-		-		-		26,007,467		-	-		26,007,467
Decrease in net unrealized losses on available-for-sale securities, net of tax	-	-		-	-		-		5,430,946		-		-	-		5,430,946
Balance, September 30, 2025	-	$	-	15,671,553	$	156,715	$	99,264,372	$	(6,744,530)	$	20,544,492	1,524,125	$	(5,568,007)	$	107,653,042


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Nine months ended September 30, 2024


	Preferred Stock			Common Stock			Capital in Excess of Par		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock
	Shares	Amount		Shares	Amount								Shares	Amount		Total
Balance, January 1, 2024	-	$	-	12,248,313	$	122,483	$	75,338,010	$	(12,274,563)	$	(23,114,310)	1,471,406	$	(5,567,481)	$	34,504,139
Stock-based compensation	-	-		-	-		906,375		-		-		-	-		906,375
Vesting of restricted stock awards	-	-		446,044	4,460		(4,460)		-		-		-	-		-
Shares deducted from restricted stock awards for payment of withholding taxes	-	-		(109,633)	(1,096)		(959,995)		-		-		-	-		(961,091)
Exercise of stock options	-	-		37,959	380		(28)		-		-		35,248	(352)		-
Exercise of warrants	-	-		60,557	606		(606)		-		-		-	-		-
Issuance of common stock, net of offering costs of $259,825	-	-		1,135,710	11,357		9,054,741		-		-		-	-		9,066,098
Net income	-	-		-	-		-		-		12,919,761		-	-		12,919,761
Decrease in net unrealized losses on available-for-sale securities, net of tax	-	-		-	-		-		3,234,450		-		-	-		3,234,450
Balance, September 30, 2024	-	$	-	13,818,950	$	138,190	$	84,334,037	$	(9,040,113)	$	(10,194,549)	1,506,654	$	(5,567,833)	$	59,669,732


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine months ended September 30, 2025	2025		2024
Cash flows from operating activities:
Net income	$	26,007,467	$	12,919,761
Adjustments to reconcile net income to net cash flows provided by operating activities:
Net realized losses on investments	12,126		59,838
Net unrealized gains on equity investments	(94,228)		(977,117)
Net unrealized gains on other investments	(508,492)		(402,028)
Gain on sale of real estate	(1,965,989)		-
Depreciation and amortization	1,881,880		1,835,503
Credit losses	96,191		85,273
Accretion of bond discount, net	(29,812)		(560,649)
Amortization of discount and issuance costs on debt	65,163		819,930
Loss on extinguishment of debt	174,962		296,553
Stock-based compensation	1,241,040		906,375
Deferred income tax expense	16,108		3,689,197
Decrease (increase) in operating assets:
Premiums receivable, net	3,418,148		(4,081,882)
Reinsurance receivables, net	9,303,376		9,847,085
Prepaid reinsurance	(2,142,329)		-
Deferred policy acquisition costs	(645,410)		(2,049,801)
Other assets	(2,917,202)		429,999
Increase (decrease) in operating liabilities:
Loss and loss adjustment expense reserves	14,983,818		(4,975,411)
Unearned premiums	5,339,407		14,353,241
Advance premiums	4,208,894		1,509,633
Reinsurance balances payable	(4,819,092)		(2,970,585)
Deferred ceding commission revenue	(3,978,822)		825,228
Accounts payable, accrued expenses and other liabilities	3,414,339		3,399,435
Net cash flows provided by operating activities	53,061,543		34,959,578

Cash flows from investing activities:
Redemption - fixed-maturity securities held-to-maturity	1,000,000		-
Purchase - fixed-maturity securities available-for-sale	(88,164,845)		(125,744,401)
Sale and maturity - fixed-maturity securities available-for-sale	29,313,789		113,854,152
Purchase - equity securities	(19,100)		-
Sale - equity securities	-		4,410,859
Proceeds from sale of real estate	3,600,000		-
Acquisition of property and equipment	(2,092,928)		(1,738,969)
Net cash flows used in investing activities	(56,363,084)		(9,218,359)

Cash flows from financing activities:
Principal payments on equipment financing	(910,736)		(859,045)
Principal payments on 2022 Notes	-		(5,000,000)
Principal payments on 2024 Notes	(5,950,000)		(3,000,000)
Issue costs on 2024 Notes and 2022 Notes	-		(203,381)
Proceeds from exercise of stock options	64,591		-
Withholding taxes paid on net exercise of stock options	(14,305)		-
Withholding taxes paid on vested restricted stock awards	(548,500)		(961,091)
Net proceeds from issuance of common stock	9,470,453		9,066,098
Dividends paid	(707,101)		-
Net cash flows provided by (used in) financing activities	1,404,402		(957,419)

(Decrease) increase in cash and cash equivalents	$	(1,897,139)	$	24,783,800
Cash and cash equivalents, beginning of period	28,669,441		8,976,998
Cash and cash equivalents, end of period	$	26,772,302	$	33,760,798

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	5,819,000	$	-
Cash paid for interest	$	1,520,130	$	1,695,141

Supplemental schedule of non-cash investing and financing activities:
Other comprehensive income, net of tax	$	5,430,946	$	3,234,450


See accompanying notes to condensed consolidated financial statements.

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KINGSTONE COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Nature of Business and Basis of Presentation

Kingstone Companies, Inc. (referred to herein as "Kingstone" or the “Company” or, on a standalone basis for the parent company only, the “Holding Company”), operates through its 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 2024 was the 12th 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 three months ended September 30, 2025 and 2024, 98.0% and 96.3%, respectively, of KICO’s direct written premiums came from the New York policies. For the nine months ended September 30, 2025 and 2024, 98.1% and 95.6%, respectively, of KICO’s direct written premiums came from the New York policies. Kingstone, through its wholly-owned subsidiary, Cosi Agency, Inc. (“Cosi”), a multi-state licensed general agency, receives commission revenue from KICO for the policies it places with others and pays commissions to these agencies.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by GAAP for complete financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2024 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2025. The accompanying condensed consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with standards of the Public Company Accounting Oversight Board (United States) but, in the opinion of management, such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations. The results of operations for the nine months ended September 30, 2025 may not be indicative of the results that may be expected for the year ending December 31, 2025.

Note 2 – Accounting Policies

Basis of Presentation

See Note 2 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for further information.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Kingstone and its wholly-owned subsidiaries: (1) KICO and its wholly-owned subsidiaries, CMIC Properties, Inc. (“Properties”) and 15 Joys Lane, LLC (“15 Joys Lane”), which together, until March 2025, owned the land and building from which KICO operated (see Note 14 - Sale of Real Estate), and (2) Cosi. All significant inter-company account balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions, and includes the reserves for losses and loss adjustment expense (“LAE”), which are subject to estimation errors due to the inherent uncertainty in projecting ultimate claim amounts that will be reported and settled over a period of many years. In addition, estimates and assumptions associated with loss and LAE recoverable under reinsurance contracts and other receivables or payable under reinsurance contracts related to contingent ceding commission revenue require judgments by management. On an ongoing basis, management reevaluates its assumptions and the methods for calculating these estimates. Actual results may differ significantly from the estimates used in preparing the condensed consolidated financial statements.

Accounting Changes

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for the

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Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires disaggregated disclosure of income statement expenses. ASU 2024-03 does not change the expense captions currently presented on the income statement; rather it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for annual reporting periods, as amended by ASU 2025-01, beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. ASU 2024-03 can be applied on a prospective basis; however, retrospective application is permitted. Early adoption is permitted. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on its consolidated financial position, results of operations and cash flows, or do not apply to its operations.

Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted. The Act includes significant federal tax law changes which, among other impacts, modify and make permanent certain business tax provisions originally enacted in the 2017 Tax Cuts and Jobs Act. The Act is subject to further clarification from the issuance of future technical guidance by the U.S. Department of Treasury. The Company is currently evaluating the impacts of the Act but does not expect it to have a material impact on its results of operations or financial condition.

Note 3 - Investments

Fixed-Maturity Securities

The amortized cost, estimated fair value, and gross unrealized gains and losses on investments in fixed-maturity securities classified as available-for-sale for which an allowance for credit losses has not been recorded, as of September 30, 2025 and December 31, 2024 are summarized as follows:


	September 30, 2025
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		Net Unrealized Losses
Category					Less than 12 Months		More than 12 Months

Fixed-Maturity Securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	997,057	$	11,073	$	-	$	-	$	1,008,130	$	11,073

Political subdivisions of States, Territories and Possessions (1)	24,258,552		190,585		-		(2,551,987)		21,897,150		(2,361,402)

Corporate and other bonds industrial and miscellaneous (1)	123,065,335		481,632		(41,640)		(2,890,680)		120,614,647		(2,450,688)

Residential mortgage and other asset backed securities (1) (2)	112,859,590		1,085,476		(38,253)		(4,786,312)		109,120,501		(3,739,089)
Total fixed-maturity securities	$	261,180,534	$	1,768,766	$	(79,893)	$	(10,228,979)	$	252,640,428	$	(8,540,106)

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	December 31, 2024
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		Net Unrealized Losses
Category					Less than 12 Months		More than 12 Months

Fixed-Maturity Securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies (1)	$	-	$	-	$	-	$	-	$	-	$	-

Political subdivisions of States, Territories and Possessions (1)	24,271,177		-		(73,589)		(3,324,491)		20,873,097		(3,398,080)

Corporate and other bonds industrial and miscellaneous (1)	112,507,436		-		(1,024,461)		(4,690,597)		106,792,378		(5,715,058)

Residential mortgage and other asset backed securities (1) (2)	65,529,545		119,647		(209,890)		(6,211,339)		59,227,963		(6,301,582)
Total fixed-maturity securities	$	202,308,158	$	119,647	$	(1,307,940)	$	(14,226,427)	$	186,893,438	$	(15,414,720)

(1)In October 2022, KICO placed certain U.S. Treasury securities to fulfill the required collateral for a sale-leaseback transaction in a designated custodian account (see Note 7 – Debt - “Equipment Financing”). As of December 31, 2024 KICO had sold its U.S. Treasury securities and replaced a portion of its other fixed-maturity securities in the designated custodian account. As of September 30, 2025 and December 31, 2024, the amount of required collateral was approximately $4,039,000 and $5,308,000, respectively. As of September 30, 2025 and December 31, 2024, the estimated fair value of the eligible collateral was approximately $4,039,000 and $5,308,000, respectively.

(2)KICO has placed certain residential mortgage backed securities as eligible collateral in a designated custodian account related to its membership in the Federal Home Loan Bank of New York (“FHLBNY”) (see Note 7 – Debt – “Federal Home Loan Bank”). The eligible collateral would be pledged to FHLBNY if KICO draws an advance from the FHLBNY credit line. As of September 30, 2025 and December 31, 2024, the estimated fair value of the eligible investments was approximately $9,779,000 and $10,130,000, respectively. KICO will retain all rights regarding all securities if pledged as collateral. As of September 30, 2025 and December 31, 2024, there was no outstanding balance on the FHLBNY credit line.

A summary of the amortized cost and estimated fair value of the Company’s investments in available-for-sale fixed-maturity securities by contractual maturity as of September 30, 2025 and December 31, 2024 is shown below:


	September 30, 2025				December 31, 2024
Remaining Time to Maturity	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value

Less than one year	$	12,951,205	$	12,916,040	$	9,522,262	$	9,484,834
One to five years	67,778,085		66,799,930		68,052,387		66,141,372
Five to ten years	47,386,586		45,910,285		38,159,446		34,068,922
More than 10 years	20,205,068		17,893,672		21,044,518		17,970,347
Residential mortgage and other asset backed securities	112,859,590		109,120,501		65,529,545		59,227,963
Total	$	261,180,534	$	252,640,428	$	202,308,158	$	186,893,438

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The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

There was no allowance for credit losses on fixed-maturity securities classified as available-for-sale as of September 30, 2025 and December 31, 2024, respectively.

Equity Securities

The cost and estimated fair value of, and gross unrealized gains and losses on, investments in equity securities as of September 30, 2025 and December 31, 2024 are as follows:


	September 30, 2025
Category	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Equity Securities:
Preferred stocks	$	9,750,322	$	-	$	(2,450,189)	$	7,300,133
Fixed income exchange traded funds	3,711,232		-		(686,632)		3,024,600
FHLBNY common stock	85,100		-		-		85,100
Total	$	13,546,654	$	-	$	(3,136,821)	$	10,409,833


	December 31, 2024
Category	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Equity Securities:
Preferred stocks	$	9,750,322	$	-	$	(2,422,617)	$	7,327,705
Fixed income exchange traded funds	3,711,232		-		(808,432)		2,902,800
FHLBNY common stock	66,000		-		-		66,000
Total	$	13,527,554	$	-	$	(3,231,049)	$	10,296,505

Other Investments

The cost and estimated fair value of, and gross gains on, the Company’s other investments as of September 30, 2025 and December 31, 2024 are as follows:


	September 30, 2025						December 31, 2024
Category	Cost		Gross Unrealized Gains		Estimated Fair Value		Cost		Gross Unrealized Gains		Estimated Fair Value

Other Investments:
Hedge fund	$	1,987,040	$	2,902,108	$	4,889,148	$	1,987,040	$	2,393,616	$	4,380,656

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Held-to-Maturity Securities

The cost or amortized cost and estimated fair value of, and unrealized gross gains and losses on, investments in held-to-maturity fixed-maturity securities as of September 30, 2025 and December 31, 2024 are summarized as follows:


	September 30, 2025

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Estimated Fair Value		Net Unrealized Losses
Category					Less than 12 Months		More than 12 Months

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,229,408	$	40	$	(17,232)	$	(6,466)	$	1,205,750	$	(23,658)

Political subdivisions of States, Territories and Possessions	-		-		-		-		-		-

Exchange traded debt	304,111		-		-		(54,111)		250,000		(54,111)

Corporate and other bonds industrial and miscellaneous	4,510,189		-		-		(791,264)		3,718,925		(791,264)
Total	$	6,043,708	$	40	$	(17,232)	$	(851,841)	$	5,174,675	$	(869,033)


	December 31, 2024
	Cost or Amortized Cost		Gross Unrealized Gains						Estimated Fair Value		Net Unrealized Losses
					Gross Unrealized Losses
Category					Less than 12 Months		More than 12 Months

Held-to-Maturity Securities:
U.S. Treasury securities	$	1,229,170	$	-	$	(39,630)	$	(15,990)	$	1,173,550	$	(55,620)

Political subdivisions of States, Territories and Possessions	499,719		-		(654)		-		499,065		(654)

Exchange traded debt	304,111		-		-		(55,611)		248,500		(55,611)

Corporate and other bonds industrial and miscellaneous	5,014,342		-		-		(976,192)		4,038,150		(976,192)
Total	$	7,047,342	$	—	$	(40,284)	$	(1,047,793)	$	5,959,265	$	(1,088,077)

Held-to-maturity U.S. Treasury securities are held in trust pursuant to various states’ minimum funds requirements.

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A summary of the amortized cost and estimated fair value of the Company’s investments in held-to-maturity securities by contractual maturity as of September 30, 2025 and December 31, 2024 is shown below:


	September 30, 2025				December 31, 2024
Remaining Time to Maturity	Cost or Amortized Cost		Estimated Fair Value		Cost or Amortized Cost		Estimated Fair Value

Less than one year	$	-	$	-	$	499,719	$	499,065
One to five years	2,059,969		2,018,138		622,375		600,288
Five to ten years	-		-		1,427,579		1,323,600
More than 10 years	3,983,739		3,156,537		4,497,669		3,536,312
Total	$	6,043,708	$	5,174,675	$	7,047,342	$	5,959,265

The actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalties.

There was no allowance for credit losses on held-to-maturity fixed-maturity securities as of September 30, 2025 and December 31, 2024, respectively.

Investment Income

Major categories of the Company’s net investment income are summarized as follows:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Income:
Fixed-maturity securities	$	2,449,081	$	1,172,023	$	6,510,764	$	3,511,243
Equity securities	123,501		144,950		370,139		467,588
Cash and cash equivalents	84,329		385,809		228,137		1,074,000
Other	-		-		-		39,227
Total	2,656,911		1,702,782		7,109,040		5,092,058
Expenses:
Investment expenses	157,840		53,109		261,106		174,929
Net investment income	$	2,499,071	$	1,649,673	$	6,847,934	$	4,917,129

Proceeds from the redemptions of fixed-maturity securities held-to-maturity were $1,000,000 and $0 for the nine months ended September 30, 2025 and 2024, respectively.

Proceeds from the sale or maturity of fixed-maturity securities available-for-sale were $29,313,789 and $113,854,152 for the nine months ended September 30, 2025 and 2024, respectively.

Proceeds from the sale of equity securities were $0 and $4,410,859 for the nine months ended September 30, 2025 and 2024, respectively.

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The Company’s net gains (losses) on investments are summarized as follows:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Realized Gains (Losses)

Fixed-maturity securities:
Gross realized gains	$	333	$	157	$	1,175	$	962
Gross realized losses	(6,655)		(4,096)		(13,301)		(12,430)
	(6,322)		(3,939)		(12,126)		(11,468)

Equity securities:
Gross realized gains	-		369,877		-		374,997
Gross realized losses	-		-		-		(423,367)
	-		369,877		-		(48,370)

Net realized losses	(6,322)		365,938		(12,126)		(59,838)

Unrealized Gains (Losses)

Equity Securities:
Gross gains	94,228		669,059		94,228		1,291,933
Gross losses	288,506		(314,816)		-		(314,816)
	382,734		354,243		94,228		977,117

Other Investments:
Gross gains	(194,290)		106,341		508,492		402,028
Gross losses	-		-		-		-
	(194,290)		106,341		508,492		402,028

Net unrealized gains	188,444		460,584		602,720		1,379,145

Net gains on investments	$	182,122	$	826,522	$	590,594	$	1,319,307

Allowance for Credit Loss

For available-for-sale fixed maturity securities, a credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis. The allowance for credit losses related to available-for-sale fixed maturity securities is the difference between the present value of cash flows expected to be collected and the amortized cost basis, limited by the amount that the fair value is less than the amortized cost basis. The Company considers all available evidence when determining whether an investment requires a credit loss write-down or allowance to be recorded, which is recognized in net loss through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income (loss).

The Company did not identify any available-for-sale securities as of September 30, 2025 and December 31, 2024 which presented a risk of loss due to credit deterioration of the security.

At September 30, 2025 and December 31, 2024, there were 130 and 204 fixed-maturity securities, respectively, that accounted for the gross unrealized losses. The Company determined that none of the unrealized losses were deemed to be credit losses for its portfolio of investments for the nine months ended September 30, 2025 and 2024. Significant factors influencing the Company’s determination that unrealized losses were temporary included credit quality considerations, the magnitude of the unrealized losses in relation to each security’s cost, the nature of the investment and interest rate environment factors, and management’s intent and ability to hold the investment for a period of time sufficient to allow for an anticipated recovery of estimated fair value to the Company’s cost basis.

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The Company held available-for-sale securities with unrealized losses representing declines that were considered temporary at September 30, 2025 as follows:


	September 30, 2025
	Less than 12 months					12 months or more					Total
Category	Estimated Fair Value		Unrealized Losses		No. of Positions Held	Estimated Fair Value		Unrealized Losses		No. of Positions Held	Estimated Fair Value		Unrealized Losses

Available-for-Sale Securities:

U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	-	$	-	-	$	-	$	-	-	$	-	$	-

Political subdivisions of States, Territories and Possessions	-		-		-	13,917,340		(2,551,987)		12	13,917,340		(2,551,987)

Corporate and other bonds industrial and miscellaneous	15,265,950		(41,640)		17	48,232,706		(2,890,680)		57	63,498,656		(2,932,320)

Residential mortgage and other asset backed securities	6,226,193		(38,253)		8	34,133,806		(4,786,312)		36	40,359,999		(4,824,565)

Total fixed-maturity securities	$	21,492,143	$	(79,893)	25	$	96,283,852	$	(10,228,979)	105	$	117,775,995	$	(10,308,872)

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The Company held available-for-sale securities with unrealized losses representing declines that were considered temporary at December 31, 2024 as follows:


	December 31, 2024
	Less than 12 months					12 months or more					Total
Category	Estimated Fair Value		Unrealized Losses		No. of Positions Held	Estimated Fair Value		Unrealized Losses		No. of Positions Held	Estimated Fair Value		Unrealized Losses

Available-for-Sale Securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	-	$	-	-	$	-	$	-	-	$	-	$	-

Political subdivisions of States, Territories and Possessions	7,705,370		(73,589)		6	13,167,726		(3,324,491)		12	20,873,096		(3,398,080)

Corporate and other bonds industrial and miscellaneous	51,411,296		(1,024,461)		60	55,381,083		(4,690,597)		68	106,792,379		(5,715,058)

Residential mortgage and other asset backed securities	19,315,521		(209,890)		22	35,206,442		(6,211,339)		36	54,521,963		(6,421,229)

Total fixed-maturity securities	$	78,432,187	$	(1,307,940)	88	$	103,755,251	$	(14,226,427)	116	$	182,187,438	$	(15,534,367)

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Note 4 - Fair Value Measurements

The following table presents information about the Company’s investments that are measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 indicating the level of the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:


	September 30, 2025
	Level 1		Level 2		Level 3		Total

Fixed-maturity securities available-for-sale
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	1,008,130	$	-	$	-	$	1,008,130

Political subdivisions of States, Territories and Possessions	-		21,897,150		-		21,897,150

Corporate and other bonds industrial and miscellaneous	120,614,647		-		-		120,614,647

Residential mortgage and other asset backed securities	-		109,120,501		-		109,120,501
Total fixed maturities	121,622,777		131,017,651		-		252,640,428
Equity securities	10,409,833		-		-		10,409,833
Total investments, at fair value	$	132,032,610	$	131,017,651	$	-	$	263,050,261


	December 31, 2024
	Level 1		Level 2		Level 3		Total

Fixed-maturity securities available-for-sale
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	-	$	-	$	-	$	-

Political subdivisions of States, Territories and Possessions	-		20,873,097		-		20,873,097

Corporate and other bonds industrial and miscellaneous	106,792,378		-		-		106,792,378

Residential mortgage and other asset backed securities	-		59,227,963		-		59,227,963
Total fixed maturities	106,792,378		80,101,060		-		186,893,438
Equity securities	10,296,505		-		-		10,296,505
Total investments, at fair value	$	117,088,883	$	80,101,060	$	-	$	197,189,943

The following table sets forth the Company’s investment in a hedge fund measured at Net Asset Value (“NAV”) per share as of September 30, 2025 and December 31, 2024. The Company measures this investment at fair value on a recurring basis. Fair value using NAV per share is as follows as of the dates indicated:


Category	September 30, 2025		December 31, 2024

Other Investments
Hedge fund	$	4,889,148	$	4,380,656

The hedge fund investment is generally redeemable with at least 45 days prior written notice. The hedge fund investment is accounted for as a limited partnership by the Company. Income is earned based upon the Company’s allocated share of the partnership's changes in unrealized gains and losses to its partners, which are recorded in the condensed consolidated statements of income and comprehensive income within net gains on investments.

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Note 5 - Fair Value of Financial Instruments and Real Estate

The estimated fair values of the Company’s financial instruments and real estate, including their fair value level as of September 30, 2025 and December 31, 2024 are as follows:


	September 30, 2025				December 31, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value

Fixed-maturity securities, held-to maturity, Level 1	$	6,043,708	$	5,174,675	$	7,047,342	$	5,959,265
Fixed-maturity securities, available-for-sale, Level 1	$	121,622,777	$	121,622,777	$	106,792,378	$	106,792,378
Fixed-maturity securities, available-for-sale, Level 2	$	131,017,651	$	131,017,651	$	80,101,060	$	80,101,060
Cash and cash equivalents, Level 1	$	26,772,302	$	26,772,302	$	28,669,441	$	28,669,441
Premiums receivable, net, Level 1	$	18,252,649	$	18,252,649	$	21,766,988	$	21,766,988
Reinsurance receivables, net, Level 3	$	60,019,060	$	60,019,060	$	69,322,436	$	69,322,436
Real estate, net of accumulated depreciation, Level 3 (1)	$	460,031	$	940,000	$	1,913,390	$	3,540,000
Reinsurance balances payable, Level 3	$	5,690,029	$	5,690,029	$	10,509,121	$	10,509,121
Debt - 13.75% Senior Notes due 2026, Level 2	$	-	$	-	$	5,508,000	$	5,553,785

(1) As of December 31, 2024, real estate consisted of a complex which included an office building, a house and vacant land located in Kingston, New York. In March 2025, the office building and house were sold, leaving the vacant land as the only remaining real estate as of September 30, 2025. See Note 14 - Sale of Real Estate.

Note 6 – Property and Casualty Insurance Activity

Premiums Earned

Premiums written, ceded and earned are as follows:


	Direct		Assumed		Ceded		Net

Nine months ended September 30, 2025
Premiums written	$	195,047,268	$	-	$	(50,178,287)	$	144,868,981
Change in unearned premiums	(5,339,407)		-		(1,866,198)		(7,205,605)
Premiums earned	$	189,707,861	$	-	$	(52,044,485)	$	137,663,376

Nine months ended September 30, 2024
Premiums written	$	169,446,603	$	-	$	(69,381,336)	$	100,065,267
Change in unearned premiums	(14,353,242)		-		6,818,683		(7,534,559)
Premiums earned	$	155,093,361	$	-	$	(62,562,653)	$	92,530,708

Three months ended September 30, 2025
Premiums written	$	75,809,863	$	-	$	(44,160,963)	$	31,648,900
Change in unearned premiums	(9,778,044)		-		26,054,197		16,276,153
Premiums earned	$	66,031,819	$	-	$	(18,106,766)	$	47,925,053

Three months ended September 30, 2024
Premiums written	$	66,626,664	$	-	$	(46,081,473)	$	20,545,191
Change in unearned premiums	(12,540,101)		-		25,402,104		12,862,003
Premiums earned	$	54,086,563	$	-	$	(20,679,369)	$	33,407,194

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Premium receipts in advance of the policy effective date are recorded as advance premiums. The balance of advance premiums as of September 30, 2025 and December 31, 2024 was $7,711,957 and $3,503,063, respectively.

Loss and Loss Adjustment Expense Reserves

The following table provides a reconciliation of the beginning and ending balances for unpaid loss and LAE reserves:


	Nine months ended September 30,		Year ended December 31,
	2025		2024

Balance at beginning of period	$	126,210,428	$	121,817,862
Less reinsurance recoverables	(32,322,637)		(33,288,650)
Net balance, beginning of period	93,887,791		88,529,212

Incurred related to:
Current year	67,156,741		64,414,543
Prior years	(822,177)		(1,779,827)
Total incurred	66,334,564		62,634,716

Paid related to:
Current year	29,492,987		32,956,899
Prior years	24,351,681		24,319,238
Total paid	53,844,668		57,276,137

Net balance at end of period	106,377,687		93,887,791
Add reinsurance recoverables	34,816,559		32,322,637
Balance at end of period	$	141,194,246	$	126,210,428

Incurred losses and LAE are presented net of reinsurance recoveries under reinsurance contracts of $16,313,217 and $13,744,230 for the nine months ended September 30, 2025 and 2024, respectively.

Prior year incurred loss and LAE development is based upon estimates by line of business and accident year. Prior year loss and LAE development incurred during the nine months ended September 30, 2025 and 2024 was $822,177 favorable and $1,637,038 favorable, respectively. Management, on a quarterly basis, performs a review of open liability claims to assess carried case and incurred but not reported (“IBNR”) reserve levels, giving consideration to both Company and industry trends.

Loss and LAE Reserves

The reserving process for loss and LAE reserves provides for the Company’s best estimate at a particular point in time of the ultimate unpaid cost of all losses and LAE incurred, including settlement and administration of losses, and is based on facts and circumstances then known including losses that have occurred but that have not yet been reported. The process relies on standard actuarial reserving methodologies, judgments relative to estimates of ultimate claim severity and frequency, the length of time before losses will develop to their ultimate level (‘tail’ factors), and the likelihood of changes in the law or other external factors that are beyond the Company’s control. Several actuarial reserving methodologies are used to estimate required loss reserves. The process produces carried reserves set by management based upon the actuaries’ best estimate and is the cumulative combination of the best estimates made by line of business, accident year, and loss and LAE. The amount of loss and LAE reserves for individual reported claims (the “case reserve”) is determined by the claims department and changes over time as new information is gathered. Such information is critical to the review of appropriate IBNR reserves and includes a review of coverage applicability, comparative liability on the part of the insured, injury severity, property damage, replacement cost estimates, and any other information considered pertinent to estimating the exposure presented by the claim. The amounts of loss and LAE reserves for unreported claims and development on known claims (IBNR reserves) are determined using historical information aggregated by line of business as adjusted to current conditions. Since this process produces loss reserves set by management based upon the actuaries’ best estimate, there is no explicit or implicit provision for uncertainty in the carried loss reserves.

Due to the inherent uncertainty associated with the reserving process, the ultimate liability may differ, perhaps substantially, from the original estimate. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current period’s

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results. Reserves are closely monitored and are recomputed periodically using the most recent information on reported claims and a variety of statistical techniques. On at least a quarterly basis, the Company reviews by line of business existing reserves, new claims, changes to existing case reserves, and paid losses with respect to the current and prior periods. Several methods are used, varying by line of business and accident year, in order to select the estimated period-end loss reserves. These methods include the following:

Paid Loss Development – historical patterns of paid loss development are used to project future paid loss emergence in order to estimate required reserves.

Incurred Loss Development – historical patterns of incurred loss development, reflecting both paid losses and changes in case reserves, are used to project future incurred loss emergence in order to estimate required reserves.

Paid Bornhuetter-Ferguson (“BF”) – an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been paid, based on historical paid loss development patterns. The estimate of required reserves assumes that the remaining unpaid portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of paid losses exists at the early stages of the claims development process.

Incurred Bornhuetter-Ferguson (“BF”) - an estimated loss ratio for a particular accident year is determined, and is weighted against the portion of the accident year claims that have been reported, based on historical incurred loss development patterns. The estimate of required reserves assumes that the remaining unreported portion of a particular accident year will pay out at a rate consistent with the estimated loss ratio for that year. This method can be useful for situations where an unusually high or low amount of reported losses exists at the early stages of the claims development process.

Incremental Claim-Based Methods – historical patterns of incremental incurred losses and paid LAE during various stages of development are reviewed and assumptions are made regarding average loss and LAE development applied to remaining claims inventory. Such methods more properly reflect changes in the speed of claims closure and the relative adequacy of case reserve levels at various stages of development. These methods may provide a more accurate estimate of IBNR for lines of business with relatively few remaining open claims but for which significant recent settlement activity has occurred.

Frequency / Severity Based Methods – historical measurements of claim frequency and average paid claim size (severity) are reviewed for more mature accident years where a majority of claims have been reported and/or closed. These historical averages are trended forward to more recent periods in order to estimate ultimate losses for newer accident years that are not yet fully developed. These methods are useful for lines of business with slow and/or volatile loss development patterns, such as liability lines where information pertaining to individual cases may not be completely known for many years. The claim frequency and severity information for older periods can then be used as reasonable measures for developing a range of estimates for more recent immature periods.

Management’s best estimate of required reserves is generally based on an average of the methods above, with appropriate weighting of methods based on the line of business and accident year being projected. In some cases, additional methods or historical data from industry sources are employed to supplement the projections derived from the methods listed above.

Three key assumptions that materially affect the estimate of loss reserves are the loss ratio estimate for the current accident year used in the BF methods, the loss development factor selections used in the loss development methods, and the loss severity assumptions used in the frequency / severity method described above. The loss ratio estimates used in the BF methods are selected after reviewing historical accident year loss ratios adjusted for rate changes, trend, and mix of business. The severity assumptions used in the frequency / severity method are determined by reviewing historical average claim severity for older more mature accident periods, trended forward to less mature accident periods.

The Company reviews the carried reserves levels on a regular basis as additional information becomes available and makes adjustments in the periods in which such adjustments are determined to be necessary. The Company is not aware of any claim trends that have emerged or that would cause future adverse development that have not already been contemplated in setting current carried reserves levels.

In New York State, lawsuits for negligence are subject to certain limitations and must be commenced within three years from the date of the accident or are otherwise barred. Accordingly, the Company’s exposure to unreported claims (“pure” IBNR) for accident dates of September 30, 2022 and prior is limited, although there remains the possibility of adverse development on reported claims (“case development” IBNR). In certain rare circumstances states have retroactively revised a statute of limitations. The Company is not aware of any such effort that would have a material impact on the Company’s results.

The following is information about incurred and paid claims development as of September 30, 2025, net of reinsurance, as well as the cumulative reported claims by accident year and total IBNR reserves as of September 30, 2025 included in the net incurred loss and allocated expense amounts. The historical information regarding incurred and paid claims development for the years ended December 31, 2016 to December 31, 2024 is presented as supplementary unaudited information.

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All Lines of Business

(in thousands, except reported claims data)


	Incurred Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance																				As of September 30, 2025
Accident Year	For the Years Ended December 31,																		Nine Months Ended September 30, 2025		IBNR		Cumulative Number of Reported Claims by Accident Year
	2016		2017		2018		2019		2020		2021		2022		2023		2024

	(Unaudited 2016 - 2024)																		(Unaudited)

2016	$	26,062	$	24,941	$	24,789	$	27,887	$	27,966	$	27,417	$	27,352	$	27,271	$	27,247	$	27,201	$	61	2,884
2017			31,605		32,169		35,304		36,160		36,532		36,502		36,819		37,268		37,267		57		3,401
2018					54,455		56,351		58,441		59,404		61,237		61,145		61,686		61,150		891		4,238
2019							75,092		72,368		71,544		71,964		73,310		74,363		74,937		1,445		4,508
2020									63,083		62,833		63,217		63,562		64,400		65,655		878		5,896
2021											96,425		96,673		96,134		96,771		97,737		1,810		5,835
2022													79,835		78,759		78,078		77,307		2,875		4,719
2023															78,978		72,025		70,965		6,776		4,097
2024																	57,860		56,848		9,194		3,133
2025																			60,990		18,455		1,713
																	Total		$	630,055

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(in thousands)


	Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	For the Years Ended December 31,																		Nine Months Ended September 30, 2025
	2016		2017		2018		2019		2020		2021		2022		2023		2024
	(Unaudited 2016 - 2024)																		(Unaudited)

2016	$	15,364	$	19,001	$	21,106	$	23,974	$	25,234	$	25,750	$	26,382	$	26,854	$	26,808	$	26,876
2017			16,704		24,820		28,693		31,393		32,529		33,522		34,683		35,046		35,312
2018					32,383		44,516		50,553		52,025		54,424		56,199		57,185		57,762
2019							40,933		54,897		58,055		60,374		63,932		66,109		68,418
2020									39,045		50,719		53,432		56,523		59,220		60,618
2021											56,282		77,756		82,317		85,314		89,642
2022													45,856		65,732		68,170		69,314
2023															46,280		56,952		58,585
2024																	29,013		39,171
2025																			26,364
																	Total		$	532,062

Net liability for unpaid loss and allocated loss adjustment expenses for the accident years presented																			$	97,994
All outstanding liabilities before 2016, net of reinsurance																			1,539
Liabilities for loss and allocated loss adjustment expenses, net of reinsurance																			$	99,533

(Components may not sum to totals due to rounding)

Reported claim counts are measured on an occurrence or per event basis. A single claim occurrence could result in more than one loss type or claimant; however, the Company counts claims at the occurrence level as a single claim regardless of the number of claimants or claim features involved.

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The reconciliation of the net incurred and paid loss development tables to the loss and LAE reserves in the condensed consolidated balance sheet is as follows:

Reconciliation of the Disclosure of Incurred and Paid Loss Development

to the Liability for Loss and LAE Reserves


(in thousands)	As of September 30, 2025
Liabilities for allocated loss and loss adjustment expenses, net of reinsurance	$	99,533
Total reinsurance recoverable on unpaid losses	34,817
Unallocated loss adjustment expenses	6,845
Total gross liability for loss and LAE reserves	$	141,194

Reinsurance

On January 1, 2024, the Company entered into a 27% quota share reinsurance treaty for its personal lines business, which primarily consisted of homeowners’ and dwelling fire policies covering the period from January 1, 2024 through January 1, 2025 (“2024/2025 Treaty”). Upon the expiration of the 2024/2025 Treaty on January 1, 2025, the Company entered into a new 16% quota share reinsurance treaty for its personal lines business, covering the period from January 1, 2025 through January 1, 2026 (“2025/2026 Treaty”).

The Company’s excess of loss and catastrophe reinsurance treaties expired on June 30, 2025 and the Company entered into new excess of loss and catastrophe reinsurance treaties effective July 1, 2025. The new catastrophe reinsurance treaties include the issuance of a $125,000,000 catastrophe bond ("Series 2025-1 Notes"). The Series 2025-1 Notes were priced at 4.5% and issued through a Bermuda-registered special purpose insurer, 1886 Re Ltd., providing KICO with $125,000,000 of collateralized reinsurance protection. The Series 2025-1 Notes offer multi-year protection against named storm events across New York, New Jersey, Connecticut, Massachusetts and Rhode Island on an indemnity trigger and per-occurrence basis. The Series 2025-1 Notes, which were structured and placed by AON Securities LLC, cover four annual risk periods from July 1, 2025, through June 30, 2029.

Effective January 1, 2024, the Company renewed an underlying excess of loss reinsurance treaty (“Underlying XOL Treaty”) covering the period from January 1, 2024 through January 1, 2025. The treaty provided 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Losses from named storms are excluded from the treaty. Effective January 1, 2025, the Underlying XOL Treaty was renewed covering the period from January 1, 2025 through June 30, 2025. Effective July 1, 2025, the Underlying XOL Treaty was renewed along with the Company's excess of loss reinsurance treaty covering the period from July 1, 2025 through June 30, 2026. Combined, the renewed treaties provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. For the period October 1, 2024 through April 30, 2025, the Company purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, the Company purchased catastrophe reinsurance which provides coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000. Material terms for reinsurance treaties in effect for the treaty years shown below are as follows:

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	Treaty Period
			2025/2026 Treaty						2024/2025 Treaty
Line of Business	January 2, 2026 to June 30, 2026		July 1, 2025 to January 1, 2026			January 2, 2025 to June 30, 2025			July 1, 2024 to January 1, 2025			January 1, 2024 to June 30, 2024

Personal Lines:
Homeowners, dwelling fire and canine legal liability
Quota share treaty:
Percent ceded (6)	(5)		16		%	16		%	27		%	27		%
Risk retained on initial
$1,000,000 of losses (4) (5) (6)	(5)		$	840,000		$	840,000		$	730,000		$	730,000
Losses per occurrence
subject to quota share
reinsurance coverage	(5)		$	1,000,000		$	1,000,000		$	1,000,000		$	1,000,000
Expiration date	(5)		January 1, 2026			January 1, 2026			January 1, 2025			January 1, 2025
Excess of loss coverage and
facultative facility
coverage (1) (4) (5)	$	8,250,000	$	8,250,000		$	8,400,000		$	8,400,000		$	8,400,000
	in excess of		in excess of			in excess of			in excess of			in excess of
	$	750,000	$	750,000		$	600,000		$	600,000		$	600,000
Total reinsurance coverage
per occurrence (4) (5)	$	8,125,000	$	8,285,000		$	8,360,000		$	8,470,000		$	8,470,000
Losses per occurrence
subject to reinsurance
coverage (5)	$	9,000,000	$	9,000,000		$	9,000,000		$	9,000,000		$	9,000,000
Expiration date	June 30, 2026		June 30, 2026			June 30, 2025			June 30, 2025			June 30, 2024

Catastrophe Reinsurance:
Initial loss subject to personal
lines quota share treaty (5)	(5)		$	10,000,000		$	10,000,000		$	10,000,000		$	10,000,000
Risk retained per catastrophe
occurrence (5) (6) (7) (8)	$	6,000,000	$	5,000,000		$	4,250,000		$	4,750,000		$	9,500,000
Catastrophe loss
coverage (2) (5) (8)	$	434,000,000	$	435,000,000		$	275,000,000		$	275,000,000		$	315,000,000

Reinstatement premium
protection (3)	Yes		Yes			Yes			Yes			Yes

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(1)For personal lines, includes the addition of an automatic facultative facility allowing KICO to obtain homeowners single risk coverage up to $9,000,000 in total insured value, which covers direct losses from $3,500,000 to $9,000,000 through June 30, 2025.

(2)Catastrophe coverage is limited on an annual basis to two times the per occurrence amounts, except for one occurrence on 80% of the first layer of $5,000,000 in excess of $5,000,000, and one occurrence on 52% of the top layer of $240,000,000 in excess of $200,000,000, which is covered under the catastrophe bond. Duration of 168 consecutive hours for a catastrophe occurrence from windstorm, hail, tornado, hurricane and cyclone.

(3)For the period July 1, 2024 through June 30, 2025 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000. For the period July 1, 2025 through June 30, 2026 (expiration date of the catastrophe reinsurance treaty), reinstatement premium protection for $50,000,000 of catastrophe coverage in excess of $10,000,000.

(4)For the period January 1, 2024 through June 30, 2025, the Underlying XOL Treaty provides 50% reinsurance coverage for losses of $400,000 in excess of $600,000. Excludes losses from named storms. Reduces retention to $530,000 from $730,000 under the 2024/2025 Treaty. Retention increases to $640,000 from $530,000 under the 2025/2026 Treaty. For the period July 1, 2025 through June 30, 2026, the Underlying XOL Treaty combined with the excess of loss treaty provide 50% reinsurance coverage for losses of $250,000 in excess of $750,000, and 100% reinsurance coverage for losses in excess of $1,000,000 up to $9,000,000 together with facultative coverage. Increased retention to $715,000 from $640,000 under the 2025/2026 Treaty (see note 5 below).

(5)The personal lines quota share treaty (homeowners, dwelling fire and canine liability) will expire on January 1, 2026, with none of these coverages to be in effect during the period from January 2, 2026 through June 30, 2026. If and when this treaty is renewed on January 2, 2026, the personal lines quota share treaty will be as provided for therein. Reinsurance coverage in effect from January 2, 2026 through June 30, 2026 is only for excess of loss, Underlying XOL, and catastrophe reinsurance treaties.

(6)For the 2024/2025 Treaty, 22% of the 27% total of losses ceded under this treaty are excluded from a named catastrophe event. For the 2025/2026 Treaty, 6% of the 16% total of losses ceded under this treaty are excluded from a named catastrophe event.

(7)Plus losses in excess of catastrophe coverage.

(8)Effective July 1, 2025 through June 30, 2026, catastrophe coverage is 80% of the first layer of $5,000,000 in excess of $5,000,000. The remaining coverage is at 100% of $430,000,000 in excess of $10,000,000. For the period October 1, 2024 through April 30, 2025, additional catastrophe reinsurance treaty provided coverage for winter storm losses to the extent of 71% of $4,500,000 in excess of $5,500,000. For the period October 15, 2025 through April 30, 2026, additional catastrophe reinsurance treaty will provide coverage for winter storm losses to the extent of 90% of $5,000,000 in excess of $5,000,000. Retention for winter storms under this treaty is $4,800,000 under the 2024/2025 Treaty, $5,200,000 under the 2025/2026 Treaty from January 1, 2025 through April 30, 2025, and $3,900,000 from October 15, 2025 through January 1, 2026, the expiration date of the 2025/2026 Treaty.

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	Treaty Year
Line of Business	July 1, 2025 to June 30, 2026			July 1, 2024 to June 30, 2025			July 1, 2023 to June 30, 2024

Personal Lines:
Personal Umbrella
Quota share treaty:
Percent ceded - first $1,000,000 of coverage	90		%	90		%	90		%
Percent ceded - excess of $1,000,000 dollars of coverage	95		%	95		%	95		%
Risk retained	$	300,000		$	300,000		$	300,000
Total reinsurance coverage per occurrence	$	4,700,000		$	4,700,000		$	4,700,000
Losses per occurrence subject to quota share reinsurance coverage	$	5,000,000		$	5,000,000		$	5,000,000
Expiration date	June 30, 2026			June 30, 2025			June 30, 2024

Commercial Lines (1)

(1)Coverage on all commercial lines policies expired in September 2020; reinsurance coverage is based on treaties in effect on the date of loss.

The Company’s reinsurance program has been structured to enable the Company to grow its premium volume while maintaining regulatory capital and other financial ratios generally within or below the expected ranges used for regulatory oversight purposes. The reinsurance program also provides income as a result of ceding commissions earned pursuant to the quota share reinsurance contracts. The Company’s participation in reinsurance arrangements does not relieve the Company of its obligations to policyholders.

Ceding Commission Revenue

The Company earned ceding commission revenue under the 2025/2026 Treaty for the three and nine months ended September 30, 2025 based on: (i) a fixed provisional commission rate at which provisional ceding commissions were earned, and (ii) a sliding scale ("Sliding Scale") of commission rates and ultimate treaty year loss ratio on the policies reinsured under this agreement based upon which contingent ceding commissions are earned. The Sliding Scale includes minimum and maximum commission rates in relation to specified ultimate loss ratios. The commission rate and contingent ceding commissions earned increase when the estimated ultimate loss ratio decreases and, conversely, the commission rate and contingent ceding commissions earned decrease when the estimated ultimate loss ratio increases.

The Company earned ceding commission revenue under the 2024/2025 Treaty for the three and nine months ended September 30, 2024, based on a fixed provisional commission rate at which provisional ceding commissions were earned.

Ceding commission revenue consists of the following:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Provisional ceding commissions earned	$	3,555,260	$	4,742,557	$	10,195,169	$	13,859,795
Contingent ceding commissions earned	1,345,141		(881)		745,479		10,953
	$	4,900,401	$	4,741,676	$	10,940,648	$	13,870,748

Provisional ceding commissions are settled monthly. Balances due to or from reinsurers for contingent ceding commissions on the 2025/2026 Treaty will be settled annually based on the Loss Ratio of the treaty year that ends on January 1. Balances due to or from reinsurers for contingent ceding commissions on quota share treaties are settled periodically based on the Loss Ratio of each treaty year that ends on June 30 for the expired treaties (which had June 30 expiration dates) that were subject to contingent commissions. As discussed above, the Loss Ratios from prior years’ treaties are subject to change as incurred losses from those periods develop, resulting in an increase or decrease in the commission rate and contingent ceding commissions earned. As of September 30, 2025, contingent ceding commissions receivable from reinsurers under the 2025/2026 Treaty was approximately $751,000, which is recorded in other assets on the accompanying condensed consolidated balance sheets. As of September 30, 2025 and December 31, 2024, net contingent

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ceding commissions payable to reinsurers under all other treaties was approximately $732,000 and $727,000, respectively, which is recorded in reinsurance balances payable on the accompanying condensed consolidated balance sheets.

Expected Credit Losses – Uncollectible Reinsurance

The Company reviews reinsurance receivables which relate to both amounts already billed on ceded paid losses as well as ceded reserves that will be billed when losses are paid in the future. The Company has not recorded an allowance for uncollectible reinsurance as there is no perceived credit risk. The principal credit quality indicator used in the valuation of the allowance for reinsurance receivables is the financial strength rating of the reinsurer sourced from major rating agencies. Changes in the allowance for credit losses are presented as a component of other underwriting expenses on the condensed consolidated statements of income and comprehensive income.

Note 7 – Debt

Federal Home Loan Bank

In July 2017, KICO became a member of, and invested in, the FHLBNY. KICO is required to maintain an investment in the capital stock of FHLBNY. Based on the redemption provisions of FHLBNY, the stock has no quoted market value and is carried at cost. At its discretion, FHLBNY may declare dividends on the stock. Management reviews the stock for impairment based on the ultimate recoverability of the cost basis in the stock. At September 30, 2025 and December 31, 2024, no impairment has been recognized. FHLBNY members have access to a variety of flexible, low cost funding through FHLBNY’s credit products, enabling members to customize advances, which are to be fully collateralized. Eligible collateral to pledge to FHLBNY includes residential and commercial mortgage-backed securities, along with U.S. Treasury and agency securities. See Note 3 – Investments for eligible collateral held in a designated custodian account available for future advances. Advances are limited to 5% of KICO’s net admitted assets under statutory insurance principles as of the previous quarter. On July 6, 2023, A.M. Best withdrew KICO’s ratings as KICO requested to no longer participate in A.M. Best’s interactive rating process. As a result of the withdrawal of A.M. Best ratings, prior to April 15, 2025, KICO was only able to borrow on an overnight basis. Effective April 15, 2025, based on KICO's credit rating from FHLBNY, KICO can now borrow for a term of up to five years. If KICO has sufficient available collateral (as discussed below), based on KICO’s net admitted assets, the maximum allowable advance as of September 30, 2025 and December 31, 2024 was approximately $15,801,000 and $13,637,000, respectively. The estimated fair value of available collateral as of September 30, 2025 and December 31, 2024 was approximately $9,779,000 and $10,130,000, respectively. Effective April 15, 2025, advances are limited to 91% of the amount of available collateral. Prior to April 15, 2025, advances were limited to 85% of the amount of available collateral. There were no borrowings under this facility during the nine months ended September 30, 2025 and 2024.

Debt

Debt as of September 30, 2025 and December 31, 2024 consists of the following:


	September 30, 2025		December 31, 2024

13.75% Senior Notes due 2026, net	$	-	$	5,508,000
Equipment financing	4,752,684		5,663,420
Balance at end of period	$	4,752,684	$	11,171,420

Exchange Agreements

General

On December 9, 2022, the Company entered into a Note and Warrant Exchange Agreement (the “2022 Exchange Agreement”) with several holders (the “2022 Exchanging Noteholders”) of the Company’s outstanding 5.50% Senior Notes due 2022 (the “2017 Notes”). On the date of the 2022 Exchange Agreement, the 2022 Exchanging Noteholders held 2017 Notes in the aggregate principal amount of $21,545,000 of the $30,000,000 aggregate principal amount of the 2017 Notes then outstanding. Pursuant to the 2022 Exchange Agreement, on December 15, 2022, the 2022 Exchanging Noteholders exchanged their respective 2017 Notes for the following: (i) new 12.0% Senior Notes due December 30, 2024 of the Company in the aggregate approximate principal amount of $19,950,000 (the “2022 Notes”); (ii) cash in the aggregate approximate amount of $1,595,000, together with accrued interest on the 2017 Notes; and (iii) three-year warrants for the purchase of an aggregate of 969,525 shares of Common Stock of the Company, exercisable until December 30, 2025 at an exercise price of $1.00 per share (the “Warrants”). The remaining $8,455,000 principal amount of the 2017 Notes, together with accrued interest thereon, was paid on the maturity date of the 2017 Notes of December 30, 2022.

On August 30, 2024, the Company entered into a Note Exchange Agreement (the “2024 Exchange Agreement”) with the holders (the “2024 Exchanging Noteholders”) of the Company’s outstanding 2022 Notes in the aggregate principal amount of $19,950,000. Pursuant to the 2024 Exchange Agreement, on September 12, 2024, the 2024 Exchanging Noteholders exchanged their respective 2022 Notes for

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the following: (i) new 13.75% Senior Notes due June 30, 2026 of the Company in the aggregate principal amount of $14,950,000 (the “2024 Notes”); and (ii) cash in the aggregate amount of $5,000,000, together with accrued interest on the 2022 Notes (the "2024 Exchange"). See “2024 Notes” below for a discussion of a change in the expiration date of the Warrants.

The Company analyzed the 2024 Exchange Agreement under the FASB's Accounting Standards Codification ("ASC") 470–50 Debt—Modifications and Extinguishments. The Company determined that extinguishment accounting was applicable, as the present value of the cash flows of the 2024 Notes differed by more than 10% from the 2022 Notes, making it a substantial change in terms. As a result, the 2022 Notes were derecognized and the 2024 Notes recorded at fair value. No gain or loss was recognized on the 2024 Exchange. Unamortized debt issue costs of $296,533 related to extinguished debt were expensed at the time the 2022 Notes were extinguished and recorded as loss on extinguishment of debt. Fees paid to third parties of $203,381 have been capitalized and are being amortized as debt issuance costs associated with the 2024 Notes.

2024 Notes

As discussed above, on September 12, 2024, the Company issued the 2024 Notes in the aggregate principal amount of $14,950,000 pursuant to the 2024 Exchange Agreement. Interest was payable semi-annually in arrears on June 30 and December 30 of each year at the rate of 13.75% per annum. Pursuant to the 2024 Exchange Agreement, the expiration date of the Warrants to purchase 969,525 shares of Common Stock of the Company was extended to June 30, 2026 from December 30, 2025 (see Note 8 – Stockholders’ Equity) and transaction costs were $203,381, for an effective yield of 14.35% per annum. The balance of the 2024 Notes as of September 30, 2025 and December 31, 2024 was as follows:


	September 30, 2025		December 31, 2024

13.75% Senior Notes due 2026	$	-	$	5,950,000
Warrants	-		(256,909)
Issuance costs	-		(185,091)
2024 Notes, net	$	-	$	5,508,000

The 2024 Notes were redeemable, at the Company’s option, in whole or in part, at any time or in part from time to time, on and after September 12, 2024, upon not less than fifteen (15) and not more than sixty (60) days’ notice, equal to 100% of the principal amount of the 2024 Notes, plus, in each case, accrued and unpaid interest, if any, to the date of redemption subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

The 2024 Exchange Agreement provided for mandatory prepayments of principal. The 2024 Exchange Agreement provided for a first mandatory pro rata partial prepayment of principal on the 2024 Notes in the aggregate amount of $3,000,000 on June 30, 2025, less the principal amount of any optional prepayments of the 2024 Note made prior to June 30, 2025, pursuant to the 2024 Exchange Agreement. The 2024 Exchange Agreement provided for a second mandatory pro rata partial prepayment of principal on the 2024 Notes in the aggregate amount of $3,000,000 on December 30, 2025, less the principal amount of (i) any optional prepayments of the 2024 Notes made from June 30, 2025 to December 29, 2025 pursuant to the 2024 Note Exchange Agreement and (ii) any optional The Company made optional prepayments of $3,000,000 on September 30, 2024, $2,000,000 on November 13, 2024, $4,000,000 on December 30, 2024, $3,500,000 on January 28, 2025, and $2,450,000 on February 24, 2025, and accordingly, has satisfied the entire principal balance of the 2024 Notes. Each prepayment of principal also included accrued and unpaid interest thereon. Unamortized debt issue costs of $174,962 related to extinguished debt were expensed at the time the 2024 Notes were extinguished and recorded as loss on extinguishment of debt in the condensed consolidated statements of income and comprehensive income within other operating expenses.

The 2024 Notes were unsecured obligations of the Company and were not the obligations of or guaranteed by any of the Company’s subsidiaries. The 2024 Notes ranked senior in right of payment to any of the Company’s existing and future indebtedness that is by its terms expressly subordinated or junior in right of payment to the 2024 Notes. The Notes ranked equally in right of payment to all of the Company’s existing and future senior indebtedness, but were effectively subordinated to any secured indebtedness to the extent of the value of the collateral securing such secured indebtedness. In addition, the 2024 Notes were structurally subordinated to the indebtedness and other obligations of the Company’s subsidiaries.

As of the end of each calendar quarter, commencing with the calendar quarter ending September 30, 2024, the Company was subject to a leverage maintenance test (“Leverage Maintenance Test”), which required that the Total Consolidated Indebtedness (as defined below) of the Company not be greater than 30% of Total Consolidated Capitalization (as defined below). As of December 31, 2024, the ratio as defined under the Leverage Maintenance Test was 7.0%. “Total Consolidated Indebtedness” was the aggregate principal amount (or accreted value in the case of any Indebtedness issued with more than de minimis original issue discount) of all outstanding long-term debt of the Company except for the sale-leaseback transaction described below under “Equipment Financing”, any refinancing or any future sale-leaseback transaction. “Total Consolidated Capitalization” was the amount equal to the sum of (x) Total Consolidated Indebtedness outstanding as of such date and (y) the total consolidated shareholders’ equity of the Company, excluding accumulated other comprehensive (loss) income, as recorded on the Company’s consolidated balance sheet.

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Equipment Financing

On October 27, 2022, KICO entered into a sale-leaseback transaction, whereby KICO sold $8,096,824 of fixed assets to a bank. Under GAAP, the sale-leaseback transaction is recorded as equipment financing (“Financing”). The provisions of the Financing require KICO to pay a monthly payment of principal and interest at the rate of 5.86% per annum totaling $126,877 for a term of 60 months, which commenced on October 27, 2022. The terms of the Financing provide buyout options to KICO at the end of the 60 month term, which are as follows:

•At the end of the lease, KICO may purchase the fixed assets for a purchase price of $2,024,206, which is 25% of the original fixed asset cost of $8,096,824; or

•KICO may renew the lease for 16 months at the same rental rate, which totals $2,030,036.

A provision of the Financing requires KICO to pledge collateral for the lease obligation. As of September 30, 2025 and December 31, 2024, the amount of required collateral was approximately $4,039,000 and $5,308,000, respectively. As of September 30, 2025 and December 31, 2024, the fair value of KICO’s pledged collateral was approximately $4,039,000 and $5,308,000, respectively, in various fixed-maturity securities.

Future contractual payment obligations under the Financing as of September 30, 2025 are as follows:


For the Years Ending December 31,	Total
Remainder of 2025	$	312,557
2026	1,296,900
2027	1,119,021
	2,728,478
2028 purchase price	2,024,206
Total	$	4,752,684

Note 8 – Stockholders’ Equity

Dividends Declared and Paid

On July 22, 2025, the Company’s Board of Directors approved a quarterly dividend of $0.05 per share which was paid in cash on August 26, 2025 to stockholders of record as of the close of business on August 11, 2025. See Note 15 - Subsequent Events, Dividend Declared.

Preferred Stock

The Board of Directors has the authority to issue shares of Preferred Stock from time to time in a series and to fix, before the issuance of each series, the number of shares in each series and the designation, liquidation preferences, conversion privileges, rights and limitations of each series. There was no preferred stock issued as of September 30, 2025 and December 31, 2024.

2014 Equity Participation Plan

Effective August 12, 2014, the Company's stockholders approved the 2014 Equity Participation Plan (the “2014 Plan”) pursuant to which a maximum of 700,000 shares of Common Stock of the Company were initially authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses. Incentive stock options granted under the 2014 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory stock options granted under the 2014 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determined the vesting provisions for stock awards granted under the 2014 Plan, subject to the provisions of the 2014 Plan. On August 5, 2020, the Company’s stockholders approved amendments to the 2014 Plan, including an increase in the maximum number of shares of Common Stock of the Company that were authorized to be issued pursuant to the 2014 Plan to 1,400,000. On August 9, 2023, the Company’s stockholders approved an amendment to the 2014 Plan to increase the maximum number of shares of Common Stock of the Company that were authorized to be issued pursuant to the 2014 Plan to 1,900,000. The 2014 Plan terminated on August 12, 2024 and no further awards may be granted under the 2014 Plan.

2024 Equity Participation Plan

Effective August 7, 2024, the Company's stockholders approved the 2024 Equity Participation Plan (the “2024 Plan”) pursuant to which a maximum of 1,000,000 shares of Common Stock of the Company are authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, and stock bonus awards. Incentive stock options granted under the 2024 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory

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stock options granted under the 2024 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determines the vesting provisions for stock awards granted under the 2024 Plan, subject to the provisions of the 2024 Plan. The 2024 Plan terminates on May 10, 2034 and no further awards may be granted under the 2024 Plan after such date.

As of September 30, 2025, there were 199,515 shares of Common Stock granted under the 2024 Plan.

Stock Options

The results of operations for the three months ended September 30, 2025 and 2024 include stock-based compensation expense for stock options totaling approximately $22,000 and $53,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of income and comprehensive income. The results of operations for the nine months ended September 30, 2025 and 2024 include stock-based compensation expense for stock options totaling approximately $67,000 and $159,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of income and comprehensive income. Stock-based compensation expense related to stock options for the nine months ended September 30, 2025 is net of estimated forfeitures of approximately 19%.

No options were granted during the nine months ended September 30, 2025. The weighted average estimated fair value of stock options granted during the nine months ended September 30, 2024 was $1.24 per share. The fair value of stock options at the grant date was estimated using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options.

The following weighted average assumptions were used for grants during the following periods:


	Nine months ended September 30,
	2025	2024

Dividend Yield	n/a	0.00	%
Volatility	n/a	74.72	%
Risk-Free Interest Rate	n/a	4.17	%
Expected Life	n/a	3.50 years

There have been no stock options granted under the 2024 Plan. A summary of stock option activity under the Company’s 2014 Plan for the nine months ended September 30, 2025 is as follows:


Stock Options	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value

Outstanding at January 1, 2025	281,913	$	2.71	3.74	$	3,517,171

Granted	-	$	-	-	$	-
Exercised	(66,507)	$	4.22	-	$	756,657
Expired/Forfeited	(16,249)	$	2.25	3.68	$	231,902

Outstanding at September 30, 2025	199,157	$	2.25	3.17	$	2,766,687

Vested and Exercisable at September 30, 2025	79,190	$	2.25	3.33	$	1,100,107

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The aggregate intrinsic value of options outstanding and options exercisable at September 30, 2025 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $14.70 closing price of the Company’s Common Stock on September 30, 2025. The total intrinsic value of options when forfeited are determined as of the date of forfeiture. The total intrinsic value of options when expired are determined as of the date of expiration.

Participants in the 2014 Plan and the 2024 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised ("Net Exercise"), or by exchanging a number of shares owned for a period of greater than one year having a fair market value equal to the exercise price of the option being exercised ("Share Exchange").

The Company received $64,591 from the exercise of 28,757 options during the nine months ended September 30, 2025. The remaining options exercised during the nine months ended September 30, 2025 were Net Exercises and Share Exchanges, resulting in the issuance of 23,564 shares of Common Stock. No options were exercised during the nine months ended September 30, 2024.

As of September 30, 2025, the estimated fair value of unamortized compensation cost related to 119,967 unvested stock option awards was approximately $13,000. Unamortized compensation cost as of September 30, 2025 is expected to be recognized over a remaining weighted-average vesting period of 1.27 years.

Restricted Stock Awards

A summary of the restricted Common Stock activity under the 2014 Plan and the 2024 Plan for the nine months ended September 30, 2025 is as follows:


Restricted Stock Awards	Shares	Weighted Average Grant Date Fair Value per Share		Aggregate Fair Value

Balance at January 1, 2025	267,586	$	5.24	$	1,402,151

Granted	140,760	$	14.96	$	2,105,770
Vested	(223,204)	$	4.16	$	(928,529)
Forfeited	(10,703)	$	9.09	$	(97,290)

Balance at September 30, 2025	174,439	$	14.23	$	2,482,102

Fair value was calculated using the closing price of the Company’s Common Stock on the grant date. For the three months ended September 30, 2025 and 2024, stock-based compensation for these grants was approximately $398,000 and $306,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of income and comprehensive income. For the nine months ended September 30, 2025 and 2024, stock-based compensation for these grants was approximately $1,148,000 and $747,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of income and comprehensive income. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be recognized by the directors, executives and employees. Unamortized compensation cost of $1,496,376 as of September 30, 2025 is expected to be recognized over a remaining weighted-average vesting period of 1.91 years.

Employee Stock Purchase Plan

On June 19, 2021, the Company’s Board of Directors adopted the Kingstone Companies, Inc. Employee Stock Purchase Plan (the “ESPP”), subject to stockholder approval. Such approval was obtained on August 10, 2021. The purpose of the ESPP is to provide eligible employees of the Company with an opportunity to use payroll deductions to purchase shares of Common Stock of the Company. The maximum number of shares of Common Stock that may be purchased under the ESPP is 750,000, subject to adjustment as provided for in the ESPP. The ESPP was effective August 10, 2021 and expires on August 10, 2031. A maximum of 5,000 shares of Common Stock may be purchased by an employee during any offering period.

The initial offering period under the ESPP was from November 1, 2021 through October 31, 2022. There was no offering pursuant to the ESPP from November 1, 2022 through December 31, 2024. Effective January 1, 2025, the Company initiated an offering period of January 1, 2025 through December 31, 2025 under the ESPP (the "2025 Offering'). For the three months ended September 30, 2025 and 2024, stock-based compensation under the 2025 Offering was approximately $10,000 and $0, respectively, which is included in other

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operating expenses on the accompanying condensed consolidated statements of income and comprehensive income. For the nine months ended September 30, 2025 and 2024, stock-based compensation under the 2025 Offering was approximately $26,000 and $0, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of income and comprehensive income.

Warrants

In connection with the 2022 Exchange Agreement (see Note 7 – Debt – “Exchange Agreements”), as additional consideration, on December 15, 2022, the Company issued warrants (the "Warrants") to the 2022 Exchanging Noteholders to purchase 969,525 shares of Common Stock. Pursuant to the 2024 Exchange Agreement, the expiration date of the Warrants was extended to June 30, 2026 from December 30, 2025. The fair value of the Warrants, using the Black-Scholes valuation formula, was $993,200, which has been capitalized as a deferred financing cost of the 2022 Notes and the 2024 Notes. The fair value of the Warrants is being amortized over the life of the Warrants, which is 36.5 months through September 12, 2024 and effective as of such date, the unamortized balance is being amortized over the extended life of the Warrants, which is now 21.5 months.

In accordance with ASC 815 - Derivatives and Hedging – Subsequent Measurement, the effect of a modification or an exchange shall be measured as the difference between the fair value of the modified or exchanged instrument and the fair value of that instrument immediately before it is modified or exchanged. The Company calculated the respective fair values and determined the difference was immaterial.

The Warrants are exercisable through June 30, 2026 at an exercise price of $1.00 per share. Holders of the Warrants may exercise their outstanding Warrants in cash, or, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the Warrants being exercised ("Net Exercise").

During the nine months ended September 30, 2025, holders exercised 394,525 Warrants under Net Exercises, resulting in the issuance of 371,634 shares of Common Stock. No warrants were exercised or granted during the nine months ended September 30, 2024.

As of September 30, 2025, Warrants for the purchase of an aggregate of 247,500 shares of Common Stock were outstanding.

Shelf Registration

On April 5, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC under the Securities Act of 1933, as amended, with regard to the registration of $50,000,000 of its equity and debt securities (the “Shelf Registration Statement”). The Shelf Registration Statement was declared effective by the SEC on April 22, 2024. Any offering made pursuant to the Shelf Registration Statement may only be made by means of a prospectus, including a prospectus supplement, forming a part of the effective Shelf Registration Statement, relating to the offering.

At-the-Market Offering

In May 2024, the Company entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which the Company initially had the ability to issue and sell shares of its Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is referred to as an “at-the-market” (“ATM”) program. On January 7, 2025, the Company filed a prospectus supplement providing for a going forward aggregate offering price for the ATM program of $25,000,000. During the nine months ended September 30, 2025, the Company sold 612,999 shares of its Common Stock at a weighted average price of $16.00 per share and raised $9,464,323 in net proceeds under the ATM program. As of September 30, 2025, the Company had remaining capacity to sell up to an additional $15,945,937 of Common Stock under the ATM program.

Note 9 – Income Taxes

The Company files a consolidated U.S. federal income tax return that includes all wholly-owned subsidiaries. State tax returns are filed on a consolidated or separate return basis depending on applicable laws. The Company records adjustments related to prior years’ taxes during the period when they are identified, generally when the tax returns are filed. The effect of these adjustments on the current and prior periods (during which the differences originated) is evaluated based upon quantitative and qualitative factors and are considered in relation to the consolidated financial statements taken as a whole for the respective periods.

Deferred tax assets and liabilities are determined using the enacted tax rates applicable to the period the temporary differences are expected to be recovered. Accordingly, the current period income tax provision can be affected by the enactment of new tax rates. The net deferred income taxes on the balance sheets reflect temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and income tax purposes, tax effected at various rates depending on whether the temporary differences are subject to federal taxes, state taxes, or both.

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Significant components of the Company’s deferred tax assets and liabilities are as follows:


	September 30, 2025		December 31, 2024

Deferred tax asset:
Net operating loss carryovers (1)	$	—	$	419,357
Claims reserve discount	1,477,311		1,305,466
Unearned premium	4,290,382		3,810,973
Deferred ceding commission revenue	1,588,108		2,423,660
Net unrealized losses on securities	1,655,751		3,069,900
Other	1,384,392		834,921
Total deferred tax assets	10,395,944		11,864,277

Deferred tax liability:
Investment in KICO (2)	759,543		759,543
Deferred policy acquisition costs	5,329,334		5,193,798
Intangible assets	105,000		105,000
Depreciation and amortization	63,923		208,016
Total deferred tax liabilities	6,257,800		6,266,357

Net deferred income tax asset	$	4,138,144	$	5,597,920

(1)The deferred tax assets from net operating loss carryovers (“NOL”) are as follows:


Type of NOL	September 30, 2025		December 31, 2024		Expiration

Federal only, NOL from 2024 and 2023	$	-	$	419,357	None

State only (A)	3,343,160		3,075,395		December 2027 - December 2045
Valuation allowance	(3,343,160)		(3,075,395)
State only, net of valuation allowance	-		-

Total deferred tax asset from net operating loss carryovers	$	-	$	419,357

(A)Kingstone generates operating losses for state purposes and has prior year NOLs available. The state NOL as of September 30, 2025 and December 31, 2024 was $51,433,225 and $47,313,775, respectively. KICO, the Company’s insurance underwriting subsidiary, is not subject to state income taxes. KICO’s state tax obligations are paid through a gross premiums tax, which is included in the condensed consolidated statements of income and comprehensive income within other underwriting expenses. Kingstone has recorded a full valuation allowance due to the uncertainty of generating enough state taxable income to utilize 100% of the available state NOLs over their remaining lives, which expire between 2027 and 2045.

(2)Deferred tax liability – Investment in KICO

On July 1, 2009, the Company completed the acquisition of 100% of the issued and outstanding common stock of KICO (formerly known as Commercial Mutual Insurance Company (“CMIC”)) pursuant to the conversion of CMIC from an advance premium cooperative to a stock property and casualty insurance company. Pursuant to the plan of conversion, the Company acquired a 100% equity interest in KICO, in consideration for the exchange of $3,750,000 principal amount of surplus notes of CMIC. In addition, the Company forgave all accrued and unpaid interest on the surplus notes as of the date of conversion. As of the date of acquisition, unpaid accrued interest on the surplus notes along with the accretion of the discount on the original purchase of the surplus notes totaled $2,921,319 (together “Untaxed Interest”).

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As of the date of acquisition, the deferred tax liability on the Untaxed Interest was $1,169,000. A temporary difference with an indefinite life exists when the parent has a lower carrying value of its subsidiary for income tax purposes. The deferred tax liability was reduced to $759,543 upon the reduction of federal income tax rates as of December 31, 2017. The Company is required to maintain its deferred tax liability of $759,543 related to this temporary difference until the stock of KICO is sold, or the assets of KICO are sold or KICO and the parent are merged.

In assessing the valuation of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. No valuation allowance against deferred tax assets has been established, except for NOL limitations, as the Company believes it is more likely than not the deferred tax assets will be realized based on the historical taxable income of KICO, or by offset to deferred tax liabilities.

The Company had no material unrecognized tax benefit and no adjustments to liabilities or operations were required. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the nine months ended September 30, 2025 and 2024. If any had been recognized these would have been reported in income tax expense.

Generally, taxing authorities may examine the Company’s tax returns for the three years from the date of filing. The Company’s tax returns for the years ended December 31, 2021 through December 31, 2024 remain subject to examination.

Note 10 – Earnings Per Common Share

Basic net earnings per common share is computed by dividing net income by the weighted-average number of shares of Common Stock outstanding. Diluted earnings per common share reflects, in periods in which it has a dilutive effect, the impact of shares of Common Stock issuable upon exercise of stock options and warrants as well as non-vested restricted stock awards. The computation of diluted earnings per common share excludes those options and warrants with an exercise price in excess of the average market price of the Company’s Common Stock during the periods presented. For the three months ended September 30, 2025 and 2024, there were -0- options and 61,270 options, respectively, with an exercise price in excess of the average market price of the Company’s Common Stock during the periods. For the nine months ended September 30, 2025 and 2024, there were -0- options and 61,270 options, respectively, with an exercise price in excess of the average market price of the Company’s Common Stock during the periods. For the three months and nine months ended September 30, 2025 and 2024, there were no warrants with an exercise price in excess of the average market price of the Company’s Common Stock during the periods.

The computation of diluted earnings per common share excludes outstanding options, warrants and non-vested restricted stock awards in periods where the exercise of such options and warrants or vesting of such restricted stock awards would be anti-dilutive. For the three months ended September 30, 2025 and 2024, there were no options, warrants or restricted stock awards that were anti-dilutive for the relevant periods.

The reconciliation of the weighted average number of shares of Common Stock used in the calculation of basic and diluted earnings per common share follows:

KINGSTONE COMPANIES, INC. 10-Q