SEC Filing - Kingstone Companies, Inc.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 or [ ] 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 -------------------------------------------------------- EXTECH CORPORATION - ------------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 36-2476480 - ------------------------------------------------------------------------------- (State or other jurisdiction (I.R.S Employer of incorporation or organization) Identification No.) 90 Merrick Avenue, East Meadow, New York 11554 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (516) 794-6300 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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. (X) YES ( ) NO APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ( ) YES ( ) NO APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 2,391,367 shares as of April 17, 1996 INDEX EXTECH CORPORATION AND SUBSIDIARIES PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheet - March 31, 1996 (Unaudited) Condensed Consolidated Statements of Operations - Three months ended March 31, 1996 and 1995 (Unaudited) Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 1996 and 1995 (Unaudited) Notes to Condensed Consolidated Financial Statements - Three months ended March 31, 1996 and 1995 (Unaudited) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION PART II. OTHER INFORMATION ITEM 1. Legal Proceedings ITEM 2. Changes in Securities ITEM 3. Defaults upon Senior Securities ITEM 4. Submission of Matters to a Vote of Security Holders ITEM 5. Other Information ITEM 6. Exhibits and Reports on Form 8-K SIGNATURES PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 1996 -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 683,877 Accounts receivable 39,732 Notes and other receivables 76,258 Inventories 8,056 Prepaid expenses 6,405 ---------- Total current assets 814,328 ---------- PROPERTY AND EQUIPMENT, NET 192,958 ---------- OTHER ASSETS: Operating equipment, net 11,388 ---------- $ 1,018,674 =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 5,779 Accrued expenses 135,219 Debentures payable 154,200 Accrued taxes payable 15,759 ---------- 310,957 ---------- MINORITY INTEREST 560 ---------- STOCKHOLDERS' EQUITY: Common Stock, $.01 par value; authorized, 10,000,000 shares; issued and outstanding, 2,391,367 shares 23,914 Capital in excess of par 4,496,950 Deficit (3,813,707) ---------- 707,157 ---------- $1,018,674 ========== See notes to condensed consolidated financial statements. EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three months ended March 31, 1996 1995 ------------------------ Revenues: Rooms $ 301,611 $ 281,010 Other 6,663 6,684 Interest 6,187 3,384 -------- -------- Total revenues 314,461 291,078 -------- -------- Costs and expenses: General, administrative and sundry 101,069 96,832 Departmental 80,782 84,830 Depreciation and amortization 12,987 12,771 Energy costs 4,635 4,652 Lease rentals 62,185 54,956 Marketing 7,791 6,444 Property operation and maintenance 4,565 4,746 Provision for bad debt 600 1,200 ------ ------ 274,614 266,431 ------ ------ Net income $ 39,847 $ 24,647 ========= ========= Income per common share: Net income $ .02 $ .01 ========= ========= Weighted average number of common shares outstanding 2,391,367 2,391,367 ========= ========= See notes to condensed consolidated financial statements. EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended March 31, 1996 1995 ------------------------ Cash flows from operating activities: Net income $ 39,847 $ 24,647 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,987 12,771 Provision for bad debts 600 1,200 Decrease (increase) in assets: Accounts receivable 12,089 2,996 Inventories (866) 1,746 Prepaid expenses 482 37,335 Notes receivable (37,078) -0- Other assets 1,415 (1,926) Increase (decrease) in liabilities: Accounts payable 2,223 7,848 Accrued expenses (4,282) (24,866) Accrued taxes payable 15,759 14,394 --------- --------- Net cash provided by operating activities 43,176 76,145 --------- --------- Net cash (used in) investing activities: Purchases of property and equipment (4,255) (515) --------- --------- Net cash (used in) investing activities: (4,255) (515) --------- --------- Net increase in cash and cash equivalents 38,921 75,630 Cash, beginning of period 644,956 482,359 --------- --------- Cash, end of period $ 683,877 $ 557,989 ========= ========= See notes to condensed consolidated financial statements. EXTECH CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED) 1. The Condensed Consolidated Balance Sheet as of March 31, 1996, the Condensed Consolidated Statements of Operations for the three months ended March 31, 1996 and 1995 and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1995 have been prepared by the Company without audit. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly its financial position as of March 31, 1996, results of operations for the three months ended March 31, 1996 and 1995 and cash flows for the three months ended March 31, 1996 and 1995. This report should be read in conjunction with the Company's annual report on Form 10-KSB for the year ended December 31, 1995. 2. The results of operations and cash flows for the three months ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. EXTECH CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION THREE MONTHS ENDED MARCH 31, 1996 AND 1995 RESULTS OF OPERATIONS: THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO 1995: The Company's net income for the three months ended March 31, 1996 was $39,847 as compared to a net income of $24,647 for the three months ended March 31, 1995. Such increased income was primarily the result of increased room revenues ($301,611 during the first quarter of 1996 as compared to $281,010 during the first quarter of 1995). LIQUIDITY AND CAPITAL RESOURCES: As of March 31, 1996, the Company had $683,877 in cash and cash equivalents. As of such date, the Company had a working capital surplus of $503,371. The Company did not have any material commitments for capital expenditures as of March 31, 1996. PROSPECTS: On May 14, 1996 the Company and Phone America International, Inc. ("Phone America") mutually agreed not to pursue a non-binding letter of intent whereby the Company would have acquired Phone America. The Company is presently exploring other business opportunities outside of the hotel industry. (See Item 5 "OTHER INFORMATION"). PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION On May 14, 1996 the Company and Phone America, an interexchange telecommunications carrier, mutually agreed not to pursue a non- binding letter of intent pursuant to which the Company would have acquired Phone America. The Company's $50,000 loan to Phone America, which was made contemporaneously with the execution of the letter of intent and which is payable upon demand on or after August 26, 1996, will continue in full force and effect according to its terms. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 3(a) Certificate of Incorporation, as amended 1 3(b) By-laws, as amended 2 27 Financial Data Schedule - -------------------- 1 Denotes document filed as an exhibit to the Company's Annual Report on Form 10-KSB for the year ended December 31, 1993 and incorporated herein by reference. 2 Denotes document filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference. (b) REPORTS ON FORM 8-K None SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EXTECH CORPORATION Dated: May 15, 1996 By:/s/ Morton L. Certilman ------------------------------ MORTON L. CERTILMAN President (Chief Operating Officer and Principal Financial Officer)

5 3-MOS DEC-31-1996 MAR-31-1996 683,877 0 115,990 0 8,056 814,328 192,958 0 1,018,674 310,957 0 23,914 0 0 683,243 1,018,674 301,611 314,461 0 274,614 0 0 0 39,847 0 0 0 0 0 39,847 .02 .02