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, 1997 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. 5,591,367 shares as of April 17, 1997 This document consists of 9 sequentially numbered pages.

INDEX EXTECH CORPORATION AND SUBSIDIARIES PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheet - March 31, 1997 (Unaudited) Condensed Consolidated Statements of Operations - Three months ended March 31, 1997 and 1996 (Unaudited) Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 1997 and 1996 (Unaudited) Notes to Condensed Consolidated Financial Statements - Three months ended March 31, 1997 and 1996 (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 2

PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 1997 -------------- ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $1,481,636 Accounts receivable 52,854 Notes and other receivables 53,121 Inventories 6,097 Prepaid expenses and other current assets 44,827 ------ Total current assets 1,638,535 --------- PROPERTY AND EQUIPMENT, net 142,777 ------- OTHER ASSETS: Operating equipment, net 7,840 Deposits 5,000 ----- Total other assets 12,840 ------ $1,794,152 ========= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES: Accounts payable $ 5,405 Accrued expenses 55,456 Debentures payable 154,200 Accrued taxes payable 18,174 ------ Total current liabilities 233,235 ------- MINORITY INTEREST 560 --- OTHER LONG TERM LIABILITIES: 59,883 ------ STOCKHOLDERS' EQUITY: Common Stock, $.01 par value; authorized, 10,000,000 shares; issued and outstanding, 5,591,367 shares 55,914 Capital in excess of par 5,264,950 Deficit (3,820,390) ---------- 1,500,474 --------- 1,794,152 ========= See notes to condensed consolidated financial statements. 3

EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three months ended March 31, 1997 1996 Revenues: Rooms $ 307,471 $ 301,611 Other 5,138 6,663 Interest 13,260 6,187 --------- --------- Total revenues 325,869 314,461 --------- --------- Costs and expenses: General, administrative and sundry 114,475 101,069 Departmental 80,334 80,782 Depreciation and amortization 12,820 12,987 Energy costs 4,907 4,635 Lease rentals 61,731 62,185 Marketing 7,198 7,791 Property operation and maintenance 5,841 4,565 Provision for bad debt 300 600 --------- --------- 287,606 274,614 Net income $ 38,263 $ 39,847 ========= ========= Income per common share: Net income $ .01 $ .02 ========= ========= Weighted average number of common shares outstanding 5,591,367 2,391,367 ========= ========= See notes to condensed consolidated financial statements. 4

EXTECH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 38,263 $ 39,847 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,820 12,987 Provision for bad debts 300 600 Decrease (increase) in assets: Accounts receivable (2,563) 12,089 Inventories 303 (866) Prepaid expenses and other current assets 77,652 482 Notes receivable 28,735 (37,078) Other assets 1,689 1,415 Deposits ( 5,000) -0- Increase (decrease) in liabilities: Accounts payable 3,431 2,223 Accrued expenses (68,170) (4,282) Accrued taxes payable 18,174 15,759 Other Long Term Liabilities 59,883 -------- --------- Net cash provided by operating activities 165,517 43,176 --------- --------- Cash flows from investing activities: Purchases of property and equipment ( 2,002) (4,255) ---------- ---------- Net cash (used in) investing activities: ( 2,002) (4,255) ---------- ---------- Net increase in cash and cash equivalents 163,515 38,921 Cash, beginning of period 1,318,121 644,956 ----------- --------- Cash, end of period $1,481,636 $ 683,877 =========== ========= See notes to condensed consolidated financial statements. 5

EXTECH CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED) 1. The Condensed Consolidated Balance Sheet as of March 31, 1997, the Condensed Consolidated Statements of Operations for the three months ended March 31, 1997 and 1996 and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 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, 1997, results of operations for the three months ended March 31, 1997 and 1996 and cash flows for the three months ended March 31, 1997 and 1996. This report should be read in conjunction with the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996. 2. The results of operations and cash flows for the three months ended March 31, 1997 are not necessarily indicative of the results to be expected for the full year. 6

EXTECH CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION THREE MONTHS ENDED MARCH 31, 1997 AND 1996 Results of Operations: The Company's net income for the three months ended March 31, 1997 was $38,263 as compared to a net income of $39,847 for the three months ended March 31, 1996. Room revenues and interest income for the three months ended March 31, 1997 increased $5,860 and $7,073, respectively, as compared to the three months ended March 31, 1996. Such increases were offset by an increase of $13,406 in selling, administrative and sundry expenses for the first quarter of 1997 as compared to 1996. Liquidity and Capital Resources: As of March 31, 1997, the Company had $1,481,636 in cash and cash equivalents and a working capital surplus of $1,405,300. As of December 31, 1996, the Company had $1,318,121 in cash and cash equivalents and a working capital surplus of $1,299,647. The increase in cash and cash equivalents was primarily the result of cash generated from operating activities for the three months ended March 31, 1997. Such operating activities include, among other things, the receipt of $77,652 in royalty payments during the first quarter of 1997 (which royalty payments were recognized as revenue in 1996), and the receipt of $28,735 in payments from Robeson Industries Corp. pursuant to a certain promissory note. The increase in working capital was primarily the result of the increase in cash and cash equivalents and the reclassification of $59,883 of certain disputed rental obligations of the Company's wholly-owned subsidiary, IAH, Inc., as long term liabilities, rather than as accrued expenses. The Company did not have any material commitments for capital expenditures as of March 31, 1997. 7

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 None 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 (b) Reports on Form 8-K None -------- (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. 8

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, 1997 By:/s/ Morton L. Certilman MORTON L. CERTILMAN President (Chief Operating Officer and Principal Financial Officer) 9

5 1 1 3-mos dec-31-1997 jan-01-1997 mar-31-1997 1 1,481,636 0 154,475 48,500 6,097 1,638,535 142,777 12,820 1,794,152 233,235 0 0 0 55,914 5,264,950 1,500,474 0 325,869 0 287,606 0 0 0 38,263 0 38,263 0 0 0 38,263 .01 .01