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Stockholders Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Dividends Declared
On November 11, 2022, the Company’s Board of Directors determined to suspend regular quarterly dividends. Future dividend policy will be subject to the discretion of the Company’s Board of Directors.
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 December 31, 2024 and 2023.
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 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 December 31, 2024, there were 58,775 shares granted under the 2024 Plan.
Stock Options
The results of operations for the years ended December 31, 2024 and 2023 include stock-based compensation expense for stock options totaling approximately $196,000 and $0, respectively, which is included in other operating expenses on the accompanying consolidated statements of operations and comprehensive income (loss). Stock-based compensation expense related to stock options for the year ended December 31, 2024 is net of estimated forfeitures of approximately 19%.
The weighted average estimated fair value of stock options granted during the year ended December 31, 2024 was $1.24 per share. No options were granted during the year ended December 31, 2023. 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:
Years ended December 31,
20242023
Dividend Yield0.00%n/a
Volatility74.72%n/a
Risk-Free Interest Rate4.17%n/a
Expected Life3.50 yearsn/a
A summary of stock option activity under the Company’s 2014 Plan and 2024 Plan for the year ended December 31, 2024 is as follows:
Stock OptionsNumber of Shares Weighted Average Exercise
Price per Share 		 Weighted Average Remaining
Contractual Term 		 Aggregate Intrinsic Value
  
Outstanding at January 1, 2024107,201$8.31 0.94$- 
     
Granted318,750$2.25 4.07$4,124,625 
Exercised(84,038)$8.42 -$166,145 
Expired/Forfeited(60,000)$2.25 4.55$241,900 
     
Outstanding at December 31, 2024281,913$2.71 3.74$3,517,111 
     
Vested and Exercisable at December 31, 202423,163$7.90 0.10$168,886 
The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2024 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 $15.19 closing price of the Company’s Common Stock on December 31, 2024. No options were exercised, forfeited or expired during the year ended December 31, 2023. 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 52,719 shares from the exercise of options under a Share Exchange for the purchase of 63,333 shares of Common Stock during the year ended December 31, 2024. Such shares received under the Share Exchange have been included in the consolidated balance sheets within treasury stock. The Company received $63,711 from the exercise of 7,974 options. The remaining options exercised during the year ended December 31, 2024 was a Net Exercise, resulting in the issuance of 690 shares of Common Stock. No options were exercised during the year ended December 31, 2023.
As of December 31, 2024, the estimated fair value of unamortized compensation cost related to 258,750 unvested stock option awards was approximately $67,008. Unamortized compensation cost as of December 31, 2024 is expected to be recognized over a remaining weighted-average vesting period of 2.01 years
Restricted Stock Awards
A summary of the restricted Common Stock activity under the Company’s 2014 Plan and 2024 Plan for the year ended December 31, 2024 is as follows:
Restricted Stock AwardsShares Weighted Average Grant Date Fair Value per Share Aggregate
Fair Value
   
Balance at January 1, 2024550,581$3.82 $2,103,219 
    
Granted237,214$5.52 $1,308,699 
Vested(517,709)$3.86 $(1,998,357)
Forfeited(2,500)$4.80 $(12,000)
    
Balance at December 31, 2024267,586$5.24 $1,402,151 
Fair value was calculated using the closing price of the Company’s Common Stock on the grant date. For the years ended December 31, 2024 and 2023, stock-based compensation for these grants was approximately $1,187,000 and $833,000, respectively, which is included in other operating expenses on the accompanying consolidated statements of operations and comprehensive income (loss). 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 $730,661 as of December 31, 2024 is expected to be recognized over a remaining weighted-average vesting period of 2.13 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 (“2021/2022 Offering”). There was no offering pursuant to the ESPP from November 1, 2022 through December 31, 2024. See Note 20 - Subsequent Events - Equity.
Warrants
In connection with the 2022 Exchange Agreement (see Note 9 – 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 2024 Notes. The fair value of the Warrants is being amortized over the life of the Warrants, which was 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 815-40-35 - 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 year December 31, 2024, holders exercised 327,500 Warrants under Net Exercises, resulting in the issuance of 304,413 shares of Common Stock. No Warrants were exercised during the year ended December 31, 2023. As of December 31, 2024, Warrants for the purchase of an aggregate of 642,025 shares of Common Stock were outstanding.
No warrants were granted during the year ended December 31, 2024 and December 31, 2023.
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 currently has 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 commonly referred to as an “at-the-market” (“ATM”) program. During the year ended December 31, 2024, the Company sold 1,437,287 shares of its Common Stock at a weighted average price of $9.79 per share and raised $13,610,807 in net proceeds under the ATM program. As of December 31, 2024, the Company had remaining capacity to sell up to an additional $2,325,087 of Common Stock under the ATM program. On January 7, 2025, the Company filed a prospectus supplement increasing the aggregate offering price for the ATM program to $25,000,000. See Note 20 - Subsequent Events, Equity.