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

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

|                                                                  |   |                                             |
|-----------------------------------------------------------------------|--------|--------------------------------------------------|
| Delaware(State or other jurisdiction ofincorporation or organization) |   | 36-2476480(I.R.S. EmployerIdentification Number) |

|                      |   |               |   |                                                                 |   |                             |
|---------------------------|--------|--------------------|--------|----------------------------------------------------------------------|--------|----------------------------------|
| Large accelerated filer o |   | Accelerated filero |   | Non-accelerated filer o(Do not check if a smaller reporting company) |   | Smaller reporting company þ |

----

|                                 |   |                 |   |                                                                                                                                                                     |   |   |   |   |
|--------------------------------------|--------|----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                 |   |                 |   |                                                                                                                                                                     |   | PAGE   |
|                                 |   |                 |   |                                                                                                                                                                     |   |   |   |   |
| PART I — FINANCIAL INFORMATION |   |                 | 4      |                                                                                                                                                                     |
|                                 |   | Item 1 —  |   |  Financial Statements                                                                                                                                               |   |   | 4      |   |
|                                 |   |                 |   |  Condensed Consolidated Balance Sheets at September 30, 2009 (Unaudited) and December 31, 2008                                                                      |   |   | 4      |   |
|                                 |   |                 |   |  Condensed Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2009 (Unaudited) and 2008 (Unaudited)             |   |   | 5      |   |
|                                 |   |                 |   |  Condensed Consolidated Statements of Operations and Comprehensive Income  for the three months ended September 30, 2009 (Unaudited) and 2008 (Unaudited) |   |   | 6      |   |
|                                 |   |                 |   |  Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2009 (Unaudited) and for the year ended December 31, 2008             |   |   | 7      |   |
|                                 |   |                 |   |  Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2009 (Unaudited) and 2008  (Unaudited)                                |   |   | 8      |   |
|                                 |   |                 |   |  Notes to Condensed Consolidated Financial Statements  (Unaudited)                                                                                        |   |   | 9      |   |
|                                 |   | Item 2 —  |   |  Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                        |   |   | 46     |   |
|                                 |   | Item 3 —  |   |  Quantitative and Qualitative Disclosures About Market Risk                                                                                                         |   |   | 55     |   |
|                                 |   | Item 4T—  |   |  Controls and Procedures                                                                                                                                            |   |   | 55     |   |
|                                 |   |                 |   |                                                                                                                                                                     |   |   |   |   |
| PART II — OTHER INFORMATION    |   |                 | 56     |                                                                                                                                                                     |
|                                 |   | Item 1 —  |   | Legal Proceedings                                                                                                                                                        |   |   | 56     |   |
|                                 |   | Item 1A — |   | Risk Factors                                                                                                                                                             |   |   | 56     |   |
|                                 |   | Item 2 —       |   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                              |   |   | 56     |   |
|                                 |   | Item 3 —       |   | Defaults Upon Senior Securities                                                                                                                                          |   |   | 56     |   |
|                                 |   | Item 4 —  |   | Submission of Matters to a Vote of Security Holders                                                                                                                      |   |   | 56     |   |
|                                 |   | Item 5 —  |   | Other Information                                                                                                                                                        |   |   | 56     |   |
|                                 |   | Item 6 —  |   | Exhibits                                                                                                                                                                 |   |   | 56     |   |
| Signatures                           |   |                 | 58     |                                                                                                                                                                     |
|  EXHIBIT 31(a)                  |
|  EXHIBIT 31(b)                  |
|  EXHIBIT 32                     |

----

----

| KINGSTONE COMPANIES, INC. AND SUBSIDIARIES                                                         |   |
|----------------------------------------------------------------------------------------------------|--------|
|                                                                                               |   |   |   |   |   |   |
| Condensed Consolidated Balance Sheets                                                              |   |   |   |   |   |   |
|                                                                                               |   | September 30, |   |   | December 31, |   |
|                                                                                               |   | 2009 |   |   | 2008 |   |
|                                                                                               |   | (unaudited) |   |   |   |   |
|  Assets                                                                                       |   |   |   |   |   |   |
|  Short term investments                                                                       |   | $ | 438,308 |   |   | $ | - |   |
|  Fixed-maturity securities, available for sale, at fair value (amortized cost of $10,742,889) |   |   | 10,939,659 |   |   |   | - |   |
|  Equity securities, available-for-sale, at fair value (cost of $1,221,762)                    |   |   | 1,354,514 |   |   |   | - |   |
|  Total investments                                                                            |   |   | 12,732,481 |   |   |   | - |   |
|  Cash and cash equivalents                                                                    |   |   | 2,318,141 |   |   |   | 142,949 |   |
|  Investment income receivable                                                                 |   |   | 120,425 |   |   |   | - |   |
|  Premiums receivable, net of of provision for uncollectible amounts                           |   |   | 4,323,238 |   |   |   | - |   |
|  Receivables - reinsurance contracts                                                          |   |   | 1,183,972 |   |   |   | - |   |
|  Reinsurance receivables, net of of provision for uncollectible amounts                       |   |   | 21,088,072 |   |   |   | - |   |
|  Notes receivable-CMIC                                                                        |   |   | - |   |   |   | 5,935,704 |   |
|  Notes receivable-sale of business                                                            |   |   | 1,113,919 |   |   |   | - |   |
|  Deferred acquisition costs                                                                   |   |   | 2,800,445 |   |   |   | - |   |
|  Intangible assets                                                                            |   |   | 4,731,100 |   |   |   | - |   |
|  Property and equipment, net of accumulated depreciation                                      |   |   | 1,758,700 |   |   |   | 82,617 |   |
|  Equities in pools and associations                                                           |   |   | 207,847 |   |   |   | - |   |
|  Other assets                                                                                 |   |   | 282,387 |   |   |   | 97,143 |   |
|  Assets of discontinued operations                                                            |   |   | - |   |   |   | 3,178,219 |   |
|  Total assets                                                                                 |   | $ | 52,660,727 |   |   | $ | 9,436,632 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|  Liabilities                                                                                  |   |   |   |   |   |   |   |   |
|  Loss and loss adjustment expenses                                                            |   |   | 17,193,269 |   |   |   | - |   |
|  Unearned premiums                                                                            |   |   | 14,220,351 |   |   |   | - |   |
|  Reinsurance balances payable                                                                 |   |   | 1,989,602 |   |   |   | - |   |
|  Deferred ceding commission revenue                                                           |   |   | 2,843,703 |   |   |   | - |   |
|  Notes payable                                                                                |   |   | 791,454 |   |   |   | 2,008,828 |   |
|  Accounts payable, accrued liabilities and other liabilities                                  |   |   | 2,111,827 |   |   |   | 966,741 |   |
|  Income taxes payable                                                                         |   |   | 140,526 |   |   |   | - |   |
|  Deferred income taxes                                                                        |   |   | 1,283,121 |   |   |   | 200,000 |   |
|  Mandatorily redeemable preferred stock                                                       |   |   | 1,299,231 |   |   |   | 780,000 |   |
|  Liabilties of discontinued operations                                                        |   |   | 85,800 |   |   |   | 223,493 |   |
|  Total liabilities                                                                            |   |   | 41,958,884 |   |   |   | 4,179,062 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|  Commitments                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|  Stockholders' Equity:                                                                        |   |   |   |   |   |   |   |   |
|  Common stock, $.01 par value; authorized 10,000,000 shares; issued 3,795,607 shares          |   |   | 37,957 |   |   |   | 37,888 |   |
|  Preferred stock, $.01 par value; authorized                                                  |   |   |   |   |   |   |   |   |
|  1,000,000 shares; 0 shares issued and outstanding                                            |   |   | - |   |   |   | - |   |
|  Capital in excess of par                                                                     |   |   | 12,013,769 |   |   |   | 11,962,512 |   |
|  Accumulated other comprehensive income                                                       |   |   | 217,485 |   |   |   | - |   |
|  Deficit                                                                                      |   |   | (346,986 | ) |   |   | (5,522,448 | ) |
|                                                                                               |   |   | 11,922,225 |   |   |   | 6,477,952 |   |
|  Treasury stock, at cost, 816,025 shares                                                      |   |   | (1,220,382 | ) |   |   | (1,220,382 | ) |
|  Total stockholders' equity                                                                   |   |   | 10,701,843 |   |   |   | 5,257,570 |   |
|                                                                                               |   |   |   |   |   |   |   |   |
|  Total liabilities and stockholders' equity                                                   |   | $ | 52,660,727 |   |   | $ | 9,436,632 |   |

----

----

| KINGSTONE COMPANIES, INC. AND SUBSIDIARIES                  |   |
|-------------------------------------------------------------|--------|
|                                                        |   |   |   |   |   |   |
| Condensed Consolidated Statements of Operations (Unaudited) |   |
| Nine Months Ended September 30,                             |   | 2009 |   |   | 2008 |   |
|                                                        |   |   |   |   |   |   |
|  Revenues                                              |   |   |   |   |   |   |
|  Net premiums earned                                   |   | $ | 2,262,819 |   |   | $ | - |   |
|  Ceding commission revenue                             |   |   | 1,483,249 |   |   |   | - |   |
|  Net investment income                                 |   |   | 115,657 |   |   |   | - |   |
|  Net realized gains on investments                     |   |   | 99,856 |   |   |   | - |   |
|  Other income                                          |   |   | 518,288 |   |   |   | 332,545 |   |
|  Total revenues                                        |   |   | 4,479,869 |   |   |   | 332,545 |   |
|                                                        |   |   |   |   |   |   |   |   |
|  Expenses                                              |   |   |   |   |   |   |   |   |
|  Loss and loss adjustment expenses                     |   |   | 1,087,276 |   |   |   | - |   |
|  Commission expense                                    |   |   | 1,091,638 |   |   |   | - |   |
|  Other underwriting expenses                           |   |   | 1,077,318 |   |   |   | - |   |
|  Other operating expenses                              |   |   | 952,570 |   |   |   | 890,435 |   |
|  Depreciation and amortization                         |   |   | 103,113 |   |   |   | 26,533 |   |
|  Interest expense                                      |   |   | 150,571 |   |   |   | 187,221 |   |
|  Interest expense - mandatorily                        |   |   |   |   |   |   |   |   |
|  redeemable preferred stock                            |   |   | 89,805 |   |   |   | 47,125 |   |
|  Total expenses                                        |   |   | 4,552,291 |   |   |   | 1,151,314 |   |
|                                                        |   |   |   |   |   |   |   |   |
|  Loss from operations                                  |   |   | (72,422 | ) |   |   | (818,769 | ) |
|  Gain on acquistion of Kingstone Insurance Company     |   |   | 5,401,860 |   |   |   | - |   |
|  Interest income-CMIC note receivable                  |   |   | 60,757 |   |   |   | 730,915 |   |
|  Income (loss) from continuing operations before taxes |   |   | 5,390,195 |   |   |   | (87,854 | ) |
|  Benefit from tax                                      |   |   | (25,590 | ) |   |   | (288,634 | ) |
|  Income from continuing operations                     |   |   | 5,415,785 |   |   |   | 200,780 |   |
|  Loss from discontinued operations, net of taxes       |   |   | (240,323 | ) |   |   | (642,443 | ) |
|  Net income (loss)                                     |   |   | 5,175,462 |   |   |   | (441,663 | ) |
|                                                        |   |   |   |   |   |   |   |   |
|  Gross unrealized investment holding gains             |   |   |   |   |   |   |   |   |
|  arising during period                                 |   |   | 329,522 |   |   |   | - |   |
|  Income tax expense related to items of                |   |   |   |   |   |   |   |   |
|  other comprehensive income                            |   |   | (112,037 | ) |   |   | - |   |
|  Comprehensive income (loss)                           |   | $ | 5,392,947 |   |   | $ | (441,663 | ) |
|                                                        |   |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per common share:         |   |   |   |   |   |   |   |   |
| Income from continuing operations                           |   | $ | 1.82 |   |   | $ | 0.07 |   |
| Loss from discontinued operations                           |   | $ | (0.08 | ) |   | $ | (0.22 | ) |
| Income (loss) per common share                              |   | $ | 1.74 |   |   | $ | (0.15 | ) |
|                                                        |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding       |   |   | 2,974,349 |   |   |   | 2,972,547 |   |

----

----

| KINGSTONE COMPANIES, INC. AND SUBSIDIARIES                  |   |
|-------------------------------------------------------------|--------|
|                                                        |   |   |   |   |   |   |
| Condensed Consolidated Statements of Operations (Unaudited) |   |
| Three Months Ended September 30,                            |   | 2009 |   |   | 2008 |   |
|                                                        |   |   |   |   |   |   |
|  Revenues                                              |   |   |   |   |   |   |
|  Net premiums earned                                   |   | $ | 2,262,819 |   |   | $ | - |   |
|  Ceding commission revenue                             |   |   | 1,483,249 |   |   |   | - |   |
|  Net investment income                                 |   |   | 115,657 |   |   |   | - |   |
|  Net realized gains on investments                     |   |   | 99,856 |   |   |   | - |   |
|  Other income                                          |   |   | 153,867 |   |   |   | 111,970 |   |
|  Total revenues                                        |   |   | 4,115,448 |   |   |   | 111,970 |   |
|                                                        |   |   |   |   |   |   |   |   |
|  Expenses                                              |   |   |   |   |   |   |   |   |
|  Loss and loss adjustment expenses                     |   |   | 1,087,276 |   |   |   | - |   |
|  Commission expense                                    |   |   | 1,091,638 |   |   |   | - |   |
|  Other underwriting expenses                           |   |   | 1,077,318 |   |   |   | - |   |
|  Other operating expenses                              |   |   | 285,674 |   |   |   | 245,764 |   |
|  Depreciation and amortization                         |   |   | 94,519 |   |   |   | 11,161 |   |
|  Interest expense                                      |   |   | 17,220 |   |   |   | 56,924 |   |
|  Interest expense - mandatorily                        |   |   |   |   |   |   |   |   |
|  redeemable preferred stock                            |   |   | 37,353 |   |   |   | 19,500 |   |
|  Total expenses                                        |   |   | 3,690,998 |   |   |   | 333,349 |   |
|                                                        |   |   |   |   |   |   |   |   |
|  Income (loss) from operations                         |   |   | 424,450 |   |   |   | (221,379 | ) |
|  Gain on acquistion of Kingstone Insurance Company     |   |   | 5,401,860 |   |   |   | - |   |
|  Interest income-CMIC note receivable                  |   |   | - |   |   |   | 129,193 |   |
|  Income (loss) from continuing operations before taxes |   |   | 5,826,310 |   |   |   | (92,186 | ) |
|  Income tax expense (benefit)                          |   |   | 184,162 |   |   |   | (9,112 | ) |
|  Income (loss) from continuing operations              |   |   | 5,642,148 |   |   |   | (83,074 | ) |
|  Loss from discontinued operations, net of taxes       |   |   | (56,550 | ) |   |   | (16,951 | ) |
|  Net income (loss)                                     |   |   | 5,585,598 |   |   |   | (100,025 | ) |
|                                                        |   |   |   |   |   |   |   |   |
|  Gross unrealized investment holding gains             |   |   |   |   |   |   |   |   |
|  arising during period                                 |   |   | 329,522 |   |   |   | - |   |
|  Income tax expense related to items of                |   |   |   |   |   |   |   |   |
|  other comprehensive income                            |   |   | (112,037 | ) |   |   | - |   |
|  Comprehensive income (loss)                           |   | $ | 5,803,083 |   |   | $ | (100,025 | ) |
|                                                        |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share:                     |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                    |   | $ | 1.89 |   |   | $ | (0.03 | ) |
| Loss from discontinued operations                           |   | $ | (0.02 | ) |   | $ | - |   |
| Income (loss) per common share                              |   | $ | 1.87 |   |   | $ | (0.03 | ) |
|                                                        |   |   |   |   |   |   |   |   |
| Diluted earnings (loss) per common share:                   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                    |   | $ | 1.56 |   |   | $ | (0.03 | ) |
| Loss from discontinued operations                           |   | $ | (0.02 | ) |   | $ | - |   |
| Income (loss) per common share                              |   | $ | 1.54 |   |   | $ | (0.03 | ) |
|                                                        |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                  |   |   |   |   |   |   |   |   |
| Basic                                                       |   |   | 2,977,501 |   |   |   | 2,971,521 |   |
| Diluted                                                     |   |   | 3,627,117 |   |   |   | 2,971,521 |   |

----

----

| KINGSTONE COMPANIES, INC. AND SUBSIDIARIES                            |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated Statement of Stockholders' Equity                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year Ended December 31, 2008 and Nine Months Ended September 30, 2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   | Capital |   |   | Other |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | Common Stock* |   |   | Preferred Stock |   |   | in Excess |   |   | Comprehensive |   |   |   |   |   | Treasury Stock* |   |   |   |   |
|                                                                  |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | of Par |   |   | Income |   |   | (Deficit) |   |   | Shares |   |   | Amount |   |   | Total |   |
| Balance, December 31, 2007                                            |   |   | 3,750,447 |   |   | $ | 37,505 |   |   |   | - |   |   | $ | - |   |   | $ | 11,850,872 |   |   | $ | - |   |   | $ | (4,545,242 | ) |   |   | (781,423 | ) |   | $ | (1,185,780 | ) |   | $ | 6,157,355 |   |
| Stock-based payments                                                  |   |   | 38,324 |   |   |   | 383 |   |   |   | - |   |   |   | - |   |   |   | 111,640 |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 112,023 |   |
| Return of stock as settlement of liability                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | (34,602 | ) |   |   | (34,602 | ) |   |   | (34,602 | ) |
| Net loss                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | (977,206 | ) |   |   | - |   |   |   | - |   |   |   | (977,206 | ) |
| Balance, December 31, 2008                                            |   |   | 3,788,771 |   |   |   | 37,888 |   |   |   | - |   |   |   | - |   |   |   | 11,962,512 |   |   |   |   |   |   |   | (5,522,448 | ) |   |   | (816,025 | ) |   |   | (1,220,382 | ) |   |   | 5,257,570 |   |
| Stock-based payments                                                  |   |   | 6,836 |   |   |   | 69 |   |   |   | - |   |   |   | - |   |   |   | 51,257 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 51,326 |   |
| Net income                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,175,462 |   |   |   | - |   |   |   | - |   |   |   | 5,175,462 |   |
| Net unrealized gains on securities                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| available for sale, net of income tax                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 217,485 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 217,485 |   |
| Balance, September 30, 2009 (unaudited)                               |   |   | 3,795,607 |   |   | $ | 37,957 |   |   |   | - |   |   | $ | - |   |   | $ | 12,013,769 |   |   | $ | 217,485 |   |   | $ | (346,986 | ) |   |   | (816,025 | ) |   | $ | (1,220,382 | ) |   | $ | 10,701,843 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| KINGSTONE COMPANIES, INC. AND SUBSIDIARIES                                              |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   |   |   |   |   |   |
| Condensed Consolidated Statements of Cash Flows (Unaudited)                             |   |
| Nine Months Ended September 30,                                                         |   | 2009 |   |   | 2008 |   |
|                                                                                    |   |   |   |   |   |   |
|  Cash flows provided by (used in) operating activities:                            |   |   |   |   |   |   |
|  Net income (loss)                                                                 |   | $ | 5,175,462 |   |   | $ | (441,663 | ) |
|  Adjustments to reconcile net income to net cash provided by (used in) operations: |   |   |   |   |   |   |   |   |
|  Gain on acquistion of Kingstone Insurance Company                                 |   |   | (5,401,860 | ) |   |   | - |   |
|  Gain on sale of investments                                                       |   |   | (99,856 | ) |   |   | - |   |
|  Depreciation and amortization                                                     |   |   | 103,113 |   |   |   | 26,532 |   |
|  Accretion of discount on notes receivable                                         |   |   | - |   |   |   | (576,228 | ) |
|  Amortization of warrants                                                          |   |   | - |   |   |   | 17,731 |   |
|  Stock-based payments                                                              |   |   | 51,326 |   |   |   | 104,614 |   |
|  Amortization of bond premium or discount                                          |   |   | 11,142 |   |   |   | - |   |
|  Deferred income taxes                                                             |   |   | (300,368 | ) |   |   | (328,000 | ) |
|  (Increase) decrease in assets:                                                    |   |   |   |   |   |   |   |   |
|  Short term investments                                                            |   |   | 373,430 |   |   |   | - |   |
|  Premiums receivable, net                                                          |   |   | 94,856 |   |   |   | - |   |
|  Receivables - reinsurance contracts                                               |   |   | (46,140 | ) |   |   | - |   |
|  Reinsurance receivables, net                                                      |   |   | (1,038,873 | ) |   |   | - |   |
|  Deferred acquisition costs                                                        |   |   | (134,643 | ) |   |   | - |   |
|  Other assets                                                                      |   |   | 78,670 |   |   |   | 332,555 |   |
|  Increase (decrease) in liabilities:                                               |   |   |   |   |   |   |   |   |
|  Loss and loss adjustment expenses                                                 |   |   | 1,001,485 |   |   |   | - |   |
|  Unearned premiums                                                                 |   |   | 340,977 |   |   |   | - |   |
|  Reinsurance balances payable                                                      |   |   | (15,988 | ) |   |   | - |   |
|  Deferred ceding commission revenue                                                |   |   | 143,327 |   |   |   | - |   |
|  Accounts payable, accrued liabilities and other liabilities                       |   |   | 122,789 |   |   |   | 269,390 |   |
|  Net cash provided by (used in) operating activities of continuing operations      |   |   | 458,849 |   |   |   | (595,069 | ) |
|  Operating activities of discontinued operations                                   |   |   | 123,325 |   |   |   | (6,101 | ) |
|  Net cash flows provided by (used in) operations                                   |   |   | 582,174 |   |   |   | (601,170 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |
|  Cash flows provided by investing activities:                                      |   |   |   |   |   |   |   |   |
|  Purchase - fixed-maturity securities                                              |   |   | (3,046,799 | ) |   |   | - |   |
|  Purchase - equity securities                                                      |   |   | (744,704 | ) |   |   | - |   |
|  Sale or maturity - fixed-maturity securities                                      |   |   | 1,575,031 |   |   |   | - |   |
|  Sale - equity securities                                                          |   |   | 1,439,854 |   |   |   | - |   |
|  Cash acquired in acquisition                                                      |   |   | 1,327,057 |   |   |   | - |   |
|  Purchase of property and equipment                                                |   |   | (1,803 | ) |   |   | (2,437 | ) |
|  Increase in accrued interest - Commercial Mutual Insurance Company                |   |   | (60,757 | ) |   |   | - |   |
|  Increase in notes receivable and accrued interest - Sale of businesses            |   |   | (118,766 | ) |   |   | - |   |
|  Collections of notes receivable and accrued interest - Sale of businesses         |   |   | 52,420 |   |   |   | - |   |
|  Other investing activities                                                        |   |   | - |   |   |   | (136,128 | ) |
|  Net cash provided by (used in) investing activities of continuing operations      |   |   | 421,533 |   |   |   | (138,565 | ) |
|  Investing activities of discontinued operations                                   |   |   | 1,869,628 |   |   |   | 1,158,291 |   |
|  Net cash flows provided by investing activities                                   |   |   | 2,291,161 |   |   |   | 1,019,726 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
|  Cash flows used in financing activities:                                          |   |   |   |   |   |   |   |   |
|  Proceeds from long term debt                                                      |   |   | 750,000 |   |   |   | - |   |
|  Principal payments on long-term debt                                              |   |   | (1,448,143 | ) |   |   | (366,643 | ) |
|  Net cash used in financing activities of continuing operations                    |   |   | (698,143 | ) |   |   | (366,643 | ) |
|  Financing activities of discontinued operations                                   |   |   | - |   |   |   | (562,177 | ) |
|  Net cash flows used in financing activities                                       |   |   | (698,143 | ) |   |   | (928,820 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |
|  Increase (decrease) in cash and cash equivalents                                  |   |   | 2,175,192 |   |   |   | (510,264 | ) |
|  Cash and cash equivalents, beginning of year                                      |   |   | 142,949 |   |   |   | 1,030,822 |   |
|  Cash and cash equivalents, end of period                                          |   | $ | 2,318,141 |   |   | $ | 520,558 |   |

----

----

----

----

|                                                                           |   | Nine months ended |      |
|--------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                           |   | September 30,     |      |   | September 30, |   |
|                                                                           |   | 2009              |      |   | 2008 |   |
|                                                                           |   |              |      |   |   |   |
|  Supplemental disclosures of cash flow information:                       |   |              |      |   |   |   |
|  Cash paid for income taxes                                               |   | $                 | 11,337    |   |   | $ | 21,316 |   |
|  Cash paid for interest                                                   |   |              | 322,937   |   |   |   | 271,940 |   |
|                                                                           |   |              |      |   |   |   |   |   |
|  Schedule of non-cash investing and financing activities:                 |   |              |      |   |   |   |   |   |
|  Exchange of notes receivable as consideration paid for the acquistion of |   |              |      |   |   |   |   |   |
|  Kingstone Insurance Company                                              |   |              | 5,996,461 |   |   |   | - |   |
|  Notes received in connection with sale of businesses                     |   |              | 1,047,573 |   |   |   | - |   |
|  Notes payable exchanged for mandatorily redeemable preferred stock       |   |              | 519,231   |   |   |   | - |   |
|  Liabilties assumed by purchaser of premium finance portfolio             |   |              | -         |   |   |   | 11,229,060 |   |
|  Reserve held by purchaser of premium finance portfolio                   |   |              | -         |   |   |   | 261,363 |   |

----

----

----

----

|  Personal Lines                                 |   |   | 66.4  | % |
|------------------------------------------------------|--------|--------|-------|---|
|  Commercial Automobile                          |   |   | 24.5  | % |
|  Total premiums earned subject to concentration |   |   | 90.9  | % |
|  Premiums earned not subject to concentration   |   |   | 9.1   | % |
|  Total premiums earned                          |   |   | 100.0 | % |

----

| • |   | Determine whether there are factors present that indicate that the market for the asset is not active at the measurement date; and                                      |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Evaluate the quoted price (i.e., a recent transaction or broker price quotation) to determine whether the quoted price is not associated with a distressed transaction. |

----

----

|  Exchange of principal amount of surplus notes of CMIC    |   | $      | 3,750,000  |   |
|----------------------------------------------------------------|--------|--------|------------|--------|
|  Accrued interest forgiven                                |   |   | 2,246,461  |   |
|  Total purchase consideration                             |   |   | 5,996,461  |   |
|  Gain on acquisition (bargain purchase)                   |   |   | 5,401,860  |   |
|  Fair value of CMIC at acquisition, net of deferred taxes |   | $      | 11,398,321 |   |

|                                                              |   | Level 1 |       |   | Level 2 |   |   | Level 3 |   |   | Total      |   |
|-------------------------------------------------------------------|--------|---------|------------|--------|---------|--------|--------|---------|--------|--------|------------|--------|
|  Assets                                                      |   |    |       |   |    |   |   |    |   |   |       |   |
|  Short term investments                                      |   | $       | 811,738    |   |    | $      | -      |    |   | $      | -          |   |   | $ | 811,738 |   |
|  Fixed-maturity securities                                   |   |    | 9,266,253  |   |    |   | -      |    |   |   | -          |   |   |   | 9,266,253 |   |
|  Equity securities                                           |   |    | 1,823,045  |   |    |   | -      |    |   |   | -          |   |   |   | 1,823,045 |   |
|  Total investments                                           |   |    | 11,901,036 |   |    |   | -      |    |   |   | -          |   |   |   | 11,901,036 |   |
|  Cash and cash equivalents                                   |   |    | 1,327,057  |   |    |   | -      |    |   |   | -          |   |   |   | 1,327,057 |   |
|  Investment income receivable                                |   |    | -          |   |    |   | -      |    |   |   | 70,216     |   |   |   | 70,216 |   |
|  Premiums receivable, net of of provision for                |   |    |       |   |    |   |   |    |   |   |       |   |   |   |   |   |
|  uncollectible amounts                                       |   |    | -          |   |    |   | -      |    |   |   | 4,418,094  |   |   |   | 4,418,094 |   |
|  Receivables - reinsurance contracts                         |   |    | -          |   |    |   | -      |    |   |   | 1,137,832  |   |   |   | 1,137,832 |   |
|  Reinsurance receivables, net of provision for               |   |    |       |   |    |   |   |    |   |   |       |   |   |   |   |   |
|  uncollectible amounts                                       |   |    | -          |   |    |   | -      |    |   |   | 20,049,199 |   |   |   | 20,049,199 |   |
|  Deferred acquisition costs                                  |   |    | -          |   |    |   | -      |    |   |   | 2,665,802  |   |   |   | 2,665,802 |   |
|  Intangible assets                                           |   |    | -          |   |    |   | -      |    |   |   | 4,850,000  |   |   |   | 4,850,000 |   |
|  Property and equipment, net of accumulated depreciation     |   |    | -          |   |    |   | -      |    |   |   | 1,658,493  |   |   |   | 1,658,493 |   |
|  Other assets                                                |   |    | -          |   |    |   | -      |    |   |   | 531,991    |   |   |   | 531,991 |   |
|  Total assets                                                |   | $       | 13,228,093 |   |    | $      | -      |    |   | $      | 35,381,627 |   |   | $ | 48,609,720 |   |
|                                                              |   |    |       |   |    |   |   |    |   |   |       |   |   |   |   |   |
|  Liabilities                                                 |   |    |       |   |    |   |   |    |   |   |       |   |   |   |   |   |
|  Loss and loss adjustment expenses                           |   | $       | -          |   |    | $      | -      |    |   | $      | 16,191,784 |   |   | $ | 16,191,784 |   |
|  Unearned premiums                                           |   |    | -          |   |    |   | -      |    |   |   | 13,879,374 |   |   |   | 13,879,374 |   |
|  Reinsurance balances payable                                |   |    | -          |   |    |   | -      |    |   |   | 2,005,590  |   |   |   | 2,005,590 |   |
|  Deferred ceding commission revenue                          |   |    | -          |   |    |   | -      |    |   |   | 2,700,376  |   |   |   | 2,700,376 |   |
|  Accounts payable, accrued liabilities and other liabilities |   |    | -          |   |    |   | -      |    |   |   | 1,157,829  |   |   |   | 1,157,829 |   |
|  Deferred income taxes                                       |   |    | -          |   |    |   | -      |    |   |   | 1,271,452  |   |   |   | 1,271,452 |   |
|  Other liabilities                                           |   |    | -          |   |    |   | -      |    |   |   | 4,994      |   |   |   | 4,994 |   |
|  Total liabilities                                           |   |    | -          |   |    |   | -      |    |   |   | 37,211,399 |   |   |   | 37,211,399 |   |
|  Stockholder's equity                                        |   |    |       |   |    |   |   |    |   |   |       |   |   |   | 11,398,321 |   |
|  Total liabilities and stockholder's equity                  |   |    |       |   |    |   |   |    |   |   |       |   |   | $ | 48,609,720 |   |

----

|  Purchase Price                                                                      |   |   |       |   | $      | 5,996,461 |       |
|-------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|-----------|------------|
|                                                                                      |   |   |       |   |   |      |       |
|  Book value of CMIC at June 30, 2009                                                 |   |   |       |   |   | 2,010,171 |       |
|  Conversion of surplus notes and accrued interest thereon to common stock            |   |   |       |   |   | 5,996,461 |       |
|  Fair value adjustments, net of taxes based on appraisal                             |   |   |       |   |   |      |       |
|  of CMIC's identifiable assets at June 30, 2009:                                     |   |   |       |   |   |      |       |
|  Insurance license                                                                   |   | $      | 500,000    |   |   |      |       |   |
|  Customer relationships                                                              |   |   | 3,400,000  |   |   |      |       |   |
|  Assembled workforce                                                                 |   |   | 950,000    |   |   |      |       |   |
|  Total intangible assets                                                             |   |   | 4,850,000  |   |   |      |       |   |
|  Real estate assets                                                                  |   |   | 288,923    |   |   |      |       |   |
|  Identifiable assets                                                                 |   |   | 5,138,923  |   |   |      |       |   |
|  Tax effect                                                                          |   |   | (1,747,234 | )      |   |      |       |   |
|  Fair value adjustments, net of taxes based on appraisal                             |   |   |       |   |   |      |       |   |
|  of CMIC's identifiable assets at June 30, 2009                                      |   |   |       |   |   |      | 3,391,689  |   |
|  Fair value of net assets acquired, net of taxes                                     |   |   |       |   |   |      | 11,398,321 |   |
|                                                                                      |   |   |       |   |   |      |       |   |
|  Excess of fair value of assets acquied over purchase price (bargain purchase price) |   |   |       |   |   | $         | (5,401,860 | ) |

|  Total revenue |   | $      | 4,002,204 |   |
|---------------------|--------|--------|-----------|--------|
|  Net income    |   |   | 414,006   |   |

----

|                                       |   | Nine Months Ended |       |   | Three Months Ended |   |
|--------------------------------------------|--------|-------------------|------------|--------|--------------------|--------|
|                                       |   | September 30,     |       |   | September 30,      |   |
|                                       |   | 2009              |       |   | 2008               |   |   | 2009 |   |   | 2008 |   |
|                                       |   |              |       |   |               |   |   |   |   |   |   |   |
| Total revenue                              |   | $                 | 13,355,291 |   |               | $      | 12,296,307 |   |   | $ | 4,122,473 |   |   | $ | 4,190,680 |   |
| Income from continuing operations          |   | $                 | 930,741    |   |               | $      | 498,161 |   |   | $ | 269,612 |   |   | $ | 195,827 |   |
| Net income (loss)                          |   | $                 | 690,418    |   |               | $      | (144,282 | ) |   | $ | 213,062 |   |   | $ | 178,876 |   |
|                                       |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share:    |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations          |   | $                 | 0.31       |   |               | $      | 0.17 |   |   | $ | 0.09 |   |   | $ | 0.07 |   |
| Net income (loss)                          |   | $                 | 0.23       |   |               | $      | (0.05 | ) |   | $ | 0.07 |   |   | $ | 0.06 |   |
|                                       |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings (loss) per common share:  |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations          |   | $                 | 0.31       |   |               | $      | 0.17 |   |   | $ | 0.07 |   |   | $ | 0.07 |   |
| Net income (loss)                          |   | $                 | 0.23       |   |               | $      | (0.05 | ) |   | $ | 0.06 |   |   | $ | 0.06 |   |
|                                       |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding |   |              |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                      |   |              | 2,974,349  |   |               |   | 2,972,547 |   |   |   | 2,977,501 |   |   |   | 2,971,521 |   |
| Diluted                                    |   |              | 2,974,349  |   |               |   | 2,972,547 |   |   |   | 3,627,116 |   |   |   | 2,971,521 |   |

----

|                               |   | Cost or   |       |   | Gross      |   |    | Gross Unrealized Losses |   |   |         |   |
|-----------------------------------------|--------|-----------|------------|--------|------------|--------|---------|-------------------------|--------|--------|--------------|--------|
|                                    |   | Amortized |       |   | Unrealized |   |    | Less than 12            |   |   | More than 12 |   |   | Fair |   |
|  Category                          |   | Cost (a)  |       |   | Gains      |   |    | Months                  |   |   | Months       |   |   | Value |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |
|  Fixed-Maturity Securities:        |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |
|  U.S. Treasury securities and      |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |
|  obligations of U.S. government    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |
|  corporations and agencies         |   | $         | 3,070,902  |   |       | $      | 23,877  |                    |   | $      | -            |   |   | $ | - |   |   | $ | 3,094,779 |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Political subdivisions of States, |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Territories and Possessions       |   |      | 4,607,406  |   |       |   | 119,320 |                    |   |   | -            |   |   |   | - |   |   |   | 4,726,726 |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Corporate and other bonds         |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Industrial and miscellaneous      |   |      | 3,064,581  |   |       |   | 78,974  |                    |   |   | (25,401      | )      |   |   | - |   |   |   | 3,118,154 |   |
|  Total fixed-maturity securities   |   |      | 10,742,889 |   |       |   | 222,171 |                    |   |   | (25,401      | )      |   |   | - |   |   |   | 10,939,659 |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Equity Securities:                |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Preferred stocks                  |   |      | 438,177    |   |       |   | 1,273   |                    |   |   | -            |   |   |   | - |   |   |   | 439,450 |   |
|  Common stocks                     |   |      | 783,585    |   |       |   | 187,557 |                    |   |   | (56,078      | )      |   |   | - |   |   |   | 915,064 |   |
|  Total equity securities           |   |      | 1,221,762  |   |       |   | 188,830 |                    |   |   | (56,078      | )      |   |   | - |   |   |   | 1,354,514 |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Short term investments            |   |      | 438,308    |   |       |   | -       |                    |   |   | -            |   |   |   | - |   |   |   | 438,308 |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |
|  Total                             |   | $         | 12,402,959 |   |       | $      | 411,001 |                    |   | $      | (81,479      | )      |   | $ | - |   |   | $ | 12,732,481 |   |

|                             |   | Amortized |       |   |       |   |
|----------------------------------|--------|-----------|------------|--------|------------|--------|
|  Remaining Time to Maturity |   | Cost      |       |   | Fair Value |   |
|                             |   |      |       |   |       |   |
|  Less than one year         |   | $         | 1,027,122  |   |       | $      | 1,015,083 |   |
|  One to five years          |   |      | 5,677,420  |   |       |   | 5,767,589 |   |
|  Five to ten years          |   |      | 3,257,064  |   |       |   | 3,358,142 |   |
|  More than 10 years    |   |      | 781,283    |   |       |   | 798,845 |   |
|  Total                      |   | $         | 10,742,889 |   |       | $      | 10,939,659 |   |

|  Income                    |   |   |    |
|---------------------------------|--------|--------|---------|
|  Fixed-maturity securities |   | $      | 105,300 |   |
|  Equity securities         |   |   | 23,130  |   |
|  Cash and cash equivalents |   |   | 18,791  |   |
|  Other                     |   |   | 60      |   |
|  Total                     |   |   | 147,281 |   |
|  Expenses                  |   |   |    |   |
|  Investment expenses       |   |   | 31,624  |   |
|  Net investment income     |   | $      | 115,657 |   |

----

|  Fixed-maturity securities              |   |   |   |
|----------------------------------------------|--------|--------|--------|
|  Gross realized gains                   |   | $      | 7,433  |   |
|  Gross realized losses                  |   |   | (1,446 | ) |
|                                         |   |   | 5,987  |   |
|                                         |   |   |   |   |
|  Equity securities                      |   |   |   |   |
|  Gross realized gains                   |   |   | 93,869 |   |
|  Gross realized losses                  |   |   | -      |   |
|                                         |   |   | 93,869 |   |
|                                         |   |   |   |   |
|  Other-than-temporary impairment losses |   |   |   |   |
|  Fixed-maturity securities              |   |   | -      |   |
|  Equity securities                      |   |   | -      |   |
|                                         |   |   | -      |   |
|                                         |   |   |   |   |
|  Net realized gains                     |   | $      | 99,856 |   |

----

|                                    |   | Less than 12 months |      |   | 12 months or more |   |    | Total  |   |
|-----------------------------------------|--------|---------------------|-----------|--------|-------------------|--------|---------|--------|--------|
|                               |   | Fair                |      |   | Unrealized        |   |    | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|  Category                          |   | Value               |      |   | Losses            |   |    | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
|                                    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |
|  Fixed-Maturity Securities:        |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |
|  U.S. Treasury securities and      |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |
|  obligations of U.S. government    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |
|  corporations and agencies         |   | $                   | -         |   |              | $      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Political subdivisions of States, |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Territories and Possessions       |   |                | -         |   |              |   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Corporate and other bonds         |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Industrial and miscellaneous      |   |                | 1,192,246 |   |              |   | (25,401 | )      |   |   | - |   |   |   | - |   |   |   | 1,192,246 |   |   |   | (25,401 | ) |
|  Total fixed-maturity securities   |   |                | 1,192,246 |   |              |   | (25,401 | )      |   |   | - |   |   |   | - |   |   |   | 1,192,246 |   |   |   | (25,401 | ) |
|                                    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Equity Securities:                |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Preferred stocks                  |   | $                   | 70,700    |   |              | $      | (19,530 | )      |   | $ | - |   |   | $ | - |   |   | $ | 70,700 |   |   | $ | (19,530 | ) |
|  Common stocks                     |   |                | 252,490   |   |              |   | (36,548 | )      |   |   | - |   |   |   | - |   |   |   | 252,490 |   |   |   | (36,548 | ) |
|  Total equity securities           |   |                | 323,190   |   |              |   | (56,078 | )      |   |   | - |   |   |   | - |   |   |   | 323,190 |   |   |   | (56,078 | ) |
|                                    |   |                |      |   |              |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Total                             |   | $                   | 1,515,436 |   |              | $      | (81,479 | )      |   | $ | - |   |   | $ | - |   |   | $ | 1,515,436 |   |   | $ | (81,479 | ) |

----

|  ($ in thousands)           |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
|----------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                             |   |    |   |   |    |   |   |    |   |   |   |   |
|  Fixed-maturity investments |   |    |   |   |    |   |   |    |   |   |   |   |
|  U.S. Treasury securities   |   |    |   |   |    |   |   |    |   |   |   |   |
|  and obligations of U.S.    |   |    |   |   |    |   |   |    |   |   |   |   |
|  government corporations    |   |    |   |   |    |   |   |    |   |   |   |   |
|  and agencies               |   | $       | 3,095  |   |    | $      | -      |    |   | $      | -      |   |   | $ | 3,095 |   |
|                             |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  Political subdivisions of  |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  States, Territories and    |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  Possessions                |   |    | 4,727  |   |    |   | -      |    |   |   | -      |   |   |   | 4,727 |   |
|                             |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  Corporate and              |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  other bonds                |   |    | 3,118  |   |    |   | -      |    |   |   | -      |   |   |   | 3,118 |   |
|                             |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  Total fixed maturities     |   |    | 10,940 |   |    |   | -      |    |   |   | -      |   |   |   | 10,940 |   |
|  Equity investments         |   |    | 1,355  |   |    |   | -      |    |   |   | -      |   |   |   | 1,355 |   |
|  Short term investments     |   |    | 438    |   |    |   |   |    |   |   |   |   |   |   | 438 |   |
|  Total investments          |   |    | 12,733 |   |    |   | -      |    |   |   | -      |   |   |   | 12,733 |   |
|                             |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  Cash and                   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
|  cash equivalents           |   |    | 2,318  |   |    |   | -      |    |   |   | -      |   |   |   | 2,318 |   |
|  Total                      |   | $       | 15,051 |   |    | $      | -      |    |   | $      | -      |   |   | $ | 15,051 |   |

----

|                                         |   | September 30, 2009 |       |   | December 31, 2008 |   |
|----------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                         |   | Carrying Value     |       |   | Fair Value        |   |   | Carrying Value |   |   | Fair Value |   |
|                                         |   | (unaudited)        |       |   |              |   |   |   |   |
|  Cash and short-term investments        |   | $                  | 2,756,449  |   |              | $      | 2,756,449 |   |   | $ | 142,949 |   |   | $ | 142,949 |   |
|  Premiums receivable                    |   |               | 4,323,238  |   |              |   | 4,323,238 |   |   |   | - |   |   |   | - |   |
|  Receivables - reinsurance contracts    |   |               | 1,183,972  |   |              |   | 1,183,972 |   |   |   | - |   |   |   | - |   |
|  Reinsurance receivables                |   |               | 21,088,072 |   |              |   | 21,088,072 |   |   |   | - |   |   |   | - |   |
|  Notes receivable-CMIC                  |   |               | -          |   |              |   | - |   |   |   | 5,935,704 |   |   |   | 5,935,704 |   |
|  Notes receivable-sale of business      |   |               | 1,113,919  |   |              |   | 1,113,919 |   |   |   | - |   |   |   | - |   |
|  Real estate, net of                    |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  accumulated depreciation               |   |               | 1,547,629  |   |              |   | 1,510,000 |   |   |   | - |   |   |   | - |   |
|  Reinsurance balances payable           |   |               | 1,989,602  |   |              |   | 1,989,602 |   |   |   | - |   |   |   | - |   |
|  Notes payable                          |   |               | 791,454    |   |              |   | 791,454 |   |   |   | 2,008,828 |   |   |   | 2,008,828 |   |
|  Mandatorily redeemable preferred stock |   |               | 1,299,231  |   |              |   | 1,299,231 |   |   |   | 780,000 |   |   |   | 780,000 |   |

----

|                        |   |     |   |   | September 30, 2009 |   |      | September 30, 2008 |   |
|-----------------------------|--------|----------|--------|--------|--------------------|--------|-----------|--------------------|--------|
|                        |   | Useful   |   |   | Gross              |   |      |               |   |   | Net |   |   | Gross |   |   |   |   |   | Net |   |
|                        |   | Life     |   |   | Carrying           |   |      | Accumulated        |   |   | Carrying |   |   | Carrying |   |   | Accumulated |   |   | Carrying |   |
|                        |   | (in yrs) |   |   | Value              |   |      | Amortization       |   |   | Amount |   |   | Value |   |   | Amortization |   |   | Amount |   |
|  Insurance license     |   |     | -      |   |               | $      | 500,000   |               |   | $  | - |   |   | $ | 500,000 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|  Customer and producer |   |     |   |   |               |   |      |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  relationships         |   |     | 10     |   |               |   | 3,400,000 |               |   |   | 85,000 |   |   |   | 3,315,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|  Assembled workforce   |   |     | 7      |   |               |   | 950,000   |               |   |   | 33,900 |   |   |   | 916,100 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|  Total                 |   |     |   |   |               | $      | 4,850,000 |               |   | $ | 118,900 |   |   | $ | 4,731,100 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| 2009 (3 months) |   | $      | 158,571 |   |
|-----------------|--------|--------|---------|--------|
| 2010            |   |   | 475,714 |   |
| 2011            |   |   | 475,714 |   |
| 2012            |   |   | 475,714 |   |
| 2013            |   |   | 475,714 |   |
| 2014            |   |   | 475,714 |   |

----

|                                           |   | Maximum              |    |
|------------------------------------------------|--------|----------------------|---------|
|                                           |   | Loss                 |    |
|  Line of business                         |   | Exposure             |    |
|  Casualty and property (personal lines)   |   |                 |    |
|  July 1, 2006 - June 30, 2010             |   | $                    | 175,000 |   |
|  July 1, 2005 - June 30, 2006             |   | $                    | 140,000 |   |
|  July 1, 2003 - June 30, 2005             |   | $                    | 75,000  |   |
|  July 1, 2002 - June 30, 2003             |   | $                    | 100,000 |   |
|  January 1, 2002 - June 30, 2002          |   | $                    | 100,000 |   |
|                                           |   |                 |    |   |
|  Basic auto physical damage               |   |                 |    |   |
|  January 1, 2006 - December 31, 2007      |   | 100% of covered loss |    |
|  October 1, 2003 - December 31, 2005      |   | 40% of covered loss  |    |
|                                           |   |                 |    |   |
|  Private passenger auto                   |   |                 |    |   |
|  July 1, 2007 - December 31, 2008         |   | 25% of covered loss  |    |
|                                           |   |                 |    |   |
|  Casualty and property (commercial lines) |   |                 |    |   |
|  October 1, 2002 - December 31, 2003      |   | $                    | 100,000 |   |
|  July 1, 1999 - October 1, 2002           |   | $                    | 25,000  |   |
|                                           |   |                 |    |   |
|  Commercial auto liability                |   |                 |    |   |
|  January 1, 2007 - December 31, 2008      |   | $                    | 150,000 |   |
|  January 1, 2005 - December 31, 2006      |   | $                    | 150,000 |   |
|  January 1, 2004 - December 31, 2004      |   | $                    | 120,000 |   |
|  January 1, 2002 - December 31, 2003      |   | $                    | 100,000 |   |
|                                           |   |                 |    |   |
|  Commercial auto physical damage          |   |                 |    |   |
|  January 1, 2007 - December 31, 2007      |   | 50% of covered loss  |    |
|  January 1, 2004 - December 31, 2006      |   | 40% of covered loss  |    |
|  January 1, 2002 - December 31, 2003      |   | 100% of covered loss |    |

|                                   |   | Unpaid |   |   | Paid   |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|  ($ in thousands)                 |   | Losses |   |   | Losses |   |   | Total  |   |
|  Motors Insurance Corporation     |   | $      | 5,717  |   |   | $      | 458    |   |   | $ | 6,175 |   |
|  SCOR Reinsurance Company         |   |   | 1,760  |   |   |   | 80     |   |   |   | 1,840 |   |
|  Allied World Assurance Company   |   |   | 934    |   |   |   | 119    |   |   |   | 1,053 |   |
|  Folksamerica Reinsurance Company |   |   | 989    |   |   |   | 33     |   |   |   | 1,022 |   |
|  Arch Reinsurance Company         |   |   | 506    |   |   |   | 100    |   |   |   | 606 |   |
|  Others                           |   |   | 1,040  |   |   |   | 221    |   |   |   | 1,261 |   |
|  Total                            |   | $      | 10,946 |   |   | $      | 1,011  |   |   | $ | 11,957 |   |

----

|  Ceded commission on reinsurance treaties |   | $      | 1,508,441 |   |
|------------------------------------------------|--------|--------|-----------|--------|
|  Contingent commission ceded              |   |   | (25,192   | )      |
|                                           |   | $      | 1,483,249 |   |

----

|                        |   |   |      |   | Less       |   |    |      |   |
|-----------------------------|--------|--------|-----------|--------|------------|--------|---------|-----------|--------|
|                        |   | Total  |      |   | Current    |   |    |      |   |
|                        |   | Note   |      |   | Maturities |   |    | Long-Term |   |
| Sale of NY stores           |   | $      | 550,543   |   |       | $      | 550,543 |      |   | $ | - |   |
| Sale of Pennsylvania stores |   |   | 394,610   |   |       |   | 15,336  |      |   |   | 379,274 |   |
| Sale of Franchise business  |   |   | 150,000   |   |       |   | 50,000  |      |   |   | 100,000 |   |
|                        |   |   | 1,095,153 |   |       |   | 615,879 |      |   |   | 479,274 |   |
| Accrued interest            |   |   | 18,766    |   |       |   | 18,757  |      |   |   | 9 |   |
| Total                       |   | $      | 1,113,919 |   |       | $      | 634,636 |      |   | $ | 479,283 |   |

----

|  Net deferred acquisition costs net of ceding |   |   |       |
|----------------------------------------------------|--------|--------|------------|
|  commission revenue, beginning of period      |   | $      | (34,574    | ) |
|                                               |   |   |       |   |
|  Cost incurred and deferred:                  |   |   |       |   |
|  Commissions and brokerage                    |   |   | 1,148,108  |   |
|  Other underwriting and acquisition costs     |   |   | 298,426    |   |
|  Ceding commission revenue                    |   |   | (1,688,749 | ) |
|  Net deferred acquisition costs net of ceding |   |   |       |   |
|  commission revenue deferred during year      |   |   | (242,214   | ) |
|  Amortization                                 |   |   | 233,529    |   |
|                                               |   |   | (8,685     | ) |
|                                               |   |   |       |   |
| Net deferred acquisition costs net of ceding       |   |   |       |   |
| commission revenue, end of period                  |   | $      | (43,259    | ) |

|  Deferred acquisition costs         |   | $      | 2,800,445  |   |
|------------------------------------------|--------|--------|------------|--------|
|  Deferred ceding commission revenue |   |   | (2,843,703 | )      |
|  Balance at end of period           |   | $      | (43,258    | )      |

|                             |   |   |      |   | Accumulated  |   |     |   |   |
|---------------------------------------|--------|--------|-----------|--------|--------------|--------|----------|--------|--------|
|                                  |   | Cost   |      |   | Depreciation |   |     | Net    |   |
|                                  |   |   |      |   |         |   |     |   |   |
| September 30, 2009 (unaudited)        |   |   |      |   |         |   |     |   |   |
|  Building                        |   | $      | 1,420,512 |   |         | $      | (4,980   | )      |   | $ | 1,415,532 |   |
|  Land                            |   |   | 132,097   |   |         |   | -        |   |   |   | 132,097 |   |
|  Furniture                       |   |   | 76,850    |   |         |   | (51,105  | )      |   |   | 25,745 |   |
|  Computer equipment and software |   |   | 275,658   |   |         |   | (177,178 | )      |   |   | 98,480 |   |
|  Automobile                      |   |   | 29,183    |   |         |   | (4,169   | )      |   |   | 25,014 |   |
|  Entertainment facility          |   |   | 200,538   |   |         |   | (138,706 | )      |   |   | 61,832 |   |
|  Total                           |   | $      | 2,134,838 |   |         | $      | (376,138 | )      |   | $ | 1,758,700 |   |
|                                  |   |   |      |   |         |   |     |   |   |   |   |   |
| December 31, 2008                     |   |   |      |   |         |   |     |   |   |   |   |   |
|  Furniture                       |   | $      | 58,076    |   |         | $      | (47,833  | )      |   | $ | 10,243 |   |
|  Computer equipment and software |   |   | 157,611   |   |         |   | (154,589 | )      |   |   | 3,022 |   |
|  Entertainment facility          |   |   | 200,538   |   |         |   | (131,186 | )      |   |   | 69,352 |   |
|  Total                           |   | $      | 416,225   |   |         | $      | (333,608 | )      |   | $ | 82,617 |   |

----

|                              |   | Direct |      |   | Assumed |   |   | Ceded  |   |   | Net        |   |
|-----------------------------------|--------|--------|-----------|--------|---------|--------|--------|--------|--------|--------|------------|--------|
|  Premiums written            |   | $      | 6,924,750 |   |    | $      | 8,378  |   |   | $      | (4,659,252 | )      |   | $ | 2,273,876 |   |
|  Change in unearned premiums |   |   | (335,551  | )      |    |   | (5,426 | )      |   |   | 329,920    |   |   |   | (11,057 | ) |
|  Premiums earned             |   | $      | 6,589,199 |   |    | $      | 2,952  |   |   | $      | (4,329,332 | )      |   | $ | 2,262,819 |   |

|                                     |   | Gross     |       |   | Reinsurance |   |
|-----------------------------------------------|--------|-----------|------------|--------|-------------|--------|
|                                          |   | Liability |       |   | Receivables |   |
|  Case-basis reserves                     |   | $         | 12,367,841 |   |        | $      | 8,367,527 |   |
|  Loss adjustment expenses                |   |      | 2,168,875  |   |        |   | 1,085,000 |   |
|  IBNR reserves                           |   |      | 2,656,553  |   |        |   | 1,534,564 |   |
|  Recoverable on paid losses              |   |      | -          |   |        |   | 969,974 |   |
|  Total loss and loss adjustment expenses |   | $         | 17,193,269 |   |        |   | 11,957,065 |   |
|  Unearned premiums                       |   |      |       |   |        |   | 9,131,007 |   |
|  Total reinsurance receivables           |   |      |       |   |        | $      | 21,088,072 |   |

|  Balance at July 1, 2009       |   | $      | 16,191,784  |   |
|-------------------------------------|--------|--------|-------------|--------|
|  Less reinsurance recoverables |   |   | (10,054,697 | )      |
|                           |   |   | 6,137,087   |   |
|                                |   |   |        |   |
|  Incurred related to:          |   |   |        |   |
|  Current year                  |   |   | 1,055,695   |   |
|  Prior years                   |   |   | 31,581      |   |
|  Total incurred                |   |   | 1,087,276   |   |
|                                |   |   |        |   |
|  Paid related to:              |   |   |        |   |
|  Current year                  |   |   | 224,779     |   |
|  Prior years                   |   |   | 793,406     |   |
|  Total paid                    |   |   | 1,018,185   |   |
|                           |   |   |        |   |
|  Net balance at end of period  |   |   | 6,206,178   |   |
|  Add reinsurance recoverables  |   |   | 10,987,091  |   |
|  Balance at end of period      |   | $      | 17,193,269  |   |
|                                |   |   |        |   |

----

|                                      |    Accident Year |
|-------------------------------------------|----------------------------|
|  Product Line                        |  Most Recent          |  1st Prior |  All Other |
|                                      |                       |   |   |
|  Fire                                | Loss Ratio                 |  Loss Development | Loss Development |
|  Homeowners                          | Loss Ratio                 |  Loss Development | Loss Development |
|  Multi-Family                        | Loss Ratio                 |  Loss Development | Loss Development |
|  Commercial multiple-peril property  | Loss Ratio                 |  Loss Development | Loss Development |
|  Commercial multiple-peril liability | Loss Ratio                 |  Loss Development | Loss Development |
|  Other Liability                     | Loss Ratio                 |  Loss Development | Loss Development |
|  Commercial Auto Liability           | Loss Ratio                 |  Loss Development | Loss Development |
|  Auto Physical Damage                | Loss Ratio                 |  Loss Development | Loss Development |
|  Personal Auto Liability             | Loss Ratio                 |  Loss Development | Loss Development |

----

|                 |   | September 30, 2009 |    |   | December 31, 2008 |   |
|----------------------|--------|--------------------|---------|--------|-------------------|--------|
|                 |   |               |    |   | Less              |   |   |   |   |   |   |   |   | Less |   |   |   |   |
|                 |   | Total              |    |   | Current           |   |   | Long-Term |   |   | Total |   |   | Current |   |   | Long-Term |   |
|                 |   | Debt               |    |   | Maturities        |   |   | Debt |   |   | Debt |   |   | Maturities |   |   | Debt |   |
| Capitalized lease    |   | $                  | 41,454  |   |              | $      | 23,916 |   |   | $ | 17,538 |   |   | $ | 58,133 |   |   | $ | 22,338 |   |   | $ | 35,795 |   |
| Note payable,        |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accurate acquisition |   |               | -       |   |              |   | - |   |   |   | - |   |   |   | 450,695 |   |   |   | 70,872 |   |   |   | 379,823 |   |
| Notes payable        |   |               | 750,000 |   |              |   | - |   |   |   | 750,000 |   |   |   | 1,500,000 |   |   |   | 1,500,000 |   |   |   | - |   |
|                 |   | $                  | 791,454 |   |              | $      | 23,916 |   |   | $ | 767,538 |   |   | $ | 2,008,828 |   |   | $ | 1,593,210 |   |   | $ | 415,618 |   |

----

|  Years ended December 31, |   |   |    |
|--------------------------------|--------|--------|---------|
| 2009 (3 months)                |   | $      | 5,660   |   |
| 2010                           |   |   | 24,467  |   |
| 2011                           |   |   | 761,327 |   |
|                           |   | $      | 791,454 |   |

----

----

|                                                                                    |   | September 30, |       |   | December 31, |   |
|-----------------------------------------------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                                                                    |   | 2009          |       |   | 2008              |   |
|                                                                                    |   | (unaudited)   |       |   |              |   |
|  Deferred tax asset:                                                               |   |          |       |   |              |   |
|  Net operating loss carryovers subject to annual limitations                       |   | $             | 846,000    |   |              | $      | 846,000 |   |
|  Other net operating loss carryovers                                               |   |          | 851,373    |   |              |   | 544,000 |   |
|  Claims reserve discount                                                           |   |          | 133,204    |   |              |   | - |   |
|  Unearned premium                                                                  |   |          | 348,059    |   |              |   | - |   |
|  Loss and loss adjustment expenses                                                 |   |          | 218,443    |   |              |   | - |   |
|  Deferred ceding commission revenue                                                |   |          | 966,859    |   |              |   | - |   |
|  Depreciation and amortization                                                     |   |          | -          |   |              |   | 21,000 |   |
|  Investment impairments                                                            |   |          | 76,565     |   |              |   | - |   |
|  Stock compensation expense                                                        |   |          | -          |   |              |   | 67,000 |   |
|  Other                                                                             |   |          | 98,791     |   |              |   | - |   |
|  Total deferred tax assets                                                         |   |          | 3,539,294  |   |              |   | 1,478,000 |   |
|                                                                                    |   |          |       |   |              |   |   |   |
|  Deferred tax liability:                                                           |   |          |       |   |              |   |   |   |
|  Investment in KICO                                                                |   |          | 1,169,000  |   |              |   | 1,144,000 |   |
|  Deferred acquisition costs                                                        |   |          | 952,151    |   |              |   | - |   |
|  Intangibles                                                                       |   |          | 1,608,540  |   |              |   | - |   |
|  Depreciation and amortization                                                     |   |          | 267,360    |   |              |   | - |   |
|  Reinsurance recoverable                                                           |   |          | 177,222    |   |              |   | - |   |
|  Net unrealized appreciation of securities                                         |   |          | 87,854     |   |              |   | - |   |
|  Other                                                                             |   |          | 67,288     |   |              |   | 41,000 |   |
|  Total deferred tax liabilities                                                    |   |          | 4,329,415  |   |              |   | 1,185,000 |   |
|                                                                                    |   |          |       |   |              |   |   |   |
|  Net deferred tax (liabilty)/asset before valuation allowance                      |   |          | (790,121   | )      |              |   | 293,000 |   |
|  Less valuation allowance due to Annual Limitation of net operating loss carryover |   |          | (493,000   | )      |              |   | (493,000 | ) |
|  Net deferred income tax liability                                                 |   | $             | (1,283,121 | )      |              | $      | (200,000 | ) |

----

----

| Stock Options                                |   | Number of Shares |    |   | Weighted Average Exercise Price per Share |   |   | Weighted Average Remaining Contractual Term |   |   | Aggregate Intrinsic Value |   |
|----------------------------------------------|--------|------------------|---------|--------|-------------------------------------------|--------|--------|---------------------------------------------|--------|--------|---------------------------|--------|
|                                         |   |             |    |   |                                      |   |   |                                        |   |   |                      |   |
| Outstanding at December 31, 2008             |   |             | 177,400 |   |                                      | $      | 2.40   |                                        |   |   | -                         |   |   |   | - |   |
|                                         |   |             |    |   |                                      |   |   |                                        |   |   |                      |   |   |   |   |   |
| Granted                                      |   |             | 70,000  |   |                                      | $      | 2.35   |                                        |   |   | -                         |   |   |   | - |   |
| Exercised                                    |   |             | -       |   |                                      | $      | -      |                                        |   |   | -                         |   |   |   | - |   |
| Forfeited                                    |   |             | (22,400 | )      |                                      | $      | 3.82   |                                        |   |   | -                         |   |   |   | - |   |
|                                         |   |             |    |   |                                      |   |   |                                        |   |   |                      |   |   |   |   |   |
| Outstanding at September 30, 2009            |   |             | 225,000 |   |                                      | $      | 2.24   |                                        |   |   | 3.43                      |   |   | $ | 12,150 |   |
|                                         |   |             |    |   |                                      |   |   |                                        |   |   |                      |   |   |   |   |   |
| Vested and Exercisable at September 30, 2009 |   |             | 126,354 |   |                                      | $      | 2.24   |                                        |   |   | 2.84                      |   |   | $ | 8,859 |   |

----

|  Weighted average number of shares outstanding           |   |   | 2,977,501 |   |
|---------------------------------------------------------------|--------|--------|-----------|--------|
|  Effect of dilutive securities, common share equivalents |   |   | 649,615   |   |
|                                                          |   |   |      |   |
|  Weighted average number of shares outstanding,          |   |   |      |   |
|  used for computing diluted earnings per share           |   |   | 3,627,116 |   |

|  Net income from continuing operations                    |   | $      | 5,642,148 |   |
|----------------------------------------------------------------|--------|--------|-----------|--------|
|  Interest expense on dilutive convertible preferred stock |   |   | 37,353    |   |
|                                                           |   |   |      |   |
|  Net income from continuing operations available          |   |   |      |   |
|  to common shareholders for diluted earnings per share    |   | $      | 5,679,501 |   |

|  Net income                                               |   | $      | 5,585,598 |   |
|----------------------------------------------------------------|--------|--------|-----------|--------|
|  Interest expense on dilutive convertible preferred stock |   |   | 37,353    |   |
|                                                           |   |   |      |   |
|  Net income available to common shareholders for          |   |   |      |   |
|  diluted earnings per share                               |   | $      | 5,622,951 |   |

----

|                                       |   | Nine Months Ended |   |   | Three Months Ended |   |
|--------------------------------------------|--------|-------------------|--------|--------|--------------------|--------|
|                                       |   | September 30,     |   |   | September 30,      |   |
|                                       |   | 2009              |   |   | 2008               |   |   | 2009 |   |   | 2008 |   |
|                                       |   |              |   |   |               |   |   |   |   |   |   |   |
| Premium finance revenue                    |   | $                 | -      |   |               | $      | 225,322 |   |   | $ | - |   |   | $ | - |   |
|                                       |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                        |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses        |   |              | -      |   |               |   | 271,696 |   |   |   | - |   |   |   | 89,753 |   |
| Provision for finance receivable losses    |   |              | -      |   |               |   | - |   |   |   | - |   |   |   | (89,316 | ) |
| Depreciation and amortization              |   |              | -      |   |               |   | 46,556 |   |   |   | - |   |   |   | - |   |
| Interest expense                           |   |              | -      |   |               |   | 47,152 |   |   |   | - |   |   |   | 1,971 |   |
| Total operating expenses                   |   |              | -      |   |               |   | 365,404 |   |   |   | - |   |   |   | 2,408 |   |
|                                       |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                       |   |              | -      |   |               |   | (140,082 | ) |   |   | - |   |   |   | (2,408 | ) |
| Loss on sale of premim financing portfolio |   |              | -      |   |               |   | 250,603 |   |   |   | - |   |   |   | 4,728 |   |
| Loss before provision for income taxes     |   |              | -      |   |               |   | (390,685 | ) |   |   | - |   |   |   | (7,136 | ) |
| Provision for income taxes                 |   |              | -      |   |               |   | - |   |   |   | - |   |   |   | - |   |
|                                       |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations,         |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| net of income taxes                        |   | $                 | -      |   |               | $      | (390,685 | ) |   | $ | - |   |   | $ | (7,136 | ) |

|                                            |   | September 30, |   |   | December 31, |   |
|-------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                            |   | 2009          |   |   | 2008         |   |
|                                            |   | (Unaudited)   |   |   |         |   |
| Due from purchaser of premium finance portfolio |   | $             | -      |   |         | $      | 18,291 |   |
| Total assets                                    |   | $             | -      |   |         | $      | 18,291 |   |
|                                            |   |          |   |   |         |   |   |   |
| Total liabilities                               |   | $             | -      |   |         | $      | - |   |

----

|                                           |   | Nine Months Ended |      |   | Three Months Ended |   |
|------------------------------------------------|--------|-------------------|-----------|--------|--------------------|--------|
|                                           |   | September 30,     |      |   | September 30,      |   |
|                                           |   | 2009              |      |   | 2008               |   |   | 2009 |   |   | 2008 |   |
|                                           |   |              |      |   |               |   |   |   |   |   |   |   |
| Commissions and fee revenue                    |   | $                 | 1,028,797 |   |               | $      | 3,091,871 |   |   | $ | - |   |   | $ | 946,525 |   |
|                                           |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                            |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses            |   |              | 1,228,657 |   |               |   | 2,852,478 |   |   |   | 49,769 |   |   |   | 910,891 |   |
| Depreciation and amortization                  |   |              | 59,481    |   |               |   | 161,640 |   |   |   | - |   |   |   | 51,829 |   |
| Interest expense                               |   |              | 11,517    |   |               |   | 31,498 |   |   |   | 1,034 |   |   |   | 10,043 |   |
| Impairment of intangibles                      |   |              | 49,470    |   |               |   |   |   |   |   | - |   |   |   | - |   |
| Total operating expenses                       |   |              | 1,349,125 |   |               |   | 3,045,616 |   |   |   | 50,803 |   |   |   | 972,763 |   |
|                                           |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss (income) from operations                  |   |              | (320,328  | )      |               |   | 46,255 |   |   |   | (50,803 | ) |   |   | (26,238 | ) |
| Loss on sale of business                       |   |              | 27,140    |   |               |   | - |   |   |   | 5,748 |   |   |   | - |   |
| (Loss) income before benefit from income taxes |   |              | (347,468  | )      |               |   | 46,255 |   |   |   | (56,551 | ) |   |   | (26,238 | ) |
| Benefit from income taxes                      |   |              | (76,499   | )      |               |   | - |   |   |   | - |   |   |   | - |   |
|                                           |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income from discontinued operations,    |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| net of income taxes                            |   | $                 | (270,969  | )      |               | $      | 46,255 |   |   | $ | (56,551 | ) |   | $ | (26,238 | ) |

----

|                                  |   | September 30, |   |   | December 31, |   |
|---------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                  |   | 2009          |   |   | 2008         |   |
|                                  |   | (Unaudited)   |   |   |         |   |
| Accounts receivable                   |   | $             | -      |   |         | $      | 404,180 |   |
| Other current assets                  |   |          | -      |   |         |   | 32,325 |   |
| Property and equipment, net           |   |          | -      |   |         |   | 144,750 |   |
| Goodwill                              |   |          | -      |   |         |   | 2,207,658 |   |
| Other intangibles, net                |   |          | -      |   |         |   | 75,666 |   |
| Other assets                          |   |          | -      |   |         |   | 30,277 |   |
| Total assets                          |   | $             | -      |   |         | $      | 2,894,856 |   |
|                                  |   |          |   |   |         |   |   |   |
| Accounts payable and accrued expenses |   | $             | 85,800 |   |         | $      | 136,685 |   |
| Deferred income taxes                 |   |          | -      |   |         |   | 77,000 |   |
| Total liabilities                     |   | $             | 85,800 |   |         | $      | 213,685 |   |

----

|                                            |   | Nine Months Ended |    |   | Three Months Ended |   |
|-------------------------------------------------|--------|-------------------|---------|--------|--------------------|--------|
|                                            |   | September 30,     |    |   | September 30,      |   |
|                                            |   | 2009              |    |   | 2008               |   |   | 2009 |   |   | 2008 |   |
|                                            |   |              |    |   |               |   |   |   |   |   |   |   |
| Commissions and fee revenue                     |   | $                 | 213,831 |   |               | $      | 346,765 |   |   | $ | - |   |   | $ | 86,223 |   |
|                                            |   |              |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                             |   |              |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses             |   |              | 179,813 |   |               |   | 618,123 |   |   |   | - |   |   |   | 62,079 |   |
| Depreciation and amortization                   |   |              | 2,061   |   |               |   | 26,655 |   |   |   | - |   |   |   | 7,721 |   |
| Total operating expenses                        |   |              | 181,874 |   |               |   | 644,778 |   |   |   | - |   |   |   | 69,800 |   |
|                                            |   |              |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                   |   |              | 31,957  |   |               |   | (298,013 | ) |   |   | - |   |   |   | 16,423 |   |
| Loss on sale of business                        |   |              | 1,312   |   |               |   | - |   |   |   | - |   |   |   | - |   |
| Income (loss) before provision for income taxes |   |              | 30,645  |   |               |   | (298,013 | ) |   |   | - |   |   |   | 16,423 |   |
| Provision for income taxes                      |   |              | -       |   |               |   | - |   |   |   | - |   |   |   | - |   |
|                                            |   |              |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from discontinued operations,     |   |              |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| net of income taxes                             |   | $                 | 30,645  |   |               | $      | (298,013 | ) |   | $ | - |   |   | $ | 16,423 |   |

|                                  |   | September 30, |   |   | December 31, |   |
|---------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                  |   | 2009          |   |   | 2008         |   |
|                                  |   | (Unaudited)   |   |   |         |   |
| Accounts receivable                   |   | $             | -      |   |         | $      | 134,522 |   |
| Other current assets                  |   |          | -      |   |         |   | 101,678 |   |
| Deferred income taxes                 |   |          | -      |   |         |   | 16,000 |   |
| Property and equipment, net           |   |          | -      |   |         |   | 7,876 |   |
| Other assets                          |   |          | -      |   |         |   | 4,996 |   |
| Total assets                          |   | $             | -      |   |         | $      | 265,072 |   |
|                                  |   |          |   |   |         |   |   |   |
| Accounts payable and accrued expenses |   | $             | -      |   |         | $      | 9,809 |   |
| Total liabilities                     |   | $             | -      |   |         | $      | 9,809 |   |

----

|                                    |   | Nine Months Ended |      |   | Three Months Ended |   |
|-----------------------------------------|--------|-------------------|-----------|--------|--------------------|--------|
|                                    |   | September 30,     |      |   | September 30,      |   |
|                                    |   | 2009              |      |   | 2008               |   |   | 2009 |   |   | 2008 |   |
|                                    |   |              |      |   |               |   |   |   |   |   |   |   |
| Commissions and fee revenue             |   | $                 | 1,242,628 |   |               | $      | 3,438,636 |   |   | $ | - |   |   | $ | 1,032,748 |   |
| Premium finance revenue                 |   |              | -         |   |               |   | 225,322 |   |   |   | - |   |   |   | - |   |
| Total revenue                           |   |              | 1,242,628 |   |               |   | 3,663,958 |   |   |   | - |   |   |   | 1,032,748 |   |
|                                    |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                     |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses     |   |              | 1,408,469 |   |               |   | 3,742,297 |   |   |   | 49,768 |   |   |   | 1,062,723 |   |
| Provision for finance receivable losses |   |              | -         |   |               |   | - |   |   |   | - |   |   |   | (89,316 | ) |
| Depreciation and amortization           |   |              | 61,542    |   |               |   | 234,851 |   |   |   | - |   |   |   | 59,550 |   |
| Interest expense                        |   |              | 11,517    |   |               |   | 78,650 |   |   |   | 1,034 |   |   |   | 12,014 |   |
| Impairment of intangibles               |   |              | 49,470    |   |               |   | - |   |   |   | - |   |   |   | - |   |
| Total operating expenses                |   |              | 1,530,998 |   |               |   | 4,055,798 |   |   |   | 50,802 |   |   |   | 1,044,971 |   |
|                                    |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                    |   |              | (288,370  | )      |               |   | (391,840 | ) |   |   | (50,802 | ) |   |   | (12,223 | ) |
| Loss on sale of businesses              |   |              | 28,452    |   |               |   | 250,603 |   |   |   | 5,748 |   |   |   | 4,728 |   |
| Loss before benefit from income taxes   |   |              | (316,822  | )      |               |   | (642,443 | ) |   |   | (56,550 | ) |   |   | (16,951 | ) |
| Benefit from income taxes               |   |              | (76,499   | )      |               |   | - |   |   |   | - |   |   |   | - |   |
|                                    |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations,      |   |              |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| net of income taxes                     |   | $                 | (240,323  | )      |               | $      | (642,443 | ) |   | $ | (56,550 | ) |   | $ | (16,951 | ) |

|                                            |   | September 30, |   |   | December 31, |   |
|-------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                            |   | 2009          |   |   | 2008         |   |
|                                            |   | (Unaudited)   |   |   |         |   |
| Accounts receivable                             |   | $             | -      |   |         | $      | 538,702 |   |
| Due from purchaser of premium finance portfolio |   |          | -      |   |         |   | 18,291 |   |
| Other current assets                            |   |          | -      |   |         |   | 134,003 |   |
| Deferred income taxes                           |   |          | -      |   |         |   | 16,000 |   |
| Property and equipment, net                     |   |          | -      |   |         |   | 152,626 |   |
| Goodwill                                        |   |          | -      |   |         |   | 2,207,658 |   |
| Other intangibles, net                          |   |          | -      |   |         |   | 75,666 |   |
| Other assets                                    |   |          | -      |   |         |   | 35,273 |   |
| Total assets                                    |   | $             | -      |   |         | $      | 3,178,219 |   |
|                                            |   |          |   |   |         |   |   |   |
| Accounts payable and accrued expenses           |   | $             | 85,800 |   |         | $      | 146,493 |   |
| Deferred income taxes                           |   |          | -      |   |         |   | 77,000 |   |
| Total liabilities                               |   | $             | 85,800 |   |         | $      | 223,493 |   |

----

----

----

----

|                                           |   | Nine Months ended September 30, 2009 |   |   | Three Months ended September 30, 2009 |   |
|------------------------------------------------|--------|--------------------------------------|--------|--------|---------------------------------------|--------|
| ($ in thousands)                               |   | 2009                                 |   |   | 2008                                  |   |   | Change |   |   | Percent |   |   | 2009 |   |   | 2008 |   |   | Change |   |   | Percent |   |
|  Revenues                                 |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net premiums earned                      |   | $                                    | 2,263  |   |                                  | $      | - |   |   | $ | 2,263 |   |   | (A) |   |   | $ | 2,263 |   |   | $ | - |   |   | $ | 2,263 |   |   | (A) |   |
|  Ceding commission revenue                |   |                                 | 1,483  |   |                                  |   | - |   |   |   | 1,483 |   |   | (A) |   |   |   | 1,483 |   |   |   | - |   |   |   | 1,483 |   |   | (A) |   |
|  Net investment income                    |   |                                 | 116    |   |                                  |   | - |   |   |   | 116 |   |   | (A) |   |   |   | 116 |   |   |   | - |   |   |   | 116 |   |   | (A) |   |
|  Net realized gains on investments        |   |                                 | 100    |   |                                  |   | - |   |   |   | 100 |   |   | (A) |   |   |   | 100 |   |   |   | - |   |   |   | 100 |   |   | (A) |   |
|  Other income                             |   |                                 | 518    |   |                                  |   | 333 |   |   |   | 185 |   |   |   | 55.6 | % |   |   | 154 |   |   |   | 112 |   |   |   | 42 |   |   |   | 37.4 | % |
|  Total revenues                           |   |                                 | 4,480  |   |                                  |   | 333 |   |   |   | 4,147 |   |   |   | 1,245.3 | % |   |   | 4,115 |   |   |   | 112 |   |   |   | 4,003 |   |   |   | 3,575.5 | % |
|                                           |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Expenses                                 |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Loss and loss adjustment expenses        |   |                                 | 1,087  |   |                                  |   | - |   |   |   | 1,087 |   |   | (A) |   |   |   | 1,087 |   |   |   | - |   |   |   | 1,087 |   |   | (A) |   |
|  Commission expense                       |   |                                 | 1,092  |   |                                  |   | - |   |   |   | 1,092 |   |   | (A) |   |   |   | 1,092 |   |   |   | - |   |   |   | 1,092 |   |   | (A) |   |
|  Other underwriting expenses              |   |                                 | 1,077  |   |                                  |   | - |   |   |   | 1,077 |   |   | (A) |   |   |   | 1,077 |   |   |   | - |   |   |   | 1,077 |   |   | (A) |   |
|  Other operating expenses                 |   |                                 | 952    |   |                                  |   | 890 |   |   |   | 62 |   |   |   | 7.0 | % |   |   | 286 |   |   |   | 246 |   |   |   | 40 |   |   |   | 16.2 | % |
|  Depreciation and amortization            |   |                                 | 103    |   |                                  |   | 27 |   |   |   | 76 |   |   |   | 281.5 | % |   |   | 95 |   |   |   | 11 |   |   |   | 83 |   |   |   | 746.9 | % |
|  Interest expense                         |   |                                 | 151    |   |                                  |   | 187 |   |   |   | (36 | ) |   |   | (19.3 | )  % |   |   | 17 |   |   |   | 57 |   |   |   | (40 | ) |   |   | (69.7 | )  % |
|  Interest expense - mandatorily           |   |                                 |   |   |                                  |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  redeemable preferred stock               |   |                                 | 90     |   |                                  |   | 47 |   |   |   | 43 |   |   |   | 91.5 | % |   |   | 37 |   |   |   | 20 |   |   |   | 18 |   |   |   | 91.6 | % |
|  Total expenses                           |   |                                 | 4,552  |   |                                  |   | 1,151 |   |   |   | 3,401 |   |   |   | 295.5 | % |   |   | 3,691 |   |   |   | 333 |   |   |   | 3,358 |   |   |   | N/A | % |
|                                           |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  (Loss) income from operations            |   |                                 | (72    | )      |                                  |   | (818 | ) |   |   | 746 |   |   |   | (91.2 | )  % |   |   | 424 |   |   |   | (221 | ) |   |   | 646 |   |   |   | (291.7 | )  % |
|  Gain on acquistion of                    |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Kingstone Insurance Company              |   |                                 | 5,402  |   |                                  |   | - |   |   |   | 5,402 |   |   | (A) | % |   |   | 5,402 |   |   |   | - |   |   |   | 5,402 |   |   | (A) |   |
|  Interest income-CMIC note receivable     |   |                                 | 60     |   |                                  |   | 731 |   |   |   | (671 | ) |   |   | (91.8 | )  % |   |   | - |   |   |   | 129 |   |   |   | (129 | ) |   |   | (100.0 | )  % |
|  Income (loss) from continuing operations |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  before taxes                             |   |                                 | 5,390  |   |                                  |   | (87 | ) |   |   | 5,477 |   |   | (A) | % |   |   | 5,826 |   |   |   | (92 | ) |   |   | 5,918 |   |   | (A) | % |
|  (Benefit from) provision for tax         |   |                                 | (26    | )      |                                  |   | (288 | ) |   |   | 262 |   |   |   | (91.0 | )  % |   |   | 184 |   |   |   | (9 | ) |   |   | 193 |   |   | (A) | % |
|  Income (loss) from continuing operations |   |                                 | 5,416  |   |                                  |   | 201 |   |   |   | 5,215 |   |   | (A) | % |   |   | 5,642 |   |   |   | (83 | ) |   |   | 5,725 |   |   | (A) | % |
|  Loss from discontinued operations,       |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  net of taxes                             |   |                                 | (240   | )      |                                  |   | (642 | ) |   |   | 402 |   |   |   | (62.6 | )  % |   |   | (57 | ) |   |   | (17 | ) |   |   | (40 | ) |   |   | 233.6 | % |
|  Net income (loss)                        |   |                                 | 5,176  |   |                                  |   | (441 | ) |   |   | 5,617 |   |   | (A) | % |   |   | 5,586 |   |   |   | (100 | ) |   |   | 5,686 |   |   | (A) | % |
|                                           |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Percent of total revenues:               |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net premiums earned                      |   |                                 | 50.5   | %      |                                  |   | 0.0 | % |   |   |   |   |   |   |   |   |   |   | 55.0 | % |   |   | 0.0 | % |   |   |   |   |   |   |   |   |
|  Ceding commission revenue                |   |                                 | 33.1   | %      |                                  |   | 0.0 | % |   |   |   |   |   |   |   |   |   |   | 36.0 | % |   |   | 0.0 | % |   |   |   |   |   |   |   |   |
|  Net investment income                    |   |                                 | 2.6    | %      |                                  |   | 0.0 | % |   |   |   |   |   |   |   |   |   |   | 2.8 | % |   |   | 0.0 | % |   |   |   |   |   |   |   |   |
|  Net realized gains on investments        |   |                                 | 2.2    | %      |                                  |   | 0.0 | % |   |   |   |   |   |   |   |   |   |   | 2.4 | % |   |   | 0.0 | % |   |   |   |   |   |   |   |   |
|  Other income                             |   |                                 | 11.6   | %      |                                  |   | 100.0 | % |   |   |   |   |   |   |   |   |   |   | 3.7 | % |   |   | 100.0 | % |   |   |   |   |   |   |   |   |
|                                           |   |                                 | 100.0  | %      |                                  |   | 100.0 | % |   |   |   |   |   |   |   |   |   |   | 100.0 | % |   |   | 100.0 | % |   |   |   |   |   |   |   |   |

----

|                                           |   | Nine months ended September 30, |   |   | Three months ended September 30, |   |
|------------------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|
| ($ in thousands)                               |   | 2009                            |   |   | 2008                             |   |   | Change |   |   | Percent |   |   | 2009 |   |   | 2008 |   |   | Change |   |   | Percent |   |
|                                           |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commissions and fee revenue                    |   | $                               | 1,029  |   |                             | $      | 3,092 |   |   | $ | (2,063 | ) |   |   | (67 | ) % |   | $ | - |   |   | $ | 947 |   |   | $ | (947 | ) |   |   | (100 | ) % |
|                                           |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                            |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses            |   |                            | 1,229  |   |                             |   | 2,852 |   |   |   | (1,623 | ) |   |   | (57 | ) % |   |   | 50 |   |   |   | 910 |   |   |   | (860 | ) |   |   | (95 | ) % |
| Depreciation and amortization                  |   |                            | 59     |   |                             |   | 162 |   |   |   | (103 | ) |   |   | (64 | ) % |   |   | - |   |   |   | 52 |   |   |   | (52 | ) |   |   | (100 | ) % |
| Interest expense                               |   |                            | 12     |   |                             |   | 32 |   |   |   | (20 | ) |   |   | (63 | ) % |   |   | 1 |   |   |   | 11 |   |   |   | (10 | ) |   |   | (91 | ) % |
| Impairment of intangibles                      |   |                            | 49     |   |                             |   | - |   |   |   | 49 |   |   |   | n/a |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| Total operating expenses                       |   |                            | 1,349  |   |                             |   | 3,046 |   |   |   | (1,697 | ) |   |   | (56 | ) % |   |   | 51 |   |   |   | 973 |   |   |   | (922 | ) |   |   | (95 | ) % |
|                                           |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income from operations                  |   |                            | (320   | )      |                             |   | 46 |   |   |   | (366 | ) |   |   | (796 | ) % |   |   | (51 | ) |   |   | (26 | ) |   |   | (25 | ) |   |   | 96 | % |
| Loss on sale of business                       |   |                            | (27    | )      |                             |   | - |   |   |   | (27 | ) |   |   | n/a |   |   |   | (6 | ) |   |   | - |   |   |   | (6 | ) |   |   | n/a |   |
| (Loss) income before benefit from income taxes |   |                            | (347   | )      |                             |   | 46 |   |   |   | (393 | ) |   |   | (854 | ) % |   |   | (57 | ) |   |   | (26 | ) |   |   | (31 | ) |   |   | 119 | % |
| Benefit from income taxes                      |   |                            | (76    | )      |                             |   | - |   |   |   | (76 | ) |   |   | n/a |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| (Loss) income from discontinued operations     |   | $                               | (271   | )      |                             | $      | 46 |   |   | $ | (317 | ) |   |   | (689 | ) % |   | $ | (57 | ) |   | $ | (26 | ) |   | $ | (31 | ) |   |   | 119 | % |

----

|                                            |   | Nine months ended September 30, |   |   | Three months ended September 30, |   |
|-------------------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|
| ($ in thousands)                                |   | 2009                            |   |   | 2008                             |   |   | Change |   |   | Percent |   |   | 2009 |   |   | 2008 |   |   | Change |   |   | Percent |   |
|                                            |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commissions and fee revenue                     |   | $                               | 214    |   |                             | $      | 347 |   |   | $ | (133 | ) |   |   | (38 | ) % |   | $ | - |   |   | $ | 86 |   |   | $ | (86 | ) |   |   | (100 | ) % |
|                                            |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                             |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses             |   |                            | 180    |   |                             |   | 618 |   |   |   | (438 | ) |   |   | (71 | ) % |   |   | - |   |   |   | 62 |   |   |   | (62 | ) |   |   | (100 | ) % |
| Depreciation and amortization                   |   |                            | 2      |   |                             |   | 27 |   |   |   | (25 | ) |   |   | (93 | ) % |   |   | - |   |   |   | 8 |   |   |   | (8 | ) |   |   | (100 | ) % |
| Total operating expenses                        |   |                            | 182    |   |                             |   | 645 |   |   |   | (463 | ) |   |   | (72 | ) % |   |   | - |   |   |   | 70 |   |   |   | (70 | ) |   |   | (100 | ) % |
|                                            |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                   |   |                            | 32     |   |                             |   | (298 | ) |   |   | 330 |   |   |   | (111 | ) % |   |   | - |   |   |   | 16 |   |   |   | (16 | ) |   |   | (100 | ) % |
| Loss on sale of business                        |   |                            | (1     | )      |                             |   | - |   |   |   | (1 | ) |   |   | n/a |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| Income (loss) before provision for income taxes |   |                            | 31     |   |                             |   | (298 | ) |   |   | 329 |   |   |   | (110 | ) % |   |   | - |   |   |   | 16 |   |   |   | (16 | ) |   |   | (100 | ) % |
| Provision for income taxes                      |   |                            | -      |   |                             |   | - |   |   |   | - |   |   |   | n/a |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| Income (loss) from discontinued operations      |   | $                               | 31     |   |                             | $      | (298 | ) |   | $ | 329 |   |   |   | (110 | ) % |   | $ | - |   |   | $ | 16 |   |   | $ | (16 | ) |   |   | (100 | ) % |

|                                        |   | Nine months ended September 30, |   |   | Three months ended September 30, |   |
|---------------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|
| ($ in thousands)                            |   | 2009                            |   |   | 2008                             |   |   | Change |   |   | Percent |   |   | 2009 |   |   | 2008 |   |   | Change |   |   | Percent |   |
|                                        |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Premium finance revenue                     |   | $                               | -      |   |                             | $      | 225 |   |   | $ | (225 | ) |   |   | (100 | ) % |   | $ | - |   |   | $ | - |   |   | $ | - |   |   |   | n/a |   |
|                                        |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                         |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses         |   |                            | -      |   |                             |   | 272 |   |   |   | (272 | ) |   |   | (100 | ) % |   |   | - |   |   |   | 90 |   |   |   | (90 | ) |   |   | (100 | ) % |
| Provision for finance receivable losses     |   |                            | -      |   |                             |   | - |   |   |   | - |   |   |   | n/a | % |   |   | - |   |   |   | (89 | ) |   |   | 89 |   |   |   | n/a |   |
| Depreciation and amortization               |   |                            | -      |   |                             |   | 47 |   |   |   | (47 | ) |   |   | (100 | ) % |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| Interest expense                            |   |                            | -      |   |                             |   | 47 |   |   |   | (47 | ) |   |   | (100 | ) % |   |   | - |   |   |   | 2 |   |   |   | (2 | ) |   |   | n/a |   |
| Total operating expenses                    |   |                            | -      |   |                             |   | 366 |   |   |   | (366 | ) |   |   | (100 | ) % |   |   | - |   |   |   | 3 |   |   |   | (3 | ) |   |   | (100 | ) % |
|                                        |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                        |   |                            | -      |   |                             |   | (141 | ) |   |   | 141 |   |   |   | (100 | ) % |   |   | - |   |   |   | (3 | ) |   |   | 3 |   |   |   | (100 | ) % |
| Loss on sale of premium financing portfolio |   |                            | -      |   |                             |   | (250 | ) |   |   | 250 |   |   |   | (100 | ) % |   |   | - |   |   |   | (5 | ) |   |   | 5 |   |   |   | (100 | ) % |
| Loss before benefit from income taxes       |   |                            | -      |   |                             |   | (391 | ) |   |   | 391 |   |   |   | (100 | ) % |   |   | - |   |   |   | (8 | ) |   |   | 8 |   |   |   | (100 | ) % |
| Provision for income taxes                  |   |                            | -      |   |                             |   | - |   |   |   | - |   |   |   | n/a |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | n/a |   |
| Loss from discontinued operations           |   | $                               | -      |   |                             | $      | (391 | ) |   | $ | 391 |   |   |   | (100 | ) % |   | $ | - |   |   | $ | (8 | ) |   | $ | 8 |   |   |   | (100 | ) % |

----

|  Revenues                          |   |   |      |
|-----------------------------------------|--------|--------|-----------|
|  Net premiums earned               |   | $      | 2,262,819 |   |
|  Ceding commission revenue         |   |   | 1,483,249 |   |
|  Net investment income             |   |   | 115,657   |   |
|  Net realized gains on investments |   |   | 99,856    |   |
|  Other income                      |   |   | 40,623    |   |
|  Total revenues                    |   |   | 4,002,204 |   |
|                                    |   |   |      |   |
|  Expenses                          |   |   |      |   |
|  Loss and loss adjustment expenses |   |   | 1,087,276 |   |
|  Commission expense                |   |   | 1,091,638 |   |
|  Other underwriting expenses       |   |   | 1,077,318 |   |
|  Depreciation and amortization     |   |   | 90,761    |   |
|  Total expenses                    |   |   | 3,346,993 |   |
|                                    |   |   |      |   |
|  Income from operations            |   |   | 655,211   |   |
|  Income tax expense                |   |   | 241,205   |   |
|  Net income                        |   | $      | 414,006   |   |

|                               |   | Cost or   |       |   | Gross      |   |    | Gross Unrealized Losses |   |   |         |   |   | % of   |   |
|-----------------------------------------|--------|-----------|------------|--------|------------|--------|---------|-------------------------|--------|--------|--------------|--------|--------|--------|--------|
|                                    |   | Amortized |       |   | Unrealized |   |    | Less than 12            |   |   | More than 12 |   |   | Fair   |   |   | Fair |   |
|  Category                          |   | Cost      |       |   | Gains      |   |    | Months                  |   |   | Months       |   |   | Value  |   |   | Value |   |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |
|  U.S. Treasury securities and      |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |
|  obligations of U.S. government    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |
|  corporations and agencies         |   | $         | 3,070,902  |   |       | $      | 23,877  |                    |   | $      | -            |   |   | $      | -      |   |   | $ | 3,094,779 |   |   |   | 25.2 | % |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Political subdivisions of States, |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Territories and Possessions       |   |      | 4,607,406  |   |       |   | 119,320 |                    |   |   | -            |   |   |   | -      |   |   |   | 4,726,726 |   |   |   | 38.4 | % |
|                                    |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Corporate and other bonds         |   |      |       |   |       |   |    |                    |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Industrial and miscellaneous      |   |      | 3,064,581  |   |       |   | 78,974  |                    |   |   | (25,401      | )      |   |   | -      |   |   |   | 3,118,154 |   |   |   | 25.4 | % |
|  Total fixed-maturity securities   |   |      | 10,742,889 |   |       |   | 222,171 |                    |   |   | (25,401      | )      |   |   | -      |   |   |   | 10,939,659 |   |   |   | 89.0 | % |
|  Equity Securities                 |   |      | 1,221,762  |   |       |   | 188,830 |                    |   |   | (56,078      | )      |   |   | -      |   |   |   | 1,354,514 |   |   |   | 11.0 | % |
|  Total                             |   | $         | 11,964,651 |   |       | $      | 411,001 |                    |   | $      | (81,479      | )      |   | $      | -      |   |   | $ | 12,294,173 |   |   |   | 100.0 | % |

----

----

| Nine Months Ended September 30,                            |   | 2009   |      |   | 2008   |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                       |   |   |      |   |   |   |
|  Cash flows provided by (used in):                    |   |   |      |   |   |   |
|  Operating activities                                 |   | $      | 582,174   |   |   | $      | (601,170 | ) |
|  Investing activities                                 |   |   | 2,291,161 |   |   |   | 1,019,726 |   |
|  Financing activities                                 |   |   | (698,143  | )      |   |   | (928,820 | ) |
|  Net increase (decrease) in cash and cash equivalents |   |   | 2,175,192 |   |   |   | (510,264 | ) |
|  Cash and cash equivalents, beginning of year         |   |   | 142,949   |   |   |   | 1,030,822 |   |
|  Cash and cash equivalents, end of year               |   | $      | 2,318,141 |   |   | $      | 520,558 |   |

| On April 17, 2009, we sold substantially all of the assets, including the book of business, of the 16 Retail Business locations that we owned in New York State (the “New York Assets”). The purchase price for the New York Assets was approximately $2,337,000, of which approximately $1,786,000 was paid at closing.  Promissory notes in the aggregate approximate principal amount of $551,000(the “New York Notes”) were also delivered at the closing. The New York Notes are payable in installments of approximately $275,500 on each of March 31, 2010 and September 30, 2010 and provide for interest at the rate of 5.25% per annum. As additional consideration, we will be entitled to receive through September 30, 2010 an amount equal to 60% of the net commissions derived from the book of business of six retail locations that we closed in 2008. |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

| Effective June 30, 2009, we sold all of the outstanding stock of the subsidiary that operated our three remaining Pennsylvania stores (the “Pennsylvania Stock”).  The purchase price for the Pennsylvania Stock was approximately $397,000 which was paid by delivery of two promissory notes, one in the approximate principal amount of $238,000 and payable with interest at the rate of 9.375% per annumin 120 equal monthly installments, and the other in the approximate principal amount of $159,000 and payable with interest at the rate of 6% per annum in 60 monthly installments commencing August 10, 2011 (with interest only being payable prior to such date). |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

----

| Effective May 1, 2009, we sold all of the outstanding stock of the subsidiaries that operated our DCAP franchise business.  The purchase price for the stock was $200,000 which was paid by delivery of a promissory note in such principal amount (the “Franchise Note”).  The Franchise Note is payable in installments of $50,000 on May 15, 2009, $50,000 on May 1, 2010 and $100,000 on May1, 2011 and provides for interest at the rate of 5.25% per annum. |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

| Accurate Acquisition |   |
|----------------------|--------|

| On April 17, 2009, we paid the balance of the note payable incurred in connection with our purchase of the Accurate agency business. |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|

| Notes Payable |   |
|---------------|--------|

----

| Effective July 1, 2009, CMIC converted from an advance premium cooperative to a stock property and casualty insurance company. Upon the effectiveness of the conversion, CMIC’s name was changed to Kingstone Insurance Company (“KICO”). Pursuant to the plan of conversion, we acquired a 100% equity interest in KICO in consideration of the exchange of our $3,750,000 principal amount of surplus notesof CMIC.  In addition, we forgave all accrued and unpaid interest of $2,246,000 on the surplus notes as of the date of exchange (See Note 3). |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

----

| 2(a)   | Amended and Restated Purchase and Sale Agreement, dated as of February 1, 2008, by and among Premium Financing Specialists, Inc., Payments Inc. and DCAP Group, Inc.1 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                  |
| 2(b)   | Asset Purchase Agreement, dated as of March 27, 2009, by and among NII BSA LLC, Barry Scott Agency, Inc., DCAP Accurate, Inc. and DCAP Group, Inc.2                   |
|   |                                                                                                                                                                  |
| 2(c)   | Stock Purchase Agreement, dated as of May 1, 2009, by and between Stuart Greenvald and Abraham Weinzimer and DCAP Group, Inc.3                                        |
|   |                                                                                                                                                                  |
| 2(d)   | Stock Purchase Agreement, dated as of June 30, 2009, between Barry Lefkowitz and Blast Acquisition Corp.4                                                             |

----

 1 Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated February 1, 2008 and incorporated herein by reference.

 2 Denotes document filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.

 3Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated May 6, 2009 and incorporated herein by reference.

 4 Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated June 30, 2009 and incorporated herein by reference. 56       3(a)Restated Certificate of Incorporation5    3(b)Certificate of Amendment of Certificate of Incorporation filed July 1, 20096    3(c)Certificate of Designation of Series A Preferred Stock7    3(d)Certificate of Designation of Series B Preferred Stock8    3(e)Certificate of Designation of Series C Preferred Stock9    3(f)Certificate of Designation of Series D Preferred Stock10    3(g)Certificate of Designation of Series E Preferred Stock11    3(h)By-laws, as amended12    31(a)Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002    31(b)Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002    32Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   

 6 Denotes document filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended June 30, 2009 and incorporated herein by reference.

 7 Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated May 28, 2003 and incorporated herein by reference.  

 9 Denotes document filed as an exhibit to our Quarterly Report on Form 10-QSB for the period ended March 31, 2008 and incorporated herein by reference.

 10 Denotes document filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended September 30, 2008 and incorporated herein by reference.

 11 Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated May 12, 2009 and incorporated herein by reference.

 12 Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated November 5, 2009 and incorporated herein by reference.

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|                               | KINGSTONE COMPANIES, INC. |                        |
|------------------------------------|---------------------------|-----------------------------|
|                               |                      |                        |   |
| Dated:  December 2, 2009 | By:                       | /s/ Barry B. Goldstein |   |
|                               |                      | Barry B. Goldstein          |   |
|                               |                      | President              |   |
|                               |                      |                        |   |

|   |   |                          |   |
|--------|--------|-------------------------------|--------|
|   | By:    | /s/ Victor Brodsky       |   |
|   |   | Victor Brodsky           |   |
|   |   | Chief Financial Officer  |   |
|   |   |                          |   |