Brooke Capital 8-K/A Financial Statements and Exhibits

Exhibit 99.3

Brooke Capital Corporation

Unaudited Pro Forma Financial Statements

Brooke Capital Corporation

Summary of Unaudited Pro Forma Financial Statements

This pro forma information should be read in conjunction with the consolidated financial statements and notes of Brooke Capital Corporation (“Company”) included in the Company’s Form 10-KSB for the fiscal year ended December 31, 2006 as filed with the Securities and Exchange Commission.

The following unaudited pro forma balance sheet as of September 30, 2007 has been prepared to give effect to the merger of Brooke Franchise Corporation (“Brooke Franchise”) with and into the Company as if the acquisition had occurred on September 30, 2007.

The following unaudited pro forma statements of income for the nine month periods ended September 30, 2007 and 2006 and each of the years in the three-year period ended December 31, 2006 have been prepared to give effect to the merger as if it had been consummated on January 1, 2004. The actual merger was consummated on November 15, 2007.

Brooke Capital Corporation (the “Company”) is a Kansas corporation that sells proprietary life insurance and annuity products through its wholly owned subsidiary, First Life America Corporation, a Kansas domiciled life insurance company. The Company also brokers loans to managing general insurance agencies through its wholly owned subsidiary, Brooke Capital Advisors, Inc. The Company’s common stock began trading on the American Stock Exchange on August 30, 2007 under the symbol BCP.

Brooke Franchise Corporation (“Brooke Franchise”) is a Missouri corporation whose primary business is distributing property and casualty insurance through a network of independent insurance agencies franchised under the “Brooke” trade name.

Brooke Corporation is a Kansas corporation that acts as a holding company, including its ownership (prior to the merger of Brooke Franchise with and into the Company) of 100% of the common stock of Brooke Franchise and approximately 53% of the common stock of the Company. Brooke Corporation also has a 62% ownership of Brooke Credit Corporation (symbol BRCR (OTCBB: BRCR.OC)), a 100% ownership of Brooke Bancshares, Inc. (parent of Brooke Savings Bank) and a 100% ownership in Delta Plus Holdings, Inc. (“Delta Plus”).

Under the terms of the Merger Agreement, Brooke Franchise was merged with and into the Company on November 15, 2007 (the “Effective Date”), whereupon the separate existence of Brooke Franchise ceased and the Company became the surviving entity of the Merger of the combined companies. On the Effective Date, Brooke Corporation received initial merger consideration of 5,000,000 shares of the Company’s common stock, with an opportunity to receive additional shares of the Company’s common stock pursuant to a contingent, performance based earn-out based on adjusted earnings in fiscal years 2007 and 2008 from operations and using assets of Brooke Franchise as it existed prior to the Merger.

From an accounting perspective, the Merger transaction represents an exchange of shares of stock between companies under common control. Accordingly, the Company has initially recognized the assets and liabilities of Brooke Franchise transferred from Brooke Corporation at their carrying amounts on the Effective Date. The Company will report its results of operations, statements of financial position and other financial information for the current period as though the merger had occurred at the beginning of the period. The Company’s financial statements and information presented for prior years will be restated to furnish comparative information for the period during which the entities have been under common control.

In connection with the effectiveness of the Merger transaction, the following events occurred (and the effects of these transactions are reflected in the September 30, 2007 pro forma balance sheet):

1)	Brooke Franchise and the Company have borrowed $12,000,000 on a long-term basis to meet certain cash requirements associated with the Merger transaction.
2)	Brooke Franchise collected its outstanding receivable ($1,639,000 as of September 30, 2007) from its parent, Brooke Corporation.
3)	Brooke Franchise paid out its total stockholders’ equity ($22,145,000 at September 30, 2007) in the form of a dividend to its parent.
4)	Reclassification of $50,000 from additional paid-in capital to reflect the issuance of 5,000,000 shares of the Company’s $.01 par value common stock to Brooke Corporation.

Not reflected in the September 30, 2007 pro forma balance sheet is the approximate $15,000,000 in cash that is expected from the sale of certain insurance agency locations acquired by Brooke Franchise in a separate transaction that closed on September 28, 2007. Some of the agencies have been sold during the fourth quarter of 2007 and the remaining number is expected to be sold during the first quarter of 2008. The insurance agency assets acquired are reported as a part of the $18,814,000 “Agency Inventory” balances on the September 30, 2007 pro forma balance sheet.

The September 30, 2007 pro forma balance sheet does not give effect to a proposed transaction under which the Company would acquire all of the capital stock of Delta Plus Holdings, Inc., a nonstandard automobile insurance company, from Brooke Corporation in exchange for common stock of the Company.

The pro forma statement of income for the nine month period ended September 30, 2007 includes an adjustment to eliminate approximately $500,000 in merger related expenses incurred by the Company (as well as the related estimated tax effect). Total stockholders’ equity of $12,275,000 reported on the September 30, 2007 pro forma balance sheet has not been adjusted for these expenses. There are no other adjustments to the pro forma statements of income presented as the Company and Brooke Franchise have not had significant business dealings prior to their merger.

These unaudited pro forma financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition been consummated as of the dates indicated.

Brooke Capital Corporation
Unaudited
Proforma Balance Sheet
(in thousands)

		Brooke Capital			Brooke Franchise
		Corporation			Corporation							Proforma
		Sep 30,			Sep 30,							Sep 30,
		2007 (a)			2007 (b)			Adjustments				2007
ASSETS
Current assets
Investments:
Securities available-for-sale, at fair value:
Fixed maturities		$	17,705			—						$	17,705
Equity securities			231			—							231
Investments in real estate			275			—							275
Policy loans			170			—							170
Mortgage loans on real estate			1,879			—							1,879
Other investments			3,363			—							3,363
Total investments			23,623			—			0				23,623
Cash			2,203			6,518			12,000		c		215
									1,639		d
									(22,145	)	e
Restricted cash			—			594							594
Accounts receivable			605			21,156							21,761
Other receivables	��		235			11,459							11,694
Deposits and prepaid expense			—			132							132
Income tax receivable Receivable from parent company			—			1,639			(1,639)		d		—
Advertising supply inventory			—			742							742
Total current assets			26,666			42,240			(10,145	)			58,761
Investment in businesses			—			18,813							18,813
Property and Equipment			3,609			17,037							20,646
Less: Accumulated depreciation			(1,040	)		(3,771	)						(4,811	)
Net Property and Equipment			2,569			13,266			0				15,835
Other assets
Amortizable intangible assets, net			5,390			569							5,959
Goodwill
Other assets			3,969			—							3,969
Total other assets			9,359			569			0				9,928
Total assets		$	38,594		$	74,888			(10,145	)		$	103,337
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Policy and contract liabilities		$	25,156		$	—						$	25,156
IBNR loss reserve													—
Accounts payable			741			5,592							6,333
Premiums payable to insurance companies			—			5,259							5,259
Producer payable			—			4,491							4,491
Interest payable			—			1,235							1,235
Income tax payable						1,249							1,249
Accrued commission refunds			—			515							515
Short-term debt						4,787							4,787
Current maturities of long-term debt			—			18,891							18,891
Total current liabilities			25,897			42,019			0				67,916
Deferred income tax payable			422			—							422
Long-term debt less current maturities			—			10,724			12,000		c		22,724
Total liabilities			26,319			52,743			12,000				91,062
Stockholders’ equity
Common stock			35			17			(17	)			85
									50		f
Less: Treasury stock						(115	)		115				—
Additional paid-in capital			14,260			6,026			(6,026	)			14,210
									(50	)	f
Accumulated other comprehensive loss			(389	)									(389	)
(Accumulated Deficit) Retained earnings			(1,631	)		16,217			(16,217	)			(1,631	)
Total stockholders’ equity			12,275			22,145			(22,145)		e		12,275
Total liabilities and stockholders’ equity		$	38,594		$	74,888			(10,145	)		$	103,337

a)	Historical financial information is derived from the Company’s unaudited consolidated financial statements as of September 30, 2007 as reported in its Report on Form 10-QSB for the quarterly period then ended. The Company’s capital structure is as follows: Common — $.01 par value; 25,000,000 shares authorized; 8,475,817 shares issued and outstanding Preferred — $5.00 par value; 1,550,000 shares authorized; no shares issued or outstanding
b)	Historical financial information for Brooke Fanchise Corporation is derived from it unaudited internally prepared financial statements as of September 30, 2007.
c)	Represents long-term borrowings to meet cash requirements associated with the merger transaction.
d)	Represents collection of the amount receivable due from the parent, Brooke Corporation.
e)	Represents the payout by Brooke Franchise of its total stockholders’ equity at closing in the form of a dividend to its parent, Brooke Corporation.
f)	Reclassification from additional paid-in capital to reflect the issuance of 5,000,000 shares of $.01 par value common stock to Brooke Corporation.

BrookeCapitalCorporation
Unaudited
Proforma Statements of Income
(in thousands)

	Brooke Capital			Brooke Franchise
	Corporation			Corporation						Proforma			Proforma
	For nine months			For nine months						For nine months			For nine months
	ended Sep 30,			ended Sep 30,						ended Sep 30,			ended Sep 30,
	2007 (a)			2007 (b)		Adjustments				2007 (d)			2006 (d)
Operating Revenues
Gross premium income	$	3,188		$	—	$	—			$	3,188			3,250
Reinsurance premiums assumed		16			—		—				16			9
Reinsurance premiums ceded		(396	)		—		—				(396	)		(456	)
Net premium income		2,808			—						2,808			2,803
Insurance commissions		—			87,541		—				87,541			75,958
Consulting fees		7,540			1,589		—				9,129			2,053
Gain on sale of businesses		—			2,089		—				2,089			3,061
Initial franchise fee — basic services		—			25,905		—				25,905			22,725
Initial franchise fee — buyers assistance		—			455		—				455			2,937
Net investment income		1,067			267		—				1,334			1,015
Net realized investment gain (loss)		81			—		—				81			(70	)
Other income		179			2,060		—				2,239			1,738
														0
Total operating revunes		11,675			119,906		—				131,581			112,220
														0
														0
Operating Expenses														0
Increase in policy reserves		677			—		—				677			643
Policy holder surrender values		267			—		—				267			251
Interest credited — annuities & deposits		578			—		—				578			420
Death claims		677			—		—				677			478
Policy acquisition costs deferred		(729	)		—		—				(729	)		(604	)
Commission expense		700			66,879		—				67,579			55,778
Payroll expense		2,067			16,020		—				18,087			18,063
Depreciation and amortization		645			476		—				1,121			683
Insurance loss and loss expense							—				—			0
Other operating expense		3,065			31,083		(500	)	c		33,648			31,365
														0
Total operating expenses		7,947			114,458		(500	)			121,905			107,077
														0
Income from operations		3,728			5,448		500				9,676			5,143
														0
Other Expenses														0
Interest expense		—			1,957		—				1,957			1,261
														0
Total other expenses		—			1,957		—				1,957			1,261
														0
Income before income taxes		3,728			3,491		500				7,719			3,882
														0
Provision for income taxes		1,226			1,327		190	c			2,743			1,555
														0
Net income	$	2,502		$	2,164	$	310			$	4,976			2,327
Net income per share (e):
Basic net income per share		0.80									0.61			0.36
Basic weighted average shares		3,108,422									8,108,422			6,419,019
Diluted net income per share		0.80									0.61			0.36
Diluted weighted average shares		3,109,277									8,109,277			6,419,019

a)	Historical financial information is derived from the Company’s unaudited consolidated financial statements for the nine month periods ended September 30, 2007 and 2006 as reported in its Report on Form 10-QSB for the quarterly period ended September 30, 2007.
b)	Historical financial information for Brooke Franchise Corporation is derived from its unaudited internally prepared financial statements for the nine month period ended September 30, 2007.
c)	Merger related expenses incurred by the Company during the nine month period ended September 30, 2007 of approximately $500,000 (along with estimated related tax effect) have been eliminated in the pro forma statement of income. (Total stockholders’ equity of $12,275,000 reported on the Company’s September 30, 2007 pro forma balance sheet has not been adjusted for these expenses.)
d)	Other than the adjustment described above at (c), there are no other adjustments to the proforma statements of income for the nine month periods ended September 30, 2007 and 2006 as the Company and Brooke Franchise have not had significant business dealings prior to their merger. Those pro forma statements of income were developed in a similar manner and include the following separate company results related to Brooke Capital Corporation:

	2007		2006
Net premium income	$	2,808,000	$	2,803,000
Net investment income		1,148,000		746,000
Consulting fees		7,540,000		2,000
Other		179,000		180,000
Total operating revunes	$	11,675,000	$	3,731,000
Net income (loss) before taxes	$	3,728,000	$	(210,000	)

e) Basic net income per common share is calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding. Diluted net income is calculated by including the weighted average effect of dilutive warrants outstanding during the periods. The weighted average number of shares issuable upon the exercise of outstanding warrants assumes that the applicable proceeds from such exercises are used to acquire treasury shares at the average price of common stock during the periods. The weighted average number of shares used in the calculation of pro forma per share data has been adjusted to give effect to the 5,000,000 shares issued on November 15, 2007 as if those shares had been outstanding since the beginning of each period presented. In addition, the weighted average number of shares outstanding for each period presented has been adjusted for the effects of a 1-for-3 reverse stock split on April 13, 2007.

Brooke Capital Corporation

Unaudited
Proforma Statements of Income
(in thousands)

	Brooke Capital			Brooke Franchise
	Corporation			Corporation		Proforma			Proforma			Proforma
	December 31,			December 31,		December 31,			December 31,			December 31,
	2006 (a)			2006 (b)		2006 (c)			2005 (c)			2004 (c)
Operating Revenues
Gross premium income	$	4,253		$	—	$	4,253		$	4,201		$	3,641
Reinsurance premiums assumed		12			—		12			12			11
Reinsurance premiums ceded		(588	)		—		(588	)		(420	)		(118	)
Net premium income		3,677			—		3,677			3,793			3,534
Insurance commissions		—			99,190		99,190			80,490			57,619
Consulting fees		1,199			2,731		3,930			4,917			5,236
Gain on sale of businesses		—			3,059		3,059			3,091			5,261
Initial franchise fee for basic services		—			31,770		31,770			19,375			8,795
Initial franchise fee for buyers assistance plans		—			3,137		3,137			10,133			8,122
Net investment income		1,086			275		1,361			1,006			556
Net realized investment gain (loss)		(40	)		—		(40	)		(2	)		464
Interest Income		—			—		—			—			—
Other income		240			2,186		2,426			1,075			394
Total operating revenues		6,162			142,348		148,510			123,878			89,981
Operating Expenses
Increase in policy reserves		841			—		841			1,118			1,021
Policy holder surrender values		270			—		270			236			135
Interest credited on annuities and premium deposits		579			—		579			406			345
Death claims		737			—		737			506			289
Policy acquisition costs deferred		(814	)		—		(814	)		(1,247	)		(1,276	)
Commission expense		809			78,318		79,127			65,434			47,785
Payroll expense		934			23,114		24,048			20,855			12,381
Depreciation and amortization		738			68		806			617			1,199
Insurance loss and loss expense		—					—			—			—
Other operating expense		1,300			35,241		36,541			27,453			17,461
Total operating expenses		5,394			136,741		142,135			115,378			79,340
Income from operations		768			5,607		6,375			8,500			10,641
Other Expenses
Interest expense		—			1,700		1,700			1,515			1,344
Total other expenses		—			1,700		1,700			1,515			1,344
Income before income taxes		768			3,907		4,675			6,985			9,297
Provision for income taxes		12			1,485		1,497			2,920			3,198
Net income	$	756			$2,422		$3,178			$4,065		$	6,099
Net Income per share (d):
Basic net income per share		0.50					0.49			0.63			0.93
Basic weighted average shares		1,497,638					6,497,638			6,437,925			6,562,359
Diluted net income per share		0.39					0.46			0.63			0.93
Diluted weighted average shares		1,958,672					6,958,672			6,437,925			6,562,359

a)	Historical financial information is derived from the Company’s audited consolidated financial statements for each of the years in the three year period ended December 31, 2006 as reported in its 2006 Report on Form 10-KSB.
b)	Historical financial information for Brooke Franchise Corporation is derived from its unaudited internal financial statements for each of the years in the three year period ended December 31, 2006.
c)	There are no adjustments to the pro forma statements of income for any of the years in the three year period ended December 31, 2006 as the Company and Brooke Franchise have not had significant business dealings prior to their merger. Those pro forma statements of income include the following separate company results related to Brooke Capital Corporation:

	2006		2005			2004
Net premium income	$	3,677,000	$	3,793,000		$	3,533,000
Net investment income		1,046,000		866,000			981,000
Consulting fees		1,199,000		1,000			—
Other		240,000		201,000			183,000
Total operating revunes	$	6,162,000	$	4,861,000		$	4,697,000
Net income (loss) before taxes	$	768,000	$	(701,000	)	$	(297,000	)

d) Basic net income per common share is calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding. Diluted net income is calculated by including the weighted average effect of dilutive warrants outstanding during the periods. The weighted average number of shares issuable upon the exercise of outstanding warrants assumes that the applicable proceeds from such exercises are used to acquire treasury shares at the average price of common stock during the periods. The weighted average number of shares used in the calculation of pro forma per share data has been adjusted to give effect to the 5,000,000 shares issued on November 15, 2007 as if those shares had been outstanding since the beginning of each period presented. In addition, the weighted average number of shares outstanding for each period presented has been adjusted for the effects of a 1-for-3 reverse stock split on April 13, 2007.