UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): July 31, 2004
ASSURANCEAMERICA CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 0-06334 87-0281240
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization Identification No.)
RiverEdge One
Suite 600
5500 Interstate North Parkway
Atlanta, Georgia 30328
(Address of principal executive offices, including zip code)
(770) 933-8911
(Registrant's telephone number, including area code)
N/A
(Former Name if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial Information.
As reported in the Current Report on Form 8-K filed by AssuranceAmerica
Corporation (the "Company") on August 3, 2004, the Company acquired
substantially all of the assets of Thomas-Cook Holding Company (the "Seller") on
July 31, 2004. The purpose of this Current Report on Form 8-K is to file the
Company's pro forma consolidated balance sheets as of March 31, 2004 and June
30, 2004, and pro forma consolidated statements of operations for the three
months ended March 31, 2004, and for the six months ended June 30, 2004, which
reflect the assets acquired from the Seller and which are filed herewith as
Exhibit 99.1.
The unaudited pro forma consolidated balance sheets of the Company and the
Seller as of March 31, 2004, and June 30, 2004, are presented to give effect to
the acquisition of Seller's assets as if it had occurred on March 31, 2004 and
June 30, 2004, respectively. The unaudited pro forma consolidated statements of
operations of the Company and the Seller for the three- and six- month periods
ended June 30, 2004, are presented as if the acquisition of the Seller's assets
had taken place on January 1, 2004.
The unaudited pro forma consolidated financial statements should be read
in conjunction with the historical consolidated financial statements and
accompanying notes contained in the Company's Quarterly Reports on Form 10-QSB
for the quarters ended March 31, 2004, and June 30, 2004. The unaudited pro
forma consolidated financial statements are not intended to be representative or
indicative of the consolidated results of operations or financial condition of
the Company that would have been reported had the acquisition of the Seller's
assets been completed as of the dates presented, and should not be taken as
representative of the future consolidated results of operations or financial
condition of the Company.
(c) Exhibit Number Description
-------------- -----------
99.1 Pro Forma Financial Information
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASSURANCEAMERICA CORPORATION
Date: October 15, 2004 /s/ Robert J. Cormican
----------------------------------------
Robert J. Cormican
Senior Vice President and Chief
Financial Officer
Exhibit 99.1
ASSURANCEAMERICA CORPORATION
(UNAUDITED) CONSOLIDATED BALANCE SHEETS
Pro Forma
June 30, 2004
----------------------------------------------------
AA Insurance
Assets Corp. Market Adjustments Combined
Short term investments $ 2,631,182 $ 2,631,182
Cash and cash equivalents 6,882,759 $ 75,333 (75,333) 6,882,759
Investment Income due and accrued 571 571
Receivable from insured 5,220,554 5,220,554
Reinsurance recoverable 9,570,963 9,570,963
Prepaid reinsurance premium 5,882,114 5,882,114
Deferred acquisition costs 147,622 147,622
Property and equipment
(net of accumulated depreciation of) 931,161 21,600 952,761
Due from related party 30,783 30,783
Prepaid expenses 171,876 7,600 179,476
Intangibles(net of accumulated amortization) 3,322,122 3,322,122
Security deposits 73,324 73,324
----------------------------------------------------
Total assets $34,865,031 $104,533 (75,333) $34,894,231
====================================================
Liabilities and equity
Accounts payable and accrued expenses 1,879,152 1,879,152
Unearned premium 8,608,440 8,608,440
Unpaid losses and loss adjustment expenses 8,195,229 8,195,229
Reinsurance payable 7,445,887 7,445,887
Provisional commission reserve 1,799,749 1,799,749
Current portion of long term debt 1,138,720 18,564 (18,564) 1,138,720
Long term debt, related party 5,804,658 61,201 (61,201) 5,804,658
Capital lease obligations 91,600 91,600
----------------------------------------------------
Total liabilities 34,963,435 79,765 (79,765) 34,963,435
Stockholder's equity
Common stock, .01 par value
(authorized 60,000,000, outstanding 45,211,111) 452,111 452,111
Preferred Stock
(authorized 5,000,000, outstanding 240,000) 2,400 2,400
Surplus-paid in 15,633,851 15,633,851
Accumulated Deficit (16,186,766) 24,768 4,432 (16,157,566)
----------------------------------------------------
Total stockholder's equity (98,404) 24,768 (69,204)
----------------------------------------------------
Total liabilities and stockholder's equity $34,865,031 $104,533 $34,894,231
====================================================
March 31, 2004
-----------------------------------------------------
AA Insurance
Assets Corp. Market Adjustments Combined
Short term investments $ 2,625,000 2,625,000
Cash and cash equivalents 4,882,277 $ 41,795 (41,795) 4,882,277
Investment Income due and accrued 23,946 23,946
Receivable from insured 5,782,294 5,782,294
Reinsurance recoverable 6,639,244 6,639,244
Prepaid reinsurance premium 5,588,275 5,588,275
Deferred acquisition costs 134,626 134,626
Property and equipment
(net of accumulated depreciation of) 983,749 25,293 1,009,042
Due from related party 30,783 30,783
Prepaid expenses 92,260 8,100 100,360
Intangibles(net of accumulated amortization) 3,322,122 3,322,122
Security deposits 72,315 72,315
-----------------------------------------------------
Total assets $30,176,891 $ 75,188 (41,795) $30,210,284
=====================================================
Liabilities and equity
Accounts payable and accrued expenses 3,031,056 3,031,056
Unearned premium 8,138,577 8,138,577
Unpaid losses and loss adjustment expenses 6,163,404 6,163,404
Reinsurance payable 5,858,377 5,858,377
Provisional commission reserve 1,002,779 1,002,779
Current portion of long term debt 1,138,720 98,965 (98,965) 1,138,720
Long term debt, related party 5,904,658 61,201 (61,201) 5,904,658
Capital lease obligations 91,600 91,600
-----------------------------------------------------
Total liabilities 31,329,171 160,166 (160,166) 31,329,171
Stockholder's equity
Common stock, .01 par value
(authorized 60,000,000, outstanding 45,211,111) 452,111 452,111
Preferred Stock
(authorized 5,000,000, outstanding 240,000)
Surplus-paid in 14,456,255 14,456,255
Accumulated Deficit (16,060,646) (84,978) 118,371 (16,027,253)
-----------------------------------------------------
Total stockholder's equity (1,152,280) (84,978) (1,118,887)
-----------------------------------------------------
Total liabilities and stockholder's equity $30,176,891 $ 75,188 $30,210,284
=====================================================
ASSURANCEAMERICA CORP
(UNAUDITED) CONSOLIDATED STATEMENTS OF INCOME
Pro Forma
Six Months Three Months
Ending June 30, 2004 Ending March 31, 2004
---------------------------------------- --------------------------------------
AA Insurance AA Insurance
Revenue: Corp. Market Combined Corp. Market Combined
Gross premiums written $16,337,206 16,337,206 $8,503,724 $8,503,724
Gross premiums ceded (11,185,886) (11,185,886) (5,838,417) ($5,838,417)
Net premiums written 5,151,320 5,151,320 2,665,307 $2,665,307
Decrease (increase) in unearned premiums,
net of prepaid reinsurance premiums (912,935) (912,935) (736,912) ($736,912)
Net premiums earned 4,238,385 4,238,385 1,928,395 $1,928,395
Commission income 5,554,880 430,675 5,985,555 2,990,630 206,232 $3,196,862
Managing general agent fees 1,692,934 1,692,934 823,409 $823,409
Net investment income 11,052 11,052 2,974 $2,974
Other Fee Income 493,249 493,249 300,759 $300,759
---------------------------------------- --------------------------------------
Total revenue 11,990,500 430,675 12,421,175 6,045,807 206,232 $6,252,039
Expenses:
Losses and loss adjustment expenses 3,331,957 3,331,957 1,495,644 $1,495,644
Selling expenses 5,192,819 122,896 5,315,715 2,598,977 72,132 $2,671,109
General and administrative expense 2,954,444 157,818 3,112,262 1,516,140 93,885 $1,610,025
Depreciation and amortization expense 127,877 127,877 67,577 $67,577
Interest Expense 283,634 283,634 141,699 $141,699
---------------------------------------- --------------------------------------
Total operating expenses 11,890,731 280,714 12,171,445 5,820,037 166,017 5,986,054
---------------------------------------- --------------------------------------
Income (loss) before provision for income 99,769 149,961 249,730 225,770 40,215 265,985
tax expense
Income Tax Provision --
---------------------------------------- --------------------------------------
Net Loss $99,769 $149,961 $249,730 $225,770 $40,215 $265,985
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