6-K 1 o16316e6vk.txt LETTERS CONCERNING CHANGE OF AUDITORS ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------------------------------------------------- FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 FOR THE MONTH OF MARCH 2005 Commission File Number 1-15114 ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. -------------------------------------------------- (Registrant's name) SUITE 355, 10333 SOUTHPORT ROAD S.W. CALGARY, ALBERTA, CANADA T2W 3X6 ---------------------------------------- (Address of principal executive offices) 1. Notice of Change of Auditor dated March 28, 2005 2. Letter from Former Auditor dated February 28, 2005 3. Letter from Successor Auditor dated March 17, 2005 4. Letter Confirming Board Approval of Change of Auditor dated March 28, 2005 Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______ Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):_______ Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ______________ ================================================================================ SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Anthony Clark International Insurance Brokers Ltd., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: April 7, 2005 ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. By: /s/ "Joseph P. Giuffre" ----------------------------------- Joseph P. Giuffre Director and Corporate Secretary [LETTERHEAD OF KPMG LLP] British Columbia Securities Commission Alberta Securities Commission 9th Floor, 701 West Georgia Street 4th Floor, 300 - 5th Avenue SW Vancouver, British Columbia V6Y 1L2 Calgary, Alberta T2P 1L2 Ontario Securities Commission Buchanan Barry LLP, Chartered Accountants 19th Floor, 20 Queen Street, West 800-840 Sixth Avenue SW Toronto, Ontario M5H 3S8 Calgary, Alberta Anthony Clark International Insurance Brokers Ltd. Suite 355, 10333 Southport Road, SW Calgary, Alberta T2W 3X6

February 28, 2005 Dear Sirs: ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. (THE "COMPANY") As required by National Instrument 51-102 - Continuous Disclosure Obligations, we have reviewed the information contained in the Company's Notice of Change of Auditor dated February 28, 2005 and we do not disagree with the information contained in such notice. Our understanding is that the notice will read as follows: "The Company has changed its auditor from KPMG LLP, Chartered Accountants of Suite 1200, 205 - 5th Avenue, SW, Calgary, Alberta T2P 4B9 to Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta. The former auditor has resigned effective February 28, 2005. There are no reservations in any auditor's reports, no reportable disagreements between the Company and KPMG LLP, Chartered Accountants and there have been no qualified opinions or denials of opinions by KPMG LLP, Chartered Accountants in connection with the audits of the Company's two most recently completed fiscal years or any subsequent period. This Notice, together with the required response letters from each of KPMG LLP, Chartered Accountants and Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta have been reviewed by the Company's Board of Directors. The resignation of KPMG LLP, Chartered Accountants and the appointment of Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta as successor auditor has been approved by the Company's Board of Directors." We understand that the Notice of Change of Auditor, along with this letter and a similar letter from Buchanan Barry LLP, Chartered Accountants will be provided to the Company's registered shareholders with the meeting materials relating to the Company's next general meeting of shareholders. Yours truly, KPMG LLP, CHARTERED ACCOUNTANTS Brian A. Rogers, FCA Partner (403) 691-7942 [LETTERHEAD OF BUCHANAN BARRY] March 17, 2005 British Columbia Securities Commission Alberta Securities Commission 9th Floor, 701 West Georgia Street 4th Floor, 300 - 5th Avenue SW Vancouver, British Columbia V6Y 1L2 Calgary, Alberta T2P 1L2 Ontario Securities Commission KPMG LLP, Chartered Accountants 19th Floor, 20 Queen Street, West Suite 1200, 205 - 5th Avenue, SW Toronto, Ontario M5H 3S8 Calgary, Alberta T2P 4B9 Anthony Clark International Insurance Brokers Ltd. Suite 355, 10333 Southport Road, SW Calgary, Alberta T2W 3X6

Dear Sirs: ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. (THE "COMPANY") As required by National Instrument 51-102 - Continuous Disclosure Obligation, we have reviewed the information contained in the Company's Notice of Change of Auditor dated February 28, 2005 and we do not disagree with the information contained in such notice. Our understanding is that the notice will read as follows: "The Company has changed its auditor from KPMG LLP, Chartered Accountants of Suite 1200, 205 - 5th Avenue, SW, Calgary, Alberta T2P 4B9 to Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta. The former auditor has resigned effective February 28, 2005. There are no reservations in any auditor's reports, no reportable disagreements between the Company and KPMG LLP, Chartered Accountants and there have been no qualified opinions or denials of opinions by KPMG LLP, Chartered Accountants in connection with the audits of the Company's two most recently completed fiscal years or any subsequent period. This Notice, together with the required response letters from each of KPMG LLP, Chartered Accountants and Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta have been reviewed by the Company's Board of Directors. The resignation of KPMG LLP, Chartered Accountants and the appointment of Buchanan Barry LLP, Chartered Accountants, of Suite 800-840 Sixth Avenue S.W., Calgary, Alberta as successor auditor has been approved by the Company's Board of Directors." We understand that the Notice of Change of Auditor, along with this letter and a similar letter from KPMG LLP, Chartered Accountants will be provided to the Company's registered shareholders with the meeting materials relating to the Company's next general meeting of shareholders. Yours truly, "BUCHANAN BARRY LLP, CHARTERED ACCOUNTANTS" BUCHANAN BARRY LLP, CHARTERED ACCOUNTANTS ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. (the "Company") TO THE SHAREHOLDERS: NOTICE OF CHANGE OF AUDITOR The Company has changed its auditor from KPMG, LLP Chartered Accountants, of Suite 1200, 205 - 5th Avenue SW, Calgary, Alberta T2P 4B9 to Buchanan Barry, Chartered Accountants, of Suite 800, 840 Sixth Avenue, Calgary, Alberta. The former auditor has resigned effective February 28, 2005. There are no reservations in any auditor's reports, no reportable disagreements between the Company and KPMG, LLP Chartered Accountants and there have been no qualified opinions or denials of opinions by KPMG, LLP, Chartered Accountants in connection with the audits of the Company's two most recently completed fiscal years or any subsequent period. This Notice, together with the required response letters from each of KPMG, LLP Chartered Accountants and Buchanan Barry, Chartered Accountants have been reviewed by the Company's Board of Directors. The resignation of KPMG, LLP Chartered Accountants and the appointment of Buchanan Barry, Chartered Accountants as successor auditor has been approved by the Company's Board of Directors. DATED this 28th day of March, 2005. ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. Per: "Primo Podorieszach" -------------------------------------- Primo Podorieszach President & Chief Executive Officer [ANTHONY CLARK LETTERHEAD] March 28, 2005 BY SEDAR British Columbia Securities Commission Alberta Securities Commission 9th Floor, 701 West Georgia Street 4th Floor, 300 - 5th Avenue SW Vancouver, British Columbia V6Y 1L2 Calgary, Alberta T2P 1L2 Ontario Securities Commission 19th Floor, 20 Queen Street, West Toronto, Ontario M5H 3S8 Dear Sirs: ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. (THE "COMPANY") - CHANGE OF AUDITOR This letter will confirm that the Company's Audit Committee and Board of Directors have reviewed the Notice of Change of Auditor and the letters from the former and successor auditor (the "Reporting Package") prior to the Reporting Package being mailed to shareholders. Yours truly, ANTHONY CLARK INTERNATIONAL INSURANCE BROKERS LTD. Per: "Primo Podorieszach" -------------------------------------- Primo Podorieszach, President & Chief Executive Officer

-------------------------------------------------------------------------------- As previously reported As revised Change -------------------------------------------------------------------------------- Cash and cash equivalents $ 1,675,657 $1,989,663 $ 314,006 Accounts receivable 1,649,781 1,335,775 (314,006) Customer accounts 5,901,399 5,027,401 (873,998) Goodwill 5,948,216 5,459,185 (489,031) Other intangible assets 178,468 663,551 485,083 Long-term debt 8,714,176 8,014,044 (700,132) Share capital 10,001,138 9,897,116 (104,022) Contributed surplus - 104,022 104,022 Deficit 3,383,595 3,502,196 118,601 Cumulative translation adjustment 64,987 845 (64,142) --------------------------------------------------------------------------------

----------------------------------------------------------------------------- As previously reported As revised Change ----------------------------------------------------------------------------- Customer accounts 5,844,775 4,973,549 (871,226) Goodwill 6,047,997 5,555,557 (492,440) Other intangible assets 177,070 657,753 480,683 Long-term debt 8,810,889 8,133,358 (677,531) Share capital 9,999,164 9,895,142 (104,022) Contributed surplus 152,288 256,310 104,022 Deficit 3,715,268 4,013,341 298,073 Cumulative translation adjustment (19,928) 45,692 65,890 -----------------------------------------------------------------------------

---------------------------------------------------------------------------- As previously reported As revised Change ---------------------------------------------------------------------------- Interest and financing costs (255,500) (287,694) (32,194) Loss before depreciation and amortization (96,168) (128,362) (32,194) Depreciation and amortization (193,928) (188,918) 5,010 Loss before income taxes (290,096) (317,280) (27,184) Net loss (331,673) (358,857) (27,184) Earnings per common share-basic and diluted (0.04) (0.05) (0.01) ----------------------------------------------------------------------------

----------------------------------------------------------------------------- As previously reported As revised Change ----------------------------------------------------------------------------- Cash flows from (used in): Financing activities: Repayment of long-term debt (86,307) (98,102) (11,795) Cash flows from (used in) financing activities (620,350) (632,145) (11,795) Investing activities: Other intangible assets 3,165 - (3,165) Cash flows from (used in) investing activities (23,163) (26,328) (3,165) Effect of foreign exchange on cash and cash equivalents 1,118 16,078 14,960 Decrease in cash and cash equivalents (221,762) (535,768) (314,006) Cash and cash equivalents, beginning of period 1,675,657 1,989,663 314,006 ----------------------------------------------------------------------------- Cash and cash equivalents, end of year $1,453,895 $1,453,895 $ - -----------------------------------------------------------------------------

-------------------------------------------------------------------------------- As previously reported As revised Change -------------------------------------------------------------------------------- Customer accounts 5,844,775 4,973,549 (871,226) Goodwill 6,047,997 5,555,557 (492,440) Other intangible assets 177,070 657,753 480,683 Long-term debt 8,810,889 8,133,358 (677,531) Share capital 9,999,164 9,895,142 (104,022) Contributed surplus 152,288 256,310 104,022 Deficit 3,715,268 4,013,341 298,073 Cumulative translation adjustment (19,928) 45,692 65,890 --------------------------------------------------------------------------------

------------------------------------------------------------------------ As previously reported As revised Change ------------------------------------------------------------------------ Interest and financing costs (255,500) (287,694) (32,194) Loss before depreciation and amortization (96,168) (128,362) (32,194) Depreciation and amortization (193,928) (188,918) 5,010 Loss before income taxes (290,096) (317,280) (27,184) Net loss (331,673) (358,857) (27,184) Earnings per common share-basic and diluted (0.04) (0.05) (0.01) ------------------------------------------------------------------------

----------------------------------------------------------------------- As previously reported As revised Change ----------------------------------------------------------------------- Cash flows from (used in) operating activities: Net loss $(331,673) $(358,857) $ (27,184) Depreciation and amortization 193,928 167,683 (26,245) Other intangible assets - 21,235 21,235 Amortization of discount on Kabaker note - 32,194 32,194 Accounts receivable 197,606 (116,400) (314,006) Cash flows from (used in) operating activities 420,633 106,627 (314,006) -----------------------------------------------------------------------

-------------------------------------------------------------------------- As previously reported As revised Change -------------------------------------------------------------------------- Cash flows from (used in): Financing activities: Repayment of long-term debt (86,307) (98,102) (11,795) Cash flows from (used in) financing activities (620,350) (632,145) (11,795) Investing activities: Other intangible assets 3,165 - (3,165) Cash flows from (used in) investing activities (23,163) (26,328) (3,165) Effect of foreign exchange on cash and cash equivalents 1,118 16,078 14,960 Decrease in cash and cash equivalents (221,762) (535,768) (314,006) Cash and cash equivalents, beginning of period 1,675,657 1,989,663 314,006 -------------------------------------------------------------------------- Cash and cash equivalents, end of year $1,453,895 $1,453,895 $ - --------------------------------------------------------------------------

-------------------------------------------------------------------------------------------- June 30, 2004 June 30, 2003 -------------------------------------------------------------------------------------------- Canadian operations: Interest on obligations under capital lease $ 396 $ 344 -------------------------------------------------------------------------------------------- 396 344 US operations: Interest and financing costs on Textron terminated debt financing - 73,749 Interest and financing costs on long-term debt 285,416 - Interest on obligations under capital lease 1,882 - -------------------------------------------------------------------------------------------- 287,298 73,749 -------------------------------------------------------------------------------------------- Total interest and financing costs $287,694 $74,093 ============================================================================================

2005 2004 2003 --------- --------------------------------------------- ---------------------------------- JUNE MAR DEC Sept. June Mar Dec Sept. --------- --------- --------- --------- --------- --------- --------- ---------- Revenues 2,516,206 2,828,346 2,035,137 1,220,662 1,385,414 1,446,539 1,206,243 1,268,380 EBITDA 159,332 433,850 43,376 (463,452) 244,728 136,288 80,762 60,387 Net earnings (loss) (358,857) (54,305) (629,271) (411,961) 44,039 (223,909) (141,682) (96,211) Earnings (loss) per share Basic and Diluted (0.05) (0.01) (0.08) (0.05) - (0.03) (0.02) (0.01) --------- --------- --------- --------- --------- --------- --------- ----------

-------------------------------------------------------------------------------- June 30, 2004 March 31, 2004 -------------------------------------------------------------------------------- Demand loan to an individual who is an officer and director of the Corporation, bearing interest at the Royal Bank of Canada prime rate, with interest payable annually and compounded semi-annually, secured by capital stock of the Corporation and a general security agreement $ 40,000 $ 40,000 Note receivable, issued on October 10, 2003, from a company, in which an officer of Addison is an owner. This note is due on demand and is non-interest bearing. It is secured by a general security agreement 201,060 196,575 Amount receivable from DKWS Enterprises Inc. DKWS is owned by an officer of Addison 121,783 - -------------------------------------------------------------------------------- $362,843 $236,575 --------------------------------------------------------------------------------

-------------------------------------------------------------------------------- June 30, 2004 March 31, 2004 -------------------------------------------------------------------------------- Note payable U.S. $3,515,000, bearing interest at 7% per annum And repayable over 10 years in equal monthly instalments of US$40,812 including interest secured by a general security agreement. The note has been discounted to reflect the fair value of the note based upon a market value interest rate for similar debt of 12%. The amount of interest calculated on the difference between the stated interest rate (7%) and the market interest rate (12%) is amortized as incremental interest expense and is accreted to the carrying value of the note 4,460,727 4,444,379 Less unamortized discount (803,086) (823,484) Amount payable to DKWS Enterprises Inc. ("DKWS") for expenses incurred on behalf of Addison. DKWS is owned by an officer of Addison - 60,832 -------------------------------------------------------------------------------- $ 3,657,641 $ 3,681,727 --------------------------------------------------------------------------------

JUNE 30, MARCH 31, 2004 2004 (UNAUDITED) (AUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,453,895 $ 1,989,663 Accounts receivable 1,453,214 1,335,775 Loan to director (note 6) 40,000 40,000 Prepaid expenses 275,188 123,329 Note receivable 201,060 196,575 Restricted cash (note 4) - 522,619 ------------------------------- 3,423,357 4,207,961 Restricted cash (note 4) 670,699 655,274 Computer systems and office equipment 377,707 376,540 Customer accounts 4,973,549 5,027,401 Goodwill 5,555,557 5,459,185 Deferred financing costs (note 4) 983,151 474,447 Other intangible assets 657,753 663,551 ------------------------------- $ 16,641,773 $ 16,864,359 =============================== LIABILITIES AND SHAREHOLDER'S EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $1,548,653 $ 1,114,545 Current portion of long term-debt (note 6 and 7) 8,623,635 485,447 Future tax liability 24,405 32,677 Litigation liability (note 4) - 522,619 ------------------------------- 10,196,693 2,155,288 Long-term debt (note 7) 14,228 8,014,044 Future tax liability 246,779 196,930 Share capital (note 8) 9,895,142 9,897,116 Contributed surplus (note 8 (d)) 256,310 104,022 Cumulative translation adjustments 45,962 (845) Deficit (4,013,341) (3,502,196) ------------------------------- 6,184,073 6,498,097 ------------------------------- $ 16,641,773 $ 16,864,359 =============================== Commitments (note 9) Subsequent events (note 11)

FOR THE THREE MONTHS ENDED JUNE 30, 2004 2003 Revenue $ 2,516,206 $ 1,385,414 Expenses: Salaries and wages 1,785,236 864,898 Rent 154,903 75,503 General and administrative 416,735 219,433 Foreign exchange gain - (19,148) --------------------------------- 2,356,874 1,140,686 --------------------------------- Earnings before interest, taxes, depreciation and amortization 159,332 244,728 Interest and financing costs (note 3) (287,694) (74,093) --------------------------------- Earnings (loss) before depreciation and amortization (128,362) 170,635 Depreciation and amortization (188,918) (70,569) --------------------------------- Earnings (loss) before income taxes (317,280) 100,066 Income taxes: Current - (52,988) Future (41,577) (3,039) --------------------------------- (41,577) (56,027) --------------------------------- Net earnings (loss) (358,857) 44,039 Deficit, beginning of period as previously reported (3,502,196) (2,450,698) Effect of change in accounting for: Stock based compensation (note 8 (d)) (152,288) - --------------------------------- Deficit, end of period as restated ($4,013,341) ($2,406,659) ================================= Earnings (loss) per share, basic and diluted (0.05) 0.01

FOR THE THREE MONTHS ENDED JUNE 30, 2004 2003 Cash flows from (used in) operating activities: Net earnings (loss) ($358,857) $44,039 Items not involving cash: Depreciation and amortization 167,683 70,569 Deferred financing costs 31,878 15,955 Decrease in other intangible assets 21,235 - Amortization of discount on Kabaker note 32,194 - Future income tax expense 41,577 3,039 --------------------------------- Cash flow from operations (64,290) 133,602 Net change in non-cash working capital relating to operations: Accounts receivable (116,400) (177,855) Prepaid expenses (150,364) 23,487 Accounts payable and accrued liabilities 437,681 56,502 Income taxes payable - 52,988 --------------------------------- 106,627 88,724 --------------------------------- Cash flows from (used in) financing activities: Repayment of long-term debt (98,102) (1,141) Share issue costs (1,974) - Deferred financing costs (531,596) - Restricted cash (473) - --------------------------------- (632,145) (1,141) --------------------------------- Cash flows from (used in) investing activities: Computer systems and office equipment additions (26,328) (5,922) --------------------------------- (26,328) (5,922) --------------------------------- Effect of foreign exchange on cash and cash equivalents 16,079 - --------------------------------- Increase (decrease) in cash and cash equivalents (535,768) 81,661 Cash and cash equivalents, beginning of period 1,989,663 3,719,408 --------------------------------- Cash and cash equivalents, end of period $1,453,895 $3,801,069 ================================= Cash and cash equivalents is comprised of: Cash 1,231,436 3,801,069 Term deposits with original terms maturing within ninety days 222,459 - --------------------------------- Supplementary disclosure of cash flow information: Interest paid in the period 247,832 344 ---------------------------------

------------------------------------------------------------------------------- As previously reported As revised Change ------------------------------------------------------------------------------- Cash and cash equivalents $ 1,675,657 $1,989,663 $ 314,006 Accounts receivable 1,649,781 1,335,775 (314,006) Customer accounts 5,901,399 5,027,401 (873,998) Goodwill 5,948,216 5,459,185 (489,031) Other intangible assets 178,468 663,551 485,083 Long-term debt 8,714,176 8,014,044 (700,132) Share capital 10,001,138 9,897,116 (104,022) Contributed surplus - 104,022 104,022 Deficit 3,383,595 3,502,196 118,601 Cumulative translation adjustment 64,987 845 (64,142) -------------------------------------------------------------------------------

----------------------------------------------------------------------------- As previously reported As revised Change ----------------------------------------------------------------------------- Customer accounts 5,844,775 4,973,549 (871,226) Goodwill 6,047,997 5,555,557 (492,440) Other intangible assets 177,070 657,753 480,683 Long-term debt 8,810,889 8,133,358 (677,531) Share capital 9,999,164 9,895,142 (104,022) Contributed surplus 152,288 256,310 104,022 Deficit 3,715,268 4,013,341 298,073 Cumulative translation adjustment (19,928) 45,692 65,890 -----------------------------------------------------------------------------

-------------------------------------------------------------------------- As previously reported As revised Change -------------------------------------------------------------------------- Cash flows from (used in) operating activities: Net loss $(331,673) $(358,857) $ (27,184) Depreciation and amortization 193,928 167,683 (26,245) Other intangible assets - 21,235 21,235 Amortization of discount on Kabaker note - 32,194 32,194 Accounts receivable 197,606 (116,400) (314,006) Cash flows from (used in) operating activities 420,633 106,627 (314,006) --------------------------------------------------------------------------

---------------------------------------------------------------------------- As previously reported As revised Change ---------------------------------------------------------------------------- Cash flows from (used in): Financing activities: Repayment of long-term debt (86,307) (98,102) (11,795) Cash flows from (used in) financing activities (620,350) (632,145) (11,795) Investing activities: Other intangible assets 3,165 - (3,165) Cash flows from (used in) investing activities (23,163) (26,328) (3,165) Effect of foreign exchange on cash and cash equivalents 1,118 16,078 14,960 Decrease in cash and cash equivalents (221,762) (535,768) (314,006) Cash and cash equivalents, beginning of period 1,675,657 1,989,663 314,006 ---------------------------------------------------------------------------- Cash and cash equivalents, end of year $1,453,895 $1,453,895 $ - ----------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------ June 30, 2004 June 30, 2003 ------------------------------------------------------------------------------------------------------ Canadian operations: Interest on obligations under capital lease $ 396 $ 344 ------------------------------------------------------------------------------------------------------ 396 344 US operations: Interest and financing costs on Textron terminated debt financing - 73,749 Interest and financing costs on long-term debt 285,416 - Interest on obligations under capital lease 1,882 - ------------------------------------------------------------------------------------------------------ 287,298 73,749 ------------------------------------------------------------------------------------------------------ Total interest and financing costs $287,694 $74,093 ------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------- June 30, 2004 March 31, 2004 -------------------------------------------------------------------------------------- Cost $ 1,016,897 $ 476,722 Accumulated amortization (33,746) (2,275) -------------------------------------------------------------------------------------- $ 983,151 $ 474,447 --------------------------------------------------------------------------------------

----------------------------------------------------------------------- June 30, 2004 March 31, 2004 ----------------------------------------------------------------------- Demand loan to an individual who is an officer and director of the Corporation, bearing interest at the Royal Bank of Canada prime rate, with interest payable annually and compounded semi-annually, secured by capital stock of the Corporation and a general security agreement $ 40,000 $ 40,000 Note receivable, issued on October 10, 2003, from a company, in which an officer of Addison is an owner This note is due on demand and is non-interest bearing. It is secured by a general security agreement 201,060 196,575 Amount receivable from DKWS Enterprises Inc. DKWS is owned by an officer of Addison 121,783 - ----------------------------------------------------------------------- $362,843 $236,575 -----------------------------------------------------------------------

------------------------------------------------------------------------ June 30, 2004 March 31, 2004 ------------------------------------------------------------------------ Note payable U.S. $3,515,000, bearing interest at 7% per annum And repayable over 10 years in equal monthly instalments of US$40,812 including interest secured by a general security agreement. The note has been discounted to reflect the fair value of the note based upon a market value interest rate for similar debt of 12%. The amount of interest calculated on the difference between the stated interest rate (7%) and the market interest rate (12%) is amortized as incremental interest expense and is accreted to the carrying value of the note 4,460,727 4,444,379 Less unamortized discount (803,086) (823,484) Amount payable to DKWS Enterprises Inc. ("DKWS") for expenses incurred on behalf of Addison. DKWS is owned by an officer of Addison - 60,832 ------------------------------------------------------------------------ $ 3,657,641 $ 3,681,727 ------------------------------------------------------------------------

------------------------------------------------------------------------- June 30, 2004 March 31, 2004 ------------------------------------------------------------------------- Anthony Clark International Insurance Brokers Ltd. Capital lease, bearing interest at 9.78% and secured by the individual assets being leased by the Corporation $ 16,373 $ 17,624 Addison York Insurance Brokers Ltd. Capital lease, bearing interest at 15.00% and secured by the individual assets being leased by the Corporation 38,259 45,254 Note payable, bearing no interest and payable on December 31, 2004 and unsecured 234,193 228,969 Note payable, bearing interest at prime plus 8%, with interest only payments for the first 2 years followed by monthly instalments of $102,030 (US$77,856) including interest over 60 months. The note is secured by a general security agreement and guaranteed by Anthony Clark International Insurance Brokers Ltd. 4,691,400 4,586,749 Note payable U.S. $3,515,000, bearing interest at 7% per annum And repayable over 10 years in equal monthly instalments of US$40,812 including interest secured by a general security agreement. The note has been discounted to reflect the fair value of the note based upon a market value interest rate for similar debt of 12%. The amount of interest calculated on the difference between the stated interest rate (7%) and the market interest rate (12%) is amortized as incremental interest expense and is accreted to the carrying value of the note 4,460,727 4,444,379 Less unamortized discount (803,086) (823,484) ------------------------------------------------------------------------- 8,637,863 8,499,491 Less current portion 504,505 485,447 ------------------------------------------------------------------------- $ 8,133,358 $ 8,014,044 -------------------------------------------------------------------------

------------------------------------------------------------------------------------------------- Number of Share capital: shares Amount ------------------------------------------------------------------------------------------------- Balance, March 31, 2003 7,692,055 $ 9,687,132 Issuance of Common Shares on completion of private placement 263,098 336,765 Estimated value of warrants included in proceeds of Units, recorded as contributed surplus - (104,022) Share issue costs (22,759) Balance, March 31, 2004 7,955,153 9,897,116 Share issue costs (1,974) Balance, June 30, 2004 7,955,153 $ 9,895,142 -------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------- June 30, 2004 March 31, 2004 ------------------------ ------------------------- Weighted- Weighted- average average Number of exercise Number of exercise options price options price ----------------------------------------------------------------------------------------- Outstanding, beginning of year 1,308,811 $ 1.23 984,400 $ 1.37 Granted - - 334,411 0.82 Cancelled (520,000) (1.60) (10,000) (1.0) ----------------------------------------------------------------------------------------- Outstanding, end of year 788,811 $ 0.99 1,308,811 $ 1.23 ----------------------------------------------------------------------------------------- Exercisable, end of year 724,611 $ 0.99 1,244,611 $ 1.25 -----------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------- Weighted- Number average Weighted- Number Weighted- Range of outstanding at remaining average exercisable at average exercise June 30, contractual exercise June 30, exercise Expiry prices 2004 life price 2004 price -------------------------------------------------------------------------------------------------- 10/26/06 $ 1.00 435,000 1.33 $1.00 374,550 $1.00 03/18/07 1.15 5,000 1.71 1.15 1,250 1.15 02/28/05 4.80 14,400 0.67 4.80 14,400 4.80 08/28/08 0.81 319,411 4.17 0.81 319,411 0.81 08/28/08 1.00 15,000 4.17 1.00 15,000 1.00 -------------------------------------------------------------------------------------------------- $0.81 to $4.80 788,811 2.53 $0.99 724,611 $0.99 --------------------------------------------------------------------------------------------------

2005 $617,651 2006 75,607 -------------------------------------------------------------------------------------------- $693,258 --------------------------------------------------------------------------------------------

THREE MONTHS ENDED JUNE 30, 2004 THREE MONTHS ENDED JUNE 30, 2003 ----------------------------------------- ------------------------------------- CANADA US CONSOLIDATED CANADA US CONSOLIDATED --------- ---------- ------------ --------- ------- ------------ Revenue 1,380,942 1,135,264 2,516,206 1,385,414 - 1,385,414 Net earnings (Ioss) 112,713 (471,570) (358,857) 109,639 (65,600) 44,039 Identifiable assets 5,522,707 11,119,066 16,641,773 8,455,840 368,216 8,824,056 Additions to - Computer systems and office equipment 3,593 22,735 26,328 5,922 - 5,922 Depreciation and amortization 66,826 122,092 188,918 70,569 - 70,569 Interest and financing costs 396 287,298 287,694 344 73,749 74,093 Computer systems and office equipment and goodwill 1,737,056 4,196,208 5,933,264 1,777,742 - 1,777,742

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