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:  May 6, 2009
(Date of earliest event reported)


DCAP GROUP, INC.
(Exact Name of Registrant as Specified in Charter)


Delaware
 
0-1665
 
36-2476480
(State or Other Jurisdiction of Incorporation)
 
(Commission File No.)
 
(IRS Employer Identification Number)

1158 Broadway, Hewlett, NY
    11557
(Address of Principal Executive Offices)
(Zip Code)


Registrant's telephone number, including area code: (516) 374-7600

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:

____
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 2.01.  Completion of Acquisition or Disposition of Assets .
 
On May 6, 2009, DCAP Group, Inc. (the “Company”) sold all of the outstanding stock of the subsidiaries that operated the Company’s DCAP franchise business to Stuart Greenvald and Abraham Weinzimer.  The sale was effective as of May 1, 2009.  The purchase price for the stock was $200,000 which was paid by delivery of a promissory note in such principal amount (the “Note”).  The Note is payable to the extent of $50,000 on May 15, 2009, $50,000 on May 1, 2010 and $100,000 on May 1, 2011 and provides for interest at the rate of 5.25% per annum.  Mr. Greenvald is the son-in-law of Morton L. Certilman, a principal shareholder of the Company.
 
Item 9.01 .   Financial Statements and Exhibits .
 
(b)            Pro Forma Financial Information :
 
(i)     
Explanatory Note with regard to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
(ii)    
Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of December 31, 2008
 
(iii)  
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2008
 
(d)            Exhibits :
 
 
2.1
Stock Purchase Agreement, dated as of May 1, 2009, by and between Stuart Greenvald and Abraham Weinzimer and the Company
 

 
 
 
 
DCAP GROUP, INC AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
EXPLANATORY NOTE

The following unaudited pro forma condensed consolidated financial statements give effect to the sale (the “Sale”) of all of the issued and outstanding stock of DCAP Management Corp. (“Management”) and Dealers Choice Automotive Planning, Inc. (“Dealers”) , wholly-owned subsidiaries of DCAP Group, Inc. (the “Registrant”), to Abraham Weinzimer and Stuart Greenvald.  These pro forma financial statements are presented for illustrative purposes only and therefore are not necessarily indicative of the operating results and financial position that might have been achieved had the Sale occurred as of an earlier date, nor are they necessarily indicative of the operating results and financial position which may occur in the future.

A Pro Forma Condensed Consolidated Balance Sheet is provided as of December 31, 2008, giving effect to the Sale as though it had been consummated on that date.  A Pro Forma Condensed Consolidated Statement of Operations is provided for the year ended December 31, 2008, giving effect to the Sale as though it had occurred on January 1, 2008.

The pro forma financial statements are based on preliminary estimates of values and transaction costs.  Accordingly, the actual recording of the transaction may differ from these pro forma financial statements.

The pro forma condensed consolidated financial statements presented as of December 31, 2008 and for the year then ended are derived from the separate historical consolidated financial statements of the Registrant and should be read in conjunction with the audited consolidated financial statements of the Registrant (included in its Annual Report on Form 10-K for the year ended December 31, 2008).



 
 DCAP GROUP, INC. AND
 
 SUBSIDIARIES
 
Pro Forma Condensed Consolidated Balance Sheet
         
December 31, 2008 (unaudited)
                         
         
Pro Forma Adjustments
         
   
As Reported
   
Previously Reported (1)
   
Current Transaction
 
Pro Forma
 
Assets
                         
Current Assets:
                         
Cash and cash equivalents
  $ 142,949     $ 417,718     $ (20,000 )  C   $ 540,667  
Accounts receivable, net
    201,787       -       (134,522 )  A     67,265  
Note receivable
            -       100,000    B     100,000  
Prepaid expenses and other current assets
    130,457       -       (101,678 )  A     28,779  
Assets from discontinued operations
    2,913,147       (2,122,284 )     -         790,863  
Total current assets
    3,388,340       (1,704,566 )     (156,200 )       1,527,574  
Property and equipment, net
    90,493       -       (7,876 )  A     82,617  
Notes receivable
    5,935,704       -       100,000    B     6,035,704  
Deposits and other assets
    6,096       -       (4,996 )  A     1,100  
Assets from discontinued operations,
                                 
non-current
    -       275,271       -         275,271  
Total assets
  $ 9,420,633     $ (1,429,295 )   $ (69,072 )     $ 7,922,266  
                                   
Liabilities and Stockholders' Equity
                                 
Current Liabilities:
                                 
Accounts payable and accrued expenses
  $ 822,350     $ -     $ -       $ 822,350  
Current portion of long-term debt
    1,593,210       (657,281 )     -         935,929  
Other current liabilities
    154,200       -       -         154,200  
Liabilities from discontinued operations
    213,685       130,918       -         344,603  
Mandatorily redeemable preferred stock
    780,000       (267,282 )     -         512,718  
Total current liabilities
    3,563,445       (793,645 )     -         2,769,800  
                                   
Long-term debt
    415,618       (379,843 )     -         35,775  
Deferred income taxes
    184,000       -       16,000         200,000  
                                   
Commitments
                                 
                                   
Stockholders' Equity:
                                 
Common stock
    37,888       -       -         37,888  
Preferred stock
    -               -         -  
Capital in excess of par
    11,962,512       -       -         11,962,512  
Deficit
    (5,522,448 )     (255,807 )     (249,072 )  A     (5,863,327 )
                      200,000    B        
                      (20,000 )  C        
                      (16,000 )  D        
      6,477,952       (255,807 )     (85,072 )       6,137,073  
Treasury stock, at cost
    (1,220,382 )     -       -         (1,220,382 )
Total stockholders' equity
    5,257,570       (255,807 )     (85,072 )       4,916,691  
Total liabilities and stockholders' equity
  $ 9,420,633     $ (1,429,295 )   $ (69,072 )     $ 7,922,266  
 
(1) On April 22, 2009, the Registrant filed a Current Report on Form 8-K disclosing the sale of substantially all of the assets of Barry Scott Agency, Inc., and DCAP Accurate, Inc. (collectively, “Seller”), wholly-owned subsidiaries of the Registrant, to NII BSA LLC.  Seller operated the Registrant’s 16 New York State retail business locations.
 
Pro Forma Condensed Consolidated Balance Sheet (continued)
December 31, 2008 (unaudited)



A) To record elimination of the assets associated with the Sale.
B) To record the note receivable representing the proceeds of the Sale.
C) To record estimated transaction costs associated with the Sale.
D) To write off deferred taxes associated with the Sale.
 

DCAP GROUP, INC. AND
 
SUBSIDIARIES
 
Pro Forma Condensed Consolidated Statement of Operations
 
Year Ended December 31, 2008 (unaudited)
                         
         
Pro Forma Adjustments
         
   
As Reported
   
Previously Reported (1)
   
Current Transaction
   
Pro Forma
 
                           
Commissions and fee revenue
  $ 911,225     $ -     $ (483,806 ) A   $ 427,419  
                                   
Operating expenses:
                                 
General and administrative expenses
    1,860,485       -       (672,233 ) A     1,229,265  
                      41,013   C        
Depreciation and amortization
    69,624       -       (32,850 ) A     36,774  
Total operating expenses
    1,930,109       -       (664,070 )       1,266,039  
                                   
Operating (loss) income
    (1,018,884 )     -       180,264         (838,620 )
                                   
Other (expense) income:
                                 
Interest income
    4,338       -       (2,116 ) A     10,097  
                      7,875   D        
Interest income - notes receivable
    764,899       -       -         764,899  
Interest expense
    (270,646 )     85,762       -         (184,884 )
Interest expense - mandatorily
                                 
redeemable preferred stock
    (66,625 )     22,830       -         (43,795 )
Total other income
    431,966       108,592       5,759         546,317  
                                   
(Loss) income from continuing operations
                                 
before (benefit from) provision for
                                 
income taxes
    (586,918 )     108,592       186,023         (292,303 )
(Benefit from) provision for income taxes
    (391,225 )     96,480       4,000   A     (216,000 )
                      88,000   B        
                      (13,255 ) E        
(Loss) income from continuing operations
    (195,693 )     12,112       107,278         (76,303 )
(Loss) income from discontinued
                                 
operations, net of income taxes
    (781,513 )     147,370       -         (634,143 )
Net (loss) income
  $ (977,206 )   $ 159,482     $ 107,278       $ (710,446 )
                                   
Basic and Diluted Net Loss Per Common Share:
                                 
                                   
Loss from continuing operations
  $ (0.07 )                     $ (0.03 )
Loss from discontinued operations
  $ (0.26 )                     $ (0.21 )
Loss per common share
  $ (0.33 )                     $ (0.24 )
                                   
Number of weighted average shares used
                                 
in computation of basic and diluted loss
                                 
per common share
    2,972,597                         2,972,597  
                                   
 
(1) On April 22, 2009, the Registrant filed a Current Report on Form 8-K disclosing the sale of substantially all of the assets of Barry Scott Agency, Inc., and DCAP Accurate, Inc. (collectively, “Seller”), wholly-owned subsidiaries of the Registrant, to NII BSA LLC.  Seller operated the Registrant’s 16 New York State retail business locations.



Pro Forma Condensed Consolidated Statement of Operations (continued)
Year Ended December 31, 2008 (unaudited)


A) To eliminate historical revenue and expenses associated with the operations of Dealers and Management.
B) To reverse tax benefit of current year net operating loss recorded as deferred tax benefit to continuing operations.
C) To record additional operating costs to be incurred after the Sale as if the Sale occurred on January 1, 2008.
D) To record interest income on promissory note associated with the Sale as if the Sale occurred on January 1, 2008.
E) To record tax effect of current year net operating loss associated with the Sale transaction as a deferred tax benefit for the period presented.



 
 
 

SIGNATURES

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.
 
 
DCAP GROUP, INC.
 
       
May 12, 2009
By:
/s/ Barry B. Goldstein  
    Barry B. Goldstein   
    President   
       

 
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