UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.
20549

FORM 10-K/A

Annual Report Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934

For the fiscal year ended
December 31, 2004 Commission file number 1-9828

GAINSCO, INC.

(Exact name of registrant as specified in its charter)

TEXAS
(State of Incorporation) 75-1617013
(IRS Employer
Identification No.)

1445 Ross Ave., Suite 5300
Dallas, Texas
(Address of principal executive offices) 75202
(Zip Code)

Registrant’s telephone number, including area code (214)647-0415

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock ($.10 par value) Name of each exchange on which registered
OTC Bulletin Board

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes o No þ

The aggregate market value of the registrant’s Common Stock ($.10 par value), the registrant’s only class of voting or non-voting common equity stock, held by non-affiliates of the registrant (19,289,597 shares) as of the close of the business on June 30, 2004 was $13,502,718 (based on the closing sale price of $0.70 per share on that date on the OTC Bulletin Board).

As of March 25, 2005, there were 61,084,960 shares of the registrant’s Common Stock ($.10 par value) outstanding.

Documents Incorporated by Reference

None.

1

Explanatory Note: GAINSCO, INC. (the “Company”) filed its Annual Report on Form 10-K on March 31, 2005. At that time the Company expected to file a proxy statement for its Annual Meeting of Shareholders during April, 2005. In the Form 10-K the Company had indicated its expectation that the Annual Meeting of Shareholders would be May 11, 2005. However, the Company has not yet set a date for the Annual Meeting and is therefore filing this Amendment to its Annual Report on Form 10-K in order to provide the information required by Part III of Form 10-K. No other parts of the original Form 10-K are amended by this Amendment, and the information contained herein is stated as of the filing date of the Form 10-K and does not reflect any events occurring after the filing of the Form 10-K.

2

TABLE OF CONTENTS

PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions
	Item 14. Principal Accountant Fees and Services
PART IV
	Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
Certification of CEO Pursuant to Rule 13a-14(b)
Certification of CFO Pursuant to Rule 13a-14(b)

PART III

Item 10. Directors and Executive Officers of the Registrant.

Board of Directors of the Registrant

     The Board of Directors of the Company consists of the following eight directors as of March 25, 2005:

Name	Age		Director Since
Glenn W. Anderson (3)(4)		52		1998
Robert J. Boulware		48		2005
John C. Goff (3)		49		1997
Joel C. Puckett (1)(3)(5)		61		1979
Sam Rosen		69		1983
Robert W. Stallings (3)		55		2001
Harden H. Wiedemann (1)(2)(5)		52		1989
John H. Williams (1)(2)(3)(5)		71		1990

(1)	Member of the Audit Committee.
(2)	Member of the Compensation Committee.
(3)	Member of the Executive Committee.
(4)	Member of the 401(k) Plan Investment Committee.
(5)	Member of the Nominating Committee.

     Glenn W. Anderson has served as President and Chief Executive Officer of the Company since April 17, 1998. Prior to joining the Company, Mr. Anderson served as Executive Vice President of USF&G Corporation and as President of the Commercial Insurance Group of United States Fidelity & Guaranty Company, positions which he held since 1996. From 1995 to 1996 he served as Executive Vice President, Commercial Lines of that company. Mr. Anderson served from 1993 to 1995 as Senior Vice President, Commercial Lines Middle Market, for USF&G Corporation. Mr. Anderson has been engaged in the property and casualty business since 1975.

     Robert J. Boulware is President and Chief Executive Officer of ING Funds Distributor, LLC, a wholly owned subsidiary of ING Group engaged in the distribution of mutual funds through intermediary and affiliate channels, with which he has been an executive officer since 1992. Mr. Boulware has specialized in wholesale distribution in financial services for 25 years. Mr. Boulware is a director of Norwood Promotional Products, Inc., a leading supplier of promotional items in the U.S.

     John C. Goff is the Chief Executive Officer and Vice Chairman of Crescent Real Estate Equities, Inc. (NYSE-CEI) (“Crescent"). From 1987 to 1994, Mr. Goff served as Vice President of Rainwater, Inc., acting as a senior investment advisor to, and investor with, Richard E. Rainwater. Beginning in 1990, Mr. Goff was responsible for the development of Mr. Rainwater’s real estate business, designing and implementing the strategy that led to the public offering of Crescent in May 1994. Mr. Goff served as Chief Executive Officer of Crescent through late 1996 when he assumed the role of Vice Chairman. During June 1999, Mr. Goff resumed his role as Chief Executive Officer of Crescent. Crescent currently is one of the nation’s larger publicly traded real estate investment companies. Mr. Goff is on the board of directors of Open Connect Systems, Inc. Prior to joining Rainwater, Inc., Mr. Goff was employed by KPMG LLP from 1981 to 1987. Mr. Goff is a graduate of the University of Texas at Austin and is a certified public accountant.

3

     Joel C. Puckett was elected non-executive Vice Chairman of the Board on September 6, 2001. Prior to that time, Mr. Puckett had served as non-executive Chairman of the Board since April 1998. Mr. Puckett is a certified public accountant located in Minneapolis, Minnesota. Mr. Puckett has been engaged in the private practice of accounting since 1973.

     Sam Rosen is a partner with the law firm of Shannon, Gracey, Ratliff & Miller, L.L.P., which has provided legal services to the Company since 1979. He has been a partner in that firm or its predecessor since 1966. Mr. Rosen is a director of AZZ Incorporated (NYSE - AZZ).

     Robert W. Stallings has been executive Chairman of the Board and Chief Strategic Officer since January 21, 2005. Mr. Stallings previously served as non-executive Chairman of the Board since September 6, 2001, and prior to that time served as non-executive Vice Chairman of the Board since March 30, 2001. Mr. Stallings also serves as Chairman and President of Stallings Capital Group, Inc., a Dallas-based merchant banking firm specializing in the financial services industry. In addition, he is a trust manager of Crescent Real Estate Equities Co. (NYSE-CEI) and a director of Texas Capital Bancshares, Inc. He is the retired Chairman and founder of ING Pilgrim Capital Corporation, a $20 billion asset management firm which was acquired by ING Group in September 2000. Mr. Stallings had served as Chief Executive Officer of Pilgrim Capital Corporation since 1995 and had been associated with that firm since 1991. GMSP has been an investor in Pilgrim Capital Corporation. Prior to Pilgrim Capital Corporation, Mr. Stallings was Founding Chairman and Chief Executive Officer of Express America Holdings Corporation, a publicly traded mortgage banking company. Mr. Stallings has also held executive positions at First Western Partners, Inc., Phoenix, Arizona; Western Savings & Loan Association, Phoenix, Arizona; Metropolitan Savings & Loan, Dallas, Texas; Murray Savings & Loan, Dallas, Texas; Center Bank, Waterbury, Connecticut; and Old Stone Bank, Providence, Rhode Island.

     Harden H. Wiedemann has been a consultant focusing on healthcare and insurance issues since September 2004. Mr. Wiedemann was Senior Vice-President and Chief Operating Officer of the Lockton-Dunning Benefits Company, an executive benefits firm in Dallas, Texas, primarily servicing large corporate life and health insurance plans, from January to September 2004. From May to November 2003, Mr. Wiedemann was Vice-President-Healthcare of Seisint, Inc., a company in Boca Raton, Florida engaged in the intelligence technologies business. Immediately prior to such time he had been a consultant to numerous companies in the Dallas, Texas area since January 2001. Prior to that time, Mr. Wiedemann was Chairman and Chief Executive Officer of Assurance Medical, Incorporated, a company providing independent oversight of drug testing, with which he had been associated since 1991. Mr. Wiedemann filed a Chapter 7 personal bankruptcy petition in 2001 and received a discharge in 2002.

     John H. Williams served until his retirement on July 31, 1999, as a Senior Vice President, Investments with Everen Securities, Inc. and had been a principal of that firm or its predecessors since May 1987. Prior to that time, Mr. Williams was associated with Thomson McKinnon Securities, Inc. and its predecessors from 1967. Mr. Williams is currently managing his personal investments, and is a director of Clear Channel Communications, Inc. (NYSE - CCU).

4

Executive Officers of the Registrant

     Information concerning the executive officers of the Company as of March 25, 2005 is set forth below:

Name	Age		Position with the Company
Robert W. Stallings		55	Chairman of the Board and Chief Strategic Officer
Glenn W. Anderson		52	President, Chief Executive Officer and Director
James R. Reis		47	Executive Vice-President
Richard M. Buxton		56	Senior Vice-President
Daniel J. Coots		53	Senior Vice President, Chief Financial Officer and Chief Accounting Officer
John S. Daniels		56	General Counsel and Secretary
Terence J. Lynch		51	Senior Vice President, Chief Investment Officer
Michael S. Johnston		45	President of Personal Lines Division
Marcia L. Buehler		40	Vice President and Controller
Betty J. Graham		59	Vice President
Jackiben N. Wisdom		56	Vice President

     Robert W. Stallings has served as Chief Strategic Officer and executive Chairman of the Board since January 2005. Mr. Stallings’ background appears above under “Board of Directors of the Registrant.”

     Glenn W. Anderson has served as President, Chief Executive Officer and Director of the Company since April 1998. Mr. Anderson’s background appears above under “Board of Directors of the Registrant.”

     Mr. Reis has served as Executive Vice President with responsibility for risk management since January 21, 2005. Since 2001 Mr. Reis has performed management consulting services through First Western Capital, LLC, of which he is the founder, Managing Director and owner and through which he provided consulting services to a subsidiary of the Company from February 1, 2003 to February 21, 2005. Mr. Reis is the retired Vice-Chairman and co-founder of ING Pilgrim Capital Corporation, a financial service company that managed mutual funds and for which he served from 1989 to 2001. In addition to serving as Vice-Chairman, Mr. Reis first served as Pilgrim’s Chief Financial Officer and later as Managing Director of Structured Transactions and Bank Loan Funds. Prior to Pilgrim Capital Corporation, Mr. Reis was co-founder (along with Mr. Stallings), Vice Chairman and Chief Financial Officer of Express America Holdings, a publicly traded mortgage banking company. Mr. Reis has also held executive positions at First Western Partners, Inc., Phoenix, Arizona; Western Savings & Loan, Phoenix, Arizona; Metropolitan Savings & Loan Association, Dallas, Texas; Murray Saving Association, Dallas, Texas; and KPMG LLP. In addition, Mr. Reis is a director of Exeter Life Sciences, Inc. Mr. Reis is a Certified Public Accountant (inactive status) and in 1979 earned a Bachelor of Science in Accounting from St. John Fisher College, Rochester, New York.

     Richard M. Buxton has served as Vice President of the Company since December of 1996. In 1999, Mr. Buxton was promoted to Senior Vice President.

     Daniel J. Coots has served as Vice President, Chief Financial Officer and Chief Accounting Officer of the Company since 1987. In 1991 Mr. Coots was promoted to Senior Vice President. Mr. Coots has been engaged in the property and casualty insurance business since 1983.

     John S. Daniels has served as General Counsel and Secretary since March 2, 2005. Mr. Daniels has been engaged in the private practice of law in Dallas, Texas for more than the past five years.

5

     Terence J. Lynch has served as Senior Vice President and the Chief Investment Officer of the Company since March 2, 2005. Prior to becoming an employee of the Company, Mr. Lynch had served as a consultant to the Company since February of 2002, primarily involved with the Florida nonstandard auto operation. Previous to that time, he had his own consulting practice for ten years in the area of investments and asset/liability management for financial institutions, as well as derivative strategies for high net worth individuals. Mr. Lynch was employed directly from 1984 to 2002 with several financial institutions, serving as the chief investment officer of two multibillion-dollar thrift institutions.

     Michael S. Johnston joined the Company in October 1998 when the Company acquired Lalande Group and since that time has served as Vice President of National Specialty Lines, Inc., a subsidiary of the Company. Mr. Johnston was promoted to President of National Specialty Lines, Inc. in March 2003. Mr. Johnston has been engaged in the property and casualty insurance business since 1993.

     Marcia L. Buehler has served as Vice President and Controller of the Company since July 2002. Beginning January 2000 through June 2002, Ms. Buehler served in a part-time capacity as staff accountant for the Company. During 1999, Ms. Buehler served as a part-time consultant to the Company with various accounting responsibilities. From June 1998 to 1999, Ms. Buehler had her own principally home-based part-time consulting business advising other clients. Prior to June 1998, Ms. Buehler was Director of Accounting for the Company. Ms. Buehler has been engaged in the property and casualty insurance business since 1989.

     Betty J. Graham has served as Vice President of the Company since March 2003. From January 1997 to March 2003 Ms. Graham served as Second Vice President. Ms. Graham has been engaged in the property and casualty insurance business since 1978.

     Jackiben N. Wisdom has served as Vice President of the Company since January 2002. From 1993 to January 2002, Mr. Wisdom served as Director of Litigation for the Company. Mr. Wisdom has been engaged in the property and casualty insurance business since 1970.

Code of Ethics

     The Company has adopted two codes of ethics. The first code of ethics, titled “GAINSCO, INC. Code of Ethics for Sarbanes-Oxley Section 406 Officers,” applies to the Company’s principal executive officer, principal financial officer, and principal accounting officer or controller, and persons performing similar functions, and is intended to comply with the provisions of Section 406 of the Sarbanes-Oxley Act of 2002, and the rules promulgated thereunder by the Securities and Exchange Commission (the “SEC”). Currently, it applies to Glenn W. Anderson, the Company’s President and Chief Executive Officer, and Daniel J. Coots, the Company’s Senior Vice President, Chief Financial Officer and Chief Accounting Officer. The GAINSCO, INC. Code of Ethics for Sarbanes-Oxley Section 406 Officers was designed to deter wrongdoing and to promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Company; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of the code of ethics to an appropriate person or persons identified in the code of ethics; and (v) accountability to the code of ethics. The Company is required to disclose in a current report on Form 8-K the nature of any amendment to the this code of ethics, or the nature of any waiver, including any implicit waiver, from a provision of this code of ethics, that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The GAINSCO, INC. Code of Ethics for Sarbanes-Oxley Section 406 Officers was filed as Exhibit 14.1 to the Company’s Form 10-K Report filed March 30, 2004.

6

     The second code of ethics, titled “GAINSCO, INC. Code of Business Conduct for All Employees,” applies to every employee of the Company, including Messrs. Anderson and Coots. It was designed to achieve the same goals as the first code of ethics, and it is even more encompassing than the first code of ethics. The GAINSCO, INC. Code of Business Conduct for All Employees was filed as Exhibit 14.2 to the Company’s Form 10-K Report filed March 30, 2004.

Audit Committee Financial Expert

     The Board determined in March 2003 that none of the members of the Audit Committee is an “audit committee financial expert” as defined in the rules adopted under the Sarbanes-Oxley Act of 2002, but that Audit Committee member Joel C. Puckett has attributes and experience that make it unnecessary for the Company to recruit an “audit committee financial expert” for the Board and Audit Committee. Mr. Puckett graduated from the University of Minnesota in 1965 as an accounting major with distinction and is a certified public accountant. After college, he worked for Arthur Andersen & Company for eight years and thereafter maintained his own public accounting practice; in these capacities his accounting experience relates primarily to tax and financial planning matters. In addition, Mr. Puckett was for a number of years the managing partner of a private venture capital fund and in that capacity sought investment opportunities, reviewed business plans and made investment decisions. He currently serves on the boards of directors of a bank and a bank holding company, neither of which is publicly held.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires the Company’s directors and executive officers, and persons who are beneficial owners of more than ten percent of the Common Stock, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of the Section 16(a) reports filed pursuant to events occurring in fiscal year 2004 furnished to it, the Company believes the persons who were required to file Section 16(a) reports in respect to their Section 16(a) ownership of Common Stock have filed on a timely basis all Section 16(a) reports required to be filed by them, except that Mr. Stallings was late in filing a Form 3 reporting his acquisition in 2001 of shares of Series B Convertible Redeemable Preferred Stock; that form was filed in September, 2004.

7

Item 11. Executive Compensation.

Summary Compensation Table

     The individuals named below (the “Named Executives”) include the Company’s chief executive officer and the other four most highly compensated executive officers of the Company for the fiscal year ending December 31, 2004. Information is provided on an accrual basis for the fiscal years ending on December 31 of the three years shown in the table below.

Summary Compensation Table

										Long-Term Compensation
Annual Compensation									Awards			Payouts
											Securities
								Other Annual	Restricted		Underlying		All Other
Name and			Salary		Bonus			Compensa-	Stock		Options/	LTIP	Compensa-
Principal Position	Year		($)		($)			tion ($)(2)	Award(s) ($)		SARs (#)	Payouts ($)	tion ($)
Glenn W. Anderson		2004		340,000		150,000								12,430	(3)
President and Chief		2003		340,000		150,000								22,066	(3)(4)
Executive Officer		2002		340,000		—	(1)							18,085	(3)
Michael S. Johnston		2004		178,000		90,000								3,600	(3)
President-Personal Lines		2003		178,000		126,000								3,600	(3)
Division		2002		178,000		—	(1)							3,600	(3)
Richard M. Buxton		2004		170,000		35,000								5,267	(3)
Senior Vice President		2003		170,000		35,000								4,836	(3)
Mergers and Acquisitions,		2002		170,000		—	(1)							12,968	(3)(4)
Investor Relations
Daniel J. Coots		2004		155,000		30,000								5,550	(3)
Senior Vice President		2003		155,000		30,000								11,314	(3)(4)
and Chief Financial		2002		155,000		—	(1)							8,427	(3)(4)
Officer
Jackiben N. Wisdom		2004		125,000		—								3,834	(3)
Vice President-Claims		2003		125,000		—								7,330	(3)(4)
		2002		120,221		—	(1)							5,594	(3)

(1)	Due to financial losses suffered by the Company during the year and the Company’s need to conserve its capital, no bonus was paid to any of the Named Executives for the year ended December 31, 2002.
(2)	With respect to all of the Named Executives, amounts were less than the lesser of $50,000 or 10% of the total of annual salary and bonus for the year reported.
(3)	This amount includes the Company’s matching contribution under the 401(k) Plan, except that with regard to Messrs. Anderson, Buxton, and Coots, the 2002 amount also includes a holiday season cash payment of $300, and that with regard to Mr. Wisdom, the 2003 amount also includes a company appreciation cash payment of $288. In the case of Mr. Anderson, this amount also includes premiums paid for his benefit (i) on term life insurance in the amount of $1,027, $2,132 and $2,277 in 2004, 2003 and 2002, respectively, and (ii) on disability insurance in the amount of $5,254, $5,254 and $10,508 in 2004, 2003 and 2002, respectively.
(4)	In the case of Mr. Anderson, this amount includes a payment of $8,990 in 2003 for accrued vacation that was both unused and unusable. In the case of Mr. Buxton, this amount includes a payment of $8,343 in 2002 for accrued vacation that was both unused and unusable. In the case of Mr. Coots, this amount includes a payment

8

of $6,713 and $2,699 in 2003 and 2002, respectively, for accrued vacation that was both unused and unusable. In the case of Mr. Wisdom, this amount includes a payment of $3,381 in 2003 for accrued vacation that was both unused and unusable.

Aggregated Option/SAR Exercises in the Last Fiscal Year and Fiscal Year-End Option/SAR Values

     The following table summarizes for each of the Named Executives the number of stock options, if any, exercised during the fiscal year ended December 31, 2004, the aggregate dollar value, if any, realized upon exercise, the total number of unexercised stock options held at December 31, 2004, if any, and the aggregate dollar value of the unexercised options held at December 31, 2004, if any. Value realized upon exercise, if any, is the difference between the fair market value of the underlying stock on the exercise date and the exercise price of the option. Value of unexercised options at fiscal year-end is the difference between the exercise price of the stock options and the fair market value of the underlying stock at December 31, 2004, the latter of which was $1.49 per share. These values, unlike the amounts, if any, set forth in the column headed “Value Realized,” have not been, and may never be, realized. The options have not been, and may not be, exercised. Actual gains, if any, on exercise will depend on the value of the Common Stock on the date of exercise. There can be no assurance that the values shown will be realized.

9

Aggregated Option Exercises In The Last
Fiscal Year and FY-End Option Values

	Shares				Number of Securities					Value of Unexercised
	Acquired on		Value		Underlying Unexercised					In-The-Money
Name	Exercise (#)		Realized ($)		Options/SARs at FY-End					Options/SARs at FY-End ($)
					Exercisable			Unexercisable		Exercisable		Unexercisable
Glenn W. Anderson		—		—		50,000	(1)		180,000		—		—
President and Chief Executive Officer
Michael S. Johnston		—		—		8,425	(2)		—		—		—
President-Personal Lines Division
Richard M. Buxton		—		—		53,164	(3)		—		—		—
Senior Vice President Mergers and Acquisitions, Investor Relations
Daniel J. Coots		—		—		50,135	(4)		—		—		—
Senior Vice President and Chief Financial Officer
Jackiben N. Wisdom		—		—		1,275	(5)		—		—		—
Vice President-Claims

(1)	Options to purchase 50,000 shares are exercisable at approximately $5.50 per share.
(2)	Options to purchase 8,425 shares are exercisable at approximately $5.50 per share.
(3)	Options to purchase 34,164 shares are exercisable at approximately $6.03 per share and options to purchase 19,000 shares are exercisable at approximately $5.50 per share.
(4)	Options to purchase 35,135 shares are exercisable at approximately $6.03 per share and options to purchase 15,000 shares are exercisable at approximately $5.50 per share.
(5)	Options to purchase 1,275 shares are exercisable at approximately $5.50 per share.

Employee Benefit Plans

     At December 31, 2004, the Company had two plans under which options could be granted: the 1995 Option Plan and the 1998 Incentive Plan. The 1995 Option Plan was approved by the shareholders on May 10, 1996 and 1,071,000 shares are currently reserved for issuance under this plan. Options granted under the 1995 Option Plan have a maximum ten year term and are exercisable at the rate of 20% immediately upon grant and 20% on each of the first four anniversaries of the grant date. The 1998 Incentive Plan was approved by the shareholders on July 17, 1998, and the aggregate number of shares of Common Stock that may be issued under the 1998 Incentive Plan is limited to 1,000,000. Under the 1998 Incentive Plan, stock options (including incentive stock options and non-qualified stock options), stock appreciation rights and restricted stock awards may be granted.

     The Company has the 401(k) Plan to help eligible employees build financial security for retirement and to help protect them and their beneficiaries in the event of death or disability. Generally all employees of the Company are eligible to participate in the 401(k) Plan. The Company and the participant both make

10

contributions to the 401(k) Plan. The 401(k) Plan currently permits employees to direct that their accounts be invested in any of a number of mutual funds or other publicly traded securities. The 401(k) Plan Investment Committee determined in 2003 not to allow employees to direct that their 401(k) Plan accounts purchase additional shares of Common Stock; however, employee 401(k) Plan accounts which held Common Stock prior to that time may continue to hold those shares. The 401(k) Plan contains no restrictions on the disposition of interests in the Plan or Common Stock held by the 401(k) Plan, but participants in the 401(k) Plan will be subject to general Company policy regarding transactions involving Common Stock to facilitate compliance with applicable securities laws. Should the Company decide to change the 401(k) Plan trustee, there will be a period of time during which interests in the Plan will not be able to be traded or otherwise disposed of.

     See “Certain Transactions” for additional information regarding arrangements relating to compensation of officers and key employees.

Compensation of Directors

     Each director of the Company who is not a full time employee of the Company receives a quarterly retainer and a meeting fee for each in person meeting, plus expenses incurred in attending meetings of the Board. In 2004, each director received $4,000 as a quarterly retainer and $2,000 per scheduled Board meeting attended. Directors who are also full time employees of the Company are not separately compensated for their service as a director.

     Members of the Special Committee received $750 per Special Committee meeting attended, or $118,500 in the aggregate (including three quarterly retainer fee payments to Mr. Puckett of $5,000 each for services as Chairman of the Special Committee) for meetings relating to the Company’s recapitalization through December 31, 2004.

     Directors have periodically been granted and hold stock options granted under one or more of the Company’s 1995 Option Plan and 1998 Incentive Plan. On May 25, 2000, options to purchase an aggregate of 33,600 shares of Common Stock for $5.50 per share were granted to non-employee directors of the Company under the 1998 Incentive Plan as follows: Joel C. Puckett, 8,400 shares; Sam Rosen, 8,400 shares; Harden H. Wiedemann, 8,400 shares; and John H. Williams, 8,400 shares. The options expire May 24, 2010 and became vested and exercisable in full on May 25, 2001. See “Security Ownership of Certain Beneficial Owners and Management” for more information regarding such grants.

Change in Control Agreements

     Of the Named Executives, Glenn W. Anderson, Richard M. Buxton and Daniel J. Coots (the “Change in Control Executives”) have each entered into agreements (“Change in Control Agreements”) which provide for the payment of benefits if he is actually or “constructively” terminated following a change in control of the Company and are automatically extended for one additional year from each December 31st unless sooner terminated by the Company. No benefits generally are payable if a Change in Control Executive terminates his own employment other than for “good reason” or is terminated for cause. No benefits beyond those otherwise provided by the Company are provided if a Change in Control Executive’s employment terminates by reason of death, disability or retirement.

     If, within two years following a change in control, a Change in Control Executive is terminated by the Company for reasons other than cause, or if the Change in Control Executive terminates employment for “good reason,” the Change in Control Executive will be paid a lump sum cash payment. In the case of Mr. Anderson, the lump sum cash payment would be in an amount equal to two times Mr. Anderson’s base salary. Under the terms of Mr. Anderson’s employment agreement with the Company described in Item 13 of this Report, if Mr. Anderson is terminated without cause, he will be entitled to the greater of (i) the amount he would be entitled to upon such termination under his employment agreement in the absence of a change in control (36 multiplied by 150% of his then current monthly rate of base salary) or (ii) the amount

11

called for by his Change in Control Agreement. In the case of the other Change in Control Executives, the lump sum cash payment would be in an amount equal to 150% of the Change in Control Executive’s base salary. In the event any of such payments would not be deductible, in whole or in part, by the Company as a result of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), such payment would be reduced to the extent necessary to make the entire payment deductible.

     The Change in Control Agreements with Messrs. Buxton and Coots were entered into at the end of 2001 in place of prior agreements. The Change in Control Agreement with Mr. Anderson was entered into in 1998 when he joined the Company and was amended in conjunction with the recapitalization transactions discussed in Item 13 of this Report.

Executive Severance Agreements

     Because of their importance to the Company, in August 2002 the Company entered into executive severance agreements with two senior executives, Richard M. Buxton and Daniel J. Coots. The agreements generally provide that the Company shall pay the executive, upon termination of the employment of the executive by the Company without cause or by the executive with good reason during the term of the agreement, a lump sum severance amount equal to the base annual salary of the executive as of the date that the executive’s employment with the Company ends. The current base annual salaries of Messrs. Buxton and Coots are $170,000 and $155,000, respectively. The executive severance agreements do not supersede the change in control agreements or any other severance agreements the employees may have with the Company.

     In May 2003, Michael S. Johnston, the President of the Personal Lines Division of the Company, entered into an Executive Severance Agreement with the Company. This agreement generally provides that if Mr. Johnston resigns his employment with the Company for good reason or if the Company terminates Mr. Johnston without cause or in connection with a change in control of National Specialty Lines, Inc. and DLT Insurance Adjusters, Inc. and Mr. Johnston is not offered employment with comparable compensation with the acquiring company in the change in control, the Company will pay Mr. Johnston an amount equal to his annual base salary at the time of termination or resignation. Also pursuant to this agreement, the Company and Mr. Johnston each mutually released the other from obligations under a stock purchase agreement and an employment contract between the Company and Mr. Johnston and generally from any and all other prior claims that each otherwise may have had against the other.

Retention Incentive Agreements

     As of December 31, 2004 the Company had retention incentive agreements with twelve of its employees, three of whom are officers of the Company. Each of the retention incentive agreements generally requires that the Company pay the applicable employee an amount based upon the employee’s annual base salary, less amounts owed by the Company to the employee pursuant to any change in control or severance agreements the employee may have with the Company. The Company’s obligation to make payments under each remaining retention incentive agreement is conditioned upon the employee remaining in the employ of the Company through a specified date, unless terminated earlier by the Company without cause or by the employee with good reason. During 2004, the Company made payments in the aggregate amount of approximately $74,000 pursuant to retention incentive agreements. As of December 31, 2004 the Company remained obligated to make up to an additional aggregate of approximately $652,000 in payments under the retention incentive agreements on or prior to April 25, 2005. The Company has made all of the payments contemplated under those retention incentive agreements in accordance with their terms. Other than Jackiben N. Wisdom (who was not one of the Named Executives of the Company at the time he entered into his retention incentive agreement), none of the Named Executives of the Company are parties to the retention incentive agreements.

12

Compensation Committee Interlocks and Insider Participation

     The members of the Company’s Compensation Committee are Harden H. Wiedemann and John H. Williams, Chairman. Sam Rosen served as a member of the Compensation Committee until August 25, 2004. No executive officer of the Company served as a member of the compensation committee of, or as a director of, another entity, one of the executive officers of which served either on the Compensation Committee or the Board.

13

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

     The following table sets forth, as of March 25, 2005, the number of shares of Common Stock beneficially owned (as defined by the rules of the SEC) by (i) each person who is known to the Company to be the beneficial owner of more than five percent of the outstanding Common Stock, (ii) each director of the Company, (iii) the Chief Executive Officer and each of the other Named Executives (defined in Item 11 hereof) for the year ended December 31, 2004, and (iv) all of the directors and executive officers of the Company as a group. Except as otherwise indicated in footnotes to the table, the address for all of the persons listed is 1445 Ross Avenue, Suite 5300, Dallas, Texas.

	Amount and Nature of Beneficial Ownership (1)
	Number			Percent of
Name of Beneficial Owner	of Shares (2)			Voting Stock (3)
Goff Moore Strategic Partners, L.P. and John C. Goff (4)		25,334,553	(5)		38.3	%
Robert W. Stallings		13,459,741	6)		20.8	%
First Western Capital, LLC and James R. Reis		6,729,871	(7)		10.4	%
Glenn W. Anderson		953,869	(8)		1.5	%
Joel C. Puckett		505,221	(9)		*
Sam Rosen		251,297	(10)		*
Daniel J. Coots		112,055	(11)		*
Richard M. Buxton		75,151	(12)		*
John H. Williams		70,962	(13)		*
Harden H. Wiedemann		60,220	(14)		*
Michael S. Johnston		8,425	(15)		*
Jackiben N. Wisdom		4,306	(16)		*
Robert J. Boulware		0	(17)		*
Directors and executive officers as a group		47,594,397	(18)		71.2	%

* Less than 1%

(1)

On March 25, 2005, there were outstanding 61,084,960 shares of Common Stock, and 18,120 shares of Series A Preferred Stock. The shares of Series A Preferred Stock were convertible into an aggregate of 3,552,941 shares of Common Stock and were held entirely by GMSP. Each share of Series A Preferred Stock is entitled to vote on each matter on which the Common Stock may vote and is entitled to one vote per share of Common Stock into which it is convertible. Together with the Common Stock, these shares constituted all of the Voting Stock. On March 25, 2005, there were 64,637,901 shares of Voting Stock outstanding.

(2)

Each person named below has sole investment and voting power with respect to all shares of Voting Stock shown as beneficially owned by the person, except as otherwise indicated below. Under applicable SEC rules under the Exchange Act, a person is deemed the “beneficial owner” of a security with regard to which the person, directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose or direct the disposition of the security, in each case irrespective of the person’s economic interest in the security. Under these SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire

14

	within 60 days (x) through the exercise of any option or warrant or (y) through the conversion of another security.
(3)	In determining the percent of Voting Stock owned by a person on March 25, 2005, (a) the numerator is the number of shares of Common Stock beneficially owned by the person, including shares the beneficial ownership of which may be acquired within 60 days upon the exercise of options or warrants or conversion of convertible securities, and (b) the denominator is the total of (i) the 64,637,901 shares in the aggregate of Voting Stock outstanding on March 25, 2005 and (ii) any shares of Common Stock which the person has the right to acquire within 60 days upon the exercise of options or warrants or conversion of convertible securities. Neither the numerator nor the denominator includes shares which may be issued upon the exercise of any other options or warrants or the conversion of any other convertible securities.
(4)	Mr. Goff may be deemed the beneficial owner of the shares of Common Stock beneficially owned by Goff Moore Strategic Partners, L.P. (“GMSP”) because he is a Managing Principal of the managing general partner of GMSP, is the owner of 82.3% of the limited partner interests in the limited partnership that is the managing general partner of GMSP and 100% of the membership interests in the limited liability company which is its general partner, and is a designee of GMSP on the Board. The address of GMSP is 777 Main Street, Suite 2250, Fort Worth, Texas 76102.
(5)	Consists of (a) 3,552,941 shares of Common Stock which GMSP may acquire upon conversion of 18,120 shares of the Series A Preferred Stock, (b) 20,189,612 shares of Common Stock beneficially owned by GMSP, (c) 42,000 shares of Common Stock that Mr. Goff has the right to acquire within 60 days through exercise of options granted under the 1995 Option Plan, and (d) 1,550,000 shares of Common Stock issuable upon exercise of the Series B Warrant that will expire January 1, 2011, at an exercise price of $2.5875 per share. GMSP and certain of its affiliates are subject to a contractual standstill prohibition and GMSP is required to vote its Series A Preferred Stock in accordance with a voting agreement.
(6)	Mr. Stallings is the executive Chairman of the Board and chief strategic officer. Mr. Stallings is subject to a contractual standstill prohibition.
(7)	Mr. Reis may be deemed the beneficial owner of the shares of Common Stock beneficially owned by First Western Capital, LLC (“Reis LLC”) because he is the sole manager and member of Reis LLC. Mr. Reis is the Executive Vice President and is subject to a contractual standstill prohibition.
(8)	Includes 12,369 shares of Common Stock held by the 401(k) Plan for the account of Mr. Anderson as beneficiary and 230,000 shares of Common Stock that Mr. Anderson has the right to acquire within 60 days through the exercise of options granted under the 1998 Incentive Plan. Also includes 600,000 shares of Common Stock issued to Mr. Anderson in January, 2005, 400,000 of which are restricted shares that vest and cease to be subject to forfeiture conditions as to 80,000 shares on each anniversary of the grant date.
(9)	Includes 51,927 shares of Common Stock held by the Joel Puckett Self-Employed Retirement Trust and 92,400 shares of Common Stock that Mr. Puckett has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and the Company’s 1998 Long-Term Incentive Plan (“1998 Incentive Plan”).
(10)	Includes 3,163 shares of an IRA for Mr. Rosen’s wife. Mr. Rosen disclaims beneficial ownership of those shares. Also includes 35,065 shares held for the benefit of Mr. Rosen by the Shannon, Gracey, Ratliff & Miller, L.L.P. Profit Sharing Plan, 3,163 shares of Common Stock held by Mr. Rosen’s IRA and 92,400 shares of Common Stock that Mr. Rosen has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan. Mr. Rosen is a partner in the law firm of Shannon, Gracey, Ratliff & Miller, L.L.P.
(11)	Includes 41,920 shares of Common Stock held by the 401(k) Plan for the account of Mr. Coots as beneficiary and 50,135 shares of Common Stock that Mr. Coots has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan.

15

(12)	Includes 6,987 shares of Common Stock held by the 401(k) Plan for the account of Mr. Buxton as beneficiary and 53,164 shares of Common Stock that Mr. Buxton has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan.
(13)	Includes 50,400 shares of Common Stock that Mr. Williams has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan.
(14)	Includes 58,800 shares of Common Stock that Mr. Wiedemann has the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan.
(15)	Includes 8,425 shares of Common Stock that Mr. Johnston has the right to acquire within 60 days through the exercise of options granted under the 1998 Incentive Plan.
(16)	Includes 3,031 shares of Common Stock held by the 401(k) Plan for the account of Mr. Wisdom as beneficiary and 1,275 shares of Common Stock that Mr. Wisdom has the right to acquire within 60 days through the exercise of options granted under the 1998 Incentive Plan.
(17)	Robert J. Boulware was elected a director of the Company effective March 2, 2005.
(18)	This director and officer group consists of 15 persons. The number of shares includes (a) 75,823 shares of Common Stock held by the 401(k) Plan for the account of executive officers, (b) 516,093 shares of Common Stock that directors and executive officers of the Company have the right to acquire within 60 days through the exercise of options granted under the 1995 Option Plan and 1998 Incentive Plan, (c) 20,189,612 shares of Common Stock held by GMSP, of which Mr. Goff is a Managing Principal, and 3,552,941 shares of Common Stock which GMSP may acquire upon conversion of 18,120 shares of the Series A Preferred Stock, (d) 1,550,000 shares of Common Stock that GMSP has the right to acquire immediately through exercise of the Series B Warrant at a price per share of $2.5875, (e) 13,459,741 shares of Common Stock held by Mr. Stallings, (f) 6,729,871 shares of Common Stock held by Reis LLC and (g) 600,000 shares of Common Stock held by Mr. Anderson.

16

Item 13. Certain Relationships and Related Transactions.

2005 Recapitalization

     Introduction. On January 21, 2005, the Company consummated a recapitalization pursuant to agreements that it entered into on August 27, 2004 and that were approved by GNAC’s shareholders on January 18, 2005. The agreements were with GMSP, then holder of the Company’s Series A and Series C Preferred Stock and approximately 5% of the outstanding Common Stock; Mr. Stallings, the Chairman of the Board and then holder of the Company’s Series B Preferred Stock; and First Western Capital, LLC, a limited liability company (“First Western”) owned by James R. Reis. The recapitalization substantially reduced, as well as extended, the Company’s existing Preferred Stock redemption obligations and resulted in cash proceeds to the Company of approximately $8.7 million (before an estimated $2.2 million in transaction costs and approximately $3.4 million used to redeem the Series C Preferred Stock). The events leading up to, and the transactions constituting, the recapitalization are described briefly below.

     1999 GMSP Transaction. On October 4, 1999 the Company sold to GMSP, for an aggregate purchase price of $31,620,000, (i) 31,620 shares of Series A Preferred Stock (stated value $1,000 per share), which were convertible into 6,200,000 shares of Common Stock at a conversion price of $5.10 per share (subject to adjustment for certain events), (ii) the Series A Warrant (which expired per its terms unexercised on October 4, 2004) to purchase an aggregate of 1,550,000 shares of Common Stock at an exercise price of $6.375 per share and (iii) the Series B Warrant expiring October 4, 2006 to purchase an aggregate of 1,550,000 shares of Common Stock at an exercise of $8.50 per share. At closing, the Company and its insurance company subsidiaries entered into investment management agreements with GMSP, pursuant to which GMSP managed their respective investment portfolios. In the securities purchase agreement entered into between GMSP and the Company for the 1999 GMSP transaction, the Company agreed to nominate John C. Goff and another individual selected by GMSP, and to use its best efforts to cause them to be elected to the Board.

     2001 GMSP Transaction. On March 23, 2001, the Company consummated another transaction with GMSP pursuant to which, among other things, the Company issued 3,000 shares of its newly created Series C Preferred Stock (stated value of $1,000 per share) to GMSP in exchange for an aggregate purchase price of $3 million in cash. The annual dividend rate on the Series C Preferred Stock was 10% until March 23, 2004 and 20% thereafter. The Series C Preferred Stock was redeemable at the Company’s option after March 23, 2006 and at GMSP’s option after March 23, 2007 at a price of $1,000 per share plus accrued and unpaid dividends. The Series C Preferred Stock was not convertible into Common Stock.

     The 2001 GMSP transaction was conditioned upon the following changes in the securities acquired by GMSP in the 1999 transaction: (i) the exercise prices of the Series A Warrant and the Series B Warrant held by GMSP were reduced to $2.25 per share and $2.5875 per share, respectively (each of these warrants provided for the purchase of 1,550,000 shares of Common Stock); and (ii) the Series A Preferred Stock was called for redemption by the Company so that on January 1, 2006 the Company would have become obligated to pay $1,000 per share for 31,620 shares ($31.6 million) to the holder to the extent that it could legally do so and, to the extent it could do so, the Company was obligated to pay quarterly an amount equal to 8% interest per annum on any unpaid balance.

     The 2001 agreement with GMSP also provided an opportunity to convert the Company’s illiquid investments with a cost of $4.2 million to cash as of November 2002. In February 2002 and with GMSP’s consent, the Company exercised its option to require GMSP purchase the illiquid investments for approximately $2.1 million.

     2001 Transactions with Mr. Stallings. On March 23, 2001, the Company sold to Mr. Stallings for $3

17

million in cash 3,000 shares of its newly created Series B Preferred Stock (stated value of $1,000 per share) and a warrant expiring March 23, 2006 to purchase an aggregate of 1,050,000 shares of Common Stock at $2.25 per share. The annual dividend provisions and the redemption provisions of the Series B Preferred Stock were the same as those for the Series C Preferred Stock. The Series B Preferred Stock was convertible into 1,333,333 shares of Common Stock at $2.25 per share. Mr. Stallings also entered into a consulting agreement pursuant to which he provided consulting services to the Company’s insurance subsidiaries for $300,000 per annum. In the securities purchase agreement entered into between Mr. Stallings and the Company for this transaction, the Company agreed to nominate Mr. Stallings, and use its best efforts to cause him to be elected to the Board.

     Recapitalization Transactions. In the recapitalization which closed on January 21, 2005, of the 31,620 shares of Series A Preferred Stock held by GMSP and called in 2001 for redemption on January 1, 2006 at a redemption price of approximately $31.6 million, 13,500 shares (redemption value of $13.5 million) were exchanged for 19,125,612 shares of Common Stock. The remaining 18,120 shares of Series A Preferred Stock (which had been called for redemption in 2006 and have a redemption value of approximately $18.1 million) became redeemable at the option of the holders on January 1, 2011, and became entitled to receive cash dividends at the rate of 6% per annum until January 1, 2006 and 10% per annum thereafter until redemption. Those remaining 18,120 shares of Series A Preferred Stock remain convertible into 3,552,941 shares of Common Stock at $5.10 per share, continue to be entitled to vote on an as-converted basis, and remain redeemable at the option of the Company commencing June 30, 2005 at a price equal to stated value plus accrued dividends. The Company received an option to purchase all of the Series C Preferred Stock from GMSP, which the Company exercised on January 21, 2005 as part of the recapitalization for approximately $3.4 million from the proceeds of the sale of Common Stock in the recapitalization. The expiration date of GMSP’s Series B Warrant to purchase 1,550,000 shares of Common Stock for $2.5875 per share was extended to January 1, 2011. The investment management agreements of the Company and its insurance company subsidiaries with GMSP were terminated, as were the agreements entered into between the Company and GMSP in connection with their 1999 and 2001 transactions.

     Also as part of the recapitalization, (i) Mr. Stallings acquired 13,459,741 shares of Common Stock in exchange for $4,629,042 cash, his 3,000 shares of outstanding Series B Preferred Stock and his warrant expiring March 23, 2006 to purchase 1,050,000 shares of Common Stock for $2.25 per share, and (ii) First Western acquired 6,729,871 shares of Common Stock in exchange for $4,037,922 in cash. The purchase price of these shares was $0.60 per share.

     As a result of the recapitalization, the number of shares of Common Stock outstanding increased from 21,169,736 previously to 61,084,960 after closing of the recapitalization. GMSP now owns approximately 33% of the outstanding Common Stock, Mr. Stallings owns approximately 22% and First Western owns approximately 11%.

     In conjunction with the recapitalization, Mr. Stallings became executive Chairman of the Board of the Company, and Mr. Reis became Executive Vice President of the Company with responsibility for risk management. Mr. Stallings’ agreements entered into with the Company in the 2001 transactions were terminated, as was First Western’s consulting agreement with a subsidiary of the Company.

Employment Agreements with Messrs. Stallings, Anderson and Reis

     As an integral part of the recapitalization, the Company entered into new employment agreements with Messrs. Stallings and Reis and an amended employment agreement with Mr. Anderson, all of which were approved by shareholders on January 18, 2005.

18

     Stallings Employment Agreement. The Employment Agreement between the Company and Mr. Stallings provides, among other things, the following:

•   Mr. Stallings serves as our executive Chairman of the Board and receives an annual base salary of $300,000.

•   Mr. Stallings’ annual bonus will be an amount equal to 5% of “EBIT,” which is defined to mean, subject to certain adjustments, the sum of the Company’s consolidated income before Federal income taxes, interest expense and any bonuses accrued in respect of Mr. Stallings.

The term of Mr. Stallings’ employment is for three years beginning January 21, 2005 and is automatically extended by an additional year on the same terms and conditions on each anniversary of the effective date (so that, as of each anniversary of the effective date, the term of the Employment Agreement remains three years), unless either party gives notice of an intention not to extend the term.

     Anderson Employment Agreement. As amended, the Employment Agreement between the Company and Mr. Anderson provides, among other things, the following:

•   Mr. Anderson continues to serve as the Company’s President and Chief Executive Officer, positions he has held since 1998.

•   The Company issued 200,000 shares of Common Stock to Mr. Anderson on January 21, 2005, which shares are fully vested and not subject to forfeiture.

•   The Company entered into a restricted stock agreement with Mr. Anderson pursuant to which he was issued an additional 400,000 shares of restricted Common Stock that would vest and cease to be subject to forfeiture conditions as to 80,000 shares on each anniversary of the date of grant.

•   Mr. Anderson’s annual bonus will be an amount equal to 2% of “EBIT,” which is defined to mean, subject to certain adjustments, the sum of the Company’s consolidated income before Federal income taxes, interest expense and any bonuses accrued in respect of Mr. Anderson.

The term of Mr. Anderson’s employment remains four years and is automatically extended by an additional year on the same terms and conditions (so that the term remains four years, unless either party gives notice of an intention not to extend the term.

     Reis Employment Agreement. The Employment Agreement between the Company and Mr. Reis provides, among other things, the following:

•   Mr. Reis serves as Executive Vice President of the Company and receives an annual base salary of $200,000.

•   Mr. Reis’ annual bonus will be an amount equal to 2.5% of “EBIT,” which is defined to mean, subject to certain adjustments, the sum of the Company’s consolidated income before Federal income taxes, interest expense and any bonuses accrued in respect of Mr. Reis.

The term of Mr. Reis’ employment is for three years beginning January 21, 2005 and will be automatically extended by an additional year on the same terms and conditions on each anniversary of the effective date (so that, as of each anniversary of the effective date, the term of the Employment Agreement remains three years).

19

Blackhawk Motorsports Sponsorship

     On February 7, 2005 the Company executed a Sponsorship Agreement between Stallings Capital Group Consultants, Ltd. dba Blackhawk Motorsports (“Blackhawk”) and the Company pursuant to which the Company agreed to become primary sponsor of a Daytona Prototype Series racing team during a term commencing on the date of the agreement and continuing until January 31, 2006. The Sponsorship Agreement provides that, in consideration of the payment by the Company of a sponsorship fee of $440,000 payable in ten installments, during the term of the agreement from February 1, 2005 through January 31, 2006 the Company will receive various benefits customary for sponsors of Daytona Prototype Series racing teams, including rights relating to signage on team equipment and access for customers and agents to certain race facilities.

     Following its recently completed recapitalization, the Company intends to use the sponsorship to build brand awareness and advance the Company’s distribution strategies.

     Blackhawk is owned and controlled by Mr. Stallings. The Board of Directors authorized entering into the agreement, and in authorizing the agreement, the Board of Directors considered Mr. Stallings’ role and concluded that, under the circumstances, the Sponsorship Agreement is fair to, and in the best interests of, the Company. The Sponsorship Agreement contains provisions protecting the Company’s interests, including a termination provision that permits the Company unilaterally to terminate the agreement at any time and thereby cease making installment payments of the sponsorship fee.

20

Item 14. Principal Accountant Fees and Services.

Fees Paid to KPMG LLP

     The following table shows the fees paid or accrued by the Company for the audit and other services provided by KPMG for fiscal years 2004 and 2003.

	For the Year Ended		For the Year Ended
	December 31, 2004		December 31, 2003
Audit Fees	$	405,703	$	257,800
Audit-Related fees (1)		111,174		199,774
Audit and Audit-Related fees	$	516,877	$	457,574
Tax fees (2)		75,350		146,265
All other fees		0		0
Total fees	$	592,227	$	603,839

(1)	Audit related fees of KPMG for the years ended December 31, 2004 and 2003 consisted of fees for services provided related to Section 404 of the Sarbanes-Oxley Act of 2002, statutory audit of insurance companies and audits of financial statements of employee benefit plans.
(2)	Tax fees of KPMG for the years ended December 31, 2004 and 2003 consisted of fees for tax consultation and tax compliance services.

Pre-Approval Policies of Audit Committee

     The Audit Committee Charter provides that any engagement of KPMG or any other outside auditor to render audit or non-audit services to the Company must be pre-approved by the Audit Committee. The Audit Committee has delegated to its Chairman the authority to grant pre-approvals of audit and non-audit services in cases where the fees for the engagement do not exceed $10,000. This pre-approval delegation does not apply to engagements for work in respect of the Company’s internal controls. During 2004, all services rendered to the Company by KPMG were pre-approved by either the Audit Committee or its Chairman acting within the scope of his delegated authority.

21

PART IV

Item 15. Exhibits and Financial Statement Schedules.

Exhibit No.	Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended

22

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

GAINSCO, INC.
(Registrant)

/s/ Glenn W. Anderson

 Glenn W. Anderson, President

Date: April 28, 2005

23