Abode Mortgage Corporation
TSX VENTURE : ABD

Abode Mortgage Corporation

December 21, 2007 21:35 ET

Abode Mortgage Holdings Corp. Reports 2007 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 21, 2007) - December 21, 2007 - Abode Mortgage Holdings Corp. (TSX VENTURE:ABD) today announced its financial results for the year ending August 31, 2007. The company recorded a loss of $4,711,176.

FINANCIAL HIGHLIGHTS

- Funded loans worth $140.6 million for 155 days of operations

- Net revenues, excluding gain on sale for the year were $3.6 million

- Operating and set up costs were $7.9 million for the year

This decrease in annual earnings primarily relates to building the infrastructure during the start up phase of the Company as well as the costs associated to obtain the organizations funding infrastructure. The bulk of these costs are concentrated in legal and commitment fees to acquire the warehouse lines, staffing infrastructure and a reorganization of senior management within the year to stream line the business. The Company commenced full operations in Western Canada starting in February 2007. Management expanded its operating processes, added underwriting and approval staff in BC and Alberta. Operating expenses continue to be weighted primarily towards salary costs to build the infrastructure required to support the operations in Western Canada. Abode was able to fund $95.88 million in mortgages volume during the fourth quarter of 2007 and had a total of $140.6 million in fundings for its inaugural seven months of operations.

On July 27th, 2006 Watersave Logic Corporation (the Company) changed its name to Abode Mortgage Holdings Corp. The change of name was completed to reflect the change of business.

The financial information for 2006 has been re-classified and de-consolidated to show both the effect of continuing operations of the Company and the effect of the discontinued operations of WPI. As such, the current fiscal performance of the quarter is not directly comparable to the previous year's quarter of the same period. The Company has now completed just over 155 days of full operations of its new venture in the mortgage industry and direct comparison to the previous retail ceramics industry exposure of WPI would be difficult.

BUSINESS HIGHLIGHTS

- Completed initial start-up phase and launched operations in February 2007

- Launched mortgage lending programs in Western Canada in February 2007

- Accessed $75 million warehouse credit facility on March 2007

- Established an additional $15 million warehouse margin facility June 2007

- Appointed former RBC Royal Bank executive Michael J. Linehan as new CEO

The Business of Abode Mortgage Corporation

Abode Mortgage Corporation (AMC) was created to enter the Canadian non-conforming residential mortgage origination market. Abode's goal is to become a multi-provincial sales, marketing, underwriting entity, focused primarily on the origination and servicing of non-conforming mortgages from various distribution channels. A non-conforming residential mortgage is defined as a mortgage that cannot be obtained from traditional Financial Institutions as the borrowers are either credit challenged or are 'A' credit quality but their needs fall outside traditional underwriting guidelines. AMC generates its revenue from the following sources:

1. Origination Fees charged on AMC's non-conforming products.

2. "Spread" or the interest differential between the cost of funds obtained by AMC.

3. The sale of mortgages into the market.

OUTLOOK

"The well documented capital markets disruption provided many challenges for our Company's initial start up phase. We have adapted to the market turbulence by altering our strategic business model to include third party mortgage insurance protection. While insurance costs impact fee income, the strategic change increases access to favorably priced capital market liquidity which remains an essential component of our business." said Mike Linehan, CEO of Abode Mortgage Corporation. Mr. Linehan Continued " For Abode, the initial establishment of our base of operations in Western Canada and our strategic west to east expansion allowed us to take advantage of higher economic growth patterns experienced out west. The housing industry remains solid throughout Canada and our upcoming expansion into Ontario will give Abode access to approximately 80% of the available Canadian residential mortgage market. Expected continued economic strength in western Canada coupled with our geographic expansion into the Ontario market further supports our growth initiatives into 2008 and beyond."



Financial Information
Abode Mortgage Holdings Corp.
Consolidated Balance Sheets
As at August 31, 2007 and 2006

2007 2006
(Restated)

$ $

Assets

Cash and cash equivalents 1,646,080 4,950,854
Advances for mortgage loans 1,066,475 -
Mortgage loans 79,393,174 -
Accrued interest receivable 241,305 -
Accounts receivable - 64,575
Prepaid expenses and deposits 1,274,228 237,001
Equipment 120,378 151,113
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83,741,640 5,403,543
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Liabilities

Credit facilities 78,561,414 -
Accounts payable and accrued liabilities 1,341,571 535,315
Debt 685,169 653,422
Interest rate swap 167,691 -
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80,755,845 1,188,737
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Shareholders' equity

Capital stock 13,636,439 10,491,022
Equity portion of convertible debenture 65,757 65,757
Contributed surplus 635,426 298,678
Deficit (11,351,827) (6,640,651)
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2,985,795 4,214,806
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83,741,640 5,403,543
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Financial Information
Abode Mortgage Holdings Corp.
Consolidated Statements of Operations and Deficit
For the years ended August 31, 2007 and 2006


2007 2006
$ $
(Restated)

Revenue

Fee income 1,975,788 -
Interest on mortgages held 1,626,836 -
Gain on sale of mortgages 91,128 -
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3,693,752 -
Origination and financing expense (2,888,688) -
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805,064 -
Other income 269,270 -
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1,074,334 -

Expenses

General and administrative 5,055,321 1,856,072
Non-recurring development expense 676,240 -
Interest on debt 115,747 120,679
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Loss from continuing operations (4,772,974) (1,976,751)
Other Items
Foreign exchange gain 25,279 131,339
Gain on sale of assets - 2,190,708
Investment impairment - (1,753,442)
Income from discontinued operations 36,519 478,547
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Loss for the year (4,711,176) (929,599)

Deficit - Beginning of year (6,640,651) (5,711,052)
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Deficit - End of year (11,351,827) (6,640,651)
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Basic and diluted loss per share (0.0458) (0.0162)
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Basic and diluted earnings per share
from discontinued operations 0.0004 0.0084
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Weighted average number of shares
outstanding 102,922,978 57,272,672
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Financial Information
Abode Mortgage Holdings Corp.
Consolidated Statements of Cash Flows
For the years ended August 31, 2007 and 2006

2007 2006
$ $
(Restated)

Operating activities:

Loss from continuing operations (4,772,974) (1,976,751)

Items not affecting cash:

Amortization 30,735 2,660
Accretion on convertible debenture 31,747 36,679
Provision for credit losses 181,196 -
Stock-based expense 443,675 74,880
Fair value of interest rate swap 167,691 -
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(3,917,930) (1,862,532)

Changes in non-cash working capital items 607,373 (305,363)
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Net cash used in operating activities from
continuing operations (3,310,557) (2,167,895)
Net cash provided by operating activities
from discontinued operations 36,519 889,471
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(3,274,038) (1,278,424)

Financing activities:

Credit facility, net of repayments 78,561,414 -
Advances for mortgage loans (1,066,475) -
Proceeds from share issuance, net of costs 2,290,000 2,879,351
Repayment of advances from directors - (286,685)
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Net cash provided by financing activities 79,784,939 2,592,666

Investing activities:
Net increase in mortgages receivable (79,815,675) -
Purchase of capital assets - (153,773)
Proceeds on disposition of capital assets - 3,440,182
Discontinued operations - (65,963)
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Net cash used in investing activities from
continuing operations (79,815,675) 3,220,446
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(Decrease) Increase in cash and cash
equivalents (3,304,774) 4,534,688

Cash and cash equivalents - beginning of year 4,950,854 416,166
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Cash and cash equivalents - end of year 1,646,080 4,950,854
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Supplementary cash flow information:

Income taxes paid 107,947 -
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Interest paid 1,023,445 243,899
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About Abode Mortgage Holdings Corp.

Abode Mortgage Holdings Corp. is a public company trading on the TSX Venture Exchange under the symbol ABD, and through its wholly owned subsidiary, Abode Mortgage Corporation, provides mortgage services to the increasing number of Canadians who are unable to find mortgage financing through traditional sources. Headquartered in Vancouver, Abode Mortgage Corporation is delivering a new standard of service excellence to the Canadian non-conforming residential mortgage industry by providing simplified products, consistent underwriting decisions, uniformed pricing and competitive compensation programs. The Company launched its lending operations in February, 2007.

Information about Abode Mortgage Corporation is available on the Internet at: www.abodecorp.com.

Forward-Looking Statements

Forward-looking statements in this document are based on current expectations and are subject to significant risks and uncertainties. Actual results may differ due to factors such as the competitive nature of the industry, the ability of Abode Mortgage to execute its growth strategy, and the reliance of Abode Mortgage on key personnel. Additional information identifying risks and uncertainties is contained the regulatory filings available on its website and at www.sedar.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information