Renasant Financial Partners Ltd.
TSX : REN

Renasant Financial Partners Ltd.

October 25, 2007 15:14 ET

Renasant Reports 2nd Quarter Fiscal 2008 Results

MISSISSAUGA, ONTARIO--(Marketwire - Oct. 25, 2007) - Renasant Financial Partners Ltd. (the "Corporation") (TSX:REN) today reported results of operations for the second quarter ended September 30, 2007. The Corporation's operating performance in the second quarter of Fiscal 2008 reflects modest levels of profitability and the continued focus on goals associated with strategic matters, reduced levels of business activity, and litigation management.

Net income for the second quarter of Fiscal 2008 was $0.2 million or $0.02 per share, down from the $1.2 million or $0.14 per share achieved in the corresponding period last year. All per share values are fully diluted. On a year-to-date basis, net income of $0.5 million or $0.06 per share was earned as compared with net income of $2.4 million or $0.27 per share earned in the first two quarters of Fiscal 2007. In both instances, the year-over-year income reduction is primarily the result of the substantial reduction in income earning assets associated with the approximately $88.0 million of shareholder distributions in Fiscal 2007. An after-tax return on equity of approximately 4.6% has been earned in Fiscal 2008.

In the absence of discontinued activities in Fiscal 2008, net income from continuing operations is the same as net income at $0.2 million in the quarter and $0.5 million year-to-date down from the $1.1 million or $0.13 per share and $2.1 million or $0.24 per share earned in the corresponding periods last year. Again, the prior year's value reflects a period when the investment portfolio was substantially higher.

Investment income was $0.6 million in the quarter and $1.2 million year-to-date compared with $2.4 million and $4.1 million in the corresponding periods last year due to a much larger investment portfolio. Trading margin at $435,000 in the quarter and $1.1 million year-to-date was down from corresponding values last year of $635,000 and $1.6 million due to an approximate 20% reduction in year-to-date revenues and a higher level of inventory write downs. SG&A at $0.7 million in the quarter and $1.5 million year-to-date was down substantially from the $1.5 million quarterly expenditure and $2.8 million year-to-date cost incurred last year due to reduced manpower and infrastructure associated with lower activity levels. The Corporation continues, however, to incur a significant level of fixed costs associated with being a public company.

The Corporation repurchased 68,800 shares for cancellation in the quarter at an average price of $2.04 a significant discount to fully diluted net book value per share of $2.67 at September 30, 2007.

The Corporation will continue to be focused on litigation management and strategic direction while generating profits from the trading business and remaining investments within appropriate risk parameters.

Second Quarter Report Fiscal 2008

RENASANT FINANCIAL PARTNERS LTD.

OVERVIEW

Operating performance in the second quarter of Fiscal 2008 continued to reflect the ongoing focus on litigation management, operating performance in the trading business and expense containment. Investment income continues to be generated primarily from bridge fund investments which are managed by a third party financial intermediary. Overall, the business will continue to generate modestly profitable, stable financial returns awaiting the resolution of the remaining contingent events and a strategic decision on the trading business.

INCOME

Net income for the second quarter of Fiscal 2008 was $0.2 million or $0.02 per share, down from the $1.2 million or $0.14 per share achieved in the corresponding period last year. All per share values are fully diluted. On a year-to-date basis, net income of $0.5 million or $0.06 per share was earned as compared with net income of $2.4 million or $0.27 per share in the first two quarters for Fiscal 2007. In both instances, the year-over-year income reduction is primarily the result of the substantial reduction in income earning assets associated with the approximately $88.0 million of shareholder distributions in Fiscal 2007. An after-tax return on equity of approximately 4.6% has been earned in Fiscal 2008.

The Corporation, having liquidated of all its leasing assets as of March 31, 2007, has no discontinued lease activities in Fiscal 2008. This compares to $0.1 million or $0.01 per share of net income from the discontinued leasing business earned in the second quarter of Fiscal 2007 and $0.3 or $0.03 per share of net income from the discontinued leasing business earned in the first two quarters of last year.

In the absence of discontinued activities in Fiscal 2008, net income from continuing operations is the same as net income at $0.2 million in the quarter and $0.5 million year-to-date down from the $1.1 million or $0.13 per share and $2.1 million or $0.24 per share earned in the corresponding periods last year. Again, the prior year's value reflects a period when the investment portfolio was substantially higher.

Income from continuing operations comprises the trading business and income from investments. Investment income was $0.6 million in the quarter compared with $2.4 million in the corresponding quarter last year. On a year-to-date basis, investment income was $1.2 million down from $4.1 million in the same period last year. Over 80% of the current year's investment income is generated from bridge loan income on an average investment balance of approximately $14 million. It is higher than normal due to fee income and retroactive interest applicable to an impaired loan resolved in the current year. A modest level of investment income was also generated by investing surplus funds in short term marketable investments. This compares to investment earned in the first two quarters of Fiscal 2007 which reflects an average investment balance in excess of $90 million. The first shareholder distribution last year was in mid-September when the $62 million special dividend was paid.

Gross margin in the equipment trading business was $435,000 in the current quarter and $1.1 million year-to-date down from the $635,000 and $1.6 million of trading margin earned in the corresponding periods last year. Activity levels were $6.3 million this quarter and $13.9 million year-to-date down almost 20% from the $7.9 million and $16.9 million generated in the equivalent periods last year. The Fiscal 2007 activity was unusually high based on historical trends and was not be replicated this year. Year-to-date trading margin was 8.2% down from 9.4% last year reflecting for the most part increased obsolescence charges respecting current year's inventory. Margins in the trading business vary by customer and equipment type and as such tend to be hard to predict. A one time currency gain of over $100,000 also increased the margin in the prior year.

Selling, General and Administrative ("SG&A") expenses were approximately $0.7 million in the quarter and $1.5 million year-to-date, down significantly from the $1.5 million incurred in the second quarter of last year and $2.8 million year-to-date in Fiscal 2007. The vast majority of the reduction relates to reduced levels of manpower costs and infrastructure associated with lower activity levels and the elimination of the expenditures on executive compensation incurred in the prior year. People and facility costs are now generally incurred through the $50,000 monthly management fee from Morguard. The Corporation also incurs a significant level of fixed costs associated with being a public company (directors' fees, audit fees, insurance, etc.) which do not decline with activity levels and will keep expenses disproportionately high compared to its income level.

Income from the discontinued lease business in the prior year represents profits earned from a small population of leases which the Corporation owned during that period. The majority of the leases were not funded and generated market rates of return. The net income incorporates a tax provision of 37.5% based on an estimate of the geographic distribution of the leases.

BALANCE SHEET

In addition to the approximately $12 million of bridge loans, the Corporation has approximately $8 million of cash on hand, only $1-2 million of which would be required to run the trading business. The balance is generally invested in relatively short term investment grade securities offered through a bank intermediary. No significant cash outlays are expected in the near term.

The trading business continues to utilize approximately $5-6 million of capital, including working capital requirements and provides a significant return on that investment.

The Corporation continues to be negatively impacted by the appreciation of the Canadian dollar versus the currencies which the trading business normally conducts its business (U.S. and U.K.). An unrealized currency loss on the translation of the net assets of the trading business in the amount of approximately $0.5 million was recorded in the accumulated other comprehensive income account in the quarter. The accumulated loss balance at September 30, 2007 was approximately $1.9 million.

Fully diluted net book value per share at September 30, 2007 was $2.67 per share. Regular quarterly dividends are not expected in the foreseeable future. Issuer bid activity in the quarter involved 68,800 shares repurchased for cancellation at an average cost of $2.04. In October of 2007, the Corporation announced that the Toronto Stock Exchange had approved the renewal of the normal course issuer bid program for a further 12 month period.

CONTINGENCIES

Little progress was made in the quarter in resolving litigation matters as Nova Scotia continues its legal posturing with no meaningful attempts at settlement. Further, the Waterloo matter suffered a setback in October of 2007 as the Court of Appeal decided that there was sufficient basis for a legal proceeding overturning the earlier court decision that the municipality could not litigate a previously settled dispute through further litigation against employees not covered in the original release.

The Corporation continues to believe it has no material exposure respecting this matter but may now incur additional legal costs in its defence and extend the timeframe of resolution. To date, the Corporation has received a third party claim from the former CFO of the City of Waterloo concerning the City's claim against him. The Corporation also believes the City's litigation against several officers and employees of the Corporation will ultimately result in a claim over against the Corporation. The Corporation will vigorously defend itself against these claims as they are without merit. The Corporation's financial risk is also reduced through potential rights to indemnification.

Detailed information on these litigation matters is provided in Note 13(a) to the 2007 Consolidated Financial Statements.

The Corporation has established a liability for litigation matters representing the estimated costs to the Corporation of settling the remaining litigation in a reasonable manner applying principles consistent with those established in earlier settlements. Should any settlement discussion prove unsuccessful, the Corporation intends to defend these actions on the basis that the lease documents entered into are clear and complete and create binding obligations. Should the Corporation be unsuccessful in its defense or settlement of one or more of these legal actions, there could be a materially adverse effect on the Corporation's financial position and future operations.

A detailed review of the federal and provincial income tax reassessments received by the Corporation is outlined in Note 13(b) to the 2007 Consolidated Financial Statements. There has been no significant change in the status of these reassessments. Detailed negotiations with CRA are ongoing.

OUTLOOK

In the near term, the Corporation will continue to be focused on resolving the remaining litigation matters, managing the trading business and optimizing investment opportunities within acceptable risk profiles.

NOTICE OF NO AUDITOR

REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim financial statements of the company have been prepared by and are the responsibility of the company's management.

The company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.



Fraser R. Berrill Robert D. Wright
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer

October 24, 2007



RENASANT FINANCIAL PARTNERS LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)

Sept. 30, 2007 March 31, 2007
--------------------------------
(Unaudited) (Audited)

ASSETS
Cash and cash equivalents $ 8,003 $ 3,028
Bridge loans receivable (Note 3) 11,887 15,858
Loans to officers (Note 9) - 2,081
Inventory (Note 4) 2,334 2,535
Receivables (Note 4) 3,016 4,956
Income taxes recoverable 3,659 2,605
Capital assets 521 474
-------------- ---------------
$ 29,420 $ 31,537

LIABILITIES
Accounts payable and accrued charges $ 5,292 $ 6,093
Future income tax liabilities 1,071 1,531
-------------- ---------------
6,363 7,624
-------------- ---------------

Contingencies and commitments (Note 7)

SHAREHOLDERS' EQUITY
Share capital (Note 6) $ 20,908 $ 21,078
Accumulated other comprehensive income (1,930) (675)
Retained earnings 4,079 3,510
-------------- ---------------
23,057 23,913
-------------- ---------------

$ 29,420 $ 31,537
-------------- ---------------
-------------- ---------------



RENASANT FINANCIAL PARTNERS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars except per share data)

for three months ended for six months ended
--------------------------- ----------------------------
Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006
--------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

REVENUE

Equipment trading $ 6,347 $ 7,861 $ 13,718 $ 16,876
Investment 620 2,368 1,175 4,150
------------ ------------- ------------- -------------

6,967 10,229 14,893 21,026
------------ ------------- ------------- -------------

EXPENSES
Equipment trading 5,912 7,226 12,599 15,295
------------ ------------- ------------- -------------

5,912 7,226 12,599 15,295
------------ ------------- ------------- -------------

GROSS MARGIN 1,055 3,003 2,294 5,731

Selling, general
and administrative 742 1,465 1,521 2,817
------------ ------------- ------------- -------------

INCOME FROM
CONTINUING
OPERATIONS 313 1,538 773 2,914

Provision for
income taxes 94 447 232 840
------------ ------------- ------------- -------------

NET INCOME FROM
CONTINUING
OPERATIONS 219 1,091 541 2,074

NET INCOME
FROM
DISCONTINUED
LEASING BUSINESS
(Note 3) - 131 - 293
------------ ------------- ------------- -------------
NET INCOME $ 219 $ 1,222 $ 541 $ 2,367
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------

OTHER
COMPREHENSIVE
LOSS
Unrealized
foreign currency
translation loss (455) 128 (1,255) (538)

------------ ------------- ------------- -------------
TOTAL
COMPREHENSIVE
(LOSS) GAIN $ (236) $ 1,350 $ (714) $ 1,829
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------

EARNINGS PER COMMON
SHARE - BASIC AND
DILUTED
Continued
operations $ 0.02 $ 0.13 $ 0.06 $ 0.24
Discontinued
operations $ - $ 0.01 $ - $ 0.03
------------ ------------- ------------- -------------
$ 0.02 $ 0.14 $ 0.06 $ 0.27
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------

AVERAGE SHARES
OUTSTANDING
Basic 8,655,426 8,758,760 8,673,344 8,802,510
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------
Diluted 8,655,426 8,758,760 8,673,344 8,802,510
------------ ------------- ------------- -------------
------------ ------------- ------------- -------------



RENASANT FINANCIAL PARTNERS LTD.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS AND
OTHER COMPREHENSIVE INCOME
(in thousands of dollars)

for three months ended for six months ended
--------------------------- ----------------------------
Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006
--------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

RETAINED EARNINGS

Balance,
beginning of
period $ 3,832 $ 64,670 $ 3,510 $ 64,410
Net income for
the period 219 1,222 541 2,367
Dividends - (60,698) - (61,583)
Discount
(premium) on
cancellation
of shares 28 (951) 28 (951)
------------- ------------- ------------- --------------
Balance, end of
period 4,079 4,243 4,079 4,243
------------- ------------- ------------- --------------

ACCUMULATED OTHER
COMPREHENSIVE
INCOME

Balance,
beginning of
period (1,475) (2,399) (675) (1,733)
Unrealized
foreign
currency
translation
loss (455) 128 (1,255) (538)
------------- ------------- ------------- --------------
Balance, end of
period (1,930) (2,271) (1,930) (2,271)
------------- ------------- ------------- --------------



RENASANT FINANCIAL PARTNERS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)

for three months ended for six months ended
--------------------------- ----------------------------
Sept 30, 2007 Sept 30, 2006 Sept 30, 2007 Sept 30, 2006
--------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

NET INFLOW
(OUTFLOW) OF
CASH RELATED
TO THE FOLLOWING
ACTIVITIES:

OPERATING
Net income from
continuing
operations $ 219 $ 1,091 $ 541 $ 2,074
Items not
affecting cash
Amortization of
other assets 31 12 64 24
Interest accrued
and other items
related to
marketable
securities - (1,092) - (1,081)
Future income
tax provision - 223 - 233
Net decrease
(increase) in
inventory,
receivables,
accounts payable
and accrued
charges 972 (588) 1,063 (14,023)
------------- ------------- ------------- --------------
1,222 (354) 1,668 (12,773)

FINANCING
Repurchase of
shares, net (143) (1,904) (143) (1,904)
Dividends paid - (61,583) - (62,468)
------------- ------------- ------------- --------------
(143) (63,487) (143) (64,372)
------------- ------------- ------------- --------------

INVESTING
(Increase)
reduction of
bridge loans
receivable, net (732) (2,267) 3,971 (11,850)
Reduction of
marketable
securities, net - 63,807 - 83,455
Additions to
other assets,
net (9) - (127) -
------------- ------------- ------------- --------------
(741) 61,540 3,844 71,605
------------- ------------- ------------- --------------
EFFECT OF
EXCHANGE RATES (139) 52 (395) (123)
------------- ------------- ------------- --------------
NET CASH INFLOW
(OUTFLOW) FROM
CONTINUING
OPERATIONS 199 (2,249) 4,974 (5,663)
------------- ------------- ------------- --------------

DISCONTINUED
LEASING
OPERATIONS
Operating
cash flows - (225) - (15,107)
Addition
(reduction)
to debt - 101 - (6,814)
Disposal
of leases - 345 - 24,784
------------- ------------- ------------- --------------
NET CASH INFLOW
FROM DISCONTINUED
OPERATIONS - 221 - 2,863
------------- ------------- ------------- --------------

NET CASH INFLOW
(OUTFLOW) 199 (2,028) 4,974 (2,800)

Cash, beginning
of period 7,803 12,265 3,028 13,037
------------- ------------- ------------- --------------

CASH, END OF
PERIOD $ 8,002 $ 10,237 $ 8,002 $ 10,237
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------

SUPPLEMENTAL CASH
FLOW DATA:

CONTINUING
OPERATIONS
Cash paid during
the year for:
Interest $ - $ - $ - $ -
Income taxes $ 65 $ 198 $ 1,191 $ 3,287

DISCONTINUED
OPERATIONS
Cash paid during
the year for:
Interest $ - $ 101 $ - $ 199
Income taxes $ - $ - $ - $ -



RENASANT FINANCIAL PARTNERS LTD.
Notes to the Consolidated Financial Statements
September 30, 2007
(all dollar amounts are in thousands)


1. BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

These financial statements should be read in conjunction with the Consolidated Financial Statements included in the Corporation's Annual Report for 2007 which provides information necessary or useful to understanding the Corporation's businesses and financial statement presentation. In particular, the Corporation's significant accounting policies and practices were presented in Note 2 to the Consolidated Financial Statements.

The quarterly financial statements are unaudited. Financial information in the Second Quarter Report reflects any adjustments that are, in the opinion of management, necessary to a fair presentation of the financial position of the Corporation and the results of its operations and cash flows for the interim periods, in accordance with generally accepted accounting principles ("GAAP") in Canada.

The results reported in these financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

2. CHANGES IN SIGNIFICANT ACCOUNTING POLICIES

On April 1, 2007, the Corporation adopted the CICA Handbook; Section 1530, Comprehensive Income, Section 3855, Financial Instruments - Recognition and Measurement and Section 3865, Hedges.

Section 1530 introduces Comprehensive income which is comprised of Net Income and Other Comprehensive Income and represents changes in Shareholders' equity during a period arising from transactions and other events with non-owner sources. Other comprehensive income (OCI) includes unrealized gains or losses in assets classified as available-for-sale, unrealized foreign currency translation amounts net of hedging arising from self-sustaining foreign operations, and changes in the effective portion of cash flow hedging instruments. The Corporation's consolidated financial statements now includes a Consolidated Statement of Comprehensive Income while the cumulative amount, Accumulated Other Comprehensive Income (AOCI), is presented as a new category of Shareholder's equity in the Consolidated Balance Sheets.

Section 3855 establishes standards for recognizing and measuring financial assets, financial liabilities and non-financial derivatives. It requires that financial assets and financial liabilities, including derivatives, be recognized on the balance sheet when the Corporation becomes party to the provisions of the financial instrument or non-financial derivative contract. All financial instruments should be measured at fair value on initial recognition except for certain related party transactions. Measurement in subsequent periods depends on whether the financial instrument has been classified as held-for-trading, available for-sale, loans and receivables or other liabilities. Other significant accounting implications arising on adoption of Section 3855 include the use of the effective interest method for the amortization of any transaction costs or fees, premiums or discounts earned or incurred for financial instruments measured at amortized cost.

Section 3865 specifies criteria under which hedge accounting can be applied.

Under adoption of these new standards, the Corporation designated its cash and equivalents as held-for-trading; which is measured at fair value. Accounts receivable and bridge loans are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued charges are classified as other financial liabilities, which are measured at amortized cost.

Comparative figures have not been restated except for the requirement to restate the foreign currency translation adjustment as part of other comprehensive income.

3. BRIDGE LOANS RECEIVABLE

The bridge loans receivable represent funds advanced on relatively short term, mezzanine loans which generally involve variable interest rates that reprice frequently. The loans are secured through charges on the underlying assets.

An amount of $1,045 (March 31, 2007 - $3,845) has been classified as impaired (and interest of $25 has not been accrued). No allowance for impairment been taken in respect of these loans as management anticipates full collection of principal and interest.

The Corporation is committed to invest a further $3.2 million (March 31, 2007 - $4.0 million) in bridge lending depending on customer activity.

4. EQUIPMENT TRADING BUSINESS

The inventory, receivables and approximately $1.2 million of accounts payable comprise the assets and liabilities of the computer trading business. While no immediate strategic plans exist for this business, it is conceivable that the net assets could be sold or liquidated as part of the ultimate wind-down of the Corporation. The values reflected in the financial statements represent reasonable approximations of their fair market value.

5. DISCONTINUED LEASING BUSINESS

On March 8, 2006, the Corporation completed the sale of its leasing business together with a substantial portion of its lease portfolio to ICON Capital Corporation ("ICON") an arms-length third party. During Fiscal 2007, the Corporation completed further sale transactions with ICON and other parties including officers of the Corporation to fully liquidate the remaining contracts in the lease portfolio. The applicable revenue, income before taxes and net income during the period of ownership for the discontinued leasing business is as follows:



---------------------------------------------------------------------------
Six Months Ended
---------------------------------------------------------------------------
Sept 30, 2007 Sept 30, 2006
---------------------------------------------------------------------------

Revenues $ - $ 586

Costs and expenses - 117

---------------------------------------------------------------------------

Income from discontinued leasing business - 269

Provision for income taxes - 176
---------------------------------------------------------------------------
Net income from discontinued leasing business $ - $ 293
---------------------------------------------------------------------------
---------------------------------------------------------------------------



6. SHARE CAPITAL

Issued Common Shares

Number of Shares Amount
---------------------------------------------------------------------------
Balance as at March 31, 2006 8,846,260 $ 48,002
---------------------------------------------------------------------------
Issued 20,000 30

Purchased for cancellation (175,000) (954)

Reduction of capital (26,000)
---------------------------------------------------------------------------
Balance as at March 31, 2007 8,691,260 $ 21,078

Issued shares - -

Purchased for cancellation (68,800) (170)
---------------------------------------------------------------------------
Balance as at September 30, 2007 8,622,460 $ 20,908
---------------------------------------------------------------------------
---------------------------------------------------------------------------


7. CONTINGENCIES AND COMMITMENTS

Litigation

In October of 2007, the Court of Appeal decided there was sufficient grounds for a legal proceeding in the Waterloo litigation, this decision overturned the earlier court decision that the municipality could not litigate a previously settled dispute through further litigation against employees not covered in the original release. The Corporation will vigorously defend itself against these claims as they are without merit. The Corporation continues to believe it has no material exposure respecting this matter but may now incur additional legal costs in its defence and extend the timeframe of resolution.

There has been no other changes in the status of litigation matters in the quarter. Detailed information is outlined in Note 13(a) to the 2007 Consolidated Financial Statements.

Income Tax Reassessment

A detailed review of the federal and provincial income tax reassessments received by the Corporation is outlined in Note 13(b) to the 2007 Consolidated Financial Statements. There has been no significant change in the status of these reassessments. Detailed negotiations with CRA are ongoing.

8. SEGMENTED INFORMATION

The Corporation derives substantially all of its revenues from the sale and lease of technology equipment and related products. The Corporation operates in three significant geographic segments:



CANADA U.S. EUROPE TOTAL

6 MONTHS ENDED 6 MONTHS ENDED 6 MONTHS ENDED 6 MONTHS ENDED
SEPT 30, SEPT 30, SEPT 30, SEPT 30,
2007 2006 2007 2006 2007 2006 2007 2006
(Unaud- (Unaud- (Unaud- (Unaud- (Unaud- (Unaud- (Unaud- (Unaud-
ited) ited) ited) ited) ited) ited) ited) ited)
------- ------- ------- ------- ------- ------ ------- -------

INCOME
STATEMENT
DATA

Equipment
Trading
Reve-
nues $ - $ - $ 9,910 $ 12,984 $ 3,808 $ 3,892 $ 13,718 $16,876
Expenses - - 9,032 11,761 3,567 3,534 12,599 15,295
------- ------- ------- ------- ------- ------ ------- -------
Gross
margin - - 878 1,223 241 358 1,119 1,581
------- ------- ------- ------- ------- ------ ------- -------

Invest-
ment
Reve-
nue $ 1,175 $ 4,150 $ - $ - $ - $ - $ 1,175 $ 4,150
------- ------- ------- ------- ------- ------ ------- -------

Total
Gross
Margin $ 1,175 $ 4,150 $ 878 $ 1,223 $ 241 $ 358 $ 2,294 $ 5,731
------- ------ ------- ------- ------- ------ ------- -------

BALANCE
SHEET
DATA
Receiv-
ables $ 244 $ 1,388 $ 2,115 $ 3,051 $ 657 $ 819 $ 3,016 $ 5,258
------- ------ ------- ------- ------- ------ ------- -------
Inven-
tory $ - $ - $ 1,483 $ 1,638 $ 851 $ 1,016 $ 2,334 $ 2,654
------- ------ ------- ------- ------- ------ ------- -------
Market-
able
secur-
ities $ - $ 2,785 $ - $ - $ - $ - $ - $ 2,785
------- ------ ------- ------- ------- ------ ------- -------
Bridge
loans
receiv-
able $ 11,887 $ 25,520 $ - $ - $ - $ - $ 11,887 $25,520
------- ------ ------- ------- ------- ------ ------- -------


9. RELATED PARTY TRANSACTIONS

During the period the Corporation entered into transactions with related entities. These transactions are measured at exchange amounts. The Corporation participates in bridge loans (see Note 3) collectively with an entity under control of one of the indirect shareholders of the Corporation. The Corporation has entered into a management services agreement with an entity under control of one of the shareholders of the Corporation. Amounts paid under this agreement were approximately $150 per quarter.

Amounts due from officers respecting the purchase of certain lease assets of the Corporation as at September 30, 2007 was NIL (March 31, 2007 -$2,081).

10. COMPARATIVES

Certain comparative figures have been reclassified to conform with current year's presentation.

Contact Information

  • For Investor Information, Contact:
    Renasant Financial Partners Ltd.
    Robert D. Wright,
    Senior Vice President & Chief Financial Officer
    (905) 281-5897
    Email: bwright@morguard.com, Website: www.renasant.ca