Renasant Financial Partners Ltd.
TSX : REN

Renasant Financial Partners Ltd.

January 23, 2008 16:11 ET

Renasant Reports 3rd Quarter Fiscal 2008 Results

MISSISSAUGA, ONTARIO--(Marketwire - Jan. 23, 2008) - Renasant Financial Partners Ltd. (the "Corporation") (TSX:REN) today reported results of operations for the third quarter ended December 31, 2007. The Corporation's operating performance in the third 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 third quarter of Fiscal 2008 was $0.2 million or $0.03 per share, an increase over the $0.1 million or $0.01 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 $0.8 million or $0.09 per share was earned as compared with net income of $2.4 million or $0.28 per share in the first three quarters for Fiscal 2007. The year-over-year income reduction is primarily the result of the reduction in income earning assets associated with the substantial shareholder distributions in Fiscal 2007 offset to some extent by reductions in the expense base.

Investment income was $0.4 million in the quarter and $1.6 million year-to-date down from $1.0 million and $5.1 million in the corresponding periods last year due to a much larger investment portfolio. Trading margin at $492,000 in the quarter and $1.6 million year-to-date compared with corresponding values last year of $489,000 and $2.1 million due to an approximate 13% reduction in year-to-date revenues and a higher level of inventory write downs. SG&A at $0.6 million in the quarter and $2.1 million year-to-date was down substantially from the $1.4 million quarterly expenditure and $4.3 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 is currently in negotiations with the management team of the Connecticut trading operation concerning a potential purchase of the trading business. It is expected that the purchase price would approximate net book value. The Corporation's largest shareholder is also considering an equity and debt participation in the venture.

The Corporation repurchased 10,600 shares for cancellation in the quarter at an average price of $1.87. On a year-to-date basis, the Corporation repurchased 79,400 shares at an average price of $2.02 per share, a significant discount to fully diluted net book value per share of $2.68 at December 31, 2007.

The Corporation will continue to be focused on litigation management and strategic directions while continuing to generate modestly profitable stable financial returns.

Third Quarter Report Fiscal 2008

RENASANT FINANCIAL PARTNERS LTD.

Management Discussion and Analysis

OVERVIEW

Performance in the third quarter of Fiscal 2008 continued to generate modestly profitable, stable financial returns with a continued focus on contingency management and strategic determinations for the trading business.

INCOME

Net income for the third quarter of Fiscal 2008 was $0.2 million or $0.03 per share, an increase over the $0.1 million or $0.01 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 $0.8 million or $0.09 per share was earned as compared with net income of $2.4 million or $0.28 per share in the first three quarters for Fiscal 2007. The year-over-year income reduction is primarily the result of the reduction in income earning assets associated with the substantial shareholder distributions in Fiscal 2007 offset to some extent by reductions in the expense base. In the third quarter, the expense reduction modestly exceeded the reduction in investment income due primarily to the special dividend payment in September of 2006. An after-tax return on equity of approximately 4.4% 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 third quarter of Fiscal 2007 and $0.3 or $0.04 per share of net income from the discontinued leasing business earned in the first three 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 $0.8 million year-to-date as compared with nominal income in the quarter and $2.1 million or $0.24 per share earned year-to-date last year. The rationale for these variances are identical to net income.

Income from continuing operations comprises the trading business and income from investments. Investment income was $0.4 million in the quarter compared with $1.0 million in the corresponding quarter last year. On a year-to-date basis, investment income was $1.6 million down from $5.1 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 $13 million. Returns in excess of 10% are higher than normal due to fee income and retroactive interest applicable to the impaired loans resolved in the current year. Investment income is also generated by investing surplus funds in short term Bankers' Acceptances at relatively modest interest rates reflective of their risk profile. Investment income earned in the first three quarters of Fiscal 2007 was earned on an average investment balance of approximately $70 million after reflecting the $62 million special dividend paid in mid September.

Gross margin in the equipment trading business was $492,000 in the current quarter and $1.6 million year-to-date as compared with $489,000 and $2.1 million of trading margin earned in the corresponding periods last year. Activity levels were $8.8 million this quarter and $22.5 million year-to-date down from the $9.0 million and $25.9 million generated in the equivalent periods last year. The Fiscal 2007 activity was unusually high based on historical trends and will not be replicated this year. Year-to-date trading margin was 7.2% down from 8.0% last year reflecting increased inventory obsolescence charges and a revision to the historic bad debt reserve. Margins in the trading business vary by customer and equipment type and as such are hard to predict.

Selling, General and Administrative ("SG&A") expenses were approximately $0.6 million in the quarter and $2.1 million year-to-date, down significantly from the $1.4 million incurred in the third quarter of last year and $4.3 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 along with 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 $10 million of bridge loans, the Corporation has approximately $9 million of cash on hand, only $1-2 million of which would be required to run the trading business. As previously outlined, the balance is invested in relatively short term Bankers' Acceptances.

The trading business continues to utilize approximately $5-6 million of capital, including working capital requirements and provides an appropriate return on that investment for the risk profile.

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 $0.2 million was recorded in the accumulated other comprehensive income account in the quarter. The accumulated loss balance at December 31, 2007 was approximately $2.1 million, an increase from $0.7 million at the start of the fiscal period.

Fully diluted net book value per share at December 31, 2007 was $2.68 per share. Issuer bid activity in the quarter involved 10,600 shares repurchased for cancellation at an average cost of $1.87. On a year-to-date basis, the Corporation repurchased 79,400 shares at an average price of $2.02. Regular quarterly dividends are not expected in the foreseeable future.

CONTINGENCIES

Limited progress was made in the quarter in resolving litigation matters. The Corporation is engaged in discussions with the parties associated with the Nova Scotia litigation. The outcome of these discussions is uncertain.

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.

The Corporation is currently in negotiations with the management team of the Connecticut trading operation concerning a potential purchase of the trading business. It is expected that the purchase price would approximate net book value. The Corporation's largest shareholder is also considering an equity and debt participation in the venture. The Corporation anticipates that the transaction, if completed, would close before year-end.

OUTLOOK

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

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, President and Chief Executive Officer

Robert D. Wright, Senior Vice President and Chief Financial Officer

January 23, 2008



Financial Statements

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

Dec 31, 2007 March 31, 2007
---------------------------------
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 10,006 $ 3,028
Bridge loans receivable (Note 3) 9,397 15,858
Loans to officers (Note 9) - 2,081
Inventory (Note 4) 2,229 2,535
Receivables (Note 4) 4,869 4,956
Income taxes recoverable 3,739 2,605
Capital assets 489 474
------------- ----------------
$ 30,729 $ 31,537
------------- ----------------
------------- ----------------

LIABILITIES
Accounts payable and accrued charges $ 6,614 $ 6,093
Future income tax liabilities 1,025 1,531
------------- ----------------
7,639 7,624
------------- ----------------
------------- ----------------

Contingencies and commitments (Note 7)

SHAREHOLDERS' EQUITY
Share capital (Note 6) $ 20,882 $ 21,078
Accumulated other comprehensive income (2,102) (675)
Retained earnings 4,310 3,510
------------- ----------------
23,090 23,913
------------- ----------------
$ 30,729 $ 31,537
------------- ----------------
------------- ----------------


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

for three months ended for nine months ended
Dec 31, 2007 Dec 31, 2006 Dec 31, 2007 Dec 31, 2006
-------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

REVENUE
Equipment trading $ 8,822 $ 8,979 $ 22,540 $ 25,855
Investment 429 952 1,604 5,102
---------- ----------- ----------- -------------
9,251 9,931 24,144 30,957
---------- ----------- ----------- -------------

EXPENSES
Equipment trading 8,330 8,490 20,929 23,785
---------- ----------- ----------- -------------
8,330 8,490 20,929 23,785
---------- ----------- ----------- -------------

GROSS MARGIN 921 1,441 3,215 7,172

Selling, general
and administrative 598 1,443 2,119 4,260
---------- ----------- ----------- -------------

INCOME FROM
CONTINUING
OPERATIONS 323 (2) 1,096 2,912

Provision for
income taxes 97 (8) 329 832
---------- ----------- ----------- -------------

NET INCOME FROM
CONTINUING
OPERATIONS 226 6 767 2,080

NET INCOME FROM
DISCONTINUED
LEASING BUSINESS
(Note 5) - 54 - 347
---------- ----------- ----------- -------------

NET INCOME $ 226 $ 60 $ 767 $ 2,427
---------- ----------- ----------- -------------
---------- ----------- ----------- -------------

OTHER
COMPREHENSIVE LOSS
Unrealized foreign
currency
translation loss (172) 772 (1,427) 234

---------- ----------- ----------- -------------
TOTAL
COMPREHENSIVE
(LOSS) GAIN $ 54 $ 832 $ (660) $ 2,661
---------- ----------- ----------- -------------
---------- ----------- ----------- -------------

EARNINGS PER COMMON
SHARE - BASIC
AND DILUTED
Continued
operations $ 0.03 $ - $ 0.09 $ 0.24
Discontinued
operations $ - $ 0.01 $ - $ 0.04
---------- ----------- ----------- -------------
$ 0.03 $ 0.01 $ 0.09 $ 0.28
---------- ----------- ----------- -------------
---------- ----------- ----------- -------------

AVERAGE SHARES
OUTSTANDING
Basic and Fully
Diluted 8,652,226 8,671,260 8,655,315 8,758,760
---------- ----------- ----------- -------------
---------- ----------- ----------- -------------



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

for three months ended for nine months ended
Dec 31, 2007 Dec 31, 2006 Dec 31, 2007 Dec 31, 2006
-------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

RETAINED EARNINGS
Balance,
beginning
of period $ 4,079 $ 4,243 $ 3,510 $ 64,410
Net income for
the period 226 60 767 2,427
Dividends - - - (61,583)
Discount(premium)
on cancellation
of shares 5 - 33 (951)
---------- ----------- ----------- -------------

Balance, end of
period 4,310 4,303 4,310 4,303
---------- ----------- ----------- -------------

ACCUMULATED OTHER
COMPREHENSIVE INCOME
Balance,
beginning
of period (1,930) (2,271) (675) (1,733)
Unrealized
foreign currency
translation loss (172) 772 (1,427) 234
---------- ----------- ----------- -------------

Balance, end of
period (2,102) (1,499) (2,102) (1,499)
---------- ----------- ----------- -------------



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

for three months ended for nine months ended
Dec 31, 2007 Dec 31, 2006 Dec 31, 2007 Dec 31, 2006
-------------------------- ----------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

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

OPERATING
Net income from
continuing
operations $ 226 $ 6 $ 767 $ 2,080
Items not
affecting cash
Amortization of
other assets 31 13 95 37
Interest accrued
and other items
related to
marketable
securities - (20) - (1,101)
Future income tax
provision - 445 - 678
Net (increase)
decrease in
inventory,
receivables,
accounts payable
and accrued
charges (772) (2,499) 291 (16,522)
---------- ----------- ----------- -------------
(515) (2,055) 1,153 (14,828)
---------- ----------- ----------- -------------

FINANCING
Repurchase of
shares, net (20) 0 (163) (1,904)
Dividends paid - - - (62,468)
---------- ----------- ----------- -------------
(20) 0 (163) (64,372)
---------- ----------- ----------- -------------

INVESTING
Reduction(increase)
of bridge loans
receivable, net 2,490 8,418 6,461 (3,432)
Reduction of
marketable
securities, net - 988 - 84,443
Additions to
other assets, net - (17) (127) (17)
---------- ----------- ----------- -------------
2,490 9,389 6,334 80,994
---------- ----------- ----------- -------------

EFFECT OF
EXCHANGE RATES 48 198 (346) 75

NET CASH INFLOW
(OUTFLOW) FROM
CONTINUING
OPERATIONS 2,003 7,532 6,978 1,869
---------- ----------- ----------- -------------

DISCONTINUED LEASING
OPERATIONS
Operating
cash flows - (423) - (15,530)
Addition
(reduction)
to debt - 102 - (6,712)
Disposal of leases - 5,263 - 30,047
---------- ----------- ----------- -------------
NET CASH INFLOW
FROM DISCONTINUED
OPERATIONS - 4,942 - 7,805
---------- ----------- ----------- -------------

NET CASH INFLOW
(OUTFLOW) 2,003 12,474 6,978 9,674

Cash, beginning
of period 8,003 10,237 3,028 13,037

CASH, END OF PERIOD $ 10,006 $ 22,711 $ 10,006 $ 22,711
---------- ----------- ----------- -------------
---------- ----------- ----------- -------------

SUPPLEMENTAL CASH
FLOW DATA:

CONTINUING OPERATIONS
Cash paid during
the year for:
Interest $ - $ - $ - $ -
Income taxes $ 36 $ 174 $ 1,227 $ 3,461

DISCONTINUED OPERATIONS
Cash paid during
the year for:
Interest $ - $ 199 $ - $ 300
Income taxes $ - $ - $ - $ -


RENASANT FINANCIAL PARTNERS LTD.
Notes to the Consolidated Financial Statements
December 31, 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.

The Corporation has no loans currently classified as impaired (March 31, 2007 - $3,845). 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 $1.1 million (March 31, 2007 -- $4.0 million) in bridge lending depending on customer activity.

4. EQUIPMENT TRADING BUSINESS

The inventory, receivables and approximately $2.6 million of accounts payable comprise the assets and liabilities of the computer trading business. The Corporation is currently in negotiations with the management team who operate the trading business concerning a potential purchase of the business at its approximate net book value. The Corporation's largest shareholder is considering an equity and debt participation in the venture.

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:



---------------------------------------------------------------------------
Nine Months Ended
Dec 31, Dec 31,
2007 2006
---------------------------------------------------------------------------
Revenues $ - $ 1,127
Costs and expenses - 572
---------------------------------------------------------------------------
Income from discontinued leasing business - 555
Provision for income taxes - 208
---------------------------------------------------------------------------
Net income from discontinued leasing business $ - $ 347
---------------------------------------------------------------------------
---------------------------------------------------------------------------

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 (79,400) (197)
---------------------------------------------------------------------------
Balance as at December 31, 2007 8,611,860 $ 20,811
---------------------------------------------------------------------------
---------------------------------------------------------------------------


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.
9 MONTHS ENDED 9 MONTHS ENDED
DEC 31, DEC 31,
2007 2006 2007 2006
INCOME STATEMENT DATA

Equipment Trading
Revenues $ - $ - $ 16,276 $ 19,096
Expenses - - 15,108 17,883
------- -------- -------- --------
Gross margin - - 1,168 1,213
------- -------- -------- --------
------- -------- -------- --------

Investment Revenue $ 1,604 $ 5,102 $ - $ -
------- -------- -------- --------
------- -------- -------- --------

Total Gross Margin $ 1,604 $ 5,102 $ 1,168 $ 1,213
------- -------- -------- --------
------- -------- -------- --------

BALANCE SHEET DATA
Receivables $ 402 $ 1,406 $ 3,272 $ 3,766
------- -------- -------- --------
Inventory $ - $ - $ 1,569 $ 1,891
------- -------- -------- --------
Marketable securities $ - $ 1,817 $ - $ -
------- -------- -------- --------
Bridge loans receivable $ 9,397 $ 17,102 $ - $ -
------- -------- -------- --------


EUROPE TOTAL
9 MONTHS ENDED 9 MONTHS ENDED
DEC 31, DEC 31,
2007 2006 2007 2006
------- -------- -------- --------
------- -------- -------- --------
INCOME STATEMENT DATA

Equipment Trading
Revenues $ 6,263 $ 6,759 $ 22,540 $ 25,855
Expenses 5,821 5,902 20,929 23,785
------- -------- -------- --------
Gross margin 443 857 1,611 2,070
------- -------- -------- --------
------- -------- -------- --------

Investment Revenue $ - $ - $ 1,604 $ 5,102
------- -------- -------- --------
------- -------- -------- --------

Total Gross Margin $ 443 $ 857 $ 3,215 $ 7,172
------- -------- -------- --------
------- -------- -------- --------

BALANCE SHEET DATA
Receivables $ 1,195 $ 1,873 $ 4,869 $ 7,045
------- -------- -------- --------
------- -------- -------- --------
Inventory $ 660 $ 1,236 $ 2,229 $ 3,127
------- -------- -------- --------
Marketable securities $ - $ - $ - $ 1,817
------- -------- -------- --------
Bridge loans receivable $ - $ - $ 9,397 $ 17,102
------- -------- -------- --------


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.

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