Ann: Annual Report to shareholders, page-26

On reflection I thought I should mention some detail about floor plan contracts. Normally there is an overall contract based on an agreed limit. That contract can and usually does contain charges over the units (vehicles or all manner of retail items) based on their wholesale price often together with a charge over the companies chattels or mortgage over the companies real estate or equity in same. This extra broad cover is often taken because the nature of floor plan is 100% wholesale financing and usually breaches are involved when units are sold retail and the floor plan financier is not paid out. Even repossession of the units more often than not leads to losses which cannot be repaid unless further assets are available. As a manager of a finance company and earlier a collection manager involved in acting to protect the financiers interests after floor plan breaches I saw first hand how difficult it was to avoid a loss. On the other hand Trouchet's quite honest approach in setting out the covenant breach problem within his accounts and also mentioning the "going concern" problem mentioned by the auditors tells me that he obviously has it under control but as yet has not quite had agreement from the Canadian lender. That open honesty counts for plenty IMO as an old ex-financier - companies usually fail to mention those types of problem within accounts.