Court File No. CV-14-10518-OOCL ONTARIO SUPERIOR COURT OF...
Transcript of Court File No. CV-14-10518-OOCL ONTARIO SUPERIOR COURT OF...
Court File No. CV-14-10518-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE - COMMERCIAL LIST
[N THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT,R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF THE CASHSTORE FINANCIAL SERVICES INC., THE CASH STORE INC., TCS CASH STORE INC.,
INSTALOANS INC., 7252331 CANDA INC., 5515433 MANITOBA INC., 1693926 ALBERTALTD DOING BUSINESS AS "THE TITLE STORE"
Applicants
AFFIDAVIT OF DON MACLEAN
Sworn on April 25, 2014
I, Don MacLean, of the City of Edmonton, in the Province of Alberta, SWEAR AND SAY THAT:
I am a Senior Vice-President in the Consulting and Deals group with
PricewaterhouseCoopers Inc. ("PwC").
2. PwC has been engaged by Bennett Jones LLP and McMillan LLP, counsel for 0678786 B.C.
Ltd. ("067") and Trimor Annuity Focus Limited Partnership #5 ("Trimor 5") respectively,
as an independent financial advisor to conduct a review of the Applicant's records relating
to the funding provided by 067 and Trimor.
3. Attached hereto as Exhibit "A" is a true copy of PwC's draft report dated April 25, 2014.
4. I swear this affidavit in response in support of the position of 067 and Trimor LP on this
application and for no other purpose.
SWORN/AFFIRMED BEFORE ME at the )City of Edmonton, in the Provinceqf
)Alberta, this 25th day o,Apri1, 2QA4
))
cm
(Notary Publicind for the Province of
)Alberta)
) Don MacLean
pwc
Contents J At a glance J Summary report
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Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
2April 25, 2014
Contents j At a glance Summary report
Mr. Ken Lenz
Mr. Adam MaerovBennett Jones LLP
McMillan LLP4500 Bankers Hall East
1700 TD Canada Trust Tower855 - 2nd Street SW
4217th Avenue SWCalgary, AB T2P 4K7
Calgary, AB T2P 4K9
Dear Sirs,
We report on Cash Store Financial Services Inc. ("CashStore Financial" and its subsidiary undertakings(together, the "Company")) in accordance with ourengagement letter dated April 21, 2014.
This report has been prepared in connection with therequest by Trimor Annuity Focus Limited Partnership#5 ("Trimor") and 0678786 B.C. Ltd. ("0678786 ") fora review of the funds owing to Trimor and 0678786.
Our work was based entirely on information suppliedby the Company's management ("Management") andwas carried out on the basis that such information isaccurate and complete. Information was not subject tochecking or verification procedures.
Our work did not constitute an audit conducted inaccordance with generally accepted auditing standards,an examination of internal controls or other attestationor review services in accordance with standardsestablished by the Canadian Institute of CharteredAccountants ("CICA").
Accordingly, we do not express an opinion or any otherPricewaterhouseCoopers Inc. form of assurance on the financial statements of theTD Tower, loo88lo2nd AvenueSuite 1501Edmonton, AB T5J 3N5T: +1 (780) 441 6700F: +1(780)4416776
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
pwcDonald MacLeanSenior Vice [email protected]: +1(780)4416704
Jennifer [email protected]: +1 (780) 441 6855
report.
Save as described in the agreement or as expresslyagreed by us in writing, we accept no liability(including for negligence) to anyone else or for anyother purpose in connection with this report, and itmay not be provided to anyone else.
Please contact the undersigned if you need further helpor information on the Company.
Yours very truly,PricewaterhouseCoopers Inc.
Company or any financial or other information, oroperating and internal controls of the Company.
This is a draft report. We have had limited access toManagement and Company records due to the veryshort duration of our engagement (i.e. 3 days). Thecomments in this draft report are subject toamendment or withdrawal. Our definitive findings andrecommendations will be those set out in the final
Donald MacLeanSenior Vice President
3April 25, 2014
Contents J At a glance Summary report
At a glance 5Summary report
71
Overview of Third Party Loan Process
8
2
Retention Payments to TPLs
9
3
Flow of Funds
10
4
Outstanding Balances Owing
11
5
Comparison of Restricted Cash vs Actual Cash Balance
13
6
Transfers to and from Third Party Lenders
14
7
Bank Accounts
i6
8
Disbursements for period from January 1 to April 14,
182014
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
4April 25, 2014
Contents
Contents I At a glance Summary report
Ataglance
0 Outstanding Balances Owing to Trimor and0678786
Summary of Lender PositionAs at March 31,2014$ in 000s
Payday Loans
2211
-
2211Lines of Credit
8,461
5,608
14,069Restricted Cash
6,316
7,768
14,085Balance Forward
8,514
(26)
8,488Total
25,502
13,350
38,852Source: Management Reports, PwC Analysis
e The Company treats the Third Party Lender's("TPLs") funds as third party funds
It is evident the Company treats these funds asbelonging to a third party:
• When deployed as loans to consumers the creditor isthe TPL. The Company takes a brokerage fee. Whenloans are collected and waiting to be redeployed,funds are segregated as Restricted Cash on thebalance sheet.
• Portfolios of loans are transferred to the TPLswhenever Restricted Cash is used for operations.However, Management advised this practice wasdiscontinued effective March 2014.
• Senior Management with whom we spoke during ourreview (CEO, CFO, Controller) advised these fundshave always been considered third party funds.
0 Restricted Funds are separately disclosed onthe balance sheet in accordance with US GAAP
Trimor 0678786Capital
B.C. Ltd.
Total
US GAAP requires cash held for a specific purpose andnot available for general use to be classified as"Restricted Cash" on the balance sheet and such fundsare not required to be set aside in a separate bankaccount,
The Company has disclosed the advances from TPL's inexcess of consumer loans written to customers asRestricted Cash as a current asset on its balance sheet.
The corresponding entry in the financial statements isdenoted as Due to TPLs in acknowledgement that therestricted funds are held for the TPLs.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
5April 25, 2014
Contents I At a g'ance I Summary report
Ataglance
0 A separate bank account was used for TPLactivity prior to January 2014
We understand that the Carlstrom Affidavit statesnumerous times that there was no account designatedfor third party funds and that the cash is comingled withthe Company's cash. In fact, the Company's account wasmerely used as a conduit for TPL funds.
A separate bank account did in fact exist and was usedfor deposit of funds received from TPLs and for cashretention payments paid to TPLs. Although this accountwas not specifically designated for third party funds, itappears to have been used primarily for that purpose.
In January 2014, the Company ceased using this accountfor the TPLs on the direction of the VP Finance(Financial Reporting).
0 The Restricted Cash account balance atMarch 31, 2014, was greater than the actual cashbalance as reported.
The Companies' normal and consistent practice inreconciling month end TPL loan balances andtransferring Company owned loans to compensate forthe use of Restricted Cash was discontinued as of theend of March.
• The Company has disbursed significantamounts on professional fees and other costsrequiring further investigation
A significant portion of the Company's cash has beendisbursed for professional fees. Disbursements sinceJanuary 1, 2014 identified $4.1 million paid forprofessional fees and a further $6.9 million in otherdisbursements requiring further investigation.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
6April 25, 2014
Contents I At a glance I Summary report
Summary report
71
Overview of Third Party Loan Process
8
2
Retention Payments to TPLs
9
3
Flow of Funds
10
4
Outstanding Balances Owing 11
5
Comparison of Restricted Cash vs Actual Cash Balance
13
6
Transfers to and from Third Party Lenders
14
7
Bank Accounts
16
8
Disbursements for period from January 1 to April 14,
i82014
Strictly private and confidentialCash Store Financial SeMces Inc.
Draft - For discussion purposes only
April 25, 2014PwC
Summaryreport
I Overview of Third Party Loan Process Contents At a glance I Summary report
• Cash Store Financial and its subsidiaries ("theCompany") has agreements with a number of Third-Party Lenders ("TPLs") who lend directly to theCompany's customers or purchase advaicesoriginated by the Company.
• Loan documents signed by the customer are acontract between the customer and the Third PartyLender.
• TPLs earn a return on the loans through an interestpayment of 59% per annum on the loans collected, asset out in the Broker Agreement.
• The Company acts as the broker, charging a fee of23% of the TPL funds advanced, paid directly by thecustomer and taken directly off the loan proceeds.
Source: Discussion With Management
Strictly private and confidential
8Cash Store Financial Services Inc
Draft - For discussion puoses only
April 25, 2014PwC
Overview of ThirdParty Loan ProcessThe loan relationship isbetween the customer andthe Third Party Lender.
The Company's role issimply acting as the brokerfor this relationship. Itreceives a broker fee forproviding these services.
PwC viewManagement recognizesthe importance of theThird Party Lenderrelationship and the fundsthey provide as critical totheir business model andhas long-standingrelationships with itsTPLs.
Overview of Third Party Lender Process
Third Party
- -'- -)IPsLenders
Retentionpayments- return of 175%per annum oftotal funds madeavailable
$23 Broker Fee
Interest59% perannum
Customer
2 Retention Payments to TPLs Contents I At a glance Summary report
Retention Paymentsto TPLsThe Retention paymentsare a voluntaiy payment.They are not arequirement of the BrokerAgreement.
PwC viewThe Company's practice ofpaying a retentionpayment to the TPLsimplies they recognize theneed to compensate theTPLs for the use of theirfunds.
Breakdown of Retention Payments
Source: Discussion With Management
• The Broker Agreements do not require retentionpayments and do not guarantee repayment or aspecified rate of return of funds committed by theTPLs.
• Under the broker model, the Company makesvoluntary retention payments to TPLs to encouragethem to continue making funds available to theCompany. The retention payments are intended tocompensate TPLs for some of the credit lossessuffered.
• Management advised that it is the Company's practiceto credit TPLs with retention payments such thatwhen combined with portfolio returns, the return onthe total funds made available by the TPLs for lendingto consumers approaches a target of 17.5% perannum.
• A portion of the retention payment is paid to theTPL's in cash with the remainder credited to theiraccount as a return of capital.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
9April 25, 2014
3 Flow of Funds Contents At a glance Summary report
Flow ofFunds STEP ONE: Funds loaned to customersPrior to January 2014, theCompany used a FlowThrough Account forcertain TPL transactions.
In January 2014, the
$ Third Party Lender FundsCompany discontinued theFlow Through Account.
This chart summarizes the
PwC viewTPL funds now flowthrough the Company'sGeneral OperatingAccount as a conduit forthe TPL funds.
Based on our discussionswith Management, thecompany considers thesefunds as third partyfunds,
STEP THREE: Cash Payments Made to Third Party Lenders
process after January2014.
STEP TWO: Funds collected from customers
Customer Repayment ''i.
Customer Repaymen Recoveries
Customer Defaults CollectionDepartment
Wnte off a: 90 dais
GeneralOperatingAccount
$
Retention paymentsTarget of 17.5% per annum
Third PartyLender
Source: Discussion With Management
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft- For discussion purposes only
10April 25, 2014
4 Outstanding Balances Owing Contents At a glance I Summary report
OutstandingBalances Owing -TrimorAs at March 31, 2014,Trimor had 1o.67 millionin loans deployed.
An additional $6.32million in excess funds(i.e. not deployed) wasbeing held by the Companyin Restricted Cash.
Summary of Lender PositionTrimor Capital
$in000s
Total funds made available byTrimor
Payday loan portfolioLines of credit to customersSub-total
Balance ForwardFunding excess held in restricted cash
Source: Lender Statements of Account
• The most recent lender statements the Company wasable to provide at this point were as of March 31, 2014which indicated the following:
- Total funds made available by Trimor Capital,25,502
$25.50 million.
Trimor had $10.67 million in loans deployed.The loans were comprised of $2.21 and $8.46million in Payday Loans and Lines of CreditLoans, respectively.
An additional $6.32 million in excess fundsrecorded as held by the Company in RestrictedCash.
As at March31, 2014
(2,211)(8,461)
(10,672)
(8,514)6,316
PwC viewTrimor's funds areprimarily deployed in theform of lines of credit tocustomers.
Trimor CapitalPortfolio Summary$ in 000s
Payday Lines ofAsatMarch3l,2014
Loans
Credit
Total
Current
1,551
4,458
6,0091 -30 Days
333
2,270
2,60331-6ODays
214
1,870
2,08461 -90 Days
162
30
1929ODays+
-
-
-AR Discrepancy in Investigation
235
(167)
68Adjustment for Late PADS
(284)
-
(284)Total
2,211
8,461
10,672
Management has advised that the variancebetween total funds made available, outstandingloans, and restricted cash is the principal loss(i.e. cumulative losses), since the inception dateof funds advanced. This is presented on thelender statement as "Balance Forward".
The balance of the funds deployed at any point intime may fluctuate; however, TPLs were paid aretention payment based on the total funds madeavailable. Management has indicated that this isintended to provide them with a return on theircapital, regardless of how it is deployed.
Balance ForwardTotal
Source: Lender Statements of Account
8,51419,186
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
iiApril 25, 2014
4 Outstanding Balances Owing Contents At a glance Summary report
OutstandingBalances Owing -0678786As at March 31, 2014,0678786 had $5.61 millionin loans deployed.
An additional $7.77million in excess funds wasrecorded as being held bythe Company in RestrictedCash.
Summary of Lender Position0678786 B.C. Ltd.
Funding excess held in restricted cash
Total funds made available by 0678786 B.C. Ltd.
Lines of credit assigned by other lenders
Balance Forward
$in000s
Source: Lender Statements of Account
As at March31, 2014
13,350
(5,608)
26
7,768
• The most recent lender statements the Company wasable to provide at this point were as of March 31, 2014which indicated the following:
- Total funds made available by 0678786 B.C. Ltd.were $13.35 million.
- 0678786 B.C. Ltd. had $5.61 million in loansdeployed. The loans were comprised entirely ofLines of Credit Loans transferred from otherthird party lenders (Trimor).
- 0678786 does not originate any of their ownloans. All loans are transferred to them fromTrimor.
Based on discussion with VP Finance, FinancialReporting, this practice is based on instructionsfrom 0678786 and is not a requirement of theBroker Agreement.
An additional $'y' million in excess funds wererecorded as held by the Company in RestrictedCash.
Management has indicated that the variancebetween total funds made available, outstandingloans, and balance forward, results in therestricted cash balance.
Balance Forward
Total
Source: Lender Statements of Account
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft- For discussion purposes only
12April 25, 2014
PwC view0678 786's funds aredeployed in the form oflines of credit transferredfrom other lenders.
0678786 B.C. Ltd.Portfolio Summary
$ in 000s
As at March 31,2014
Current1-30 Days31 -60 Days61-90 Days90 Days +AR Discrepancy in nestigalionMjustment for Late PADSTotal
Lines of Credit
2,8191,3711,337
17
138(74)
5,608
(26)
5,582
5 Comparison of Restricted Cash vs Actual Cash Balance Contents I At a glance Summary report
Restricted Cash inshort positionOur analysis of theCompany's accounts forthe 'ast 4 monthsidentified that theCompany's unrestrictedcash has been significantlydeclining.
As at March 31, 2014, theCompany was short $5.01million in cash comparedto the Restricted Cashbalance.
PwC viewWhenever the Companyuses some of theRestricted Cash balance tofit rid its operations, it wasadjusted at month end byassignment of Companyloans as part of the TPLaccount reconciliationprocess.
Total Cash vs. Restricted CashSeptember to March 2014Consolidated
18,000
10/31/2013 11/30/2013 12/31/2013 1/31/2014 2/28/2014 3/31/2014
Total Cash ($)
TPL Restricted Cash ($)
Source: Management Reports, PwC Analysis
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Fluctuations in Cash Position
• Management has advised that there can be significantfluctuations throughout any given month on theactual cash balances and restricted cash balances dueto timing of loan advances.
• The business typically sees a significant increase inloan advances near the end of the week, withrepayments typically occurring at the beginning of theweek. The net impact of these activities is minimal ascustomers typically take out a new loan upon repayingexisting loans.
• The Company manages its restricted cash positionthrough transfers of loans to TPLs, as needed.
• As noted in the graph above, the gap between theCompany's total cash and Restricted Cash has beencontinuing to narrow. At March 31, 2014, the totalcash balance was in a short position.
Impact of CCAA on Restricted Cash
• The Initial Order requires the Company to maintain aTPL Net Receipt Minimum Balance, whichpresumably is intended to restrict the Company fromusing the TPL restricted cash to fund its operationsduring the CCAA.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
13April 25, 2014
6 Transfers to and from Third Party Lenders Contents I At a glance Summary report
Transfers to ThirdParty LendersThe Company willoccasionally transfer itsown direct loan receivablesto the relevant TPLs to freeup restricted funds to fundits operations. As ofMarch 31, 2014, thispractice was discontinued.
PwC viewThe transfers to TPLs wasused in the normal courseof managing the loanportfolio to ensure thatrestricted funds aren'tbeing used to fund theCompaiiy's operations.
Trimor CapitalLoans Outstanding$s in 000s
180000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
143 310 (1 98)
10,672
September 2013,Opening
New Loans Collections
Loans 90 days
Purchased by Transfers from
Transfers to
March 2014,past due
CSF
Other Lenders Other Lenders
Ending
Source: Lender Statements of Account, PwC Analysis
Transfers of Cash Stores Financial Loans to TPLs
• When the Restricted Cash Balance is found to exceedthe total cash in the Company's accounts during themonth end reconciliation process, the Companytransfers its own direct loan receivables to therelevant TPL(s).
• The transfer is calculated as an amount equal to theRestricted cash shortfall plus any additional amountto meet the Company's working capital needs for thenext month.
• The Restricted Cash is therefore reduced by this sameamount. As of March 31, 2014, this practice wasdiscontinued.
• These transfers of the Company's direct loanreceivables are made at face value of the loans.
• Based on our discussion with the VP Finance -Financial Reporting, there are no separateagreements authorizing the transfer of theseaccounts. These transfers were being done under theauthority of the provisions in the Broker Agreementswith the TPLs.
Strictly private and confidential
14Cash Store Financial Seices Inc.
Draft - For discussion purposes only
April 25, 2014PwC
6 Transfers to and from Third Party Lenders Contents At a glance Summary report
068786 B.C. Ltd.Loans Outstanding$s in 000s
40,000
30,000
20,000
10,000 7,964
60000
50,000
4n4;4
977y
Transfers fromThird Party LendersIn certain situations, theCompany may purchase aportfolio of loans from aTPL. These loans arepurchased at face value.
PwC viewPurchases of loans by thecompany from a TPL arepurchased at face value.
068786 B.C. Ltd. does not originate any oftheir loans. All loans are transferred tothem from other TPLs, as outlined insection 2.9 in the Broker Agreement.
cn2
(7049)
(928) 29 5,608
September Transferred to Transferred
Collections2013, Opening Other Lenders from Other
Lenders
Source: Lender Statements of Account, PwC Analysis
Loans assigned Purchased by Loans 90 days Fair Value
March 2014,by CSF
CSF
past due
Adjustment Closing
Transfers of Loans from TPLs to Cash StoreFinancial
• The Compaiiy may occasionally purchase a portfolioof loans from the TPL.
- Authority to do these transfers is set out in theBroker Agreement.
For example, Management advise that betweenOctober, 2013 and January, 2014, line of creditportfolios from branches in Manitoba and Ontariowere delinquent. Due to license restrictions in theseprovinces, the Company was unable to collect theselines of credit on behalf of the TPL.
• Transfers were also made to the Company from TPLson a regular basis to purchase overdue lines of credit.
• By purchasing this portfolio from the TPLs, theCompany was permitted to collect these loans.
• The loan portfolio was purchased at face value fromthe TPL, therefore, the Company then assumed artycollection risk associated with these accounts.
• The Company then records these on their financialstatements as Consumer Advances Receivable attheir fair value (i.e. estimated recovery). Thedifference is reflected in their income statement as aretention expense.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
15April 25, 2014
7 Bank Accounts Contents I At a glance Summary report
Flow Through Account
Funding madeavaiiabe
Funding madeavailable
Customer
Source: Management Discussion
Designated BankAccounts for TPLFundsFunds received fromBroker customers arecomingled with theCompany's generaloperating funds but arereconciled on a monthlybasis.
The TPL's position willthen be adjustedaccordingly, throughtransfer of third partyloans and an adjustment tothe Restricted Cash. As ofMarch 31, 2014, thispractice was discontinued.
PwC viewThe company's monthlyreconciliation processesand subsequentadjustments to the TPLspositions indicate theyconsider these third partyfunds.
Row ThroughAccount
Cash Payments(175%)
Cash Store FinancialGeneral Operating
Account
ill
Third PartyLender
Cash Payments(175%)
Cash Store Financial Services Inc.PwC
• The Broker agreements provide for funds to be held ina designated account ("Designated Financier BankAccount") for the purposes of depositing fundsreceived from Broker Customers in respect of TPLfunded loans.
• Notwithstanding this, the Company has advised thatthe advances to the Broker Customers are fundedfrom the TPL Funds held in the Company's generaloperating accounts. These accounts are simply usedas a conduit for the TPL funds.
• The Carlstrom Affidavit states that no such accountswere designated and that, in fact, the Restricted Cashis comingled in the Company's account with its othercash.
CIEC Account - Lender Account ("Flow ThroughAccount")
• Our discussions with Management identified anadditional bank account.
• Prior to January 2014, this account was used tofacilitate the cash receipts from, and payments madeto the TPLs. Although this account was notspecifically designated for third party funds, itappears to have been used primarily for that purpose.
• The VP Finance (Financial Reporting) advised thisprocess was discontinued in December 2013.
• We reviewed the bank statements for the FlowThrough Account for the period October, 2013 toMarch, 2014. Prior to January 2014, we noted theaccount was actively being used. After January 2014,we noted minimal activity occurring in the account.
• The Flow Through Account had a balance ofapproximately $5,000 as at March 31, 2014.
Strictly private and confidential
16Draft - For discussion purposes only
April 25, 2014
7 Bank Accounts Contents I At a glance I Summary report
Restricted Funds - GAAP
According to US GAAP, restricted cash is defined asmonies earmarked for a specific purpose and is notavailable for general use.
• Restricted cash is disclosed separately on thefinancial statements, even if the funds are not setaside in special bank accounts.
• In accordance with Rule 5-02, caption 1 ofRegulation S-X, Restricted Cash should besegregated from cash and cash equivalents on thebalance sheet.
• The Company appropriately discloses TPL funds onthe financial statements as Restricted Cash, eventhough the funds may be considered to becomingled.
AccountingforRestricted Cashunder GAAPThe Company hasseparately disclosed itsrestricted cash balances inits financial statements inaccordance with US GAAP.
PwC viewIn recording an qffsettingentry of "Due to TPLs' thecompany appears toacknowledge these arethird party jimds.
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
17April 25, 2014
8 Disbursements for period from January ito April 14, 2014 Contents I At a glance Summary report
Disbursements forperiod from January1,2014 to April 14,2014
The Company appears tohave been using restrictedcash balances to fund itsoperations. PwC scannedthe disbursements fron1the Company's generaloperating account fromJanuary 1, 2014 to theCAA filing date toidentiiT significantdisbursement out of theordinary course.
PwC viewA sigmjIcant portion ofthe company's Cash wasused to pay professionalfees.
Significant DisbursementsJanuary Ito April 14, 2014
Vendor
Professional FeesOsler Hoskin Harcourt LLPCassels Brock & Blackwell LLPKPMG LLPConway Mackenzie New York - LLCRothschild Inc.Norton Rose Fulbright Canada LLPFTI Consulting Canada Inc.Rmrf Barristers SolicitorsOntario Court Of JusticePaul, Weiss Rifkind, Wharton & Garrison LLPMcCarthyTetraultLLP., In TrustOsler Hoskin Harcourt LLP, In TrustSub-Total
Other Significant DisbursementsAMEX Bank of CanadaThe Great-West Life Assurance CompanyDirect Cash ATM Processing PartnershipEchelon General Insurance CompanyFoster Park Baskett Ins. Ltd.Quinco Financial Inc.Onx Enterprise Soluons Ltd.Frontier Networks Inc.London Life Group Retirement Services424187 .Aiberta Ltd.Sub-Total
Disbursements
• We scanned the disbursements from all bankaccounts for the period from January 1, 2014 to April14, 2014 for the following companies:
- Cash Store Financial Inc.
- Instaloans Inc.
- TCS Cash Store Inc.
- Title Store
Total disbursements for the period were $25.88million. See table for a summary of significant, non-typical transactions and expenditures noted,primarily comprised of professional fees.
I)isbursements also included a number of significant4,115,593
payments that appeared to be in the normal course;
1,259,9181,002,136
925,000802845796,832637,732504,116430,668296,359284,999
6,940,605
however, may require further analysis to determinethe nature of these expenditures.
Amount($)
843,252615,313568,155538,204323,387287,171222,951189,997187,515139,648100,000100,000
Source: Company Reports
Cash Store Financial Services Inc.
Strictly private and confidentialPwC
Draft - For discussion purposes only
18April 25, 2014
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