Paula Financial Announces Six Month Operating Results

Business Wire, Nov 6, 2008

PASADENA, Calif. -- PAULA Financial (Pink Sheets:PFCO) today posted its reviewed financial statements for the six months ended June 30, 2008 on its website, www.pfco.cc.

For the six months ended June 30, 2008, the Company reported net income of $22,314,000 or $3.06 per share. The sale of assets completed in the first quarter of 2008 generated a net gain of $3.54 per share. Various components of discontinued operations, including the resolution of various litigation items, aggregated to a net loss of ($0.48) per share.

In addition to addressing litigation items previously reported and new claims following the sale of assets, the Company has made multiple cash distributions to stockholders in 2008 consistent with the intention of the board of directors to achieve the liquidation and winding up of the affairs of the corporation following the previously referenced sale of assets.

In March 2008, the Company distributed $3.89 per share to stockholders. An additional $1.52 per share was returned to stockholders in September 2008 for an aggregate year to date distribution to stockholders of $5.41 per share. The Company's remaining cash reserves are being held largely as reserves for potential indemnification commitments as well as to provide for contingent and unknown claims which may or may not arise during the winding up of the Company.

The Company cautions readers to recognize the existence of certain forward-looking statements in this press release and in any other statement made by, or on behalf of, the Company. The Company disclaims any obligation to update forward-looking information.