Untitled Document

RRSP Update - 2009/2010
The phase out of the LSIF (Provincial) tax credit is as follows: 15% until the end of the 2009 tax season 10% for the 2010 tax season 5% for the 2011 tax season 0% after the 2011 tax season Available until March 1, 2010. After March 1, 2010 tax credits are 25%. Covington Kicks Off 2010 with the Merger of BPS Inc. & Resolver Inc. Covington started off 2010 with the merger of BPS Business Propulsion Systems Inc. and Resolver Inc. (www.bpsinc.com). The new entity, BPS Resolver Inc., will be well positioned to further expand on their exisiting market presence as well as benefit from economic and operational synergies resulting from the combination of two leading industry players. BPS Resolver Inc. is held in Covington Fund II, Covington Strategic Capital Fund and Covington Venture Fund. Covington Fund II Investors Rollover Into Maturity + Liquidity March 1, 2010 is the last opportunity to provide your clients with the full 15% Provincial tax credit.* Making this year one of the best times to reinvest your client's mature Covington Fund II holdings. Reinvesting into a mature, liquid fund such as Covington Fund II, provides your clients with all the benefits of an LSIF investment plus the added benefit of exposure to a fund with over 70% invested in liquid holdings (publicly traded companies, cash, and bonds)¹. To learn more about the benefits of Covington Fund II please visit our website at www.covingtonfunds.com or contact your Covington representative today. 1. As at January 31, 2010 Covington Group of Funds 200 Front St W., Suite 3003 Toronto, ON M5K 3K2 Tel: 416-365-9155 1-866-244-4714 Fax: 416-365-9822 Email: info@covingtonfunds.com www.covingtonfunds.com	LSIF Strategies for Your TFSA When looking at venture capital (LSIF) investing this year, consider Tax Free Savings Accounts ("TFSA"). Not only are Covington Funds eligible to be held directly within a TFSA (effective February 19, 2010), but the tax credits generated by an LSIF investment outside your TFSA can be used to fund your TFSA contribution. Manager Commentary: Canada - On the Road to Recovery Entering 2010, the general economic sentiment is that Canada is on the road to recovery. Modest improvements are expected in the IPO market; with more noticeable improvements anticipated toward the latter half of the year. M&A markets are also expected to improve as increases in revenues of larger enterprises push corporations to once again think about acquiring new technologies to support expansion in their client base. Furthermore, a renewed sense of optimism south of the border, is expected to positively impact the technology sector. It is expected that US investors will once again look north for opportunities in Canada's rich technology sector. Covington & OETF - Investing in Canada's Future Covington is pleased to support the Ontario Government in the launch, and on-going management, of the Ontario Emerging Technologies Fund ("OETF"). In reviewing investment opportunities in conjunction with the OETF, Covington is pleased with the program's investment activity in the last six months. To date, The Fund has completed financings on 4 Ontario-based enterprises. It is clear that the need for venture funding in Ontario remains strong and, as such, Covington is extremely proud to be affiliated with the OETF to help bridge the funding gap for these promising enterprises. Investment activity in Covington's retail portfolios remains focused primarily on the management of our existing holdings. We remain cautiously optimistic that the changes in the overall macro economic environment will bode well for individual holdings within the Funds. With a rich base of innovative enterprises, we feel that there are a number of portfolio holdings well positioned to take advantage of positive market activity in 2010.
Venture Capital Portfolios Built on Vision, Focus and Experience

RRSP Update - 2009/2010

The phase out of the LSIF (Provincial) tax credit is as follows:

15% until the end of the 2009 tax season
10% for the 2010 tax season
5% for the 2011 tax season
0% after the 2011 tax season

*Available until March 1, 2010. After March 1, 2010 tax credits are 25%.

Covington Kicks Off 2010 with the Merger of BPS Inc. & Resolver Inc.

Covington started off 2010 with the merger of BPS Business Propulsion Systems Inc. and Resolver Inc. (www.bpsinc.com). The new entity, BPS Resolver Inc., will be well positioned to further expand on their exisiting market presence as well as benefit from economic and operational synergies resulting from the combination of two leading industry players.

BPS Resolver Inc. is held in Covington Fund II, Covington Strategic Capital Fund and Covington Venture Fund.

Covington Fund II Investors

Rollover Into Maturity + Liquidity

March 1, 2010 is the last opportunity to provide your clients with the full 15% Provincial tax credit. Making this year one of the best times to reinvest your client's mature Covington Fund II holdings.

Reinvesting into a mature, liquid fund such as Covington Fund II, provides your clients with all the benefits of an LSIF investment plus the added benefit of exposure to a fund with over 70% invested in liquid holdings (publicly traded companies, cash, and bonds)¹.

To learn more about the benefits of Covington Fund II please visit our website at www.covingtonfunds.com or contact your Covington representative today.

1. As at January 31, 2010

Covington Group of Funds
200 Front St W., Suite 3003
Toronto, ON M5K 3K2
Tel: 416-365-9155
1-866-244-4714
Fax: 416-365-9822
Email: info@covingtonfunds.com
www.covingtonfunds.com

LSIF Strategies for Your TFSA

When looking at venture capital (LSIF) investing this year, consider Tax Free Savings Accounts ("TFSA"). Not only are Covington Funds eligible to be held directly within a TFSA (effective February 19, 2010), but the tax credits generated by an LSIF investment outside your TFSA can be used to fund your TFSA contribution.

Manager Commentary:

Canada - On the Road to Recovery

Entering 2010, the general economic sentiment is that Canada is on the road to recovery. Modest improvements are expected in the IPO market; with more noticeable improvements anticipated toward the latter half of the year. M&A markets are also expected to improve as increases in revenues of larger enterprises push corporations to once again think about acquiring new technologies to support expansion in their client base.

Furthermore, a renewed sense of optimism south of the border, is expected to positively impact the technology sector. It is expected that US investors will once again look north for opportunities in Canada's rich technology sector.

Covington & OETF -
Investing in Canada's Future

Covington is pleased to support the Ontario Government in the launch, and on-going management, of the Ontario Emerging Technologies Fund ("OETF"). In reviewing investment opportunities in conjunction with the OETF, Covington is pleased with the program's investment activity in the last six months. To date, The Fund has completed financings on 4 Ontario-based enterprises. It is clear that the need for venture funding in Ontario remains strong and, as such, Covington is extremely proud to be affiliated with the OETF to help bridge the funding gap for these promising enterprises.

Investment activity in Covington's retail portfolios remains focused primarily on the management of our existing holdings. We remain cautiously optimistic that the changes in the overall macro economic environment will bode well for individual holdings within the Funds. With a rich base of innovative enterprises, we feel that there are a number of portfolio holdings well positioned to take advantage of positive market activity in 2010.

Venture Capital Portfolios Built on Vision, Focus and Experience