UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C.   20549





___________________________________





FORM
10-Q


___________________________________





Quarterly
Report Pursuant to Section 13 or 15(d) of the
 Securities
Exchange Act of 1934


For
the Quarterly Period Ended March 31,
2008





Commission
File Number:  0-21475


EMERGENT GROUP
INC.
 (Exact
name of registrant as specified in its charter)
   Nevada
              
              93-1215401(State of
      jurisdiction of Incorporation)
              
              (I.R.S. Employer
      Identification No.)


10939
Pendleton Street
 Sun Valley, CA
91352


(Address
of principal executive offices)





(818)
394-2800


(Registrant’s
telephone number)





Not
Applicable


(Former
name, address and fiscal year, if changed since last report)
 ___________________________________





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.Yes [X] No [  ]





Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act).Yes [  ] No [X]


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes [  ] No [X]


As of May 12, 2008, the registrant had
a total of 5,724,878 shares of Common Stock outstanding.




EXPLANATORY
NOTE
  This
Form 10-Q is being filed in replacement of a Form 10-QSB for the quarter ended
March 31, 2008 filed with the Securities and Exchange Commissionon May 15, 2008,
which Form 1O-QSB was filed on an incorrect form.















EMERGENT
GROUP INC.





FORM
10-Q Quarterly Report





Table
of Contents




PagePART
      I.  FINANCIAL INFORMATIONItem
      1. Financial
      StatementsCondensed
      Consolidated Balance Sheets as of March 31, 2008 (unaudited) and December
      31, 2007
              3Condensed
      Consolidated Statements of Income for the Three Months Ended
      March 31, 2008 and 2007 (unaudited)
              4Condensed
      Consolidated Statements of Cash Flows for the Three Months Ended
      March 31, 2008 and 2007 (unaudited)
              5Notes
      to Condensed Consolidated Financial Statements
              6Item
      2. Management’s
      Discussion and Analysis of Financial Condition and
      Results of Operations
              10Item
      3. Controls
      and Procedures
              13PART
      II.  OTHER INFORMATIONItem
      1. Legal
      Proceedings
              14Item
      2. Changes
      in Securities
              14Item
      3. Defaults
      Upon Senior Securities
              14Item
      4. Submissions
      of Matters to a Vote of Security Holders
              14Item
      5. Other
      Information
              14Item
      6. Exhibits
              14Signatures
              15
  2




PART
I.  FINANCIAL INFORMATION





Item 1.  Financial
Statements






Emergent
Group Inc. and Subsidiaries
 Condensed
Consolidated Balance Sheets


March
      31,
              
              
              December
      31,2008
              
              
              2007ASSETS
              
              (Unaudited)Current
      assetsCash
              
              $
              1,532,150
              
              
              $
              3,043,654Accounts
      receivable, net of allowance for doubtfulaccounts
      of $17,460 and $17,460
              
              
              2,286,493
              
              
              
              2,313,084Inventory,
      net of reserves of $57,339 and $54,999
              
              
              544,640
              
              
              
              504,792Prepaid
      expenses
              
              
              181,530
              
              
              
              164,857Deferred
      tax assets
              
              
              915,488
              
              
              
              915,488Total
      current assets
              
              
              5,460,301
              
              
              
              6,941,875Property
      and equipment, net of accumulated depreciation andamortization
      of $6,247,119 and $5,954,233
              
              
              4,062,167
              
              
              
              4,142,230Goodwill
              
              
              1,120,058
              
              
              
              1,120,058Other
      intangible assets, net of accumulated amortization of$185,614
      and $172,355
              
              
              80,672
              
              
              
              93,930Deposits
      and other assets
              
              
              77,975
              
              
              
              104,758Total
      assets
              
              $
              10,801,173
              
              
              $
              12,402,851LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilitiesCurrent
      portion of capital lease obligations
              
              $
              1,190,022
              
              
              $
              1,143,198Current
      portion of notes payable
              
              
              75,667
              
              
              
              100,888Accounts
      payable
              
              
              917,772
              
              
              
              709,027Dividends
      payable
              
              
              -
              
              
              
              1,686,095Accrued
      expenses and other liabilities
              
              
              1,086,572
              
              
              
              1,559,046Total
      current liabilities
              
              
              3,270,033
              
              
              
              5,198,254Capital lease
      obligations, net of current portion
              
              
              2,160,282
              
              
              
              2,341,710Total
      liabilities
              
              
              5,430,315
              
              
              
              7,539,964Minority
      interest
              
              
              639,106
              
              
              
              592,807Shareholders'
      equityPreferred
      stock, $0.001 par value, non-voting 10,000,000shares
      authorized, no shares issued and outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.04 par value, 100,000,000 shares authorized5,724,878
      and 5,619,392 shares issued and outstanding
              
              
              228,992
              
              
              
              224,772Additional
      paid-in capital
              
              
              14,861,819
              
              
              
              14,836,263Accumulated
      deficit
              
              
              (10,359,059
              )
              
              
              (10,790,955
              )Total
      shareholders' equity
              
              
              4,731,752
              
              
              
              4,270,080Total
      liabilities and shareholders' equity
              
              $
              10,801,173
              
              
              $
              12,402,851









3






Emergent
Group Inc. and Subsidiaries


Condensed
Consolidated Statements of Income


(Unaudited)


Three
      Months EndedMarch
      31,2008
              
              
              2007Revenue
              
              $
              4,504,289
              
              
              $
              4,382,808Cost
      of goods sold
              
              
              2,625,834
              
              
              
              2,567,105Gross
      profit
              
              
              1,878,455
              
              
              
              1,815,703Selling,
      general, and administrative expenses
              
              
              1,123,853
              
              
              
              1,088,224Income
      from operations
              
              
              754,602
              
              
              
              727,479Other
      income (expense)Interest
      expense
              
              
              (62,432
              )
              
              
              (51,804
              )Gain
      on disposal of property and equipment
              
              
              -
              
              
              
              8,102Other
      income, net
              
              
              12,652
              
              
              
              14,220Total
      other income (expense)
              
              
              (49,780
              )
              
              
              (29,482
              )Income
      before provision for income taxesand
      minority interest
              
              
              704,822
              
              
              
              697,997Provision
      for income taxes
              
              
              (60,500
              )
              
              
              (55,902
              )Income
      before minority interest
              
              
              644,322
              
              
              
              642,095Minority
      interest in income of consolidatedlimited
      liability companies
              
              
              (212,422
              )
              
              
              (124,985
              )Net
      income
              
              $
              431,900
              
              
              $
              517,110Basic
      earnings per share
              
              $
              0.08
              
              
              $
              0.10Diluted
      earnings per share
              
              $
              0.07
              
              
              $
              0.09Basic
      weighted average shares outstanding
              
              
              5,650,498
              
              
              
              5,442,961Diluted
      weighted-average shares outstanding
              
              
              5,912,217
              
              
              
              5,783,891





The
accompanying notes are an integral part of these condensed financial
statements.


4




Emergent
Group Inc. and Subsidiaries


Condensed
Consolidated Statements of Cash Flows


(Unaudited)







Three
      Months Ended
              March
      31,2008
            
            
            2007Cash
      flows from operating activitiesNet
      income
            
            $
            431,900
            
            
            $
            517,110Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      and amortization
            
            
            360,373
            
            
            
            347,841Amortization
      of finance fees
            
            
            2,500
            
            
            
            13,576(Gain)
      loss on disposal of property and equipment and other
            
            
            -
            
            
            
            (8,102
            )Minority
      interest in income
            
            
            212,422
            
            
            
            124,985Stock-based
      compensation expense
            
            
            29,775
            
            
            
            21,490Other
      income
            
            
            -
            
            
            
            -(Increase)
      decrease inAccounts
      receivable
            
            
            21,384
            
            
            
            (90,684
            )Inventory
            
            
            (39,848
            )
            
            
            160,724Prepaid
      expenses
            
            
            (16,673
            )
            
            
            (2,095
            )Deposits
      and other assets
            
            
            24,283
            
            
            
            38,476Increase
      (decrease) inAccounts
      payable
            
            
            173,742
            
            
            
            (64,760
            )Accrued
      expenses
            
            
            (577,473
            )
            
            
            10,229Net
      cash provided by operating activities
            
            
            622,385
            
            
            
            1,068,790Cash
      flows from investing activitiesPurchase
      of property and equipment
            
            
            (52,052
            )
            
            
            (78,831
            )Cash
      paid to members of limited liability companies
            
            
            (213,416
            )
            
            
            (177,935
            )Contributions
      from new members to limited liability companies
            
            
            52,500
            
            
            
            7,500Proceeds
      from the sale of property and equipment
            
            
            -
            
            
            
            4,580Net
      cash used in investing activities
            
            
            (212,968
            )
            
            
            (244,686
            )Cash
      flows from financing activitiesPayments
      on capital lease obligations
            
            
            (284,604
            )
            
            
            (263,048
            )Payments
      on dividends declared
            
            
            (1,686,095
            )
            
            
            (1,094,249
            )Borrowings
      under line of credit
            
            
            4,500,000
            
            
            
            3,928,100Repayments
      on line of credit
            
            
            (4,500,000
            )
            
            
            (3,928,100
            )Payments
      on notes payable, net
            
            
            (25,222
            )
            
            
            (102,430
            )Proceeds
      from equipment refinancing
            
            
            75,000
            
            
            
            -Net
      cash used in financing activities
            
            
            (1,920,921
            )
            
            
            (1,459,727
            )Net
      (decrease) increase in cash
            
            
            (1,511,504
            )
            
            
            (635,623
            )Cash,
      beginning of period
            
            
            3,043,654
            
            
            
            1,318,612Cash,
      end of period
            
            $
            1,532,150
            
            
            $
            682,989Supplemental
      disclosures of cash flow information:Interest
      paid
            
            $
            71,814
            
            
            $
            58,123Income
      taxes paid
            
            $
            174,031
            
            
            $
            41,120Supplemental
      schedule of noncash investing and financing activities:During
      the three months ended March 31, 2008 and 2007, the Company incurred
      capital lease obligations of $150,000 and $132,839, respectively, for
      medical equipment.






The
accompanying notes are an integral part of these condensed financial
statements.


5




EMERGENT
GROUP INC and SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





1.
            BUSINESS





Emergent
Group Inc. (“Emergent”) is the parent company of PRI Medical Technologies, Inc.
(“PRI Medical”), its wholly owned and only operating subsidiary. Emergent and
PRI Medical are referred to collectively hereinafter as the “Company.” PRI
Medical provides mobile laser/surgical services, along with technical support,
on a per procedure basis to hospitals, out-patient surgery centers, and
physicians' offices.





2.
            BASIS
      OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements of Emergent
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. These unaudited condensed
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company’s
Annual Report on Form 10-KSB for the year ended December 31, 2007. In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments, which are of a normal recurring
nature, necessary for a fair presentation of the results for the periods
presented.





The
results of operations presented for the three months ended March 31, 2008 are
not necessarily indicative of the results to be expected for any other interim
period or any future fiscal year.





Principles of
Consolidation


The
consolidated financial statements include the accounts of Emergent and its
wholly owned subsidiaries. Also, in accordance with the Financial Accounting
Standards Board Interpretation No. 46R, “Consolidation of Variable Interest
Entities” the Company has accounted for its equity investments in ten limited
liability companies under the full consolidation method. All significant
intercompany transactions and balances have been eliminated through
consolidation.





Use of
Estimates


The
preparation of the condensed consolidated financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of income and expenses during the
reporting period. Actual results could differ significantly from those
estimates.





Accounts Receivable and
Concentration of Business and Credit Risks


We market
our services primarily to hospitals and out-patient centers located in
California, Nevada, Utah, Colorado and Arizona. Our equipment rental and
technician services are subject to competition from other similar businesses.
Our accounts receivable represent financial instruments with potential credit
risk. We offer credit terms and credit limits to most of our customers based on
the creditworthiness of such customers. However, we retain the right to place
such customers on credit hold should their account become delinquent. We
maintain an allowance for doubtful accounts for estimated losses should
customers fail to make required payments. In addition, we monitor the age of
customer account balances, historical bad debt experience, customer
creditworthiness, customer specific information, and changes in payment patterns
when making estimates of the collectibility of trade receivables. Accounts
receivable are written off when all collection attempts have failed. Our
allowance for doubtful accounts will be increased if circumstances warrant.
Based on the information available, management believes that our net accounts
receivable are collectible.





Inventory


Inventory
consists of finished goods primarily used in connection with the delivery of our
mobile surgical equipment rental and services business. Inventory is stated at
the lower of cost or market, on a first-in, first-out
basis.


6


Stock-Based
Compensation




Compensation
costs related to stock options are determined accordance with SFAS
No. 123R, Share-Based Payments, using the modified prospective method.
Under this method, compensation cost recognized during the quarters ended March
31, 2008 and 2007 includes compensation cost for all share-based payments
granted prior to but not yet vested as of January 1, 2006, and all grants
subsequent to that date, based on the grant date fair value, which is amortized
over the remaining vesting period for such options. There were no options
granted during the quarters ended March 31, 2008 and 2007. For the quarters
ended March 31, 2008 and 2007 compensation costs related to common stock options
were $2,996 and $2,761, respectively.




The 2002
Employee Benefit and Consulting Services Compensation Plan (the “2002 Plan”) was
adopted in 2002 for the purpose of providing incentives to key employees,
officers, and consultants of the Company who provide significant services to the
Company. As of March 31, 2008, there are 650,000 common shares authorized for
grant under the 2002 Plan. Options will not be granted for a term of more than
ten years from the date of grant. Generally, options will vest evenly over a
period of five years, and the 2002 Plan expires in March 2012. Incentive stock
options granted under the 2002 are non-statutory stock options. As of March 31,
2008, the number of shares reserved for future awards was 217,957.




A summary
of the Company's outstanding options and activity is as follows:




Number of
      Shares
              
              
              Weighted
      Average Exercise PriceOutstanding
      at January 1, 2008
              
              
              321,376
              
              
              $
              1.48Options
      Granted
              
              
              -
              
              
              $
              -Options
      Canceled
              
              
              -
              
              
              $
              -Options
      Exercised
              
              
              (558
              )
              
              $
              0.40Outstanding
      at March 31, 2008
              
              
              320,818
              
              
              $
              1.48Exercisable
      at March 31, 2008
              
              
              265,940
              
              
              $
              1.59


The
weighted-average remaining contractual life of the options outstanding at March
31, 2008 is 5.30 years. The exercise prices for the options outstanding at March
31, 2008 ranged from $0.40 to $162.00, and information relating to these options
is as follows:






Range
      of Exercise Prices
                
                
                Stock
      Options Outstanding
                
                
                Stock
      Options Exercisable
                
                Weighted-Average
      Remaining Contractual Life of Options Exercisable
                
                Weighted-Average
      Exercise Price of Options Outstanding
                
                
                Weighted-Average
      Exercise Price of Options Exercisable$
                0.40
                
                
                
                298,469
                
                
                
                255,291
                
                4.93
      years
                
                $
                0.40
                
                
                $
                0.40$
                3.05
      - 8.00
                
                
                
                14,500
                
                
                
                2,800
                
                6.16
      years
                
                $
                3.73
                
                
                $
                6.58$
                20.00
      - 51.00
                
                
                
                7,844
                
                
                
                7,844
                
                3.35
      years
                
                $
                38.41
                
                
                $
                38.41$
                162.16
                
                
                
                5
                
                
                
                5
                
                1.15
      years
                
                $
                162.00
                
                
                $
                162.00$
                0.40
      - 162.16
                
                
                
                320,818
                
                
                
                265,940
                
                4.90
      years
                
                $
                1.48
                
                
                $
                1.59


As of
March 31, 2008, the total unrecognized fair value compensation cost related to
unvested stock options was $35,646, which is to be recognized over a remaining
weighted average period of approximately 2.9 years.




7




WeightedAverageRemaining
              
              
              WeightedNumber
              
              
              Contractual
      Life
              
              
              AverageOutstanding
              
              
              (in
      years)
              
              
              Exercise
      PriceNon
      Vested, January 1, 2008
              
              
              67,821
              
              
              
              4.76
              
              
              $
              0.89Granted
              
              
              -
              
              
              
              
              
              
              $
              -Forfeited
              
              
              -
              
              
              
              
              
              
              $
              -Vested
              
              
              (12,943
              )
              
              
              
              
              
              $
              0.40Non
      Vested, March 31, 2008
              
              
              54,878
              
              
              
              4.50
              
              
              $
              1.00


In
addition to options granted under the 2002 Plan, as of March 31, 2008 we have
330,500 restricted award shares issued and outstanding of which 105,000 shares
were granted to executive officers and directors in each of March 2008 and 2007,
respectively. Award shares generally vest in equal installments over five years
from the date of issuance. Such award shares are issued from time to time to
executive officers, directors and employees of the Company. Non-vested award
shares are subject to forfeiture in the event that the recipient is no longer
employed by the Company at the time of vesting, subject to the Board’s right to
waive the forfeiture provisions. Compensation expense related to such shares is
determined as of the issuance date based on the fair value of the shares issued
and is amortized over the related vesting period. Total compensation expense
related to the award shares issued in March 2008 and 2007 was $320,250 and
$341,250, respectively, which are being amortized over the vesting period of
five years. Compensation expense related to outstanding award shares was $26,780
and $5,729 for the three months ended March 31, 2008 and 2007,
respectively.





Earnings Per
Share


The
Company utilizes SFAS No. 128, "Earnings per Share." Basic earnings per share
are computed by dividing earnings available to common shareholders by the
weighted-average number of common shares outstanding.  Diluted
earnings per share is computed similar to basic earnings per share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential common share equivalents had
been issued and if the additional common shares were dilutive. Common equivalent
shares are excluded from the computation if their effect is
anti-dilutive.




Quarter
      Ended March 31,2008
              
              
              2007Numerator
      -Net
      income attributable to commonshareholders
              
              $
              431,900
              
              
              $
              517,110Denominator
      -Weighted-average
      number of commonshares
      outstanding during the year
              
              
              5,650,498
              
              
              
              5,442,961Dilutive
      effect of stock options
              
              
              261,719
              
              
              
              340,930Common
      stock and common stockequivalents
      used for diluted earnings per share
              
              
              5,912,217
              
              
              
              5,783,891


Recent Accounting
Pronounments




In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
157). SFAS 157 establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair value
measurements. SFAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007. The Company is required to
adopt the provision of SFAS 157, as applicable, beginning in fiscal year
2008.  The adoption of SFAS 157 did not have a material impact on the
Company's financial position or results of operations.




8




3.
              DEBT
      OBLIGATIONS




The
Company maintains a revolving credit line (the “Revolver”) for $1 million, which
is collateralized by accounts receivable and certain fixed assets. Borrowings
under the Revolver, as amended, are based on 80% of eligible receivables, as
defined. In addition, the Revolver provides for an annual renewal fee equal to
1% of the capital availability amount, as defined. Borrowings under the Revolver
bear interest at the prime rate (5.25% as of March 31, 2008), plus 2%. In May
2007, the Revolver automatically renewed for a one year period and the Company
paid the lender a renewal fee of $10,000, which is being amortized over the loan
term. As of March 31, 2008 and 2007 there were no amounts were outstanding under
the Revolver.





The
Revolver, as amended, requires the Company to maintain a tangible net worth of
at least $1.5 million and requires the lender to pay the Company interest on
cash collections in excess of amounts borrowed under the Revolver at a rate of
2.25% below the prime rate. As of March 31, 2008 the Company was in compliance
with the terms of its revolving credit agreement.





The
Company is currently negotiating a new revolving credit agreement with a bank,
which we anticipate will become effective concurrent with the expiration and/or
termination of its previous credit agreement in May 2008.





The
Company incurred total net interest expense of $62,432 and $51,804 for the three
months ended March 31, 2008 and 2007, respectively.





4.
            COMMITMENTS
      AND CONTINGENCIES





Legal
Matters


Byong Y.
Kwon, Plaintiff against Daniel J. Yun, Emergent Group Inc., Emergent Capital
Investment Management, LLC, Metedeconk Holdings, LLC, Voyager Advisors, LLC,
Millennium Tradition Limited (f/k/a Millennium Heritage, Limited), Emergent
Management Company, LLC, Endurance Advisors, Limited, SK Networks Co., Ltd.
(f/k/a SK Global Co., Ltd.), Hye Min Kang, John Does 1-2 and Richard Roes 1-2
(collectively the “Defendants”).





Plaintiff’s
complaint against the Defendants named above is a civil lawsuit, which was
signed by the clerk on February 2, 2005. This action is brought in the United
States District Court, Southern District of New York by Plaintiff against the
Company, a former director, Daniel Yun, and other parties to recover money
damages for alleged fraud, negligent misrepresentations and aiding and abetting
fraud. The Amended Complaint alleges that the factual basis involving the action
against the Company involves alleged false representations to Plaintiff to
induce him to leave his then employment in 2001 and accept the Company’s and
another named Defendant’s alleged offer of employment. Plaintiff seeks
compensatory damages and punitive damages each in the amount of not less than
$2,100,000 together with interest thereon, reasonable attorneys’ fees and other
specific relief against Defendants other than the Company. Management has denied
the Plaintiff’s allegations against the Company and intends to vigorously defend
this lawsuit. During the quarter ended March 31, 2008, there were no material
developments in this matter.





5.
            RELATED
      PARTY TRANSACTIONS





Transactions with BJH
Management


The
services of the Company’s Chairman and Chief Executive Officer are contracted
through BJH Management for a monthly fee of $15,167. In March 2007, the services
agreement with BJH Management was extended to June 30, 2010.





The
Company’s Chairman and Chief Executive Officer maintains his primary office in
New York. In this regard, the Company reimbursed BJH Management, LLC (“BJH”), a
company owned by the Company’s Chairman and Chief Executive Officer, for office
rent and other reimbursable expenses totaling $9,817 and $13,846 for the three
months ended March 31, 2008 and 2007.





In March
2007, the Company agreed to extend Mr. Buther’s employment contract for one year
to June 2008.





6.
            LIMITED
      LIABILITY COMPANIES





In
connection with expanding its business in certain commercial and geographic
areas, PRI Medical will at times help to form Limited Liability Companies
(“LLCs”) in which it will acquire either a minority or majority interest and
offer the remaining interests to other investors. These LLCs acquire certain
medical equipment for use in their respective business activities which
generally focus on surgical procedures. PRI Medical helped to form and acquire
equity interests in various LLCs in Colorado and California and currently holds
interests in ten LLCs as of March 31, 2008. During the second half of 2007, PRI
Medical helped to form four new LLCs. Such LLCs acquired medical equipment for
rental purposes under equipment financing leases. The third party investors in
each respective LLC generally provide the lease financing company with
individual proportionate lease guarantees based on their respective ownership
percentages in the LLCs. In addition, PRI Medical will provide such financing
companies with its corporate guarantee based on its respective ownership
interest in each LLC. In certain instances, PRI Medical has provided such
financing companies with an overall corporate guarantee in connection with
equipment financing transactions. In such instances, the individual investors in
each respective LLC will generally indemnify PRI Medical against losses, if any,
incurred in connection with its corporate guarantee.


9


Item
2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations





Forward-Looking
Statements





The
information contained in this Form 10-Q and documents incorporated herein by
reference are intended to update the information contained in the Company’s
Annual Report on Form 10-KSB for the year ended December 31, 2007 and such
information presumes that readers have access to, and will have read, the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” “Risk Factors” and other information contained in such Form 10-KSB
and other Company filings with the Securities and Exchange Commission
(“SEC”).





This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.  These
forward-looking statements involve risks and uncertainties, and actual results
could be significantly different than those discussed in this Form 10-Q. Certain
statements contained in Management's Discussion and Analysis, particularly in
"Liquidity and Capital Resources," and elsewhere in this Form 10-Q are
forward-looking statements. These statements discuss, among other things,
expected growth, future revenues and future performance. Although we believe the
expectations expressed in such forward-looking statements are based on
reasonable assumptions within the bounds of our knowledge of our business, a
number of factors could cause actual results to differ materially from those
expressed in any forward-looking statements, whether oral or written, made by us
or on our behalf. The forward-looking statements are subject to risks and
uncertainties including, without limitation, the following: (a) changes in
levels of competition from current competitors and potential new competition,
(b) possible loss of significant customer(s), (c) the Company’s ability to
effectively integrate new and changing medical technologies into to its product
and service offerings, (d) the risk of equipment vendors not making their
equipment and technologies available to equipment rental and service companies
such as ours, (e) the Company’s ability to meet the terms and conditions of its
debt and lease obligations, and (f) changes in availability or terms of working
capital financing from vendors and lending institutions. The foregoing should
not be construed as an exhaustive list of all factors that could cause actual
results to differ materially from those expressed in forward-looking statements
made by us. All forward-looking statements included in this document are made as
of the date hereof, based on information available to the Company on the date
thereof, and the Company assumes no obligation to update any forward-looking
statements.





Overview





Emergent
Group Inc. (“Emergent”) is the parent company of PRI Medical Technologies, Inc.
(“PRI Medical”), its wholly owned and only operating subsidiary. Emergent and
PRI Medical are referred to collectively hereinafter as the “Company.” PRI
Medical provides mobile laser/surgical services, along with technical support,
on a per procedure basis to hospitals, out-patient surgery centers, and
physicians' offices.





Critical
Accounting Policies





Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States. The preparation
of financial statements requires managers to make estimates and disclosures on
the date of the financial statements. On an on-going basis, we evaluate our
estimates including, but not limited to, those related to revenue recognition,
inventory valuation and property and equipment. We use authoritative
pronouncements, historical experience and other assumptions as the basis for
making judgments. Actual results could differ from those estimates. We believe
that the following critical accounting policies affect our more significant
judgments and estimates in the preparation of our financial
statements.





Revenue Recognition. Revenue
is recognized when the services are performed and billable. We are required to
make judgments based on historical experience and future expectations, as to the
realizability of goods and services billed to our customers. These judgments are
required to assess the propriety of the recognition of revenue based on Staff
Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” and related
guidance. We make such assessments based on the following factors: (a)
customer-specific information, and (b) historical experience for issues not yet
identified.


10


Inventory Valuation. We are
required to make judgments based on historical experience and future
expectations as to the realizability of our inventory. We make these assessments
based on the following factors: (a) existing orders and usage, (b) age of the
inventory, and (c) historical experience.





Property and Equipment. We
are required to make judgments based on historical experience and future
expectations as to the realizability of our property and equipment. We made
these assessments based on the following factors: (a) the estimated useful lives
of such assets, (b) technological changes in our industry, and (c) the changing
needs of our customers.





Results
of Operations





The
following table sets forth certain selected unaudited condensed consolidated
statements of income data for the periods indicated in dollars and as a
percentage of total revenues. The following discussions relate to our results of
operations for the periods noted and are not necessarily indicative of the
results expected for any other interim period or any future fiscal year. In
addition, we note that the period-to-period comparison may not be indicative of
future performance.


March
      31,2008
              
              
              %
              
              
              2007
              
              
              %Revenue
              
              $
              4,504,289
              
              
              
              100
              %
              
              $
              4,382,808
              
              
              
              100
              %Cost
      of goods sold
              
              
              2,625,834
              
              
              
              58
              %
              
              
              2,567,105
              
              
              
              59
              %Gross
      profit
              
              
              1,878,455
              
              
              
              42
              %
              
              
              1,815,703
              
              
              
              41
              %Selling,
      general, and administrative expenses
              
              
              1,123,853
              
              
              
              25
              %
              
              
              1,088,224
              
              
              
              24
              %Income
      from operations
              
              
              754,602
              
              
              
              17
              %
              
              
              727,479
              
              
              
              17
              %Other
      income (expense)
              
              
              (49,780
              )
              
              
              -1
              %
              
              
              (29,482
              )
              
              
              -1
              %Income
      before provision for incometaxes
      and minority interest
              
              
              704,822
              
              
              
              16
              %
              
              
              697,997
              
              
              
              16
              %Provision
      for income taxes
              
              
              (60,500
              )
              
              
              -1
              %
              
              
              (55,902
              )
              
              
              -1
              %Net
      income before minority interest
              
              
              644,322
              
              
              
              15
              %
              
              
              642,095
              
              
              
              15
              %Minority
      interest in income of consolidatedlimited
      liability companies
              
              
              (212,422
              )
              
              
              -5
              %
              
              
              (124,985
              )
              
              
              -3
              %Net
      income
              
              $
              431,900
              
              
              
              10
              %
              
              $
              517,110
              
              
              
              12
              %


Comparison
of the Three Months Ended March 31, 2008 to March 31, 2007





The
Company generated revenues of $4,504,289 in 2008 compared to $4,382,808 in 2007.
The increase in revenues in 2008 of $121,481 or 3% is primarily related to an
increase in revenues from our surgical procedures. Revenues from our surgical
and cosmetic procedures represented approximately 95% and 5% of total revenues
for 2008 and 94% and 6% for 2007, respectively.





Cost of
goods sold was $2,625,834 in 2008 or 58% of revenues for 2008 compared to
$2,567,105 or 59% of revenues for 2007, respectively. Costs of goods sold
primarily consist of payroll costs and related expenses for technicians, cost of
disposables consumed, depreciation and amortization related to equipment,
insurance costs and other operating costs incurred in rendering mobile medical
equipment and technician services. The overall dollar increase in cost of goods
sold of $58,729 or 2% for 2008 is generally due to increases in disposable
costs, equipment maintenance costs, and to depreciation and amortization
expense. Disposable costs increased as a result of a change in the mix of
surgical procedures rendered to customers whereby a greater number of higher
priced procedures were performed in 2008 compared to 2007, which required more
expensive disposable items while depreciation and amortization expense increased
due to equipment purchases. The net change in other cost categories included in
cost of goods sold remained relatively consistent in 2008 compared to
2007.





Gross
profit from operations was $1,878,455 in 2008 compared to $1,815,703 in 2007.
Gross profit as a percentage of revenues was 42% in 2008 compared to 41% in
2007. Gross margins may vary from quarter to quarter depending on the type of
surgical procedures performed due to the fact that certain procedures require
more expensive disposable items. In addition, gross margin rates will vary from
period to period depending upon other factors including pricing considerations,
and equipment and technician utilization rates. The gross margin for 2008 is not
necessarily indicative of the margins that may be realized in future
periods.




11





Selling,
general, and administrative expenses were $1,123,853 in 2008 or 25% of
revenue compared to $1,088,224 in 2007 or 24% of revenue. Such costs
include, among others, payroll and related expenses, insurance costs and
occupancy costs. The increase in selling, general and administrative expenses of
$35,629 in 2008 is primarily related to increased payroll expenses, including
commissions, related to sales personnel.





Other
income (expense) was $(49,780) in 2008 compared to $(29,482) in 2007. Other
income (expense) includes interest income and expense, gains and losses on
disposal of property and equipment, and other miscellaneous income and expense
items. The net increase in other income (expense) of $(20,298) is primarily
related to an increase in interest expense of $10,628, and a decrease of $9,670
in gain on disposal of property and equipment and other income in 2008 compared
to 2007. The increase in interest costs relates to new equipment leases entered
into during the current and prior years.





The
minority interest (ownership interests held by non-affiliates) in net income of
limited liability companies was $212,422 in 2008 compared to $124,985 in 2007.
In 2008 and 2007 we held minority interests in ten and six entities,
respectively. As of March 31, 2008 and 2007, in accordance with the Financial
Accounting Standards Board Interpretation No. 46R, “Consolidation of Variable
Interest Entities”, the Company accounted for its equity investments in entities
in which it holds a minority interest under the full consolidation
method.





Net
income was $431,900 in 2008 compared to $517,110 in 2007. The decrease in net
income of $85,210 for 2008 compared to 2007 is attributable to the changes in
revenues and expenses as discussed above. Provision for income taxes was $60,500
in 2008 compared to $55,902 in 2007. The Company has net operating loss
carryforwards for federal tax purposes. The provision for income taxes of as of
March 31, 2008 relates to state taxes and to federal Alternative Minimum Taxes
(AMT). Basic and fully diluted net income per share for 2008 was $0.08 and
$0.07, respectively, compared to basic and fully diluted net of income per share
for 2007 of $0.10 and $0.09, respectively. Basic and fully diluted shares
outstanding for 2008 were 5,650,498 and 5,912,217, respectively, and 5,442,961
and 5,783,891 for 2007, respectively.





Liquidity
and Capital Resources





The
Company maintains a revolving credit line (the “Revolver”) for $1 million, which
is collateralized by accounts receivable and certain fixed assets. Borrowings
under the Revolver, as amended, are based on 80% of eligible receivables, as
defined. In addition, the Revolver provides for an annual renewal fee equal to
1% of the capital availability amount, as defined. Borrowings under the Revolver
bear interest at the prime rate (5.25% as of March 31, 2008), plus 2%. In May
2007, the Revolver automatically renewed for a one year period and the Company
paid the lender a renewal fee of $10,000, which is being amortized over the loan
term. As of March 31, 2008, no amounts were outstanding under the
Revolver.





The
Company is currently negotiating a new revolving credit agreement with a bank,
which we anticipate will become effective concurrent with the expiration and/or
termination of its previous credit agreement in May 2008.





The
Revolver, as amended, requires the Company to maintain a tangible net worth of
at least $1.5 million and requires the lender to pay the Company interest on
cash collections in excess of amounts borrowed under the Revolver at a rate of
2.25% below the prime rate. As of March 31, 2008 the Company was in compliance
with the terms of its revolving credit agreement.





The
Company had cash and cash equivalents of $1,532,150 at March 31, 2008. Cash
provided by operating activities for the three months ended March 31, 2008 was
$622,385. Cash generated from operations includes net income of $431,900,
depreciation and amortization of $362,873, minority interest in net income of
$212,422, stock-based compensation of $29,775, decreases in accounts receivable
of $21,384, deposits and other assets of $24,283 and an increase in accounts
payable of $173,742; offset by increases in inventory of $39,848, prepaid
expenses of $16,673 and a decrease in accrued expenses and other liabilities of
$577,473. Cash used in investing activities was $212,968 and consisted of
purchase of property and equipment of $52,052, cash distributions of $213,416 to
members of limited liability companies, offset by contributions from new members
to limited liability companies of $52,500. Cash used for financing activities
was $1,920,921 and consisted of payments on lease and debt obligations of
$284,604 and $25,222, respectively, and the payment of dividends on common stock
of $1,686,095, offset by proceeds of $75,000 from equipment refinancing. In
addition, during the three months ended March 31, 2008 we borrowed and repaid
$4,500,000 under our revolving line of credit.




12








The
Company had cash and cash equivalents of $682,989 at March 31, 2007. Cash
provided by operating activities for the three months ended March 31, 2007 was
$1,068,790. Cash generated from operations includes net income of $517,110,
depreciation and amortization of $361,417, minority interest in net income of
$124,985, decrease in inventory of $160,724, stock-based compensation expense of
$21,490, decreases in deposits and other assets of $38,476, and an increase in
accrued expenses of $10,229; offset by increases in accounts receivable of
$90,684 and a decrease in accounts payable of $64,760. Cash used in investing
activities was $244,686 related to the purchase of property and equipment of
$78,831 and to cash distributions of $177,935 to members of limited liability
companies; offset by net proceeds of $4,580 from the disposition of property and
equipment and contributions for new members to limited liability companies of
$7,500. Cash used for financing activities was $1,459,727 from payments on lease
and debt obligations of $263,048 and $102,430, respectively, and payment of
dividends on common stock of $1,094,249. In addition, during the three months
ended March 31, 2007 we borrowed and repaid $3,928,100 under our line of
credit.





We
anticipate that our future liquidity requirements will arise from the need to
finance our accounts receivable and inventories, and from the need to fund our
current debt and lease obligations and capital expenditures. The primary sources
of funding for such requirements will be cash generated from operations,
borrowings under debt facilities and trade payables, and raising additional
capital from the sale of equity or other securities. The Company believes that
it can generate sufficient cash flow from these sources to fund its on-going
operations for at least the next twelve months.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT  MARKET
RISK
  Market
risk is the risk of loss arising from adverse changes in market rates and
prices, such as interest rates,foreign currency exchange rates and commodity
prices. Our primary exposure to market risk is interest rate risk associated
with our short term money market investments.The Company does not have any
financial instruments held for hading or other speculative purposes and does not
invest in derivative financial instruments, interest rate swaps or other
investments that alter interest rate exposure. The Company does not have any
credit facilities with variable interest rates.




Item 4. Controls and
Procedures




We
maintain disclosure controls and procedures, which are designed to ensure that
information required to be disclosed in the reports we file or submit under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, and that such information is accumulated and
communicated to our management, including our CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.






Under the
supervision and with the participation of our management, including our CEO and
CFO, an evaluation was performed on the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period
covered by this quarterly report. Based on that evaluation, our management,
including our CEO and CFO, concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this report.






There
were no changes in the Company’s internal controls over financial reporting
during the most recently completed fiscal quarter that have materially affected
or are reasonably likely to materially affect the Company’s internal control
over financial reporting.







13


PART
II.  OTHER INFORMATION





Item
1.     Legal
Proceedings





See Note
4 to Notes to Condensed Consolidated Financial Statements included herein for a
description of legal matters.




Item
2.     Changes in
Securities





(a)
            In
      the first quarter ended March 31, 2008, there were no sales of
      unregistered securities, except as follows: On March 6, 2008 the board
      approved the issuance of 105,000 shares of restricted common stock to our
      executive officers and directors in exchange for services to be rendered.
      No commissions were paid. Exemption from registration is claimed under
      Section 4(2) of the Securities Act of 1933, as
  amended.


(b)
            Rule
      463 of the Securities Act is not applicable to the
  Company.


(c)
            In
      the first quarter ended March 31, 2008 there were no repurchases by the
      Company of its Common Stock.




Item
3.     Defaults Upon Senior
Securities





None.




Item
4.     Submissions of Matters to a
Vote of Security Holders





In the
first quarter ended March 31, 2008 there were no matters submitted to a vote of
security holders.




Item
5.     Other
Information





None.




Item
6.     Exhibits





Except
for the exhibits listed below, other required exhibits have been previously
filed with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended.





Number
Exhibit Description


____________________________________________





11.1
            Statement
      re: computation of earnings per share.  See condensed
      consolidated statement of operations and notes
  thereto.




31.1
            Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities
      Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002*




31.2
            Certification
      of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities
      Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002*




32.1
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002*




32.2
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002*




99.1
            Press
      Release*


________________________


* Filed
herewith.


14


SIGNATURES








Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.






EMERGENT GROUP
      INC.Date:
      May 14, 2008
              By:
              /s/ Bruce
      J. HaberBruce
      J. Haber,Chairman
      and Chief Executive Officer


Date: May 14, 2008
              By:
              /s/ William
      M. McKayWilliam M.
      McKay,Chief
      Financial Officer and Secretary














15