It may be the first time in the histroy of the company that there has been zero balance!!!!
This usually was the indicator of future sales of fractionals. At a whopping 12 policies for the entire 9 months, I'd say the AR (trade) account speaks to an even worse 4th qtr.
i am not up on GAAP tax accounting, but the increase in payable might well be legal expenses that the insurance doesn't cover. Of course, the insurance carriers will want all their money back if LPI/LPHI ever is found of violating securities or other laws.
I agree. I think the 4th quarter will be horrible. Another question I have is how can they have a non-current income tax receivable. If it is the result of overpayimg income taxes, why wouldn't it be a current asset, to be received in the next 12 months when they file their return. It strikes me as odd. Any thoughts?
Here is how you have that income tax receivable (I think): Buy a policy at the end of each quarter to show "revenue" but don't bother to have the buyers on the other side. If you do this and have non-cash revenue you still have to "pay" taxes on the reported revenue, right? Keep doing this until there are no new buyers to eventually buy the policies you purchased. Now you have all this tax "paid" on revenues that were booked before the fractional boughts out the policy, and no fractional investors left to buy anything. So you now have an income tax receivable since there are revenues that were never realized. Is this what happened with LPHI? I don't know. In a week or so I'll spreadsheet the past few years worth of the income statements and stmts. of cash flows and see what happens.
I do know there is no way this company should trade over $1.00 per share since it is a sinking ship. I also believe there is no reason why Texas can't go with deceptive trade practices. Something ain't right in the Lone Star state. I hope these guys aren't thinking of dumping the resold policies in California. The state likes the old people living in Rossmoor.
I also find that odd, along with the other issues I mentioned in another posting. The usual games with taxes, as you know, have to do with the timing of loss carryforwards (a smart thing to do) or prepayments in order to time/smooth earnings. But these clowns have no income and no hope of having income until the SEC suit settles. So why the overpayment? Something doesn't add up and I'm wondering if the income reported in past years is overstated. Perhaps the timing of the "income" came from purchasing policies at the end ot the quarter for a long time, and with no sales the scheme finally caught up to them? What do you think?
Regardless, that trust still needs to be impaired. The can't keep stating the Equity Method allows them to increase the asset value of the trust everytime the trust expenses increase.