SUNDANCE STRATEGIES, INC. (OTCMKTS:SUND) Files An 8-K Material ImpairmentsItem 2.06
Sundance Strategies, Inc. and Subsidiary (“the Company”) is currently focused on the purchase of net insurance benefit contracts (“NIBs”) based on life settlements or life insurance policies. The investment in NIBs is a residual economic beneficial interest in a portfolio of life insurance policies that have been financed by an independent third party via a loan from lenders. The Company does not take possession or control of the life insurance policies, nor is the associated debt related to the maintenance of these policies an obligation of the Company. The owners of the life insurance policies acquire such policies at a discount to their face value and finance the ongoing life insurance premiums through third-party loans. The policies are used as collateral on the loans.
At January 15, 2018, the Company held NIBs related to life insurance policies with death benefits approximating $48 million that were secured with loans approximating $12 million, with the loans due on January 15, 2018. The owners worked with the lender to extend the loans, but without success. On May 29, 2018, the owners entered in an agreement that completed a strict foreclosure transaction that transferred these policies to the lender in full satisfaction of the loan obligation. The Company’s carrying value of investment in NIBs relating to the above-mentioned life insurance policies totaled approximately $5 million at March 31, 2017, which amount will be reduced to zero because of the foreclosure transaction. This impairment of investment in NIBs will also reduce to zero any expected future cash flows associated with the impaired investment in NIBs.
About SUNDANCE STRATEGIES, INC. (OTCMKTS:SUND)
Sundance Strategies, Inc., formerly Java Express, Inc., is a specialty financial services company. The Company is engaged in the business of purchasing or acquiring and selling life insurance policies and residual interests in or financial products tied to life insurance policies, including notes, drafts, acceptances, open accounts receivable and other obligations representing part or all of the sales price of insurance, life settlements and related insurance contracts being traded in the secondary marketplace, referred to as the life settlements market. The Company is focused on the purchase and sale of net insurance benefit contracts (NIB) based on life insurance policies. The Company does not take possession or control of the policies. The Company does not purchase or hold life insurance policies but, rather, holds a contractual right to receive the NIBs, from a portfolio of life insurance policies held by a third-party.
