Note

Consumer

Receivables Acquired for Liquidation

Accounts acquired for liquidation are stated at cost and consist primarily of defaulted consumer loans of individuals throughout the United States and South America.

The following tables summarize the changes in the condensed consolidated balance sheet account of consumer receivables acquired for liquidation during the following periods:

	For the Three Months Ended December 31,
	201 9			201 8
Balance, beginning of period	$	1,668,000		$	3,749,000

Net cash collections		(3,375,000	)		(4,025,000	)
Impairment		(23,000	)		–
Effect of foreign currency translation		46,000			(147,000	)
Finance income recognized		3,132,000			3,494,000
Balance, end of period	$	1,448,000		$	3,071,000
Finance income as a percentage of collections		92.8	%		86.8	%

During the

three

months ended

December 31, 2019

and

2018

the Company did

not

purchase any new portfolios.

As of

December 31, 2019,

the Company held consumer receivables acquired for liquidation from Peru and Colombia of

$0.9

million and

$0.3

million, respectively. The total amount of foreign consumer receivables acquired for liquidation was

$1.2

million, or

83.1%

of the

$1.4

million in total consumer receivables held at

December 31, 2019.

Of the total consumer receivables held domestically and internationally

individual portfolios comprise

25.2%,

16.9%,

14.5%

and

10.0%

of the overall asset balance at

December 31, 2019.

As of

September 30, 2019,

the Company held consumer receivables acquired for liquidation from Peru and Colombia of

$1.1

million and

$0.3

million, respectively. The total amount of foreign consumer receivables acquired for liquidation was

$1.4

million, or

83.8%

of the total consumer receivables held of

$1.7

million at

September 30, 2019.

Of the total consumer receivables held domestically and internationally

individual portfolios comprise

23.9%,

16.2%,

14.1%

and

11.0%

of the overall asset balance at

September 30, 2019.

As of

December 31, 2019,

and

September 30, 2019,

1.3%

and

1.5%

of the Company's total assets were related to its international operation, respectively. For the

three

months ended

December 31, 2019

and

2018,

6.2%

and

4.9%

of the Company's total revenue related to its international operations, respectively.

December 31, 2019,

approximately

27%

of the Company’s portfolio face value was serviced by

five

collection organizations. At

September

30,

2019,

approximately

28%

of the Company’s portfolio face value was serviced by

five

collection organizations. The Company has servicing agreements in place with these

five

collection organizations, as well as all of the Company’s other

third

-party collection agencies and attorneys that cover standard contingency fees and servicing of the accounts. While the

collection organizations represent only

27%

and

28%

as of

December 31, 2019

and

September 30, 2019,

respectively, of the Company’s portfolio face value, it does represent approximately

86%

and

86%

of the Company’s portfolio face value at all

third

party collection agencies and attorneys as of

December 31, 2019

and

September 30, 2019,

respectively.

The following table summarizes collections received by the Company’s

third

-party collection agencies and attorneys, less commissions and direct costs, for the

three

months ended

December 31, 2019

and

2018,

respectively.

	For the Three Months Ended December 31,
	201 9		201 8
Gross collections (1)	$	6,549,000	$	8,220,000
Commissions and fees (2)		3,174,000		4,195,000
Net collections	$	3,375,000	$	4,025,000

(

)

Gross collections include collections from

third

party collection agencies and attorneys, collections from in-house efforts and collections represented by account sales.

(

)

Commissions are earned by

third

party collection agencies and attorneys, and include direct costs associated with the collection effort, generally court costs. In

December 2007

an arrangement was consummated with

one

servicer who also received a

fee on gross collections received by the Company in connection with the related portfolio purchase. The fee is charged for asset location and skip tracing in connection with this portfolio purchase.