Note 4 - Equity Method Investments

3 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

 

Note

4

-Equity Method Investments

Serlefin Peru is a joint venture in which the Company has a

49%

ownership interest. The other

51%

is owned by

three

individuals who share common ownership with Serlefin BPO&O Serlefin S.A. (“Serlefin”). Each owner maintains voting rights equivalent to their share ownership, and the

51%

shareholders collectively manage the operations of the business. Based on the Company's ownership and voting rights, the Company lacks requisite control of Serlefin Peru, and therefore accounts for its investment in Serlefin Peru under the equity method of accounting. 

Additionally, the Company and Serlefin jointly purchase international consumer debt portfolios under a purchase agreement. The Company and Serlefin purchase the portfolios on a pro-rata basis of

80%

and

20%,

respectively. The purchased portfolios are transferred to an administrative and payment trust, where the Company and Serlefin are trustees. Serlefin provides collection services to the trust, and receives a performance fee determined by the parties for each loan portfolio acquired. Serlefin received approximately

$0.3

million and

$0.3

million in performance fees for the

three

months ended

December 31, 2019

and

2018,

respectively.

The carrying value of the investment in Serlefin Peru was

$278,000

and

$280,000

as of

December 31, 2019

and

September 30, 2019,

respectively. The cumulative net loss from our investment in Serlefin Peru from the date of the initial investment through

December 31, 2019

was approximately

$256,000,

and was

not

significant to the Company's condensed consolidated statement of operations.