Exhibit 99.3

 

	Monthly Operating Report
	ACCRUAL BASIS

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)
JUDGE:	Russell Nelms

 

UNITED STATES BANKRUPTCY COURT

 

NORTHERN & EASTERN DISTRICTS OF TEXAS

 

REGION 6

 

MONTHLY OPERATING REPORT

 

MONTH ENDING:	January		2016
	MONTH		YEAR

 

IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING REPORT (ACCRUAL BASIS-1 THROUGH ACCRUAL BASIS-7) AND THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT, AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY) IS BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.

 

RESPONSIBLE PARTY:
/s/ H. Thomas Moran II		Trustee
ORIGINAL SIGNATURE OF RESPONSIBLE PARTY		TITLE
H. Thomas Moran II		2/22/2016
PRINTED NAME OF RESPONSIBLE PARTY		DATE
PREPARER:
/s/ Colette Pieper		CEO
ORIGINAL SIGNATURE OF PREPARER		TITLE
Colette Pieper		2/22/2016
PRINTED NAME OF PREPARER		DATE

 

		Monthly Operating Report
		ACCRUAL BASIS-1

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

COMPARATIVE BALANCE SHEET

 

				SCHEDULE AMOUNT				MONTH  November 30, 2015				MONTH  December 31, 2015				MONTH January 31, 2016
ASSETS
1.		UNRESTRICTED CASH		$	1,744,873			$	1,083,015			$	510,400			$	25,314
2.		RESTRICTED CASH
3.		TOTAL CASH		$	1,744,873			$	1,083,015			$	510,400			$	25,314
4.		ACCOUNTS RECEIVABLE (NET)		$	2,741,107							$	0						2
5.		INVENTORY
6.		NOTES RECEIVABLE
7.		PREPAID EXPENSES
8.		OTHER (ATTACH LIST)						$	0			$	0			$	0
9.		TOTAL CURRENT ASSETS		$	4,485,981			$	1,083,015			$	510,400			$	25,314
10.		PROPERTY, PLANT & EQUIPMENT
11.		LESS: ACCUMULATED DEPRECIATION/DEPLETION
12.		NET PROPERTY, PLANT & EQUIPMENT		$	0			$	0			$	0			$	0
13.		DUE FROM INSIDERS		$	4,157,912														1
14.		OTHER ASSETS - NET OF AMORTIZATION (ATTACH LIST)
15.		OTHER (ATTACH LIST)
16.		TOTAL ASSETS		$	8,643,892			$	1,083,015			$	510,400			$	25,314
POSTPETITION LIABILITIES
17.		ACCOUNTS PAYABLE						$	1,288			$	0			$	0
18.		TAXES PAYABLE
19.		NOTES PAYABLE
20.		PROFESSIONAL FEES						$	328,481			$	87,407			$	157,428
21.		SECURED DEBT
22.		OTHER (ATTACH LIST)						$	5,138			$	0			$	0
23.		TOTAL POSTPETITION LIABILITIES						$	334,907			$	87,407			$	157,428
PREPETITION LIABILITIES
24.		SECURED DEBT
25.		PRIORITY DEBT			unknown
26.		UNSECURED DEBT		$	9,001			$	1,062			$	1,062			$	1,062
27.		OTHER (ATTACH LIST)
28.		TOTAL PREPETITION LIABILITIES		$	9,001			$	1,062			$	1,062			$	1,062
29.		TOTAL LIABILITIES		$	9,001			$	335,968			$	88,468			$	158,490
EQUITY
30.		PREPETITION OWNERS' EQUITY						$	5,901,723			$	5,901,723			$	5,901,723
31.		POSTPETITION CUMULATIVE PROFIT OR (LOSS)						$	1,451,203			$	1,416,090			$	1,341,818
32.		DIRECT CHARGES TO EQUITY (ATTACH EXPLANATION)						$	(6,605,880	)		$	(6,895,882	)		$	(7,376,718	)	1
33.		TOTAL EQUITY						$	747,046			$	421,932			$	(133,176	)
34.		TOTAL LIABILITIES & OWNERS' EQUITY						$	1,083,015			$	510,400			$	25,314

 

1

This is Intercompany Due From Life Partners, Inc. reported on Schedule B Item 16 and shown above under Item 13. Due From Insiders.

2

The Debtor LPIFS records receipts on a cash basis and accordingly, does not carry receivable balances. The Schedules note a receivable balance as if receipts were recorded on an accrual basis as of the petition date.

 

	Monthly Operating Report
	SUPPLEMENT TO
	ACCRUAL BASIS-1

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

COMPARATIVE BALANCE SHEET

 

				SCHEDULE AMOUNT				MONTH  November 30, 2015				MONTH  December 31, 2015				MONTH January 31, 2016
POSTPETITION LIABILITIES
22.		US TRUSTEE FEES						$	5,138
22		TOTAL OTHER POSTPETITION LIABILITIES						$	5,138			$	0			$	0

 

	Monthly Operating Report
	ACCRUAL BASIS-2

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

INCOME STATEMENT				OCTOBER				NOVEMBER				DECEMBER				JANUARY
REVENUES
1.		GROSS REVENUES		$	214,446			$	53,944			$	28,943			$	15,452
2.		LESS: RETURNS & DISCOUNTS
3.		NET REVENUE		$	214,446			$	53,944			$	28,943			$	15,452
COST OF GOODS SOLD
4.		MATERIAL
5.		DIRECT LABOR
6.		DIRECT OVERHEAD
7.		TOTAL COST OF GOODS SOLD		$	0			$	0			$	0			$	0
8.		GROSS PROFIT		$	214,446			$	53,944			$	28,943			$	15,452
OPERATING EXPENSES
9.		OFFICER / INSIDER COMPENSATION
10.		SELLING & MARKETING
11.		GENERAL & ADMINISTRATIVE		$	26,817			$	464			$	270			$	213
12.		RENT & LEASE
13.		OTHER (ATTACH LIST)
14.		TOTAL OPERATING EXPENSES		$	26,817			$	464			$	270			$	213
15.		INCOME BEFORE NON-OPERATING INCOME & EXPENSE		$	187,628			$	53,480			$	28,673			$	15,239
OTHER INCOME & EXPENSES
16.		NON-OPERATING INCOME (ATTACH LIST)
17.		NON-OPERATING EXPENSE (ATTACH LIST)
18.		INTEREST EXPENSE
19.		DEPRECIATION / DEPLETION
20.		AMORTIZATION
21.		OTHER (ATTACH LIST)
22.		NET OTHER INCOME & EXPENSES		$	0			$	0			$	0			$	0
REORGANIZATION EXPENSES
23.		PROFESSIONAL FEES		$	65,916			$	155,296			$	63,226			$	88,755
24.		U.S. TRUSTEE FEES		$	4,813			$	0			$	0			$	325
25.		OTHER (ATTACH LIST)		$	0			$	354			$	560			$	431		1
26.		TOTAL REORGANIZATION EXPENSES		$	70,729			$	155,650			$	63,786			$	89,511
27.		INCOME TAX
28.		NET PROFIT (LOSS)		$	116,900			$	(102,170	)		$	(35,113	)		$	(74,272	)

 

1

Expenses for Relativity Hosting and Privilege Log Export reclassified from Item 23. Professional Fees.

 

	Monthly Operating Report
	ACCRUAL BASIS-3

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

				MONTH				MONTH				QUARTER				MONTH
CASH RECEIPTS AND DISBURSEMENTS				November 30, 2015				December 31, 2015								January 31, 2016
1.		CASH - BEGINNING OF MONTH		$	1,028,203			$	1,083,015							$	510,400
RECEIPTS FROM OPERATIONS
2.		CASH SALES		$	53,988			$	28,943			$	299,238			$	15,452
COLLECTION OF ACCOUNTS RECEIVABLE
3.		PREPETITION										$	0
4.		POSTPETITION										$	0
5.		TOTAL OPERATING RECEIPTS		$	53,988			$	28,943			$	299,238			$	15,452
NON-OPERATING RECEIPTS
6.		LOANS & ADVANCES (ATTACH LIST)										$	0
7.		SALE OF ASSETS										$	0
8.		OTHER (ATTACH LIST)		$	3,101			$	35,496			$	47,229			$	1,334
9.		TOTAL NON-OPERATING RECEIPTS		$	3,101			$	35,496			$	47,229			$	1,334
10.		TOTAL RECEIPTS		$	57,088			$	64,439			$	346,467			$	16,786
11.		TOTAL CASH AVAILABLE		$	1,085,291			$	1,147,454							$	527,186
OPERATING DISBURSEMENTS
12.		NET PAYROLL										$	0
13.		PAYROLL TAXES PAID										$	0
14.		SALES, USE & OTHER TAXES PAID										$	0
15.		SECURED / RENTAL / LEASES										$	0
16.		UTILITIES										$	0
17.		INSURANCE										$	0
18.		INVENTORY PURCHASES										$	0
19.		VEHICLE EXPENSES										$	0
20.		TRAVEL										$	0
21.		ENTERTAINMENT										$	0
22.		REPAIRS & MAINTENANCE										$	0
23.		SUPPLIES										$	25,513						1
24.		ADVERTISING										$	0
25.		OTHER (ATTACH LIST)		$	2,276			$	637,054			$	901,173			$	501,547
26.		TOTAL OPERATING DISBURSEMENTS		$	2,276			$	637,054			$	926,686			$	501,547
REORGANIZATION EXPENSES
27.		PROFESSIONAL FEES										$	0
28.		U.S. TRUSTEE FEES										$	325			$	325
29.		OTHER (ATTACH LIST)										$	0
30.		TOTAL REORGANIZATION EXPENSES		$	0			$	0			$	325			$	325
31.		TOTAL DISBURSEMENTS		$	2,276			$	637,054			$	927,011			$	501,872		2
32.		NET CASH FLOW		$	54,812			$	(572,615	)		$	(580,544	)		$	(485,086	)
33.		CASH - END OF MONTH		$	1,083,015			$	510,400							$	25,314

 

1

Item 23. Supplies includes $25,000 of postage.

2

Total Disbursements includes the following amounts that are NOT disbursements, but are transfers of funds between bank accounts (from LPI Financial Services account to Life Partners, Inc. account) for the periods shown below.

 

November 30, 2015		$	-
December 31, 2015		$	628,957.75
January 31, 2016		$	500,000.00

 

	Monthly Operating Report
	SUPPLEMENT TO
	ACCRUAL BASIS-3

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

				MONTH				MONTH				QUARTER				MONTH
CASH RECEIPTS AND DISBURSEMENTS				November 30, 2015				December 31, 2015								January 31, 2016
NON-OPERATING RECEIPTS (OTHER)
8.		FLOW THRU PREMIUMS		$	3,101			$	6,538			$	13,585			$	1,334
8.		RECEIPTS TO BE FORWARDED TO LPI						$	28,958			$	33,644
9.		TOTAL NON-OPERATING RECEIPTS		$	3,101			$	35,496			$	47,229			$	1,334
OPERATING DISBURSEMENTS
25.		BANK FEES		$	454			$	270			$	2,018			$	213
25.		CREDIT CARD PROCESSING FEES		$	10							$	20
25.		FLOW THRU PREMIUMS		$	1,813			$	7,826			$	15,491			$	1,334
25.		TRANSFER TO LPI BANK ACCOUNT						$	628,958			$	883,644			$	500,000
25		TOTAL OPERATING DISBURSEMENTS (OTHER)		$	2,276			$	637,054			$	901,173			$	501,547

 

	Monthly Operating Report
	ACCRUAL BASIS-4

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

ACCOUNTS RECEIVABLE AGING				SCHEDULE AMOUNT				MONTH  November 30, 2015				MONTH  December 31, 2015				MONTH  January 31, 2016
1.		0-30
2.		31-60		$	803,662
3.		61-90
4.		91+		$	1,937,445
5.		TOTAL ACCOUNTS RECEIVABLE		$	2,741,107			$	0			$	0			$	0
6.		AMOUNT CONSIDERED UNCOLLECTIBLE
7.		ACCOUNTS RECEIVABLE (NET)		$	2,741,107			$	0			$	0			$	0		1

 

AGING OF POSTPETITION TAXES AND PAYABLES

MONTH:

January 2016

 

				0-30				31-60				61-90				91+
TAXES PAYABLE				DAYS				DAYS				DAYS				DAYS				TOTAL
1.		FEDERAL																		$	0
2.		STATE																		$	0
3.		LOCAL																		$	0
4.		OTHER (ATTACH LIST)																		$	0
5.		TOTAL TAXES PAYABLE		$	0			$	0			$	0			$	0			$	0
6.		ACCOUNTS PAYABLE																		$	0

 

STATUS OF POSTPETITION TAXES

MONTH:

January 2016

 

				BEGINNING				AMOUNT								ENDING
				TAX				WITHHELD AND/				AMOUNT				TAX
FEDERAL				LIABILITY				0R ACCRUED				PAID				LIABILITY
1.		WITHHOLDING														$	0
2.		FICA-EMPLOYEE														$	0
3.		FICA-EMPLOYER														$	0
4.		UNEMPLOYMENT														$	0
5.		INCOME														$	0
6.		OTHER (ATTACH LIST)														$	0
7.		TOTAL FEDERAL TAXES		$	0			$	0			$	0			$	0
STATE AND LOCAL
8.		WITHHOLDING														$	0
9.		SALES														$	0
10.		EXCISE														$	0
11.		UNEMPLOYMENT														$	0
12.		REAL PROPERTY														$	0
13.		PERSONAL PROPERTY														$	0
14.		OTHER (ATTACH LIST)														$	0
15.		TOTAL STATE & LOCAL		$	0			$	0			$	0			$	0
16.		TOTAL TAXES		$	0			$	0			$	0			$	0

 

1

The Debtor LPIFS records receipts on a cash basis and accordingly, does not carry receivable balances. The Schedules note a receivable balance as if receipts were recorded on an accrual basis as of the petition date.

 

	Monthly Operating Report
	ACCRUAL BASIS-5

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

	MONTH:	January 2016
BANK RECONCILIATIONS

 

				Account #1				Account #2				Account #3
A. BANK:				Bank of Texas
B. ACCOUNT NUMBER:				4069												TOTAL
C. PURPOSE (TYPE):				Checking
1.		BALANCE PER BANK STATEMENT		$	25,639											$	25,639
2.		ADD: TOTAL DEPOSITS NOT CREDITED														$	0
3.		SUBTRACT: OUTSTANDING CHECKS		$	325											$	325
4.		OTHER RECONCILING ITEMS														$	0
5.		MONTH END BALANCE PER BOOKS		$	25,314			$	0			$	0			$	25,314
6.		NUMBER OF LAST CHECK WRITTEN			1031

 

INVESTMENT ACCOUNTS

 

				DATE OF				TYPE OF				PURCHASE				CURRENT
BANK, ACCOUNT NAME & NUMBER				PURCHASE				INSTRUMENT				PRICE				VALUE
7.
8.
9.
10.
11.		TOTAL INVESTMENTS										$	0			$	0
CASH
12.		CURRENCY ON HAND														$	0
13.		TOTAL CASH - END OF MONTH														$	25,314

 

	Monthly Operating Report
	ACCRUAL BASIS-6

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

MONTH:

January 2016

 

PAYMENTS TO INSIDERS AND PROFESSIONALS

 

 

INSIDERS
				TYPE OF		AMOUNT				TOTAL PAID
NAME				PAYMENT		PAID				TO DATE
1.		Advance Trust & Life Escrow Services		Premium Remittance		$	1,218			$	99,481
2.		Purchase Escrow Services, LLC		Premium Remittance		$	116			$	3,803
3.
4.
5.
6.		TOTAL PAYMENTS TO INSIDERS				$	1,334			$	103,284

 

PROFESSIONALS																					1
				DATE OF COURT														TOTAL
				ORDER AUTHORIZING		AMOUNT				AMOUNT				TOTAL PAID				INCURRED
NAME				PAYMENT		APPROVED				PAID				TO DATE				& UNPAID
1.		Asset Servicing Group		12/15/15		$	819,974			$	63,157			$	819,974			$	192,659		2
2.		Bridgepoint Consulting		12/15/15		$	673,261							$	673,261			$	343,362
3.		Epiq Bankruptcy Solutions		05/22/15		$	2,650,023							$	2,343,973			$	331,050
4.		Kim Hinkle, Attorney at Law		12/15/15		$	200,377							$	200,377			$	51,602
5.		MMS Advisors																$	217,600		4
6.		Munsch, Hardt, Kopf & Harr,P.C.		12/15/15		$	1,673,802							$	1,673,802			$	476,316
7.		Thompson & Knight LLP		12/15/15		$	8,304,511							$	8,307,945			$	2,665,200		3
8.		Tom Moran, US Trustee		12/18/15		$	11,850							$	11,850			$	547,750		5
9.		Phillips Murrah		12/15/15		$	152,051							$	152,051			$	31,153
10.		Smith, Jackson, Boyer & Brovard, PLLC		12/18/15		$	55,199							$	55,199			$	6,451
11.		Predictive Resources		11/19/15		$	92,121							$	92,121			$	158,848
12.		D3G/Lewis & Ellis		12/03/15		$	88,912							$	88,912			$	151,663
13.		Barbara Pope		12/15/15		$	42,477							$	42,477			$	0		6
14.		TOTAL PAYMENTS TO PROFESSIONALS								$	63,157			$	14,461,942			$	5,173,655		1

 

POSTPETITION STATUS OF SECURED NOTES, LEASES PAYABLE AND ADEQUATE PROTECTION PAYMENTS

 

				SCHEDULED				AMOUNTS
				MONTHLY				PAID				TOTAL
				PAYMENTS				DURING				UNPAID
NAME OF CREDITOR				DUE				MONTH				POSTPETITION
1.
2.
3.
4.
5.
6.		TOTAL		$	0			$	0			$	0

 

1

Professional fees and expenses estimated and accrued prior to May 19th are reflected only on the books of Life Partners Holdings, Inc.  Thereafter, professional fees and expenses reflect the estimated aggregate, unallocated fees and expenses for all of the Debtors, and are noted on each of the Debtors MORs.

2

Amount Paid includes payment authorized by Fee Procedures Orders dated 8/6/15 & 10/29/15.

3

Total Paid To Date for Thompson & Knight includes $1,129,446.39 paid by Life Partners Holdings, Inc. and also includes $3,434 in filing fees paid twice (at the time of filing and when the fee application was paid) which is not duplicated in Amount Approved.

4

MMS Advisors incurred fees and expenses March 13th - May 18th in the estimated amount of $230,000.00 that are not included here since their retention has not been approved for this period of time.

5

Total Paid To Date excludes out-of-pocket expense reimbursements on behalf of subsidiary debtors.

6

Amounts shown are for Fee Applications only and do not include subsequent employee/contractor payments.

 

	Monthly Operating Report
	ACCRUAL BASIS-7

 

CASE NAME:	LPI Financial Services, Inc.
CASE NUMBER:	15-40289 (Jointly Administered)

 

MONTH:

January 2016

 

QUESTIONNAIRE

 

				YES		NO
1.		HAVE ANY ASSETS BEEN SOLD OR TRANSFERRED OUTSIDE THE NORMAL COURSE OF BUSINESS THIS REPORTING PERIOD?				X
2.		HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN POSSESSION ACCOUNT?				X
3.		ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR LOANS) DUE FROM RELATED PARTIES?				X
4.		HAVE ANY PAYMENTS BEEN MADE ON PREPETITION LIABILITIES THIS REPORTING PERIOD?				X
5.		HAVE ANY POSTPETITION LOANS BEEN RECEIVED BY THE DEBTOR FROM ANY PARTY?				X
6.		ARE ANY POSTPETITION PAYROLL TAXES PAST DUE?				X
7.		ARE ANY POSTPETITION STATE OR FEDERAL INCOME TAXES PAST DUE?				X
8.		ARE ANY POSTPETITION REAL ESTATE TAXES PAST DUE?				X
9.		ARE ANY OTHER POSTPETITION TAXES PAST DUE?				X
10.		ARE ANY AMOUNTS OWED TO POSTPETITION CREDITORS DELINQUENT?				X
11.		HAVE ANY PREPETITION TAXES BEEN PAID DURING THE  REPORTING PERIOD?				X
12.		ARE ANY WAGE PAYMENTS PAST DUE?				X

 

IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "YES," PROVIDE A DETAILED EXPLANATION OF EACH ITEM. ATTACH ADDITIONAL SHEETS IF NECESSARY.

 

INSURANCE
				YES		NO
1.		ARE WORKER'S COMPENSATION, GENERAL LIABILITY AND OTHER NECESSARY INSURANCE COVERAGES IN EFFECT?		X
2.		ARE ALL PREMIUM PAYMENTS PAID CURRENT?		X
3.		PLEASE ITEMIZE POLICIES BELOW.

 

IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "NO," OR IF ANY POLICIES HAVE BEEN CANCELLED OR NOT RENEWED DURING THIS REPORTING PERIOD, PROVIDE AN EXPLANATION BELOW. ATTACH ADDITIONAL SHEETS IF NECESSARY.

 

INSTALLMENT PAYMENTS

TYPE OF						PAYMENT AMOUNT
POLICY		CARRIER		PERIOD COVERED		& FREQUENCY