Over a tenth of their current market cap on auditing fees.........lol Not counting this year......!

Audit Fees
Grant Thornton LLP billed us $1,184,000 for audit services rendered for the year ended December 31, 2007. These fees related to:
• the audit of our financial statements;

• the audit of our internal control over financial reporting;

• the review of our quarterly financial statements; and

• the review of and the required procedures related to our quarterly financial statements and other financial data included in our filings with the SEC.

According to this if they spent 9.2 million to exercise their warrants they would pay .244 per share for the 37,719,296 shares remaining to own 49%........



Pursuant to a warrant agreement we entered into with Arco on August 17, 2007, Arco has the right to purchase, at a price of $0.18 per share, at any time until the fifth anniversary of the date of the warrant agreement, a combination of shares of our common stock and shares of a newly-created class of non-voting preferred stock that in the aggregate represent 51% of our equity. So long as our 8.125% Convertible Senior Notes due 2027 are outstanding and the holders of the convertible notes have the right to cause their convertible notes to be redeemed following a change in control of us, the maximum number of shares that may be issued to Arco upon the exercise of the warrant granted under the warrant agreement is the number that, together with all other shares beneficially owned by Arco, would result in Arco owning 49% of the issued and outstanding shares. Based upon 44,803,339 shares of common stock outstanding, if Arco were deemed to be the beneficial owner of the 2,716,795 shares reported above as beneficially owned by the other persons, the maximum number of shares that Arco could acquire upon exercise of the warrant would be 37,719,296 (representing approximately 45.7% of the common shares that would be outstanding following the exercise). Arco subsequently transferred the warrant to its wholly owned subsidiary, Arco LUM.

We entered into a series of new financing transactions with Arco from August through December 2007 in the form of repurchase agreement financing and a revolving line of credit. As of March 31, 2008, we had $190 million in financing from Arco. Arco also fully guaranteed our obligations under a repurchase agreement with Sovereign Bank, N.A. In addition, we entered into a warrant agreement with Arco pursuant to which Arco received a warrant to purchase up to 49% of the voting interest in us and 51% of the economic interest in us on a fully diluted basis.
We have reduced our repurchase agreement financing liabilities with unrelated third parties from approximately $3.2 billion at July 31, 2007 to approximately $14.0 million at June 5, 2008. As we have begun to stabilize our financial condition with the financings provided by Arco, we have determined to relinquish our REIT qualification and convert to a publicly traded partnership taxable as a partnership, or PTP, for U.S. federal income tax purposes.

same verbage in the last one, just delayed until the third quarter now.

Q. When do you expect to complete the merger?
A. We anticipate that we will be able to complete the merger in the third quarter of 2008. However, we cannot assure you when or if the merger will occur during that period or at all. To complete the merger, we must obtain the approvals of our stockholders and the equity holders of LLC and Sub. We reserve the right, in our sole and absolute discretion, to cancel or defer the merger even if our stockholders vote to approve the merger and the other conditions to the completion of the merger are satisfied or waived.

NOTE J - GOING CONCERN MATTERS and other illnesses to think about.

Payroll Taxes


At March 31, 2008, the Company is delinquent with filing and remitting payroll taxes of approximately $100,000, including estimated penalties and interest related to payroll taxes withheld since April 2007. The Company has recorded the delinquent payroll taxes, which are included in accrued expenses on the balance sheet.

Although the Company has not entered into any formal repayment agreements with the respective tax authorities, management plans to make payment as funds become available. Penalties and interest amounts are subject to increase based on a number of factors that can cause the estimated liability to increase further.

Interest and penalties were accrued in an amount estimated to cover the ultimate liability.



Sales Taxes


At March 31, 2008, the Company is delinquent with remitting sales taxes of approximately $13,211, including related estimated penalties and interest related to sales taxes withheld since 2006 in the state of New York. The Company has recorded the delinquent sales taxes, which are included in accrued expenses on the balance sheet. Although the Company has not entered into any formal repayment agreements with the respective tax authorities, management plans to make payment as funds become available. Penalties and interest amounts are subject to increase based on a number of factors that can cause the estimated liability to increase further. Interest and penalties were accrued in an amount estimated to cover the ultimate liability.


NOTE J - GOING CONCERN MATTERS

The accompanying statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements and for the nine months then ended March 31, 2008 the Company had sales of $349,926 incurred losses of $1,636,357, and used $294,509 in cash for operations. As of March 31, 2008, the Company had a working capital deficit of $1,371,416, and accumulated losses of $2,934,773. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.



The Company is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance the Company will be successful in its effort to secure additional equity financing.



If operations and cash flows improve through these efforts, management believes that the Company can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems.




The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through the continued developing, marketing and selling of its services and additional equity investment in the Company. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.






NOTE K - SUBSEQUENT EVENTS


On May 14, 2008, the Company issued promissory notes in the amount of $134,759.45 and $21,027.40 to a single accredited investor. These notes were issued in exchange for certain evidences of indebtedness in the aggregate amount of $147,000 with accrued interest on such indebtedness of $8,786,85. The $134,759.45 promissory note bears interest at a rate of 10% per annum and is convertible into the Company’s common stock at a rate of $0.001 per share; provided, however that holder may not convert the note if such conversion would result in holder beneficially owning more than 4.99% of the Company’s outstanding stock. This note has a maturity date of May 14, 2010. The $21,027.40 promissory note bears interest at a rate of 10% per annum and is payable on demand.

The story gets more interesting either way. Cash or Cashless.


The cashless exercise using the example below that I clipped out.

The value of the warrant to purchase 49% stake is 9.2 million. That would be 51 million shares.........9.2 divided by .18 = 51 million shares. I don't have a clue how luminent arrived at that amount but that is what they stated in the latest S-4.

Using .25 as an example, the value of their warrants would be 12.75 million. So if they did a cashless conversion the difference would be the 12.75 minus the 9.2 million or 3,550,000 (for value). If they took the shares @.25 the math would be 3,550,000 divided by .25 = 14,200,000 shares for free.........Called a cashless conversion.


Now the Cash conversion;

Folks this 9.2 million is more than the entire market cap of the company. Current market cap using 43 million shares x .20 = 8.6 million.

I think the cashless conversion looks much better for them. Think about it. If they pay 9.2 million for 49% of the company they would be paying more than the market current market cap for less than half of the company. Who would pay 9.2 million for 4.3 million worth of stock? Not to mention the dilution of the share price right after the exercise! Common sense would say the cashless exercise is the way to go. Assuming they get their way with the merger. Even the 14 million shares will give them about 25% of the voting rights.

Personally I'd like to see them spend the 9.2 million for 49%. But, I think I know why this option that wasn't mentioned before is now included, don't you?

If I made any mistakes in my calculations let me know and I'll re-examine!






This is an example of a cashless exercise.

To tack the holding period of a warrant or option to the holding period for the stock acquired on exercise, the investor must pay at least a nominal consideration (e.g. $100) for the warrant or option. This will commence the holding period because the investor now has capital "at risk." In addition, the warrant or option must specifically contain the right to effect a "cashless" exercise of the warrant or option. To illustrate a cashless exercise, assume a trading price of $10.00 per share and a warrant to acquire 10,000 shares at an exercise price of $1.00 per share. Presumably, the warrant is worth $90,000 (10,000 x $10 = $100,000, less the exercise price of $10,000). In a cashless exercise, the holder would surrender the warrant in exchange for 9,000 shares ($90,000 intrinsic value of warrant divided by the $10 stock price).






This is from their amended S-4 filing dated June 10th 2008. Notice the price to exercise is 9.2 million!

9.2 million divided by .18 is 51 million shares. I don't know how they arrive at that because that's more shares than 49% of the company. My last work on the share structure showed there would be about 80 million if they exercised. I'm just quoting them in this example.



Q. Will Arco have a vote? If so, how will Arco vote?
A. In 2007, we issued a warrant to Arco Capital Corporation, Ltd., or Arco. Arco may, at any time and in its sole discretion, exercise this warrant to acquire 49% of our voting power. Arco may elect to exercise the warrant by either paying the exercise price of $0.18 per share multiplied by the number of shares for which Arco is then exercising the warrant or by surrendering for cancellation warrants to acquire a number of shares equal to the aggregate exercise price divided by the fair market value of one share, otherwise known as a cashless exercise. If Arco exercises all of its warrant in full and does not elect a cashless exercise, we would receive cash proceeds of $9.2 million. If Arco exercises the warrant and votes to approve the merger proposal, the merger proposal is likely to be approved even if substantially all of our stockholders other than Arco vote against the approval of the merger proposal.
Arco has advised us that it is considering whether or not it will exercise the warrant prior to the record date for our annual meeting. If Arco were to exercise the warrant, Arco has advised us that it intends to vote for the approval of the merger proposal.
Q. What do I need to do now?
A. You should first carefully read this proxy statement/prospectus. After you have decided how you wish to vote your shares, please vote by submitting your proxy using one of the methods described above. To submit your proxy card by mail, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope
-5-

U.S. fixed mortgage rates surged to their highest in almost eight months after central bankers jolted financial markets with concerns of accelerating inflation.


http://www.cnbc.com/id/25120141/for/cnbc/

There is a strong possibility that this was an attempt to shake out as many shares for short covering. You know one last time before they capitulate. Odd things the last couple of days.

buying 35 million shares @ .18 will cost them 6.3 million and give us 80 million shares outstanding, if they used that as part of the cash dividend that would amount to .08 per share, using just that cash.


lol, bid went up to .182.........too funny. Even funnier is the 500 shares sold at .18 the first time. Seems to be no takers at .18 or .181 or .182 do I hear .183 or .184.



.185 now any takers?

If Arco's exercises their warrants and they might as well. They will be buying approximately 35 million at .18 and own 49% of Luminent.

Just sent them an email suggesting they buy them from the market now...........lol

They raised the bid up too .181.............I rather wallpaper my garage with the cert's...........or use them as Christmas wrapping..................lol

bid now at Arco's price, what a country!..........lol

I've emailed them twice this week with investor concerns. Didn't expect them to reply as they are in silent mode. The wager is now on Arco and their talent to produce results. When is the question. Frustrating silence as I've detailed to them.

I can't disagree with any of that Miles. I think they will start promoting themselves after the merger with the new entities in place.

couple of die-hards...........just checking....It's like watching grass grow......I know!

Do we still have folks in and/or watching out there?

One important point to point out is, with our current low volume the estimated time to cover is up too 16 + days to cover those 4.2 million shares. Wink!

Updated short count is 4,225,517 still short as of May 30th.

We had 4.4 million on May 15th so we had about 180,000 more covered over the last 15 days. We had about 11 million in Feb 2008 so they just keep covering while folks sell their positions. Why do they keep covering? Because they know!

Keeps getting harder for them to cover and shares keep getting more scarce and hard to fine. Buy and hold now!



http://www.otcbb.com/asp/OTCE_Short_Interest.asp


Still on the naked short list with failed to delivered shares.

http://www.otcbb.com/asp/OTCE_Short_Interest.asp

The Mortgage Bankers Association said its seasonally adjusted mortgage application index, boosted by increased demand for both purchase and refinance loans, rose 10.9 percent to 557.1 in the June 6 week.

Is the bottom in yet?

http://www.cnbc.com/id/25090501

I would tend to agree that the upside is brighter now. At least that pressure is removed. We are nearing the end of the second quarter. This was their projection for closing the merger and paying out the dividends.

Former New York Gov. Eliot Spitzer is looking at a number of options to possibly invest in distressed real estate, but does not yet have a formal plan, according to a source familiar with the matter.

http://www.cnbc.com/id/25089944

At 3:52 today we had traded 145,900 shares and by the close a 4 pm we had traded 424,419. In the last 8 minutes or so we saw 278,519 share purchased at the ask. Quite a baffling day of trading today including those 4990 trades earlier. Someone is covering or stocking up, don't you know.....?


just a sample

0.24 10000 OBB 15:57:39
0.24 114000 OBB 15:57:20
0.24 10000 OBB 15:56:57
0.24 41922 OBB 15:56:57
0.24 20000 OBB 15:56:21
0.235 10000 OBB 15:55:42
0.24 68010 OBB 15:55:35
0.24 5000 OBB 15:55:35

No dilution is happening? What?

In the last 10Q they paid (what looks like) everyone in shares!

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29546143

4990 trades.................several of them........MM talk?

Things that have changed (vs) Things that haven't.

This one is still relevent.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29003478

Luminent Mortgage Capital, Inc. Announces Proposed Restructuring and Files 2007 Form 10-K
Monday March 31, 6:44 pm ET

PHILADELPHIA, March 31 /PRNewswire-FirstCall/ -- An affiliated company of Luminent Mortgage Capital, Inc. (NYSE: LUM - News) filed a Form S-4 registration statement with the Securities and Exchange Commission on Friday, March 28, 2008 with respect to the Company's proposed conversion to a publicly traded partnership and other matters. In addition, the Company filed its Form 10-K for the year ended December 31, 2007 on Friday, March 28, 2008.

ADVERTISEMENT
The Company believes that maintaining its qualification as a real estate investment trust, or REIT, is no longer beneficial to it or its stockholders. Accordingly, the Company's board of directors has approved a restructuring whereby the Company will convert from a Maryland corporation qualified as a REIT to a Delaware limited liability company that would be considered a publicly traded partnership taxable as a partnership, or PTP.

The Company believes that the restructuring is in the best interests of its stockholders, and that since the PTP will not be required to comply with the REIT income and asset tests and distribution requirements, it will significantly enhance its flexibility for investment diversification and cash management. In addition, following the restructuring, the PTP plans to diversify and offer fee-based services, including credit risk management, asset management advisory services and sub-manager services for investment funds. These fee-based activities generally will be conducted through corporate subsidiaries that would be subject to corporate income tax.

The restructuring is subject to stockholder approval and, if approved, it is expected that the restructuring will be completed in the second quarter of 2008. The proposed restructuring will result in each share of currently issued and outstanding Luminent Mortgage Capital, Inc. common stock being exchanged for one-third of a newly issued common share of the PTP.

The association's chief economist Lawrence Yun said regions of the country that have seen sharp price declines, like the West, are now seeing a sales recovery.

"Bargain hunters have entered the market en masse, especially in areas that have seen double-digit price declines," he said in a statement.


http://www.cnbc.com/id/25058900

I'm expecting some news in the next week or two on the merger/dividends!

Luminent remains on the naked short list;

http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOThreshold

As of May 15th showing 4.4 million still short;

http://www.otcbb.com/asp/OTCE_Short_Interest.asp

Just for fun luminent's financials on yahoo....

http://finance.yahoo.com/q/is?s=lumc.ob

Luminent has always claimed low losses by doing due diligence on all their loans.

From the bits I've read it looks like their dilution makes ours look small. They are a big jumbo lender. I don't see them out performing LUMC...........I do follow it with my streamer and have for some time.

Thornburg Plans Reverse Split
June 3, 2008
SANTA FE, N.M. -- Thornburg Mortgage Inc., a residential-finance company hit hard by the credit crunch, delayed the release of its financial report and said it plans a reverse stock split.

The mortgage-finance company said it needs more time before it releases its quarterly results and files the report with regulators.

Thornburg said last month that it planned to report by June 2, but now expects to do so by June 12. The company said it intends to implement a reverse stock split to regain listing compliance with the New York Stock Exchange. The company fell out of compliance because the share price had been less than $1 for 30 consecutive trading days.

Specific information regarding the timing and details of the reverse stock split will be released at a later date. Shareholder approval of the reverse stock split isn't required. Thornburg shares in after-hours trading fell 12% to 76 cents after closing the regular session up six cents at 85 cents.



or this:

http://www.marketwatch.com/news/story/thornburg-mortgage-announces-further-delay/story.aspx?guid=%7B7B5837C3%2D4310%2D486A%2DB6FA%2D6DDBAC889EBF%7D&dist=TQP_Mod_pressN

Looks like they will regain compliance......

http://online.wsj.com/article/SB121246357898040647.html?mod=MKTW

lol, that's why I bailed the last time it was $7 per share...........wink, wink! or .07 pre-split...

Arco has not exercised their warrants yet. If you remember they have the option of acquiring 49% of the company. Keep in mind the market cap of about 10 million and Arco has loaned luminent about $5 dollars per-share and if they exercise they will spend about half their market cap to do it!

To think you can pick up one share of LUMC for about the same price of one NWOL share if amazing isn't it? Fully reporting vs who knows what! Glad you got some at this price, again!

You're doing well at this, hey?

Wow, just got my internet restored had no idea what had been happening for the last two days.......out Monday and just got it back.............time to buy at this price.