JanOne Inc (JAN)

[Principian]

Declining Book Value for ARCI

Take a look at the year over year Balance Sheet. ARCI went from having about an $11 Million Book Value at the end of 2016 to now having about $2 Million. Proper book value discounts Intangibles and Goodwill.

As well without that one time sale of property for $5.1 Million, ARCI would have more than likely incurred around a $1.2 Million Loss for the year.

1st Qtr Numbers will be interesting as they will no longer have ApplianceSmart as a Cash Cow and so taking the numbers that Live Ventures Added to their Balance sheet, ARCIs Book value will more than likely be in the Negative.

I talked with one of my accountant buddies on the ability to pad the Intangible Assets with that Deferred Tax Liability and it confirmed my suspicion. It is a "grey" area, very subjective... they will need that padding to keep an illusion up.

What I find interesting about that Deferred Tax Liability of $10 Million was not mentioned in any filings till now. As well my understanding is you would create this balance sheet entry as a reserve for an expected Future Tax Payment. In this case this is saying Geotraq had a reason to beleive they would have a future tax liability and therefore it is a temporary assumption. ARCI has flipped this assumption to being part of the cost and value of the entire Intangibles... so this hides that possible future liability and makes it appear as a increasinging their Assets. So if their is no revenue vrom Geotraq, there would be no taxes and this number woukd have to go down.