UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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1 Robert P. Mosier Craig M. Collins, CPA Ryan Baker, Senior Financial Analyst MOSIER & COMPANY, INC. 1 Airway Avenue, Suite A-1 Costa Mesa, California Telephone: ( -000 Facsimile: ( - Rmosier@Mosierco.com Court Appointed Receiver SECURITIES AND EXCHANGE COMMISSION, Plaintiff, vs. PAUL MATA, DAVID KAYATTA, MARION PINCHEIRA, SECURED CAPITAL INVESTMENTS, LLC, LOGOS REAL ESTATE HOLDINGS, LLC, LOGOS WEALTH ADVISORS, INC., and LIFETIME ENTERPRISES, LLC (dba LOGOS LIFETIME UNIVERSITY, Defendants. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Case No: :-cv-0-vap-kk Assigned for all purposes to the Honorable Virginia A. Philips PERMANENT RECEIVER S SECOND STATUS REPORT; DECLARATION OF RECEIVER, ROBERT P. MOSIER. Date: June, Time: :00 PM Dept: Robert P. Mosier, duly appointed Permanent Receiver ( Receiver for Secured Capital Investments, LLC and its affiliates/subsidiaries (collectively SCI, respectfully submits this Second Status Report ("Report" on the operational and financial aspects of SCI. The timeframe for this report is October, (date of appointment through April 0, with exceptions noted (fees are reported through March 1,. Limitation: This Report should be viewed as preliminary and subject to change. New data is still being discovered. Notwithstanding these discoveries, all attempts are made to be as accurate as possible given the time limitation, assets located in several states, and a variety of investment options and variations. SCI Perm Rec nd Stat RPT -- R-.doc 1 // : PM

2 Organization: This Supplement is organized as follows: (A Activity to Date, (B Future Activity and (C Accounting Update Including Fees and Costs. A. ACTIVITY TO DATE 1. Sale of the Primary Properties: Pursuant to this Court s order, the primary or principal properties of the Receivership estate were auctioned in March. Of the eight properties auctioned, six were sold and two remain unsold. Exhibit A is a summary of the auction results. The gross proceeds from the six that were sold total $,0,00. After commissions, mortgages payoffs, delinquent taxes and closing costs, the six assets are expected to produce approximately $,1,0 (still subject to change. These pending sales are expected to close by late May or roughly thirty days after this Court signed the orders confirming the sales.. Remaining Unsold Properties: Tranzon Asset Strategies that conducted the auctions is continuing to work on the sale of a vacant hospital in Excelsior Springs, Missouri and a vacant house in Kentucky (a foreclosure from a delinquent tax sale. It is too early to tell if these assets can be sold or will have to be abandoned.. Investor/Victim Claims: The Court-established bar date of May, recently expired. The Receiver originally reported knowledge of victims with net claims that totaled $. million. Approximately 1 investors filed claims in the aggregate face amount of approximately $.1 million. Additionally, approximately creditors filed claims in the aggregate amount of $0,000. Some claims may result in objections to claims.. Forensic Accounting: HSNO Forensic Accountancy was retained to trace the cash receipts and disbursements since inception of SCI. The accounting shows that many investments and loans simply did not work out. There is no substantial evidence to date that large portions of investor monies have been diverted to personal use, but there is evidence that investor monies were used for non-investor projects owned by the principals. SCI Perm Rec nd Stat RPT -- R-.doc // : PM

3 B. FUTURE ACTIVITY. Other Assets: The Receiver is monitoring the following assets. The Receiver will pursue an asset if the likely benefit outweighs the probable cost: a. Portfolio of Tax Liens: The Receiver has received a proposal to auction the portfolio of tax liens that will be presented by motion. b. Landwin REIT: This asset is being examined to determine marketable. c. IE Crowd Stock: The IE Crowd ( IEC stock (0,000 shares has plummeted in value from a theoretical price of $.0 per share to perhaps $0. per share, if that. IEC s president reports that the company is lucky to be alive. To raise survival money, IEC issued tens of millions of new shares that have diluted SCI s position from % to 0.% of outstanding IEC shares. IEC continues to work on two projects that it believes may have long-term potential. It is the Receiver's view that the value of this investment continues to be very problematic. d. Bad Loans: The Receiver is evaluating a portfolio of bad loans made by SCI to a variety of individuals and businesses. The cost/benefit of pursuing these loans initially appears marginal. e. Destiny with a Purpose: The Receivership Estate owns.% of this portfolio of trust deeds ( TDs. The Receiver plans to explore the options of either (i being bought out at current market value or (ii selling the portfolio subject to court approval to liquidate the estate s position and pay off the other owners of this TD portfolio. This analysis is just starting and will be followed by negotiations with the other owners of the TDs. f. Auction or Abandon: The Receiver anticipates that he will file a motion to sell some or all of these assets by auction or, alternatively to abandon the assets. SCI Perm Rec nd Stat RPT -- R-.doc // : PM

4 C. ACCOUNTING UPDATE INCLUDING FEES AND COSTS. Receipts: Exhibit "B" is a summary of Cash Receipts and Disbursements from October, through May,. In the area of estate operations, receipts total $1, including $0, that was turned over by the temporary Receiver. Expenses from Operations total $,; the major expenses were insurance ($,, payroll at the various projects ($,, utilities at the storage facilities and apartments ($, and patient refunds from a closed mental hospital in Missouri ($,1. These four areas of expense total roughly $,000 or 1% of the expenditures. The remaining balance from the operations side of the Receivership Estate is $,01.. Receipts and Disbursements from Real Estate Sales: Only the sale of the Tucson storage facilities has closed at this point. This is summarized on the lower half of Exhibit B. The gross sale proceeds were $1. million. After mortgages, property taxes, sales commissions and other items that totaled $,00, the net recovery from this sale was $,. The estate is also holding deposits on other sales that have yet to close. Real estate deposits produced another $0,0 as set forth in the lower part of the Exhibit. The total cash balance from operations, the Tucson sale and deposits is $,.. Projected Net Recoveries: Exhibit C is a pro forma cash flow that anticipates the balance of the projected receipts from the sale of existing assets (already sold will total $1. million. When added to the current cash balance outlined at the end of paragraph above, the projected cash available will be approximately $. million. As set forth in the schedule, there are still some assets to administer and claims to evaluate. After payment of professional fees and costs and other expenses, the forecast for the cash balance available for dividend to the victims is crudely estimated at this point at $1. million. This number could vary by $0,000 either direction, subject to the sales actually closing. SCI Perm Rec nd Stat RPT -- R-.doc // : PM

5 . Payment of Fees and Costs: As set forth in Exhibit C, the Receiver has identified the possibility of paying roughly $,000 in professional fees and costs in June subject to approval of this Court. There are additional minor recoveries forecast, and final fees currently forecast through year-end or approximately sixteen months after the receivership commenced. Whether or not this deadline can be met remains to be seen.. Future Strategy: An important variable from this point forward will be the cost benefit of pursuing asset recoveries. Given the meager recoveries to date, one strategy is to work to bring the estate to a close as quickly as practicable to preserve as much as possible for the victims/investors. This will involve a close look at the cost to (a pursue certain recoveries versus (b the gross recovery expected. Another cost/benefit analysis will apply to the claims objections.. Future Reporting: Additional information will be provided as it is developed and confirmed. The Receiver again cautions that this Second Status Report is preliminary and therefore the data presented herein is subject to change.. Conclusion: There is good progress during the seven months of the Receivership in the following areas: (a ceasing operations, (b inventorying books and records, (c valuing and then liquidating the primary assets, (d soliciting input from the investors to affirm their claims and (e performing an accounting to trace the expenditure of investor funds. Date: May, Robert P. Mosier Receiver SCI Perm Rec nd Stat RPT -- R-.doc // : PM

6 DECLARATION OF ROBERT P. MOSIER I, Robert P. Mosier, declare and affirm as follows: I am the duly appointed Receiver in this matter and have first-hand knowledge about the following facts except where otherwise noted. If called upon to testify, I could do so competently. I have personally prepared this Second Status Report. The description of the activities and Receivership assets for this reporting period is accurate to the best of my knowledge and belief at this time. As cautioned in the Report, this data should be treated as preliminary and subject to change. Exhibit A, prepared by Craig Collins, a CPA who is assisting the Receiver in the administration of the case, is a list of real estate assets that were sold at auction in March. Note that these numbers are preliminary. Exhibit B (also prepared by Mr. Collins with input from the bookkeeping staff is a reconciliation of cash receipts and disbursements from October, through May,. Exhibit C is pro forma to estimate future cash receipts and disbursements that may or may not come about or be accurate. These exhibits are based on information known today and are therefore believed to be accurate to the best of my knowledge and belief. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge and belief. This declaration is executed on the th day of May in Costa Mesa, CA. Robert P. Mosier, Receiver SCI Perm Rec nd Stat RPT -- R-.doc // : PM