11.17.08
Daniel Kahan, director of Maxlife Fund Corp, follows my advice
Over the last two months Kahan sold every share of Maxlife Fund Corp (OTC BB: MXFD) that he owned. He made $59,850 from the sales of 2,500 shares while also donating 500 shares to a synagogue. Not a bad profit for someone who is director of a company with essentially no operations, assets, or revenues (at least as of the last 10Q — I am eagerly awaiting the 10K and hey, maybe Maxlife will have actually done some business over the last quarter, but I am not betting on it).
Kahan’s average sale price was $23.94, 33% above the current stock price of $18. See the Form 4 here. Kahan still owns stock options, some exercisable at prices as low as $20.
Maxlife’s last 10Q shows a book value of $597,000, nil quarterly revenues, and a quarterly loss of $219,000. The company has a market cap (at a recent price of $18) of $545 million.
Disclosure: I have no position in MXFD.
daniel kahan said,
January 18, 2009 at 3:28 pm
Today is January 18 and I just discovered your comments about me. You may want to update your blog with the fact that I recently resigned as a director from Max Life because I felt the stock options they awarded me for becoming a director in April 2008 were worthless because the stocks would be restricted for 6 months as stated in the 8-K.
The 3,000 shares I sold in your article were shares I was awarded for joining the Advisory Board in September 2007 and were restricted for 12 months so I was fortunate that the restriction ended in September 2008.
As far as the MXFD share price you are presumably aware it is thinly traded and there were a lot of short sellers who got squeezed each time the SEC placed restrictions on the short selling of financial stocks.
The underlying business of life settlements is sound and profitable if done properly and there was a considerable amount of time and effort spent in R&D over the past year by both myself and Bennett Kurtz which does not show up in the revenue stream or the balance sheet. I expect intellectual capital is an off balance sheet item which doesn’t meet your definition of “goode” value.
michael said,
January 18, 2009 at 5:18 pm
Mr. Kahan, I did post about you leaving Maxlife (see here: http://www.goodevalue.com/2009/01/12/maxlife-fund-corp-makes-it-easy-no-comment-necessary/); I see that you found that post and commented there, too.
Was Maxlife on the short sale ban list? I couldn’t find them on the original ban list here: http://www.sec.gov/rules/other/2008/34-58592.pdf
I doubt short sellers have much to do with the current share price — there were under 100,000 shares sold short as of December 23, 2008. Even back in March 2008 there were under 200,000 shares sold short
As to the intellectual capital, I do not care how much of that there is, an investment company (what Maxlife purports to be, although not in the technical sense, investing in life insurance policies), capital is essential. Even assuming astronomical returns of 50% on each insurance policy bought and sold, there is no way for Maxlife to justify its current market capitalization (or anything near it) with book value under $1 million.
daniel kahan said,
August 9, 2009 at 10:15 am
As I just noticed your reply, I would like to reply for the public record that although MXFD was not on the original short sellers ban list, there is a strong positive correlation between the 2 periods when the ban was in place and the steep rises in the MXFD share price last year.
Besides the intellectual capital there is a considerable time and effort spent to find a strategic investor or investment to move the company out of its development stage status. Given MXFD’s Canadian roots and origin when it bought my Ontario numbered company back in August 06 to go public, it would make a lot of sense for it to have concentrated on developing a Candian marketplace for both investors and policyholders. Since January when I resigned as a director, I have been doing this on my own through my private company Scotia Life Line and anyone interested is welcome to contact me at 416-782 8766.