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"Alaris Royalty Corp is engaged in investing in operating entities. Its operations consist primarily of investments in private operating entities, typically in the form of preferred limited partnership interests, preferred interest in limited liability corporations in the United States, loans receivable, or long-term license and royalty arrangements."

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Alaris Royalty Corp > Tax Bill

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Post by DivysRock on Sep 09, 2019 1:50pm

Tax Bill

I believe AD has a big cloud overhanging the stock due to the potential of a large tax bill by year end due to the changes in the US.which could be effective January 1, 2019. The statement below is in the MD&A for Q2. If we assume double the first half this could be a $11 million tax bill by end of 2019.

“In December of 2018 the U.S. Treasury issued proposed regulations which provided administrative guidance and clarified certain aspects of U.S. Tax Reform. The proposed regulations are complex and comprehensive, and considerable uncertainty continues to exist until the final regulations are released, which is expected to occur later in 2019. As these proposed regulations have not been enacted as at June 30, 2019, their impact has not been reflected in income tax expense. However, if the proposed regulations are enacted as currently drafted, certain provisions could be effective commencing January 1, 2019. Based on the Corporation’s current capital structure, the resulting increase to income tax expense of the Company for the period ended, June 30, 2019 would be an increase of approximately $5.5 million.”

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Comment by camille22 on Sep 14, 2019 8:08am

I would think the company know and are ready for it

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Comment by SunsetGrill on Sep 16, 2019 11:19am

Also, less than 1 million a month IF AND ONLY IF fully implemented. Wishing it was a tax break for the same amt. but these things happen. Fairly insignificant to operations - plus new yr coming up with increased collars so....

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Comment by DivysRock on Sep 16, 2019 5:00pm

The problem is in the Run Rate Cash Flow calculation published in Q2 which takes into account new investments but not the adjustments at year end, the excess cash flow is $11.3MM. If we add $12MM in additional taxes which should continue going forward Excess Cash Flow is negative. Payout ratio in 2020 will be barely above zero after year end adjustments.

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Comment by DivysRock on Sep 16, 2019 5:02pm

Should have said Excess cash flow barely positive, ie almost 100% payout ratio.

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Comment by camille22 on Sep 16, 2019 6:42pm

Blah blah blah looking for cheap share or a shorter,if you say you are trying to save me some money for I don’t believe in santa any more

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Comment by DivysRock on Sep 16, 2019 9:12pm

No I am not a shorter but I don’t ignore the financials. Just pointing out the risks. If you want to ignore them feel free. I will not buy additional shares until they release the tax details on the US tax reform effects by year end. Don’t forget they are also fighting CRA on their taxes for the last ten years. If they lose there’s tens of millions they owe.

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Alaris Royalty Corp