GWG Holdings, Inc.

CIK:0001522690|SEC Filings

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
REVENUE
Gain on life insurance policies, net	$ 15,484	$ 14,122	$ 17,923	$ 43,355
Investment income, net	17,554	56,705	21,417	41,590
Interest income	213	278	835	1,293
Other income (loss)	535	(3,093)	(2,916)	33,504
TOTAL REVENUE	33,786	68,012	37,259	119,742
EXPENSES
Interest expense	45,096	40,792	128,605	113,805
Employee compensation and benefits	14,871	33,777	43,977	123,321
Legal and professional fees	6,650	7,830	20,832	21,636
Other expenses	9,652	4,712	23,050	13,387
TOTAL EXPENSES	76,269	87,111	216,464	272,149
LOSS BEFORE INCOME TAXES	(42,483)	(19,099)	(179,205)	(152,407)
INCOME TAX EXPENSE (BENEFIT)	655	3,618	173	(14,545)
NET LOSS BEFORE LOSS FROM EQUITY METHOD INVESTMENT	(43,138)	(22,717)	(179,378)	(137,862)
Loss from equity method investment	(4,949)	(1,431)	(11,898)	(4,279)
NET LOSS	(48,087)	(24,148)	(191,276)	(142,141)
Net (income) loss attributable to noncontrolling interests	(87)	(21,181)	29,766	32,901
Less: Preferred stock dividends	2,404	3,569	8,371	11,235
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ (50,578)	$ (48,898)	$ (169,881)	$ (120,475)
NET LOSS PER COMMON SHARE
Basic (in usd per share)	$ (2.44)	$ (1.60)	$ (8.18)	$ (3.95)
Diluted (in usd per share)	$ (2.44)	$ (1.60)	$ (8.18)	$ (3.95)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic (in shares)	20,759,854	30,477,792	20,758,910	30,516,331
Diluted (in shares)	20,759,854	30,477,792	20,758,910	30,516,331

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (191,276)	$ (142,141)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Change in fair value of life insurance policies	(623)	(23,476)
Investment income, net	(21,417)	(41,590)
Amortization of deferred financing and issuance costs	19,594	13,619
Amortization and depreciation on long-lived assets	1,552	827
Return on investments in alternative assets	3,043	1,577
Non-cash interest income	(214)	(215)
Non-cash interest expense	3,149	1,795
Loss from equity method investment	11,898	4,279
Loss on change in fair value of put options	4,022	3,191
Deferred income tax	(141)	(18,553)
Write-off of other equity investment	2,037	0
Equity-based compensation	14,252	96,618
Forfeiture of vested equity-based compensation	0	(36,267)
Change in operating assets and liabilities
Life insurance policy benefits receivable	(18,771)	(13,387)
Other assets	(1,369)	(2,450)
Accounts payable and other accrued expenses	(2,022)	8,364
NET CASH FLOWS USED IN OPERATING ACTIVITIES	(176,286)	(147,809)
CASH FLOWS FROM INVESTING ACTIVITIES
Return of investment for matured life insurance policies	30,974	32,255
Purchases of fixed assets	(2,477)	(2,498)
Equity method investments	(3,750)	(10,144)
Investments in alternative assets	(4,470)	(226)
Return of investments in alternative assets	19,692	5,752
Investment in put options	0	(14,775)
NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES	39,969	10,364
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on senior debt	215,959	28,530
Purchase of noncontrolling interest	0	(1,195)
Proceeds from issuance of L Bonds	155,170	317,302
Payments for redemption of L Bonds	(127,961)	(82,206)
Issuance of common stock	0	8
Payments for redemption of preferred stock	(58,354)	(34,779)
Payment for equity issuance costs	(778)	0
Preferred stock dividends	(8,371)	(11,235)
Tax distribution to noncontrolling interest	(1,388)	0
Tax distribution to noncontrolling interest	0	(5,592)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	79,880	137,323
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(56,437)	(122)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
BEGINNING OF PERIOD	124,160	115,790
END OF PERIOD	67,723	115,668
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	105,464	97,098
Premiums paid, including prepaid	54,885	52,136
NON-CASH INVESTING AND FINANCING ACTIVITIES
L Bonds: Conversion of accrued interest and commissions payable to principal	436	1,296
Liquidity Bonds, net of financing costs (see Note 9)	246	0
Employee payroll tax liability on restricted equity units	0	1,555
Debt due to related parties: Capitalization of deferred financing costs to principal	1,014	0
Debt due to related parties: Deferred financing costs payable (see Note 9)	2,334	0
Noncash issuance of noncontrolling interest (Note 10)	374	0
Distribution payable to noncontrolling interest (Note 10)	1,120	165
Collateral Swap (see Note 1):
Deemed capital contribution from related party	0	46,770
Adjustment to noncontrolling interest	0	3,444
Treasury Stock
Collateral Swap (see Note 1):
Consideration given	0	42,856
Senior Debt
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of senior debt and debt due to related parties	(81,105)
Debt Due To Related Parties
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of senior debt and debt due to related parties		(50,000)
Senior Debt and Debt Due to Related Parties
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred financing costs and issuance costs	(3,285)	(3,307)
LBonds
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred financing costs and issuance costs	(10,007)	(20,203)
Seller Trust L Bonds
Collateral Swap (see Note 1):
Consideration given	$ 0	$ 94,788

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
ASSETS
Cash and cash equivalents	$ 42,207	$ 85,249
Restricted cash	25,516	38,911
Investment in life insurance policies, at fair value	761,560	791,911
Life insurance policy benefits receivable, net	33,105	14,334
Investment in alternative assets, at fair value	226,138	221,894
Equity method investments	664	8,582
Other assets	33,256	36,326
Goodwill	2,367,750	2,367,750
TOTAL ASSETS	3,490,196	3,564,957
LIABILITIES
Senior credit facilities with LNV Corporation and National Founders LP	327,702	193,730
L Bonds	1,279,808	1,246,902
Seller Trust L Bonds	272,104	272,104
Total debt due to related parties	77,362	76,260
Interest and dividends payable	24,440	24,080
Accounts payable and accrued expenses	30,448	26,505
Deferred tax liability, net	51,328	51,469
TOTAL LIABILITIES	2,063,192	1,891,050
Redeemable noncontrolling interests	1,226,020	1,233,093
Common stock
(par value $0.001; shares authorized 210,000,000; shares issued and outstanding, 33,097,118 and 33,094,664 as of September 30, 2021 and December 31, 2020, respectively)	33	33
Common stock in treasury, at cost (12,337,264 shares as of both September 30, 2021 and December 31, 2020)	(67,406)	(67,406)
Additional paid-in capital	265,812	274,023
Accumulated deficit	(412,621)	(251,111)
TOTAL GWG HOLDINGS STOCKHOLDERS’ (DEFICIT) EQUITY	(115,703)	112,372
Noncontrolling interests	316,687	328,442
TOTAL STOCKHOLDERS’ EQUITY	200,984	440,814
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$ 3,490,196	$ 3,564,957
Common stock, issued (in shares)	33,097,118	33,094,664
Common stock, outstanding (in shares)	33,097,118	33,094,664
Redeemable Preferred Stock
STOCKHOLDERS’ EQUITY
Redeemable preferred stock	$ 31,069	$ 46,241
Series 2 Redeemable Preferred Stock
STOCKHOLDERS’ EQUITY
Redeemable preferred stock	$ 67,410	$ 110,592