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Florida
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30-0663473
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page No.
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PART I — FINANCIAL INFORMATION
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PART II — OTHER INFORMATION
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•
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our ability to obtain future financings on favorable terms, or at all;
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•
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our ability to manage the process of exploring strategic alternatives;
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•
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our ability to complete any strategic alternatives that our special committee may recommend;
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•
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our ability to receive distributions from policy proceeds from life insurance policies pledged as collateral under our revolving credit facilities;
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•
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our ability to meet our debt service obligations;
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•
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delays in the receipt of death benefits from our portfolio of life insurance policies;
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•
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costs related to obtaining death benefits from our portfolio of life insurance policies;
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•
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our ability to continue to comply with the covenants and other obligations, including the conditions precedent for additional fundings, under our revolving credit facilities;
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•
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increases in premiums on, or the cost of insurance of, life insurance policies that we own;
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•
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lack of mortalities of insureds of the life insurance policies that we own;
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•
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changes to actuarial life expectancy tables;
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•
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changes in general economic conditions, including inflation, changes in interest or tax rates;
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•
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our results of operations;
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•
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our ability to continue to make premium payments on the life insurance policies that we own;
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•
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continuing costs associated with an investigation by the U.S. Securities and Exchange Commission ("SEC") (the "SEC Investigation");
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•
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adverse developments, including financial ones, associated with the SEC Investigation, other litigation and judicial actions or similar matters;
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•
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inaccurate estimates regarding the likelihood and magnitude of death benefits related to life insurance policies that we own;
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•
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increases to the discount rates used to value the life insurance policies that we own;
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•
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changes in mortality rates and inaccurate assumptions about life expectancies;
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•
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changes in life expectancy calculation methodologies by third party medical underwriters;
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•
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the effect on our financial condition as a result of any lapse of life insurance policies;
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•
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our ability to sell the life insurance policies we own at favorable prices, if at all;
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•
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adverse developments in capital markets;
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•
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deterioration of the market for life insurance policies and life settlements;
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•
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increased carrier challenges to the validity of our life insurance policies;
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•
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adverse court decisions regarding insurable interest and the obligation of a life insurance carrier to pay death benefits or return premiums upon a successful rescission or contest;
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•
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challenges to the ownership of the policies in our portfolio;
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•
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changes in laws and regulations;
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•
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deterioration in the credit worthiness of the life insurance companies that issue the policies included in our portfolio;
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•
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regulation of life settlement transactions as securities;
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•
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liabilities associated with our legacy structured settlement business;
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•
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our failure to maintain the security of personally identifiable information pertaining to insureds and counterparties;
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•
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disruption of our information technology systems;
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•
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cyber security risks and the threat of data breaches;
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•
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loss of the services of any of our executive officers; and
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•
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the effects of United States' involvement in hostilities with other countries and large-scale acts of terrorism, or the threat of hostilities or terrorist acts.
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September 30,
2016 |
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December 31,
2015* |
||||
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(Unaudited)
|
|
|
||||
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(In thousands except share data)
|
||||||
ASSETS
|
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,801
|
|
|
$
|
12,946
|
|
Cash and cash equivalents (VIE Note 4)
|
9,098
|
|
|
7,395
|
|
||
Certificates of deposit
|
6,008
|
|
|
2,501
|
|
||
Prepaid expenses and other assets
|
1,488
|
|
|
1,017
|
|
||
Deposits - other
|
1,347
|
|
|
1,347
|
|
||
Life settlements, at estimated fair value
|
7,810
|
|
|
11,946
|
|
||
Life settlements, at estimated fair value (VIE Note 4)
|
475,585
|
|
|
449,979
|
|
||
Receivable for maturity of life settlements (VIE Note 4)
|
20,088
|
|
|
18,223
|
|
||
Fixed assets, net
|
256
|
|
|
322
|
|
||
Investment in affiliates
|
2,384
|
|
|
2,384
|
|
||
Total assets
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$
|
533,865
|
|
|
$
|
508,060
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
3,550
|
|
|
$
|
3,051
|
|
Accounts payable and accrued expenses (VIE Note 4)
|
521
|
|
|
419
|
|
||
Other liabilities
|
395
|
|
|
360
|
|
||
Interest payable - Convertible Notes (Note 11)
|
768
|
|
|
2,272
|
|
||
Convertible Notes, net of discount and deferred debt costs (Note 11)
|
59,532
|
|
|
56,812
|
|
||
Interest payable - Senior Secured Notes (Note 12)
|
200
|
|
|
—
|
|
||
Senior Secured Notes, net of discount and deferred debt costs (Note 12)
|
29,209
|
|
|
—
|
|
||
White Eagle Revolving Credit Facility, at estimated fair value (VIE Note 4)
|
182,128
|
|
|
169,131
|
|
||
Red Falcon Revolving Credit Facility, at estimated fair value (VIE Note 4)
|
61,451
|
|
|
55,658
|
|
||
Total liabilities
|
337,754
|
|
|
287,703
|
|
||
Commitments and Contingencies (Note 16)
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Common stock (par value $0.01 per share, 80,000,000 authorized at September 30, 2016 and December 31, 2015; 28,836,573 issued and 28,228,573 outstanding as of September 30, 2016; 28,130,508 issued and 27,522,508 outstanding at December 31, 2015)
|
288
|
|
|
281
|
|
||
Preferred stock (par value $0.01 per share, 40,000,000 authorized; 0 issued and outstanding as of September 30, 2016 and December 31, 2015)
|
—
|
|
|
—
|
|
||
Treasury Stock, net of cost (608,000 shares as of September 30, 2016 and December 31, 2015)
|
(2,534
|
)
|
|
(2,534
|
)
|
||
Additional paid-in-capital
|
307,210
|
|
|
305,450
|
|
||
Accumulated deficit
|
(108,853
|
)
|
|
(82,840
|
)
|
||
Total stockholders’ equity
|
196,111
|
|
|
220,357
|
|
||
Total liabilities and stockholders’ equity
|
$
|
533,865
|
|
|
$
|
508,060
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
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2016
|
|
2015
|
||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||
Income
|
|
|
|
|
|||||||||||
Change in fair value of life settlements (Notes 8 & 14)
|
$
|
4,735
|
|
|
$
|
2,667
|
|
|
$
|
(2,690
|
)
|
|
$
|
43,582
|
|
Other income
|
32
|
|
|
102
|
|
|
125
|
|
|
201
|
|
||||
Total income (loss)
|
4,767
|
|
|
2,769
|
|
|
(2,565
|
)
|
|
43,783
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
7,895
|
|
|
8,614
|
|
|
21,330
|
|
|
21,491
|
|
||||
Extinguishment of Secured Notes
|
—
|
|
|
8,782
|
|
|
—
|
|
|
8,782
|
|
||||
Change in fair value of Revolving Credit Facilities (Notes 9, 10 & 14)
|
(551
|
)
|
|
(4,203
|
)
|
|
(16,121
|
)
|
|
13,489
|
|
||||
Personnel costs
|
1,303
|
|
|
1,945
|
|
|
5,133
|
|
|
5,425
|
|
||||
Legal fees
|
1,833
|
|
|
3,370
|
|
|
5,361
|
|
|
10,345
|
|
||||
Professional fees
|
2,136
|
|
|
1,579
|
|
|
5,347
|
|
|
5,284
|
|
||||
Insurance
|
200
|
|
|
309
|
|
|
639
|
|
|
966
|
|
||||
Other selling, general and administrative expenses
|
494
|
|
|
585
|
|
|
1,511
|
|
|
1,671
|
|
||||
Total expenses
|
13,310
|
|
|
20,981
|
|
|
23,200
|
|
|
67,453
|
|
||||
Income (loss) from continuing operations before income taxes
|
(8,543
|
)
|
|
(18,212
|
)
|
|
(25,765
|
)
|
|
(23,670
|
)
|
||||
(Benefit) provision for income taxes
|
—
|
|
|
(4,721
|
)
|
|
—
|
|
|
(6,981
|
)
|
||||
Net income (loss) from continuing operations
|
$
|
(8,543
|
)
|
|
$
|
(13,491
|
)
|
|
$
|
(25,765
|
)
|
|
$
|
(16,689
|
)
|
Discontinued Operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income taxes
|
(54
|
)
|
|
(147
|
)
|
|
(248
|
)
|
|
(640
|
)
|
||||
(Benefit) provision for income taxes
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(224
|
)
|
||||
Net income (loss) from discontinued operations
|
(54
|
)
|
|
(113
|
)
|
|
(248
|
)
|
|
(416
|
)
|
||||
Net income (loss)
|
$
|
(8,597
|
)
|
|
$
|
(13,604
|
)
|
|
$
|
(26,013
|
)
|
|
$
|
(17,105
|
)
|
Basic and diluted income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.31
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.70
|
)
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
Net income (loss)
|
$
|
(0.31
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.95
|
)
|
|
$
|
(0.72
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted
|
27,614,441
|
|
|
28,084,254
|
|
|
27,529,120
|
|
|
23,827,030
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital
|
|
Accumulated Deficit
|
|
Total
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
|
(in thousands, except share data)
|
||||||||||||||||||||||||
Balance, January 1, 2016
|
28,130,508
|
|
|
$
|
281
|
|
|
(608,000
|
)
|
|
$
|
(2,534
|
)
|
|
$
|
305,450
|
|
|
$
|
(82,840
|
)
|
|
$
|
220,357
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,013
|
)
|
|
(26,013
|
)
|
|||||
Stock-based compensation
|
265,212
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
270
|
|
|||||
Common stock issued through ATM, net
|
443,038
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
1,501
|
|
|
—
|
|
|
1,505
|
|
|||||
Retirement of common stock
|
(2,185
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Balance, September 30, 2016
|
28,836,573
|
|
|
$
|
288
|
|
|
(608,000
|
)
|
|
$
|
(2,534
|
)
|
|
$
|
307,210
|
|
|
$
|
(108,853
|
)
|
|
$
|
196,111
|
|
|
For the Nine Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(26,013
|
)
|
|
(17,105
|
)
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
76
|
|
|
74
|
|
||
Red Falcon Revolving Credit Facility origination cost
|
297
|
|
|
3,273
|
|
||
Amortization of discount and deferred costs for Convertible Notes
|
2,721
|
|
|
2,281
|
|
||
Amortization of discount and deferred costs for 15.00% Senior Secured Notes
|
260
|
|
|
—
|
|
||
Amortization of discount and deferred costs for 12.875% Secured Notes
|
—
|
|
|
542
|
|
||
Stock-based compensation expense
|
262
|
|
|
429
|
|
||
Finance cost and fees withheld by borrower
|
664
|
|
|
5,566
|
|
||
Change in fair value of life settlements
|
2,690
|
|
|
(43,582
|
)
|
||
Unrealized change in fair value of structured settlements
|
—
|
|
|
(20
|
)
|
||
Change in fair value of Revolving Credit Facilities
|
(16,121
|
)
|
|
13,489
|
|
||
Loss on life settlements, net
|
—
|
|
|
(32
|
)
|
||
Interest income
|
(23
|
)
|
|
(81
|
)
|
||
Extinguishment of Secured Notes
|
—
|
|
|
8,782
|
|
||
Deferred income tax
|
—
|
|
|
(7,205
|
)
|
||
Change in assets and liabilities:
|
|
|
|
||||
Deposits - other
|
—
|
|
|
(654
|
)
|
||
Structured settlement receivables
|
—
|
|
|
1,097
|
|
||
Prepaid expenses and other assets
|
1,177
|
|
|
(188
|
)
|
||
Accounts payable and accrued expenses
|
602
|
|
|
(1,492
|
)
|
||
Other liabilities
|
60
|
|
|
(812
|
)
|
||
Interest payable - Convertible Notes
|
(1,503
|
)
|
|
(1,503
|
)
|
||
Interest payable - 15.00% Senior Secured Notes
|
200
|
|
|
—
|
|
||
Interest payable - 12.875% Secured Notes
|
—
|
|
|
(261
|
)
|
||
Net cash used in operating activities
|
(34,651
|
)
|
|
(37,401
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchase of fixed assets, net of disposals
|
(9
|
)
|
|
(47
|
)
|
||
Certificate of deposit
|
(5,000
|
)
|
|
—
|
|
||
Purchase of life settlements
|
(1,390
|
)
|
|
(28,904
|
)
|
||
Premiums paid on life settlements
|
(52,750
|
)
|
|
(48,243
|
)
|
||
Proceeds from maturity of life settlements
|
27,980
|
|
|
47,519
|
|
||
Net cash used in investing activities
|
(31,169
|
)
|
|
(29,675
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Borrowings from White Eagle Revolving Credit Facility
|
38,771
|
|
|
36,880
|
|
||
Repayment of borrowings under White Eagle Revolving Credit Facility
|
(10,577
|
)
|
|
(43,241
|
)
|
||
Borrowings under Red Falcon Revolving Credit Facility
|
15,101
|
|
|
2,967
|
|
||
Repayment of borrowings under Red Falcon Revolving Credit Facility
|
(9,195
|
)
|
|
(1,863
|
)
|
||
Proceeds from issue of common stock, net
|
1,505
|
|
|
—
|
|
||
Proceeds from rights offering
|
—
|
|
|
38,458
|
|
||
Proceeds from 15.00% Senior Secured Notes
|
30,000
|
|
|
—
|
|
||
Proceeds from Secured Notes, net
|
—
|
|
|
23,750
|
|
||
Purchase of treasury stock
|
—
|
|
|
(348
|
)
|
||
Payment under finance lease obligations
|
(26
|
)
|
|
(25
|
)
|
||
Extinguishment of Secured Notes
|
—
|
|
|
(3,570
|
)
|
||
Red Falcon Revolving Credit Facility origination costs
|
(150
|
)
|
|
(427
|
)
|
||
15.00% Senior Secured Notes deferred cost
|
(1,051
|
)
|
|
—
|
|
||
12.875% Secured Notes deferred costs
|
—
|
|
|
(5
|
)
|
||
Net cash provided by financing activities
|
64,378
|
|
|
52,576
|
|
||
Net decrease in cash and cash equivalents
|
(1,442
|
)
|
|
(14,500
|
)
|
||
Cash and cash equivalents, at beginning of the period
|
20,341
|
|
|
54,917
|
|
||
Cash and cash equivalents, at end of the period
|
$
|
18,899
|
|
|
$
|
40,417
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest during the period
|
$
|
19,339
|
|
|
$
|
12,143
|
|
Supplemental disclosures of non-cash financing activities:
|
|
|
|
||||
Interest payment and fees withheld from borrowings by lender
|
$
|
664
|
|
|
$
|
5,566
|
|
Red Falcon Revolving Credit Facility origination cost paid to lender
|
—
|
|
|
$
|
2,200
|
|
|
Repayment of 12.875% Secured Notes by lender of Red Falcon Revolving Credit Facility
|
—
|
|
|
$
|
51,800
|
|
|
Borrowings under Red Falcon Revolving Credit Facility
|
—
|
|
|
$
|
54,000
|
|
|
As reported under previous accounting guidance
|
|
As reported under ASU 2015-03
|
|
Effect of change
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
December 31, 2015
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
||||||
Deferred debt costs
|
$
|
1,797
|
|
|
$
|
—
|
|
|
$
|
(1,797
|
)
|
Total assets
|
$
|
509,857
|
|
|
$
|
508,060
|
|
|
$
|
(1,797
|
)
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Convertible Notes, net of discount
|
58,609
|
|
|
56,812
|
|
|
(1,797
|
)
|
|||
Total liabilities
|
289,500
|
|
|
287,703
|
|
|
(1,797
|
)
|
|||
|
|
|
|
|
|
||||||
Total stockholders' equity
|
220,357
|
|
|
220,357
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
509,857
|
|
|
$
|
508,060
|
|
|
$
|
(1,797
|
)
|
|
|
|
|
|
|
||||||
Net effect
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Primary Beneficiary
|
|
Not Primary
Beneficiary
|
||||||||||||
|
Consolidated VIEs
|
|
Non-consolidated VIEs
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Total
Assets
|
|
Maximum
Exposure
To Loss
|
||||||||
September 30, 2016
|
$
|
504,771
|
|
|
$
|
244,100
|
|
|
$
|
2,384
|
|
|
$
|
2,384
|
|
December 31, 2015
|
$
|
475,597
|
|
|
$
|
225,208
|
|
|
$
|
2,384
|
|
|
$
|
2,384
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016(1)
|
|
2015(2)
|
|
2016(1)
|
|
2015(2)
|
||||||||
Income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
$
|
(8,543
|
)
|
|
$
|
(13,491
|
)
|
|
$
|
(25,765
|
)
|
|
$
|
(16,689
|
)
|
Net income (loss) from discontinued operations
|
(54
|
)
|
|
(113
|
)
|
|
(248
|
)
|
|
(416
|
)
|
||||
Net income (loss)
|
$
|
(8,597
|
)
|
|
$
|
(13,604
|
)
|
|
$
|
(26,013
|
)
|
|
$
|
(17,105
|
)
|
Basic and diluted income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income (loss) from continuing operations
|
$
|
(0.31
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.70
|
)
|
Basic and diluted income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||||
Basic and diluted income (loss) per share available to common shareholders
|
$
|
(0.31
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.95
|
)
|
|
$
|
(0.72
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted
|
27,614,441
|
|
|
28,084,254
|
|
|
27,529,120
|
|
|
23,827,030
|
|
(1)
|
The computation of diluted EPS does not include
265,212
shares of restricted stock,
763,594
options,
6,240,521
warrants, and up to
10,738,165
shares of underlying common stock issuable upon conversion of the Convertible Notes, as the effect of their inclusion would have been anti-dilutive.
|
(2)
|
The computation of diluted EPS did not include
41,259
shares of restricted stock,
774,394
options,
6,240,521
warrants, up to
10,738,165
shares of underlying common stock issuable upon conversion of the Convertible Notes and
323,500
performance shares, as the effect of their inclusion would have been anti-dilutive.
|
Common Stock Options
|
|
Number of
Shares
|
|
Weighted
Average Exercise Price
per Share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
||||||
Options outstanding, January 1, 2016
|
|
774,394
|
|
|
$
|
8.50
|
|
|
3.47
|
|
|
$
|
—
|
|
Options granted
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||
Options exercised
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||
Options forfeited
|
|
(10,800
|
)
|
|
$
|
7.22
|
|
|
—
|
|
|
|
|
|
Options expired
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||
Options outstanding, September 30, 2016
|
|
763,594
|
|
|
$
|
8.52
|
|
|
2.72
|
|
|
$
|
—
|
|
Exercisable at September 30, 2016
|
|
763,594
|
|
|
$
|
8.52
|
|
|
2.72
|
|
|
|
|
|
Unvested at September 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Common Unvested Shares
|
Number of
Shares
|
|
Outstanding January 1, 2016
|
41,259
|
|
Granted
|
265,212
|
|
Vested
|
(41,259
|
)
|
Forfeited
|
—
|
|
Outstanding September 30, 2016
|
265,212
|
|
Performance Shares
|
Number of
Shares
|
|
Outstanding January 1, 2016
|
319,500
|
|
Awarded
|
—
|
|
Vested
|
—
|
|
Forfeited
|
(319,500
|
)
|
Outstanding September 30, 2016
|
—
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total income (loss)
|
$
|
3
|
|
|
$
|
(13
|
)
|
|
$
|
9
|
|
|
$
|
60
|
|
Total expenses
|
57
|
|
|
134
|
|
|
257
|
|
|
700
|
|
||||
Income (loss) before income taxes
|
(54
|
)
|
|
(147
|
)
|
|
(248
|
)
|
|
(640
|
)
|
||||
Income tax benefit
|
—
|
|
|
34
|
|
|
$
|
—
|
|
|
224
|
|
|||
Net income (loss) from discontinued operations, net of income taxes
|
$
|
(54
|
)
|
|
$
|
(113
|
)
|
|
$
|
(248
|
)
|
|
$
|
(416
|
)
|
Remaining Life Expectancy (In Years)*
|
Number of
Life Settlement
Contracts
|
|
Estimated Fair
Value
|
|
Face
Value
|
|||||
0 - 1
|
5
|
|
|
$
|
18,456
|
|
|
$
|
22,192
|
|
1 - 2
|
14
|
|
|
33,153
|
|
|
50,245
|
|
||
2 - 3
|
13
|
|
|
33,749
|
|
|
61,450
|
|
||
3 - 4
|
28
|
|
|
34,899
|
|
|
92,584
|
|
||
4 - 5
|
35
|
|
|
53,344
|
|
|
158,546
|
|
||
Thereafter
|
528
|
|
|
309,794
|
|
|
2,568,779
|
|
||
Total
|
623
|
|
|
$
|
483,395
|
|
|
$
|
2,953,796
|
|
Remaining Life Expectancy (In Years)*
|
Number of
Life Settlement
Contracts
|
|
Estimated Fair
Value
|
|
Face
Value
|
|||||
0-1
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1-2
|
12
|
|
|
28,873
|
|
|
42,988
|
|
||
2-3
|
17
|
|
|
47,272
|
|
|
84,497
|
|
||
3-4
|
18
|
|
|
24,450
|
|
|
58,154
|
|
||
4-5
|
31
|
|
|
42,304
|
|
|
124,720
|
|
||
Thereafter
|
554
|
|
|
319,026
|
|
|
2,668,993
|
|
||
Total
|
632
|
|
|
$
|
461,925
|
|
|
$
|
2,979,352
|
|
|
|
||
Remainder of 2016
|
$
|
18,754
|
|
2017
|
81,169
|
|
|
2018
|
84,039
|
|
|
2019
|
91,375
|
|
|
2020
|
95,623
|
|
|
Thereafter
|
971,246
|
|
|
|
$
|
1,342,206
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Life settlements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
483,395
|
|
|
$
|
483,395
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
483,395
|
|
|
$
|
483,395
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
White Eagle Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
182,128
|
|
|
$
|
182,128
|
|
|
Red Falcon Revolving Credit Facility
|
—
|
|
|
—
|
|
|
61,451
|
|
|
61,451
|
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,579
|
|
|
$
|
243,579
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair
Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Life settlements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
461,925
|
|
|
$
|
461,925
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
461,925
|
|
|
$
|
461,925
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair
Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
White Eagle Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169,131
|
|
|
$
|
169,131
|
|
Red Falcon Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55,658
|
|
|
$
|
55,658
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
224,789
|
|
|
$
|
224,789
|
|
($ in thousands)
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|||||||||||
|
Fair Value
at 9/30/16 |
|
Aggregate
death benefit at 9/30/16 |
|
Valuation Technique
|
|
Unobservable Input (s)
|
|
Range
(Weighted Average)
|
||||
Non-premium financed
|
$
|
103,219
|
|
|
$332,588
|
|
Discounted cash flow
|
|
Discount rate
|
|
15.00%
|
-
|
21.00%
|
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(5.8 years)
|
||||
Premium financed
|
$
|
380,176
|
|
|
$2,621,208
|
|
Discounted cash flow
|
|
Discount rate
|
|
16.00%
|
-
|
22.50%
|
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(9.7 years)
|
||||
Life settlements
|
$
|
483,395
|
|
|
$2,953,796
|
|
Discounted cash flow
|
|
Discount rate
|
|
16.52%
|
||
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(9.2 years)
|
||||
White Eagle Revolving Credit Facility
|
$
|
182,128
|
|
|
$2,167,370
|
|
Discounted cash flow
|
|
Discount rate
|
|
20.06%
|
||
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(9.2 years)
|
||||
Red Falcon Revolving Credit Facility
|
$
|
61,451
|
|
|
$619,652
|
|
Discounted cash flow
|
|
Discount Rate
|
|
11.20%
|
||
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(8.6 years)
|
Life Expectancy Months Adjustment
|
Value
|
|
Change in Value
|
||||
+6
|
$
|
403,498
|
|
|
$
|
(79,897
|
)
|
-
|
$
|
483,395
|
|
|
—
|
|
|
-6
|
$
|
568,760
|
|
|
$
|
85,365
|
|
Carrier
|
Percentage of
Total
Fair Value
|
|
Percentage of
Total Death
Benefit
|
|
Moody's
Rating
|
|
S&P
Rating
|
||
Transamerica Life Insurance Company
|
18.3
|
%
|
|
20.6
|
%
|
|
A1
|
|
AA-
|
Lincoln National Life Insurance Company
|
21.7
|
%
|
|
19.2
|
%
|
|
A1
|
|
AA-
|
Weighted Average Rate Calculated Based on
|
|
|
|
|
|
|||||
Death Benefit
|
Rate Adjustment
|
|
Value
|
|
Change in Value
|
|||||
16.02%
|
-0.50%
|
|
|
$
|
496,625
|
|
|
$
|
13,230
|
|
16.52%
|
—
|
|
|
$
|
483,395
|
|
|
$
|
—
|
|
17.02%
|
+0.50%
|
|
|
$
|
470,722
|
|
|
$
|
(12,673
|
)
|
Life Expectancy Months Adjustment
|
Fair Value of White Eagle
Revolving Credit
Facility
|
|
Change in Value
|
||||
+6
|
$
|
152,558
|
|
|
$
|
(29,570
|
)
|
|
$
|
182,128
|
|
|
—
|
|
|
-6
|
$
|
214,421
|
|
|
$
|
32,293
|
|
Discount Rate
|
Rate Adjustment
|
|
Fair Value of White Eagle
Revolving Credit
Facility
|
|
Change in Value
|
|||||
19.56%
|
-0.50
|
%
|
|
$
|
186,485
|
|
|
$
|
4,357
|
|
20.06%
|
—
|
|
|
$
|
182,128
|
|
|
$
|
—
|
|
20.56%
|
+0.50
|
%
|
|
$
|
177,933
|
|
|
$
|
(4,195
|
)
|
Life Expectancy Months Adjustment
|
Fair Value of Red Falcon
Revolving Credit
Facility
|
|
Change in Value
|
||||
+6
|
$
|
58,820
|
|
|
$
|
(2,631
|
)
|
|
$
|
61,451
|
|
|
—
|
|
|
-6
|
$
|
63,718
|
|
|
$
|
2,267
|
|
Discount Rate
|
Rate Adjustment
|
|
Fair Value of Red Falcon
Revolving Credit
Facility
|
|
Change in Value
|
|||||
10.70%
|
-0.50
|
%
|
|
$
|
60,542
|
|
|
$
|
(909
|
)
|
11.20%
|
—
|
|
|
$
|
61,451
|
|
|
$
|
—
|
|
11.70%
|
+0.50
|
%
|
|
$
|
62,382
|
|
|
$
|
931
|
|
Life Settlements:
|
|
||
Balance, January 1, 2016
|
$
|
461,925
|
|
Purchase of policies
|
16
|
|
|
Retained death benefits acquisitions
|
1,374
|
|
|
Change in fair value*
|
(2,690
|
)
|
|
Matured/lapsed/sold policies
|
(29,980
|
)
|
|
Premiums paid
|
52,750
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2016
|
$
|
483,395
|
|
Changes in fair value included in earnings for the period relating to assets held at September 30, 2016
|
$
|
(17,838
|
)
|
White Eagle Revolving Credit Facility:
|
|
||
Balance, January 1, 2016
|
$
|
169,131
|
|
Draws under the White Eagle Revolving Credit Facility
|
39,295
|
|
|
Payments on White Eagle Revolving Credit Facility
|
(10,577
|
)
|
|
Unrealized change in fair value
|
(15,721
|
)
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2016
|
$
|
182,128
|
|
Changes in fair value included in earnings for period relating to liabilities held at September 30, 2016
|
$
|
(15,721
|
)
|
Red Falcon Revolving Credit Facility:
|
|
||
Balance, January 1, 2016
|
$
|
55,658
|
|
Draws under the Red Falcon Revolving Credit Facility
|
15,387
|
|
|
Payments on Red Falcon Revolving Credit Facility
|
(9,195
|
)
|
|
Unrealized change in fair value
|
(400
|
)
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2016
|
$
|
61,450
|
|
Changes in fair value included in earnings for period relating to liabilities held at September 30, 2016
|
$
|
(400
|
)
|
Life Settlements:
|
|
||
Balance, January 1, 2015
|
$
|
388,886
|
|
Purchase of policies
|
30,534
|
|
|
Change in fair value
|
43,582
|
|
|
Matured/sold policies
|
(53,435
|
)
|
|
Premiums paid
|
48,243
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2015
|
$
|
457,810
|
|
Changes in fair value included in earnings for the period relating to assets held at September 30, 2015
|
$
|
2,805
|
|
White Eagle Revolving Credit Facility:
|
|
||
Balance, January 1, 2015
|
$
|
145,831
|
|
Draws under the White Eagle Revolving Credit Facility
|
42,448
|
|
|
Payments on White Eagle Revolving Credit Facility
|
(43,241
|
)
|
|
Unrealized change in fair value
|
12,908
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2015
|
$
|
157,946
|
|
Changes in fair value included in earnings for the period relating to liabilities held at September 30, 2015
|
$
|
12,908
|
|
Red Falcon Revolving Credit Facility
|
|
||
Balance, January 1, 2015
|
$
|
—
|
|
Draws under the Red Falcon Revolving Credit Facility
|
54,000
|
|
|
Payments on Red Falcon Revolving Credit Facility
|
2,967
|
|
|
Unrealized change in fair value
|
(1,863
|
)
|
|
Transfers into level 3
|
581
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, September 30, 2015
|
$
|
55,685
|
|
Changes in fair value included in earnings for the period relating to liabilities held at September 30, 2015
|
$
|
581
|
|
•
|
Changes in Fair Value of Life Settlements
—When we acquire certain life insurance policies, we initially record these investments at the transaction price, which is the fair value of the policy for those acquired upon relinquishment or the amount paid for policies acquired for cash. The fair value of the investment in insurance policies is evaluated at the end of each reporting period. Changes in the fair value of the investment based on evaluations are recorded as changes in fair value of life settlements in our consolidated statement of operations. The fair value is determined on a discounted cash flow basis that incorporates current life expectancy assumptions. The discount rate incorporates current information about market interest rates, the credit exposure to the insurance company that issued the life insurance policy and our estimate of the risk premium an investor in the policy would require. We recognize income
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Period Acquisitions — Policies Owned
|
|
|
|
|
|
|
|
||||||||
Number of policies acquired
|
—
|
|
|
3
|
|
|
1
|
|
|
41
|
|
||||
Average age of insured at acquisition
|
—
|
|
|
85.4
|
|
|
90.3
|
|
|
85.0
|
|
||||
Average life expectancy — Calculated LE (Years)
|
—
|
|
|
5.6
|
|
|
2.3
|
|
|
5.4
|
|
||||
Average death benefit
|
$
|
—
|
|
|
$
|
6,232
|
|
|
$
|
690
|
|
|
$
|
2,924
|
|
Aggregate purchase price
|
$
|
—
|
|
|
$
|
2,679
|
|
|
$
|
16
|
|
|
$
|
30,534
|
|
End of Period — Policies Owned
|
|
|
|
|
|
|
|
||||||||
Number of policies owned
|
623
|
|
|
634
|
|
|
623
|
|
|
634
|
|
||||
Average Life Expectancy — Calculated LE (Years)
|
9.2
|
|
|
10.0
|
|
|
9.2
|
|
|
10.0
|
|
||||
Aggregate Death Benefit
|
$
|
2,953,796
|
|
|
$
|
2,997,903
|
|
|
$
|
2,953,796
|
|
|
$
|
2,997,903
|
|
Aggregate fair value
|
$
|
483,395
|
|
|
$
|
457,810
|
|
|
$
|
483,395
|
|
|
$
|
457,810
|
|
Monthly premium — average per policy
|
$
|
10.6
|
|
|
$
|
8.9
|
|
|
$
|
10.6
|
|
|
$
|
8.9
|
|
Period Maturities
|
|
|
|
|
|
|
|
||||||||
Number of policies matured
|
2
|
|
|
2
|
|
|
10
|
|
|
14
|
|
||||
Average age of insured at maturity
|
85.2
|
|
|
86.8
|
|
|
85.6
|
|
|
84.1
|
|
||||
Average life expectancy - Calculated LE (Years)
|
1.8
|
|
|
5.4
|
|
|
3.7
|
|
|
7.4
|
|
||||
Aggregate death benefit
|
$
|
12,800
|
|
|
$
|
3,700
|
|
|
$
|
29,980
|
|
|
$
|
53,468
|
|
Gains on maturity
|
$
|
4,014
|
|
|
$
|
2,421
|
|
|
$
|
14,777
|
|
|
$
|
40,240
|
|
Proceeds collected
|
$
|
7,000
|
|
|
$
|
28,280
|
|
|
$
|
27,980
|
|
|
$
|
47,519
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Income
|
|
$
|
4,767
|
|
|
$
|
2,769
|
|
|
$
|
1,998
|
|
|
72
|
%
|
|
increase
|
Expenses
|
|
13,310
|
|
|
20,981
|
|
|
(7,671
|
)
|
|
(37
|
)%
|
|
decrease
|
|||
Income tax (benefit)
|
|
—
|
|
|
(4,721
|
)
|
|
4,721
|
|
|
(100
|
)%
|
|
decrease
|
|||
Net loss
|
|
$
|
(8,543
|
)
|
|
$
|
(13,491
|
)
|
|
$
|
4,948
|
|
|
(37
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Change in fair value of life settlements
|
|
$
|
4,735
|
|
|
$
|
2,667
|
|
|
$
|
2,068
|
|
|
78
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Interest expense
|
|
$
|
7,895
|
|
|
$
|
8,614
|
|
|
$
|
(719
|
)
|
|
(8
|
)%
|
|
decrease
|
Extinguishment of Senior Notes
|
|
—
|
|
|
8,782
|
|
|
(8,782
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Change in fair value of Revolving Credit Facilities
|
|
(551
|
)
|
|
(4,203
|
)
|
|
3,652
|
|
|
(87
|
)%
|
|
increase
|
|||
SG&A expenses
|
|
5,966
|
|
|
7,788
|
|
|
(1,822
|
)
|
|
(23
|
)%
|
|
decrease
|
|||
Total Expense
|
|
$
|
13,310
|
|
|
$
|
20,981
|
|
|
$
|
(7,671
|
)
|
|
(37
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
White Eagle Revolving Credit Facility
|
|
$
|
2,926
|
|
|
$
|
2,325
|
|
|
$
|
601
|
|
|
26
|
%
|
|
increase
|
Red Falcon Revolving Credit Facility
|
|
1,259
|
|
|
3,789
|
|
|
(2,530
|
)
|
|
(67
|
)%
|
|
decrease
|
|||
Convertible Notes
|
|
2,466
|
|
|
2,320
|
|
|
146
|
|
|
6
|
%
|
|
increase
|
|||
15% Senior Secured Notes
|
|
1,242
|
|
|
—
|
|
|
1,242
|
|
|
100
|
%
|
|
increase
|
|||
12.875% Senior Secured Notes
|
|
—
|
|
|
174
|
|
|
(174
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Other
|
|
2
|
|
|
6
|
|
|
(4
|
)
|
|
(67
|
)%
|
|
decrease
|
|||
Total Interest Expense
|
|
$
|
7,895
|
|
|
$
|
8,614
|
|
|
$
|
(719
|
)
|
|
(8
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Extinguishment of Senior Notes
|
|
$
|
—
|
|
|
$
|
8,782
|
|
|
$
|
(8,782
|
)
|
|
(100
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
White Eagle Revolving Credit Facility
|
|
$
|
(1,316
|
)
|
|
$
|
(4,784
|
)
|
|
$
|
3,468
|
|
|
(72
|
)%
|
|
decrease
|
Red Falcon Revolving Credit Facility
|
|
765
|
|
|
581
|
|
|
184
|
|
|
32
|
%
|
|
increase
|
|||
Total Change in Fair Value of Revolving Credit Facilities
|
|
$
|
(551
|
)
|
|
$
|
(4,203
|
)
|
|
$
|
3,652
|
|
|
(87
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Personnel costs
|
|
$
|
1,303
|
|
|
$
|
1,945
|
|
|
$
|
(642
|
)
|
|
(33
|
)%
|
|
decrease
|
Legal fees
|
|
1,833
|
|
|
3,370
|
|
|
(1,537
|
)
|
|
(46
|
)%
|
|
decrease
|
|||
Professional fees
|
|
2,136
|
|
|
1,579
|
|
|
557
|
|
|
35
|
%
|
|
increase
|
|||
Insurance
|
|
200
|
|
|
309
|
|
|
(109
|
)
|
|
(35
|
)%
|
|
decrease
|
|||
Other SG&A expenses
|
|
494
|
|
|
585
|
|
|
(91
|
)
|
|
(16
|
)%
|
|
decrease
|
|||
Total SG&A Expenses
|
|
$
|
5,966
|
|
|
$
|
7,788
|
|
|
$
|
(1,822
|
)
|
|
(23
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|||||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Total income (loss)
|
$
|
3
|
|
|
$
|
(13
|
)
|
|
$
|
16
|
|
|
(123
|
)%
|
|
increase
|
Total expenses
|
57
|
|
|
134
|
|
|
(77
|
)
|
|
(57
|
)%
|
|
decrease
|
|||
Income (loss) before income taxes
|
(54
|
)
|
|
(147
|
)
|
|
93
|
|
|
(63
|
)%
|
|
decrease
|
|||
Income tax benefit
|
—
|
|
|
34
|
|
|
(34
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Net income (loss), net of income taxes
|
$
|
(54
|
)
|
|
$
|
(113
|
)
|
|
$
|
59
|
|
|
(52
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Income
|
|
$
|
(2,565
|
)
|
|
$
|
43,783
|
|
|
$
|
(46,348
|
)
|
|
(106
|
)%
|
|
decrease
|
Expenses
|
|
23,200
|
|
|
67,453
|
|
|
(44,253
|
)
|
|
(66
|
)%
|
|
decrease
|
|||
Income tax (benefit)
|
|
—
|
|
|
(6,981
|
)
|
|
6,981
|
|
|
(100
|
)%
|
|
decrease
|
|||
Net loss
|
|
$
|
(25,765
|
)
|
|
$
|
(16,689
|
)
|
|
$
|
(9,076
|
)
|
|
54
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Change in fair value of life settlements
|
|
$
|
(2,690
|
)
|
|
$
|
43,582
|
|
|
$
|
(46,272
|
)
|
|
(106
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Interest expense
|
|
$
|
21,330
|
|
|
$
|
21,491
|
|
|
$
|
(161
|
)
|
|
(1
|
)%
|
|
decrease
|
Extinguishment of Senior Notes
|
|
—
|
|
|
8,782
|
|
|
(8,782
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Change in fair value of Revolving Credit Facilities
|
|
(16,121
|
)
|
|
13,489
|
|
|
(29,610
|
)
|
|
(220
|
)%
|
|
decrease
|
|||
SG&A expenses
|
|
17,991
|
|
|
23,691
|
|
|
(5,700
|
)
|
|
(24
|
)%
|
|
decrease
|
|||
Total Expense
|
|
$
|
23,200
|
|
|
$
|
67,453
|
|
|
$
|
(44,253
|
)
|
|
(66
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
White Eagle Revolving Credit Facility
|
|
8,142
|
|
|
6,875
|
|
|
$
|
1,267
|
|
|
18
|
%
|
|
increase
|
||
Red Falcon Revolving Credit Facility
|
|
3,178
|
|
|
3,789
|
|
|
(611
|
)
|
|
(16
|
)%
|
|
decrease
|
|||
Convertible Notes
|
|
7,231
|
|
|
6,791
|
|
|
440
|
|
|
6
|
%
|
|
increase
|
|||
15% Senior Secured Notes
|
|
2,770
|
|
|
—
|
|
|
2,770
|
|
|
100
|
%
|
|
increase
|
|||
12.875% Senior Secured Notes
|
|
—
|
|
|
4,019
|
|
|
(4,019
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Other
|
|
9
|
|
|
17
|
|
|
(8
|
)
|
|
(47
|
)%
|
|
decrease
|
|||
Total Interest Expense
|
|
$
|
21,330
|
|
|
$
|
21,491
|
|
|
$
|
(161
|
)
|
|
(1
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
||||||
Extinguishment of Senior Notes
|
|
$
|
—
|
|
|
$
|
8,782
|
|
|
(8,782
|
)
|
|
(100
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
||||||
White Eagle Revolving Credit Facility
|
|
$
|
(15,721
|
)
|
|
$
|
12,908
|
|
|
(28,629
|
)
|
|
(222
|
)%
|
|
decrease
|
Red Falcon Revolving Credit Facility
|
|
(400
|
)
|
|
581
|
|
|
(981
|
)
|
|
(169
|
)%
|
|
decrease
|
||
Total Change in Fair Value of Revolving Credit Facilities
|
|
$
|
(16,121
|
)
|
|
$
|
13,489
|
|
|
(29,610
|
)
|
|
(220
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Personnel costs
|
|
$
|
5,133
|
|
|
$
|
5,425
|
|
|
(292
|
)
|
|
(5
|
)%
|
|
decrease
|
|
Legal fees
|
|
5,361
|
|
|
10,345
|
|
|
(4,984
|
)
|
|
(48
|
)%
|
|
decrease
|
|||
Professional fees
|
|
5,347
|
|
|
5,284
|
|
|
63
|
|
|
1
|
%
|
|
increase
|
|||
Insurance
|
|
639
|
|
|
966
|
|
|
(327
|
)
|
|
(34
|
)%
|
|
decrease
|
|||
Other SG&A
|
|
1,511
|
|
|
1,671
|
|
|
(160
|
)
|
|
(10
|
)%
|
|
decrease
|
|||
Total SG&A Expenses
|
|
$
|
17,991
|
|
|
$
|
23,691
|
|
|
$
|
(5,700
|
)
|
|
(24
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, |
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
|||||||
Total income (loss)
|
|
$
|
9
|
|
|
$
|
60
|
|
|
$
|
(51
|
)
|
|
(85
|
)%
|
|
decrease
|
Total expenses
|
|
257
|
|
|
700
|
|
|
(443
|
)
|
|
(63
|
)%
|
|
decrease
|
|||
Income (loss) before income taxes
|
|
(248
|
)
|
|
(640
|
)
|
|
392
|
|
|
(61
|
)%
|
|
decrease
|
|||
Income tax benefit
|
|
$
|
—
|
|
|
224
|
|
|
(224
|
)
|
|
(100
|
)%
|
|
decrease
|
||
Net income (loss), net of income taxes
|
|
$
|
(248
|
)
|
|
$
|
(416
|
)
|
|
$
|
168
|
|
|
(40
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid Per Share
|
July 1 through July 31
|
|
—
|
|
—
|
August 1 through August 31
|
|
99,353
|
|
$3.83
|
September 1 through September 30
|
|
343,685
|
|
$3.35
|
Total
|
|
443,038
|
|
$3.42
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Statement of Cash Flows Data:
|
|
|
|
|
||||
Total cash (used in) provided by:
|
|
|
|
|
||||
Operating activities
|
|
$
|
(34,651
|
)
|
|
$
|
(37,401
|
)
|
Investing activities
|
|
(31,169
|
)
|
|
(29,675
|
)
|
||
Financing activities
|
|
64,378
|
|
|
52,576
|
|
||
Increase (decrease) in cash and cash equivalents
|
|
$
|
(1,442
|
)
|
|
$
|
(14,500
|
)
|
Carrier
|
Percentage of
Total Fair
Value
|
|
Percentage of
Total Death
Benefit
|
|
Moody’s
Rating
|
|
S&P
Rating
|
||
Transamerica Life Insurance Company
|
18.3
|
%
|
|
20.6
|
%
|
|
A1
|
|
AA-
|
Lincoln National Life Insurance Company
|
21.7
|
%
|
|
19.2
|
%
|
|
A1
|
|
AA-
|
|
|
Emergent Capital, Inc.
|
|
|
|
/s/ Miriam Martinez
|
|
Chief Financial Officer
|
Miriam Martinez
|
|
(Principal Financial Officer)
|
Date November 7, 2016
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
Exhibit 10.1
|
|
First Amendment to Loan and Security Agreement, dated July 15, 2016, among Red Falcon Trust, as borrower, Imperial Finance & Trading, LLC, as guarantor, Blue Heron Designated Activity Company, as portfolio administrator, LNV Corporation, as lender, and CLMG Corp, as administrative agent.
|
|
|
|
Exhibit 31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 101.
|
|
Interactive Data Files
|
|
|
|
Exhibit 101.INS +
|
|
XBRL Instance Document
|
|
|
|
Exhibit 101.SCH +
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
Exhibit 101.CAL +
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
Exhibit 101.DEF +
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
Exhibit 101.LAB +
|
|
XBRL Taxonomy Extension Label Linkbase Document 10.1 & 10.2
|
|
|
|
Exhibit 101.PRE +
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1.
|
Schedule 8.1(w) to the Loan Agreement is replaced in its entirety by Schedule 8.1(w) to this Agreement.
|
2.
|
Eligibility Criteria Clause (g) Schedule to the Loan Agreement is hereby replaced in its entirety by Eligibility Criteria Clause (g) Schedule to this Agreement.
|
3.
|
Eligibility Criteria Clause (i) Schedule to the Loan Agreement is hereby replaced in its entirety by Eligibility Criteria Clause (i) Schedule to this Agreement.
|
4.
|
Eligibility Criteria Clause (m) Schedule to the Loan Agreement is hereby replaced in its entirety by Eligibility Criteria Clause (m) Schedule to this Agreement.
|
DOC ID - 24388782.9
|
1
|
|
5.
|
The Borrower has previously requested and hereby agrees that proceeds of the Additional Policy Advance, to be made on the date hereof, shall be deposited into the Borrower Account. As provided in Section 5.1(c) of the Loan Agreement, the Borrower shall be entitled to withdraw such proceeds from the Borrower Account for any purpose permitted by the Loan Agreement.
|
6.
|
AS A MATERIAL INDUCEMENT TO THE LENDER AND THE ADMINISTRATIVE AGENT TO ENTER INTO THIS AGREEMENT, THE BORROWER, THE GUARANTOR AND THE PORTFOLIO ADMINISTRATOR, EACH ON BEHALF OF ITSELF AND ITS SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES AND CONSTITUENTS (WHETHER OR NOT A PARTY HERETO) (BORROWER, THE GUARANTOR, THE PORTFOLIO ADMINISTRATOR AND SUCH SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES AND CONSTITUENTS BEING REFERRED TO HEREIN COLLECTIVELY AND INDIVIDUALLY, AS “OBLIGORS, ET AL.”), HEREBY FULLY, FINALLY AND COMPLETELY RELEASE AND FOREVER DISCHARGE THE LENDER, THE ADMINISTRATIVE AGENT AND THEIR RESPECTIVE OWNERS, SUCCESSORS, ASSIGNS, AFFILIATES, SUBSIDIARIES, PARENTS, OFFICERS, SHAREHOLDERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, PAST, PRESENT AND FUTURE, AND THEIR RESPECTIVE HEIRS, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY AND INDIVIDUALLY, “LENDER, ET AL.”) OF AND FROM ANY AND ALL CLAIMS, CONTROVERSIES, DISPUTES, LIABILITIES, OBLIGATIONS, DEMANDS, DAMAGES, EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES), DEBTS, LIENS, ACTIONS AND CAUSES OF ACTION OF ANY AND EVERY NATURE WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY THEREOF RELATING TO THE ADVANCES, AND WAIVE AND RELEASE ANY DEFENSE, RIGHT OF COUNTERCLAIM, RIGHT OF SET-OFF OR DEDUCTION TO THE PAYMENT OF THE INDEBTEDNESS EVIDENCED BY THE LENDER NOTE AND/OR ANY OTHER TRANSACTION DOCUMENT WHICH OBLIGORS, ET AL. NOW HAVE OR MAY CLAIM TO HAVE AGAINST LENDER, ET AL., OR ANY THEREOF, ARISING OUT OF, CONNECTED WITH OR RELATING TO ANY AND ALL ACTS, OMISSIONS OR EVENTS OCCURRING PRIOR TO THE EXECUTION OF THIS AGREEMENT.
|
DOC ID - 24388782.9
|
2
|
|
7.
|
As an additional material inducement to the Lender and the Administrative Agent to enter into this Agreement and to amend certain provisions of the Loan Agreement as provided herein, the Borrower, the Guarantor and the Portfolio Administrator hereby represent and warrant to, and agree with, the Lender and the Administrative Agent that, as of the date hereof:
|
(a)
|
the Transaction Documents, as amended hereby, are in full force and effect and none of Borrower, the Guarantor or the Portfolio Administrator has any defense, counterclaim or offset to the payment or performance of any of such party’s obligations in regard to the Advances or any of the Transaction Documents, as amended hereby, and the Liens created and granted by the Transaction Documents continue unimpaired and of first priority and secure all existing and future obligations owed to the Lender and/or the Administrative Agent in regard to the Advances;
|
(b)
|
the representations and warranties of the Borrower and the Guarantor set forth in the Transaction Documents and the representations and warranties of the Portfolio Administrator set forth in Section 8.2 of the Loan Agreement and Section 3.1 of the Portfolio Administration Agreement are true and correct in all material respects as of the date hereof and are hereby reaffirmed as if such representations and warranties had been made on the date hereof and shall continue in full force and effect; and
|
(c)
|
this Agreement constitutes the legal, valid and binding obligation of the Borrower, the Guarantor and the Portfolio Administrator, enforceable against the Borrower, the Guarantor and the Portfolio Administrator in accordance with the terms hereof.
|
DOC ID - 24388782.9
|
3
|
|
8.
|
In addition to the documents, instruments and acts described in this Agreement and which are to be executed and/or delivered and/or taken pursuant to this Agreement, the Borrower, the Guarantor and the Portfolio Administrator shall execute and deliver, and/or cause to be executed and delivered, from time to time upon request by the Administrative Agent such other documents and instruments, and take such other action, as the Administrative Agent may reasonably request or require to more fully and completely evidence and carry out the transactions contemplated by this Agreement.
|
9.
|
The Borrower, the Guarantor and the Portfolio Administrator hereby affirm, confirm, ratify, renew and extend the debts, duties, obligations, liabilities, rights, titles, security interests, Liens, powers and privileges created or arising by virtue of the Transaction Documents, as amended hereby, until all of the Advances and all other Obligations have been paid and performed in full. The Borrower confirms that it is fully, unconditionally liable for the payment and performance of the Advances as provided in the Transaction Documents and that neither the Administrative Agent nor the Lender has released, forgiven, discharged, impaired, waived or relinquished, and the Administrative Agent and the Lender do not hereby release, forgive, discharge, impair, waive or relinquish any rights, titles, interests, Liens, security interests, Collateral, parties, remedies or any other matter with respect to the Advances or any of the Transaction Documents, but rather the Administrative Agent and the Lender are expressly retaining and reserving the same to their fullest extent.
|
10.
|
Except as expressly amended hereby, all the terms, provisions, debts, duties, Obligations, liabilities, representations, warranties, rights, titles, security interests, Liens, powers and privileges existing by virtue of the Transaction Documents shall be and continue in full force and effect and are hereby acknowledged by the Borrower, the Guarantor and the Portfolio Administrator to be legal, valid, binding and enforceable in accordance with their terms.
|
11.
|
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York and the laws of the United States applicable to transactions within New York, exclusive of any laws relating to conflicts of law.
|
12.
|
This Agreement shall constitute a Transaction Document and shall be binding upon the parties hereto and their respective successors and assigns. Nothing contained herein shall act to amend or modify any of the provisions of the Transaction Documents which restrict or prohibit assignment or transfer.
|
13.
|
Neither this Agreement nor any provision of any of the other Transaction Documents may be waived, modified or amended, except by an instrument in writing signed by
|
DOC ID - 24388782.9
|
4
|
|
14.
|
The provisions of Section 11.3 (Limited Recourse and Non-Petition) of the Loan Agreement shall apply to this Agreement,
mutatis mutandis
, in respect of the obligations of the Portfolio Administrator in respect of this Agreement, and such provisions shall survive the termination of this Agreement.
|
15.
|
This Agreement constitutes the entire agreement between the parties in regard to the amendment of the Loan Agreement effected hereby, and supersedes all prior agreements and understandings, if any, between the parties relating to the amendment of the Loan Agreement.
|
16.
|
This Agreement may be signed in multiple counterparts and each shall be deemed to be an original, and the facsimile transmission or transmission by email of executed counterpart agreements shall be deemed to be an originally executed agreement; provided that executed original documents are provided to the parties promptly following such facsimile transmission or transmission by email.
|
DOC ID - 24388782.9
|
5
|
|
17.
|
The Borrower agrees to pay and/or reimburse the Administrative Agent and the Lender for all costs and expenses incurred by the Administrative Agent and/or the Lender in regard to the amendment of the Transaction Documents effected hereby.
|
RED FALCON TRUST, as Borrower
|
By: Blue Heron Designated Activity Company, in its capacity as Residual Interest Holder
|
By:
/s/ Miriam Martinez
Name: Miriam Martinez Title: Director |
|
IMPERIAL FINANCE & TRADING, LLC,
as Guarantor |
|
By:
/s/ Miriam Martinez
Name: Miriam Martinez Title: Chief Financial Officer |
|
BLUE HERON DESIGNATED ACTIVITY COMPANY,
as Portfolio Administrator |
|
By:
/s/ Miriam Martinez
Name: Miriam Martinez Title: Director |
DOC ID - 24388782.9
|
6
|
|
|
LENDER:
|
LNV CORPORATION
|
|
By:
/s/ Jacob Cherner
Name: Jacob Cherner Title: Executive Vice President |
|
ADMINISTRATIVE AGENT:
|
CLMG CORP.
|
|
By:
/s/ James Erwin
Name: James Erwin Title: President |
DOC ID - 24388782.9
|
7
|
|
DOC ID - 24388782.9
|
|
|
|
RDB SCHEDULE
|
|
Death Benefit Split by $
|
Death Benefit Split by %
|
||||||||||
|
Case #
|
NAME
|
POLICY
|
Policy Issue Date
|
Issuing Company
|
|
Imperial Net
Death Benefit
|
Split DB to
Insured
|
Split DB to
Security
Savings
Bank
|
Total Policy Face
|
Imperial Net
Death Benefit |
Split DB to
Insured |
Split DB to
Security Savings Bank |
Total
Policy Face |
1
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
2
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
3
|
[*]
|
[*]
|
[*]
|
[*]
|
The Manufacturers Life Insurance Company (USA)
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
4
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
5
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
6
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
7
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Financial Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
8
|
[*]
|
[*]
|
[*]
|
[*]
|
Security Life of Denver Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
9
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
10
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
11
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
12
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
13
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
14
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
[*]
|
|
|
|
|
|
|
|
47,900,000
|
18,829,800
|
|
67,100,000
|
|
|
|
|
|
|
|
DOC ID - 24388782.9
|
|
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Phoenix Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Phoenix Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Jefferson Pilot Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
American General Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Principal Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
|
|
|
[*]
|
[*]
|
[*]
|
Jefferson Pilot Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
United of Omaha Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
West Coast Life Insurance Company
|
[*]
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Axa Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Protective Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
|
|
|
|
DOC ID - 24388782.9
|
|
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
|
|
|
DOC ID - 24388782.9
|
|
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Phoenix Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Jefferson Pilot Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Phoenix Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Principal Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Principal Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Phoenix Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
ReliaStar Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Genworth Life and Annuity Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
AXA Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln Benefit Life Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Massachusetts Mutual Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Variable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Security Life of Denver Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
United of Omaha Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
MetLife Investors USA Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Travelers Life & Annuity Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Pruco Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
New York Life Insurance and Annuity Corporation
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Pacific Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Sun Life Assurance Company of Canada
|
[*]
|
[*]
|
[*]
|
[*]
|
American General Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
ReliaStar Life Insurance Company of New York
|
[*]
|
[*]
|
[*]
|
[*]
|
Columbus Life Insurance
|
[*]
|
[*]
|
[*]
|
[*]
|
US Financial Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Wilton Reassurance Life Company of NY
|
[*]
|
[*]
|
[*]
|
[*]
|
United States Life Insurance Company in the City of New York
|
[*]
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Axa Equitable Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Protective Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
United of Omaha Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Jefferson Pilot Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
West Coast Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Hartford Life and Annuity Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
American General Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
New York Life Insurance and Annuity Corporation
|
[*]
|
[*]
|
[*]
|
[*]
|
US Financial Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Travelers Life & Annuity Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Lincoln National Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Pruco Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Pacific Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Columbus Life Insurance
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
John Hancock Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Wilton Reassurance Life Company of NY
|
[*]
|
[*]
|
[*]
|
[*]
|
United States Life Insurance Company in the City of New York
|
[*]
|
[*]
|
[*]
|
[*]
|
Transamerica Occidental Life Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
Security Life of Denver Insurance Company
|
[*]
|
[*]
|
[*]
|
[*]
|
American General Life Insurance Company
|
[*]
|
Last Name
|
First Name
|
Policy Number
|
Carrier
|
Net Death Benefit
|
[*]
|
[*]
|
[*]
|
Transamerica Life Insurance Company
|
[*]
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Emergent Capital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary companies, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Antony Mitchell
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Antony Mitchell
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Chief Executive Officer and Director
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(Principal Executive Officer)
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|
November 7, 2016
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Emergent Capital, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary companies, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Miriam Martinez
|
Miriam Martinez
|
Chief Financial Officer
|
(Principal Financial Officer)
|
|
November 7, 2016
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
/s/ Antony Mitchell
|
Antony Mitchell
|
Chief Executive Officer and Director
|
|
November 7, 2016
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
/s/ Miriam Martinez
|
Miriam Martinez
|
Chief Financial Officer
|
|
November 7, 2016
|