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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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Emerging growth 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 continue as a going concern and avoid a bankruptcy or other reorganization proceeding;
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•
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risks associated with the proposed transactions relating to PJC or its designee's investment in the Company, including but not limited to risks related to the failure to close the proposed transactions and the failure to receive the requisite shareholder approval;
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•
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our ability to maintain our rights in the policies that serve as the primary assets of the Company and are the collateral under various debt instruments to which we are a party;
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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 facility;
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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 funding under our revolving credit facility;
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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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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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adverse developments, including financial ones, associated with other litigation and judicial actions;
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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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lack of mortalities of insureds of the 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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our ability to avoid defaulting under the various credit documents to which we are a party;
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•
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our ability to maintain a listing or quotation on a national securities exchange or automated quotation system;
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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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March 31,
2017 |
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December 31,
2016* |
||||
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(Unaudited)
|
|
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||||
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(In thousands except share data)
|
||||||
ASSETS
|
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|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
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2,100
|
|
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$
|
2,246
|
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Cash and cash equivalents (VIE Note 4)
|
15,923
|
|
|
9,072
|
|
||
Certificates of deposit
|
1,004
|
|
|
6,025
|
|
||
Prepaid expenses and other assets
|
2,601
|
|
|
1,112
|
|
||
Deposits - other
|
1,377
|
|
|
1,347
|
|
||
Life settlements, at estimated fair value
|
708
|
|
|
680
|
|
||
Life settlements, at estimated fair value (VIE Note 4)
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505,964
|
|
|
497,720
|
|
||
Receivable for maturity of life settlements (VIE Note 4)
|
32,850
|
|
|
5,000
|
|
||
Fixed assets, net
|
208
|
|
|
232
|
|
||
Investment in affiliates
|
2,384
|
|
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2,384
|
|
||
Total assets
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$
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565,119
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$
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525,818
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
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3,873
|
|
|
$
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2,590
|
|
Accounts payable and accrued expenses (VIE Note 4)
|
683
|
|
|
593
|
|
||
Other liabilities
|
273
|
|
|
359
|
|
||
Interest payable - Convertible Notes (Note 11)
|
806
|
|
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2,272
|
|
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Convertible Notes, net of discount and deferred debt costs (Note 11)
|
65,002
|
|
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60,535
|
|
||
Interest payable - Senior Secured Notes (Note 12)
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213
|
|
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213
|
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||
Senior Secured Notes, net of discount and deferred debt costs (Note 12)
|
29,387
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|
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29,297
|
|
||
White Eagle Revolving Credit Facility, at estimated fair value (VIE Note 4)
|
290,200
|
|
|
257,085
|
|
||
Total liabilities
|
390,437
|
|
|
352,944
|
|
||
Commitments and Contingencies (Note 15)
|
|
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||||
Stockholders’ Equity
|
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|
||||
Common stock (par value $0.01 per share, 80,000,000 authorized at March 31, 2017 and December 31, 2016; 29,021,844 issued and 28,413,844 outstanding as of March 31, 2017 and December 31, 2016
|
290
|
|
|
290
|
|
||
Preferred stock (par value $0.01 per share, 40,000,000 authorized; 0 issued and outstanding as of March 31, 2017 and December 31, 2016)
|
—
|
|
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—
|
|
||
Treasury Stock, net of cost (608,000 shares as of March 31, 2017 and December 31, 2016)
|
(2,534
|
)
|
|
(2,534
|
)
|
||
Additional paid-in-capital
|
307,760
|
|
|
307,647
|
|
||
Accumulated deficit
|
(130,834
|
)
|
|
(132,529
|
)
|
||
Total stockholders’ equity
|
174,682
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|
|
172,874
|
|
||
Total liabilities and stockholders’ equity
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$
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565,119
|
|
|
$
|
525,818
|
|
|
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For the Three Months Ended
March 31, |
||||||
|
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2017
|
|
2016
|
||||
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(in thousands, except share and per share data)
|
|||||||
Income
|
|
|
|
|
||||
Change in fair value of life settlements (Notes 8 & 13)
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|
$
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25,540
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|
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$
|
8,388
|
|
Other income
|
|
50
|
|
|
66
|
|
||
Total income
|
|
25,590
|
|
|
8,454
|
|
||
Expenses
|
|
|
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|
||||
Interest expense
|
|
7,535
|
|
|
6,050
|
|
||
Change in fair value of Revolving Credit Facilities (Notes 9, 10 & 13)
|
|
11,831
|
|
|
4,097
|
|
||
Personnel costs
|
|
1,085
|
|
|
1,557
|
|
||
Legal fees
|
|
995
|
|
|
1,818
|
|
||
Professional fees
|
|
1,604
|
|
|
1,643
|
|
||
Insurance
|
|
192
|
|
|
244
|
|
||
Other selling, general and administrative expenses
|
|
464
|
|
|
490
|
|
||
Total expenses
|
|
23,706
|
|
|
15,899
|
|
||
Income (loss) from continuing operations before income taxes
|
|
1,884
|
|
|
(7,445
|
)
|
||
(Benefit) provision for income taxes
|
|
—
|
|
|
—
|
|
||
Net income (loss) from continuing operations
|
|
$
|
1,884
|
|
|
$
|
(7,445
|
)
|
Discontinued Operations:
|
|
|
|
|
||||
Income (loss) from discontinued operations before income taxes
|
|
(189
|
)
|
|
(68
|
)
|
||
(Benefit) provision for income taxes
|
|
—
|
|
|
—
|
|
||
Net income (loss) from discontinued operations
|
|
(189
|
)
|
|
(68
|
)
|
||
Net income (loss)
|
|
$
|
1,695
|
|
|
$
|
(7,513
|
)
|
Basic and diluted income (loss) per share:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
0.07
|
|
|
$
|
(0.27
|
)
|
Discontinued operations
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
Net income (loss)
|
|
$
|
0.06
|
|
|
$
|
(0.27
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
||||
Basic and Diluted
|
|
28,148,632
|
|
|
27,481,249
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital
|
|
Accumulated Deficit
|
|
Total
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
|
(in thousands, except share data)
|
||||||||||||||||||||||||
Balance, January 1, 2017
|
29,021,844
|
|
|
$
|
290
|
|
|
(608,000
|
)
|
|
$
|
(2,534
|
)
|
|
$
|
307,647
|
|
|
$
|
(132,529
|
)
|
|
$
|
172,874
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,695
|
|
|
1,695
|
|
|||||
Stock-based compensation
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
|||||
ATM stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||||
Balance, March 31, 2017
|
29,021,844
|
|
|
$
|
290
|
|
|
(608,000
|
)
|
|
$
|
(2,534
|
)
|
|
$
|
307,760
|
|
|
$
|
(130,834
|
)
|
|
$
|
174,682
|
|
|
For the Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
1,695
|
|
|
$
|
(7,513
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
26
|
|
|
27
|
|
||
Amortization of discount and deferred costs for Convertible Notes
|
989
|
|
|
861
|
|
||
Amortization of discount and deferred costs for 15% Senior Secured Notes
|
90
|
|
|
64
|
|
||
Stock-based compensation expense
|
139
|
|
|
60
|
|
||
Finance cost and fees withheld by borrower
|
194
|
|
|
200
|
|
||
Interest Paid in Kind on Senior Unsecured Convertible Notes
|
3,477
|
|
|
—
|
|
||
Change in fair value of life settlements
|
(25,540
|
)
|
|
(8,388
|
)
|
||
Change in fair value of Revolving Credit Facilities
|
11,831
|
|
|
4,097
|
|
||
Interest income
|
(9
|
)
|
|
(5
|
)
|
||
Change in assets and liabilities:
|
|
|
|
||||
Deposits - other
|
(30
|
)
|
|
(150
|
)
|
||
Prepaid expenses and other assets
|
(1,510
|
)
|
|
(533
|
)
|
||
Accounts payable and accrued expenses
|
1,373
|
|
|
(291
|
)
|
||
Other liabilities
|
(78
|
)
|
|
1,380
|
|
||
Interest payable - Convertible Notes
|
(1,466
|
)
|
|
(1,503
|
)
|
||
Interest payable - 15.00% Senior Secured Notes
|
—
|
|
|
215
|
|
||
Net cash used in operating activities
|
(8,819
|
)
|
|
(11,479
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchase of fixed assets, net of disposals
|
—
|
|
|
(5
|
)
|
||
Certificate of deposit
|
5,025
|
|
|
—
|
|
||
Premiums paid on life settlements
|
(20,582
|
)
|
|
(16,653
|
)
|
||
Proceeds from maturity of life settlements
|
10,000
|
|
|
15,480
|
|
||
Deposits on purchase of life settlements
|
—
|
|
|
(31
|
)
|
||
Net cash used in investing activities
|
(5,557
|
)
|
|
(1,209
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Borrowings from White Eagle Revolving Credit Facility
|
21,090
|
|
|
12,419
|
|
||
Repayment of borrowings under White Eagle Revolving Credit Facility
|
—
|
|
|
(2,509
|
)
|
||
Borrowings under Red Falcon Revolving Credit Facility
|
—
|
|
|
5,061
|
|
||
Repayment of borrowings under Red Falcon Revolving Credit Facility
|
—
|
|
|
(4,086
|
)
|
||
Proceeds from 15% Senior Secured Notes
|
—
|
|
|
30,000
|
|
||
Payment under finance lease obligations
|
(9
|
)
|
|
(9
|
)
|
||
15% Senior Secured Notes deferred cost
|
—
|
|
|
(633
|
)
|
||
Net cash provided by financing activities
|
21,081
|
|
|
40,243
|
|
||
Net increase in cash and cash equivalents
|
6,705
|
|
|
27,555
|
|
||
Cash and cash equivalents, at beginning of the period
|
11,318
|
|
|
20,341
|
|
||
Cash and cash equivalents, at end of the period
|
$
|
18,023
|
|
|
$
|
47,896
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest during the period
|
$
|
4,370
|
|
|
$
|
6,409
|
|
Interest Paid in Kind on Senior Unsecured Convertible Notes
|
$
|
3,477
|
|
|
$
|
—
|
|
Supplemental disclosures of non-cash financing activities:
|
|
|
|
||||
Interest payment and fees withheld from borrowings by lender
|
$
|
194
|
|
|
$
|
200
|
|
|
Primary Beneficiary
|
|
Not Primary
Beneficiary
|
||||||||||||
|
Consolidated VIEs
|
|
Non-consolidated VIEs
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Total
Assets
|
|
Maximum
Exposure
To Loss
|
||||||||
March 31, 2017
|
$
|
554,737
|
|
|
$
|
290,883
|
|
|
$
|
2,384
|
|
|
$
|
2,384
|
|
December 31, 2016
|
511,792
|
|
|
257,678
|
|
|
2,384
|
|
|
$
|
2,384
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2017(1)
|
|
2016(2)
|
||||
Income (loss) per share:
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income (loss) from continuing operations
|
$
|
1,884
|
|
|
$
|
(7,445
|
)
|
Net income (loss) from discontinued operations
|
(189
|
)
|
|
(68
|
)
|
||
Net income (loss)
|
$
|
1,695
|
|
|
$
|
(7,513
|
)
|
Basic and diluted income (loss) per common share:
|
|
|
|
||||
Basic and diluted income (loss) from continuing operations
|
$
|
0.07
|
|
|
$
|
(0.27
|
)
|
Basic and diluted income (loss) from discontinued operations
|
(0.01
|
)
|
|
—
|
|
||
Basic and diluted income (loss) per share available to common shareholders
|
$
|
0.06
|
|
|
$
|
(0.27
|
)
|
Denominator:
|
|
|
|
||||
Basic and Diluted
|
28,148,632
|
|
|
27,481,249
|
|
(1)
|
The computation of diluted EPS does not include
265,212
shares of restricted stock,
605,227
options,
6,240,521
warrants, and up to
11,266,011
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,
763,594
options,
6,240,521
warrants, up to
10,738,165
shares of underlying common stock issuable upon conversion of the Convertible Notes and
319,500
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, 2017
|
|
763,594
|
|
|
$
|
8.52
|
|
|
2.47
|
|
|
$
|
—
|
|
Options granted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
Options exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
Options forfeited
|
|
(158,367
|
)
|
|
$
|
8.00
|
|
|
—
|
|
|
|
|
|
Options expired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
Options outstanding, March 31, 2017
|
|
605,227
|
|
|
$
|
8.66
|
|
|
2.14
|
|
|
$
|
—
|
|
Exercisable at March 31, 2017
|
|
605,227
|
|
|
$
|
8.66
|
|
|
2.14
|
|
|
|
|
|
Unvested at March 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Common Unvested Shares
|
Number of
Shares
|
|
Outstanding January 1, 2017
|
265,212
|
|
Granted
|
—
|
|
Vested
|
—
|
|
Forfeited
|
—
|
|
Outstanding March 31, 2017
|
265,212
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Total income
|
$
|
3
|
|
|
$
|
3
|
|
Total expenses
|
192
|
|
|
71
|
|
||
Income (loss) before income taxes
|
(189
|
)
|
|
(68
|
)
|
||
Income tax benefit
|
—
|
|
|
—
|
|
||
Net income (loss) from discontinued operations, net of income taxes
|
$
|
(189
|
)
|
|
$
|
(68
|
)
|
Remaining Life Expectancy (In Years)*
|
Number of
Life Settlement
Contracts
|
|
Estimated Fair
Value
|
|
Face
Value
|
|||||
0 - 1
|
4
|
|
|
$
|
16,367
|
|
|
$
|
19,721
|
|
1 - 2
|
16
|
|
|
38,602
|
|
|
57,093
|
|
||
2 - 3
|
12
|
|
|
20,840
|
|
|
43,374
|
|
||
3 - 4
|
39
|
|
|
61,945
|
|
|
153,992
|
|
||
4 - 5
|
38
|
|
|
54,588
|
|
|
172,558
|
|
||
Thereafter
|
508
|
|
|
314,330
|
|
|
2,462,138
|
|
||
Total
|
617
|
|
|
$
|
506,672
|
|
|
$
|
2,908,876
|
|
Remaining Life Expectancy (In Years)*
|
Number of
Life Settlement
Contracts
|
|
Estimated Fair
Value
|
|
Face
Value
|
|||||
0-1
|
4
|
|
|
$
|
16,280
|
|
|
$
|
19,497
|
|
1-2
|
14
|
|
|
35,019
|
|
|
52,093
|
|
||
2-3
|
14
|
|
|
31,300
|
|
|
57,274
|
|
||
3-4
|
31
|
|
|
44,096
|
|
|
114,449
|
|
||
4-5
|
40
|
|
|
57,792
|
|
|
172,157
|
|
||
Thereafter
|
518
|
|
|
313,913
|
|
|
2,531,041
|
|
||
Total
|
621
|
|
|
$
|
498,400
|
|
|
$
|
2,946,511
|
|
|
|
||
Remainder of 2017
|
$
|
63,155
|
|
2018
|
85,648
|
|
|
2019
|
92,666
|
|
|
2020
|
96,339
|
|
|
2021
|
96,537
|
|
|
Thereafter
|
871,258
|
|
|
|
$
|
1,305,603
|
|
LTV
|
|
Premiums, Interest & Other Fees
|
|
Principal
|
|
Distribution to White Eagle - 55%
|
|
Lender Participation - 45%
|
N/A
|
|
100%
|
|
—%
|
|
—%
|
|
—%
|
>65%
|
|
N/A
|
|
100%
|
|
—%
|
|
—%
|
50-65%
|
|
N/A
|
|
70%
|
|
16.5%
|
|
13.5%
|
35-50%
|
|
N/A
|
|
55%
|
|
24.8%
|
|
20.3%
|
0-35%
|
|
N/A
|
|
45%
|
|
30.3%
|
|
24.8%
|
Clause
|
Amount
|
Use of Proceeds
|
||
First:
|
$
|
59
|
|
Custodian and Securities Intermediary
|
Second:
|
—
|
|
White Eagle - Ongoing Maintenance Cost Reimbursable
|
|
Third:
|
—
|
|
Administrative Agent - Protective Advances
|
|
Fourth:
|
10
|
|
Administrative Agent - Administrative Agent Fee and Legal Expense Reimbursement
|
|
Fifth:
|
2,412
|
|
Administrative Agent - Accrued and Unpaid Interest
|
|
Sixth:
|
—
|
|
Administrative Agent - Required Amortization
|
|
Seventh:
|
—
|
|
Administrative Agent - Amortization Shortfall
|
|
Eighth:
|
—
|
|
Administrative Agent - Participation Interest
|
|
Ninth:
|
—
|
|
Reserved - $0
|
|
Tenth:
|
—
|
|
Administrative Agent Aggregate Unpaid Participation Interest
|
|
Eleventh:
|
—
|
|
Administrative Agent - Remaining Available Amount After Clause First to Tenth
|
|
Twelfth:
|
—
|
|
Wilmington Trust - Custodian and Securities Intermediary - Unpaid Fees
|
|
Thirteenth:
|
—
|
|
Borrower - Any Remaining Available Amount After Clause First to Twelfth
|
|
Total Distributions
|
$
|
2,481
|
|
|
Face value collected in 2016 and distributed in 2017
|
$
|
2,480
|
|
Face value collected in 2017
|
10,000
|
|
|
Other collections*
|
37
|
|
|
Total waterfall collection
|
$
|
12,517
|
|
Less: Total waterfall distribution during the three months ended March 31, 2017
|
(2,481
|
)
|
|
Total to be distributed subsequent to the quarter ended March 31, 2017
|
$
|
10,036
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment in life settlements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
506,672
|
|
|
$
|
506,672
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
506,672
|
|
|
$
|
506,672
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
White Eagle Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
290,200
|
|
|
$
|
290,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
290,200
|
|
|
$
|
290,200
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair
Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment in life settlements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
498,400
|
|
|
$
|
498,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
498,400
|
|
|
$
|
498,400
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair
Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
White Eagle Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
257,085
|
|
|
$
|
257,085
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
257,085
|
|
|
$
|
257,085
|
|
($ in thousands)
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|||||||||||
|
Fair Value
at 3/31/17 |
|
Aggregate
death benefit at 3/31/17 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||||
Non-premium financed
|
$
|
97,023
|
|
|
$311,557
|
|
Discounted cash flow
|
|
Discount rate
|
|
15.00%
|
-
|
18.00%
|
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(5.7 years)
|
||||
Premium financed
|
$
|
409,649
|
|
|
$2,597,319
|
|
Discounted cash flow
|
|
Discount rate
|
|
16.00%
|
-
|
21.00%
|
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(9.3 years)
|
||||
Life settlements
|
$
|
506,672
|
|
|
$2,908,876
|
|
Discounted cash flow
|
|
Discount rate
|
|
16.37%
|
||
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(8.9 years)
|
||||
White Eagle Revolving Credit Facility
|
$
|
290,200
|
|
|
$2,896,876
|
|
Discounted cash flow
|
|
Discount rate
|
|
18.38%
|
||
|
|
|
|
|
|
|
Life expectancy evaluation
|
|
(8.9 years)
|
Life Expectancy Months Adjustment
|
Value
|
|
Change in Value
|
||||
+6
|
$
|
423,376
|
|
|
$
|
(83,296
|
)
|
-
|
$
|
506,672
|
|
|
$
|
—
|
|
-6
|
$
|
594,453
|
|
|
$
|
87,781
|
|
Carrier
|
Percentage of
Total
Fair Value
|
|
Percentage of
Total Death
Benefit
|
|
Moody's
Rating
|
|
S&P
Rating
|
||
Transamerica Life Insurance Company
|
18.7
|
%
|
|
20.9
|
%
|
|
A1
|
|
AA-
|
Lincoln National Life Insurance Company
|
22.0
|
%
|
|
19.4
|
%
|
|
A1
|
|
AA-
|
Weighted Average Rate Calculated Based on
|
|
|
|
|
|
|||||
Death Benefit
|
Rate Adjustment
|
|
Value
|
|
Change in Value
|
|||||
15.87%
|
-0.50%
|
|
|
$
|
520,072
|
|
|
$
|
13,400
|
|
16.37%
|
—
|
|
|
$
|
506,672
|
|
|
$
|
—
|
|
16.87%
|
+0.50%
|
|
|
$
|
493,824
|
|
|
$
|
(12,848
|
)
|
Life Expectancy Months Adjustment
|
Fair Value of White Eagle
Revolving Credit
Facility
|
|
Change in Value
|
||||
+6
|
$
|
250,498
|
|
|
$
|
(39,702
|
)
|
|
$
|
290,200
|
|
|
$
|
—
|
|
-6
|
$
|
336,371
|
|
|
$
|
46,171
|
|
Discount Rate
|
Rate Adjustment
|
|
Fair Value of White Eagle
Revolving Credit
Facility
|
|
Change in Value
|
|||||
17.88%
|
-0.50
|
%
|
|
$
|
297,433
|
|
|
$
|
7,233
|
|
18.38%
|
—
|
|
|
$
|
290,200
|
|
|
$
|
—
|
|
18.88%
|
+0.50
|
%
|
|
$
|
283,251
|
|
|
$
|
(6,949
|
)
|
Life Settlements:
|
|
||
Balance, January 1, 2017
|
$
|
498,400
|
|
Purchase of policies
|
—
|
|
|
Change in fair value
|
25,540
|
|
|
Matured/lapsed/sold policies
|
(37,850
|
)
|
|
Premiums paid
|
20,582
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, March 31, 2017
|
$
|
506,672
|
|
Changes in fair value included in earnings for the period relating to assets held at March 31, 2017
|
$
|
9,152
|
|
White Eagle Revolving Credit Facility:
|
|
||
Balance, January 1, 2017
|
$
|
257,085
|
|
Draws under the White Eagle Revolving Credit Facility
|
21,284
|
|
|
Payments on White Eagle Revolving Credit Facility
|
—
|
|
|
Unrealized change in fair value
|
11,831
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, March 31, 2017
|
$
|
290,200
|
|
Changes in fair value included in earnings for period relating to liabilities held at March 31, 2017
|
$
|
11,831
|
|
Life Settlements:
|
|
||
Balance, January 1, 2016
|
$
|
461,925
|
|
Purchase of policies
|
1,374
|
|
|
Change in fair value
|
8,388
|
|
|
Matured/sold policies
|
(12,980
|
)
|
|
Premiums paid
|
16,653
|
|
|
Transfers into level 3
|
—
|
|
|
Transfers out of level 3
|
—
|
|
|
Balance, March 31, 2016
|
$
|
475,360
|
|
Changes in fair value included in earnings for the period relating to assets held at March 31, 2016
|
$
|
103
|
|
White Eagle Revolving Credit Facility:
|
|
||
Balance, January 1, 2016
|
$
|
169,131
|
|
Draws under the White Eagle Revolving Credit Facility
|
12,595
|
|
|
Payments on White Eagle Revolving Credit Facility
|
(2,509
|
)
|
|
Unrealized change in fair value
|
3,094
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, March 31, 2016
|
$
|
182,311
|
|
Changes in fair value included in earnings for the period relating to liabilities at March 31, 2016
|
$
|
3,094
|
|
Red Falcon Revolving Credit Facility
|
|
||
Balance, January 1, 2016
|
$
|
55,658
|
|
Draws under the Red Falcon Revolving Credit Facility
|
5,086
|
|
|
Payments on Red Falcon Revolving Credit Facility
|
(4,086
|
)
|
|
Unrealized change in fair value
|
1,002
|
|
|
Transfers into level 3
|
—
|
|
|
Transfer out of level 3
|
—
|
|
|
Balance, March 31, 2016
|
$
|
57,660
|
|
Changes in fair value included in earnings for the period relating to liabilities held at March 31, 2016
|
$
|
1,002
|
|
Old Notes to be Exchanged
|
|
Total Consideration*
|
8.5% Senior Unsecured Convertible Notes Due 2019
CUSIP 452834AE4
CUSIP 29102NAB1 (PIK notes)
|
|
For each $1,000 Principal Amount of Old Notes, $1,000 Principal Amount of New Unsecured Notes plus the right to purchase 500 shares of common stock at $0.20 per share
|
Old Notes to be Exchanged
|
|
Total Consideration*
|
8.5% Senior Unsecured Convertible Notes Due 2019
CUSIP 452834AE4
CUSIP 29102NAB1 (PIK notes)
|
|
For each $1,000 Principal Amount of Old Notes, $1,000 Principal Amount of New Unsecured Notes plus the right to purchase 500 shares of common stock at $0.20 per share
|
•
|
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 from life settlement maturities upon receipt of death notice or verified obituary of the insured. This income is the difference between the death benefits and fair values of the policy at the time of maturity.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Period Acquisitions — Policies Owned
|
|
|
|
|
||||
Number of policies acquired
|
|
—
|
|
|
—
|
|
||
Weighted average age of insured at acquisition
|
|
—
|
|
|
—
|
|
||
Weighted average life expectancy — Calculated LE (Years)
|
|
—
|
|
|
—
|
|
||
Average death benefit
|
|
—
|
|
|
—
|
|
||
Aggregate purchase price
|
|
—
|
|
|
—
|
|
||
End of Period — Policies Owned
|
|
|
|
|
||||
Number of policies owned
|
|
617
|
|
|
626
|
|
||
Weighted average age of insured
|
|
82.7
|
|
|
81.7
|
|
||
Average death benefit per policy
|
|
$
|
4,715
|
|
|
$
|
4,744
|
|
Weighted average Life Expectancy — Calculated LE (Years)
|
|
8.9
|
|
|
9.7
|
|
||
Aggregate Death Benefit
|
|
$
|
2,908,876
|
|
|
$
|
2,969,670
|
|
Aggregate fair value
|
|
$
|
506,672
|
|
|
$
|
475,360
|
|
Monthly premium — average per policy
|
|
$
|
11.4
|
|
|
$
|
9.6
|
|
Period Maturities
|
|
|
|
|
||||
Number of policies matured
|
|
4
|
|
|
6
|
|
||
Weighted average age of insured at maturity
|
|
82.8
|
|
|
84.9
|
|
||
Weighted average life expectancy - Calculated LE (Years)
|
|
3.5
|
|
|
5.5
|
|
||
Aggregate death benefit
|
|
$
|
37,850
|
|
|
$
|
12,980
|
|
Gains on maturity
|
|
$
|
16,264
|
|
|
$
|
8,279
|
|
Proceeds collected
|
|
$
|
10,000
|
|
|
$
|
15,480
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
Income
|
|
$
|
25,590
|
|
|
$
|
8,454
|
|
|
$
|
17,136
|
|
|
203
|
%
|
|
increase
|
Expenses
|
|
23,706
|
|
|
15,899
|
|
|
7,807
|
|
|
49
|
%
|
|
increase
|
|||
Net income (loss)
|
|
$
|
1,884
|
|
|
$
|
(7,445
|
)
|
|
$
|
9,329
|
|
|
(125
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
Change in fair value of life settlements
|
|
$
|
25,540
|
|
|
$
|
8,388
|
|
|
$
|
17,152
|
|
|
204
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
Interest expense
|
|
$
|
7,535
|
|
|
$
|
6,050
|
|
|
$
|
1,485
|
|
|
25
|
%
|
|
increase
|
Change in fair value of Revolving Credit Facilities
|
|
11,831
|
|
|
4,097
|
|
|
7,734
|
|
|
189
|
%
|
|
increase
|
|||
SG&A expenses
|
|
4,340
|
|
|
5,752
|
|
|
(1,412
|
)
|
|
(25
|
)%
|
|
decrease
|
|||
Total Expense
|
|
$
|
23,706
|
|
|
$
|
15,899
|
|
|
$
|
7,807
|
|
|
49
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
White Eagle Revolving Credit Facility
|
|
$
|
3,194
|
|
|
$
|
2,423
|
|
|
$
|
771
|
|
|
32
|
%
|
|
increase
|
Red Falcon Revolving Credit Facility
|
|
—
|
|
|
980
|
|
|
(980
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Convertible Notes
|
|
3,124
|
|
|
2,364
|
|
|
760
|
|
|
32
|
%
|
|
increase
|
|||
15% Senior Secured Notes
|
|
1,215
|
|
|
279
|
|
|
936
|
|
|
335
|
%
|
|
increase
|
|||
Other
|
|
2
|
|
|
4
|
|
|
(2
|
)
|
|
(50
|
)%
|
|
decrease
|
|||
Total Interest Expense
|
|
$
|
7,535
|
|
|
$
|
6,050
|
|
|
$
|
1,485
|
|
|
25
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
White Eagle Revolving Credit Facility
|
|
$
|
11,831
|
|
|
$
|
3,094
|
|
|
$
|
8,737
|
|
|
282
|
%
|
|
increase
|
Red Falcon Revolving Credit Facility
|
|
—
|
|
|
1,003
|
|
|
(1,003
|
)
|
|
(100
|
)%
|
|
decrease
|
|||
Total Change in Fair Value of Revolving Credit Facilities
|
|
$
|
11,831
|
|
|
$
|
4,097
|
|
|
$
|
7,734
|
|
|
189
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
Personnel costs
|
|
$
|
1,085
|
|
|
$
|
1,557
|
|
|
$
|
(472
|
)
|
|
(30
|
)%
|
|
decrease
|
Legal fees
|
|
995
|
|
|
1,818
|
|
|
(823
|
)
|
|
(45
|
)%
|
|
decrease
|
|||
Professional fees
|
|
1,604
|
|
|
1,643
|
|
|
(39
|
)
|
|
(2
|
)%
|
|
decrease
|
|||
Insurance
|
|
192
|
|
|
244
|
|
|
(52
|
)
|
|
(21
|
)%
|
|
decrease
|
|||
Other SG&A expenses
|
|
464
|
|
|
490
|
|
|
(26
|
)
|
|
(5
|
)%
|
|
decrease
|
|||
Total SG&A Expenses
|
|
$
|
4,340
|
|
|
$
|
5,752
|
|
|
$
|
(1,412
|
)
|
|
(25
|
)%
|
|
decrease
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
|
|||||||
Total income
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
—
|
%
|
|
decrease
|
Total expenses
|
192
|
|
|
71
|
|
|
121
|
|
|
170
|
%
|
|
increase
|
|||
Income (loss) before income taxes
|
(189
|
)
|
|
(68
|
)
|
|
(121
|
)
|
|
178
|
%
|
|
increase
|
|||
Net income (loss), net of income taxes
|
$
|
(189
|
)
|
|
$
|
(68
|
)
|
|
$
|
(121
|
)
|
|
178
|
%
|
|
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Statement of Cash Flows Data:
|
|
|
|
|
||||
Total cash (used in) provided by:
|
|
|
|
|
||||
Operating activities
|
|
$
|
(8,819
|
)
|
|
$
|
(11,479
|
)
|
Investing activities
|
|
(5,557
|
)
|
|
(1,209
|
)
|
||
Financing activities
|
|
21,081
|
|
|
40,243
|
|
||
Increase in cash and cash equivalents
|
|
$
|
6,705
|
|
|
$
|
27,555
|
|
Carrier
|
Percentage of
Total Fair
Value
|
|
Percentage of
Total Death
Benefit
|
|
Moody’s
Rating
|
|
S&P
Rating
|
||
Transamerica Life Insurance Company
|
18.7
|
%
|
|
20.9
|
%
|
|
A1
|
|
AA-
|
Lincoln National Life Insurance Company
|
22.0
|
%
|
|
19.4
|
%
|
|
A1
|
|
AA-
|
|
|
Emergent Capital, Inc.
|
|
|
|
/s/ Miriam Martinez
|
|
Chief Financial Officer
|
Miriam Martinez
|
|
(Principal Financial Officer)
|
Date May 15, 2017
|
|
|
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed/
Furnished Herewith
|
4.1
|
|
First Supplemental Indenture, dated as of March 9, 2017, by and among Emergent Capital, Inc. and Wilmington Trust, National Association.
|
|
8-K
|
|
4.1
|
|
3/17/2017
|
|
|
4.2
|
|
First Supplemental Indenture, dated as of March 13, 2017, by and among Emergent Capital, Inc. and U.S. Bank National Association
|
|
8-K
|
|
4.2
|
|
3/17/2017
|
|
|
4.3
|
|
Form of Indenture between Emergent Capital, Inc. and U.S. Bank National Association, as Trustee.
|
|
SC
TO
|
|
(b)(1)
|
|
4/18/2017
|
|
|
4.4
|
|
Form of 5.00% Senior Unsecured Convertible Note Due 2023 to be issued by Emergent Capital, Inc.
|
|
SC
TO
|
|
(b)(2)
|
|
4/18/2017
|
|
|
10.1†
|
|
Second Amended and Restated Securities Account Control and Custodian Agreement, dated January 31, 2017, among White Eagle Asset Portfolio, LP, as borrower, Wilmington Trust, National Association, as securities intermediary and custodian, and CLMG Corp, as the administrative agent.
|
|
10-K
|
|
10.19
|
|
3/21/2017
|
|
|
10.2
|
|
Master Transaction Agreement, dated as of March 15, 2017 by and among Emergent Capital, Inc., PJC Investments, LLC, a Texas limited liability company, and the consenting holders of the Company's 8.50% Senior Unsecured Convertible Notes Due 2019 party thereto.
|
|
SC
TO
|
|
(d)(1)
|
|
4/18/2017
|
|
|
10.3
|
|
Exchange Participation Agreement, dated as of April 7, 2017 by and among Emergent Capital, Inc. and the consenting holders of the Company’s 15.0% Senior Secured Notes Due 2018 party thereto.
|
|
|
|
|
|
|
|
*
|
10.4
|
|
Amendment to Master Transaction Agreement, dated as of April 7, 2017 by and among Emergent Capital, Inc., PJC Investments, LLC, a Texas limited liability company, and the consenting holders of the Company's 8.50% Senior Unsecured Convertible Notes Due 2019 party thereto.
|
|
SC
TO
|
|
(d)(2)
|
|
4/18/2017
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
*
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
*
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
**
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
**
|
101
|
|
Interactive Data Files
|
|
|
|
|
|
|
|
*
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
*
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
*
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
|
|
*
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document 10.1 & 10.2
|
|
|
|
|
|
|
|
*
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
*
|
†
|
Certain portions of the exhibit have been omitted pursuant to a confidential treatment order. An unredacted copy of the exhibit has been filed separately with the United States Securities and Exchange Commission pursuant to the request for confidential treatment.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
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.
|
/s/ Antony Mitchell
|
Antony Mitchell
|
Chief Executive Officer and Director
|
(Principal Executive Officer)
|
|
May 15, 2017
|
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.
|
/s/ Miriam Martinez
|
Miriam Martinez
|
Chief Financial Officer
|
(Principal Financial Officer)
|
|
May 15, 2017
|
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
|
|
May 15, 2017
|
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
|
|
May 15, 2017
|