Current Report Filing (8-k)
19 January 2022 - 1:29AM
Edgar (US Regulatory)
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2022-01-15
2022-01-15
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of Report (date of earliest event reported): January 15, 2022
GWG
Holdings, Inc.
(Exact
name of registrant as specified in its charter)
Commission
File Number: 001-36615
Delaware
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|
26-2222607
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(State
or other jurisdiction of
incorporation)
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|
(IRS
Employer
Identification No.)
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325
North St. Paul Street, Suite 2650, Dallas, TX 75201
(Address
of principal executive offices, including zip code)
(612)
746-1944
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading Symbol(s)
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Name
of each exchange on which registered
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Common Shares
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GWGH
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Nasdaq
Capital Market
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
8.01 Other Events
The Board of Directors of GWG Holdings, Inc. (the
“Company”) has authorized management to retain the services of a restructuring advisor, which the Company expects will be
FTI Consulting, Inc., and Mayer Brown LLP as restructuring legal advisor to assist the Company’s Board of Directors and management
in evaluating alternatives with respect to its capital structure and liquidity.
As
disclosed in the Company’s periodic reports filed with the SEC, the Company relies to a significant extent on L Bond sales to provide
liquidity. The Company voluntarily suspended its L Bond sales during eight months in 2021 due to the late filing of its Annual Report
on Form 10-K for the year ended December 31, 2020 (the “2020 10-K”) while the Company was working with its auditors and the
SEC’s Office of the Chief Accountant to resolve two accounting questions relevant to the December 31, 2020 financial statements,
as previously disclosed. In addition, once the Company resumed L Bond sales following the filing of its 2020 10-K on November 5, 2021,
it has experienced significantly lower L Bond sales than it had experienced previously, including after the Company voluntarily suspended
its L Bonds sales in 2019. In addition, the Company believes that the filing of its Annual Report on Form 10-K for the year ended December
31, 2021, will likely be later than the March 31, 2022 due date for such filing due to the recently disclosed decision of its independent
registered public accounting firm to decline to stand for reappointment, which would also likely result in a voluntary suspension of
the sale of L Bonds. As previously disclosed, the decision of the Company’s independent registered public accounting firm to decline
to stand for reappointment did not involve any disagreements between the firm and the Company on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the firm’s satisfaction,
would have caused it to make reference to the subject matter of the disagreement in connection with its audit report.
Accordingly,
the Company did not make the January 15, 2022 interest payment of approximately $10.35
million and principal payments of approximately $3.25 million with respect to its
L Bonds, which are issued under its Amended and Restated Indenture, dated as of October 23, 2017, among the Company, GWG Life, LLC, as
guarantor, and Bank of Utah, as trustee (as amended and supplemented, the “Indenture”). The Indenture permits the Company
a 30-day grace period to make the interest and maturity payments. If the Company fails to make the interest or maturity payments within
the grace period, an event of default under the Indenture will result, and the trustee or noteholders holding at least 25% in the aggregate
outstanding principal amount of L Bonds may elect to accelerate the L Bonds causing them to be immediately due and payable, provided
that, due to the Company’s outstanding Senior Debt (as such term is defined in the Indenture), such a declaration of acceleration
may not become effective until the earlier of (i) the day which is five Business Days (as defined in the Indenture) after the receipt
by each of the Company and the holders of Senior Debt of such written notice of acceleration or (ii) the date of acceleration of any
Indebtedness (as defined in the Indenture) under any Senior Debt. Payment of principal and interest on the L Bonds is subject to the
subordination provisions of the Indenture for the benefit of holders of Senior Debt.
The
Company also elected to voluntarily suspend its L Bonds sales effective as of January 10, 2022 and to pay the January 15, 2022 Redeemable
Preferred Stock and Series 2 Redeemable Preferred Stock dividends in additional shares of the applicable series of preferred stock in
accordance with the terms of the certificates of designation for the Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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GWG
HOLDINGS, INC.
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Date:
January 18, 2022
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By:
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/s/
Timothy L. Evans
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Name:
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Timothy
L. Evans
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Title:
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Chief
Financial Officer
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2
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