Current Report Filing (8-k)
January 04 2019 - 4:45PM
Edgar (US Regulatory)
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):
December 28, 2018
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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220
South Sixth Street, Suite 1200, Minneapolis, MN 55402
(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:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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
1.01 Entry into a Material Definitive Agreement.
On
January 12, 2018, GWG Holdings, Inc. (the “Company” or “GWG”) and its wholly owned subsidiary GWG Life,
LLC (“GWG Life”) entered into a Master Exchange Agreement with The Beneficient Company Group, L.P., a Delaware limited
partnership (“Beneficient”), MHT Financial SPV, LLC, a Delaware limited liability company (“MHT SPV”),
and various related trusts (the “Seller Trusts”), as amended and restated on January 18, 2018 with effect from January
12, 2018, and as further amended by the First Amendment to Master Exchange Agreement, the Second Amendment to Master Exchange
Agreement and the Third Amendment to the Master Exchange Agreement (as amended, the “Master Exchange Agreement”).
The material terms and conditions of the initial Master Exchange Agreement were described in GWG Holdings’ Current Report
on Form 8-K (the “January 2018 Form 8-K”) filed with the Securities and Exchange Commission on January 18, 2018.
On
August 10, 2018, the Company, Beneficient, MHT SPV, and the Seller Trusts entered into a Third Amendment to Master Exchange Agreement.
Pursuant to the Third Amendment, the parties agreed to consummate the transactions contemplated by the Master Exchange Agreement
in two closings. The Third Amendment also generally deleted MHT SPV as a party to the Master Exchange Agreement. The material
terms and conditions of the Third Amendment to Master Exchange Agreement were described in GWG Holdings’ Current Report
on Form 8-K (the “August Form 8-K”) filed with the Securities and Exchange Commission on August 14, 2018.
On
the first closing date, which took place on August 10, 2018 (the “Initial Transfer Date”),
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in
consideration for GWG and GWG Life entering into the Master Exchange Agreement and consummating
the transactions contemplated thereby, Beneficient, as borrower, entered into a commercial
loan agreement (the “Commercial Loan Agreement) with GWG Life, as lender, in a
principal amount of $200 million as more fully described below;
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Beneficient
delivered to GWG a promissory note (the “Exchangeable Note”) in the principal
amount of $162,911,379 as more fully described below;
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Beneficient
purchased 5,000,000 shares of GWG’s Series B Convertible Preferred Stock, par value
$0.001 per share and having a stated value of $10 per share (the “Convertible Preferred
Stock”), for cash consideration of $50,000,000, which shares were subsequently
transferred to the Seller Trusts, as more fully described below;
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the
Seller Trusts delivered to GWG 4,032,349 common units of Beneficient;
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GWG
issued to the Seller Trusts Seller Trust L Bonds due 2023 (the “Seller Trust L
Bonds”) in an aggregate principal amount of $403,234,866, as more fully described
below;
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GWG
and the Seller Trusts entered into a registration rights agreement with respect to the
Seller Trust L Bonds received by the Seller Trusts; and
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GWG
and Beneficient entered into a registration rights agreement with respect to the Beneficient
common units received and to be received by GWG.
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Under
the Master Exchange Agreement, at the final closing (the “Final Closing” and the date on which the final closing occurred,
the “Final Closing Date”), which occurred on December 28, 2018:
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in
accordance with the Master Exchange Agreement, and based on the net asset value of alternative asset financings as of
the Final Closing Date, effective as of the Initial Transfer Date, (i) the principal amount of the Commercial Loan Agreement was
reduced to $181,974,314, (ii) the principal amount of the Exchangeable Note was reduced to $148,228,432, and (iii) the principal
amount of the Seller Trust L Bonds was reduced to $366,891,940;
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the
Seller Trusts refunded to GWG $840,430 in interest paid on the Seller Trust L Bonds related
to the Seller Trust L Bonds that were issued as of the Initial Transfer Date but cancelled,
effective as of the Initial Transfer Date, on the Final Closing Date;
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the
accrued interest on the Commercial Loan Agreement and the Exchangeable Note was added
to the principal amount of the Commercial Loan Agreement, as a result of which the principal
amount of the Commercial Loan Agreement as of the Final Closing Date was $192,507,946;
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the
Seller Trusts transferred to GWG an aggregate of 21,650,087 common units of Beneficient
and GWG received 14,822,843 common units of Beneficient in exchange for the Exchangeable
Note, upon completion of which GWG owned (including the 4,032,349 common units received
by GWG on the Initial Transfer Date) 40,505,279 common units of Beneficient;
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Beneficient
issued to GWG an option (the “Option Agreement”) to acquire the number of
common units of Beneficient, interests or other property that would be received by a
holder of the NPC-A Prime limited partnership interests of Beneficient Company Holdings,
L.P., an affiliate of Beneficient (“Beneficient Holdings”); and
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GWG
issued to the Seller Trusts 27,013,516 shares of GWG common stock (including shares issued
upon conversion of the Convertible Preferred Stock).
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On
the Final Closing Date, GWG and the Seller Trusts also entered into a registration rights agreement with respect to the shares
of GWG common stock owned by the Seller Trusts, an orderly marketing agreement and a stockholders agreement. The material terms
of these agreements were described in the January 2018 Form 8-K.
The
foregoing description of the agreements described above does not purport to be complete and is qualified in its entirety by reference
to the agreements, copies of which are filed with this report and incorporated herein by reference.
Item
2.01. Completion of Acquisition or Disposition of Assets.
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
3.02. Unregistered Sales of Equity Securities.
On
December 28, 2018, in connection with the Final Closing Date described above in Item 1.01, GWG issued and sold 27,013,516 shares
of common stock (including shares issued upon conversion of the Convertible Preferred Stock) to the Seller Trusts. No underwriting
discounts or commissions were paid in connection with such sale.
The
shares were offered and sold in reliance upon the exemption from registration provided by Section 4(a)(2) under the Securities
Act of 1933, as amended (the “Securities Act”). The Master Exchange Agreement contains representations to support
GWG’s reasonable belief that Beneficient and the Seller Trusts had access to information concerning GWG’s operations
and financial condition, that each such recipient is acquiring the securities for its own account and not with a view to the distribution
thereof (other than pursuant to a public offering registered under the Securities Act or another applicable exemption), and that
each such recipient is an “accredited investor” as defined by Rule 501 promulgated under the Securities Act.
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
8.01 Other Information.
On
December 28, 2018, GWG issued a press release, a copy of which is attached to this report as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits.
(a)
Financial Statements of Businesses Acquired.
As permitted by Item 9.01(a)(4) of
Form 8-K, the financial statements required by this item will be filed by amendment to this Current Report on Form 8-K within 71
calendar days after the date on which this Current Report must be filed.
(b)
Pro Forma Financial Information.
As permitted by Item 9.01(a)(4) of
Form 8-K, the pro forma financial statements required by this item will be filed by amendment to this Current Report on Form 8-K
within 71 days after the date on which this Current Report must be filed.
(d)
Exhibits.
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 4, 2019
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By:
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/s/
William Acheson
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Name:
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William
Acheson
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Title:
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Chief
Financial Officer
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