8-K

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) July 30, 2014

IMPERIAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Florida	001-35064	30-0663473
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
701 Park of Commerce Boulevard, Suite 301 Boca Raton, Florida		33487
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number including area code: (561) 995-4200

(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))

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2014, Imperial Holdings, Inc. (the “Company”) issued a press release announcing earnings and other financial results for its second quarter ended June 30, 2014.

This Current Report on Form 8-K and the press release attached hereto are being furnished by the Company pursuant to Item 2.02 “Results of Operations and Financial Condition.” In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press release issued July 30, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

July 30, 2014

IMPERIAL HOLDINGS, INC.
(Registrant)
By:	/s/ Michael Altschuler
	Michael Altschuler
	General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued July 30, 2014.

EX-99.1

Exhibit 99.1

Imperial Holdings, Inc. Announces Second Quarter 2014 Results

Company Reports Book Value of $9.83 per Share

Boca Raton, FL, July 30, 2014 – Imperial Holdings, Inc. (NYSE: IFT) (“Imperial” or the “Company”), a specialty finance company with a focus on providing liquidity solutions to owners of illiquid financial assets, announced today its financial results for the three and six month periods ended June 30, 2014.

Three Months Ended June 30, 2014

Total income from continuing operations was $9.0 million for the three months ended June 30, 2014 compared to total income from continuing operations of $65.6 million for the same period in 2013. Income for the three months ended June 30, 2013 was primarily driven by the change in fair value associated with the acquisition of 422 life insurance policies, while no policy acquisitions occurred during the same period in 2014. Total expenses were $19.5 million for the three months ended June 30, 2014 compared to $18.5 million for the same period in 2013. The increase was primarily driven by the change in fair value of $4.7 million associated with the conversion derivative liability embedded in the Company’s convertible notes. This change in fair value was driven in large part by the increase in the Company’s stock price during the period from March 31, 2014 through June 5, 2014, the date the Company obtained shareholder approval to issue shares of common stock in excess of certain NYSE limits. As of June 5, 2014, this conversion derivative liability was reclassified to additional paid-in-capital, net of the related tax impact.

The Company reported a net loss from continuing operations of $6.3 million, or ($.29) per fully diluted share, for the three months ended June 30, 2014, compared to net income of $47.2 million, or $2.22 per fully diluted share, for the same period in 2013.

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Six Months Ended June 30, 2014

Total income from continuing operations was $22.6 million for the six months ended June 30, 2014 compared to total income from continuing operations of $67.8 million for the same period in 2013. Income for the six months ended June 30, 2013 was primarily driven by the change in fair value associated with the acquisition of 422 life insurance policies, while no policy acquisitions occurred during the same period in 2014. Total expenses were $32.4 million for the six months ended June 30, 2014 compared to $25.9 million for the same period in 2013. The increase in expenses was primarily due to the change in the fair value of the conversion derivative liability as noted above of $6.8 million and an increase in the fair value of the Company’s revolving credit facility of $3.8 million.

The Company reported a net loss from continuing operations of $9.6 million, or ($.45) per fully diluted share, for the six months ended June 30, 2014, compared to net income of $41.8 million, or $1.97 per fully diluted share, for the same period in 2013. The net loss was impacted by a one-time income tax provision of approximately $3.7 million, which resulted from the adoption of a new accounting pronouncement during the first quarter of 2014.

As of June 30, 2014, the Company had cash and cash equivalents of approximately $82.4 million and had 21,402,990 shares outstanding with a per share book value of $9.83.

Life Settlements Portfolio Highlights

At June 30, 2014, the estimated fair value of the Company’s 593 life insurance policies was $336.8 million compared to $303.0 million for 612 life insurance policies at December 31, 2013. The weighted average discount rate was 18.92% at June 30, 2014 compared to 19.14% at December 31, 2013. The aggregate face value of the Company’s portfolio of life insurance policies was approximately $2.9 billion at June 30, 2014.

Antony Mitchell, Chief Executive Officer of Imperial, commented: “As we enter the second half of 2014, we remain encouraged by the continued interest in our asset class.” Mr. Mitchell concluded, “We expect to execute the first phase of our capital deployment plan during the third quarter and continue through the end of the year.”

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Conference Call

The Company will host a conference call today at 5:00 P.M ET. To join the call please dial US Toll Free (877) 312-5529 or from Outside of the US (253) 237-1147 and provide Conference ID 72177663 when prompted.

The conference call will also be broadcast live through a link on the Investor Relations section of the Company’s website at www.imperial.com. Please visit the website at least 10 minutes prior to the call to register, download and install any necessary audio software.

About Imperial Holdings, Inc.

Imperial is a leading specialty finance company that provides customized liquidity solutions to owners of illiquid financial assets. More information about Imperial can be found at www.imperial.com.

Safe Harbor Statement

This press release may contain certain “forward-looking statements” relating to the business of Imperial Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, and involve known and unknown risks and uncertainties. Although Imperial believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Imperial does not assume a duty to update these forward-looking statements.

Contact:

David Sasso

Imperial Holdings, Inc.

Director- Investor Relations

561.672.6114

IR@imperial.com

www.imperial.com

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Imperial Holdings, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2014			2013*
	(Unaudited)
	(In thousands except share data)
ASSETS
Assets
Cash and cash equivalents	$	67,673		$	14,722
Cash and cash equivalents (VIE)		14,713			7,977
Restricted cash		—			13,506
Prepaid expenses and other assets		2,003			1,331
Deposits - other		1,379			1,597
Structured settlement receivables, at estimated fair value		388			660
Structured settlement receivables at cost, net		551			797
Investment in life settlements, at estimated fair value		47,954			48,442
Investment in life settlements, at estimated fair value (VIE)		288,892			254,519
Receivable for maturity of life settlements (VIE)		2,100			2,100
Fixed assets, net		47			74
Investment in affiliates		2,384			2,378
Deferred debt costs, net		2,384			—
Total assets	$	430,468		$	348,103
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable and accrued expenses	$	4,227		$	2,977
Accounts payable and accrued expenses (VIE)		333			341
Other liabilities		1,267			21,221
Interest payable - senior unsecured convertible notes (Note 10)		2,171			—
Revolving Credit Facility debt, at estimated fair value (VIE)		148,783			123,847
Senior unsecured convertible notes, net of discount		54,645			—
Income taxes payable		—			6,295
Deferred tax liability		8,618			—
Total liabilities		220,044			154,681
Commitments and Contingencies
Stockholders’ Equity
Common stock (par value $0.01 per share, 80,000,000 authorized; 21,402,990 and 21,237,166 issued and outstanding as of June 30, 2014 and December 31, 2013, respectively)		213			212
Additional paid-in-capital		266,311			239,506
Accumulated deficit		(56,100	)		(46,296	)
Total stockholders’ equity		210,424			193,422
Total liabilities and stockholders’ equity	$	430,468		$	348,103

* Derived from audited consolidated financial statements.

Imperial Holdings, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(in thousands, except share and per share data)
Income
Interest income	$	11		$	10		$	13		$	30
Interest and dividends on investment securities available for sale		—			—			—			14
Loss on life settlements, net		(67	)		(1,247	)		(426	)		(1,247	)
Change in fair value of life settlements		9,000			64,846			22,956			66,686
Servicing fee income		—			76			—			310
Other income		52			1,952			55			2,004
Total income		8,996			65,637			22,598			67,797
Expenses
Interest expense		4,061			10,759			6,862			10,861
Loss on extinguishment of Bridge Facility		—			3,991			—			3,991
Change in fair value of Revolving Credit Facility debt		2,689			(5,361	)		3,818			(5,361	)
Change in fair value of conversion derivative liability		4,697			—			6,759			—
Gain on loan payoffs and settlements, net		—			(65	)		—			(65	)
Amortization of deferred costs		—			—			—			7
Personnel costs		2,548			2,428			4,716			4,292
Legal fees		3,335			4,240			6,179			7,983
Professional fees		1,248			1,259			2,420			2,062
Insurance		416			479			839			998
Other selling, general and administrative expenses		476			753			822			1,172
Total expenses		19,470			18,483			32,415			25,940
Income (loss) from continuing operations before income taxes		(10,474	)		47,154			(9,817	)		41,857
Benefit (provision) for income taxes		4,193			—			217			(40	)
Net income (loss) from continuing operations	$	(6,281	)	$	47,154		$	(9,600	)	$	41,817
Discontinued Operations:
Income (loss) from discontinued operations, net of income taxes	$	(185	)	$	567		$	(204	)	$	1,572
Net income (loss)	$	(6,466	)	$	47,721		$	(9,804	)	$	43,389
Earnings per share:
Basic and diluted earnings per common share
Continuing operations	$	(0.29	)	$	2.22		$	(0.45	)	$	1.97
Discontinued operations	$	(0.01	)	$	0.03		$	(0.01	)	$	0.07
Net income (loss)	$	(0.30	)	$	2.25		$	(0.46	)	$	2.04
Weighted average shares outstanding:
Basic and diluted		21,350,200			21,219,880			21,347,173			21,213,039

Imperial Holdings, Inc.

Life Finance Business Segment Data

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Period Acquisitions — Policies Owned
Number of policies acquired		—		422		—		430
Average age of insured at acquisition		—		77.7		—		77.7
Average life expectancy - Calculated LE (Years)		—		12.7		—		12.7
Average death benefit	$	—	$	4,756	$	—	$	4,744
Aggregate purchase price	$	—	$	56,875	$	—	$	58,400
End of Period — Policies Owned
Number of policies owned		593		627		593		627
Average Life Expectancy - Calculated LE (Years)		11.1		11.9		11.1		11.9
Aggregate Death Benefit	$	2,873,899	$	3,015,140	$	2,873,899	$	3,015,140
Aggregate fair value	$	336,846	$	265,773	$	336,846	$	265,773
Monthly premium — average per policy	$	7.6	$	7.8	$	7.6	$	7.8