S-1/A

As filed with the Securities and Exchange Commission on February 7, 2017

Registration No. 333-214896

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 2 to

FORM S-1

REGISTRATION STATEMENT

Under the Securities Act of 1933

GWG HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	26-2222607
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

220 South Sixth Street, Suite 1200
Minneapolis, Minnesota 55402
Tel: (612) 746-1944
Fax: (612) 746-0445

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Paul D. Chestovich Maslon LLP 3300 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402 Tel: (612) 672-8200 Copies to: GWG Holdings, Inc. Jon R. Sabes Chief Executive Officer 220 South Sixth Street, Suite 1200 Minneapolis, Minnesota 55402 Tel: (612) 746-1944 (Name, address, including zip code, and telephone number, including area code, of agent for service) Dominic Baldini Emerson Equity LLC 155 Bovet Road, Suite 725 San Mateo, CA 94402 Tel: (650) 312-0200

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the SEC pursuant to Rule 462(e) under the Securities Act, check the following box. ☐

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered	Amount to be Registered		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price (1)		Amount of Registration Fee
Series 2 Redeemable Preferred Stock, par value $.001 per share		150,000	$	1,000	$	150,000,000	$	17,385	(2)
Common Stock, par value $.001 per share, issuable upon conversion of Series 2 Redeemable Preferred Stock (3)(4)		—		—		—		—

(1)	Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.
(2)	Amount previously paid in connection with December 2, 2016 filing (at which time we paid $28,975).
(3)	We also are registering hereunder an indeterminate number of shares of Common Stock that may be issuable upon the conversion of the Series 2 Redeemable Preferred Stock. The shares of Common Stock issuable upon conversion of the Series 2 Redeemable Preferred Stock will be issued for no additional consideration, and therefore no registration fee is required pursuant to Rule 457(i) under the Securities Act of 1933.
(4)	Pursuant to Rule 416 of the Securities Act of 1933, such number of shares of Common Stock registered hereby also shall include an indeterminate number of shares of Common Stock that may be issued in connection with stock splits, stock dividends, recapitalizations or similar events or adjustments in the number of shares issuable as provided in the Certificate of Designation setting forth the rights, preferences and limitations of the Series 2 Redeemable Preferred Stock.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission, of which this prospectus is a part, shall have been declared effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 2017

GWG HOLDINGS, INC.

Maximum of 150,000 Shares of Series 2 Redeemable Preferred Stock

We are offering a maximum of 150,000 shares of our Series 2 Redeemable Preferred Stock, par value $.001 per share. Each share of Series 2 Redeemable Preferred Stock will have an initial stated value of $1,000 per share, which is the price at which the Series 2 Redeemable Preferred Stock will be publicly offered and sold. The Series 2 Redeemable Preferred Stock will not be certificated. The Series 2 Redeemable Preferred Stock ranks senior to our common stock with respect to payment of dividends and distribution of amounts upon our liquidation, dissolution or winding up, and pari passu with the rights of our Redeemable Preferred Stock and our Series A Convertible Preferred Stock. Holders of our Series 2 Redeemable Preferred Stock will have no voting rights.

Each share of Series 2 Redeemable Preferred Stock has an initial stated value of $1,000 per share, and may be partially converted into our common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days prior to the date of conversion (discounted, based on the number of years your preferred stock has been held, as described below), subject, however, to a minimum conversion price of $      per common share, and a maximum of      % of the stated value of the preferred shares being convertible (i.e., a maximum of       common shares for each share of converted preferred stock), subject to equitable adjustment. Our common stock trades on The NASDAQ Capital Market under the symbol “GWGH.” Our Series 2 Redeemable Preferred Stock, however, does not trade on any national securities exchange or over-the-counter market. 

We are an “emerging growth company” under applicable law and are subject to reduced public company reporting requirements. Please read the disclosures on page 7 of this prospectus for more information. Investing in our securities involves a high degree of risk, including the risk of losing your entire investment. You should carefully read and consider “Risk Factors” included in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, and those on page 13 of this prospectus and in any applicable prospectus supplement before investing in our securities.

Please read this prospectus before investing and keep it for future reference. We file annual, quarterly and current reports with the SEC. This information will be available free of charge by contacting us at 220 South Sixth Street, Suite 1200, Minneapolis, Minnesota 55402 or by phone at (612) 746-1944 or on our website at www.gwgh.com. The SEC also maintains a website at www.sec.gov that contains such information.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Share		Maximum Offering
Public offering price	$	1,000	$	150,000,000
Selling commissions(1)(3)	$	60	$	9,000,000
Additional compensation(2)(3)	$	20	$	3,000,000
Proceeds, before expenses, to us	$	920	$	138,000,000

(1)	Selling commissions will equal 6.00% of aggregate gross proceeds, and be payable to each soliciting broker-dealer authorized by us and Emerson Equity LLC, the managing broker-dealer or “dealer manager” for this offering.
(2)	Additional compensation consists of (i) a non-accountable expense allowance of up to 0.60% of gross offering proceeds, (ii) an accountable expense allowance of up to 0.40% of gross offering proceeds, (iii) a dealer manager fee (payable only to the dealer manager) of 0.40% of gross offering proceeds for managing and coordinating the offering, (iv) a wholesaling fee (payable only to the wholesalers, who are employees of the Company and associated with the dealer manager) of 0.50% of gross offering proceeds, and (v) non-cash compensation of up to 0.10% of gross offering proceeds. Aggregate additional compensation will not exceed 2.00% of gross offering proceeds. The dealer manager may reallow up to 0.60% of additional compensation to other soliciting broker-dealers. The amount of the reallowance to any soliciting broker-dealer will be determined by the dealer manager in its sole discretion.
(3)	The combined selling commissions and additional compensation for this offering will not exceed 8.00% of the aggregate gross proceeds of this offering.

The dealer manager for this offering is Emerson Equity LLC. The dealer manager is not required to sell any specific number or dollar amount of securities, but will use its “best efforts” to sell the securities offered. The minimum permitted purchase is generally $10,000, but we may accept purchases of less than $10,000 in our discretion. We may terminate this offering at any time or may offer Series 2 Redeemable Preferred Stock pursuant to a new registration statement.

We will sell Series 2 Redeemable Preferred Stock through Depository Trust Company, or “DTC,” settlement. We will also sell Series 2 Redeemable Preferred Stock through direct settlement with the Company. See “How to Purchase Shares” and “Plan of Distribution” for a description of this settlement method.

EMERSON EQUITY LLC

as Dealer Manager

The date of this prospectus is            , 2017

TABLE OF CONTENTS

	Page
ABOUT THIS PROSPECTUS	i
INDUSTRY AND MARKET DATA	i
HOW TO PURCHASE SHARES	i
COVERED SECURITY	i
FREQUENTLY ASKED QUESTIONS ABOUT THIS OFFERING	1
PROSPECTUS SUMMARY	4
RISK RELATING TO FORWARD-LOOKING STATEMENTS	12
RISK FACTORS	13
USE OF PROCEEDS	18
BUSINESS	20
EXECUTIVE COMPENSATION	43
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT​	47
DESCRIPTION OF SECURITIES OFFERED	48
PLAN OF DISTRIBUTION	51
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS	53
STATE, LOCAL AND FOREIGN TAXES	59
LEGAL MATTERS	59
EXPERTS	60
WHERE YOU CAN FIND MORE INFORMATION	60
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	60

GWG Holdings, Inc.
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
Tel: (612) 746-1944
Fax: (612) 746-0445

ABOUT THIS PROSPECTUS

We have prepared this prospectus as part of a registration statement that we filed with the SEC for our offering of Series 2 Redeemable Preferred Stock. The registration statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this prospectus and certain information that is incorporated by reference. You should read this prospectus, the related exhibits filed with the SEC, together with additional information described below under “Where You Can Find More Information,” and the documents that are incorporated, or deemed to be incorporated, by reference into this prospectus. This prospectus contains summaries of certain other documents, which summaries contain all material terms of the relevant documents and are believed to be accurate, but reference is hereby made to the full text of the actual documents for complete information concerning the rights and obligations of the parties thereto. Such information necessarily incorporates significant assumptions, as well as factual matters. All documents relating to this offering and related documents and agreements, if readily available to us, will be made available to a prospective investor or its representatives upon request.

You should rely only on the information contained in this prospectus. Neither we nor the dealer manager have authorized any other person to provide you with any information different from that contained in this prospectus or information furnished by us upon request as described herein. The information contained in this prospectus is complete and accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or sale of our shares. In this prospectus, we use the term “day” to refer to a calendar day, and we use the term “business day” to refer to any day other than Saturday, Sunday, a legal holiday or a day on which banks in New York City are authorized or required to close.

No information contained herein, nor in any prior, contemporaneous or subsequent communication should be construed by a prospective investor as legal or tax advice. Each prospective investor should consult its, his or her own legal, tax and financial advisors to ascertain the merits and risks of the transactions described herein prior to purchasing the Series 2 Redeemable Preferred Stock. This written communication is not intended to be “written advice,” as defined in Circular 230 published by the U.S. Treasury Department.

INDUSTRY AND MARKET DATA

The industry and market data used throughout this prospectus have been obtained from our own research, surveys or studies conducted by third parties and industry or general publications. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. We believe that each of these studies and publications is reliable.

HOW TO PURCHASE SHARES

If, after carefully reading this entire prospectus, obtaining any other information requested and available, and being fully satisfied with the results of pre-investment due-diligence activities, you would like to purchase the Series 2 Redeemable Preferred Stock offered hereby, you may purchase the shares through DTC (Depository Trust Company) settlement or direct settlement with the Company.

For DTC settlement, your broker-dealer must be a participant in the DTC system. In such a case, you can place an order for the purchase of shares through your broker-dealer. A broker-dealer using this service will have an account with DTC in which your funds will be placed to facilitate your purchase in this offering. Orders will be executed by your broker-dealer electronically and you must coordinate with your broker-dealer’s registered representative to pay the full purchase price for the shares by the settlement date. Orders may be placed at any time, and the settlement date will be the date on which your purchase is accepted and consummated. You will be credited with ownership of the shares on the settlement date. Your purchase price for the shares purchased in this way will not be held in escrow.

When settling a purchase directly with the Company, you will send your completed and executed Subscription Agreement, together with your subscription amount, to the address listed below. Your subscription amount should be paid through a certified check or personal check payable to the order of “GWG Holdings, Inc.—Subscription Account.” In lieu of paying by check, you may wire your subscription amount to the account referenced below.

Securities Transfer Corp.
2591 Dallas Parkway, Suite 102
Frisco, TX 75034

Wire Instructions
GWG Holdings, Inc. — Subscription Account
Account:       
Routing:       
Bank Name: Bell State Bank & Trust

Your broker-dealer or professional will gather and send in the required information on your behalf, and may facilitate your payment of the subscription amount. Once we have received your subscription amount and required documentation, we will either reject or accept your subscription. Once accepted, we will have immediate access to your subscription amount and we will issue you, in book-entry form, the Series 2 Redeemable Preferred Stock you have purchased.

COVERED SECURITY

Our Series 2 Redeemable Preferred Stock is a “covered security.” The term “covered security” applies to securities exempt from state registration pursuant to Section 18 of the Securities Act of 1933. Generally, securities listed on national exchanges are the most common type of covered security exempt from state registration. A non-traded security also can be a covered security if it has a seniority greater than or equal to other securities from the same issuer that are listed on a national exchange. Our Series 2 Redeemable Preferred Stock is a covered security because it will be senior to our common stock, which is listed on The NASDAQ Capital Market, and therefore our offering of this preferred stock is exempt from state registration.

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FREQUENTLY ASKED QUESTIONS ABOUT THIS OFFERING

What is this offering?

GWG Holdings, Inc. is offering to sell 150,000 shares of Series 2 Redeemable Preferred Stock. This preferred stock will pay a      % per annum cumulative dividend, and will be callable at our discretion, in whole or in part, at any time and from time to time. In addition, investors may request redemption of this preferred stock once per calendar quarter, subject, however, to our ultimate discretion as to whether to honor such a request, and further subject to an applicable redemption fee. In addition, investors may themselves elect to convert some of their preferred shares into our common stock.

Are there minimum purchase requirements for this offering?

The shares will sell for $1,000 per share. The minimum purchase is 10 shares and there is no maximum purchase. There is no aggregate minimum number of shares of Series 2 Redeemable Preferred Stock that must be subscribed for, or related proceeds that must be received, before we can accept subscriptions and access investor funds.

What do you mean by “preferred stock?”

Preferred stock means that, in the event of the liquidation of our Company, the holder of this stock will receive preferential treatment as compared to holders of certain other stock or equity in the Company. In this case, the holders of this preferred stock would receive payment of accrued and declared but unpaid dividends, plus the stated value of their preferred stock (i.e., the original purchase price), before the holders of junior equity, such as our common stock. This preferred stock will also entitle its holders to preferred dividends, meaning that dividends on this stock must be paid prior to dividend payments being made to holders of junior equity, such as our common stock. This preferred stock does not, however, have any voting rights. Our Company has earlier issued other series of preferred stock denominated “Redeemable Preferred Stock” and “Series A Convertible Preferred Stock,” and with respect to both liquidation and dividend-payment rights, the Series 2 Redeemable Preferred Stock offered hereby will be pari passu with that earlier issued Redeemable Preferred Stock and Series A Convertible Preferred Stock.

Will I be able to receive any of my dividend payments in the form of additional shares of preferred stock?

Yes, however, we (the Company) will decide whether to issue dividends in the form of cash or additional shares of preferred stock. We do not anticipate that purchasers of the Series 2 Redeemable Preferred Stock will be able to express any preference in this regard, or affect any decision on our part to pay dividends in cash or in stock.

Are the dividends paid on this stock taxable?

Yes, the dividends you receive on the preferred stock are taxable in the period in which you receive the dividends. We believe that dividends paid on this stock may be eligible for taxation as “qualified dividend income,” which means a tax rate of 15–20% may apply to this income depending on the ordinary income marginal tax bracket in which an investor is taxed. Investors will receive an IRS form 1099-DIV for the tax year in which a dividend is paid. Investors should consult with their own tax advisor regarding tax consequences.

Is my investment guaranteed?

No. As with almost any investment, there is a risk of loss. Before you invest in our Series 2 Redeemable Preferred Stock you should read the entire prospectus and understand the risks associated with this investment. In particular, you should carefully read the “Risk Factors” section of this prospectus together with the risk disclosures incorporated into this prospectus by reference. We encourage you to review all of our disclosures about this offering and to ask questions of us and consult with your advisors about any questions you may have regarding this offering.

Can I resell or transfer my shares after they have been purchased?

Yes. It will be legally possible to sell or transfer the shares you purchase in this offering since these securities are being offered and sold pursuant to a registration statement and will not therefore be “restricted” under applicable law. We do not, however, expect a public trading market to develop for the Series 2 Redeemable Preferred Stock in the foreseeable future, if ever. If you wish to transfer your preferred shares held in book-entry form, you should contact us. If you wish to transfer your preferred shares held through DTC, you should contact your broker-dealer.

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Will it be possible, at some point, to redeem the preferred shares for cash?

You will be entitled once per calendar quarter to request redemption of your preferred stock at a redemption price equal to the stated value of such redeemed shares, plus any accrued but unpaid dividends thereon. In some cases, however, a redemption fee may apply. After the third anniversary of the issuance of the preferred shares, no redemption fee will apply.

You should understand that we will not be obligated to redeem your preferred shares upon request. Even if we accept your redemption request, our obligation to consummate a redemption will be limited to the extent that we have sufficient funds available to fund any such redemption, which is a determination we will make in our sole and complete discretion. Our obligation to consummate a redemption we have earlier agreed to make will be further limited by applicable law, any restrictions in our Certificate of Incorporation, and any borrowing agreements to which we or our subsidiaries are a party or are otherwise bound. To the extent we are unable to complete redemptions we may have earlier agreed to make, we will consummate those redemptions promptly after we become able to do so, with all such deferred redemptions being satisfied on a prorated basis, regardless of the order in which we received the related requests. See “Description of Securities Offered.” See also “Risk Factors—You may not be able to redeem your preferred shares when and as you wish.”

If I have an emergency, can I get any of my money when I need it?

Preferred stock is an equity investment and we are not obligated to redeem your shares unless and until we call the stock for redemption (please see the discussion immediately above for more detail). You should take this into account before you purchase our preferred stock. You should not count on us redeeming any stock if you have an emergency need for the money. There are, however, certain circumstances—such as upon your death, bankruptcy or total disability—where we will, if legally possible, redeem your shares upon your request. These circumstances are discussed immediately below.

If I die, will you repurchase my preferred stock?

Not automatically. The legal representative of your estate will, however, have the right to request that we redeem your preferred shares. If we receive adequate documentation evidencing your death, we will honor this kind of repurchase request without any penalty if we are permitted by applicable law, our Certificate of Incorporation, and our borrowing agreements to do so. In the absence of a repurchase request by your estate, your preferred stock will go to your estate for distribution according to your will or the applicable laws of intestacy, and be paid out when called by us or through your estate’s exercise of a redemption request. The Certificate of Designation for our Series 2 Redeemable Preferred Stock, which governs the rights, preferences and privileges of the preferred shares, contains similar rights to request redemption in the event of a bankruptcy or your total disability. Please see “Description of Securities Offered” for important details about these rights.

Will I receive a stock certificate?

No. Stock certificates will not be issued. Your ownership will be noted as Series 2 Redeemable Preferred Stock in our stock register.

What if I need proof of ownership of my investment in GWG?

At your request, we will confirm in writing your investment in our Series 2 Redeemable Preferred Stock.

Can I convert some of my preferred stock into shares of common stock?

Yes. Holders of this preferred stock may partially convert the preferred stock into common stock. When this is done, the conversion price at which common shares are issued will equal the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date on which your notice of conversion is delivered to us (discounted, based on the number of years the preferred stock has been held, as described below), but subject to a minimum conversion price of $      per common share. Nevertheless, a holder’s right to convert is limited to a maximum of     % of the stated value of their preferred shares (i.e.,     shares of common stock for each share of preferred stock converted). In such a case, the remaining unconverted portion of your preferred stock will remain as a fractional share of Series 2 Redeemable Preferred Stock.

Your right to convert preferred shares into common shares will be suspended in the event that we call your preferred shares for redemption. For more information, please see “Description of Securities Offered.”

Could my subscription be refused?

Yes. Your subscription must be approved by us. We have the right to reject any subscription for any reason.

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Who might benefit from an investment in our Company?

An investment in our Company and our preferred stock may be beneficial for you if seek to add to your personal portfolio an investment focused in our industry or that is otherwise not correlated to the financial markets, and are able to hold your investment indefinitely. Our preferred stock will not be an appropriate investment for persons who need or may need immediate liquidity.

How long will this offering last?

The offering is a continuous offering. Under SEC rules, the offering under this registration statement will expire after three years from the date of its effectiveness. We may, however, conduct similar or identical offerings during this same time or afterwards. We may also decide to terminate this offering at any time.

Will I be notified of how my investment is doing?

We will provide you with periodic updates on our performance through periodic filings we make with the SEC. Such filings will include: (i) three quarterly financial reports; (ii) one annual report; (iii) supplements and amendments to this offering, as appropriate; and (iv) such other reports as required under Sections 13 and 15(d) of the Securities Exchange Act of 1934. Such information is also available on our corporate website at www.gwgh.com.

Who can help answer my questions about the offering?

If you have more questions about the offering, you should contact a registered representative of your broker-dealer or other investment professional, or else contact:

GWG Holdings, Inc.
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
(612) 746-1944

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PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. It is not complete and may not contain all of the information that you may want to consider. To understand this offering fully, you should carefully read the entire prospectus, including the section entitled “Risk Factors,” and the documents that are incorporated, or deemed to be incorporated, by reference into this prospectus, before making a decision to invest in our preferred stock. Unless otherwise noted or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “GWG” refer to GWG Holdings, Inc. together with its wholly owned direct or indirect subsidiaries. In instances where we refer specifically to “GWG Holdings” or “GWG Holdings, Inc.,” or where we refer to a specific subsidiary of ours by name, we are referring only to that specific legal entity.

Our Company

We are a financial services company committed to finding new ways of disrupting and transforming the life insurance and related industries through innovative products and services, business processes, financing strategies, and advanced epigenetic technology. Historically, we have focused on creating opportunities for consumers to maximize the value of their life insurance as compared to the traditional options offered by the insurance industry. As part of our business, we create opportunities for investors to receive income and capital appreciation from our various activities in the life insurance and related industries. More recently, we have focused on applying new technology to our products and services that promises to be more predictive and offer even greater opportunity in the life insurance and related industries.

The life insurance industry provides us with the opportunity to bring value to consumers and earn non-correlated yield by purchasing life insurance policies at a discount to the face value of the policy benefit. We pay the premiums of the policies that we purchase and collect the policy benefit upon maturity. In sum, we seek to earn a net profit between the yield generated by the life insurance assets we own and the costs we incur to originate and finance those assets. This practice is disruptive to the life insurance industry since insurance carriers rely on consumer lapse and surrender behavior resulting in the forfeiture of policy benefits. Since inception, we have purchased approximately $2.2 billion in face value of policy benefits from consumers for over $379.7 million, as compared to the $26.1 million in surrender value offered by insurance carriers on those same policies. Our business allows consumers to maximize their investment in life insurance for their retirement or other financial needs.

We believe the market potential for the secondary life insurance market is large. According to the 2016 American Council of Life Insurers Fact Book (ACLI), in 2015 individuals owned over $12.3 trillion in face value of life insurance policies in the United States. This figure includes all types of policies, including term insurance and permanent insurance known as whole life and universal life. The ACLI reports that in 2015, the lapse and surrender rate of individual life insurance policies was 5.4%, aggregating to a face value of $638.5 billion in surrendered benefits. Research by Conning Research & Consulting (Conning) reports that in 2016 the annual net potential for the secondary life insurance market exceeded $141 billion in benefits. Of that market potential, Conning estimates that, in 2015, secondary market investors purchased approximately $1.7 billion in face value of life insurance benefits. With an aging demographic in need of retirement assets and related financial services, Conning expects the net market potential to grow to an annual $170 billion in face value of life insurance benefits by 2025. We believe that the life insurance secondary market represents both a dramatically underserved market and significant long-term growth opportunity.

A critical factor for our success in bringing value to consumers and creating opportunities for investors to earn yield from our life insurance assets, is our ability to accurately estimate human life expectancy. Our search for increased precision in estimating life expectancy led us to a mortality predictive technology developed by Dr. Steve Horvath, a Professor of Human Genetics and Biostatistics at the University of California, Los Angeles (UCLA). In 2016, we exercised an exclusive option to license Dr. Horvath’s “DNA Methylation Based Predictor of Mortality” technology, or “M-Panel” technology, which tests certain metabolic processes occurring at the molecular level that are referred to as “methylation.” We believe M-Panel technology could improve our ability to more precisely predict human life expectancy. We are currently in the process of negotiating a license agreement and assessing the intellectual property protection we may receive as a result of such a license.

Our M-Panel technology is based upon a revolutionary new science known as “epigenetics” that reads and measures changing methylation levels occurring in human cells at molecular scale. The amount of methylation change that occurs in a human cell is a result of lifestyle, environment, diet, and other factors typically associated with human lifespan. We believe our M-Panel and similar technology may not only improve the way in which we select and price life insurance policies for purchase in the secondary market, but it could also revolutionize the manner in which the entire life insurance industry prices and selects mortality risk. As a result, we intend to use M-Panel and other technology to improve our life insurance secondary market business as well as to pursue additional lines of business in the life insurance industry. According to industry experts, advancements in life expectancy technology have the potential to upend the ability of insurers to assess and select risks. Industry consultants KPMG, Accenture, and Ernst & Young all take the position that the insurance industry will undergo transformational change as advanced technologies affect their businesses. We believe that increased precision in predicting life expectancy through the use of our M-Panel technology, and our broader commitment to innovating through the use of new technologies in an “insurtech” approach, will provide us with a significant competitive advantage in the secondary market. Furthermore, while we are still refining the precise strategies through which we may pursue specific opportunities, we believe that our use of technology may offer us opportunities to innovate and transform historical business methods used throughout the broader insurance, long-term care and annuity industries.

We believe that we are uniquely positioned to continue acquiring life insurance assets from consumers in the secondary market, while developing additional innovative business models in the life insurance and related industries through the use of M-Panel technology. We expect to continue to finance our growth by providing investors with the opportunity to participate in the yield from the life insurance assets we own and growth opportunities we create. 

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To participate and compete in, and expand, our markets, we spend significant resources: (i) recruiting and developing a professional management team; (ii) establishing strategic relationships for delivering the services we provide; (iii) creating opportunities for investors to participate in the yield and capital appreciation that may be generated by the alternative life insurance assets and technology we own; (iv) creating innovative growth opportunities to participate in the life insurance industry through the use of technology; and (v) developing a robust operational platform and systems for originating life insurance policies and other alternative assets.

Portfolio Information

Our portfolio of life insurance policies owned by our subsidiaries as of September 30, 2016 is summarized below:

Total portfolio face value of contract benefits	$	1,272,078,000
Average face value per contract	$	2,035,000
Average face value per insured life	$	2,263,000
Weighted average age of insured (yrs.)*		81.8
Weighted average life expectancy estimate (yrs.)*		6.8
Total number of contracts		625
Number of unique lives		562
Demographics		73%  Males; 27% Females
Number of smokers		24
Largest contract as % of total portfolio		0.79	%
Average contract as % of total portfolio		0.16	%
Average annual premium as % of face value		3.33	%

* averages presented in the table are weighted averages.

Corporate Organization

Our business was originally organized in February 2006. We added our current parent holding company, GWG Holdings Inc., in March 2008, and in September 2014 we consummated an initial public offering of our common stock on The NASDAQ Capital Market, where our stock trades under the ticker symbol “GWGH.”

GWG Holdings, Inc. (GWG Holdings) conducts its life insurance related business through a wholly owned subsidiary, GWG Life, LLC (GWG Life), and GWG Life’s wholly owned subsidiaries, GWG Life Trust, GWG DLP Funding III, LLC, and GWG DLP Funding IV, LLC. All of these entities are legally organized in Delaware, other than GWG Life Trust which is governed by the laws of State of Utah.

Our principal executive offices are located at 220 South Sixth Street, Suite 1200, Minneapolis, Minnesota 55402 and our telephone number at that address is (612) 746-1944. Our website address is www.gwgh.com. The information on or accessible through our website is not part of this prospectus. Our corporate structure, including our principal subsidiaries, is depicted below.

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“Emerging Growth Company” Status

As a public reporting company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other requirements otherwise generally applicable to public companies. In particular, as an emerging growth company we:

● are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting under the Sarbanes-Oxley Act of 2002;

● are not required to provide a detailed narrative disclosure discussing our compensation principles and objectives and analyzing how our compensation elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

● are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

● are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

● may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations, or MD&A; and

● are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards. Our election to use the phase-in periods is irrevocable and may make it difficult to compare our financial statements to companies that are either ineligible for, or have opted out of, the longer phase-in periods.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933 (which occurred in September 2014), or such earlier time that we no longer meet the definition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

It should be noted that certain reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules, and our claim to those reduced reporting requirements and exemptions will not be affected by the loss of our status as an “emerging growth company.” In this regard, we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter.

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The Offering

Issuer	GWG Holdings, Inc.
Method of Purchase	Investors may pay cash or exchange our outstanding debt securities in satisfaction of the aggregate purchase price for the Series 2 Redeemable Preferred Stock.
Minimum Investment	The minimum investment amount is generally $10,000, but we may accept purchases of less than $10,000 in our discretion.
Offering Price	$1,000 per share of Series 2 Redeemable Preferred Stock.
Series 2 Redeemable Preferred Stock	A maximum of 150,000 shares of Series 2 Redeemable Preferred Stock is being offered on a continuous basis.
	Ranking. The Series 2 Redeemable Preferred Stock ranks senior to our common stock, pari passu with our Series A Convertible Preferred Stock and our earlier issued Redeemable Preferred Stock, and senior to or pari passu with all other classes and series of our preferred stock, with respect to the payment of dividends and rights upon liquidation, dissolution or winding up.
	“Pari passu” means that in determining priority of payment in respect of entitlement to dividends and distributions upon our liquidation, winding-up or dissolution, the holders of this preferred stock, together with the holders of any other class of “pari passu” equity, will be treated equally and without preference.
	Stated Value. Each share of Series 2 Redeemable Preferred Stock will have an initial “stated value” of $1,000, subject to appropriate adjustment upon certain events such as recapitalizations, stock dividends, stock splits, stock combinations, and reclassifications, as set forth in the Certificate of Designation for the Series 2 Redeemable Preferred Stock.
	Dividends. Holders of Series 2 Redeemable Preferred Stock are entitled to receive, when and as declared by our Board of Directors out of legally available funds, cumulative cash dividends on each share of Redeemable Preferred Stock at an annual rate of     % of the stated value of such share. Dividends are payable monthly. Dividends on each preferred share will begin accruing on, and will be cumulative from, the date of issuance and regardless of whether our Board of Directors declares and pays such dividends.
	In the event that our Certificate of Incorporation, provisions of Delaware law or our borrowing agreements prohibit us from paying dividends in cash, and if we do not pay dividends in the form of preferred stock as described below, unpaid dividends will cumulate.
	At our option, we may pay dividends in the form of duly authorized, validly issued, fully paid and non-assessable shares of the Series 2 Redeemable Preferred Stock. Any preferred stock we issue in satisfaction of our dividend-payment obligations will be valued at the stated value of such shares.
	No commissions or additional compensation will be payable on preferred shares issued in satisfaction of our dividend-payment obligations.

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Voting Rights.  The Series 2 Redeemable Preferred Stock has no voting rights.

Redemption Request at the Option of a Holder. Once per calendar quarter, a holder will have the opportunity to request that we redeem that holder’s Series 2 Redeemable Preferred Stock. We will not be obligated to redeem preferred shares upon request. If we do agree to redeem shares, we will do so at a redemption price equal to the stated value of such redeemed shares, plus any accrued but unpaid dividends thereon, less the applicable redemption fee (if any). As a percentage of the aggregate redemption price of a holder’s shares to be redeemed, the redemption fee shall be:

●     12% if the redemption is requested on or before the first anniversary of the original issuance of such shares.

●     10% if the redemption is requested after the first anniversary and on or before the second anniversary of the original issuance of such shares.

●     8% if the redemption is requested after the second anniversary and on or before the third anniversary of the original issuance of such shares.

After the third anniversary of the date of original issuance of shares to be redeemed, no redemption fee shall be subtracted from the redemption price.

Optional Repurchase Upon Death, Disability or Bankruptcy of a Holder. Subject to certain restrictions and conditions, we will also redeem the preferred shares of a holder who is a natural person (including an individual beneficial holder who holds our preferred shares through a custodian or nominee, such as a broker-dealer) upon his or her death, total disability or bankruptcy, within 60 days of our receipt of a written request from the holder or the holder’s estate at a redemption price equal to the stated value, plus accrued and unpaid dividends thereon. 

A “total disability” means a determination by a physician approved by us that a holder, who was gainfully employed and working on a full-time basis as of the date on which his or her preferred shares were purchased, has been unable to work on a full-time basis for at least 24 consecutive months. In this regard, the Certificate of Designation for the Series 2 Redeemable Preferred Stock defines working “on a full-time basis” to mean working at least 40 hours per week.

Optional Redemption by the Company. We will have the right (but not the obligation) to call and redeem shares of the Series 2 Redeemable Preferred Stock at 100% of their stated value, plus any accrued but unpaid dividends thereon. In the event that we call and redeem an investor’s preferred shares prior to the one-year anniversary of the purchase of those shares, we will also pay an additional amount sufficient to cause the investor to have received at least one year’s worth of dividends on the preferred shares being redeemed  (i.e., a minimum redemption price of      % of the stated value of the redeemed preferred shares).

Restrictions on Redemption and Repurchase.  We will not be obligated in all cases to redeem these preferred shares, whether in connection with a redemption request by a holder to which we have earlier agreed, at the option of the Company, or upon the death, total disability or bankruptcy of a holder. In particular, we will not redeem or repurchase any preferred shares if we are restricted by applicable law or our Certificate of Incorporation from making such redemption or to the extent any such redemption would cause or constitute a default under any borrowing agreements to which we or any of our subsidiaries are a party or otherwise bound. In addition, we will have no obligation to redeem preferred shares in connection with a redemption request made by a holder if we determine, as of the redemption date, that we do not have sufficient funds available to fund that redemption. In this regard, we will have complete discretion under the Certificate of Designation for the Series 2 Redeemable Preferred Stock to determine whether we are in possession of “sufficient funds” to fund a redemption request. To the extent we are unable to complete redemptions we may have earlier agreed to make, we will complete those redemptions promptly after we become able to do so, with all such deferred redemptions being satisfied on a prorated basis, regardless of the order in which we received the related requests.

Conversion by a Holder. Subject to the limitations described below, holders of this preferred stock will have the option to partially convert their preferred stock into common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date on which notice of conversion is delivered to us. This volume-weighted average price will be discounted, based on the number of years you have held your preferred stock (determined at the date on which you provide notice of conversion), as set forth below:

Years Held		Applicable Discount
	0-3		%
	4 or less		%
	5 or less		%
	After 5 years		%

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	Notwithstanding the foregoing, in no event will the conversion price be less than $      per share of common stock. The right of holders to convert their preferred shares is limited to      % of the stated value of their preferred shares (i.e.,  shares of common stock for each share of converted preferred stock), subject to customary equitable adjustment in cases of stock splits, stock dividends and recapitalizations. In the case of a conversion, the remaining unconverted portion of your preferred stock will remain as a fractional share of Series 2 Redeemable Preferred Stock.
	In the event that we deliver a notice of proposed redemption of an investor’s preferred shares (see the caption “Optional Redemption by the Company” above), the right of a holder to convert those shares into our common stock will be suspended until the redemption date. If, however, we do not consummate the redemption on the redemption date, then the suspension on the right to convert will terminate and holders will once again have the right to convert their preferred shares into our common stock.
	Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, and before any distribution or payment shall be made to holders of our common stock or any other class or series of capital stock ranking junior to our shares of Series 2 Redeemable Preferred Stock, the holders of these preferred shares will be entitled to be paid out of our assets legally available for distribution to our stockholders, after payment or provision for our debts and other liabilities, a liquidation preference equal to the stated value per share, plus accrued but unpaid dividends thereon.
Capital stock outstanding before this offering	As of February 7, 2017, there were:   ●     2,654,246 shares of Series A Convertible Preferred Stock outstanding; ●     78,388 shares of Redeemable Preferred Stock outstanding; and ●     5,980,190 shares of common stock outstanding (this number excludes shares of common stock issuable upon the conversion of our outstanding Series A Convertible Preferred Stock, shares of common stock issuable upon the conversion of outstanding Redeemable Preferred Stock, the exercise of outstanding warrants and options, and shares of common stock reserved for future issuance under our 2013 Stock Incentive Plan).
Capital stock outstanding after this offering	Assuming all 150,000 shares of Series 2 Redeemable Preferred Stock offered hereby are sold, after the conclusion of this offering we will have: ●     2,654,246 shares of Series A Convertible Preferred Stock outstanding; ●     78,388 shares of Redeemable Preferred Stock outstanding; ●     150,000 shares of Series 2 Redeemable Preferred Stock outstanding; and ●     5,980,190 shares of common stock outstanding (this number excludes shares of common stock issuable upon the conversion of our outstanding Series A Convertible Preferred Stock, shares of common stock issuable upon the conversion of outstanding Redeemable Preferred Stock and Series 2 Redeemable Preferred Stock, the exercise of outstanding warrants and options, and shares of common stock reserved for future issuance under our 2013 Stock Incentive Plan).
Use of Proceeds	If all the shares offered hereby are sold for cash, we would expect to receive up to approximately $137,635,000 of net proceeds from this offering after deducting estimated offering expenses, including selling commissions and additional compensation, and our own offering-related expenses. There is no aggregate minimum amount of preferred shares that must be sold before we access investor funds. We intend to use a majority of the net cash proceeds from this offering to acquire life insurance assets. We also intend to use net proceeds from this offering for certain other business expenditures, including without limitation, to make payments of premiums on life insurance policy assets we own, to repay principal and interest on debt as it becomes due, redeem shares of preferred stock, to make strategic acquisitions of other yield-bearing assets, to develop and commercialize certain technologies we may license, and for general working capital purposes. See “Use of Proceeds” for additional information.

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No Market for Redeemable Preferred Stock; Transferability	There is no existing public trading market for the Series 2 Redeemable Preferred Stock and we do not anticipate that a secondary market for the stock will develop. We do not intend to apply for listing of this preferred stock on any securities exchange or for quotation of the preferred stock in any automated dealer quotation system or other over-the-counter market. Nevertheless, you will be able to freely transfer or pledge your preferred shares.
Tax Matters	Dividends received by individual holders of Series 2 Redeemable Preferred Stock will generally be subject to a tax rate of 15% to 20% if such dividends are treated as “qualified dividend income” for U.S. federal income tax purposes, depending on the ordinary income tax bracket of the individual holder. The treatment of dividends received as qualified dividends is limited under certain circumstances. Please see “Material Federal Income Tax Considerations.”
Covered Security	Our Series 2 Redeemable Preferred Stock is a “covered security.” The term “covered security” applies to securities exempt from state registration pursuant to Section 18 of the Securities Act of 1933. Generally, securities listed on national exchanges are the most common type of covered security exempt from state registration. A non-traded security also can be a covered security if it has a seniority greater than or equal to other securities from the same issuer that are listed on a national exchange. Our Series 2 Redeemable Preferred Stock is a covered security because it will be senior to our common stock, which is listed on The NASDAQ Capital Market, and therefore our offering of these preferred shares is exempt from state registration.
Risk Factors	An investment in the shares offered hereby involves significant risks, including the risk of losing your entire investment. For a summary of risks relating to this offering and our Company and business, please see “Risk Factors,” page 13.

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RISK RELATING TO FORWARD-LOOKING STATEMENTS

Certain matters discussed in this prospectus contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions about our operations and the investments we make, including, among other things, factors discussed under the heading “Risk Factors” in this prospectus and the following:

● changes in the secondary market for life insurance;

● changes resulting from the evolution of our business model and strategy with respect to the life insurance industry;

● our limited operating history;

● the valuation of assets reflected on our financial statements;

● the reliability of assumptions underlying our actuarial models, including our life expectancy estimates;

● our reliance on debt financing;

● risks relating to the validity and enforceability of the life insurance policies we purchase;

● risks relating to our ability to license and effectively apply technologies to improve and expand the scope of our business;

● our reliance on information provided and obtained by third parties;

● federal, state and FINRA regulatory matters;

● competition in the secondary market of life insurance;

● the relative illiquidity of life insurance policies;

● our ability to satisfy our debt obligations if we were to sell our entire portfolio of life insurance policies;

● life insurance company credit exposure;

● cost-of-insurance (premium) increases on our life insurance contracts;

● general economic outlook, including prevailing interest rates;

● performance of our investments in life insurance policies;

● financing requirements;

● litigation risks;

● restrictive covenants contained in borrowing agreements; and

● our ability to make cash distributions in satisfaction of dividend obligations and redemption requests.

Forward-looking statements can be identified by the use of words like “believes,” “could,” “possibly,” “probably,” “anticipates,” “estimates,” “projects,” “expects,” “may,” “will,” “should,” “seek,” “intend,” “plan,” “expect,” or “consider” or the negative of these expressions or other variations, or by discussions of strategy that involves risks and uncertainties. All forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements.

We base these forward-looking statements on current expectations and projections about future events and the information currently available to us. Although we believe that the assumptions for these forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Consequently, no representation or warranty can be given that the estimates, opinions, or assumptions made in or referenced by this prospectus will prove to be accurate. Some of the risks, uncertainties and assumptions are identified in the discussion entitled “Risk Factors” in this prospectus. We caution you that the forward-looking statements in (or incorporated by reference into) this prospectus are only estimates and predictions, or statements or current intent. Actual results or outcomes, or actions that we ultimately undertake, could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements.

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RISK FACTORS

An investment in our securities involves a high degree of risk. Before purchasing the securities offered by this prospectus, you should carefully consider the risks, uncertainties and additional information (i) set forth in our most recent Annual Report on Form 10-K filed with the SEC on March 22, 2016, our Quarterly Reports on Form 10-Q filed on with the SEC on November 10, August 12, and May 13, 2016, Current Reports on Form 8-K filed with the SEC on April 28, August 16, August 19, September 19, November 8, 2016, and our definitive proxy statement filed with the SEC on March 4, 2016, all which are incorporated by reference into this prospectus, and (ii) contained herein or in any supplement to this prospectus. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.” The risks and uncertainties in this prospectus and in the documents incorporated, or deemed to be incorporated, by reference into this prospectus are those that we currently believe may materially impact the Company. Additional risks not presently known or are currently deemed immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects.

There is no public market for our Series 2 Redeemable Preferred Stock and we do not expect one to develop.

There is no public market for our Series 2 Redeemable Preferred Stock offered in this offering, and we currently have no plan to list this stock on a securities exchange or to include these shares for quotation on any automated quotation system or other over-the-counter market. If you are able to sell your preferred stock, you may only be able to sell them at a substantial discount from the price you paid. Therefore, you should purchase the preferred stock only as a long-term investment. Holders of these preferred shares may request that we redeem their shares, with the redemption price payable in cash. Nevertheless, we will have no obligation to redeem preferred shares upon a redemption request made by a holder. Even if we initially agree to redeem preferred shares upon request, we will not be required to consummate a redemption if we do not have sufficient funds available to fund that redemption and, in this regard, the Certificate of Designation for the Series 2 Redeemable Preferred Stock provides us with ultimate discretion to determine whether we are in possession of “sufficient funds” to fund a redemption request.

We will be required to terminate this offering if our common stock is no longer listed on The NASDAQ Capital Market or another national securities exchange.

Our Series 2 Redeemable Preferred Stock is a “covered security” and therefore is not subject to registration under the state securities (i.e., blue sky), regulations in the various states in which it may be sold due to its seniority to our common stock, which is listed on The NASDAQ Capital Market. If our common stock is no longer listed on The NASDAQ Capital Market or another national securities exchange, we will be required to register this offering in any state in which we subsequently offer the Series 2 Redeemable Preferred Stock. This would almost certainly require the termination of this offering and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering is sold. This would reduce our ability to make additional investments and limit the diversification of our portfolio and meet the other business goals we seek with the proceeds of this offering.

There may not be a broad market for our common stock, which may cause our common stock to trade at a discount and make it difficult for you to sell the common stock into which your Series 2 Redeemable Preferred Stock is convertible.

Our common stock into which the Series 2 Redeemable Preferred Stock is partially convertible trades on The NASDAQ Capital Market under the symbol “GWGH.” Listing on The NASDAQ Capital Market or another national securities exchange does not ensure an actual or active market for our common stock. Accordingly, an actual or active market for our common stock may not be maintained, the market for our common stock may not be liquid, the holders of our common stock may be unable to sell their shares of our common stock, and the prices that may be obtained in a sale of our common stock that your receive upon the conversion of your preferred shares may not reflect the underlying value of our assets and business.

You may not be able to redeem your preferred shares when and as you wish.

You will be entitled periodically to request redemption of all or a portion of your Series 2 Redeemable Preferred Stock. Nevertheless, there is no assurance that we will be able, or willing, to redeem those shares as you may request. Even in a situation in which we initially agree to redeem your preferred shares, the Certificate of Designation for the Series 2 Redeemable Preferred Stock contains limitations on our ability to consummate a redemption of preferred shares in connection with a redemption request, and also provides us with discretion to decline those requests. For example, if either our Certificate of Incorporation or applicable law prohibits us from using funds to redeem your preferred shares when requested, we will not be under any obligation to redeem those shares. Similarly, if we or any of our subsidiaries are parties to (or otherwise bound by) an agreement under which we or they have borrowed money, and the consummation of a redemption request would trigger a breach of the borrowing agreement, then we will not be under any obligation to complete a redemption of those shares as requested. Finally, and importantly, the Certificate of Designation provides us with the right to decline to complete a redemption in connection with a request in the event we determine that we do not have sufficient funds to fund a redemption request. In this regard, the Certificate of Designation grants us, the Company, with the complete discretion to determine whether or not we have “sufficient funds” to fund a redemption.

All of these provisions discussed above are in the nature of restrictions and limitations on an investor’s ability to complete a redemption of his, her or its investment in our preferred shares, and none of these restrictions and limitations (or the determinations upon which they are based) will be within your control. These provisions together create the risk that you, if you invest in these preferred shares, may not be able to redeem your preferred stock when and as you wish. As such, we believe that a purchase of shares in this offering is suitable only for investors who will have no need for immediate liquidity in their investment.

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We will be able to call your preferred shares for redemption under certain circumstances without your consent.

We will have the ability to call and redeem the outstanding shares of Series 2 Redeemable Preferred Stock at any time and from time to time, in whole or in part. We can exercise this right without your consent. If we exercise this right, upon our redemption of your preferred shares we will pay 100% of the stated value per share being redeemed, plus any accrued and unpaid dividends thereon. If we redeem your preferred shares prior to the one-year anniversary of your purchase of those shares, we will also pay an additional amount equal to one year’s worth of dividends on your redeemed preferred shares (i.e., resulting in an effective redemption price of no less than      % of the stated value of the preferred shares being redeemed).

Our limited operating history makes it difficult for you to evaluate our likely performance and this investment.

We are a company with a limited history, which makes it difficult to accurately forecast our earnings and cash flows. During the nine months ended September 30, 2016, we incurred a net loss of $42,000. During the year ended December 31, 2015, we incurred a net loss of $6.0 million, and in the year ended December 31, 2014, we incurred a net loss of $6.1 million. Our lack of a significant history and the evolving nature of the market in which we operate make it likely that there are risks inherent in our business that are yet to be recognized by us or others, or not fully appreciated, and that could result in us earning less than we anticipate or even suffering further anticipated or unanticipated losses. As a result of the foregoing, an investment in our securities necessarily involves uncertainty about the stability of our earnings, cash flows and, ultimately, our ability to service and repay our debt and meet our other obligations. Moreover, we have limited income, cash flow, funds from operations and cash available for distribution from which we can make dividend distributions to holders of the Series 2 Redeemable Preferred Stock.

You should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies like ours that do not have a substantial operating history, many of which may be beyond our control.

We depend upon cash distributions from our subsidiaries, and contractual restrictions on distributions to us or adverse events at one of our operating subsidiaries could materially and adversely affect our ability to pay our debts and to continue to operate our business, which may harm our financial position and cash flow and potentially impact our ability to pay dividends on or satisfy redemptions for the Series 2 Redeemable Preferred Stock.

As its name suggests, GWG Holdings, Inc. is a holding company. As a holding company, we conduct our operations through our operating subsidiaries, and our only significant assets are the capital stock of our subsidiaries. Accordingly, our ability to meet our cash obligations, including our obligations under the Series 2 Redeemable Preferred Stock, depends in material part upon the ability of our subsidiaries to make cash distributions to us. In this regard, the ability of our subsidiaries to make distributions to us is, and will continue to be, restricted by certain negative covenants in the agreement governing our revolving credit facilities.

If any of these contractual limitations were to materially impede the flow of cash to us, such fact would materially and adversely affect our ability to pay cash dividends on or redeem this preferred stock. In addition, any adverse event at the subsidiary level, such as a declaration of bankruptcy, liquidation or reorganization or an event of default under our revolving credit facility, could materially and adversely affect the ability of our subsidiaries to make cash distributions to us. Just as with a material contractual impediment to cash flow, any such subsidiary corporate event would materially and adversely affect our ability to service and repay our debt and to pay cash dividends on or redeem these preferred shares, and could negatively impact our ability to continue operations.

We cannot guarantee we will be able to make cash distributions in satisfaction of dividend obligations.

Holders of Series 2 Redeemable Preferred Stock are entitled to receive, when and as authorized by our Board of Directors and declared by us out of legally available funds, cumulative cash dividends on each share of preferred stock at an annual rate of     % of the stated value. We expect to pay dividends on the Series 2 Redeemable Preferred Stock monthly. Nevertheless, provisions of Delaware law, our Certificate of Incorporation, or our borrowing agreements, may prohibit us from doing so. If our Board of Directors does not declare and pay cash dividends, and if they do not choose to satisfy our dividend-payment obligations by issuing additional shares of preferred stock, then unpaid dividends will cumulate.

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We established the offering price for the preferred stock pursuant to negotiations among us and our dealer manager and, as a result, the actual value of your investment may be substantially less than what you pay.

The selling price of this preferred stock has been determined pursuant to negotiations among us and the dealer manager, based upon the following primary factors: the economic conditions in and future prospects for the industry in which we compete; our prospects for future earnings; an assessment of our management; the present state of our development; the prevailing conditions of the equity securities markets at the time of this offering; and current market valuations of public companies considered comparable to our company. Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that you would receive upon a sale of those securities or our liquidation.

The Series 2 Redeemable Preferred Stock will be subordinate in right of payment to any corporate-level debt that we incur, and your interests could be diluted by the issuance of additional preferred stock and by other transactions.

The Series 2 Redeemable Preferred Stock will be subordinate in right of payment to any corporate-level debt that we incur. The credit agreement for one of our credit facilities includes, and future debt we incur may include, restrictions on our ability to pay cash dividends on our preferred stock, including the Series 2 Redeemable Preferred Stock. The issuance of additional preferred stock on a parity with or senior to the Series 2 Redeemable Preferred Stock would dilute the interests of the holders of this preferred stock, and any issuance of preferred stock senior to the Series 2 Redeemable Preferred Stock or of additional indebtedness could affect our ability to pay cash dividends on, redeem or ultimately pay the liquidation preference on the Series 2 Redeemable Preferred Stock. The Series 2 Redeemable Preferred Stock does not contain any provision affording the holders of these preferred shares protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all of our assets or business, that might adversely affect the holders of these preferred shares.

Our ability to redeem these preferred shares may be limited by Delaware law.

Under Delaware law, a corporation may redeem stock as long as, after giving effect to the redemption, the corporation is able to pay its debts as they become due in the usual course (the equity solvency test) and its total assets exceed the sum of its total liabilities plus, unless its charter permits otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the redemption, to satisfy the preferential rights upon dissolution of stockholders when preferential rights on dissolution are superior to those whose stock is being redeemed (the balance sheet solvency test). If we were insolvent at any time a redemption of these preferred shares is requested or otherwise required to be made, we would not be able to effect that redemption.

We have no obligation to contribute to a sinking fund to retire the Series 2 Redeemable Preferred Stock, nor is this preferred stock guaranteed by any governmental agency.

We have no obligation to contribute to a sinking fund with respect to the Series 2 Redeemable Preferred Stock, and our obligations under this preferred stock are not guaranteed by any depositary institution. Further, no governmental entity insures or guarantees payment on this preferred stock if we do not have enough funds to make principal or interest payments.

Actual results from our life insurance portfolio may not match our expected results, which could adversely affect our ability to make distributions.

Our business model relies on achieving actual results from our portfolio of life insurance assets that are profitable. In this regard, we expect to receive cash flows from our investments in life insurance policy assets over time. We believe that the larger the portfolio we own (in terms of mortality diversification), the greater the likelihood that we will receive cash flows that better meet our expectations. To our knowledge, rating agencies generally suggest that portfolios of life insurance policies be diversified enough to achieve actuarial stability in receiving expected cash flows from underlying mortalities. For instance, in a study published in 2016, A.M. Best concluded that at least 300 lives are necessary to narrow the band of cash flow volatility and achieve actuarial stability, while Standard& Poor’s has indicated that stability is unlikely to be achieved with a pool of less than 1,000 lives. As of September 30, 2016, we owned life insurance policies covering 562 lives. Accordingly, while there is a risk with a portfolio of any size that actual cash flows may be less predictable than expected, we believe that the risk is higher when our current portfolio is smaller than rating agency recommendations.

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Although we plan to expand the number of life insurance policies we own using proceeds raised from this offering, we may be unable to meet this goal if sufficient financing from capital sources is not available or is available only on unfavorable or unacceptable terms. Furthermore, even if our portfolio reaches the size we desire, we still may experience differences between our expected cash flows and our actual cash flow. Any resulting reduction in our revenues and net income could cause a resulting decrease in our cash available for distributions.

Cost-of-insurance (premium) increases could materially and adversely affect our financial condition and our profitability.

We are subject to the risk of increased cost-of-insurance (COI) charges (i.e., premium charges) for the universal life insurance policies we own in our portfolio. Approximately 10% of the policies in our portfolio have premium levels that are guaranteed, under the terms of the policy, to keep the policy’s death benefit in force even in a situation where the policy’s cash account has been wholly depleted. We fund the remaining 90% of our policies to pay “non-guaranteed COI charges,” and therefore we are subject to the risk that the insurer could increase the COI charges for the policy. In all cases, the amount or rate of increase is subject to limits set forth in the insurance policy. Because very few of the policies we own have significant cash account value balances, any COI increase will require us to use more cash to satisfy the minimum premium amount required to keep the policy in force.

A COI increase can be expected to impair the value of the affected policy because extra expense (additional premium amounts) will be required to keep the policy in force, and such extra expense will diminish the economic value (return) of the policy upon the mortality of the insured. As a result, any widespread COI increases in policies owned in our portfolio would likely have a material and adverse effect on the value of our portfolio, which in turn would materially and adversely affect our financial condition and our profitability.

We may not be able to raise the capital that we are seeking, and may be unable to meet our overall business objectives of growing a larger, more statistically diverse portfolio of life insurance policies without the proceeds from our securities offerings.

Our offer and sale of preferred stock and our L Bond offering are the principal means by which we intend to raise funds needed to meet our goal of growing a larger and more statistically diverse portfolio likely to meet our cash flow projections. While we plan to continue financing our business, if we are unable to continue to do so for any reason we may be unable to meet our goal. In addition, if actual cash flows from our portfolio of life insurance policies do not occur as our actuarial projections have forecasted, we could be forced to sell our investments in life insurance policies in order to service or satisfy our debt-related obligations. If we are forced to sell investments in life insurance policies or our entire portfolio, we may be unable to sell them at prices we believe are optimal, and may not be able to sell them at prices that approximate the discount rate we have applied to value our portfolio, particularly if our sale of policies occurs at a time when we are (or are perceived to be) in distress. In any such event, our business and the value of our securities, including these preferred shares, may be materially and adversely impacted.

Inaccuracies in the life expectancy estimates and mortality curves we use for small face policies could have a material and adverse effect on our results of operation and financial condition.

As of September 30, 2016, we owned 306 “small face” life insurance policies (i.e., a policy with $1 million in face value benefits or less) having $164 million in face value of insurance benefits. The underwriting processes and mortality curves we use to evaluate, price and purchase small face policies may be different from, and, as a result, may not be as reliable as, the processes we use for life insurance policies with larger face values of benefits. While we obtain life expectancy reports from third-party evaluators based on medical evidence, the processes used to develop these life expectancy reports are less extensive than traditional methods. Although we have professional actuarial guidance in the use and application of mortality curves to price and value small face policies, the application of these mortality curves may not be as reliable as, or more subject to adjustment than, the processes we use for larger face value of benefits. As the face value of our small face policies increases relative to the size of our total portfolio, the accuracy with which we have estimated life expectancies and mortality curves for these policies will become increasingly material to our business. Any shortcomings in the processes we have used to evaluate, price, purchase and value the small face policies we own could have a material and adverse effect on our results of operation and financial condition. Any such outcomes would likely have a negative and possibly material effect on the price of our common stock and our ability to satisfy our debts and pay cash dividends.

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We may in the future rely, in part, on new and unproven technology as part of our underwriting processes. If the mortality predictions we obtain through use of this technology proves inaccurate, our results of operation and financial condition could be materially and adversely affected.

We recently exercised our option to license, on an exclusive basis for use in the life insurance industry, new technology (which we call “M-Panel” technology) that we believe may be applied to assist us with mortality predictions in the course of underwriting and valuing life insurance policies. This M-Panel technology, however, has not yet been commercially applied in the manner we envision, and it is possible that we will be unable to elicit more accurate mortality predictions through its use. It is also possible that the mortality predictions we obtain through the use of this M-Panel technology will prove inaccurate, and perhaps materially so. In such a case, our failure to accurately forecast mortalities could have a material and adverse effect on our results of operation and financial condition, which could in turn materially and negatively affect the price of our common stock and our ability to satisfy our debts and pay cash dividends.

We may be unable to enter into a license prohibiting competitors from using the M-Panel technology, and we may be required to obtain additional licenses from other parties prior to our use of that technology. If we encounter difficulties in these regards, we may be forced to develop our own proprietary processes, the success of which may not be certain. Difficulties we encounter in our efforts to use or develop, and protect, intellectual property may prove costly and affect our results of operations.

Although we recently exercised our option to exclusively license M-Panel technology for use in the life insurance industry, we have not yet entered into a written license agreement for this purpose. We continue, however, negotiating the terms and conditions of that written license agreement and assessing the scope of protection we would obtain through such an agreement. The intellectual property rights (relating to the M-Panel technology) that we have a right to license are the subject of a provisional patent, and no patent protection will be afforded those rights unless and until a non-provisional patent application is filed with the U.S. Patent and Trademark Office, which filing is beyond our control. If the patent for the M-Panel technology were to issue and we were to enter into the license agreement, we would be legally entitled to prevent third parties from using any part of the technology that is both covered by the claims of the patent and licensed to us. If, on the other hand, no patent is ultimately granted with respect to the M-Panel technology (or the scope of claims is too narrow to afford us with meaningful protection), or if we are unable to enter into a license agreement, we may be unable to prevent third parties from using the M-Panel technology. This outcome may severely diminish any competitive advantage we hope to obtain through our use of the M-Panel technology.

We are aware that other patent applications pending in the U.S. Patent and Trademark Office may have scopes of claims that overlap with the claims contained in provisional patent application filed with respect to the M-Panel technology. If those other patents were to issue with scopes of claims that in fact overlap with the claims in any patent application for the M-Panel technology, we would likely be required to enter into a license agreement with other third parties before we could use processes that are covered by those overlapping claims. We may be unable, however, to procure such a license, and even if we are able to procure such a license it may prove too costly for us. Alternatively, we would ourselves be required to develop other processes that would not overlap with other patent claims. Our own development of these processes could be costly and time consuming and may ultimately prove unsuccessful.

In sum, any difficulties we encounter in our efforts to use (through a license), or develop, and ultimately protect, intellectual property from which we hope to gain a competitive advantage and enter into new insurance-related markets could prove costly and time-consuming enough to materially and adversely affect our results of operations.

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The technology we license may subject us to claims of infringement or invalidity from third parties, and the magnitude of this risk to our business generally rises if and as we become more successful in employing and relying on the technology. Any such claims would be complex and costly, and adverse outcomes could undermine the competitive advantages we seek.

Our reliance on technology will subject us to the risk that other parties may assert, rightly or wrongly, that our intellectual property rights are invalid or violate the rights of those parties, as well as the risk that our intellectual property rights will be infringed upon by third parties. In general, defending intellectual property rights in litigation is expensive. Our involvement in litigation of this type would likely have a material and adverse effect on our business and results of operation. In addition, any outcome that invalidates our intellectual property rights or otherwise diminishes the competitive advantages obtained, at least in part, through the use of those rights could have a material and adverse effect on our competitive position and our prospects. The magnitude of these risks—even if not the likelihood—becomes more pronounced if and as our use of proprietary intellectual property rights contributes to our overall success.

We are an “emerging growth company” under federal securities laws, and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements normally applicable to public companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a non-binding advisory vote on executive compensation, and delayed adoption of new or revised financial accounting standards. We could be an emerging growth company through 2019, although certain circumstances could cause us to lose that status earlier. It is possible that investors will find our common stock (into which Series 2 Redeemable Preferred Stock is partially convertible) less attractive due to our use of these reduced reporting requirements. If some investors do in fact find our common stock less attractive, there may be a less active trading market for our common stock and our stock price may be more volatile.

We cannot know the tax implications of an investment in this preferred stock.

The section of this prospectus entitled “Material Federal Income Tax Considerations” sets forth a summary of federal income tax consequences to the purchasers of the Series 2 Redeemable Preferred Stock. No information is provided concerning tax consequences under any other federal, state, local or foreign laws that may apply to the purchasers of the preferred stock. Prospective investors or their representatives should read that section very carefully in order to properly evaluate the federal income tax risks of an investment in these preferred shares. Each prospective investor should consult his personal counsel, accountant and other business advisors as to the federal, state, local and foreign tax consequences of an investment in this offering.

USE OF PROCEEDS

Assuming we sell the maximum number of preferred shares in this offering, for cash, at the public offering price of $1,000 per share, we expect to receive up to approximately $137,635,000 of net cash proceeds from this offering after paying selling commissions, dealer manager fees, and our own estimated offering expenses. More specifically, if all preferred shares offered hereby are sold, we would pay $9,000,000 in selling commissions, up to $3,000,000 in additional compensation, and an estimated $365,000 in our own offering-related expenses consisting of legal, accounting, printing, mailing, registration, qualification and associated securities offering filing costs and expenses. Additional compensation consists of (i) a non-accountable expense allowance of up to 0.60% of gross offering proceeds, (ii) an accountable expense allowance of up to 0.40% of gross offering proceeds, (iii) a dealer manager fee (payable only to the dealer manager) of 0.40% of gross offering proceeds for managing and coordinating the offering, (iv) a wholesaling fee (payable only to the wholesalers, who are employees of the Company and associated with the dealer manager) of 0.50% of gross offering proceeds, and (v) non-cash compensation of up to 0.10% of gross offering proceeds. Aggregate additional underwriting compensation will not exceed 2.0% of gross offering proceeds. The dealer manager may reallow up to 0.60% of additional compensation to soliciting broker-dealers. The amount of the reallowance to any soliciting broker-dealer will be determined by the dealer manager in its sole discretion.

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The maximum amount of commissions, fees, non-cash compensation, if any, and reimbursements payable to FINRA selling members is 8.0% of the gross proceeds of preferred shares sold. If all of the preferred shares were sold for cash and the maximum commissions, fees, non-cash compensation and reimbursements were paid, we estimate that the net cash proceeds to us, after paying our own estimated offering and related expenses, would be approximately $137,635,000. Nevertheless, because we do not know the total amount of preferred shares that will be ultimately sold, we are unable to accurately forecast the total net proceeds that will be generated by this offering.

There is no minimum amount of preferred shares that must be sold before we access investor funds.

Our primary goal is to use a majority of the net proceeds from the sale of preferred shares to purchase additional life insurance policy assets. The precise amount of proceeds we apply towards purchasing additional life insurance policy assets will depend, among other things, on the amount of net proceeds that we receive from the sale of shares being offered, the existence and timing of opportunities to invest in life insurance policy assets or acquire other yield-bearing assets, our cash needs for certain other expenditures (summarized below) we anticipate incurring in connection with our business, and the availability of other sources of cash (e.g., our revolving credit facilities). These certain other expenditures include:

● servicing life insurance assets;

● paying principal at maturity, interest and fees to our lenders, including under our revolving credit facility, the Series I Secured Notes, and the L Bonds; and paying fees and expenses of the trustees of certain trusts and the securities intermediary associated with our financing arrangements, and fees and expenses related to the securities offered hereby;

● acquiring other yield-bearing assets;

● developing technologies we have licensed, and commercial deployment of those technologies;

● calling and redeeming other outstanding preferred stock we have issued; and

● general working capital purposes

As indicated above, the extent to which we will use proceeds from this offering for these other purposes, and the amounts and timing of such expenditures will depend on a variety of factors. In sum, our management will have significant discretion over the ultimate manner in which net proceeds from this offering will be applied. Net offering proceeds not immediately applied to the uses summarized above will be invested in short-term investments such as money market funds, commercial paper, U.S. Treasury Bills and similar securities investments pending their use. We may also purchase interest rate hedges to lock in our cost of capital, or longevity hedges to lock in our expected return from our portfolio.

As indicated above, we may use some of the net proceeds from this offering to pay premiums on life insurance assets we own and servicing costs. Our aggregate premium obligations over the next five and one-half years for life insurance assets that we own as of September 30, 2016, together with anticipated servicing costs, are set forth in the table below. These obligations do not take into account the expectation of mortality over the periods presented.

Years Ending December 31	Premiums
Three months ending December 31, 2016	$	10,637,000
2017		43,905,000
2018		47,597,000
2019		51,563,000
2020		57,383,000
2021		63,972,000
Total	$	275,057,000

Also as indicated above, we may use some of the net proceeds from this offering to pay principal amounts owing under our Series I Secured Notes or L Bonds when such amounts become due and payable, or to call and redeem other preferred shares outstanding. The amount of such securities that we would repay with proceeds of this offering will depend, in part, on whether the holders of the debt securities elect repayment rather than renewal of such securities, as well as whether we perceive higher returns to be available to us for other uses of our proceeds or if we elect to use other sources of repayment. We believe it is most likely that such payments, if any, would relate to debt securities that mature within the first three years after the initial effective date of the registration statement of which this prospectus is a part.

At September 30, 2016 and December 31, 2015, the weighted-average interest rate of Series I Secured Notes was 8.63% and 8.47%, respectively. The principal amount outstanding under these Series I Secured Notes was $17,830,000 and $23,578,000 at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, the weighted-average interest rate of L Bonds was 7.16% and 7.18%, respectively. The principal amount outstanding under these L Bonds was $384,586,000 and $282,171,000 at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016 and December 31, 2015, we had 2,650,000 and 2,782,000 shares, respectively, of Series A Convertible Preferred Stock outstanding, with related liquidation preference amounts of $19,872,000 and $20,863,000, respectively. 

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BUSINESS

Overview

We are a financial services company committed to finding new ways of disrupting and transforming the life insurance and related industries through innovative products and services, business processes, financing strategies, and advanced epigenetic technology. Historically, we have focused on creating opportunities for consumers to maximize the value of their life insurance as compared to the traditional options offered by the insurance industry. As part of our business, we create opportunities for investors to receive income and capital appreciation from our various activities in the life insurance and related industries. More recently, we have focused on applying new technology to our products and services that promises to be more predictive and offer even greater opportunity in the life insurance and related industries.

The life insurance industry provides us with the opportunity to bring value to consumers and earn non-correlated yield by purchasing life insurance policies at a discount to the face value of the policy benefit. We pay the premiums of the policies that we purchase and collect the policy benefit upon maturity. This practice is disruptive to the life insurance industry since insurance carriers rely on consumer lapse and surrender behavior resulting in the forfeiture of policy benefits. Since inception, we have purchased approximately $2.2 billion in face value of policy benefits from consumers for over $379.7 million, as compared to the $26.1 million in surrender value offered by insurance carriers on those same policies. As such, we provide unique and valuable services that help meet the financial need of life-insurance-owning consumers 65 years or older.

By purchasing life insurance policies at a discount to the face value of the policy benefit, we have the opportunity to generate attractive investment returns from assets the value of which is not correlated to traditional financial markets. The potential yield generated from a portfolio of life insurance assets equals the difference between the purchase price of the life insurance assets, plus the premiums and financing costs to maintain those assets, and the face value of the policy benefits received. As of September 30, 2016, our total investment in our portfolio of life insurance assets, including the purchase price, attendant premiums and financing costs, was $460 million, and the total face value of our life insurance policy benefits was $1.272 billion.

We seek to build a profitable and large portfolio of life insurance assets that is well diversified in terms of insurance companies and insureds. We believe that diversification is a key factor and risk mitigation strategy to provide consistent cash flows and reliable investment returns. Accordingly, we seek to grow our portfolio and achieve diversification through a variety of financings and securities products offered to investors. To this end, we have built a robust operational platform to offer consumers options based on the market value of their life insurance policy.

A critical factor for our overall success is our ability to accurately estimate human life expectancy. Our search for increased precision in estimating human life expectancy led us to a mortality predictive technology developed by Dr. Steve Horvath, a Professor of Human Genetics and Biostatistics at the University of California, Los Angeles (UCLA). We recently exercised an exclusive option to license, for use in the life insurance industry, Dr. Horvath’s “DNA Methylation Based Predictor of Mortality” technology or “M-Panel” technology, which tests certain metabolic processes occurring at the molecular level that are referred to as “methylation.” We believe M-Panel technology could improve our ability to more precisely predict life expectancy and, in turn, generate more reliable investment returns from our portfolio of the life insurance assets. We are currently in the process of negotiating a license agreement and assessing the intellectual property protection we may receive as a result of such a license.

We believe that M-Panel technology could revolutionize the life insurance industry’s ability to more accurately predict human life expectancy. The ability to more precisely predict human life expectancy on a cost-effective basis could be a significant innovation for the life insurance, long-term care, and annuity industries. Accordingly, we intend to pursue additional lines of business in the life insurance industry that commercialize and capitalize on the use of M-Panel technology. We believe this presents us with significant growth opportunities in what is referred to as the “insurtech” marketplace, where new technologies are transforming the historical methods and models of the insurance industry.

To grow our portfolio and achieve the diversification we seek, as well as to pursue additional opportunities in the life insurance and related industries through the use of technology, we offer investors the opportunity to potentially receive income and capital appreciation through a variety of financings and securities offerings providing investors with potential yield appreciation derived from the life insurance industry.

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We are dedicated to finding new ways of disrupting and transforming the life insurance industry, both as it relates to our historical secondary life insurance business and now with the application of advanced epigenetic technology. Today, we provide consumers additional value for their life insurance policies by disrupting the status quo of high policy lapse rates and low surrender values that life insurance carriers have enjoyed for years. In the future, we intend to disrupt the industry further by providing consumers with additional innovative products and services that benefit from the use of advanced technologies, such as the M-Panel technology we are seeking to license. We believe this technology will permit us to reimagine the way in which risk is assessed, selected and priced in the life insurance industry, and possibly also the long-term care and annuity industries.

Our business was originally organized in February 2006. We added our current parent holding company, GWG Holdings Inc., in March 2008, and in September 2014 we consummated an initial public offering of our common stock on The NASDAQ Capital Market, where our stock trades under the ticker symbol “GWGH.”

GWG Holdings, Inc. (GWG Holdings) conducts its life insurance related business through a wholly owned subsidiary, GWG Life, LLC (GWG Life), and GWG Life’s wholly owned subsidiaries, GWG Life Trust, GWG DLP Funding III, LLC, and GWG DLP Funding IV, LLC. All of these entities are legally organized in Delaware, other than GWG Life Trust, which is governed by the laws of the State of Utah. Unless the context otherwise requires or we specifically so indicate, all references in this prospectus to “we,” “us,” “our,” “our Company,” “GWG,” or the “Company” refer to these entities collectively. Our headquarters are based in Minneapolis, Minnesota.

Markets

Consumers Owning Life Insurance; Other Products

The market for life insurance is large. According to the American Council of Life Insurers Fact Book 2016 (ACLI), individual consumers owned over $10.3 trillion in face value of life insurance policy benefits in the United States in 2015. In that same year, the ACLI reports individual consumers purchased an aggregate of $1.6 trillion of new life insurance policy benefits. This figure includes all types of policies, including term insurance and permanent insurance known as whole life and universal life. Moreover, we believe that existing markets related to insurance are potential areas where we could engage in disruptive activity benefitting consumers and investors. An example would be the annuity market. The ACLI reports that, in 2015, individual consumers purchased $209 billion of annuities and owned over $2.3 trillion total outstanding annuities, of which 97.5% are life-contingent payout obligations.

The secondary market for life insurance exists as a result of consumer lapse behaviors and inadequate surrender values offered to consumers by the insurance carriers. The ACLI reports that the lapse and surrender rate for individual life insurance policies is 5.4%, amounting to over $638.5 billion in face value of policy benefits surrendered in 2015 alone. According to testimony by Gottlieb & Smetters, it is estimated that nearly 88% of all universal life insurance policies sold in the United States do not result in the payment of a benefit claim.

Rather than allowing a policy to lapse as worthless, or receiving the surrender value offered by the issuing insurance carrier, the secondary market can be a source of significant value to consumers. Without the secondary market, insurance carriers maintain monopsony power over consumers who no longer desire to pay the premiums for their life insurance coverage. To illustrate the significance of this value, since our inception we have paid consumers $379.7 million for their life insurance policies as compared to the $26.1 million of cash surrender value offered by insurance carriers for these same policies. The development of a robust life insurance secondary market provides consumers with greater flexibility and options for the life insurance assets they own and maintain.

The life insurance secondary market is geared towards consumers, 65 years and older, who own life insurance and are addressing retirement financial needs. These consumers represent the fastest growing demographic segment in the United States according to the U.S. Census Bureau. As these consumers age, they and their families will be faced with a variety of financial needs that can benefit from the value-added products and services we offer.

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Research by Conning Research & Consulting (Conning) reports that the annual net market potential for life insurance policy benefits sold in the secondary market exceeded $141 billion face value of policy benefits in 2016. Of that market potential, Conning estimates that investors purchased approximately $1.7 billion in face value of life insurance benefits in 2015, indicating that the market is dramatically underserved. And with an aging demographic in the United States, Conning expects the net market potential to grow to an annual $170 billion in face value of life insurance benefits by 2025. We share the belief that the life insurance secondary market represents both a dramatically underserved market and a significant long-term growth opportunity. We further believe that GWG is well positioned to address the market need.

Technology and the Life Insurance Industry

The opportunity to apply technology to transform the life insurance is significant. According to industry consultants at KPMG, Accenture, and Ernst & Young, there is a major movement afoot to transform the insurance industry through the use and application of advanced technologies. This movement, commonly referred to as “insurtech,” suggests a new era of disruptive entrants into the traditional insurance marketplace that have the potential to upend the insurance industry’s historical approach to assessing and selecting acceptable risks.

We intend to participate in the life insurance industry’s insurtech movement, initially through the advanced epigenetic technology developed by Dr. Steve Horvath. We began working with Dr. Horvath in 2015 after he reported that human cells have an internal “biological age” and “biological clock” at the DNA molecular level that is indicative of the aging process. The study of chemical modifications to the DNA molecule that reveal aging, and upon which the M-Panel technology is based, is part of the epigenetics field. Epigenetics is the study of how the DNA molecule’s instructions are translated into the production of proteins that make us who we are. Dr. Horvath’s epigenetic research has focused on methylation sites on our DNA in order to study the determinants of aging and mortality.

In 2016, Dr. Horvath reported a discovery upon the completion of a statistical meta-analysis of over 13,000 individual epigenetic samples. His research identified specific sets of methylation-based bio-markers that could be used to predict individual risk of all-cause mortality. We believe the implications of this discovery are simple and profound: individual lifespans can now be estimated with significantly greater precision across large groups of people. We are currently working to translate this technology into an actuarial underwriting methodology that we believe could revolutionize the life insurance industry.

Investors Seeking Yield from Alternative Assets

Since the credit crisis of 2008, the flow of capital to a variety of alternative asset classes has undergone a structural shift. Alternative assets, broadly defined, are any non-traditional asset with potential economic value that would not be found in a standard investment portfolio. An asset is generally considered “alternative” if it has some or all of the following characteristics: a limited investment history, not commonly found in portfolios, an illiquid market, different performance characteristics, and requires specialized skill to originate and service the asset. Definitions of traditional assets today extend well beyond stocks and bonds, and can include a variety of assets which may have been better classified as “alternative” a decade ago, i.e., real estate, commodities or natural resources. Thus, what is an alternative asset today may be considered tomorrow’s mainstream investment asset.

Once dominated by banks, alternative asset markets are in many cases no longer viable for banks to finance due to vast new regulation effected since the 2008 credit crisis, regulation that has in effect reshaped the way in which banks participate in many parts of the economy. At the same time, an increasing number of investors are now turning to alternative asset classes as a means to diversify their investment portfolio to manage risk and volatility, and to obtain greater returns in the low interest rate environment that has persisted since 2008. In fact, according to research published by Goldman Sachs, a significant shift by retail investors in their investments from an average of 4% allocation in alternative asset investments to the 20% allocation favored by institutional investors is expected over the next five to ten years (see Goldman Sachs, Retail Liquid Alternatives: The Next Frontier (2013)).

The trend of investors seeking access and exposure to alternative investment products is expected to continue as traditional bank sources of capital for these assets continues to retreat and alternative investment product offering innovations occur within the regulated securities markets. Researchers at McKinsey report that U.S. individual investors are expected to be a primary driver of growth in alternative asset investments. McKinsey reports that high net-worth individuals and the mass affluent are increasingly looking to hedge downside risk, protect principal, manage volatility, and generate income — the same reasons institutional investors have favored larger allocations to alternative asset investment classes.

Our Business Model

Our business model is to earn a net profit between the yield generated by the assets we own and the costs we incur to originate and finance those assets. We believe that we are uniquely positioned to acquire life insurance assets in the secondary market directly from consumers needing our services, and to finance our portfolio’s growth by providing investors with the opportunity to participate in the yield we generate from our assets. In addition, if we are successful in implementing M-Panel or other similar technology, we believe that we will be uniquely positioned to create even more opportunities for capital appreciation by obtaining a competitive edge in our current market space, exploiting our technologies in other insurance-related industries, and bringing innovative products and services to those industries.

To participate and compete in, and expand, our markets, we spend significant resources: (i) recruiting and developing a professional management team; (ii) establishing strategic relationships for delivering the services we provide; (iii) creating opportunities for investors to participate in the yield and capital appreciation generated by the alternative life insurance assets and technology we own; (iv) creating innovative growth opportunities to participate in the life insurance industry through the use of technology; and (v) developing a robust operational platform and systems for originating life insurance policies and other alternative assets.

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Originating Life Insurance Assets

We generally purchase life insurance assets in the secondary market directly from policy owners who purchased their life insurance in the primary market. Historically, we have purchased these life insurance policies through a network of specialized brokers who assist consumers and financial professionals in accessing the secondary market. We maintain membership affiliations and representation within key industry groups, such as the Life Insurance Settlement Association. We typically attend and sponsor trade events where we maintain contacts and visibility among professionals who submit life insurance policies for our potential purchase.

A key strategic initiative of ours has been to expand our origination capabilities by marketing our products and services directly to consumers through financial professionals. Most recently, we focused these efforts towards financial professionals, namely financial advisors and life insurance agents, through our “Appointed Agent Program.” Our Appointed Agent Program is designed to empower financial professionals to bring the life insurance secondary market’s value proposition to their respective markets. Our Appointed Agent Program emphasizes education, training, regulatory compliance, and marketing support. We have built an extensive team capable of marketing our products and services directly to life insurance professionals. We expect to continue allocating considerable resources towards the development and support of our direct origination team. We believe these resources will be of particular value as we seek to expand our business into other, more conventional, insurance-related industries.

Underwriting and Purchasing Life Insurance Assets

We focus on investing in high quality life insurance assets through our origination practices and underwriting procedures. These practices and procedures strive to meet guidelines and methodologies published by rating agency A.M. Best. At the same time, we seek innovative value-added tools, services, and methodologies to improve both the accuracy and efficiency with which we acquire life insurance assets.

Our secondary market underwriting procedures consist of a careful review and analysis of available materials and information related to a life insurance policy and the insured. The goal of our underwriting procedures is to make an informed purchasing decision. We typically purchase life insurance policies from insureds who are 65 years or older and whose life expectancies are less than 120 months (ten years). The life expectancies we use are estimates, stated in months, which indicate the 50% probability of an individual’s mortality (meaning actuarial analysis predicts half of the individuals with similar age, sex, and medical conditions will experience mortality before that number of months, and half will experience mortality after that number of months). Life expectancies are based on actuarial tables that predict statistical probability of individual mortality.

We obtain life expectancies from independent third-party medical-actuarial underwriting firms, unless the life insurance policy benefit has a face value of $1,000,000 or less (which we generally refer to as a “small face policy”). When we obtain life expectancies from independent third-party medical-actuarial firms, we receive a medical underwriter’s report summarizing the health of the insured based on a review of the insured’s historical medical records. For all life insurance policies we purchase, other than small face policies, we average two life expectancies from two independent medical-actuarial underwriting firms to form the life expectancy we use to price and value our life insurance assets. In some cases, we may obtain more than two life expectancy estimates. In those cases, we average the two life expectancy estimates that we believe are the most reliable of those we have received, based on our own analyses and conclusions. In this regard, the two life expectancy estimates we ultimately choose to average may not always be the most conservative. For small face policies, we use modified procedures to estimate a life expectancy that may, or may not, use life expectancies from independent third-party medical-actuarial underwriting firms. If in the future we believe our business model will benefit from changes in our underwriting process and if such revisions are permitted under our borrowing covenants, we may change our underwriting processes and policies.

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Our success with our Appointed Agent Program, and in designing and implementing underwriting procedures, has presented us with the opportunity to purchase a greater number of small face life insurance policies. We believe this opportunity is meaningful since the majority of life insurance policies outstanding are small face policies, and policy diversification is critical in obtaining normalized actuarial performance. Historically, however, small face policies have not been available to purchasers of life insurance policies because the secondary market industry participants have significantly relied on life settlement brokers, who are paid a commission determined as a percentage of the face value benefit of the purchased policy, to present purchase opportunities. Not surprisingly, because larger commissions are associated with larger face value life insurance policies, brokers have focused on larger policies and the industry has developed origination practices and underwriting procedures to accommodate such practices. As a result, the industry’s traditional approaches to underwriting and purchasing life insurance assets are ill suited for small face policies. For example, procuring complete medical records, two separate life expectancy reports, and engaging in related activities, can be time consuming and expensive, and these same costs cannot be justified when purchasing smaller life insurance assets. In sum, our method is focused on obtaining enough medical information to generate reliable life expectancy estimates, and thereby make informed purchase decisions. Our streamlined procedures have made it possible to complete a preliminary underwriting in a number of days (as opposed to weeks), and complete the entire purchasing process in a number of weeks (as opposed to months).

We expect to further refine our underwriting processes for large- and small-face policies over time and, to the extent possible, use new technologies to enhance this process and our overall business. In 2015 we began an initiative to re-examine the way in which we approached underwriting. Our initiative included a review of new advanced medical technologies capable of predicting aging and related mortality more accurately than traditional methods. One of these technologies uses new developments in the examination of telomere length, gene expression, and protein expression, and was pioneered by Dr. Steven Horvath, Professor of Human Genetics and Biostatistics at the University of California, Los Angeles (UCLA). Dr. Horvath is a recognized expert on aging who has focused his research on the root causes of aging encoded in the DNA molecule.

Value Proposition — Life Insurance as an Alternative Asset

We realize profits from the life insurance assets we own by earning a spread between the investment cost of our life insurance assets and the face value of the policy benefits we receive. Accordingly, if we originate and invest in life insurance assets in the secondary market, and make all the attendant premium payments to maintain those assets in order to receive the policy benefits, the most significant risk factors (among others that we discuss in the “Risk Factors” section of this prospectus) in the performance of those assets are: (i) the predictability of mortality, or longevity risk; and (ii) the creditworthiness of the issuing life insurance company, or credit risk. We believe the value proposition of our investments in the alternative asset of life insurance is our ability to obtain superior risk-adjusted returns.

Longevity Risk. We believe actuarial mortality is the single largest variable affecting the returns on our investments in life insurance assets and impacting the portfolio’s performance over time. Accurately predicting a specific individual’s mortality date is impossible, and the best an actuary can do is provide a set of probabilities of survival over time. Nevertheless, predicting mortality among a group of similarly situated individuals is less difficult—in fact, the larger the group, the more accurate actuarial prediction tends to become. The statistical mathematical concept stating that the results of random events tend to become very predictable as the number of events becomes large is the “Central Limit Theorem” (or more commonly known as the “Law of Large Numbers”). “Mean regression” is another statistical mathematical concept used to describe that, on average, observations (in this case, the actual mortality of insureds) tend to cluster around the mean observation (i.e., our estimate of mortality of insureds as described further under “Value Proposition” below). These statistical mathematical concepts are the basis for many business models, ranging from all types of insurance to the lottery. Insurance carriers, for example, can be very certain of the number of insurance claims to expect when they have spread their risk over a large book of diversified policies. In this way, insurance carriers can price a large number of insurance policies of any type to collect premiums slightly above the level of expected claims, and thereby expect to earn a surplus or profit. Similarly, a lottery can depend on an expected amount of earnings equal to the small advantage built into the odds of the games.

The implications for our business model are two-fold. First, as we accumulate larger numbers of life insurance policies, we should expect our results to increasingly correlate with our expectations. Second, over the long run, we should expect that the actual cash flows will converge with the forecasted cash flows from our portfolio of life insurance assets, and the actual return on our portfolio of life insurance assets will converge with our expected return. Although medical advances and life expectancy changes may significantly impact the longevity risk we face and our understanding of that risk, these concepts nevertheless serve as guiding principles as we seek to build, manage, and forecast the performance of our portfolio of life insurance assets.

These expectations are affirmed in research published by A.M. Best and others, illustrating that as the number of insured lives increase within a portfolio of life insurance policies, there is a corresponding decrease in the standard deviation of the mortality events within the portfolio—i.e., longevity risk decreases as the number of insureds increases. Standard & Poor’s indicates that 1,000 insured lives are required to reach statistical “significance” (where the relationship, in this context, between mortality projections and actual mortality events is not random). A.M. Best concludes that a portfolio of at least 300 insured lives is statistically significant. Our portfolio as of September 30, 2016 covered 625 insured lives and we believe that both the predictability and actual performance will continue to improve with additional size and diversification. Accordingly, we continue to seek to grow the size and diversification of the portfolio in order to further mitigate risk and improve our profitability.

Credit Risk. We rely on the payment of policy benefit claims by life insurance companies as our most significant source of revenue collection. The life insurance assets we own represent obligations of third-party life insurance companies to pay the benefit amount under the relevant policy upon the mortality of the insured. As a result, we manage this credit risk exposure by generally purchasing policies issued by insurance companies with investment-grade ratings from Standard & Poor’s, and diversifying our portfolio among a number of insurance companies.

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Approximately 97.0% of life insurance assets in our portfolio were issued by insurance companies with investment-grade credit ratings from Standard & Poor’s, as of September 30, 2016. Our largest life insurance company credit exposures and their respective Standard & Poor’s credit rating of their respective financial strength and claims paying ability is set forth below:

Rank	Policy Benefits		Percentage of Policy Benefit Amount			Insurance Company	Ins. Co. S&P Rating
1	$	182,494,000		14.3	%	AXA Equitable Life Insurance Company	A+
2	$	165,255,000		13.0	%	John Hancock Life Insurance Company (U.S.A.)	AA-
3	$	145,721,000		11.5	%	Lincoln National Life Insurance Company	AA-
4	$	129,116,000		10.1	%	Transamerica Life Insurance Company	AA-
5	$	89,806,000		7.1	%	Metropolitan Life Insurance Company	A+
6	$	57,250,000		4.5	%	Massachusetts Mutual Life Insurance Company	AA+
7	$	50,975,000		4.0	%	American General Life Insurance Company	A+
8	$	48,095,000		3.8	%	Pacific Life Insurance Company	A+
9	$	45,300,000		3.6	%	Reliastar Life Insurance Company	A
10	$	44,990,000		3.5	%	West Coast Life Insurance Company	AA-
		959,002,000		75.4	%

The yield to maturity on bonds issued by life insurance carriers reflects, among other things, the credit risk (risk of default) of such insurance carrier. We follow the yields on certain publicly traded life insurance company bonds since this information is part of the data we consider when valuing our portfolio of life insurance policies for our financial statements.

Name of Bond	Maturity	YTM			Duration (Years)		Bond S&P Rating
AXA 7.125%	12/15/2020		1.54	%		4.2	BBB
Manulife Finl 4.15%	3/4/2026		2.83	%		9.4	A
Lincoln National Corp Ind 3.35%	3/9/2025		3.05	%		8.7	A-
Amer Intl Grp 4.875%	6/1/2022		2.48	%		5.7	A-
Protective Life 7.375%	10/15/2019		2.18	%		3.0	A-
Metro Life Gbl Fd1 4.75%	9/17/2021		3.01	%		5.0	AA-
Prudential Finl Inc Mtns Book 4.5%	5/15/2024		2.97	%		7.9	A
Average yield on insurance bonds			2.58	%		6.3

The table above indicates the current yields to maturity (YTM) for the senior bonds of selected life insurance carriers with durations, on average, that our similar to our life insurance portfolio. The average YTM of these bonds was 2.58%, which we believe reflects, in part, the financial market’s judgment that credit risk is low with regard to these carriers’ financial obligations. It should be noted that the obligations of life insurance carriers to pay life insurance policy benefits ranks senior to all of their other obligations. This “super senior” priority is not reflected in the YTM in the table and, if considered, would result in a lower YTM all else being equal. As such, as long as the respective premium payments have been made, it is highly likely that the owner of the insurance policy will collect the insurance policy benefit upon the mortality of the insured.

Value Proposition. We define the value proposition presented by our portfolio of life insurance assets as our ability to earn superior risk-adjusted returns. At any time, we calculate our returns from our life insurance assets based upon (i) our historical results; and (ii) the future cash flows we expect to realize from our statistical forecasts. To forecast our expected future cash flows, we use the probabilistic method of analysis. The actuarial software we use to produce our expected future cash flows and conduct our probabilistic analysis was developed by the actuarial firm Milliman and is now owned by Modeling Actuarial Pricing Systems, Inc. (“MAPS”). The expected future cash flow forecasts derived from this probabilistic analysis, in relation to our investment cost basis, provides us with an expected internal rate of return on our portfolio. As of September 30, 2016, the expected internal rate of return on our portfolio of life insurance assets was 11.65%.

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We seek to further enhance our understanding of our expected future cash flow forecast by applying a stochastic analysis, sometimes referred to as a “Monte Carlo simulation,” to provide us with a greater understanding of the variability of our future cash flow projections. The stochastic analysis we perform is built within the MAPS actuarial software and provides internal rate of return calculations for different statistical confidence intervals. The results of our stochastic analysis, in which we run 10,000 random mortality scenarios, demonstrates that the scenario ranking at the 50th percentile of all 10,000 results generates an internal rate of return of 11.65% which is equal to our expected internal rate of return of 11.65%. The stochastic analysis results also reveal that our portfolio is expected to generate an internal rate of return of 11.06% or better in 75% of all generated scenarios; and an internal rate of return of 10.57% or better in 90% of all generated scenarios. As the portfolio continues to grow, all else equal, the percentage of observations that result in an internal rate of return at or very near 11.65% (currently our median, or 50th percentile, internal rate of return expectation) is expected to increase, thereby lowering future cash flow volatility and potentially justifying our use of lower discount rates to value our portfolio.

In sum, we believe our statistical analyses show that, if we can continue to grow and maintain our investments in life insurance assets, then, in the absence of significant negative events, including but not limited to events impacting longevity and credit risk, and interest rate and financing risk, those investments will provide superior risk-adjusted returns for our company and provide us with the means to generate attractive returns for our investors.

Portfolio Information

Our portfolio of life insurance policies owned by our subsidiaries as of September 30, 2016 is summarized below:

Total portfolio face value of contract benefits	$	1,272,078,000
Average face value per contract	$	2,035,000
Average face value per insured life	$	2,263,000
Weighted average age of insured (yrs.)*		81.8
Weighted average life expectancy estimate (yrs.)*		6.8
Total number of contracts		625
Number of unique lives		562
Demographics		73% Males; 27% Females
Number of smokers		24
Largest contract as % of total portfolio		0.79	%
Average contract as % of total portfolio		0.16	%
Average annual premium as % of face value		3.33	%

Our portfolio of life insurance policies, owned by our subsidiaries as of September 30, 2016, and organized by the insured’s current age and the associated policy benefits, is summarized below:

					Wtd. Avg.	Percentage of Total
Min Age	Max Age	Contracts	Contract Benefits		Life Expectancy (yrs.)	Number of Contracts			Contract Benefits
90	96	55	$	105,815,000	2.4		8.8	%		8.3	%
85	89	155	$	331,989,000	4.8		24.8	%		26.1	%
80	84	152	$	385,904,000	6.7		24.3	%		30.3	%
75	79	115	$	251,466,000	9.2		18.4	%		19.8	%
70	74	87	$	120,791,000	9.8		13.9	%		9.5	%
65	69	61	$	76,113,000	10.1		9.8	%		6.0	%
Total		625	$	1,272,078,000	6.8		100.0	%		100.0	%

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Our portfolio of life insurance policies, owned by our subsidiaries as of September 30, 2016, and organized by the insured’s estimated life expectancy estimates and associated policy benefits, is summarized below:

					Percentage of Total
Min LE (Months)	Max LE (Months)	Contracts	Contract Benefits		Number of Contracts			Contract Benefits
6	47	160	$	275,036,000		25.6	%		21.6	%
48	71	145		300,501,000		23.2	%		23.6	%
72	95	112		249,118,000		17.9	%		19.6	%
96	119	97		223,012,000		15.5	%		17.6	%
120	143	63		134,822,000		10.1	%		10.6	%
144	202	48		89,589,000		7.7	%		7.0	%
Total		625	$	1,272,078,000		100.0	%		100.0	%

We track concentrations of pre-existing medical conditions among insured individuals within our portfolio based on information contained in life expectancy reports. We track these medical conditions within the following ten primary disease categories: (1) cancer, (2) cardiovascular, (3) cerebrovascular, (4) dementia, (5) diabetes, (6) multiple, (7) neurological disorders, (8) no disease, (9) other, and (10) respiratory diseases. Our primary disease categories are summary generalizations based on the ICD-9 codes we track on each insured individuals within our portfolio. ICD-9 codes, published by the World Health Organization, are used worldwide for medical diagnoses and treatment systems, as well as morbidity and mortality statistics. Currently, the only primary disease category within our portfolio that represents a concentration of over 10% is cardiovascular, which constitutes 21.93% of the face amount of insured benefits of our portfolio as at September 30, 2016.

The complete detail of our portfolio of life insurance policies, owned by our subsidiaries as of September 30, 2016, organized by the current age of the insured and the associated policy benefits, sex, estimated life expectancy, issuing insurance carrier, and the credit rating of the issuing insurance carrier, is set forth below.

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Life Insurance Portfolio Detail
(as of September 30, 2016)

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
1	$	1,100,000	Male	96	17	Reliastar Life Insurance Company	A
2	$	184,000	Male	95	38	Reliastar Life Insurance Company	A
3	$	219,000	Male	95	38	Reliastar Life Insurance Company	A
4	$	8,000,000	Female	95	14	Massachusetts Mutual Life Insurance Company	AA+
5	$	4,000,000	Male	95	25	Metropolitan Life Insurance Company	A+
6	$	1,500,000	Female	95	24	Accordia Life and Annuity Company	A-
7	$	3,200,000	Male	95	15	West Coast Life Insurance Company	AA-
8	$	1,000,000	Female	94	22	Transamerica Life Insurance Company	AA-
9	$	250,000	Male	94	23	North American Company for Life and Health Insurance	A+
10	$	264,000	Female	94	11	Lincoln Benefit Life Company	BBB+
11	$	125,000	Female	94	6	Lincoln National Life Insurance Company	AA-
12	$	3,500,000	Male	93	29	Reliastar Life Insurance Company	A
13	$	500,000	Male	93	7	John Hancock Life Insurance Company (U.S.A.)	AA-
14	$	2,000,000	Female	93	7	Pruco Life Insurance Company	AA-
15	$	500,000	Female	93	41	Sun Life Assurance Company of Canada (U.S.)	AA-
16	$	250,000	Male	93	7	Transamerica Life Insurance Company	AA-
17	$	1,682,773	Female	92	40	Hartford Life and Annuity Insurance Company	BBB+
18	$	572,429	Female	92	26	Reliastar Life Insurance Company	A
19	$	3,000,000	Male	92	31	West Coast Life Insurance Company	AA-
20	$	500,000	Female	92	55	John Hancock Life Insurance Company (U.S.A.)	AA-
21	$	5,000,000	Female	92	43	American General Life Insurance Company	A+
22	$	400,000	Female	92	59	Principal Life Insurance Company	A+
23	$	5,000,000	Female	92	23	John Hancock Life Insurance Company (U.S.A.)	AA-
24	$	1,000,000	Female	92	26	Lincoln National Life Insurance Company	AA-
25	$	300,000	Female	92	17	West Coast Life Insurance Company	AA-
26	$	3,845,000	Female	92	36	Pacific Life Insurance Company	A+
27	$	500,000	Male	91	40	Massachusetts Mutual Life Insurance Company	AA+
28	$	5,000,000	Male	91	23	John Hancock Life Insurance Company (U.S.A.)	AA-
29	$	500,000	Female	91	15	Lincoln National Life Insurance Company	AA-
30	$	3,500,000	Female	91	62	John Hancock Life Insurance Company (U.S.A.)	AA-
31	$	3,100,000	Female	91	25	Lincoln Benefit Life Company	BBB+
32	$	1,500,000	Female	91	54	Lincoln National Life Insurance Company	AA-
33	$	3,000,000	Female	91	25	Lincoln National Life Insurance Company	AA-
34	$	5,000,000	Female	91	31	Reliastar Life Insurance Company	A
35	$	5,000,000	Female	91	12	Lincoln National Life Insurance Company	AA-
36	$	500,000	Male	91	41	Reliastar Life Insurance Company	A
37	$	1,000,000	Male	91	7	Voya Retirement Insurance and Annuity Company	A
38	$	1,203,520	Male	91	33	Columbus Life Insurance Company	AA
39	$	1,350,000	Female	91	27	Lincoln National Life Insurance Company	AA-
40	$	600,000	Female	91	15	Columbus Life Insurance Company	AA
41	$	5,000,000	Female	90	38	Massachusetts Mutual Life Insurance Company	AA+
42	$	2,500,000	Female	90	38	American General Life Insurance Company	A+
43	$	2,500,000	Male	90	45	Pacific Life Insurance Company	A+
44	$	1,000,000	Female	90	40	United of Omaha Life Insurance Company	AA-

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	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
45	$	375,000	Male	90	33	Lincoln National Life Insurance Company	AA-
46	$	1,103,922	Female	90	51	Sun Life Assurance Company of Canada (U.S.)	AA-
47	$	1,000,000	Female	90	54	Transamerica Life Insurance Company	AA-
48	$	250,000	Female	90	54	Transamerica Life Insurance Company	AA-
49	$	500,000	Female	90	34	Transamerica Life Insurance Company	AA-
50	$	2,500,000	Female	90	4	AXA Equitable Life Insurance Company	A+
51	$	2,500,000	Female	90	4	AXA Equitable Life Insurance Company	A+
52	$	500,000	Female	90	27	Nationwide Life and Annuity Insurance Company	A+
53	$	715,000	Female	90	45	Lincoln National Life Insurance Company	AA-
54	$	2,225,000	Female	90	74	Transamerica Life Insurance Company	AA-
55	$	3,500,000	Female	90	32	Lincoln National Life Insurance Company	AA-
56	$	1,000,000	Female	89	45	Metropolitan Life Insurance Company	A+
57	$	248,859	Female	89	25	Lincoln National Life Insurance Company	AA-
58	$	500,000	Female	89	57	Sun Life Assurance Company of Canada (U.S.)	AA-
59	$	250,000	Male	89	60	Metropolitan Life Insurance Company	A+
60	$	4,000,000	Female	89	61	Transamerica Life Insurance Company	AA-
61	$	5,000,000	Male	89	42	AXA Equitable Life Insurance Company	A+
62	$	1,200,000	Male	89	42	Massachusetts Mutual Life Insurance Company	AA+
63	$	1,200,000	Male	89	42	Massachusetts Mutual Life Insurance Company	AA+
64	$	1,050,000	Male	89	34	John Hancock Life Insurance Company (U.S.A.)	AA-
65	$	3,000,000	Male	89	85	Transamerica Life Insurance Company	AA-
66	$	1,000,000	Male	89	44	AXA Equitable Life Insurance Company	A+
67	$	500,000	Male	89	52	Lincoln National Life Insurance Company	AA-
68	$	4,785,380	Female	89	32	John Hancock Life Insurance Company (U.S.A.)	AA-
69	$	1,803,455	Female	89	55	Metropolitan Life Insurance Company	A+
70	$	1,529,270	Female	89	55	Metropolitan Life Insurance Company	A+
71	$	800,000	Male	89	54	Lincoln National Life Insurance Company	AA-
72	$	5,000,000	Male	89	41	John Hancock Life Insurance Company (U.S.A.)	AA-
73	$	500,000	Female	89	41	Transamerica Life Insurance Company	AA-
74	$	400,000	Female	89	41	Lincoln Benefit Life Company	BBB+
75	$	3,000,000	Female	89	70	Massachusetts Mutual Life Insurance Company	AA+
76	$	200,000	Male	89	40	Lincoln Benefit Life Company	BBB+
77	$	4,445,467	Male	89	47	Penn Mutual Life Insurance Company	A+
78	$	1,500,000	Male	89	35	Union Central Life Insurance Company	A+
79	$	7,500,000	Male	89	39	Lincoln National Life Insurance Company	AA-
80	$	3,600,000	Female	89	54	AXA Equitable Life Insurance Company	A+
81	$	3,000,000	Male	89	33	Lincoln National Life Insurance Company	AA-
82	$	2,000,000	Male	89	36	John Hancock Life Insurance Company (U.S.A.)	AA-
83	$	100,000	Female	89	46	American General Life Insurance Company	A+
84	$	100,000	Female	89	46	American General Life Insurance Company	A+
85	$	396,791	Male	89	26	Lincoln National Life Insurance Company	AA-
86	$	1,500,000	Male	89	93	Transamerica Life Insurance Company	AA-
87	$	1,000,000	Male	88	45	John Hancock Life Insurance Company (U.S.A.)	AA-
88	$	2,000,000	Male	88	45	John Hancock Life Insurance Company (U.S.A.)	AA-
89	$	5,000,000	Male	88	41	Lincoln National Life Insurance Company	AA-
90	$	5,000,000	Female	88	27	Transamerica Life Insurance Company	AA-
91	$	3,000,000	Male	88	36	Transamerica Life Insurance Company	AA-
92	$	1,200,000	Male	88	62	Transamerica Life Insurance Company	AA-
93	$	6,000,000	Female	88	46	Sun Life Assurance Company of Canada (U.S.)	AA-

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	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
94	$	250,000	Male	88	40	Wilton Reassurance Life Insurance Company	N/A
95	$	330,000	Male	88	60	AXA Equitable Life Insurance Company	A+
96	$	175,000	Male	88	60	Metropolitan Life Insurance Company	A+
97	$	335,000	Male	88	60	Metropolitan Life Insurance Company	A+
98	$	3,000,000	Male	88	65	AXA Equitable Life Insurance Company	A+
99	$	2,000,000	Female	88	40	Beneficial Life Insurance Company	N/A
100	$	250,000	Female	88	40	John Hancock Life Insurance Company (U.S.A.)	AA-
101	$	1,000,000	Female	88	30	New York Life Insurance Company	AA+
102	$	1,250,000	Male	88	27	Columbus Life Insurance Company	AA
103	$	300,000	Male	88	27	Columbus Life Insurance Company	AA
104	$	10,000,000	Female	88	61	West Coast Life Insurance Company	AA-
105	$	2,500,000	Male	88	37	Transamerica Life Insurance Company	AA-
106	$	8,500,000	Male	88	68	Massachusetts Mutual Life Insurance Company	AA+
107	$	1,000,000	Female	88	41	West Coast Life Insurance Company	AA-
108	$	2,000,000	Female	88	41	West Coast Life Insurance Company	AA-
109	$	500,000	Female	88	45	Beneficial Life Insurance Company	N/A
110	$	800,000	Male	88	44	National Western Life Insurance Company	A
111	$	1,269,017	Male	88	25	Hartford Life and Annuity Insurance Company	BBB+
112	$	5,000,000	Male	88	68	Lincoln National Life Insurance Company	AA-
113	$	4,513,823	Female	88	18	Accordia Life and Annuity Company	A-
114	$	2,000,000	Male	88	78	Security Life of Denver Insurance Company	A
115	$	2,000,000	Male	88	78	Security Life of Denver Insurance Company	A
116	$	2,000,000	Male	88	78	Security Life of Denver Insurance Company	A
117	$	309,000	Male	88	27	Transamerica Life Insurance Company	AA-
118	$	2,000,000	Female	88	64	U.S. Financial Life Insurance Company	A+
119	$	1,365,000	Female	87	82	Transamerica Life Insurance Company	AA-
120	$	1,000,000	Female	87	76	Security Life of Denver Insurance Company	A
121	$	200,000	Female	87	75	Lincoln National Life Insurance Company	AA-
122	$	1,000,000	Male	87	38	Sun Life Assurance Company of Canada (U.S.)	AA-
123	$	1,000,000	Male	87	29	Massachusetts Mutual Life Insurance Company	AA+
124	$	1,000,000	Female	87	19	State Farm Life Insurance Company	AA-
125	$	2,000,000	Male	87	85	Transamerica Life Insurance Company	AA-
126	$	209,176	Male	87	81	Lincoln National Life Insurance Company	AA-
127	$	2,328,547	Male	87	34	Metropolitan Life Insurance Company	A+
128	$	2,000,000	Male	87	34	Metropolitan Life Insurance Company	A+
129	$	1,000,000	Male	87	23	Transamerica Life Insurance Company	AA-
130	$	500,000	Male	87	69	Metropolitan Life Insurance Company	A+
131	$	750,000	Female	87	71	Lincoln National Life Insurance Company	AA-
132	$	1,500,000	Female	87	71	Lincoln National Life Insurance Company	AA-
133	$	400,000	Female	87	71	Lincoln National Life Insurance Company	AA-
134	$	1,250,000	Female	87	71	Lincoln National Life Insurance Company	AA-
135	$	2,000,000	Male	87	50	Lincoln National Life Insurance Company	AA-
136	$	3,000,000	Female	87	54	Transamerica Life Insurance Company	AA-
137	$	347,211	Male	87	30	Pruco Life Insurance Company	AA-
138	$	1,800,000	Male	87	41	John Hancock Life Insurance Company (U.S.A.)	AA-
139	$	2,000,000	Male	87	51	AXA Equitable Life Insurance Company	A+
140	$	1,750,000	Male	87	51	AXA Equitable Life Insurance Company	A+
141	$	4,000,000	Male	87	41	Metropolitan Life Insurance Company	A+
142	$	2,000,000	Male	87	25	Transamerica Life Insurance Company	AA-

30

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
143	$	1,425,000	Male	87	63	John Hancock Life Insurance Company (U.S.A.)	AA-
144	$	1,500,000	Male	87	48	AXA Equitable Life Insurance Company	A+
145	$	1,500,000	Male	86	27	Transamerica Life Insurance Company	AA-
146	$	1,500,000	Female	86	96	Lincoln Benefit Life Company	BBB+
147	$	3,750,000	Male	86	63	AXA Equitable Life Insurance Company	A+
148	$	2,000,000	Male	86	43	Metropolitan Life Insurance Company	A+
149	$	3,000,000	Male	86	43	Metropolitan Life Insurance Company	A+
150	$	1,000,000	Male	86	29	John Hancock Life Insurance Company (U.S.A.)	AA-
151	$	2,000,000	Female	86	73	AXA Equitable Life Insurance Company	A+
152	$	1,000,000	Male	86	43	Security Life of Denver Insurance Company	A
153	$	3,000,000	Female	86	71	Sun Life Assurance Company of Canada (U.S.)	AA-
154	$	125,000	Male	86	53	Jackson National Life Insurance Company	AA
155	$	1,500,000	Male	86	66	AXA Equitable Life Insurance Company	A+
156	$	1,000,000	Male	86	45	AXA Equitable Life Insurance Company	A+
157	$	5,000,000	Male	86	75	Security Life of Denver Insurance Company	A
158	$	1,500,000	Male	86	38	Reliastar Life Insurance Company	A
159	$	1,500,000	Male	86	38	Reliastar Life Insurance Company	A
160	$	5,000,000	Male	86	60	Security Life of Denver Insurance Company	A
161	$	500,000	Male	86	31	Genworth Life Insurance Company	BB
162	$	1,980,000	Male	86	40	New York Life Insurance Company	AA+
163	$	1,000,000	Male	86	36	John Hancock Life Insurance Company (U.S.A.)	AA-
164	$	500,000	Male	86	39	New England Life Insurance Company	AA-
165	$	4,000,000	Female	86	41	Reliastar Life Insurance Company	A
166	$	284,924	Male	86	51	Transamerica Life Insurance Company	AA-
167	$	5,000,000	Female	86	80	American General Life Insurance Company	A+
168	$	500,000	Female	86	25	Transamerica Life Insurance Company	AA-
169	$	3,500,000	Female	86	95	Lincoln Benefit Life Company	BBB+
170	$	800,000	Male	86	40	Metropolitan Life Insurance Company	A+
171	$	5,000,000	Female	85	88	AXA Equitable Life Insurance Company	A+
172	$	1,000,000	Female	85	71	John Hancock Life Insurance Company (U.S.A.)	AA-
173	$	6,000,000	Female	85	98	American General Life Insurance Company	A+
174	$	5,000,000	Male	85	53	AXA Equitable Life Insurance Company	A+
175	$	1,433,572	Male	85	44	Security Mutual Life Insurance Company of NY	N/A
176	$	2,000,000	Male	85	42	National Life Insurance Company	A
177	$	1,000,000	Female	85	34	Metropolitan Life Insurance Company	A+
178	$	2,147,816	Female	85	107	John Hancock Life Insurance Company (U.S.A.)	AA-
179	$	4,200,000	Female	85	105	Transamerica Life Insurance Company	AA-
180	$	750,000	Male	85	75	West Coast Life Insurance Company	AA-
181	$	4,000,000	Male	85	26	John Hancock Life Insurance Company (U.S.A.)	AA-
182	$	1,000,000	Male	85	65	John Hancock Life Insurance Company (U.S.A.)	AA-
183	$	2,000,000	Female	85	86	Lincoln Benefit Life Company	BBB+
184	$	2,000,000	Female	85	62	New York Life Insurance Company	AA+
185	$	5,000,000	Male	85	62	Lincoln National Life Insurance Company	AA-
186	$	2,400,000	Male	85	27	Genworth Life Insurance Company	BB
187	$	3,000,000	Male	85	80	Transamerica Life Insurance Company	AA-
188	$	8,500,000	Male	85	93	John Hancock Life Insurance Company (U.S.A.)	AA-
189	$	600,000	Male	85	88	AXA Equitable Life Insurance Company	A+
190	$	7,600,000	Female	85	85	Transamerica Life Insurance Company	AA-
191	$	250,000	Male	85	18	Midland National Life Insurance Company	A+

31

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
192	$	250,000	Male	85	41	Transamerica Life Insurance Company	AA-
193	$	2,500,000	Female	85	58	American General Life Insurance Company	A+
194	$	2,500,000	Male	85	47	AXA Equitable Life Insurance Company	A+
195	$	3,000,000	Male	85	47	Lincoln National Life Insurance Company	AA-
196	$	2,000,000	Male	85	73	Pacific Life Insurance Company	A+
197	$	7,600,000	Male	85	89	Transamerica Life Insurance Company	AA-
198	$	3,000,000	Female	85	36	AXA Equitable Life Insurance Company	A+
199	$	250,000	Male	85	68	Voya Retirement Insurance and Annuity Company	A
200	$	1,800,000	Female	85	50	Lincoln National Life Insurance Company	AA-
201	$	1,703,959	Male	85	58	Lincoln National Life Insurance Company	AA-
202	$	3,000,000	Male	85	49	Metropolitan Life Insurance Company	A+
203	$	500,000	Male	85	11	Great Southern Life Insurance Company	N/A
204	$	2,247,450	Female	85	49	Transamerica Life Insurance Company	AA-
205	$	1,000,000	Male	85	46	Hartford Life and Annuity Insurance Company	BBB+
206	$	400,000	Male	85	39	Transamerica Life Insurance Company	AA-
207	$	1,000,000	Male	85	81	Lincoln National Life Insurance Company	AA-
208	$	1,000,000	Male	85	51	Metropolitan Life Insurance Company	A+
209	$	3,500,000	Male	85	54	Pacific Life Insurance Company	A+
210	$	2,500,000	Male	85	54	AXA Equitable Life Insurance Company	A+
211	$	10,000,000	Male	84	116	Pacific Life Insurance Company	A+
212	$	87,677	Female	84	47	Protective Life Insurance Company	AA-
213	$	1,000,000	Male	84	51	Texas Life Insurance Company	N/A
214	$	500,000	Male	84	92	Metropolitan Life Insurance Company	A+
215	$	1,000,000	Male	84	57	Lincoln National Life Insurance Company	AA-
216	$	3,000,000	Male	84	30	U.S. Financial Life Insurance Company	A+
217	$	325,000	Male	84	53	Genworth Life and Annuity Insurance Company	BB
218	$	175,000	Male	84	53	Genworth Life and Annuity Insurance Company	BB
219	$	850,000	Male	84	48	American General Life Insurance Company	A+
220	$	600,000	Male	84	61	Massachusetts Mutual Life Insurance Company	AA+
221	$	1,900,000	Male	84	54	American National Insurance Company	A
222	$	500,000	Male	84	35	New York Life Insurance Company	AA+
223	$	500,000	Male	84	35	New York Life Insurance Company	AA+
224	$	5,000,000	Male	84	46	AXA Equitable Life Insurance Company	A+
225	$	385,000	Male	84	62	Metropolitan Life Insurance Company	A+
226	$	500,000	Male	84	62	Metropolitan Life Insurance Company	A+
227	$	75,000	Male	84	39	Fidelity and Guaranty Insurance Company	BBB-
228	$	10,000,000	Male	84	62	Lincoln National Life Insurance Company	AA-
229	$	1,500,000	Male	84	67	Lincoln National Life Insurance Company	AA-
230	$	250,000	Male	84	41	The Ohio State Life Insurance Company	N/A
231	$	3,500,000	Female	84	77	AXA Equitable Life Insurance Company	A+
232	$	1,000,000	Female	84	89	West Coast Life Insurance Company	AA-
233	$	1,000,000	Female	84	66	American General Life Insurance Company	A+
234	$	5,000,000	Female	84	65	Sun Life Assurance Company of Canada (U.S.)	AA-
235	$	3,000,000	Female	84	57	Metropolitan Life Insurance Company	A+
236	$	750,000	Male	84	67	John Hancock Life Insurance Company (U.S.A.)	AA-
237	$	4,500,000	Male	84	61	AXA Equitable Life Insurance Company	A+
238	$	1,250,000	Female	84	51	Columbus Life Insurance Company	AA
239	$	2,275,000	Male	84	80	Reliastar Life Insurance Company	A
240	$	10,000,000	Male	84	72	AXA Equitable Life Insurance Company	A+

32

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
241	$	340,000	Female	84	75	Jackson National Life Insurance Company	AA
242	$	2,300,000	Male	84	13	American General Life Insurance Company	A+
243	$	3,500,000	Male	84	60	AXA Equitable Life Insurance Company	A+
244	$	6,217,200	Female	84	94	Phoenix Life Insurance Company	B+
245	$	2,500,000	Female	84	62	Reliastar Life Insurance Company	A
246	$	5,000,000	Female	84	48	Massachusetts Mutual Life Insurance Company	AA+
247	$	1,275,000	Male	84	44	General American Life Insurance Company	A+
248	$	2,000,000	Female	84	86	Lincoln National Life Insurance Company	AA-
249	$	1,000,000	Male	84	41	American General Life Insurance Company	A+
250	$	750,000	Male	84	78	AXA Equitable Life Insurance Company	A+
251	$	5,000,000	Male	84	71	Lincoln National Life Insurance Company	AA-
252	$	3,000,000	Male	83	56	Protective Life Insurance Company	AA-
253	$	1,500,000	Male	83	56	American General Life Insurance Company	A+
254	$	2,000,000	Female	83	94	Transamerica Life Insurance Company	AA-
255	$	1,500,000	Male	83	61	Pacific Life Insurance Company	A+
256	$	2,000,000	Male	83	75	New York Life Insurance Company	AA+
257	$	5,000,000	Male	83	97	American General Life Insurance Company	A+
258	$	250,000	Male	83	132	Reliastar Life Insurance Company	A
259	$	1,995,000	Female	83	69	Transamerica Life Insurance Company	AA-
260	$	4,000,000	Male	83	46	Lincoln National Life Insurance Company	AA-
261	$	10,000,000	Male	83	69	New York Life Insurance Company	AA+
262	$	1,000,000	Male	83	59	Hartford Life and Annuity Insurance Company	BBB+
263	$	1,000,000	Male	83	59	Jackson National Life Insurance Company	AA
264	$	417,300	Male	83	90	Jackson National Life Insurance Company	AA
265	$	5,000,000	Male	83	68	Transamerica Life Insurance Company	AA-
266	$	2,000,000	Male	83	59	Ohio National Life Assurance Corporation	AA-
267	$	1,000,000	Male	83	59	Ohio National Life Assurance Corporation	AA-
268	$	500,000	Female	83	92	AXA Equitable Life Insurance Company	A+
269	$	350,000	Male	83	26	Jackson National Life Insurance Company	AA
270	$	5,000,000	Female	82	68	Security Mutual Life Insurance Company of NY	N/A
271	$	5,000,000	Male	82	80	AXA Equitable Life Insurance Company	A+
272	$	6,000,000	Male	82	96	Transamerica Life Insurance Company	AA-
273	$	8,000,000	Male	82	73	AXA Equitable Life Insurance Company	A+
274	$	850,000	Female	82	89	Zurich Life Insurance Company	AA-
275	$	550,000	Male	82	106	Genworth Life Insurance Company	BB
276	$	500,000	Male	82	54	West Coast Life Insurance Company	AA-
277	$	1,680,000	Female	82	59	AXA Equitable Life Insurance Company	A+
278	$	1,000,000	Female	82	86	Lincoln National Life Insurance Company	AA-
279	$	1,250,000	Male	82	89	Metropolitan Life Insurance Company	A+
280	$	3,000,000	Female	82	61	AXA Equitable Life Insurance Company	A+
281	$	1,000,000	Male	82	55	AXA Equitable Life Insurance Company	A+
282	$	1,250,000	Female	82	75	Principal Life Insurance Company	A+
283	$	1,000,000	Male	82	47	AXA Equitable Life Insurance Company	A+
284	$	1,500,000	Male	82	60	Lincoln Benefit Life Company	BBB+
285	$	700,000	Male	82	91	Banner Life Insurance Company	AA-
286	$	3,000,000	Male	82	88	John Hancock Life Insurance Company (U.S.A.)	AA-
287	$	10,000,000	Male	82	60	Hartford Life and Annuity Insurance Company	BBB+
288	$	1,750,000	Male	82	72	AXA Equitable Life Insurance Company	A+
289	$	5,000,000	Male	82	62	AXA Equitable Life Insurance Company	A+

33

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
290	$	300,000	Female	82	64	Hartford Life and Annuity Insurance Company	BBB+
291	$	250,000	Male	82	70	American General Life Insurance Company	A+
292	$	3,500,000	Male	82	76	Metropolitan Life Insurance Company	A+
293	$	2,502,000	Male	82	136	Transamerica Life Insurance Company	AA-
294	$	10,000,000	Male	82	102	John Hancock Life Insurance Company (U.S.A.)	AA-
295	$	250,000	Female	82	93	Accordia Life and Annuity Company	A-
296	$	3,000,000	Male	82	115	Principal Life Insurance Company	A+
297	$	1,700,000	Male	82	54	Lincoln National Life Insurance Company	AA-
298	$	1,210,000	Male	82	56	Lincoln National Life Insurance Company	AA-
299	$	3,000,000	Female	82	96	West Coast Life Insurance Company	AA-
300	$	7,000,000	Male	82	76	Genworth Life Insurance Company	BB
301	$	8,000,000	Male	81	118	Metropolitan Life Insurance Company	A+
302	$	3,000,000	Male	81	81	Reliastar Life Insurance Company	A
303	$	4,000,000	Male	81	72	Lincoln National Life Insurance Company	AA-
304	$	500,000	Male	81	46	Genworth Life and Annuity Insurance Company	BB
305	$	3,000,000	Male	81	136	Metropolitan Life Insurance Company	A+
306	$	300,000	Female	81	90	Metropolitan Life Insurance Company	A+
307	$	200,000	Male	81	64	Protective Life Insurance Company	AA-
308	$	150,000	Male	81	64	Protective Life Insurance Company	AA-
309	$	150,000	Male	81	64	Protective Life Insurance Company	AA-
310	$	350,000	Male	81	64	Lincoln National Life Insurance Company	AA-
311	$	1,187,327	Male	81	88	Transamerica Life Insurance Company	AA-
312	$	5,000,000	Male	81	99	John Hancock Life Insurance Company (U.S.A.)	AA-
313	$	800,000	Male	81	70	North American Company for Life And Health Insurance	A+
314	$	2,000,000	Male	81	20	Metropolitan Life Insurance Company	A+
315	$	1,000,000	Female	81	80	Lincoln Benefit Life Company	BBB+
316	$	6,000,000	Male	81	113	AXA Equitable Life Insurance Company	A+
317	$	320,987	Female	81	96	John Hancock Life Insurance Company (U.S.A.)	AA-
318	$	130,000	Male	81	43	Genworth Life Insurance Company	BB
319	$	5,500,000	Male	81	113	Metropolitan Life Insurance Company	A+
320	$	1,000,000	Male	81	114	Protective Life Insurance Company	AA-
321	$	2,000,000	Female	81	80	Pacific Life Insurance Company	A+
322	$	4,000,000	Male	81	87	Lincoln National Life Insurance Company	AA-
323	$	2,000,000	Male	81	74	Metropolitan Life Insurance Company	A+
324	$	2,000,000	Male	81	74	Metropolitan Life Insurance Company	A+
325	$	4,300,000	Female	81	101	American National Insurance Company	A
326	$	200,000	Male	81	59	Kansas City Life Insurance Company	N/A
327	$	2,000,000	Female	81	67	Transamerica Life Insurance Company	AA-
328	$	1,500,000	Female	81	68	Protective Life Insurance Company	AA-
329	$	1,000,000	Male	81	49	Pacific Life Insurance Company	A+
330	$	200,000	Male	81	40	Pruco Life Insurance Company	AA-
331	$	500,000	Male	81	40	Transamerica Life Insurance Company	AA-
332	$	3,000,000	Male	80	35	Pacific Life Insurance Company	A+
333	$	3,000,000	Male	80	35	Minnesota Life Insurance Company	A+
334	$	3,000,000	Male	80	35	Pruco Life Insurance Company	AA-
335	$	5,000,000	Male	80	89	Pacific Life Insurance Company	A+
336	$	5,000,000	Male	80	89	Pacific Life Insurance Company	A+
337	$	3,601,500	Male	80	85	Transamerica Life Insurance Company	AA-
338	$	1,000,000	Male	80	87	Sun Life Assurance Company of Canada (U.S.)	AA-

34

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
339	$	5,000,000	Male	80	80	John Hancock Life Insurance Company (U.S.A.)	AA-
340	$	5,000,000	Male	80	120	Principal Life Insurance Company	A+
341	$	150,000	Male	80	85	MetLife Insurance Company USA	A+
342	$	1,009,467	Male	80	51	John Hancock Life Insurance Company (U.S.A.)	AA-
343	$	7,000,000	Male	80	77	Lincoln Benefit Life Company	BBB+
344	$	100,000	Male	80	57	North American Company for Life And Health Insurance	A+
345	$	1,000,000	Male	80	108	Lincoln National Life Insurance Company	AA-
346	$	5,000,000	Male	80	49	John Hancock Life Insurance Company (U.S.A.)	AA-
347	$	6,799,139	Male	80	114	AXA Equitable Life Insurance Company	A+
348	$	476,574	Male	80	64	Transamerica Life Insurance Company	AA-
349	$	2,250,000	Male	80	85	Massachusetts Mutual Life Insurance Company	AA+
350	$	775,000	Male	80	115	Lincoln National Life Insurance Company	AA-
351	$	1,000,000	Female	80	115	John Hancock Life Insurance Company (U.S.A.)	AA-
352	$	6,000,000	Male	80	111	AXA Equitable Life Insurance Company	A+
353	$	1,445,000	Female	80	97	AXA Equitable Life Insurance Company	A+
354	$	1,500,000	Female	80	97	AXA Equitable Life Insurance Company	A+
355	$	1,000,000	Male	80	78	Lincoln National Life Insurance Company	AA-
356	$	200,000	Male	80	50	Lincoln National Life Insurance Company	AA-
357	$	1,000,000	Male	80	102	Metropolitan Life Insurance Company	A+
358	$	6,000,000	Male	80	98	AXA Equitable Life Insurance Company	A+
359	$	5,000,000	Female	80	108	Reliastar Life Insurance Company	A
360	$	750,000	Male	80	61	Lincoln National Life Insurance Company	AA-
361	$	5,000,000	Male	80	170	West Coast Life Insurance Company	AA-
362	$	3,000,000	Male	80	87	Principal Life Insurance Company	A+
363	$	5,000,000	Male	79	129	Lincoln National Life Insurance Company	AA-
364	$	3,000,000	Male	79	78	American General Life Insurance Company	A+
365	$	5,000,000	Male	79	71	John Hancock Life Insurance Company (U.S.A.)	AA-
366	$	500,000	Male	79	60	John Hancock Life Insurance Company (U.S.A.)	AA-
367	$	1,000,000	Male	79	106	Metropolitan Life Insurance Company	A+
368	$	1,250,000	Male	79	91	AXA Equitable Life Insurance Company	A+
369	$	3,000,000	Female	79	81	New York Life Insurance Company	AA+
370	$	4,000,000	Male	79	43	Metropolitan Life Insurance Company	A+
371	$	2,500,000	Male	79	79	Massachusetts Mutual Life Insurance Company	AA+
372	$	2,500,000	Male	79	79	Massachusetts Mutual Life Insurance Company	AA+
373	$	500,000	Female	79	108	Columbus Life Insurance Company	AA
374	$	4,000,000	Female	79	86	Transamerica Life Insurance Company	AA-
375	$	4,000,000	Male	79	140	John Hancock Life Insurance Company (U.S.A.)	AA-
376	$	325,000	Male	79	36	American General Life Insurance Company	A+
377	$	1,750,000	Male	79	56	John Hancock Life Insurance Company (U.S.A.)	AA-
378	$	5,000,000	Male	79	96	Transamerica Life Insurance Company	AA-
379	$	3,750,000	Male	79	52	AXA Equitable Life Insurance Company	A+
380	$	550,000	Male	79	72	Pruco Life Insurance Company	AA-
381	$	300,000	Male	79	72	Pruco Life Insurance Company	AA-
382	$	2,000,000	Female	79	50	Transamerica Life Insurance Company	AA-
383	$	1,200,000	Female	78	126	Athene Annuity & Life Assurance Company	A-
384	$	1,000,000	Male	78	98	Accordia Life and Annuity Company	A-
385	$	2,840,000	Male	78	91	Transamerica Life Insurance Company	AA-
386	$	750,000	Male	78	82	North American Company for Life and Health Insurance	A+
387	$	1,000,000	Male	78	82	John Hancock Life Insurance Company (U.S.A.)	AA-

35

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
388	$	500,000	Male	78	82	North American Company for Life and Health Insurance	A+
389	$	50,000	Male	78	40	Lincoln National Life Insurance Company	AA-
390	$	4,000,000	Male	78	62	Massachusetts Mutual Life Insurance Company	AA+
391	$	1,000,000	Female	78	68	John Hancock Life Insurance Company (U.S.A.)	AA-
392	$	1,000,000	Female	78	123	John Hancock Life Insurance Company (U.S.A.)	AA-
393	$	2,000,000	Male	78	94	Lincoln National Life Insurance Company	AA-
394	$	2,000,000	Male	78	94	Lincoln National Life Insurance Company	AA-
395	$	5,000,000	Male	78	113	Lincoln National Life Insurance Company	AA-
396	$	1,000,000	Male	78	115	Principal Life Insurance Company	A+
397	$	2,000,000	Male	78	100	Genworth Life Insurance Company	BB
398	$	6,250,000	Male	78	185	John Hancock Life Insurance Company (U.S.A.)	AA-
399	$	490,620	Male	78	80	Ameritas Life Insurance Corporation	A+
400	$	600,000	Male	78	77	Protective Life Insurance Company	AA-
401	$	400,000	Male	78	113	John Hancock Life Insurance Company (U.S.A.)	AA-
402	$	730,000	Male	77	96	Transamerica Life Insurance Company	AA-
403	$	5,000,000	Male	77	142	Pruco Life Insurance Company	AA-
404	$	300,000	Male	77	73	Penn Mutual Life Insurance Company	A+
405	$	5,000,000	Male	77	131	AXA Equitable Life Insurance Company	A+
406	$	3,000,000	Male	77	91	Pruco Life Insurance Company	AA-
407	$	3,000,000	Female	77	101	John Hancock Life Insurance Company (U.S.A.)	AA-
408	$	5,000,000	Male	77	136	Massachusetts Mutual Life Insurance Company	AA+
409	$	5,000,000	Male	77	136	Massachusetts Mutual Life Insurance Company	AA+
410	$	200,000	Female	77	139	West Coast Life Insurance Company	AA-
411	$	1,100,000	Male	77	133	Accordia Life and Annuity Company	A-
412	$	3,000,000	Male	77	97	Protective Life Insurance Company	AA-
413	$	2,000,000	Female	77	113	Accordia Life and Annuity Company	A-
414	$	10,000,000	Male	77	127	AXA Equitable Life Insurance Company	A+
415	$	2,500,000	Male	77	134	John Hancock Life Insurance Company (U.S.A.)	AA-
416	$	2,500,000	Male	77	134	John Hancock Life Insurance Company (U.S.A.)	AA-
417	$	1,000,000	Male	77	98	Athene Annuity & Life Assurance Company of New York	A-
418	$	7,000,000	Female	77	116	Pacific Life Insurance Company	A+
419	$	100,946	Female	77	154	Genworth Life and Annuity Insurance Company	BB
420	$	350,000	Male	77	106	AXA Equitable Life Insurance Company	A+
421	$	600,000	Male	77	106	AXA Equitable Life Insurance Company	A+
422	$	1,000,000	Male	77	77	Pacific Life Insurance Company	A+
423	$	2,000,000	Male	77	113	Transamerica Life Insurance Company	AA-
424	$	200,000	Male	77	111	Prudential Insurance Company of America	AA-
425	$	2,000,000	Female	77	162	Lincoln National Life Insurance Company	AA-
426	$	150,000	Male	77	99	Genworth Life Insurance Company	BB
427	$	2,000,000	Male	77	58	Athene Annuity & Life Assurance Company	A-
428	$	7,097,434	Male	77	153	Lincoln National Life Insurance Company	AA-
429	$	5,000,000	Male	77	54	West Coast Life Insurance Company	AA-
430	$	1,000,000	Male	76	122	Transamerica Life Insurance Company	AA-
431	$	750,000	Male	76	107	Protective Life Insurance Company	AA-
432	$	250,000	Male	76	98	Midland National Life Insurance Company	A+
433	$	3,000,000	Male	76	51	Accordia Life and Annuity Company	A-
434	$	200,000	Male	76	65	Reliastar Life Insurance Company	A
435	$	500,000	Male	76	96	AXA Equitable Life Insurance Company	A+
436	$	3,000,000	Male	76	108	John Hancock Life Insurance Company (U.S.A.)	AA-

36

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
437	$	5,000,000	Male	76	108	John Hancock Life Insurance Company (U.S.A.)	AA-
438	$	8,000,000	Male	76	94	Metropolitan Life Insurance Company	A+
439	$	100,000	Male	76	53	AXA Equitable Life Insurance Company	A+
440	$	4,000,000	Female	76	137	American General Life Insurance Company	A+
441	$	500,000	Male	76	88	AIG Life Insurance Company	A+
442	$	1,000,000	Male	76	155	Security Mutual Life Insurance Company of NY	N/A
443	$	355,700	Male	76	103	Security Life of Denver Insurance Company	A
444	$	5,000,000	Male	76	54	Lincoln Benefit Life Company	BBB+
445	$	250,000	Male	76	135	West Coast Life Insurance Company	AA-
446	$	1,000,000	Male	76	112	Transamerica Life Insurance Company	AA-
447	$	2,000,000	Male	76	146	John Hancock Life Insurance Company (U.S.A.)	AA-
448	$	7,500,000	Female	76	173	Security Life of Denver Insurance Company	A
449	$	3,000,000	Female	76	110	General American Life Insurance Company	A+
450	$	100,000	Male	76	67	Transamerica Life Insurance Company	AA-
451	$	300,000	Female	76	133	Minnesota Life Insurance Company	A+
452	$	250,000	Male	76	88	United of Omaha Life Insurance Company	AA-
453	$	600,000	Male	75	69	United of Omaha Life Insurance Company	AA-
454	$	500,000	Male	75	87	Protective Life Insurance Company	AA-
455	$	1,000,000	Male	75	93	Security Life of Denver Insurance Company	A
456	$	1,000,000	Male	75	96	Transamerica Life Insurance Company	AA-
457	$	500,000	Male	75	89	AXA Equitable Life Insurance Company	A+
458	$	500,000	Male	75	103	United of Omaha Life Insurance Company	AA-
459	$	750,000	Male	75	27	North American Company for Life And Health Insurance	A+
460	$	8,000,000	Female	75	131	West Coast Life Insurance Company	AA-
461	$	250,000	Female	75	155	AXA Equitable Life Insurance Company	A+
462	$	300,000	Male	75	36	Lincoln National Life Insurance Company	AA-
463	$	172,245	Female	75	54	Symetra Life Insurance Company	A
464	$	5,004,704	Male	75	133	American General Life Insurance Company	A+
465	$	2,000,000	Male	75	119	Pruco Life Insurance Company	AA-
466	$	190,000	Male	75	103	Protective Life Insurance Company	AA-
467	$	100,000	Male	75	151	Protective Life Insurance Company	AA-
468	$	5,000,000	Male	75	129	AIG Life Insurance Company	A+
469	$	4,000,000	Male	75	108	Security Mutual Life Insurance Company of NY	N/A
470	$	89,626	Female	75	117	Union Central Life Insurance Company	A+
471	$	2,000,000	Male	75	94	American General Life Insurance Company	A+
472	$	10,000,000	Female	75	134	Reliastar Life Insurance Company	A
473	$	1,000,000	Female	75	150	John Hancock Life Insurance Company (U.S.A.)	AA-
474	$	500,000	Male	75	72	American General Life Insurance Company	A+
475	$	250,000	Male	75	73	Genworth Life and Annuity Insurance Company	BB
476	$	500,000	Male	75	95	Delaware Life Insurance Company	BBB+
477	$	370,000	Female	75	125	Minnesota Life Insurance Company	A+
478	$	500,000	Male	74	33	Midland National Life Insurance Company	A+
479	$	3,000,000	Male	74	71	AXA Equitable Life Insurance Company	A+
480	$	500,000	Male	74	61	William Penn Life Insurance Company of New York	AA-
481	$	2,500,000	Male	74	103	John Hancock Life Insurance Company (U.S.A.)	AA-
482	$	500,000	Male	74	134	Pruco Life Insurance Company	AA-
483	$	8,600,000	Male	74	152	AXA Equitable Life Insurance Company	A+
484	$	3,000,000	Male	74	103	Transamerica Life Insurance Company	AA-
485	$	800,000	Male	74	122	John Hancock Life Insurance Company (U.S.A.)	AA-

37

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
486	$	1,500,000	Male	74	126	Lincoln National Life Insurance Company	AA-
487	$	1,500,000	Male	74	126	Lincoln National Life Insurance Company	AA-
488	$	1,500,000	Male	74	126	Lincoln National Life Insurance Company	AA-
489	$	2,500,000	Male	74	136	Banner Life Insurance Company	AA-
490	$	400,000	Male	74	80	Protective Life Insurance Company	AA-
491	$	10,000,000	Male	74	144	John Hancock Life Insurance Company (U.S.A.)	AA-
492	$	1,784,686	Male	74	153	Transamerica Life Insurance Company	AA-
493	$	250,000	Female	74	171	Protective Life Insurance Company	AA-
494	$	500,000	Male	73	122	Ameritas Life Insurance Corporation	A+
495	$	370,000	Male	73	122	Ameritas Life Insurance Corporation	A+
496	$	750,000	Male	73	130	Security Life of Denver Insurance Company	A
497	$	1,000,000	Female	73	120	United of Omaha Life Insurance Company	AA-
498	$	500,000	Male	73	106	William Penn Life Insurance Company of New York	AA-
499	$	250,000	Male	73	18	Security Life of Denver Insurance Company	A
500	$	100,000	Male	73	110	Protective Life Insurance Company	AA-
501	$	500,000	Male	73	128	Metropolitan Life Insurance Company	A+
502	$	2,000,000	Male	73	120	Voya Retirement Insurance and Annuity Company	A
503	$	1,500,000	Male	73	120	Voya Retirement Insurance and Annuity Company	A
504	$	300,000	Male	73	114	Protective Life Insurance Company	AA-
505	$	250,000	Male	73	68	American General Life Insurance Company	A+
506	$	2,500,000	Male	73	104	American General Life Insurance Company	A+
507	$	2,000,000	Male	73	131	John Hancock Life Insurance Company (U.S.A.)	AA-
508	$	800,000	Male	73	84	Commonwealth Annuity and Life Insurance Company	A-
509	$	267,988	Male	73	52	Minnesota Life Insurance Company	A+
510	$	300,000	Male	73	111	New England Life Insurance Company	AA-
511	$	1,167,000	Male	73	50	Transamerica Life Insurance Company	AA-
512	$	1,500,000	Male	73	108	Metropolitan Life Insurance Company	A+
513	$	1,000,000	Female	73	144	Reliastar Life Insurance Company	A
514	$	10,000,000	Male	73	118	AXA Equitable Life Insurance Company	A+
515	$	1,000,000	Male	72	130	AIG Life Insurance Company	A+
516	$	2,500,000	Male	72	51	Transamerica Life Insurance Company	AA-
517	$	400,000	Male	72	195	Protective Life Insurance Company	AA-
518	$	3,000,000	Male	72	75	John Hancock Life Insurance Company (U.S.A.)	AA-
519	$	2,000,000	Male	72	100	New York Life Insurance Company	AA+
520	$	2,000,000	Male	72	100	New York Life Insurance Company	AA+
521	$	5,000,000	Male	72	128	John Hancock Life Insurance Company (U.S.A.)	AA-
522	$	250,000	Female	72	108	Protective Life Insurance Company	AA-
523	$	2,500,000	Male	72	114	Lincoln National Life Insurance Company	AA-
524	$	2,500,000	Male	72	114	John Hancock Life Insurance Company (U.S.A.)	AA-
525	$	1,350,000	Male	72	100	Lincoln National Life Insurance Company	AA-
526	$	230,000	Male	72	117	Transamerica Life Insurance Company	AA-
527	$	139,398	Female	72	23	Lincoln National Life Insurance Company	AA-
528	$	190,000	Female	72	191	Protective Life Insurance Company	AA-
529	$	420,000	Male	72	131	Protective Life Insurance Company	AA-
530	$	75,000	Female	72	102	American General Life Insurance Company	A+
531	$	600,000	Male	72	84	AXA Equitable Life Insurance Company	A+
532	$	4,000,000	Male	72	141	MONY Life Insurance Company of America	A+
533	$	420,000	Male	72	122	RiverSource Life Insurance Company	A+
534	$	100,000	Male	72	137	Protective Life Insurance Company	AA-

38

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
535	$	250,000	Male	71	50	Protective Life Insurance Company	AA-
536	$	650,000	Female	71	72	Security Life of Denver Insurance Company	A
537	$	500,000	Male	71	120	Ohio National Life Assurance Corporation	AA-
538	$	232,000	Male	71	179	Protective Life Insurance Company	AA-
539	$	185,000	Male	71	131	Genworth Life and Annuity Insurance Company	BB
540	$	40,000	Male	71	31	Banner Life Insurance Company	AA-
541	$	750,000	Male	71	125	Transamerica Life Insurance Company	AA-
542	$	1,250,000	Male	71	99	West Coast Life Insurance Company	AA-
543	$	1,500,000	Female	71	153	Pruco Life Insurance Company	AA-
544	$	5,000,000	Male	71	91	Transamerica Life Insurance Company	AA-
545	$	500,000	Male	71	92	Transamerica Life Insurance Company	AA-
546	$	500,000	Male	71	92	North American Company for Life And Health Insurance	A+
547	$	300,000	Male	71	195	John Hancock Life Insurance Company (U.S.A.)	AA-
548	$	100,000	Male	71	44	Genworth Life and Annuity Insurance Company	BB
549	$	150,000	Male	71	34	Protective Life Insurance Company	AA-
550	$	150,000	Male	71	34	AXA Equitable Life Insurance Company	A+
551	$	1,000,000	Male	71	54	John Hancock Life Insurance Company (U.S.A.)	AA-
552	$	202,700	Male	71	117	Farmers New World Life Insurance Company	N/A
553	$	5,000,000	Male	71	151	Metropolitan Life Insurance Company	A+
554	$	250,000	Female	70	120	Ohio National Life Assurance Corporation	AA-
555	$	2,000,000	Male	70	172	John Hancock Life Insurance Company (U.S.A.)	AA-
556	$	400,000	Male	70	161	Lincoln National Life Insurance Company	AA-
557	$	100,000	Male	70	101	Massachusetts Mutual Life Insurance Company	AA+
558	$	92,000	Female	70	199	Protective Life Insurance Company	AA-
559	$	175,000	Female	70	111	Lincoln National Life Insurance Company	AA-
560	$	1,500,000	Male	70	71	Lincoln National Life Insurance Company	AA-
561	$	250,000	Male	70	184	Lincoln National Life Insurance Company	AA-
562	$	1,500,000	Male	70	105	Midland National Life Insurance Company	A+
563	$	500,000	Male	70	111	Lincoln Benefit Life Company	BBB+
564	$	700,000	Male	70	116	Massachusetts Mutual Life Insurance Company	AA+
565	$	750,000	Male	69	134	North American Company for Life And Health Insurance	A+
566	$	1,000,000	Male	69	191	AXA Equitable Life Insurance Company	A+
567	$	1,200,000	Male	69	126	Massachusetts Mutual Life Insurance Company	AA+
568	$	2,500,000	Male	69	161	Pruco Life Insurance Company	AA-
569	$	2,500,000	Male	69	161	Pruco Life Insurance Company	AA-
570	$	4,000,000	Male	69	133	MetLife Insurance Company USA	A+
571	$	500,000	Male	69	42	Voya Retirement Insurance and Annuity Company	A
572	$	1,000,000	Male	69	87	Protective Life Insurance Company	AA-
573	$	2,000,000	Male	69	113	Transamerica Life Insurance Company	AA-
574	$	1,000,000	Male	69	113	Genworth Life Insurance Company	BB
575	$	250,000	Female	69	158	Protective Life Insurance Company	AA-
576	$	1,000,000	Male	69	163	Accordia Life and Annuity Company	A-
577	$	1,000,000	Male	69	61	Protective Life Insurance Company	AA-
578	$	1,000,000	Male	69	131	Transamerica Life Insurance Company	AA-
579	$	1,000,000	Male	69	131	Protective Life Insurance Company	AA-
580	$	156,538	Female	69	107	New York Life Insurance Company	AA+
581	$	2,000,000	Male	69	51	Metropolitan Life Insurance Company	A+
582	$	2,000,000	Male	69	51	Metropolitan Life Insurance Company	A+
583	$	1,000,000	Male	69	153	John Hancock Life Insurance Company (U.S.A.)	AA-

39

	Face Amount		Gender	Age (ALB)(1)	LE (mo.)(2)	Insurance Company	S&P Rating
584	$	400,000	Female	69	142	AXA Equitable Life Insurance Company	A+
585	$	300,000	Male	69	90	Protective Life Insurance Company	AA-
586	$	1,000,000	Male	68	138	Transamerica Life Insurance Company	AA-
587	$	250,000	Female	68	75	Transamerica Life Insurance Company	AA-
588	$	750,000	Male	68	161	Northwestern Mutual Life Insurance Company	AA+
589	$	2,000,000	Male	68	173	John Hancock Life Insurance Company (U.S.A.)	AA-
590	$	150,000	Male	68	117	Protective Life Insurance Company	AA-
591	$	600,000	Male	68	88	William Penn Life Insurance Company of New York	AA-
592	$	5,616,468	Male	68	180	John Hancock Life Insurance Company (U.S.A.)	AA-
593	$	1,100,000	Male	68	156	John Hancock Life Insurance Company (U.S.A.)	AA-
594	$	3,000,000	Male	68	193	John Hancock Life Insurance Company (U.S.A.)	AA-
595	$	400,000	Male	67	191	Lincoln National Life Insurance Company	AA-
596	$	3,000,000	Male	67	100	Reliastar Life Insurance Company	A
597	$	2,000,000	Male	67	100	AXA Equitable Life Insurance Company	A+
598	$	2,000,000	Male	67	100	AXA Equitable Life Insurance Company	A+
599	$	1,000,000	Male	67	48	Lincoln National Life Insurance Company	AA-
600	$	1,000,000	Male	67	78	Transamerica Life Insurance Company	AA-
601	$	350,000	Female	67	85	Assurity Life Insurance Company	N/A
602	$	5,000,000	Male	67	105	Athene Annuity & Life Assurance Company	A-
603	$	1,000,000	Male	67	149	Sun Life Assurance Company of Canada (U.S.)	AA-
604	$	800,000	Male	67	129	Lincoln National Life Insurance Company	AA-
605	$	800,000	Male	67	129	Lincoln National Life Insurance Company	AA-
606	$	229,725	Female	67	107	Hartford Life and Annuity Insurance Company	BBB+
607	$	490,000	Male	67	97	AXA Equitable Life Insurance Company	A+
608	$	220,581	Male	67	25	American General Life Insurance Company	A+
609	$	1,000,000	Male	67	109	The Savings Bank Life Insurance Company of Massachusetts	A-
610	$	320,000	Male	67	162	Transamerica Life Insurance Company	AA-
611	$	250,000	Male	67	163	Pruco Life Insurance Company	AA-
612	$	125,000	Male	67	50	Genworth Life and Annuity Insurance Company	BB
613	$	250,000	Male	67	199	Zurich Life Insurance Company	AA-
614	$	650,000	Male	67	185	Lincoln National Life Insurance Company	AA-
615	$	400,000	Male	66	132	Jackson National Life Insurance Company	AA
616	$	500,000	Female	66	171	Banner Life Insurance Company	AA-
617	$	350,000	Male	66	97	RiverSource Life Insurance Company	A+
618	$	200,000	Male	66	163	Prudential Insurance Company of America	AA-
619	$	200,000	Male	66	163	Prudential Insurance Company of America	AA-
620	$	750,000	Male	66	128	Pacific Life Insurance Company	A+
621	$	500,000	Male	66	136	Transamerica Life Insurance Company	AA-
622	$	500,000	Female	66	132	AIG Life Insurance Company	A+
623	$	265,000	Male	65	159	Protective Life Insurance Company	AA-
624	$	10,000,000	Male	65	65	Lincoln National Life Insurance Company	AA-
625	$	540,000	Male	65	172	West Coast Life Insurance Company	AA-
	$	1,272,077,891

(1)     Person’s age on last birthday (ALB)

(2)     The insured’s life expectancy estimate, other than for a small face value insurance policy (i.e., a policy with $1 million in face value benefits or less), is the average of two life expectancy estimates provided by independent third-party medical-actuarial underwriting firms at the time of purchase, actuarially adjusted through the measurement date. Numbers in this column represent months.

40

Competition

We encounter significant competition from numerous companies in the life insurance secondary market, including hedge funds, investment banks, secured lenders, specialty life insurance finance companies and life insurance companies. Many of these competitors have greater financial and other resources than we do and may have significantly lower cost of funds because they have greater access to insured deposits or the capital markets. Moreover, some of these competitors have significant cash reserves and can better fund shortfalls in collections that might have a more pronounced impact on companies such as ours. They may also have greater market share. In the event that better-financed life insurance companies make a significant effort to compete against our business or the secondary market in general, we would experience significant challenges with our business model.

Competition can take many forms, including the pricing of the financing, transaction structuring, timeliness and responsiveness in processing a seller’s application, and customer service. Some competitors may outperform us in these areas. Some competitors target the same type of life insurance owners as we do and generally have operated in the markets we service for a longer period of time. Increased competition may result in increased costs of purchasing policies or may affect the availability and quality of policies that are available for our purchase. These factors could adversely affect our profitability by reducing our return on investment or increasing our risk.

As we enter new markets, we expect to experience significant competition from incumbent market participants. Our ability to compete in these markets will be dependent upon our ability to deliver value-added products and services to the customers we serve. Even still, our competitors in these markets may have greater financial, market share and other resources than we do. These factors could adversely affect our profitability by reducing our return on investment or increasing our risk as we enter these markets. 

Government Regulation

Our business is highly regulated at the state level with respect to life insurance assets, and at the federal level with respect to the issuance of securities. At the state level, states generally subject us to laws and regulations requiring us to obtain specific licenses or approvals to purchase or issue life insurance policies in those states. State statutes typically provide state regulatory agencies with significant powers to interpret, administer and enforce the laws relating to the life insurance industry. Under this authority, state regulators have broad discretionary power and may impose new licensing and other requirements, and interpret or enforce existing regulatory requirements in new and different ways. Any of these new requirements, interpretations or enforcement directives could be adverse to our industry, even in a material way. Furthermore, because the life insurance secondary market is relatively new and because of the history of certain abuses in the industry, we believe it is likely that state regulation will increase and grow more complex in the foreseeable future. We cannot, however, predict what any new regulation would specifically involve or how it might affect our industry or our business.

State regulation more generally affecting life insurance assets (and not necessarily directed at the life insurance secondary market itself) may also affect our industry and business in negative ways. For example, we are aware of recent legislative efforts in some states to mandate the sale or liquidation of life insurance policies as a precondition to eligibility for health care under the Patient Protection and Affordable Care Act. These kinds of laws, if passed, may adversely affect the number of life insurance policies available for purchase.

Although federal laws and regulations do not directly affect life insurance, in some cases the purchase of a variable life insurance policy may constitute a transaction involving a “security” that is governed by federal securities laws. While we presently hold few variable life insurance policies, our holding of a significant amount of such policies in the future could cause our company or one of its subsidiaries to be characterized as an “investment company” under the federal Investment Company Act of 1940. The application of that law to all or part of our business—whether due to our purchase of variable life insurance policies or to the expansion of definition of “securities” under federal securities laws—could require us to comply with detailed and complex regulatory requirements, and cause us to fall out of compliance with certain covenants under our revolving senior credit facility. Such an outcome could negatively affect our liquidity and increase our cost of capital and operational expenses, all of which would adversely affect our operating results. It is possible that such an outcome could even threaten the viability of our business and our ability to satisfy our obligations as they come due.

We hold licenses to purchase life insurance policies in 37 states and can also purchase in the eight unregulated states. At times, we may work with licensed entities to purchase a policy in a state where we are not licensed.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA requires that holders of medical records maintain such records and implement procedures designed to assure the privacy of patient records. In order to carry out our business, we receive medical records and obtain a release to share such records with a defined group of persons, take on the responsibility for preserving the privacy of that information, and use the information only for purposes related to the life insurance policies we own.

41

The Genetic Information Nondiscrimination Act of 2008 (GINA)

GINA is a federal law that protects people from genetic discrimination in health insurance and employment. GINA prohibits health insurers from: (i) requesting, requiring or using genetic information to make decisions about eligibility for health insurance; or (ii) making decisions on health insurance premiums, contribution amounts, or coverage terms they offer to consumers. This means it is against the law for health insurance companies to use a genetic test result or family health history to deny health insurance, or to decide how much to charge for health insurance. In addition, GINA makes it against the law for health insurers to consider family history or a genetic test result, a pre-existing condition, require a genetic test, or use any genetic information, to discriminate coverage, even if the health insurance company did not mean to collect such genetic information.

GINA does not apply to the life insurance, long-term care or annuity industries. The life insurance, long-term care or annuity industries are founded on medical-evidenced underwriting principles in which specific medical conditions are taken into account when assessing and pricing risk. The regulation of genetic and related data (such as epigenetic data) is relatively new, and we believe it is likely that regulation will increase and grow more complex in the foreseeable future. We cannot, however, predict what any new law or regulation would specifically involve or how it might affect our industry, our business, or our future plans.

Employees

We employ approximately 67 employees.

Properties

Our principal executive offices are located at 220 South Sixth Street, Suite 1200, Minneapolis, Minnesota 55402. At that location, we lease 17,687 square feet of space for a lease term expiring in 2026. We believe that these facilities are adequate for our current needs and that suitable additional space will be available as needed.

Company Website Access and SEC Filings

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, are filed with the SEC. We are subject to the informational requirements of the Securities Exchange Act of 1934 and file or furnish reports, proxy statements and other information with the SEC.

Our general website address is www.gwgh.com. Our website has a wealth of information about our company, its mission, and our specialty finance business. Our website also has tools that could be used by our potential clients, financial advisors and investors alike.

42

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the cash and non-cash compensation awarded to or earned by: (i) each individual who served as the principal executive officer and principal financial officer of GWG Holdings during the years ended December 31, 2016 and 2015; and (ii) each other individual that served as an executive officer of GWG Holdings at the conclusion of the years ended December 31, 2016 and 2015 and who received more than $100,000 in the form of salary and bonus during such fiscal year. These individuals are referred to as our “named executives.”

Name and Principal Position		Salary		Bonus		Option Awards(1)		Total
Jon R. Sabes	2016	$	491,546	$	386,607	$	282,623	$	1,160,776
Chief Executive Officer	2015	$	480,000	$	126,305	$	9,253	$	615,558
Michael D. Freedman	2016	$	350,000	$	253,084	$	—	$	603,084
President	2015	$	350,000	$	57,377	$	—	$	407,377
William B. Acheson	2016	$	225,000	$	166,331	$	13,549	$	404,880
Chief Financial Officer	2015	$	219,135	$	63,946	$	64,816	$	347,897
Jon L. Gangelhoff	2016	$	250,000	$	132,847	$	18,923	$	401,770
Chief Operating Officer	2015	$	250,000	$	59,770	$	25,043	$	334,813
Steven F. Sabes	2016	$	208,246	$	133,481	$	18,416	$	360,143
Executive Vice President and Secretary	2015	$	200,000	$	41,033	$	7,645	$	248,678
Paul A. Siegert	2016	$	201,488	$	—	$	—	$	201,488
Executive Chairman	2015	$	200,000	$	7,739	$	3,216	$	210,955

(1) Amounts shown reflect the grant date fair value of stock option awards granted for the respective year pursuant to the Company’s equity incentive plans, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.  The assumptions used in calculating the grant date fair value of stock option awards made in 2016 were consistent with those used for 2015 (please see fn. 12 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 22, 2016), namely, the expected volatility used in the Black-Scholes model valuation of options issued during 2016 is based on the standard deviation of the average continuously compounded rate of return of five selected comparable companies over the previous 52 weeks, and forfeither rates used in the valuation are based on historical Company information and expected future trend.

43

Employment Agreements and Change-in-Control Provisions

In June 2011, we entered into employment agreements with each of Messrs. Jon R. Sabes, Steven F. Sabes, Paul A. Siegert and Jon Gangelhoff. Mr. Jon R. Sabes is our Chief Executive Officer; Mr. Steven F. Sabes is our Executive Vice President of Originations and Servicing and Secretary and previously served as our President and our Chief Operating Officer; Mr. Siegert previously served as our President and Chairman of the Board of Directors and is currently the Executive Chairman of the Board of Directors; and Mr. Gangelhoff previously served as our Chief Financial Officer and is currently our Chief Operating Officer. On May 30, 2014, we entered into an employment agreement with William Acheson coincident with his appointment as our new Chief Financial Officer. These employment agreements establish key employment terms (including reporting responsibilities, base salary, discretionary and bonus opportunity and other benefits), provide for severance benefits in certain situations, and contain non-competition, non-solicitation and confidentiality covenants.

Under their respective employment agreements, Mr. Jon R. Sabes receives an annual base salary of $491,546, Mr. Steven F. Sabes receives an annual base salary of $208,246, Paul A. Siegert receives an annual base salary of $201,487, William Acheson receives an annual base salary of $225,000, and Mr. Gangelhoff receives an annual base salary of $250,000. The employment agreements contain customary provisions prohibiting the executives from soliciting our employees for a period of 12–18 months after any termination of employment, and from competing with the Company for either two years (if the executive is terminated for good cause or if he resigns without good reason) or one year (if we terminate the executive’s employment without good cause or if he resigns with good reason). In the case of Mr. Acheson, his employment agreement prohibits him from competing against the Company for a one-year period after his termination of employment, regardless of the circumstances relating to that termination. If an executive’s employment is terminated by us without “good cause” or if the executive voluntarily resigns with “good reason,” then the executive will be entitled to (i) severance pay for a period of 12 months and (ii) reimbursement for health insurance premiums for his family if he elects continued coverage under COBRA.

The employment agreements for Messrs. Jon R. Sabes, Steve F. Sabes and Paul A. Siegert also provide that we will reimburse them for any legal costs they incur in enforcing their rights under the employment agreement and, to the fullest extent permitted by applicable law, indemnify them for claims, costs and expenses arising in connection with their employment, regardless of the outcome of any such legal contest, as well as interest at the prime rate on any payments under the employment agreements that are determined to be past due, unless prohibited by law.

All of the foregoing executive employment agreements include a provision allowing us to reduce their severance payments and any other payments to which the executive becomes entitled as a result of our change in control to the extent needed for the executive to avoid paying an excise tax under Code Section 280G, unless the named executive officer is better off, on an after-tax basis, receiving the full amount of such payments and paying the excise taxes due.

In September 2014, we entered into an employment agreement with Michael D. Freedman, who was appointed as our President in November 2014. Under his employment agreement, Mr. Freedman receives an annual base salary of $350,000. His employment agreement contains customary provisions prohibiting him from soliciting our employees or customers for a one-year period after his termination of employment, regardless of the circumstances relating to that termination. If Mr. Freedman’s employment is terminated without “cause” or if he voluntarily resigns with “good reason,” then he will be entitled to (i) severance pay equal to one-half of his annual salary then in effect (if such termination or resignation occurs one year or less from the date he was first employed by the Company) or his annual salary then in effect (if such termination or resignation occurs more than one year from the date he was first employed by the Company) 12 months; and (ii) reimbursement for health insurance premiums for his family if he elects continued coverage under COBRA for six months (if such termination or resignation occurs one year or less from the date he was first employed by the Company) or for 12 months (if such termination or resignation occurs more than one year from the date he was first employed by the Company).

2013 Stock Incentive Plan

In April 2013, our Board of Directors and our stockholders adopted the 2013 Stock Incentive Plan. The plan was subsequently revised on March 4, 2015 and reserved 2,000,000 shares of common stock for issuance. The 2013 Stock Incentive Plan permits the grant of both incentive and non-statutory stock options. As of December 31, 2016, there were 1,122,512 common shares issuable upon exercise of outstanding incentives granted under the plan. The Board of Directors adopted the 2013 Stock Incentive Plan to provide a means by which our employees, directors, officers and consultants may be granted an opportunity to purchase our common stock, to assist in retaining the services of such persons, to secure and retain the services of persons capable of filling such positions and to provide incentives for such persons to exert maximum efforts for our success.

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Outstanding Equity Awards at Fiscal Year End

As of December 31, 2016, our named executives had the following outstanding options to purchase common stock:

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date
Jon R. Sabes		4,000		2,000		—	$	8.28	9/5/2018
		3,333		1,667		—	$	8.20	4/7/2019
		3,333		1,667		—	$	8.71	9/2/2019
		3,333		1,667		—	$	9.91	11/24/2019
		1,667		3,333		—	$	10.18	6/12/2020
		1,667		3,333		—	$	8.55	8/18/2020
		1,667		3,333		—	$	6.60	12/29/2020
		—		5,000		—		6.35	4/29/2021
		—		5,000		—		6.41	5/13/2021
		13,541		311,459		—		9.47	11/10/2021
Michael D. Freedman		106,000		92,750		—	$	12.50	9/22/2024
William B. Acheson		22,500		10,000		—	$	7.46	5/27/2024
		3,333		1,667		—	$	7.92	9/2/2024
		3,333		1,667		—	$	9.01	11/24/2024
		30,000		—		—	$	8.00	3/11/2025
		30,000		60,000		—	$	7.53	4/6/2025
		1,667		3,333		—	$	9.25	6/12/2025
		1,667		3,333		—	$	7.77	12/29/2025
		—		5,000				6.35	4/29/2026
		—		5,000				6.41	5/13/2026
Jon L. Gangelhoff		77,000		—		—	$	7.52	9/5/2023
		3,333		1,667		—	$	7.46	4/7/2024
		3,333		1,667		—	$	7.92	9/2/2024
		3,333		1,667		—	$	9.01	11/24/2024
		3,334		6,666		—	$	8.00	3/11/2025
		1,667		3,333		—	$	9.25	6/12/2025
		3,334		6,666		—	$	7.77	8/18/2025
		1,667		3,333		—	$	6.00	12/29/2025
		—		5,000		—	$	6.35	4/29/2026
		—		5,000		—	$	6.41	5/13/2016
		—		2,500		—	$	8.76	9/19/2026
		—		2,000		—	$	7.93	12/20/2026
Steven F. Sabes		27,500		—		—	$	8.28	9/5/2018
		3,333		1,667		—	$	8.20	4/7/2019
		3,333		1,667		—	$	8.71	9/2/2019
		3,333		1,667		—	$	9.91	11/24/2019
		834		1,666		—	$	10.18	6/12/2020
		1,667		3,333		—	$	8.55	8/18/2020
		1,667		3,333		—	$	8.55	12/29/2020
		—		5,000		—	$	6.35	4/29/2021
		—		5,000		—	$	6.41	5/13/2021
		—		5,000			$	9.64	9/19/2021
Paul A. Siegert		27,500		—		—	$	7.52	9/5/2023
		3,333		1,667		—	$	7.46	4/7/2024
		1,667		833		—	$	7.92	9/2/2024
		1,667		833		—	$	9.01	11/24/2024
		1,667		3,333		—	$	9.25	6/12/2025

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Director Compensation

The following table sets forth the cash and non-cash compensation awarded to or earned by each individual who served as a member of our Board of Directors during the year ended December 31, 2016.

Director’s Name	Fees Earned or Paid in Cash 2016		Option Awards(1)			Total
Paul A. Siegert (Executive Chairman)	$	15,000	$	0	(2)	$	15,000
Jon R. Sabes	$	15,000	$	0	(2)	$	15,000
Steven F. Sabes	$	15,000	$	0	(2)	$	15,000
David H. Abramson	$	46,200	$	38,780		$	84,980
Charles H. Maguire III	$	33,600	$	27,146		$	60,746
Jeffrey L. McGregor	$	34,800	$	31,024		$	65,824
Shawn R. Gensch	$	29,400	$	23,268		$	52,668

(1)	Amounts shown reflect the grant date fair value of stock option awards granted during fiscal 2016, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.
(2)	Excludes stock option awards granted to employee directors as compensation for serving as employees of the Company.

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Each independent board member receives base compensation of $6,000 and an option to purchase 1,400 shares of the Company’s common stock per quarter. In addition, the chairman of the audit committee receives $4,800 and an option to purchase up to 1,400 shares of the Company’s common stock per quarter. The chairmen of the compensation committee and the corporate governance committee each receive $2,400 and an option to purchase up to 700 shares of the Company’s common stock per quarter. Also each non-chair member of committees receives $1,200 and an option to purchase up to 350 shares of the Company’s common stock per quarter.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of our common stock as of February 1, 2017 by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, (ii) each director, (iii) each named executive identified in the Summary Compensation Table above, and (iv) all named executives and directors as a group. Unless otherwise indicated, the address of each person is 220 South Sixth Street, Suite 1200, Minneapolis, Minnesota 55402, and each person has sole voting and investment power with respect to the shares of common stock set forth opposite their name.

Name	Shares Beneficially Owned		Percentage of Shares Beneficially Owned
Jon R. Sabes(1)		2,252,436		37.40	%
Steven F. Sabes(2)		2,258,374		37.50	%
Paul A. Siegert(3)		237,947		3.95	%
Jon L. Gangelhoff(4)		100,337		1.65	%
William B. Acheson(5)		92,502		1.36	%
Michael D. Freedman(6)		108,700		1.79	%
David H. Abramson(7)		70,500		1.17	%
Jeffrey L. McGregor(8)		50,400			*
Charles H. Maguire III(9)		49,350			*
Shawn R. Gensch(10)		39,300			*
All current directors and officers as a group		5,036,711		78.86	%

*  less than one percent.

(1)	Mr. Sabes is our Chief Executive Officer and a director of the Company. Shares reflected in the table include 1,258,319 shares held individually, 169,671 shares held by Jon Sabes 1992 Trust No.1, a trust of which Mr. Sabes is the beneficiary, 168,801 shares held by Jon Sabes 12.30.92 Trust, a trust of which Mr. Sabes is a beneficiary, 241,631 shares held by Jon Sabes 1982 Trust, a trust of which Mr. Sabes is a beneficiary, and 163,737 shares held by Jon Sabes 1976 Trust, a trust of which Mr. Sabes is a beneficiary. Also included are 102,192 shares held by Mr. Sabes’ immediate family members. The trustees of each of the trusts are Robert W. Sabes, Steve F. Sabes and Ross A. Sabes. The number of shares also includes 48,086 stock options currently exercisable or exercisable within 60 days granted pursuant to stock option agreements. Figures also include 100,000 shares held by Insurance Strategies Fund, LLC, a Delaware limited liability company over whose securities each of Jon R. and Steven F. Sabes exercise voting and dispositive control. Jon R. and Steve F. Sabes disclaim beneficial ownership over the shares held by Insurance Strategies Fund, LLC except to the extent of their pecuniary interest in such shares.
(2)	Mr. Sabes is our Executive Vice President of Originations and Servicing, Secretary and a director of the Company. Shares reflected in the table include 799,779 shares held individually, 521,158 shares held by Moe Sabes 1982 Trust FBO Steven Sabes, a trust of which Mr. Sabes is the beneficiary, 350,779 shares held by Esther Sabes 1992 Trust FBO Steven Sabes, a trust of which Mr. Sabes is a beneficiary, and 200,445 shares held by Moe Sabes 1976 Trust FBO Steven Sabes, a trust of which Mr. Sabes is a beneficiary. The trustees of each of the trusts are Robert W. Sabes, Jon R. Sabes and Ross A. Sabes. The number of shares also includes 33,335 stock options currently exercisable or exercisable within 60 days granted pursuant to stock option agreements. Figures also includes 100,000 shares held by Insurance Strategies Fund, LLC, a Delaware limited liability company over whose securities each of Jon R. and Steven F. Sabes exercise voting and dispositive control. Jon R. and Steve F. Sabes disclaim beneficial ownership over the shares held by Insurance Strategies Fund, LLC except to the extent of their pecuniary interest in such shares.
(3)	Mr. Siegert is a director of the Company (Chairman). Shares reflected in the table include 200,445 shares held individually and 37,502 of vested stock options granted pursuant to our 2013 Stock Incentive Plan.
(4)	Mr. Gangelhoff is our Chief Operating Officer. Shares reflected in the table include 100,337 of vested stock options granted pursuant to our 2013 Stock Incentive Plan.
(5)	Mr. Acheson is our Chief Financial Officer. Shares reflected in the table include 92,502 of vested stock options granted pursuant to our 2013 Stock Incentive Plan.
(6)	Mr. Freedman is our President. Shares reflected in the table include 2,700 shares held individually and 106,000 of vested stock options.
(7)	Mr. Abramson is a director of the Company. Shares reflected in the table include 70,500 of stock options vested or vesting within 60 days, granted pursuant to our 2013 Stock Incentive Plan.
(8)	Mr. McGregor is a director of the Company. Shares reflected in the table include 50,400 of stock options vested or vesting within 60 days, granted pursuant to our 2013 Stock Incentive Plan.
(9)	Mr. Maguire III is a director of the Company. Shares reflected in the table include 49,350 of stock options vested or vesting within 60 days, granted pursuant to our 2013 Stock Incentive Plan.
(10)	Mr. Gensch is a director of the Company. Shares reflected in the table include 39,300 of vested stock options vested or vesting within 60 days, granted pursuant to our 2013 Stock Incentive Plan.

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DESCRIPTION OF SECURITIES OFFERED

Series 2 Redeemable Preferred Stock

Our Board of Directors has created, out of our authorized and unissued shares of our preferred stock, a series of preferred stock designated as the “Series 2 Redeemable Preferred Stock.” This series of preferred stock is being offered, and will be issued in up to 150,000 shares, pursuant to this prospectus. The par value of each share of Series 2 Redeemable Preferred Stock is $.001, and the “stated value” is $1,000. These preferred shares are partially convertible into shares of our common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date on which notice of conversion is delivered to us (discounted, based on the number of years the preferred stock has been held, as described below), subject, however, to a minimum conversion price of $     per share and a maximum     % of the stated value of each preferred share being convertible (i.e., a maximum of      shares of common stock for each share of preferred stock converted). This limitation on conversions will be equitably adjusted upon customary events affecting our share capital, such as stock dividends, subdivisions (splits), and combinations. For more detailed information, see “Series 2 Redeemable Preferred Stock — Conversion by a Holder” below.

The following is a brief description of the terms of our Series 2 Redeemable Preferred Stock. This description does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation for our Series 2 Redeemable Preferred Stock, which is filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.

Rank. With respect to dividend rights and rights upon our liquidation, winding-up or dissolution, our Series 2 Redeemable Preferred Stock ranks:

● senior to our common stock and any other class or series of our capital stock, including capital stock issued in the future, the terms of which expressly provide that our Series 2 Redeemable Preferred Stock ranks senior to such class or series as to dividend rights or rights on our liquidation, winding-up and dissolution;

● pari passu with our “Series A Convertible Preferred Stock” with respect to dividend payment and liquidation distribution rights;

● pari passu with our (earlier issued) “Redeemable Preferred Stock” with respect to dividend payment and liquidation distribution rights;

● senior to or pari passu with all other classes and series of our preferred stock;

● junior to each class or series of our capital stock, including capital stock issued in the future, the terms of which expressly provide that such class or series ranks senior to the Series 2 Redeemable Preferred Stock as to dividend rights or rights on our liquidation, winding up and dissolution; and

● junior to all our existing and future debt obligations.

“Pari passu” means that in determining priority of payment in respect of entitlement to dividends and distributions upon our liquidation, winding-up or dissolution, the holders of our Series 2 Redeemable Preferred Stock, together with the holders of any other class of “pari passu” equity, will be treated equally and without preference.

Stated Value. Each share of Series 2 Redeemable Preferred Stock has an initial “stated value” of $1,000, subject to appropriate adjustment upon certain events such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events as set forth in the Certificate of Designation for our Series 2 Redeemable Preferred Stock. The stated value is the basis upon which dividends are calculated, and represents the price (subject to redemption fees) at which a share of Series 2 Redeemable Preferred Stock may under certain circumstances be repurchased by us, and the aggregate amount (plus accrued but unpaid dividends) of liquidating distributions to which a holder of a share of Series 2 Redeemable Preferred Stock will be entitled in any case where our Company is dissolved, its assets liquidated and its business wound-up.

Dividends. Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to our Series 2 Redeemable Preferred Stock, if any such class or series is authorized in the future, the holders of Series 2 Redeemable Preferred Stock are entitled to receive, when and as declared by our Board of Directors out of legally available funds, cumulative cash dividends on each preferred share at an annual rate of     % of the stated value of such share.

Dividends on each preferred share begin accruing on, and are cumulative from, the date of issuance. We expect to pay dividends on these preferred shares monthly. In the event that provisions of Delaware law, our Certificate of Incorporation, or our borrowing agreements prohibit us from paying dividends in cash, and we do not pay dividends through the issuance of preferred stock as described below, unpaid dividends will cumulate.

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At our option, we may pay dividends in the form of duly authorized, validly issued, fully paid and non-assessable shares of the Series 2 Redeemable Preferred Stock. Any such preferred stock we issue in satisfaction of our dividend-payment obligations will be valued at the stated value of such shares. We may exercise this option even if we are legally permitted to pay dividends in cash.

No commissions or additional compensation will be payable on preferred shares issued in satisfaction of our dividend-payment obligations.

Unless full cumulative dividends on our shares of Series 2 Redeemable Preferred Stock for all past dividend periods through the most recent payment date have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment, we will not:

● declare a dividend on any other series or class or classes of capital stock as to which the Series 2 Redeemable Preferred Stock ranks senior or pari passu as to dividends or liquidation, including without limitation shares of common stock, in respect of any period; or

● redeem, purchase or otherwise acquire any series or class of capital stock that ranks junior or pari passu to the Series 2 Redeemable Preferred Stock (except for (1) the repurchase of shares of common stock from employees, officers, directors, consultants or other persons performing services for us or any of our subsidiaries pursuant to agreements under which we have the right or option to repurchase such shares upon the occurrence of certain events or otherwise, or (2) shares of Series A Convertible Preferred Stock pursuant to the terms of the Certificate of Designation of Series A Convertible Preferred Stock, or terms superior to those contained within that Certificate of Designation, or (3) shares of Redeemable Preferred Stock pursuant to the terms of the Certificate of Designation of Redeemable Preferred Stock, or terms superior to those contained within that Certificate of Designation) for any consideration (or any money to be paid into any sinking fund or otherwise set apart for the purchase of any such junior stock).

Redemption Request at the Option of a Holder. Once per calendar quarter, holders of this preferred stock will have the opportunity to request that we redeem some or all of their preferred shares. We will not, however, be obligated to redeem shares upon request. If we, in our discretion, agree to honor a redemption request, we will redeem these preferred shares at a redemption price equal to the stated value of the shares to be redeemed, plus any accrued but unpaid dividends thereon, less an applicable redemption fee. As a percentage of the aggregate redemption price of a holder’s shares to be redeemed, the redemption fee shall be:

● 12% if the redemption is requested on or before the first anniversary of the original issuance of such shares.

● 10% if the redemption is requested after the first anniversary and on or before the second anniversary of the original issuance of such shares.

● 8% if the redemption is requested after the second anniversary and on or before the third anniversary of the original issuance of such shares.

● After the three-year anniversary of the date of original issuance of such shares, no redemption fee shall be subtracted from the redemption price.

Optional Repurchase Upon Death, Disability or Bankruptcy of a Holder. Subject to certain restrictions and conditions, we will also redeem the preferred shares of a holder who is a natural person (including an individual beneficial holder who holds preferred shares through a custodian or nominee, such as a broker-dealer) upon his or her death, total disability or bankruptcy, within 60 days of our receipt of a written request from the holder or the holder’s estate at a redemption price equal to the stated value, plus accrued and unpaid dividends thereon.

A “total disability” means a determination by a physician approved by us that a holder, who was gainfully employed and working on a full-time basis as of the date on which his or her preferred shares were purchased from us, has been unable to work on a full-time basis for at least 24 consecutive months. In this regard, the Certificate of Designation for the Series 2 Redeemable Preferred Stock defines working “on a full-time basis” to mean working at least 40 hours per week.

Optional Redemption by the Company. We will have the right to redeem any or all shares of our Series 2 Redeemable Preferred Stock in whole or in part, at any time and from time to time. We will redeem any called preferred shares at a redemption price equal to 100% of the stated value per share, plus any accrued but unpaid dividends thereon. In the event that we call and redeem an investor’s preferred shares prior to the one-year anniversary of the purchase of those shares, we will also pay an additional amount sufficient to cause the investor to have received at least one year’s worth of dividends on the preferred shares being redeemed (i.e., at a minimum redemption price of     % of the stated value of those preferred shares).

We may exercise our redemption right by delivering a written notice thereof to all, but not less than all, of the holders of Series 2 Redeemable Preferred Stock. Each such notice will state the date on which the redemption by us shall occur, which date will be no later than 60 days following the notice date.

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Restrictions on Redemption and Repurchase. We will not be obligated in all cases to redeem shares of Series 2 Redeemable Preferred Stock, whether in connection with a redemption request by a holder to which we have earlier agreed, at the option of the Company, or upon the death, total disability or bankruptcy of a holder. In particular, we will not redeem or repurchase any preferred shares if we are restricted by applicable law or our Certificate of Incorporation from making such redemption, or to the extent any such redemption would cause or constitute a default under any borrowing agreements to which we or any of our subsidiaries are a party or otherwise bound. In addition, and even after we may have earlier agreed to redeem preferred shares upon a redemption request, we will have no obligation to consummate the redemption of preferred shares in connection with a redemption request made by a holder if we determine, as of the redemption date, that we do not have sufficient funds available to fund that redemption. We will have complete discretion under the Certificate of Designation to determine whether we are in possession of “sufficient funds” to fund a redemption request. To the extent we are unable to complete redemptions we may have earlier agreed to make, we will consummate those redemptions promptly after we become able to do so, with all such deferred redemptions being satisfied on a prorated basis, regardless of the order in which we received the related requests.

Conversion by a Holder. Holders of Series 2 Redeemable Preferred Stock will have the option to partially convert their preferred stock into common stock at a conversion price equal to the volume-weighted average price of our common stock for the 20 trading days immediately prior to the date on which notice of conversion is delivered to us. This volume-weighted average price will be discounted, based on the number of years you have held your preferred stock, as set forth below: 

Years Held	Applicable Discount
0-3 years	%
4 years or less (but more than 3 years)	%
5 years or less (but more than 4 years)	%
More than 5 years	%

Notwithstanding the foregoing, in no event will the preferred shares convert into common stock at a conversion price less than $     per common share. The right of holders to convert their preferred shares will be subject to a maximum of     % of the stated value of the preferred shares being partially converted (i.e., a maximum of       shares of common stock for each share of preferred stock converted). This limitation on conversion will be equitably adjusted upon customary events affecting our share capital, such as stock dividends, subdivisions (i.e., splits), and combinations. Upon any conversion, the remaining unconverted portion of your preferred stock will remain as a fractional share of Series 2 Redeemable Preferred Stock. 

In the event that we deliver a notice of proposed redemption of an investor’s preferred shares (see the caption “Optional Redemption by the Company” above), the right of a holder to convert those shares into our common stock will be suspended until the redemption date. If, however, we do not consummate the redemption on the redemption date, then the suspension on the right to convert will terminate and holders will once again have the right to convert their preferred shares into our common stock.

Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, before any distribution or payment shall be made to holders of our common stock or any other class or series of capital stock ranking junior to our shares of Series 2 Redeemable Preferred Stock, the holders of shares of Series 2 Redeemable Preferred Stock will be entitled to be paid out of our assets legally available for distribution to our stockholders, after payment or provision for our debts and other liabilities, a liquidation preference equal to the stated value per share, plus an amount equal to any accrued and unpaid dividends (whether or not declared) to and including the date of payment. 

After payment of the full amount of the liquidating distributions to which they are entitled, the holders of our shares of Series 2 Redeemable Preferred Stock will have no right or claim to any of our remaining assets. Our consolidation or merger with or into any other corporation, trust or other entity, the consolidation or merger of any other corporation, trust or entity with or into us, the sale or transfer of any or all our assets or business, or a statutory share exchange will not be deemed to constitute a liquidation, dissolution or winding-up of our affairs. 

In determining whether a distribution (other than upon voluntary or involuntary liquidation) by dividend, redemption or other acquisition of shares of our capital stock, or otherwise, is permitted under Delaware law, amounts that would be needed, if we were to be dissolved at the time of any such distribution, to satisfy the preferential rights of the holders of Series 2 Redeemable Preferred Stock will not be added to our total liabilities. 

Voting Rights. Our Series 2 Redeemable Preferred Stock has no voting rights. 

Protective Provisions. Although the Series 2 Redeemable Preferred Stock has no voting rights relative to matters submitted to a vote of our stockholders (other than as required by law), the affirmative vote or written consent of holders of at least a majority of the then-outstanding shares of Series 2 Redeemable Preferred Stock, voting together as a single class, either given in writing or by vote at a meeting, is required for us to:

● amend, modify, add, repeal or waive any provision of the Certificate of Designation for the Series 2 Redeemable Preferred Stock or otherwise take any action that modifies any powers, rights, preferences, privileges or restrictions of the Redeemable Preferred Stock;

● authorize, create or issue shares of any class of stock having rights, preferences or privileges upon our liquidation that are superior to the Series 2 Redeemable Preferred Stock; or

● amend our Certificate of Incorporation in a manner that adversely and materially affects the rights of the Series 2 Redeemable Preferred Stock.

Exchange Listing. We do not plan on making an application to list these preferred shares on The NASDAQ Capital Market, any other national securities exchange or any other nationally recognized trading system. Our common stock is listed on The NASDAQ Capital Market. 

No Sinking Fund. These preferred shares are not associated with any sinking fund. 

Reports. We will publish annual reports containing financial statements and quarterly reports containing financial information for the first three quarters of each fiscal year. We will send copies of these reports, at no charge, to any holder of these preferred shares who sends us a written request.

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PLAN OF DISTRIBUTION

General

We are offering up to a maximum of 150,000 shares of our Series 2 Redeemable Preferred Stock. The offering is made through Emerson Equity LLC, our dealer manager, on a “best efforts” basis, which means that the dealer manager is only required to use its good faith efforts and reasonable diligence to sell the preferred shares and has no firm commitment or obligation to purchase any specific number or dollar amount of the shares.

The preferred shares will be sold at a public offering price of $1,000 per share. Investors may pay cash or exchange their outstanding debt securities of the Company in satisfaction of the aggregate purchase price for the preferred shares. These preferred shares will not be certificated. This offering is a continuous offering, and we may terminate this offering at any time.

We will sell these shares using DTC settlement and direct settlement with the Company. See “Settlement Procedures” below for more detail.

Emerson Equity LLC is a securities broker-dealer registered with the SEC and a member firm of FINRA. The principal business address of Emerson Equity is 155 Bovet Road, Suite 725, San Mateo, CA 94402. Our dealer manager will manage, direct and supervise its associated persons who will be wholesalers in connection with the offering. We expect our dealer manager to authorize other broker-dealers that are members of FINRA, which we refer to as soliciting broker-dealers, to sell our preferred shares in this offering.

Compensation of Dealer Manager and Soliciting Broker-Dealers

We will pay to our dealer manager and soliciting broker-dealers a selling commission of 6.00% of the gross offering proceeds from this offering for a maximum of $9,000,000. We will also pay additional compensation to soliciting broker-dealers. In particular, the managing dealer and soliciting broker dealers may receive up to 2.00% of the gross offering proceeds as additional compensation consisting of (i) an accountable and non-accountable expense allowance, (ii) a dealer manager fee (payable only to the dealer manager) for managing and coordinating the offering, (iii) a wholesaling fee (payable only to the wholesalers, who are employees of the Company and associated with the dealer manager), and (iv) non-cash compensation. We will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the debentures.

Additional compensation includes (i) a non-accountable expense allowance of up to 0.60% of gross offering proceeds for a maximum of $900,000; (ii) an accountable allowance expense, which may include due diligence expenses set forth in a detailed and itemized invoice and wholesaling expenses other than salaries and commissions, of up to 0.40% of gross offering proceeds for a maximum of $600,000; (iii) a dealer manager fee of 0.40% gross offering proceeds for a maximum of $600,000; (iv) a wholesaling fee, which may consist of commissions and salaries of the wholesalers, of 0.50% of gross offering proceeds for a maximum of $750,000; and (v) non-cash compensation of up to 0.10% of gross offering proceed for a maximum of $150,000. Final additional compensation will not exceed 2.00% of gross offering proceeds, and the combined selling commission and such additional compensation under this offering will not exceed 8.00% of gross offering proceeds.

Our dealer manager may reallow up to 0.60% of any additional compensation it receives to a soliciting broker-dealer. The amount of any such reallowance will be determined by our dealer manager in its sole discretion.

Certain of our employees are also registered representatives and supervisory principals of the dealer manager (the “dual employees”). We have granted these dual employees certain share appreciation rights (“SARs”), which are not securities, as part of their compensation. The SARs give a dual employee the contractual right to receive from us additional cash compensation at any point before the SAR’s expiration, but only if the price of our common stock has increased between the grant date and the date when we receive notice of the dual employee’s intention to exercise the SAR. At the termination of this offering, the aggregate of the appreciation amount, as defined in the SAR agreement, will be calculated and added to the other items of value (e.g., selling commissions and additional forms of compensation) to ensure that aggregate compensation paid in connection with this offering does not exceed 8.00% of the gross offering proceeds.

We will not pay any selling commissions, but will pay dealer manager fees, in connection with the sale of preferred shares to investors whose contracts for investment advisory and related brokerage services include a fixed or “wrap” fee feature. Investors may agree with their broker-dealers to reduce the amount of selling commissions payable with respect to the purchase of their preferred shares down to zero (i) if the investor has engaged the services of a registered investment advisor, or RIA, or other financial advisor who will be paid compensation for investment advisory services or other financial or investment advice, or (ii) if the investor is investing through a bank trust account with respect to which the investor has delegated the decision-making authority for investments made through the account to a bank trust department. The net proceeds to us will not be affected by reducing commissions payable in connection with such sales. Neither our dealer manager nor its affiliates will directly or indirectly compensate any person engaged as an investment advisor or a bank trust department by a potential investor as an inducement for such investment advisor or bank trust department to advise favorably for an investment in the preferred shares offered hereby.

No commissions or additional compensation will be payable on preferred shares issued in satisfaction of our dividend-payment obligations.

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Dealer Manager and Soliciting Broker-Dealer Compensation

The table below sets forth the nature and estimated amount of all items viewed as compensation by FINRA, assuming we sell all the preferred shares offered hereby.

	Per Share		Maximum Offering
Public offering price	$	1,000	$	150,000,000
Selling commissions(1)(3)	$	60	$	9,000,000
Additional compensation(2)(3)	$	20	$	3,000,000
Proceeds, before expenses, to us	$	920	$	138,000,000

(1) Selling commissions will equal 6.00% of aggregate gross proceeds, and will be payable to each soliciting broker-dealer as authorized by us and Emerson Equity LLC, the managing broker-dealer or “dealer manager” for this offering.

(2) Additional compensation consists of (i) a non-accountable expense allowance of up to 0.60% of gross offering proceeds, (ii) an accountable expense allowance of up to 0.40% of gross offering proceeds, (iii) a dealer manager fee (payable only to the dealer manager) of 0.40% of gross offering proceeds for managing and coordinating the offering, (iv) a wholesaling fee (payable only to wholesalers) of 0.50% of gross offering proceeds, and (v) non-cash compensation of up to 0.10% of gross offering proceeds. Aggregate additional compensation will not exceed 2.0% of gross offering proceeds. The dealer manager may reallow up to 0.60% of additional compensation to other soliciting broker-dealers. The amount of the reallowance to any soliciting broker-dealer will be determined by the dealer manager in its sole discretion.

(3) The combined selling commissions and additional compensation for this offering will not exceed 8.00% of the aggregate gross proceeds of this offering.

To the extent permitted by law and our Certificate of Incorporation, we will indemnify the soliciting broker-dealers and the dealer manager against certain civil liabilities, including certain liabilities arising under the Securities Act of 1933 and liabilities arising from breaches of our representations and warranties contained in the dealer manager agreement. Nevertheless, the SEC takes the position that indemnification against liabilities arising under the Securities Act of 1933 is against public policy and is not enforceable.

We will be responsible for the expenses of issuance and distribution of the preferred stock in this offering, including registration fees, printing expenses and our legal and accounting fees, which we estimate will total approximately $365,000 (excluding selling commissions and dealer manager fees).

The obligations of the dealer manager may be terminated in the event of a material adverse change in economic, political or financial conditions or upon the occurrence of certain other conditions specified in the dealer manager agreement.

Settlement Procedures

We are settling purchases of these preferred shares through a DTC participant (referred to as “DTC settlement”) or directly with the Company.

If your broker-dealer uses DTC settlement, then you may place an order for the purchase of preferred shares through your broker-dealer. Investors purchasing shares through DTC settlement will coordinate with their registered representatives to pay the full purchase price for their shares by the applicable settlement date, and such payments will not be held in escrow. When settling their purchase through DTC settlement, investors purchasing shares will coordinate with their registered representatives of broker-dealer firms to pay the full purchase price for their shares by the settlement date, and such payments will not be held in escrow. Your broker-dealer will ensure your order is electronically placed with us and that we timely receive your subscription amount. There is no need to furnish us with a Subscription Agreement when you purchase through a DTC participant.

Once we have received your subscription amount, we will either reject or accept your subscription. Once accepted based on our closing cycle, we will have immediate access to your subscription amount and we will issue you the shares you have purchased.

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When settling their purchase directly with the Company, investors will send their completed and executed Subscription Agreement, together with their subscription amount, to our transfer agent and to us at the address listed in “How to Purchase Shares.” Your subscription amount should be paid through a certified check or personal check payable to the order of “GWG Holdings, Inc.—Subscription Account.” In lieu of paying by check, you may wire your subscription amount to the account referenced in “How to Purchase Shares.” If you are working with a broker-dealer or other investment professional, your broker-dealer or professional will gather and send in the required information on your behalf, and may facilitate your payment of the subscription amount. Once we have received your subscription amount and required documentation, we will either reject or accept your subscription. Once accepted, we will have immediate access to your subscription amount and we will issue you, in book-entry form, the shares you have purchased.

Each soliciting dealer who sells shares on our behalf has the responsibility to make every reasonable effort to determine that the purchase of shares is appropriate for the investor. In making this determination, the soliciting broker-dealer will rely on relevant information provided by the investor, including information as to the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments and other pertinent information. Each investor should be aware that the soliciting broker-dealer will be responsible for determining whether this investment is appropriate for your portfolio. Nevertheless, you may be required to represent and warrant to the registered representative that you have received a copy of this prospectus and have had sufficient time to review this prospectus. The selling broker-dealer will maintain records of any information used to determine that an investment in the preferred shares is suitable and appropriate for an investor.

Minimum Purchase Requirements

For your initial investment in our Series 2 Redeemable Preferred Stock, you must invest at least $10,000, or such lesser amount as we in our discretion accept. In order to satisfy the minimum purchase requirement for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs. You should note that an investment in the preferred shares will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Internal Revenue Code of 1986.

MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

The following is a general discussion of the material United States federal income tax considerations relating to the initial purchase, ownership and disposition of the preferred stock offered hereby. This discussion is a summary only and is not a complete analysis of all the potential tax considerations relating to the purchase, ownership and disposition of the Series 2 Redeemable Preferred Stock. We have based this summary on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury Regulations promulgated thereunder, judicial opinions, and published rulings of the Internal Revenue Service (the “IRS”), all as in effect on the date of this prospectus. Nevertheless, these laws and other guidance are subject to differing interpretations or change, possibly with retroactive effect. In addition, we have not sought, and will not seek, a ruling from the IRS or an opinion of counsel with respect to any tax consequences of purchasing, owning or disposing of the Series 2 Redeemable Preferred Stock. Thus, the IRS could take a different position regarding one or more of the tax consequences or matters described in this prospectus; and there can be no assurance that any position taken by the IRS would not be sustained.

This discussion is limited to purchasers of preferred shares who acquire the shares from us in this offering and hold them as capital assets for federal income tax purposes. This discussion does not address all possible tax consequences that may be applicable to you in light of your specific circumstances. For instance, this discussion does not address the alternative minimum tax provisions of the Code, or special rules applicable to some categories of investors such as financial institutions, insurance companies, tax-exempt organizations, securities dealers, real estate investment trusts, regulated investment companies, or persons who hold preferred shares as part of a hedge, conversion or constructive sale transaction, straddle or other risk reduction transaction that may be subject to special rules. This discussion also does not address the tax consequences arising under the laws of any foreign, state or local jurisdiction; or any U.S. estate or gift tax laws.

If you are considering the purchase of Series 2 Redeemable Preferred Stock in this offering, you should consult your own tax advisors as to the particular tax consequences to you of acquiring, holding or otherwise disposing of the shares, including the effect and applicability of state, local or foreign tax laws, or any U.S. estate and gift tax laws.

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U.S. Holders

As used in this discussion, the term “U.S. holder” means a holder of Series 2 Redeemable Preferred Stock that is:

● for United States federal income tax purposes, a citizen or resident of the United States, as defined in Section 7701(b) of the Code;

● a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof or other entity characterized as a corporation or partnership for federal income tax purposes;

● an estate, the income of which is subject to United States federal income taxation regardless of its source; or

● a trust, the administration of which is subject to the primary supervision of a court within the United States and which has one or more United States persons with authority to control all substantial decisions, or if the trust was in existence on August 20, 1996, and has elected to continue to be treated as a United States trust.

Cash Distributions. In general, cash distributions, if any, made with respect to our Series 2 Redeemable Preferred Stock will be treated as dividends in the year of distribution to the extent of our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. Any portion of a distribution that exceeds our current and accumulated earnings and profits will first reduce a U.S. holder’s tax basis in this preferred stock, and the excess will be treated as gain from the disposition of preferred stock, the tax treatment of which is discussed below under “Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions.” We currently do not have accumulated earnings and profits. Additionally, we may not have sufficient current earnings and profits during future fiscal years for any distributions on these preferred shares to qualify as dividends for U.S. federal income tax purposes.

Dividends received by individual holders of Series 2 Redeemable Preferred Stock will generally be subject to a maximum tax rate of up to 20% if such dividends are treated as “qualified dividend income” for U.S. federal income tax purposes. That preferential rate does not apply to dividends received to the extent that the individual shareholder elects to treat the dividends as “investment income,” which may be offset against investment expenses. Furthermore, the preferential rate does not apply to dividends that are paid to individual shareholders with respect to preferred stock that is held for 60 days or less during the 121-day period beginning on the date which is 60 days before the date on which the preferred stock becomes ex-dividend (or where the dividend is attributable to a period or periods in excess of 366 days, preferred stock that is held for 90 days or less during the 181-day period beginning on the date which is 90 days before the date on which the preferred stock becomes ex-dividend). In addition, if a dividend received by an individual shareholder that qualifies for the rate reduction is an “extraordinary dividend” within the meaning of Section 1059 of the Code, any loss recognized by such individual holder on a subsequent disposition of the stock will be treated as long-term capital loss to the extent of such “extraordinary dividend.” In addition, dividends recognized by certain U.S. holders could be subject to the 3.8% Medicare tax on net investment income. Shareholders should consult their own tax advisors regarding the implications of these rules in light of their particular circumstances.

Dividends received by corporate holders of these preferred shares generally will be eligible for the dividends-received deduction. Generally, this deduction is allowed if the underlying stock is held for at least 46 days during the 91-day period beginning on the date 45 days before the ex-dividend date of the stock, and for cumulative preferred stock with an arrearage of dividends attributable to a period in excess of 366 days, the holding period is at least 91 days during the 181-day period beginning on the date 90 days before the ex-dividend date of the stock. Corporate holders of these preferred shares should also consider the effect of Section 246A of the Code, which reduces the dividends-received deduction allowed to a corporate shareholder that has incurred indebtedness that is “directly attributable” to an investment in portfolio stock such as preferred stock. If a corporate shareholder receives a dividend on this preferred stock that is an “extraordinary dividend” within the meaning of Section 1059 of the Code, the shareholder in certain instances must reduce its tax basis in the preferred stock by the amount of the “nontaxed portion” of such “extraordinary dividend” that results from the application of the dividends-received deduction. If the “nontaxed portion” of such “extraordinary dividend” exceeds such corporate shareholder’s tax basis, any excess will be taxed as gain as if such shareholder had disposed of its shares in the year the “extraordinary dividend” is paid. Each corporate U.S. holder is urged to consult with its tax advisors with respect to the eligibility for and amount of any dividends received deduction and the application of Section 1059 of the Code to any dividends it receives on these preferred shares.

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Constructive Distributions on Series 2 Redeemable Preferred Stock. A distribution of stock by a corporation may be deemed made with respect to its preferred stock in certain circumstances, even when no distribution of cash or property occurs, and such a deemed distribution is treated as a distribution of property under Code Section 301. If a corporation issues preferred stock that may be redeemed at a price higher than its issue price, the difference between the two prices (“redemption premium”) is treated under certain circumstances as a constructive distribution (or series of constructive distributions) of additional preferred stock.

The constructive distribution of property would accrue without regard to the holder’s method of accounting for U.S. federal income tax purposes at a constant yield determined under principles similar to the determination of original issue discount (“OID”) under Treasury regulations under Sections 1271 through 1275 of the Code (the “OID Rules”). The constructive distributions of property would be treated for U.S. federal income tax purposes as distributions of preferred stock that would constitute a dividend, return of capital or capital gain to the holder of the stock in the same manner as cash distributions described under “Material U.S. Federal Income Tax Considerations—U.S. Holders: Cash Distributions.” The application of principles similar to those applicable to debt instruments with OID to a redemption premium for the Series 2 Redeemable Preferred Stock is uncertain.

We have the right to call these preferred shares for redemption in whole or in part, at any time, and from time to time (the “call option”), at a price of 100% of the stated value plus any accrued but unpaid dividends thereon (and, in cases where the preferred shares we redeem shall have been purchased from us less than one year prior to their redemption, an additional make-whole amount to provide the redeemed stockholder with one year’s worth of dividends). We are required, subject to certain conditions and legal restrictions, to redeem the preferred stock of a holder who is a natural person upon his or her death, disability or bankruptcy within 60 days of receipt of a written request of the holder or the holder’s estate at a redemption price equal to the stated value plus accrued and unpaid dividends thereon through and including the date of redemption.

If the redemption price of the Series 2 Redeemable Preferred Stock exceeds the stock’s issue price upon any redemption, the excess will be treated as a redemption premium that may result in certain circumstances in a constructive distribution or series of constructive distributions of additional preferred shares. Assuming that the issue price of the preferred stock is determined under principles similar to the OID Rules, the issue price for the Series 2 Redeemable Preferred Stock should be the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the preferred stock is sold.

A redemption premium for the Series 2 Redeemable Preferred Stock should not result in constructive distributions if the redemption premium is less than a de minimis amount as determined under principles similar to the OID Rules. A redemption premium should be considered de minimis if such premium is less than one quarter of one percent of the preferred stock’s liquidation value, multiplied by the number of complete years such stock was held. Because the determination under the OID Rules of a maturity date for the preferred stock is unclear, the remainder of this discussion assumes that the Series 2 Redeemable Preferred Stock is issued with a redemption premium greater than a de minimis amount.

The call option should not require constructive distributions of the redemption premium, if based on all of the facts and circumstances as of the issue date, a redemption pursuant to the call option is not more likely than not to occur. The Treasury regulations provide that an issuer’s right to redeem will not be treated as more likely than not to occur if: (i) the issuer and the holder of the stock are not related within the meaning of Section 267(b) or Section 707(b) of the Code (substituting “20%” for the phrase “50%”); (ii) there are no plans, arrangements, or agreements that effectively require or are intended to compel the issuer to redeem the stock; and (iii) exercise of the right to redeem would not reduce the yield on the stock determined using principles applicable to the determination of OID under the OID rules. The fact that a redemption right is not within the safe harbor described in the preceding sentence does not mean that an issuer’s right to redeem is more likely than not to occur and the issuer’s right to redeem must still be tested under all the facts and circumstances to determine if it is more likely than not to occur. We do not believe that redemption pursuant to the call option should be treated as more likely than not to occur under the foregoing test. Accordingly, no U.S. holder of the Series 2 Redeemable Preferred Stock should be required to recognize constructive distributions of the redemption premium because of our call option.

Prospective purchasers of Series 2 Redeemable Preferred Stock should consult their own tax advisors regarding the potential implications of these constructive distribution rules.

Holder’s Conversion Option. If a U.S. holder’s shares of Series 2 Redeemable Preferred Stock are converted into our common stock, the holder should not recognize gain or loss upon the conversion except as noted below. If a U.S. holder receives cash in lieu of a fractional share of stock, the holder should recognize gain or loss equal to the difference between the cash received and that portion of such holder’s basis in the stock attributable to the fractional share. The U.S. holder’s conversion of Series 2 Redeemable Preferred Stock into common stock may result in a deemed distribution taxed in the same manner as a cash distribution described under the heading “Material U.S. Federal Income Tax Consequences — U.S. Holder: Cash Distributions” if either: (i) the holder’s right is pursuant to a plan to periodically increase a stockholder’s proportionate interest in our assets or earnings and profits, or (ii) there are dividends in arrears on the preferred stock at the time of the conversion, and as a result, the holder’s interest in our assets or earnings and profits increases. In the latter case, the amount of the constructive distribution is limited to the lesser of (i) the redemption premium; or (ii) the amount of dividends in arrears on the Series 2 Redeemable Preferred Stock. We believe that any conversion of the Series 2 Redeemable Preferred Stock into common stock should not be treated as pursuant to a plan to periodically increase the holders’ interest in the assets or earnings and profits of the Company. Accordingly, the amount of any deemed distribution upon conversion should be the lesser of: (i) the redemption premium for preferred stock or (ii) the amount of dividends in arrears.

A U.S. holder’s initial tax basis in common stock received in the conversion will be equal to such holder’s basis in the Series 2 Redeemable Preferred Stock surrendered in the exchange (taking into account the basis of any fractional share for which cash is paid), and the holding period for such common stock will include the period during which the holder held converted preferred stock. Generally, a U.S. holder’s initial tax basis in any common stock (or portion thereof) considered received as a constructive distribution will be equal to its fair market value, and the holding period with respect to such common stock will begin on the date of the exchange.

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Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions. Upon any sale, exchange, redemption (except as discussed below) or other disposition of the Series 2 Redeemable Preferred Stock, a U.S. holder will recognize capital gain or loss equal to the difference between the amount realized by the U.S. holder and the U.S. holder’s adjusted tax basis in the preferred stock. Such capital gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period for the preferred stock is longer than one year. A U.S. holder should consult its own tax advisors with respect to applicable tax rates and netting rules for capital gains and losses. Certain limitations exist on the deduction of capital losses by both corporate and non-corporate taxpayers. In addition, gains recognized by non-corporate U.S. holders could be subject to the 3.8% tax on net investment income.

A redemption of shares of Series 2 Redeemable Preferred Stock will generally be a taxable event. If the redemption is treated as a sale or exchange, instead of a dividend, a U.S. holder will recognize capital gain or loss (which will be long-term capital gain or loss, if the U.S. holder’s holding period for such shares exceeds one year) equal to the difference between the amount realized by the U.S. holder and the U.S. holder’s adjusted tax basis in the preferred stock redeemed, except to the extent that any cash received is attributable to any declared but unpaid dividends, which will be subject to the rules discussed above in “Material U.S. Federal Income Tax Considerations—U.S. Holders: Cash Distributions.” A payment made in redemption of preferred stock may be treated as a distribution, rather than as payment in exchange for the preferred stock, unless the redemption:

● is “not essentially equivalent to a dividend” with respect to a U.S. holder under Section 302(b)(1) of the Code;

● is a “substantially disproportionate” redemption with respect to a U.S. holder under Section 302(b)(2) of the Code;

● results in a “complete redemption” of a U.S. holder’s stock interest in the company under Section 302(b)(3) of the Code; or

● is a redemption of stock held by a non-corporate shareholder, which results in a partial liquidation of the company under Section 302(b)(4) of the Code.

In determining whether any of these tests has been met, a U.S. holder must take into account not only shares of the Series 2 Redeemable Preferred Stock and our common stock that the U.S. holder actually owns, but also shares of stock that the U.S. holder owns through attribution under Code Section 318.

A redemption payment will be treated as “not essentially equivalent to a dividend” if it results in a “meaningful reduction” in a U.S. holder’s aggregate stock interest in the company, which will depend on the U.S. holder’s particular facts and circumstances at such time. If the redemption payment is treated as a distribution, the rules discussed above in “Material U.S. Federal Income Tax Considerations—U.S. Holders: Cash Distributions” apply.

Satisfaction of the “complete redemption” and “substantially disproportionate” exceptions is dependent upon compliance with the objective tests set forth in Code Section 302(b). A redemption will result in a “complete redemption” if either all of the shares of our stock actually and constructively owned by a U.S. holder are exchanged in the redemption or all of the shares of our stock actually owned by the U.S. holder are exchanged in the redemption and the U.S. holder effectively waives the attribution of shares of our stock constructively owned by the U.S. holder in accordance with Code Section 302(c)(2). A redemption does not qualify for the “substantially disproportionate” exception if the stock redeemed is only non-voting stock, and for this purpose, stock which does not have voting rights until the occurrence of an event is not voting stock until the occurrence of the specified event. Accordingly, any redemption of the Series 2 Redeemable Preferred Stock will not qualify for this exception because the preferred stock does not have voting rights.

For purposes of the “redemption from non-corporate shareholders in a partial liquidation” test, a distribution will be treated as in partial liquidation if the distribution is not essentially equivalent to a dividend (determined at the corporate level rather than the shareholder level) and the distribution is pursuant to a plan and occurs within the taxable year in which the plan was adopted or within the succeeding taxable year. For these purposes, a distribution is generally not essentially equivalent to a dividend if the distribution results in a corporate contraction. The determination of what constitutes a corporate contraction is factual in nature, and has been interpreted under case law to include the termination of a business or line of business.

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Each U.S. holder of the Series 2 Redeemable Preferred Stock should consult its own tax advisors to determine whether a payment made in redemption of the preferred stock will be treated as a dividend or a payment in exchange for the preferred stock. If the redemption payment is treated as a dividend, the rules discussed above in “Material U.S. Federal Income Tax Considerations—U.S. Holders: Cash Distributions” apply.

Information Reporting and Backup Withholding. Information reporting and backup withholding may apply with respect to payments of dividends on, and to certain payments of proceeds on the redemption of, the Series 2 Redeemable Preferred Stock. Certain non-corporate U.S. holders may be subject to U.S. backup withholding (currently at a rate of 28%) on payments of dividends on, and certain payments of proceeds on the sale or other disposition of, the preferred stock if such holder is not exempt and:

● such U.S. holder failus to furnish its taxpayer identification number or “TIN,” which for an individual is normally his or her social security number;

● the IRS notifies the payor that such holder furnished an incorrect TIN;

● in the case of interest payments, such U.S. holdelr is notified by the IRS of a failure to properly report payments of interest or dividends; or

● in the case of interest payments, such U.S. holder fails to certify under penalties of perjury that such U.S. holder has furnished a correct TIN and that the IRS has not notified the U.S holder that it is subject to backup withholding.

U.S. backup withholding tax is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability, which may entitle the U.S. holder to a refund, provided the U.S. holder timely furnishes the required information to the IRS.

Partnership Audit Rules. The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships. Under these rules (which are generally effective for taxable years beginning after December 31, 2017), among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction, or credit of a partnership (and any partner's distributive share thereof) is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the partnership level. Although, it is uncertain how these rules will be implemented, it is possible that they could result in partnerships in which we directly or indirectly invest being required to pay additional taxes, interest, and penalties as a result of an audit adjustment, and we as a direct or indirect partner of these partnerships, could be required to bear the economic burden of those taxes, interest, and penalties. Investors are urged to consult their tax advisors with respect to these changes and their potential impact on their investment in our Series 2 Redeemable Preferred Stock.

Non-U.S. Holders

For the purposes of this discussion, a “non-U.S. holder” means any holder of Series 2 Redeemable Preferred Stock other than a U.S. holder. Any Series 2 Redeemable Preferred Stock purchaser who is not a U.S. citizen will be required to furnish appropriate documentation that clearly states whether it is subject to U.S. withholding taxes, in accordance with applicable requirements of the IRS.

Distributions on the Series 2 Redeemable Preferred Stock. If distributions are made with respect to the Series 2 Redeemable Preferred Stock (including constructive distributions as discussed under the heading “Material U.S. Federal Income Tax Considerations—Constructive Distributions on Series 2 Redeemable Preferred Stock”), such distributions will be treated as dividends to the extent of our current and accumulated earnings and profits as determined under the Code and may be subject to withholding as discussed below. Any portion of a distribution that exceeds our current and accumulated earnings and profits will first be applied to reduce the Non-U.S. holder’s basis in the preferred stock and, to the extent such portion exceeds the Non-U.S. holder’s basis, the excess will be treated as gain from the disposition of the preferred stock, the tax treatment of which is discussed below under “Material U.S. Federal Income Tax Considerations—Non-U.S. Holders: Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions.” In addition, if we are a U.S. real property holding corporation (a “USRPHC”) and any distribution exceeds our current and accumulated earnings and profits, we will need to choose to satisfy our withholding requirements either by treating the entire distribution as a dividend, subject to the withholding rules in the following paragraph (and withhold at the applicable rate), or by treating only the amount of the distribution equal to our reasonable estimate of our current and accumulated earnings and profits as a dividend, subject to the withholding rules in the following paragraph, with the excess portion of the distribution subject to withholding at the applicable rate (discussed below under “Material U.S. Federal Income Tax Considerations—Non-U.S. Holders: Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions”), with a credit generally allowed against the Non-U.S. holder’s U.S. federal income tax liability in an amount equal to the amount withheld from such excess.

Dividends paid to a Non-U.S. holder of the preferred stock will be subject to withholding of U.S. federal income tax at a 30% rate or the rate specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, where a tax treaty applies, are attributable to a permanent establishment (or in the case of an individual, a fixed base) maintained by the Non-U.S. holder in the United States) are not subject to the withholding tax, provided that certain certification and disclosure requirements are satisfied including completing IRS Form W-8ECI (or other applicable form). Instead, such dividends are subject to U.S. federal income tax on a net income basis in the same manner as if the Non-U.S. holder were a United States person as defined under the Code, unless an applicable income tax treaty provides otherwise. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

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A Non-U.S. holder who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required to (i) complete IRS Form W-8BEN (or other applicable form) and certify under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits, or (ii) if the preferred stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable Treasury regulations.

A Non-U.S. holder eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions. Any gain realized by a Non-U.S. holder on the disposition of the Series 2 Redeemable Preferred Stock will not be subject to U.S. federal income or withholding tax unless:

● the gain is effectively connected with a trade or business of the Non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment (or, in the case of an individual, a fixed base) maintained by the Non-U.S. holder in the United States);

● the Non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition, and certain other conditions are met; or

● we are or have been a USRPHC for U.S. federal income tax purposes, as such term is defined in Section 897(c) of the Code, and such Non-U.S. holder owned directly or pursuant to attribution rules at any time during the five-year period ending on the date of disposition more than 5% of the Series 2 Redeemable Preferred Stock. This assumes that the preferred stock is regularly traded on an established securities market, within the meaning of Section 897(c)(3) of the Code. We do not believe that we are currently a USRPHC or that we will become one in the future although we cannot be certain of our future operations and asset holdings.

A Non-U.S. holder described in the first bullet point immediately above will generally be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates in the same manner as if the Non-U.S. holder were a United States person as defined under the Code, and if it is a corporation, may also be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty. An individual Non-U.S. holder described in the second bullet point immediately above will be subject to a flat 30% tax (or at such reduced rate as may be provided by an applicable treaty) on the gain derived from the sale, which may be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States. A Non-U.S. holder described in the third bullet point above will be subject to U.S. federal income tax under regular graduated U.S. federal income tax rates with respect to the gain recognized in the same manner as if the Non-U.S. holder were a United States person as defined under the Code.

If a Non-U.S. holder is subject to U.S. federal income tax on any sale, exchange, redemption (except as discussed below), or other disposition of the preferred stock, such a Non-U.S. holder will recognize capital gain or loss equal to the difference between the amount realized by the Non-U.S. holder and the Non-U.S. holder’s adjusted tax basis in the preferred stock. Such capital gain or loss will be long-term capital gain or loss if the Non-U.S. holder’s holding period for the preferred stock is longer than one year. A Non-U.S. holder should consult its own tax advisors with respect to applicable tax rates and netting rules for capital gains and losses. Certain limitations exist on the deduction of capital losses by both corporate and non-corporate taxpayers.

If a Non-U.S. holder is subject to U.S. federal income tax on any disposition of the preferred stock, a redemption of preferred shares will be a taxable event. If the redemption is treated as a sale or exchange, instead of a dividend, a Non-U.S. holder generally will recognize long-term capital gain or loss, if the Non-U.S. holder’s holding period for such preferred stock exceeds one year, equal to the difference between the amount of cash received and fair market value of property received and the Non-U.S. holder’s adjusted tax basis in the preferred stock redeemed, except that to the extent that any cash received is attributable to any declared but unpaid dividends on the preferred stock, which generally will be subject to the rules discussed above in “Material U.S. Federal Income Tax Considerations—Non-U.S. Holders: Distributions on the Series 2 Redeemable Preferred Stock.” A payment made in redemption of the preferred stock may be treated as a dividend, rather than as payment in exchange for the preferred stock, in the same circumstances discussed above under “Material U.S. Federal Income Tax Considerations—U.S. Holders: Disposition of Series 2 Redeemable Preferred Stock, Including Redemptions.” Each Non-U.S. holder of the preferred stock should consult its own tax advisors to determine whether a payment made in redemption of the preferred stock will be treated as a dividend or as payment in exchange for the preferred stock.

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Information Reporting and Backup Withholding. We must report annually to the IRS and to each Non-U.S. holder the amount of dividends paid to such Non-U.S. holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns may also be made available to the tax authorities in the country in which the Non-U.S. holder resides under the provisions of an applicable income tax treaty.

A Non-U.S. holder will not be subject to backup withholding on dividends paid to such Non-U.S. holder as long as such Non-U.S. holder certifies under penalty of perjury that it is a Non-U.S. holder (and the payor does not have actual knowledge or reason to know that such Non-U.S. holder is a United States person as defined under the Code), or such Non-U.S. holder otherwise establishes an exemption.

Depending on the circumstances, information reporting and backup withholding may apply to the proceeds received from a sale or other disposition of the Series 2 Redeemable Preferred Stock unless the beneficial owner certifies under penalty of perjury that it is a Non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.

U.S. backup withholding tax is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Accounts at Foreign Financial Institutions. The Foreign Account Tax Compliance Act (“FATCA”), will generally impose a 30% withholding tax on dividends on, and the gross proceeds of a disposition of, Series 2 Redeemable Preferred Stock that are paid to: (i) a foreign financial institution (as that term is defined in Section 1471(d)(4) of the Code) unless that foreign financial institution satisfies certain requirements, including entering into an agreement with the U.S. Treasury Department to collect and disclose information regarding U.S. account holders of that foreign financial institution (directly or indirectly); and (ii) certain other foreign entities unless such entity certifies that it does not have any substantial U.S. owners or provides information for each substantial U.S. owner and such entity satisfies other specified requirements. Foreign financial institutions located in jurisdictions that have an “intergovernmental agreement” with the United States governing FATCA may be subject to different rules.

Although FATCA generally applies now, under delayed effective dates provided for by Treasury Regulations and other IRS guidance, FATCA withholding tax of 30% will not apply to gross proceeds from the disposition of shares of our Series 2 Redeemable Preferred Stock until after January 1, 2019.

Although administrative guidance and final Treasury regulations regarding the FATCA rules have recently been issued, the exact scope of these rules remains unclear. Prospective investors should consult their own tax advisors regarding the possible impact of these rules on their investment in this preferred stock. If withholding is required under FATCA on a payment related to our Series 2 Redeemable Preferred Stock, holders that would otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate of withholding) generally will be required to seek a refund or credit from the IRA to obtain the benefit of such exemption or reduction.

Prospective investors should consult their own tax advisors regarding the possible impact of FATCA on an investment in our Series 2 Redeemable Preferred Stock.

STATE, LOCAL AND FOREIGN TAXES

We make no representations regarding the tax consequences of the purchase, ownership or disposition of the Series 2 Redeemable Preferred Stock under the tax laws of any state, locality or foreign country. You should consult your own tax advisors regarding these state and foreign tax consequences.

LEGAL MATTERS

Certain legal matters in connection with the Series 2 Redeemable Preferred Stock will be passed upon for us by Maslon LLP, of Minneapolis, Minnesota.

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EXPERTS

The consolidated financial statements of GWG Holdings, Inc. and its subsidiaries as of and for the years ended December 31, 2015 and December 31, 2014, incorporated by reference in this prospectus and in the registration statement of which this prospectus is a part, have been audited by Baker Tilly Virchow Krause, LLP, an independent registered public accounting firm. As indicated in their report with respect thereto, these consolidated financial statements are included in this prospectus in reliance upon the authority of such firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities to be offered and sold pursuant to the prospectus that is a part of that registration statement. This prospectus does not contain all the information contained in the registration statement. For further information with respect to our Company and the preferred shares to be sold in this offering, we refer you to the registration statement, including the agreements, other documents and schedules filed as exhibits to the registration statement, and the documents incorporated by reference into the prospectus.

We file annual, quarterly and current reports, and other information with the SEC. We intend to make these filings available on our website at www.gwgh.com. Information on our website is not incorporated by reference in this prospectus. We maintain an office at 220 South Sixth Street, Suite 1200, Minneapolis, MN 55402, where all records concerning the Series 2 Redeemable Preferred Stock are to be retained. Holders of the preferred stock and their representatives can request information regarding those securities by contacting our office by mail at our address or by telephone at (612) 746-1944 or by fax at (612) 746-0445. Upon request, we will provide copies of our filings with the SEC free of charge to our investors. Our SEC filings, including the registration statement of which this prospectus is a part, will also be available on the SEC’s Internet site at http://www.sec.gov. You may read and copy all or any portion of the registration statement or any reports, statements or other information we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. In addition, you may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. You may receive copies of these documents upon payment of a duplicating fee by writing to the SEC.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We are incorporating certain information about us that we have filed with the SEC by reference in this prospectus, which means that we are disclosing important information to you by referring you to those documents. The information we incorporate by reference is an important part of this prospectus.

We incorporate by reference the documents listed below, together with any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of such registration statement, and (ii) from the date of this prospectus but prior to the termination of the offering of the securities covered by this prospectus:

● Our Annual Report on Form 10-K for the period ended December 31, 2015, filed with the SEC on March 22, 2016;

● Our Quarterly Reports on Form 10-Q for the period ended September 30, 2016, filed with the SEC on November 10, 2016, the period ended June 30, 2016, filed with the SEC on August 12, 2016, and the period ended March 31, 2016, filed with the SEC on May 13, 2016;

● Our Current Reports on Form 8-K filed with the SEC on April 28, August 16, August 19, September 19, November 8, 2016; and

● Our definitive proxy statement filed with the SEC on March 4, 2016.

We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed above or filed in the future, that are not deemed “filed” with the SEC or any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or certain exhibits furnished pursuant to Item 9.01 of Form 8-K.

The section entitled “Where You Can Find More Information” above describes how you can obtain or access any documents or information that we have incorporated by reference herein. The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.

Upon written or oral request, we will provide, free of charge, to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that are incorporated by reference into this prospectus. Such written or oral requests should be made to:

Willam Acheson, Chief Financial Officer
220 South Sixth Street, Suite 1200
Minneapolis, MN 55402
Telephone Number: (612) 746-1944

In addition, such reports and documents may be found on our website at www.gwgh.com.

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$150,000,000 of Series 2 Redeemable Preferred Stock

(150,000 shares)

GWG HOLDINGS, INC.

PROSPECTUS

            , 2017

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Set forth below are expenses (other than the dealer manager commissions and fees) we expect to be incurred in connection with the issuance and distribution of the securities registered hereby. With the exception of the Securities and Exchange Commission registration fee, the amounts set forth below are estimates and actual expenses may vary considerably from these estimates:

Securities and Exchange Commission registration fee	$	18,000
Accounting fees and expenses	$	50,000
Legal fees and expenses	$	75,000
FINRA filing fees	$	37,500
Blue sky fees and expenses	$	10,000
Printing expenses	$	75,000
Miscellaneous	$	99,500
Total	$	365,000

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law provides for, under certain circumstances, the indemnification of our officers, directors, employees and agents against liabilities that they may incur in such capacities. A summary of the circumstances in which such indemnification provided for is contained herein, but that description is qualified in its entirety by reference to the relevant Section of the Delaware General Corporation Law.

In general, the statute provides that any director, officer, employee or agent of a corporation may be indemnified against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in a proceeding (including any civil, criminal, administrative or investigative proceeding) to which the individual was a party by reason of such status. Such indemnity may be provided if the indemnified person’s actions resulting in the liabilities: (i) were taken in good faith; (ii) were reasonably believed to have been in or not opposed to our best interest; and (iii) with respect to any criminal action, such person had no reasonable cause to believe the actions were unlawful. Unless ordered by a court, indemnification generally may be awarded only after a determination of independent members of the Board of Directors or a committee thereof, by independent legal counsel or by vote of the stockholders that the applicable standard of conduct was met by the individual to be indemnified.

The statutory provisions further provide that to the extent a director, officer, employee or agent is wholly successful on the merits or otherwise in defense of any proceeding to which he was a party, he is entitled to receive indemnification against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the proceeding.

Indemnification in connection with a proceeding by or in the right of GWG Holdings, Inc. (the “Company”) in which the director, officer, employee or agent is successful is permitted only with respect to expenses, including attorneys’ fees actually and reasonably incurred in connection with the defense. In such actions, the person to be indemnified must have acted in good faith, in a manner believed to have been in our best interest and must not have been adjudged liable to us unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expense which the Court of Chancery or such other court shall deem proper. Indemnification is otherwise prohibited in connection with a proceeding brought on behalf of the Company in which a director is adjudged liable to us, or in connection with any proceeding charging improper personal benefit to the director in which the director is adjudged liable for receipt of an improper personal benefit.

Delaware law authorizes us to reimburse or pay reasonable expenses incurred by a director, officer, employee or agent in connection with a proceeding in advance of a final disposition of the matter. Such advances of expenses are permitted if the person furnishes to us a written agreement to repay such advances if it is determined that he is not entitled to be indemnified by us.

II-1

The statutory section cited above further specifies that any provisions for indemnification of or advances for expenses does not exclude other rights under our certificate of incorporation, corporate bylaws, resolutions of our stockholders or disinterested directors, or otherwise. These indemnification provisions continue for a person who has ceased to be a director, officer, employee or agent of the corporation and inure to the benefit of the heirs, executors and administrators of such persons.

The statutory provision cited above also grants the power to the Company to purchase and maintain insurance policies that protect any director, officer, employee or agent against any liability asserted against or incurred by him in such capacity arising out of his status as such. Such policies may provide for indemnification whether or not the corporation would otherwise have the power to provide for it.

Article 6 of our corporate bylaws provides that we shall indemnify our directors, officers, employees and agents to the fullest extent permitted by the Delaware General Corporation Law. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we understand that in the opinion of the SEC such indemnification is against public policy as expressed in that Act and is therefore unenforceable.

We have purchased directors’ and officers’ liability insurance in order to limit the exposure to liability for indemnification of directors and officers, including liabilities under the Securities Act of 1933.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In 2013, the Company’s wholly owned subsidiary, GWG Life, sold $196,484 in principal amount of Series I Secured notes in consideration of reinvested interest payable on account of earlier issued notes. The Company is a guarantor of GWG Life’s obligations under the Series I Secured notes. The notes were offered and sold solely to accredited investors in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder. Arque Capital Ltd. was the managing broker-dealer for the offering of the notes.

In 2013, the Company issued 82,606 shares of Series A Preferred Stock as in-kind dividends payable on account of the preferred stock. The preferred stock was sold solely to accredited investors in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder.

In 2014, the Company issued 110,584 shares of Series A Preferred Stock as in-kind dividends payable on account of the preferred stock. The preferred stock was sold solely to accredited investors in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder.

In 2014, the Company issued 60,000 shares of common stock to Brewer Consulting Group in exchange for certain advisory services including financial consulting and marketing support to be provided to the Company by Brewer Consulting Group. The common stock was sold to Brewer Consulting Group, as accredited investor, in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder.

In 2015, the Company issued 97,590 shares of Series A Preferred Stock as in-kind dividends payable on account of the preferred stock. The preferred stock was sold solely to accredited investors in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder.

In 2016, the Company issued 98,580 shares of Series A Preferred Stock as in-kind dividends payable on account of the preferred stock. The preferred stock was sold solely to accredited investors in a private placement under Section 4(a)(2) of the Securities Act of 1933, and Regulation D/Rule 506 thereunder.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)      Exhibits. The exhibits listed below are filed as a part of this registration statement.

Exhibit	Description
1.1	Form of Dealer Manager Agreement (filed herewith)
3.1	Certificate of Incorporation (1)
3.2	Bylaws (1)
3.3	Certificate of Amendment to Certificate of Incorporation (3)
3.4	Certificate of Designations for Series A Convertible Preferred Stock (3)
3.5	Certificate of Amendment to Certificate of Incorporation (8)
3.5	Amendment No. 1 to Bylaws (9)
3.6	Amendment No. 2 to Bylaws (10)
3.7	Certificate of Designation for Redeemable Preferred Stock (18)
3.8	Certificate of Amendment to Certificate of Designation for Redeemable Preferred Stock (18)
4.1	Form of Certificate of Designation for Series 2 Redeemable Preferred Stock (filed herewith)
4.2	Form of Subscription Agreement (for use in offering of Series 2 Redeemable Preferred Stock) (filed herewith)
5.1	Opinion of Maslon LLP (filed herewith)
10.1	Second Amended and Restated Credit and Security Agreement with DZ Bank AG Deutsche Zentral-Genossenschaftsbank (as agent), and Autobahn Funding Company LLC (as lender), dated effective May 11, 2015 (11)
10.2	Amended and Restated Performance Guaranty of GWG Holdings, LLC dated as of May 11, 2015, delivered in favor of DZ Bank AG Deutsche Zentral-Genossenschaftsbank (as agent) and Autobahn Funding Company LLC (as lender) (11)
10.3	Pledge Agreement dated November 15, 2010, among Jon R. Sabes, Steven F. Sabes, Opportunity Finance, LLC, SFS Trust 1976, SFS Trust 1992 Esther, SFS Trust 1982, Mokeson, LLC (collectively as pledgors), and Lord Securities Corporation (as trustee and pledgee) (3)
10.4	Third Amended and Restated Note Issuance and Security Agreement dated November 1, 2011, with Lord Securities Corporation (as trustee), GWG LifeNotes Trust (as secured party), and noteholders (2)
10.5	Amendment to Third Amended and Restated Note Issuance and Security Agreement, dated as of November 18, 2013, with Lord Securities Corporation (as trustee for the GWG LifeNotes Trust) (9)
10.6	Employment Agreement with Jon R. Sabes, dated June 14, 2011 (4)
10.7	Employment Agreement with Steven F. Sabes, dated June 14, 2011 (4)
10.8	Employment Agreement with Paul A. Siegert, dated June 14, 2011 (4)
10.9	Employment Agreement with William B. Acheson, dated May 30, 2014 (15)
10.10	Employment Agreement with Michael D. Freedman, dated September 22, 2014 (16)
10.11	Stock Option Agreement with Michael D. Freedman, dated September 22, 2014 (16)
10.12	2013 Stock Incentive Plan (17)
10.13	Form of Stock Option Agreement used with 2013 Stock Incentive Plan (15)
10.14	Loan and Security Agreement by and among GWG DLP Funding IV, LLC, as borrower, certain lenders, and CMLG Corp. as administrative agent, dated effective as of September 14, 2016 (19)
10.15	Indenture with Bank of Utah, dated October 19, 2011 (5)
10.16	Pledge and Security Agreement by and among GWG Holdings, Inc., GWG Life, LLC, Jon R. Sabes, Steven F. Sabes, and Bank of Utah, dated October 19, 2011 (5)
10.17	Intercreditor Agreement by and among Bank of Utah, and Lord Securities Corporation, dated October 19, 2011 (5)
10.18	Amendment No. 1 to Indenture with Bank of Utah, dated December 15, 2011 (6)
10.19	Amendment No. 1 to Pledge and Security Agreement, dated December 15, 2011 (6)
10.20	Amendment No. 2 to Indenture with Bank of Utah, dated January 9, 2015 (12)
10.21	Amendment No. 1 to Intercreditor Agreement, dated January 9, 2015 (13)
10.22	Amendment No. 2 to Pledge and Security Agreement , dated January 9, 2015 (13)
10.23	Amendment No. 3 to Indenture with Bank of Utah, dated June 12, 2015 (14)
10.24	Amendment No. 2 to Intercreditor Agreement, dated June 12, 2015 (14)
10.25	Amendment No. 3 to Pledge and Security Agreement, dated June 12, 2015 (14)
21	List of Subsidiaries  (filed herewith)
23.1	Consent of Baker Tilly Virchow Krause, LLP (filed herewith)

(1)	Incorporated by reference to Form S-1 Registration Statement filed on June 14, 2011 (File No. 333-174887).
(2)	Incorporated by reference to Post-Effective Amendment No. 8 to Form S-1/A filed on November 12, 2013 (File No. 333-174887).
(3)	Incorporated by reference to Form S-1/A Registration Statement filed on August 23, 2011 (File No. 333-174887).
(4)	Incorporated by reference to Form S-1/A Registration Statement filed on September 20, 2011 (File No. 333-174887).
(5)	Incorporated by reference to Form S-1/A Registration Statement filed on October 20, 2011 (File No. 333-174887).
(6)	Incorporated by reference to Post-Effective Amendment No. 1 to Form S-1/A filed on April 30, 2012 (File No. 333-174887).
(7)	Incorporated by reference to Current Report on Form 8-K filed on February 1, 2013.
(8)	Incorporated by reference to Quarterly Report on Form 10-Q filed on August 8, 2014.
(9)	Incorporated by reference to Quarterly Report on Form 10-Q filed on November 13, 2014.
(10)	Incorporated by reference to Current Report on Form 8-K filed on June 2, 2015.
(11)	Incorporated by reference to Post-Effective Amendment No. 3 to Form S-1/A filed on May 15, 2015 (File No. 333-197227).
(12)	Incorporated by reference to Form S-1/A Registration Statement filed on November 4, 2014 (File No. 333-197227).
(13)	Incorporated by reference to Form S-1/A Registration Statement filed on January 7, 2015 (File No. 333-197227).
(14)	Incorporated by reference to Form S-1/A Registration Statement filed on June 12, 2015 (File No. 333-203879).
(15)	Incorporated by reference to Form S-1/A Registration Statement filed on June 6, 2014 (File No. 333-195505).
(16)	Incorporated by reference to Form S-1/A Registration Statement filed on December 18, 2014 (File No. 333-197227).
(17)	Incorporated by reference to the registrant’s Definitive Proxy Statement filed on April 30, 2015.
(18)	Incorporated by reference to the registrant’s Annual Report on Form 10-K filed on March 22, 2016.
(19)	Incorporated by reference to the registrant’s Current Report on Form 8-K filed on September 19, 2016.

II-3

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(a)(2) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) [intentionally omitted]

(5) For the purpose of determining any liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on February 7, 2017.

GWG HOLDINGS, INC.
By:	/s/ Jon R. Sabes
	Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Jon R. Sabes and William Acheson, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed, as of February 7, 2017, by the following persons in the capacities indicated below.

Name	Title
/s/ Jon R. Sabes	Director, Chief Executive Officer
Jon R. Sabes	(Principal Executive Officer)
/s/ Paul A. Siegert *	Director, Executive Chairman
Paul A. Siegert
/s/ William Acheson	Chief Financial Officer
William Acheson	(Principal Financial and Accounting Officer)
	Director, Executive Vice President and Secretary
Steven F. Sabes
	Director
David H. Abramson
/s/ Charles H. Maguire III *	Director
Charles H. Maguire III
/s/ Jeffrey L. McGregor *	Director
Jeffrey L. McGregor
/s/ Shawn R. Gensch *	Director
Shawn R. Gensch

* By Power of Attorney granted on December 2, 2016.

II-5

EX-1.1

EXHIBIT 1.1

EMERSON EQUITY, LLC

FORM OF DEALER MANAGER AGREEMENT

________________, 2017

Emerson Equity, LLC

155 Bovet Road, Suite 725

San Mateo, California 94402

RE: GWG HOLDINGS, INC.

Ladies and Gentlemen:

GWG Holdings, Inc. (the “Company”) is a Delaware corporation. The Company proposes to offer up to 150,000 shares (the “Offering”) of Series 2 Redeemable Preferred Stock, par value $0.01 per share (“Series 2 Redeemable Preferred Stock” or the “Shares”). Each Share will be sold at a public offering price of $1,000 per Share.

Upon the terms and subject to the conditions contained in this Dealer Manager Agreement (this “Agreement”), the Company hereby appoints Emerson Equity, LLC, a California limited liability company (the “Dealer Manager”), to act as the exclusive dealer manager for the Offering, and the Dealer Manager desires to accept such engagement.

1. Representations and Warranties of the Company. The Company hereby represents, warrants and agrees, as of the date of this Agreement and on each Effective Date (as defined below) as follows:

(a) Registration Statement and Prospectus. In connection with the Offering, the Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement (File No. 333-214896) on Form S-1 for the registration of the public offer and sale of the Shares under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the Commission promulgated thereunder (the “Securities Act Rules and Regulations”); and one or more amendments to such registration statement have been or may be so prepared and filed. The registration statement on Form S-1 and the prospectus contained therein, as finally amended at the date the registration statement is declared effective by the Commission (the “Effective Date”) are respectively hereinafter referred to as the “Registration Statement” and the “Prospectus”, except that:

(i) if the Company files a post-effective amendment to such registration statement, then the term “Registration Statement” shall, from and after the declaration of the effectiveness of such post-effective amendment by the Commission, refer to such registration statement as amended by such post-effective amendment, and the term “Prospectus” shall refer to the amended prospectus then on file with the Commission; and

(ii) if the prospectus filed by the Company pursuant to either Rule 424(b) or 424(c) of the Securities Act Rules and Regulations shall differ from the prospectus on file at the time the Registration Statement or the most recent post-effective amendment thereto, if any, shall have become effective, then the term “Prospectus” shall refer to such prospectus filed pursuant to either Rule 424(b) or 424(c), as the case may be, from and after the date on which it shall have been filed. The term “preliminary Prospectus” as used herein shall mean a preliminary prospectus related to the Shares as contemplated by Rule 430 or Rule 430A of the Securities Act Rules and Regulations included at any time as part of the Registration Statement. As used herein, the terms “Registration Statement”, “preliminary Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein.

As used herein, the term “Effective Date” also shall refer to the effective date of each post-effective amendment to the Registration Statement, unless the context otherwise requires.

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(b) Compliance with the Securities Act. During the term of this Agreement:

(i) the Registration Statement, the Prospectus and any amendments or supplements thereto have complied, and will comply, in all material respects with the Securities Act, the Securities Act Rules and Regulations, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (the “Exchange Act Rules and Regulations”);

(ii) the Registration Statement does not, and any amendment thereto will not, in each case as of the applicable Effective Date, include any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and the Prospectus does not, and any amendment or supplement thereto will not, as of the applicable filing date, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however, that the foregoing provisions of this Section 1(b) will not extend to any statements contained in or omitted from the Registration Statement or the Prospectus that are based upon written information furnished to the Company by the Dealer Manager expressly for use in the Offering; and

(iii) the documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they are hereafter filed with the Commission, will comply in all material respects with the requirements of the Exchange Act and the Exchange Act Rules and Regulations, and, when read together with the other information in the Prospectus, at each applicable Effective Date, did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(c) Securities Matters. There has not been:

(i) any request by the Commission for any further amendment to the Registration Statement or the Prospectus or for any additional information;

(ii) any issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or, to the Company’s knowledge, threat of any proceeding for that purpose; or

(iii) any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or any initiation or, to the Company’s knowledge, threat of any proceeding for such purpose.

The Company is in compliance in all material respects with all federal and state securities laws, rules and regulations applicable to it and its activities, including, without limitation, with respect to the Offering and the sale of the Shares.

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(d) Corporate Status and Good Standing. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware and is in good standing with the Delaware Secretary of State, with all requisite power and authority to enter into this Agreement and to carry out its obligations hereunder.

(e) Authorization of Agreement. This Agreement is duly and validly authorized, executed and delivered by or on behalf of the Company and, assuming the due authorization, execution and delivery of the same by the Dealer Manager, constitutes a valid and binding agreement of the Company enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States, any state or any political subdivision thereof which affect creditors’ rights generally or by equitable principles relating to the availability of remedies or except to the extent that the enforceability of the indemnity and contribution provisions contained in this Agreement may be limited under applicable securities laws.

(f) Absence of Conflict or Default. The execution and delivery of this Agreement and the performance of this Agreement, the consummation of the transactions contemplated herein and the fulfillment of the terms hereof, do not and will not conflict with, or result in a breach of any of the terms and provisions of, or constitute a default under:

(i) the Company’s or any of its subsidiaries’ charter, bylaws, or other organizational documents, as the case may be;

(ii) any indenture, mortgage, deed of trust, voting trust agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their properties is bound except, for purposes of this clause (ii) only, for such conflicts, breaches or defaults that do not result in and could not reasonably be expected to result in, individually or in the aggregate, a Company MAE (as defined below in this Section 1(f)); or

(iii) any statute, rule or regulation or order of any court or other governmental agency or body having jurisdiction over the Company, any of its subsidiaries or any of their properties, except for such conflicts, breaches or defaults that do not result in and would not reasonably be expected to result in, individually or in the aggregate, a Company MAE (as defined in this Section 1(f)).

No consent, approval, authorization or order of any court or other governmental agency or body has been or is required for the performance of this Agreement or for the consummation by the Company of any of the transactions contemplated hereby (except as have been obtained under the Securities Act, the Exchange Act, or as may be required under the Financial Industry Regulatory Authority (“FINRA”) or state securities or applicable blue sky laws in connection with the offer and sale of the Shares or under the laws of states in which the Company may own real properties in connection with its qualification to transact business in such states or as may be required by subsequent events which may occur). Neither the Company nor any of its subsidiaries is in violation of its charter, bylaws or other organizational documents, as the case may be, that would reasonably be expected to result in a Company MAE.

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As used in this Agreement, “Company MAE” means any event, circumstance, occurrence, fact, condition, change or effect, individually or in the aggregate, that is, or could reasonably be expected to be, materially adverse to (A) the condition, financial or otherwise, earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, or (B) the ability of the Company to perform its obligations under this Agreement or the validity or enforceability of this Agreement or the Shares. As used in this Agreement, “business prospects” excludes any development resulting from any event, circumstance, development, change or effect (1) in general economic or business conditions, (2) in financial or securities markets generally, or (3) generally affecting the business or industry in which the Company operates.

(g) Actions or Proceedings. As of the initial Effective Date, there are no actions, suits or proceedings against, or investigations of, the Company or its subsidiaries pending or, to the knowledge of the Company, threatened, before any court, arbitrator, administrative agency or other tribunal:

(i) asserting the invalidity of this Agreement;

(ii) seeking to prevent the issuance of the Shares or the consummation of any of the transactions contemplated by this Agreement;

(iii) that would reasonably be expected to materially and adversely affect the performance by the Company of its obligations under or the validity or enforceability of, this Agreement or the Shares;

(iv) that would reasonably be expected to result in a Company MAE, or

(v) seeking to affect adversely the federal income tax attributes of the Shares except as described in the Prospectus.

The Company promptly will give notice to the Dealer Manager of the occurrence of any action, suit, proceeding or investigation of the type referred to above arising or occurring on or after the initial Effective Date.

(h) [Reserved.]

(i) Sales Literature. Any supplemental sales literature or advertisement (including, without limitation any “broker-dealer use only” or institutional material), regardless of how labeled or described, used in addition to the Prospectus in connection with the Offering which previously has been, or hereafter is, furnished or approved by the Company (collectively, “Approved Sales Literature”), shall, to the extent required, be filed with and approved by the appropriate securities agencies and bodies, provided that the Dealer Manager will make all FINRA filings, to the extent required. Any and all Approved Sales Literature, when used in connection with the Prospectus, did not or will not at the time provided for use include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(j) Authorization of Shares. The Shares have been duly authorized and, when issued and sold as contemplated by the Prospectus and upon payment therefor as provided in this Agreement and the Prospectus, will be validly issued, fully paid and nonassessable and will conform in all material aspects to the description thereof contained in the Prospectus.

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(k) Taxes. Any taxes, fees and other governmental charges in connection with the execution and delivery of this Agreement or the execution, delivery and sale of the Shares have been or will be paid when due.

(l) Investment Company. The Company is not, and neither the offer or sale of the Shares nor any of the activities of the Company will cause the Company to be, an “investment company” or under the control of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

(m) Tax Returns. The Company has filed or will file all material federal, state and foreign income tax returns required to be filed by or on behalf of the Company on or before the due dates therefor (taking into account all extensions of time to file) and has paid or provided for the payment of all such material taxes, except those being contested in good faith, indicated by such tax returns and all assessments received by the Company to the extent that such taxes or assessments have become due.

(n) [Reserved.]

(o) Independent Registered Public Accounting Firm. The accountants who have certified certain financial statements appearing in the Prospectus are an independent registered public accounting firm within the meaning of the Securities Act and the Securities Act Rules and Regulations. Such accountants have not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).

The Company and its subsidiaries each maintains a system of internal accounting and other controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles as applied in the United States (“GAAP”), including, without limitation: (i) policies and procedures that: (A) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect in all material respects the transactions and dispositions of the assets of the Company or its subsidiaries; (B) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company or its subsidiaries are being made only in accordance with general or specific authorizations of the Company’s management and directors; and (C) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s or its subsidiaries’ assets that could have a material adverse effect on the Company’s financial statements; and (ii) policies and procedures that provide reasonable assurances that: (A) transactions are executed only in accordance with general or specific authorizations of the Company’s management or directors; (B) transactions are recorded as necessary to permit preparation of the Company’s financial statements in conformity with GAAP and to maintain accountability for assets: (C) access to assets is permitted only in accordance with general or specific authorization of the Company’s management or directors; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Except as described in the Registration Statement, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated), and (2) no change in the Company’s internal control over financial reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Company’s internal control over financial reporting.

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(p) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules are required to be included in the Registration Statement or any applicable Prospectus.

(q) Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as may otherwise be stated therein or contemplated thereby, there has not occurred a Company MAE, whether or not arising in the ordinary course of business.

(r) Government Permits. The Company and its subsidiaries possess such certificates, authorities or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, other than those the failure to possess or own would not have, individually or in the aggregate, a Company MAE. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Company MAE.

2. Representations and Warranties of the Dealer Manager. The Dealer Manager represents and warrants to the Company as of the date of this Agreement and on each Effective Date that:

(a) Organization Status. The Dealer Manager is a limited liability company duly organized, validly existing and in good standing under the laws of the State of California, with all requisite power and authority to enter into this Agreement and to carry out its obligations hereunder.

(b) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Dealer Manager, and assuming due authorization, execution and delivery of this Agreement by the Company, will constitute a valid and legally binding agreement of the Dealer Manager enforceable against the Dealer Manager in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability and except that rights to indemnity and contribution hereunder may be limited by applicable law and public policy.

(c) Absence of Conflict or Default. The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and compliance with the terms of this Agreement by the Dealer Manager will not conflict with or constitute a default under:

(i) its organizational or charter documents;

(ii) any indenture, mortgage, deed of trust or lease to which the Dealer Manager is a party or by which it may be bound, or to which any of the property or assets of the Dealer Manager is subject; or

(iii) any statute, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Dealer Manager or its assets, properties or operations, except in the case of clause (ii) or (iii) for such conflicts or defaults that would not individually or in the aggregate have a material adverse effect on the condition (financial or otherwise), business, properties or results of operations of the Dealer Manager.

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(d) Broker-Dealer Registration; FINRA Membership. The Dealer Manager is, and during the term of this Agreement will be, duly registered as a broker-dealer pursuant to the provisions of the Exchange Act, a member in good standing of FINRA, and a broker or dealer duly registered as such in those states where the Dealer Manager is required to be registered in order to carry out the Offering as contemplated by this Agreement. Moreover, the Dealer Manager’s employees and representatives have all required licenses and registrations to act under this Agreement. There is no provision in the Dealer Manager’s FINRA membership agreement that would restrict the ability of the Dealer Manager to carry out the Offering as contemplated by this Agreement.

The information under the caption “Plan of Distribution” in the Prospectus insofar as it relates to the Dealer Manager, and all other information furnished to the Company by the Dealer Manager in writing specifically for use in the Registration Statement, any preliminary Prospectus or the Prospectus, does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading

3. Offering and Sale of the Shares. Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby appoints the Dealer Manager as its agent and exclusive distributor to solicit and to retain the Soliciting Dealers (as defined in Section 3(a)) to solicit subscriptions for the Shares at the subscription price to be paid in cash (or the exchange of debt securities, as contemplated by the Prospectus). Upon the terms and subject to the conditions set forth in this Agreement, the Dealer Manager hereby accepts such agency and exclusive distributorship and agrees to use its best efforts to sell or cause to be sold the Shares in such quantities and to such persons in accordance with such terms as are set forth in this Agreement, the Prospectus and the Registration Statement.

The Dealer Manager shall do so during the period commencing on the initial Effective Date and ending on the earliest to occur of the following: (1) the acceptance by the Company of subscriptions for the amount offered in the Offering; (2) the termination of the Offering by the Company, which the Company shall have the right to terminate in its sole and absolute discretion at any time; (3) the termination of the effectiveness of the Registration Statement, which is three years from the initial Effective Date; and (4) the liquidation or dissolution of the Company (such period being the “Offering Period”).

The number of Shares, if any, to be reserved for sale by each Soliciting Dealer may be determined by mutual agreement, from time to time, by the Dealer Manager and the Company. In the absence of such determination, the Company shall, subject to the provisions of Section 3(b), accept subscriptions based upon a first-come, first accepted reservation or other similar method (subject, however, to the right of the Company to reject subscriptions as described in the Prospectus and paragraph (c) below). Under no circumstances will the Dealer Manager be obligated to underwrite or purchase any Shares for its own account and, in soliciting purchases of Shares, the Dealer Manager shall act solely as the Company’s agent and not as an underwriter or principal.

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(a) Soliciting Dealers. The Shares offered and sold through the Dealer Manager under this Agreement shall be offered and sold only by the Dealer Manager and other securities dealers the Dealer Manager may retain (collectively the “Soliciting Dealers”); provided, however, that:

(i) the Dealer Manager reasonably believes that all Soliciting Dealers are registered with the Commission, members of FINRA and are duly licensed or registered by the regulatory authorities in the jurisdictions in which they will offer and sell Shares; and

(ii) all such engagements are evidenced by written agreements, the terms and conditions of which substantially conform to the form of Soliciting Dealer Agreement attached hereto as Exhibit A (the “Soliciting Dealer Agreement”).

(b) Subscription Documents. Each person desiring to purchase Shares through the Dealer Manager, or any other Soliciting Dealer, will be required to complete and execute the subscription documents or comply with other procedures described in the Prospectus.

(c) Completed Sale. The Company will sell Shares directly (“Direct Settlement”) or through a closing service provided by the Depository Trust Company (“DTC”), DTC closing (“DTC Settlement”). A sale of a Share shall be deemed by the Company to be completed if and only if (i) the Company has received payment of the full purchase price of each purchased Share, from an investor who satisfies the minimum purchase requirements set forth in the Registration Statement as determined by the Soliciting Dealer, or the Dealer Manager, as applicable, in accordance with the provisions of this Agreement, (ii) the Company has accepted such subscription, and, if using Direct Settlement, a properly completed and executed Subscription Agreement, and (iii) such investor has been admitted as a stockholder of the Company. In addition, no sale of Shares shall be completed until after the date on which the subscriber receives a copy of the Prospectus. The Dealer Manager hereby acknowledges and agrees that the Company, in its sole and absolute discretion, may accept or reject any subscription, in whole or in part, for any reason whatsoever or no reason, and no commission or Dealer Manager Fee will be paid to the Dealer Manager with respect to that portion of any subscription which is rejected. As used in this Agreement, “business day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

(d) Dealer-Manager Compensation.

(i) Subject to the special circumstances described in or otherwise provided in the “Plan of Distribution” section of the Prospectus or this Section 3(d), the Company agrees to pay Soliciting Dealers selling commissions in the amount of up to and including six percent (6.0%) of the selling price of each Share for which a sale is completed from the Shares offered in the Offering. The Company may pay reduced selling commissions or may eliminate commissions on certain sales, including the reduction or elimination of selling commissions in accordance with, and on the terms set forth in, the Prospectus. The Dealer Manager will re-allow all the selling commissions, subject to federal and state securities laws, to the Soliciting Dealer who sold the Shares as described more fully in the Soliciting Dealer Agreement.

(ii) Subject to the special circumstances described in or otherwise provided in the “Plan of Distribution” section of the Prospectus or this Section 3(d), as compensation for acting as the dealer manager, the Company will pay the Dealer Manager a dealer manager fee in the amount of up to and including 0.40% of the selling price of each Share for which a sale is completed from the Shares offered in the Offering (the “Dealer Manager Fee”).

Further, the Dealer Manager is entitled to receive:

● a non-accountable expense allowance of up to 0.60% of gross offering proceeds;

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● an accountable allowance expense of up to 0.40% of gross offering proceeds, which includes, subject to Section 3(e), due diligence expenses and wholesaling expenses other than salaries and commissions to the wholesalers;

● a wholesaling fee (payable only to wholesaling dealers) of 0.50% of gross offering proceeds to pay commissions; and

● non-cash compensation of up to 0.10% of gross offering proceeds.

The Dealer Manager may retain or re-allow up to 0.60% of any additional compensation it receives, subject to federal and state securities laws, to the Soliciting Dealer who sold the Shares, as described more fully in the Soliciting Dealer Agreement.

(iii) All selling commissions and Dealer Manager fees payable to the Dealer Manager will be paid at least within twenty (20) business days after the investor subscribing for the Share is admitted as a shareholder of the Company, in an amount equal to the sales commissions payable with respect to such Shares.

(iv) In no event shall the total aggregate underwriting compensation payable to the Dealer Manager and any Soliciting Dealers participating in the Offering, including, but not limited to, selling commissions and the Dealer Manager Fee exceed eight percent (8.0%) of gross offering proceeds from the Offering in the aggregate.

(v) Notwithstanding anything to the contrary contained herein, if the Company pays any selling commission to a Soliciting Dealer of one or more Shares and the subscription is rescinded as to one or more of the Shares covered by such subscription, then the Company shall decrease the next payment of selling commissions or other compensation otherwise payable to the Soliciting Dealer by the Company under this Agreement by an amount equal to the commission rate established in this Section 3(d), multiplied by the number of Shares as to which the subscription is rescinded. If no payment of selling commissions or other compensation is due to the Soliciting Dealer after such withdrawal occurs, then the Soliciting Dealer shall pay the amount specified in the preceding sentence to the Company within a reasonable period of time not to exceed thirty (30) days following receipt of notice by the Soliciting Dealer from the Company stating the amount owed as a result of rescinded subscriptions.

(e) Reasonable Bona Fide Due Diligence Expenses. The Company shall only reimburse the Dealer Manager or any Soliciting Dealer for such approved bona fide due diligence expenses to the extent such expenses have actually been incurred and are supported by detailed and itemized invoice(s) provided to the Company.

(f) Reserved.

(g) Company Expenses. Subject to the limitations described above, the Company agrees to pay all costs and expenses incident to the Offering, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including expenses, fees and taxes in connection with:

(i) the registration fee, the preparation and filing of the Registration Statement (including without limitation financial statements, exhibits, schedules and consents), the Prospectus, and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Dealer Manager and to Soliciting Dealers (including costs of mailing and shipment);

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(ii) the preparation, issuance and delivery of certificates, if any, for the Shares, including any stock or other transfer taxes or duties payable upon the sale of the Shares;

(iii) all fees and expenses of the Company’s legal counsel, independent public or certified public accountants and other advisors;

(iv) the determination of the Shares’ eligibility for sale or an exemption under state law and the printing and furnishing of copies of blue sky surveys if any;

(v) the filing fees in connection with filing for review by FINRA, if required, of all necessary documents and information relating to the Offering and the Shares;

(vi) the fees and expenses of any transfer agent or registrar for the Shares and miscellaneous expenses referred to in the Registration Statement;

(vii) all costs and expenses incident to the travel and accommodation of the Dealer Manager representatives acting on behalf of the Company, in making road show presentations and presentations to Soliciting Dealers and other broker-dealers and financial advisors with respect to the offering of the Shares; and

(viii) the performance of the Company’s other obligations hereunder.

4. Conditions to the Dealer Manager’s Obligations. The Dealer Manager’s obligation to use its best efforts to offer and sell Shares pursuant to this Agreement shall be subject to the following conditions:

(a) The representations and warranties on the part of the Company contained in this Agreement hereof shall be true and correct in all material respects and the Company shall have complied with its covenants, agreements and obligations contained in this Agreement in all material respects;

(b) The Registration Statement shall have become effective and no stop order suspending the effectiveness of the Registration Statement shall have been issued by the Commission and, to the best knowledge of the Company, no proceedings for that purpose shall have been instituted, threatened or contemplated by the Commission; and any request by the Commission for additional information (to be included in the Registration Statement or Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Dealer Manager; and

(c) The Registration Statement and the Prospectus, and any amendment or any supplement thereto, shall not contain any untrue statement of material fact, or omit to state a material fact that is required to be stated therein or is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

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5. Covenants of the Company. The Company covenants and agrees with the Dealer Manager as follows:

(a) Registration Statement. The Company will use its best efforts to cause the Registration Statement and any subsequent amendments thereto to become effective as promptly as possible and will furnish a copy of any proposed amendment or supplement of the Registration Statement or the Prospectus to the Dealer Manager. The Company will comply in all material respects with all federal and state securities laws, rules and regulations which are required to be complied with in order to permit the continuance of offers and sales of the Shares in accordance with the provisions hereof and of the Prospectus.

(b) Commission Orders. If the Commission shall issue any stop order or any other order preventing or suspending the use of the Prospectus, or shall institute any proceedings for that purpose, then the Company will promptly notify the Dealer Manager and use its best efforts to prevent the issuance of any such order and, if any such order is issued, to use its best efforts to obtain the removal thereof as promptly as possible.

(c) Blue Sky Qualifications. If required by applicable law or regulation, the Company will use its best efforts to qualify the Shares for offering and sale under the securities or blue sky laws of such jurisdictions as the Dealer Manager and the Company shall mutually agree upon and to make such applications, file such documents and furnish such information as may be reasonably required for that purpose. The Company will, at the Dealer Manager’s request, furnish the Dealer Manager with a copy of such papers filed by the Company in connection with any such qualification. The Company will promptly advise the Dealer Manager of the issuance by such securities administrators of any stop order preventing or suspending the use of the Prospectus or of the institution of any proceedings for that purpose, and will use its best efforts to prevent the issuance of any such order and if any such order is issued, to use its best efforts to obtain the removal thereof as promptly as possible.

(d) Amendments and Supplements. If, at any time when a Prospectus relating to the Shares is required to be delivered under the Securities Act, any event shall have occurred to the knowledge of the Company, or the Company receives notice from the Dealer Manager that it believes such an event has occurred, as a result of which the Prospectus or any Approved Sales Literature as then amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Registration Statement or supplement the Prospectus relating to the Shares to comply with the Securities Act, then the Company will promptly notify the Dealer Manager thereof (unless the information shall have been received from the Dealer Manager) and will prepare and file with the Commission an amendment or supplement which will correct such statement or effect such compliance to the extent required, and shall make available to the Dealer Manager thereof sufficient copies for its own use and/or distribution to the Soliciting Dealers.

(e) Requests from Commission. The Company will promptly advise the Dealer Manager of any request made by the Commission or a state securities administrator for amending the Registration Statement, supplementing the Prospectus or for additional information.

(f) Copies of Registration Statement. Upon request, the Company will furnish the Dealer Manager with one signed copy of the Registration Statement, including its exhibits, and such additional copies of the Registration Statement, without exhibits, and the Prospectus and all amendments and supplements thereto, which are finally approved by the Commission, as the Dealer Manager may reasonably request for sale of the Shares.

(g) Qualification to Transact Business. The Company will take all steps necessary to ensure that at all times the Company will validly exist as a Delaware corporation and will be qualified to do business in all jurisdictions in which the conduct of its business requires such qualification and where such qualification is required under local law.

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(h) Authority to Perform Agreements. The Company undertakes to obtain all consents, approvals, authorizations or orders of any court or governmental agency or body which are required for the Company’s performance of this Agreement and under the Company’s Certificate of Incorporation, as amended (as the same may be amended, supplemented or otherwise modified from time to time, the “Company’s Charter”), and the Company’s Bylaws, each in the form included as exhibits to the Registration Statement for the consummation of the transactions contemplated hereby and thereby, respectively, or the conducting by the Company of the business described in the Prospectus.

(i) Sales Literature. The Company will furnish to the Dealer Manager as promptly as shall be practicable upon request any Approved Sales Literature (provided that the use of said material has been first approved for use to the extent required by all appropriate regulatory agencies). Any supplemental sales literature or advertisement, regardless of how labeled or described, used in addition to the Prospectus in connection with the Offering which is furnished or approved by the Company (including, without limitation, Approved Sales Literature) shall, to the extent required, be filed with and, to the extent required, approved by the appropriate securities agencies and bodies, provided that the Dealer Manager will make all FINRA filings, to the extent required. The Company will not (and will instruct its affiliates not to): show or give to any investor or prospective investor or reproduce any material or writing that is marked “broker-dealer use only,” institutional, or otherwise bears a legend denoting that it is not to be used in connection with the sale of Shares to members of the public; or show or give to any investor or prospective investor in a particular jurisdiction any material or writing if such material bears a legend denoting that it is not to be used in connection with the sale of Shares to members of the public in such jurisdiction.

(j) Use of Proceeds. The Company will apply the proceeds from the sale of the Shares as set forth in the Prospectus.

(k) Customer Information. The Dealer Manager and the Company shall, when applicable:

(i) abide by and comply with (A) the privacy standards and requirements of the Gramm-Leach-Bliley Act of 1999 (the “GLB Act”) and applicable regulations promulgated thereunder, (B) the privacy standards and requirements of any other applicable federal or state law, including but not limited to, the Fair Credit Reporting Act (“FCRA”), and (C) its own internal privacy policies and procedures, each as may be amended from time to time;

(ii) refrain from the use or disclosure of nonpublic personal information (as defined under the GLB Act) of all customers who have opted out of such disclosures except as necessary to service the customers or as otherwise necessary or required by applicable law;

(iii) except as expressly permitted under the FCRA, the Dealer Manager and the Company shall not disclose any information that would be considered a “consumer report” under the FCRA; and

(iv) determine which customers have opted out of the disclosure of nonpublic personal information by periodically reviewing and, if necessary, retrieving an aggregated list of such customers from the Soliciting Dealers (the “List”) to identify customers that have exercised their opt-out rights. If either party uses or discloses nonpublic personal information of any customer for purposes other than servicing the customer, or as otherwise required by applicable law, that party will consult the List to determine whether the affected customer has exercised his or her opt-out rights. Each party understands that it is prohibited from using or disclosing any nonpublic personal information of any customer that is identified on the List as having opted out of such disclosures.

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(l) Dealer Manager’s Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration Statement, any preliminary prospectus or the Prospectus (including any amendment or supplement through incorporation of any report filed under the Exchange Act), the Company shall furnish to the Dealer Manager for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each such proposed amendment or supplement, and the Company shall not file or use any such proposed amendment or supplement without the Dealer Manager’s consent, which consent shall not be unreasonably withheld or delayed.

(m) Certain Payments. Without the prior consent of the Dealer Manager, none of the Company, the Manager or any of their respective affiliates will make any payment (cash or non-cash) to any associated Person or registered representative of the Dealer Manager.

6. Covenants of the Dealer Manager. The Dealer Manager covenants and agrees with the Company as follows:

(a) Compliance with Laws. With respect to the Dealer Manager’s participation and the participation by each Soliciting Dealer in the offer and sale of the Shares (including, without limitation, any resales and transfers of Shares), the Dealer Manager agrees, and each Soliciting Dealer in its Soliciting Dealer Agreement will agree, to comply in all material respects with all applicable requirements of the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations and all other federal regulations applicable to the Offering, the sale of Shares and with all applicable state securities or blue sky laws, and the Rules of FINRA applicable to the Offering, from time to time in effect, specifically including, but not in any way limited to, NASD Conduct Rule 2340 (Customer Account Statements) and FINRA Rules 2040 (Payments to Unregistered Persons), 2111 (Suitability), 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements), 5130 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings), and 5141 (Sale of Securities in a Fixed Price Offering) therein. The Dealer Manager will not offer the Shares for sale in any jurisdiction unless and until it has been advised that the Shares are either registered in accordance with, or exempt from, the securities and other laws applicable thereto.

In addition, the Dealer Manager shall, in accordance with applicable law or as prescribed by any state securities administrator, provide, or require in the Soliciting Dealer Agreement that the Soliciting Dealer shall provide, to any prospective investor copies of any prescribed document which is part of the Registration Statement and any supplements thereto during the course of the Offering and prior to the sale. The Company may provide the Dealer Manager with certain Approved Sales Literature to be used by the Dealer Manager and the Soliciting Dealers in connection with the solicitation of purchasers of the Shares. The Dealer Manager agrees not to deliver the Approved Sales Literature to any person prior to the initial Effective Date. If the Dealer Manager elects to use such Approved Sales Literature after the initial Effective Date, then the Dealer Manager agrees that such material shall not be used by it in connection with the solicitation of purchasers of the Shares and that it will direct Soliciting Dealers not to make such use unless accompanied or preceded by the Prospectus, as then currently in effect, and as it may be amended or supplemented in the future.

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The Dealer Manager agrees that it will not use any Approved Sales Literature other than those provided to the Dealer Manager by the Company for use in the Offering. The use of any other sales material is expressly prohibited.

(b) No Additional Information. In offering the Shares for sale, the Dealer Manager shall not, and each Soliciting Dealer shall agree not to, give or provide any information or make any representation other than those contained in the Prospectus or the Approved Sales Literature.

(c) Sales of Shares. The Dealer Manager shall, and each Soliciting Dealer shall agree to, solicit purchases of the Shares only in the jurisdictions in which the Dealer Manager and such Soliciting Dealer are legally qualified to so act and in which the Dealer Manager and each Soliciting Dealer have been advised by the Company or counsel to the Company that such solicitations can be made.

(d) Subscription Agreement. The Dealer Manager will comply in all material respects with the subscription procedures and “Plan of Distribution” set forth in the Prospectus. Subscriptions using Direct Settlement will be submitted by the Dealer Manager and each Soliciting Dealer to the Company only on the subscription agreement, a form of which is included as an exhibit to the Registration Statement. The Dealer Manager understands and acknowledges, and each Soliciting Dealer shall acknowledge if using Direct Settlement, that the Subscription Agreement must be executed and initialed by the subscriber as provided for by the Subscription Agreement.

(e) Suitability. The Dealer Manager will offer Shares, and in its agreement with each Soliciting Dealer will require that the Soliciting Dealer offer Shares, only to persons that it has reasonable grounds to believe meet the financial qualifications set forth in the Prospectus or in any suitability letter or memorandum sent to it by the Company and will only make offers to persons in the states in which it is advised in writing by the Company that the Shares are qualified for sale or that such qualification is not required. In offering Shares, the Dealer Manager will comply, and in its agreements with the Soliciting Dealers, the Dealer Manager will require that the Soliciting Dealers comply, with the provisions of all applicable rules and regulations relating to suitability of investors, including applicable FINRA Rules.

The Dealer Manager agrees that in recommending the purchase of the Shares in the Offering to an investor, the Dealer Manager and each person associated with the Dealer Manager that make such recommendation shall have, and each Soliciting Dealer in its Soliciting Dealer Agreement shall agree with respect to investors to which it makes a recommendation shall agree that it shall have, reasonable grounds to believe, on the basis of information obtained from the investor concerning the investor’s investment objectives, other investments, financial situation and needs, and any other information known by the Dealer Manager, the person associated with the Dealer Manager or the Soliciting Dealer that:

(i) the investor is or will be in a financial position appropriate to enable the investor to realize to a significant extent the benefits described in the Prospectus, including the tax benefits where they are a significant aspect of the Company;

(ii) the investor has a fair market net worth sufficient to sustain the risks inherent in the program, including loss of investment and lack of liquidity; and

(iii) an investment in the Shares offered in the Offering is otherwise suitable for the investor.

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The Dealer Manager agrees as to investors to whom it makes a recommendation with respect to the purchase of the Shares in the Offering (and each Soliciting Dealer in its Soliciting Dealer Agreement shall agree, with respect to Investors to whom it makes such recommendations) to maintain in the files of the Dealer Manager (or the Soliciting Dealer, as applicable) documents disclosing the basis upon which the determination of suitability was reached as to each investor.

In making the determinations as to financial qualifications and as to suitability, the Dealer Manager and Soliciting Dealers may rely on (A) representations from investment advisers who are not affiliated with a Soliciting Dealer, and banks acting as trustees or fiduciaries, and (B) information it has obtained from a prospective investor, including such information as the investment objectives, other investments, financial situation and needs of the person or any other information known by the Dealer Manager (or Soliciting Dealer, as applicable), after due inquiry. Notwithstanding the foregoing, the Dealer Manager shall not, and each Soliciting Dealer shall agree not to, execute any transaction in the Company in a discretionary account without prior written approval of the transaction by the customer.

(f) Soliciting Dealer Agreements. All engagements of the Soliciting Dealers will be evidenced by a Soliciting Dealer Agreement.

(g) Electronic Delivery. If the Dealer Manager uses electronic delivery to distribute the Prospectus to any person, that it will comply with all applicable requirements of the Commission, the Blue Sky laws and/or FINRA and any other laws or regulations related to the electronic delivery of documents.

(h) AML Compliance. The Dealer Manager represents to the Company that it has established and implemented an anti-money laundering compliance program (“AML Program”) in accordance with Section 352 of the USA PATRIOT Act of 2001 (the “PATRIOT Act”) and FINRA Rule 3310, that complies with applicable anti-money laundering laws and regulations, including, but not limited to, the customer identification program requirements of Section 326 of the PATRIOT Act, and the suspicious activity reporting requirements of Section 356 of the PATRIOT Act, and the laws, regulations and Executive Orders administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury (collectively, “AML/OFAC Laws”). The Dealer Manager hereby covenants to remain in compliance with the AML/OFAC Laws and shall, upon request by the Company, provide a certification to the Company that, as of the date of such certification, its AML Program is compliant with the AML/OFAC Laws.

(i) Customer Information. The Dealer Manager will use its best efforts to provide the Company with any and all subscriber information that the Company requests in order for the Company to satisfy its obligations under the AML/OFAC Laws and comply with the requirements under Section 5(k) above.

(j) Recordkeeping. The Dealer Manager will comply, and will require each Soliciting Dealer to comply, with the record keeping requirements of the Exchange Act, including, but not limited to, Rules 17a-3 and 17a-4 promulgated under the Exchange Act, and shall maintain, for at least six years or for a period of time not less than that required in order to comply with all applicable federal, state and other regulatory requirements, whichever is later, such records with respect to each investor who purchases Shares, information used to determine that the investor meets the suitability standards imposed on the offer and sale of the Shares, the amount of Shares sold, and a representation of the investor that the investor is investing for the investor’s own account or, in lieu of such representation, information indicating that the investor for whose account the investment was made met the suitability standards.

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(k) Suspension or Termination of Offering. The Dealer Manager agrees, and will require that each of the Soliciting Dealers agree, to suspend or terminate the offering and sale of the Shares upon request of the Company at any time and to resume the offering and sale of the Shares upon subsequent request of the Company.

7. Indemnification.

(a) Indemnified Parties Defined. For the purposes of this Agreement, an “Indemnified Party” shall mean a person or entity entitled to indemnification under this Section 7, as well as such person’s or entity’s officers, directors, employees, members, partners, affiliates, agents and representatives, and each person, if any, who controls such person or entity within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

(b) Indemnification of the Dealer Manager and Soliciting Dealers. The Company will indemnify, defend and hold harmless the Dealer Manager and the Soliciting Dealers, and their respective Indemnified Parties, from and against any losses, claims, expenses (including reasonable legal and other expenses incurred in investigating and defending such claims or liabilities), damages or liabilities, joint or several, to which any such Soliciting Dealers or the Dealer Manager, or their respective Indemnified Parties, may become subject under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) arise out of or are based upon:

(i) any material inaccuracy in a representation or warranty contained herein by the Company, any material breach of a covenant contained herein by the Company, or any material failure by the Company to perform its obligations hereunder or to comply with state or federal securities laws applicable to the Offering;

(ii) any untrue statement or alleged untrue statement of a material fact contained (A) in any Registration Statement or any post-effective amendment thereto or in the Prospectus or any amendment or supplement to the Prospectus, (B) in any Approved Sales Literature or (C) in any blue sky application or other document executed by the Company or on its behalf specifically for the purpose of qualifying any or all of the Shares for sale under the securities laws of any jurisdiction or based upon written information furnished by the Company under the securities laws thereof (any such application, document or information being hereinafter called a “Blue Sky Application”); or

(iii) the omission or alleged omission to state a material fact required to be stated in the Registration Statement or any post-effective amendment thereof to make the statements therein not misleading, or the omission or alleged omission to state a material fact required to be stated in the Prospectus or any amendment or supplement to the prospectus to make the statements therein, in light of the circumstances under which they were made, not misleading.

The Company will reimburse each Soliciting Dealer or the Dealer Manager, and their respective Indemnified Parties, for any reasonable legal or other expenses incurred by such Soliciting Dealer or the Dealer Manager, and their respective Indemnified Parties, in connection with investigating or defending such loss, claim, expense, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, expense, damage or liability arises out of, or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Dealer Manager expressly for use in the Registration Statement or any post-effective amendment thereof or the Prospectus or any such amendment thereof or supplement thereto. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

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(c) Dealer Manager Indemnification of the Company and the Manager. The Dealer Manager will indemnify, defend and hold harmless the Company and each of its Indemnified Parties and each person who has signed the Registration Statement, from and against any losses, claims, expenses (including the reasonable legal and other expenses incurred in investigating and defending any such claims or liabilities), damages or liabilities to which any of the aforesaid parties may become subject under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations or otherwise, insofar as such losses, claims, expenses, damages (or actions in respect thereof) arise out of or are based upon:

(i) any material inaccuracy in a representation or warranty contained herein by the Dealer Manager, or any material breach of a covenant contained herein by the Dealer Manager;

(ii) any untrue statement or any alleged untrue statement of a material fact contained (A) in any Registration Statement or any post-effective amendment thereto or in the Prospectus or any amendment or supplement to the Prospectus, (B) in any Approved Sales Literature, or (C) any Blue Sky Application; or

(iii) the omission or alleged omission to state a material fact required to be stated in the Registration Statement or any post-effective amendment thereof to make the statements therein not misleading, or the omission or alleged omission to state a material fact required to be stated in the Prospectus or any amendment or supplement to the Prospectus to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that in each case described in clauses (ii) and (iii) to the extent, but only to the extent, that such untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company by the Dealer Manager expressly for use in the Registration Statement or any such post-effective amendments thereof or the Prospectus or any such amendment thereof or supplement thereto;

(iv) any use of sales literature, including “broker-dealer use only” materials, by the Dealer Manager that is not Approved Sales Literature; or

(v) any untrue statement made by the Dealer Manager, or omission by the Dealer Manager to state a fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in connection with the Offering; provided, however, this clause (v) shall not apply to any statements or omissions made in conformity with the Registration Statement, the Prospectus, any Approved Sales Literature or any other materials or information furnished by or on behalf of the Company.

The Dealer Manager will reimburse the aforesaid parties for any reasonable legal or other expenses incurred in connection with investigation or defense of such loss, claim, expense, damage, liability or action. This indemnity agreement will be in addition to any liability which the Dealer Manager may otherwise have.

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(d) Soliciting Dealer Indemnification of the Company. By virtue of entering into the Soliciting Dealer Agreement, each Soliciting Dealer severally will agree to indemnify, defend and hold harmless the Company, the Dealer Manager, each of their respective Indemnified Parties, and each person who signs the Registration Statement, from and against any losses, claims, expenses, damages or liabilities to which the Company, the Dealer Manager, or any of their respective Indemnified Parties, or any person who signed the Registration Statement, may become subject, under the Securities Act or otherwise, as more fully described in the Soliciting Dealer Agreement.

(e) Action Against Parties; Notification. Promptly after receipt by any Indemnified Party under this Section 7 of notice of the commencement of any action, such Indemnified Party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 7, promptly notify the indemnifying party of the commencement thereof; provided, however, that the failure to give such notice shall not relieve the indemnifying party of its obligations hereunder except to the extent it shall have been actually prejudiced by such failure. In case any such action is brought against any Indemnified Party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled, to the extent it may wish, jointly with any other indemnifying party similarly notified, to participate in the defense thereof, with separate counsel.

Such participation shall not relieve such indemnifying party of the obligation to reimburse the Indemnified Party for reasonable legal and other expenses incurred by such Indemnified Party in defending itself, except for such expenses incurred after the indemnifying party has deposited funds sufficient to effect the settlement, with prejudice, of, and unconditional release of all liabilities from, the claim in respect of which indemnity is sought. Any such indemnifying party shall not be liable to any such Indemnified Party on account of any settlement of any claim or action effected by the Indemnified Party without the consent of such indemnifying party, such consent not to be unreasonably withheld or delayed.

(f) Reimbursement of Fees and Expenses. An indemnifying party under this Section 7 of this Agreement shall be obligated to reimburse an Indemnified Party for reasonable legal and other expenses as follows

(i) In the case of the Company indemnifying the Dealer Manager, the advancement of funds to the Dealer Manager for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought shall be permissible only if all of the following conditions are satisfied: (A) the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; (B) the legal action is initiated by a third party who is not a stockholder of the Company or the legal action is initiated by a stockholder of the Company acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; and (C) the Dealer Manager undertakes to repay the advanced funds to the Company, together with the applicable legal rate of interest thereon, in cases in which the Dealer Manager is found not to be entitled to indemnification.

(ii) In any case of indemnification other than that described in Section 7(f)(i) above, the indemnifying party shall pay all legal fees and expenses reasonably incurred by the Indemnified Party in the defense of such claims or actions; provided, however, that the indemnifying party shall not be obligated to pay legal expenses and fees to more than one law firm in connection with the defense of similar claims arising out of the same alleged acts or omissions giving rise to such claims notwithstanding that such actions or claims are alleged or brought by one or more parties against more than one Indemnified Party. If such claims or actions are alleged or brought against more than one Indemnified Party, then the indemnifying party shall only be obliged to reimburse the expenses and fees of the one law firm (in addition to local counsel) that has been participating by a majority of the indemnified parties against which such action is finally brought; and if a majority of such indemnified parties is unable to agree on which law firm for which expenses or fees will be reimbursable by the indemnifying party, then payment shall be made to the first law firm of record representing an Indemnified Party against the action or claim. Such law firm shall be paid only to the extent of services performed by such law firm and no reimbursement shall be payable to such law firm on account of legal services performed by another law firm.

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8. Contribution.

(a) If Indemnification is Unavailable. If the indemnification provided for in Section 7 is for any reason unavailable to or insufficient to hold harmless an Indemnified Party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such Indemnified Party, as incurred:

(i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the Dealer Manager and the Soliciting Dealer, respectively, from the proceeds received in Offering pursuant to this Agreement and the relevant Soliciting Dealer Agreement; or

(ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Dealer Manager and the Soliciting Dealer, respectively, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

(b) Relative Benefits. The relative benefits received by the Company, the Dealer Manager and the Soliciting Dealer, respectively, in connection with the proceeds received in the Offering pursuant to this Agreement and the relevant Soliciting Dealer Agreement shall be deemed to be in the same respective proportion as the total net proceeds from the Offering pursuant to this Agreement and the relevant Soliciting Dealer Agreement (before deducting expenses), received by the Company, and the total selling commissions and dealer manager fees received by the Dealer Manager and the Soliciting Dealer, respectively, in each case as set forth on the cover of the Prospectus bear to the aggregate offering price of the Shares sold in the Offering as set forth on such cover.

(c) Relative Fault. The relative fault of the Company, the Dealer Manager and the Soliciting Dealer, respectively, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact related to information supplied by the Company, by the Dealer Manager or by the Soliciting Dealer, respectively, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

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(d) Pro Rata is Unreasonable. The Company, the Dealer Manager and the Soliciting Dealer (by virtue of entering into the Soliciting Dealer Agreement) agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable contributions referred to above in this Section 8. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an Indemnified Party and referred to above in this Section 8 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission or alleged omission.

(e) Limits. Notwithstanding the provisions of this Section 8, the Dealer Manager and the Soliciting Dealer shall not be required to contribute any amount by which the total price at which the Shares sold in the Offering to the public by them exceeds the amount of any damages which the Dealer Manager and the Soliciting Dealer have otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission.

(f) Fraudulent Misrepresentation. No party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation.

(g) Benefits of Contribution. For the purposes of this Section 8, the Dealer Manager’s officers, directors, employees, members, partners, agents and representatives, and each person, if any, who controls the Dealer Manager within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution of the Dealer Manager, and each officers, directors, employees, members, partners, agents and representatives of the Company, each officer of the Company who signed the Registration Statement and each person, if any, who controls the Company, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution of the Company. The Soliciting Dealers’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the number of Shares sold by each Soliciting Dealer in the Offering and not joint.

9. Termination of this Agreement.

(a) Term; Expiration. This Agreement shall become effective on the initial Effective Date and the obligations of the parties hereunder shall not commence until the initial Effective Date. This Agreement may be terminated by either party upon 30 calendar days’ written notice to the other party. This Agreement shall automatically expire on the termination date of the Offering as described in the Prospectus.

(b) Delivery of Records Upon Expiration or Early Termination. Upon the expiration or early termination of this Agreement for any reason, the Dealer Manager shall:

(i) promptly forward any and all funds, if any, in its possession which were received from investors for the sale of Shares for deposit;

(ii) to the extent not previously provided to the Company a list of all investors who have subscribed for or purchased Shares and all broker-dealers with whom the Dealer Manager has entered into a Soliciting Dealer Agreement;

(iii) notify Soliciting Dealers of such termination; and

(iv) promptly deliver to the Company copies of any sales literature designed for use specifically for the Offering that it is then in the process of preparing. Upon expiration or earlier termination of this Agreement, the Company shall pay to the Dealer Manager all compensation to which the Dealer Manager is or becomes entitled under Section 3(d) at such time as such compensation becomes payable.

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10. Miscellaneous

(a) Survival. The following provisions of the Agreement shall survive the expiration or earlier termination of this Agreement: Section 3(d) (Dealer-Manager Compensation); Section 3(e) (Reasonable Bona Fide Due Diligence Expenses); Section 6(h) (AML Compliance); Section 7 (Indemnification); Section 8 (Contribution); Section 9 (Termination of This Agreement) and this Section 10 (Miscellaneous). Notwithstanding anything else that may be to the contrary herein, the expiration or earlier termination of this Agreement shall not relieve a party for liability for any breach occurring prior to such expiration or earlier termination. In no event shall the Dealer Manager be entitled to payment of any compensation in connection with the Offering that is not completed according to this Agreement; provided, however, that the reimbursement of out-of-pocket accountable expenses actually incurred by the Dealer Manager or person associated with the Dealer Manager shall not be presumed to be unfair or unreasonable and shall be payable under normal circumstances.

(b) Notices. All notices or other communications required or permitted hereunder, except as herein otherwise specifically provided, shall be in writing and shall be deemed given or delivered: (i) when delivered personally or by commercial messenger; (ii) one business day following deposit with a recognized overnight courier service, provided such deposit occurs prior to the deadline imposed by such service for overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided confirmation of receipt is received by sender and such notice is sent by an additional method provided hereunder; in each case above provided such communication is addressed to the intended recipient thereof as set forth below:

If to the Company:

GWG Holdings, Inc.
220 South Sixth Street, Suite 1200
Minneapolis, Minnesota 55402
Attention: Jacky Junek, Senior Counsel

with a copy to:

Maslon LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Attention: Paul D. Chestovich

If to the Dealer Manager:

Emerson Equity, LLC
1431 Greenway Drive, Suite 710
Irving, TX 75038
Attention: Mr. Robert Jones

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with a copy to:

Kunzman & Bollinger, Inc.
5100 N. Brookline Avenue, Suite 600
Oklahoma City, Oklahoma 73112
Attention: Wallace W. Kunzman, Jr.

Any party may change its address specified above by giving each party notice of such change in accordance with this Section 10(b).

(c) Successors and Assigns. No party shall assign (voluntarily, by operation of law or otherwise) this Agreement or any right, interest or benefit under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be fully binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.

(d) Invalid Provision. The invalidity or unenforceability of any provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

(e) Applicable Law. This Agreement and any disputes relative to the interpretation or enforcement hereto shall be governed by and construed under the internal laws, as opposed to the conflicts-of-laws provisions, of the State of New York.

(f) Waiver. EACH OF THE PARTIES HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT. The parties hereto each hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the Eastern District of New York, in respect of the interpretation and enforcement of the terms of this Agreement, and in respect of the transactions contemplated hereby, and each hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the parties hereto each hereby irrevocably agrees that all claims with respect to such action or proceeding shall be heard and determined in such a New York State or Federal court.

(g) Attorneys’ Fees. If a dispute arises concerning the performance, meaning or interpretation of any provision of this Agreement or any document executed in connection with this Agreement, then the prevailing party in such dispute shall be awarded any and all costs and expenses incurred by the prevailing party in enforcing, defending or establishing its rights hereunder or thereunder, including, without limitation, court costs and attorneys and expert witness fees. In addition to the foregoing award of costs and fees, the prevailing also shall be entitled to recover its attorneys’ fees incurred in any post-judgment proceedings to collect or enforce any judgment.

(h) No Partnership. Nothing in this Agreement shall be construed or interpreted to constitute the Dealer Manager or the Soliciting Dealer as being in association with or in partnership with the Company or one another, and instead, this Agreement only shall constitute the Soliciting Dealer as a broker authorized by the Company to sell and to manage the sale by others of the Shares according to the terms set forth in the Registration Statement, the Prospectus or this Agreement. Nothing herein contained shall render the Dealer Manager or the Company liable for the obligations of any of the Soliciting Dealers or one another.

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(i) Third Party Beneficiaries. Except for the persons and entities referred to in Section 7 (Indemnification) and Section 8 (Contribution), there shall be no third party beneficiaries of this Agreement, and no provision of this Agreement is intended to be for the benefit of any person or entity not a party to this Agreement, and no third party shall be deemed to be a beneficiary of any provision of this Agreement. Except for the persons and entities referred to in Section 7 and Section 8, no third party shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against any party to this Agreement. Each of the persons and entities referred to in Section 7 and Section 8 shall be a third party beneficiary of this Agreement.

(j) Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

(k) Nonwaiver. The failure of any party to insist upon or enforce strict performance by any other party of any provision of this Agreement or to exercise any right under this Agreement shall not be construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon any such provision or right in that or any other instance; rather, such provision or right shall be and remain in full force and effect.

(l) Access to Information. The Company may authorize the Company’s transfer agent to provide information to the Dealer Manager and each Soliciting Dealer regarding recordholder information about the clients of such Soliciting Dealer who have invested with the Company on an on-going basis for so long as such Soliciting Dealer has a relationship with such clients. The Dealer Manager shall require in the Soliciting Dealer Agreement that Soliciting Dealers not disclose any password for a restricted website or portion of website provided to such Soliciting Dealer in connection with the Offering and not disclose to any person, other than an officer, director, employee or agent of such Soliciting Dealers, any material downloaded from such a restricted website or portion of a restricted website.

(m) Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in counterpart copies, each of which shall be deemed an original but all of which together shall constitute one and the same instrument comprising this Agreement.

(n) Absence of Fiduciary Relationships. The parties acknowledge and agree that:

(i) the Dealer Manager’s responsibility to the Company is solely contractual in nature; and

(ii) the Dealer Manager does not owe the Company, any of its affiliates or any other person or entity any fiduciary (or other similar) duty as a result of this Agreement or any of the transactions contemplated hereby.

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return it to us, whereupon this instrument will become a binding agreement between you and the Company in accordance with its terms.

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IN WITNESS WHEREOF, the parties hereto have each duly executed this Dealer Manager Agreement as of the day and year set forth above.

THE COMPANY:
GWG Holdings, Inc.
By:
	Name:
	Title:

Accepted as of the date first above written:

THE DEALER MANAGER:
EMERSON EQUITY, LLC
By:
	Name:
	Title:

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EX-4.1

EXHIBIT 4.1

CERTIFICATE OF DESIGNATION

of

SERIES 2 REDEEMABLE PREFERRED STOCK

GWG HOLDINGS, INC.

(Pursuant to Section 151(g) of the

Delaware General Corporation Law)

GWG HOLDINGS, INC., a Delaware corporation (the “Company”), hereby certifies as of ______________, 2017 (the “Filing Date”), that the following resolution was duly adopted by the Board of Directors of the Company (the “Board”), effective as of ______________, 2017, pursuant to Section 151(g) of the Delaware General Corporation Law (the “DGCL”):

RESOLVED, that pursuant to the authority vested in the Board of Directors of the Company by the Company’s Certificate of Incorporation, and in accordance with the Delaware General Corporation Law, Section 151, the Board of Directors hereby states the authorized number and terms of a new class of preferred stock of the Company, to be entitled “Series 2 Redeemable Preferred Stock,” and fixes the relative powers, privileges, preferences and rights, and the qualifications, limitations and restrictions, thereof as follows:

1.            Designation and Amount. The shares of such series shall be designated as “Series 2 Redeemable Preferred Stock,” and the number of shares constituting the Series 2 Redeemable Preferred Stock shall be 1,000,000. Such number of shares may be increased or decreased by resolution of the Board adopted and filed pursuant to the DGCL, Section 151(g), or any successor provision; provided, however, that no decrease shall reduce the number of authorized shares of Series 2 Redeemable Preferred Stock to a number less than the number of such shares then outstanding plus the number of shares reserved for issuance upon the exercise of any then-outstanding options, warrants, convertible or exchangeable securities or other rights for the purchase of shares of Series 2 Redeemable Preferred Stock, if any.

2.            Stated Value.

(a)            Each share of Series 2 Redeemable Preferred Stock shall have a stated value equal to $1,000 (the “Stated Value”). If at any time after the Filing Date the Company effects (i) a stock dividend payable in shares of Series 2 Redeemable Preferred Stock, (ii) a subdivision of the outstanding Series 2 Redeemable Preferred Stock into a greater number of shares of Series 2 Redeemable Preferred Stock, or (iii) a combination of the outstanding shares of Series 2 Redeemable Preferred Stock, by reclassification or otherwise, into a lesser number of shares of Series 2 Redeemable Preferred Stock, then, in any such case, the Stated Value in effect immediately prior to such event shall, concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate.

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(b)            Upon any adjustment of the Stated Value of the Series 2 Redeemable Preferred Stock, then and in each such case the Company shall give written notice thereof to the registered holders of the Series 2 Redeemable Preferred Stock (“Holders”), which notice shall state the new stated value resulting from such adjustment and set forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

3.            Ranking. As to the payment of dividends and the distribution of assets of the Company upon its liquidation, dissolution or winding up, the Series 2 Redeemable Preferred Stock shall rank as follows: (a) senior to the Company’s common stock; (b) pari passu with the Company’s Series A Convertible Preferred Stock and the Company’s Redeemable Preferred Stock; and (c) senior to or pari passu with all other classes and series of the Company’s preferred stock.

4.            Dividends in Cash or in Kind.

(a)            Holders shall be entitled to receive for each share of Series 2 Redeemable Preferred Stock, and the Company shall pay, subject to the provisions of the DGCL and legally available funds therefor, preferential cumulative dividends at the per annum rate of [●]% on the Stated Value, payable in arrears in monthly installments on the 15th day of the next following month (or if such date is not a business day, then the next following business day), when and as declared by the Board (the “Preferred Dividends”), (i) in cash out of legally available funds, or (ii) at the Company’s option, in duly authorized, validly issued, fully paid and non-assessable shares of Series 2 Redeemable Preferred Stock. Preferred Dividends on shares of Series 2 Redeemable Preferred Stock shall also be payable upon any Redemption Date, as defined below, and upon the final distribution date relating to a Liquidation Event, as defined below.

(b)            Preferred Dividends shall cease to accrue on shares of Series 2 Redeemable Preferred Stock on the day immediately prior to any Redemption Date, as defined in Section 9(a) below, and on the final distribution date relating to a Liquidation Event.

(c)            Regular dividends shall be payable to the Holders, in accordance with the DGCL, as of each regular record date that is the final business day of a calendar month that is also a day on which the Company’s common stock trades or is eligible for trading on the primary market for such stock. Notwithstanding the foregoing, Holders as of a regular record date must have held their Series 2 Redeemable Preferred Stock for more than two business days (each of which must also have been a trading day on which the Company’s common stock traded or was eligible for trading on the primary market for such stock) in order to be eligible to receive a dividend payment on the next payment date. If the Company’s common stock no longer trades or is eligible for trading on a trading market, then the requirement in the prior two sentences that a business day shall be a “trading day” shall not apply. In the case of payment by the Company of dividends in the form of shares of Series 2 Redeemable Preferred Stock, such stock shall be valued at the Stated Value.

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(d)            Preferred Dividends shall be calculated on the basis of a calendar year consisting of twelve 30-day months (or 360 days), and shall begin to accrue on outstanding shares of Series 2 Redeemable Preferred Stock from the date of each share’s original issuance until paid, whether or not declared. Preferred Dividends shall accrue whether or not there are profits, surplus or other funds of the Company legally available for the payment of dividends at the time such Preferred Dividends become payable or at any other time. Preferred Dividends shall be cumulative from the date of issue, whether or not declared for any reason, including if such declaration is prohibited under applicable law or any outstanding indebtedness or borrowings of the Company or any of its subsidiaries, or any other contractual provision binding on the Company or any of its subsidiaries.

(e)            No dividend shall be declared on any other series or class or classes of capital stock to which the Series 2 Redeemable Preferred Stock ranks senior or pari passu as to dividends or liquidation, including without limitation shares of common stock, in respect of any period, nor shall any series or class of capital stock that ranks junior or pari passu to the Series 2 Redeemable Preferred Stock be redeemed, purchased or otherwise acquired for any consideration (or any money to be paid into any sinking fund or otherwise set apart for the purchase of any such junior stock), unless all accrued and unpaid Preferred Dividends through the most recent payment date have been or contemporaneously are declared and paid on all then-outstanding shares of the Series 2 Redeemable Preferred Stock; provided, however, that this restriction shall not apply to the repurchase by the Company of (i) shares of common stock from employees, officers, directors, consultants or other persons performing services for the Company or any of its subsidiaries pursuant to agreements under which the Company has the right or option to repurchase such shares upon the occurrence of certain events or otherwise, (ii) shares of Series A Convertible Preferred Stock pursuant to the terms of the Certificate of Designation for such preferred stock, or terms superior to those contained within such Certificate of Designation, or (iii) shares of Redeemable Preferred Stock pursuant to the terms of the Certificate of Designation for such preferred stock, or terms superior to those contained within such Certificate of Designation.

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5.            Liquidation Preference.

(a)            In the event of (i) the sale, conveyance, exchange or other disposition of all or substantially all of the assets of the Company, (ii) any acquisition of the Company by means of a consolidation, stock exchange, stock sale, merger or other form of corporate reorganization with any other entity in which the Company’s stockholders prior to any such transaction own less than a majority of the voting securities of the surviving entity (a “Change-in-Control Transaction”), or (iii) the winding up or dissolution of the Company, whether voluntary or involuntary (each such event described in clause (i), (ii) and (iii), a “Liquidation Event”), the Board shall determine in good faith the amount legally available for distribution to stockholders after taking into account the distribution of assets among, or payment thereof over to, creditors of the Company in the manner required by the DGCL (the “Net Assets Available for Distribution”). Subject to the provisions of Section 5(d) below, each Holder shall be entitled to be paid out of the Net Assets Available for Distribution, and before any payment or distribution is made to the holders of any class of capital stock ranking junior to the Series 2 Redeemable Preferred Stock, and on a pari passu basis with holders of Series A Convertible Preferred Stock, Redeemable Preferred Stock and any other class or series of capital stock then ranking pari passu with the Series 2 Redeemable Preferred Stock (if the Liquidation Event triggers a payment obligation on such classes), for each then-outstanding share of Series 2 Redeemable Preferred Stock held by such Holder, an amount equal to the Stated Value, as adjusted, plus all accrued and unpaid Preferred Dividends thereon (the “Liquidation Amount”). Notwithstanding the foregoing, a transaction shall not constitute a Liquidation Event if the Board shall have approved such transaction and the sole purpose of the transaction is to change the jurisdiction in which the Company is incorporated or create a holding company with substantially similar series and classes of capital shares, each having substantially the same terms as those that existed immediately prior to the transaction and owned in the same proportions by the persons or entities who held the Company’s securities immediately prior to such transaction. Holders of a majority of the shares of Series 2 Redeemable Preferred Stock, voting as a single class, may vote to determine whether a transaction which otherwise constitutes a Liquidation Event shall be deemed not to be a Liquidation Event for purposes of this Section 5(a).

(b)            If the amount of the Net Assets Available for Distribution is insufficient to pay the full Liquidation Amount, then such Net Assets Available for Distribution shall be distributed ratably to the Holders in proportion to the respective amounts to which such Holders would otherwise be entitled.

(c)            If any distribution contemplated in this Section 5 is payable in securities or property other than cash, then the value of such distribution shall be the fair market value of such distribution as determined in good faith by the Board.

(d)            In connection with the occurrence of a Change-in-Control Transaction, Holders of a majority of then-outstanding shares of Series 2 Redeemable Preferred Stock may vote to receive, in lieu of cash in an amount per share equal to the Liquidation Amount, securities of the successor or purchasing corporation having the same or substantially identical rights, preferences and privileges as the Series 2 Redeemable Preferred Stock held immediately prior to such Change-in-Control Transaction.

6.            Voting. Except as otherwise set forth herein or as required by law, Holders shall not be entitled to vote on any matter on account of their Series 2 Redeemable Preferred Stock. If the DGCL requires the vote of the Holders, voting as a separate class, to authorize an action of the Company, then the affirmative vote of the Holders of a majority of then-outstanding shares of Series 2 Redeemable Preferred Stock shall constitute the approval of such action by the class, unless the DGCL requires a different threshold, in which case such different threshold shall apply.

7.            Certain Notices. The Company will provide the Holders with prior written notice of any meeting of the stockholders of the Company and written notice of any action taken by the stockholders of the Company without a meeting. The Company will also provide the Holders with at least 20 days’ written notice prior to the consummation of any transaction described in Section 5(a), clauses (i) or (ii), constituting a Liquidation Event.

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8.            Protective Provisions. In addition to any other vote or consent required herein or by law, the affirmative vote or written consent of Holders of a majority of then-outstanding shares of Series 2 Redeemable Preferred Stock, voting together as a single class, given in writing or by a vote at a meeting, shall be required for the Company to:

(a)            amend or waive any provision of this Certificate of Designation or otherwise take any action that modifies any powers, rights, preferences, privileges or restrictions of the Series 2 Redeemable Preferred Stock (other than an amendment solely for the purpose of changing the number of shares of Series 2 Redeemable Preferred Stock designated for issuance hereunder, as contemplated in Section 1 above);

(b)            authorize, create or issue shares of any class of stock having rights, preferences or privileges upon a liquidation of the Company that are superior to the Series 2 Redeemable Preferred Stock; or

(c)            amend the Certificate of Incorporation of the Company in a manner that adversely and materially affects the rights of the Series 2 Redeemable Preferred Stock.

9.            Redemption and Repurchase.

(a)          Redemption Request by a Holder.

(i)           Upon receipt of a written notice from a Holder requesting that the Company redeem all or any portion of such Holder’s share(s) (the “Holder Redemption Notice”), the Company may choose to (but shall not be obligated to) redeem the applicable Series 2 Redeemable Preferred Stock for the Redemption Price, as defined in Section 9(b)(i), subject, however, to the applicable redemption fee specified below:

(A)            if the Holder Redemption Notice is given prior to or on the first anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a 12% redemption fee shall apply;

(B)            if the Holder Redemption Notice is given after the first anniversary of the issuance of such Series 2 Redeemable Preferred Stock and prior to or on the second anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a 10% redemption fee shall apply;

(C)            if the Holder Redemption Notice is given after the second anniversary of the issuance of such Series 2 Redeemable Preferred Stock and prior to or on the third anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a 8% redemption fee shall apply; and

(D)            if the Holder Redemption Notice is given after the third anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then no redemption fee shall apply.

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(ii)            Within 30 days after the Company’s receipt of the Holder Redemption Notice, the Company shall provide written notice to such requesting Holder specifying whether all or a portion of the Series 2 Redeemable Preferred Stock sought to be redeemed pursuant to the Holder Redemption Notice will be repurchased by the Company (which the Company shall determine in its discretion) (the “Company Redemption Response”). If all or any portion of such Series 2 Redeemable Preferred Stock is to be repurchased by the Company, then the Company Redemption Response shall specify the date on which such repurchase and redemption shall occur (the “Redemption Date”), which date shall be no more than 60 days after the giving of the Holder Redemption Notice, and the Company Redemption Response shall include the stock power, if required, described in paragraph (iv) below.

(iii)            On any Redemption Date and in accordance with this Section 9(a), the Company will, to the extent that it has sufficient funds to consummate a redemption, as determined by the Company in its discretion, and to the extent that it may then lawfully do so under the DGCL and such payment is further permitted under the Company’s Certificate of Incorporation (including all related certificates of designation), and any borrowing agreements to which it or its subsidiaries are bound (the “Borrowing Agreements”), in connection with the delivery by such Holder of the applicable items described in paragraph (iv) below, redeem the shares specified in the Company Redemption Response by paying in cash, via wire transfer of immediately available funds to an account designated in writing by the Holder, an amount per share equal to the applicable Redemption Price.

(iv)           On or before a Redemption Date, the applicable Holder shall deliver to the Company a stock power duly executed (in the form provided by the Company together with the Company Redemption Response).

(v)            From and after the Redemption Date, (A) the shares identified in the Company Redemption Response shall be cancelled on the books and records of the Company, (B) the right to receive Preferred Dividends thereon shall cease to accrue, and (C) all rights of the Holder of the shares to be redeemed shall cease and terminate, excepting only the right to receive the Redemption Price therefor (which right shall be contingent upon the Holder delivering the stock power required under paragraph (iv) above); provided, however, that if as of the close of business on the Redemption Date the Company has not paid the Redemption Price with respect to such Holder (other than any case in which the Redemption Price has not been paid due to a failure by the Holder to deliver the stock power required under paragraph (iv) above), then the shares to be redeemed shall remain issued and outstanding, and all rights of such Holder with respect to such shares shall continue.

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(vi)            If, on any Redemption Date, the Company (A) is unable, by virtue of applicable law or provisions in its Certificate of Incorporation (including all related certificates of designation), to redeem shares of Series 2 Redeemable Preferred Stock, or (B) cannot redeem shares of Series 2 Redeemable Preferred Stock without constituting a default under any Borrowing Agreements, then such redemption obligation shall be discharged promptly after the Company becomes able to discharge such redemption obligation under applicable law and without causing or constituting a default under Borrowing Agreements, with all such deferred redemption obligations being satisfied on a prorated basis and regardless of the order in which any Holder Redemption Notices shall have been received by the Company. If and so long as the redemption obligation with respect to shares of Series 2 Redeemable Preferred Stock has not been fully discharged, the Company shall not declare or make any dividend or other distribution on any junior class or series of capital stock or directly or indirectly redeem, purchase or otherwise acquire for any consideration any shares of a junior class or series of capital stock or discharge any optional redemption, sinking fund or other similar obligation in respect of any such junior class or series of capital stock; provided, however, that this restriction shall not apply to the repurchase by the Company of shares of (x) common stock from employees, officers, directors, consultants or other persons performing services for the Company or any of its subsidiaries pursuant to agreements under which the Company has the right or option to repurchase such shares upon the occurrence of certain events or otherwise, or (y) Series A Convertible Preferred Stock pursuant to the terms of the Certificate of Designation of Series A Convertible Preferred Stock or terms superior to those contained within such Certificate of Designation of Series A Convertible Preferred Stock.

(b)          Redemption at the Option of the Company.

(i)            The Company shall have the right (but not the obligation) to redeem shares of Series 2 Redeemable Preferred Stock at a price per share equal to the Stated Value plus an amount equal to all accrued and unpaid Preferred Dividends thereon (whether or not declared), up to but not including the Company Redemption Date, as defined below (such amount, the “Redemption Price”); provided, however, that if the Company redeems any shares of Series 2 Redeemable Preferred Stock prior to the one-year anniversary of their issuance, then the Redemption Price shall include a premium equal to the amount by which the Redemption Price (calculated as above) is less than [●]% of the Stated Value of those shares. To exercise this redemption right, the Company shall deliver written notice to each Holder that all or part of the Series 2 Redeemable Preferred Stock will be redeemed (the “Company Redemption Notice”) on a date that is no earlier than 20 and no later than 60 days after the date of the Company Redemption Notice (such date, the “Company Redemption Date”); provided, however, that if the Company elects to redeem less than all of the Series 2 Redeemable Preferred Stock, it shall do so ratably among all Holders.

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(ii)           On the Company Redemption Date and in accordance with this Section 9(b), the Company will, at its option (to the extent it may then lawfully do so under the DGCL, and for so long as (A) a redemption is permitted under the Company’s Certificate of Incorporation (including all related certificates of designation), and (B) such redemption does not constitute a default under any Borrowing Agreements), redeem the shares specified in the Company Redemption Notice by paying in cash, via wire transfer of immediately available funds to the respective accounts designated in writing by the applicable Holders, an amount per share equal to the Redemption Price.

(iii)          On or before the Company Redemption Date, each Holder whose shares are being redeemed under this Section 9(b) shall deliver to the Company a stock power, duly executed (in the form provided by the Company together with the Company Redemption Notice).

(iv)          From and after the Company Redemption Date, (A) the shares identified in the Company Redemption Notice shall be cancelled on the books and records of the Company, (B) the right to receive Preferred Dividends thereon shall cease to accrue, and (C) all rights of Holders with respect to the shares to be redeemed shall cease and terminate, excepting only the right to receive the Redemption Price with respect to such shares (which right shall be contingent upon the Holder delivering the stock power required under paragraph (iii) above); provided, however, that if as of the close of business on the Redemption Date the Company has not paid the Redemption Price with respect to such Holder (other than any case in which the Redemption Price has not been paid due to a failure by the Holder to deliver the stock power required under paragraph (iii) above), then the shares to be redeemed shall remain issued and outstanding, and all rights of such Holder with respect to such shares shall continue.

(c)          Repurchase in the Event of Death, Disability or Bankruptcy.

(i)            Subject to the terms of this Section 9(c), within 45 days of the death, Total Permanent Disability or Bankruptcy, as each such term is defined in paragraph (iv) below, of a Holder or Beneficial Holder, as defined below (a “Holder Repurchase Event”), the estate of such Holder or Beneficial Holder (in the event of death) or such Holder or Beneficial Holder or his or her legal representative (in the event of Total Permanent Disability or Bankruptcy) may request that the Company repurchase, in whole but not in part, without penalty, the Series 2 Redeemable Preferred Stock held by such Holder (including Series 2 Redeemable Preferred Stock of the Holder held in his or her individual retirement accounts) or Beneficial Holder by delivering to the Company a written request for repurchase (a “Repurchase Request”). Any such Repurchase Request shall identify the applicable Holder Repurchase Event. If Series 2 Redeemable Preferred Stock is held jointly by natural persons who are legally married, then a Repurchase Request may be made by (A) the surviving Holder (or Beneficial Holder) upon the occurrence of a Holder Repurchase Event arising by virtue of a death, or (B) the disabled or bankrupt Holder or Beneficial Holder (or his or her legal representative) upon the occurrence of a Holder Repurchase Event arising by virtue of a Total Permanent Disability or Bankruptcy. If Series 2 Redeemable Preferred Stock is held together by two or more natural persons that are not legally married (regardless of whether held as joint tenants, co-tenants or otherwise), then none of such co-Holders shall have the right to make a Repurchase Request unless a Holder Repurchase Event has occurred for each such co-Holder. A Holder that is not an individual natural person does not have the right to make a Repurchase Request.

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(ii)         Upon receipt of a Repurchase Request, the Company shall designate a date for the repurchase of Series 2 Redeemable Preferred Stock (the “Repurchase Date”), which date shall not be later than the 60th day after the Company is provided with facts or certifications establishing, to the reasonable satisfaction of the Company, the occurrence of the Holder Repurchase Event. On the Repurchase Date, the Company shall, to the extent that it may then lawfully do so under the DGCL and such payment is further permitted under its Certificate of Incorporation (including related certificates of designation) and any Borrowing Agreements, pay the Holder or Beneficial Holder, or the estate of the Holder or Beneficial Holder, an amount per share equal to the Stated Value plus all accrued and unpaid Preferred Dividends thereon (whether or not declared), up to but not including the Repurchase Date (the “Repurchase Price”).

(iii)          From and after the Repurchase Date, (A) the shares being repurchased pursuant to the Repurchase Request shall be cancelled on the books and records of the Company, (B) the right to receive Preferred Dividends thereon shall cease to accrue, and (C) all rights of the Holder with respect to the shares being repurchased shall cease and terminate, excepting only the right to receive the Repurchase Price with respect to such shares (which right shall be contingent upon the Holder delivering a stock power relating to the shares to be repurchased); provided, however, that if as of the close of business on the Repurchase Date the Company has not paid the Repurchase Price (other than any case in which the Repurchase Price has not been paid due to a failure by the Holder to deliver a required stock power), then the shares to be repurchased shall remain issued and outstanding, and all rights of such Holder with respect to such shares shall continue.

(iv)         For purposes of this Section 9(c):

(A)            “Bankruptcy” means, with respect to a Beneficial Holder or Holder who is an individual natural person, the (1) commencement of a voluntary bankruptcy case by that Beneficial Holder or Holder; (2) consent to the entry of an order for relief against such Beneficial Holder or Holder in an involuntary bankruptcy case; or (3) consent to the appointment of a custodian of such Beneficial Holder or Holder or for all or substantially all of such person’s property;

(B)            “Beneficial Holder” means an individual natural person that holds a beneficial interest in Series 2 Redeemable Preferred Stock through a custodian or nominee, including a broker-dealer; and

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(C)            “Total Permanent Disability” means, with respect to a Beneficial Holder or Holder who is an individual natural person, a determination by a physician approved by the Company that such person, who was gainfully employed and working at least 40 hours per week as of the date on which Series 2 Redeemable Preferred Stock was purchased, has been unable to work 40 or more hours per week for at least 24 consecutive months.

10.          Conversion.

(a)          Conversions at Option of Holder. Holders have the right and option to partially convert their Series 2 Redeemable Preferred Stock, at any time and from time to time, into that number of shares of common stock determined by dividing the Stated Value of such shares of Series 2 Redeemable Preferred Stock by the Conversion Price, as defined below; provided, however, that:

(i)            no more than [●]% of the Stated Value of Series 2 Redeemable Preferred Stock originally purchased from the Company may be converted into common stock (i.e., no share of Series 2 Redeemable Preferred Stock originally purchased from the Company may be converted into more than [●] shares of common stock);

(ii)           no shares of Series 2 Redeemable Preferred Stock issued by the Company as Preferred Dividends, and no accrued but unpaid Preferred Dividends, may be converted into common stock; and

(iii)          upon the giving of a Company Redemption Notice, the right to convert shares of Series 2 Redeemable Preferred Stock that are subject to redemption shall be suspended through the Company Redemption Date.

Holders shall effect conversions by delivering to the Company a conversion notice in the form provided by the Company (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series 2 Redeemable Preferred Stock to be converted, and the date on which such conversion is to be effected (the “Conversion Date”), which date may not be prior to the date the applicable Notice of Conversion is delivered to the Company. If no Conversion Date is specified in a Notice of Conversion, then the Conversion Date shall be the date that such Notice of Conversion is deemed given under Section 15 below.

(b)          Conversion Price. The conversion price for the Series 2 Redeemable Preferred Stock shall be the volume-weighted average price of the Company’s common stock for the 20 trading days immediately prior to the date of conversion of such Series 2 Redeemable Preferred Stock (the “Conversion Price”), subject, however, to the applicable Conversion Price discount specified below:

(i)            if the Notice of Conversion is given prior to or on the third anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a [●]% discount on the Conversion Price shall apply;

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(ii)            if the Notice of Conversion is given after the third anniversary of the issuance of such Series 2 Redeemable Preferred Stock and prior to or on the fourth anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a [●]% discount on the Conversion Price shall apply;

(iii)            if the Notice of Conversion is given after the fourth anniversary of the issuance of such Series 2 Redeemable Preferred Stock and prior to or on the fifth anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then an [●]% discount on the Conversion Price shall apply; and

(iv)            if the Notice of Conversion is given after the fifth anniversary of the issuance of such Series 2 Redeemable Preferred Stock, then a [●]% discount on the Conversion Price shall apply.

Notwithstanding the foregoing, the Conversion Price shall in no event (including after the application of discount as specified above) be less than $[●] per share, subject, however, to equitable adjustment upon stock dividends, subdivisions or combinations, by reclassification or otherwise.

(c)          Mechanics of Conversion.

(i)            Not later than five business days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the converting Holder a certificate representing the Conversion Shares or shall deliver Conversion Shares electronically through the Depository Trust Company or another established clearing corporation performing similar functions. “Conversion Shares” means, collectively, the shares of common stock issued and issuable upon conversion of the shares of Series 2 Redeemable Preferred Stock in accordance with the terms hereof.

(ii)            Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate(s) are not delivered to or as directed by the applicable Holder by the Share Delivery Date, then such Holder shall be entitled to elect, by written notice to the Company at any time on or before such Holder’s receipt of such certificate(s), to rescind such Conversion Notice, in which event such Holder shall promptly return to the Company any common stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

(iii)            Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of common stock, for the sole purpose of issuance upon conversion of the Series 2 Redeemable Preferred Stock as herein provided, free from preemptive rights or any other actual contingent-purchase rights, that number of shares of common stock that would be issuable upon the conversion of all then-outstanding shares of Series 2 Redeemable Preferred Stock eligible for conversion hereunder. The Company covenants that all shares of common stock so issuable shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable.

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(iv)            No Fractional Common Shares. No fractional common shares or scrip representing fractional common shares shall be issued upon the conversion of the Series 2 Redeemable Preferred Stock. As to any fraction of a common share which the Holder would otherwise be entitled to receive upon a conversion, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price, or round up or down to the nearest whole share (with even halves rounded up).

(v)            Transfer Taxes and Expenses. The issuance of certificates representing shares of the common stock issued upon conversion of the Series 2 Redeemable Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders; and provided, further, that the Company shall not be required to issue or deliver such certificates unless or until the Holder requesting the issuance thereof has paid to the Company the amount of such tax or has established to the satisfaction of the Company that such tax has been paid. The Company shall pay all transfer agent fees required for the processing of any Notice of Conversion.

11.          No Sinking Fund. The Company shall not be required to establish any sinking or retirement fund with respect to the shares of Series 2 Redeemable Preferred Stock.

12.         Fractional Shares. Series 2 Redeemable Preferred Stock may be issued in fractional shares.

13.          Loss, Theft or Destruction. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of certificates, if any, representing shares of Series 2 Redeemable Preferred Stock, and receipt of indemnity or security reasonably satisfactory to the Company (or in the case of mutilation, upon surrender and cancellation of the mutilated certificate), the Company shall cause to be made, issued and delivered, in lieu of such lost, stolen, destroyed or mutilated certificate, a new certificate of like tenor.

14.          Holder of Record Deemed Absolute Owner. The Company may deem the Holder in whose name shares of Series 2 Redeemable Preferred Stock is registered upon the books and records of the Company to be, and may treat such Holder as, the absolute owner of the Series 2 Redeemable Preferred Stock for the purpose of paying Preferred Dividends, paying the Redemption Price, and for all other purposes, and the Company shall not be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability of the Company in respect of the Series 2 Redeemable Preferred Stock to the extent of the sum or sums so paid.

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15.            Notices. Unless otherwise provided herein, all notices or other communications or deliveries to be provided shall be given in writing and delivered in person, by overnight courier, by first-class mail (registered or certified, return-receipt requested), by facsimile or by email, in each case to the other’s address as provided below:

If to the Company:	GWG Holdings, Inc. 220 South Sixth Street, Suite 1200 Minneapolis, MN 55402 Attention: Chief Financial Officer Facsimile: (612) 746-0445
If to a Holder:	such Holder’s address as shown on the books and records of the Company or a more recent address that such Holder may have provided in writing to the Company.

If given in person, notice shall be treated as given when personally received or, if sent as provided above, the effective date of the notice shall, as applicable, be (a) the date of the written receipt if delivered via overnight courier, (b) three days after the date on which the notice is mailed by first-class mail (registered or return-receipt requested), (c) the date on which the notice is transmitted by confirmed facsimile, or (d) the day after the notice is sent electronically to the email address on record (without receipt of any failure notice).

16.            Reacquired Shares. If any Series 2 Redeemable Preferred Stock is exchanged, redeemed, purchased or otherwise acquired by the Company in any manner, then those shares shall be cancelled, and upon such cancellation shall be returned to the pool of authorized but undesignated and unissued shares of preferred stock of the Company, and thereafter may be reissued as part of a new series of preferred stock of the Company to be created by resolution of the Board as permitted by the DGCL and the Company’s Certificate of Incorporation.

17.            Severability. If any provision of this Certificate of Designation, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, then (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision, and (ii) the remainder of this Certificate of Designation and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

* * * * * * *

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IN WITNESS WHEREOF, GWG Holdings, Inc. has caused this Certificate of Designation to be signed by the undersigned on this ___ day of __________, 2017.

GWG HOLDINGS, INC.

William Acheson

Chief Financial Officer 

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EX-4.2

EXHIBIT 4.2

GWG HOLDINGS, INC.

Series 2 Redeemable Preferred Stock

SUBSCRIPTION AGREEMENT

Please complete this form to purchase Series 2 Redeemable Preferred Stock. Any sections of this form that are incomplete may be returned to your broker-dealer and may delay your purchase of Series 2 Redeemable Preferred Stock.

Once completed, send this Subscription Agreement along with your certified or personal check payable to our transfer agent, Securities Transfer Corp., or wire your deposit to the account listed below, and forward any other documents requested in this agreement to your broker-dealer or to Securities Transfer Corp. at:

Securities Transfer Corp.

2901 N. Dallas Parkway, Suite 380

Plano, TX 75093

Domestic Wire Instructions:

Account Name: Securities Transfer Corp. Agent for GWG Holdings Inc.

Routing: 111923238

Account: 574589

Bank Name: Texas Bank & Trust Company

GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

1.  INVESTMENT

NOTE: Minimum investment amount is $10,000. Any amount in excess of such minimum investment amount must be in increments of $1,000. GWG does not recommend investing more than 10% of an investor’s liquid net worth in the Series 2 Redeemable Preferred Stock offering.
Purchase price per share:	$ 1,000.00	(Net of Commission $940)
Number of shares:	________________
Aggregate purchase price:	$ ___________________	(Market Value: $_______________)
Payment Instructions: See front cover for payment instructions.

2.  FORM OF OWNERSHIP Please choose one option within the “Non-Custodial Ownership” or the “Custodial Ownership” columns

NON-CUSTODIAL OWNERSHIP		CUSTODIAL OWNERSHIP
☐	Individual	THIRD-PARTY ADMINISTERED CUSTODIAL PLAN
☐	Joint Tenant – Joint accounts will be registered as joint tenants with right of survivorship unless otherwise indicated.	☐	IRA
		☐	ROTH IRA
☐	Tenants in Common	☐	SEP (Simple Employee Pension)
☐	Corporation or Partnership – Authorized signature required. Include corporate resolution or partnership agreement, as applicable.	☐	Other (Specify): __________________________________ _______________________________________________________
		Name of Custodian: _____________________________________________ Mailing Address: _______________________________________________
☐	Uniform Gift/Transfer to Minors – (UGMA/UTMA)	City, State, ZIP: ________________________________________________
☐	Pension or Other Retirement Plan – Include plan documents.	CUSTODIAN INFORMATION (To be completed by custodian)
☐	Trust – Include title and applicable trust agreement	Custodian Tax ID #: _____________________________________________ Custodian Acct #: _______________________________________________
☐	Other (describe): _______________________________________	Custodian Phone #: _____________________________________________

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GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

3.  INVESTOR INFORMATION (Print name(s) in which shares are to be registered)

A.  Investor or Trustee
First Name:	________________________________	Middle Name:	______________________________
Last Name:	________________________________	Tax ID or SS #:	______________________________
Street Address:	________________________________

City: ___________________________ State: ______________________ ZIP: ________________________

Date of Birth: __________________________

If Non-U.S. Citizen, specify country of citizenship: _____________________________________________________

Primary Phone: ______________________________________ Email Address: _____________________________

B.  Co-Investor or Co-Trustee
First Name:	________________________________	Middle Name:	_____________________________
Last Name:	________________________________	Tax ID or SS #:	_____________________________
Street Address:	________________________________

City: __________________________ State: ________________________ ZIP: _______________________

Date of Birth: __________________________

If Non-U.S. Citizen, specify country of citizenship: _____________________________________________________

Primary Phone: ______________________________________ Email Address: _____________________________

C.  Residential Street Address (Must be completed if mailing address in Section 3A is a P.O. Box)
Street Address:	________________________________________________________________________
City:	_______________________	State:	_____________________	ZIP:	_______________________

D.  Trust/Corporation/Partnership/Other (Trustee information must be provided in Sections 3A and 3B)
Date of Trust:	_________________________________________________________________
Entity Name/Title of Trust:	_________________________________________________________________
Tax ID#:	_________________________________________________________________

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GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

4.  DISTRIBUTIONS (Complete this section to elect how to receive your dividend distributions. Select only one.)

NOTE:  If nothing is marked, we will default to “Credit Dividend to Custodian Clearing Firm/Platform of Record” or “Mail Check to Address of Record,” as applicable.  IRA accounts may not direct distributions without the custodian’s approval.
I hereby elect the dividend distribution option indicated below:
☐	FOR CUSTODIAL OR CLEARING FIRM/PLATFORM ACCOUNTS: Credit Dividend to Custodian (including IRA) or Clearing Firm/Platform of Record
☐	I currently receive direct deposit payments from an existing GWG investment. I hereby instruct GWG to deposit all principal and interest payments related to the Series 2 Redeemable Preferred stock into the same account
☐	FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS: Cash/Direct Deposit (please attach a copy of a voided check to this form if funds are to be sent to a bank)
	If the box immediately above is checked, then I authorize GWG Holdings, Inc. or its agent to deposit my dividend distribution to my checking or savings account.  This authority will remain in force until I notify GWG Holdings, Inc. in writing to cancel this authority.  If GWG Holdings, Inc. deposits funds erroneously into my account, they are authorized to debit my account for an amount not to exceed the amount of the erroneous deposit.
☐	Mail Check to Address of Record

Name/Entity Name/Financial Institution: __________________________________________________________

Mailing Address: _________________________________________________________________________

City:	___________________	State:	__________________	ZIP:	___________________
Your Account #:	___________________	☐	Checking Account	☐	Savings Account
		☐	Brokerage Account

For electronic funds transfers, signatures of bank account owners are required exactly as they appear on the bank records.  If the registration at the bank differs from that in this Subscription Agreement, then all parties must sign below.
Owner Signature:	_______________________________	Date:	_______________________________
Co-Owner Signature:	_______________________________	Date:	_______________________________

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GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

5.  ELECTRONIC DELIVERY ELECTION

☐	Check the box if you do NOT consent to electronic delivery of documents, including the prospectus, any prospectus supplements, annual and quarterly reports, and other stockholder communications and reports.  An e-mail address is required in Section 3 above.  Please carefully read the following representations before consenting to receive documents electronically.  If you do not check this box, you hereby represent the following:
(a)	I acknowledge that access to both e-mail and Internet is required in order to access documents electronically.  I may receive by e-mail notification the availability of documents in electronic format.  The notification e-mail will contain an Internet address or hyperlink where the referenced document can be found.  By entering this address into my Internet web browser, I can view, download and print the documents from my computer.  I acknowledge that there may be costs associated with electronic access, such as usage charges from my Internet provider and telephone provider, and that these costs are my responsibility.
(b)	I acknowledge that documents distributed electronically may be provided in Adobe’s Portable Document Format (.pdf).  The Adobe Reader software is required to view these documents.  The Adobe Reader software is available free of charge from Adobe’s Internet website at www.adobe.com.  The Adobe Reader software must be correctly installed on my computer before I will be able to view documents in .pdf format.  Electronic delivery also involves risks related to system or network outages that could impair my timely receipt of or access to stockholder communications.
(c)	I acknowledge that, at no cost, I may receive from GWG Holdings, Inc. a paper copy of documents delivered electronically by calling my financial advisor or by calling GWG Holdings, Inc.
(d)	I understand that if an e-mail notification to me is returned to GWG Holdings, Inc. as “undeliverable,” a letter will be mailed to me with instructions on how to update my e-mail address to begin receiving communications by means of electronic delivery.  I further understand that if GWG Holdings, Inc. is unable to obtain a valid e-mail address for me, GWG Holdings, Inc. will resume sending me a paper copy of its filings by U.S. mail to my address of record.
(e)	I understand that my consent to receive documents and communications electronically may be updated or cancelled at any time by calling my financial advisor or by calling GWG Holdings, Inc.

5

GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

6. SUBSCRIBER ACKNOWLEDGEMENTS AND SIGNATURES

The undersigned hereby confirms his, her or its agreement to purchase Series 2 Redeemable Preferred Stock of GWG Holdings, Inc. on the terms and conditions set forth herein and acknowledges and represents (or, in the case of fiduciary accounts, the person authorized to sign on such subscriber’s behalf) the following:
NOTE:  You must initial each of the representations below.
	Owner	Co-Owner	(a) I/We have received the final prospectus for the Series 2 Redeemable Preferred Stock of GWG Holdings, Inc. and any applicable prospectus supplements.
	Owner	Co-Owner	(b) I/We accept the terms of the Certificate of Incorporation, as amended, and the bylaws of GWG Holdings, Inc.
	Owner	Co-Owner	(c) I/We are purchasing these shares for my/our own account.
	Owner	Co-Owner	(d) I/We hereby acknowledge that this investment in Series 2 Redeemable Preferred Stock is illiquid.

Owner Signature:	_____________________________________	Date:	___________________________________
Co-Owner Signature:	_____________________________________	Date:	___________________________________
Signature of Custodian(s) or Trustee(s) if applicable.  Current custodian must sign if investment is for an IRA account.
Authorized Signature:	_____________________________________	Date:	___________________________________

STAMP
HERE
IF APPLICABLE WE INTEND TO ASSERT THE FOREGOING REPRESENTATIONS AS A DEFENSE IN ANY SUBSEQUENT LITIGATION WHERE SUCH ASSERTION WOULD BE RELEVANT. WE HAVE THE RIGHT TO ACCEPT OR REJECT THIS SUBSCRIPTION IN WHOLE OR IN PART. THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO SUCH STATE’S CONFLICTS-OF-LAW PRINCIPLES.

6

GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

7.  BROKER-DEALER/FINANCIAL ADVISOR INFORMATION

NOTE:  The financial advisor must sign below to complete the order. The financial advisor hereby represents and warrants that he or she is duly licensed and may lawfully sell shares of GWG Holdings, Inc.’s Series 2 Redeemable Preferred Stock. All fields below must be completed.
Broker-Dealer:	__________________________________________________________________
Financial Advisor Name/RIA:	__________________________________________________________________
Mailing Address:	__________________________________________________________________

City: ________________ State: ________________ ZIP: ______________

Business Phone: _____________________________ Fax: ____________________________

E-mail Address:

__________________________________________________________________

☐

RIA Submission.  Check this box to indicate whether submission is made through the RIA in its capacity as the RIA and not in its capacity as a registered representative of a broker-dealer, if applicable, whose agreement with the subscriber includes a fixed or “wrap” fee feature for advisory and related brokerage services. I understand that by checking the above box, I will not be receiving a selling commission.

The undersigned further represents and certifies that in connection with this subscription for shares, he or she has complied with and has followed all applicable policies and procedures under his or her firm’s existing Anti-Money Laundering Program and Customer Identification Program.

Financial Advisor and/or RIA Signature:	__________________________	Date:	__________________________
Branch Manager, OSJ, or BD Signature:	__________________________	Date:	__________________________
Branch Manager, OSJ, or BD Printed Name:	______________________________

7

GWG HOLDINGS, INC.

SERIES 2 REDEEMABLE PREFERRED STOCK SUBSCRIPTION AGREEMENT

8.  DELIVERY INSTRUCTIONS

The undersigned hereby requests delivery of the securities contemplated herein in the following manner:

VIA DWAC TO:

Broker-Dealer Name:	_______________________________________________________________________
DTC Participant #:	_______________________________________________________________________
Name on Account1:	_______________________________________________________________________
Account #:	_______________________________________________________________________
Broker-Dealer Phone #:	_______________________________________________________________________
Broker Name:	_______________________________________________________________________

VIA PHYSICAL DELIVERY TO:

Name:	_______________________________________________________________________
Address:	_______________________________________________________________________
Phone #:	_______________________________________________________________________

To receive a TOD Form, contact your financial representative.

¹ Name on account must match the name under which the securities contemplated herein are issued.

8

EX-5.1

EXHIBIT 5.1

MASLON LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Tel: (612) 672-8200

February 7, 2017

GWG Holdings, Inc.

220 South Sixth Street, Suite 1200

Minneapolis, Minnesota 55402

Re: Registration Statement on Form S-1; Series 2 Redeemable Preferred Stock

Ladies and Gentlemen:

We have acted as counsel to GWG Holdings, Inc., a Delaware corporation (the “Company”), in connection with the filing with the Securities and Exchange Commission (the “Commission”) of a registration statement on Form S-1 (Registration Numbers 333-214896) (as amended, the “Registration Statement”) under the Securities Act of 1933 (the “Securities Act”), relating to the offer and sale of preferred equity securities of the Company.

You have provided us with a draft of the Registration Statement in the form in which it will be filed, which includes the prospectus (the “Prospectus”). The Prospectus provides that it will be supplemented in the future by one or more supplements to the Prospectus, either via incorporation by reference to filings with the Commission made by the Company pursuant to the Securities Exchange Act of 1934, via the filing of supplements made pursuant to Rule 424 under the Securities Act, or both (each, a “Prospectus Supplement”). The Prospectus, as supplemented by various Prospectus Supplements, will provide for the registration by the Company of the offer and sale of up to 150,000 shares of Series 2 Redeemable Preferred Stock of the Company (the “Preferred Shares”). The Preferred Shares are convertible, subject to certain procedures and limitations, into shares of the Company’s common stock (the “Common Shares”).

For the purposes of this opinion, we have assumed that such proceedings to be taken in the future will be timely completed in the manner presently proposed and that the terms of each issuance will otherwise be in compliance with law. As counsel to the Company, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon the foregoing and upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We have also examined (a) a certified copy of the Certificate of Incorporation of the Company, as amended, (b) the Company’s corporate bylaws, (c) resolutions adopted by the Board of Directors of the Company relating to, among other matters, the offer, sale, issuance and registration of the Preferred Shares (including the Certificate of Designations of the Preferred Shares) and the issuance of the Common Shares (collectively, the “Resolutions”), certified as of the date hereof by an officer of the Company. All of the foregoing documents described in clauses (a), (b) and (c) of the prior sentence, together with the Registration Statement, are collectively referred to as the “Documents.”

We are opining herein as to the effect on the subject transaction only of the General Corporation Law of the State of Delaware and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Delaware, any other laws, or as to any matters of municipal law or the laws of any local agencies within any state.

Subject to the foregoing and the other matters set forth herein, it is our opinion that as of the date hereof:

1. The Company is a corporation duly incorporated and existing under the laws of the State of Delaware and is in good standing therein.

2. The issuance of the Preferred Shares has been duly authorized and, when and if issued and delivered against payment therefor in accordance with the Registration Statement and the Resolutions, such Preferred Shares will be validly issued and the Preferred Shares will be fully paid and non-assessable.

3. The issuance of the Common Shares has been duly authorized and, when and if issued and delivered upon conversion of Preferred Shares in accordance with the Registration Statement and the Resolutions, the Common Shares will be validly issued, fully paid and non-assessable.

In expressing the opinion herein, we have assumed the following: (i) each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so; (ii) each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so; (iii) ach of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms; (iv) all Documents submitted to us as originals are authentic and the form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. We have further assumed that all Documents submitted to us as certified or photostatic copies conform to the original documents; that all signatures on all such Documents are genuine; that all public records reviewed or relied upon by us or on our behalf are true and complete; that all representations, warranties, statements and information contained in the Documents are true and complete; that there has been no oral or written modification of or amendment to any of the Documents; and that there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Prospectus forming a part of the Registration Statement under the caption “Legal Matters.” In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder.

The opinions expressed herein are limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

Very truly yours,

/s/ MASLON LLP

EX-21.1

EXHIBIT 21.1

List of Subsidiaries

The following are the registrant’s principal subsidiaries and jurisdictions of organization:

● GWG Life, LLC (Delaware)

● GWG DLP Funding III, LLC (Delaware)

● GWG DLP Funding IV, LLC (Delaware)

● GWG Life Trust (Utah)

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of:

GWG Holdings, Inc. and Subsidiaries

We consent to the use in this Registration Statement on Form S-1 of our report dated March 22, 2016, relating to the consolidated financial statements of GWG Holdings, Inc. and its subsidiaries as of and for the years ended December 31, 2015 and December 31, 2014, which appear or are incorporated by reference in such Registration Statement, and the reference to our firm under the heading “Experts” in the prospectus.

/s/ BAKER TILLY VIRCHOW KRAUSE, LLP

Minneapolis, Minnesota

February 7, 2017