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GWG Holdings Reports Third Quarter 2016 Financial Results

GWG Holdings, Inc. (NASDAQ: GWGH), a sponsor of non-traded life settlement investment programs, announced its financial results for the third quarter ended September 30, 2016.

Highlights for the Three Months Ended September 30, 2016

GAAP Financial Information

• Total revenue of $13.9 million, up more than 68 percent from the prior year

• Net loss attributable to common shareholders of $2.6 million, or $0.50 per basic and fully diluted share, respectively

Non-GAAP Financial Information

• Adjusted Non-GAAP net income of $7.6 million, or $1.28 per basic share

• Completed a new $172 million, 10-year credit facility

• Increased the total number of financial advisors able to sell GWG’s investment products to approximately 4,300

• Raised a record $83 million of debt & equity capital from GWG’s investment product offerings

• Increased the number of appointed agents able to source life insurance policies through GWG’s appointed agent program to more than 2,900

• Purchased $122.6 million in face value of policy benefits, the third consecutive quarter of growth in excess of $100 million

• GWG’s direct-origination channel – purchases of life insurance policies through independent financial advisors and life insurance agents – accounted for 34 percentage of total purchases

• Ended the quarter with a portfolio of life insurance of $1.27 billion in face value of policy benefits covering 562 unique lives; a net sequential growth of $117.3 million

• Recognized $5.3 million in policy benefits from four life insurance policies during the quarter

• Recognized policy benefits in each of 10 consecutive calendar months through October 2016, a record for the company.

• Reported a total liquidity position of $117 million at November 2, 2016

• Recently exercised an option with University of California, Los Angeles for the exclusive license of “DNA Methylation Based Predictor of Mortality” technology

• Launched new website www.gwgh.com in early November

“We executed on numerous key objectives this quarter, which include securing a new long-term credit facility; raising a record amount of capital; purchasing policies from our direct origination sources; recruiting increasing numbers of life insurance agents to send us policies directly for acquisition; achieving DTC closings for all of our investment products; acquiring new technology that promises to improve our underwriting capabilities; and launching a new corporate website that highlights our strategic plans for our long-term future success in the insurance marketplace,” commented Jon Sabes, GWG Holdings’ chief executive officer. “The groundwork completed this quarter continues to improve all aspects of our business that are foundational to our future growth and profitability.”

Total revenue for the third quarter ended September 30, 2016 was $13.9 million, as compared to $8.3 million for the same period in 2015. Realized gain from policy benefits for the third quarter was $4.2 million, as compared to $0.3 million for the same period in 2015. The company recognized $5.3 million of life insurance policy benefits in the third quarter, as compared to $0.4 million in the same period of 2015. Total revenue from new policy purchases during the third quarter was $11.7 million, as compared to $7.4 million for the same period in 2015. Total operating expenses for the third quarter of 2016 were $18.3 million, as compared to $14.0 million for the same period in 2015.

GWG Holdings is a specialty finance company and a leader in the life insurance secondary market. As of September 30, 2016, GWG’s portfolio consisted of more than $1.27 billion in face value of policy benefits. Since 2006, GWG has purchased more than $2.2 billion in life insurance policy benefits and paid seniors more than $379 million for their life insurance.

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