BOCA RATON, FL / ACCESSWIRE / July 10, 2019 / Emergent Capital, Inc. (OTCQX: EMGC) ('Emergent' or the 'Company'), today announced its financial results for the three and six months ended May 31, 2019.

Second Quarter 2019 Financial Highlights

As a result of a resolution adopted by the Board of Directors on September 7, 2018 that changed the Company's fiscal year end from December 31st to November 30th , our results for the second quarter covers the period from March 1, 2019 to May 31, 2019. To aid investors, the results of the second quarter of 2019 are being presented to the directly comparable period last year, but are not comparable to the results previously filed with the SEC in its Quarterly Report on Form 10-Q on August 14, 2018, for the second quarter of 2018 which covers April 1, 2018 to June 30, 2018. Additionally, given the ongoing Chapter 11 case of Lamington Road Designated Activity Company ('Lamington'), Lamington and its subsidiaries' (White Eagle Asset Portfolio, LP ('White Eagle'), White Eagle General Partner, LLC ('WEGP') and Lamington Road Bermuda Limited) financial results are excluded from the Company's consolidated results for the three and six months ended May 31, 2019, and therefore, our 2019 results are not comparable with 2018.

Consolidated Results

Income from continuing operations for the three months ended May 31, 2019 (the '2019 Period') was $12,000 compared to $2.5 million for the three months ended May 31, 2018 (the '2018 Period') and was significantly impacted by the deconsolidation of Lamington and related subsidiaries. Income for the 2018 Period mainly includes net gain on maturity of $13.9 million which is attributable to eight policies maturity. There were no maturities for the consolidated entities for the 2019 Period.

Total expense from continuing operations for the 2019 Period was approximately $22.7 million compared to $9.5 million for the 2018 Period. Expense from continuing operations for the 2019 Period includes approximately $18.8 million which represents a reduction of our investment in the deconsolidated subsidiaries. The fair value of $77.2 million has inherent estimates including, but not limited to, when Lamington and related subsidiaries will emerge from bankruptcy, the estimated discount rate, the value of the debt under the White Eagle Revolving Credit Facility, as well as other factors inherent in the valuation process.

Expense also includes interest expense of approximately $2.8 million for the 2019 Period was and was mainly comprised of interest expense of approximately $1.3 million on the 5% Convertible Notes, $1.5 million on the 8.5% Senior Secured Notes and $25,000 on the 8.5% Convertible Notes.

Deconsolidated Subsidiaries Results

Total income for the deconsolidated subsidiaries was a loss of $16.9 million and mainly comprised change in fair value of life settlements loss of approximately $17.1 million. Our deconsolidated subsidiaries had eight life insurance policies with face amounts totaling $45.6 million matured. The net gain of these maturities was $34.6 million and is recorded as a change in fair value of life settlements in the deconsolidated statements of operations for the quarter ended May 31, 2019. Proceeds from maturities totaling $18.3 million were received during the quarter ended May 31, 2019. White Eagle recorded a $46.2 million receivable for maturity of life settlements at May 31, 2019.

On May 22, 2019, a settlement in the amount of $21.3 million was signed between Lincoln Benefit Life Company, White Eagle Asset Portfolio, L.P. and Emergent Capital, Inc. pursuant to which Lincoln Benefit, agreed to not to contest the 55 life insurance policies that are presently owned by White Eagle policies and Emergent Capital agreed to drop its legal action against Allstate Life Insurance Company and settle for $2.0 million. The settlement relates to six separate legal actions pertaining to the validity of certain White Eagle policies and receivables for maturities of life settlements totaling $39.1 million. The settlement of the litigation was approved by the Bankruptcy Court in June 2019, and accordingly, the receivable for maturities of life settlement was adjusted to reflect the reduction which resulted in approximately $17.8 million recorded as change in fair value of life settlements loss in the condensed and consolidated financial statements of the Debtors at May 31, 2019. The $2.0 million settlement related to the Allstate lawsuit will be recorded upon receipt. All amounts were received in June 2019.

Our deconsolidated subsidiaries expense was significantly impacted by change in fair value of the White Eagle Revolving Credit Facility of approximately of approximately $29.1 million, which is mainly attributable the projected early repayment of the White Eagle Revolving Credit Facility due to the Chapter 11 filings. The calculation incorporates a probability weighted assessment of expected cash flows based on the Settlement Agreement approved by the Bankruptcy Court.

Other items impacting expenses were interest expense of $2.6 million, reorganization cost of $6.7 million, administrative services fees of $1.3 million, legal fees of $627,000 and professional fees.

The following table provides a summary of the components of income from the Company's consolidated and deconsolidated life settlements.

The Company reported a net loss from continuing operations of $25.9 million, or $(0.16) per diluted share for the 2019 Period, compared to a net loss from continuing operations of $6.9 million, or $(0.04) per diluted share for the 2018 Period.

Our income for the 2019 Period, was impacted by income tax expense of approximately $3.2 million compared to tax benefit of approximately $3.2 million for the 2018 Period, the tax benefits for 2018 represents reversal of estimated cash taxes to be paid of approximately $878,000 and deferred tax expense of approximately $2.3 million.

Six Months Ended May 31, 2019

Consolidated Results

Total loss from continuing operations for the six months ended May 31, 2019 was $63.3 million compared to $2.0 million for the same period last year. Loss was significantly impacted by the deconsolidation of Lamington and its subsidiaries. Income for 2018 mainly includes net gain on maturity of $28.0 million which is attributable to the maturity, 12 policies. There were no maturities for the consolidated entities for the 2019 Period.

Total expenses from continuing operations for the six months ended May 31, 2019 was approximately $60.1 million compared to $19.4 million for the same period last year. Expense from continuing operations for the six months ended May 31, 2019 includes approximately $52.8 million which represents a reduction of our investment in the deconsolidated subsidiaries. Expense also includes interest of $2.5 million on the 5% Convertible Notes, $2.9 million on the 8.5% Senior Secured Notes and $71,000 on the 8.5% Convertible Notes.

Total expenses from continuing operations for the six months ended May 31, 2018 were mainly comprised of interest expense on the White Eagle Revolving Credit Facility of $10.9 million, $2.5 million on the 5% Convertible Notes, $1.6 million on the 8.5% Senior Secured Notes and $92,000 on the 8.5% Convertible Notes; offset by a change in the fair value gain for the White Eagle Revolving Credit Facility of $4.6 million.

Deconsolidated Subsidiaries Results

Total income for the deconsolidated subsidiaries was a loss of $29.5 million and mainly comprised change in fair value of life settlements loss of approximately $29.8 million. Our deconsolidated subsidiaries had 12 life insurance policies with face amounts totaling $68.6 million matured. The net gain of these maturities was $50.3 million and is recorded as a change in fair value of life settlements in the deconsolidated statements of operations for the quarter ended May 31, 2019. Proceeds from maturities totaling $32.3 million were received during the six months ended May 31, 2019.

Our deconsolidated subsidiaries expense was significantly impacted by change in fair value of the White Eagle Revolving Credit Facility of approximately $43.7 million. Other items impacting expenses were interest expense of $5.0 million, reorganization cost of $8.6 million, administrative services fees of $2.8 million, legal fees of $1.2 million and professional fees of 1.0 million.

The following table provides a summary of the components of income from the Company's consolidated and deconsolidated life settlements.

At May 31, 2019, we had approximately $1.4 million of cash and cash equivalents and certificates of deposit of $506,000. Of this amount, approximately $1.4 million was available to pay premiums on two policies that have not been pledged as collateral under the White Eagle Revolving Credit Facility and for other overhead expenses, with approximately $8.7 million restricted to the White Eagle Revolving Credit Facility. The Company had 158,051,803 shares outstanding, treasury shares of 608,000 and an undiluted book value of $0.23 per share at May 31, 2019.

Life Settlements Portfolio Highlights

As of May 31, 2019, we owned 2 policies with an estimated fair value of $1.3 million compared to 2 policies with an estimated fair value of $1.2 million at November 30, 2018.The weighted average discount rate was 14.5% at each of May 31, 2019 and November 30, 2018.

As of May 31, 2019, White Eagle owned 574 policies with an estimated fair value of $475.6 million and an aggregate death benefit of $2.7 billion. All 574 policies were pledged under the White Eagle Revolving Credit Facility. White Eagle also recorded a $46.2 million receivable for maturity of life settlements at May 31, 2019 relating to policies pledged under the White Eagle Revolving Credit Facility. These policies have been excluded from the Company results as of May 31, 2019 due to the deconsolidation resulting from bankruptcy filing of White Eagle's parent.

Of these 574 policies owned as of May 31, 2019, 503 were previously premium financed and are valued using discount rates that range from 12.25% - 19.25%. The remaining 71 policies are valued using discount rates that range from 12.25% - 13.25%.

During the 2019 Period, 12 life insurance policies that served as collateral under the White Eagle Revolving Credit Facility matured with a face value totaling $68.6 million.

About Emergent Capital, Inc.

Emergent (OTCQX: EMGC) is a specialty finance company that invests in life settlements. More information about Emergent can be found at www.emergentcapital.com.

Safe Harbor Statement

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

Company Contact:

Investor Relations
Rob Fink
FNK IR
646.809.4048
IR@emergentcapital.com
www.emergentcapital.com

Emergent Capital, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended May 31,								Six Months Ended May 31,
		2019				2018				2019				2018
		(in thousands, except share and per share data)
Income
Change in fair value of life settlements		$	4			$	2,415			$	6			$	13,895
Other income			8				119				17				243
Total income			12				2,534				23				14,138
Expenses
Interest expense			2,775				7,817				5,538				15,419
Change in fair value of investment in deconsolidated subsidiaries			-				-				52,769				-
Change in fair value of White Eagle Revolving Credit Facility			18,804				(3,002	)			-				(4,626	)
Personnel costs			138				873				307				1,660
Legal fees			725				1,375				720				2,927
Professional fees			(57	)			1,668				278				2,623
Insurance			217				203				396				400
Other selling, general and administrative expenses			60				532				124				1,010
Total expenses			22,662				9,466				60,132		Share article: Watch latest videos Subscribe and Follow Get a daily dose of Pittsburgh Star news through our daily email, its complimentary and keeps you fully up to date with world and business news as well. Subscribe Now News RELEASES Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Pittsburgh Star. More Information Pennsylvania Section With Warren's Rise, Biden DrawsDems' Anxiety About 2020 Bid WASHINGTON - Joe Biden is confronting growing anxiety among would-be allies in the Democratic establishment about his ability to win ... How Mister Rogers' faith shaped his idea of children's television The beloved children's television icon Fred Rogers - who is played by actor Tom Hanks in the upcoming film "A ... Sikh delivers US Senate morning prayer, scripts history Pennsylvania [US], Oct 17 (ANI): Milbourne-based Gaini Sukhvinder Singh scripted history by becoming the first Sikh guru to deliver the ... AP Fact Check: Democrats Flub Details on Guns, Syria in Debate WASHINGTON - A dozen Democrats seeking the presidency tussled in a debate packed with policy, flubbing some details in the ... Mumps Outbreak Strikes Delaware County High School Officials are investigating an outbreak of mumps at a Delaware County High School. Photo Credit: Google ... The Tell- Stuck outside of Columbus with the Pittsburgh blues again The Middle East was very much on the agenda at this week's Democratic debate. The post The Tell: Stuck outside ... International Section Explosion targets worshippers at Mosque near Jalalabad in Afghanistan JALALABAD, Afghanistan - Dozens of worshippers have been killed and scores more wounded Friday in an explosion at a mosque ... Deaths mount in north Syria in midst of confusion over ceasefire NORTHEAST SYRIA - A total of sixty-four Syrian rebels fighting alongside Turkish forces have been killed in the offensive which ... Venezuelans win seat on Human Rights Council despite U.S. opposition NEW YORK, New York - Despite fierce opposition by the United States, Venezuela won a seat on the UN Human ... Astonishing victory for Johnson as he agrees Brexit deal with EU LONDON, UK - British Prime Minister Boris Johnson on Thursday has stunned the UK and the world with an announcement ... Ecuador's Moreno Scraps Fuel Subsidy Cuts in Big Win for Indigenous G QUITO - Ecuadorean President Lenin Moreno on Monday officially scrapped his own law to cut expensive fuel subsidies after days ... UK parents in mourning call U.S. National Security Advisor a 'thug' WASHINGTON - A British couple grieving over their son's death in a car accident say they feel they were "ambushed" ... Movie Review Velvet Buzzsaw