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Item 1A. Risk Factors

2022-06-29 compared with 2021-06-29 · 259 added, 150 removed, 725 unchanged (36% of the section changed)

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our consolidated financial statements and related notes.

of Risk Factors

business is subject to a number of risks and uncertainties including those described at length in the Risk Factors section below.

consider the following to be our most material risks:

A pandemic, epidemic or outbreak of an infectious disease

in the United States or elsewhere may adversely affect our business.

We have historically used significant amounts of cash

in operating activities since our inception and may continue to use significant amounts of cash for operating activities in the foreseeable

We are pursuing opportunities relating to the tokenization

and sale of digital assets that are subject to volatile market prices, impairment and unique risks of loss.

Our management team relies on outside consultants and

others in our industry to make informed business decisions;

potential conflicts of interest involving those parties who are relied

upon could adversely affect the execution of our business model

Current and future federal regulation under the Dodd-Frank

Act’s consumer protection provisions may have an adverse effect on our business and our planned business operations.

General economic conditions could have an adverse effect

on our business.

The costs in time and expense of being a publicly-held

company are substantial and will only increase if our business model is successful.

Inadequate funding will impede execution of our business

We may be unable to access capital on a timely basis

to fund our operations, which would adversely affect our ability to continue as a going concern.

We may default on our obligations under various debt

arrangements, which may accelerate our repayment obligations or otherwise limit our access to future financing.

We are new to the bond, life settlement, and financial

advisory industry and may not be able to successfully compete in this industry.

Historically, 99% of our total assets are interests

in life settlement policies, resulting in a lack of diversification of assets and concentration in assets that are subject to significant

fluctuations in value.

Limitations to the financial model we use may result

in inaccurate or incomplete projections of future cash flow from the insurance policies.

The individuals insured by the life insurance policies

may live longer than their actuarial life expectancies and thereby, cash flows from life insurance policies may be delayed.

Having relatively few insureds could cause the overall

performance to be unduly influenced by a relatively small number of underlying policies that perform better or worse than expected.

Increased general market interests rates could increase

the carrying costs of the life insurance policies and reduce the related cash flows.

Changes to foreign banking laws and regulations or

decreased lending capacity for life settlements could have a negative impact on ability of Holders to obtain loans with respect to

purchases of life settlements.

Holders may be required to obtain MRI coverage as a

condition of our business model, which, if unavailable, could potentially increase our risk of failure.

The lapse of life insurance policies will result in

the entire loss of our interest in the death benefits from those particular policies.

Actual results from life settlement products may not

match expected results, which could reduce returns and also adversely affect the ability to service and grow a portfolio for actuarial

The limited number of sellers of life settlement products

in the secondary market may limit the ability to negotiate favorable prices in the acquisition of such life settlement interests.

We do not track concentrations of pre-existing medical

conditions of insureds in our guidelines for purchasing life settlement products.

If life settlement products are determined to be “securities,”

Holders may be required to register as an investment company under the Investment Company Act, which would substantially increase

SEC reporting costs and oversight of a Holder’s business operations.

There is poor liquidity in the secondary market for

life insurance and life settlements.

Life settlements, and therefore our common stock, are

highly speculative and may lose all of their value.

Policies may be determined to have been issued without

an “insurable interest” and could be void or voidable.

Additional insurable interest concerns regarding life

insurance policies originated pursuant to premium finance transactions may also result in adverse decisions that could effect policies.

Fraud in the application for life insurance can also

affect assets and interest in policies.

The risk of litigation with issuing insurance companies

could substantially raise our costs of operation and increase our risk of loss.

The contestation of the life insurance policies by

the applicable issuing insurance companies could result in the loss of the benefits from such life insurance policies.

Increases in cost of insurance could reduce estimated

returns and lower revenues.

Carrier and service partner credit risk can adversely

affect life settlements.

The inability to keep track of the insureds could keep

us from updating the medical records of the insured.

Lost insureds can result in a delay or a loss of an

insurance benefit that would have a negative effect on revenues and prospects.

life settlement and viatical regulations may result

in determination(s) of applicable law violations.

State protections for the insolvency of an insurance

company are limited.

Liability for failing to comply with U.S.

privacy safeguards.

Cyber-attacks or other security breaches could have

a material adverse effect on our business.

privacy concerns may affect the access to accurate

and current medical information regarding the insured under life insurance policies.

There is a limited public market for our common stock,

and any market that may develop could be volatile.

We are an emerging growth company and we cannot be

certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive

to investors.

Our management and two stockholders beneficially own

approximately 62% of our outstanding common stock and therefore can exert control over our business.

Future sales of our common stock could adversely affect

our stock price and our ability to raise capital in the future, resulting in our inability to raise required funding for our operations.

Factors relating to Our Business

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The spread of COVID-19 from China to other countries

has resulted in the World Health Organization declaring the outbreak of COVID-19 as a “pandemic,”

or a worldwide spread of

has resulted in the World Health Organization declaring the outbreak of COVID-19 as a “pandemic,” or a worldwide spread of

a new disease, on March 11, 2020.

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resources to execute our business plan.

are pursuing opportunities relating to the tokenization and sale of digital assets that are subject to volatile market prices, impairment

and unique risks of loss.

are exploring opportunities to pursue the tokenization and sale of non-fungible tokens (“NFTs”).

There is no guarantee that

we will be able to successfully tokenize and sell such NFTs, and our use of NFTs exposes us to additional risks.

prices of digital assets have been in the past and may continue to be highly volatile due to various associated risks and uncertainties.

For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers, and businesses

is unpredictable.

Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional

validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence.

As a result, the value that we may realize, if any, from the sale of NFTs is uncertain.

assets, as intangible assets without centralized issuers or governing bodies, have been, and may in the future be, subject to security

breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or

destruction of private keys needed to access such assets.

While we intend to take all reasonable measures to secure any digital assets,

if such threats are realized or the measures or controls we create or implement to secure our digital assets fail, it could result in

a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be harmed.

this time, the regulation of digital assets and NFTs remains in an early stage.

The extent to which securities laws or other regulations

apply or may apply in the future to such assets is unclear at this time.

However, on March 9, 2022, the White House issued an Executive

Order on Ensuring Responsible Development of Digital Assets proposing, among other things, regulation of digital assets.

Future regulation

of such assets may increase our compliance costs or adversely impact our business.

may also be subject to regulations of the Financial Crimes Enforcement Network (“FinCEN”) of the U.S.

Department of Treasury

and the Bank Secrecy Act.

Further, the Office of Foreign Assets Controls (“OFAC”) has signaled sanctions could apply to digital

transactions and has pursued enforcement actions involving cryptocurrencies and digital asset accounts.

The nature of many NFT transactions

also involve circumstances which present higher risks for potential violations, such as anonymity, subjective valuation, use of intermediaries,

lack of transparency, and decentralization associated with blockchain technology.

In addition, the Commodity Futures Trading Commission

has stated that cryptocurrencies, with which NFTs have some similarities, fall within the definition of “commodities.” If

NFTs were deemed to be a commodity, NFT transactions could be subject to prohibitions on deceptive and manipulative trading or restrictions

on manner of trading (e.g., on a registered derivatives exchange), depending on how the transaction is conducted.

Moreover, if NFTs were

deemed to be a “security,” it could raise federal and state securities law implications, including exemption or registration

requirements for marketplaces for NFT transactions, sellers of NFTs, and the NFT transactions themselves, as well as liability issues,

such as insider trading or material omissions or misstatements, among others.

NFT transactions may also be subject to laws governing

virtual currency or money transmission.

For example, New York has legislation regarding the operation of virtual currency businesses.

NFT transactions also raise issues regarding compliance with laws of foreign jurisdictions, many of which present complex compliance

issues and may conflict with one another.

Our launch and operation of our NFT platform expose us to the foregoing risks, among others,

any of which could materially and adversely affect the success of our NFT platform and harm our business, financial condition, results

of operations, reputation, and prospects.

management team relies on outside consultants and others in our industry to make informed business decisions;

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an affordable price, our business will be harmed.

and future federal regulation under the Dodd-Frank Act’s consumer protection provisions may have an adverse effect on our business

and our planned business operations.

July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank

The Dodd-Frank Act contains significant changes to the regulation of financial institutions including the creation of new

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and the entities from which we acquire NIBs and similar life settlement products.

February 3, 2017, President Donald Trump signed an executive order pursuant to which he ordered the Secretary of the Treasury to consult

with the heads of the member agencies of the Financial Stability Oversight Council on the extent to which existing laws, treaties, regulations,

guidance, reporting and recordkeeping requirements, and other government policies promote certain core principles laid out in the executive

This may result in repeals of or amendments to existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements

and other government policies, including regulations implementing the Dodd-Frank Act.

The changes resulting from this executive order

and the continuing implementation of the Dodd-Frank Act may impact the profitability of our business activities or otherwise adversely

affect our business.

Failure to comply with the requirements may negatively impact our results of operations and financial condition.

While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations

would have on us, these changes could be materially adverse to investors in our common stock.

economic conditions could have an adverse effect on our business.

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costs in time and expense of being a publicly-held company are substantial and will only increase if our business model is successful.

are a “reporting issuer”

under Section 13 of the Exchange Act, required to file annual reports on Form 10-K, quarterly reports

on Form 10-Q and current reports respecting certain events on Form 8-K, along with proxy or information statements for any meeting of

stockholders or written consents of stockholders holding sufficient securities to effect corporate actions.

Most of these reports require

generating and compiling significant accounting, legal and financial information, including audited year-end financial statements and

reviewed quarterly financial statements.

The preparation of these reports, their review by management and professionals and the auditing

and review process of such financial statements consumes significant resources, in terms of management time and focus, as well as expenses

related to legal, accounting and audit fees.

It is difficult to quantify these costs, but we believe them to be not less than between

approximately $175,000 and $250,000 annually.

As our business grows, these costs can only increase.

are required to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports respecting certain events on Form

8-K, along with proxy or information statements for any meeting of stockholders or written consents of stockholders holding sufficient

securities to effect corporate actions.

Most of these reports require generating and compiling significant accounting, legal and financial

information, including audited year-end financial statements and reviewed quarterly financial statements.

The preparation of these reports,

their review by management and professionals and the auditing and review process of such financial statements consumes significant resources,

in terms of management time and focus, as well as expenses related to legal, accounting and audit fees.

It is difficult to quantify these

costs, but we believe them to be not less than between approximately $175,000 and $250,000 annually.

As our business grows, these costs

can only increase.

funding will impede execution of our business model.

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matters that are not within our control, such as the current health and life expectancy of the insureds underlying our NIBs, the solvency

of the Holders of the policies and the Holders’

Lender, the Holders’

financing costs and ability to acquire policies and

of the Holders of the policies and the Holders’ Lender, the Holders’ financing costs and ability to acquire policies and

the solvency of the insurance companies.

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life expectancies.

Our model also requires

other inputs including but not limited to the following:

Our model also requires other inputs including but not limited to the following:

(i) a 15-year period for projections;

(ii) a distinct number of lives;

a distinct number of policies;

(iii) a distinct number of policies;

(iv) life expectancy tables and projections;

(v) premiums;

(vi) senior lending fees;

senior lending fees;

(vii) MRI fees;

(viii) insurance, servicing and custodial fees.

While this method of modeling cash flows is helpful in setting general expectations of

potential returns that might be produced from a given portfolio, there is no way such results can be guaranteed.

In addition to our assumptions,

there are many factors that may affect the selection of inputs for the model.

and (viii) insurance, servicing and custodial fees.

While this method of modeling cash flows is

helpful in setting general expectations of potential returns that might be produced from a given portfolio, there is no way such results

can be guaranteed.

In addition to our assumptions, there are many factors that may affect the selection of inputs for the model.

individuals insured by the life insurance policies may live longer than their actuarial life expectancies and thereby, cash flows from

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However, it is impossible

to predict with certainty any insured’s life expectancy.

We have and will continue to base our longevity assumptions on the reports

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Some factors that may affect the accuracy of a life expectancy report or other calculation of the estimated length

of an individual’s life are:

experience and qualifications of the medical professional or life expectancy company providing the life expectancy estimate;

completeness and accuracy of medical records received by the life expectancy company;

reliability of, and revisions to, actuarial tables or other mortality data published by public and private organizations or developed

by a life expectancy company and utilized by its medical professionals;

nature of any illness or health conditions of the insured disclosed or undisclosed;

in living habits and lifestyle of an insured and medical treatments, medications and therapies available to and used by an insured;

improvements in medical treatments and cures, and the quality of medical care the insured receives.

of an individual’s life are:

the experience and qualifications

of the medical professional or life expectancy company providing the life expectancy estimate;

the completeness and accuracy

of medical records received by the life expectancy company;

the reliability of, and

revisions to, actuarial tables or other mortality data published by public and private organizations or developed by a life expectancy

company and utilized by its medical professionals;

the nature of any illness

or health conditions of the insured disclosed or undisclosed;

changes in living habits

and lifestyle of an insured and medical treatments, medications and therapies available to and used by an insured;

future improvements in

medical treatments and cures, and the quality of medical care the insured receives.

rely primarily on various different life expectancy providers.

A life expectancy, or LE, can be considered the life expectancy provider’s

“best estimate”

as to how long a person would live.

A life expectancy, or LE, can be considered the life expectancy provider’s

“best estimate” as to how long a person would live.

We assume that the life expectancies were accurately calculated and properly

assessed for purposes of our model.

To introduce some “checks and balances”

into our cash flow projections, we use at least

To introduce some “checks and balances” into our cash flow projections, we use at least

two LE reports from different third-party LE providers for each policy.

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of the life insurance policies due to the lower resulting present value of the death benefits forecasted to be paid at later dates.

Holders’

senior loans require that certain loan to value ratios be maintained and decreases in policy values could result in violations of these

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Having fewer lives in a policy portfolio can cause the overall performance

of such portfolio to be unduly influenced by a relatively small number of “outliers”

where the assets perform better or worse

of such portfolio to be unduly influenced by a relatively small number of “outliers” where the assets perform better or worse

than expected.

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general market interest rates increase, the value of life insurance portfolios would likely decrease.

Some of the Holder’s carrying

costs associated with the life insurance policy portfolios (specifically interest payments on the MRI coverage outstanding balance) are

tied to interest rates.

If interest rates increase, the Holder’s carrying costs will increase and the return on our investment

will decrease.

Because the Holders pay all of the costs associated with the life insurance policy portfolios, an increase in the Holder’s

carrying costs will correspondingly decrease the amount cash flows.

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If the present value of the life insurance policies decreases significantly, the Holder may be

in breach of such obligations, which could impair the Holder’s ability to obtain financing necessary to service existing life insurance

policies or acquire new policies.

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Holders to obtain loans with respect to purchases of life settlements.

current business model relies on the availability to the Holders of senior loans from the Holders’

Lender or any other lender.

current business model relies on the availability to the Holders of senior loans from the Holders’ Lender or any other lender.

In the event of adverse regulatory changes or reduced capacity for life settlement lending, the Holders could experience the same liquidity

issues that have plagued other market participants.

Changes to the Holders’

Lender’s loan to value requirements, compliance

Changes to the Holders’ Lender’s loan to value requirements, compliance

with regulatory large exposure limits and changes to regulatory large exposure limits could also result in liquidity issues for the Holders

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may be required to obtain MRI coverage as a condition of our business model, which, if unavailable, could potentially increase our risk

MRI is a relatively new product and there are no guarantees that the MRI provider will be able to meet the Holders’

coverage needs.

MRI is a relatively new product and there are no guarantees that the MRI provider will be able to meet the Holders’ coverage needs.

In addition, it is our understanding that there is only one MRI provider.

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Without the MRI coverage, the Holders have limited options when the senior loans mature.

The Holders’

Lender has demanded

The Holders’ Lender has demanded

repayment of all outstanding amounts under the senior loans.

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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 actuarial stability is unlikely to be achieved with a pool

of less than 1,000 lives.

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our estimates of cash flows therefrom could be inaccurate.

life settlement products are determined to be “securities,”

Holders may be required to register as an investment company

under the Investment Company Act, which would substantially increase SEC reporting costs and oversight of a Holder’s business operations.

life settlement products are determined to be “securities,” Holders may be required to register as an investment company

under the Investment Company Act, which would substantially increase SEC reporting costs and oversight of a Holder’s business operations.

July 22, 2010, the SEC released a Staff Report by the Life Settlements Task Force that recommended the SEC consider recommending to Congress

that it amend the definition of “security”

under the federal securities laws to include life settlement policies as securities.

that it amend the definition of “security” under the federal securities laws to include life settlement policies as securities.

Congressman has sought to introduce a bill to make such amendment.

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If federal securities laws are indeed amended to include such

policies within the definition of “security,”

or if courts with relevant jurisdiction interpret existing securities laws

policies within the definition of “security,” or if courts with relevant jurisdiction interpret existing securities laws

to that effect, our ability to operate our business under our current business model may be constrained by additional regulatory requirements

under the Securities Act, the Exchange Act and the Investment Company Act.

requirements could, among other things, limit our or Holder’s ability to change investment policies without stockholder approval,

prohibit our acquisition of assets from an affiliate without SEC approval, limit leveraging of our assets to one-third of our total asset

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Related to the Life Insurance Policies

may be determined to have been issued without an “insurable interest”

and could be void or voidable.

may be determined to have been issued without an “insurable interest” and could be void or voidable.

insurance laws in the United States require that an insurance policy may only be initially procured by a person that has an insurable

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Typically this

includes the insured, the insured’s spouse and children, and in some states, other close relatives.

In some jurisdictions, however,

this could also include entities such as the insured’s creditors, employer, business partners or certain charitable institutions.

It also typically includes a trust that owns a life insurance policy insuring the life of the grantor or settlor of the trust where the

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policy purchased by a person without an insurable interest may, depending on relevant state insurance law, be (i) void, (ii) voidable

by the insurer that issued the policy and/or (iii) subject to the claims of the insured’s presumptive beneficiaries, such as his

or her spouse or other family members.

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of a party who does not have an insurable interest in the life of the insured for the purpose of evading the insurable interest laws,

the purchase may be viewed under applicable state law as a violation of the state’s insurable interest laws.

Should the issuer

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Lockwood Pension Services,

, (United States District Court –

Southern District of New York)).

, (United States District Court – Southern District of New York)).

These courts have held life insurance policies

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Wells Fargo (Florida Supreme Court, which held that a policy

may not be contested after the expiration of the policy’s contestability period).

Delaware has laws which benefit the insurance

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There is also legislation in most states regulating premium financing that must be complied with for policies originated after the legislation

in every state that has addressed the question other than New York and Michigan, the expiration of an insurance policy’s contestability

period may not cut off the insurer’s ability to raise the insurable interest issue as a defense to the payment of the policy proceeds.

in every state that has addressed the question other than New York and Michigan, the expiration of an insurance policy’s contestability

period may not cut off the insurer’s ability to raise the insurable interest issue as a defense to the payment of the policy proceeds.

or more states could adopt legislation that would require a holder of an insurance policy to have an insurable interest in the insured

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in the insureds polices acquired by or on our behalf.

If such legislation were to be adopted without a ‘grandfathering’

If such legislation were to be adopted without a ‘grandfathering’ provision

(i.e., so as not to be applicable to insurance policies then in force), then we may be unable to collect the proceeds on the death benefits

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adverse decisions that could effect policies.

legality and merit of “investor-initiated”

or “stranger-originated”

life insurance products have been questioned

legality and merit of “investor-initiated” or “stranger-originated” life insurance products have been questioned

by members of the insurance industry, including by many life insurance companies and insurance regulators.

For example, the New York

Department of Insurance issued a General Counsel’s opinion in 2005 concluding that a premium finance program that was coupled with

the right of the policy owner to put the financed insurance policy to a third party violated New York’s insurable interest statute

and may also constitute a violation of New York State’s prohibition against premium rebates/free insurance.

Department of Insurance issued a General Counsel’s opinion in 2005 concluding that a premium finance program that was coupled with

the right of the policy owner to put the financed insurance policy to a third party violated New York’s insurable interest statute

and may also constitute a violation of New York State’s prohibition against premium rebates/free insurance.

More recently, many

states have enacted laws expressly defining and prohibiting stranger-originated life insurance (“STOLI”) practices, which

in general involve the issuance of life insurance policies as part of or in connection with a practice or plan to initiate life insurance

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Life Insurance Company v.

Lawrence Rucker 2007 Insurance Trust that concluded that “an insured’s ability to procure a

policy is not limited to paying the premiums with his own funds;

borrowing money with an obligation to repay would also qualify as an

insured procuring a policy.”

cannot predict whether a state regulator, insurance carrier or other party will assert that any policies should be treated as having

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Types of fraud that have enabled carriers to successfully rescind or void the related policies include, among others, misrepresentations

concerning an insured’s financial net worth and/or income, need for and purpose of the life insurance protection, medical history

and current physical condition, including age and whether the insured is a smoker.

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In particular, there is a significant risk that applicants and potential insureds may not answer truthfully or completely questions related

to whether the life insurance policy premiums will be financed through a premium finance loan or otherwise, the applicants’

for purchasing the policy or the applicants’

intention regarding the future sale or transfer of the life insurance policy.

to whether the life insurance policy premiums will be financed through a premium finance loan or otherwise, the applicants’ purpose

for purchasing the policy or the applicants’ intention regarding the future sale or transfer of the life insurance policy.

risk may be further increased to the extent life insurance agents communicate to applicants and potential insureds regarding potential

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to a life insurance policy are materially increased, additional premium payments may be required to maintain enforceability of such policy.

Equitable issued cost-of-insurance, referred to herein as “COI,”

increases on eleven (11) of the previously held life insurance

Equitable issued cost-of-insurance, referred to herein as “COI,” increases on eleven (11) of the previously held life insurance

policies underlying our prior NIBs.

In addition, one Transamerica and one Lincoln policy, both of which were Policies underlying our

prior NIBs, were subject to increased COI’s.

Other carriers have been issuing COI increases that impact life insurance policies

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is important for the Holder of the life insurance policies to track the health status of an insured and keep information current, which

is done by contacting the insured and/or other designated persons and obtaining updated medical records from an insured’s physician.

There are significant U.S.

federal and state laws relating to privacy of personal information that affect the operations of the servicer

and its ability to properly service the policies, especially with regard to obtaining current information from an insured’s physician.

the Health Insurance Portability and Accountability Act or HIPAA, the federal law that governs the release of medical records from medical

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begin the process of obtaining a death certificate and arranging for the payout of the policy.

Changes to the Social Security Administration’s

Death Master File have resulted in the elimination of many state records that were previously included in the Death Master File.

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Thus, it has become necessary to enhance

alternative methods for learning of an insured’s death.

On average, it now takes longer to learn about an insured’s death

alternative methods for learning of an insured’s death.

On average, it now takes longer to learn about an insured’s death

as compared to periods prior to the changes in the Death Master File.

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medical condition for the insured impossible.

There can also be no assurance that the Holder will learn of an insured’s death on

a timely basis.

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the death of the insured.

In the event of a “lost”

insured, the death claim may be delayed for up to seven years by the issuing

In the event of a “lost” insured, the death claim may be delayed for up to seven years by the issuing

insurance company.

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Obtaining actual knowledge of death of an insured, as discussed above, may prove difficult and time-consuming due to the need to comply

with applicable law regarding the contacting of the insured’s family to ascertain the fact of death and to obtain a copy of the

death certificate or other necessary documents in order to file the claim.

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life settlement and viatical regulations may result in determination(s) of applicable law violations.

purchase and sale of insurance policies in the secondary market from the policy’s original owner and among secondary market participants

is subject to regulation in approximately 45 states and Puerto Rico.

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In many states, a policy on an insured with a life expectancy of two years or less is referred to as a

“viatical settlement”

or a “viatical.”

A policy on an insured with a life expectancy of more than two years is

referred to as a “life settlement.”

The Holders have not, and do not intend to, purchase viatical settlements and should

“viatical settlement” or a “viatical.” A policy on an insured with a life expectancy of more than two years is

referred to as a “life settlement.” The Holders have not, and do not intend to, purchase viatical settlements and should

not be subject to the regulatory regimes that govern these policies.

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United States and state securities laws could have an adverse effect

on the Holders’

ability to liquidate any policies we or they believe should be sold.

on the Holders’ ability to liquidate any policies we or they believe should be sold.

is possible that, depending on the facts and circumstances attending a particular sale of a life insurance policy, a sale could implicate

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of an issuing insurance company.

In addition, in the event of an issuing insurance company’s insolvency, courts and receivers may

impose moratoriums or delays on payments of cash surrender values and/or death benefits.

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privacy safeguards.

federal and state statutes safeguard an insured’s private health information.

In addition, insureds frequently have an expectation

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Even if the insured granted a general consent that gave the

owner of the policy the right to subsequently request and receive medical information from the insured’s health providers, it is

possible for the insured to subsequently revoked such consent.

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Even if the consent is effective, without the cooperation of the insured, it may be difficult to convince

the insured’s health care providers of the consent’s efficacy and such health providers may be reluctant to release medical

These impediments to accessing current medical information can prove to be a significant obstacle to the proper valuation

of a policy at the time of either the policy’s purchase or sale.

Factors Related To Our Common Stock

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of our shares, among other factors:

and publicity regarding the life settlement market and related regulations generally;

developments in the life settlement market;

of listing for our common stock;

of shares of our common stock in public float;

of market makers with respect to our common stock;

to raise needed capital;

volume of trading of our common stock;

and volume fluctuations in the stock market at large, which do not relate to our operating performance;

by securities analysts or government officials, including those with regard to the viability or profitability of the life settlement

industry generally or with regard to our ability to meet market expectations.

Conditions and publicity regarding the life settlement

market and related regulations generally;

Regulatory developments in the life settlement market;

Lack of listing for our common stock;

Lack of shares of our common stock in public float;

Lack of market makers with respect to our common stock;

Inability to raise needed capital;

Low volume of trading of our common stock;

Price and volume fluctuations in the stock market at

large, which do not relate to our operating performance;

Comments by securities analysts or government officials,

including those with regard to the viability or profitability of the life settlement industry generally or with regard to our ability

to meet market expectations.

stock market has from time to time experienced extreme price and volume fluctuations that are unrelated to the operating performance

21 unchanged sentences

Decreased disclosures in our

SEC filings due to our status as an “emerging growth company”

may make it harder for investors to analyze our results of

SEC filings due to our status as an “emerging growth company” may make it harder for investors to analyze our results of

operations and financial prospects.

15 unchanged sentences

are subject to leak-out agreements.

Pursuant to such agreements, each of these stockholder’s common stock can only be sold in an

amount equal to 0.0025% (1/4%) of our outstanding securities (to be defined for all purposes thereof as the amount indicated in our most

3 unchanged sentences

any quarterly period while common stock was qualified to be sold, such shares of common stock cannot be sold in the next successive quarterly

period (the “Leak-Out Period”).

Notwithstanding the foregoing, any stockholder subject to a lock-up/leak-out agreement that

owns less than 100,000 shares of common stock that are covered thereby, is allowed to sell such stockholder’s common stock.

remaining outstanding shares are mostly freely tradable under Rule 144 and certain limitations on the number of shares that can be sold

quarterly by “affiliates”

of the Company as defined under the Securities Act.

quarterly by “affiliates” of the Company as defined under the Securities Act.

Any sales of substantial amounts of our common

stock in the public market, or the perception that those sales might occur, could harm the market price of our common stock.

captions “Market Price of Common Stock and Related Matters”

and “Security Ownership of Certain Beneficial Owners and

Management”

of Part II, Item 5, below for further information.

Further, certain stockholders have “piggy-back”

captions “Market Price of Common Stock and Related Matters” and “Security Ownership of Certain Beneficial Owners and

Management” of Part II, Item 5, below for further information.

Further, certain stockholders have “piggy-back” registration

rights afforded to them if we file a registration statement with the SEC;

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors