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Equity Method Investments
 6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Equity Method Investments
FOXO BioScience LLC (formerly, InsurTech Holdings, LLC)
On November 11, 2019, GWG contributed the common stock and membership interests of its wholly-owned subsidiaries, FOXO Labs and FOXO Life (“Insurtech Subsidiaries”), to a legal entity, FOXO, in exchange for a membership interest in FOXO. Although GWG Holdings currently owns 100% of FOXO’s equity, we do not have a controlling financial interest in FOXO because the managing member has substantive participating rights. Therefore, we account for our ownership interest in FOXO as an equity method investment.
The transaction resulted in a loss of control of the Insurtech Subsidiaries and, as a result, we deconsolidated the subsidiaries and recorded an equity method investment balance during the fourth quarter of 2019. The loss of control required us to measure the equity investment at fair value. We determined the fair value of our investment in FOXO approximated the carrying value of $3.4 million, which was primarily comprised of cash and fixed assets contributed to the entity during the fourth quarter of 2019. We recognized a loss on equity method investment of $1.6 million during the fourth quarter of 2019, resulting in a balance of $1.8 million as of December 31, 2019.
The following table includes a rollforward of the equity method investment in FOXO (in thousands):
Three Months Ended
June 30, 2020		Six Months Ended
June 30, 2020
Beginning balance$5,648  $1,761  
Contributions3,750  9,167  
Loss on equity method investment(1,318) (2,848) 
Other(307) (307) 
Ending balance$7,773  $7,773  
In accordance with the operating agreement of FOXO, GWG Holdings is committed to contribute an additional $8.8 million to the entity through October 2021. Our investment in the membership interest of FOXO is presented in other assets in our consolidated balance sheets. Our proportionate share of earnings or losses from our investee is recognized in earnings (loss) from equity method investments in our consolidated statements of operations.
The Beneficient Company Group, L.P.
During 2018, we acquired 40,505,279 million Common Units for a total limited partnership interest in the Common Units of approximately 89.9% as of December 31, 2018. On June 12, 2019, we acquired an additional 1,000,000 Common Units from a third party for a cash investment of $10.0 million. On December 31, 2019, we acquired an additional 666,667 newly-issued Common Units for a cash investment of $10.0 million. On May 26, 2020, we acquired an additional 26,009 Common Units from a third party for a cash investment of $260,090. The Common Units are not publicly traded on a stock exchange.
Prior to December 31, 2019, our investment in Common Units was presented in equity method investment on our consolidated balance sheets. Our proportionate share of earnings or losses from our investee was recognized in earnings (loss) from equity method investments in our consolidated statements of operations. We recorded our share of the earnings or loss of Beneficient through September 30, 2019, on a one-quarter lag.
On December 31, 2019, we obtained control of Beneficient and consolidated Beneficient as of that date in accordance with ASC 805, Business Combinations. See Note 4 for further information on the business combination. In connection with the consolidation, we discontinued the one-quarter reporting lag.
Pre-consolidation financial information pertaining to Beneficient is summarized in the table below (in thousands):
Three Months Ended March 31, 2019Six Months Ended March 31, 2019
Total revenues$15,805  $41,111  
Net loss(4,397) (46,041) 
Net gain (loss) attributable to Ben LP common unitholders673  (12,519) 
GWG portion of net earnings (loss)600  (1)(1,327) (2)
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1.Our portion of Beneficient’s net earnings (loss) from January 1, 2019 to March 31, 2019. This amount was recognized during the three months ended June 30, 2019.
2.Our portion of Beneficient's net earnings (loss) from October 1, 2018 to March 31, 2019. This amount was recognized during the six months ended June 30, 2019.
We eliminated the effects of any intercompany transactions in the summarized information presented above. Our historical ownership percentage of our investment in Common Units is as follows:
Date
Percentage of Outstanding
Common Units
Reason
August 10, 201813.9%Purchase of units
December 28, 201889.9%Purchase of units
March 31, 201988.1%Change in investee outstanding units
June 12, 201990.2%Purchase of units
December 31, 201995.5%Purchase of units
May 26, 202095.6%Purchase of units