# EDGAR Filing Document

**Accession Number:** 0000355379
**File Stem:** 0001558370-23-004736
**Filing Date:** 2023-3
**Character Count:** 38548
**Document Hash:** 7c0b9956d57dbd12807e99178b4930be
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-23-004736.hdr.sgml**: 20230327

**ACCESSION NUMBER**: 0001558370-23-004736

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230301

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230327

**DATE AS OF CHANGE**: 20230327

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MIDWEST HOLDING INC.
- **CENTRAL INDEX KEY:** 0000355379
- **STANDARD INDUSTRIAL CLASSIFICATION:** LIFE INSURANCE [6311]
- **IRS NUMBER:** 200362426
- **STATE OF INCORPORATION:** NE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39812
- **FILM NUMBER:** 23765341

**BUSINESS ADDRESS:**
- **STREET 1:** 2900 SOUTH 70TH STREET
- **STREET 2:** SUITE 400
- **CITY:** LINCOLN
- **STATE:** NE
- **ZIP:** 68506
- **BUSINESS PHONE:** 402-489-8266

**MAIL ADDRESS:**
- **STREET 1:** 2900 SOUTH 70TH STREET
- **STREET 2:** SUITE 400
- **CITY:** LINCOLN
- **STATE:** NE
- **ZIP:** 68506

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MIDWEST HOLDING INC
- **DATE OF NAME CHANGE:** 20000101

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MIDWEST NATIONAL CORP
- **DATE OF NAME CHANGE:** 19860123

?xml version='1.0' encoding='UTF-8'? Midwest Holding - 8-K (Earnings Release)(Q3) (01411326).DOC

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): March 1, 2023**

**Midwest Holding Inc.**

*(Exact name of registrant as specified in its charter)*

---

| | | |
|:---|:---|:---|
| **DELAWARE**<br>*(State or other jurisdiction*  | **001-39812**<br>*(Commission File Number)* | **20-0362426**<br>*(IRS Employer Identification No.)* |
| *of incorporation)* |  |  |

---

**2900 South 70th Street, Suite 400**

**Lincoln, Nebraska 68506**

*(Address of principal executive offices) (Zip Code)* 

**(402) 489-8266**

*(Registrant's telephone number, including area code)*

---

| |
|:---|
| &nbsp;&nbsp;**Not Applicable**  |
| &nbsp;&nbsp;*(Former name or former address, if changed since last report)* |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):\

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class<br>| Trading Symbol(s)<br>| Name of each exchange on which registered<br>|
| **Voting Common Stock, $0.001 par value**<br>| **MDWT**<br>| **NASDAQ Stock Market LLC** <br>|

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.02 Results of Operations and Financial Condition.**

On March 27, 2023, Midwest Holding Inc. (the "Company") issued a press release announcing its financial and operating results for the three months and year ended December 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in this Current Report on Form 8-K furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liability under that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

The following exhibits are included with this Current Report on Form 8-K:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description**<br>|
| 99.1 <br>| [Press Release dated March](mdwt-20230301xex99d1.htm) 27, 2023.<br>|
| 104<br>| Cover Page Interactive Data File (formatted as inline XBRL).<br>|

---

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 27, 2023

---

| |
|:---|
| MIDWEST HOLDING INC. |
| By: /s/ Georgette Nicholas |
| Name: Georgette Nicholas |
| Title: Chief Executive Officer |

---

## Exhibit 99.1

**Midwest Holding Inc. Reports Fourth Quarter and Full-Year 2022 Results**

LINCOLN, Neb., March 27, 2023 / PR Newswire/ -- Midwest Holding Inc. ("Midwest") (NASDAQ: MDWT), today announced financial results for the fourth quarter and full year ended December 31, 2022.

**Fourth Quarter and Full Year 2022 Highlights:**

● GAAP net income for the year was $7.1 million compared with a $16.6 million net loss recorded in 2021. GAAP earnings were $1.88 per share (diluted) versus a ($4.45) per share (diluted) loss in the prior year. For the fourth quarter 2022, a GAAP net loss of $(9.7) million was incurred compared to a loss of $(7.0) million in the prior year fourth quarter driven by lower investment income from other invested assets and an increase in other expenses related to legal and other fees paid related to the establishment of the line of credit and reinsurance in the quarter.

● GAAP total revenue for the year was $30.0 million compared with revenue of $30.1 million in 2021, driven by an increase in investment income from growth in invested assets retained, higher policy administration fees and growing amortization of deferred ceding commissions, offset by unrealized losses on derivatives compared to gains in the prior year.

● Annuity direct written premium under statutory accounting principles ("SAP"), a non-GAAP measure, was up 51.8% to $715.8 million from $471.6 million in 2021 reflecting strong growth throughout 2022, from a focus on distribution and pricing. The mix of new business was 56% Multi-Year Guaranteed Annuities (MYGA) and 44% Fixed Indexed Annuities (FIA).

● Authority to write business obtained in Florida and Georgia along with product approvals in Florida, North and South Dakota.

● Ceded premiums (SAP), a non-GAAP measure, were $311.3 million compared to $237.4 million in the prior year. The rate for the year, or that portion of our written premium that we reinsured, was 43.5% compared to 50.3% in the prior year.

● Total expenses decreased to $21.7 million from $41.9 million in the prior year benefiting from negative interest credited due to the value of the options embedded in our liabilities and from a gain on the mark to market value of the options allowance included in other operating expenses . On a non-GAAP basis, total expenses have increased from variable costs associated with increased premiums written related to technology, distribution, product fees and premium taxes along with expenses related to state expansion and capital initiatives. Salaries and benefits increased with the addition, repositioning and retention of personnel to support growth and manage a tighter labor market.

● Invested assets grew to $1,615.0 million at year-end 2022 compared with $975.5 million at year- end 2021. The retained portfolio was $812 million at the end of December 31, 2022 compared to $414 million at the end of the prior year. Third party assets under management were $502 million at year-end compared to $405 million in prior year.

● Effective February 28, 2023, reinsurer American Republic Insurance Company ("AEG") elected not to extend its commitment period for reinsuring liabilities under its Modified Coinsurance Agreement (the "AEG Agreement"). AEG had previously been taking a 20% quota share of certain liabilities with respect to Midwest's MYGA-5 business as well as a 20% quota share of certain liabilities with respect to our FIA products and, as a result of the election, its quota share with respect to both MYGA and FIA policies is 0% going forward. The AEG Agreement remains in place, and AEG remains responsible for previously ceded liabilities.

------

Georgette Nicholas, CEO of Midwest noted, "We are excited about the execution and progress we have made in 2022. The results reflect the actions we took to position the Company for growth. We have been focusing on distribution, pricing, products, investment management, and reinsurance. We are investing in technology and foundational capabilities to strengthen the business. We continue to see strong trends in premiums written and are very excited to add Florida and Georgia to our state footprint for this year. We are focused on continued execution and growth in 2023."

Ms. Nicholas concluded: "Our opportunities are substantial to build the platform and to deliver on our commitment to deliver value to shareholders."

**Full-Year 2022 versus Full-Year 2021 on a GAAP basis**

Midwest reported net income of $7.1 million for 2022. This compares with the $(16.6) million net loss in the prior year. On a diluted, per-share basis, this year's net income was $1.88 compared with a loss of ($4.45) reported in 2021.

Investment income rose in 2022 to $35.1 million from $15.7 million in the prior year Driving the change was an increase in invested assets as well as performance on those assets, benefiting from sourcing assets with a higher yield – generating approximately a 2.2% return on the investment portfolio.

Amortization of deferred gain on reinsurance reached $4.8 million compared with $3.0 million in 2021 due to growth in the deferred gain on co-insurance on the balance sheet to $38.1 million compared to $28.6 million , which reflects ceding commission received on reinsurance with third parties.

Service fee revenue was consistent at $2.4 million in 2022 from $2.3 million in 2021. Service fee revenue consists of fee revenue generated by our wholly owned asset manager, 1505 Capital, for asset-management services provided to third-party clients.

Policy administration fee revenue for the year was $2.1 million in 2022 versus $0.8 million in 2021. Policy administration fee revenue is generated by providing ancillary services, such as policy administration, to third partie,s and policy surrender charges. The increase was correlated with growth in policies written.

Our expenses were $21.7 million in the year compared with $41.9 million in the prior year. Contributing to the decrease was significant negative interest credited, as well as mark to market expense which is included in other operating expenses. On a non-GAAP basis, total expenses have increased from variable costs associated with increased premiums written related to technology, distribution, product fees and premium taxes along with expenses related to state expansion and capital initiatives. Salaries and benefits increased with the addition, repositioning and retention of personnel to support growth and manage a tighter labor market.

**Q4 2022 versus Q4 2021 on a GAAP basis**

Midwest reported GAAP net loss of $(9.7) million in the fourth quarter of 2022 compared to a $(7.0) million GAAP net loss incurred in the fourth quarter of 2021. On a per-share basis, this year's quarterly net loss was $(2.62) compared with the $(0.82) per-share loss reported in the fourth quarter of 2021.

Investment income in 2022's fourth quarter was $5.4 million compared with $3.4 million in the prior year's fourth quarter, driven by the increase in invested assets and portfolio retained along with yield

------

improvement from a rising rate environment. We did see a lower return from other invested assets in the fourth quarter.

Amortization of deferred gain on reinsurance reached $1.6 million in the fourth quarter of 2022 compared with $1.3 in the fourth quarter of 2021 primarily due to growth of the deferred gain on co-insurance on our balance sheet.

Service fee revenue from assets under management was $0.7 million versus $0.6 million in the prior fourth quarter.

Policy charges revenue for the fourth quarter was $0.7 million in 2022 versus less than $0.1 million in fourth quarter 2021 given growth in policies written.

Our total expenses on a GAAP basis were $12.1 million versus $20.0 million in the prior year fourth quarter. Total expenses were helped by reduced salaries and benefits expenses, as well as lower interest credited of negative $(3.7) million compared to $5.1 million in the prior year. Salaries and benefits were $3.8 million in Q4 2022 compared to $5.5 million in Q4 2021 as we continue to seek operational improvement.

**Guidance**

We continue to see a growing fixed annuity market with new competitors and various movement in pricing. Our focus is to maintain a competitive position on pricing and service to continue sales momentum in 2023. Given where we are in the first quarter of 2023, we anticipate premiums for the quarter will be consistent with the fourth quarter of 2022.

State expansion efforts remain a key priority. We are excited to begin writing business in Florida, where we were granted approval to conduct business in late December along with Georgia, where we received approval at the end of February. We have obtained our product approvals in Florida and will be working to obtain those in Georgia. We anticipate that the addition of these states could add approximately 33% growth to our existing premium written. We have other active state applications in process and will provide updates as they progress.

Given our start for 2023, we estimate that premiums written for 2023 to be in the range of $800 million to $850 million (SAP) as of now. As we begin to get Florida and Georgia moving, we expect that to increase depending on how quickly agents begin writing new business. We are focused on improving our FIA production this year and expect the mix in product sales to be 60% towards FIA and 40% MYGA.

The goal is to cede, on average, approximately 70-90% of our premium in a year to generate ceded commission fees and manage capital, although through fourth quarter we ceded approximately 47%. We would expect to cede approximately 55-65% in 2023 given the demand from reinsurance partners is strong. We have capacity in place to cover anticipated written premium through existing partners along with additional potential reinsurance transactions in the pipeline.

We continue to focus on expense management, making key investments to support growth of the business and bring efficiencies with technology. We anticipate general and administrative expenses on a management basis, a non-GAAP measure, to be approximately $30 to $32 million for the full year 2023.

------

**Q4 2021 Key Performance Indicators and Non-GAAP Financial Measures**

In addition to GAAP measures, Midwest's management utilizes a series of key performance indicators (KPI's) and non-GAAP measures to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• monitor and evaluate the performance of our business operations and financial performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• facilitate internal comparisons of the historical operating performance of our business operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review and assess the operating performance of our management team;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• analyze and evaluate financial and strategic planning decisions regarding future operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• plan for and prepare future annual operating budgets and determine appropriate levels of operating investments; and

● facilitate comparison of results between periods and to better understand the underlying historical trends in our business and prospects.

These non-GAAP measures are not a substitute for GAAP measures; however, management believes that when used in conjunction with the GAAP measures, the non-GAAP measures can contribute to investors' understanding of the progress of our business. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, our operating performance measures as prescribed by GAAP.

**Annuity Premiums (a KPI)**

For the fourth quarter of 2022, annuity direct written premiums were $206.2 million compared with $104.2 million in the fourth quarter of 2021. Ceded premiums were $97.5 million in 2022's fourth quarter compared to $43.8 million in the fourth quarter of 2021. Of the fourth-quarter 2022 sales of $206.2 million, 66% was in the MYGA category and the remaining 34% consisted of sales of Fixed Indexed Annuities.

For the full year 2022, annuity direct written premiums were $715.8 million up from $471.6 million for 2021, a 52% increase. Ceded premium was $311.3 million in 2022 compared to $237.4 million in 2021. Of the 2022 sales of 56% was in the MYGA category and the remaining 44% consisted of sales of Fixed Indexed Annuities.

**Fees Received for Reinsurance (a KPI)**

We use this non-GAAP figure to measure the progress of our effort to secure third-party capital to back our reinsurance programs. Fees Received for Reinsurance sums two components: Amortization of deferred gain on reinsurance, which is a line item in our Consolidated Statements of Comprehensive Loss, and deferred coinsurance ceding commission, which is a line item in our GAAP consolidated Statement of Cash Flows.

For the fourth quarter of 2022, fees received for reinsurance totaled $4.2 million compared with $2.1 million in the fourth quarter of 2021. For the full year 2022, fees received for reinsurance totaled $14.3 million compared to $13.4 million in 2021.

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**General and Administrative Expenses (a non-GAAP measure)**

We monitor this figure to track our overhead. It includes salary and benefits and other operating expenses; however, it excludes non-cash stock-based compensation and the non-cash mark-to-market-adjustment of our option budget allowance.

G&A expense in 2022 rose to $35.0 million from $24.6 million in the prior year. Total expenses have increased from variable costs associated with increased premiums written related to technology, distribution, product fees and premium taxes along with expenses related to state expansion and capital initiatives. Salaries and benefits increased with the addition, repositioning and retention of personnel to support growth and manage a tighter labor market.

**Management Expenses (a non-GAAP measure)** 

We use this figure to monitor the expenses of our business on a cash basis. Importantly, we exclude from the calculation of management expenses the index interest credited related to our Fixed Indexed Annuities because this expense is fully hedged. Instead, we add back to Management Expenses the period's amortization of options previously purchased to provide this hedge. We view this amortized cost as our true cost of funds. Management Expenses also excludes the mark-to-market adjustment of our option budget allowance as that is recorded as a component of other operating expense.

Management expenses for 2022 were $55.6 million compared with $36.3 million in the prior year. Principal drivers of the increase were higher interest credited and increases in expenses from retained premiums along with increase in G&A noted above.

**SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements contained or incorporated by reference in this release constitute forward-looking statements. These statements are based on management's expectations, estimates, projections and assumptions. In some cases, you can identify forward-looking statements by terminology including "could," "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "intend," or "continue," the negative of these terms, or other comparable terminology used in connection with any discussion of future operating results or financial performance. These statements are only predictions and reflect our management's good faith present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Factors that may cause our actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted in such forward-looking statements include among others, the following possibilities:

● our business plan, particularly including our reinsurance strategy, may not prove to be successful;

● our reliance on third-party insurance marketing organizations to market and sell our annuity insurance products through a network of independent agents;

● adverse changes in our ratings obtained from independent rating agencies;

● failure to maintain adequate reinsurance;

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● our inability to expand our insurance operations outside the 24 states and District of Columbia in which we are currently licensed;

● our annuity insurance products may not achieve significant market acceptance;

● we may continue to experience operating losses in the foreseeable future;

● the possible loss or retirement of one or more of our key executive personnel;

● intense competition, including the intensification of price competition, competitive pressures from established insurers with greater financial resources, the entry of new competitors, and the introduction of new products by new and existing competitors;

● adverse state and federal legislation or regulation, including decreases in rates, limitations on premium levels, increases in minimum capital and reserve requirements, benefit mandates and tax treatment of insurance products;

● fluctuations in interest rates causing a reduction of investment income or increase in interest expense and in the market value of interest-rate sensitive investment;

● failure to obtain new customers, retain existing customers, or reductions in policies in force by existing customers;

● higher service, administrative, or general expense due to the need for additional advertising, marketing, administrative or management information systems expenditures;

● changes in our liquidity due to changes in asset and liability matching;

● possible claims relating to sales practices for insurance products; and

● lawsuits in the ordinary course of business.

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**Earnings Teleconference information and Details** 

Midwest Holding has announced plans to host a conference call to discuss financial and operating results for the fourth quarter and full year 2022 on March 28, 2023, at 8:30 a.m. Eastern Time. The Company also posted those results on the investor relations section of its website at https://ir.midwestholding.com after the close of the financial markets on March 27, 2023.

**To register for this conference call, please go to this link . Registrants will receive confirmation with dial-in details.** 

**The call may also be accessed via webcast, using this link** .

A replay of the webcast will be made available after the call on the Investor Relations page of the Company's website at https://ir.midwestholding.com

**About Midwest Holding Inc.**

Midwest Holding Inc. is a growing, technology-enabled, services-oriented annuity platform. Midwest designs and develops annuity products that are distributed through independent distribution channels, to a large and growing demographic of U.S. retirees. Midwest originates, manages and typically transfers these annuities through reinsurance arrangements to asset managers and other third-party investors. Midwest also provides the operational and regulatory infrastructure and expertise to enable asset managers and third-party investors to form and manage their own reinsurance capital vehicles.

For more information, please visit www.midwestholding.com

Investor contact: ir@midwestholding.com

Media inquiries: press@midwestholding.com

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**Consolidated Balance Sheets**<br> (in thousands)

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| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| (In thousands, except share information) |  |  |
| **Assets** |  |  |
| &nbsp;&nbsp;Fixed maturities, available for sale, at fair value<br>(amortized cost: $1,269,735 and $679,921, respectively) (See Note 3) | $1214635  | $683296  |
| &nbsp;&nbsp;Mortgage loans on real estate, held for investment | 227047  | 183203  |
| &nbsp;&nbsp;Derivative instruments (See Note 4) | 15934  | 23022  |
| &nbsp;&nbsp;Equity securities, at fair value (cost: $10,256 in 2022 and $22,158 in 2021) | 5111  | 21869  |
| &nbsp;&nbsp;Other invested assets | 112431  | 35293  |
| &nbsp;&nbsp;Preferred stock | 31415  | 18686  |
| &nbsp;&nbsp;Deposits and notes receivable | 8359  | 10071  |
| &nbsp;&nbsp;Policy loans | 25  | 87  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total investments | 1614957  | 975527  |
| &nbsp;&nbsp;Cash and cash equivalents | 191414  | 142013  |
| &nbsp;&nbsp;Deferred acquisition costs, net | 43433  | 24530  |
| &nbsp;&nbsp;Premiums receivable | 362  | 354  |
| &nbsp;&nbsp;Accrued investment income | 25165  | 13623  |
| &nbsp;&nbsp;Reinsurance recoverables (See Note 8) | 20190  | 38579  |
| &nbsp;&nbsp;Property and equipment, net | 1897  | 386  |
| &nbsp;&nbsp;Receivable for securities sold | 10518  | 19732  |
| &nbsp;&nbsp;Other assets | 12495  | 5173  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $1920431  | $1219917  |
| **Liabilities and Stockholders' Equity** |  |  |
| Liabilities: |  |  |
| &nbsp;&nbsp;Benefit reserves | $12945  | $12941  |
| &nbsp;&nbsp;Deposit-type contracts (See Note 6) | 1743348  | 1075439  |
| &nbsp;&nbsp;Other policy-holder funds | 4105  | 238  |
| &nbsp;&nbsp;Notes payable (See Note 7) | 25000  |  |
| &nbsp;&nbsp;Deferred gain on coinsurance transactions | 38063  | 28589  |
| &nbsp;&nbsp;Payable for securities purchased | 8872  | 5546  |
| &nbsp;&nbsp;Other liabilities | 53721  | 11408  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 1886054  | 1134161  |
| Stockholders' Equity: |  |  |
| &nbsp;&nbsp;Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of December 31, 2022 or December 31, 2021 |  |  |
| &nbsp;&nbsp;Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,727,976 shares issued and outstanding as of December 31, 2022 and 3,737,564 at December 31, 2021, respectively; non-voting common stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding December 31, 2022 and December 31, 2021, respectively | 4 | 4  |
| &nbsp;&nbsp;Additional paid-in capital | 138482 | 138452  |
| &nbsp;&nbsp;Treasury stock | (175) | (175) |
| &nbsp;&nbsp;Accumulated deficit | (63019) | (70159) |
| &nbsp;&nbsp;Accumulated other comprehensive (loss) income | (51386) | 2634  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Midwest Holding Inc.'s stockholders' equity** | 23906 | 70756  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests | 10471  | 15000  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 34377  | 85756  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $1920431  | $1219917  |

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**Consolidated Statements of Comprehensive Loss**<br> (in thousands, except per share amounts)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended December 31,**  | **Three months ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
| (In thousands, except per share data) | **2022** | **2021** | **2022** | **2021** |
| **Revenues** |  |  |  |  |
| &nbsp;&nbsp;Investment income, net of expenses | $5395 | 3434 | $35115 | $15737 |
| &nbsp;&nbsp;Net realized (loss) gain on investments (See Note 3) | (203) | 10456 | (14878) | 7752 |
| &nbsp;&nbsp;Amortization of deferred gain on reinsurance transactions | 1565 | 1312 | 4816 | 3022 |
| &nbsp;&nbsp;Policy administration fees | 732 | 1 | 2130 | 842 |
| &nbsp;&nbsp;Service fee revenue, net of expenses | 734 | 605 | 2366 | 2343 |
| &nbsp;&nbsp;Other revenue | 367 | 202 | 500 | 367 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 8590 | 16009 | 30049 | 30063 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;Interest credited | (3704) | 5143 | (10193) | 7012 |
| &nbsp;&nbsp;Benefits | 861 | 5 | 3206 | 6 |
| &nbsp;&nbsp;Amortization of deferred acquisition costs | 1693 | 1106 | 4788 | 2886 |
| &nbsp;&nbsp;Salaries and benefits | 3830 | 5460 | 16196 | 16926 |
| &nbsp;&nbsp;Other operating expenses | 9401 | 8335 | 7661 | 15104 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 12081 | 20050 | 21658 | 41934 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) before income tax expense | (3491) | (4041) | 8391 | (11871) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (See Note 9) | (3753) | (2934) | (7600) | (4766) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income (loss) after income tax benefit (expense)** | (7244) | (6975) | 791 | (16637) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Less: Income attributable to noncontrolling interest** | 2496 |  | (6349) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income (loss) attributable to Midwest Holding Inc.** | (9740) | (6975) | 7140 | (16637) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income (loss): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (losses) on investments arising during the year ended December 31, 2022 and 2021, net of offsets, net of tax ($10.4 million and $0.2 million, respectively) | 508 | (3843) | (54975) | (1422) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Reclassification adjustment for net realized losses on investments, net of offsets during the year ended December 31, 2022 and 2021 (net of tax ($24.9 million) and $0.4 million, respectively) | 1049 | (764) | 955 | (2375) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive loss  | 1557 | (4607) | (54020) | (3797) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Comprehensive loss** | $(8183) | $(11582) | $(46880) | $(20434) |
| **Impairment** |  |  |  |  |
| &nbsp;&nbsp;Total other-than-temporary impairment | 881 |  | 1415 |  |
| &nbsp;&nbsp;Net other-than-temporary impairment loss recognized in net income | $881 |  | 1415 |  |
| **Income (Loss) per common share** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $(2.62) | $(0.82) | $1.91 | $(4.45) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(2.57) | $(0.82) | $1.88 | $(4.45) |

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**Consolidated Statements of Cash Flows**<br> (in thousands)

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| | | |
|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  |
| (In thousands) | **2022** | **2021** |
| Cash Flows from Operating Activities: |  |  |
| Income (loss) attributable to Midwest Holding, Inc. | $7140 | $(16637) |
| Adjustments to arrive at cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net premium and discount on investments | (11548) | (1244) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 338 | 50 |
| &nbsp;&nbsp;&nbsp;Stock options | 29 | 4981 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs | 4788 | 2886 |
| &nbsp;&nbsp;&nbsp;Deferred acquisition costs capitalized | (23857) | (14018) |
| &nbsp;&nbsp;&nbsp;Net realized loss on investments | 14878 | (7752) |
| &nbsp;&nbsp;&nbsp;Deferred gain on coinsurance transactions | 9474 | 10390 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reinsurance recoverable | 29015 | (6434) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and dividends due and accrued | (11542) | (6816) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premiums receivable | (8) | (40) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposit-type liabilities | 3431 | 24371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Policy liabilities | 3872 | 239 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivable and payable for securities | 12540 | (14185) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets and liabilities | 34612 | (1129) |
| **Net cash provided by (used in) operating activities** | 73162 | (25338) |
| Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;Fixed maturities available for sale: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases | (1060013) | (660059) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale or maturity | 456615 | 356820 |
| &nbsp;&nbsp;&nbsp;Mortgage loans on real estate, held for investment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases | (110381) | (160714) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale  | 69365 | 72064 |
| &nbsp;&nbsp;&nbsp;Derivatives |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases | (24112) | (23944) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale  | 3232 | 14578 |
| &nbsp;&nbsp;&nbsp;Equity securities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases |  | (22097) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale  | 16986 |  |
| &nbsp;&nbsp;&nbsp;Other invested assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases | (84734) | (95529) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale  | 3334 | 82272 |
| &nbsp;&nbsp;&nbsp;Purchase of restricted common stock  | (806) | (500) |
| &nbsp;&nbsp;&nbsp;Preferred stock |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases |  | (14926) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale  | 23579 |  |
| &nbsp;&nbsp;&nbsp;Net change in policy loans | 62 | (41) |
| &nbsp;&nbsp;&nbsp;Net purchases of property and equipment | (1835) | (331) |
| **Net cash used in investing activities** | (708708) | (452407) |
| Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net transfer to noncontrolling interest | (4529) | 15000 |
| &nbsp;&nbsp;&nbsp;Proceeds from term debt | 25000 |  |
| &nbsp;&nbsp;&nbsp;Capital contribution |  | (121) |
| &nbsp;&nbsp;&nbsp;Receipts on deposit-type contracts | 716083 | 471646 |
| &nbsp;&nbsp;&nbsp;Withdrawals on deposit-type contracts | (51607) | (18446) |
| **Net cash provided by financing activities** | 684947 | 468079 |
| **Net increase (decrease) in cash and cash equivalents** | 49401 | (9666) |
| Cash and cash equivalents: |  |  |
| &nbsp;&nbsp;&nbsp;Beginning | 142013 | 151679 |
| &nbsp;&nbsp;&nbsp;Ending | $191414 | $142013 |
| Supplementary information |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | $2870 | $6450 |

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<br>**Supplemental Information – Reconciliation – Management Expenses to GAAP Expenses**<br>(in thousands)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended December 31,**  | **Three months ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
| **Management Expenses** |  |  |  |  |
| G&A | $10197 | $7274 | $35015 | $24632 |
| Management interest credited | 5217 | 2646 | 15811 | 8757 |
| Amortization of deferred acquisition costs | 1693 | 1105 | 4788 | 2886 |
| Expenses related to retained business | 6910 | 3751 | 20599 | 11643 |
| Management expenses - total | $17107 | $11025 | $55614 | $36275 |
|  | **Three months ended December 31,**  | **Three months ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
| **G&A** |  |  |  |  |
| Salaries and benefits - GAAP | $3830 | $5460 | $16196 | $16926 |
| Other operating expenses - GAAP | 9401 | 8335 | 7661 | 15104 |
| Subtotal | 13231 | 13795 | 23857 | 32030 |
| Adjustments: |  |  |  |  |
| Less: Stock-based compensation | (316) | (2216) | (29) | (4981) |
| Less: Mark-to-market option allowance | (2718) | (4305) | 11187 | (2417) |
| G&A | $10197 | $7274 | $35015 | $24632 |
|  | **Three months ended December 31,**  | **Three months ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
| **Management Interest Credited** |  |  |  |  |
| Interest credited - GAAP | $(3704) | $5143 | $(10193) | $7012 |
| Adjustments: |  |  |  |  |
| Less: FIA interest credited - GAAP | 6047 | (4132) | 17171 | (4169) |
| Add: FIA options cost - amortized - GAAP | 2874 | 1634 | 8833 | 5914 |
| Management interest credited | $5217 | $2645 | $15811 | $8757 |
|  | **Three months ended December 31,**  | **Three months ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2021** | **2022** | **2021** |
| **Reconciliation - Management Expenses to GAAP Expenses** |  |  |  |  |
| Total expenses - GAAP | $12081 | $20050 | $21658 | $41934 |
| Adjustments: |  |  |  |  |
| Less: Benefits | (861) | (6) | (3206) | (6) |
| Less: Stock-based compensation | (316) | (2216) | (29) | (4981) |
| Less: Mark-to-market option allowance | (2718) | (4305) | 11187 | (2417) |
| Less: FIA interest credited - GAAP | 6047 | (4132) | 17171 | (4169) |
| Add: FIA options cost - amortized - GAAP | 2874 | 1634 | 8833 | 5914 |
| Management expenses - total | $17107 | $11025 | $55614 | $36275 |

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