Revenue Growth - Total revenue for the three months ended June 30, 2023, was $11,378,765, an increase from $8,398,901 in the same period of 2022, representing a growth of approximately 35.5%[222] - Active management revenue for the six months ended June 30, 2023, reached $20,994,917, up from $17,285,971 in 2022, reflecting a growth of about 21.5%[222] - Total active management revenue for the six months ended June 30, 2023, was $20,994,917, an increase of $3,708,946, or 21%, compared to the same period in 2022[234] - Active management revenue increased by $3,044,920, or 38.2%, for the three months ended June 30, 2023, driven by maturities of policies accounted for under the investment method[231] - Total revenue for the portfolio servicing segment decreased by $65,056, or 16%, for the three months ended June 30, 2023, compared to the same period in 2022[278] - Total revenue for the portfolio servicing segment decreased by $400,270, or 40%, for the six months ended June 30, 2023, compared to the same period in 2022[279] Profitability - Gross profit for the three months ended June 30, 2023, was $10,405,365, compared to $7,732,782 in 2022, indicating an increase of approximately 34.5%[222] - Gross profit increased by $2,672,584, or 35%, for the three months ended June 30, 2023, driven by a decrease in cost of revenue and an expansion in the active management business, which contributed to a revenue increase of $3,044,920, or 38%[239] - Gross profit from the active management segment increased by $3,029,591, or 40.7%, for the three months ended June 30, 2023, compared to the same period in 2022[280] - Gross profit for the six months ended June 30, 2023, increased by $3,931,800, or 24%, primarily due to a decrease in cost of revenue and an increase in revenues from the active management business[240] - Gross profit from the portfolio servicing segment decreased by $424,188, or 151%, for the three months ended June 30, 2023, compared to the same period in 2022[278] - Gross profit from the portfolio servicing segment decreased by $834,880, or 125%, for the six months ended June 30, 2023, compared to the same period in 2022[279] Expenses - Total operating expenses for the three months ended June 30, 2023, were $2,034,771, a decrease from $2,398,996 in 2022, representing a decline of about 15.2%[222] - Cost of revenue (excluding depreciation) increased by $307,281, or 46%, for the three months ended June 30, 2023, compared to the same period in 2022, primarily due to increased payroll expenses[237] - General, administrative, and other expenses increased by $572,040, or 10,403%, for the three months ended June 30, 2023, due to costs associated with launching new income funds and other consolidated entities[246] - General, administrative, and other expenses increased by $627,726, or 97%, for the six months ended June 30, 2023, related to various expenses including payroll and insurance costs[247] - Sales and marketing expenses decreased by $335,657, or 33%, for the three months ended June 30, 2023, attributed to a reduction in advertising costs[242] Income and Loss - Net income attributable to Abacus Life, Inc. for the six months ended June 30, 2023, was $14,835,648, up from $11,515,698 in 2022, marking a growth of around 28.5%[223] - The company reported a net loss of $318,098 for the three months ended June 30, 2023, compared to a net loss of $90,243 in the same period of 2022[335] - Provision for income taxes increased by $1,064,439, or 886%, for the three months ended June 30, 2023, compared to the same period in 2022, mainly due to taxable income of $7,081,252[271] Cash Flow - Net cash used in operating activities was $38,364,171 for the six months ended June 30, 2023, compared to $4,751,170 for the same period in 2022[294] - Financing activities generated $35,983,097 of net cash for the six months ended June 30, 2023, compared to $7,744,154 for the same period in 2022[297] - Net cash used in operating activities for the six months ended June 30, 2023, was $(24,292), a significant improvement from $(452,367) in the same period of 2022[382] - Investing activities used $(182,528) of net cash in the first half of 2023, compared to $(35,687) in 2022, primarily due to property and equipment purchases[383] - Financing activities resulted in a net cash outflow of $(443,694) for the six months ended June 30, 2023, compared to $(671,726) in 2022, mainly due to member distributions[386] Policy Management - The number of policies serviced increased to 819 in the six months ended June 30, 2023, up 85.7% from 441 in the same period in 2022[288] - The value of policies serviced rose to $1,823,437,795, an increase of 180.3% compared to $650,461,869 in the same period in 2022[288] - The company originated 38 policies for the Nova Funds with a total value of approximately $56,688,680 for the three months ended June 30, 2023, compared to 92 policies valued at $102,307,954 in the same period of 2022[341] Market and Operational Insights - The life settlements industry captures only a narrow portion of the potential market, indicating significant growth opportunities for Abacus[330] - Abacus operates in 49 states and the District of Columbia, holding licenses in 43 jurisdictions, with no current plans to enter Alaska[331] - Global macroeconomic factors, such as inflation and regulatory policies, may impact the timing and volume of transactions[333] - Abacus aims to enhance its technology and marketing infrastructure to support expected growth in the life settlements market[332] - The company has shifted its focus towards directly acquiring life insurance policies since 2021, leading to rapid growth in this segment[210] Financing and Debt - Management plans to seek additional equity or debt financing to support future capital requirements related to revenue growth and expansion of active management services[292] - As of June 30, 2023, the outstanding principal amount of LMATTS 2024 notes is $9,866,900, designed to provide upside exposure to the S&P 500 Index with a 40% downside protection feature[298] - The fair value of secured borrowings for LMA Income Series, LP as of June 30, 2023, is $22,124,676, while for LMA Income Series II, LP, it is $20,041,851[302][314]
EAST RESOURCES A(ERES) - 2023 Q2 - Quarterly Report