EAST RESOURCES A(ERES) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements detail the company's financial position and performance Consolidated Balance Sheets The balance sheets show a decrease in total assets and a shift in liabilities from long-term to current Consolidated Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------------ | | Assets | | | | Cash and cash equivalents | $74,836,871 | $131,944,282 | | Total current assets | $105,920,010 | $159,564,646 | | Life settlement policies, at fair value | $386,144,698 | $370,398,447 | | TOTAL ASSETS | $848,357,920 | $874,164,752 | | Liabilities & Equity | | | | Current portion of long-term debt, at fair value | $117,869,504 | $37,430,336 | | Total current liabilities | $140,178,035 | $62,466,079 | | TOTAL LIABILITIES | $426,824,728 | $450,870,080 | | TOTAL STOCKHOLDERS' EQUITY | $416,533,192 | $423,294,672 | Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) The statements of operations reflect significant year-over-year growth in revenue and net income Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------ | :----------- | :--------- | | TOTAL REVENUES | $56,224,620 | $29,076,102 | | GROSS PROFIT | $50,169,976 | $26,332,568 | | OPERATING INCOME | $22,519,595 | $6,770,770 | | NET INCOME (LOSS) | $17,610,929 | $651,749 | | NET INCOME (LOSS) ATTRIBUTABLE TO ABACUS GLOBAL MANAGEMENT, INC. | $17,583,689 | $769,983 | | Earnings (loss) per share - basic | $0.18 | $0.01 | | Earnings (loss) per share - diluted | $0.18 | $0.01 | Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------ | :------------ | :---------- | | TOTAL REVENUES | $100,363,966 | $50,563,286 | | GROSS PROFIT | $87,200,915 | $45,098,855 | | OPERATING INCOME | $43,546,559 | $9,023,899 | | NET INCOME (LOSS) | $23,009,955 | $(623,722) | | NET INCOME (LOSS) ATTRIBUTABLE TO ABACUS GLOBAL MANAGEMENT, INC. | $22,223,272 | $(578,762) | | Earnings (loss) per share - basic | $0.23 | $(0.01) | | Earnings (loss) per share - diluted | $0.23 | $(0.01) | Unaudited Consolidated Statements of Mezzanine Equity and Stockholders' Equity Stockholders' equity decreased due to significant treasury stock repurchases offsetting net income Stockholders' Equity Changes (Six Months Ended June 30, 2025) | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :------------------ | :------------ | | Total Stockholders' Equity | $423,294,672 | $416,533,192 | | Shares Issued (Class A Common Stock) | 96,731,194 | 97,954,471 | | Treasury Stock (Shares) | (1,048,226) | (6,129,703) | | Treasury Stock (Amount) | $(12,025,137) | $(47,076,918) | | Accumulated Deficit | $(57,896,606) | $(35,767,080) | - The Company repurchased 5,081,477 common shares for $35,051,781 during the period from March 31, 2025 to June 30, 2025[10] Unaudited Consolidated Statements of Cash Flows Cash flows show a significant positive shift in operations but a large outflow from financing activities Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :------------------------------------------ | :------------ | :------------ | | Net cash provided by (used in) operating activities | $14,511,602 | $(64,542,510) | | Net cash used in investing activities | $(13,743,342) | $(716,113) | | Net cash (used in) provided by financing activities | $(57,875,671) | $130,993,784 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(57,107,411) | $65,735,161 | | Cash, cash equivalents, and restricted cash at end of period | $74,836,871 | $91,323,829 | - Operating activities shifted from a net cash outflow of $64.5 million in 2024 to a net cash inflow of $14.5 million in 2025, primarily due to increased net life settlement sales and net income[14][15] - Financing activities saw a significant decrease in cash provided, moving from $131.0 million in 2024 to a net cash outflow of $57.9 million in 2025, mainly due to decreased stock issuance proceeds, increased share repurchases, and debt repayments[14][15] Condensed Notes to Consolidated Financial Statements The notes provide detailed disclosures on accounting policies, business combinations, and segment performance 1. Basis of Presentation The interim financial statements are prepared in accordance with SEC rules and U.S. GAAP - The interim financial statements are prepared in accordance with SEC rules and U.S. GAAP, condensing certain disclosures normally found in the annual 10-K report[16] - The Company consolidates all entities where it has a controlling voting interest or is the primary beneficiary of variable interest entities (VIEs)[17] 2. Significant Accounting Policies and Recent Accounting Standards The Company has not early adopted new accounting standards and is evaluating recent tax law changes - The Company has chosen not to early adopt new accounting standards ASU 2025-03 (Business Combinations), ASU 2025-04 (Stock Compensation), and ASU 2025-05 (Credit Losses), none of which are expected to have a significant impact upon adoption[22][23][24] - The One Big Beautiful Bill Act (OBBB) was signed into law on July 4, 2025, modifying U.S. tax code, and the Company is currently evaluating its financial impact[25] - Net income (loss) per share is computed using the two-class method for participating securities, including redeemable convertible preferred stock and common stock[26][27] - One related party customer accounted for 26% of total revenue for the three months ended June 30, 2025, and 15% for the six months ended June 30, 2025[31] 3. Business Combinations The Company completed three strategic acquisitions, significantly expanding its Asset Management and Life Solutions segments - The Company completed three acquisitions: Carlisle Management Company S.C.A. (Asset Management segment, Dec 2024), FCF Advisors, LLC (Asset Management segment, Dec 2024), and National Insurance Brokerage, LLC (Life Solutions segment, April 2025)[36][44][49] Carlisle Acquisition Details (December 2, 2024) | Metric | Fair Value | | :------------------------------------------ | :----------- | | Intangibles | $51,700,000 | | Net assets acquired | $51,953,965 | | Goodwill | $93,745,891 | | Total purchase price | $145,699,856 | | Consideration (Fixed Rate Senior Unsecured Notes) | ~$72.7 million | | Consideration (Common Stock) | ~$73.0 million (9.2 million shares) | FCF Acquisition Details (December 2, 2024) | Metric | Finalized Fair Value | | :------------------------------------------ | :------------------- | | Intangibles | $5,300,000 | | Net assets acquired | $5,726,476 | | Goodwill | $4,558,285 | | Total purchase price | $10,284,761 | | Consideration (Cash, net of cash acquired) | ~$10.2 million | | Consideration (Common Stock) | ~$4.6 million (0.6 million shares) | NIB Acquisition Details (April 24, 2025) | Metric | Finalized Fair Value | | :------------------------------------------ | :------------------- | | Intangibles | $1,393,300 | | Net assets acquired | $2,313,258 | | Goodwill | $686,742 | | Total purchase price | $3,000,000 | | Consideration (Cash, net of cash acquired) | ~$2.1 million | 4. Revenues Revenue growth was driven by acquisitions in Asset Management and strong performance in Life Solutions Disaggregated Revenue (Three Months Ended June 30) | Revenue Source | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Asset management | $8,761,876 | $204,888 | | Life solutions | $47,300,844 | $28,871,214 | | Technology services | $161,900 | $0 | | TOTAL REVENUES | $56,224,620 | $29,076,102 | Disaggregated Revenue (Six Months Ended June 30) | Revenue Source | 2025 | 2024 | | :-------------------- | :------------ | :----------- | | Asset management | $16,534,953 | $422,823 | | Life solutions | $83,599,501 | $50,140,463 | | Technology services | $229,512 | $0 | | TOTAL REVENUES | $100,363,966 | $50,563,286 | - Asset management revenue significantly increased due to the Carlisle and FCF acquisitions[55] - Life solutions revenue increased, driven by realized and unrealized gains from life insurance policies[55] 5. Life Settlement Policies The company's life settlement portfolio decreased in policy count but increased in fair value Life Settlement Policies Held (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total policies held | 600 | 719 | | Policies at fair value | 595 | 714 | | Aggregate face value (fair value method) | $1,138,815,252 | $1,295,788,355 | | Fair value (fair value method) | $386,144,698 | $370,398,447 | | Policies at investment method (cost + premiums) | 5 | 5 | | Aggregate face value (investment method) | $2,225,000 | $2,225,000 | | Carrying value (investment method) | $1,109,808 | $1,083,977 | - The Company held 600 life settlement policies as of June 30, 2025, with the majority (595) accounted for using the fair value method[57] Estimated Future Premium Payments (Investment Method) as of June 30, 2025 | Year | Amount | | :------------- | :------- | | 2025 remaining | $35,378 | | 2026 | $64,043 | | 2027 | $60,235 | | 2028 | $27,866 | | 2029 | $8,002 | | Thereafter | $9,422 | | Total | $204,946 | 6. Property and Equipment—Net Net property and equipment increased significantly due to asset additions and recent acquisitions Property and Equipment, Net (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Property and equipment—gross | $1,904,039 | $1,256,718 | | Less: accumulated depreciation | $(386,194) | $(231,652) | | Property and equipment—net | $1,517,845 | $1,025,066 | - Net property and equipment increased by $492,779 (48.1%) from December 31, 2024, to June 30, 2025[66] - Depreciation expense for the three months ended June 30, 2025, was $87,716, up from $44,418 in the prior year[66] 7. Goodwill and Other Intangible Assets Goodwill and intangible assets grew substantially following the completion of recent business acquisitions Goodwill by Reportable Segment (June 30, 2025) | Reportable Segment | December 31, 2024 | Additions | Adjustments | June 30, 2025 | | :----------------- | :------------------ | :-------- | :---------- | :------------ | | Life Solutions | $139,930,190 | $686,742 | $0 | $140,616,932 | | Asset Management | $98,366,010 | $0 | $(61,834) | $98,304,176 | | Total | $238,296,200 | $686,742 | $(61,834) | $238,921,108 | Intangible Assets Acquired (Fair Value) | Asset Type | Fair Value | | :-------------------------------- | :----------- | | Management agreements | $47,400,000 | | Customer relationships | $28,793,300 | | Non-compete agreements | $7,400,000 | | Internally developed and used technology | $2,100,000 | | Trade Name (definite-lived) | $2,000,000 | | State Insurance Licenses (indefinite-lived) | $2,700,000 | | Trade Name (indefinite-lived) | $900,000 | | Total | $91,293,300 | - Amortization expense for definite-lived intangible assets was $4,667,987 for the three months ended June 30, 2025, a significant increase from $1,682,083 in the prior year, primarily due to recent acquisitions[68] 8. Available-for-Sale Securities, at Fair Value The value of available-for-sale securities, consisting of convertible notes, increased during the period - The Company holds convertible promissory notes in two unrelated entities, valued at $3,287,463 as of June 30, 2025, up from $2,205,904 at December 31, 2024[71] - These notes are accounted for using the available-for-sale method, with fair value approximating carrying value, and no unrealized gains/losses or credit losses recorded since inception[72] Interest Income from Convertible Promissory Notes | Period | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Three months ended June 30 | $44,125 | $19,945 | | Six months ended June 30 | $81,559 | $59,640 | 9. Other Investments and Other Assets Other investments and assets grew substantially due to a new note receivable and equity investments - Other investments, including convertible preferred and common stock in unrelated entities, increased to $9,850,000 as of June 30, 2025, from $1,850,000 at December 31, 2024[73] - A $7,000,000 note receivable was recorded in April 2025 from an unrelated party, maturing in April 2028, with 25% paid-in-kind lender fees of $1,750,000 added to the principal[77] Other Assets (June 30, 2025 vs. December 31, 2024) | Asset Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Note receivable | $8,986,197 | $0 | | Restricted cash deposits | $1,856,113 | $1,837,813 | | Total other assets | $10,845,818 | $1,851,845 | 10. Consolidation of Variable Interest Entities The Company consolidates several VIEs where it is the primary beneficiary and manages others as related parties - The Company consolidates VIEs where it is the primary beneficiary, including LMA Income Series II LP, LMX Series LLC, and LMA Income Series, LP[79] Consolidated VIEs Assets and Liabilities | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Total assets | $166,887,084 | $169,322,167 | | Total liabilities | $119,258,043 | $143,200,287 | - New LP Funds (Abacus Enhanced Income Fixed LP, etc) established in 2025 are not consolidated as the Company does not have a controlling financial interest, leading to related party activities for policy sales and fees[80] 11. Segment Reporting The Company reorganized into three reportable segments, with Asset Management showing substantial growth - The Company updated its business organization into three reportable segments: Asset Management, Life Solutions, and Technology Services, effective Q1 2025[81] Revenue by Reportable Segment (Six Months Ended June 30) | Segment | 2025 | 2024 | | :---------------- | :------------ | :----------- | | Asset Management | $16,534,953 | $422,823 | | Life Solutions | $83,599,501 | $50,140,463 | | Technology Services | $229,512 | $0 | | Total Revenue | $100,363,966 | $50,563,286 | Gross Profit by Reportable Segment (Six Months Ended June 30) | Segment | 2025 | 2024 | | :---------------- | :----------- | :----------- | | Asset Management | $10,745,842 | $(108,240) | | Life Solutions | $77,188,097 | $45,207,095 | | Technology Services | $(733,024) | $0 | | Total Gross Profit | $87,200,915 | $45,098,855 | - Asset Management revenue and gross profit saw substantial growth, while Technology Services generated revenue but incurred a gross loss in 2025[87][88] 12. Commitments and Contingencies The Company reports no material legal proceedings and notes the upcoming expiration of a key service agreement - The Company is not aware of any material legal proceedings that would adversely affect its business, financial position, results of operations, or cash flows[91] - An additional commitment of $1,000,000 exists to purchase convertible promissory notes from one investee[92] - The Strategic Services and Expenses Support Agreement (SSES) with Providers will expire at the end of 2025 and will not be renewed[93] 13. Fair Value Measurements Assets and liabilities measured at fair value primarily use significant unobservable (Level 3) inputs - All assets and liabilities measured at fair value are categorized as Level 3 inputs, indicating significant unobservable inputs[96] Assets and Liabilities Measured at Fair Value (June 30, 2025) | Item | Fair Value (Level 3) | | :------------------------------------------ | :------------------- | | Life settlement policies, at fair value | $386,144,698 | | Available-for-sale securities, at fair value | $3,287,463 | | Current portion of long-term debt, at fair value | $117,869,504 | | Private Placement Warrants | $9,968,000 | - Life settlement policies are valued using a discounted cash flow (DCF) model with Monte Carlo simulation, incorporating risk-based discount rates, historical trade spreads, risk scores, and life expectancy[97][103][104] - A 1% increase in the discount rate would decrease the fair value of policies by $13.7 million, while a 1% decrease would increase it by $12.8 million[106] - The fair value of long-term debt (LMATT notes) was determined using the Black-Scholes-Merton option-pricing formula and discounted cash flow analysis, with the last LMATT note paid off in January 2025[107] 14. Long-Term Debt The Company's debt profile changed with new credit facilities and note issuances for acquisitions Outstanding Principal Balances of Long-Term Debt (June 30, 2025 vs. December 31, 2024) | Debt Type | June 30, 2025 (Cost) | December 31, 2024 (Cost) | | :------------------------------------------ | :------------------- | :----------------------- | | Senior Secured Credit Facility | $99,500,000 | $100,000,000 | | LMA Income Series II, LP | $118,587,332 | $105,856,422 | | Fixed Rate Senior Unsecured Notes | $133,377,075 | $133,377,075 | | Sponsor PIK Note | $13,296,214 | $12,525,635 | | Total debt | $357,061,279 | $377,455,997 | | Less current portion of long-term debt | $(118,869,504) | $(34,068,233) | | Total long-term debt | $238,191,775 | $343,387,764 | - The Company issued an additional $72,727,075 in Fixed Rate Senior Unsecured Notes in December 2024 as consideration for the Carlisle Acquisition[118] - The Senior Secured Credit Facility, entered into in December 2024, provides an initial $100 million term loan and up to $50 million in delayed draw term loans, maturing in December 2030[119][120] - The LMATT Series 2024 market-indexed notes were fully extinguished in January 2025 with a payment of $11,229,560[125] - The Sponsor PIK Note's outstanding principal balance increased due to accrued non-cash interest expense, reaching $13,296,214 as of June 30, 2025[139] 15. Convertible Preferred Stock and Stockholders' Equity The Company issued new preferred stock and significantly increased its stock repurchase program - The Company issued 5,000 shares of Series A Convertible Preferred Stock in March 2025 with a $5,000,000 aggregate liquidation preference, classified as mezzanine equity due to holder redemption rights upon change of control[143] - As of June 30, 2025, there were 97,954,471 common shares issued, with 91,824,768 outstanding and 6,129,703 held as treasury stock[142] - The Board of Directors authorized additional stock repurchase programs totaling $35,000,000 in April and June 2025, extending the program to December 2026, with $2,923,082 remaining available[152][153] Stock Repurchase Activity (Six Months Ended June 30, 2025) | Period | Number of Shares Purchased | Total Cost | Average Price per Share | | :-------------------------- | :------------------------- | :----------- | :---------------------- | | As of December 31, 2024 | 1,048,226 | $12,025,137 | $11.61 | | April 1, 2025 to April 30, 2025 | 1,763,303 | $14,023,198 | $7.98 | | May 1, 2025 to May 31, 2025 | 477,223 | $4,083,214 | $8.57 | | June 1, 2025 to June 30, 2025 | 2,840,951 | $16,945,369 | $5.99 | | As of June 30, 2025 | 6,129,703 | $47,076,918 | $8.24 | 16. Stock-Based Compensation Stock-based compensation expense decreased compared to the prior year, with significant unrecognized costs remaining - The Company grants Restricted Stock Units (RSUs) to executives, employees, and directors under its Long-Term Equity Compensation Incentive Plan, with vesting typically over three years[154] Stock-Based Compensation Expense | Period | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Three months ended June 30 | $3,486,829 | $6,165,459 | | Six months ended June 30 | $5,842,224 | $12,258,830 | - As of June 30, 2025, approximately $26,404,842 of unrecognized compensation costs related to RSUs and stock options is expected to be recognized over the next 2.3 years[159] 17. Employee Benefit Plan Expenses for the Company's 401(k) employee benefit plan increased year-over-year - The Company's 401(k) Plan includes a matching contribution of up to 4% of eligible employee compensation[160] 401(k) Plan Expenses | Period | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Three months ended June 30 | $197,685 | $90,716 | | Six months ended June 30 | $315,808 | $199,532 | 18. Income Taxes Income tax expense increased due to higher net income, while the effective tax rate decreased significantly Income Tax Expense and Effective Tax Rate | Period | Income Tax Expense (2025) | Effective Tax Rate (2025) | Income Tax Expense (2024) | Effective Tax Rate (2024) | | :-------------------------------- | :------------------------ | :------------------------ | :------------------------ | :------------------------ | | Three months ended June 30 | $4,069,971 | 18.8% | $1,757,710 | 73.0% | | Six months ended June 30 | $6,404,056 | 21.8% | $2,931,223 | 127.0% | - The increase in income tax expense for both periods is primarily driven by the increase in net income[161][162] 19. Related-Party Transactions The Company engages in significant related-party transactions, including debt and policy sales with its funds - The Sponsor PIK Note of $13,296,214 is recorded as a related party transaction[164] - Life policy sales to or purchases from the Carlisle Funds and LP Funds, along with management, performance, and servicing fees, are considered related party activities[165] Related Party Receivables (June 30, 2025 vs. December 31, 2024) | Receivable Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Current related party receivables (Carlisle Funds) | $10,989,251 | $6,772,072 | | Noncurrent related party receivables (Carlisle Funds) | $14,501,482 | $13,379,301 | - The Company recognized $16,175,271 in realized and unrealized gains from life policy sales to Carlisle Funds and LP Funds for the three months ended June 30, 2025[168] 20. Leases Operating lease assets and liabilities increased due to additional office space and recent acquisitions - The Company's operating lease right-of-use assets increased to $4,867,682 as of June 30, 2025, from $4,722,573 at December 31, 2024, due to additional office space amendments and the Carlisle Acquisition[171][172][173] Operating Lease Liabilities (June 30, 2025 vs. December 31, 2024) | Liability Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Current operating lease liabilities | $646,851 | $515,597 | | Non-current operating lease liabilities | $4,713,328 | $4,580,158 | | Total lease liability | $5,360,179 | $5,095,755 | - Total lease cost for the three months ended June 30, 2025, was $472,065, up from $254,083 in the prior year[174] 21. Earnings (Loss) Per Share Earnings per share increased substantially, driven by a significant rise in net income Basic Earnings (Loss) Per Share (Three Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------ | :----------- | :------- | | Net income (loss) attributable to common stockholders | $17,489,939 | $769,983 | | Weighted average shares outstanding—basic | 94,690,195 | 63,846,170 | | Basic earnings (loss) per share | $0.18 | $0.01 | Diluted Earnings (Loss) Per Share (Three Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------ | :----------- | :------- | | Numerator used to calculate diluted earnings (loss) per share | $17,489,939 | $769,983 | | Weighted average shares for diluted earnings (loss) per share | 97,372,470 | 67,162,820 | | Diluted earnings (loss) per share | $0.18 | $0.01 | - The increase in basic and diluted EPS for the three months ended June 30, 2025, is primarily due to a significant increase in net income attributable to common stockholders[177] 22. Subsequent Events The Company plans a Q3 acquisition and completed a warrant exchange offer after the reporting period - The Company expects to complete the acquisition of an insurance brokerage firm in Q3 2025, using an outstanding note receivable of approximately $9.0 million as consideration[180] - An exchange offer for Public and Private Placement Warrants was commenced on June 30, 2025, offering 0.23 common shares per warrant. The offer expired on July 29, 2025, with 88% of warrants tendered[181] - Following the exchange offer, the Company exercised its right to exchange remaining outstanding warrants for 0.207 common shares per warrant, leading to the delisting of public warrants from Nasdaq by August 14, 2025[181] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial results, highlighting revenue growth driven by acquisitions and strong segment performance Business Overview The Company is a financial services firm focused on alternative asset management and longevity-based assets - Abacus Global Management, Inc. is a financial services company specializing in alternative asset management, data-driven wealth solutions, technology innovations, and institutional services, with a focus on longevity-based assets[185] Results of Operations Operations show substantial revenue and income growth, primarily driven by acquisitions and the Life Solutions segment Total Revenues by Segment (Three Months Ended June 30) | Segment | 2025 | 2024 | Change | % Change | | :---------------- | :----------- | :----------- | :----------- | :--------- | | Asset management | $8,761,876 | $204,888 | $8,556,988 | 4176.4% | | Life solutions | $47,300,844 | $28,871,214 | $18,429,630 | 63.8% | | Technology services | $161,900 | $0 | $161,900 | NM | | TOTAL REVENUES | $56,224,620 | $29,076,102 | $27,148,518 | 93.4% | Total Revenues by Segment (Six Months Ended June 30) | Segment | 2025 | 2024 | Change | % Change | | :---------------- | :------------ | :----------- | :------------ | :--------- | | Asset management | $16,534,953 | $422,823 | $16,112,130 | 3810.6% | | Life solutions | $83,599,501 | $50,140,463 | $33,459,038 | 66.7% | | Technology services | $229,512 | $0 | $229,512 | NM | | TOTAL REVENUES | $100,363,966 | $50,563,286 | $49,800,680 | 98.5% | - Asset management revenue surged due to the Carlisle and FCF acquisitions in December 2024[189][190] - Life solutions revenue increased significantly, driven by higher realized gains from life insurance policies[191][192] Gross Profit and Operating Income (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------------- | :----------- | :----------- | :----------- | :--------- | | GROSS PROFIT | $87,200,915 | $45,098,855 | $42,102,060 | 93.4% | | OPERATING INCOME | $43,546,559 | $9,023,899 | $34,522,660 | 382.6% | | NET INCOME (LOSS) | $23,009,955 | $(623,722) | $23,633,677 | NM | - Interest expense increased by $10.2 million (124.0%) for the six months ended June 30, 2025, primarily due to increased Fixed Rate Senior Unsecured Notes and the Senior Secured Credit Facility[221] Results of Operations—Segment Results Segment results highlight exceptional growth in Asset Management and sustained strength in Life Solutions Asset Management Segment Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------- | :------------ | :----------- | :------------ | :---------- | | Revenue | $16,534,953 | $422,823 | $16,112,130 | 3810.6% | | Cost of revenue | $5,789,111 | $531,063 | $5,258,048 | 990.1% | | Gross profit | $10,745,842 | $(108,240) | $10,854,082 | (10027.8)% | - Asset Management segment revenue and gross profit significantly increased due to the Carlisle and FCF acquisitions[230] Life Solutions Segment Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------- | :------------ | :----------- | :------------ | :--------- | | Revenue | $83,599,501 | $50,140,463 | $33,459,038 | 66.7% | | Cost of revenue | $6,411,404 | $4,933,368 | $1,478,036 | 30.0% | | Gross profit | $77,188,097 | $45,207,095 | $31,981,002 | 70.7% | - Life Solutions segment revenue and gross profit increased due to higher policy acquisition and trading activity[234] Technology Services Segment Performance (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------- | :---------- | :---------- | :---------- | :--------- | | Revenue | $229,512 | $0 | $229,512 | NM | | Cost of revenue | $962,536 | $0 | $962,536 | NM | | Gross loss | $(733,024) | $0 | $(733,024) | NM | - Technology Services segment commenced revenue activity in December 2024, resulting in a gross loss for the six months ended June 30, 2025, primarily due to compensation expenses[239] Non-GAAP Financial Measures and Key Business Metrics Non-GAAP measures show significant growth in adjusted net income and a stable adjusted EBITDA margin - The Company uses non-GAAP measures like Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA to evaluate business performance, excluding non-recurring or non-cash items[240][241][245] Adjusted Net Income and Adjusted EPS (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------- | :------------ | :------------ | | NET INCOME (LOSS) ATTRIBUTABLE TO ABACUS GLOBAL MANAGEMENT, INC. | $22,223,272 | $(578,762) | | ADJUSTED NET INCOME | $39,084,239 | $18,413,219 | | ADJUSTED EPS - BASIC | $0.41 | $0.29 | | ADJUSTED EPS - DILUTED | $0.40 | $0.29 | Adjusted EBITDA and Adjusted EBITDA Margin (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------- | :------------ | :------------ | | NET INCOME (LOSS) | $23,009,955 | $(623,722) | | Adjusted EBITDA | $56,044,091 | $28,293,097 | | Adjusted EBITDA margin | 55.8% | 56.0% | | Net income (loss) margin | 22.9% | (1.2)% | Pro Forma Non-GAAP Financial Measures and Segment Results Pro forma results, including the Carlisle acquisition, demonstrate strong underlying growth in adjusted earnings - Pro Forma Adjusted Net Income and EPS include Carlisle's historical information prior to its acquisition to provide a combined view of operations[250] Pro Forma Adjusted Net Income and EPS (Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------ | :------------ | :------------ | | PRO FORMA NET INCOME AVAILABLE TO ABACUS GLOBAL MANAGEMENT, INC. | $22,223,272 | $3,760,143 | | PRO FORMA ADJUSTED NET INCOME | $39,084,239 | $22,752,124 | | PRO FORMA ADJUSTED EPS—BASIC | $0.41 | $0.28 | | PRO FORMA ADJUSTED EPS—DILUTED | $0.40 | $0.27 | Pro Forma Adjusted EBITDA and Margin (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------- | :------------ | :------------ | | PRO FORMA NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $23,009,955 | $3,715,183 | | PRO FORMA ADJUSTED EBITDA | $56,044,091 | $35,948,108 | | PRO FORMA ADJUSTED EBITDA MARGIN | 55.8% | 55.9% | | PRO FORMA NET INCOME MARGIN | 22.9% | 5.8% | Key Business Metrics Key metrics reflect a significant increase in policy sales, realized gains, and assets under management - Key metrics include revenue from life policies (sales, maturities, realized gains), asset management revenue (AUM/NAV), servicing revenue (policies serviced, face value, invested dollars), and origination revenue (policy originations)[259][261] Life Policies (Fair Value Method) Activity (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :------------------------------------------ | :--- | :--- | :----- | :--------- | | Policies bought | 421 | 362 | 59 | 16.3% | | Policies sold | 517 | 192 | 325 | 169.3% | | Policies matured | 20 | 5 | 15 | 300.0% | | Average realized gain on policies sold | 34.1% | 19.4% | | | | Total realized gains, net of premiums paid | $72,207,798 | $18,002,387 | $54,205,411 | 301.1% | | Realized gains from maturities, net of premiums paid | $10,480,671 | $1,365,104 | $9,115,567 | 667.8% | Origination and Servicing Metrics (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :------------------------------------------ | :------------- | :------------- | :----- | :--------- | | Assets under management | $2,865,633,717 | $0 | $2,865,633,717 | NM | | Number of policies serviced | 3,101 | 1,155 | 1,946 | 168.5% | | Face value of policies serviced | $7,383,844,908 | $2,526,819,484 | $4,857,025,424 | 192.2% | | Total invested dollars | $2,931,575,304 | $1,081,579,116 | $1,849,996,188 | 171.0% | | Number of policy originations to external parties | 61 | 61 | 0 | 0% | | Number of policy originations to subsidiaries eliminated in consolidation | 312 | 194 | 118 | 60.8% | Liquidity and Capital Resources Cash decreased due to financing outflows, but operating cash flow improved significantly - Cash and cash equivalents decreased to $74,836,871 as of June 30, 2025, from $131,944,282 at December 31, 2024[267] - Operating activities provided $14,511,602 in cash for the six months ended June 30, 2025, a significant improvement from $(64,542,510) used in the prior year[272] - Financing activities used $(57,875,671) in cash for the six months ended June 30, 2025, a substantial decrease from $130,993,784 provided in the prior year, mainly due to reduced stock issuance proceeds, increased share repurchases, and debt repayments[274][276] - Management believes current cash and cash equivalents, along with cash generated from operations, will be sufficient to support operating and debt service needs for the next 12 months[270] Contractual Obligations and Commitments Details on contractual obligations are cross-referenced to the notes on commitments, debt, and leases - Contractual obligations and commitments are detailed in Note 12 (Commitments and Contingencies), Note 14 (Long-Term Debt), and Note 20 (Leases) of the Interim Financial Statements[279] Critical Accounting Policies and Estimates No material changes to critical accounting policies have occurred since the last annual report - There have been no material changes to the Company's critical accounting policies or methodologies since the most recent Annual Report on Form 10-K, other than new policies described in Note 2[277] Recent Accounting Pronouncements Information on new accounting standards is available in the notes to the financial statements - Information on recently issued accounting pronouncements and their future adoption is discussed in Note 2 (Summary of Significant Accounting Policies and Recent Accounting Standards) of the condensed notes to consolidated financial statements[278] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, detailed market risk disclosures are not required - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[280] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the period end - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[281] - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[282] PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company is not currently a party to any material litigation - The Company is not a party to any litigation that is material to ongoing operations as of June 30, 2025[283] Item 1A. Risk Factors There have been no material changes to previously disclosed risk factors - No material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K have occurred as of the date of this report[284] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details regarding the company's stock repurchase program are provided in the financial statement notes - Details of the stock repurchase program and repurchases made during the six months ended June 30, 2025, are discussed in Note 15 Convertible Preferred Stock and Stockholders' Equity[285] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[286] Item 4. Mine Safety Disclosures The Company has no mine safety disclosures to report - There are no mine safety disclosures[286] Item 5. Other Information No officers or directors adopted or terminated any specified trading arrangements during the quarter - No officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[286] Item 6. Exhibits This section lists all exhibits filed as part of this quarterly report - Exhibits include various agreements such as the Agreement and Plan of Merger, Share Purchase Agreement, Credit Agreement, and Security Agreement[288][289][290] - Corporate governance documents like the Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws are also filed[289] - Certifications from the Principal Executive Officer and Principal Financial Officer, as required by the Sarbanes-Oxley Act, are included[290][291]