COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39403 | |
Entity Registrant Name | Abacus Life, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1210472 | |
Entity Address, Address Line One | 2101 Park Center Drive, Suite 200 | |
Entity Address, City or Town | Orlando | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32835 | |
City Area Code | 800 | |
Local Phone Number | 561-4148 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 63,925,316 | |
Entity Central Index Key | 0001814287 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | ABL | |
Security Exchange Name | NASDAQ | |
Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | ABLLW | |
Security Exchange Name | NASDAQ | |
9.875% Fixed Rate Senior Notes due 2028 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 9.875% Fixed Rate Senior Notes due 2028 | |
Trading Symbol | ABLLL | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 65,386,512 | $ 25,588,668 |
Equity securities, at fair value | 3,403,897 | 2,252,891 |
Prepaid expenses and other current assets | 2,037,753 | 699,127 |
Total current assets | 74,324,428 | 31,776,834 |
Property and equipment, net | 547,561 | 400,720 |
Intangible assets, net | 28,048,028 | 29,623,130 |
Goodwill | 140,287,000 | 140,287,000 |
Operating right-of-use assets | 2,182,681 | 1,893,659 |
Life settlement policies, at cost | 1,434,444 | 1,697,178 |
Life settlement policies, at fair value | 125,488,525 | 122,296,559 |
Available-for-sale securities, at fair value | 1,145,630 | 1,105,935 |
Other investments, at cost | 1,650,000 | 1,650,000 |
Other assets | 1,501,036 | 998,945 |
Equity securities, at fair value | 110,067 | 96,107 |
TOTAL ASSETS | 376,719,400 | 331,826,067 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt | 15,648,628 | 13,029,632 |
Accrued expenses | 707,159 | 4,354,225 |
Operating lease liabilities | 232,138 | 118,058 |
Contract liabilities, deposits on pending settlements | 667,500 | 507,000 |
Income taxes payable | 1,617,171 | 751,734 |
Total current liabilities | 23,835,352 | 23,326,331 |
Operating lease liabilities | 2,028,959 | 1,796,727 |
Deferred tax liability | 9,657,810 | 9,199,091 |
Warrant liability | 5,696,000 | 6,642,960 |
TOTAL LIABILITIES | 211,378,628 | 167,755,991 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Treasury stock - at cost; $778,766 and $146,650 shares repurchased at March 31, 2024 and December 31, 2023, respectively | (8,807,454) | (1,283,062) |
Additional paid-in capital | 209,889,362 | 199,826,278 |
Accumulated deficit | (36,074,880) | (34,726,135) |
Accumulated other comprehensive income | 120,323 | 108,373 |
Noncontrolling interest | 207,043 | 138,283 |
Total stockholders' equity | 165,340,772 | 164,070,076 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 376,719,400 | 331,826,067 |
Class A Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Class A common stock, $0.0001 par value; 200,000,000 authorized shares; 63,776,058 and 63,388,823 shares issued at March 31, 2024 and December 31, 2023, respectively | 6,378 | 6,339 |
Nonrelated Party | ||
CURRENT ASSETS: | ||
Accounts receivable | 2,520,869 | 2,149,111 |
CURRENT LIABILITIES: | ||
Other current liabilities | 3,797,808 | 3,400,734 |
Long-term debt | 131,365,988 | 89,137,013 |
Related Party | ||
CURRENT ASSETS: | ||
Accounts receivable | 215,033 | 79,509 |
CURRENT LIABILITIES: | ||
Long-term debt | 38,794,519 | 37,653,869 |
Affiliated Entity | ||
CURRENT ASSETS: | ||
Other receivables | 760,364 | 1,007,528 |
CURRENT LIABILITIES: | ||
Other current liabilities | 5,236 | 5,236 |
Former Members | ||
CURRENT LIABILITIES: | ||
Other current liabilities | $ 1,159,712 | $ 1,159,712 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized (in shares) | 200,000,000 | |
Common stock, shares issued (in shares) | 63,776,058 | 63,388,823 |
Common stock, shares outstanding (in shares) | 62,997,292 | 63,388,823 |
Treasury stock (in shares) | 778,766 | 146,650 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 63,776,058 | 63,388,823 |
Common stock, shares outstanding (in shares) | 63,776,058 | 63,388,823 |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
REVENUES: | |||
Active management revenue | $ 19,796,999 | $ 9,970,518 | |
Total revenues | 21,487,184 | 10,273,389 | |
COST OF REVENUES (excluding depreciation and amortization stated below) | |||
Total cost of revenue | 2,720,897 | 489,550 | |
Gross Profit | 18,766,287 | 9,783,839 | |
OPERATING EXPENSES: | |||
Sales and marketing | 1,929,944 | 729,004 | |
General and administrative (including stock-based compensation) | 11,353,499 | 696,892 | |
Loss on change in fair value of debt | 2,712,627 | 953,433 | |
Unrealized gain on investments | (1,164,966) | (125,220) | |
Depreciation and amortization expense | 1,682,054 | 1,043 | |
Total operating expenses | 16,513,158 | 2,255,152 | |
Operating Income | 2,253,129 | 7,528,687 | |
OTHER INCOME (EXPENSE): | |||
Gain on change in fair value of warrant liability | 946,960 | 0 | |
Interest expense | (3,670,445) | (357,383) | |
Interest income | 421,426 | 7,457 | |
Other expense | (53,028) | (210,432) | |
Total other (expense) | (2,355,087) | (560,358) | |
Net (loss) income before provision for income taxes | (101,958) | 6,968,329 | |
Income tax expense (benefit) | 1,173,513 | (656,467) | |
NET (LOSS) INCOME | (1,275,471) | 7,624,796 | |
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST | 73,274 | (460,707) | |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (1,348,745) | $ 8,085,503 | |
(LOSS) EARNINGS PER SHARE: | |||
(Loss) earnings per share - basic (in dollars per share) | $ (0.02) | $ 0.16 | |
(Loss) earnings per share - diluted (in dollars per share) | $ (0.02) | $ 0.16 | |
Weighted-average stock outstanding - basic (in shares) | [1] | 63,027,246 | 50,369,350 |
Weighted-average stock outstanding - diluted (in shares) | [1] | 63,027,246 | 50,369,350 |
NET (LOSS) INCOME | $ (1,275,471) | $ 7,624,796 | |
Other comprehensive income (loss), net of tax or tax benefit: | |||
Change in fair value of debt (risk adjusted) | 7,436 | (112,313) | |
Comprehensive (loss) income before non-controlling interests | (1,268,035) | 7,512,483 | |
Net and comprehensive income (loss) attributable to non-controlling interests | 68,760 | (487,638) | |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | (1,336,795) | 8,000,121 | |
Nonrelated Party | |||
COST OF REVENUES (excluding depreciation and amortization stated below) | |||
Total cost of revenue | 2,720,212 | 489,550 | |
Related Party | |||
COST OF REVENUES (excluding depreciation and amortization stated below) | |||
Total cost of revenue | 685 | 0 | |
Portfolio servicing revenue | |||
REVENUES: | |||
Revenue | 217,935 | 302,871 | |
Portfolio servicing revenue | Nonrelated Party | |||
REVENUES: | |||
Revenue | 32,750 | 89,424 | |
Portfolio servicing revenue | Related Party | |||
REVENUES: | |||
Revenue | 185,185 | 213,447 | |
Originations revenue | |||
REVENUES: | |||
Revenue | $ 1,472,250 | $ 0 | |
[1]The 2023 number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to reflect the par value of the outstanding stock of Abacus Life, Inc. as a result of the Business Combination. |
UNAUDITED CONSOLIDATED STATEM_2
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) | Total | Class A Common Stock | Common Stock Class A Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non- Controlling Interests | |
Beginning balance (in shares) at Dec. 31, 2022 | [1] | 50,369,350 | |||||||
Beginning balance at Dec. 31, 2022 | [1] | $ 28,149,697 | $ 5,037 | $ 0 | $ 704,963 | $ 25,487,323 | $ 1,052,836 | $ 899,538 | |
Beginning balance, Treasury stock (in shares) at Dec. 31, 2022 | [1] | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other Comprehensive Income | (112,313) | (85,382) | (26,931) | ||||||
Net (loss) income | 7,624,796 | 8,085,503 | (460,707) | ||||||
Ending balance (in shares) at Mar. 31, 2023 | [1] | 50,369,350 | |||||||
Ending balance, Treasury stock (in shares) at Mar. 31, 2023 | [1] | 0 | |||||||
Ending balance at Mar. 31, 2023 | [1] | $ 35,662,180 | $ 5,037 | $ 0 | 704,963 | 33,572,826 | 967,454 | 411,900 | |
Beginning balance (in shares) at Dec. 31, 2023 | 63,388,823 | 63,388,823 | 63,388,823 | ||||||
Beginning balance at Dec. 31, 2023 | $ 164,070,076 | $ 6,339 | $ (1,283,062) | 199,826,278 | (34,726,135) | 108,373 | 138,283 | ||
Beginning balance, Treasury stock (in shares) at Dec. 31, 2023 | (146,650) | (146,650) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Deferred transaction costs | $ (483,451) | (483,451) | |||||||
Repurchase of common stock (in shares) | (632,116) | ||||||||
Repurchase of common stock | (7,524,392) | $ (7,524,392) | |||||||
Stock-based compensation | 6,093,371 | 6,093,371 | |||||||
Warrant Conversions (in shares) | 387,235 | ||||||||
Warrant Conversions | 4,453,203 | $ 39 | 4,453,164 | ||||||
Other Comprehensive Income | 7,436 | 11,950 | (4,514) | ||||||
Net (loss) income | $ (1,275,471) | (1,348,745) | 73,274 | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 62,997,292 | 63,776,058 | 63,776,058 | ||||||
Ending balance, Treasury stock (in shares) at Mar. 31, 2024 | (778,766) | (778,766) | |||||||
Ending balance at Mar. 31, 2024 | $ 165,340,772 | $ 6,378 | $ (8,807,454) | $ 209,889,362 | $ (36,074,880) | $ 120,323 | $ 207,043 | ||
[1]The 2023 number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to reflect the par value of the outstanding stock of Abacus Life, Inc. as a result of the successful Business Combination. |
UNAUDITED CONSOLIDATED STATEM_3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (1,275,471) | $ 7,624,796 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 1,682,054 | 1,043 |
Stock-based compensation | 6,093,371 | 0 |
Amortization of debt issuance costs | 92,750 | 0 |
Unrealized gain on investments | (1,164,966) | (125,220) |
Unrealized gain on policies | (5,290,554) | (1,192,865) |
Loss on change in fair value of debt | 2,712,627 | 953,433 |
Gain on change in fair value of warrant liability | (946,960) | 0 |
Non-cash interest income on available for sale security | (39,695) | 0 |
Deferred income taxes | 456,194 | (656,468) |
Non-cash interest expense | 1,258,266 | 0 |
Non-cash lease expense | 57,290 | 192 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (371,758) | 10,448 |
Accounts receivable, related party | (135,524) | 112,477 |
Prepaid expenses and other current assets | (495,676) | (196,117) |
Other assets | (502,091) | (34,371) |
Accounts payable | 0 | 14,989,460 |
Accrued expenses | (3,647,066) | 0 |
Accrued transaction costs | 0 | 397,806 |
Contract liability—deposits on pending settlements | 160,500 | 0 |
Other current liabilities | 397,074 | 8,757 |
Income tax payable | 865,437 | 0 |
Net change in life settlement policies, at fair value | 2,098,588 | (12,091,256) |
Net change in life settlement policies, at cost | 262,734 | (27,182,930) |
Net cash provided (used) in operating activities | 2,267,124 | (17,380,815) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (161,787) | 0 |
Purchase of intangible assets | (92,006) | 0 |
Purchase of other investments | 0 | (150,000) |
Change in due from affiliates | 247,164 | (848,337) |
Net cash used in investing activities | (6,629) | (998,337) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of long term-debt | 42,920,873 | 8,048,159 |
Payment of discounts and financing costs | (985,934) | 0 |
Repurchase of common stock | (7,524,392) | 0 |
Transaction costs | (483,451) | 0 |
Warrant conversions | 3,610,253 | 0 |
Due to affiliates | 0 | 322 |
Net cash provided by financing activities | 37,537,349 | 8,048,481 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 39,797,844 | (10,330,671) |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 25,588,668 | 30,052,823 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 65,386,512 | 19,722,152 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 1,691,205 | 0 |
Income taxes paid, net of refunds | $ 1,842 | $ 0 |
Abacus Settlements LLC - UNAUDI
Abacus Settlements LLC - UNAUDITED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | 3 Months Ended | |
Mar. 31, 2023 USD ($) $ / shares shares | ||
Total revenues | $ 10,273,389 | |
Total cost of revenue | 489,550 | |
Total gross profit | 9,783,839 | |
OPERATING EXPENSES: | ||
General and administrative expenses | 696,892 | |
Depreciation | 1,043 | |
Total operating expenses | 2,255,152 | |
Operating Income | 7,528,687 | |
OTHER INCOME (EXPENSE): | ||
Interest income | 7,457 | |
Interest expense | (357,383) | |
Total other (expense) | (560,358) | |
Net (loss) income before provision for income taxes | 6,968,329 | |
Income tax expense (benefit) | (656,467) | |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 8,085,503 | |
WEIGHTED-AVERAGE UNITS USED IN COMPUTING NET LOSS PER UNIT: | ||
Weighted-average common shares outstanding for basic (loss) earnings per share (in shares) | shares | 50,369,350 | [1] |
Weighted-average common shares outstanding for diluted (loss) earnings per share (in shares) | shares | 50,369,350 | [1] |
NET LOSS PER UNIT: | ||
Basic loss per unit (in dollars per share) | $ / shares | $ 0.16 | |
Diluted loss per unit (in dollars per share) | $ / shares | $ 0.16 | |
Nonrelated Party | ||
Total cost of revenue | $ 489,550 | |
Related Party | ||
Total cost of revenue | 0 | |
Abacus Settlements, LLC | ||
Origination revenue | 6,299,986 | |
Total revenues | 6,299,986 | |
Total cost of revenue | 4,395,323 | |
Total gross profit | 1,904,663 | |
OPERATING EXPENSES: | ||
General and administrative expenses | 2,551,003 | |
Depreciation | 3,036 | |
Total operating expenses | 2,554,039 | |
Operating Income | (649,376) | |
OTHER INCOME (EXPENSE): | ||
Interest income | 724 | |
Interest expense | (5,862) | |
Total other (expense) | (5,138) | |
Net (loss) income before provision for income taxes | (654,514) | |
Income tax expense (benefit) | 2,289 | |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (656,803) | |
WEIGHTED-AVERAGE UNITS USED IN COMPUTING NET LOSS PER UNIT: | ||
Weighted-average common shares outstanding for basic (loss) earnings per share (in shares) | shares | 400 | |
NET LOSS PER UNIT: | ||
Basic loss per unit (in dollars per share) | $ / shares | $ (1,642.01) | |
Abacus Settlements, LLC | Nonrelated Party | ||
Origination revenue | $ 1,563,650 | |
Total cost of revenue | 1,229,616 | |
Abacus Settlements, LLC | Related Party | ||
Origination revenue | 4,736,336 | |
Total cost of revenue | $ 3,165,707 | |
[1]The 2023 number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to reflect the par value of the outstanding stock of Abacus Life, Inc. as a result of the Business Combination. |
Abacus Settlements LLC - UNAU_2
Abacus Settlements LLC - UNAUDITED STATEMENTS OF CHANGES IN MEMBERS' EQUITY - USD ($) | Total | Additional Paid-In Capital | Retained Earnings | Abacus Settlements, LLC | Abacus Settlements, LLC Common Units | Abacus Settlements, LLC Additional Paid-In Capital | Abacus Settlements, LLC Retained Earnings | ||||
Beginning balance at Dec. 31, 2022 | [1] | $ 28,149,697 | $ 704,963 | $ 25,487,323 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | 8,085,503 | $ (656,803) | $ (656,803) | ||||||||
Distributions | 0 | 0 | |||||||||
Ending balance (in shares) at Mar. 31, 2023 | 400 | ||||||||||
Ending balance at Mar. 31, 2023 | $ 35,662,180 | [1] | 704,963 | [1] | 33,572,826 | [1] | 1,354,334 | $ 4,000 | $ 80,000 | 1,270,334 | |
Beginning balance (in shares) at Dec. 31, 2023 | 63,388,823 | 400 | |||||||||
Beginning balance at Dec. 31, 2023 | $ 164,070,076 | 199,826,278 | (34,726,135) | $ 2,011,137 | $ 4,000 | $ 80,000 | $ 1,927,137 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | $ (1,348,745) | ||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 62,997,292 | ||||||||||
Ending balance at Mar. 31, 2024 | $ 165,340,772 | $ 209,889,362 | $ (36,074,880) | ||||||||
[1]The 2023 number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to reflect the par value of the outstanding stock of Abacus Life, Inc. as a result of the successful Business Combination. |
Abacus Settlements LLC - INTERI
Abacus Settlements LLC - INTERIM UNAUDITED STATEMENTS OF CASH FLOWS | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss | $ 8,085,503 |
Adjustments to reconcile net loss to net cash used in operating activities: | |
Depreciation expense | 1,043 |
Amortization of deferred financing fees | 0 |
Changes in operating assets and liabilities: | |
Related party receivables | 112,477 |
Accrued payroll and other expenses | 0 |
Contract liability—deposits on pending settlements | 0 |
Accounts payable | 14,989,460 |
Net cash provided (used) in operating activities | (17,380,815) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Net cash used in investing activities | (998,337) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
Net cash provided by financing activities | 8,048,481 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (10,330,671) |
CASH AND CASH EQUIVALENTS: | |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 30,052,823 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 19,722,152 |
Abacus Settlements, LLC | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss | (656,803) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
Depreciation expense | 8,647 |
Amortization expense | 20,139 |
Amortization of deferred financing fees | 5,869 |
Non-cash lease expense | 815 |
Changes in operating assets and liabilities: | |
Related party receivables | (251,481) |
Other receivables | 122,446 |
Prepaid expenses | (306,165) |
Other current assets | (6,561) |
Accrued payroll and other expenses | (28,568) |
Contract liability—deposits on pending settlements | 354,500 |
Accounts payable | (36,750) |
Net cash provided (used) in operating activities | (773,912) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Capital expenditures | (45,590) |
Due from members and affiliates | (24,938) |
Net cash used in investing activities | (70,528) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
Due to members | (1,411) |
Net cash provided by financing activities | (1,411) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (845,851) |
CASH AND CASH EQUIVALENTS: | |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 1,458,740 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | $ 612,889 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying consolidated financial statements (“Interim Financial Statements”) are presented in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC") and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) as contained in the Company’s Annual Report on Form 10-K. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Accordingly, the consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”). Refer to Note 2 in the Company’s 2023 Annual Report for the full list of the Company’s significant accounting policies. The details in those notes have not changed, except as discussed in Note 2 to the Interim Financial Statements and as a result of normal adjustments in the interim periods. Capitalized terms used and not specifically defined herein have the same meanings given those terms in our 2023 Annual Report. We also may use certain other terms that are defined within these Interim Financial Statements. The Interim Financial Statements presented herein and discussed below include 100% of the assets, liabilities, revenues, expenses, and cash flows of Abacus Life, Inc., (the “Company”) all entities in which the Company has a controlling voting interest (“subsidiaries”), and variable interest entities (“VIEs”) for which the Company is the primary beneficiary, as determined in accordance with consolidation accounting guidance. References in these Interim Financial Statements to net income or loss attributable to common stockholders and stockholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entity and are reported separately. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The Interim Financial Statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2023, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2024, and the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024 and 2023, respectively, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, respectively. The consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024, or any other period. All references to financial information as of and for the periods ended March 31, 2024, and 2023 in the condensed notes to consolidated financial statements are unaudited. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, cost of revenue, life settlement policy valuation, goodwill and intangibles valuation, market-indexed note valuation, and income taxes. The uncertainties in the broader macroeconomic environment have made it more challenging to make these estimates. Actual results could differ from our estimates, and such differences may be material. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS | SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS New Accounting Standards —The Company’s management reviews recent accounting standards to determine the impact to the Company’s financial statements. Below we discuss the impact of new accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board’s (“FASB”) to the Interim Financial Statements. ASU 2023-07—“Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures”, was intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. We early adopted ASU 2023-07 in the first quarter of 2024, by including significant segment expenses reviewed by the Company’s CODM. Refer to Note 11, Segment Reporting, for our updated presentation. ASU 2024-01—”Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards”. In March 2024, the FASB issued ASU 2024-01 to add an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards (“profits interest awards”) should be accounted for in accordance with Topic 718, Compensation—Stock Compensation . The amendments in this ASU are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Although early adoption of this ASU is permitted, the Company’s management chose to not early adopt this ASU. The amendments in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied retrospectively, an entity is required to provide the disclosures in paragraphs 250-10-50-1 through 50-3 in the period of adoption. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. This ASU is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. ASU 2024-02—”Codification Improvements—Amendments to Remove References to the Concepts Statements”. In March 2024, the FASB issued ASU 2024-02 to remove references to various FASB Concepts Statements. The Board has a standing project on its agenda to address suggestions received from stakeholders on the Accounting Standards Codification and other incremental improvements to GAAP. This effort facilitates Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Although early adoption of this ASU is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance), the Company’s management chose to not early adopt this ASU. The amendments in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments. This ASU is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. Stock Options —The Company awards stock options (“options”) to purchase the Company’s common stock at the market price of the stock on the grant date. Options generally vest over a period of three years and expire no later than 10 years from the grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying certain assumptions. That fair value is reduced when options are forfeited. The fair value of options, net of forfeitures, is recognized in general and administrative expenses on a straight-line basis over the vesting period. Concentrations —Two customers accounted for 49% and 35% of active management revenue for the three months ended March 31, 2024. One customer accounted for 32% of active management revenue for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023 zero and two maturities accounted for over 10% of active management revenue, respectively. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On June 30, 2023, LMA acquired Abacus through the Abacus Merger, which was accounted for using the acquisition method of accounting based on a business enterprise value of approximately $165.4 million. The preliminary purchase price was allocated among the identified assets to be acquired. The primary area of the acquisition accounting that is not yet finalized is our estimate of the impact of acquisition accounting on deferred income taxes. An estimate of deferred income taxes has been recorded in the Company’s books based on information available as of March 31, 2024, which has not changed significantly from our initial recognition on June 30, 2023. As the initial acquisition accounting is based on our preliminary assessments, actual values may differ when final information becomes available. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary values of deferred taxes recorded. We will continue to evaluate this item until it is satisfactorily resolved and adjust our acquisition accounting accordingly, which is up to one year from the acquisition date, as defined by ASC Topic 805, Business Combinations, (“ASC 805”). Transaction costs incurred as a result of the Business Combination were recognized within accumulated deficit on the consolidated balance sheet ending March 31, 2024. All valuation procedures related to existing assets as no new assets were identified as a result of procedures performed. Goodwill was recognized as a result of the acquisition, which represents the excess fair value of consideration over the fair value of the underlying net assets, largely arising from the extensive industry expertise that has been established by Abacus. This was considered appropriate based on the determination that the Abacus Merger would be accounted for as a business acquisition under ASC 805. Net Assets Identified Fair Value Intangibles $ 32,900,000 Goodwill 140,287,000 Current Assets 1,280,100 Non-Current Assets 901,337 Deferred Tax Liabilities (8,310,966) Accrued Expenses (524,400) Other Liabilities (1,171,739) Total Fair Value $ 165,361,332 Intangible assets were comprised of the following: Asset Type Fair Value Useful Life Valuation Methodology Customer Relationships-Agents $ 12,600,000 5 years Multi-period excess earnings method Customer Relationships-Financing Entities 11,000,000 8 years Multi-period excess earnings method Internally Developed and Used Technology-APA 1,600,000 2 years Relief from royalty method Internally Developed and Used Technology-Marketplace 100,000 3 years Replacement cost method Trade Name 900,000 Indefinite Relief from royalty method Non-Compete Agreements 4,000,000 2 years With and without method State Insurance Licenses 2,700,000 Indefinite Replacement cost method Total Fair Value $ 32,900,000 Useful lives for customer relationships were developed using attrition data for agents and financing entities which resulted in a useful life of 5 years and 8 years, respectively. Estimates over the useful lives of internally developed and used technology contemplates the period in which the Company expects to utilize the technology and the length of time the technology is expected to maintain recognition and value in the market without significant investment. Non-compete agreements have a useful life commensurate with the executed non-compete agreements in place as a result of the Business Combination. Pro Forma Results of Operations The supplemental unaudited pro forma financial information in the table below summarizes the combined results of operations for the Business Combination as if the Companies were combined for both reporting periods. There were no acquisition-related costs included in the unaudited pro forma results presented below. The unaudited pro forma financial information as presented below is for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combinations occurred as of the date indicated or what the results would be for any future periods. Three Months Ended March 31, 2023 Proforma revenue $ 13,294,318 Proforma net income 7,433,278 |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregated Revenue— The disaggregation of the Company’s revenue by major sources is as follows: Three Months Ended March 31, 2024 March 31, 2023 Portfolio servicing revenue: Related party serving revenue $ 185,185 $ 213,447 Portfolio servicing revenue 32,750 89,424 Total portfolio servicing revenue 217,935 302,871 Active management revenue: Investment income from life insurance policies held using the investment method 500,000 8,392,334 Revenue from fee-based services and realized and unrealized gains from life insurance policies held using the fair value method 19,296,999 1,578,184 Total active management revenue 19,796,999 9,970,518 Origination revenue: Agent 557,500 $ — Broker 883,250 — Client direct 31,500 — Total origination revenue 1,472,250 — Total revenue $ 21,487,184 $ 10,273,389 Contract Balances —We had no contract assets at March 31, 2024 and December 31, 2023. The balances of contract liabilities arising from originated contracts with customers were as follows: March 31, 2024 December 31, 2023 Contract liabilities, deposits on pending settlements $ 667,500 $ 507,000 Total contract liabilities $ 667,500 $ 507,000 Revenue recognized during the first quarter of 2024 that was included in our contract liabilities balance at December 31, 2023 was $507,000, less $347,000 intercompany revenue that was eliminated in consolidation. |
LIFE SETTLEMENT POLICIES
LIFE SETTLEMENT POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Investments, All Other Investments [Abstract] | |
LIFE INSURANCE SETTLEMENT POLICIES | LIFE SETTLEMENT POLICIES As of March 31, 2024, the Company held 322 life settlement policies, of which 314 were accounted for using the fair value method and 8 were accounted for using the investment method (cost, plus premiums paid). Aggregate face value of policies held at fair value was $506,955,702 as of March 31, 2024, with a corresponding fair v alue of $125,488,525. The aggregate face value of policies accounted for using the investment method was $30,900,000 as of March 31, 2024 , with a corresponding carrying value of $1,434,444 . As of December 31, 2023, the Company held 296 life settlement policies, of which 287 were accounted for under the fair value method and 9 were accounted for using the investment method (cost, plus premiums paid). The aggregate face value of policies held at fair value was $520,503,710 as of December 31, 2023, with a corresponding fair value of $122,296,559. The aggregate face value of policies accounted for using the investment method was $33,900,000 as of December 31, 2023, with a corresponding carrying value of $1,697,178. At March 31, 2024, the Company did not have any contractual restrictions on its ability to sell policies, including those held as collateral for the issuance of long-term debt. Refer to Note 14, Long-Term Debt, for further details. Life expectancy reflects the probable number of years remaining in the life of a class of persons determined statistically, affected by such factors as heredity, physical condition, nutrition, and occupation. It is not an estimate or an indication of the actual expected maturity date or indication of the timing of expected cash flows from death benefits. The following tables summarize the Company’s life insurance policies grouped by remaining life expectancy as of March 31, 2024: Policies Carried at Fair Value — Remaining Life Expectancy (Years) Policies Face Value Fair Value 0-1 2 $ 5,283,461 $ 2,691,760 1-2 7 11,082,062 5,314,074 2-3 18 27,201,580 10,713,554 3-4 40 69,698,534 31,456,621 4-5 31 33,084,969 12,494,075 Thereafter 216 360,605,096 62,818,441 314 $ 506,955,702 $ 125,488,525 Policies accounted for using the investment method— Remaining Life Expectancy (Years) Policies Face Value Carrying Value 1-2 1 500,000 329,714 2-3 2 1,500,000 458,289 3-4 1 8,000,000 86,859 4-5 2 500,000 325,331 Thereafter 2 20,400,000 234,251 8 $ 30,900,000 $ 1,434,444 Estimated premiums to be paid by the Company for its portfolio accounted for using the investment method during each of the five succeeding calendar years and thereafter as of March 31, 2024, are as follows: 2024 remaining $ 66,151 2025 92,883 2026 72,923 2027 50,388 2027 32,736 Thereafter 366,103 Total $ 681,184 The Company is required to pay premiums to keep its portion of life insurance policies in force. The estimated total future premium payments could increase or decrease significantly to the extent that actual mortalities of insureds differ from the estimated life expectancies. |
PROPERTY AND EQUIPMENT_NET
PROPERTY AND EQUIPMENT—NET | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT—NET | PROPERTY AND EQUIPMENT—NET Property and equipment—net composed of the following: March 31, December 31, Computer equipment $ 518,456 $ 356,939 Furniture and fixtures 91,125 91,125 Leasehold improvements 22,687 22,418 Property and equipment—gross 632,268 470,482 Less: accumulated depreciation (84,707) (69,762) Property and equipment—net $ 547,561 $ 400,720 Depreciation expense for the three months ended March 31, 2024 and 2023, was $14,945 and $1,043, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill of $140,287,000 was recognized as a result of the Business Combination, which represents the excess fair value of consideration over the fair value of the underlying net assets, largely arising from the extensive industry expertise that has been established by Abacus. This was considered appropriate based on the determination that the Abacus Merger would be accounted for as a business acquisition under ASC 805. The estimates of fair value are based upon preliminary valuation assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. Refer to Note 3, Business Combination, for further discussion. The changes in the carrying amount of goodwill by reportable segments were as follows: Portfolio Servicing Active Management Originations Goodwill at December 31, 2023 $ — $ — $ 140,287,000 Additions — — — Goodwill at March 31, 2024 $ — $ — $ 140,287,000 Intangible Assets acquired comprised of the following: Asset Type Fair Value Useful Life Valuation Methodology Customer Relationships - Agents $ 12,600,000 5 years Multi-period excess-earnings method Customer Relationships - Financial Relationships 11,000,000 8 years Multi-period excess-earnings method Internally Developed and Used Technology—APA 1,600,000 2 years Relief from Royalty Method Internally Developed and Used Technology—Market Place 100,000 3 years Replacement Cost Method Trade Name 900,000 Indefinite Relief from Royalty Method Non-Compete Agreements 4,000,000 2 years With or Without Method State Insurance Licenses 2,700,000 Indefinite Replacement Cost Method $ 32,900,000 Intangible assets and related accumulated amortization as of March 31, 2024 are as follows: Definite Lived Intangible Assets: Gross Value Accumulated Amortization Net Book Value Customer Relationships - Agents $ 12,600,000 $ (1,890,000) $ 10,710,000 Customer Relationships - Financial Relationships 11,000,000 (1,031,250) 9,968,750 Internally Developed and Used Technology—APA 1,600,000 (600,000) 1,000,000 Internally Developed and Used Technology—Market Place 100,000 (25,000) 75,000 Non-Compete Agreements 4,000,000 (1,500,000) 2,500,000 Balance at March 31, 2024 $ 29,300,000 $ (5,046,250) $ 24,253,750 Indefinite Lived Intangible Assets: Trade Name 900,000 — 900,000 State Insurance Licenses 2,700,000 — 2,700,000 Total Intangible Asset Balance at March 31, 2024 $ 32,900,000 $ (5,046,250) $ 27,853,750 Substantially all intangible assets with finite useful lives are subject to amortization when they are available for their intended use. Amortization expense for definite lived intangible assets was $1,667,109 and $— for the three months ended March 31, 2024 and 2023, respectively. Estimated annual amortization of intangible assets for the next five years ending December 31 and thereafter is as follows: 2024 remaining $ 5,046,250 2025 5,328,333 2026 3,911,667 2027 3,895,000 2028 2,635,000 Thereafter 3,437,500 Total $ 24,253,750 The Company also had other insignificant intangible assets of $194,278 and $87,297, net of related amortization, as of March 31, 2024 and December 31, 2023, respectively. |
AVAILABLE-FOR-SALE SECURITIES,
AVAILABLE-FOR-SALE SECURITIES, AT FAIR VALUE | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE SECURITIES, AT FAIR VALUE | AVAILABLE-FOR-SALE SECURITIES, AT FAIR VALUE Convertible Promissory Note —The Company holds a convertible promissory note in a separate unrelated insurance technology company. This unrelated insurance technology company is a producer of life expectancy reports. The Company purchases life expectancy reports and uses them as an input into the valuation methodology for policies held at fair value. In November 2021, the Company purchased a $250,000 note and then purchased an additional note in January 2022 for $250,000 as part of the Tranche 5 offering (“Tranche 5 Promissory Note”). On October 3, 2023, the unrelated insurance technology company’ management, their board of directors, as well as the Company’s management approved a change to the Tranche 5 Notes. The terms where changed as follows: a) Promissory Note pays 8% interest per annum (the original interest rate was 6%), b) The Tranche 5 Promissory Note matures on September 30, 2025 (“Maturity Date”) and will be paid in full as to outstanding principal and accrued interest on the Maturity Date unless the Tranche 5 Promissory Note converts prior to the 2025 Maturity Date (the original maturity date was in November 2023), and c) conversion into preferred stock occurs if the technology company engages in an additional equity financing event that yields gross cash proceeds in excess of $5,000,000 (“Next Equity Financing”) (the original conversion trigger was $1,000,000). In October 2022, the Company purchased an additional convertible promissory note in the same unrelated insurance technology company for $500,000 as part of the Tranche 6 offering (“Tranche 6 Promissory Note” and collectively, the “Convertible Promissory Notes”). The Tranche 6 Promissory Note pays 8% interest per annum and matures September 30, 2024 (“2024 Maturity Date”) and will be paid in full as to outstanding principal and accrued interest on the 2024 Maturity Date unless the Tranche 6 Promissory Note converts prior to the 2024 Maturity Date. Conversion into preferred stock occurs if the technology company engages in an additional equity financing event that yields gross cash proceeds in excess of $5,000,000 (“Next Round Securities”). We evaluated our relationship with the unrelated insurance technology company, including our CEO membership in the unrelated insurance technology company’s board of directors, and determined that the Company does not have control over the unrelated insurance technology company’s decision-making process. The Company applies the available-for-sale method of accounting for its investment in the Convertible Promissory Note, which is a debt investment. The Convertible Promissory Note does not qualify for either the held-to-maturity method due to the Convertible Promissory Note’s conversion rights or the trading securities method because the Company holds the Convertible Promissory Note as a long-term investment. The Convertible Promissory Notes are measured at fair value at each reporting period-end. Unrealized gains and losses are reported in other comprehensive income until realized. As of March 31, 2024 and December 31, 2023, the Company evaluated the fair value of its investment and determined that the fair value approximates the carrying value of $1,145,630, which includes accrued accumulated interest income of $145,630, and there was no unrealized gain or loss recorded. |
OTHER INVESTMENTS AND OTHER NON
OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS | OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS Other Investments, at Cost: Convertible Preferred Stock Ownership —The Company owns convertible preferred stock in two entities, further described below. On July 22, 2020, the Company purchased 224,551 units of an unrelated insurance technology company’s Series Seed Preferred units for $750,000 (“Seed Units”). During December 2022, the Company agreed to purchase 119,760 Series Seed Preferred Units for $400,000 in cash consideration by way of eight monthly payments of $50,000 starting December 15, 2022, resulting in a total of $950,000 investment as of March 31, 2023, $1,100,000 investment as of June 30, 2023 and $1,150,000 investment at September 30, 2023. Upon conversion, the Seed Units held by the Company would represent 8.6% control in the technology company. On December 21, 2020, the Company purchased 207,476 shares of a separate unrelated insurance technology company’s Series B-1 preferred stock for $500,000 (“Preferred Stock”). The Preferred Stock are convertible into voting common stock of insured consent at the option of the Company. Upon conversion, the Preferred Stock would represent less than 1% control in the technology company. The Company applies the measurement alternative for its investments in the Seed Units and Preferred Stock because these investments are of an equity nature, and the Company does not have the ability to exercise significant influence over operating and financial policies of entities even in the event of conversion of the Seed Units or Preferred Stock. Under the measurement alternative, the Company records the investment based on original cost, less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the investee. The Company’s share of income or loss of such companies is not included in the Company’s consolidated statements of operations and comprehensive (loss) income. The Company tests its investments for impairment whenever circumstances indicate that the carrying value of the investment may not be recoverable. No im pairment of investments occurred for the three months ended March 31, 2024 and 2023. Other Assets: Other Assets — The Company’s other assets are mainly composed of cash deposits in compliance requirements in various states. As of March 31, 2024 and December 31, 2023, the balance of other assets was $1,501,036 and $998,945, respectively . Equity Securities, at Fair Value: S&P Options — The Company invested in S&P 500 call options, which were purchased through a broker as an economic hedge related to the market-indexed debt instruments included in the long-term debt note. The value is based on stock owned and quoted market prices in active markets. Changes in fair value are recorded in the unrealized gain on investments line item on the consolidated statements of operations and comprehensive (loss) income. As of March 31, 2024 and December 31, 2023, the value of the S&P 500 options was $3,513,964 and $2,348,998, respectively, recorded in the following accounts on the consolidated balance sheets: March 31, 2024 December 31, 2023 Current assets: Equity securities, at fair value $ 3,403,897 $ 2,252,891 Noncurrent assets: Equity securities, at fair value 110,067 96,107 Total $ 3,513,964 $ 2,348,998 |
CONSOLIDATION OF VARIABLE INTER
CONSOLIDATION OF VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATION OF VARIABLE INTEREST ENTITIES | CONSOLIDATION OF VARIABLE INTEREST ENTITIES The Company consolidates VIEs for which it is the primary beneficiary or VOEs for which it controls through a majority voting interest or other arrangement. See Note 2, Summary of Significant Accounting Policies of our 2023 Annual Report, for more information on how the Company evaluates an entity for consolidation. The Company evaluated any entity in which it had a variable interest upon formation to determine whether the entity should be consolidated. The Company also evaluated the consolidation conclusion during each reconsideration event, such as changes in the governing documents or additional equity contributions to the entity. During the three months ended March 31, 2024, the Company’s consolidated VIEs, LMA Income Series II LP, LMX Series LLC (LMATT Series 2024, Inc.), and LMA Income Series, LP, had total assets of $104,415,574 and liabilities of $85,530,346. For the year ended December 31, 2023, the Company’s consolidated VIEs, LMA Income Series II LP, LMX Series LLC (LMATT Series 2024, Inc.), and LMA Income Series, LP, had total assets and liabilities of $77,132,592 and $65,031,207, respectively. The Company did not deconsolidate any entities during the period ended March 31, 2024, or during the year ended December 31, 2023. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Segment Information —The Business Combination that took place on June 30, 2023, where ERES, LMA and Abacus Settlements consummated the combining of the Companies, triggered a re-organization of Abacus Life Inc., where the legacy Abacus Settlements business and legacy LMA business would both operate under Abacus Life, Inc. subsequent to the Business Combination date. Abacus Settlements historically had one operating and reportable segment, Originations. LMA historically had two operating and reportable segments, (1) Portfolio Servicing and (2) Active Management. As the Business Combination did not occur until the last day of the second quarter of 2023, income activity related to Abacus Settlements had not yet been reported by Abacus Life, Inc. as the businesses did not begin operating as a combined Company until July 1, 2023. As such, beginning in the third quarter of 2023, the Company organizes its business into three reportable segments (1) Portfolio Servicing, (2) Active Management, and (3) Originations, which all generate revenue and incur expenses in different manners. This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision maker (CODM), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting . The Company’s CODM is the President and Chief Executive Officer. The Company’s reportable segments are not aggregated. The Portfolio Servicing segment generates revenues by providing policy services to customers on a contract basis. The Active Management segment generates revenues by buying, selling, and trading policies and maintaining policies until receipt of death benefits. The Originations segment generates revenue by originating life insurance policy settlements between investors or buyers, and the sellers, who are often the original policy owner. The policies are purchased from owners or other providers through advisors, brokers or directly through the owner. The Company’s method for measuring profitability on a reportable segment basis is gross profit. The CODM does not review disaggregated assets by segment. The Company adopted ASU 2023-07 in March 2024. The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the CODM. The Company’s CODM periodically reviews cost of revenues by segment and treats it as a significant segment expense. Revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 217,935 $ 302,871 Active management 19,796,999 9,970,518 Originations 5,024,204 — Segment revenue (including inter-segment) 25,039,138 10,273,389 Intersegment elimination (3,551,954) — Total revenue $ 21,487,184 $ 10,273,389 Cost of revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 362,392 $ 325,114 Active management (including stock-compensation) 958,472 164,436 Originations 4,951,987 — Total expenses (including inter-segment) 6,272,851 489,550 Intersegment elimination (3,551,954) — Total cost of revenue $ 2,720,897 $ 489,550 Information related to the Company’s reporting segments for the three-month ended March 31, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ (144,457) $ (22,243) Active management 18,838,527 9,806,082 Originations 72,217 — Total gross profit 18,766,287 9,783,839 Sales and marketing (1,929,944) (729,004) General and administrative (including stock-based compensation) (11,353,499) (696,892) Depreciation and amortization expense (1,682,054) (1,043) Other (expense) income (53,028) (210,432) Loss on change in fair value of warrant liability 946,960 — Interest expense (3,670,445) (357,383) Interest income 421,426 7,457 Gain (Loss) on change in fair value of debt (2,712,627) (953,433) Unrealized (loss) gain on investments 1,164,966 125,220 Provision for income taxes (1,173,513) 656,467 Net income (loss) attributable to non-controlling interests (73,274) 460,707 Net income attributable to common stockholders $ (1,348,745) $ 8,085,503 Segment gross profit is defined as revenues less cost of sales, excluding depreciation and amortization. Expenses below the gross profit line are not allocated across operating segments, as they relate primarily to the overall management of the consolidated entity. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings —Occasionally, the Company may be subject to various proceedings such as lawsuits, disputes, or claims. The Company assesses these proceedings as they arise and accrues a liability when losses are probable and reasonably estimable. Although legal proceedings are inherently unpredictable, the Company is currently not aware of any matters that, if determined adversely to the Company, would individually, or taken together, have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. Commitment —The Company has entered into a Strategic Services and Expenses Support Agreement (“SSES” or “Expense Support Agreement”) with the Providers in exchange for an option to purchase the outstanding equity ownership of the Providers. Pursuant to the Expense Support Agreement, the Company provides financial support and advice for the expenses of the Providers incurred in connection with their life settlement transactions businesses and the Providers are required to hire a life settlement transactions operations employee of an affiliate of the Company. No later than December 1 of each calendar year, the Company provides a budget for the Providers, in which the Company commits to extend financial support for all operating expenses up to the budgeted amount. “Operating Expenses” for purposes of the Expense Support Agreement means all annual operating expenses of the Providers incurred in the ordinary course of business, excluding the premiums paid for the Providers insurance coverages that are allocable to the insurance coverage provided to the Providers, which owns all the outstanding membership interests of the Providers if unrelated to the Providers settlement business. For the three months ended March 31, 2024 and 2023, Abacus Life, Inc. incurred $—, and $29,721 of expenses related to the Expense Support Agreement, which is included in the Other (expense) line of the consolidated statements of operations and comprehensive (loss) income and have not been reimbursed by the Providers. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 inputs: Other than quoted prices in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Recurring Fair Value Measurements —The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Fair Value Hierarchy As of March 31, 2024 Level 1 Level 2 Level 3 Total Assets: Life settlement policies $ — $ — $ 125,488,525 $ 125,488,525 Available-for-sale securities, at fair value — — 1,145,630 1,145,630 Equity securities, at fair value 3,513,964 — — 3,513,964 Total assets held at fair value $ 3,513,964 $ — $ 126,634,155 $ 130,148,119 Liabilities: Debt maturing within one year $ — $ — $ 15,648,628 $ 15,648,628 Long-term debt — — $ 73,440,696 $ 73,440,696 Private placement warrants — — 5,696,000 5,696,000 Total liabilities held at fair value: $ — $ — $ 94,785,324 $ 94,785,324 Fair Value Hierarchy As of December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Life settlement policies $ — $ — $ 122,296,559 $ 122,296,559 Available-for-sale securities, at fair value — — 1,105,935 1,105,935 Equity securities, at fair value 2,348,998 — — 2,348,998 Other assets — — — — Total assets held at fair value $ 2,348,998 $ — $ 123,402,494 $ 125,751,492 Liabilities: Debt maturing within one year $ — $ — $ 13,029,632 $ 13,029,632 Long-term debt — — $ 55,318,924 $ 55,318,924 Private placement warrants — — $ 6,642,960 $ 6,642,960 Total liabilities held at fair value: $ — $ — $ 74,991,516 $ 74,991,516 Life Settlement Policies — For all policies purchased after June 30, 2023, the Company accounts for owned life settlement policies using the fair value method. Prior to June 30, 2023, the Company elected to use either the fair value method or the investment method (cost, plus premiums paid). The valuation method is chosen upon contract acquisition and is irrevocable. For policies carried at fair value, the valuation based on Level 3 inputs that reflect our assumptions about what factors market participants would use in pricing the asset or liability, such as life expectancies and cash flow discount rates. The inputs are developed based on the best available information, including our own data. The valuation model is based on a discounted cash flow analysis and is sensitive to changes in the discount rate used. The Company utilized a blended average discount rate of 20% and 21% for policy valuations at March 31, 2024 and at December 31, 2023, respectively, which is based on economic and company-specific factors. The Company re-evaluates its discount rates at the end of every reporting period in order to reflect the estimated discount rates that could reasonably be used in a market transaction involving the Company’s portfolio of life settlements. For life settlement policies carried using the investment method, the Company measures these at the cost of the policy plus premiums paid. The policies accounted for using the investment method totaled $1,434,444 and $1,697,178 at March 31, 2024 and at December 31, 2023, respectively. Discount Rate Sensitivity —20% was determined to be the weighted average discount rate used to estimate the fair value of policies held by LMA and its investment funds. If the discount rate increased or decreased by two percentage points and the other assumptions used to estimate fair value remained the same, the change in estimated fair value as of March 31, 2024, would be as follows: As of March 31, 2024 Fair Value Change in Rate Adjustment +2% $ 114,667,471 $ (10,821,054) No change 125,488,525 -2% 136,252,710 10,764,185 Credit Exposure to Insurance Companies —The following table provides information about the life insurance issuer concentrations that exceed 10% of total face value or 10% of total fair value of the Company’s life insurance policies as of March 31, 2024: Carrier Percentage of Percentage of Carrier John Hancock Life Insurance Company (U.S.A.) 26.0 % 16.0 % A+ Lincoln National Life Insurance Company 7.0 % 10.0 % A The following table provides a roll forward of the fair value of life insurance policies for the three months-ended March 31, 2024: Fair value at December 31, 2023 $ 122,296,559 Policies purchased 40,440,083 Matured/sold policies (42,538,671) Realized gain on matured/sold policies 9,478,212 Premiums paid (2,431,040) Unrealized gain on held policies 5,290,554 Change in estimated fair value 12,337,726 Realized gain on matured/sold policies (9,478,212) Premiums paid 2,431,040 Fair value at March 31, 2024 $ 125,488,525 Long-Term Debt —See Note 14, Long-Term Debt, for background information on the market-indexed debt. The Company has elected the fair value option in accounting for the instruments. Fair value is determined using Level 3 inputs. The valuation methodology is based on the Black-Scholes-Merton option-pricing formula and a discounted cash flow analysis. Inputs to the Black-Scholes-Merton model include (i) the S&P 500 Index price, (ii) S&P 500 Index volatility, (iii) a risk-free rate based on data published by the US Treasury, and (iv) a term assumption based on the contractual term of the LMATT Notes. The discounted cash flow analysis includes a discount rate that is based on the implied discount rate developed by calibrating a valuation model to the purchase price on the initial investment date. The implied discount rate is evaluated for reasonableness by benchmarking it to yields on actively traded comparable securities. The total change in fair value of the debt resulted in a loss of $2,702,666. This loss is comprised of $7,436, net of tax, which is included within accumulated other comprehensive income and $4,514 net of tax, which is included in equity of noncontrolling interests resulting from risk-adjusted valuation scenarios. The Company recognized a loss of $2,712,627 on the change in fair value of the debt resulting from risk-free valuation scenarios, which is included within loss on change in fair value of debt within the consolidated statement of operations and comprehensive loss for the three months ended March 31, 2024. The following table provides a roll forward of the fair value of the outstanding debt for the three months ended March 31, 2024: Fair value at December 31, 2023 $ 68,348,556 Unrealized loss on change in fair value (risk-free) 2,712,627 Unrealized loss on change in fair value (credit-adjusted) included in OCI (16,007) Unrealized gain on change in fair value (credit-adjusted) included in equity of NCI 6,046 Change in estimated fair value of debt 2,702,666 Other $ (22,155) Fair value at March 31, 2024 $ 89,089,324 Private Placement Warrants —The Company had 8,900,000 Private Placement Warrants outstanding as of March 31, 2024 and December 31, 2023. Each Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share, subject to adjustment. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees and (z) the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Private Placement Warrants were accounted for as liabilities in accordance with ASC 815-40. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented separately in the consolidated statements of operations and comprehensive (loss) income. The Private Placement Warrants were considered a Level 3 fair value measurement using a binomial lattice model in a risk-neutral framework. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The implied volatility as of the reporting date was derived from observable public warrant traded price provided by Bloomberg LP. The following table presents the key assumptions in the analysis: Private Placement Warrants Expected implied volatility de minimis Risk-free interest rate 4.09% Term to expiration 5.0 years Exercise price $11.50 Common Stock Price $10.03 Dividend Yield —% Equity Securities, at Fair Value: S&P 500 Options —In February 2022, LMATT Series 2024, Inc., which the Company consolidates for financial reporting, purchased and sold S&P 500 call and put options through a broker. The Company purchased and sold additional S&P 500 call options through a broker in September 2022 through their 100% owned and fully consolidated subsidiaries LMATT Growth Series 2.2024, Inc. and LMATT Growth and Income Series 1.2026, Inc. The options are exchange traded, and fair value is determined using Level 1 inputs of quoted market prices as of the consolidated balance sheets dates. Changes in fair value are classified as unrealized (gain)/loss on investments within the consolidated statements of operations and comprehensive (loss) income. Available-for-Sale Investment —The Convertible Promissory Note is classified as an available-for-sale security. Available-for-sale investments are subsequently measured at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized. The Company determines fair value of its available-for-sale investments using unobservable inputs by considering the initial investment value, next round financing, and the likelihood of conversion or settlement based on the contractual terms in the agreement. The Company initially purchased a convertible promissory note from the issuer in 2022 and then on January 7, 2022, the Company purchased an additional $250,000 convertible promissory note from the same issuer and then an additional $500,000 in October 2022. As of March 31, 2024 and December 31, 2023, the Company evaluated the fair value of its Promissory Note and determined that the fair value approximates the carrying value of $1,145,630 and $1,105,935, respectively. Financial Instruments Where Carrying Value Approximates Fair Value —Th e carrying value of cash, cash equivalents, accounts receivables, and due to affiliates approximates fair value due to the short-term nature of their maturities. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Outstanding principal balances of Long-term debt comprises of the following: March 31, 2024 December 31, 2023 Cost Fair value Cost Fair value Market-indexed notes: LMATT Series 2024, Inc. $ 10,031,919 $ 11,221,852 $ 9,124,944 $ 9,477,780 LMATT Growth Series 2.2024, Inc. 3,331,744 4,426,776 2,981,480 3,551,852 LMATT Growth & Income Series 1.2026, Inc 542,618 631,377 492,582 569,862 Secured borrowing: LMA Income Series, LP 22,485,826 22,485,826 22,368,209 22,368,209 LMA Income Series II, LP 50,323,493 50,323,493 32,380,852 32,380,852 Unsecured borrowing: Fixed Rate Senior Unsecured Notes 60,650,000 60,650,000 35,650,000 35,650,000 SPV Purchase and Sale Note 27,341,832 27,341,832 26,538,004 26,538,004 Sponsor PIK Note 11,452,687 11,452,687 11,115,865 11,115,865 Deferred issuance costs and discounts (2,724,708) (2,724,708) (1,831,910) (1,831,910) Total debt $ 183,435,411 $ 185,809,135 $ 138,820,026 $ 139,820,514 Less current portion of long-term debt $ (13,363,663) $ (15,648,628) $ (11,440,236) $ (13,029,632) Total long-term debt $ 170,071,748 $ 170,160,507 $ 127,379,790 $ 126,790,882 Fixed Rate Senior Unsecured Notes On November 10, 2023, the Company issued $35,650,000 in fixed rate senior unsecured notes (“Fixed Unsecured Notes”). The net proceeds after related debt issue costs, were used by the Company to repay the Owl Rock Credit Facility and for general corporate purposes. The Fixed Unsecured Notes are based on a fixed interest rate of 9.875% to be paid in quarterly interest payments beginning on February 15, 2024 and mature on November 15, 2028. The Company has the option to redeem the Fixed Unsecured Notes in whole or in part at a price of 100% of the outstanding principal balance on or after November 15, 2027. The notes will be senior unsecured obligations of the Company and will rank equal in right of payment to all of the Company’s other senior unsecured indebtedness from time to time outstanding. On February 15, 2024, the Company issued an additional $25,000,000 as part of the previously issued Fixed Unsecured Notes. The net proceeds, after related debt issue costs, were used by the Company for general corporate purposes. The Fixed Rate Senior Unsecured Notes are based on a fixed interest rate of 9.875% to be paid in quarterly interest payments beginning on May 15, 2024 and mature on November 15, 2028. LMATT Series 2024, Inc. Market-Indexed Notes: On March 31, 2022, LMATT Series 2024, Inc., which the Company consolidates for financial reporting, issued $10,166,900 in market-indexed private placement notes. The note, titled the Longevity Market Assets Target-Term Series (LMATTS) 2024, is a market-indexed instrument designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the note at the end of 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The note has a feature to protect debt holders from market downturns, up to 40%. Any subsequent losses below the 40% threshold will reduce the note on a one-to-one basis. As of March 31, 2024, $8,816,900 of the principal amount remained outstanding of which $200,000 is owed to LMA. LMA’s investment is eliminated in consolidation. The notes are held at fair value, which represents the exit price, or anticipated price to transfer the liability to a third party. As of March 31, 2024 and December 31, 2023, the fair value of the LMATT Series 2024, Inc. notes was $11,221,852 and $9,477,780, respectively. The notes are secured by the assets of the issuing entities, which includes cash, S&P 500 call options, and life settlement policies totaling $12,413,273 as of March 31, 2024. The notes’ agreements do not restrict the trading of life settlement contracts prior to maturity of the note, as total assets of the issuing companies are considered as collateral. There are also no restrictive covenants associated with the notes with which the entities must comply. LMATT Growth Series 2.2024, Inc. Market-Indexed Notes: On September 16, 2022, LMATTS Growth Series 2.2024, Inc., a 100% owned subsidiary which the Company consolidates for financial reporting issued $2,333,391 in market-indexed private placement notes. The note, titled the Longevity Market Assets Target-Term Growth Series 2.2024, Inc. (“ LMATTS TM Series 2.2024, Inc.”) is a market-indexed instrument designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the note in July of 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The note has a feature to provide upside performance participation that is capped at 120% of the performance of the S&P 500. A separate layer of the note has a feature to protect debt holders from market downturns by up to 20% if the index price experiences a loss during the investment period. After the underlying index has decreased in value by more than 20%, the investment will experience all subsequent losses on a one-to-one basis. As of March 31, 2024, the entire principal amount remained outstanding. The notes are held at fair value, which represents the exit price, or anticipated price to transfer the liability to a third party. As of March 31, 2024 and December 31, 2023, the fair value of the LMATT Series 2.2024, Inc. notes were $4,426,776 and $3,551,852, respectively. The notes are secured by the assets of the issuing entity, LMATT Series 2.2024, Inc., which includes cash, S&P 500 call options, and life settlement policies totaling $3,903,470 as of March 31, 2024. The note agreements do not restrict the trading of life settlement contracts prior to maturity of the note, as total assets of the issuing company are considered as collateral. There are also no restrictive covenants associated with the note with which the entity must comply. LMATT Growth and Income Series 1.2026, Inc. Market-Indexed Notes: On September 16, 2022, LMATTS Growth and Income Series 1.2026, Inc., a 100% owned subsidiary which the Company consolidates for financial reporting issued $400,000 in market-indexed private placement notes. The note, titled the Longevity Market Assets Target-Term Growth and Income Series 1.2026, Inc (“ LMATTS TM Growth and Income Series 1.2026, Inc.”) is a market-indexed instrument designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the note in July of 2026, the principal, plus the return based upon the S&P 500 Index must be paid. The note has a feature to provide upside performance participation that is capped at 140% of the performance of the S&P 500. A separate layer of the note has a feature to protect debt holders from market downturns by up to 10% if the index price experiences a loss during the investment period. After the underlying index has decreased in value by more than 10%, the investment will experience all subsequent losses on a one-to-one basis. This note also includes a 4% dividend feature that will be paid annually. As of March 31, 2024, the entire principal amount remained outstanding. The notes are held at fair value, which represents the exit price, or anticipated price to transfer the liability to a third party. As of March 31, 2024 and December 31, 2023, the fair value of the LMATT Growth and Income Series 1.2026, Inc., notes were $631,377 and 569,862, respectively. The notes are secured by the assets of the issuing entity, LMATTS Growth and Income Series 1.2026, Inc., which includes cash, S&P 500 call options, and life settlement policies totaling $515,297 as of March 31, 2024. The note agreements do not restrict the trading of life settlement contracts prior to maturity of the note, as total assets of the issuing company are considered as collateral. There are also no restrictive covenants associated with the note with which the entity must comply. LMA Income Series, LP and LMA Income Series, GP LLC Secured Borrowing On September 2, 2022, LMA Income Series, GP, LLC, wholly owned and controlled by that LMA Series, LLC, formed a limited partnership, LMA Income Series, LP and subsequently issued partnership interests to limited partners in a private placement offering. The initial term of the offering is three years with the ability to extend for two additional one-year periods at the discretion of the general partner, LMA Income Series, GP, LLC. The limited partners will receive an annual dividend of 6.5% paid quarterly and 25% of returns in excess of a 6.5% internal rate of return capped at 9% which would require a 15% net internal rate of return. The General Partner will receive 75% of returns in excess of a 6.5% internal rate of return to limited partners then 100% in excess of a 15% net internal rate of return. It was determined that LMA Series, LLC is the primary beneficiary of LMA Income Series, LP and thus has fully consolidated the limited partnership in its consolidated financial statements for the three months ended March 31, 2024. The private placement offerings proceeds are used to acquire and actively manage a large and diversified portfolio of financial assets. LMA, through its consolidated subsidiaries, serves as the portfolio manager for the financial asset portfolio, which includes investment sourcing and monitoring. In this role, LMA has the unilateral ability to acquire and dispose of any of the above investments. As the partnership does not represent a business in accordance with ASC 810 and is a consolidated subsidiary that only holds financial assets, this represents a transfer subject to ASC 860-10. As the financial assets are not transferred outside the consolidated group, the proceeds from the offering shall be classified as a liability unless it meets the definition of a participating interest and the derecognition criteria in ASC 860 are met. The transferred interest did not meet the definition of a participating interest as LMA possesses the unilateral ability to direct the sale of the financial assets (ASC 860-10-50-6A(d)). In accordance with ASC 860-30-25-2, as the transfer of the financial assets did not meet the definition of a participating interest, LMA shall recognize the proceeds received from the offering as a secured borrowing. Dividends paid and accrued are included in interest expense. The excess dividend returns will not be paid by LMA Income Series, LP until termination, are considered non-cash interest expense, and are included in the principal balance outstanding. As of March 31, 2024 and December 31, 2023, $596,381 and $478,765 in non-cash interest expense was added to the outstanding principal balance, respectively. LMA elected to account for the secured borrowing at fair value under the collateralized financing entity guidance within ASC 810-10-30. As of March 31, 2024 and December 31, 2023, the fair value of the secured borrowing was $22,485,826 and $22,368,209, respectively. LMA Income Series II, LP and LMA Income Series II, GP LLC Secured Borrowing On January 31, 2023, LMA Income Series II, GP, LLC, wholly owned and controlled by that LMA Series, LLC, formed a limited partnership, LMA Income Series II, LP and subsequently issued partnership interests to limited partners in a private placement offering. The initial term of the offering was three years with the ability to extend for two additional one-year periods at the discretion of the general partner, LMA Income Series II, GP, LLC. The limited partners received annual dividends equal to the Preferred Return Amounts as follows: Capital commitment less than $500,000, 7.5%; between $500,000 and $1,000,000, 7.75%; over $1,000,000, 8%. Thereafter, 100% of the excess to be paid to the General Partner. It was determined that LMA Series, LLC is the primary beneficiary of LMA Income Series, LP and thus has fully consolidated the limited partnership in its consolidated financial statements for the three months ended March 31, 2024. The private placement offerings proceeds are used to acquire and actively manage a large and diversified portfolio of financial assets. LMA, through its consolidated subsidiaries, serves as the portfolio manager for the financial asset portfolio, which includes investment sourcing and monitoring. In this role, LMA has the unilateral ability to acquire and dispose of any of the above investments. As the partnership does not represent a business in accordance with ASC 810 and is a consolidated subsidiary that only holds financial assets, this represents a transfer subject to ASC 860-10. As the financial assets are not transferred outside the consolidated group, the proceeds from the offering shall be classified as a liability unless it meets the definition of a participating interest and the derecognition criteria in ASC 860 are met. The transferred interest did not meet the definition of a participating interest as LMA possesses the unilateral ability to direct the sale of the financial assets (ASC 860-10-50-6A(d)). In accordance with ASC 860-30-25-2, as the transfer of the financial assets did not meet the definition of a participating interest, LMA shall recognize the proceeds received from the offering as a secured borrowing. During the first quarter of 2024, LMA Income Series II, GP, LLC through the LMA Income Series II, LP admitted additional limited partners into the fund. The additional limited partnership interests amounted to $17,942,641 as of March 31, 2024. LMA Income Series II, GP plans to continue admitting new limited partners. In addition to new partnership interests, an amendment to the limited partnership was signed to add redemption opportunities for limited partners and extend the maturity date of the fund. The first redemption date is March 31, 2026, but limited partners can elect to stay in the fund at the same terms. If a limited partners elect to stay invested, the next redemption date would be June 30, 2027 with a final maturity date of December 31, 2028. Along with these redemption windows, the amendment also increased the Preferred Return Amount by fifty basis points annually across all tiers. The amendment will become effective April 01, 2024. LMA elected to account for the secured borrowing at fair value under the collateralized financing entity guidance within ASC 810-10-30. As of March 31, 2024 and December 31, 2023, the fair value of the secured borrowing was $50,323,493 and $32,380,852, respectively. Sponsor PIK Note On the June 30, 2023, in connection with the Merger Agreement, East Sponsor, LLC, a Delaware limited liability company (“Sponsor”), made an unsecured loan to the Company in the aggregate amount of $10,471,648 (the “Sponsor PIK Note”) with an interest rate of 12.00% per year compounding semi-annually. Accrued interest is payable in arrears quarterly starting on September 30, 2023 by adding it to the outstanding principal balance. As of March 31, 2024 and December 31, 2023, $981,039 and $644,217 in non-cash interest expense was added to the outstanding principal balance, respectively. The Sponsor PIK Note matures on June 30, 2028 (the “Maturity Date”) and may be prepaid at any time in accordance with its terms without any premium or penalty. SPV Purchase and Sale Note On July 5, 2023, the Company entered into an Asset Purchase Agreement (the “Policy APA”) to acquire certain insurance policies with an aggregate fair market value of $10,000,000 from Abacus Investment SPV, LLC, a Delaware limited liability company (“SPV”), in exchange for a payable obligation owed by the Company to SPV (such acquisition transaction under the Policy APA, the “SPV Purchase and Sale”). SPV is jointly owned by the Sponsor and former members of LMA and Abacus. SPV extended an additional principal amount of $15,000,000 bringing the total SPV Purchase and Sale Note to $25,000,000. The Company is able to borrow additional funds from SPV. The interest accrues at a rate of 12% per year, payable quarterly, all of which is to be paid in-kind by the Company by increasing the principal amount of the SPV Purchase and Sale Note on each interest payment date and is not required to be paid until maturity on July 5, 2026, three years after the closing of the SPV Purchase and Sale Note, subject to two automatic extensions of one-year each without any amendment of the relevant documentation. As of March 31, 2024 and December 31, 2023, $2,341,832 and $1,538,004 in non-cash interest expense was added to the outstanding principal balance, respectively. The following table shows scheduled principal payments by year for our long-term debt as of March 31, 2024: Payments (without fair value adjustments) by Year 2024 remaining 2025 2026 2027 2028 Thereafter Total Market-indexed notes: LMATT Series 2024, Inc. $ 10,031,919 $ — $ — $ — $ — $ — $ 10,031,919 LMATT Series 2.2024, Inc. 3,331,744 — — — — — 3,331,744 LMATT Growth & Income Series 1.2026, Inc. — — 542,618 — — — 542,618 Secured borrowing: LMA Income Series, LP — 22,485,826 — — — — 22,485,826 LMA Income Series II, LP — — 50,323,493 — — — 50,323,493 Unsecured borrowing: Fixed Rate Senior Unsecured Notes — — — — 60,650,000 — 60,650,000 SPV Purchase and Sale Note — — 27,341,832 — — — 27,341,832 Sponsor PIK Note — — — — 11,452,687 — 11,452,687 $ 13,363,663 $ 22,485,826 $ 78,207,943 $ — $ 72,102,687 $ — $ 186,160,119 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The Company is authorized to issue up to 200,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. No shares of preferred stock are issued or outstanding. Holders of the Company’s common stock are entitled to one vote for each share. As of March 31, 2024, there were 63,776,058 shares of common stock issued, of which 62,997,292 are outstanding and 778,766 shares were held as treasury stock. Holders of shares were entitled to receive, in the event of a liquidation, dissolution or winding up, ratably the assets available for distribution to the stockholders after payment of all liabilities. The equity structure has been recast in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, 0.0001 par value per share, issued to legacy LMA’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to legacy LMA common stock prior to the Business Combination have been retroactively recast as shares reflecting the exchange ratio of 0.8 established in the Business Combination. As of December 31, 2023, this resulted in 63,388,823 shares of common stock issued and outstanding. Public Warrants As of March 31, 2024, the Company had 16,862,749 Public Warrants outstanding. Each redeemable whole Public Warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per full share, subject to adjustment as described. Public Warrants represent a freestanding financial instrument as it is traded on the Nasdaq under the symbol “ABLLW” and legally detachable and separately exercisable from the related underlying shares of the Company’s common stock. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will expire five years from the purchase date for July 27, 2020 or August 25, 2020, the dates of the initial public offering and over-allotment, respectively, by the Sponsor, or earlier upon redemption or liquidation. Redemption of Warrants for Cash - The Company may redeem the outstanding Public Warrants for cash: • in whole and not in part; • at a price of $0.01 per Public Warrant; • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. Redemption of Warrants for Shares of Class A Common Stock - The Company may redeem the outstanding warrants for shares of Class A common stock: • in whole and not in part; • at a price equal to a number of shares of Class A common stock to be determined by reference to the agreed table set forth in the warrant agreement based on the redemption date and the “fair market value” of the Class A common stock; • upon not less than 30 days’ prior written notice of redemption to each warrant holder; and • if, and only if, the last sale price of the Class A common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company elects to redeem all of the Public Warrants or the common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange, management has the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. However, in no instance can the warrant holder unilaterally decide to exercise its Public Warrant on a cashless basis. The Company accounts for the Public Warrants as equity instruments. The Company estimated that the fair value of the warrants upon the Business Combination is approximately $4.73 million, or $0.274 per Public Warrant, using the binomial lattice model. The fair value of the warrants is estimated as of the date of grant using the following assumptions: (1) risk-free interest rate of 4.09%, (2) term to expiration of 5.00 years, (3) exercise price of $11.50 and (4) stock price of $10.03. The Company accounted for the warrant as an expense of the IPO resulting in a charge directly to stockholders’ equity on June 30, 2023. On January 18, 2024, the Company’s share price reached the warrant exercise price of $11.50. Certain public warrant holders redeemed their warrants for the Company’s common stock. As of March 31, 2024, the Company received $3,610,253 and has a receivable of $842,950 recorded in prepaid expense and other current assets in our consolidated balance sheets from 387,235 exercised public warrants. Stock Repurchase Program On December 11, 2023, our board of directors authorized a stock repurchase program under which the Company may purchase shares of our common stock for an aggregate purchase price not to exceed $15,000,000 over a period of up to 18 months. Stock repurchases may be made through open market transactions, block trades, accelerated stock repurchases, privately negotiated transactions, derivative transactions or otherwise, certain of which may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in compliance with applicable state and federal securities laws. The timing, as well as the number and value of stock repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including our assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, the nature of other investment opportunities available to the Company, and other considerations. The Company is not obligated to purchase any stock under the repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand and expected free cash flow to be generated in the future. Acquired shares of our common stock are held as treasury stock carried at cost in our consolidated financial statements. In connection with the repurchase program, the Company is authorized to adopt one of more plans pursuant to the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. As of March 31, 2024, $6,192,546 remained available for repurchase under the authorization approved by the Company’s board of directors. The authorization for the stock repurchase program may be suspended, terminated, increased or decreased by our board of directors at any time without prior notice. The following table summarizes stock repurchase activity under our stock repurchase program: Total Number of Shares Purchased Cost of Shares Repurchased Average Price Paid per Share As of December 31, 2023 146,650 $ 1,283,062 $ 8.82 January 1, 2024 to January 31, 2024 316,800 3,664,552 $ 11.61 February 1, 2024 to February 29, 2024 200,916 2,480,383 $ 12.35 March 1, 2024 to March 31, 2024 114,400 1,379,457 $ 12.06 As of March 31, 2024 778,766 $ 8,807,454 $ 11.50 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK- BASED COMPENSATION Long-term Incentive Plan: In October of 2023, the Compensation Committee approved the issuance of 2,468,500 restricted stock units (“RSUs”) to executives, employees and directors as part of the Company’s 2023 Long-Term Equity Compensation Incentive Plan (“Long-term Incentive Plan”). This plan provides for equity-based awards, including restricted stock units, performance stock units (“PSU”), stock options and unrestricted shares of common stock, may be granted to officers, key employees and directors of the Company. The Company has granted RSUs that provide the right to receive, subject to service based vesting conditions, shares of common stock pursuant to the Equity Plan. The expense associated with these awards will be based on the fair value of the stock as of the grant date, where the Company will elect to straight line recognition over the vesting period, which is three years. Under the approved Long-term Incentive Plan, generally, each RSU entitles the unit holder to one share of common stock when the restriction expires. RSUs have service conditions associated with them that range from one of Class A common stock. Shares that are issued upon vesting are newly issued shares from the Long-term Incentive Plan and are not issued from treasury stock. Forfeitures are recorded as they occur. In February 2024, the Compensation Committee approved the issuance of 108,000 RSUs and 345,263 stock options to certain executives under the Company’s Long-Term Incentive Plan (collectively the “February 2024 Awards”). These RSUs will vest equally over three years from the grant date. The stock options expire after ten years and vest equally over three years from the grant date. The expense associated with these awards will be based on the fair value of the stock or the stock options as of the grant date over the vesting period on a straight-line basis. After the issuance of the February 2024 Awards, 243,228 shares of common stock remained available for issuance of the 3,164,991 shares that were authorized for issuance under the Long-term Incentive Plan. The following table shows a summary of the unvested restricted stock under the 2023 Long-Term Equity Compensation Incentive Plan as of March 31, 2024 as well as activity during the year: Number of shares Weighted Average Grant Date Fair Value Restricted stock units, unvested, December 31, 2023 2,429,500 $ 6.16 Granted 108,000 $ 12.37 Vested — $ — Forfeited — $ — Restricted stock units, unvested, March 31, 2024 2,537,500 $ 6.42 Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table: 2024 Dividend yield — % Expected volatility 23.00 % Risk-free interest rate 3.98 % Expected option life 5.81 years Weighted average fair value of options $ 3.91 The Company does not intend to pay dividends for the foreseeable future. The expected volatility reflects the Company’s past daily common stock price volatility. The risk-free interest rate is derived using the term matched U.S. Treasury constant maturity yields. The expected option life is based on the average of the average time to vest and the remaining contractual term. The following table shows the status of, and changes in, common stock options: Number of Options Weighted Average Exercise Price Options outstanding, December 31, 2023 — $ — Granted 345,263 $ 3.91 Exercised — $ — Expired or cancelled — $ — Options exercisable, March 31, 2024 345,263 $ 3.91 Compensation costs recognized for RSUs and stock options were $1,509,739 and $— for the three months ended March 31, 2024 and 2023, respectively. $322,607 and $1,187,132 of the compensation costs is recorded in cost of revenue (including stock-based compensation) and in general and administrative expense (including stock-based compensation) in the consolidated statements of operations and comprehensive (loss) income, respectively. As of March 31, 2024, there was approximately $14,781,400 of unrecognized compensation costs related to RSUs and options which the Company expects to recognize over the next 2.8 years. CEO Restriction Agreement: As part of the Merger, the Chief Executive Officer (“CEO”) entered into a Restriction Agreement with the Company that provides terms for the CEO’s ownership interest grant that were assigned to him from the three original founders of Abacus Settlements. As of the Closing Date of the Merger on June 30, 2023, the CEO received 4,569,922 shares of Restricted Stock. Vesting Conditions. The Company shall issue the shares of Restricted Stock either (a) in certificate form or (b) in book entry form, registered in the CEO’s name, referring to the terms, conditions and restrictions applicable to the shares as outlined below. The CEO’s Ownership Interest Grant (“Restricted Stock”) shall vest as follows: i. 50% of the shares on the 25 th month following the Effective Date, ii. 50% of the shares on the 30 th month following the Effective Date, iii. Additionally, the Restricted Stock will become fully vested upon the first to occur of one of the following events: (i) separation from service due to disability, (ii) death, (iii) separation from service without cause; or (iv) separation from service for good reason. CEO Stock-based compensation expense is recorded in general and administrative expense (including stock-based compensation) in the consolidated statements of operations and comprehensive (loss) income is summarized as follows: Three Months Ended March 31, 2024 2023 Stock-based compensation expense $ 4,583,632 $ — Restricted Stock activity relative to the CEO for the three months ended March 31, 2024 is summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 4,569,922 $ 10.03 Granted — 0 Vested — 0 Forfeited — 0 Outstanding at March 31, 2024 4,569,922 $ 10.03 As of March 31, 2024, unamortized stock-based compensation expense for unvested Restricted Stock relative to the CEO was $32,085,422 with a remaining contractual life of 1.8 years |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 3 Months Ended |
Mar. 31, 2024 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLAN The Company has a defined contribution plan in the U.S. intended to qualify under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer up to 100% of their annual compensation on a pretax basis. The Company matches up to a maximum of 4% of eligible employee compensation and may choose to make additional discretionary contributions to the 401(k) Plan. For the three months ended March 31, 2024 and 2023, the Company recognized expenses related to the 401(k) Plan amounting to $108,816 and $12,240, respectively. For the three months ended March 31, 2024 and 2023, the Company did not make discretionary contributions. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Before June 30, 2023 the date of the Merger, LMA and Abacus had elected to file as S corporation for Federal and state income tax purposes, as such, neither LMA nor Abacus incurred Federal or state income taxes, except for income taxes related to LMA’s consolidated variable interest entities (VIE) and subsidiaries which are taxable C corporations. These VIEs and subsidiaries include LMATT Series 2024, Inc., the wholly owned subsidiary of LMX, which is consolidated into LMA as a VIE, as well as LMATT Growth Series 2.2024, Inc., a wholly owned subsidiary of LMATT Growth Series, Inc., and LMATTS Growth and Income Series 1.2026, Inc., a wholly owned subsidiary of LMATT Growth and Income Series, Inc., all of which are 100% owned subsidiaries and fully consolidated. Accordingly, the provision for income taxes was attributable to amounts for LMATT Series 2024, Inc, LMATT Growth Series, Inc. and LMATT Growth and Income Series, Inc. After the Merger, both LMA and Abacus are considered disregarded entities of the Company, a C corporation for Federal and state income tax purposes. For the three months ended March 31, 2024 and 2023, the Company recorded a provision for income taxes (benefit) of $1,173,513 and $(656,467), respectively. The effective tax rate is 1151.0% for the three months ended March 31, 2024 primarily driven by the portion of the stock-based compensation expense deduction limited by the Internal Revenue Code (IRC) Section 162(m) and the impact of the VIEs. The effective rate for the three months ended March 31, 2023 was (9.4)% due to the impact of the VIEs. The Company did not have any unrecognized tax benefits relating to uncertain tax positions at March 31, 2024, and December 31, 2023, and did not recognize any interest or penalties related to uncertain tax positions at March 31, 2024, and December 31, 2023. The Company does not anticipate that changes in its unrecognized tax benefits will have a material impact on the consolidated statements of operations and comprehensive (loss) income during 2024. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS As of March 31, 2024 and December 31, 2023, $5,236 and $5,236, respectively, were due to affiliates as well as distributions to the former members of 1,159,712 as a part of the Business Combination as of March 31, 2024. As of March 31, 2024 and December 31, 2023, $760,364 and $1,007,528, respectively, was due from affiliates. The majority of the due from affiliate amount as of December 31, 2023 represents transaction costs incurred by the Company related to the planned business combination in which ERES had committed to reimburse the Company upon the consummation of the merger. The SPV Purchase and Sale Note of $27,341,832 is a related party transaction given the transfer of cash and policies between the Company and the SPV, which is jointly owned by the Sponsor and former members of LMA and Abacus. The Sponsor PIK Note for $11,452,687 is also recorded as a related party transaction given the relationship between the Sponsor and the Company. The Company has a related-party relationship with Nova Trading (US), LLC (“Nova Trading”), a Delaware limited liability company and Nova Holding (US) LP, a Delaware limited partnership (“Nova Holding” and collectively with Nova Trading, the “Nova Funds”). The Company earns service revenue related to policy and administrative services on behalf of the Nova Funds. The servicing fee is equal to 50 basis points (0.50%) times the monthly invested amount in policies held by Nova Funds divided by 12. The Company earned $185,185 and $213,447 in service revenue related to the Nova Funds for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, and December 31, 2023, there were $215,033 and $79,509, respectively, owed by the Nova Funds, which are included as related-party receivables in the consolidated balance sheets. After the Merger, the Company also originates policies for the Nova Funds. For its origination services to the Nova Funds, the Company earns origination fees equal to the lesser of (i) 2% of the net death benefit for the policy or (ii) $20,000. For the three months ended March 31, 2024 and 2023 the Company did not earn any related party origination revenue from the Nova Funds. A summary of origination transactions with the Nova Funds is presented below: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cost $ 685 $ — |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
LEASES | LEASES During 2023, the Company amended the lease with the lessor to swap office spaces, increase square footage, and extend the lease term from July 31, 2023 to December 31 2029. The Company applied the lease modification guidance to account for the amendment to the lease. The commencement date for the amended lease was December 8, 2023, the date the lessor allowed the Company to take possession of the space. The amended lease provided for a leasehold improvement allowance, a monthly lease abatement from August to December 2024, and an option terminate. The Company remeasured the ROU assets and the lease liabilities as of the commencement date. The Company determined that the termination option is not reasonably certain of exercise based on an evaluation of the contract, the termination fee, market and asset-based factors, and therefore does not exclude periods covered by the termination option. In February 2024, the Company added additional office space to the existing lease via an amendment. This amendment did not significantly change the overall terms of the amendment signed in 2023 and as a result was treated as a lease modification. The modification increased our right of use asset and liability by $359,352 . The Company’s right-of-use assets and lease liabilities for its operating lease consisted of the following amounts as of March 31, 2024 and December 31, 2023: As of March 31, 2024 As of December 31, 2023 Assets: Operating lease right-of-use assets $ 2,182,681 $ 1,893,659 Liabilities: Operating lease liability, current 232,138 118,058 Operating lease liability, non-current 2,028,959 1,796,727 Total lease liability $ 2,261,097 $ 1,914,785 The Company recognizes lease expense for its operating leases within general, administrative, and other expenses on the Company’s consolidated statements of operations and comprehensive (loss) income. The Company’s lease expense for the periods presented consisted of the following: Three Months Ended March 31, 2024 2023 Operating lease cost $ 121,833 $ 12,471 Variable lease cost 20,769 1,221 Total lease cost $ 142,602 $ 13,692 The following table shows supplemental cash flow information related to lease activities for the periods presented: Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of the lease liability Operating cash flows from operating leases $ 85,314 $ 12,279 ROU assets obtained in exchange for new lease liabilities 359,352 — The table below shows a weighted-average analysis for lease terms and discount rates for all operating leases for the periods presented: Three Months Ended March 31, 2024 2023 Weighted-average remaining lease term (in years) 5.76 1.34 Weighted-average discount rate 9.67 % 3.36 % Future minimum noncancellable lease payments under the Company’s operating leases on an undiscounted basis reconciled to the respective lease liability at March 31, 2024 are as follows: Operating leases Remaining of 2024 $ 95,359 2025 553,953 2026 570,602 2027 587,694 2028 605,268 Thereafter 623,490 Total operating lease payments (undiscounted) 3,036,366 Less: Imputed interest (775,269) Lease liability as of March 31, 2024 $ 2,261,097 |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | (LOSS) EARNINGS PER SHARE Basic (loss) or earnings per share represents net loss or income attributable to ordinary stockholders divided by the weighted average number of common stock outstanding during the reported period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted (loss) or earnings per common share attributable to common shareholders is calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period, except in periods when there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. The dilutive effect of outstanding equity-based compensation awards is reflected in diluted earnings or loss per common share applicable to common shareholders by application of the treasury stock method using average market prices during the period. The shares issuable upon exercise of the Public Warrants or Private Warrants will not impact the total dilutive weighted average shares outstanding unless and until the price of our common stock exceeds the respective strike price. If and when the price of our common stock exceeds the respective strike price of any of the warrants, we will include the dilutive effect of the additional shares that may be issued upon exercise of the warrants in total dilutive weighted average shares outstanding, which we calculate using the treasury stock method. The table below illustrates the reconciliation of the earnings or loss and number of shares used in our calculation of basic earnings or loss per share attributable to common shareholders: Three Months Ended March 31, 2024 2023 Net (loss) income attributable to common stockholders for basic and diluted (loss) earnings per share $ (1,348,745) $ 8,085,503 Weighted-average common shares outstanding for basic and diluted (loss) earnings per share 63,027,246 50,369,350 (Loss) earnings per share: Basic and diluted (loss) earnings per share $ (0.02) $ 0.16 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions from the consolidated balance sheet date through the date at which the consolidated financial statements were issued. Proposed Public Offering of Common Stock On May 10, 2024, the Company filed a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) for a proposed public offering of its common stock. The number of shares of common stock to be sold and the price range for the proposed offering have not yet been determined. The Company intends to commence the public offering following completion of the SEC review process, subject to market and other conditions. |
Abacus Settlements LLC - DESCRI
Abacus Settlements LLC - DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
DESCRIPTION OF THE BUSINESS | BASIS OF PRESENTATION The accompanying consolidated financial statements (“Interim Financial Statements”) are presented in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC") and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) as contained in the Company’s Annual Report on Form 10-K. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Accordingly, the consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”). Refer to Note 2 in the Company’s 2023 Annual Report for the full list of the Company’s significant accounting policies. The details in those notes have not changed, except as discussed in Note 2 to the Interim Financial Statements and as a result of normal adjustments in the interim periods. Capitalized terms used and not specifically defined herein have the same meanings given those terms in our 2023 Annual Report. We also may use certain other terms that are defined within these Interim Financial Statements. The Interim Financial Statements presented herein and discussed below include 100% of the assets, liabilities, revenues, expenses, and cash flows of Abacus Life, Inc., (the “Company”) all entities in which the Company has a controlling voting interest (“subsidiaries”), and variable interest entities (“VIEs”) for which the Company is the primary beneficiary, as determined in accordance with consolidation accounting guidance. References in these Interim Financial Statements to net income or loss attributable to common stockholders and stockholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entity and are reported separately. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The Interim Financial Statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2023, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2024, and the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024 and 2023, respectively, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, respectively. The consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024, or any other period. All references to financial information as of and for the periods ended March 31, 2024, and 2023 in the condensed notes to consolidated financial statements are unaudited. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, cost of revenue, life settlement policy valuation, goodwill and intangibles valuation, market-indexed note valuation, and income taxes. The uncertainties in the broader macroeconomic environment have made it more challenging to make these estimates. Actual results could differ from our estimates, and such differences may be material. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS Abacus Settlements, LLC d/b/a Abacus Life (“Abacus”) was formed in 2004 in the state of New York. In 2016, the Company obtained its licensure in Florida and re-domesticated to that state. On June 13, 2023, the Company re-domesticated to Delaware. Abacus acts as a purchaser of outstanding life insurance policies (“Provider”) on behalf of investors (“Financing Entities”) by locating policies and screening them for eligibility for a life settlement, including verifying that the policy is in force, obtaining consents and disclosures, and submitting cases for life expectancy estimates, also known as origination services. When the sale of a policy is completed, this is deemed “settled” and the policy is then referred to as either a “life settlement” in which the insured’s life expectancy is greater than two years or “viatical settlement,” in which the insured’s life expectancy is less than two years. Abacus is not an insurance company, and therefore Abacus does not underwrite insurable risks for its own account. On June 30, 2023 Abacus was acquired by LMA. |
Abacus Settlements LLC - SUMMAR
Abacus Settlements LLC - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS New Accounting Standards —The Company’s management reviews recent accounting standards to determine the impact to the Company’s financial statements. Below we discuss the impact of new accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board’s (“FASB”) to the Interim Financial Statements. ASU 2023-07—“Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures”, was intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. We early adopted ASU 2023-07 in the first quarter of 2024, by including significant segment expenses reviewed by the Company’s CODM. Refer to Note 11, Segment Reporting, for our updated presentation. ASU 2024-01—”Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards”. In March 2024, the FASB issued ASU 2024-01 to add an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards (“profits interest awards”) should be accounted for in accordance with Topic 718, Compensation—Stock Compensation . The amendments in this ASU are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Although early adoption of this ASU is permitted, the Company’s management chose to not early adopt this ASU. The amendments in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied retrospectively, an entity is required to provide the disclosures in paragraphs 250-10-50-1 through 50-3 in the period of adoption. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. This ASU is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. ASU 2024-02—”Codification Improvements—Amendments to Remove References to the Concepts Statements”. In March 2024, the FASB issued ASU 2024-02 to remove references to various FASB Concepts Statements. The Board has a standing project on its agenda to address suggestions received from stakeholders on the Accounting Standards Codification and other incremental improvements to GAAP. This effort facilitates Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Although early adoption of this ASU is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance), the Company’s management chose to not early adopt this ASU. The amendments in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments. This ASU is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. Stock Options —The Company awards stock options (“options”) to purchase the Company’s common stock at the market price of the stock on the grant date. Options generally vest over a period of three years and expire no later than 10 years from the grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying certain assumptions. That fair value is reduced when options are forfeited. The fair value of options, net of forfeitures, is recognized in general and administrative expenses on a straight-line basis over the vesting period. Concentrations —Two customers accounted for 49% and 35% of active management revenue for the three months ended March 31, 2024. One customer accounted for 32% of active management revenue for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023 zero and two maturities accounted for over 10% of active management revenue, respectively. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —The accompanying financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). Unaudited Financial Statements —The financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of Abacus’ financial position as of March 31, 2023, and the results of its operations and comprehensive loss and cash flows for the three months ended March 31, 2023. Use of Estimates —The preparation of US GAAP financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities at the date of financial statements and the reports amounts of revenue and expenses during the reporting periods. Abacus’ estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from the estimates. Estimates are used when accounting for revenue recognition and related costs, the selection of useful lives of property and equipment, impairment testing, valuation of other receivables from clients, income taxes, and legal reserves. Concentrations —All of Abacus’ revenues are derived from life settlement transactions in which Abacus represents Financing Entities that purchased existing life insurance policies. One financing entity, a company in which the Abacus’ members own interests, represented 24% of Abacus’ revenues in the three months ended March 31, 2023. Abacus originates policies through three different channels: Direct to Consumer, Agent, and Broker. No single broker represented the sellers for over 10% of Abacus’ life settlement commission expense during the period three months ended March 31, 2023. Abacus maintains cash deposits with a major financial institution, which from time to time may exceed federally insured limits. Abacus periodically assesses the financial condition of the institution and believes that the risk of loss is minimal. Advertising —All advertising expenditures incurred by Abacus are charged to expense in the period to which they relate and are included in general and administrative expenses on the accompanying statements of operations and comprehensive loss. Advertising expense $374,371 for three months ended March 31, 2023. |
Abacus Settlements LLC - SEGMEN
Abacus Settlements LLC - SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
SEGMENT REPORTING | SEGMENT REPORTING Segment Information —The Business Combination that took place on June 30, 2023, where ERES, LMA and Abacus Settlements consummated the combining of the Companies, triggered a re-organization of Abacus Life Inc., where the legacy Abacus Settlements business and legacy LMA business would both operate under Abacus Life, Inc. subsequent to the Business Combination date. Abacus Settlements historically had one operating and reportable segment, Originations. LMA historically had two operating and reportable segments, (1) Portfolio Servicing and (2) Active Management. As the Business Combination did not occur until the last day of the second quarter of 2023, income activity related to Abacus Settlements had not yet been reported by Abacus Life, Inc. as the businesses did not begin operating as a combined Company until July 1, 2023. As such, beginning in the third quarter of 2023, the Company organizes its business into three reportable segments (1) Portfolio Servicing, (2) Active Management, and (3) Originations, which all generate revenue and incur expenses in different manners. This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision maker (CODM), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting . The Company’s CODM is the President and Chief Executive Officer. The Company’s reportable segments are not aggregated. The Portfolio Servicing segment generates revenues by providing policy services to customers on a contract basis. The Active Management segment generates revenues by buying, selling, and trading policies and maintaining policies until receipt of death benefits. The Originations segment generates revenue by originating life insurance policy settlements between investors or buyers, and the sellers, who are often the original policy owner. The policies are purchased from owners or other providers through advisors, brokers or directly through the owner. The Company’s method for measuring profitability on a reportable segment basis is gross profit. The CODM does not review disaggregated assets by segment. The Company adopted ASU 2023-07 in March 2024. The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the CODM. The Company’s CODM periodically reviews cost of revenues by segment and treats it as a significant segment expense. Revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 217,935 $ 302,871 Active management 19,796,999 9,970,518 Originations 5,024,204 — Segment revenue (including inter-segment) 25,039,138 10,273,389 Intersegment elimination (3,551,954) — Total revenue $ 21,487,184 $ 10,273,389 Cost of revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 362,392 $ 325,114 Active management (including stock-compensation) 958,472 164,436 Originations 4,951,987 — Total expenses (including inter-segment) 6,272,851 489,550 Intersegment elimination (3,551,954) — Total cost of revenue $ 2,720,897 $ 489,550 Information related to the Company’s reporting segments for the three-month ended March 31, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ (144,457) $ (22,243) Active management 18,838,527 9,806,082 Originations 72,217 — Total gross profit 18,766,287 9,783,839 Sales and marketing (1,929,944) (729,004) General and administrative (including stock-based compensation) (11,353,499) (696,892) Depreciation and amortization expense (1,682,054) (1,043) Other (expense) income (53,028) (210,432) Loss on change in fair value of warrant liability 946,960 — Interest expense (3,670,445) (357,383) Interest income 421,426 7,457 Gain (Loss) on change in fair value of debt (2,712,627) (953,433) Unrealized (loss) gain on investments 1,164,966 125,220 Provision for income taxes (1,173,513) 656,467 Net income (loss) attributable to non-controlling interests (73,274) 460,707 Net income attributable to common stockholders $ (1,348,745) $ 8,085,503 Segment gross profit is defined as revenues less cost of sales, excluding depreciation and amortization. Expenses below the gross profit line are not allocated across operating segments, as they relate primarily to the overall management of the consolidated entity. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
SEGMENT REPORTING | SEGMENT REPORTING |
Abacus Settlements LLC - REVENU
Abacus Settlements LLC - REVENUE | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
REVENUE | REVENUES Disaggregated Revenue— The disaggregation of the Company’s revenue by major sources is as follows: Three Months Ended March 31, 2024 March 31, 2023 Portfolio servicing revenue: Related party serving revenue $ 185,185 $ 213,447 Portfolio servicing revenue 32,750 89,424 Total portfolio servicing revenue 217,935 302,871 Active management revenue: Investment income from life insurance policies held using the investment method 500,000 8,392,334 Revenue from fee-based services and realized and unrealized gains from life insurance policies held using the fair value method 19,296,999 1,578,184 Total active management revenue 19,796,999 9,970,518 Origination revenue: Agent 557,500 $ — Broker 883,250 — Client direct 31,500 — Total origination revenue 1,472,250 — Total revenue $ 21,487,184 $ 10,273,389 Contract Balances —We had no contract assets at March 31, 2024 and December 31, 2023. The balances of contract liabilities arising from originated contracts with customers were as follows: March 31, 2024 December 31, 2023 Contract liabilities, deposits on pending settlements $ 667,500 $ 507,000 Total contract liabilities $ 667,500 $ 507,000 Revenue recognized during the first quarter of 2024 that was included in our contract liabilities balance at December 31, 2023 was $507,000, less $347,000 intercompany revenue that was eliminated in consolidation. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
REVENUE | REVENUE Disaggregated Revenue— The following table presents a disaggregation of Abacus’ revenue by major sources for three months ended March 31, 2023: Three Months Ended March 31, 2023 Agent $ 3,808,614 Broker 1,866,474 Client direct 624,898 Total $ 6,299,986 |
Abacus Settlements LLC - INCOME
Abacus Settlements LLC - INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
INCOME TAXES | INCOME TAXES Before June 30, 2023 the date of the Merger, LMA and Abacus had elected to file as S corporation for Federal and state income tax purposes, as such, neither LMA nor Abacus incurred Federal or state income taxes, except for income taxes related to LMA’s consolidated variable interest entities (VIE) and subsidiaries which are taxable C corporations. These VIEs and subsidiaries include LMATT Series 2024, Inc., the wholly owned subsidiary of LMX, which is consolidated into LMA as a VIE, as well as LMATT Growth Series 2.2024, Inc., a wholly owned subsidiary of LMATT Growth Series, Inc., and LMATTS Growth and Income Series 1.2026, Inc., a wholly owned subsidiary of LMATT Growth and Income Series, Inc., all of which are 100% owned subsidiaries and fully consolidated. Accordingly, the provision for income taxes was attributable to amounts for LMATT Series 2024, Inc, LMATT Growth Series, Inc. and LMATT Growth and Income Series, Inc. After the Merger, both LMA and Abacus are considered disregarded entities of the Company, a C corporation for Federal and state income tax purposes. For the three months ended March 31, 2024 and 2023, the Company recorded a provision for income taxes (benefit) of $1,173,513 and $(656,467), respectively. The effective tax rate is 1151.0% for the three months ended March 31, 2024 primarily driven by the portion of the stock-based compensation expense deduction limited by the Internal Revenue Code (IRC) Section 162(m) and the impact of the VIEs. The effective rate for the three months ended March 31, 2023 was (9.4)% due to the impact of the VIEs. The Company did not have any unrecognized tax benefits relating to uncertain tax positions at March 31, 2024, and December 31, 2023, and did not recognize any interest or penalties related to uncertain tax positions at March 31, 2024, and December 31, 2023. The Company does not anticipate that changes in its unrecognized tax benefits will have a material impact on the consolidated statements of operations and comprehensive (loss) income during 2024. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
INCOME TAXES | INCOME TAXES Since Abacus elected to file as an S corporation for federal and State income tax purposes, Abacus incurred no federal or state income taxes. Accordingly, provision for income taxes is attributable to minimum state tax payments that are due regardless of their S corporation status and income position. For the three months ended March 31, 2023, Abacus recorded provision for income taxes of $2,289. which consist of state minimum taxes for state taxes that have been paid and settled during the period. The effective tax rate was approximately (0.35)% for the three months ended March 31, 2023. Given Abacus' S Corporation status, temporary book and tax differences do not create a deferred tax asset or liability on the balance sheets. Accordingly, an assessment of realizability of any deferred tax asset balances is not relevant. |
Abacus Settlements LLC - RETIRE
Abacus Settlements LLC - RETIREMENT PLAN | 3 Months Ended |
Mar. 31, 2024 | |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
RETIREMENT PLAN | RETIREMENT PLAN |
Abacus Settlements LLC - RELATE
Abacus Settlements LLC - RELATED-PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS As of March 31, 2024 and December 31, 2023, $5,236 and $5,236, respectively, were due to affiliates as well as distributions to the former members of 1,159,712 as a part of the Business Combination as of March 31, 2024. As of March 31, 2024 and December 31, 2023, $760,364 and $1,007,528, respectively, was due from affiliates. The majority of the due from affiliate amount as of December 31, 2023 represents transaction costs incurred by the Company related to the planned business combination in which ERES had committed to reimburse the Company upon the consummation of the merger. The SPV Purchase and Sale Note of $27,341,832 is a related party transaction given the transfer of cash and policies between the Company and the SPV, which is jointly owned by the Sponsor and former members of LMA and Abacus. The Sponsor PIK Note for $11,452,687 is also recorded as a related party transaction given the relationship between the Sponsor and the Company. The Company has a related-party relationship with Nova Trading (US), LLC (“Nova Trading”), a Delaware limited liability company and Nova Holding (US) LP, a Delaware limited partnership (“Nova Holding” and collectively with Nova Trading, the “Nova Funds”). The Company earns service revenue related to policy and administrative services on behalf of the Nova Funds. The servicing fee is equal to 50 basis points (0.50%) times the monthly invested amount in policies held by Nova Funds divided by 12. The Company earned $185,185 and $213,447 in service revenue related to the Nova Funds for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, and December 31, 2023, there were $215,033 and $79,509, respectively, owed by the Nova Funds, which are included as related-party receivables in the consolidated balance sheets. After the Merger, the Company also originates policies for the Nova Funds. For its origination services to the Nova Funds, the Company earns origination fees equal to the lesser of (i) 2% of the net death benefit for the policy or (ii) $20,000. For the three months ended March 31, 2024 and 2023 the Company did not earn any related party origination revenue from the Nova Funds. A summary of origination transactions with the Nova Funds is presented below: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cost $ 685 $ — |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Abacus has a related-party relationship with Nova Trading (US), LLC (“Nova Trading”), a Delaware limited liability company and Nova Holding (US) LP, a Delaware limited partnership (“Nova Holding” and collectively with Nova Trading, the “Nova Funds”) as the owners of Abacus jointly own 11% of the Nova Funds. For the three months ended March 31, 2023, Abacus originated 34 policies, respectively, for the Nova Funds with a total value of $39,985,400, respectively. For its origination services to the Nova Funds, Abacus earns origination fees equal to the lesser of (i) 2% of the net death benefit for the policy or (ii) $20,000. For three months ended March 31, 2023, revenue earned, and contracts originated are as follows: Three Months Ended March 31, 2023 Origination fee revenue $ 1,448,305 Transaction reimbursement revenue 65,628 Total $ 1,513,933 Cost $ 6,366,133 Face value 39,985,400 Total policies 34 Average Age 75 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (1,348,745) | $ 8,085,503 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Basis of Presentation | The accompanying consolidated financial statements (“Interim Financial Statements”) are presented in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC") and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) as contained in the Company’s Annual Report on Form 10-K. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Accordingly, the consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report”). Refer to Note 2 in the Company’s 2023 Annual Report for the full list of the Company’s significant accounting policies. The details in those notes have not changed, except as discussed in Note 2 to the Interim Financial Statements and as a result of normal adjustments in the interim periods. Capitalized terms used and not specifically defined herein have the same meanings given those terms in our 2023 Annual Report. We also may use certain other terms that are defined within these Interim Financial Statements. The Interim Financial Statements presented herein and discussed below include 100% of the assets, liabilities, revenues, expenses, and cash flows of Abacus Life, Inc., (the “Company”) all entities in which the Company has a controlling voting interest (“subsidiaries”), and variable interest entities (“VIEs”) for which the Company is the primary beneficiary, as determined in accordance with consolidation accounting guidance. References in these Interim Financial Statements to net income or loss attributable to common stockholders and stockholders’ equity do not include noncontrolling interests, which represent the outside ownership of our consolidated non-wholly owned entity and are reported separately. Intercompany accounts and transactions between consolidated entities have been eliminated in consolidation. The Interim Financial Statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2023, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2024, and the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024 and 2023, respectively, and the consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, respectively. The consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024, or any other period. All references to financial information as of and for the periods ended March 31, 2024, and 2023 in the condensed notes to consolidated financial statements are unaudited. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates include, but are not limited to, revenue recognition, cost of revenue, life settlement policy valuation, goodwill and intangibles valuation, market-indexed note valuation, and income taxes. The uncertainties in the broader macroeconomic environment have made it more challenging to make these estimates. Actual results could differ from our estimates, and such differences may be material. |
New Accounting Standards | New Accounting Standards —The Company’s management reviews recent accounting standards to determine the impact to the Company’s financial statements. Below we discuss the impact of new accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board’s (“FASB”) to the Interim Financial Statements. ASU 2023-07—“Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures”, was intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. We early adopted ASU 2023-07 in the first quarter of 2024, by including significant segment expenses reviewed by the Company’s CODM. Refer to Note 11, Segment Reporting, for our updated presentation. ASU 2024-01—”Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards”. In March 2024, the FASB issued ASU 2024-01 to add an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards (“profits interest awards”) should be accounted for in accordance with Topic 718, Compensation—Stock Compensation . The amendments in this ASU are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Although early adoption of this ASU is permitted, the Company’s management chose to not early adopt this ASU. The amendments in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. If the amendments are applied retrospectively, an entity is required to provide the disclosures in paragraphs 250-10-50-1 through 50-3 in the period of adoption. If the amendments are applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle. This ASU is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. |
Stock Options | Stock Options —The Company awards stock options (“options”) to purchase the Company’s common stock at the market price of the stock on the grant date. Options generally vest over a period of three years and expire no later than 10 years from the grant date. Fair value is estimated using the Black-Scholes option-pricing model by applying certain assumptions. That fair value is reduced when options are forfeited. The fair value of options, net of forfeitures, is recognized in general and administrative expenses on a straight-line basis over the vesting period. |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Basis of Presentation | Basis of Presentation —The accompanying financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). Unaudited Financial Statements —The financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of Abacus’ financial position as of March 31, 2023, and the results of its operations and comprehensive loss and cash flows for the three months ended March 31, 2023. |
Use of Estimates | Use of Estimates —The preparation of US GAAP financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities at the date of financial statements and the reports amounts of revenue and expenses during the reporting periods. Abacus’ estimates, judgments, and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from the estimates. Estimates are used when accounting for revenue recognition and related costs, the selection of useful lives of property and equipment, impairment testing, valuation of other receivables from clients, income taxes, and legal reserves. |
Concentrations | Concentrations —All of Abacus’ revenues are derived from life settlement transactions in which Abacus represents Financing Entities that purchased existing life insurance policies. One financing entity, a company in which the Abacus’ members own interests, represented 24% of Abacus’ revenues in the three months ended March 31, 2023. Abacus originates policies through three different channels: Direct to Consumer, Agent, and Broker. No single broker represented the sellers for over 10% of Abacus’ life settlement commission expense during the period three months ended March 31, 2023. Abacus maintains cash deposits with a major financial institution, which from time to time may exceed federally insured limits. Abacus periodically assesses the financial condition of the institution and believes that the risk of loss is minimal. |
Advertising | Advertising —All advertising expenditures incurred by Abacus are charged to expense in the period to which they relate and are included in general and administrative expenses on the accompanying |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Purchase Price Allocation | Net Assets Identified Fair Value Intangibles $ 32,900,000 Goodwill 140,287,000 Current Assets 1,280,100 Non-Current Assets 901,337 Deferred Tax Liabilities (8,310,966) Accrued Expenses (524,400) Other Liabilities (1,171,739) Total Fair Value $ 165,361,332 |
Intangible Assets Acquired | Intangible assets were comprised of the following: Asset Type Fair Value Useful Life Valuation Methodology Customer Relationships-Agents $ 12,600,000 5 years Multi-period excess earnings method Customer Relationships-Financing Entities 11,000,000 8 years Multi-period excess earnings method Internally Developed and Used Technology-APA 1,600,000 2 years Relief from royalty method Internally Developed and Used Technology-Marketplace 100,000 3 years Replacement cost method Trade Name 900,000 Indefinite Relief from royalty method Non-Compete Agreements 4,000,000 2 years With and without method State Insurance Licenses 2,700,000 Indefinite Replacement cost method Total Fair Value $ 32,900,000 |
Pro Forma Financial Information | The supplemental unaudited pro forma financial information in the table below summarizes the combined results of operations for the Business Combination as if the Companies were combined for both reporting periods. There were no acquisition-related costs included in the unaudited pro forma results presented below. The unaudited pro forma financial information as presented below is for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combinations occurred as of the date indicated or what the results would be for any future periods. Three Months Ended March 31, 2023 Proforma revenue $ 13,294,318 Proforma net income 7,433,278 |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The disaggregation of the Company’s revenue by major sources is as follows: Three Months Ended March 31, 2024 March 31, 2023 Portfolio servicing revenue: Related party serving revenue $ 185,185 $ 213,447 Portfolio servicing revenue 32,750 89,424 Total portfolio servicing revenue 217,935 302,871 Active management revenue: Investment income from life insurance policies held using the investment method 500,000 8,392,334 Revenue from fee-based services and realized and unrealized gains from life insurance policies held using the fair value method 19,296,999 1,578,184 Total active management revenue 19,796,999 9,970,518 Origination revenue: Agent 557,500 $ — Broker 883,250 — Client direct 31,500 — Total origination revenue 1,472,250 — Total revenue $ 21,487,184 $ 10,273,389 |
Schedule of Contract Liabilities | The balances of contract liabilities arising from originated contracts with customers were as follows: March 31, 2024 December 31, 2023 Contract liabilities, deposits on pending settlements $ 667,500 $ 507,000 Total contract liabilities $ 667,500 $ 507,000 |
LIFE SETTLEMENT POLICIES (Table
LIFE SETTLEMENT POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, All Other Investments [Abstract] | |
Schedule of Life Settlement Contracts, Fair Value Method | The following tables summarize the Company’s life insurance policies grouped by remaining life expectancy as of March 31, 2024: Policies Carried at Fair Value — Remaining Life Expectancy (Years) Policies Face Value Fair Value 0-1 2 $ 5,283,461 $ 2,691,760 1-2 7 11,082,062 5,314,074 2-3 18 27,201,580 10,713,554 3-4 40 69,698,534 31,456,621 4-5 31 33,084,969 12,494,075 Thereafter 216 360,605,096 62,818,441 314 $ 506,955,702 $ 125,488,525 |
Schedule of Life Settlement Contracts, Investment Method | Policies accounted for using the investment method— Remaining Life Expectancy (Years) Policies Face Value Carrying Value 1-2 1 500,000 329,714 2-3 2 1,500,000 458,289 3-4 1 8,000,000 86,859 4-5 2 500,000 325,331 Thereafter 2 20,400,000 234,251 8 $ 30,900,000 $ 1,434,444 Estimated premiums to be paid by the Company for its portfolio accounted for using the investment method during each of the five succeeding calendar years and thereafter as of March 31, 2024, are as follows: 2024 remaining $ 66,151 2025 92,883 2026 72,923 2027 50,388 2027 32,736 Thereafter 366,103 Total $ 681,184 |
PROPERTY AND EQUIPMENT_NET (Tab
PROPERTY AND EQUIPMENT—NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment—net composed of the following: March 31, December 31, Computer equipment $ 518,456 $ 356,939 Furniture and fixtures 91,125 91,125 Leasehold improvements 22,687 22,418 Property and equipment—gross 632,268 470,482 Less: accumulated depreciation (84,707) (69,762) Property and equipment—net $ 547,561 $ 400,720 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill by reportable segments were as follows: Portfolio Servicing Active Management Originations Goodwill at December 31, 2023 $ — $ — $ 140,287,000 Additions — — — Goodwill at March 31, 2024 $ — $ — $ 140,287,000 |
Schedule of Finite-Lived Intangible Assets | Intangible Assets acquired comprised of the following: Asset Type Fair Value Useful Life Valuation Methodology Customer Relationships - Agents $ 12,600,000 5 years Multi-period excess-earnings method Customer Relationships - Financial Relationships 11,000,000 8 years Multi-period excess-earnings method Internally Developed and Used Technology—APA 1,600,000 2 years Relief from Royalty Method Internally Developed and Used Technology—Market Place 100,000 3 years Replacement Cost Method Trade Name 900,000 Indefinite Relief from Royalty Method Non-Compete Agreements 4,000,000 2 years With or Without Method State Insurance Licenses 2,700,000 Indefinite Replacement Cost Method $ 32,900,000 Intangible assets and related accumulated amortization as of March 31, 2024 are as follows: Definite Lived Intangible Assets: Gross Value Accumulated Amortization Net Book Value Customer Relationships - Agents $ 12,600,000 $ (1,890,000) $ 10,710,000 Customer Relationships - Financial Relationships 11,000,000 (1,031,250) 9,968,750 Internally Developed and Used Technology—APA 1,600,000 (600,000) 1,000,000 Internally Developed and Used Technology—Market Place 100,000 (25,000) 75,000 Non-Compete Agreements 4,000,000 (1,500,000) 2,500,000 Balance at March 31, 2024 $ 29,300,000 $ (5,046,250) $ 24,253,750 Indefinite Lived Intangible Assets: Trade Name 900,000 — 900,000 State Insurance Licenses 2,700,000 — 2,700,000 Total Intangible Asset Balance at March 31, 2024 $ 32,900,000 $ (5,046,250) $ 27,853,750 |
Schedule of Indefinite-Lived Intangible Assets | Intangible Assets acquired comprised of the following: Asset Type Fair Value Useful Life Valuation Methodology Customer Relationships - Agents $ 12,600,000 5 years Multi-period excess-earnings method Customer Relationships - Financial Relationships 11,000,000 8 years Multi-period excess-earnings method Internally Developed and Used Technology—APA 1,600,000 2 years Relief from Royalty Method Internally Developed and Used Technology—Market Place 100,000 3 years Replacement Cost Method Trade Name 900,000 Indefinite Relief from Royalty Method Non-Compete Agreements 4,000,000 2 years With or Without Method State Insurance Licenses 2,700,000 Indefinite Replacement Cost Method $ 32,900,000 Intangible assets and related accumulated amortization as of March 31, 2024 are as follows: Definite Lived Intangible Assets: Gross Value Accumulated Amortization Net Book Value Customer Relationships - Agents $ 12,600,000 $ (1,890,000) $ 10,710,000 Customer Relationships - Financial Relationships 11,000,000 (1,031,250) 9,968,750 Internally Developed and Used Technology—APA 1,600,000 (600,000) 1,000,000 Internally Developed and Used Technology—Market Place 100,000 (25,000) 75,000 Non-Compete Agreements 4,000,000 (1,500,000) 2,500,000 Balance at March 31, 2024 $ 29,300,000 $ (5,046,250) $ 24,253,750 Indefinite Lived Intangible Assets: Trade Name 900,000 — 900,000 State Insurance Licenses 2,700,000 — 2,700,000 Total Intangible Asset Balance at March 31, 2024 $ 32,900,000 $ (5,046,250) $ 27,853,750 |
Schedule of Estimated Annual Amortization for Intangible Assets | Estimated annual amortization of intangible assets for the next five years ending December 31 and thereafter is as follows: 2024 remaining $ 5,046,250 2025 5,328,333 2026 3,911,667 2027 3,895,000 2028 2,635,000 Thereafter 3,437,500 Total $ 24,253,750 |
OTHER INVESTMENTS AND OTHER N_2
OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Equity Securities, at Fair Value | As of March 31, 2024 and December 31, 2023, the value of the S&P 500 options was $3,513,964 and $2,348,998, respectively, recorded in the following accounts on the consolidated balance sheets: March 31, 2024 December 31, 2023 Current assets: Equity securities, at fair value $ 3,403,897 $ 2,252,891 Noncurrent assets: Equity securities, at fair value 110,067 96,107 Total $ 3,513,964 $ 2,348,998 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Segment | Revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 217,935 $ 302,871 Active management 19,796,999 9,970,518 Originations 5,024,204 — Segment revenue (including inter-segment) 25,039,138 10,273,389 Intersegment elimination (3,551,954) — Total revenue $ 21,487,184 $ 10,273,389 |
Summary of Segment Information | Cost of revenue related to the Company’s reporting segments is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ 362,392 $ 325,114 Active management (including stock-compensation) 958,472 164,436 Originations 4,951,987 — Total expenses (including inter-segment) 6,272,851 489,550 Intersegment elimination (3,551,954) — Total cost of revenue $ 2,720,897 $ 489,550 Information related to the Company’s reporting segments for the three-month ended March 31, 2024 and 2023 is as follows: Three Months Ended March 31, 2024 2023 Portfolio servicing $ (144,457) $ (22,243) Active management 18,838,527 9,806,082 Originations 72,217 — Total gross profit 18,766,287 9,783,839 Sales and marketing (1,929,944) (729,004) General and administrative (including stock-based compensation) (11,353,499) (696,892) Depreciation and amortization expense (1,682,054) (1,043) Other (expense) income (53,028) (210,432) Loss on change in fair value of warrant liability 946,960 — Interest expense (3,670,445) (357,383) Interest income 421,426 7,457 Gain (Loss) on change in fair value of debt (2,712,627) (953,433) Unrealized (loss) gain on investments 1,164,966 125,220 Provision for income taxes (1,173,513) 656,467 Net income (loss) attributable to non-controlling interests (73,274) 460,707 Net income attributable to common stockholders $ (1,348,745) $ 8,085,503 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. Fair Value Hierarchy As of March 31, 2024 Level 1 Level 2 Level 3 Total Assets: Life settlement policies $ — $ — $ 125,488,525 $ 125,488,525 Available-for-sale securities, at fair value — — 1,145,630 1,145,630 Equity securities, at fair value 3,513,964 — — 3,513,964 Total assets held at fair value $ 3,513,964 $ — $ 126,634,155 $ 130,148,119 Liabilities: Debt maturing within one year $ — $ — $ 15,648,628 $ 15,648,628 Long-term debt — — $ 73,440,696 $ 73,440,696 Private placement warrants — — 5,696,000 5,696,000 Total liabilities held at fair value: $ — $ — $ 94,785,324 $ 94,785,324 Fair Value Hierarchy As of December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Life settlement policies $ — $ — $ 122,296,559 $ 122,296,559 Available-for-sale securities, at fair value — — 1,105,935 1,105,935 Equity securities, at fair value 2,348,998 — — 2,348,998 Other assets — — — — Total assets held at fair value $ 2,348,998 $ — $ 123,402,494 $ 125,751,492 Liabilities: Debt maturing within one year $ — $ — $ 13,029,632 $ 13,029,632 Long-term debt — — $ 55,318,924 $ 55,318,924 Private placement warrants — — $ 6,642,960 $ 6,642,960 Total liabilities held at fair value: $ — $ — $ 74,991,516 $ 74,991,516 |
Fair Value Measurement Inputs and Valuation Techniques | If the discount rate increased or decreased by two percentage points and the other assumptions used to estimate fair value remained the same, the change in estimated fair value as of March 31, 2024, would be as follows: As of March 31, 2024 Fair Value Change in Rate Adjustment +2% $ 114,667,471 $ (10,821,054) No change 125,488,525 -2% 136,252,710 10,764,185 The following table presents the key assumptions in the analysis: Private Placement Warrants Expected implied volatility de minimis Risk-free interest rate 4.09% Term to expiration 5.0 years Exercise price $11.50 Common Stock Price $10.03 Dividend Yield —% |
Schedules of Concentration of Risk, by Risk Factor | The following table provides information about the life insurance issuer concentrations that exceed 10% of total face value or 10% of total fair value of the Company’s life insurance policies as of March 31, 2024: Carrier Percentage of Percentage of Carrier John Hancock Life Insurance Company (U.S.A.) 26.0 % 16.0 % A+ Lincoln National Life Insurance Company 7.0 % 10.0 % A |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a roll forward of the fair value of life insurance policies for the three months-ended March 31, 2024: Fair value at December 31, 2023 $ 122,296,559 Policies purchased 40,440,083 Matured/sold policies (42,538,671) Realized gain on matured/sold policies 9,478,212 Premiums paid (2,431,040) Unrealized gain on held policies 5,290,554 Change in estimated fair value 12,337,726 Realized gain on matured/sold policies (9,478,212) Premiums paid 2,431,040 Fair value at March 31, 2024 $ 125,488,525 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a roll forward of the fair value of the outstanding debt for the three months ended March 31, 2024: Fair value at December 31, 2023 $ 68,348,556 Unrealized loss on change in fair value (risk-free) 2,712,627 Unrealized loss on change in fair value (credit-adjusted) included in OCI (16,007) Unrealized gain on change in fair value (credit-adjusted) included in equity of NCI 6,046 Change in estimated fair value of debt 2,702,666 Other $ (22,155) Fair value at March 31, 2024 $ 89,089,324 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Outstanding principal balances of Long-term debt comprises of the following: March 31, 2024 December 31, 2023 Cost Fair value Cost Fair value Market-indexed notes: LMATT Series 2024, Inc. $ 10,031,919 $ 11,221,852 $ 9,124,944 $ 9,477,780 LMATT Growth Series 2.2024, Inc. 3,331,744 4,426,776 2,981,480 3,551,852 LMATT Growth & Income Series 1.2026, Inc 542,618 631,377 492,582 569,862 Secured borrowing: LMA Income Series, LP 22,485,826 22,485,826 22,368,209 22,368,209 LMA Income Series II, LP 50,323,493 50,323,493 32,380,852 32,380,852 Unsecured borrowing: Fixed Rate Senior Unsecured Notes 60,650,000 60,650,000 35,650,000 35,650,000 SPV Purchase and Sale Note 27,341,832 27,341,832 26,538,004 26,538,004 Sponsor PIK Note 11,452,687 11,452,687 11,115,865 11,115,865 Deferred issuance costs and discounts (2,724,708) (2,724,708) (1,831,910) (1,831,910) Total debt $ 183,435,411 $ 185,809,135 $ 138,820,026 $ 139,820,514 Less current portion of long-term debt $ (13,363,663) $ (15,648,628) $ (11,440,236) $ (13,029,632) Total long-term debt $ 170,071,748 $ 170,160,507 $ 127,379,790 $ 126,790,882 |
Schedule of Maturities of Long-Term Debt | The following table shows scheduled principal payments by year for our long-term debt as of March 31, 2024: Payments (without fair value adjustments) by Year 2024 remaining 2025 2026 2027 2028 Thereafter Total Market-indexed notes: LMATT Series 2024, Inc. $ 10,031,919 $ — $ — $ — $ — $ — $ 10,031,919 LMATT Series 2.2024, Inc. 3,331,744 — — — — — 3,331,744 LMATT Growth & Income Series 1.2026, Inc. — — 542,618 — — — 542,618 Secured borrowing: LMA Income Series, LP — 22,485,826 — — — — 22,485,826 LMA Income Series II, LP — — 50,323,493 — — — 50,323,493 Unsecured borrowing: Fixed Rate Senior Unsecured Notes — — — — 60,650,000 — 60,650,000 SPV Purchase and Sale Note — — 27,341,832 — — — 27,341,832 Sponsor PIK Note — — — — 11,452,687 — 11,452,687 $ 13,363,663 $ 22,485,826 $ 78,207,943 $ — $ 72,102,687 $ — $ 186,160,119 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Share Repurchase Activity | The following table summarizes stock repurchase activity under our stock repurchase program: Total Number of Shares Purchased Cost of Shares Repurchased Average Price Paid per Share As of December 31, 2023 146,650 $ 1,283,062 $ 8.82 January 1, 2024 to January 31, 2024 316,800 3,664,552 $ 11.61 February 1, 2024 to February 29, 2024 200,916 2,480,383 $ 12.35 March 1, 2024 to March 31, 2024 114,400 1,379,457 $ 12.06 As of March 31, 2024 778,766 $ 8,807,454 $ 11.50 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Restricted Stock Unit, Activity | The following table shows a summary of the unvested restricted stock under the 2023 Long-Term Equity Compensation Incentive Plan as of March 31, 2024 as well as activity during the year: Number of shares Weighted Average Grant Date Fair Value Restricted stock units, unvested, December 31, 2023 2,429,500 $ 6.16 Granted 108,000 $ 12.37 Vested — $ — Forfeited — $ — Restricted stock units, unvested, March 31, 2024 2,537,500 $ 6.42 Restricted Stock activity relative to the CEO for the three months ended March 31, 2024 is summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 4,569,922 $ 10.03 Granted — 0 Vested — 0 Forfeited — 0 Outstanding at March 31, 2024 4,569,922 $ 10.03 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | Black-Scholes option-pricing model assumptions and the resulting fair value of options are presented in the following table: 2024 Dividend yield — % Expected volatility 23.00 % Risk-free interest rate 3.98 % Expected option life 5.81 years Weighted average fair value of options $ 3.91 |
Share-Based Payment Arrangement, Option, Activity | The following table shows the status of, and changes in, common stock options: Number of Options Weighted Average Exercise Price Options outstanding, December 31, 2023 — $ — Granted 345,263 $ 3.91 Exercised — $ — Expired or cancelled — $ — Options exercisable, March 31, 2024 345,263 $ 3.91 |
Share-Based Payment Arrangement, Expense | CEO Stock-based compensation expense is recorded in general and administrative expense (including stock-based compensation) in the consolidated statements of operations and comprehensive (loss) income is summarized as follows: Three Months Ended March 31, 2024 2023 Stock-based compensation expense $ 4,583,632 $ — |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | A summary of origination transactions with the Nova Funds is presented below: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cost $ 685 $ — |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
ROU Assets and Lease Liabilities | The Company’s right-of-use assets and lease liabilities for its operating lease consisted of the following amounts as of March 31, 2024 and December 31, 2023: As of March 31, 2024 As of December 31, 2023 Assets: Operating lease right-of-use assets $ 2,182,681 $ 1,893,659 Liabilities: Operating lease liability, current 232,138 118,058 Operating lease liability, non-current 2,028,959 1,796,727 Total lease liability $ 2,261,097 $ 1,914,785 The table below shows a weighted-average analysis for lease terms and discount rates for all operating leases for the periods presented: Three Months Ended March 31, 2024 2023 Weighted-average remaining lease term (in years) 5.76 1.34 Weighted-average discount rate 9.67 % 3.36 % |
Lease Expense | The Company’s lease expense for the periods presented consisted of the following: Three Months Ended March 31, 2024 2023 Operating lease cost $ 121,833 $ 12,471 Variable lease cost 20,769 1,221 Total lease cost $ 142,602 $ 13,692 The following table shows supplemental cash flow information related to lease activities for the periods presented: Three Months Ended March 31, 2024 2023 Cash paid for amounts included in the measurement of the lease liability Operating cash flows from operating leases $ 85,314 $ 12,279 ROU assets obtained in exchange for new lease liabilities 359,352 — |
Future Minimum Noncancellable Lease Payments | Future minimum noncancellable lease payments under the Company’s operating leases on an undiscounted basis reconciled to the respective lease liability at March 31, 2024 are as follows: Operating leases Remaining of 2024 $ 95,359 2025 553,953 2026 570,602 2027 587,694 2028 605,268 Thereafter 623,490 Total operating lease payments (undiscounted) 3,036,366 Less: Imputed interest (775,269) Lease liability as of March 31, 2024 $ 2,261,097 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The table below illustrates the reconciliation of the earnings or loss and number of shares used in our calculation of basic earnings or loss per share attributable to common shareholders: Three Months Ended March 31, 2024 2023 Net (loss) income attributable to common stockholders for basic and diluted (loss) earnings per share $ (1,348,745) $ 8,085,503 Weighted-average common shares outstanding for basic and diluted (loss) earnings per share 63,027,246 50,369,350 (Loss) earnings per share: Basic and diluted (loss) earnings per share $ (0.02) $ 0.16 |
Abacus Settlements LLC - REVE_2
Abacus Settlements LLC - REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Disaggregation of Revenue | The disaggregation of the Company’s revenue by major sources is as follows: Three Months Ended March 31, 2024 March 31, 2023 Portfolio servicing revenue: Related party serving revenue $ 185,185 $ 213,447 Portfolio servicing revenue 32,750 89,424 Total portfolio servicing revenue 217,935 302,871 Active management revenue: Investment income from life insurance policies held using the investment method 500,000 8,392,334 Revenue from fee-based services and realized and unrealized gains from life insurance policies held using the fair value method 19,296,999 1,578,184 Total active management revenue 19,796,999 9,970,518 Origination revenue: Agent 557,500 $ — Broker 883,250 — Client direct 31,500 — Total origination revenue 1,472,250 — Total revenue $ 21,487,184 $ 10,273,389 |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Disaggregation of Revenue | The following table presents a disaggregation of Abacus’ revenue by major sources for three months ended March 31, 2023: Three Months Ended March 31, 2023 Agent $ 3,808,614 Broker 1,866,474 Client direct 624,898 Total $ 6,299,986 |
Abacus Settlements LLC - RELA_2
Abacus Settlements LLC - RELATED-PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Schedule of Related Party Transactions | A summary of origination transactions with the Nova Funds is presented below: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cost $ 685 $ — |
Abacus Settlements, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Schedule of Related Party Transactions | For three months ended March 31, 2023, revenue earned, and contracts originated are as follows: Three Months Ended March 31, 2023 Origination fee revenue $ 1,448,305 Transaction reimbursement revenue 65,628 Total $ 1,513,933 Cost $ 6,366,133 Face value 39,985,400 Total policies 34 Average Age 75 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS - Stock Options (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Stock-based awards vesting period | 3 years |
Stock-based awards expiration period | 10 years |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS - Concentrations (Details) - Customer Concentration Risk - Revenue Benchmark - Active management | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Customer 1 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 49% | 32% |
Customer 2 | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 35% |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Abacus Settlements | |
Business Acquisition [Line Items] | |
Enterprise value | $ 165.4 |
BUSINESS COMBINATION - Purchase
BUSINESS COMBINATION - Purchase Price Allocation (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 |
Business Acquisition [Line Items] | |||
Intangibles | $ 32,900,000 | ||
Goodwill | $ 140,287,000 | $ 140,287,000 | |
LMA and Abacus | |||
Business Acquisition [Line Items] | |||
Intangibles | $ 32,900,000 | ||
Goodwill | 140,287,000 | ||
Current Assets | 1,280,100 | ||
Non-Current Assets | 901,337 | ||
Deferred Tax Liabilities | (8,310,966) | ||
Accrued Expenses | (524,400) | ||
Other Liabilities | (1,171,739) | ||
Total Fair Value | $ 165,361,332 |
BUSINESS COMBINATION - Intangib
BUSINESS COMBINATION - Intangible Assets Acquired (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2024 |
Business Acquisition [Line Items] | ||
Intangibles | $ 32,900,000 | |
Trade Name | ||
Business Acquisition [Line Items] | ||
Intangibles | 900,000 | |
State Insurance Licenses | ||
Business Acquisition [Line Items] | ||
Intangibles | 2,700,000 | |
Customer Relationships - Agents | ||
Business Acquisition [Line Items] | ||
Intangibles | 12,600,000 | |
Customer Relationships - Financial Relationships | ||
Business Acquisition [Line Items] | ||
Intangibles | 11,000,000 | |
Internally Developed and Used Technology—APA | ||
Business Acquisition [Line Items] | ||
Intangibles | 1,600,000 | |
Internally Developed and Used Technology—Market Place | ||
Business Acquisition [Line Items] | ||
Intangibles | 100,000 | |
Non-Compete Agreements | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 4,000,000 | |
LMA and Abacus | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 32,900,000 | |
LMA and Abacus | Trade Name | ||
Business Acquisition [Line Items] | ||
Intangibles | 900,000 | |
LMA and Abacus | State Insurance Licenses | ||
Business Acquisition [Line Items] | ||
Intangibles | 2,700,000 | |
LMA and Abacus | Customer Relationships - Agents | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 12,600,000 | |
Useful Life | 5 years | |
LMA and Abacus | Customer Relationships - Financial Relationships | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 11,000,000 | |
Useful Life | 8 years | |
LMA and Abacus | Internally Developed and Used Technology—APA | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 1,600,000 | |
Useful Life | 2 years | |
LMA and Abacus | Internally Developed and Used Technology—Market Place | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 100,000 | |
Useful Life | 3 years | |
LMA and Abacus | Non-Compete Agreements | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 4,000,000 | |
Useful Life | 2 years |
BUSINESS COMBINATION - Pro Form
BUSINESS COMBINATION - Pro Forma Financial Information (Details) - LMA and Abacus | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Proforma revenue | $ 13,294,318 |
Proforma net income | $ 7,433,278 |
REVENUES - Disaggregated Revenu
REVENUES - Disaggregated Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Investment income from life insurance policies held using the investment method | $ 500,000 | $ 8,392,334 |
Revenue from fee-based services and policies held using the fair value method | 19,296,999 | 1,578,184 |
Active management revenue | 19,796,999 | 9,970,518 |
Total revenues | 21,487,184 | 10,273,389 |
Portfolio servicing revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 217,935 | 302,871 |
Portfolio servicing revenue | Related Party | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 185,185 | 213,447 |
Portfolio servicing revenue | Nonrelated Party | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 32,750 | 89,424 |
Origination fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,472,250 | 0 |
Origination fee revenue | Agent | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 557,500 | 0 |
Origination fee revenue | Broker | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 883,250 | 0 |
Origination fee revenue | Client direct | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 31,500 | $ 0 |
REVENUES - Contract Balances (D
REVENUES - Contract Balances (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities, deposits on pending settlements | $ 667,500 | $ 507,000 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue recognized | $ 507,000 |
Consolidation, Eliminations | |
Disaggregation of Revenue [Line Items] | |
Revenue recognized | $ (347,000) |
LIFE SETTLEMENT POLICIES - Narr
LIFE SETTLEMENT POLICIES - Narrative (Details) | Mar. 31, 2024 USD ($) insurance_contract | Dec. 31, 2023 USD ($) insurance_contract |
Investments, All Other Investments [Abstract] | ||
Number of life settlement policies | insurance_contract | 322 | 296 |
Number of life settlement policies accounted for under fair value method | insurance_contract | 314 | 287 |
Number of life settlement policies accounted for under investment method | insurance_contract | 8 | 9 |
Face value of policies held at fair value | $ 506,955,702 | $ 520,503,710 |
Life settlement policies, at fair value | 125,488,525 | 122,296,559 |
Face value of policies accounted for using investment method | 30,900,000 | 33,900,000 |
Life settlement policies, at cost | $ 1,434,444 | $ 1,697,178 |
LIFE SETTLEMENT POLICIES - Fair
LIFE SETTLEMENT POLICIES - Fair Value (Details) | Mar. 31, 2024 USD ($) insurance_contract | Dec. 31, 2023 USD ($) insurance_contract |
Policies | ||
0-1 | insurance_contract | 2 | |
1-2 | insurance_contract | 7 | |
2-3 | insurance_contract | 18 | |
3-4 | insurance_contract | 40 | |
4-5 | insurance_contract | 31 | |
Thereafter | insurance_contract | 216 | |
Policies | insurance_contract | 314 | 287 |
Face Value | ||
0-1 | $ 5,283,461 | |
1-2 | 11,082,062 | |
2-3 | 27,201,580 | |
3-4 | 69,698,534 | |
4-5 | 33,084,969 | |
Thereafter | 360,605,096 | |
Face Value | 506,955,702 | $ 520,503,710 |
Fair Value | ||
0-1 | 2,691,760 | |
1-2 | 5,314,074 | |
2-3 | 10,713,554 | |
3-4 | 31,456,621 | |
4-5 | 12,494,075 | |
Thereafter | 62,818,441 | |
Fair Value | $ 125,488,525 | $ 122,296,559 |
LIFE SETTLEMENT POLICIES - Inve
LIFE SETTLEMENT POLICIES - Investment Method (Details) | Mar. 31, 2024 USD ($) insurance_contract | Dec. 31, 2023 USD ($) insurance_contract |
Policies | ||
1-2 | insurance_contract | 1 | |
2-3 | insurance_contract | 2 | |
3-4 | insurance_contract | 1 | |
4-5 | insurance_contract | 2 | |
Thereafter | insurance_contract | 2 | |
Policies | insurance_contract | 8 | 9 |
Face Value | ||
1-2 | $ 500,000 | |
2-3 | 1,500,000 | |
3-4 | 8,000,000 | |
4-5 | 500,000 | |
Thereafter | 20,400,000 | |
Face Value | 30,900,000 | $ 33,900,000 |
Carrying Value | ||
1-2 | 329,714 | |
2-3 | 458,289 | |
3-4 | 86,859 | |
4-5 | 325,331 | |
Thereafter | 234,251 | |
Carrying Value | $ 1,434,444 | $ 1,697,178 |
LIFE SETTLEMENT POLICIES - Esti
LIFE SETTLEMENT POLICIES - Estimated Premiums (Details) | Mar. 31, 2024 USD ($) |
Investments, All Other Investments [Abstract] | |
2024 remaining | $ 66,151 |
2025 | 92,883 |
2026 | 72,923 |
2027 | 50,388 |
2027 | 32,736 |
Thereafter | 366,103 |
Total | $ 681,184 |
PROPERTY AND EQUIPMENT_NET (Det
PROPERTY AND EQUIPMENT—NET (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment—gross | $ 632,268 | $ 470,482 | |
Less: accumulated depreciation | (84,707) | (69,762) | |
Property and equipment—net | 547,561 | 400,720 | |
Depreciation expense | 14,945 | $ 1,043 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment—gross | 518,456 | 356,939 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment—gross | 91,125 | 91,125 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment—gross | $ 22,687 | $ 22,418 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Goodwill by Reportable Segments (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | $ 140,287,000 |
Goodwill at end of period | 140,287,000 |
Portfolio servicing | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | 0 |
Additions | 0 |
Goodwill at end of period | 0 |
Active management | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | 0 |
Additions | 0 |
Goodwill at end of period | 0 |
Originations | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | 140,287,000 |
Additions | 0 |
Goodwill at end of period | $ 140,287,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets Acquired (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 32,900 |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | 32,900 |
Trade Name | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | 900 |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | 900 |
State Insurance Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | 2,700 |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | 2,700 |
Customer Relationships - Agents | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 12,600 |
Useful Life | 5 years |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 12,600 |
Customer Relationships - Financial Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 11,000 |
Useful Life | 8 years |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 11,000 |
Internally Developed and Used Technology—APA | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 1,600 |
Useful Life | 2 years |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 1,600 |
Internally Developed and Used Technology—Market Place | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 100 |
Useful Life | 3 years |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 100 |
Non-Compete Agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 4,000 |
Useful Life | 2 years |
Indefinite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 4,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets and Accumulated Amortization (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Intangible Assets [Line Items] | |||
Gross Value | $ 29,300,000 | ||
Accumulated Amortization | (5,046,250) | ||
Net Book Value | 24,253,750 | ||
Intangible assets, net | 28,048,028 | $ 29,623,130 | |
Amortization expense | 1,667,109 | $ 0 | |
Other intangible assets | 194,278 | $ 87,297 | |
Trade Name | |||
Schedule of Intangible Assets [Line Items] | |||
Indefinite Lived Intangible Assets | 900,000 | ||
State Insurance Licenses | |||
Schedule of Intangible Assets [Line Items] | |||
Indefinite Lived Intangible Assets | 2,700,000 | ||
Finite-Lived Intangible Assets Excluding Other Insignificant Amount | Indefinite-Lived Intangible Assets Excluding Other Insignificant Amount | |||
Schedule of Intangible Assets [Line Items] | |||
Accumulated Amortization | (5,046,250) | ||
Gross Value | 32,900,000 | ||
Intangible assets, net | 27,853,750 | ||
Customer Relationships - Agents | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Value | 12,600,000 | ||
Accumulated Amortization | (1,890,000) | ||
Net Book Value | 10,710,000 | ||
Customer Relationships - Financial Relationships | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Value | 11,000,000 | ||
Accumulated Amortization | (1,031,250) | ||
Net Book Value | 9,968,750 | ||
Internally Developed and Used Technology—APA | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Value | 1,600,000 | ||
Accumulated Amortization | (600,000) | ||
Net Book Value | 1,000,000 | ||
Internally Developed and Used Technology—Market Place | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Value | 100,000 | ||
Accumulated Amortization | (25,000) | ||
Net Book Value | 75,000 | ||
Non-Compete Agreements | |||
Schedule of Intangible Assets [Line Items] | |||
Gross Value | 4,000,000 | ||
Accumulated Amortization | (1,500,000) | ||
Net Book Value | $ 2,500,000 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Annual Amortization (Details) | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 remaining | $ 5,046,250 |
2025 | 5,328,333 |
2026 | 3,911,667 |
2027 | 3,895,000 |
2028 | 2,635,000 |
Thereafter | 3,437,500 |
Net Book Value | $ 24,253,750 |
AVAILABLE-FOR-SALE SECURITIES_2
AVAILABLE-FOR-SALE SECURITIES, AT FAIR VALUE (Details) - USD ($) | 1 Months Ended | ||||||
Jan. 07, 2022 | Oct. 31, 2022 | Jan. 31, 2022 | Nov. 30, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | Oct. 03, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |||||||
Purchase of convertible promissory note | $ 250,000 | $ 500,000 | $ 250,000 | $ 250,000 | |||
Interest rate per annum | 8% | 6% | 8% | ||||
Equity financing threshold | $ 5,000,000 | $ 1,000,000 | |||||
Available-for-sale securities, at fair value | $ 1,145,630 | $ 1,105,935 | |||||
Accrued interest on available-for-sale securities | $ 145,630 |
OTHER INVESTMENTS AND OTHER N_3
OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS - Narrative (Details) | 1 Months Ended | 3 Months Ended | ||||||
Dec. 21, 2020 USD ($) shares | Jul. 22, 2020 USD ($) shares | Dec. 31, 2022 USD ($) payment shares | Mar. 31, 2024 USD ($) entity | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Conversion of Stock [Line Items] | ||||||||
Number of entities, convertible preferred stock ownership | entity | 2 | |||||||
Equity securities without readily determinable fair value, amount | $ 1,650,000 | $ 1,650,000 | ||||||
Impairment of investments | 0 | $ 0 | ||||||
Other assets | 1,501,036 | 998,945 | ||||||
Equity securities, at fair value | $ 3,513,964 | $ 2,348,998 | ||||||
Series Seed Preferred Units | ||||||||
Conversion of Stock [Line Items] | ||||||||
Units purchased (in shares) | shares | 224,551 | 119,760 | ||||||
Equity securities without readily determinable fair value, amount | $ 750,000 | $ 400,000 | $ 950,000 | $ 1,150,000 | $ 1,100,000 | |||
Number of monthly payments | payment | 8 | |||||||
Monthly payment amount | $ 50,000 | |||||||
Equity ownership percentage | 8.60% | |||||||
Series B-1 Preferred Stock | ||||||||
Conversion of Stock [Line Items] | ||||||||
Units purchased (in shares) | shares | 207,476 | |||||||
Equity securities without readily determinable fair value, amount | $ 500,000 | |||||||
Equity ownership percentage | 1% |
OTHER INVESTMENTS AND OTHER N_4
OTHER INVESTMENTS AND OTHER NONCURRENT ASSETS - Equity Securities, at Fair Value (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Equity securities, at fair value | $ 3,403,897 | $ 2,252,891 |
Noncurrent assets: | ||
Equity securities, at fair value | 110,067 | 96,107 |
Total | $ 3,513,964 | $ 2,348,998 |
CONSOLIDATION OF VARIABLE INT_2
CONSOLIDATION OF VARIABLE INTEREST ENTITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Variable Interest Entity [Line Items] | ||
Assets | $ 376,719,400 | $ 331,826,067 |
Liabilities | 211,378,628 | 167,755,991 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 104,415,574 | 77,132,592 |
Liabilities | $ 85,530,346 | $ 65,031,207 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) - segment | 6 Months Ended | 9 Months Ended |
Jun. 30, 2023 | Mar. 31, 2024 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 3 | |
Abacus Settlements | ||
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | |
Number of reportable segments | 1 | |
LMA | ||
Segment Reporting Information [Line Items] | ||
Number of operating segments | 2 | |
Number of reportable segments | 2 |
SEGMENT REPORTING - Revenue by
SEGMENT REPORTING - Revenue by Segment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Active management | $ 19,796,999 | $ 9,970,518 |
Total revenues | 21,487,184 | 10,273,389 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 25,039,138 | 10,273,389 |
Operating Segments | Portfolio servicing | ||
Segment Reporting Information [Line Items] | ||
Revenue | 217,935 | 302,871 |
Operating Segments | Active management | ||
Segment Reporting Information [Line Items] | ||
Active management | 19,796,999 | 9,970,518 |
Operating Segments | Originations | ||
Segment Reporting Information [Line Items] | ||
Revenue | 5,024,204 | 0 |
Intercompany Elimination | ||
Segment Reporting Information [Line Items] | ||
Total revenues | $ (3,551,954) | $ 0 |
SEGMENT REPORTING - Cost of Rev
SEGMENT REPORTING - Cost of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Total cost of revenue | $ 2,720,897 | $ 489,550 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total cost of revenue | 6,272,851 | 489,550 |
Operating Segments | Portfolio servicing | ||
Segment Reporting Information [Line Items] | ||
Total cost of revenue | 362,392 | 325,114 |
Operating Segments | Active management | ||
Segment Reporting Information [Line Items] | ||
Total cost of revenue | 958,472 | 164,436 |
Operating Segments | Originations | ||
Segment Reporting Information [Line Items] | ||
Total cost of revenue | 4,951,987 | 0 |
Intercompany Elimination | ||
Segment Reporting Information [Line Items] | ||
Total cost of revenue | $ (3,551,954) | $ 0 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Net Income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Total gross profit | $ 18,766,287 | $ 9,783,839 |
Sales and marketing | (1,929,944) | (729,004) |
General and administrative (including stock-based compensation) | (11,353,499) | (696,892) |
Depreciation and amortization expense | (1,682,054) | (1,043) |
Other (expense) income | (53,028) | (210,432) |
Gain on change in fair value of warrant liability | 946,960 | 0 |
Interest expense | (3,670,445) | (357,383) |
Interest income | 421,426 | 7,457 |
Gain (Loss) on change in fair value of debt | (2,712,627) | (953,433) |
Unrealized (loss) gain on investments | 1,164,966 | 125,220 |
Provision for income taxes | (1,173,513) | 656,467 |
Net income (loss) attributable to non-controlling interests | (73,274) | 460,707 |
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | (1,348,745) | 8,085,503 |
Portfolio servicing | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | (144,457) | (22,243) |
Active management | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | 18,838,527 | 9,806,082 |
Originations | ||
Segment Reporting Information [Line Items] | ||
Total gross profit | $ 72,217 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Other Commitments [Line Items] | ||
Other expense | $ 53,028 | $ 210,432 |
Expense Support Agreement | Variable Interest Entity, Not Primary Beneficiary | ||
Other Commitments [Line Items] | ||
Other expense | $ 0 | $ 29,721 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring Fair Value Measurements (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Assets: | ||
Life settlement policies | $ 125,488,525 | $ 122,296,559 |
Available-for-sale securities, at fair value | 1,145,630 | 1,105,935 |
Equity securities, at fair value | 3,513,964 | 2,348,998 |
Liabilities: | ||
Private placement warrants | 5,696,000 | 6,642,960 |
Fair Value, Recurring | ||
Assets: | ||
Life settlement policies | 125,488,525 | 122,296,559 |
Available-for-sale securities, at fair value | 1,145,630 | 1,105,935 |
Equity securities, at fair value | 3,513,964 | 2,348,998 |
Other assets | 0 | |
Total assets held at fair value | 130,148,119 | 125,751,492 |
Liabilities: | ||
Debt maturing within one year | 15,648,628 | 13,029,632 |
Long-term debt | 73,440,696 | 55,318,924 |
Private placement warrants | 5,696,000 | 6,642,960 |
Total liabilities held at fair value: | 94,785,324 | 74,991,516 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Life settlement policies | 0 | 0 |
Available-for-sale securities, at fair value | 0 | 0 |
Equity securities, at fair value | 3,513,964 | 2,348,998 |
Other assets | 0 | |
Total assets held at fair value | 3,513,964 | 2,348,998 |
Liabilities: | ||
Debt maturing within one year | 0 | 0 |
Long-term debt | 0 | 0 |
Private placement warrants | 0 | 0 |
Total liabilities held at fair value: | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Life settlement policies | 0 | 0 |
Available-for-sale securities, at fair value | 0 | 0 |
Equity securities, at fair value | 0 | 0 |
Other assets | 0 | |
Total assets held at fair value | 0 | 0 |
Liabilities: | ||
Debt maturing within one year | 0 | 0 |
Long-term debt | 0 | 0 |
Private placement warrants | 0 | 0 |
Total liabilities held at fair value: | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Life settlement policies | 125,488,525 | 122,296,559 |
Available-for-sale securities, at fair value | 1,145,630 | 1,105,935 |
Equity securities, at fair value | 0 | 0 |
Other assets | 0 | |
Total assets held at fair value | 126,634,155 | 123,402,494 |
Liabilities: | ||
Debt maturing within one year | 15,648,628 | 13,029,632 |
Long-term debt | 73,440,696 | 55,318,924 |
Private placement warrants | 5,696,000 | 6,642,960 |
Total liabilities held at fair value: | $ 94,785,324 | $ 74,991,516 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Jan. 07, 2022 | Oct. 31, 2022 | Jan. 31, 2022 | Nov. 30, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Life settlement policies, at cost | $ 1,434,444 | $ 1,697,178 | |||||
Total change in fair value of debt | (2,702,666) | ||||||
Gain (loss) on change in fair value of debt, included within other comprehensive income | 7,436 | ||||||
Gain (loss) on change in fair value of debt, included within equity of noncontrolling interests | 4,514 | ||||||
Loss on change in fair value of debt | 2,712,627 | $ 953,433 | |||||
Purchase of convertible promissory note | $ 250,000 | $ 500,000 | $ 250,000 | $ 250,000 | |||
Available-for-sale securities, at fair value | 1,145,630 | 1,105,935 | |||||
Private Placement Warrant | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Warrants outstanding | $ 8,900,000 | $ 8,900,000 | |||||
Number of securities called by each warrant (in shares) | 1 | ||||||
Exercise price of warrants (in dollars per share) | $ 11.50 | ||||||
Discount rate | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Life settlement policies, measurement input | 20% | ||||||
Discount rate | Discounted cash flow method | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Life settlement policies, measurement input | 20% | 21% |
FAIR VALUE MEASUREMENTS - Disco
FAIR VALUE MEASUREMENTS - Discount Rate Sensitivity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | ||
Life settlement policies, fair value, impact of +2% discount rate adjustment | $ 114,667,471 | |
Life settlement policies, change in fair value, impact of +2% discount rate adjustment | (10,821,054) | |
Life settlement policies, at fair value | 125,488,525 | $ 122,296,559 |
Life settlement policies, fair value, impact of -2% discount rate adjustment | 136,252,710 | |
Life settlement policies, change in fair value, impact of -2% discount rate adjustment | $ 10,764,185 |
FAIR VALUE MEASUREMENTS - Credi
FAIR VALUE MEASUREMENTS - Credit Exposure to Insurance Companies (Details) - Life Insurance Carrier Concentration Risk | 3 Months Ended |
Mar. 31, 2024 | |
Life Insurance Contract, Face Value | John Hancock Life Insurance Company (U.S.A.) | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Concentration risk percentage | 26% |
Life Insurance Contract, Face Value | Lincoln National Life Insurance Company | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Concentration risk percentage | 7% |
Life Insurance Contract, Fair Value | John Hancock Life Insurance Company (U.S.A.) | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Concentration risk percentage | 16% |
Life Insurance Contract, Fair Value | Lincoln National Life Insurance Company | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Concentration risk percentage | 10% |
FAIR VALUE MEASUREMENTS - Life
FAIR VALUE MEASUREMENTS - Life Insurance Policies (Details) - Life Insurance Policies | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value at beginning of period | $ 122,296,559 |
Policies purchased | 40,440,083 |
Matured/sold policies | (42,538,671) |
Realized gain on matured/sold policies | 9,478,212 |
Premiums paid | 2,431,040 |
Unrealized gain on held policies | 5,290,554 |
Change in estimated fair value | 12,337,726 |
Fair value at end of period | $ 125,488,525 |
FAIR VALUE MEASUREMENTS - Issue
FAIR VALUE MEASUREMENTS - Issued Notes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at beginning of period | $ 68,348,556 | |
Loss on change in fair value of debt | 2,712,627 | $ 953,433 |
Unrealized loss on change in fair value (credit-adjusted) included in OCI | (16,007) | |
Unrealized gain on change in fair value (credit-adjusted) included in equity of NCI | 6,046 | |
Change in estimated fair value of debt | 2,702,666 | |
Other | (22,155) | |
Fair value at end of period | $ 89,089,324 |
FAIR VALUE MEASUREMENTS - Assum
FAIR VALUE MEASUREMENTS - Assumptions (Details) - Private Placement Warrant | Mar. 31, 2024 |
Risk-free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.0409 |
Term to expiration | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 5 |
Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 11.50 |
Common Stock Price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 10.03 |
Dividend Yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0 |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less current portion of long-term debt | $ (15,648,628) | $ (13,029,632) |
Cost | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 186,160,119 | |
Total debt | 183,435,411 | 138,820,026 |
Less current portion of long-term debt | (13,363,663) | (11,440,236) |
Total long-term debt | 170,071,748 | 127,379,790 |
Cost | Market-indexed notes | LMATT Series 2024, Inc. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 10,031,919 | 9,124,944 |
Cost | Market-indexed notes | LMATT Series 2.2024, Inc. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 3,331,744 | 2,981,480 |
Cost | Market-indexed notes | LMATT Growth & Income Series 1.2026, Inc | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 542,618 | 492,582 |
Cost | Secured borrowing | LMA Income Series, LP | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 22,485,826 | 22,368,209 |
Cost | Secured borrowing | LMA Income Series II, LP | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 50,323,493 | 32,380,852 |
Cost | Unsecured borrowing | ||
Debt Instrument [Line Items] | ||
Deferred issuance costs and discounts | (2,724,708) | (1,831,910) |
Cost | Unsecured borrowing | Fixed Rate Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 60,650,000 | 35,650,000 |
Cost | Unsecured borrowing | SPV Purchase and Sale Note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 27,341,832 | 26,538,004 |
Cost | Unsecured borrowing | Sponsor PIK Note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 11,452,687 | 11,115,865 |
Fair value | ||
Debt Instrument [Line Items] | ||
Total debt | 185,809,135 | 139,820,514 |
Less current portion of long-term debt | (15,648,628) | (13,029,632) |
Total long-term debt | 170,160,507 | 126,790,882 |
Fair value | Market-indexed notes | LMATT Series 2024, Inc. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 11,221,852 | 9,477,780 |
Fair value | Market-indexed notes | LMATT Series 2.2024, Inc. | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 4,426,776 | 3,551,852 |
Fair value | Market-indexed notes | LMATT Growth & Income Series 1.2026, Inc | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 631,377 | 569,862 |
Fair value | Secured borrowing | LMA Income Series, LP | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 22,485,826 | 22,368,209 |
Fair value | Secured borrowing | LMA Income Series II, LP | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 50,323,493 | 32,380,852 |
Fair value | Unsecured borrowing | ||
Debt Instrument [Line Items] | ||
Deferred issuance costs and discounts | (2,724,708) | (1,831,910) |
Fair value | Unsecured borrowing | Fixed Rate Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 60,650,000 | 35,650,000 |
Fair value | Unsecured borrowing | SPV Purchase and Sale Note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 27,341,832 | 26,538,004 |
Fair value | Unsecured borrowing | Sponsor PIK Note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 11,452,687 | $ 11,115,865 |
LONG-TERM DEBT - Fixed Rate Sen
LONG-TERM DEBT - Fixed Rate Senior Unsecured Notes (Details) - 9.875% Fixed Rate Senior Notes due 2028 - Unsecured borrowing - USD ($) | Nov. 10, 2023 | Feb. 15, 2024 |
Debt Instrument [Line Items] | ||
Face amount | $ 35,650,000 | $ 25,000,000 |
Interest rate (as a percent) | 9.875% | 9.875% |
Redemption percentage | 100% |
LONG-TERM DEBT - LMATT Series 2
LONG-TERM DEBT - LMATT Series 2024, Inc. Market-Indexed Notes (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2022 |
Debt Instrument [Line Items] | |||
Assets | $ 376,719,400 | $ 331,826,067 | |
Cost | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 186,160,119 | ||
LMATT Series 2024, Inc. | Market-indexed notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 10,166,900 | ||
Market downturn protection percentage | 40% | ||
Note reduction ratio for losses below threshold | 100% | ||
LMATT Series 2024, Inc. | Market-indexed notes | Asset Pledged as Collateral | |||
Debt Instrument [Line Items] | |||
Assets | 12,413,273 | ||
LMATT Series 2024, Inc. | Market-indexed notes | Cost | |||
Debt Instrument [Line Items] | |||
Long-term debt, before market index return | 8,816,900 | ||
Long-term debt, gross | 10,031,919 | 9,124,944 | |
LMATT Series 2024, Inc. | Market-indexed notes | Cost | LMA | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 200,000 | ||
LMATT Series 2024, Inc. | Market-indexed notes | Fair value | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 11,221,852 | $ 9,477,780 |
LONG-TERM DEBT - LMATT Series_2
LONG-TERM DEBT - LMATT Series 2.2024, Inc. Market-Indexed Notes (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Sep. 16, 2022 |
Debt Instrument [Line Items] | |||
Assets | $ 376,719,400 | $ 331,826,067 | |
LMATT Series 2.2024, Inc. | Market-indexed notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 2,333,391 | ||
Upside performance participation cap | 120% | ||
Market downturn protection percentage | 20% | ||
Note reduction ratio for losses below threshold | 100% | ||
LMATT Series 2.2024, Inc. | Market-indexed notes | Asset Pledged as Collateral | |||
Debt Instrument [Line Items] | |||
Assets | 3,903,470 | ||
LMATT Series 2.2024, Inc. | Market-indexed notes | Fair value | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 4,426,776 | $ 3,551,852 | |
LMATT Series 2.2024, Inc. | |||
Debt Instrument [Line Items] | |||
Ownership percentage | 100% |
LONG-TERM DEBT - LMATT Growth a
LONG-TERM DEBT - LMATT Growth and Income Series 1.2026, Inc. Market-Indexed Notes (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Sep. 16, 2022 |
Debt Instrument [Line Items] | |||
Assets | $ 376,719,400 | $ 331,826,067 | |
LMATT Growth & Income Series 1.2026, Inc | Market-indexed notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 400,000 | ||
Upside performance participation cap | 140% | ||
Market downturn protection percentage | 10% | ||
Note reduction ratio for losses below threshold | 100% | ||
Dividend percentage | 4% | ||
LMATT Growth & Income Series 1.2026, Inc | Market-indexed notes | Asset Pledged as Collateral | |||
Debt Instrument [Line Items] | |||
Assets | 515,297 | ||
LMATT Growth & Income Series 1.2026, Inc | Market-indexed notes | Fair value | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 631,377 | $ 569,862 | |
LMATT Growth & Income Series 1.2026, Inc | |||
Debt Instrument [Line Items] | |||
Ownership percentage | 100% |
LONG-TERM DEBT - LMA Income Ser
LONG-TERM DEBT - LMA Income Series, LP and LMA Income Series, GP LLC Secured Borrowing (Details) | 3 Months Ended | 12 Months Ended | ||
Sep. 02, 2022 option | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||
Non-cash interest expense | $ 1,258,266 | $ 0 | ||
LMA Income Series, LP | Secured borrowing | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 3 years | |||
Debt Instrument extension options | option | 2 | |||
Debt instrument extension term | 1 year | |||
Dividend percentage | 6.50% | |||
Return rate in excess of minimum internal rate of return | 25% | |||
Minimum internal rate of return threshold | 6.50% | |||
Internal rate of return cap | 9% | |||
Net internal rate of return at cap | 15% | |||
Non-cash interest expense | 596,381 | $ 478,765 | ||
LMA Income Series, LP | Secured borrowing | Fair value | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 22,485,826 | $ 22,368,209 | ||
LMA Income Series, LP | Secured borrowing | General Partner | ||||
Debt Instrument [Line Items] | ||||
Return rate in excess of minimum internal rate of return | 75% | |||
Minimum internal rate of return threshold | 6.50% | |||
LMA Income Series, LP | Secured borrowing | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Internal rate of return cap | 15% | |||
Return rate in excess of capped internal rate of return threshold | 100% |
LONG-TERM DEBT - LMA Income S_2
LONG-TERM DEBT - LMA Income Series II, LP and LMA Income Series II, GP LLC Secured Borrowing (Details) - LMA Income Series II, LP - Secured borrowing | Jan. 31, 2023 USD ($) option | Apr. 01, 2024 | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Debt Instrument [Line Items] | ||||
Debt instrument term | 3 years | |||
Debt Instrument extension options | option | 2 | |||
Debt instrument extension term | 1 year | |||
Fair value | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 50,323,493 | $ 32,380,852 | ||
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Preferred return amount increase | 0.50% | |||
Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 17,942,641 | |||
General Partner | ||||
Debt Instrument [Line Items] | ||||
Dividend percentage | 100% | |||
Capital Commitment Threshold One | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Dividend percentage | 7.50% | |||
Capital Commitment Threshold One | Maximum | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Capital commitment threshold to determine dividend rate | $ 500,000 | |||
Capital Commitment Threshold Two | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Dividend percentage | 7.75% | |||
Capital Commitment Threshold Two | Maximum | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Capital commitment threshold to determine dividend rate | $ 1,000,000 | |||
Capital Commitment Threshold Two | Minimum | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Capital commitment threshold to determine dividend rate | $ 500,000 | |||
Capital Commitment Threshold Three | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Dividend percentage | 8% | |||
Capital Commitment Threshold Three | Minimum | Limited Partner | ||||
Debt Instrument [Line Items] | ||||
Capital commitment threshold to determine dividend rate | $ 1,000,000 |
LONG-TERM DEBT - Sponsor PIK No
LONG-TERM DEBT - Sponsor PIK Note (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | ||||
Non-cash interest expense | $ 1,258,266 | $ 0 | ||
Unsecured borrowing | Sponsor PIK Note | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 10,471,648 | |||
Interest rate (as a percent) | 12% | |||
Non-cash interest expense | $ 981,039 | $ 644,217 |
LONG-TERM DEBT - SPV Purchase a
LONG-TERM DEBT - SPV Purchase and Sale and SPV Investment Facility (Details) | 3 Months Ended | 12 Months Ended | |
Jul. 05, 2023 USD ($) extension | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Policy APA | |||
Debt Instrument [Line Items] | |||
Insurance policies fair value | $ 10,000,000 | ||
SPV Investment Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Face amount | $ 25,000,000 | ||
Interest rate (as a percent) | 12% | ||
Debt instrument term | 3 years | ||
Number of extensions | extension | 2 | ||
Debt instrument extension term | 1 year | ||
Interest expense on outstanding principal balance | $ 2,341,832 | $ 1,538,004 | |
SPV Investment Facility | Line of Credit | Secured borrowing | |||
Debt Instrument [Line Items] | |||
Face amount | $ 15,000,000 |
LONG-TERM DEBT - Principal Paym
LONG-TERM DEBT - Principal Payments by Year for Long-Term Debt (Details) - Cost - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
2024 remaining | $ 13,363,663 | |
2025 | 22,485,826 | |
2026 | 78,207,943 | |
2027 | 0 | |
2028 | 72,102,687 | |
Thereafter | 0 | |
Total | 186,160,119 | |
Market-indexed notes | LMATT Series 2024, Inc. | ||
Debt Instrument [Line Items] | ||
2024 remaining | 10,031,919 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 10,031,919 | $ 9,124,944 |
Market-indexed notes | LMATT Series 2.2024, Inc. | ||
Debt Instrument [Line Items] | ||
2024 remaining | 3,331,744 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 3,331,744 | 2,981,480 |
Market-indexed notes | LMATT Growth & Income Series 1.2026, Inc | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 0 | |
2026 | 542,618 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 542,618 | 492,582 |
Secured borrowing | LMA Income Series, LP | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 22,485,826 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 22,485,826 | 22,368,209 |
Secured borrowing | LMA Income Series II, LP | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 0 | |
2026 | 50,323,493 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 50,323,493 | 32,380,852 |
Unsecured borrowing | 9.875% Fixed Rate Senior Notes due 2028 | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 60,650,000 | |
Thereafter | 0 | |
Total | 60,650,000 | 35,650,000 |
Unsecured borrowing | SPV Investment Facility | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 0 | |
2026 | 27,341,832 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total | 27,341,832 | 26,538,004 |
Unsecured borrowing | Sponsor PIK Note | ||
Debt Instrument [Line Items] | ||
2024 remaining | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 11,452,687 | |
Thereafter | 0 | |
Total | $ 11,452,687 | $ 11,115,865 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) | 2 Months Ended | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) vote $ / shares shares | Mar. 31, 2024 USD ($) vote $ / shares shares | Mar. 31, 2023 USD ($) | Jan. 18, 2024 $ / shares | Dec. 31, 2023 USD ($) $ / shares shares | Aug. 30, 2022 USD ($) $ / shares | |
Class of Warrant or Right [Line Items] | ||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |||
Number of votes per share | vote | 1 | 1 | ||||
Common stock, shares issued (in shares) | 63,776,058 | 63,776,058 | 63,388,823 | |||
Common stock, shares outstanding (in shares) | 62,997,292 | 62,997,292 | 63,388,823 | |||
Treasury stock (in shares) | 778,766 | 778,766 | 146,650 | |||
Proceeds from warrant exercises | $ | $ 3,610,253 | $ 0 | ||||
Prepaid expenses and other current assets | $ | $ 2,037,753 | $ 2,037,753 | $ 699,127 | |||
Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants outstanding (in shares) | 16,862,749 | 16,862,749 | ||||
Number of securities called by each warrant (in shares) | 1 | 1 | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | |||
Warrants term | 5 years | 5 years | ||||
Redemption price per warrant (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Warrant redemption notice period | 30 days | |||||
Common stock price threshold (in dollars per share) | $ / shares | 18 | $ 18 | ||||
Trading days | 20 days | |||||
Trading day period | 30 days | |||||
Common stock price threshold for redemption for common stock (in dollars per share) | $ / shares | $ 10 | $ 10 | ||||
Warrants outstanding | $ | $ 4,730,000 | |||||
Warrant outstanding fair value per share (in dollars per share) | $ / shares | $ 0.274 | |||||
Proceeds from warrant exercises | $ | $ 3,610,253 | |||||
Prepaid expenses and other current assets | $ | $ 842,950 | $ 842,950 | ||||
Number of exercised warrants (in shares) | 387,235 | 387,235 | ||||
Public Warrants | Binomial Lattice Model | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants term | 5 years | 5 years | ||||
Public Warrants | Risk-free interest rate | Binomial Lattice Model | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.0409 | 0.0409 | ||||
Public Warrants | Exercise price | Binomial Lattice Model | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 11.50 | 11.50 | ||||
Public Warrants | Common Stock Price | Binomial Lattice Model | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 10.03 | 10.03 | ||||
LMA | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exchange ratio | 0.8 | 0.8 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchase Program (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 11, 2023 | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 31, 2024 | Mar. 31, 2024 | |
Equity [Abstract] | |||||||
Stock repurchase program authorized amount | $ 15,000,000 | ||||||
Stock repurchase program period | 18 months | ||||||
Amount remaining available for repurchase under stock repurchase program | $ 6,192,546 | $ 6,192,546 | $ 6,192,546 | ||||
Stock Repurchase Program [Roll Forward] | |||||||
Beginning balance, Treasury stock (in shares) | 146,650 | 146,650 | |||||
Total Number of Shares Purchased (in shares) | 114,400 | 200,916 | 316,800 | ||||
Ending balance, Treasury stock (in shares) | 778,766 | 146,650 | 778,766 | 778,766 | |||
Cost of Shares Repurchased, Beginning of Period | $ 1,283,062 | $ 1,283,062 | |||||
Cost of Shares Repurchased | $ 1,379,457 | $ 2,480,383 | $ 3,664,552 | 7,524,392 | |||
Cost of Shares Repurchased, End of Period | $ 8,807,454 | $ 1,283,062 | $ 8,807,454 | $ 8,807,454 | |||
Average Price Paid per Share (in dollars per share) | $ 11.50 | $ 8.82 | $ 12.06 | $ 12.35 | $ 11.61 |
STOCK-BASED COMPENSATION - Long
STOCK-BASED COMPENSATION - Long-term Incentive Plan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Feb. 29, 2024 | Oct. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Feb. 01, 2024 | |
Long-term Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 243,228 | 3,164,991 | |||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Issuance of restricted stock units (in shares) | 108,000 | 2,468,500 | |||
Unamortized stock-based compensation expense weighted-average remaining contractual life | 3 years | ||||
Stock-based awards vesting period | 3 years | ||||
Vesting period, employment termination | 12 months | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Share-Based Payment Arrangement, Tranche One | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 10% | ||||
Stock-based awards vesting period | 12 months | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Share-Based Payment Arrangement, Tranche One | Pre-Merger Employees | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 10% | ||||
Stock-based awards vesting period | 9 months | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Share-Based Payment Arrangement, Tranche Two | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 90% | ||||
Stock-based awards vesting period | 36 months | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Share-Based Payment Arrangement, Tranche Two | Pre-Merger Employees | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Vesting percentage | 90% | ||||
Stock-based awards vesting period | 33 months | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Minimum | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Service period | 1 year | ||||
Vesting percentage, employment termination | 10% | ||||
Restricted Stock Units (RSUs) | Long-term Incentive Plan | Maximum | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Service period | 3 years | ||||
Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based awards vesting period | 3 years | ||||
Stock-based awards expiration period | 10 years | ||||
Stock Options | Long-term Incentive Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Issuance of restricted stock units (in shares) | 345,263 | ||||
Stock-based awards vesting period | 3 years | ||||
Stock-based awards expiration period | 10 years | ||||
Restricted Stock Units (RSUs) And Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Unamortized stock-based compensation expense weighted-average remaining contractual life | 2 years 9 months 18 days | ||||
Stock-based compensation | $ 1,509,739 | $ 0 | |||
Unamortized stock-based compensation expense for unvested stock | 14,781,400 | ||||
Restricted Stock Units (RSUs) And Stock Options | Cost of Sales | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation | 322,607 | ||||
Restricted Stock Units (RSUs) And Stock Options | General and Administrative Expense | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock-based compensation | $ 1,187,132 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Number of Shares | |
Outstanding at beginning of period (in shares) | 2,429,500 |
Granted (in shares) | 108,000 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 2,537,500 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 6.16 |
Granted (in dollars per share) | $ / shares | 12.37 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 6.42 |
CEO Restricted Stock | |
Number of Shares | |
Outstanding at beginning of period (in shares) | 4,569,922 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 4,569,922 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 10.03 |
Granted (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 10.03 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions and Fair Value of Options (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Dividend yield | 0% |
Expected volatility | 23% |
Risk-free interest rate | 3.98% |
Expected option life | 5 years 9 months 21 days |
Weighted average fair value of options (in dollars per share) | $ 3.91 |
STOCK-BASED COMPENSATION - Comm
STOCK-BASED COMPENSATION - Common Stock Options (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Options | |
Options outstanding at beginning of period (in shares) | 0 |
Granted (in shares) | 345,263 |
Exercised (in shares) | 0 |
Expired (in shares) | 0 |
Options exercisable at end of period (in shares) | 345,263 |
Weighted Average Exercise Price | |
Options outstanding at beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 3.91 |
Options exercisable at end of period (in dollars per share) | $ / shares | $ 3.91 |
STOCK-BASED COMPENSATION - CEO
STOCK-BASED COMPENSATION - CEO Restriction Agreement (Details) - CEO Restricted Stock - USD ($) | 3 Months Ended | |
Apr. 21, 2023 | Mar. 31, 2024 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares authorized (in shares) | 4,569,922 | |
Unamortized stock-based compensation expense for unvested stock | $ 32,085,422 | |
Unamortized stock-based compensation expense weighted-average remaining contractual life | 1 year 9 months 18 days | |
Share-Based Payment Arrangement, Tranche One | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Vesting percentage | 50% | |
Stock-based awards vesting period | 25 months | |
Share-Based Payment Arrangement, Tranche Two | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Vesting percentage | 50% | |
Stock-based awards vesting period | 30 months |
STOCK-BASED COMPENSATION - CE_2
STOCK-BASED COMPENSATION - CEO Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CEO Restricted Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock-based compensation | $ 4,583,632 | $ 0 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Postemployment Benefits [Abstract] | ||
Maximum annual contributions (as a percent) | 100% | |
Employer match (as a percent) | 4% | |
Benefit plan expense | $ 108,816 | $ 12,240 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 1,173,513 | $ (656,467) |
Effective tax rate percentage | 1,151% | (9.40%) |
RELATED-PARTY TRANSACTIONS - Na
RELATED-PARTY TRANSACTIONS - Narrative (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Jul. 05, 2023 | Jun. 30, 2023 | |
SPV Investment Facility | Line of Credit | |||||
Related Party Transaction [Line Items] | |||||
Face amount | $ 25,000,000 | ||||
Sponsor PIK Note | Unsecured borrowing | |||||
Related Party Transaction [Line Items] | |||||
Face amount | $ 10,471,648 | ||||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Other current liabilities | $ 5,236 | $ 5,236 | |||
Other receivables | 760,364 | 1,007,528 | |||
Affiliated Entity | Nova Funds | |||||
Related Party Transaction [Line Items] | |||||
Revenue | 185,185 | $ 213,447 | |||
Affiliated Entity | Expense Reimbursements | Nova Funds | |||||
Related Party Transaction [Line Items] | |||||
Accounts receivable | 215,033 | 79,509 | |||
Former Members | |||||
Related Party Transaction [Line Items] | |||||
Other current liabilities | 1,159,712 | $ 1,159,712 | 1,159,712 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Accounts receivable | $ 215,033 | $ 79,509 | |||
Related Party | Nova Funds | |||||
Related Party Transaction [Line Items] | |||||
Origination revenue percent | 2% | ||||
Origination revenue | $ 20,000 | ||||
Related Party | Service Fee Agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction rate | 0.50% | ||||
Related Party | SPV Investment Facility | Line of Credit | |||||
Related Party Transaction [Line Items] | |||||
Face amount | $ 27,341,832 | ||||
Related Party | Sponsor PIK Note | Unsecured borrowing | |||||
Related Party Transaction [Line Items] | |||||
Face amount | $ 11,452,687 |
RELATED-PARTY TRANSACTIONS - Re
RELATED-PARTY TRANSACTIONS - Revenue Earned and Contracts Originated (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Nova Funds | Related Party | ||
Related Party Transaction [Line Items] | ||
Origination expenses for life settlement policies | $ 685 | $ 0 |
LEASES - ROU Assets and Lease L
LEASES - ROU Assets and Lease Liabilities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Leases [Abstract] | |||
ROU assets obtained in exchange for new lease liabilities | $ 359,352 | $ 0 | |
Assets: | |||
Operating lease right-of-use assets | 2,182,681 | $ 1,893,659 | |
Liabilities: | |||
Operating lease liability, current | 232,138 | 118,058 | |
Operating lease liability, non-current | 2,028,959 | 1,796,727 | |
Total lease liability | $ 2,261,097 | $ 1,914,785 |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating lease cost | $ 121,833 | $ 12,471 |
Variable lease cost | 20,769 | 1,221 |
Total lease cost | $ 142,602 | $ 13,692 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 85,314 | $ 12,279 |
ROU assets obtained in exchange for new lease liabilities | $ 359,352 | $ 0 |
LEASES - Lease Terms and Discou
LEASES - Lease Terms and Discount Rates (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 5 years 9 months 3 days | 1 year 4 months 2 days |
Weighted-average discount rate | 9.67% | 3.36% |
LEASES - Future Minimum Noncanc
LEASES - Future Minimum Noncancellable Lease Payments (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Remaining of 2024 | $ 95,359 | |
2025 | 553,953 | |
2026 | 570,602 | |
2027 | 587,694 | |
2028 | 605,268 | |
Thereafter | 623,490 | |
Total operating lease payments (undiscounted) | 3,036,366 | |
Less: Imputed interest | (775,269) | |
Lease liability as of March 31, 2024 | $ 2,261,097 | $ 1,914,785 |
(LOSS) EARNINGS PER SHARE - Bas
(LOSS) EARNINGS PER SHARE - Basic and Diluted (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Earnings Per Share [Abstract] | |||
Net (loss) income attributable to common stockholders for basic (loss) earnings per share | $ (1,348,745) | $ 8,085,503 | |
Net (loss) income attributable to common stockholders for diluted (loss) earnings per share | $ (1,348,745) | $ 8,085,503 | |
Weighted-average common shares outstanding for basic (loss) earnings per share (in shares) | [1] | 63,027,246 | 50,369,350 |
Weighted-average common shares outstanding for diluted (loss) earnings per share (in shares) | [1] | 63,027,246 | 50,369,350 |
(Loss) earnings per share: | |||
Basic (loss) earnings per share (in dollars per share) | $ (0.02) | $ 0.16 | |
Diluted (loss) earnings per share (in dollars per share) | $ (0.02) | $ 0.16 | |
[1]The 2023 number of shares outstanding and their par value have been retrospectively recast for all prior periods presented to reflect the par value of the outstanding stock of Abacus Life, Inc. as a result of the Business Combination. |
Abacus Settlements LLC - SUMM_2
Abacus Settlements LLC - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Abacus Settlements, LLC | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Concentration Risk [Line Items] | |
Advertising expense | $ 374,371 |
Revenue Benchmark | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 24% |
Abacus Settlements LLC - SEGM_2
Abacus Settlements LLC - SEGMENT REPORTING (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Abacus Settlements, LLC | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 1 |
Abacus Settlements LLC - REVE_3
Abacus Settlements LLC - REVENUE (Details) - Abacus Settlements, LLC | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 6,299,986 |
Agent | |
Disaggregation of Revenue [Line Items] | |
Revenue | 3,808,614 |
Broker | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,866,474 |
Client direct | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 624,898 |
Abacus Settlements LLC - INCO_2
Abacus Settlements LLC - INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Contingency [Line Items] | ||
Income tax expense (benefit) | $ 1,173,513 | $ (656,467) |
Effective tax rate percentage | 1,151% | (9.40%) |
Abacus Settlements, LLC | ||
Income Tax Contingency [Line Items] | ||
Income tax expense (benefit) | $ 2,289 | |
Effective tax rate percentage | (0.35%) |
Abacus Settlements LLC - RETI_2
Abacus Settlements LLC - RETIREMENT PLAN (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Abacus Settlements, LLC | |
Defined Contribution Plan Disclosure [Line Items] | |
Percent of employees gross pay (as a percent) | 4% |
Abacus Settlements LLC - RELA_3
Abacus Settlements LLC - RELATED-PARTY TRANSACTIONS - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) insurance_contract | |
Related Party Transaction [Line Items] | ||
Total cost of revenue | $ 2,720,897 | $ 489,550 |
Related Party | ||
Related Party Transaction [Line Items] | ||
Total cost of revenue | $ 685 | 0 |
Related Party | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Origination revenue percent | 2% | |
Origination revenue | $ 20,000 | |
Affiliated Entity | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Revenue | $ 185,185 | 213,447 |
Abacus Settlements, LLC | ||
Related Party Transaction [Line Items] | ||
Revenue | 6,299,986 | |
Total cost of revenue | 4,395,323 | |
Abacus Settlements, LLC | Related Party | ||
Related Party Transaction [Line Items] | ||
Revenue | 4,736,336 | |
Total cost of revenue | $ 3,165,707 | |
Abacus Settlements, LLC | Related Party | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Total policies | insurance_contract | 34 | |
Face value | $ 39,985,400 | |
Origination revenue percent | 2% | |
Origination revenue | $ 20,000 | |
Revenue | 1,513,933 | |
Abacus Settlements, LLC | Related Party | LMA | ||
Related Party Transaction [Line Items] | ||
Other assets | 25,607 | |
Abacus Settlements, LLC | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Revenue | 3,222,402 | |
Total cost of revenue | 2,397,402 | |
Abacus Settlements, LLC | Affiliated Entity | LMA | ||
Related Party Transaction [Line Items] | ||
Revenue | 2,885,902 | |
Total cost of revenue | $ 2,115,902 | |
Abacus Settlements, LLC | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 11% |
Abacus Settlements LLC - RELA_4
Abacus Settlements LLC - RELATED-PARTY TRANSACTIONS - Revenue Earned and Contracts Originated (Details) | 3 Months Ended | |
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) insurance_contract | |
Related Party | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Cost | $ 685 | $ 0 |
Abacus Settlements, LLC | ||
Related Party Transaction [Line Items] | ||
Revenue | 6,299,986 | |
Abacus Settlements, LLC | Related Party | ||
Related Party Transaction [Line Items] | ||
Revenue | 4,736,336 | |
Abacus Settlements, LLC | Related Party | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Revenue | 1,513,933 | |
Cost | 6,366,133 | |
Face value | $ 39,985,400 | |
Total policies | insurance_contract | 34 | |
Average Age | 75 years | |
Abacus Settlements, LLC | Related Party | Origination fee revenue | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Revenue | $ 1,448,305 | |
Abacus Settlements, LLC | Related Party | Transaction reimbursement revenue | Nova Funds | ||
Related Party Transaction [Line Items] | ||
Revenue | $ 65,628 |