Filed Pursuant to Rule 424(b)(3)
Registration No. 333-274553

PROSPECTUS

$31,000,000

9.875% Fixed Rate Senior Notes due 2028

Abacus Life, Inc., a Delaware corporation (“Abacus” or the “Company”), is offering $31,000,000 aggregate principal amount of Fixed Rate Senior Notes (the “notes”). The notes will bear interest at the rate of 9.875% per annum, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, beginning on February 15, 2024 and ending on the maturity date. The notes will mature on November 15, 2028 (the “maturity date”).

The Company may, at its option, redeem the notes in whole or in part at any time or from time to time on or after February 15, 2027 at a redemption price of 100% of the outstanding principal amount of the notes to be redeemed plus accrued and unpaid interest payments otherwise payable thereon for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption as further described under “Description of the Notes—Optional Redemption.” In addition, each holder of the notes may require the Company to repurchase all or a portion of such holder’s notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of repurchase as further described under “Description of the Notes-Offer to Repurchase Upon a Change of Control Repurchase Event.” The notes will not be entitled to any sinking fund.

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 (including the Company’s $10.5 million Amended and Restated Unsecured Senior Promissory Note, dated as of July 5, 2023). Because the notes will not be secured by any of the Company’s assets, they will be effectively subordinated to any future secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness. The notes will be structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries because the notes will be obligations exclusively of the Company and will not be guaranteed by any of the Company’s subsidiaries.

The notes will be issued only in registered book-entry form, in minimum denominations of $25 and integral multiples of $25 in excess thereof. The Company intends to list the notes on the Nasdaq Global Market^® (“NASDAQ”) within 30 days of the original issue date under the trading symbol “ABLLL.” Currently, there is no public market for the notes and there can be no assurance that one will develop.

Investing in the notes involves risks. See “Risk Factors” beginning on page 10 of this prospectus for a discussion of risks that you should consider in connection with an investment in the notes.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes nor have any of the foregoing authorities determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Note			Total(2)
Price to Public(1)	$	25.00		$	31,000,000
Underwriting discount		3.15	%	$	976,500
Proceeds, before expenses, to the Company	$	24.21		$	30,023,500

⁽¹⁾  Plus accrued interest, if any, from November 10, 2023.

⁽²⁾  We have granted the underwriters an option to purchase up to an additional $4,650,000 aggregate principal amount of the notes, solely to cover overallotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total public offering price will be $35,650,000, the total underwriting discounts and commissions paid by us will be $1,122,975, and total proceeds, before expenses, to us will be $34,527,025.

The underwriters expect to deliver the notes in book-entry only form through the facilities of The Depository Trust Company on or about November 10, 2023, which is the fifth business day following the date of this Prospectus.

Joint Book Running Managers

Piper Sandler Ladenburg Thalmann InspereX

Co-Manager

A.G.P.

The date of this prospectus is November 3, 2023

Neither we nor the underwriters have authorized any other person to provide you with any information other than that contained or incorporated by reference in this prospectus. Neither we nor the underwriters take any responsibility for, or provide any assurance as to the reliability of, any other information that others may give you.

We are not, and the underwriters are not, making an offer to sell the notes in any jurisdiction where the offer or sale is not permitted. This prospectus does not constitute an offer of, or an invitation on our behalf or on behalf of the underwriters to subscribe for and purchase, any securities, and may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. You should assume that the information contained in this prospectus is accurate only as of the date on the front of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

TABLE OF CONTENTS

Prospectus

INFORMATION ABOUT THIS PROSPECTUS	1
FORWARD-LOOKING STATEMENTS	2
SUMMARY	3
RISK FACTORS SUMMARY	5
THE OFFERING	7
RISK FACTORS	10
USE OF PROCEEDS	30
CAPITALIZATION OF ABACUS LIFE AND ITS CONSOLIDATED SUBSIDIARIES	31
UNAUDITED PRO FORMA FINANCIAL INFORMATION	32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	40
BUSINESS	80
MANAGEMENT	94
EXECUTIVE AND DIRECTOR COMPENSATION	100
PRINCIPAL SECURITYHOLDERS	107
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	109
DESCRIPTION OF THE NOTES	110
BOOK-ENTRY ISSUANCE	118
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	120
UNDERWRITING	126
LEGAL MATTERS	130
EXPERTS	131
WHERE YOU CAN FIND ADDITIONAL INFORMATION	132

i

INFORMATION ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 (File No. 333-274553). As permitted by SEC rules, this prospectus does not contain all of the information included in the registration statement. For further information, we refer you to the registration statement, including its exhibits. Statements contained in this prospectus about the provisions or contents of any agreement or other document are not necessarily complete. If the SEC’s rules and regulations require that an agreement or document be filed as an exhibit to the registration statement, please see that agreement or document for a complete description of these matters.

You should read this prospectus together with any additional information you may need to make your investment decision. You should also read and carefully consider the information in the documents we have referred you to in “Where You Can Find Additional Information” below. Neither we nor the underwriters have authorized any other person to provide you with any information other than that contained in this prospectus. Neither we nor the underwriters take any responsibility for, or provide any assurance as to the reliability of, any other information that others may give you.

References in this prospectus to “Abacus,” “the Company,” “we,” “us,” and “our” refer to Abacus Life, Inc. (formerly known as East Resources Acquisition Company), and not to any of its consolidated subsidiaries, unless otherwise specified or as the context otherwise requires.

1

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “predicts,” “projects,” “forecasts,” “may,” “might,” “will,” “could,” “should,” “would,” “seeks,” “plans,” “scheduled,” “possible,” “continue,” “potential,” “anticipates” or “intends” or similar expressions; provided that the absence of these does not means that a statement is not forward-looking. Forward-looking statements contained in this prospectus include, but are not limited to, statements about the ability of the Company to:

• realize the benefits expected from the previously disclosed business combination (the “Business Combination”) and related transactions consummated by the Company on June 30, 2023;

• maintain the listing of the Company on a securities exchange;

• achieve projections and anticipate uncertainties relating to the business, operations and financial performance of the Company, including:

• expectations with respect to financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;

• expectations regarding product development and pipeline;

• expectations regarding market size;

• expectations regarding the competitive landscape;

• expectations regarding future acquisitions, partnerships or other relationships with third parties; and

• future capital requirements and sources and uses of cash, including the ability to obtain additional capital in the future.

• develop, design and sell services that are differentiated from those of competitors;

• retain and hire necessary employees;

• attract, train and retain effective officers, key employees or directors;

• enhance future operating and financial results;

• comply with laws and regulations applicable to its business;

• stay abreast of modified or new laws and regulations applying to its business, including privacy regulation;

• anticipate the impact of, and response to, new accounting standards;

• anticipate the significance and timing of contractual obligations; and

• maintain key strategic relationships with partners and customers.

2

SUMMARY

This summary highlights selected information included in this prospectus and does not contain all of the information that may be important to you. You should read the entire prospectus and the other documents to which we refer before you decide to invest.

Overview of the Company

Abacus Life, Inc. is composed of two principal operating subsidiaries, Abacus Settlements, LLC (“Abacus Settlements”) and Longevity Market Assets, LLC (“LMA”). These principal operating subsidiaries comprise a leading vertically integrated alternative asset manager specializing in investing in inforce life insurance products throughout the lifecycle of a life insurance policy. As an alternative asset manager, the Company focuses on originating, holding and servicing life insurance policies. The Company purchases life insurance policies from consumers seeking liquidity and actively manages those policies over time (via trading, holding and/or servicing). To date, the Company has purchased over $2.9 billion in policy value and has helped thousands of clients maximize the value of their life insurance policies.

The mailing address of the Company’s principal executive office is 2101 Park Center Drive, Suite 170, Orlando, Florida 32835 and the telephone number of the Company’s principal executive office is 800-561-4148.

Summary of Historical Financial Data for LMA

The summary of historical statements of income data of LMA for the years ended December 31, 2022 and 2021 and the historical balance sheet data as of December 31, 2022 and December 31, 2021 are derived from LMA’s audited financial statements included elsewhere in this prospectus. The summary historical statements of income data of LMA for the six months ended June 30, 2023 and 2022 and the balance sheet data as of June 30, 2023 and 2022 are derived from LMA’s unaudited interim condensed financial statements included elsewhere in this prospectus.

LMA’s historical results are not necessarily indicative of the results that may be expected in the future. The information below is only a summary and should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements, and the notes and schedules related thereto, which are included elsewhere in this prospectus.

	As of and for the six months ended June 30, 2023			As of and for the six months ended June 30, 2022			As of and for the year ended December 31, 2022			As of and for the year-ended December 31, 2021
Statement of Income Data:
Total revenue	$	21,584,974		$	18,276,299		$	44,713,553		$	1,199,986
Total cost of revenue		1,462,950			2,086,075			6,245,131			735,893
Gross profit		20,122,024			16,190,224			38,468,422			464,093
Sales, general, administrative, and depreciation		2,689,417			2,298,344			3,666,826			597,702
Change in fair value of debt		2,398,662			375,513			90,719			—
Unrealized loss on investments		(798,156	)		1,054,975			1,045,623			—
Income (loss) from operations		15,832,101			12,461,392			33,665,255			(133,609	)
Other (expense) income Other (expense)		(21,651	)		(242,247	)		(347,013	)		—
Interest (expense)		(941,458	)		—			(42,798	)		—
Interest income		7,457			—			1,474			—
Total other (expense)		(955,652	)		(242,247	)		(388,337	)		—
Income (loss) before income taxes		14,876,449			12,219,145			33,276,917			(133,609	)
Provision for Income taxes (benefit)		(528,104	)		(296,806	)		889,943			—

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	As of and for the six months ended June 30, 2023			As of and for the six months ended June 30, 2022		As of and for the year ended December 31, 2022		As of and for the year-ended December 31, 2021
Less: Net Income (Loss) attributable to Noncontrolling Interest		(487,303	)		406,641		—		—
Net and Comprehensive Income (loss)	$	14,835,648		$	11,515,698	$	32,386,975	$	(133,609	)
Balance Sheet Data:
Total assets	$	277,334,437		$	22,933,083	$	59,094,847	$	1,840,218
Total liabilities		116,835,522			10,626,292		30,945,150		1,073,325
Total members’ equity		160,498,915			12,306,791		28,149,697		766,893

Summary of Historical Financial Data for Abacus Settlements

The summary historical statements of income data of Abacus Settlements for the years ended December 31, 2022 and 2021 and the historical balance sheet data as of December 31, 2022 and December 31, 2021 are derived from Abacus Settlement’s audited financial statements included elsewhere in this prospectus. The summary historical statements of income data of Abacus Settlements for the three months ended June 30, 2023 and 2022 and the balance sheet data as of June 30, 2023 and 2022 are derived from our unaudited interim financial statements included elsewhere in this prospectus.

Abacus Settlement’s historical results are not necessarily indicative of the results that may be expected in the future. The information below is only a summary and should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements, and the notes and schedules related thereto, which are included elsewhere in this prospectus.

	As of and for the six months ended June 30, 2023			As of and for the six months ended June 30, 2022		As of and for the year ended December 31, 2022			As of and for the year-ended December 31, 2021
Statement of Income Data:
Total revenue	$	13,184,676		$	13,014,664	$	25,203,463		$	22,592,144
Total cost of revenue		9,293,303			8,787,625		16,561,005			14,205,341
Gross profit		3,891,373			4,227,039		8,642,458			8,386,803
Operating Expenses		4,854,177			3,954,346		8,686,590			7,449,688
Income (loss) from operations		(962,804	)		272,693		(44,132	)		937,115
Other (expense) income
Interest income		1,917			1,147		2,199			10,870
Interest (expense)		(11,725	)		—		(8,817	)		—
Consulting income . . . . . . . . . . . . . . .		—			—		273			50,000
Other income . . . . . . . . . . . . . . . . . . .		—			273		—			630
Total other (expense) income . . . . .		(9,808	)		1,420		(6,345	)		61,500
Income (loss) before income taxes		(972,612	)		274,113		(50,477)			998,615
Provision for Income taxes.		2,289			1,325		2,018			1,200
Net income (loss)	$	(974,901	)	$	272,788	$	(52,495	)	$	997,415
Balance Sheet Data:
Total assets		—		$	3,666,138	$	3,215,812			$5,291,997
Total liabilities		—			1.330.224		1,204,675			2,569,002
Total members’ equity		—			2.335.914		2,011,137			2,722,995

4

RISK FACTORS SUMMARY

• The notes will be unsecured and therefore are effectively subordinated to any secured indebtedness we have incurred or may incur in the future.

• The notes will be structurally subordinated to the indebtedness and other liabilities of our subsidiaries.

• The indenture under which the notes are issued contains limited protection for holders of the notes.

• There is no existing trading market for the notes, and, even if NASDAQ approves the listing of the notes, an active trading market for the notes may not develop, which could limit your ability to sell the notes or the market price of the notes.

• We may choose to redeem the notes when prevailing interest rates are relatively low.

• An increase in interest rates could result in a decrease in the fair value of the notes.

• A downgrade, suspension or withdrawal of any credit rating assigned by a rating agency to us or the notes or change in the debt markets could cause the liquidity or market value of the notes to decline significantly.

• If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

• We may not be able to repurchase the notes upon a Change of Control Repurchase Event.

• The Company has entered into certain credit agreements. Each of these agreements limit the Company’s ability to enter into further credit facilities or take on additional debt which could result in additional financial strain on the Company.

• The Company’s valuation of certain life insurance policies is tied to their actual maturity date and any erroneous valuations could have a material adverse impact on the Company’s business.

• The Company could fail to accurately forecast life expectancies. There may also be changes to life expectancies generally, which could result in a lower return on the Company’s life settlement policies.

• The Company’s policy acquisitions are limited by the market availability of life insurance policies that meet the Company’s eligibility criteria and purchase parameters; failure to secure a sufficient number of quality life insurance policies could have a material adverse effect on the Company’s business.

• The Company may experience increased competition from originating life insurance companies, life insurance brokers, and investment funds which could adversely affect the Company’s business.

• Historically, there has been a negative public perception of the life settlement industry that could affect the value and/or liquidity of the Company’s investments and the life settlement industry faces political opposition from life insurance companies which could adversely affect the Company’s business.

• The Company or third parties the Company relies upon could fail to accurately evaluate, acquire, maintain, track, or collect on life settlement policies, which could adversely affect the Company.

• There is a risk of fraud in the origination of the original life insurance policy or in subsequent sales of the life insurance policy that could adversely affect the Company’s returns.

• The Company may become subject to claims by life insurance companies, individuals and their families, or regulatory authorities.

• If the life settlements in which the Company invests were to become regulated as securities, further compliance with federal and state securities laws would be required, which could result in significant additional regulatory burdens on the Company and limit the Company’s investments.

5

• The Company faces privacy and cyber security risks related to its maintenance of proprietary information, including information regarding life settlement policies and the related insureds, and any adverse impact related to such risks could have a material adverse impact on the Company’s business.

• The Company is subject to U.S. privacy laws and regulations. Failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of operations; reputational harm; loss of revenue or profits; and other adverse business consequences.

• The Company’s business may be subject to additional or different government regulation in the future, which could have a material adverse impact on the Company’s business.

• There is currently no direct legal authority regarding the proper federal tax treatment of life settlements and potential future rulings from the Internal Revenue Service (“IRS”) may have significant tax consequences on the Company.

• There have been lawsuits in various states questioning whether a purchaser of a life insurance policy has the requisite “insurable interest” in the policy which would permit the purchaser to collect the insurance benefits and an adverse finding in any of these lawsuits could have a material adverse effect on the Company’s business.

• The failure of the Company to accurately and timely track and pay premium payments on the life insurance policies it holds could result in the lapse of such policies which would have a material adverse impact on the Company’s business.

• The originating life insurance company may increase the cost of insurance premiums, which would adversely affect the Company’s returns.

• The Company may not be able to liquidate its life insurance policies which could have a material adverse effect on the Company’s business.

• The Company assumes the credit risk associated with life insurance companies and may not be able to realize the full value of insurance company payouts.

• The Company’s success is dependent upon the services of its management and employees. If the Company is unable to such individuals, its ability to compete could be harmed.

• The Company’s intellectual property rights may not adequately protect the Company’s business.

• The Company may become subject to costly intellectual property disputes.

• The ongoing COVID-19 pandemic, along with rising interest rates and inflation, may disrupt the ability of the Company and its providers to originate life settlement policies which could have a material adverse impact on the Company’s financial position.

• We have identified material weaknesses in our internal control over financial reporting. If our remediation of these issues is not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations.

• If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a public company in a timely and reliable manner.

• Our ability to raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. Debt issued to raise additional capital could affect our ability to execute our investment strategy or impact the value of our investments.

• Our management has limited experience in operating a public company.

6

THE OFFERING

The following is a brief summary of certain terms of this offering. For a more complete description of the terms of the notes, see “Description of the Notes” in this prospectus.

Issuer	Abacus Life, Inc., a Delaware corporation.
Title of the securities	9.875% Fixed Rate Senior Notes due 2028 (the “notes”).
Initial aggregate principal amount being offered	$31,000,000
Overallotment option	The underwriters may also purchase from us up to an additional $4,650,000 aggregate principal amount of notes solely to cover overallotments, if any, within 30 days of the date of this prospectus.
Principal payable at maturity	100% of the aggregate principal amount. The outstanding principal amount of the notes will be payable on the stated maturity date at the office of the trustee, paying agent and security registrar for the notes or at such other office as we may designate.
Maturity date	The notes will mature on November 15, 2028.
Interest rate	9.875% per annum.
Interest periods	The initial interest period will be the period from and including the issue date, to, but excluding, the initial interest payment date, and the subsequent interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment date or the stated maturity date, as the case may be.
Interest payment dates	Each February 15, May 15, August 15 and November 15 of each year beginning on February 15, 2024 and ending on the maturity date. If an interest payment date falls on a non-business day, the applicable interest payment will be made on the next business day and no additional interest will accrue as a result of such delayed payment.
Interest day count convention	Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
Record dates	Interest will be paid to the person in whose name a note is registered at the close of business on the 15th calendar day (whether or not a Business Day) preceding the related date an interest payment is due with respect to such note; provided that if the notes are global notes held by DTC, the record date for such notes will be the close of business on the Business Day preceding the applicable interest payment date.
No guarantees	The notes are not guaranteed by any of the Company’s subsidiaries. As a result, the notes will be structurally subordinated to the liabilities of the Company’s subsidiaries as discussed below under “Ranking.”

7

Ranking	The notes will be the Company’s senior unsecured obligations and will rank: (i) equal in right of payment to the Company’s other outstanding and future senior unsecured indebtedness (including the Company’s $10.5 million Amended and Restated Unsecured Senior Promissory Note, dated as of July 5, 2023); (ii) senior to any of the Company’s existing and future indebtedness that expressly provides it is subordinated to the notes (including the Company’s indebtedness under its SPV Investment Facility, dated as of July 5, 2023); (iii) effectively subordinated to all of the Company’s existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries. As of July 5, 2023, the Company had approximately $25 million in principal amount of other senior unsecured long-term debt outstanding, all of which will be repaid with the proceeds of this offering, and approximately $35.5 million in principal amount of subordinated long-term debt outstanding.
Optional redemption	The notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after February 15, 2027 upon not less than 15 days nor more than 60 days written notice to holders prior to the date fixed for redemption thereof, at a redemption price of 100% of the outstanding principal amount of the notes to be redeemed plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to, but not including, the date fixed for redemption. You may be prevented from exchanging or transferring the notes when they are subject to redemption. Any exercise of our option to redeem the notes will be done in compliance with the Indenture. If the Company redeems only some of the notes by partial redemption, the global notes shall be selected in accordance with applicable rules and procedures of the Depository Trust Company (“DTC”), or in the case of certificated notes, any other method in accordance with the policies and procedures of the trustee. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the notes called for redemption.
Change of control offer to repurchase	If the Company is subject to a Change of Control Repurchase Event, each holder of the Notes may require the Company to purchase all or a portion of such holder’s notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of purchase.
Repayment at holder’s option	The notes will not be subject to repayment at the option of the holder at any time prior to the maturity date, except as set forth under “Description of the Notes-Offer to Repurchase Upon a Change of Control Repurchase Event” and will not be entitled to any sinking fund.

8

Use of proceeds	The net proceeds from the offering will be approximately $30 million, after deducting the discounts and commissions payable to the underwriters and estimated offering expenses payable by us. The Company intends to use these proceeds for to refinance outstanding debt, which will include the Owl Rock Credit Facility, with the remained used for general corporate purposes. For further information, see “Use of Proceeds” in this prospectus.
Form and denomination	The notes will be issued as fully registered global notes which will be deposited with, or on behalf of, the DTC and registered, at the request of DTC, in the name of Cede & Co. Beneficial interests in the global notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as participants in DTC. Beneficial interests in the global notes must be held in minimum denominations of $25 or any amount in excess thereof which is an integral multiple of $25.
Further issuances	The amount of debt securities the Company can issue under the Indenture is unlimited. The Company will issue notes in the initial aggregate principal amount of $31,000,000 ($35,650,000 if the underwriters’ overallotment option is exercised in full). However, the Company may, without your consent and without notifying you, create and issue further notes, which notes may be consolidated and form a single series with the series of notes offered by this prospectus and may have the same terms as to interest rate, maturity, covenants or otherwise; provided that if any such additional notes are not fungible with the notes for U.S. federal income tax purposes, such additional notes will have a separate CUSIP or other identifying number.
Events of default	For a discussion of events that will permit acceleration of the payment of the principal of the notes, see “Description of the Notes—Events of Default; Waivers” in this prospectus.
Indenture and trustee	The notes will be issued under an indenture, to be entered into with U.S. Bank Trust Company, National Association, as trustee, as supplemented by a supplemental indenture relating to the issuance of the notes.
Governing law	The notes will be governed by and construed in accordance with the laws of the State of New York.
Listing	We intend to list the notes on NASDAQ within 30 days of the issue date under the trading symbol “ABLLL.”
Risk factors	An investment in the notes involves risks. You should carefully consider the information set forth in the section entitled “—Risk Factors” below, as well as other information included in this prospectus before deciding whether to invest in the notes.

9

RISK FACTORS

You should carefully consider the risks and uncertainties described below and the other information in this prospectus before making an investment in our notes. Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our notes could decline and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. See the section titled “Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below.

Risks Related to our Notes

The notes will be unsecured and therefore are effectively subordinated to any secured indebtedness we have incurred or may incur in the future.

The notes will not be secured by any of our assets or any of the assets of our subsidiaries, including our wholly owned subsidiaries. As a result, the notes will be effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness. As of June 30, 2023, the Company and its subsidiaries had long-term debt with a fair market value of $66,165,396. Because the notes will not be secured by any of our assets, they will be effectively subordinated to any secured indebtedness we may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our future secured indebtedness may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the notes.

The notes will be structurally subordinated to the indebtedness and other liabilities of our subsidiaries.

The notes will be obligations exclusively of the Company, and will not be of any of our subsidiaries. None of our subsidiaries will be a guarantor of the notes and the notes are not required to be guaranteed by any subsidiary we may acquire or create in the future. Any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the notes. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such entities (and therefore the claims of our creditors, including holders of the notes) with respect to the assets of such entities. Even if we are recognized as a creditor of one or more of these entities, our claims would still be effectively subordinated to any security interests in the assets of any such entity and to any indebtedness or other liabilities of any such entity senior to our claims. Consequently, the notes will be structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries and portfolio companies with respect to which we hold equity investments. As of June 30, 2023, the Company and its subsidiaries had long-term debt with a fair market value of $66,165,396. In addition, the Company and its subsidiaries may incur substantial indebtedness in the future, all of which would be structurally senior to the notes.

The indenture under which the notes are issued contains limited protection for holders of the notes.

The indenture under which the notes are issued offers limited protection to holders of the notes. The terms of the indenture and the notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have a material adverse impact on your investment in the notes. In particular, the terms of the indenture and the notes do not place any restrictions on our or our subsidiaries’ ability to:

• issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the notes, (2) any

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indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the notes to the extent of the values of the assets securing such debt and (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the notes;

• sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);

• enter into transactions with affiliates;

• create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;

• make investments; or

• create restrictions on the payment of dividends or other amounts to us from our subsidiaries.

Furthermore, the terms of the indenture and the notes do not protect holders of the notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, if any, as they do not require that we adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.

Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the notes may have important consequences for you as a holder of the notes, including making it more difficult for us to satisfy our obligations with respect to the notes or negatively affecting the trading value of the notes.

Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the notes.

There is no existing trading market for the notes, and, even if NASDAQ approves the listing of the notes, an active trading market for the notes may not develop, which could limit your ability to sell the notes or the market price of the notes.

The notes will be a new issue of debt securities for which there initially will not be a trading market. We intend to list the notes on NASDAQ within 30 days of the original issue date under the symbol “ABLLL.” However, there is no assurance that the notes will be approved for listing on NASDAQ.

Moreover, even if the listing of the notes is approved, we cannot provide any assurances that an active trading market will develop or be maintained for the notes or that you will be able to sell your notes. If the notes are traded after their initial issuance, they may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, if any, general economic conditions, our financial condition, performance and prospects and other factors. The underwriters have advised us that they intend to make a market in the notes, but they are not obligated to do so. The underwriters may discontinue any market-making in the notes at any time at their sole discretion.

Accordingly, we cannot assure you that the notes will be approved for listing on NASDAQ, that a liquid trading market will develop for the notes, that you will be able to sell your notes at a particular time or that the price you receive when you sell will be favorable. To the extent an active trading market does not develop, the liquidity and trading price for the notes may be harmed. Accordingly, you may be required to bear the financial risk of an investment in the notes for an indefinite period of time.

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We may choose to redeem the notes when prevailing interest rates are relatively low.

On or after February 15, 2027, we may choose to redeem the notes from time to time, especially when prevailing interest rates are lower than the rate borne by the notes. If prevailing rates are lower at the time of redemption, you would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the notes being redeemed. Our redemption right also may adversely impact your ability to sell the notes as the optional redemption date or period approaches.

An increase in interest rates could result in a decrease in the fair value of the notes.

In general, as market interest rates rise, notes bearing interest at a fixed rate generally decrease in value. Consequently, if you purchase these notes and market interest rates increase, the fair value of your notes will likely decrease. We cannot predict the future level of market interest rates.

A downgrade, suspension or withdrawal of any credit rating assigned by a rating agency to us or the notes or change in the debt markets could cause the liquidity or market value of the notes to decline significantly.

Any credit rating is an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in any credit ratings will generally affect the market value of the notes. These credit ratings may not reflect the potential impact of risks relating to the structure or marketing of the notes. Credit ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. Neither we nor any underwriter undertakes any obligation to obtain or maintain any credit ratings or to advise holders of notes of any changes in any credit ratings. There can be no assurance that any credit ratings will remain for any given period of time or that such credit ratings will not be lowered or withdrawn entirely by the rating agencies if in their judgment future circumstances relating to the basis of the credit ratings, such as adverse changes in our company, so warrant. The conditions of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, which could have an adverse effect on the market price of the notes.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

Any default under the agreements governing our indebtedness that is not waived by the required lenders and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness, including the notes. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the other debt we may incur in the future could elect to terminate its commitment, cease making further loans and institute foreclosure proceedings against our assets and we could be forced into bankruptcy or liquidation. In addition, any such default may constitute a default under the notes, which could further limit our ability to repay our debt, including the notes. If our operating performance declines, we may in the future need to seek to obtain waivers from the lender under the other debt that we may incur in the future to avoid being in default. If we breach our covenants under the other debt and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under the other debt, the lender could exercise its rights as described above, and we could be forced into bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt.

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We may not be able to repurchase the notes upon a Change of Control Repurchase Event.

Upon the occurrence of a Change of Control Repurchase Event, unless we have exercised our right to redeem the notes, each holder of the notes will have the right to require us to repurchase all or any part of such holder’s notes at a price equal to 100% of their principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the date of repurchase. If we experience a Change of Control Repurchase Event, there can be no assurance that we would have sufficient financial resources available to satisfy our obligations to repurchase the notes and any other indebtedness that may be required to be repaid or repurchased as a result of such event. A failure to repurchase the notes as required under the indenture would result in a default under the indenture, which could have material adverse consequences for us and the holders of the notes. See “Description of the Notes—Offer to Repurchase Upon a Change of Control Repurchase Event” herein.

On or about June 30, 2023, the Company entered into each of the Owl Rock Credit Facility, the SPV Purchase and Sale, including the Policy APA, and the SPV Investment Facility. Each of these agreements limits the Company’s ability to enter into further credit facilities or take on additional debt which could result in additional financial strain on the Company.

Owl Rock Credit Facility

On July 5, 2023, the Company entered into a Credit Agreement (the “Owl Rock Credit Facility”), among the Company, as borrower, the several banks and other persons from time to time party thereto (the “Owl Rock Lenders”), and Owl Rock Capital Corporation, as administrative and collateral agent for the Owl Rock Lenders thereunder.

The Owl Rock Credit Facility, among other things:

• requires Abacus Settlements and LMA and certain subsidiaries of Abacus Settlements and LMA to guarantee the loans to be provided under the Owl Rock Credit Facility pursuant to separate loan documentation;

• provides credit extensions for (i) an initial term loan in an aggregate principal amount of $25.0 million upon the closing of the Owl Rock Credit Facility, and (ii) a delayed draw term loan in an aggregate principal amount of $25.0 million, with the delayed draw term loan drawn in a period between 90 and 120 days after the closing of the Owl Rock Credit Facility upon satisfaction of certain conditions precedent;

• provides proceeds from the Owl Rock Credit Facility for working capital and the business requirements of the enterprise, and to fund acquisitions, investments and other transactions not prohibited by the loan documentation (with expected prohibitions related to, among other potential items, the use of such proceeds to pay transaction costs incurred in connection with the Business Combination);

• contains a maturity date that shall be the date that is five years after the closing of the Owl Rock Credit Facility;

• is secured by a first-priority security interest in substantially all of the assets of the Company and the subsidiary guarantors. No pledge of any equity interests in the Company shall be required by any holder of such equity interests;

• provides for interest to accrue on such loans, at the election of the Company, by reference to either (i) an alternative base rate (such loans, “ABR Loans”) or (ii) an adjusted term SOFR rate (such loans, “SOFR Loans”) plus an applicable margin. The adjusted term SOFR rate is expected to be determined by the applicable term SOFR for a relevant interest period plus a credit spread adjustment of 0.10%, 0.15% and 0.25% per annum for interest periods of 1, 3 and 6 months, respectively. The applicable margin for each type of loan is expected to be (i) 6.25% per annum for any ABR Loans and (ii) 7.25% per annum for any SOFR Loans, with an expected interest period for SOFR Loans of one, three or six months (or other periods if agreed by all lenders);

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• provides a default rate that will accrue at 2.00% per annum over the rate otherwise applicable;

• provides for amortization payments based on the initial principal amount of the loans outstanding of 1.0% per year (0.25% due per quarter), with adjustments expected to be made to the overall amortization amount upon the incurrence of the delayed draw loans;

• contains provisions requiring mandatory prepayment of the initial term loans and delayed draw term loans with 100% of the proceeds of (i) indebtedness not permitted by the Owl Rock Credit Facility and (ii) non-ordinary course asset dispositions and settlements or payments in respect of any property, casualty insurance claims or condemnation proceedings, with the proceeds received under clause (ii) subject to certain specified reinvestment rights and procedures to be set forth in the Owl Rock Credit Facility. The Owl Rock Credit Facility permits voluntary prepayments of outstanding loans at any time;

• provides for a prepayment premium equal to (i) 4.00% of the principal amount of such loans prepaid on or prior to the first anniversary of the closing of the Owl Rock Credit Facility, (ii) 3.00% of the principal amount of such loans prepaid after the first anniversary of the closing of the Owl Rock Credit Facility but on or prior to the second anniversary of the closing of the Owl Rock Credit Facility and (iii) 2.00% of the principal amount of such loans prepaid after the second anniversary of the closing of the Owl Rock Credit Facility but on or prior to the third anniversary of the closing of the Owl Rock Credit Facility. No prepayment premium will be applicable for any such prepayment made after the third anniversary of the closing of the Owl Rock Credit Facility. The prepayment premium is expected to be applicable to voluntary prepayments and certain specified mandatory prepayment during such applicable periods;

• contains certain closing conditions that the Owl Rock Credit Facility is subject to, including (i) the consummation of the Business Combination pursuant to the terms of the Merger Agreement and (ii) satisfaction of the conditions precedent to funding of the initial term loans, which is expected to include, among others, (A) customary deliverables for financings of this type, (B) a notice of borrowing request and (C) payment of certain other specified fees. It is also expected that the funding of delayed draw term loans will be subject to certain specified conditions, including, among others, the making of representations, the absence of events of defaults and a notice of borrowing request;

• provides for financial covenants such that (i) a consolidated net leverage ratio cannot exceed 2.50 to 1.00 and (ii) a liquid asset coverage ratio cannot be less than 1.80 to 1.00;

• contains affirmative covenants related to, among other things, delivery of certain financial reports and compliance certificates, maintenance of existence, compliance with laws, payment of taxes, property and insurance matters, inspection of property, books and records, notices, collateral matters and future subsidiaries, in each case, subject to specified limitations and exceptions;

• contains negative covenants related to, among other things, incurrence of debt, creation of liens, mergers, acquisitions and certain other fundamental changes, conditions concerning the creation of new subsidiaries, conditions concerning opening of new accounts, disposition of assets, dividends and other restricted payments, transactions with affiliates, burdensome agreements, investments and limitations on lines of business, in each case, subject to specified limitations and exceptions; and

• provides for certain specified events of default upon the occurrence and continuation of certain events or conditions (subject to specified exceptions, grace periods or cure rights, as applicable) each as set forth in the Owl Rock Credit Facility, which includes, among other things, with respect to non-payment, representations and warranties, compliance with covenants, cross-default to other material indebtedness, bankruptcy and insolvency matters, ERISA matters, material judgments, collateral and perfection matters, and the occurrence of a change of control. The occurrence and continuance of an event of default that is not cured or waived will enable the agent and/or the lenders, as applicable, to accelerate the loans or take other remedial steps as provided in the Owl Rock Credit Facility and the other loan documents.

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SPV Purchase and Sale

On or about June 30, 2023 the Company entered into the Abacus Investment SPV, LLC (“SPV”) Purchase and Sale, including the Asset Purchase Agreement (“Policy APA”). The Company and the SPV are parties to the Policy APA. The payable obligation owing by the Company to the SPV in connection with the SPV Purchase and Sale is evidenced by a note issued by the Company under the SPV Investment Facility in an original principal amount equal to the aggregate fair market value of the acquired insurance policies. The aforementioned note has the same material terms and conditions as the other credit extensions under the SPV Investment Facility (as defined below).

Relationships

The Sponsor, members of the Company’s founding team, directors or officers of Abacus Settlements and LMA or its or their affiliates are members of the SPV and thereby indirectly receive economic or other benefits from the Policy APA.

SPV Investment Facility

On or about July 5, 2023, the Company entered into a SPV Investment Facility (the “SPV Investment Facility”), between the Company, as borrower, and the SPV, as lender.

The SPV Investment Facility, among other things:

• was unsecured without collateral security expected to be provided in favor of the SPV;

• evidenced or provided for certain credit extensions to include: (i) an initial credit extension in an original principal amount of $15.0 million that is expected to be funded upon the closing of the SPV Investment Facility, (ii) a note in favor of the SPV in an original principal amount of $10.0 million to finance the purchase of the insurance policies under the Policy APA and (iii) a delayed draw credit extension in an original principal amount of $25.0 million, with the delayed draw credit extension drawn in a period between 90 and 120 days after the closing of the SPV Investment Facility upon satisfaction of certain conditions precedent (such $25.0 million delayed drawing expected to be made substantially concurrently with the delayed drawing in the same amount expected under the Owl Rock Credit Facility);

• provided proceeds from the SPV Investment Facility for payment of certain transaction expenses, general corporate purposes and any other purposes not prohibited by law (it being expected that a significant portion of the proceeds from the SPV Investment Facility will be used by the Company for purchasing insurance policies, among other purposes);

• was subordinated in right of payment to the Company’s obligations under the Owl Rock Credit Facility, subject to limited specified exceptions and circumstances for permitting early payment;

• required Abacus Settlements and LMA and certain subsidiaries of Abacus Settlements and LMA to guarantee the credit extensions to be provided under the SPV Investment Facility pursuant to separate documentation;

• contained a maturity date that is at least three years after the closing of the SPV Investment Facility, subject to two automatic extensions of one year each without any amendment of the relevant documentation;

• provided for interest to accrue on the SPV Investment Facility at a rate of 12.00% per annum, payable quarterly, all of which is expected be paid in-kind by the Company by increasing the principal amount of the SPV Investment Facility owing to the SPV on each interest payment date;

• provided a default rate that will accrue at 2.00% per annum (subject to applicable subordination restrictions) over the rate otherwise applicable. If cash payment is not permitted due to applicable subordination restrictions or otherwise, such default interest shall be paid in-kind;

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• provided that no amortization payments shall be required prior to maturity;

• provided for financial and other covenants no worse than those contained in the Owl Rock Credit Facility from the perspective of the Company; and

• provided for certain specified events of default (including certain events of default which are expected to be subject to grace or cure periods), with the occurrence and continuance of such events of default enabling the lender under the SPV Investment Facility to accelerate the obligations under the SPV Investment Facility, among other potential rights or remedies; and contain certain specified closing conditions. The SPV’s investment resulting from credit extensions under the SPV Investment Facility is expected to be treated by the Company as debt for U.S. Generally Accepted Accounting Principles (“GAAP”) accounting purposes. To the extent that multiple notes are issued under the SPV Investment Facility, it is expected that the documentation will provide flexibility for the SPV to request such notes be reissued as a single note under such facility.

Relationships

Directors and officers of the Company and significant shareholders of the Company are members of the SPV and thereby indirectly receive economic or other benefits from the SPV Investment Facility.

Risks Related to the Business of the Company

The Company’s valuation of life insurance policies is uncertain as many life insurance policies’ values are tied to their actual maturity date and any erroneous valuations could have a material adverse impact on the Company’s business.

The valuation of life insurance policies involves inherent uncertainty (including, without limitation, the life expectancies of insureds and future increases in premium costs to keep the policies in force). There is no guarantee that the value determined with respect to a particular life settlement policy by the Company will represent the value that will be realized by the Company on the eventual disposition of the related investment or that would, in fact, be realized upon an immediate disposition of the investment. In addition, there can be no guarantee that such valuation accurately reflects the current present value of such life insurance policy at its actual maturity. Uncertainties as to the valuation of life insurance policies held by the Company could require adjustments to reported net asset values and could have a material adverse impact on the Company’s business. Uncertainties as to the valuation may also result in the Company being less competitive in the market for originating new life settlement policies and could adversely affect the profits the Company realizes on life settlements purchased and sold.

The Company could fail to accurately forecast life expectancies. There may also be changes to life expectancies generally, resulting in people living longer in the future, which could result in a lower return on the Company’s life settlement policies.

Prices for life insurance policies and annuities that may be obtained by the Company depend, in large measure, upon the life expectancy of the underlying insureds. The returns of the Company’s hold portfolio is almost entirely dependent upon how accurate the actual longevity of an insured is as compared to the Company’s expectation for that insured. Life expectancies are estimates of the expected longevity or mortality of an insured. In determining the life expectancy of an insured, the Company relies on medical underwriting conducted by various medical underwriting firms. The medical underwriting process underlying life expectancy estimates is highly subjective, and mortality and longevity estimates are inherently uncertain. In addition, there can be no assurance that the applicable medical underwriting firm received accurate or complete information regarding the health of an insured under a life insurance policy, or that such insured’s health has not changed since the information was received. Different medical underwriting firms use different methods and may arrive at materially different mortality estimates for the same individual based on the same information, thus causing a life

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insurance policy’s value to vary. Moreover, as methods of calculating mortality estimates change over time, a mortality estimate prepared by any medical underwriting firm in connection with the acquisition of a life insurance policy may be different from a mortality estimate prepared by the same person at a later time. The valuation of the life insurance policies will vary depending on the dates of the related mortality estimates and the medical underwriting firms that provide the supporting information.

Other factors, including, but not limited to, better access to health care, better adherence to treatment plans, improved nutritional habits, improved lifestyle, an improved economic environment and a higher standard of living could also lead to increases in the longevity of the insureds under the life insurance policies. In addition to other factors affecting the accuracy of life expectancy estimates, improvements in medicine, disease treatment, pharmaceuticals and other medical and health services may enable insureds to live longer.

The actual longevity of an insured may be materially different than the predicted mortality estimate. If the actual maturity date of life insurance policies are longer than projected, it would delay when the Company could expect to receive a return on its investment and the Company may be unable to meet its investment objectives and goals. For example, a term life insurance policy in which the Company may invest have a stated expiration date on the date at which the underlying insured reaches a certain attained age and, beyond such date, the issuing insurance company may not be obligated to pay the face value, but rather only the cash surrender value which is usually maintained at a low value by investors, if any, in accordance with the terms of such life insurance policy. Therefore, if the underlying insured survives to the stated maturity date set forth in the terms of the life insurance policy, the issuing insurance company may only be obligated to pay an amount substantially less than the face value, which could have an adverse effect on the performance of the Company.

The medical underwriting and other firms that provide information for the Company’s forecasts of life expectancies are generally not regulated by the U.S. federal or state governments, with the exception of the states of Florida and Texas, which require life expectancy providers to register with their respective offices of insurance regulation. There can be no assurance that this business will not become more broadly regulated and, if so, that any such regulation would not have a material adverse effect on the ability of the Company to establish appropriate life expectancies in connection with the purchase or sale of policies.

The Company’s policy acquisitions are limited by the market availability of life insurance policies that meet the Company’s eligibility criteria and purchase parameters, and failure to secure a sufficient number of quality life insurance policies could have a material adverse effect on the Company’s business.

The life insurance policy secondary market has grown substantially in the past several years, however, as to whether and how it will continue to develop is uncertain. There are only a limited number of life insurance policies available in the market from time to time. There can be no assurance that the Company will be able to source life insurance policies on terms acceptable to the Company. As more investment funds flow into the market for life insurance policies, margins may be squeezed and the value of the collateral may become comparatively more expensive to purchase or subject to greater competition on the purchase side. There can be no assurance that secondary market life insurance policies will be available to the Company on satisfactory or competitive terms.

The supply of life insurance policies available in the market may be reduced by, among other things: (i) improvement in the economy, resulting in higher investment returns to insureds and other owners of life insurance policies from their investment portfolios; (ii) improvements in health insurance coverage, limiting the need of insureds to obtain funds to pay the cost of their medical treatment by selling their life insurance policies; (iii) the entry into the market of less reputable third-party brokers who submit inaccurate or false life insurance policy information to the Company; (iv) the establishment of new licensing requirements for market participants and a delay in complying or an inability to comply with such new requirements; or (v) refusal of the carrier that issued a life insurance policy to consent to its transfer. A change in the availability of life insurance policies could adversely affect the Company’s ability to execute its strategy and meet its objectives.

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The Company may experience increased competition from originating life insurance companies, life insurance brokers, and investment funds which could have a material adverse effect on the Company’s business.

Life insurance companies have begun offering to repurchase their own in-force life insurance policies from their current policyholders by offering “enhanced cash surrender value payments” above the amount of the net cash surrender value provided under the life insurance contracts’ terms and thus compete directly with the Company and other life settlement providers. The life settlements industry has challenged the legal validity of the life insurance companies’ actions, and some state insurance regulators have declared that these repurchase offers are unlawful while other state insurance regulators have approved them. To the extent that life insurance companies can seek to repurchase their own in-force life insurance policies, they present competition to the Company in acquiring policies.

In addition, the Company is subject to significant competition from other life settlement brokers and investment funds for the purchase of life settlement policies. Increased competition for life settlement policies may result in the Company being unable to access the number of life settlement policies that it desires for its business at prices that it deems acceptable.

Historically, there has been a negative public perception of the life settlement industry that could affect the value and/or liquidity of the Company’s investments and the life settlement industry faces political opposition from life insurance companies which could have a material adverse effect on the Company’s business.

Many regulators, lawmakers and other governmental authorities, as well as many insurance companies and insurance industry organizations, are hostile to or otherwise concerned about certain aspects of the longevity-contingent asset markets. The life settlement industry and some of its participants have also been, and may continue to be, portrayed negatively in a number of widely read publications and other forms of media. These opponents regularly contend that life settlement transactions are contrary to public policy by promoting financial speculation on human life and often involve elements of fraud and other wrongdoing. Continued public opposition to the life settlement industry, as well as actual or alleged wrongdoing by participants in the industry, could have a material adverse effect on the Company and its investors, including on the value and/or liquidity of the Company’s investments.

In March 2010, the American Council of Life Insurers, an insurance carrier trade association, issued a press release calling for a complete ban on life settlement securitization. While that effort was not successful, any such federal or state legislation, if passed, could have the effect of severely limiting or potentially prohibiting the continued operation of the Company’s life settlement purchasing operations. All of the foregoing could adversely affect the Company’s ability to execute its investment strategy and meet its investment objective.

The Company or third parties the Company relies upon could fail to accurately evaluate, acquire, maintain, track, or collect on life settlement policies, which could have a material adverse impact on the Company’s revenues.

The Company relies on third party data for tracking and servicing its life settlement policies. This includes the origination and servicing of life settlement policies by the servicing and tracking agent, market counterparties and other service providers, and the Company may not be in a position to verify the risks or reliability of such third-party data and systems. Failures in the systems employed by the Company and other service providers, counterparties, and other parties could result in mistakes made in the evaluation, acquisition, maintenance, tracking and collection of life settlement policies and other longevity-linked investments. This could result in the Company overpaying for life settlement policies it acquires or underpricing life settlement policies it sells. In addition, disruptions in the Company’s operations as a result of a failure in a third party system may cause the Company to suffer, among other things, financial loss, the disruption of its business, liability to third-parties, regulatory intervention or reputational damage. Any of the foregoing failures or disruptions could have a material adverse effect on the Company.

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There is a risk of fraud in the origination of the original life insurance policy or in subsequent sales of the life insurance policy that could adversely affect the Company’s returns which could have a material adverse impact on the Company’s business.

The Company faces the risk that an original owner of a life insurance policy, the related insured, the insurance agent involved in the issuance of such life insurance policy, or other party may have committed fraud, or misstated or failed to provide material information in connection with the origination or subsequent sale of that life insurance policy. While most life insurance policies may not be challenged for fraud after the end of the two-year contestability period, there may be situations where such fraud in connection with the issuance of a life insurance policy may survive the contestability period. If an issuing insurance company successfully challenges a life insurance policy acquired by the Company on the grounds of fraud, the Company may lose its entire investment in that life insurance policy. Furthermore, if the age of an insured was misstated, the Company may receive lower death benefits than expected. In addition, there may be information directly relevant to the value of a life insurance policy, including, but not limited to, information relating to the insured’s medical or financial condition, to which the Company will not have access. It is not possible to verify the accuracy or completeness of each piece of information or the completeness of the overall information supplied by such parties. Any such misstatement or omission could cause the Company to rely on assumptions which turn out to be inaccurate. Additionally, there can be no assurance that the seller of a life insurance policy in the tertiary market properly acquired that policy from the former owner, or that a former beneficiary or other interested party will not attempt to challenge the validity of the transfer. The occurrence of any one or more of these factors could adversely affect the Company’s performance and returns.

The Company may become subject to claims by life insurance companies, individuals and their families, or regulatory authorities which could have a material adverse impact on the Company’s business.

The secondary market for life insurance policies has been subjected to allegations of fraud and misconduct as reflected in certain litigated cases. Some of these cases, some of which have been brought by regulatory authorities, involve allegations of fraud, breaches of fiduciary duty, bid rigging, non-disclosure of material facts and associated misconduct in life settlement transactions. Cases have also been brought by the life insurance companies that challenge the legality of the original issuance of the life insurance policies based on lack of insurable interest, fraud and misrepresentation grounds.

Further, both federal and U.S. state statutes safeguard an insured’s private health information. In addition, insureds frequently have an expectation of confidentiality even if they are not legally entitled to it. Even if the Company properly obtains and uses otherwise private health information, but fails to maintain the confidentiality of such information, the Company may be the subject of complaints from the affected individuals, their families and relatives and, potentially, interested regulatory authorities. Because of the uncertainty of applicable laws, it is not possible to predict the outcome of those disputes. It is also possible that, due to a misunderstanding regarding the scope of consents that a transaction party possesses, the Company may request and receive from health care providers, information that it in fact did not have a right to request or receive. If the Company finds itself to be the recipient of complaints for these acts, it is not possible to predict what the results will be. This uncertainty also increases the likelihood that a transaction party may sell, or cause to be sold, life insurance policies in violation of applicable law, which could potentially result in additional costs related to defending claims or enduring regulatory inquiries, rescinding such transactions, possible legal damages and penalties and probable reduced market value of the affected life insurance policies. Each of the foregoing factors may delay or reduce the return on the policies and adversely affect the Company’s business and results of operations.

Life settlements in which we invest are not currently regulated under the federal securities laws, but if deemed to be securities would require further compliance with federal and state securities laws, which could result in significant additional regulatory burdens on the Company, and limit the Company’s investments, which could have an adverse impact on the Company’s business and results of operations.

The origination and trading in whole, non-variable life insurance policies has historically been understood to not involve transactions in securities. However, on February 22, 2019, the United States Court of Appeals for

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the Fifth Circuit in a case captioned In the Matter of Living Benefits Asset Management, LLC, vs. Kestrel Aircraft Company, Incorporated, case No. 18-10510, concluded that whole, non-variable life insurance policies, when offered for sale to an investor, were securities for purposes of the Investment Company Act. If this same conclusion were to be reached in other circuits or at the Supreme Court and extended to the Securities Act, there would be significant changes to our industry and it would materially impact the Company’s ability to conduct its business.

In 2002, the Eleventh Circuit Court of Appeals reached a similar conclusion with respect to fractionalized death benefits payable under non-variable policies in SEC v. Mutual Benefits Corp., but, the District of Columbia Circuit Court of Appeals reached a contrary result with respect to fractionalized death benefits in SEC v. Life Partners which was decided in 1996. The Company does not presently transact in fractionalized death benefits, i.e. buying or selling a part of, but not all of, a life settlement policy, nor does it currently plan to transact in fractionalized death benefits.

On July 22, 2010, the SEC released a staff report that recommended that Congress clearly define life settlements to be securities, so that the investors in life settlements transactions would be protected under the U.S. federal securities laws. To date, the SEC has not made another such recommendation to Congress nor has Congress acted on the SEC staff’s report. If the statutory definitions of “security” were to be amended to encompass life settlements involving non-variable life insurance policies, or if the Supreme Court or other Circuit Courts were to conclude that non-variable life insurance policies are securities for purposes of the Securities Act, the Company could become subject to additional extensive regulatory requirements under the federal securities laws. Those regulatory requirements would include the obligation to register the Company’s sales and offerings of life settlements with the SEC as public offerings under the Securities Act. Also, if the resale of non-variable life insurance policies were to be considered securities, the Company’s ownership of those policies as a percentage of its assets or source of income could be limited as it would likely manage its business to avoid being required to register as an “investment company” pursuant to the Investment Company Act. Those limitations could have an adverse effect on the Company’s business and results of operations. Any legislation or court or regulatory interpretations leading to that regulatory change or a change in the transactions that are characterized as life settlement transactions could lead to significantly increased compliance costs and increased liability risk to the Company, and could adversely affect the Company’s ability to acquire or sell life insurance policies in the future. This could materially and adversely affect the Company’s business, financial condition and results of operations, which in turn could materially and adversely affect the performance of the Company.

The Company cannot assure you as to the ultimate content, timing, or effect of changes, nor is it possible at this time to estimate the impact of any such potential change in administration or new legislation on the Company’s business, financial condition, or results of operations and consequently, any potential material and adverse effect on the performance of the Company.

The Company may be subject to certain U.S. state securities laws, and failure to comply with applicable requirements may result in fines, sanctions and rescission of purchase or sale transactions.

Certain U.S. state laws specifically characterize life settlements as securities transactions. Thus, in some U.S. states, purchases and sales of life insurance policies by the Company may be subject to applicable U.S. state blue sky laws or other U.S. state securities laws. The Company intends to comply with all applicable federal and state securities laws. However, this will not necessarily exempt the Company from compliance with U.S. federal or state broker-dealer laws. The failure to comply with applicable securities laws in connection with the purchase or sale of life settlement policies could result in the Company being subject to fines, administrative and civil sanctions and rescission of life settlement policy purchase or sales transactions. Each of the foregoing factors could materially and adversely affect the performance of the Company.

The Company could in the future be required to register as an investment company under the Investment Company Act or could have to substantively change its business model in order to fit within an applicable exemption from such registration requirement.

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The Company’s sales of life insurance policies and investment and financing programs of which the purchase or sale of a life insurance policy is a part are subject to an evolving regulatory landscape. Depending on the facts and circumstances attending such sales or programs, U.S. state and federal securities laws, including the Investment Company Act could be implicated, and it is possible that the Company could in the future be required to register as an investment company under the Investment Company Act. The Company would not be able to continue to operate its business as it does today if required to register as an investment company. In such event, the Company would have to substantively change its business model to avoid registration as an investment company under the Investment Company Act. If the Company were re quired to change its business model in order to fit within an exemption from registration, it would have a material adverse effect on the performance of the Company.

The Company faces privacy and cyber security risks related to its maintenance of proprietary information, including information regarding life settlement policies and the related insureds, and any adverse impact related to such risks could have a material adverse impact on the Company’s business.

The Company relies on data processing systems to price and close transactions, to evaluate investments, to monitor its portfolio and capital, and to generate risk management and other reports that are critical to oversight of the Company’s activities. Further, the Company relies on information systems to store sensitive information about the Company, its affiliates, and its investments, including life settlement policies and information about the related insured individuals and others. While the Company is not aware of security breaches or proceedings related to the processing of information, the loss or improper access, use or disclosure of the Company’s proprietary information can adversely impact the Company. For example, the Company could suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing events could have a material adverse effect on the Company.

Additionally, the Company collects information related to life insurance, including nonpublic personal information (“NPI”) and protected health information (“PHI”), and information from its website, such as contact information and high-level policy information. The Company also collects information from its employees, such as standard HR information, and business contact information from third party employees. The Company shares information with its service providers, and has entered into non-disclosure and business association agreements, where appropriate. Although the Company has, and believes that each service provider has, procedures and systems in place that it believes are reasonably designed to protect such information and prevent data loss and security breaches, such measures cannot guarantee absolute security.

Furthermore, the techniques used to obtain unauthorized access to data, disable or degrade service, or sabotage systems change frequently with increasing sophistication and may be difficult to detect for long periods of time. For example, hardware or software acquired from third parties may contain defects in design or other problems that could unexpectedly compromise information security. Network connected services provided by third parties to the Company may be susceptible to compromise, leading to a breach of the Company’s network and/or business interruptions. The Company’s systems or facilities may be susceptible to employee error or malfeasance, government surveillance, or other security threats.

The Company is subject to U.S. privacy laws and regulations. Failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of operations; reputational harm; loss of revenue or profits; and other adverse business consequences.

Due to the type of information the Company collects, including personal, medical, and financial information on the underlying insureds, and the nature of its services, the Company is subject to privacy laws. In the United States, federal, state and local governments have enacted numerous data privacy and security laws to address privacy, data protection and collection, and the processing and disclosure of certain types of information. Obligations related to these laws are quickly changing, becoming increasingly stringent and creating regulatory uncertainty. In addition, these obligations may be subject to differing applications and interpretations, which can

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result in inconsistency or conflict among jurisdictions. Among these laws, the Company is likely subject to the Telephone Consumer Protection Act (“TCPA”), Controlling Assault of Non-Solicited Pornography and Marketing Act of 2003, the Gramm-Leach Bliley Act (“GLBA”) and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

The Company may be considered a financial institution under the GLBA, and is subject to the GLBA through the NPI it collects. The GLBA regulates, among other things, the use of certain information about individuals (NPI) in the context of the provision of financial services. The GLBA includes both a “Privacy Rule,” which imposes obligations on financial institutions relating to the use or disclosure of NPI, and a “Safeguards Rule,” which imposes obligations on financial institutions, and indirectly, their service providers, to implement and maintain physical, administrative and technological measures to protect the security of NPI.

The Company has certain business components that are subject to HIPAA. HIPAA imposes privacy, security and breach notification obligations on “covered entities” and “business associates.” Furthermore, HIPAA requires “covered entities” and “business associates” to develop and maintain policies with respect to the protection of PHI. If in violation of HIPAA, the Company may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations. HIPAA also authorizes state Attorneys Generals to file suit on behalf of their residents. Courts may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue the Company in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

Because of the complexity of the various data privacy laws the Company may be subject to, compliance can be costly. The Company has taken general steps to comply with data privacy and security laws. For example, the Company has implemented a number of policies, including policies regarding access controls, customer data privacy, secure data disposal, and incident response and risk assessments. Despite these efforts, the Company may at times fail in its efforts due to the complexity and evolving nature of these laws. Failure to comply with relevant data privacy laws could negatively impact the Company’s operations, including subject the Company to possible government enforcement actions which could result in investigations, fines, penalties, audits, inspection, litigation, additional reporting requirements and/or oversight.

The Company’s business may be subject to additional or different government regulation in the future, which could have a material adverse impact on the Company’s business.

The Company is currently licensed and operating in 49 states. Increased regulation (whether promulgated under insurance laws or any other applicable law) and regulatory oversight of and changes in law applicable to life settlements may restrict the ability of the Company to carry on its business as currently conducted. This could also impose additional administrative burdens on the Company, including responding to examinations and other regulatory inquiries and implementing policies and procedures. Regulatory inquiries often are confidential in nature, may involve a review of an individual’s or a firm’s activities or may involve studies of the industry or industry practices, as well as the practices of a particular institution.

There is currently no direct legal authority regarding the proper federal tax treatment of life settlements and potential future rulings from the IRS may have significant tax consequences on the Company.

There is no direct legal authority regarding the proper U.S. federal income tax treatment of life settlements, and the Company does not plan to request a ruling from the IRS. Consequently, significant aspects of the tax treatment of the Company’s assets are uncertain, and the IRS or a court might not agree with the Company’s treatment of life settlements as prepaid financial contracts that are not debt. If the IRS were successful in asserting an alternative treatment, the tax consequences of ownership and disposition of life settlements could be materially and adversely affected. In addition, in 2007, the U.S. Treasury Department and the IRS released a notice requesting public comments on various issues regarding the U.S. federal income tax treatment of “prepaid

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forward contracts” and similar instruments. Any Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in life settlements, possibly with retroactive effect.

There have been lawsuits in various states questioning whether a purchaser of a life insurance policy has the requisite “insurable interest” in the policy which would permit the purchaser to collect the insurance benefits and an adverse finding in any of these lawsuits could have a material adverse effect on the Company’s business.

All states require that the initial purchaser of a new life insurance policy insuring the life of another individual have an insurable interest in that individual’s life at the time of the original issuance of the policy. An “insurable interest” is an economic stake in an event for which a person or entity purchases an insurance policy. An insurance policy may only be initially purchased by a person or entity who has an insurable interest in the insured. For example, if a spouse purchases an insurance policy on his or her spouse or a company purchases an insurance policy on an employee. In addition, some states may require that the Company have an insurable interest in the insured. Whether an insurable interest exists in the context of the purchase of a life insurance policy is critical because in the absence of a valid insurable interest, life insurance policies are unenforceable under the laws of most states. Where a life insurance policy has been issued to a policy holder without an insurable interest in the life of the insured, the life insurance company may not be required to pay the face value under the policy and may also be entitled to retain the premiums paid. Generally, there are two forms of insurable interest in the life of an individual, familial and financial. Additionally, an individual is deemed to have an insurable interest in his or her own life. Insurable interest is determined at the inception of the policy. The definition of exactly what constitutes “insurable interest” tends to vary by state. Some cases have also been initiated by life insurance companies, challenging the legality of the original issuance of policies on insurable interest grounds and asserting that such policies constitute “Stranger-Originated Life Insurance” or “STOLI,” which is defined as a practice or plan to initiate a life insurance policy for a third-party investor who, at the time of policy origination, has no insurable interest in the insured. Some states (such as Utah and New York) permit the heirs and beneficiaries of an insured to recover the face value under such STOLI policies rather than the policy owner which lacked insurable interest.

While the Company does not believe it has invested in any STOLI polices, and has policies and procedures in place to identify potential STOLI policies, there can be no guarantee that the Company will identify all STOLI policies. As such, the Company may acquire certain life insurance policies that may be deemed by an issuing insurance company to be STOLI policies, whether purposefully, if the Company deems such life insurance policy to be an attractive investment even after taking into account the insurable interest risk, or inadvertently, where the true nature of such life insurance policy is not discovered prior to its acquisition by the Company. Should an issuing insurance company successfully challenge the validity of a life insurance policy acquired by the Company, the Company will lose its investment in such life insurance policy. Furthermore, the Company will also suffer losses if a family member of an insured is successful in asserting a claim that he or she, and not the Company, is entitled to the face value payable under a life insurance policy.

The failure of the Company to accurately and timely track and pay premium payments on the life insurance policies it holds could result in the lapse of such policies which would have a material adverse impact on the Company’s business.

In order to realize on its investment in life insurance policies, the Company must ensure that the life insurance policies remain in force until they mature or are sold by the Company. Failure by the Company to pay premiums on the life insurance policies when due will result in termination or “lapse” of the life insurance policies and will result in the loss of the Company’s investment in such life insurance policies.

The originating life insurance company may increase the cost of insurance premiums, which would adversely affect the Company’s returns.

For any life insurance policies that may be obtained by the Company, the Company will be responsible for maintaining the policies, including paying insurance premiums. If a life insurance company increases the cost of

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insurance charged for any of the life insurance policies held by the Company, the amounts required to be paid for insurance premiums due for these life insurance policies may increase, requiring the Company to incur additional costs for the life insurance policies which may reduce the value of such life insurance policies and consequently affect the returns available on such policies.

Life insurance companies have in the past materially increased the cost of insurance charges. There can be no assurance that life insurance policies acquired by the Company will not be subject to cost of insurance increases. If any such life insurance policies are affected by a cost of insurance increase, the value of such life insurance policy may be materially reduced and the Company may decide or may be forced to allow such life insurance policy to lapse, resulting in a loss to the Company.

In the event an insurance company experiences significantly higher than anticipated expenses associated with operation and/or policy administration, or, in some instances, lower investment returns, the insurance company may have the right to increase the charges to each of its policy owners, but not beyond guaranteed maximums. While the insurance companies did not specify the reason for the increases, it is generally believed that the low interest rate environment was a significant contributing factor in the decision to raise the cost of insurance.

The Company may not be able to liquidate its life insurance policies which could have a material adverse effect on the Company’s business.

In the ordinary course of its business, the Company engages in the purchase and sale of life insurance policies. The liquidation value of these life insurance policies is important where, for example, it becomes necessary to sell life insurance policies from the Company’s hold portfolio in order to meet the Company’s cash flow needs, including the payment of future premiums.

In many cases liquidations may not be a viable option to meet the Company’s liquidity because of, among other things: (1) the lack of a market for such life insurance policies at the time; (2) the uncertainties surrounding the liquidation value of an individual life insurance policy; (3) the extensive amount of time and effort it might take to sell a life insurance policy; (4) the effect excessive sales of life insurance policies may have on transactions and future cash flows; and (5) the tax consequences.

The Company assumes the credit risk associated with life insurance companies and may not be able to realize the full value of insurance company payouts which could have a material adverse effect on the Company’s profits.

The Company will assume the credit risk associated with life insurance policies issued by various life insurance companies. The failure or bankruptcy of any such life insurance company could have a material adverse impact on the Company’s ability to achieve its investment objectives. A life insurance company’s business tends to track general economic and market conditions that are beyond its control, including extended economic recessions, interest rate changes, the subprime lending market crisis or changes in investor perceptions regarding the strength of insurers generally and the life insurance policies or annuities they offer. Adverse economic factors and volatility in the financial markets may have a material adverse effect on a life insurance company’s business obligation to pay the face value of policies.

The insolvency of any insurance company or a downgrade in the ratings of an insurance company could have a material adverse impact on the value of the related life insurance policies, the collectability of the related face value, cash surrender value or other amounts agreed to be paid by such insurance company. In the event that a life insurance carrier becomes insolvent or is placed into receivership, most state guaranty associations place a $300,000 or lower cap on face value for policies per insured. In addition to the limitations on the amount of coverage, which vary by state, there are limitations on who may make claims under such coverage and the

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Company may not be eligible to make claims under U.S. state guarantee funds as most U.S. state guarantee fund laws were enacted with the stated goal of assisting policyholders residing in such states. Even if available to the Company, guarantee fund coverage limits are typically smaller than the face values of some of the life insurance policies that the Company will acquire. There can be no assurance that as more life settlement transactions are undertaken, legislators will not adopt additional restrictions on the availability of U.S. state guaranty funds.

The Company’s success is dependent upon the services of its experienced management and talented employees. If the Company is unable to retain management and/or key employees, its ability to compete could be harmed.

The success of the Company is dependent upon the talents and efforts of highly skilled individuals employed by the Company and the Company’s ability to identify and willingness to provide acceptable compensation to attract, retain and motivate experienced management, talented investment professionals and other employees. Most of the shares registered for sale by the Registration Statement of which this Prospectus is a part are owned by our founders who are also key members of management of the Company.

There can be no assurance that the Company’s management and professionals will continue to be associated with the Company, and the failure to attract or retain such professionals could have a material adverse effect on the Company’s ability to execute on its business plan. Competition in the financial services industry for qualified management and employees is intense and there is no guarantee that, if lost, the talents of the Company’s professionals could be replaced.

The Company’s intellectual property rights may not adequately protect the Company’s business.

To be successful, the Company must protect its technology, know-how and brand through means, such as trademarks, trade secrets, patents, copyrights, service marks, contractual restrictions, and other intellectual property rights and confidentiality procedures. Despite the Company’s efforts to implement these protections, they may not adequately protect its business for a variety of reasons, including:

• inability to successfully register or obtain patents and other intellectual property rights for important innovations that sufficiently protect the full scope of such innovations;

• inability to maintain appropriate confidentiality and other protective measures to establish and maintain the Company’s trade secrets;

• uncertainty in, and evolution of, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights;

• potential invalidation of the Company’s intellectual property rights through administrative processes or litigation; and

• other practical, resource, or business limitations on the Company’s ability to detect and prevent infringement or misappropriation of our rights and to enforce our rights.

Litigation may be necessary to enforce the Company’s intellectual property or proprietary rights, protect the Company’s trade secrets, or determine the validity and scope of proprietary rights claimed by others. Any litigation, whether or not resolved in the Company’s favor, could result in significant expense to the Company, and divert the time and efforts of the Company’s technical and management personnel. If the Company is unable to prevent third parties from infringing upon, violating or misappropriating the Company’s intellectual property or is required to incur substantial expenses defending the Company’s intellectual property rights, the Company’s business, financial condition and results of operations may be materially adversely affected.

The Company may become subject to intellectual property disputes, which are costly and may subject the Company to significant liability and increased costs of doing business.

The Company may in the future become subject to intellectual property disputes. The Company’s success depends, in part, on the Company’s ability to operate without infringing, misappropriating or otherwise violating

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the intellectual property rights of third parties. However, the Company may not be aware that its practices are infringing, misappropriating or otherwise violating third-party intellectual property rights, and such third parties may bring claims against the Company or its business partners alleging such infringement, misappropriation or violation.

Any claims of intellectual property infringement, even those without merit, may be time-consuming and expensive to resolve, divert management’s time and attention, cause the Company to cease using or incorporating the asserted challenged intellectual property rights expose it to other legal liabilities, or require it to enter into licensing agreements to obtain the right to use a third party’s intellectual property. Although the Company carries general liability insurance, it may not cover potential claims of this type or may not be adequate to indemnify the Company for all liability that may be imposed. The Company cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on the Company’s business, financial condition, or results of operations.

Even if the claims do not result in litigation or are resolved in the Company’s favor, these claims, and the time and resources necessary to resolve them, could divert the resources of the Company’s management and harm the Company’s business and results of operations.

The ongoing COVID-19 pandemic, along with rising interest rates and inflation, may disrupt the ability of the Company and its providers to originate life settlement policies which could have a material adverse impact on the Company’s financial position.

The COVID-19 pandemic disrupted the global economy in several ways, some of which are still unfolding. COVID-19, or any outbreak of contagious diseases and other adverse public health developments, particularly in the United States, could have a material and adverse effect on our business operations. These could include disruptions or restrictions on our ability to source life settlement policies, as well as temporary closures of our facilities and the facilities of our third-party service providers. Any disruption or delay of our third-party service providers would likely impact our operating results. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of the United States and throughout the world, resulting in an economic downturn that could affect demand for the life insurance policies and significantly impact the Company’s operating results.

We have identified material weaknesses in our internal control over financial reporting. And, prior to the Business Combination, we were not timely in filing our Form 10-K for the year ended December 31, 2022 and our Form 10-Q for the quarter ended March 31, 2023. If our remediation of the material weaknesses are not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations.

In connection with the audit of our financial statements for Abacus and LMA for the years ended December 31, 2022 and 2021, we identified the same material weakness in our internal control over financial reporting for both Abacus and LMA. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses for both entities related to members of executive management having access to post to the general ledger; members of finance having inappropriate information technology access to the general ledger; and journal entry users having the ability to post to the general ledger without formal review or approval. The material weaknesses did not result in a misstatement to our financial statements.

We are taking steps to remediate the material weaknesses and, as it related to executive management and information technology access to the general ledger, LMA and Abacus revoked the inappropriate privileges before 2022 year-end. We have also hired a new qualified accounting resource and are in the process of enhancing and formalizing our accounting, business operations and information technology policies, procedures

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and controls. We have engaged outside resources to enhance our business documentation process, provide company-wide training and to help with management’s self-assessment and testing of internal controls. We are implementing a new accounting system in 2023 that will require the appropriate approval of journal entries in our accounting system and are currently working with outside advisors to ensure proper segregation of duties and put mitigating controls in place. However, we are still in the process of implementing these steps and cannot assure investors that these measures will significantly improve or remediate the material weaknesses described above.

In addition, prior to the Business Combination, the Company (then known as East Resources Acquisition Company), was not timely in filing its Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the quarter ended March 31, 2023.

We may in the future discover additional material weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

Risks Related to Being a Public Company

The market price of our notes may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.

The trading price of our notes may be volatile. The securities markets have recently experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your notes at an attractive price due to a number of factors such as the following:

• the impact of the COVID-19 pandemic on our financial condition and the results of operations;

• our operating and financial performance and prospects;

• our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

• conditions that impact demand for our products and/or services;

• future announcements concerning our business, our clients’ businesses or our competitors’ businesses;

• the public’s reaction to our press releases, other public announcements and filings with the SEC;

• the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”);

• the size of our public float;

• coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

• market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

• strategic actions by us or our competitors, such as acquisitions or restructurings;

• changes in laws or regulations which adversely affect our industry or us;

• privacy and data protection laws, privacy or data breaches, or the loss of data;

• changes in accounting standards, policies, guidance, interpretations or principles;

• changes in senior management or key personnel;

• issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

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• changes in our dividend policy;

• adverse resolution of new or pending litigation against us; and

• changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from inflation, natural disasters, terrorist attacks, acts of war and responses to such events.

These broad market and industry factors may materially reduce the market price of the notes, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our notes is low. As a result, you may suffer a loss on your investment.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of management from our business regardless of the outcome of such litigation.

If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a U.S. publicly traded company in a timely and reliable manner.

The implementation of all required accounting practices and policies and the hiring of additional financial staff has increased and may continue to increase our operating costs and requires our management to devote significant time and resources to such implementation. If we fail to develop and maintain effective internal controls and procedures and disclosure procedures and controls, we may be unable to provide financial information and required SEC reports that are timely and reliable. Any such delays or deficiencies could harm us, including by limiting our ability to obtain financing, either in the public capital markets or from private sources and damaging our reputation, which in either cause could impede our ability to implement our growth strategy. In addition, any such delays or deficiencies could result in our failure to meet the requirements for continued listing of our notes on NASDAQ.

Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. Our failure to raise capital when needed could harm our business, operating results and financial condition. Debt issued to raise additional capital may reduce the cash flow available to make required payments with respect to the notes and affect our ability to execute our investment strategy or impact the value of our investments.

We have funded our operations since inception primarily through our origination, active management and holding of life settlement policies. We cannot be certain when or if our operations will generate sufficient cash to fund our ongoing operations or the growth of our business.

We intend to continue to make investments to support our business and may require additional funds. Additional financing may not be available on favorable terms, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results and financial condition. If we incur debt, the debt holders could have rights senior to holders of the notes to make claims on our assets.

The Company has a series of warrants outstanding (collectively the “Warrants”), which include: (i) warrants (the “Private Placement Warrants”) originally issued in connection the Company’s initial public offering (the “Company IPO”) to purchase up to 7,120,000 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), issuable upon the exercise, at an exercise price of $11.50 per share; (ii) warrants issued in connection with the Closing of the Business Combination to purchase up to 1,780,000 shares of our Common Stock issuable upon the exercise, at an exercise price of $11.50 per share; (iii) warrants (the “Public Warrants”) issued in connection with the Company IPO to purchase up to 17,250,000 shares of Common Stock, at an exercise price of $11.50 per share, of the public warrants. We receive no capital until the Warrants are exercised, which do not expire until 2028. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

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We are an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make our notes less attractive to investors.

We qualify as an “emerging growth company,” as defined in the JOBS Act. While we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These provisions include: (1) an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, (3) reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements and (4) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, the information we provide will be different than the information that is available with respect to other public companies that are not emerging growth companies. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected to irrevocably opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time public companies adopt the new or revised standard. This may make comparison of our financial statements with another emerging growth company that has not opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict whether investors will find our notes less attractive if we rely on these exemptions. If some investors find our notes less attractive as a result, there may be a less active trading market for our notes. The market price of our notes may be more volatile.

We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of the date of the completion of the Company IPO, (2) in which we have total annual gross revenue of at least $1.235 billion, (3) the date on which we have, during the immediately preceding three-year period, issued more than $1.0 billion in non-convertible debt securities, or (4) the end of any fiscal year in which the market value of our Common Stock held by non-affiliates is at least $700 million as of the end of the second quarter of that fiscal year.

Our management has limited experience in operating a public company.

Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the Company. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the Company will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

In addition, prior to the Business Combination, the Company (then known as East Resources Acquisition Company), was not timely in filing its Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the quarter ended March 31, 2023.

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USE OF PROCEEDS

The net proceeds received from the sale of the notes are estimated to be approximately $29.5 million, after deducting the discounts and commissions payable to the underwriters and $250,000 of estimated offering expenses payable by us. The net proceeds received will be used to repay, in full, approximately $26.5 million in indebtedness (which includes the principal amount, accrued interest at a rate of approximately 12.6% and any prepayment obligations) under the Owl Rock Credit Facility, dated as of July 5, 2023 (with a maturity date of July 5, 2028) and to retire such credit facility. The Company affirms that it is currently in compliance with the net leverage ratio, liquid asset coverage ratio, and all other requirements under the Owl Rock Credit Facility. Any remainder will be used primarily to refinance other outstanding indebtedness and for general corporate purposes.

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CAPITALIZATION OF ABACUS AND ITS CONSOLIDATED SUBSIDIARIES

The following table sets forth the unaudited capitalization of Abacus and its consolidated subsidiaries as of June 30, 2023 on an actual basis and on an as adjusted basis to give effect to the sale of the notes. This table should be read in conjunction with the financial statements of Abacus and its subsidiaries in the prospectus.

	As of June 30, 2023
	Actual			As Adjusted
	(Dollars in thousands — unaudited)
LONG-TERM DEBT(1)		66,165			66,165
% Fixed Rate Senior Notes due 2028 offered hereby	$	—		$	69,000
Other Long-Term Debt		—			—
TOTAL LONG-TERM DEBT	$	66,165		$	135,165
STOCKHOLDERS’ EQUITY	$			$
Common stock, par value $0.0001 per share; 200,000,000 authorized shares; 62,961,688 and 50,369,350 issued and outstanding, respectively		6			6
Additional paid-in capital
Retained earnings		188,642			188,642
Accumulated other comprehensive income		877			877
Accumulated other comprehensive income (loss), net		(29,382	)		(29,382	)
Non-Controlling interest		356			356
TOTAL SHAREHOLDERS’ EQUITY	$	160,499		$	160,499
TOTAL CAPITALIZATION	$	226,664		$	295,664

⁽¹⁾  Long-term debt consists of debt with a maturity of one year or more at the time it is incurred. These amounts are presented at the gross principal amounts outstanding and exclude unamortized debt issuance costs and purchase accounting adjustments.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

Introduction

The Company and its subsidiaries are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Company. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.

The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2023 combines the unaudited condensed statement of operations of East Resources Acquisition Company for the six months ended June 30, 2023, the unaudited condensed statement of operations of LMA for the six months ended June 30, 2023, and the unaudited condensed statement of operations of Abacus Settlements for the six months ended June 30, 2023. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 combines the audited statement of operations of East Resources Acquisition Company for the year ended December 31, 2022, the audited statement of operations of LMA for the year ended December 31, 2022, and the audited statement of operations of Abacus Settlements for the year ended December 31, 2022, giving effect to the Business Combination as if it had been consummated on January 1, 2022, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this prospectus and incorporated by reference into the prospectus to which this Unaudited Pro Forma Condensed Combined Financial Information is attached:

• The historical unaudited condensed financial statements of East Resources Acquisition Company as of and for the six months ended June 30, 2023, and the historical audited financial statements of East Resources Acquisition Company as of and for year ended December 31, 2022;

• The historical unaudited condensed financial statements of LMA as of and for the six months ended June 30, 2023, and the historical audited financial statements of LMA as of and for the year ended December 31, 2022; and

• The historical unaudited condensed financial statements of Abacus Settlements as of and for the six months ended June 30, 2023, and the historical audited financial statements of Abacus Settlements as of and for the year ended December 31, 2022.

The foregoing historical financial statements have been prepared in accordance with GAAP. The pro forma adjustments reflect transaction accounting adjustments related to the Business Combination, which is discussed in further detail below. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent the Company’s consolidated results of operations or consolidated financial position that would actually have occurred had the Business Combination been consummated on the dates assumed or to project the Company’s consolidated results of operations or consolidated financial position for any future date or period.

The unaudited pro forma condensed combined financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other financial information included elsewhere in this prospectus.

Description of the Business Combination

On August 30, 2022, East Resource Acquisition Company entered into an Agreement and Plan of Merger, as amended on October 14, 2022 (the “Merger Agreement”), with Abacus Settlements, LMA, Abacus Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Abacus Merger Sub”) and LMA Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary

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of the Company (“LMA Merger Sub” and, together with Abacus Settlements, LMA and Abacus Merger Sub, the “Merger Subs”), pursuant to which, among other things and subject to the terms and conditions contained in the Merger Agreement, Abacus Merger Sub merged with and into Abacus Settlements, with Abacus Settlements surviving the merger as a wholly owned subsidiary of East Resource Acquisition Company (the “Abacus Merger”), and LMA Merger Sub merged with and into LMA, with LMA surviving the merger as a wholly owned subsidiary of East Resource Acquisition Company (the “LMA Merger” and, together with the Abacus Merger, the “Merger” and, along with the other transactions contemplated by the Merger Agreement, the “Business Combination”). In connection with the closing of the Merger (the “Closing”), East Resource Acquisition Company was renamed Abacus Life, Inc.

On October 14, 2022, East Resource Acquisition Company entered into the First Amendment to the Merger Agreement with Abacus Settlements, LMA and the Merger Subs, which modified certain terms and conditions contained within the Merger Agreement.

On April 20, 2023, East Resource Acquisition Company entered into the Second Amendment to the Merger Agreement with Abacus Settlements, LMA and the Merger Subs, which modified certain terms and conditions contained within the Merger Agreement.

Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, on June 30, 2023, the Business Combination was consummated.

Accounting for the Business Combination

The Business Combination has been accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, East Resource Acquisition Company has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the LMA shareholders having a relative majority of the voting power of the Post-Combination Company, the LMA shareholders having the authority to appoint a majority of directors on the Board of Directors, and senior management of LMA comprising the majority of the senior management of the Post-Combination Company. LMA was then determined to be the “acquirer” for financial reporting purposes based on the relative size of LMA as compared to Abacus Settlements, represented by their revenue, equity, gross profit and net income. Accordingly, for accounting purposes, the financial statements of the combined entity represent a continuation of the financial statements of LMA with the LMA Merger being treated as the equivalent of LMA issuing stock for the net assets of East Resource Acquisition Company, accompanied by a recapitalization. The net assets of East Resource Acquisition Company have been stated at historical cost, with no goodwill or other intangible assets recorded.

The Abacus Settlements Merger has been accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of Abacus Settlements have been recorded at estimated fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net assets acquired, if applicable, has been recognized as goodwill.

Basis of Pro Forma Presentation

The historical financial information has been adjusted to give pro forma effect to the transaction accounting required for the Business Combination. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Company upon Closing.

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had East Resource Acquisition Company always been combined with LMA and Abacus Settlements (together, the “Companies”). You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had East Resource Acquisition Company and the Companies always been combined or the future results that the Company will experience.

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Abacus Settlements and LMA were related parties, although they were determined not to be under common control. As such, an adjustment was applied to the statement of operations for the year ended December 31, 2022 to remove activity that would be considered intercompany activity and eliminated upon consolidation. This activity represented revenue for Abacus Settlements and cost of sales for LMA in the amount of $2.3 million for the year ended December 31, 2022, respectively. Abacus Settlements and LMA have not had any historical relationship with East Resource Acquisition Company prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between East Resource Acquisition Company and either the Company or Abacus Settlements and LMA.

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Unaudited Pro Forma Condensed Combined Statement of Operations

Six Months Ended June 30, 2023

(In thousands)

	(1) ERES Historical			(2) Abacus Life, Inc. Historical			(3) Transaction Adjustments				(4) Pro  Forma Combined ERES and LMA (1) + (2) + (3)			(5) Transaction Adjustments  - Abacus Acquisition				Pro Forma Combined (4) + (5)
Revenue		—			21,585							21,585							21,585
Cost of sales		—			1,463							1,463							1,463
Gross profit		—			20,122			—				20,122			—				20,122
Formation and operating costs		2,109			—							2,109							2,109
Sales and marketing		—			1,413							1,413							1,413
General and administrative expenses		13,144			1,274			10,084		(BB)		24,502							24,502
Unrealized gain on life settlement policies		—			—							—							—
Unrealized loss on investments		—			(798	)						(798	)						(798	)
Loss on change in fair value of debt		—			2,399							2,399							2,399
Amortization expense		—			—							—			3,237		(HH)		3,237
Depreciation		—			2							2							2
Total operating expenses		15,253			4,290			10,084				29,627			3,237				32,864
Loss from Operations		(15,253	)		15,832			(10,084	)			(9,505	)		(3,237	)			(12,742	)
Other income (expense):
Change in fair value of warrant liability		18,828			—			(6,408	)	(CC)		12,420							12,420
Interest income		15			7							22							22
Interest expense		—			(941	)		(1,500	)	(EE)		(4,534	)						(4,534	)
								(1,465	)	(FF)
								(628	)	(GG)
Interest earned on marketable securities held in Trust Account		745			—			(745	)	(AA)		—							—
Other income (expense)		(2,702	)		(22	)						(2,724	)						(2,724	)
Total other income (expense)		16,886			(956	)		(10,746	)			5,184			—				5,184
Net income before provision for income taxes		1,633			14,876			(20,830	)			(4,321	)		(3,237	)			(7,558	)
(Provision for)/Benefit from income taxes		(52	)		(528	)		2,723		(DD)		2,143			820		(DD)		2,963
Net income		1,581			14,348			(18,107	)			(2,178	)		(2,417	)			(4,595	)
Net income attributable to noncontrolling interest		—			(487	)						(487	)						(487	)
Net income / (loss) attributable to members / shareholders		1,581			14,835			(18,107	)			(1,691	)		(2,417	)			(4,108	)
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
Basic and diluted net income per share, Class A common stock subject to possible redemption
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
Basic and diluted net income per share, Non-redeemable common stock
Basic and diluted weighted average shares outstanding, Class A common stock					50,438,921														50,438,921
Basic and diluted net loss per share, Class A common stock					0.29														(0.09	)

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Unaudited Pro Forma Condensed Combined Statement of Operations

Year Ended December 31, 2022

(in thousands)

	(1) ERES Historical			(2) LMA Historical			(3) Transaction Adjustments				(4) Pro Forma Combined ERES and LMA (1) + (2) + (3)			(5) Abacus Settlements Acquisition			(6) Transaction Adjustments – Abacus Settlements Acquisition				Pro Forma Combined (4) + (5) + (6)
Revenue		—			44,713			(2,268	)	(II)		42,445			25,203							67,648
Cost of Sales		—			6,245			(2,268	)	(II)		3,977			16,561							20,538
Gross profit		—			38,468			—				38,468			8,642			—				47,110
Formation and operating costs		11,722			—							11,722			—							11,722
Sales and marketing		—			2,596							2,596			—							2,596
General and administrative expenses		—			1,066			20,168		(LL)		21,234			8,674							29,908
Loss (gain) on change in fair value of debt		—			91							91			—							91
Unrealized loss (gain) on investments		—			1,046							1,046			—							1,046
Other operating expenses		—			—							—			—							—
Amortization expense		—			—							—			—			6,474		(SS)		6,474
Depreciation		—			4							4			12							16
Total operating expenses		11,722			4,803			20,168				36,693			8,686			6,474				51,853
Loss from operations		(11,722	)		33,665			(20,168	)			1,775			(44	)		(6,474	)			(4,743	)
Other income (expense):
Change in fair value of warrant liability		9,336			—			(6,794	)	(KK)		2,542			—							2,542
Change in fair value of forward purchase agreement liability		600			—							600			—							600
Interest income		10			2							12			3							15
Interest (expense)		—			(43	)		(3,000	)	(OO)		(6,404	)		(9	)						(6,413	)
								(2,104	)	(PP)					—							—
								(1,257	)	(QQ)					—							—
Interest earned on marketable securities held in Trust Account		672			—			(672	)	(JJ)		—			—							—
Consulting income		—			—							—			—							—
Other income/(expense)		513			(347	)						166			—							166
Total other income		11,131			(388	)		(13,827	)			(3,084	)		(6	)		—				(3,090	)
Net income before provision for income taxes		(591	)		33,277			(33,995	)			(1,309	)		(50	)		(6,474	)			(7,833	)
(Provision for)/Benefit from income taxes		(53	)		(890	)		1,671		(MM)		(7,295	)		(2	)		1,539		(MM)		(5,758	)
								(8,023	)	(NN)
Net income / (loss)		(644	)		32,387			(40,347	)			(8,604	)		(52	)		(4,935	)			(13,591	)
Net income / (loss) attributable to noncontrolling interest		—			705							705										705
Net income / (loss) attributable to members / share		(644	)		31,682			(40,347	)			(9,309	)		(52	)		(4,935	)			(14,296	)
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		23,637,084
Basic and diluted net income per share, Class A common stock subject to possible redemption		(0.02	)
Basic and diluted weighted average shares outstanding, Non-redeemable common stock		8,625,000
Basic and diluted net income per share, Non-redeemable common stock		(0.02	)
Basic and diluted weighted average shares outstanding, Class A common stock					50,369,350																	50,438,921
Basic and diluted net loss per share, Class A common stock					0.63																	(0.27	)

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. Basis of Presentation

The pro forma adjustments have been prepared as if the Business Combination had been consummated on January 1, 2022, the beginning of the earliest period presented in the unaudited pro forma condensed combined statement of operations.

The LMA Merger is expected to be accounted for using the reverse recapitalization method of accounting, with no goodwill or other intangible assets recorded in accordance with GAAP. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of LMA with the acquisition being treated as the equivalent of LMA issuing stock for the net assets of ERES, accompanied by a recapitalization. The net assets of East Resource Acquisition Company have been stated at historical cost, with no goodwill or other intangible assets recorded.

The Abacus Settlements Merger is expected to be accounted for using the acquisition method of accounting in accordance with GAAP. Accordingly, for accounting purposes, the identified assets and liabilities of Abacus Settlements have been recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair values of the net assets acquired, if applicable, has been recognized as goodwill.

The pro forma adjustments represent management’s estimates based on information available as of the date of this prospectus and incorporated by reference into the prospectus to which this Unaudited Pro Forma Condensed Combined Financial Information is attached and are subject to change as additional information becomes available and additional analyses are performed. Management considers this basis of presentation to be reasonable under the circumstances.

2. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2023

The adjustments included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2023 are as follows:

(AA) Reflects the elimination of interest earned on marketable securities held in the Trust Account.

(BB) Reflects recurring compensation expense due to a non-pro-rata distribution to one of the existing owners of the Companies, which vests in two equal tranches over the period of 25 months and 30 months, respectively, following Closing and which is subject to forfeiture prior to vesting. The negotiations related to the draft Restriction Agreement governing these shares, attached to this prospectus as Annex I, were considered to be concluded as of January 12, 2023, and this was determined to be the grant date of these incentive shares. The compensation expense amount was calculated using East Resource Acquisition Company’s closing stock price on the grant date. This adjustment is expected to result in a permanent difference between book and taxable income, and as such, no income tax benefit has been reflected herein related to this adjustment.

(CC) Represents the elimination of the change in fair value of the ERES’s public warrants for the six months ended June 30, 2023 as a result of the reclassification of these warrants and the forfeiture of 20% of ERES’s Private Placement Warrants. This adjustment is expected to result in a permanent difference between book and taxable income, and as such, no income tax benefit has been reflected herein related to this adjustment.

(DD) Represents the pro forma adjustment to taxes as a result of adjustments to the income statement for the six months ended June 30, 2023, which was calculated using the statutory income tax rate of 26.5%. Adjustments that were expected to result in permanent differences between book and taxable income, as noted herein, were not included in the calculation of the tax impact of pro forma adjustments.

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(EE) Reflects the interest expense related to the issuance of new debt, calculated based on an interest rate of 12%.

(FF) Reflects the interest expense related to the issuance of debt by Blue Owl, calculated based on an interest rate of 725 basis points over SOFR. A change in SOFR of 1/8 of a percent would not result in a significant increase or decrease in interest expense for the six months ended June 30, 2023.

(GG) Reflects the interest expense related to the incremental issuance under the promissory note with the Sponsor, which is subject to a fixed interest rate of 12%, for the six months ended June 30, 2023.

(HH) Reflects the incremental amortization expense related to intangibles. These intangibles include customer relationships, internally developed and used technology, and non-compete agreements, which were previously not present within Abacus Settlements’ historical financial statements and were adjusted to fair value based on the purchase price allocation. The amortization expense for intangibles was calculated on a straight-line basis using the estimated remaining useful lives of the assets, which varied among the different intangibles.

3. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2022

The adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 are as follows:

(II) Reflects the elimination of activity between LMA and Abacus Settlements for the year ended December 31, 2022 that, following the Business Combination, would be considered intercompany activity and eliminated upon consolidation. This activity was historically recorded as revenue for Abacus Settlements and as cost of sales for LMA.

(JJ) Reflects the elimination of interest earned on marketable securities held in the Trust Account.

(KK) Represents the elimination of the change in fair value of the ERES’s public warrants for the year ended December 31, 2022 as a result of the reclassification of these warrants and the forfeiture of 20% of ERES’s Private Placement Warrants. This adjustment is expected to result in a permanent difference between book and taxable income, and as such, no income tax benefit has been reflected herein related to this adjustment.

(LL) Reflects recurring compensation expense due to a non-pro-rata distribution to one of the existing owners of the Companies, which vests in two equal tranches over the period of 25 months and 30 months, respectively, following Closing and which is subject to forfeiture prior to vesting. The negotiations related to the draft Restriction Agreement governing these shares, attached to this prospectus as Annex I, were considered to be concluded as of January 12, 2023, and this was determined to be the grant date of these incentive shares. The compensation expense amount was calculated using East Resource Acquisition Company’s closing stock price on the grant date. This adjustment is expected to result in a permanent difference between book and taxable income, and as such, no income tax benefit has been reflected herein related to this adjustment.

(MM) Represents the pro forma adjustment to taxes as a result of adjustments to the income statement for the year ended December 31, 2022, which was calculated using the statutory income tax rate of 26.5%. Adjustments that were expected to result in permanent differences between book and taxable income, as noted herein, were not included in the calculation of the tax impact of pro forma adjustments.

(NN) Reflects the tax impact of transitioning the Companies from pass-through entities for tax purposes to taxable entities for the year ended December 31, 2022.

(OO) Reflects the interest expense related to the debt issued as part of a capital contribution, calculated based on an interest rate of 12%.

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(PP) Reflects the interest expense related to the issuance of debt by Blue Owl, calculated based on an interest rate of 725 basis points over SOFR. A change in SOFR of 1/8 of a percent would not result in a significant increase or decrease in interest expense for the year ended December 31, 2022.

(QQ) Reflects the interest expense related to the incremental issuance under the promissory note with the Sponsor, which is subject to a fixed interest rate of 12%, for the year ended December 31, 2022.

(RR) Reflects the incremental amortization expense related to intangibles. These intangibles include customer relationships, internally developed and used technology, and non-compete agreements, which were previously not present within Abacus Settlements’ historical financial statements and were adjusted to fair value based on the purchase price allocation. The amortization expense for intangibles was calculated on a straight-line basis using the estimated remaining useful lives of the assets, which varied among the different intangibles.

4. Earnings per Share Information

The pro forma weighted average shares calculations have been performed for the six months ended June 30, 2023 and the year ended December 31, 2022 using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the transaction occurred on January 1, 2022. As the Business Combination is being reflected as if it had occurred at the beginning of the periods presented, the calculation of weighted average share outstanding for both basic and diluted earnings per share assumes that the shares issued relating to the Business Combination have been outstanding for the entire periods presented. As such, historical weighted average common shares outstanding—basic and diluted for the six months ended June 30, 2023 were determined to appropriately approximate the pro forma weighted average common shares outstanding — basic and diluted for the pro forma periods presented.

(In thousands, except share and per share data)	Three Months Ended			Year Ended December 31,
Pro forma net income	$	(4,595	)	$	(13,591	)
Pro forma weighted average Class A Common Stock outstanding—basic and diluted		50,438,921			50,438,921
Pro forma Class A Common Stock income per share	$	(0.09	)	$	(0.27	)

The above calculation excludes the effects of potentially dilutive shares from the computation of diluted net income per share as the effect would have an antidilutive impact under the treasury stock method. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net profit per share attributable to common shareholders of the Company is the same.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is composed of two principal operating subsidiaries, LMA and Abacus Settlements. The following sets forth management’s discussion and analysis of financial condition and results of operations of the Company and its operating subsidiaries.

Business Combination

The Company was formed under the laws of the State of Delaware on May 22, 2020 as a blank check company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. The Business Combination was effectuated using cash from the proceeds of the Company IPO and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt. On August 30, 2022, the Company entered into the Merger Agreement, and the Business Combination was consummated on June 30, 2023.

Prior to the Business Combination, the Company neither engaged in any operations (other than searching for a business combination after the Company IPO) nor generated any revenues to date. Our only activities from May 22, 2020 (inception) through June 30, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination and completing such Business Combination.

Longevity Market Assets

Overview

LMA directly acquires life insurance policies in a mutually beneficial transaction for both us and the underlying insured. With meaningful support from our proprietary risk rating heat map, we consistently evaluate policies (at origination and throughout the lifecycle) to generate essentially uncorrelated risk adjusted returns. Additionally, we provide a range of services for owners of life settlement assets.

Upon acquiring a policy, we have the option to either (i) trade that policy to a third-party institutional investor (i.e., generating a spread on each trade) or (ii) hold that policy on our balance sheet until maturity (i.e., paying the premiums over time and receiving the final claim / payout). This process is predicated on driving the best economics for LMA and we categorize this revenue as “Trading” or “Active management revenue.”

Additionally, LMA provides a wide range of services to owners and purchasers of life settlements assets (i.e., acquired policies). More specifically, LMA provides consulting, valuation, actuarial services, and performs administrative work involved in keeping a policy in force and at the premium level most advantageous to the owner. We have experience servicing a large number of policies for highly sophisticated institutions, including policies for large institutional life settlement funds. We generate revenue on these services by charging a base servicing fee of approximately 0.5% of total asset value of the portfolio. We categorize this revenue as “Servicing” or “Portfolio servicing revenue.”

In 2021, we shifted our focus from a service based only business model and began directly acquiring life insurance policies. Our first purchase under the expanded model was in June 2021, and the revenue related to that purchase is included in the Active management revenue line item in the accompanying financial statements for the period ended December 31, 2022. We have seen rapid growth in this segment as we have continued to dedicate capital and resources towards our marketing and diversified origination channels. Such items are appropriately reflected in the operating expenses section of the accompanying financial statements for the period ended June 30, 2023.

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LMA was formed as Abacus Life Services, LLC in the state of Florida in February 2017. Subsequently, in February 2022, we changed our name to Longevity Market Assets, LLC. We are headquartered in Orlando, Florida.

Our Business Model

As mentioned in the above Overview section, LMA generates revenue in two main ways. The first is through our active portfolio management strategy (“Active management revenue”), whereby we can (i) generate a spread on traded policies, (ii) hold policies on our balance sheet (paying premiums over time and receiving the payout/claim), or (iii) generate unrealized gains or losses on policies purchased by our structured note offerings: LMATT Series 2024, Inc., LMATT Growth Series 2.2024, Inc., LMATT Growth and Income Series 1.2026, Inc., and LMA Income Series, LP using the proceeds from the debt offerings with the intention to hold to maturity. The second is through our portfolio and policy servicing activities, whereby we provide a range of services to life settlement asset owners.

Active management revenue derives from buying and selling policies; and the receipt of death benefits proceeds on policies we hold where the insured dies. Of the purchased policies, some are purchased with the intent to hold to maturity, while others are held for trading to be sold for a gain. We elect to account for each investment in life settlement contracts using either the investment method or the fair value method. Once the accounting method is elected for each policy, it cannot be changed. LMA accounts for life settlement policies purchased through the structured note and fund offerings on a fair value basis, and life settlement policies that we intend to trade in the near term at cost plus premiums paid. At the time that this election was made, this was the result of a cost-benefit analysis: because of our intention to hold the instruments for a relatively short period, we believed that the investment method provided a more cost-effective method of accounting for the instruments and did not believe that, in the course of the short period, the fair value would differ materially from the accumulated cost. For the life settlement policies accounted for under the fair value method, these policies are part of the collateral consideration for the market linked structured notes issued under LMX Series, LLC and LMA Series, LLC subsidiaries where quarterly valuations are a condition of the private placement memorandum. Given that there is a valuation requirement stipulated in the notes, management has elected to use the fair value method for these policies as the information is readily available and also captures the change in fair value within the income statement when those changes occur as opposed to when the policies mature given management’s intention to hold them to maturity. For policies held at fair value, changes in fair value are reflected in operations in the period the change is calculated. Under the investment method, investments in contracts are recorded at investment price plus all initial direct costs. Continuing costs (e.g., policy premiums, statutory interest and direct external costs, if any) to keep the policy in force are capitalized. Gains/losses on sales of such are recorded at the time of sale or maturity. Under the fair value method, we record the initial investment of the transaction price and remeasure the investment at fair value at each subsequent reporting period. Changes in fair value are reported in revenue when they occur including those related to life insurance proceeds (policy maturities) and premium payments. Upon sale of a life settlement contract, we record revenue (gain/loss) for the difference between the agreed-upon purchase price with the buyer, and the carrying value of the contract.

Generating Portfolio servicing revenue involves the provision of services to one affiliate by common ownership, and third parties, which own life insurance policies. Portfolio servicing revenue is derived from services related to maintaining these settled policies pursuant to agreement with investors in settled policies (“Service Agreement(s)”). Additionally, also included in servicing revenue are fees for limited consulting services related to the evaluation of policies that we perform for third parties. Portfolio servicing revenue is recognized ratably over the life of the Service Agreements, which range from one month to ten years. The duties performed by the Company under these arrangements are considered a single performance obligation that is satisfied ratably as the customer simultaneously receives and consumes the benefit provided by us. As such, revenue is recognized for services provided for the corresponding month.

Portfolio servicing revenue also consists of revenue related to consulting engagements. We provide services for the owners of life settlement contracts who are often customers of the servicing business line, or customers of

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Abacus Settlements. These consulting engagements are comprised of valuation, actuarial services, and overall policy assessments related to life settlement contracts and are short-term in nature. The performance obligations are typically identified as separate services with a specific deliverable or a group of deliverables to be provided in tandem, as agreed to in the engagement letter or contract. Each service provided under a contract is considered as a performance obligation and revenue is recognized at a point in time when the deliverable or group of deliverables is transferred to the customer.

Key Factors Affecting Our Performance

The markets for our consulting and portfolio servicing are affected by economic, regulatory, and legislative changes, technological developments, and increased competition from established and new competitors. We believe that the primary factors in selecting LMA include reputation, the ability to provide measurable increases to shareholder value and return on investment, global scale, quality of service and the ability to tailor services to each client’s specific needs. In that regard, with our ability to leverage the technology we develop, we are focused on developing and implementing data and analytic solutions for both internal operations and for maintaining industry standards and meeting client needs.

Results of Operations

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not indicative of future results:

	Three Months Ended June 30,					Six Months Ended June 30,					Twelve Months Ended December 31,
	2023			2022		2023			2022		2022		2021
Portfolio Servicing Revenue
Related party servicing revenue	$	329,629		$	419,253	$	543,076		$	620,159	$	818,300	$	699,884
Portfolio servicing revenue		24,737			169		46,981			370,169		652,672		380,102
Total Portfolio servicing revenue		354,366			419,422		590,057			990,328		1,470,972		1,079,986
Active management revenue
Investment income from life insurance policies held using investment method		8,263,499			5,965,466		16,655,833			13,980,466		37,828,829		120,000
Change in fair value of life insurance policies (policies held using fair value method)		2,760,900			2,014,013		4,339,084			3,305,505		5,413,751		—
Total active management revenue		11,024,399			7,979,479		20,994,917			17,285,971		43,242,580		120,000
Total Revenue		11,378,765			8,398,901		21,584,974			18,276,299		44,713,552		1,199,986
Cost of revenues (excluding depreciation stated below)		973,400			666,119		1,462,950			2,086,075		6,245,131		735,893
Gross Profit		10,405,365			7,732,782		20,122,024			16,190,224		38,468,421		464,093
Operating expenses
Sales and marketing		683,841			1,019,498		1,412,845			1,649,498		2,596,140		—
General, administrative and other		577,539			5,499		1,274,431			646,705		1,066,403		101,406
Unrealized loss (gain) on investments		(672,936	)		1,039,022		(798,156	)		1,054,975		90,719		—
Loss on change in fair value of debt		1,445,229			333,879		2,398,662			375,513		1,045,623		—
Other operating expenses												—		493,849
Depreciation expense		1,098			1,098		2,141			2,141		4,282		2,447
Total operating expenses		2,034,771			2,398,996		4,289,923			3,728,832		4,803,167		597,702

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	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended December 31,
	2023			2022			2023			2022			2022			2021
Operating income		8,370,594			5,333,786			15,832,101			12,461,392			33,665,254			(133,609	)
Other (expense) income
Other income (expense)		121,601			(127,455	)		(21,651	)		(242,247	)		(347,013	)		—
Interest (expense)		(584,075	)		—			(941,458	)		—			(41,324	)		—
Interest income		—			—			7,457			—			—			—
Net income before provision for income taxes		7,908,120			5,206,331			14,876,449			12,219,145			33,276,918			(133,609	)
Provision for income taxes		(1,184,571	)		(120,132	)		(528,104	)		(296,806	)		(889,943	)
Net income		6,723,549			5,086,199			14,348,345			11,922,339			32,386,975			(133,609	)
Less: Net income (loss) attributable to noncontrolling interest		(26,596	)		406,641			(487,303	)		406,641			704,699			(148,155	)
Net income attributable to Abacus Life, Inc.	$	6,750,145		$	4,679,558		$	14,835,648		$	11,515,698		$	31,682,275		$	14,546

Revenue

Related Party Services

We have 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 some of the owners of Abacus Life, Inc. and certain members of management jointly own 11% of the Nova Funds. We enter into service agreements with the owners of life settlement contracts and are responsible for maintaining the policies, managing processing of claims in the event of death of the insured and ensuring timely payment of optimized premiums computed to derive maximum return on maturity of the policy. We neither assume the ownership of the contracts nor undertake the responsibility to make the associated premium payments. The duties that we perform under these arrangements are considered a single performance obligation that is satisfied over time and revenue is recognized for services provided for the corresponding time period. We earn servicing revenue related to policy and administrative services on behalf of Nova Funds portfolio (the “Nova Portfolio”). 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.

	Three Months Ended June 30,				$ Change			% Change
	2023		2022
Related party servicing revenue	$	329,629	$	419,253	$	(89,624	)		(21.4	)%

Related party servicing revenue decreased by $89,624, or 21%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease in related party servicing revenue is primarily due to the joint venture (“JV”) owning less policies at June 30, 2023. Total policy count for the Nova Portfolio was 353 and 413 for the periods ended June 30, 2023 and June 30, 2022, respectively. This translated to total invested dollars of $151,738,261 and $162,162,124 as of June 30, 2023 and June 30, 2022, respectively.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Related party servicing revenue	$	543,076	$	620,159	$	(77,083)		(12.4	)%
	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Portfolio servicing revenue	$	24,737	$	169	$	24,568		14,537.3	%

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Portfolio servicing revenue increased by $24,568, or 14,537%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in portfolio servicing revenue is primarily attributable to servicing more external funds during the three months ended June 30, 2023 compared to the three months ended June 30, 2022. There were zero non-recurring consulting projects in Q2, 2023.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Portfolio servicing revenue	$	46,981	$	370,169	$	(323,188)		(87.3	)%

Portfolio servicing revenue decreased by $323,188, or 87%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in portfolio servicing revenue is primarily attributable to a reduction in the non-recurring consulting projects in 2023.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Related party servicing revenue	$	818,300	$	699,884	$	118,416		17	%

Related party servicing revenue increased by $118,416, or 17%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in related party servicing revenue is primarily attributable to the increase in size of the Nova Portfolio, both in policy count and invested dollars. Total policy count for the Nova Portfolio was 392 and 231 for the periods ended December 31, 2022 and December 31, 2021, respectively. This translated to total invested dollars of $155,451,161 and $76,016,669 as of December 31, 2022 and December 31, 2021, respectively.

Active management revenue

Active management revenue is generated by buying, selling, and trading policies and maintaining policies through to receipt of maturity or death benefits. Policies are accounted for under both the investment method and fair value method. We have elected on an instrument-by-instrument basis to account for these policies under the investment method, pursuant to ASC 323-30-25-2. Abacus Life, Inc. engages in direct buying and selling of life settlement policies whereby each potential policy is independently researched to determine if it would be a profitable investment. Policies purchased under Abacus Life, Inc. are typically purchased with the intention to sell within twelve months and are measured for under the investment method given that the purchase dates are recent, and policies turn fairly quickly. Policies purchased under LMATT Series 2024, Inc. or LMATT Growth Series 2.2024, Inc. (the “LMATT subsidiaries”) are measured under the fair value method and will either be sold or held until the policies mature. Upon sale of a life settlement contract, the company will record revenue (gain/loss) for the difference between the agreed-upon purchase price with the buyer, and the carrying value of the contract.

	Three Months Ended June 30,				$ Change		% Change
	2023		2022
Active management revenue
Policies accounted for under the investment method	$	8,263,499	$	5,965,466	$	2,298,033		38.5	%
Policies accounted for under the fair value method		2,760,900		2,014,013		746,887		37.1	%
Total active management revenue	$	11,024,399	$	7,979,479	$	3,044,920		38.2	%

Total active management revenue increased by $3,044,920, or 38%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in active management revenue was primarily attributable to maturities of policies accounted for under the investment method. As of June 30, 2023, Abacus Life, Inc. holds 167 policies, of which 122 are accounted for under the fair value method and 45 are accounted for using the investment method (cost, plus premiums paid). Policies recorded under the investment

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method represent those policies purchased by Abacus Life, Inc. with the intent to sell within the next 12 months. Policies recorded under the investment method resulted in a revenue increase in of $2,298,033, or 39%. Aggregate face value of policies accounted for using the investment method is $39,520,877 as of June 30, 2023, with a corresponding carrying value of approximately $9,889,610. Additional information regarding policies accounted for under the investment method is as follows:

	Three Months Ended June 30,
	2023			2022
Investment method:
Policies bought		79			52
Policies sold		88			20
Policies matured		0			0
Average realized gain (loss) on policies sold		16.7	%		11.1	%
Number of external counter parties that purchased policies		11			3

Policies accounted for under the fair value method, resulted in a revenue increase of $746,887, which was driven primarily by a realized gain on the sale of 22 policies of $1,297,702 for the three months ended June 30, 2023. In the three months period ended June 30, 2023, an unrealized gain of $2,126,723 was recorded on 54 policies purchased. For the policies held at fair value, the unrealized gain on policies of $2,126,723 represents a change in fair value of the aforementioned policies. Abacus Life, Inc. realized a gain of $1,297,702 for the three months ended June 30, 2023 for 9 policies that sold that were included in the change in fair value of life insurance policies held using the fair value method and made premium payments of $663,424, which were also included in the same line item. Additional information regarding policies accounted for under the fair value method is as follows:

	Three Months Ended June 30,
	2023			2022
Fair value method:
Policies bought		54			31
Policies sold		9			—
Policies matured		1			—
Average realized gain (loss) on policies sold		14.7	%		—
Number of external counter parties that purchased policies		3			—

	Six Months Ended June 30,				$ Change		% Change
	2023		2022
Active management revenue
Policies accounted for under the investment method	$	16,655,833	$	13,980,466	$	2,675,367		19	%
Policies accounted for under the fair value method		4,339,084		3,305,505		1,033,579		31	%
Total active management revenue	$	20,994,917	$	17,285,971	$	3,708,946		21	%

Total active management revenue increased by $3,708,946, or 21%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase in active management revenue was primarily attributable to an increase in policy sales and maturities. As of June 30, 2023, Abacus Life, Inc. holds 167 policies, of which 122 are accounted for under the fair value method and 45 are accounted for using the investment method (cost, plus premiums paid). Policies recorded under the investment method represent those policies purchased by Abacus Life, Inc. with the intent to sell within the next 12 months. Policies recorded under the investment method resulted in an increase of $2,675,367, or 19%. Aggregate face value of policies accounted

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for using the investment method is $39,520,877 as of June 30, 2023, with a corresponding carrying value of approximately $9,889,610. Additional information regarding policies accounted for under the investment method is as follows:

	Six Months Ended June 30,
	2023			2022
Investment method:
Policies bought		165			80
Policies sold		127			48
Policies matured		2			0
Average realized gain (loss) on policies sold		16.3	%		13.5	%
Number of external counter parties that purchased policies		15			4

Policies accounted for under the fair value method, with the intention to hold to maturity, resulted in an increase in revenue of $1,033,579 driven primarily by a realized gain on life settlement policies of $1,898,958 for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. Aggregate face value of policies held at fair value is $195,205,585 as of June 30, 2023, with a corresponding fair value of $56,685,617. For the policies held at fair value, the unrealized gain recorded on 69 purchased policies as of $3,319,588 represents a change in fair value of the aforementioned policies. Abacus Life, Inc. realized a gain of $ 1,898,958 for the six months ended June 30, 2023 for 11 sold policies that were included in the change in fair value of life insurance policies held using the fair value method and made premium payments of $879,461, which were also included in the same line item. Additional information regarding policies accounted for under the fair value method is as follows:

	Six Months Ended June 30,
	2023			2022
Fair value method:
Policies bought		69			32
Policies sold		11			—
Policies matured		1			—
Average realized gain (loss) on policies sold		10.4	%		—
Number of external counter parties that purchased policies		5			—

	Years Ended December 31,				$ Change		% Change
	2022		2021
Active management revenue
Policies accounted for under the investment method	$	37,828,829	$	120,000	$	37,708,829		31,424	%
Policies accounted for under the fair value method		5,413,751		—		5,413,751		—
Total active management revenue	$	43,242,581	$	120,000	$	43,122,581		35,935	%

Active management revenue increased by $43,122,581, or 35,935%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in Active management revenue was primarily attributable to LMA making a strategic shift and re-organizing the business to include an active management segment. This shift in business model occurred in 2021. As of December 31, 2022, LMA holds 53 policies, of which 35 are accounted for under the fair value method and 18 are accounted for using the investment method (cost, plus premiums paid). Policies recorded under the investment method represent those policies purchased by LMA with the intent to sell within the next 12 months. Policies recorded under the investment method resulted in

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an increase of $37,708,829. Aggregate face value of policies accounted for using the investment method is $42,330,000 as of December 31, 2022, with a corresponding carrying value of approximately $8,716,111. Additional information regarding policies accounted for under the investment method is as follows:

	Years Ended December 31,
	2022			2021
Investment method
Policies bought		145			1
Policies sold		127			1
Policies matured		2			—
Average realized gain (loss) on policies sold		17	%		40	%
Number of external counter parties that purchased policies		25			1
Life insurance proceeds received		2			—

Policies accounted for under the fair value method, with the intention to hold to maturity, resulted in an increase in revenue of $5,413,751 driven primarily by an unrealized gain on policies of $5,742,377 for the year ended December 31, 2022 compared to the year ended December 31, 2021. Aggregate face value of policies held at fair value is $40,092,154 as of December 31, 2022, with a corresponding fair value of $13,809,352. For the policies held at fair value, the unrealized gain on policies of $5,742,377 represents a change in fair value of the aforementioned policies. LMA realized a gain of $105,000 for the year-ended December 31, 2022 for two policies that had matured that were included in the change in fair value of life insurance policies held using the fair value method and made premium payments of $433,626, which were also included in the same line item. Additional information regarding policies accounted for under the fair value method is as follows:

	Years Ended December 31,
	2022		2021
Fair value method
Policies bought		32		—
Policies sold		—		—
Policies matured		2		—
Average realized gain (loss) on policies sold		—		—
Number of external counter parties that purchased policies
Life insurance proceeds received		2		—

Cost of Revenues (Excluding Depreciation) and Gross Profit

Cost of revenues (excluding depreciation) primarily consists of payroll costs for employees who service policies and consulting expenses for discretionary commissions directly related to active management trading revenue. Cost of revenues excludes depreciation expense as Abacus Life, Inc. does not hold any material property and equipment that is directly used to support the servicing or trading of life settlement policies. The payroll costs related to policy servicing are for recurring and non-recurring projects where the time incurred for servicing policies is measurable and directly correlates to revenue earned. Similarly, consulting expenses are for discretionary commissions earned directly related to revenue generated as part of the Active management revenue stream.

	Three Months Ended June 30,				$ Change		% Change
	2023		2022
Cost of revenue (excluding depreciation)	$	973,400	$	666,119	$	307,281		46	%

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Cost of revenues (excluding depreciation) increased by $307,281, or 46%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in cost of revenues is primarily due to an increase of payroll expenses related to increased headcount and changes to various benefit packages in 2023.

	Six Months Ended June 30,				$ Change			% Change
	2023		2022
Cost of revenue (excluding depreciation)	$	1,462,950	$	2,086,075	$	(623,125	)		(30	)%

Cost of revenues (excluding depreciation) decreased by $623,125, or 30%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in cost of revenues is primarily due to a $1,057,735 decrease in consulting expenses primarily represents discretionary commissions for individuals directly related to active management trading revenue and bonuses paid out during the first quarter of 2022. The bonuses and commissions did not recur during 2023. The decrease in consulting expenses offset by a $427,380 increase in wages related to policy servicing activity as a result of increased headcount of 4 people and changes to various benefit packages in 2023.

	Years Ended December 31,				$ Change		% Change
	2022		2021
Cost of revenue (excluding depreciation)	$	6,245,131	$	735,893	$	5,509,238		749	%

Cost of revenues (excluding depreciation) increased by $5,509,238, or 749%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in cost of revenues is primarily due to a $5,012,394 increase in consulting expenses which represent primarily discretionary commissions for individuals directly related to active management trading revenue along with various due diligence and consulting fees. There was also a $708,727 increase in wages related to policy servicing activity as a result of increased headcount and changes to various benefit packages in 2022, offset by a $211,883 decrease in policy serving.

	Three Months Ended June 30,				$ Change		% Change
	2023		2022
Gross profit	$	10,405,366	$	7,732,782	$	2,672,584		35	%

Gross profit increased by $2,672,584, or 35%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in gross profit is due to the decrease in the cost of revenue by $307,281, or 46% which was attributable to reductions in consulting expenses. The expansion of the active management business resulted in increased revenues of $3,044,920, or 38%, of the total increase in revenues of $2,979,864 or 35%.

	Six Months Ended June 30,				$ Change		% Change
	2023		2022
Gross profit	$	20,122,024	$	16,190,224	$	3,931,800		24	%

Gross profit increased by $3,931,800, or 24%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase in gross profit is primarily due to decrease of cost of revenue by $623,125, or 30% and the expansion of the active management business which resulted in increased revenues of $ 3,708,946 , or 21%, of the total increase in revenues of $3,308,675, or 18%, offset by a decrease of portfolio servicing revenue of $323,188, or 87%.

	Years Ended December 31,				$ Change		% Change
	2022		2021
Gross profit	$	38,468,422	$	464,093	$	38,004,329		8,189	%

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Gross profit increased by $38,004,329, or 8,189%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in gross profit is primarily due to the expansion of the active service management services which resulted in increased revenues of $43,049,541, or 99%, of the total increase in revenues of $43,122,581, offset by an increase in cost of revenues of 5,509,238.

Operating Expenses

Sales and Marketing Expenses

Sales and marketing expenses primarily consist of advertising and marketing related expenses.

	Three Months Ended June 30,
	2023		2022		$ Change			% Change
Sales and marketing expenses	$	683,841	$	1,019,498	$	(335,657	)		(33	)%

Sales and marketing expenses decreased by $335,657 or 333% for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease in sales and marketing expense was attributable to reduction in advertising costs.

	Six Months Ended June 30,				$ Change			% Change
	2023		2022
Sales and marketing expenses	$	1,412,845	$	1,649,498	$	(236,653	)		(14	)%

Sales and marketing expenses decreased by $236,653, or 14% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The decrease is attributable to reduction in advertising costs. The increase in 2022 was attributable to marketing of the new active management segment. Sales and marketing expense relates to sponsoring a sports organization and are not directly attributable to revenue generating activity, therefore these expenses do not represent cost of revenue.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Sales and marketing expenses	$	2,596,140	$	—	$	2,596,140		—	%

Sales and marketing expenses increased by $2,596,140, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in 2022 is attributable to marketing of the new active management segment. Sales and marketing expense relates to sponsoring a sports organization and are not directly attributable to revenue generating activity, therefore these expenses do not represent cost of revenue.

General, Administrative, and Other

General, administrative, and other primarily consists of compensation and benefits related costs associated with our finance, legal, human resources, information technology, and administrative functions. General, administrative and other costs also consist of third-party professional service fees for external legal, accounting and other consulting services, rent and lease charges, insurance costs, and software expense.

	Three Months Ended June 30,				$ Change		% Change
	2023		2022
General, administrative and other	$	577,539	$	5,499	$	572,040		10,403	%

General, administrative, and other increased by $572,040, or 10,403%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase of $284,588 and $40,060 in general, administrative and other of is related to launching the new income funds: LMA Income Series, LP and LMA Income Series II GP LLC, respectively, which did not exist during the three months ended June 30, 2022. The

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remaining difference is attributable to other various consolidated entities pertaining to policy servicing and administrator expenses, accounting, legal, and bank fees as we finalized the SPAC.

	Six Months Ended June 30,				$ Change		% Change
	2023		2022
General, administrative and other	$	1,274,431	$	646,705	$	627,726		97	%

General, administrative, and other increased by $627,726, or 97%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in general, administrative and other is related to various expenses, including but not limited to increases in payroll related expense (excluding payroll expenses wages) of $245,842, an increase in Errors and Omissions insurance of $55,250, an increase in medical record consulting expense of $132,688 and an increase of $31,000 in software expenses. Additionally, $341,064 in general, administrative and other expenses were recorded in LMA Income Series, LP and LMA Income Series II GP LL pertaining to policy servicing and administrator expenses, accounting, legal, and bank fees.

	Years Ended December 31,
	2022		2021		$ Change		% Change
General, administrative and other	$	1,066,403	$	101,406	$	964,997		952	%

General, administrative, and other increased by $964,997, or 952%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in general, administrative and other is related to various expenses, including but not limited to increases in payroll expense and payroll related expense of $242,628, an increase in legal expense of $83,644, and an increase in rent expense of $31,561. Additionally, $384,374 in general, administrative and other expenses were recorded in various consolidated entities pertaining to consulting charges, administrator expenses, accounting, legal, and bank fees.

Depreciation

Depreciation expense consists primarily of depreciation on property and equipment purchased and leasehold improvements made. The property at Abacus Life, Inc. currently consists of furniture, fixtures and leasehold improvements for the office and are not directly used to support the servicing or trading of life settlement policies.

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Depreciation	$	1,098	$	1,098	$	—		—	%

Depreciation is consistent for the three months ended June 30, 2023 and June 30, 2022 as no purchases of property and equipment were made in 2023.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Depreciation	$	2,141	$	2,141	$	—		—	%

Depreciation is consistent for the six months ended June 30, 2023 and June 30, 2022 as no purchases of property and equipment were made in 2023.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Depreciation	$	4,282	$	2,447	$	1,835		75	%

Depreciation increased by $1,835, or 75%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The $1,835 increase in depreciation is primarily due to the acquisition of furniture and fixtures in 2022 and the incremental depreciation expense that accompanies its acquisition.

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Unrealized Loss (Gain) on Investments

	Three Months Ended June 30,
	2023			2022		$ Change			% Change
Unrealized loss (gain) on investments	$	(672,936	)	$	1,039,022	$	(1,711,958	)		(165	)%

Unrealized loss on investments increased by $1,711,958 for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The primary cause of this increase driven by changes in fair value of put and call options. During the three months ended June 30, 2023, the unrealized loss was $467,701, $186,470, $15,289, and $3,475 for LMATT Series 2024 Inc., LMATT Growth Series Inc., and LMATT Growth, Income Series Inc. and Longevity Market Assets, LLC, respectively.

	Six Months Ended June 30,
	2023			2022		$ Change			% Change
Unrealized loss (gain) on investments	$	(798,156	)	$	1,054,975	$	(1,853,131	)		(176	)%

Unrealized loss (gain) on investments increased by $1,853,131 for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. During the first and third quarters of 2022, Abacus Life, Inc., through three subsidiaries, LMATT Series 2024 Inc., LMATT Growth Series Inc., LMATT Growth and Income Series Inc., and purchased S&P 500 call options and sold S&P 500 put options through a broker as an economic hedge related to the market-indexed instruments described below. The primary cause of this decrease pertains to $540,818, $230,231, $23,632, and $3,475 respectively, which represents a change in fair value of those options and is classified as an unrealized loss on investments within the results of operations.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Unrealized loss on investments	$	1,045,623	$	—	$	1,045,623		—	%

Unrealized loss on investments increased by $1,045,623 for the year ended December 31, 2022 compared to the year ended December 31, 2021. During the first and third quarters of 2022, LMA, through three subsidiaries, LMATT Series 2024 Inc., LMATT Growth Series Inc., and LMATT Growth and Income Series Inc., purchased S&P 500 put and call options through a broker as an economic hedge related to the market-indexed instruments described below. The primary cause of this increase pertains to $971,281, $68,965, and $5,377, respectively, which represents a change in fair value of those options and is classified as an unrealized loss on investments within the results of operations.

Loss on Change in Fair Value of Debt

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Loss on change in fair value of debt	$	1,445,229	$	333,879	$	1,111,350		333	%

Loss on change in fair value of debt increased by $1,111,350 for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase is primarily attributable to changes in the risk-free fair value of LMATT debt.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Loss on change in fair value of debt	$	2,398,662	$	375,513	$	2,023,149		539	%

Loss on change in fair value of debt increased by $2,023,149 for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase is primarily attributable to changes in the risk-free fair value of LMATT debt.

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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 notes, titled the Longevity Market Assets Target-Term Series (LMATTS) 2024, are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes haves a feature to protect debt holders from market downturns, up to 40%. Any subsequent losses below the 40% threshold will reduce the notes on a one-to-one basis. As of June 30, 2023, $9,866,900 of the 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 June 30, 2023, the fair value of the LMATT Series 2024, Inc. notes was $9,621,141. The notes are secured by the assets of the issuing entities, which includes cash, S&P 500 options, and life settlement policies totaling $11,195,701 as of June 30, 2023. The note 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.

On September 16, 2022, LMATTS 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 notes, titled the Longevity Market Assets Target-Term Growth Series 2.2024, Inc. (“LMATTSTM Series 2.2024, Inc.”) are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have 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 notes 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 investments will experience all subsequent losses on a one-to-one basis. As of June 30, 2023, 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 June 30, 2023, the fair value of the LMATT Series 2.2024, Inc. notes was $3,446,527. The notes are secured by the assets of the issuing entity, LMATT Series 2.2024, Inc., which includes cash, S&P 500 options, and life settlement policies totaling $3,331,872 as of June 30, 2023. The notes agreement do not restrict the trading of life settlement contracts prior to maturity of the notes, as total assets of the issuing company are considered as collateral. There are also no restrictive covenants associated with the notes with which the entity must comply.

Additionally, on September 16, 2022, LMATT 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. LMATTSTM Growth and Income Series 1.2026, Inc. are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2026, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have 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 notes 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 investments will experience all subsequent losses on a one-to-one basis. These notes also include a 4% dividend feature that will be paid annually. As of June 30, 2023, 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 June 30, 2023, the fair value of the LMATT Growth and Income Series 1.2026, Inc., notes was $459,533. The notes are secured by the assets of the issuing entity, LMATT Growth and Income Series 1.2026, Inc., which includes cash, S&P 500 options, and life settlement policies totaling $517,218 as of June 30, 2023. The notes agreement does 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 notes with which the entity must comply. See additional fair value considerations within the Fair Value footnote.

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	Years Ended December 31,
	2022		2021		$ Change		% Change
Change in fair value of debt	$	90,719	$	—	$	90,719		—	%

Loss on change in fair value of debt increased by $90,719 for the year ended December 31, 2022 compared to the year ended December 31, 2021.

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 notes, titled the Longevity Market Assets Target-Term Series (LMATTS) 2024, are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes haves a feature to protect debt holders from market downturns, up to 40%. Any subsequent losses below the 40% threshold will reduce the notes on a one-to-one basis. As of December 31, 2022, $9,886,900 of the 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 December 31, 2022, the fair value of the LMATT Series 2024, Inc. notes was $8,067,291. The notes are secured by the assets of the issuing entities, which includes cash, S&P 500 options, and life settlement policies totaling $12,200,797 as of December 31, 2022. The note 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.

On September 16, 2022, LMATTS 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 notes, titled the Longevity Market Assets Target-Term Growth Series 2.2024, Inc. (“LMATTSTM Series 2.2024, Inc.”) are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have 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 notes 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 investments will experience all subsequent losses on a one-to-one basis. As of December 31, 2022, 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 December 31, 2022, the fair value of the LMATT Series 2.2024, Inc. notes was $2,354,013. The notes are secured by the assets of the issuing entity, LMATT Series 2.2024, Inc., which includes cash, S&P 500 options, and life settlement policies totaling $3,246,756, as of December 31, 2022. The note agreements do not restrict the trading of life settlement contracts prior to maturity of the notes, as total assets of the issuing company are considered as collateral. There are also no restrictive covenants associated with the notes with which the entity must comply.

Additionally, on September 16, 2022, LMATT 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 notes, titled the Longevity Market Assets Target-Term Growth and Income Series 1.2026, Inc (“LMATTSTM Growth and Income Series 1.2026, Inc.”) are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2026, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have 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 notes 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 investments will experience all subsequent losses on a one-to-one basis. These notes also include a 4% dividend feature that will be paid annually. As of December 31, 2022, 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 December 31, 2022, the fair value of the LMATT Growth and Income Series

53

1.2026, Inc., notes were $400,000. The notes are secured by the assets of the issuing entity, LMATT Growth and Income Series 1.2026, Inc., which includes cash, S&P 500 options, and life settlement policies totaling $752,236, as of December 31, 2022. The note agreement does 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 notes with which the entity must comply. See additional fair value considerations within the Fair Value footnote.

Other Operating Expenses

	Years Ended December 31,
	2022		2021		$ Change			% Change
Other operating expense	$	—	$	493,849	$	(493,849	)		—	%

Other operating expense decreased by $493,849, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This decrease in other operating expense consisted primarily of legal, bank, and consulting expenses related to the start-up for LMATT Series 2024 Inc. which occurred in 2021.

Other Income (Expense)

Other income (expense) consists of working capital support that Abacus Life, Inc. provides to two life settlement Providers through a contractual agreement (the “Strategic Services and Expenses Support Agreement” or “SSES”). Abacus Life, Inc. entered into the SSES with the Providers and simultaneously acquired an option to purchase the outstanding equity ownership of the Providers, upon the achievement by the Providers of certain financial targets. For the years ended December 31, 2022 and December 31, 2021, the Providers were considered to be VIEs, but were not consolidated in our interim condensed consolidated financial statements as we do not hold a controlling financial interest in the Providers.

	Three Months Ended June 30,						$ Change			% Change
	2023			2022
Other income (expense)	$	121,601		$	(127,455	)	$	249,056			(195.4	)%
Interest (expense)		(584,075	)		—			(584,075	)		—	%
Interest income		—			—			—			—	%

Other income (expense) decreased by $249,056, for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase in other income is driven by reduction of excess return expense of $184,795 at LMA Income Series, LP for the three months ended June 30, 2023. As noted above, LMA Income Series, LP did not exist during the three months ended June 30, 2022. The remaining difference is attributable to dividend income of $4,063 at LMA Income Series GP and other income at Regional Investment Services for the three months ended June 30, 2023.

Interest (expense) increased by $584,075, for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase in interest expense is driven by the dividend of 6.5% required to be paid out by the LMA Income Series to its limited partner investors. The remaining increase is attributable to interest expense at LMATT Growth & Income Series Inc.

	Six Months Ended June 30,						$ Change			% Change
	2023			2022
Other income (expense)	$	(21,651	)	$	(242,247	)	$	220,596			(91.1	)%
Interest (expense)		(941,458	)		—			(941,458	)		100	%
Interest income		7,457			—			7,457			100	%

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Other income (expense) decreased by $220,596, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in other income is driven by reduction of excess return expense of $212,526. $29,721 was paid to the Providers during the six months ended June 30, 2023, compared to $242,247 paid during the six months ended June 30, 2022. The remaining difference is attributable to dividend income of $8,125 at LMA Income Series GP and other income at Regional Investment Services for the six months ended June 30, 2023.

Interest (expense) increased by $941,458, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in interest expense is driven primarily by $713,149 and $220,309 accrued interest payments relating to LMA Income Series LP LLC and LMA Income Series II LP, respectively, along with $8,000 in interest expense for LMATT Growth & Income Series, Inc. for the six months ended June 30, 2022.

Interest income increased by $7,457, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in interest income is driven by interest on proceeds from policies that matured in the first three months of 2023.

	Years Ended December 31,					$ Change			% Change
	2022			2021
Other (expense)/income	$	(347,013	)	$	—	$	(347,013	)		—	%
Interest (expense)		(42,798	)		—		(42,798	)		—	%
Interest income		1,474			—		1,474			—	%

Other (expense)/income increased by $347,013, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in other (expense) is driven by an increase in SSES paid to the Providers described above of $347,013.

Interest (expense) increased by $42,798, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in interest expense is driven primarily by a $26,587 accrued interest payment relating to LMA Income Series LP along with $11,111 and $5,100 in interest expense for LMA and LMATT Growth & Income Series, Inc. for the year ended December 31, 2022.

Interest income increased by $1,474, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in interest income is driven by increases in bank interest.

Provision for income taxes

As the Company elected to file as an S corporation for federal and Florida state income tax purposes, the Company incurred no federal or Florida state income taxes, except for income taxes recorded related to LMATT Series 2024, Inc. (“LMATT”), a Delaware C corporation and wholly owned subsidiary of LMX Series, LLC (“LMX”), which Abacus Life, Inc. consolidates. Accordingly, tax expense has historically been attributable to tax expense for LMATT Series 2024, Inc. However, the Business Combination resulted in changes to the tax status of certain entities which impacted the provision for income taxes by $1,383,692.

	Three Months Ended June 30,
	2023			2022			$ Change			% Change
Provision for income taxes	$	(1,184,571	)	$	(120,132	)	$	(1,064,439	)		886	%

Provision for income taxes increased by $1,064,439, or 886% for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. Our effective income tax rate for the three months ended June 30, 2023 and three months June 30, 2022, was 15% and 12%, respectively. The Company’s effective tax rate as of June 30, 2022 differed from the statutory rate of 21% due to state taxes and the release of the valuation

55

allowance. The higher provision for income taxes for the three months ended June 30, 2023 is mainly related to Longevity Market Assets LLC taxable income of $7,081,252 resulting in $1,203,190 of provision for income taxes from the change in tax status upon the Business Combination.

	Six Months Ended June 30,
	2023			2022			$ Change			% Change
Provision for income taxes	$	(528,104	)	$	(296,806	)	$	(231,298	)		78	%

Provision for income taxes increased by $231,298, or 78% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. Our effective income tax rate for the six months ended June 30, 2023, and six months ended June 30, 2022, was 3.6% and 18%, respectively. The Company’s effective tax rate as of June 30, 2022 differed from the statutory rate of 21% due to the impact of state income taxes and valuation allowance released, as there was sufficient evidence of the Company’s ability to generate future taxable income at June 30, 2022. The existence of non-taxable flow-through entities within the Company as well as a change in tax status of certain entities upon the Business Combination caused the effective tax rate to be significantly lower than the statutory rate. The higher provision for income taxes for the six months ended June 30, 2023 is related to Longevity Market Assets LLC (LMA) taxable income of $13,876,206 resulting in $1,203,190 of provision for income taxes, offset by LMATT Series 2024, Inc. net taxable loss of $2,118,344 resulting in $536,894 of income tax benefit and LMATT Growth & Income Series, Inc. net taxable loss of $303,328 resulting in $76,878 of income tax benefit and LMATT Growth Series, Inc. net taxable loss of $954,095 resulting in $241,815 of income tax benefit.

	Years Ended December 31,
	2022			2021		$ Change			% Change
Income tax expense	$	(889,943	)	$	—	$	(889,943	)		—	%

Income tax expense decreased by $889,943 for the year ended December 31, 2022 compared to the year ended December 31, 2021. Our effective income tax rate for the year ended December 31, 2022 and year ended December 31, 2021 was 22.22% and 0.0%, respectively. The difference in the effective tax rate for the year ended December 31, 2021 and year ended December 31, 2021 is related to LMX’s taxable income of $3,088,732 resulting in $657,673 of income tax expense, LMATT Growth Series, Inc. taxable income of $562,263 resulting in $142,505 of income tax expense, and LMATT Growth & Income Series, Inc. taxable income of $358,658 resulting in $90,902 of income tax expense.

Results of Operations—Segment Results

Abacus Life, Inc. organizes its business into two reportable segments (i) portfolio servicing and (ii) active management, which generate revenue in different manners. During 2021, we primarily focused on the Portfolio Servicing business. At the end of June 2021, we underwent a change in our business to focus on active management services in addition to portfolio servicing.

This segment structure reflects the financial information and reports used by Abacus Life, Inc.’s management, specifically its chief operating decision maker (CODM), to make decisions regarding Abacus Life, Inc.’s business, including resource allocations and performance assessments as well as the current operating focus in accordance with ASC 280, Segment Reporting. Abacus Life, Inc.’s CODM is the Chief Executive Officer of Abacus Life, Inc.

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 through to death benefit. Abacus Life, Inc.’s reportable segments are not aggregated.

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The following tables provide supplemental information on revenue and profitability by operating segment:

Portfolio Servicing

	Three Months Ended June 30,
	2023			2022		$ Change			% Change
Total revenue	$	354,366		$	419,422		(65,056	)		(16	)%
Gross profit		(76,705	)		280,303		(357,008	)		(127	)%

Total revenue for the portfolio servicing segment decreased by $65,056, or 16% for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease in portfolio servicing revenue is primarily attributable to a decrease in the non-recurring consulting projects in Portfolio servicing revenue. Gross profit from our portfolio servicing segment decreased by $357,008 or 127%, for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The decrease in gross margin is primarily due to increases in total cost of revenue of $359,132, or 258% and the reduction of revenue by $65,056, or 16%.

	Six Months Ended June 30,
	2023			2022		$ Change			% Change
Total revenue	$	590,057		$	990,327	$	(400,270	)		(40	)%
Gross profit		(166,128	)		668,752		(834,880	)		(125	)%

Total revenue for the portfolio servicing segment decreased by $400,270 or 40% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The decrease in portfolio servicing revenue is primarily attributable to decrease in the non-recurring consulting projects in Portfolio servicing revenue. Gross profit from our portfolio servicing segment decreased by $834,880, or 125%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The decrease in gross margin is primarily due to increases in total cost of revenue of $434,610, or 135% and the reduction of revenue by $400,270, or 40%.

Total revenue for the portfolio servicing segment increased by $390,987, or 36%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in Portfolio servicing revenue is primarily attributable to $118,416 in increased related party servicing revenue and $272,570 in Portfolio servicing revenue. Gross profit from our portfolio servicing segment decreased $105,858, or 26%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in gross margin is primarily due to an increase in total cost of revenue of $496,844 partially offset by increases in revenue of $390,987.

Active Management

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Total revenue	$	11,024,399	$	7,979,479		3,044,920		38.2	%
Gross profit		10,482,070		7,452,479		3,029,591		40.7	%

Total revenue for the active management segment increased by $3,044,920, or 38% for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. Gross profit from our active management segment increased $3,029,591, or 41% for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase in active management revenue and gross profit was primarily attributable to the increase in revenue of $3,044,920 and decrease in cost of revenue from 7% of revenue to 5% of revenue.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Total revenue	$	20,994,917	$	17,285,971		3,708,946		21.5	%
Gross profit		20,288,152		15,521,471		4,766,681		30.7	%

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Total revenue for the active management segment increased by $3,708,946, or 22% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. Gross profit from our active management segment increased $4,766,681, or 31% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in Active management revenue and gross profit was primarily attributable to the increase in revenue of $3,708,946 and decrease in cost of revenue from 10% of revenue to 3% of revenue. The decrease in cost of revenue of approximately $1,073,064 was related to the decrease in consulting bonus expenses.

	Twelve Months Ended December 31,
	2022		2021		$ Change		% Change
Total revenue	$	43,242,581	$	120,000	$	43,122,581		35.934	%

Total revenue for the active management segment increased by $43,122,581 for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in Active management revenue was primarily attributable to LMA making a strategic shift and re-organizing the business to focus on active management services in addition to portfolio servicing at the end of September 2021.

Key Business Metrics and Non-GAAP Financial Measures

The consolidated financial statements of Abacus Life, Inc. have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and are prepared in accordance with U.S. GAAP. We monitor key business metrics and non-GAAP financial measures that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions. We have presented the following non-GAAP measures, their most directly comparable GAAP measure, and key business metrics:

Adjusted EBITDA

Non-GAAP Measure	Comparable GAAP Measure
Adjusted EBITDA	Net Income

Adjusted EBITDA is net income adjusted for depreciation expense, income tax and other non-cash and non-recurring items that in our judgement significantly impact the period-over-period assessment of performance and operating results that do not directly relate to business performance within Abacus Life, Inc.’s control. These unusual items may include proceeds from the PPP loan, payments made as part of Abacus Life, Inc.’s expense support commitment, loss on the change in fair value of debt, S&P 500 put and call options that were entered into as an economic hedge related to the debt (described as the unrealized loss on investments), and other non-recurring items. Management plans to terminate the agreement for the expense support commitment within the next twelve months. As such, management has deemed this to be non-recurring item. Adjusted EBITDA should not be determined as substitution for net income (loss), cash flows provided (used in) operating, investing, and financing activities, operating income (loss), or other metrics prepared in accordance with U.S. GAAP.

Management believes the use of Adjusted EBITDA assists investors in understanding the ongoing operating performance by presenting comparable financial results between periods. We believe that by removing the impact of depreciation and amortization and excluding certain non-cash charges, amounts spent on interest and taxes and certain other non-recurring charges that are highly variable from year to year, Adjusted EBITDA provides our investors with performance measures that reflect the impact to operations from trends in changes in revenue, policy values and operating expenses, providing a perspective not immediately apparent from net income and operating income. The adjustments we make to derive the non-GAAP measure of Adjusted EBITDA exclude items which may cause short-term fluctuations in net income and operating income and which we do not consider to be the fundamental attributes or primary drivers of our business.

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The following table presents a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, net income (loss), on a historical basis for the periods indicated below:

	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended December 31,
	2023			2022			2023			2022			2022			2021
Net income	$	6,723,549		$	5,086,199		$	14,348,345		$	11,922,339		$	32,386,975		$	(133,609	)
Depreciation expense		1,098			1,098			2,141			2,141			4,284			2,447
Interest Income		584,075			—			934,001			—			(1,474	)		—
Income tax		1,184,571			120,132			528,104			296,806			889,943			—
Other income (expense)		(121,601	)		127,455			21,651			242,247			389,811			485,405
Loss on change in fair value of debt		1,445,229			333,879			2,398,662			375,513			90,718			—
Unrealized loss (gain) on investments		(672,936	)		1,039,022			(798,156	)		1,054,975			1,045,623			—
Adjusted EBITDA	$	9,143,985		$	6,707,785		$	17,434,748		$	13,894,021		$	34,805,879		$	354,243
Adjusted EBITDA Margin		80.4	%		79.9	%		80.8	%		76.0	%		77.8	%		29.5	%
Net Income Margin		59.1	%		60.6	%		66.5	%		65.2	%		72.4	%		-11.1	%

Adjusted EBITDA for the three months ended June 30, 2023 was $9,143,985 compared to $6,707,785 for the three months ended June 30, 2022. The increase of $2,436,200, or 36% in adjusted EBITDA is primarily due to the increase of $1,637,350, or 32% in net and comprehensive income and the increase of $1,111,350, or 333% in gain on change in fair value of debt. There is an offset in unrealized loss on investments of $672,936.

Adjusted EBITDA for the six months ended June 30, 2023 was $17,434,748 compared to $13,894,021 for the six months ended June 30, 2022. The increase of $3,540,727, or 25% in adjusted EBITDA is primarily due to the expansion of the active management services which resulted in increased revenues of $3,708,946, or 21% and the increase of $2,023,149, or 539% in gain on change in fair value of debt.

Adjusted EBITDA for the year ended December 31, 2022 was $34,805,879 compared to $354,243 for the year ended December 31, 2021. The increase in adjusted EBITDA is primarily due to the expansion of the active management services which resulted in increased revenues of $43,122,581, offset by an increase in cost of revenues of $38,110,187 for active management sales.

We monitor the following key business metrics: (i) number of policies serviced, (ii) value of policies serviced, and (iii) total invested dollars. Servicing revenue involves the provision of services to one affiliate by common ownership and third parties which own life insurance policies. The number of policies and the value of policies serviced represents the volume and dollar value of policies over which the above services are performed. Total invested dollars represent the acquisition cost plus premiums paid by the policy. We use the aforementioned metrics to assess business operations and provide concrete benchmarks that provide a clear snapshot of growth between the periods under consideration. Please refer to the following Key Business Metrics below:

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Key business metric
Number of policies serviced		819		441		378		85.7	%
Value of policies serviced ($)		1,823,437,795		650,461,869		1,172,975,926		180.3	%
Total invested dollars ($)		678,400,432		167,374,107		511,026,325		305.3	%

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	Years Ended December 31,
	2022		2021		$ Change		% Change
Key business metric
Number of policies serviced		421		379		42		11	%
Value of policies serviced ($)		649,842,091		600,651,852		49,190,239		8	%
Total invested dollars ($)		163,939,204		153,378,077		10,561,127		7	%

Liquidity and Capital Resources

Abacus Life, Inc. has financed operations since our inception primarily through customer payments, debt issuances, and net proceeds from equity financings in the form of capital contributions from our limited liability company members. Our principal uses of cash and cash equivalents in recent periods have been funding our operations as Abacus Life, Inc. must actively manage its working capital and the associated cash requirements when servicing policies while also effectively utilizing cash and other sources of liquidity to purchase additional policies. As of June 30, 2023, our principal sources of liquidity was cash totaling $20,611,122. During the six months ended June 30, 2023, Abacus Life, Inc. had a net income attributable to Abacus Life, Inc. of $14,348,345 and during the six months ended June 30, 2022, Abacus Life, Inc. had a net income attributable to Abacus Life, Inc. of $11,515,698. During the six months ended June 30, 2023, and 2022, Abacus Life, Inc. had a net cash used in operations of $38,364,171 and $4,751,170, respectively.

As described above, Abacus Life, Inc. has entered into an SSES with the Providers. Since inception of the SSES on January 1, 2021 through December 31, 2021, Abacus Life, Inc. had incurred $120,000 related to initial funding of operations, and $0 related to expenses. As of June 30, 2023, Abacus Life, Inc. did not incurred related expenses to fund the deficits. Additionally, the Providers reimbursed Abacus Life, Inc. for the initial funding of $120,000 but have not reimbursed other expenses paid by Abacus Life, Inc. on behalf of the Providers in 2022. For the three months and six months ended June 30, 2023, the Providers were considered to be VIEs, but were not consolidated in our consolidated financial statements due to a lack of the power criterion or the losses/benefits criterion.

Our future capital requirements will depend on many factors, including our revenue growth rate and, the expansion of our active management and portfolio activities. Abacus Life, Inc. may, in the future, enter into arrangements to acquire or invest in complementary businesses, products and technologies. Abacus Life, Inc. may be required to seek additional equity or debt financing.

Cash Flows from our operations

The following table summarizes our cash flows for the periods presented:

	Six Months Ended June 30,						Twelve Months Ended December 31,
	2023			2022			2022			2021
Net cash used in operating activities	$	(38,364,171	)	$	(4,751,170	)	$	10,693,252		$	(139,168	)
Net cash used in investing activities		(7,060,627	)		(250,000	)		(3,704,654	)		(275,346	)
Net cash provided by financing activities		35,983,097			7,744,154			22,961,795			381,663

Operating Activities

During the six months ended June 30, 2023, our operating activities used $38,364,171 of net cash as compared to $4,751,170 of net cash used from operating activities during the six months ended June 30, 2022. The increase in net cash used from operating activities during the six months ended June 30, 2023 compared to the six months ended June 30, 2022, was primarily due to purchases of $39,556,677 life settlement policies at fair value and $11,374,605 life settlement policies at cost during the six months ended June 30, 2023 compared to purchases of $7,211,509 life settlement polices at fair value and $7,204,753 life settlement polices at cost during the six months ended in June 30, 2022.

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During the year ended December 31, 2022, our operating activities generated $10,693,252 of net cash as compared to net cash used from operating activities of $139,168 during the year ended December 31, 2021. The increase in net cash from operating activities during 2022 compared to 2021 was primarily due to the increased net income, which was primarily attributable to increases in Active management revenue.

Investing Activities

During the six months ended June 30, 2023, investing activities used $7,060,627 of net cash as compared to $250,000 net cash used during the six months ended June 30, 2022. $7,060,627 of net cash used in investing activities during the six months ended June 30, 2023 was related to payments of $6,760,627 due from affiliates and $300,000 of net cash was used for the purchase of other investments. $250,000 of net cash used in investing activities during the six months ended June 30, 2022 was related to the purchase of other investments.

During the year ended December 31, 2022, investing activities used $3,704,645 of net cash as compared to $275,346 during the year ended December 31, 2021. Net cash used in investing activities during the year ended December 31, 2022 was related to purchase of available-for-sale investments, other investments and the increase in the amounts due from affiliates during the year. Net cash used in investing activities during the year ended December 31, 2021 was related to purchase of available-for-sale investments and the purchase of property and equipment during the year, along with amounts due from affiliates of $2,904,646.

Financing Activities

During the six months ended June 30, 2023, financing activities generated $35,983,097 of net cash as compared to $7,744,154 of net cash generated during the six months ended June 30, 2022. The increase of $28,238,943 in net cash generated in financing activities during the six months ended June 30, 2023 compared to June 30, 2022, was related to the proceeds of $25,000,000 received from the SPV Purchase and Sale Note as well as $35,206,351 from the issuance of debt certificates, offset by $23,533,072 of capital distributions to members during June 30, 2023.

During the year ended December 31, 2022, financing activities generated $22,961,795 of net cash as compared to net cash generated of $381,663 during the year ended December 31, 2021. Net cash generated in financing activities during the year ended December 31, 2022 was related to the increase in amount for issuance of debt securities of $ 30,028,640, partially offset by amount due to affiliates of $666,845 and distributions to members of $6,400,000. Net cash generated in financing activities during the year ended December 31, 2021 was related to the increase in the amounts due to members of $781,663, partially offset by distributions to members of $400,000.

Contractual Obligations and Commitments

Our significant contractual obligations as of June 30, 2023, include three notes, LMATTS^TM 2024, LMATTS^TM 2.2024, and LMATTS^TM 1.2026. The $10,166,900 LMATTS^TM 2024 notes are a market-indexed instrument designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 40%. Any subsequent losses below the 40% threshold will reduce the notes. The notes do not pay interest to the holders. As of June 30, 2023, $9,866,900 of the principal amount remained outstanding.

The $2,333,391 LMATTS^TM 2.2024 notes are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 20%. Any subsequent losses below the 20% threshold will reduce the notes. The notes do not pay interest to the holders. As of June 30, 2023, the entire principal amount remained outstanding.

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The $400,000 LMATTS^TM 1.2026 notes are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2026, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 10%. Any subsequent losses below the 10% threshold will reduce the notes. The notes pay annual interest of 4% on invested capital to the holders. As of June 30, 2023, the entire principal amount remained outstanding.

Additionally, LMA Income Series, GP, LLC, wholly owned and controlled by that LMA Series, LLC, formed a limited partnership, LMA Income Series, LP and 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 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 year ended December 31, 2022, and interim condensed consolidated financial statements for the three and six months ended June 30, 2023.

During the six months ended June 30, 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 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 II, GP, LLC. The limited partners will receive 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 and six months ended June 30, 2023.

The private placement offerings proceeds for both LMA Income Series, LP and LMA Income Series II, LP will be used to acquire an actively managed large and diversified portfolio of financial assets. Abacus Life, Inc. elected to account for the secured borrowings at fair value under the collateralized financing entity guidance within ASC 810-10-30. As of June 30, 2023, the fair value of the LMA Income Series, LP secured borrowing was $22,124,676. As of June 30, 2023, the fair value of the LMA Income Series II, LP secured borrowing was $20,041,851.

Additionally, Abacus Life, Inc. has operating lease obligations, which are included as liabilities on our balance sheet, for our office space. As of June 30, 2023, operating lease obligations were $244,425 with $227,561 due in less than one year and $16,864 due within one to three years, which are comprised of the minimum commitments for our office space.

Critical Accounting Policies and Estimates

Abacus Life, Inc. has prepared our consolidated financial statements in accordance with GAAP. Our preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and related disclosures at the date of the financial statements, as well as revenue and expense recorded during the reporting periods. Abacus Life, Inc. evaluates our estimates and judgments on an ongoing basis. Abacus Life, Inc. bases our estimates on historical experience and or other relevant assumptions that Abacus Life, Inc. believes to be reasonable under the circumstances. Actual results may differ materially from management’s estimates.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements contained herein, Abacus Life, Inc. believes the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements.

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Longevity Market Assets Target-Term Series (LMATTSTM) Note

On March 31, 2022, LMATT Series 2024, Inc., which Abacus Life, Inc. consolidates for financial reporting, issued approximately $10,166,900 in market-indexed private placement notes. The notes, LMATTSTM 2024, are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 40%. Any subsequent losses below the 40% threshold will reduce the notes. The notes do not pay interest to the holders. As of June 30, 2023, $9,866,900 of the principal amount remained outstanding.

On September 16, 2022, LMATT Growth Series, Inc., which Abacus Life, Inc. consolidates for financial reporting, issued approximately $2,333,391 in market-indexed private placement notes. The notes, LMATTS^TM 2.2024, are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 20%. Any subsequent losses below the 20% threshold will reduce the notes. The notes do not pay interest to the holders. As of June 30, 2023, the entire principal amount remained outstanding.

On September 16, 2022, LMATT Growth and Income Series, Inc., which Abacus Life, Inc. consolidates for financial reporting, issued approximately $400,000 in market-indexed private placement notes. The notes, LMATTS^TM 1.2026, are market-indexed instruments designed to provide upside performance exposure of the S&P 500 Index, while limiting downward exposure. Upon maturity of the notes in 2024, the principal, plus the return based upon the S&P 500 Index must be paid. The notes have a feature to protect debt holders from market downturns, up to 10%. Any subsequent losses below the 10% threshold will reduce the notes. The notes pay an annual 4% interest rate on invested capital to the holders. As of June 30, 2023, the entire principal amount remained outstanding.

Abacus Life, Inc. 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^TM note. The discounted cash flow analysis includes a discount rate that is based on the implied discount rate assumption 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.

For the three months ended June 30, 2023, Abacus Life, Inc. has recognized a loss of $620,085 and a loss of $765,591 for the LMATTS^TM 2024, Inc. notes and LMATTS^TM Growth Series, Inc. notes respectively on the change in fair value 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 interim Condensed Consolidated Statement of Operations. For the six months ended June 30, 2023, Abacus Life, Inc. has recognized a loss of $1,305,293 and a loss of $1,033,816 for the LMATTS^TM 2024, Inc. notes and LMATTS^TM Growth Series, Inc. notes, respectively on the change in fair value 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 interim Condensed Consolidated Statement of Operations.

Longevity Market Assets Income Series, LP

On November 30, 2022, LMA Income Series, GP, LLC, wholly owned and controlled by that LMA Series, LLC, which Abacus Life, Inc. consolidates, formed a limited partnership, LMA Income Series, LP and issued partnership interests to limited partners in a private placement offering. 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 year ended December 31, 2022. The limited partners will receive an

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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. The general partner committed $250,000, with the limited partners contributing $17,428,349. Additional limited partner contributions of $4,461,095 were raised in the first quarter of 2023 bringing the total deposit amount to $22,139,444.

The private placement offerings proceeds were used to acquire an actively managed large and diversified portfolio of financial assets. Abacus Life, Inc., through its consolidated subsidiaries, serves as the portfolio manager for the financial asset portfolio, which includes investment sourcing and monitoring. In this role, Abacus Life, Inc. has the unilateral ability to acquire and dispose of any of the above investments. Abacus Life, Inc. elected to account for the secured borrowing at fair value under the collateralized financing entity guidance within ASC 810-10-30. As of June 30, 2023, the fair value of the secured borrowing, not including the $250,000 committed from the general partner, was $22,124,676 and there was no gain or loss recognized.

Longevity Market Assets Income Series II, LP

On January 31, 2023, LMA Series, LLC, a wholly owned subsidiary of the Company, signed an Operating Agreement to be the sole member of a newly created general partnership, LMA Income Series II, GP, LLC. Subsequent to that, LMA Income Series II, GP, LLC formed a limited partnership, LMA Income Series II, LP and issued partnership interests to limited partners in a private placement offering. It was determined that LMA Series, LLC is the primary beneficiary of LMA Income Series II, LP and thus has fully consolidated the limited partnership in its consolidated financial statements for the three months ended June 30, 2023. The limited partners will receive 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.

The private placement offerings proceeds were used to acquire an actively managed large and diversified portfolio of financial assets. Abacus Life, Inc., through its consolidated subsidiaries, serves as the portfolio manager for the financial asset portfolio, which includes investment sourcing and monitoring. In this role, Abacus Life, Inc. has the unilateral ability to acquire and dispose of any of the above investments. Abacus Life, Inc. elected to account for the secured borrowing at fair value under the collateralized financing entity guidance within ASC 810-10-30. As of June 30, 2023, the fair value of the secured borrowing, not including the commitment from the general partner, was $20,041,851 and there was no gain or loss recognized.

Valuation of Life Insurance Policies

Abacus Life, Inc. accounts for its holdings of life insurance settlement policies at fair value in accordance with ASC 325-30, Investments in Insurance Contracts. Any resulting changes in estimates are reflected in operations in the period the change becomes apparent.

Abacus Life, Inc. follows ASC 820, Fair Value Measurements and Disclosures, in estimating the fair value of its life insurance policies, which defines fair value as an exit price representing the amount that would be received if an asset were sold or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-level, fair value hierarchy that prioritizes the inputs used to measure fair value. Level 1 relates to quoted prices in active markets for identical assets or liabilities. Level 2 relates to observable inputs other than quoted prices included in Level 1. Level 3 relates to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Abacus Life, Inc.’s valuation of life settlements is considered to be Level 3, as there is currently no active market where Abacus Life, Inc. is able to observe quoted prices for identical assets. Abacus Life, Inc.’s valuation model incorporates significant inputs that are not observable.

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The aggregate face value of policies held at fair value is approximately $195,205,585 as of June 30, 2023, with a corresponding fair value of approximately $56,685,617. Aggregate face value of policies accounted for using the investment method is $39,520,877 as of June 30, 2023, with a corresponding carrying value of approximately $9,889,610.

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 June 30, 2023:

Carrier	Percentage of Face Value	Percentage of Fair Value	Carrier Rating
American General Life Insurance Company	14.0%	11.0%	A
ReliaStar Life Insurance Company	6.0%	12.0%	A
Lincoln National Life Insurance Company	14.0%	12.0%	A

The Company reviews the composition of its portfolio with respect to the concentration of life insurance carriers on an ongoing basis. In addition, as a general policy, the Company typically invests in life insurance policies issued by “A-” rated or better life insurance carriers.

Equity Investments in Privately-Held Companies

Equity investments without readily determinable fair values include our investments in privately-held companies in which Abacus Life, Inc. holds less than a 20% ownership interest and does not have the ability to exercise significant influence. Abacus Life, Inc. determines fair value using level 3 inputs under the measurement alternative. These investments are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

In addition, Abacus Life, Inc. monitors these investments to determine if impairment charges are required based primarily on the financial condition and near-term prospects of these companies. As of June 30, 2023, Abacus Life, Inc. did not identify any impairment indicators and determined that the carrying value of $1,600,000 is the fair value for these equity investments in privately held companies, given that there have been no observable price changes.

Available-For-Sale Securities

Abacus Life, Inc. has investments in securities that are classified as available-for-sale securities, and which are reflected on the Consolidated Balance Sheets at fair value. These securities solely consist of a convertible promissory note in a private company that was entered into an arms-length. Abacus Life, Inc. determines the fair value 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. Unrealized gains and losses on these investments are included as a separate component of accumulated other comprehensive loss, net of tax, on the Consolidated Balance Sheets. Abacus Life, Inc. classifies its available-for-sale securities as short-term or long-term based on the nature of the investment, its maturity date and its availability for use in current operations. Abacus Life, Inc. monitors its available-for-sale securities for possible other-than-temporary impairment when business events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. As of June 30, 2023, Abacus Life, Inc. evaluated the fair value of its investment and determined that the fair value approximates the carrying value of $1,000,000, and no unrealized gains and losses were recorded.

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Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

JOBS Act Election

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

Abacus Life, Inc. has irrevocably elected to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, Abacus Life, Inc., as an emerging growth company, will adopt the new or revised standard at the time public companies adopt the new or revised standard. As a result, following the consummation of the Business Combination, Abacus Life, Inc. will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

Abacus Settlements

Overview

Abacus Settlements originates life insurance policy settlement contracts as a licensed life settlement provider on behalf of third-party institutional investors (“Financing Entities”) interested in investing in the life settlement asset class. Specifically, Abacus Settlements originates policies through three primary origination channels (Agents/Financial Advisors, Direct-to-Consumers, Life Settlement Brokers and Third-Party Intermediaries), screens them for eligibility by verifying that the policy is in force, obtaining consents and disclosures, and submitting cases for life expectancy estimates. This process is characterized as our origination services, which averages a fee of approximately 2% of face value (“Origination Revenue”).

Our Business Model

As a life settlement provider, Abacus Settlements serves as a purchaser of outstanding life insurance policies. When serving as a purchaser, Abacus Settlements’ primary purpose in the transaction is to connect buyers and sellers through an origination process. The origination process is core to Abacus Settlements’ business and drives its economics. Abacus Settlements averages approximately 2% of face value in origination fees on policies and has developed three high quality origination channels which include agents and financial advisors, direct to consumer, life settlements brokers and third-party intermediaries. Generally, diversification across multiple origination channels lowers average policy acquisition cost and increases estimated returns. Abacus Settlements finds sellers through its origination channels using strategic marketing practices in its core markets, with the purpose of finding policy owners who want to capitalize on their investments prior to death by extracting value from their policies through the sale of such policies to Financing Entities.

Key Factors Affecting Our Performance

Our operations and financial performance are impacted by economic factors affecting the industry, including:

Opportunities in the Life Settlements Industry

Within the life settlements industry, there is significant policy value that lapses on an annual basis. Currently, the life settlements industry only captures a narrow portion of the potential market leaving significant

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runway for future growth for industry participants. With the anticipation of growth in total face value of life insurance policies, we believe we are well positioned to capitalize on the overall market growth. Abacus is currently conducting business in 49 states and the District of Columbia. The company holds viatical settlement and or life settlement provider licenses in forty-three (43) of those jurisdictions. Abacus also conducts business in seven (7) jurisdictions which do not currently have life and or viatical settlement provider licensing requirements. Abacus conducts business where is it legally allowed to across the United States. The only state Abacus is not currently conducting business in is Alaska and there are no current plans to procure a license.

Our ability to originate policies is essential to scale our business over time. In order to support this expected growth, we continue to invest in our technology and marketing infrastructure. In general, we expect our efforts will continue to focus on driving education and awareness of life settlements. In order to meet this growing demand, we have increased our total headcount by 18% since December, 2022, and anticipate a total of 36% growth of our total headcount from December 31, 2022 to December 31, 2024, of which 18% has already been captured.

Macroeconomic Changes

Global macroeconomic factors, including regulatory policies, unemployment, changes in retirement savings, the cost of healthcare, inflation, and tax rate changes impact demand for our origination services. These factors evolve over time and while these changes have not currently made any significant impact on performance, these trends may shift the timing and volume of transactions, or the number of customers using our origination services.

Components of Results of Operations

Results of Operations

The following tables set forth our results of operations for each of the periods indicated, and we presented and expressed the relationship of certain line items as a percentage of revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

The following tables set forth our historical results for the periods indicated, and the changes between periods:

	Three Months Ended June 30,				Six Months Ended June 30,				Twelve Months Ended December 31,
	2023		2022		2023		2022		2022		2021
Origination Revenue	$	1,689,088	$	743,388	$	3,252,738	$	3,185,068	$	7,050,007	$	4,906,374
Related-party revenue		5,195,602		4,948,528		9,931,938		9,829,596		18,153,456		17,685,770
Total Revenue		6,884,690		5,691,916		13,184,676		13,014,664		25,203,463		22,592,144
Cost of revenue		1,505,333		956,625		2,734,949		3,265,313		5,538,470		2,678,029
Related party cost of revenue		3,392,647		2,615,307		6,558,354		5,522,312		11,022,535		11,527,312
Gross Profit		1,986,710		2,119,984		3,891,373		4,227,039		8,642,458		8,386,803
Operating expenses
General, administrative and other		2,297,577		2,208,051		4,848,580		3,948,358		8,674,425		7,439,549
Depreciation expense		2,561		3,048		5,597		5,988		12,165		10,139
Total operating expenses		2,300,138		2,211,099		4,854,177		3,954,346		8,686,590		7,449,688

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	Three Months Ended June 30,						Six Months Ended June 30,					Twelve Months Ended December 31,
	2023			2022			2023			2022		2022			2021
Income (loss) from operations		(313,428	)		(91,115	)		(962,804	)		272,693		(44,132	)		937,115
Other income (expense)
Interest income		1,193			599			1,917			1,147		2,199			11,500
Interest (expense)		(5,863	)		—			(11,725	)		—		(8,817	)		—
Other income		—			273			—			273		273			50,000
Total other income (expense)		(4,670	)		872			(9,808	)		1,420		(6,345	)		61,500
Income (loss) before income taxes		(318,098	)		(90,243	)		(972,612	)		274,113		(50,477	)		998,615
Provision for income taxes		—			—			2,289			1,325		2,018			1,200
Net income attributable to Abacus Life, Inc.	$	(318,098	)	$	(90,243	)	$	(974,901	)	$	272,788	$	(52,495	)	$	997,415

Origination Revenue

Abacus recognizes revenue from origination activities by acting as a provider of life settlements and viatical settlements by representing investors that are interested in purchasing life settlements on the secondary or tertiary market. Revenue from origination services consists of fees negotiated for each purchase and sale of a policy to an investor, which also include any agent and broker commissions received and the reimbursement of transaction costs.

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Origination revenue	$	1,689,088	$	743,388	$	945,700		127	%

Revenue increased by $945,700, or 127%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. This increase was primarily attributable to higher pricing on the sale of broker policies arising from various factors such as policy death benefits, cash surrender values, life expectancy and policyholder age pertaining to the policies sold. These factors resulted in an increase of the commission fee paid to Abacus.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Origination revenue	$	3,252,738	$	3,185,068	$	67,670		2	%

Revenue increased by $67,670, or 2%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase in revenue is primarily attributable to an increase in agent and client direct sales during 2023, which is driven by higher face values on the policies originated and higher commission flows, partially offset by a decrease in broker sales. The agent, broker, and client direct sales are all in line with normal, recurring business.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Origination revenue	$	7,050,007	$	4,906,374		2,143,633		44	%

Revenue increased by $2,143,633, or 44%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in revenue is primarily attributable to an increase in agent and broker

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sales during 2022 of $489,687 and $1,681,175, which is driven by higher face values on the policies originated, partially offset by a decrease in client direct sales of $63,297. The agent, broker, and client direct sales are all in line with normal, recurring business.

Related Party Revenue

Abacus has a related party relationship with the Nova Funds as the owners of Abacus jointly own 11% of the Nova Funds. Pricing for origination fees are governed by origination contracts that have been negotiated by both parties and are considered to be arms-length and consistent with origination fees charged to third party customers. 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.

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Related Party Revenue	$	5,195,602	$	4,948,529	$	247,073		5	%

For the three months ended June 30, 2023 and June 30, 2022, Abacus has originated 38 and 92 policies, respectively, for the Nova Funds with a total value of approximately $56,688,680 and $102,307,954 respectively. This decrease in the origination of Nova Fund policies was partially offset by increases in origination services to LMA. For the three months ended June 30, 2023 and June 30, 2022, Abacus has originated 69 and 8 policies, respectively, for LMA with a total value of approximately $114,999,768 and $31,200,000, respectively.

Related party revenue decreased by $247,073, or 5%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease in related party revenue is primarily attributable to decrease in Nova origination sales and transaction fee reimbursement of $2,176,724 and $1,196,167, partially offset by increased LMA originations services of $3,438,539.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Related Party Revenue	$	9,931,938	$	9,829,596	$	102,342		1	%

For the six months ended June 30, 2023 and June 30, 2022, Abacus has originated 72 and 183 policies, respectively, for the Nova Funds with a total value of approximately $96,674,080 and $282,804,838, respectively. This decrease in the origination of Nova Fund policies was partially offset by increases in origination services to LMA. For the six months ended June 30, 2023 and June 30, 2022, Abacus has originated 103 and 8 policies, respectively, for LMA with a total value of approximately $192,685,578 and $31,200,000, respectively.

Related party revenue decreased by $102,342 or 1%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in related party revenue is primarily attributable to a decrease in Nova origination sales and transaction fee reimbursement of $4,770,057 and $1,284,679, partially offset by increased LMA originations services of $6,324,441.

	Years Ended December 31,
	2022		2021		$ Change		% Change
Related Party Revenue	$	18,153,456	$	17,685,770	$	467,686		3	%

For the years ended December 31, 2022 and December 31, 2021, Abacus Settlements originated 333 and 313 policies, respectively, for the Nova Funds with a total value of approximately $87,143,005 and $106,633,792, respectively. Related party revenue increased by $467,686, or 3%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in related party revenue is primarily attributable to increased agent and direct client sales of $3,627,939, partially offset by decreased broker

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sales during 2022 of $3,160,223. There was an increase in origination policies of 16% in 2022, with origination fees increasing 13%.

Cost of Revenue, Related Party Cost of Revenue, and Gross Margin

Cost of revenue is primarily comprised of third-party commissions, which includes third-party sales and marketing commission fees, as well as transaction costs that are reimbursed as part of the origination activity and depreciation and amortization expense. Abacus receives an origination fee plus any commission to be paid from the purchaser for its part in arranging the life settlement transactions. Out of that fee income, Abacus pays commissions to the licensed representative of the seller, if one is required. Commission expense is recorded at the same time revenue is recognized and is included within cost of revenue. Depreciation expense consists of depreciation of property and equipment assets, which are computer equipment. Amortization expense consists primarily of amortization of capitalized costs incurred for the development of internal use software. The costs incurred exclusively consist of fees incurred from an external consulting firm during the development stage of the project and is amortized on the straight-line basis over an estimated useful life of three years.

	Three Months Ended June 30,
	2023			2022			$ Change			% Change
Cost of revenue	$	1,505,333		$	956,625		$	548,708			57	%
Related party cost of revenue		3,392,647			2,615,307			777,340			30	%
Gross Profit		1,986,710			2,119,984			(133,274	)		(6	)%
Gross Margin		29	%		37	%

Cost of revenue increased by $548,708 or 57%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in cost of revenue is primarily due to increases in sales-agents commission expenses of $838,577, partially offset by a decrease in marketing origination payout and consulting fees.

Related party cost of revenue increased by $777,340 or 30%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in related party cost of revenue is primarily attributable to an increase in LMA agent commission expenses of $2,245,314 partially offset by a decrease in the originations of policies sold to Nova Fund of $1,478,661.

Gross profit decreased by $133,274 or 6%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. Gross margin decreased to 29% for the three months ended June 30, 2023 compared to 37% for the three months ended June 30, 2022. The decrease in gross profit and gross margin is primarily due to the increased commission expense per related party policy and correspondingly the decrease in gross margin due to a greater portion of the profit margin allocated to the licensed agent or broker.

	Six Months Ended June 30,
	2023			2022			$ Change			% Change
Cost of revenue	$	2,734,949		$	3,265,313		$	(530,364	)		(16	)%
Related party cost of revenue		6,558,354			5,522,312			1,036,042			19	%
Gross Profit		3,891,373			4,227,039			(335,666	)		(8	)%
Gross Margin		30	%		32	%

Cost of revenue decreased by $530,364, or 16%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease in cost of revenue is primarily due to decreases in sales-agents commission expenses and marketing origination payout.

Related party cost of revenue increased by $1,036,042, or 19%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase in related party cost of revenue is primarily

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attributable to increase in LMA agent commission expenses of $4,634,216 partially offset by a decrease in the originations of policies sold to Nova Fund of $3,368,361.

Gross profit decreased by $335,666, or 8%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. Gross margin decreased to 30% for the six months ended June 30, 2023, compared to 32% for the six months ended June 30, 2022. The decrease in gross profit and gross margin is primarily due to the increased commission expense per related party policy and correspondingly the decrease in gross margin due to a greater part of the profit margin allocated to the licensed agent or broker.

	Years Ended December 31,						$ Change			% Change
	2022			2021
Cost of revenue	$	5,538,470		$	2,678,029			2,860,441			107	%
Related party cost of revenue		11,022,535			11,527,312			(504,777	)		-4	%
Gross Profit		8,642,458			8,386,803			255,656			3	%
Gross Margin		34	%		37	%					-8	%

Cost of revenue increased by $2,860,441, or 107%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in cost of revenue is primarily due to increases in agent commission expenses of $1,570,908 due to increases in agent and broker origination revenue, which is driven by increased origination activity and an increase in the face value of policies sold to third parties. There was also an increase in life expectancy report fees of $470,883 which is driven off of increases in agent and broker activity during 2022.

Related party cost of revenue decreased by $504,777, or 4%, for the year ended December 31, 2022 compared to the year ended December 30, 2021. The decrease in related party cost of revenue is primarily attributable to decreases in agent commission expenses of $569,229 as a result of decrease in the total face value of policies sold to the Nova funds, which agent commission expense is primarily based off of.

Gross profit increased by $255,656, or 3%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. Gross margin decreased to 34% for the year ended December 31, 2022 compared to 37% for the year ended December 31, 2021. The increase in gross profit and decrease in gross margin is primarily due to a decrease in client direct sales of 12%, as no agent commission needs to be paid for client direct sales, so the margins are much higher than agent and broker origination sales which increased by 16% in 2022.

Operating Expenses

Operating expenses is comprised of general and administrative expenses as well as depreciation expense.

General and administrative expenses include compensation, payroll, advertising, marketing, rent, insurance, recruitment, trade shows, telephone & internet, licenses, and other professional fees.

Depreciation expense consists of depreciation of property and equipment assets, which are computer equipment, office furniture and lease improvement.

	Three Months Ended June 30,
	2023		2022		$ Change			% Change
General and administrative expenses	$	2,297,577	$	2,208,444	$	89,133			4	%
Depreciation expense		2,561		3,048		(487	)		(16	)%

General and administrative expenses increased by $89,133, or 4%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The increase in general and administrative expenses are primarily due to increases in payroll expenses of $180,520 for administration support as a result of higher

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employee headcounts, and compensation raises, partially offset by a decrease in payroll expenses of $11,963 for the sales department. There was an increase in marketing expenses of $80,723 due to increased spending in internet advertising. There was also an increase of $57,000 in sponsorships. Rent and office expense also increased by $15,508 and $34,812 respectively. Salaries and payroll expense, as a percentage of total revenue, represented 23% and 25% for the three months ended June 30, 2023 and 2022, respectively.

Depreciation expense decreased by $487, or 16%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease in depreciation expense is primarily due to the declining book value of obsolescent furniture in normal course of business operations.

	Six Months Ended June 30,
	2023		2022		$ Change			% Change
General and administrative expenses	$	4,848,580	$	3,948,358	$	900,222			23	%
Depreciation expense		5,597		5,988		(391	)		(7	)%

General and administrative expenses increased by $900,222, or 23%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in general and administrative expenses are primarily due to increases in payroll expenses of $138,944 for the sales department and $479,068 for administration support as a result of higher employee headcounts, and compensation raises. There was an increase in marketing expenses of $186,987 due to increased spending in internet advertising. There was also an increase of $125,500 in sponsorships. Rent and office expense also increased by $41,271 and $71,688 respectively. Salaries and payroll expense, as a percentage of total revenue, represented 24% and 19% for the six months ended June 30, 2023 and 2022, respectively.

Depreciation expense decreased by $391, or 7%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The decrease in the expense is primarily due to the declining book value of obsolescent furniture in normal course of business operations.

	Year Ended December 31,				$ Change		% Change
	2022		2021
General and administrative expenses	$	8,674,425	$	7,439,549	$	1,234,876		17	%
Depreciation expense		12,165		10,139		2,026		20	%

General and administrative expenses increased by $1,234,876, or 17%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in general and administrative expenses are primarily due to increases in payroll expenses as a result of higher employee headcounts as there was an increase of 40% during 2022, and compensation raises. There was an increase in marketing expenses due to increased television ads and radio commercials, as well as increased spending in internet advertising. Salaries and payroll expense, as a percentage of total revenue, represented 21% and 18% for the years ended December 31, 2022 and 2021, respectively.

Depreciation expense increased by $2,026, or 20%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in the expense is primarily due to an increase in the purchase of depreciable assets. The majority of the purchases are computer equipment.

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Other income (expense)

Other income (expense) includes interest income, consulting income, and other income. Interest income represents the interest earned on Abacus’ certificates of deposits. Consulting income represents income earned on various origination consulting services performed. Other income comprises of income from credit card cash rewards.

	Three Months Ended June 30,
	2023			2022		$ Change			% Change
Interest income	$	1,193		$	599	$	594			99	%
Interest (expense)		(5,863	)		—		(5,863	)		(100	)%
Other income		—			273		(273	)		(100	)%

Interest income increased by $594, or 99%, for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase in interest income is primarily due to favorable changes in interest rate terms for the Abacus certificate of deposit.

Interest expense increased by $5,863, or 100% for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The increase in interest expense is primarily due to the amortization of the deferred financing fees.

Other income decreased by $273, or 100% for the three months ended June 30, 2023, compared to the three months ended June 30, 2022. The decrease in other income is primarily due to none collected credit card cash rewards during 2023.

	Six Months Ended June 30,
	2023			2022		$ Change			% Change
Interest income	$	1,917		$	1,147	$	770			67	%
Interest (expense)		(11,725	)		—		(11,725	)		(100	)%
Other income		—			273		(273	)		(100	)%

Interest income increased by $770, or 67%, for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in interest income is primarily due to favorable changes in interest rate terms for the Abacus certificate of deposit.

Interest expense increased by $11,725, or 100% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The increase in interest expense is primarily due to the amortization of the deferred financing fees.

Other income decreased by $273 or 100% for the six months ended June 30, 2023, compared to the six months ended June 30, 2022. The decrease in other income is primarily due to none collected credit card cash rewards during 2023.

	Years ended December 31,					$ Change			% Change
	2022			2021
Interest income	$	2,199		$	11,500	$	(9,301	)		-81	%
Interest (expense)		(8,817	)		—		(8,817	)		100	%
Other income		273			50,000		(49,727	)		-99	%

Interest income decreased by $9,301, or 81%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in interest income is primarily due to an unfavorable change in interest rate terms for Abacus Settlements certificate of deposit.

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Interest expense increased by $8,817 or 100% for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in interest expense is primarily due to a fee for the certificate of deposit of $1,000 as well as amortized deferred financing fees of $7,817 for the year ended December 31, 2022.

Other income decreased by $49,727, or 99%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The decrease in other income is primarily due to a decrease in consulting income as the Company serviced a policy during 2021 for $50,000 that did not occur for the year ended December 31, 2022.

Provision for Income Taxes

	Three Months Ended June 30,
	2023		2022		$ Change		% Change
Provision for income taxes	$	—	$	—	$	—		—	%

Provision for income taxes reflected no change for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Provision for income taxes	$	2,289	$	1,325	$	964		73	%

Provision for income taxes increased by $964, or 73%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. These amounts are primarily LLC annual report filing fees within the various states.

	Years ended December 31,
	2022			2021			$ Change			% Change
Provision for income taxes	$	(2,018	)	$	(1,200	)	$	(818	)		68	%

Provision for income taxes decreased by $818 or 68%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. These amounts are primarily LLC annual report filing fees within the various states.

Business Segments

Operating as a centrally led life insurance policy intermediary, Abacus’ Chief Executive Officer is the Chief Operating Decision Maker (CODM) who allocates resources and assesses financial performance. As a result of this management approach, Abacus is organized as a single operating segment. The CODM reviews performance and allocates resources based on the total originations, total corresponding revenue generated for the period, gross profit, and adjusted EBITDA.

Key Business Metrics and Non-GAAP Financial Measures

Management uses non-GAAP financial measures, in conjunction with GAAP financial measures, as an integral part of managing our business and to, among other things: (i) monitor and evaluate the performance of our business operations and financial performance; (ii) facilitate internal comparisons of the historical operating performance of our business operations; (iii) review and assess the operating performance of our management team; (iv) analyze and evaluate financial and strategic planning decisions regarding future operating investments; and (v) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments.

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We monitor the following key business metrics and non-GAAP financial measures that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions. As such, we have presented the following non-GAAP measure, their most directly comparable U.S. GAAP measure, and key business metrics:

Non-GAAP Measure	Comparable U.S. GAAP Measure
Adjusted EBITDA	Net Income

Adjusted EBITDA is net income adjusted for depreciation expense, provision for income taxes, interest income, and non-recurring items that in our judgement significantly impact the period-over-period assessment of performance and operating results. Adjusted EBITDA should not be construed as an indicator of our operating performance, liquidity, or cash flows provided by or used in operating, investing, and financing activities, as there may be significant factors or trends that it fails to address. We caution investors that non-GAAP financial information departs from traditional accounting conventions. Therefore, its use can make it difficult to compare current results with results from other reporting periods and with the results of other companies.

Management believes the use of Adjusted EBITDA measures assists investors in understanding the ongoing operating performance by presenting comparable financial results between periods. We believe that by removing the impact of depreciation and amortization, amounts spent on interest and taxes and certain other non-recurring income and charges that are highly variable from year to year, Adjusted EBITDA provides our investors with performance measures that reflect the impact to operations from trends in changes in revenue and operating expenses, providing a perspective not immediately apparent from net income and operating income. The adjustments we make to derive the non-GAAP measure of Adjusted EBITDA exclude items which may cause short-term fluctuations in net income and operating income and which we do not consider to be the fundamental attributes or primary drivers of our business.

The following table illustrates the reconciliations from net income to adjusted EBITDA for the three months ended June 30, 2023, and 2022 and for the six months ended June 30, 2023, and 2022:

	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended December 31,
	2023			2022			2023			2022			2022			2021
Net income	$	(318,098	)	$	(90,243	)	$	(974,901	)	$	272,788		$	(52,495	)	$	997,415
Depreciation expense		2,561			3,048			5,597			5,988			12,165			10,139
Interest Income		(1,193	)		(599	)		(1,917	)		(1,147	)		(2,199	)		(11,500	)
Income tax		—			—			2,289			1,325			2,018			1,200
Other income (expense)		5,863