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Abacus Settlements LLC - SEGMENT REPORTING | 9 Months Ended
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Sep. 30, 2023
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] |
SEGMENT REPORTING | SEGMENT REPORTINGSegment Information—The Business Combination that took place on June 30, 2023, where ERES, LMA and Abacus Settlements consummated the combining of the Companies, triggered a re-organization of Abacus Life Inc., where the legacy Abacus Settlements business and legacy LMA business would both operate under Abacus Life, Inc. subsequent to the Business Combination date. Abacus Settlement’s historically had one operating segment one reportable segment, Originations. LMA historically had two operating segments, (1) Portfolio Servicing and (2) Active Management. As the Business Combination did not occur until the last day of the second quarter, income activity related to Abacus Settlements had not yet been reported by Abacus Life, Inc. as the businesses did not begin operating as a combined Company until July 1, 2023. As such, beginning in the third quarter, the Company now organizes its business into three reportable segments (1) Portfolio Servicing, (2) Active Management and (3) Originations, which all generate revenue and incur expenses in different manners. This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision maker (CODM), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting. The Company’s CODM is the President and Chief Executive Officer. The Company’s reportable segments are not aggregated. The Portfolio Servicing segment generates revenues by providing policy services to customers on a contract basis. The Active Management segment generates revenues by buying, selling, and trading policies and maintaining policies until receipt of death benefits. The Originations segment generates revenue by originating life insurance policy settlements between investors or buyers, and the sellers, who is often the original policy owner. The policies are purchased from owners or other providers through advisors, brokers or directly through the owner. The Company’s method for measuring profitability on a reportable segment basis is gross profit. The CODM does not review asset information related to investments nor expenditures incurred for long-lived assets given the Company’s investments are recognized using the measurement alternative, and the Company’s long-lived assets are immaterial to the condensed consolidated financial statements. Revenue related to the Company’s reporting segments for the three-month and nine-month periods ended September 30, 2023, and September 30, 2022, is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Portfolio servicing | $ | 224,569 |  |  | $ | 382,245 |  |  | $ | 814,626 |  |  | $ | 1,372,573 |
Active management | 18,926,144 |  |  | 11,125,503 |  |  | 39,921,061 |  |  | 28,411,475 |
Originations | 10,214,489 |  |  | — |  |  | 10,214,489 |  |  | — |
Segment revenue (including inter-segment) | 29,365,202 |  |  | 11,507,748 |  |  | 50,950,176 |  |  | 29,784,048 |
Inter-segment elimination | (8,244,272) |  |  | — |  |  | (8,244,272) |  |  | — |
Total revenue | $ | 21,120,930 |  |  | $ | 11,507,748 |  |  | $ | 42,705,904 |  |  | $ | 29,784,048 |
Information related to the Company’s reporting segments for the three-month and nine-month periods ended September 30, 2023 and September 30, 2022 is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Portfolio servicing | $ | (626,045) |  |  | $ | (106,817) |  |  | $ | (792,173) |  |  | $ | 561,935 |
Active management | 13,856,637 |  |  | 9,859,671 |  |  | 34,144,789 |  |  | 25,381,144 |
Originations | 4,525,381 |  |  | — |  |  | 4,525,381 |  |  | — |
Total gross profit | 17,755,973 |  |  | 9,752,854 |  |  | 37,877,997 |  |  | 25,943,079 |
Sales and marketing | (1,704,154) |  |  | (14,905) |  |  | (3,116,999) |  |  | (1,664,403) |
General and administrative (including stock based compensation of $4,583,632) | (9,838,951) |  |  | (59,816) |  |  | (11,113,382) |  |  | (706,523) |
Depreciation and amortization expense | (1,694,853) |  |  | (1,071) |  |  | (1,696,994) |  |  | (3,211) |
Other (expense) income | 20,086 |  |  | 42,289 |  |  | (1,565) |  |  | (199,958) |
Loss on change in fair value of warrant liability | (943,400) |  |  | — |  |  | (943,400) |  |  | — |
Interest expense | (2,679,237) |  |  | — |  |  | (3,620,695) |  |  | — |
Interest income | 63,826 |  |  | — |  |  | 71,283 |  |  | — |
Gain (Loss) on change in fair value of debt | 2,088,797 |  |  | 1,235,032 |  |  | (309,865) |  |  | 859,519 |
Unrealized (loss) gain on investments | (306,800) |  |  | (246,846) |  |  | 491,356 |  |  | (1,301,821) |
Provision for income taxes | (1,710,315) |  |  | (352,081) |  |  | (2,238,419) |  |  | (648,887) |
Less: Net gain (loss) attributable to non-controlling interests | (147,611) |  |  | (363,452) |  |  | 339,692 |  |  | (770,093) |
Net income attributable to Abacus Life, Inc. | $ | 903,361 |  |  | $ | 9,992,004 |  |  | $ | 15,739,009 |  |  | $ | 21,507,702 |
Segment gross profit is defined as revenues less cost of sales, excluding depreciation and amortization. Expenses below the gross profit line are not allocated across operating segments, as they relate primarily to the overall management of the consolidated entity. As of September 30, 2023 and 2022, our operations are confined to the United States. Therefore, we have not generated significant revenues or made significant capital expenditures in any geographic areas outside of the United States.
Abacus Settlements, LLC |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] |
SEGMENT REPORTING | SEGMENT REPORTINGOperating as a centrally led life insurance policy intermediary, Abacus’ president and chief executive officer is the chief operating decision maker who allocates resources and assesses financial performance based on financial information presented for Abacus as a whole. As a result of this management approach, Abacus is organized as a single operating segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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