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United States securities and exchange commission logo
January 6, 2023
Terence Pegula
Chief Executive Officer
East Resources Acquisition Company
7777 NW Beacon Square Boulevard
Boca Raton, FL 33487
Re: East Resources
Acquisition Company
Amendment No. 1 to
Preliminary Proxy Statement on Schedule 14A
Filed December 7,
2022
File No. 001-39403
Dear Terence Pegula:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Revised Preliminary Proxy Statement filed December 7, 2022
Basis of Presentation and Glossary, page iv
1. Please refer to comment
1 and revise the relevant sections of your filing to disclose that at
this time you have no
committed PIPE investment amounts.
What Happens to the Funds Deposited in the Trust Account After
Consummation of the Business
Combination, page xvii
2. Please refer to your
response to comment 5. Please revise the disclosure to include
additional information
regarding the redemption of 71.83% of the outstanding public
shares, including any
factors that lead to such large percentage of the shares being
redeemed.
Terence Pegula
FirstName LastNameTerence Pegula
East Resources Acquisition Company
Comapany
January NameEast Resources Acquisition Company
6, 2023
January
Page 2 6, 2023 Page 2
FirstName LastName
ERES directors and officers may have interests in the Business Combination
different from the
interests of ERES stockholders, page 7
3. Please refer to comment 11. Please quantify the aggregate dollar
amount and describe the
nature of what the sponsor and its affiliates have at risk that
depends on completion of a
business combination, including the current value of securities held,
loans extended, fees
due, and out-of-pocket expenses for which the sponsor and its
affiliates are awaiting
reimbursement in connection with their activities on your behalf (such
as investigating
possible business targets and business combinations). Provide similar
disclosure for your
officers and directors, if material. Similarly revise other portions
of the proxy statement as
necessary.
Life settlements in which we invest are not currently regulated under the
federal securities laws,
page 36
4. Please refer to your response to comment 7. Please briefly describe
the internal guidelines
developed by Abacus to avoid purchasing life insurance policies which
would be deemed
to be securities.
Adjustments and Assumptions to the Unaudited Pro Form Condensed Combined
Balance Sheet
as of September 30, 2022, page 74
5. Please refer to comment 22. Please revise to disclose how you measured
the recurring
compensation recognized in adjustments (DD) and (MM).
Abacus Overview, page 133
6. Please revise to describe the type of life insurance policies (e.g.
whole, universal, term,
etc.) that typically meet your purchasing guidelines and clarify if
any type represented a
concentration of purchased policies during any period presented.
7. Please refer to your response to comment 33. Please substantiate, or
with respect to
beliefs, characterize as such and discuss your reasonable basis for
the belief, the following
statements in this section:
that [you] are currently a leader in the life settlements
industry, with approximately
a 20% market share and a proven track record of growth and strong
asset returns on
page 123. In particular, please provide support for the statement
that you have
approximately a 20% market share;
that we believe 90% of senior citizens who let policies lapse
would have considered
this alternative once made aware" on page 135. In particular,
please provide support
for your belief regarding the 90% figure;
that "diversification . . . across multiple origination channels
creates a lower average
policy acquisition cost and higher estimated returns" on page
136. In particular,
please provide support that such diversification actually has
lowered average policy
acquisition costs and generated higher returns; and
that [y]our hold portfolio has the prospect to generate a
higher estimated annual
Terence Pegula
FirstName LastNameTerence Pegula
East Resources Acquisition Company
Comapany
January NameEast Resources Acquisition Company
6, 2023
January
Page 3 6, 2023 Page 3
FirstName LastName
return than our traded portfolio but requires a higher capital
base, on page 140. In
particular, please quantify the higher capital base referenced
here.
Continued Innovation in Technology - Liquidity (Abacusmarketplace.com), page
141
8. Please refer to comment 35. Please revise to clarify if and how you
will generate revenue
from Abacusmarketplace.com and whether it is expected to materially
impact future
financial results. Additionally, please revise to provide additional
information regarding
the blockchain technology to be used (e.g., public, private, etc.) and
to discuss the stage of
development of any blockchain technology.
Proven Ability to Deploy Capital and Scale, page 142
9. Please refer to comment 36. Please revise your disclosure related to
the joint venture not
being included in the historical financial statements to clarify that
under US GAAP the
financial results of the entire joint venture are not included in your
financial statements
and that the financial impacts of the joint venture recognized in
Abacus and LMA s
financial statements are discussed in the related party transaction
notes in the financial
statements. Additionally, to the extent you believe the information is
relevant and material
for investors, please revise to simply disclose the revenue and net
income of the joint
venture for 2020 and 2021 as opposed to characterizing these amounts
as potentially
impacting the financial statements of Abacus and LMA. Please make
revisions to similar
disclosure in the Customers section on page 143 and ensure the amounts
disclosed for
revenue and net income on page 142 and 143 are consistent.
Customers, page 143
10. Please refer to your response to comment 37. You state that Abacus
does not plan to
continue its current relationship with some of its prior customers
following the Business
Combination. Please disclose what percentage of revenue those
customers accounted for
during the years ended December 31, 2021 and 2020.
Active Management Revenue, page 152
11. Please refer to comment 40 and revise your table on page 152 to
clearly state that your
active management revenues are for the nine-months ended September 30,
2022 and 2021,
respectively.
12. We note your disclosure that life settlement policies that you intend
to sell within twelve
months are measured using the investment method given that the
purchase dates are recent
and policies turn fairly quickly. Considering these factors are
typically associated with a
trading strategy with items measured at fair value, please revise to
disclose the reasons
you elected to measure these items using a cost measurement (i.e.,
investment method)
and specifically disclose if and how you believe this measurement
basis provides
information that is more representative of your business and useful
for investors.
Terence Pegula
East Resources Acquisition Company
January 6, 2023
Page 4
13. We note your disclosure that life settlement policies that you intend
to hold to maturity are
measured at fair value. Considering a held to maturity strategy is
typically associated with
measuring items at amortized cost, please revise to disclose the
reasons why you elected
to measure these items using a fair value measurement and specifically
disclose if and
how you believe this measurement basis provides information that is
more representative
of your business and useful for investors.
Unaudited Prospective Financial Information of the Companies, page 194
14. Please refer to your response to comment 47. Please disclose the units
for the "Financial
Projections" table.
Opinion of Northland, page 195
15. Please refer to your response to comment 47. Please disclose any key
assumptions made
by Northland in formulating its fairness opinion with respect to any
valuation
analysis dependent upon the financial projections.
Unaudited Interim Condensed Consolidated Financial Statements as of September
30, 2022 and
December 31, 2021, page F-79
16. Please refer to comment 55 and revise to disclose where you present
premiums paid and
life insurance proceeds received from policies accounted for pursuant
to the fair value
method in the Statement of Operations and Comprehensive Income.
Note 10. Fair Value Measurements, page F-93
17. It appears from your disclosures that paying a premium results in a
decrease to the fair
value of the life insurance policy in the roll forward on page F-93.
Please provide us the
journal entry recorded when a premium is paid and explain to us why and
how this results
FirstName LastNameTerence Pegula
in a decrease to the fair value of the life insurance policy. If
appropriate, please revise
Comapany
yourNameEast Resources
roll forward Acquisition
to more clearly Company
present the impact of paying a
premium on the fair value
Januaryof6,the lifePage
2023 insurance
4 policy.
FirstName LastName
Terence Pegula
FirstName LastNameTerence Pegula
East Resources Acquisition Company
Comapany
January NameEast Resources Acquisition Company
6, 2023
January
Page 5 6, 2023 Page 5
FirstName LastName
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Michael Volley at (202) 551-3437 or John Spitz at (202)
551-3484 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Robert Arzonetti at (202) 551-8819 or J. Nolan McWilliams, Acting Legal
Branch
Chief, at (202) 551-3217 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: Daniel J. Harrist, Esq.