UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2023
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(Exact name of registrant as specified in its charter)
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(800 ) 561-4148
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
135108535v.2
Item 7.01. Regulation FD Disclosure.
On November 20, 2023, Abacus Life, Inc. (the “Company”) posted an updated investor deck on its website at www.abacuslife.com. A copy of the investor deck slides is furnished herewith as Exhibit 99.1.
The information contained in this Item 7.01 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly incorporated by specific reference in such filing
Cautionary Note Regarding Forward Looking Statements
This Current Report (this “Report”) on Form 8-K may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding the Company’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “could,” “plan,” “project,” “forecast,” “predict,” “possible,” “potential,” “opportunity,” “seem,” “seek,” “future,” “outlook,” “target,” “will likely result,” “will continue,” “valuation,” and other similar expressions that predict or indicate future events or trends that are not statements of historical matters may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions. Many factors could cause actual future events to differ materially from any forward-looking statements in this report, including but not limited to: (i) the risk that demand for the Company’s life settlement and related offerings does not grow as expected, (ii) the ability of the Company to retain existing customers and attract new customers, (iii) the potential inability of the Company to manage growth effectively, (iv) the potential inability of the Company to grow its market share of the life settlement industry or to achieve efficiencies regarding its operating model or other costs, (v) negative trends in the life settlement industry impacting the value of life settlements, including increases to the premium costs of life insurance policies, increased longevity of insureds, and errors in the methodology and assumptions of life expectancy reports, (vi) legal challenges by insurers relating to the validity of the origination or assignment of certain life settlements, (vii) the enforceability of the Company’s intellectual property rights, including its trademarks and trade secrets, and the potential infringement on the intellectual property rights of others, (viii) the Company’s dependence on senior management and other key employees, and (ix) the risk of downturns and a changing regulatory landscape in the industry in which the Company operates. The foregoing list of factors is not exhaustive.
Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should carefully consider the foregoing factors and the other risks and uncertainties which will be more fully described in documents filed by the Company from time to time with the United States Securities and Exchange Commission. There may be additional risks that the Company does not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in any forward-looking statements. In addition, forward-looking statements may reflect the Company’s expectations, plans or forecasts of future events and views only as of the date of this Report. The Company anticipates that subsequent events and developments may cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. Forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon any forward-looking statements.
Item 9.01. Financial Statement and Exhibits.
(a) Exhibits.
104 Cover page Interactive Date file (embedded within Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Abacus Life, Inc. | ||||||||
| Date: November 20, 2023 | By: | /s/ Jay Jackson | ||||||
| Name: | Jay Jackson | |||||||
| Title: | Chief Executive Officer | |||||||
2
3Q 2023 IMPORTANT NOTE TO INVESTORS: On or about November 14, 2023 a document titled “Abacus Life Q3 Board Presentation November 9, 2023” (the “Disclaimed Document”) entered the public domain. The Company advises investors not to rely upon the Disclaimed Document or any information contained therein in making investment decisions to transact in Abacus Life, Inc. securities. The Company notes that the Disclaimed Document and certain of the information contained therein, may be inaccurate and preliminary, was not intended to be publicly disclosed, and was not reviewed by the Company’s auditors. The Company is providing this Note to Investors and Third Quarter 2023 Investor Presentation, which the Company believes includes any material information from the Disclaimed Document, in order to better inform investors about the Company.
Disclaimer General. This presentation (this “Presentation”) is provided solely for informational purposes. This Presentation is subject to update, completion, revision, verification and further amendment. None of Abacus Life, Inc. (the “Company”) or its affiliates has authorized anyone to provide interested parties with additional or different information. No securities regulatory authority has expressed an opinion about the securities discussed in this Presentation and it is an offense to claim otherwise. The information contained herein does not purport to be all inclusive or contain all of the information that may be required to make a full analysis of the Company. Viewers of this Presentation should each make their own evaluation of the Company and of the relevance and adequacy of the information and should make such other investigations as they deem necessary. Nothing herein shall be deemed to constitute investment, legal, tax, financial, accounting or other advice, and you should consult with your own attorney, business advisor and tax advisor as to legal, business, tax and other matters related hereto. No representations or warranties, express or implied, are given in, or in respect of, this Presentation. To the fullest extent permitted by law, in no circumstances will the Company or any of its respective subsidiaries, stockholders, affiliates, representatives, partners, directors, officers, employees, advisers or agents (collectively, the “Representatives”) be responsible or liable for any direct, indirect or consequential loss or loss of profit arising from use of this Presentation, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. Forward-Looking Information. This Presentation contains certain forward-looking statements within the meaning of the federal securities laws with respect to the Company, including statements regarding the future financial condition and performance of the Company and the platform and markets and expected future growth and market opportunities of the Company. These forward-looking statements generally are identified by the words “believe,” “predict,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “scales,” “representative of,” “valuation,” “potential,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions or the negatives of these terms or variations of them. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are inherently subject to risks and uncertainties. These forward‐looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are beyond the Company’s control, are difficult or impossible to predict and may differ from assumptions. Many factors could cause actual future events to differ materially from the forward-looking statements in this Presentation. Nothing in this Presentation should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should carefully consider the foregoing factors and the other risks and uncertainties which will be more fully described in the “Risk Factors” section of the Company’s SEC filings made from time to time with the Securities and Exchange Commission (the “SEC”). These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Viewers of this Presentation are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and do not intend to update or revise these forward-looking statements , whether as a result of new information, future events, or otherwise. The Company does not give any assurance that the Company will achieve expectations. No Offer or Solicitation. This Presentation is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the U.S. Securities Act of 1933, as amended, or otherwise in accordance with applicable law. Use of Projections. This Presentation contains financial forecasts with respect to the Company’s projected revenue, net income and return on equity for 2023. The financial and operation forecasts and projections contained herein represent certain estimates of the Company as of the date hereof and are included herein for illustrative purposes only. The Company’s independent public accountants have not audited, examined, reviewed, compiled or performed any procedures with respect to the forecasts or projections and, accordingly, do not express an opinion or other form of assurance with respect thereto. These projections should not be relied upon as being necessarily indicative of future results. In this Presentation, certain of the above mentioned projected information has been repeated (in each case, with an indication that the information is an estimate and is subject to the qualifications presented herein) for purposes of providing comparisons with historical data. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of the Company or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this Presentation should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved. Financial Information; Some of the financial information and data contained in this Presentation is unaudited and does not conform to Regulation S-X. Such information and data may not be included in, may be adjusted in or may be presented differently in the proxy statement to be filed relating to the Transaction. Except as otherwise noted, all references herein to full-year periods refer to the Abacus Companies’ fiscal year, which ends on December 31. You should review the Abacus Companies’ audited financial statements, which will be included in the proxy statement to be filed in connection with the Transaction. Industry And Market Data. This Presentation has been prepared by the Company and includes market data and other statistical information from third party sources. Although the Company believes these third party sources are reliable as of their respective dates, none of the Company or any of its respective Representatives has independently verified the accuracy or completeness of this information and cannot guarantee its accuracy and completeness. Some data is also based on good faith estimates of the Company, which are derived from both internal sources and the third party sources described above. None of the Company or its respective Representatives make any representation or warranty with respect to the accuracy of such information. 2
Non-GAAP Financial Information Adjusted Net Income, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for non-controlling interest income, amortization, change in fair value of warrants and non-cash stock-based compensation and the related tax effect of those adjustments. Management believes that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. A reconciliation of Adjusted Net Income to Net income attributable to Abacus, the most directly comparable GAAP measure, appears below. Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for depreciation expense, amortization, interest 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’ control.]. A reconciliation of Adjusted EBITDA to Net income attributable to Abacus Life, the most directly comparable GAAP measure, appears below. Adjusted EBITDA margin, a non-GAAP measure, is defined as Adjusted EBITDA divided by Total revenues. A reconciliation of Adjusted EBITDA margin to Net income margin, the most directly comparable GAAP measure, appears below. Annualized return on invested capital (ROIC), a non-GAAP measure, is defined as Adjusted net income for the quarter divided by the result of Total Assets less Intangible assets, net, Goodwill and Current Liabilities multiplied by four. ROIC is not a measure of financial performance under GAAP. We believe ROIC should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. Annualized return on equity (ROE), a non-GAAP measure, is defined as Adjusted net income divided by total shareholder equity multiplied by four. ROE is not a measure of financial performance under GAAP. We believe ROE should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. The below table presents our calculation of ROE. 3 For the Period Ended September 30, 2023 Total Assets 304,301,937 Less: Intangible assets, net (31,217,917) Goodwill (140,287,000) Current Liabilities (5,457,675) Total Invested Capital 127,339,345 Net Income Attributable to shareholders 903,361 Annualized ROIC 2.8% Proforma Adjusted Net income 9,168,359 Adjusted Annualized ROIC 29% For the Period Ended September 30, 2023 Total Shareholder Equity 166,089,747 Net Income Attributable to shareholders 903,361 Annualized ROE 2.2% Proforma Adjusted Net income 9,168,359 Adjusted Annualized ROE 22% ABACUS LIFE, INC. Return on Invested Capital (ROIC) ABACUS LIFE, INC. Return on Equity (ROE)
Abacus Life – ABL Board 4 Jay Jackson Michiel van KatwijkKarla Radka Thomas W. Corbett Jr.Adam Gusky Chairman DirectorDirector DirectorDirector ASSET MANAGEMENT Abacus Life CEO with 25+ years longevity asset experience Built multiple origination & platform providers in longevity asset management and technology. Former CFO, Treasurer, Director & EVP at Transamerica Life Insurance Co. (Iowa) and Treasurer & Senior Vice President at Transamerica Advisors Life Insurance Company of NY Principal member of Corbett Consulting, LLC since 2015 Former Governor of Pennsylvania Former PA Attorney General and US Attorney for the Western District of PA 12+ years as CIO for East Management Services Responsible for financial & business due diligence of all acquisitions Rand Capital Board of Director President & CEO of Senior Resource Alliance 25+ years of experience in business development, nonprofit management, health and social issues, and community impact. Sean McNealy Director Abacus Life Co-Founder 25+ years in policy origination experience Established over 30K relationships with Financials Advisors and Insurance Agents Beth Schulte, CPA, MBA CFO of Attivo Partners 30+years of accounting and CFO experience working for Big 4 accounting firms including EY and KPMG Director
10-Q 3rd Quarter Review 5 Increased staff by 10% ABL Bond Issuance Process 2023E Adjusted EBITDA Range 35M-41M Adjusted 3Q Financials non cash amortizations ABL Longevity Growth & Income Fund filed N-2 Financials Overview (3rd Quarter – July - Sept 2023) Gross Revenue $21.1 million Adj. EBITDA $10.8 million Annualized Adjusted Return on Invested Capital (ROIC) 29% Annualized Adjusted Return on Equity (ROE) 22% Proforma Key Performance Indicators 20% Revenue % Increase 26% Adj. EBITDA % Increase 43% Origination Capital Deployed % Increase Q3 2023 Compared to Q3 2022 *See disclosure page 2 for forward looking statements related to 2023E adjusted EBITDA range
Company Highlights Growth Company in an Essentially Uncorrelated Alternative Asset Class with a Large TAM, Institutional Investment Grade CounterpartiesI Abacus is a leading alternative investment originator and asset managerII 19 consecutive years of positive net incomeIII Proprietary Longevity Technology Platform IV Original Management Team and Founders V 6
Overview of Abacus Life (ABL) Using Lifespan and Longevity data as a core foundation - Abacus has 3 business verticals. 7 fully integrated Advisor, Agent and consumer facing secondary market origination platform Actively managed originations held for investment and serviced with support from valuation and due diligence team Life Insurance Acquisition Longevity Market Assets, LLC Abacus Settlements, LLC Business Description fully integrated consumer facing RIA & Broker Dealer 1940 Act Interval Mutual Fund with daily valuation and quarterly liquidity Private Wealth Abacus Equity Income Fund Abacus Life Advisors Business Description Lifespan data AI platform developing full stack programs to build, predict and value lifespan based products Lifetrac and Mortality tracking services for asset managers, pension funds, unions, government agencies Data & Technology Abacus Life Technologies Life and Mortality Tracker Business Description Abacus Lifespan Funds Model ETF Strategy that utilizes individual lifespan to determine asset allocation
Life Insurance Acquisition & Management
Source: Market share data per The Deal and based on value of settlements paid in 2021. 1. Includes policies originated, owned, and / or serviced by Abacus through June 2023 Overview of Abacus Life – Life Insurance Acquisition We have built a leading vertically integrated alternative asset manager specializing in life insurance products 9 fully integrated consumer facing secondary market origination platform Actively managed originations held for investment and serviced with support from valuation and due diligence team Industry Leader with ~20% Market Share • Purchased ~$2.1bn in face value of policies from ‘19 – ‘23 • ~4x origination growth from ’16 – ’22 • Manage assets for KKR, Teamsters Union, and other 3rd party investment fund strategies High Barriers to Entry • Scaled origination drives low-cost policy acquisition • Operational in 49 states • Highly regulated sector with many disclosure requirements Institutionalized Processes • Formed in 2004 and currently has 82 employees • Serviced ~$1.8bn in policies, including a JV with KKR Innovative & Experienced Leadership Team • Management averages 20+ years experience in industry • Firm led by an innovative management team ~20% Market Share 49 States with Ability / License to Operate ~$1.8bn Policies Serviced 1 20+ Years Avg. Experience We are active throughout the lifecycle of an insurance policy Abacus Settlements, LLC Longevity Market Assets, LLC Business Description Revenue Description origination fees (~2% of FV on average) returns for assets held & actively managed plus charge management/servicing fees (0.5% of Asset Value)
Sources: Life Insurance Industry per the American Council of Life Insurers Annual Report (2020). American Real Estate Industry per the MSCI – Real Estate Market Size report (2021 / 2022). Percent of insurance policies that do not pay claims per the Life Settlement Insights (Observations and Commentary on the Life Settlement Market) report. Annual Life Settlement Market Opportunity per Strategic Study Series Insurance Research, Life Settlements “A Market Takes Off” (2019) provided by Conning, Inc. Annual Life Settlement Market per The Deal: Annual Life Settlement Market Rankings (2021). Percentages of awareness and willingness for life settlement per Life Insurance Settlement Association (annual survey of insureds who let the policy lapse). Percent of advisors and agents that transact based on number of estimated financial advisors per Occupational Employment and Wage Statistics data provided by the U.S. Bureau of Labor Statistics, Abacus' market share and observed success rate with financial advisors. 1. Total Life Insurance Industry refers to total face value of individual life insurance policies in force in 2020. Annual Life Settlement Market Opportunity includes policies with estimated age of policy holder over 65 years old. Current Annual Life Settlement Market refers to total face value of policies settled in 2021. Large Total Addressable Market with Meaningful Growth Potential 10 Significant Total Addressable Market Life Insurance Industry 1 Americas Real Estate Industry ~$13tn ~$5tn >90% of life insurance policies don’t pay claims Significant Opportunity to Increase Market Penetration Annual Life Settlement Market Opportunity Current Annual Life Settlement Market 1 $233bn $4bn ~2% market penetration We believe that we provide an attractive solution for life insurance policyholders to monetize an underutilized asset Life Insurance Policies are Assets Benefits to Consumers 49% 90% of financial advisors are not aware of this alternative for their clients of senior citizens who let policies lapse would consider this alternative once made aware We help clients understand that a life insurance police is personal property and selling it for a fair market value is a legitimate, safe, and viable choice to create more options for the future Life insurance is often a senior citizen’s largest asset and one that can be used to alleviate retirement challenges – but they rarely treat it that way immediate liquidity for retirement & wealth transfer payment of medical bills (often tax free) no longer required to pay premiums 8x above cash value paid to sellers on average <1% of advisors and agents actually transact ~
Abacus Russell 2000 S&P 500HY Bonds US Bonds Senior Loans Treasury 0% 5% 10% 15% 20% 25% 30% 35% 0% 5% 10% 15% 20% 25% 30% Standard Deviation Abacus Abacus’ Historical Risk Adjusted Returns Relative to Other Asset Classes 2 Source: Policy Cash Value Over Time chart based on a $1 million death benefit, ~3% cash value rate of increase, beginning at 35-years old and paying out at 100-years old. A-cyclical and essentially uncorrelated returns based on the average return and associated standard deviation chart – based on 3-year comparative return for a variety of market indices per Yahoo Finance. 1. A Rating or better determined by AM Best and classified as insurance companies that have or exceed an “excellent ability to meet their ongoing obligations”. 2. Abacus return and standard deviation based on its entire portfolio (holding and trading) as of August 2022 and then extrapolated to August 2025, assuming zero mortalities. Uncorrelated Alternative Asset with Institutional Investment Grade Counterparts 11 Policies are Cash Collateralized by High Quality Carriers . . . 93% of carriers have an “A Rating” or better 1 Policy counterparties are generally high-quality investment grade insurance companies Policies are cash collateralized with minimal payout risk . . . and Consistently Generate Strong & Essentially Uncorrelated Returns Similarities to a zero-coupon bond, driven by mortality Industry is generally a-cyclical Policies have very limited risk of loss A ve ra ge R et u rn s The Value of Life Insurance Policies Increase Over Time $-- $200,000 $400,000 $600,000 $800,000 $1,000,000 35 40 45 50 55 60 65 70 75 80 85 90 95 P ol ic y V al u e Age of Policy Holder Death Benefit
Source: Market share data per The Deal and based on number of settlements provided from 2017 – 2022. Note: All portfolio trading performance metrics measured from 2019 through 2023. Abacus is at the Heart of the Life Settlements Industry Capital Providers Origination Machine Agents DTC Brokers Hold Portfolio & Policies Serviced Portfolio Trading ~20% 2022 Market Share Portfolio modeling & cash flow management Custom SMAs for 3rd party investors Underwriting & valuation for ~$520mm in policiesBuyside Lenders & Asset Managers Public Markets Cost Basis = $494mm Policies Traded = 1227 Face Value = ~$2.1bn 12
Note: LS abbreviation denotes “Life Settlement”. ORIGINATION MACHINE with a Model to Drive Economics Agents Work with LS providers on behalf of clients DTC Advertising via internet, social media platforms, television, and mail LS Brokers Largely pre-packaged policies for bidding 38% Policies Originated 35% Policies Originated 27% Policies Originated Diversification Across Multiple Origination Channels Creates a Lower Average Policy Acquisition Cost 13 long-term relationships with 78 institutional origination partners access to over 30,000 financial advisors 70-person origination team with 30 sales members, assigned by channel 49 states with ability / license to operate 2021 2022 34% 2022 202220212021 38%27%
Outstanding Operations & Execution Team 14 Policy Acquisition ABL Wealth ABL Tech 90 Team Members • 30 – Sales Team • 18 – Acquisition Managers & Case Processors • 16 – Contracts, In-House Counsel, and Accounting • 6 – Marketing and IT • 15 - Trading, Analysts, Servicing • 5 -Executive 8 Team Members • 2 Executives and Sales • 6 – Programmers/Coding 98 Person Operational & Execution Team Note: Size of operational & execution team as of June 30th, 2023. 48 65 98 25 35 45 55 65 75 85 95 105 1/1/2021 1/1/2022 1/1/2023 Total Number of Employees Total Number of Employees Apr. 20 2Apr. 2021 Apr. 2023 5 Team Members • All Team Members are dual role with ABL • 3 – New Hires – Targeting hire date in Q1
ABL Wealth
Aggregated Historical Track Record 16 Traded Portfolio Held Portfolio Realized Portfolio 121 Policies Acquired $101mm Total Face Value $835k Average Face Value 160% Realized Return 1,312 Policies Traded $2.5bn Total Face Value $1.9mm Average Face Value 20.3% Realized Return 1. Construct policy tranches for a range of institutional buyers 1 – 2-day trading process given policies are held at securities intermediary ~$1.76bn Policies Servicing (incl. KKR & Apollo assets) 1951 Policies Purchased (acquired from 2019 – 2023) ~$2.10bn Face Value of Policies ~$520mm Underwritten & Valued (on behalf of 3rd parties) ~4x Origination Growth Over the Past Six Years 1 ~$230mm Capital Base (Including Nova JV) 229 Policies Traded $748mm Total Face Value $3.3mm Average Face Value 16.3% Realized Return Portfolio - Incl. KKR Portfolio - LMA Exclusive Realized Portfolio 6 Policies Acquired $15mm Total Face Value $2.5mm Average Face Value 523% Realized Return
This slide is for illustrative purposes only. The launch, operation and success of the Fund is subject to significant risks and uncertainties, including SEC approval, Company’s ability to manage the Fund, the ability to attract investors, ability to acquire and manage Fund assets and the ability to achieve the illustrative yield , growth and total return. Primary Custodian is Wilmington Trust and UMB ABL Longevity Growth and Income Fund Target Launch 2024 – ABLGX(1) 17 ABL Longevity Growth & Income Fund 1.45% Management Fee 6% Target Yield 8-10% Target Growth Target Launch: 2024 End Date: Interval Fund 5% Quarterly Liquidity 14-16% Target Total Return 1940 Act Interval Mutual Fund Daily valuation with ticker symbol Demand is high for a low correlation fund Target open in 2024
ABL Wealth Advisors 18 Aligned with 80BN RIA for back office and Advisor growth Experienced team to manage operations Will Receive ABL Non-Qualified Leads Offer custom financial solutions using Lifespan as the core driver of portfolio allocation Acquire strategic RIAs and Advisors
The Power of Data & Tech: ABL Technologies (abltech.com)
Purchase Price Policy Type Carrier Rating Lead Source Policy Face Value Expected IRR Life Expectancy (LE) LE Extension Ratio Age Age on LE Date Age on B/E Date Surv Prob on B/E Date Risk Grade $151,500 GUL A+ Broker $500,000 15.60% 65 196% 72 80 90 0% 1 $150,180 UL A Agent $250,000 15.50% 25 614% 67 73 86 0% 2 $150,180 UL A Agent $250,000 15.50% 25 614% 67 73 86 0% 2 $556,705 UL A+ Insured $1,000,000 15.40% 31 903% 49 52 75 0% 3 $168,945 GUL NR Insured $750,000 15.40% 91 275% 60 68 89 0% 1 $23,488 GUL A Broker $100,000 15.40% 88 113% 69 76 84 1% 4 $325,000 UL A- Insured $500,000 15.30% 26 527% 97 99 110 0% 1 $323,434 GUL A+ Insured $5,300,000 15.30% 133 92% 72 83 93 1% 2 $115,502 UL A Insured $550,000 15.30% 48 125% 86 90 95 2% 2 $108,111 GUL A Agent $400,000 15.20% 53 527% 90 97 121 0% 1 $47,079 UL A Agent $400,000 15.20% 103 21% 87 98 100 34% 4 $22,976 UL NR Agent $189,964 15.20% 75 66% 84 90 94 10% 5 $37,405 GUL A+ Agent $1,000,000 15.20% 157 135% 68 81 99 0% 1 $165,000 GUL A Broker $500,000 15.20% 26 107% 90 92 94 6% 4 $181,527 Term A+ Insured $250,000 15.10% 12 354% 62 63 67 0% 5 $138,360 UL NR Agent $1,000,000 15.10% 132 170% 69 81 100 0% 1 $112,500 GUL A+ Agent $300,000 15.10% 58 218% 82 87 98 0% 1 $37,816 UL A++ Insured $100,000 15.10% 40 98% 69 72 75 10% 5 Policy Value Calculator 1. Illustrative example. Proprietary Technology Platform Yields Differentiated Underwriting Capabilities PURCHASE PRICE POLICY TYPE CARRIER RATING LEAD SOURCE POLICY FACE VALUE EXPECTED IRR LIFE EXPECTANCY LE EXTENSION RATIO CURRENT AGE & AGE ON LE SURVIVAL PROBABILITY Proprietary Risk Rating Heat Map Instant Policy Valuations Name Email Your Phone Gender Current Age $1,000,000 Policy Universal / Flexible Premium Policy Value Calculator 1 Health Status Average Price Standard $42,890 Slightly Impaired $95,980 Moderately Impaired $129,150 Highly Impaired $203,410 Extremely Impaired $256,790 Terminal Illness Up to $800,000 20
ABL Tech: Abacus Marketplace and Blockchain Integration 21 Origination Flow Lead Management Centralized Bidding and Servicing Remove Bank as Intermediary Instantly Transact Tertiary Policies Secure Transactions Through Smart Contracts
ABL Tech: Aging IQ and Live Life Table 22 Live Life Table Drive Wealth Planning Through AI & Longevity More accurate morality assumptions Wealth Planning Updates data in real time Industry standard with 20+ years of longevity data MyTrueAge • AI Technology to estimate biological age MyLifeScore • Data-Driven approach to estimating healthspan and lifespan
Marketing and Advertising
Quick Facts 24 • 25.1% of the United States population has seen the commercial at least once. • 50,714 seniors directly contacted by account managers • Market saturation is strong on major news channels including Fox, CNN, FBN, Bloomberg, and MSNBC • Diminishing returns not yet reached, CPL continues to drop with higher spend volume • Low competition; high intent leads 858mm Client Education (1/23 – 10/31) Spending Efficiency 84mm Unique ImpressionsImpressions 13x Lead Growth From Prev. Year
3Q Financial Information and Proforma
Q3 2023 Financial Information Abacus Life, Inc. Proforma Income Statement (Q3 2023 compared to Q3 2022) 26 2022 2023 2022 Total Portfolio servicing revenue 224,569 382,245 814,626 1,372,573 Total Active management revenue 18,926,144 12,080,503 46,715,702 29,836,674 Total Origination revenue 1,970,217 5,076,481 8,360,252 17,620,944 21,120,930 17,539,229 55,890,580 48,830,191 Total Cost of revenue 3,364,957 5,618,973 14,121,210 16,492,673 17,755,973 11,920,256 41,769,370 32,337,519 Sales and marketing 1,704,154 14,905 3,116,999 1,664,403 General, administrative and other 9,838,951 2,344,237 15,961,962 6,938,942 (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 Depreciation and amortization expense 1,694,853 4,219 1,702,591 12,360 Total Operating expenses 11,455,961 1,375,175 20,600,061 9,058,007 Operating Income $ 6,300,012 $ 10,545,081 $ 21,169,309 $ 23,279,512 Gross Profit OPERATING EXPENSES: Total Revenues COST OF REVENUES (excluding depreciation and amortization stated below) Three Months Ended September 30, Nine Months Ended September 30, 2023 REVENUES:
Q3 2023 Financial Information (cont’d) Abacus Life, Inc. Proforma Income Statement (Q3 2023 compared to Q3 2022) 27 2022 2023 2022 OTHER INCOME (EXPENSE) Change in fair value of warrant liability (943,400) - (943,400) - Interest (expense) (2,679,237) (2,449) (3,632,420) (1,449) Interest income 63,826 - 73,200 - Other income (expense) 20,086 42,288 (1,565) (199,959) Total other income (expense) (3,538,725) 39,839 (4,504,185) (201,408) Net income before provision for income taxes 2,761,287 10,584,920 16,665,124 23,078,104 Income tax expense 1,710,315 (948,600) 2,240,708 (650,794) NET INCOME 1,050,972 11,533,520 14,424,416 23,728,898 LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST 147,611 363,452 (339,692) 770,093 NET INCOME ATTRIBUTABLE TO SHAREHOLDERS 903,361 11,170,068 14,764,108 22,958,805 Three Months Ended September 30, Nine Months Ended September 30, 2023
Q3 2023 Financial Information Abacus Life, Inc. Proforma Adjusted Net Income 28 Proforma adjusted Net Income and Adjusted EPS Net income attributable to Abacus Life, Inc. 903,361 9,992,003 15,739,009 21,507,702 Net income for Abacus Settlements, LLC — (122,998) (974,901) 149,790 Proforma net income attributable to Abacus Life, Inc. 903,361 9,869,005 14,764,108 21,657,492 Net income attributable to non-controlling interests 147,611 363,452 (339,692) 770,093 Amortization expense 1,682,083 — 1,682,083 — Stock compensation expense 4,583,632 — 4,583,632 — Change in fair value of warrant liability 943,400 — 943,400 — Tax impact of items listed above 908,271 908,271 Proforma adjusted Net Income 9,168,359 10,232,457 22,541,803 22,427,585 Weighted-average shares of Class A common stock outstanding 63,349,823 50,369,350 54,632,826 50,369,350 Proforma Adjusted EPS 0.14 0.20 0.41 0.45 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 1. *Adjusted Net Income, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for non-controlling interest income, amortization, change in fair value of warrants and non-cash stock-based compensation and the related tax effect of those adjustments. Management uses adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently.
Q3 2023 Financial Information (cont’d) Abacus Life, Inc. Proforma Adjusted EBITDA 29 Proforma adjusted EBITDA Net Income for Abacus Life Inc. 10,355,455 15,399,317 22,277,795 Net Income for Abacus Settlements, LLC (122,998) (974,901) 149,790 Proforma Net Income 1,050,972 10,232,457 14,424,416 22,427,585 Depreciation 12,770 4,219 20,508 12,360 Amortization 1,682,083 — 1,682,083 — Interest expense 2,679,237 2,449 3,632,420 1,449 Interest income (63,826) — (73,200) — Income tax expense 1,710,315 (948,600) 2,240,708 (650,794) Stock compensation 4,583,632 — 4,583,632 — Other (Income) / Expenses (20,086) (42,288) 1,565 199,959 Change in fair value of warrant liability 943,400 — 943,400 — Expense support agreement — 283,047 — 283,047 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 Proforma Adjusted EBITDA 10,796,500 8,543,099 27,274,041 22,715,908 Revenue 21,120,930 17,539,229 55,890,580 48,830,191 Proforma Adjusted EBITDA Margin 51.12% 48.71% 48.80% 46.52% Proforma Net Income Margin 4.98% 58.34% 25.81% 45.93% Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 *Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) attributable to Abacus adjusted for depreciation expense, amortization, interest 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’ control. Management uses EBITDA as an internal operating performance measure in the management of business as part of our capital allocation process. Management believes Adjusted EBITDA provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted EBITDA should not be viewed as a substitute for metrics calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently.
Q3 2023 Financial Information (cont’d) Abacus Life, Inc. Return on Equity (ROE) and Return on Invested Capital (ROIC)* 30 For the Period Ended Return on Equity September 30, 2023 Total Shareholder Equity 166,089,747 Net Income Attributable to shareholders 903,361 Annualized ROE 2.2% Proforma Adjusted Net income 9,168,359 Adjusted Annualized ROE 22% For the Period Ended Return on Invested Capital September 30, 2023 Total Assets 304,301,937 Less: Intangible assets, net (31,217,917) Goodwill (140,287,000) Current Liabilities (5,457,675) Total Invested Capital 127,339,345 Net Income Attributable to shareholders 903,361 Annualized ROIC 2.8% Proforma Adjusted Net income 9,168,359 Adjusted Annualized ROIC 29% * Annualized return on invested capital (ROIC), a non-GAAP measure, is defined as Adjusted net income for the quarter divided by the result of Total Assets less Intangible assets, net, Goodwill and Current Liabilities multiplied by four. ROIC is not a measure of financial performance under GAAP. We believe ROIC should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. Annualized return on equity (ROE), a non-GAAP measure, is defined as Adjusted net income divided by total shareholder equity multiplied by four. ROE is not a measure of financial performance under GAAP. We believe ROE should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. Management uses ROE and ROIC as internal operating performance measures in the management of business as part of our capital allocation process. We believe ROE and ROIC provide useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. ROE and ROIC should not be viewed as a substitute for metrics calculated in accordance with GAAP, and other companies may define these metrics differently.
Consolidated Proforma Historical Financial KPIs (Q1 2022 – Q3 2023) (Only Includes Longevity Market Assets, LLC and Abacus Settlements, LLC) 43% 20% 28% 17% 11% Annualized 28% Annualized 29% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Revenue EBITDA Adjusted Quarterly Return on Invested Capital Adjusted Quarterly Return on Equity 31 $17.2 $14.1 $17.5 $21.1 $16.6 $18.3 $21.1 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $7.6 $6.6 $8.5 $11.0 $7.6 $8.8 $10.8 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 130% 37% 45% 36% 24% Annualized 16% Annualized 22% Q1 2022 Q2 2022 Q3 2022 Q3 2022 Q1 2023 Q2 2023 Q3 2023 ($ in millions) ($ in millions) Added 62M+ Shares
Additional Origination KPIs (Q1 2022 – Q3 2023) 122 131 119 110 108 136 181 0 50 100 150 200 250 300 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Capital Deployed Through Abacus Face Value Originated Through Abacus Number of Originations 32 $45.3 $31.8 $39.4 $35.5 $34.4 $59.8 $56.4 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $233.0 $159.9 $183.1 $197.4 $156.2 $211.4 $340.9 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 ($ in millions)
