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Abacus Settlements LLC - SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2024
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
SEGMENT REPORTING SEGMENT REPORTING
Segment Information—The Business Combination that took place on June 30, 2023, where ERES, LMA and Abacus Settlements consummated the combining of the Companies, triggered a re-organization of Abacus Life Inc., where the legacy Abacus Settlements business and legacy LMA business would both operate under Abacus Life, Inc. subsequent to the Business Combination date. Abacus Settlements historically had one operating and reportable segment, Originations. LMA historically had two operating and reportable segments, (1) Portfolio Servicing and (2) Active Management. As the Business Combination did not occur until the last day of the second quarter of 2023, income activity related to Abacus Settlements had not yet been reported by Abacus Life, Inc. as the businesses did not begin operating as a combined Company until July 1, 2023. As such, beginning in the third quarter of 2023, the Company organizes its business into three reportable segments (1) Portfolio Servicing, (2) Active Management, and (3) Originations, which all generate revenue and incur expenses in different manners.
This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision maker (CODM), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting. The Company’s CODM is the President and Chief Executive Officer. The Company’s reportable segments are not aggregated.
The Portfolio Servicing segment generates revenues by providing policy services to customers on a contract basis.
The Active Management segment generates revenues by buying, selling, and trading policies and maintaining policies until receipt of death benefits.
The Originations segment generates revenue by originating life insurance policy settlements between investors or buyers, and the sellers, who are often the original policy owner. The policies are purchased from owners or other providers through advisors, brokers or directly through the owner.
The Company’s method for measuring profitability on a reportable segment basis is gross profit. The CODM does not review disaggregated assets by segment. The Company adopted ASU 2023-07 in March 2024. The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the CODM. The Company’s CODM periodically reviews cost of revenues by segment and treats it as a significant segment expense.
Revenue related to the Company’s reportable segments is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Portfolio servicing$204,888 $354,366 $422,823 $590,057 
Active management27,013,757 11,024,399 46,810,756 20,994,917 
Originations5,666,274 — 10,690,478 — 
Total revenue (including intersegment)32,884,919 11,378,765 57,924,057 21,584,974 
Intersegment eliminations(3,808,817)— (7,360,771)— 
Total revenue$29,076,102 $11,378,765 $50,563,286 $21,584,974 
Cost of revenue related to the Company’s reportable segments is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Portfolio servicing$168,671 $431,071 $531,063 $756,185 
Active management (including stock-compensation)852,418 542,329 1,810,890 706,765 
Originations3,923,762 — 7,289,770 — 
Total expenses (including intersegment)4,944,851 973,400 9,631,723 1,462,950 
Intersegment eliminations(2,201,317)— (4,167,292)— 
Total cost of revenue$2,743,534 $973,400 $5,464,431 $1,462,950 
Gross profit related to the Company’s reportable segments and the reconciliation of the total gross profit to net income (loss) attributable to common stockholders is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Portfolio servicing$36,217 $(76,705)$(108,240)$(166,128)
Active management26,161,339 10,482,070 44,999,866 20,288,152 
Originations1,742,512 — 3,400,708 — 
Gross profit (including intersegment)27,940,068 10,405,365 48,292,334 20,122,024 
Intersegment eliminations(1,607,500)— (3,193,479)— 
Total gross profit26,332,568 10,405,365 45,098,855 20,122,024 
Sales and marketing(2,552,801)(683,841)(4,482,745)(1,412,845)
General and administrative (including stock-based compensation)(14,553,344)(577,539)(25,906,843)(1,274,431)
Depreciation and amortization expense(1,750,452)(1,098)(3,432,506)(2,141)
Other income (expense)195,470 121,601 142,442 (21,651)
(Loss) gain on change in fair value of warrant liability(667,500)— 279,460 — 
Interest expense(4,529,187)(584,075)(8,199,632)(941,458)
Interest income639,906 — 1,061,332 7,457 
Loss on change in fair value of debt(1,199,463)(1,445,229)(3,912,090)(2,398,662)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Unrealized loss (gain) on equity securities, at fair value(362,482)672,936 802,484 798,156 
Realized gain on equity securities, at fair value856,744 — 856,744 — 
Income tax expense(1,757,710)(1,184,571)(2,931,223)(528,104)
Less: Net loss attributable to non-controlling interests118,234 26,596 44,960 487,303 
Net income (loss) attributable to common stockholders$769,983 $6,750,145 $(578,762)$14,835,648 
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.
For the three and six months ended June 30, 2024 and 2023, our operations were confined to the United States.
Abacus Settlements, LLC  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
SEGMENT REPORTING SEGMENT REPORTING
Operating 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.