Abacus Global Management, Inc.: Form 10-Q for the period ended Sep 30, 2025

ABACUS GLOBAL MANAGEMENT, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations, hopes, intentions or strategies regarding the future. In addition to historical financial analysis, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions, as described under the heading “Cautionary Note Regarding Forward-Looking Statements.” All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to: the potential impact of our business relationships, including with our employees, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; weakness or adverse changes in the level of activity in our sector or the sectors of our affiliated companies, which may be caused by, among other things, high or increasing interest rates, or a weak U.S. economy; significant competition that our operating subsidiaries face; compliance with extensive government regulation; and other risks detailed in the those set forth under “Risk Factors” or elsewhere in this quarterly statement and in our 2024 Annual Report on Form 10-K. Unless the context otherwise requires, references in this “Abacus Global Management, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” , “Abacus”, and “Company” are intended to mean the business and operations of Abacus Global Management, Inc.

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the Company’s financial condition and results of operations. This discussion should be read in conjunction with the Company’s financial statements and related notes thereto that appear elsewhere in this Quarterly Report on Form 10-Q and our 2024 Annual Report on Form 10-K.

Business Overview

The Company is a leading financial services company specializing in alternative asset management, data-driven wealth solutions, technology innovations, and institutional services. With a focus on longevity-based assets and personalized financial planning, Abacus leverages proprietary data analytics and decades of industry expertise to deliver innovative solutions that optimize financial outcomes for individuals and institutions worldwide.

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:

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Revenue

Asset Management

Asset management revenue increased by $8,517,417, or 7318.2%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is mainly due to the Carlisle Acquisition and FCF Acquisition with their corresponding revenue activity having commenced in December 2024. The Company did not record significant performance fees during the three months ended September 30, 2025.

Asset management revenue increased by $24,629,547, or 4567.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is mainly due to the Carlisle Acquisition and FCF Acquisition with their corresponding revenue activity having commenced in December 2024. The Company did not record significant performance fees during the nine months ended September 30, 2025.

Life Solutions

Life solutions revenue increased by $26,090,472 or 93.1% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is mainly due to an increase of $31,460,434 in realized gains, partially offset by $(1,063,870) in unrealized gains and $(4,604,497) in premiums paid related to policies accounted for under the fair value method.

The realized gain and unrealized activity is mainly due to the Company’s expanded capital base and deployment capacity following two major financing events: a $90.0 million equity raise in November 2024 and a $100.0 million debt facility acquired in December 2024. The additional capital enabled the Company to acquire a larger portfolio of life insurance policies, with a substantial portion sold during three months ended September 30, 2025 to investors seeking uncorrelated assets to invest in. The average realized gain per policy sold also improved markedly, rising from 19.0% for the three months ended September 30, 2024 to 36.6% for the three months ended September 30, 2025. This improvement reflects increased institutional demand for life settlement policies as uncorrelated assets, creating more favorable pricing conditions for the Company’s portfolio trades. In the quarter ended September 30, 2025, the Company’s discount rate was 15%, which is based on the historical and current realized gains on policies sold, risk score, duration, and current demand for uncorrelated assets. Refer to Note 4 Revenues and Note 13 Fair Value Measurements to the consolidated Interim Financial Statements for additional information.

Life solutions revenue increased by $59,549,510 or 76.2% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is mainly due to an increase of $86,754,404 in realized gains, partially offset by $(4,539,068) in unrealized gains, $(16,145,915) in premiums paid, and $(6,959,273) fee-based revenue that did not recur related to policies accounted for under the fair value method. Fee-based revenue includes a) commissions earned from the sale of insurance policies, both in the first year the policy is sold and, when applicable, when the underlying policyholder renews their policy in subsequent years; and b) one-time consulting fees that can vary widely on a quarterly basis by identifying policies available for sale, valuing these policies, and negotiating terms with sellers and buyers.

The realized and unrealized gain activity is mainly due to the Company’s expanded capital base and deployment capacity following two major financing events: a $90.0 million equity raise in November 2024 and a $100.0 million debt facility acquired in December 2024. The additional capital enabled the Company to acquire a larger portfolio of life insurance policies, with a substantial portion sold during nine months ended September 30, 2025 to investors seeking uncorrelated assets to invest in. The average realized gain per policy sold also improved markedly, rising from 20.2% for the nine months ended September 30, 2024 to 30.2% for the nine months ended September 30, 2025. This reflects increased institutional demand for life settlement policies as uncorrelated assets, creating more favorable pricing conditions for the Company’s portfolio trades. During nine months ended September 30, 2025, the Company sold approximately 51% of the policies that were on the balance sheet as of December 31, 2024 and redeployed a majority of that capital to purchase additional policies. In the quarter ended September 30, 2025, the Company’s discount rate was 15%, which is based on the historical and current realized gains on policies sold, risk score, duration, and current demand for uncorrelated assets. Refer to Note 4 Revenues and Note 13 Fair Value Measurements to the consolidated Interim Financial Statements for additional information.

Technology services

Technology services revenue increased by $218,776 for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is mainly due technology service revenue activity having commenced in December 2024.

Technology services revenue increased by $448,288 for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is mainly due technology service revenue activity having commenced in December 2024.

Cost of Revenues (Excluding Depreciation and Amortization) and Gross Profit

Cost of revenues (including stock-based compensation) increased by $5,467,717, or 249.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in cost of revenues is primarily due to $3,259,327 asset management retrocession fees with the balance of the increase related to compensation expense due to the growth in life policy acquisition and sale activity. Refer to Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements for the composition of cost of revenues.

Cost of revenues (including stock-based compensation) increased by $13,166,337, or 172.1%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in cost of revenues is primarily due to $7,719,927 asset management retrocession fees, $2,230,487 increase related to compensation expenses due to the growth in life policy acquisition and sale activity. Refer to Note 2 Significant Accounting Policies and Recent Accounting Standards for the composition of cost of revenues.

Gross profit increased by $29,358,948, or 113.1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in gross profit is primarily due to an increase in asset management revenue and life solutions revenue driven by an increase in policies purchased.

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Gross profit increased by $71,461,008, or 100.6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in gross profit is primarily due to the increase in asset management revenue and life solutions revenue driven by an increase in policies purchased.

Operating Expenses

Sales and Marketing Expenses

Sales and marketing expenses increased by $1,630,687 or 75.2%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily related to an increase in advertising costs to support our life solutions growth strategy.

Sales and marketing expenses increased by $3,031,657 or 45.6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily related to an increase in advertising costs to support our life solutions growth strategy.

General and Administrative (Including Stock-Based Compensation) Expenses

General and administrative (including stock-based compensation) increased by $9,216,811, or 59.5%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily related to increases in legal and professional fees of $4,528,470, payroll expense of $3,738,314 mainly due to acquisitions, other general and administrative expenses of $1,953,424, and accounting and auditing fees of $1,048,335, partially offset by decreases in non-cash stock-based compensation expense of $2,051,732.

General and administrative (including stock-based compensation) increased by $14,500,083, or 35.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily related to increases in payroll expense of $9,057,445 mainly due to acquisitions, legal and professional fees of $9,678,261, and other general and administrative expenses of $4,924,886, partially offset by decreases in non-cash stock-based compensation expense of $8,793,764 and accounting and auditing fees of $366,745.

Depreciation and Amortization Expense

The increase of $2,654,803, or 152.1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 in depreciation and amortization expense is primarily related to the amortization of acquired businesses intangible assets.

The increase of $9,164,926, or 177.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 in depreciation and amortization expense is primarily related to the amortization of acquired businesses intangible assets.

Unrealized Loss (Gain) on Equity Securities, at Fair Value

Unrealized loss on investments decreased by $417,677 or 100.0% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The change is mainly due to investments in S&P 500 options sold in 2024.

Unrealized gain on investments decreased by $1,220,161 or 100.0% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The change is mainly due to investments in S&P 500 options sold in 2024.

Realized Loss (Gain) on Equity Securities, at Fair Value

Realized gain on investments increased by $— for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The change is mainly due to the sale of investments in S&P 500 options in June and December 2024 used to pay off the market-indexed notes between July 2024 and January 2025.

Realized gain on investments increased by $856,744 or 100.0% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The change is mainly due to the sale of investments in S&P 500 options in June and December 2024 used to pay off the market-indexed notes between July 2024 and January 2025.

(Gain) Loss on Change in Fair Value of Debt

Loss on change in fair value of debt decreased by $124,237 or 100.0% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The change is primarily attributable to the payoff of the market-indexed notes between July 2024 and January 2025. Please refer to Note 14 Long-Term Debt for further information.

Gain on change in fair value of debt increased by $7,398,430 or 183.3% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The change is primarily attributable to the payoff of the market-indexed notes. The Company’s final paid amount to the debt holders was less than the fair value amount reported, resulting in the reported gain. The Company had the contractual right to pay off the debt at par value, and the fair value of the debt at retirement was different from its par value (due to the prevailing interest rate at the end of each reporting period, amongst other factors). Please refer to Note 14 Long-Term Debt for further information.

Other Income (Expense)

Other (expense) income increased by $619,295 or 6298.8% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The change is primarily related to the credit loss allowance recorded during the period discussed in Note 8 Available-for-Sale Securities, at Fair Value to the consolidated Interim Financial Statements.

Interest expense increased by $5,520,158 or 130.9% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in interest expense is primarily related to he $100,000,000 issuance of the Senior Secured Credit Facility and the $72,727,075 increase in the Fixed Rate Senior Unsecured Notes in connection with the Carlisle Acquisition b in December 2024.

Interest income increased by $194,152 or 31.9% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in interest income is related to interest earned on our bank deposits.

Loss on change in fair value of warrant liability decreased by $7,685,307 or 87.7% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The change is primarily attributable to the redemption of all the Private Placement Warrants offset by the issuance of common stock. Refer to Note 13 Fair Value Measurements to the consolidated Interim Financial Statements for additional information.

Other (expense) income increased by $1,911,911 or 1441.8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The change is primarily related to lending fees discussed in Note 9 Other Investments and Other Assets.

Interest expense increased by $15,691,001 or 126.4% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in interest expense is primarily related to the $100,000,000 issuance of the Senior Secured Credit Facility and the $72,727,075 increase in the Fixed Rate Senior Unsecured Notes in connection with the Carlisle Acquisition borrowed in December 2024.

Interest income increased by $1,320,099 or 79.0% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in interest income is related to interest earned on our bank deposits.

The loss on change in fair value of warrant liability decreased by $6,782,847 or 79.9% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The change is primarily attributable to the redemption of all the Private Placement Warrants offset by the issuance of common stock. Refer to Note 13 Fair Value Measurements to the consolidated Interim Financial Statements for additional information.

Income Tax Expense

Income tax expense (benefit) increased by $4,943,054, or (1974.3)% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was primarily driven by the increase in net income. Our effective income tax rate for the three months ended September 30, 2025 and three months September 30, 2024, was 39.9% and 4.5%, respectively.

Income tax expense (benefit) increased by $8,415,887, or 313.9% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily driven by the increase in net income. Our effective income tax rate for the nine months ended September 30, 2025 and for the nine months September 30, 2024, was 26.9% and (83.1)%, respectively.

Results of Operations—Segment Results

Asset Management

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements.

Cost of revenue from our asset management segment increased by $3,941,426, or 981.7%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to retrocession fees related to the Longevity and ETF Funds.

The change of gross profit is a product of the change of revenue and cost of revenue.

Assets Under Management

The Company did not have assets under management until the fourth quarter of 2024.

**Longevity Funds—**The change in inflows are related to new subscriptions of approximately $71.0 million. The outflows are related to redemptions of approximately $16.3 million. The change in value was approximately $50.5 million is the result of realized and unrealized gains generated by the funds, net of operating expenses.

**ETF Funds—**The change in inflows are related to new subscriptions of approximately $31.1 million. The outflows are related to redemptions of approximately $9.3 million. The change in value of approximately $14.8 million is the result of realized and unrealized gains generated by the funds, net of operating expenses

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements.

Cost of revenue from our asset management segment increased by $9,199,474, or 986.5%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to retrocession fees related to the Longevity and ETF Funds.

The change of gross profit is a product of the change of revenue and cost of revenue.

Assets Under Management

The Company did not have assets under management until the fourth quarter of 2024.

**Longevity Funds—**The change in inflows are related to new subscriptions of approximately $329.1 million. The outflows are related to redemptions of approximately $31.1 million. The change in value of approximately $(69.5) million is the result of realized and unrealized gains generated by the funds, net of operating expenses.

**ETF Funds—**The change in inflows are related to new subscriptions of approximately $139.2 million. The outflows are related to redemptions of approximately $(124.4) million. The change in value of approximately $69.1 million is the result realized and unrealized gains generated by the funds, net of operating expenses.

Life Solutions

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards.

Cost of revenue from our life solutions segment increased by $752,451, or 42.1% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, mainly due to an increase in compensation related expenses.

The change of gross profit is a product of the change of revenue and cost of revenue.

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements.

Cost of revenue from our life solutions segment increased by $2,230,487, or 33.2% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, mainly due to an increase in compensation related expenses.

The change of gross profit is a product of the change of revenue and cost of revenue.

Technology Services

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements.

Cost of revenue from our technology services segment increased by $773,840, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, mainly due to compensation related expenses. Our technology service revenue and related cost of revenue activity commenced in December 2024.

The change of gross loss is a product of the change of revenue and cost of revenue.

The change in revenue is explained above under Revenue. The composition of cost of revenue is described in Note 2 Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements.

Cost of revenue from our technology services segment increased by $1,736,376, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, mainly due to compensation related expenses. Our technology service revenue and related cost of revenue activity commenced in December 2024.

The change of gross loss is a product of the change of revenue and cost of revenue.

Non-GAAP Financial Measures and Key Business Metrics

The consolidated financial statements of the Company 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 Net Income, Adjusted EPS, Adjusted EBITDA and Adjusted EBITDA Margin, are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, net income (loss) (for Adjusted EBITDA and Adjusted EBITDA Margin), net income (loss) attributable to common stockholders (for Adjusted Net Income) or earnings (loss) per share (for Adjusted EPS), which are considered to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing Company’s operating performance, these non-GAAP financial measures should not be considered in isolation or as substitutes for net income (loss), net income (loss) attributable to common stockholders, earnings (loss) per share or other consolidated statements of operations and comprehensive income (loss) data prepared in accordance with GAAP.

Adjusted Net Income is presented for the purpose of calculating Adjusted EPS. The Company defines Adjusted Net Income as net income (loss) attributable to common stockholders adjusted for non-controlling interest income, amortization, change in fair value of warrants, business acquisition costs, and non-cash stock-based compensation and the related tax effect. We believe that Adjusted Net Income provides an additional measure of operating performance that eliminates the impact of expenses that do not relate to business performance.

Adjusted EPS measures our per share earnings and is calculated as Adjusted Net Income divided by adjusted weighted-average shares outstanding. We believe that Adjusted EPS may be useful to investors because it enables them to better evaluate per share operating performance across reporting periods by eliminating the impact of expenses that do not relate to the Company’s business performance.

Adjusted Net Income and Adjusted EPS

The following table presents a reconciliation of Adjusted Net Income to the most comparable GAAP financial measure, net income (loss) attributable to common stockholders and Adjusted EPS to the most comparable GAAP financial measure, earnings per share, on a historical basis for the periods indicated below:

[1] Tax impact represents the permanent difference in tax expense related to the restricted stock awards granted to certain executives due to IRC 162(m) limitations.

[2] The estimated tax is based on the net federal and state statutory rate.

Note: EPS totals may not add up due to rounding.

The change in adjusted net Income was primarily a result of the factors described in connection with operating revenues and operating expenses and the items listed above.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is net income adjusted for depreciation expense, amortization, interest expense, income tax, business acquisition costs, non-cash expenses, and certain other items that in our judgment significantly impact the period-over-period assessment of performance and operating results that do not directly relate to business performance within the Company's control. These items may include payments made as part of the Company's expense support commitment, change in fair value of debt, change in fair value of warrant liability, S&P 500 options that were entered into as an economic hedge related to the debt (described as the realized and unrealized gain on equity securities, at fair value), non-cash stock based compensation, and other items. Adjusted EBITDA should not be determined as substitution for net income (loss), cash flows from operating, investing, and financing activities, operating income (loss), or other metrics prepared in accordance with U.S. GAAP.

We believe that Adjusted EBITDA assists investors in understanding the Company’s 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 charges that are variable from year to year. We believe that 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 that provides a perspective not immediately apparent from net income (loss) and operating income (loss). Adjusted EBITDA excludes items which we believe may cause short-term fluctuations in net income (loss) and operating income (loss) which we do not consider to be the primary drivers of the Company’s business.

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

The change in adjusted EBITDA was primarily a result of the factors described in connection with operating revenues and operating expenses and the items listed above.

Pro Forma Non-GAAP Financial Measures and Segment Results

Pro Forma Adjusted Net Income and Pro Forma Adjusted EPS

Refer to the Adjusted Net Income and Adjusted EPS section for the description of this measure and comparable GAAP measures. The three and nine months ended September 30, 2024 includes Carlisle’s historical information prior to the Carlisle Acquisition.

The following table presents a reconciliation of Pro Forma Adjusted Net Income to the most comparable GAAP financial measure, net income (loss) attributable to the Company and Pro Forma Adjusted EPS to the most comparable GAAP financial measure, earnings (loss) per share combined with Carlisle on a historical basis for the three and nine months ended September 30, 2024:

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[1] Tax impact represents the permanent difference in tax expense related to the restricted stock awards granted to certain executives due to IRC 162(m) limitations.

[2] The estimated tax is based on the net federal and state statutory rate.

Note: EPS totals may not add up due to rounding.

The pro forma change in adjusted net Income was primarily a result of the factors described in connection with non-pro forma operating revenues and operating expenses adjusted for $(760,792) and $3,578,113 pro forma Carlisle net income for the three and nine months ended September 30, 2024, respectively.

Pro Forma Adjusted EBITDA

Refer to the Adjusted EBITDA section for the description of this measure and comparable GAAP measures. The three and nine months ended September 30, 2024 combines Carlisle historical information prior to the Carlisle Acquisition.

The following table presents a reconciliation of Proforma Adjusted EBITDA and Proforma Adjusted EBITDA Margin to the most comparable GAAP financial measure, net income (loss) for common stockholders combined with Carlisle on a historical basis for the three and nine months ended September 30, 2024:

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The pro forma change in adjusted EBITDA was primarily a result of the non-pro forma factors described in connection with operating revenues and operating expenses and the items listed above adjusted for $(760,792) and $3,578,113 pro forma Carlisle net income for the three and nine months ended September 30, 2024, respectively.

Pro Forma Segment Revenue

The table below summarizes the combined results of operations for the Company and Carlisle in connection with the Carlisle Acquisition as if the Companies were combined for the three and nine months ended September 30, 2024. The unaudited supplemental pro forma financial information related to the asset management segment as presented below is for illustrative purposes only and does not purport to represent what the results of operations would actually have been if the business combinations occurred as of the date indicated or what the results would be for any future periods.

Key Business Metrics

We monitor the following key business metrics:

• Revenue generated from life policies: (i) policies sold, matured, and bought, (ii) realized gains, (iii) revenues from maturities, and (iv) net death benefit value of policies held. The number of policies sold and purchased helps us measure the level of trading activity for the period that leads to realized and unrealized gains, respectively. Realized gains on sold policies and revenues from maturities is used to measure our profit optimization. The net death benefit of policies represents the maximum potential maturity revenue realization on policies held.
• Asset management revenue: (i) assets under management also referred to as the net asset value of funds (“AUM” or “NAV”). AUM drives management fees and performance fees generated by the Company.
• Servicing revenue: (i) number of policies serviced, (ii) face value of policies serviced, and (iii) total invested dollars. Servicing revenue involves the provision of services for maintaining the policy, 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. The number of policies and the face value of policies serviced represents the volume and dollar face value of policies over which the above services are performed. Total invested dollars represent the acquisition cost plus premiums paid for serviced policies and is used to determine servicing fees.
• Origination revenue: Origination revenues represent fees negotiated for each purchase and sale of a policy with an investor. The number of policy originations (i) represents the volume of policies over which the above origination services are performed. The number of policy originations directly correlates with origination revenues allowing management to evaluate fees earned upon each transaction.

Information regarding policies accounted for under the fair value method is as follows:

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Note: Realized gains represent the difference between the sale price of life insurance policies or the net death benefit of matured life insurance policies, net of the original cost of the corresponding life settlement policy plus related lifetime continuing costs (e.g., premium costs) (together all costs associated with life insurance policies are “Lifetime Carrying Costs”). The average realized gain on policies sold represents realized gains as a percentage of related Lifetime Carrying Costs of sold life insurance policies. Refer to Note 19 Related-Party Transactions for additional information.

Information regarding policies accounted for under the investment method is as follows:

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Note: Realized gains represent the difference between the sale price of life insurance policies or the net death benefit of matured life insurance policies, net of the original cost of the corresponding life settlement policy plus related lifetime continuing costs (e.g., premium costs) (together all costs associated with life insurance policies are “Lifetime Carrying Costs”). The average realized gain on policies sold represents realized gains as a percentage of related Lifetime Carrying Costs of sold life insurance policies.

Information regarding originations revenue, management fees, and servicing revenue is as follows:

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[1] For the nine months ended September 30, 2025, LMA and LMA subsidiaries comprised 579 of the policies serviced, $1,152,418,475 face value of the policies serviced, and $359,183,851 of the total invested dollars. For the nine months ended September 30, 2024, LMA and LMA subsidiaries comprised 530 of the policies serviced, $974,986,831 face value of the policies serviced, and $221,368,597 of the total invested dollars. All servicing revenues related to LMA or LMA subsidiaries are eliminated in consolidation.

Liquidity and Capital Resources

The Company finances its operations primarily through cash generated from operations and net proceeds from debt or equity financing. The Company actively manages its working capital and the associated cash requirements when servicing and originating policies while also effectively utilizing cash and other sources of liquidity to purchase additional life settlement policies. As of September 30, 2025 and December 31, 2024, our principal source of liquidity was cash and cash equivalents totaling $86,418,953 and $131,944,282, respectively.

Our future capital requirements will depend on many factors, including our revenue growth rate. The Company. may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. The Company may seek additional equity or debt financing.

In December 2023, April 2025, and June 2025, the Company’s Board of Directors approved a $15,000,000, $15,000,000, and $20,000,000 repurchase plans, respectively, that will expire in December 2026. As of September 30, 2025, $— remains available for repurchases under the approved plan. Refer to Note 15, Convertible Preferred Stock and Stockholders’ Equity, to the Interim Financial Statements for additional information.

Refer to Note 13 Fair Value Measurements and Note 15 Convertible Preferred Stock and Stockholders’ Equity for disclosures related to the Company’s conversion of all Private Placement Warrants and Public Warrants in a non-cash exchange for the Company’s common stock, respectively.

We believe that our current cash and cash equivalents as well as cash generated from operations will be sufficient to support our operating and debt service needs for the 12 months following the filing of this Quarterly Report on From 10-Q.

Cash Flows from our Operations

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

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Operating Activities

During the nine months ended September 30, 2025, our operating activities used $(18,240,847) of net cash compared to $(116,827,478) of net cash used from operating activities during the nine months ended September 30, 2024. The increase of $98,586,631 in net cash provided from operating activities was primarily due to $89,472,306 increase in net life settlement sales.

Investing Activities

During the nine months ended September 30, 2025, investing activities used $(13,979,145) of net cash compared to $(1,167,166) net cash used during the nine months ended September 30, 2024. The increase of $(12,811,979) in net cash used in investing activities was primarily related to $(7,000,000) the issuance of a note receivable.

Financing Activities

During the nine months ended September 30, 2025, financing activities used $(13,305,337) of net cash compared to $111,815,591 of net cash provided during the nine months ended September 30, 2024. The increase of $(125,120,928) in net cash used by financing activities is primarily due to $(86,114,424) decrease in net proceeds received from our follow-on stock issuances that did not reoccur, $(27,501,830) increase in share repurchases, $(6,852,207) decrease in cash received from public warrant conversions that did not reoccur, and $(5,723,665) net decrease in long-term debt.

Contractual Obligations and Commitments

Refer to the following notes in our Interim Financial Statements for a list of contractual obligations and commitments:

• Note 12 Commitments and Contingencies for a list of commitments and contingencies.
• Note 14 Long-Term Debt for a list of outstanding debt, related interest rates, and maturity dates.
• Note 20 Leases for our outstanding lease obligations.

Critical Accounting Policies and Estimates

The Company prepared its 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. The Company evaluates its estimates and judgments on an ongoing basis. The Company bases its estimates on historical experience and or other relevant assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ materially from management’s estimates. We have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application in our most recent Annual Report on Form 10-K. Since the date of our most recent Annual Report on Form 10-K, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them other than any new policies described in Note 2, Summary of Significant Accounting Policies and Recent Accounting Standards, to our condensed notes to consolidated financial statements.

Recent Accounting Pronouncements

See Note 2 Summary of Significant Accounting Policies and Recent Accounting Standards to the consolidated Interim Financial Statements for a discussion of recently issued accounting pronouncements, including information on new accounting standards and the future adoption of such standards.

We are a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) or Rule 15d-15(b) promulgated by the SEC under the Securities Exchange Act of 1934, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the three months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our 2024 Annual Report on Form 10-K filed with the SEC on March 28, 2024. As of the date of this Report, there have been no material changes to the risk factors disclosed in our 2024 Annual Report on Form 10-K for the fiscal year ended December 31, 2024 other than what is disclosed below.

Risks Related to the Business and Regulatory Matters

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. To date the Company has not acquired annuities. The Company will disclose material annuity balances and activities in the consolidated financial statements. 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 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 utilizes a multitude of inputs including historical realized gains on life insurance policies sold, quarterly lookback analysis, risk score, risk-based discount rate and life expectancies to determine the fair value of the policies it holds. The Company uses life expectancy reports from six different life expectancy entities including life expectancy reports generated by Lapetus Solutions, Inc. (“Lapetus”), in which the Company holds a minority ownership interest representing less than a 5% equity stake on a fully diluted basis. The Company’s Chief Executive Officer previously held an advisory board position at Lapetus, where his role was strictly limited to an uncompensated advisory position rather than a contractor role or service on the board of directors of Lapetus. The Company’s Chief Executive Officer resigned from his advisory board position with Lapetus effective on May 16, 2024. For the six months ended June 30, 2025, Lapetus represented 34% of expectancy reports purchased. The Company will not be purchasing any additional expense reports from Lapetus going forward as Lapetus announced shutdown on August 31, 2025.