abl-20251231
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-K
__________________
For the fiscal year ended December 31, 2025
OR
For the transition period from _____ to _____
Commission file number 001-39403
Abacus Global Management, Inc.
(Exact name of registrant as specified in its charter)
(Address of Principal Executive Offices) (Zip Code)
(800) 561-4148
Registrant's telephone number, including area code
__________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, par value $0.0001 per share ABX New York Stock Exchange
9.875% Fixed Rate Senior Notes due 2028 ABXL New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes☐ Nox
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes☐ Nox
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer o Accelerated filer o
Non-accelerated filer x Smaller reporting company x
Emerging growth company o
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. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to§240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of voting and non-voting common stock held by non-affiliates as of June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, was $142,281,625.
The registrant had 96,542,155 shares of common stock, $0.0001 par value per share, outstanding as of March 10, 2026.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the Definitive Proxy Statement for the 2026 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.
Table of Contents
ABACUS GLOBAL MANAGEMENT, INC.
TABLE OF CONTENTS
Page
PART I
Item 1. Business 1
Item 1A. Risk Factors 13
Item 1B. Unresolved Staff Comments 30
Item 1C. Cybersecurity 31
Item 2. Properties 31
Item 3. Legal Proceedings 31
Item 4. Mine Safety Disclosures 32
PART II
Item 6. [Reserved] 32
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 51
Item 8. Financial Statements and Supplementary Data 51
Item 9A. Controls and Procedures 114
Item 9B. Other Information 115
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 115
PART III
Item 10. Directors, Executive Officers and Corporate Governance 116
Item 11. Executive Compensation 116
Item 14. Principal Accountant Fees and Services 116
PART IV
Item 15. Exhibit and Financial Statement Schedules 117
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding our beliefs, 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. All statements other than statements of historical fact included in this Annual Report on Form 10-K regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking words such as “believe(s),” “estimate(s),” “expect(s),” “predict(s),” “project(s),” “forecast(s),” “may,” “might,” “will,” “could,” “should,” “would,” “seek(s),” “plan(s),” “scheduled,” “possible,” “continue,” “potential,” “anticipate(s)” or “intend(s)” or similar expressions, including the negative of these terms or variations of them or similar terms; provided that the absence of these does not means that a statement is not forward-looking.
All forward-looking statements included in this document are based on information available to us on the date hereof, and speak only as of the date they are made. The Company assumes no obligation to update any such forward-looking statements except as required by law. Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, many of which are beyond our control, 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 document and in our other public filings with the United States Securities and Exchange Commission (the “SEC”).
Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Further, factors identified herein are not necessarily all the factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm us. Accordingly, you should consider all these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by us and not place undue reliance on forward-looking statements.
Part I
Item 1. Business
Business Combination
Abacus Global Management, Inc. (“we,” “us,” “our,” the “Company,” or “Abacus”) was formerly known as Abacus Life, Inc. and East Resources Acquisition Company (“ERES”). The Company was initially organized as ERES, a blank check company incorporated in Delaware on May 22, 2020. On June 30, 2023, we completed a business combination by and between Abacus Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of ERES (“Abacus Merger Sub”), Longevity Market Assets, LLC, a Florida limited liability company (“LMA”), and Abacus Settlements, LLC, a Florida limited liability company (“Abacus Settlements” and, together with LMA, the “Companies”), pursuant to which (i) LMA Merger Sub merged with and into LMA, with LMA surviving and (ii) Abacus Merger Sub merged with and into Abacus, with Abacus
1
Table of Contents
surviving (together the “Mergers” and, along with the transactions contemplated in the Merger Agreement, the “Business Combination”) and the Companies became direct wholly owned subsidiaries of ERES. In connection with the Business Combination, ERES changed its name to Abacus Life, Inc. On February 27, 2025, we changed our name to Abacus Global Management, Inc.
Prior to December 2, 2024, the Company conducted its business through its wholly owned, consolidated subsidiaries, primarily the Companies.
On December 2, 2024, we completed the acquisitions of Carlisle Management Company S.C.A., a corporate partnership limited by shares established under the laws of Luxembourg (“CMC”), Carlisle Investment Group S.A.R.L., a private limited liability company incorporated under the laws of Luxembourg (“CIG,” and together with CMC, “Carlisle”), a Luxembourg-based investment manager in the life settlement space (such acquisitions, the “Carlisle Acquisition”). On December 2, 2024, we also completed the acquisition of FCF Advisors, LLC (“FCF Advisors” or “FCF”), a New York based asset manager and index provider specializing in free cash flow-focused investment strategies (“FCF Acquisition”). Refer to Note 3 Business Combinations of the consolidated financial statements in Part II, Item 8 Financial Statements and Supplementary Data for additional information.
On October 6, 2025, we completed the acquisition of AccuQuote, an online life insurance brokerage company that offers customers quotes from multiple insurance providers through a single platform. For more than four decades, AccuQuote has helped nearly 350,000 families discern insurance options and secure coverage. The acquisition strengthens the Company’s financial services platform while removing barriers and expanding access to insurance solutions nationwide, empowering our technology stack with accretive solutions.
We operate through five principal subsidiaries:
•Abacus Settlements, LLC (“Abacus Settlements”), was organized as a New York limited liability company in 2004. In 2016, Abacus Settlements was licensed in Florida as a life settlement provider and became a Florida limited liability company. Abacus Settlements is not an insurance company, are not licensed or regulated as an insurance company, and therefore does not underwrite insurable risks for our own account.
•Longevity Market Assets, LLC (“LMA”), which was formed in 2017 as a Florida limited liability company
•Carlisle, incorporated in 2008 in Luxembourg
•FCF Advisors, incorporated in 2016 in New York
•AccuQuote, an online life insurance brokerage company acquired in October 2025
Our Mission
Our mission is to revolutionize financial services through expert asset management and data-driven lifespan insights, leveraging advanced technology to deliver personalized solutions that optimize financial well-being across every stage of life.
Strategic Vision
“Abacus envisions a future where financial decisions are transformed by the powerful intersection of technology, longevity data, and expert asset management. Through our four integrated verticals—Life Solutions, Asset Management, Private Wealth Management, and Health and Longevity Technology—we strive to be the premier financial partner that helps institutional investors, financial advisors, and clients harness untapped value in lifespan metrics, creating investment strategies that stand the test of time.”
- Jay Jackson, Chairman and Chief Executive Officer of Abacus Global Management, Inc.
2
Table of Contents
Abacus Overview
Abacus Global Management (NYSE: ABX) 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. As of the end of 2025, the Company’s assets under management grew to approximately $3.33 billion. On December 30, 2025, the Company transferred its listing from the Nasdaq Stock Market to the New York Stock Exchange (“NYSE”) and began trading under the ticker symbol “ABX,” reflecting its evolution as a scaled, diversified alternative asset manager.
The company’s expanded business model now operates through four distinct yet complementary divisions:
Abacus Life Solutions
Since 2004, Abacus has purchased over $10 billion in face value of life insurance policies, helping thousands of clients maximize the value of their life insurance assets. The Life Solutions division specializes in helping consumers achieve financial security through retirement products while serving as a solutions provider to institutions. The institutional business assists insurance carriers and reinsurers in optimizing legacy liabilities and creating innovative consumer-facing products through data-based solutions. With the acquisition of AccuQuote in October 2025, the Life Solutions division now includes a premier digital life insurance origination platform that allows customers to compare quotes from multiple carriers through a single, user-friendly interface, further expanding the Company’s ability to serve clients across the entire lifecycle of their insurance needs.
Policy Origination
As one of the leading buyers of life insurance policies in the United States for over 20 years, we sit at the heart of the life settlements industry. We leverage our strong market position, highly efficient origination platform and proprietary technology to drive our revenue and profitability. The Company and its executive team have deep experience in the life settlement industry. The Company’s guidelines are designed to allow the Company to target the life insurance policies that it believes have the most upside potential to generate attractive risk-adjusted returns to the Company through either its hold or trade portfolio. Currently, the Company principally invests in non-variable universal life insurance policies and retains the discretion to invest in whole life or convertible term life insurance policies.
Underwriting. Abacus’ origination guidelines focus on the age, gender and health of the insured, the duration, mortality risk and face value of the underlying life insurance policy, the projected internal rate of return of the investment in the underlying life insurance policy after taking into account the cost of making continued premium payments, and the ultimate amount and timing of the death benefit. These guidelines are designed to allow the Company to target the life insurance policies that it believes will generate attractive risk-adjusted returns. The Company invests primarily in non-variable universal life insurance policies.
Origination. Our proven policy origination process, known as “origination services” first locates policies and screens them for eligibility for a life settlement. This process includes verifying that the policy is in force, obtaining consent forms, and making disclosures to policy owners, and obtaining or generating life expectancy estimates.
We generate fees on the policies we originate, which are sourced from three channels: (i) a network of approximately 30,000 financial advisors and agents, (ii) direct-to-consumer, and (iii) a number of traditional life settlements intermediaries that submit policies to us on behalf of a financial advisor, agent or other client.
Portfolio Management. Once identified, we utilize our proprietary “heat-map” technology platform to determine the initial risk and viability of policies. Thereafter, a purchased policy is “actively managed,” whereby we consistently monitor the policy risk to optimize revenue by choosing to either (x) trade the policy
3
Table of Contents
to a third-party institutional investor (i.e., receive a trade spread) or (y) hold the policy over time (i.e., pay premiums and receive payout). Additionally, we service policies on behalf of third parties for which we receive fee-based revenue based on a percentage of policy value. Our multi-faceted and dynamic revenue model is made possible by the fact that we sit at the heart of the entire life settlements industry.
Our revenue generation platform and economic model is best summarized below:
1.Origination (fees based on a percentage of the face value or net death benefit of the acquired policies)
2.Active Management (spreads for traded policies and realized returns for held policies)
3.Third Party Portfolio Servicing (fees based on a percentage of the total asset value serviced)
Abacus Asset Group
The asset management division serves primarily institutional investors alongside select private clients, providing excess returns across the risk-reward spectrum. Abacus Asset Group specializes in uncorrelated and longevity-based assets, fixed-income replacement strategies, free-cash flow based investment solutions, and asset-based finance. This division leverages proprietary analytics and market insights to identify unique opportunities through distinct investment strategies that deliver consistent performance through various market cycles while maintaining a disciplined approach to risk management.
During December 2024, we added two asset management companies in connection with two business acquisitions described above. Starting in December 2024, we manage alternative investment funds and exchange-traded funds (“ETFs”). The alternative investment funds primarily invest in insurance policy settlement contracts that cater to investors seeking risk-adjusted returns with low correlation to other asset classes. The ETFs primarily invest in equity securities using a suite of core and thematic free cash flow equity strategies and offer over 50 customizable free cash flow index strategies covering eight global equities allocation categories available in separately managed accounts. Asset Management fees are based on a percentage of total asset value under management. We also realize performance fees based on a percentage of returns over certain hurdle rates for the managed alternative investment funds.
In January 2026, the Company launched an asset-based finance (“ABF”) strategy within Abacus Asset Group, targeting the $20 trillion-plus asset-based finance market. The ABF strategy deploys capital into asset-backed investments, combining institutional-quality origination and structuring expertise with the Company’s proprietary insurance analytics and deep sector relationships. The strategy targets a broad range of asset classes, including consumer credit, equipment finance, receivables, small business loans, intellectual property rights, and contractual cash flows, with approximately 65% of investments targeted in holdings with investment grade-like characteristics. The strategy seeks to generate returns comprised of both current income and capital appreciation, with an emphasis on stable cash flows, low volatility, and low correlation to broader markets.
Abacus Intel
Building on decades of experience and proprietary health and longevity data sets, Abacus Intel creates technology products that are revolutionizing the life planning industry. These innovations deliver tremendous benefits for pension funds, government agencies, and insurance-related businesses. The division has developed platforms that conduct real-time mortality verification, locate missing participants, and service the secondary life insurance market with unprecedented speed and accuracy. Starting in February 2024, we utilize proprietary technology based on health and longevity data sets to provide solutions to pension funds, government agencies, insurance-related businesses, as well as other entities that benefit from real-time mortality verification, missing participant verification, and other services specific to the life insurance market. Technology Services fees are based on fixed annual contracts. During the fourth quarter of 2024 we began recognizing Technology Service revenue generated by ABL Tech (now operating as Abacus Intel).
Abacus Wealth Advisors
4
Table of Contents
Leveraging more than two decades of proprietary data and algorithms, Abacus Wealth Advisors is redefining wealth management through a transparent, cutting edge, data-driven approach. The division helps financial advisors create customized plans based on clients’ health, longevity, and overall financial wellbeing, moving beyond one-size-fits-all planning to develop financial strategies tailored to each individual.
The Life Settlement Industry
Large Addressable Market with Meaningful Growth Potential
We operate within a large, growing and currently under-penetrated market. The face value of all in force U.S. life insurance industry policies is approximately $14 trillion. Historically, more than 90% of life insurance policies in force did not pay a claim. Based on industry forecasts, approximately 75% of policyholders over the age of 65 will either cancel their policies or allow their coverage to lapse, forfeiting the right to ever receive a full payout. The life settlements industry helps solve this problem by allowing policyholders the opportunity to monetize their policies.
We are currently a leader in the life settlements industry. The Company has approximately a 26% market share based on our 2023 capital invested/total industry capital invested and data compiled in a 2024 report by The Deal and Life Settlements Report, a U.S. life settlements industry news source. Data for the report was aggregated from each state based on 2023 annual reporting. We have a proven track record of growth and strong asset returns. Furthermore, we are currently operational in 49 states, which is a key differentiator in an industry with high barriers to entry due to significant regulatory requirements. Our business is supported by over 325 employees and an innovative leadership team, with an average of over 20 years of experience in the industry.
The combination of the large U.S. life insurance market and the high percentage of policies that never pay a claim creates a considerable opportunity for Abacus and the broader life settlements industry. Specifically, the scale of the life settlements market opportunity is $224 billion each year, according to the 2025 “A Conning Strategic Study.” However, in 2024, the life settlements industry captured only approximately 2% of the annual market of lapsed life insurance policies. We believe there is a significant opportunity to increase this market penetration, primarily by driving awareness and education regarding the ability to monetize life insurance policies by utilizing our services.
Life insurance is often a senior citizen’s largest asset and one that can be used to alleviate retirement challenges, but it is rarely treated in this way. This can be partially attributed to the fact that almost half of all financial advisors are not aware that selling a life insurance policy is an option for their clients. We help financial advisors and their clients understand that a life insurance policy is personal property and selling it for a fair market value is a legitimate, safe and viable choice that creates more investment options for the client. While less than 1% of financial advisors and agents transact in the life settlements market, based on research conducted by the Life Insurance Settlement Association, the primary industry trade association for the U.S. life settlements industry, we believe approximately 90% of senior citizens who let their life insurance policies lapse or surrendered their policies, would have considered this alternative if they had been made aware of it before lapsing or surrendering their policies. The reference to this study can be found at the Life Insurance Settlement Association — https://www.lisa.org/life-settlements-industry-will-grow-as-more-seniors-are-informed-of-their-options-say-experts-at-lisa-conference/.
Selling a life insurance policy is a valuable transaction and for those consumers who transact, the benefits can be substantial. On average, life settlements companies pay sellers nearly eight times more than the current cash value of a policy. Selling a life insurance policy not only alleviates the requirement for a policyholder to pay premiums but creates a meaningful and immediate monetization event. Sellers use these proceeds in a variety of ways, including to support their retirement, transfer wealth and pay medical bills.
Generally Uncorrelated Alternative Asset Class with Institutional Investment Grade Counterparts
5
Table of Contents
While selling life insurance policies at a fair market value can have significantly positive impacts on a person’s life, it is a mutually beneficial transaction. The underlying life insurance policy is a highly attractive asset that has minimal payout risk and generally uncorrelated returns. The counterparties to these transactions are generally high-quality investment grade insurance companies. In fact, greater than 90% of our carriers have an “A Rating” or better. Additionally, these life insurance policies are cash backed by the carriers, which means they are required to pay policy claims ahead of any other contractual obligation, including senior debt.
In addition to counterparty quality, this is a largely non-cyclical asset class. A life insurance policy is sometimes described as a “mortality-driven zero-coupon bond” because its underlying value will appreciate over time as it approaches maturity (i.e., as the policyholder ages). This is best demonstrated when comparing our historical risk-adjusted returns relative to other benchmark asset classes.
We are at the Heart of the Life Settlements Industry
Abacus’ Origination Model
Our “Origination Process” is core to our entire business and drives our economics. We’re paid a percentage of face value in origination fees on policies and have spent the last 20 years developing three high quality origination channels (financial advisors or agents, direct to consumer and life settlements brokers).
An example of our target market includes policyholders over 75 years old whose insurance need for life insurance is outweighed by the benefit of immediate cash. We then focus our origination process on these targeted individuals, developing processes and procedures for identifying and screening policies that have attractive potential returns.
We have three distinct origination channels to reach this target market.
•Financial Advisor or Agent—Our largest origination channel involves working directly with financial advisors to facilitate the sale of their client’s life insurance policies. Since our founding, we have been at the forefront of developing this market and are now ingrained in a network of over 30,000 financial advisors. We are currently on multiple national financial advisory platforms, we present at conferences, and we develop marketing tools to help advisors efficiently present the benefits of life insurance settlements to their clients. As we highlighted earlier, just under half of financial advisors are unaware this financial option exists and less than 1% have completed a life settlement transaction. This origination channel has driven our significant growth over the last five years, and we believe it will continue to be a priority for our future growth.
•Direct to Consumer—We have been building this channel for several years and have focused heavily on increasing broad consumer awareness and education regarding life insurance settlements. We have been active in a variety of common direct-to-consumer advertisement channels, including radio and television advertisements. In addition, we have created a unique online “Policy Value Calculator” so that individuals can receive an instant valuation on their life insurance policies. With the acquisition of AccuQuote, the Company has significantly expanded this channel by adding a premier digital insurance marketplace that allows customers to compare quotes from multiple carriers through a single, user-friendly interface, offering them convenience, optionality, and the ability to enroll in a plan specific to their needs. The direct-to-consumer channel has historically driven origination of smaller face value life policies than through our financial advisor or agent channel, thereby expanding the scope of life policies we are able to value and acquire.
•Traditional Life Settlements Intermediaries—Within this channel, we engage with life settlements intermediaries or “brokers” who submit policies to us on behalf of an advisor or client, for which the life settlement intermediary earns a commission. We intend to slowly reduce our reliance on these intermediaries over time and focus our efforts on building out the technology required to educate and gain access to both the financial advisor and direct-to-consumer channels.
6
Table of Contents
We intend to continue to fuel origination growth by expanding our team and outreach. In order to drive awareness across all origination channels, we plan to expand our marketing and national television advertising campaigns.
Abacus’ Policy Acquisition Process
A life settlement transaction is the process by which a third-party intermediary acquires an existing life insurance policy for an amount greater than its current cash surrender value. Upon closing of the life settlement transaction, the policyholder receives an immediate cash payment, and the third-party intermediary receives ownership of the policy. Thus, the third-party intermediary becomes the beneficiary of the insured’s claim payout but is now solely responsible for all future premium payments. Our company functions as this third-party intermediary.
The process of acquiring a life insurance policy in the secondary market is highly regulated and policyholder friendly. Unique licenses are mandatory to operate, and significant consumer protection disclosures are required to be made available to policyholders. We originate these policies through three distinct channels (i.e., financial advisors / agents, direct-to-consumer and traditional life settlements intermediaries). We first screen each policy to ensure it is eligible for a life settlement, including verifying the policy is in force, obtaining appropriate consents, providing disclosures, and submitting cases for medical underwriting and life expectancy estimates. In connection with this process, we use our proprietary analytics and risk-rating systems to determine an estimated market value for each individual policy.
The Company has established policies and guidelines with respect to its purchase of life insurance policies. For the underlying life insurance policies, these guidelines focus on (i) the age of the insured, (ii) the sex and health of the insured, (iii) the duration of the policy, (iv) mortality risk and life expectancy of the insured, (v) the type of the underlying life insurance policy, (vi) the projected internal rate of return of the investment, and (vii) the amount of the death benefit after accounting for the cost of making continued premium payments. We exclude considering certain types of primary health impairments associated with the underlying insured to ensure that all policies are purchased in accordance with established industry practice and state law requirements. These guidelines are designed to target life insurance policies that the Company believes will generate attractive risk adjusted returns.
Following the origination, underwriting and valuation processes, we formally present our proposed purchase price to the policyholder or advisor. If agreed upon, the settlement closing process begins. Appropriate closing documents are reviewed by our in-house counsel, and we send funds to an independent escrow agent. Simultaneously, change of ownership and beneficiary documentation is sent to the underlying insurance carrier. Once the carrier confirms the changes, the escrow agent sends the life settlement proceeds to the appropriate party, and we become responsible for the underlying insurance policy (i.e., paying premiums and receiving death benefit claim proceeds). The proceeds paid by the escrow agent will also include the commission(s) we owe to the broker and / or agent as well as our fee for completing the origination services.
While the transaction is deemed closed, it is important to note that the policy owner may generally rescind the life settlement contract within 30 days from execution of the agreement or 15 days from the receipt of cash proceeds by the owner. As such, revenue is not recorded until this rescission period is over.
Once the transaction is closed, the policy enters our active portfolio management process whereby we determine whether a policy should be sold to a third-party institutional investor or held on our balance sheet. In certain cases, we identify a purchaser prior to the close of a transaction, in which case the policy is transferred directly to the purchaser at closing using our life settlement closing services.
Proprietary Technology Platforms Support Our Business
We have and continue to develop a comprehensive suite of technology products that helps drive origination, underwriting and trading. Specifically, we have created:
7
Table of Contents
•Risk Rating Heat Map—Using the large amount of data we have gathered over time, we have developed a proprietary risk-rating platform that measures the risk of life insurance contracts on a range from 1–5 (low–high risk, respectively). This risk score is calculated on a wide range of factors, including (i) duration and extension risk, (ii) policy face value and purchase type, (iii) policy type, (iv) carrier rating, (v) life expectancy (“LE”) and LE extension ratios, (vi) age and age on LE date and (vii) survival probability. We believe this platform is a key differentiating factor relative to our competitors as it gives us a meaningful advantage when valuing and purchasing life insurance policies.
•Policy Value Calculator—Our “Policy Value Calculator” drives origination by using proprietary data to instantly value policies for both individuals and financial advisors. This easy-to-use online tool only requires four pieces of information: (i) gender, (ii) age, (iii) face value and (iv) policy type. These data points then generate a valuation range that advisors and individuals can use to quickly assess the current value of their policy.
Active Portfolio Management Strategy
With meaningful support from our proprietary risk rating heat map, we consistently evaluate policies (at origination and throughout the lifecycle) to generate essentially uncorrelated risk adjusted returns. Upon acquiring a policy, we have the option to either (i) trade that policy to a third-party institutional investor (i.e., generating a spread on each trade) or (ii) hold that policy on our balance sheet until maturity (i.e., paying the premiums over time and receiving the final claim / payout). This process is predicated on driving the best economics for Abacus.
•Traded Portfolio—Our traded portfolio returns are driven by (i) the spread we generate by selling policies to third-party institutional investors and (ii) our ability to quickly recycle capital. Our trade spreads average above cost basis depending on the contract and we recycle our capital annually. These two metrics are driven by our ability to effectively originate new policies (supply) and the underlying market interest for the policies (demand).
•Hold Portfolio—Relative to our traded portfolio, our hold portfolio has the potential to generate a higher estimated annual return than our traded portfolio but requires approximately a 3 to 4 times greater capital investment, which is driven by the need to hold policies, rather than recycle the policies in trading, and to fund premium payments during the holding period for a policy. To the extent that we are not able to commit the required capital, we then focus efforts more on our traded portfolio. Our origination platform and proprietary risk rating heat map has allowed us to hold only what we determine to be the highest quality policies which have our lowest risk ratings. In October 2025, the Company completed a $50 million investment-grade securitized note backed by life insurance assets, establishing a repeatable, lower-cost funding mechanism while retaining servicing rights and generating ongoing fee-based revenue.
Policy Servicing
In addition to generating economics on the policies we directly originate and actively manage, we have a dynamic platform to service bundles of policies for a variety of third-party institutions. We have experience servicing a large number of policies for highly sophisticated institutions, including policies for large asset managers. Beyond our fees, servicing policies at scale supports our data analytics and keeps us at the heart of the life settlements industry. We have a sophisticated team of professionals solely focused on servicing these policies. As the Company expands its securitization activities, the servicing platform is expected to generate additional recurring fee-based revenue, as the Company retains servicing rights on securitized assets sold to institutional investors.
Prospects for Future Growth
Continued Maturation of the Life Settlements Industry
8
Table of Contents
As described above, there is approximately $200 billion in life insurance policy death benefit value that lapses on an annual basis. However, the life settlements industry captured only approximately 2% of the potential market in 2024, which leaves significant runway for future growth for industry participants. The total face value of life insurance policies is expected to grow from approximately $6 billion in 2022 to approximately $8 billion in 2028, which is a 5% compounded annual growth rate. Given our position at the heart of the life settlements industry, we believe that we are well positioned to capitalize on this anticipated market growth.
Focus on Growing the Origination Process
Our ability to originate policies is essential to scale our business over time. In order to support this expected growth, we continue to invest in our technology and marketing infrastructure. In general, we expect our efforts will continue to focus on driving education and awareness of life settlements. In order to meet this growing demand, we have increased our total employee headcount. The acquisition of AccuQuote further expands our origination capabilities by adding a premier digital life insurance distribution platform that connects insurance solutions to broader wealth strategies, enabling the Company to serve clients across the entire lifecycle of their financial needs.
Continued Innovation in Technology
Using technology to improve our analytics, market liquidity and velocity of capital use is a key priority. Certain key technology elements are:
•Analytics (Abacus Analytics)—the standard pricing and valuation platform for policy valuation and portfolio assessment that we believe will allow us to obtain visibility into every transaction in the industry.
•Liquidity (Longevity Market Assets)—tertiary trading, servicing and valuation platform (added direct purchase in 2023). Abacusmarketplace.com is a proprietary technology platform that has been designed in order to facilitate tertiary trading, servicing and valuation for the life settlement industry. This platform is intended to increase the trading volume for the entire industry by removing intermediaries and improving the efficiency and security of the transactions.
Access to Capital Markets Provides More Attractive Financing
We believe that as a publicly traded company listed on the NYSE, we have access to a lower cost of capital, which will optimize our per policy revenue and allow us to fund additional investment in infrastructure. In September 2025, the Company was added to the Russell 2000® and Russell 3000® Indexes, broadening our visibility with institutional investors. Our NYSE listing is further enhanced by Citadel Securities serving as our Designated Market Maker (“DMM”). Additionally, as discussed in more detail below, access to additional capital will enable us to increase our balance sheet hold portfolio, which we believe may drive higher long-term returns.
Transitioning Our Business Model as Our Capital Base Scales
As our capital base scales, we have the ability to increase the proportion of policies that we hold on our balance sheet. One of the most obvious benefits to a larger hold portfolio is that it may increase the predictability of returns (i.e., held policies typically increase in value over time, largely independent of trading market conditions). Additionally, with a larger hold portfolio, there is a unique opportunity to begin securitizing policies. In October 2025, we completed our first $50 million investment-grade securitized note backed by life insurance assets, establishing a template for future transactions. We expect securitized products to become a consistent component of our long-term funding strategy, alongside sales to third-parties and in-house managed funds. In the long-term, we believe securitized portfolios can drive an even lower cost of capital and can be sold in scale to third parties at a significant multiple.
Scaling Asset Management and Fee-Related Earnings
9
Table of Contents
The Company is focused on transitioning toward a more durable, recurring revenue model through the growth of its asset management platform. With the December 2024 acquisitions of Carlisle and FCF Advisors and the January 2026 launch of the ABF strategy, the Company has meaningfully expanded its investment offerings and distribution capabilities. The ABF strategy represents a natural extension of the Company’s platform, deploying third-party capital into asset-backed lending and structured credit opportunities that leverage the Company’s actuarial expertise and insurance infrastructure in a market estimated at more than $20 trillion. In November 2025, the Board of Directors approved an annual cash dividend of $0.20 per share and a $10 million share repurchase program, reflecting confidence in the Company’s long-term business model, recurring earnings, and capital strength.
Competition
We compete with numerous life insurance settlement originators, servicers, and investors, alternative asset managers, wealth advisors, and mortality verification companies. Our primary competitors in each of our business lines differ significantly from those in our other business lines principally because few companies compete against us in all business segments in which we operate. Competition is high in all our business lines, in particular life insurance settlement origination where our competitors have invested significantly in marketing and acquisitions.
The risks associated with our competitors are further discussed in Part I, Item 1A Risk Factors.
Our Employees
As of December 31, 2025, we had 326 employees, none of whom are subject to any collective bargaining agreement or represented by a labor union. We have 25 employees based outside of the United States. To date, we have not experienced any work stoppages and we consider our employee relations to be good. We believe that our employees are critical to our long-term success. Nearly 80% of our employees are shareholders, reflecting an ownership mentality that drives company performance.
Intellectual Property
Our business depends, in part, on our ability to develop and maintain the proprietary aspects of its core technology. We rely on trademarks to protect our intellectual property.
We have been issued federal registrations for our “Abacus Settlements,” “Abacus Life,” and “Abacus Global Management” trademarks. We also hold various domain names for websites that we use in our business. Additionally, we have developed and maintain proprietary software for our internal use to aid in pricing, valuation and risk analysis of life settlement policies.
Regulatory Overview
We are subject to various laws, regulations and licensing requirements in the United States which may expose us to liability, increase costs or have other adverse effects that could harm our business. These laws and regulations include, but are not limited to, data privacy and data localization, healthcare, insurance, copyright or similar laws, anti-spam, consumer protection, employment and taxation. Compliance with such laws can require changes to our business practices and significant management time and effort. Additionally, as we continue to develop and improve consumer-facing products and services, and as those offerings grow in popularity, the risk that additional laws and regulations will impact our business will continue to increase. We believe that we are in material compliance with all such laws, regulations and licensing requirements.
Insurance Laws and Regulations
We operate as a life settlement provider in 49 states. We have a strong track record with each state in which we are licensed and have not had any reportable incidents. Our in-house counsel and compliance staff reviews every life insurance policy we consider acquiring for compliance with applicable state regulations. We file an annual report with each state in which we operate and each state has the ability to request an audit at its
10
Table of Contents
discretion. Currently, 46 states have regulations that support the sale of life insurance policies to a third party, like our Company. Each state also has its own policyholder-facing consumer protection disclosure requirements that we comply with in the ordinary course of our business.
We focus on acquiring and trading non-variable, non-fractionalized life insurance policies. These life insurance policies are deemed to be personal property of the owner based upon the Supreme Court decision Grigsby v. Russell in 1911. Furthermore, non-variable, non-fractionalized life insurance policies are not deemed to be securities under the federal securities laws, and so the Company is not required to register as an investment adviser or an investment company under the Investment Advisers Act of 1940, as amended or the Investment Company Act of 1940, as amended, respectively.
We operate a limited purpose broker dealer, which we intend to license to engage in transactions for variable and fractionalized life insurance policies. We expect that any transactions in variable or fractionalized life insurance policies will represent less than 20% of the total number of life insurance policies held by the Company at any time. The Company does not, and does not in the future intend to, engage in any life insurance securitization.
Data Privacy Laws and Regulations
Because we receive, use, transmit, disclose and store personal data, we are subject to numerous state and federal laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data. We are subject to the Telephone Consumer Protection Act (“TCPA”) which restricts the making of telemarketing calls and the use of automatic telephone dialing systems. Violators of the TCPA face regulatory enforcement action, substantial civil penalties, injunctions, and in some states, private lawsuits for damages.
Privacy and data security regulation in the U.S. is rapidly evolving. For example, California enacted the California Consumer Privacy Act (“CCPA”), which came into force in 2020 and was later expanded by a 2023 amendment and subsequent implementing regulations (including regulations effective January 1, 2026,related to security risk assessments, privacy risk assessments, and automated decision making technologies).As of January 1, 2026, 18 other states (Colorado, Connecticut, Delaware, Indiana, Iowa, Kentucky, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia) have also passed substantially similar laws to the CCPA, hereafter referred to as comprehensive consumer privacy laws. These comprehensive consumer privacy laws provide individuals with rights to request access, correction and deletion of their personal information, opt out of certain personal information sharing, processing activities, and receive detailed information about how their personal information is used and shared. Individuals also may be required to consent to certain processing activities, such as activities with sensitive categories of personal information in certain circumstances. They also include notice obligations when using personal data for training on large language models, and additional obligations to perform various types of personal information processing assessments, both related to general privacy risks to individuals, but also security risks and risks unique to artificial intelligence or automated decision making technologies. The CCPA creates a specialist enforcement agency known as the California Privacy Protection Agency or “CPPA” that has independent authority to enforce the requirements of the CCPA. The CCPA’s and other comprehensive consumer privacy laws provide for an opt-out right with respect to any restrictions on “sales” of personal information may restrict our use of cookies and similar technologies for advertising purposes, to the extent that individuals exercise their opt-out rights, as well as increasing our compliance costs and potential liability. Notably, private litigation associated with state wiretapping laws, such as CIPA (in California) in addition to substantially similar wiretapping laws in other states, have been a major risk factor related to the use of website tracking technologies.
The CCPA excludes information covered by the Gramm-Leach-Bliley Act, the Driver’s Privacy Protection Act, the Fair Credit Reporting Act and the California Financial Information Privacy Act from the CCPA’s scope, but the CCPA’s definition of “personal information” is broad and may encompass other information that we maintain, such as personnel information and business to business (b2b) data. Notably, other consumer privacy
11
Table of Contents
laws generally exempt b2b data and personnel information. While other comprehensive consumer privacy laws generally maintained an entity level exemption for entities that are a “financial institution” under the GLBA, more states are amending their laws to narrow this exemption to just the information covered by the GLBA in line with the CCPA. These states include Connecticut, Minnesota, Oregon, and Montana, with others potentially joining that list in the coming years.
In addition to the comprehensive consumer privacy laws, some states have passed specialized privacy laws that focus on specific elements of personal information. For example, Washington has passed the “My Health My Data Act” that provides a similar set of consumer privacy protections to those in the comprehensive consumer privacy laws, but focused on sensitive categories of personal information such as health information. Other laws in this category include the Illinois Biometric Privacy Act and the analogous laws protecting biometrics in Texas and Washington.To the extent that we process biometrics, health, or other sensitive categories of personal information, we may be exposed to legal risk and additional consent and compliance obligations.
Various regulators are interpreting existing state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of other personal data. Courts may also adopt the standards for fair information practices which concern consumer notice, choice, security and access. Consumer protection laws require us to publish statements that describe how we handle personal information and choices individuals may have about the way we handle their personal data.
Our failure to comply with these privacy laws or regulations could expose us to significant fines and penalties imposed by regulators and has in the past and could in the future expose us to legal claims by buyers of life insurance policies from us, or other relevant stakeholders. Some of these laws, such as the CCPA, permit individual or class action claims for certain alleged violations related to data breaches and reasonable security obligations, increasing the likelihood of such legal claims. Additionally, the CPPA is directly funded in part through the penalties it assesses during enforcement actions, raising the incentive and potential for enforcement activity in California. Similarly, many of these laws require us to maintain an online privacy policy, terms of service and other informational pages that disclose our practices regarding the collection, processing and disclosure of personal information. If these disclosures contain any information that a court or regulator finds to be inaccurate, we could also be exposed to legal or regulatory liability. Any such proceedings or violations could force us to spend money in defense or settlement of these proceedings, result in the imposition of monetary liability or demanding injunctive relief, divert management’s time and attention, increase our costs of doing business and materially adversely affect our reputation.
Regulated Entities Outside of the U.S.
Carlisle and the funds it manages are licensed and have authorizations to operate in Luxembourg. These licenses and authorizations relate to providing investment management, administration of funds, marketing of the funds, and other regulated activities. Failure to comply with the laws and regulations could expose us to liability and/or damage our reputation.
The risks associated with our regulated entities outside of the U.S. are further discussed in Part I, Item 1A Risk Factors.
Securityholder Reports
The Company is subject to the periodic and other reporting requirements of the Exchange Act, including the filing of annual, quarterly, and other reports, and amendments to those reports, with the SEC. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and any and all amendments thereto are available free of charge through our investor relations website as soon as reasonably practicable after they are filed or furnished to the Securities and Exchange Commission (the “SEC”). Our investor relations website address is https://ir.abacusgm.com. The information on the Company’s website is not incorporated into this report or any other filing the Company makes with the SEC. These materials are also accessible on the SEC’s website at www.sec.gov.
12
Table of Contents
Item 1A. Risk Factors
The following discussion of “Risk Factors” identifies factors that we believe could adversely affect our business, operations, financial condition or future performance and trading in our securities. This information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Result of Operations” and the consolidated financial statements and related notes. The following discussion of risks is not all-inclusive but is designed to highlight what we believe are the material factors to consider when evaluating our business and expectations. References to past events and risks are provided as examples only and are not intended to be a complete listing or representation as to whether any such risk factor presented has occurred in the past or the likelihood of it occurring in the future. These factors could cause our future results to differ materially from our historical results and from expectations reflected in forward-looking statements.
Risk Factors Summary
Risks Related to our Business
•The Company’s valuation of life insurance policies is uncertain as many life insurance policies’ values are tied to their actual maturity date and any erroneous valuations could have a material adverse impact on the Company’s business.
•The Company could fail to accurately forecast life expectancies. There may also be changes to life expectancies generally, or from improvements in health care treatments, resulting from people living longer in the future, which could result in a lower return on the Company’s life settlement policies.
•The Company’s policy acquisitions are limited by the market availability of life insurance policies that meet the Company’s eligibility criteria and purchase parameters, and failure to secure a sufficient number of quality life insurance policies could have a material adverse effect on the Company’s business.
•The Company may experience increased competition from originating life insurance companies, life insurance brokers, and investment funds which could have a material adverse effect on the Company’s business.
•Historically, there has been a negative public perception of the life settlement industry that could affect the value and/or liquidity of the Company’s investments and the life settlement industry faces political opposition from life insurance companies.
•The Company, or third parties on which it relies, could fail to accurately evaluate, acquire, maintain, track, or collect on life settlement policies, which could have a material adverse impact on the Company’s revenues.
•There is a risk of fraud in the origination of the original life insurance policy or in subsequent sales of the life insurance policy that could adversely affect the Company’s investment returns which could have a material adverse impact on the Company’s business.
•The Company may become subject to claims by life insurance companies, individuals and their families, or regulatory authorities which could have a material adverse impact on the Company’s business.
•The Company faces privacy and cyber security risks related to its maintenance of proprietary information, including information regarding life settlement policies and the related insureds, and any adverse impact related to such risks could have a material adverse impact on the Company’s business.
13
Table of Contents
•The failure of the Company to accurately and timely track and pay premium payments on the life insurance policies it holds could result in the lapse of such policies which would have a material adverse impact on the Company’s business.
•The life insurance company that has issued a life insurance policy we own may increase the cost of insurance premiums, which would adversely affect the Company’s investment returns.
•The Company may not be able to liquidate its life insurance policies, which could have a material adverse effect on the Company’s business.
•The Company bears the credit risk associated with life insurance companies and may not be able to realize the full value of insurance company payouts on life insurance policies we own when they mature, which could have a material adverse effect on the Company’s profits.
•The Company’s success depends on the services of its experienced management and talented employees. If the Company is unable to retain management and/or key employees, its ability to compete could be harmed.
•The Company’s intellectual property rights may not adequately protect the Company’s business.
•Outstanding and future indebtedness could adversely affect the Company’s financial and operational flexibility.
•Failure to maintain adequate financial, information technology and management processes and controls could result in material weaknesses and lead to errors in our financial reporting, which could adversely affect our business as a public company.
•The Company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. A failure to raise capital when needed could harm the Company’s business, operating results and financial condition. Debt issued to raise additional capital may reduce the cash flow available to make required payments with respect to the notes and affect our ability to execute our investment strategy or impact the value of the Company’s investments.
•The Company’s use of different estimates and assumptions in the application of its accounting policies could result in material changes to its reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact its reported results of operations.
•The Company’s international operations pose additional risks that may adversely impact our financial results and operations.
•Because a portion of the Company’s business is conducted in currency other than U.S. dollar, the Company has foreign currency risk.
•Litigation and other claims and liabilities have arisen and may arise with respect to the acquisitions that we consummate or the businesses acquired, including our recently completed acquisitions, and could have a material adverse effect on our business and financial results.
•Events and circumstances outside of the Company’s control may disrupt the ability of the Company and its providers to originate life settlement policies, or to generate such policies on acceptable terms, which could have a material adverse impact on the Company’s financial position.
Risks Related to the Regulatory and Legal Environment
•Life settlements in which we invest are not currently regulated under the federal securities laws, but if deemed to be securities would require further compliance with federal and state securities laws,
14
Table of Contents
which could result in significant additional regulatory burdens on the Company, and limit the Company’s investments, which would materially impact the Company’s ability to conduct its business.
•The Company may be subject to certain U.S. state securities laws, and failure to comply with applicable requirements may result in fines, sanctions and rescission of purchase or sale transactions.
•The Company could in the future be required to register as an investment company under the Investment Company Act or could have to substantively change its business model to fit within an applicable exemption from such registration requirement.
•The Company is subject to U.S. privacy laws and regulations. Failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
•There have been lawsuits in various states questioning whether a purchaser of a life insurance policy has the requisite “insurable interest” in the policy which would permit the purchaser to collect the insurance benefits and an adverse finding in any of these lawsuits could have a material adverse effect on the Company’s business.
•Changes in tax laws or regulations or their interpretation could negatively impact our cash flows and results of operations.
•The Company’s business may be subject to additional or different government regulation in the future, which could have a material adverse impact on the Company’s business.
Risks Related to Our Common Stock
•Our stock repurchase program may not enhance long-term stockholder value and could increase the volatility of the market price of our common stock and diminish our cash.
•Our Board has broad discretion to issue additional securities, and to raise sufficient funds to expand our operations, we may have to issue securities at prices which may result in substantial dilution to our stockholders.
•If we issue additional debt securities, our operations may be restricted, we will be exposed to additional risk and the market price of our Common Stock could be adversely affected.
•If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our Common Stock or if our operating results do not meet their expectations, our stock price could decline.
•The trading price of our Common Stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
•Investing in our Common Stock may involve a significant degree of risk.
Risks Related to our Business
The Company’s valuation of life insurance policies is uncertain as many life insurance policies’ values are tied to their actual maturity date and any erroneous valuations could have a material adverse impact on the Company’s business.
The valuation of life insurance policies involves inherent uncertainty (including, without limitation, the life expectancies of insureds and future increases in premium costs to keep the policies in force). The Company utilizes a multitude of inputs to determine the fair value of the policies it holds. The Company uses its own underwriting practices, origination protocols, and proprietary technology. There is no guarantee that the value determined with respect to a particular life settlement policy by the Company will represent the value that will
15
Table of Contents
be realized by the Company on the eventual disposition of the related investment or that would, in fact, be realized upon an immediate disposition of the investment. In addition, there can be no guarantee that such valuation accurately reflects the current present value of such life insurance policy at its actual maturity. Uncertainties as to the valuation of life insurance policies held by the Company could require adjustments to reported net asset values and could have a material adverse impact on the Company’s business. Uncertainties as to the valuation may also result in the Company being less competitive in the market for originating new life settlement policies and could adversely affect the profits the Company realizes on life settlements purchased and sold.
The Company could fail to accurately forecast life expectancies. There may also be changes to life expectancies generally, or from improvements in health care treatments, resulting from 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 investment returns on the policies held by the Company’s portfolio depends almost entirely on the accuracy of the Company’s expectation for that insured’s mortality when the Company purchases a life insurance policy, as well as during the period that the Company owns a life insurance policy. 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 medical treatment plans, improved health care treatments and access to health care, 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.
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 insurance regulatory authority. 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.
16
Table of Contents
The Company’s policy acquisitions are limited by the market availability of life insurance policies that meet the Company’s eligibility criteria and purchase parameters, and failure to secure a sufficient number of quality life insurance policies could have a material adverse effect on the Company’s business.
The life insurance policy secondary market has grown substantially in the past several years; however, its future development is uncertain. There are a limited number of life insurance policies available in the market from time to time. As more investment funds flow into the life settlement market for acquiring life insurance policies, margins may be squeezed and the value of the life settlement assets may become comparatively more expensive to purchase or subject to greater competition on the purchase side. There can be no assurance that the Company will be able to source life insurance policies directly from insureds in the secondary market or that tertiary market life insurance policies will be available to the Company on satisfactory or competitive terms that would be acceptable to it.
The supply of life insurance policies available in the life settlement market may be reduced by, among other things: (i) improvement in the economy, resulting in higher investment returns to insureds and other owners of life insurance policies from their investment portfolios; (ii) improvements in health insurance coverage, limiting the need of insureds to obtain funds to pay the cost of their medical treatment by selling their life insurance policies; (iii) the entry into the market of less reputable third-party brokers who submit inaccurate or false life insurance policy information to the Company; (iv) the establishment of new licensing requirements for market participants and a delay in complying or an inability to comply with such new requirements; or (v) refusal of the carrier that issued a life insurance policy to consent to its transfer. A change in the availability of life insurance policies in the life settlement market could adversely affect the Company’s ability to execute its strategy and meet its objectives.
The Company may experience increased competition from originating life insurance companies, life insurance brokers, and investment funds which could have a material adverse effect on the Company’s business.
Some life insurance companies have begun offering to repurchase their own in-force life insurance policies from their policyholders by offering “enhanced cash surrender value payments” above the amount of the net cash surrender value provided under the life insurance contracts’ terms and thus compete directly with the Company and other life settlement providers. The life settlements industry has challenged the legal validity of the life insurance companies’ actions, and some state insurance regulators have declared that these repurchase offers are unlawful while other state insurance regulators have approved them. To the extent that life insurance companies can seek to repurchase their own in-force life insurance policies, they present competition to the Company in acquiring policies.
In addition, the Company is subject to significant competition from other life settlement providers and investment funds for the purchase of life settlement policies. Increased competition for life settlement policies may result in the Company being unable to access the number and quality of life settlement policies that it desires for its business at prices that it deems acceptable.
Historically, there has been a negative public perception of the life settlement industry that could affect the value and/or liquidity of the Company’s investments and the life settlement industry faces political opposition from life insurance companies.
Many regulators, lawmakers and other governmental authorities, as well as many life insurance companies and life insurance industry organizations, are hostile to, or otherwise concerned about, certain aspects of the longevity-contingent asset markets that underlie the life settlement industry. The life settlement industry and some of its participants have been, and may continue to be, portrayed negatively in a number of widely read publications and other forms of media. These opponents regularly contend that life settlement transactions are contrary to public policy by promoting financial speculation on human life and often involve elements of fraud and other wrongdoing. Past efforts, including activities of life insurance carrier trade associations, have sought to ban life settlement securitization. While such efforts have historically been unsuccessful, any such future efforts could have the effect of severely limiting or potentially prohibiting the continued operation of
17
Table of Contents
the Company’s life settlement purchasing operations. Continued public opposition to the life settlement industry, as well as actual or alleged wrongdoing by participants in the industry, could have a material adverse effect on the Company and its investors, including on the value and/or liquidity of the Company’s investments, or in shaping public opinion about the life settlement industry.
The Company, or third parties on which it relies, could fail to accurately evaluate, acquire, maintain, track, or collect on life settlement policies, which could have a material adverse impact on the Company’s revenues.
The Company utilizes certain third party data for tracking and servicing its life settlement policies. This includes the origination and servicing of life settlement policies by the servicing and tracking agent, market counterparties and other service providers, and the Company may not be in a position to verify the risks or reliability of such third-party data and systems. Failures in the systems employed by the Company and other service providers, counterparties, and other parties could result in mistakes made in the evaluation, acquisition, maintenance, tracking and collection of life settlement policies and other longevity-linked investments. This could result in the Company overpaying for life settlement policies it acquires or underpricing life settlement policies it sells. In addition, disruptions in the Company’s operations as a result of a failure in a third party system may cause the Company to suffer, among other things, financial loss, the disruption of its business, liability to third-parties, regulatory intervention or reputational damage. Any of the foregoing failures or disruptions could have a material adverse effect on the Company.
There is a risk of fraud in the origination of the original life insurance policy or in subsequent sales of the life insurance policy that could adversely affect the Company’s investment returns which could have a material adverse impact on the Company’s business.
The Company faces the risk that an original owner of a life insurance policy, the related insured, the insurance agent involved in the issuance of such life insurance policy, or other party may have committed fraud, or misstated or failed to provide material information in connection with the origination or subsequent sale of that life insurance policy. While present law provides that most life insurance policies may not be challenged for fraud after the end of the two-year contestability period, there may be situations where such fraud in connection with the issuance of a life insurance policy may survive its contestability period. If an issuing insurance company successfully challenges a life insurance policy acquired by the Company on the grounds of fraud, the Company may lose its entire investment in that life insurance policy. Furthermore, if the age of an insured was misstated, the Company may receive lower death benefits than expected. In addition, there may be information directly relevant to the value of a life insurance policy, including, but not limited to, information relating to the insured’s medical condition, to which the Company will not have access. It is not possible to verify the accuracy or completeness of each piece of information or the completeness of the overall information supplied at the origination of an insurance policy. Any such misstatement or omission could cause the Company to rely on assumptions which turn out to be inaccurate. Additionally, there can be no assurance that the seller of a life insurance policy in the tertiary market properly acquired that policy from the former owner, or that a former beneficiary or other interested party will not attempt to challenge the validity of the transfer. The occurrence of any one or more of these factors could adversely affect the Company’s performance and investment returns.
The Company may become subject to claims by life insurance companies, individuals and their families, or regulatory authorities which could have a material adverse impact on the Company’s business.
The secondary market for life insurance policies has been subjected to allegations of fraud and misconduct as reflected in certain litigated cases. Some of these cases, some of which have been brought by regulatory authorities, involve allegations of fraud, breaches of fiduciary duty, bid rigging, non-disclosure of material facts and associated misconduct in life settlement transactions. Cases have also been brought by the life insurance companies that challenge the legality of the original issuance of the life insurance policies based on lack of insurable interest, fraud and misrepresentation.
18
Table of Contents
Further, both U.S. federal and state statutes safeguard an insured’s personal health information. In addition, insureds frequently have an expectation of confidentiality even if they are not legally entitled to it. Even if the Company properly obtains and uses otherwise personal health information, but fails to maintain the confidentiality of such information, the Company may be the subject of complaints from the affected individuals, their families and relatives and, potentially, interested regulatory authorities. It is also possible that, due to a misunderstanding regarding the scope of consents that a transaction party possesses, the Company may request and receive from health care providers, information that it in fact did not have a right to request or receive. If the Company finds itself to be the recipient of complaints for these acts, it is not possible to predict what the results will be. This uncertainty also increases the likelihood that a transaction party may sell, or cause to be sold, life insurance policies in violation of applicable law, which could potentially result in additional costs related to defending claims or enduring regulatory inquiries, rescinding such transactions, possible legal damages and penalties and probable reduced market value of the affected life insurance policies. Each of the foregoing factors may delay or reduce the return on the policies and adversely affect the Company’s business and results of operations.
The Company faces privacy and cyber security risks related to its maintenance of proprietary information, including information regarding life settlement policies and the related insureds, and any adverse impact related to such risks could have a material adverse impact on the Company’s business.
The Company relies on data processing systems, including data processing systems of third parties, to price and close transactions, to evaluate investments, to monitor its portfolio and capital, and to generate risk management and other reports that are critical to oversight of the Company’s activities. Further, the Company relies on information systems to store sensitive information about the Company, its affiliates, and its investments, including life settlement policies and information about the related insured individuals and others. While the Company is not aware of any material security breaches or proceedings related to the processing of the Company’s information or those third-party systems utilized by it, the loss or misappropriation of information, improper access or an ability to access information or systems, or the use or disclosure of the Company’s proprietary information could adversely impact the Company. For example, the Company could suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing events could have a material adverse effect on the Company.
Additionally, the Company collects information related to life insurance, including nonpublic personal information (“NPI”) and protected health information (“PHI”), and information from its website, such as contact information and high-level policy information. The Company also collects information from its employees, such as standard HR information, and business contact information from third party employees. The Company shares information with its service providers and has entered into non-disclosure and business association agreements, where appropriate. Although the Company has, and believes that each service provider has, procedures and systems in place that it believes are reasonably designed to protect such information and prevent data loss and security breaches, such measures cannot guarantee absolute security.
Furthermore, the techniques used to obtain unauthorized access to data, disable or degrade service, or sabotage systems change frequently, demonstrate increasing sophistication and may be difficult to detect for long periods of time. For example, hardware or software acquired from third parties may contain defects in design or other problems that could unexpectedly compromise information security. Network connected services provided by third parties to the Company may be susceptible to compromise, leading to a breach of the Company’s network and/or business interruptions. The Company’s systems or facilities may be susceptible to employee error or malfeasance, surveillance by hostile threat actors, or other security threats.
The failure of the Company to accurately and timely track and pay premium payments on the life insurance policies it holds could result in the lapse of such policies which would have a material adverse impact on the Company’s business.
19
Table of Contents
To realize gains on its investment in life insurance policies, the Company must ensure that the life insurance policies it acquires remain in force until they mature or are sold by the Company. Failure by the Company to pay premiums on the life insurance policies when due will result in termination or “lapse” of the life insurance policies and will result in the loss of the Company’s investment in such life insurance policies.
The life insurance company that has issued a life insurance policy we own may increase the cost of insurance premiums, which would adversely affect the Company’s investment returns.
If a life insurance company increases the cost of insurance charged for any of the life insurance policies held by the Company, the amounts required to be paid for insurance premiums due for these life insurance policies may increase, requiring the Company to incur additional costs for the life insurance policies which may reduce the value of such life insurance policies and consequently affect the investment returns available on such policies.
Some life insurance companies have in the past materially increased the cost of insurance charges. There can be no assurance that life insurance policies acquired by the Company will not be subject to cost of insurance increases. If any such life insurance policies are affected by a cost of insurance increase, the policy value may be materially reduced and the Company may decide or may be forced to allow such life insurance policy to lapse, resulting in a loss to the Company.
In the event a life insurance company experiences significantly higher than anticipated expenses associated with operation and/or policy administration, or, in some instances, lower investment returns, the insurance company may have the right to increase the charges to each of its policy owners, but not beyond guaranteed maximums. While the insurance companies historically have not specified the reasons for premium increases, it is generally believed that low interest rate environments were a significant contributing factor in the decision to increase the cost of insurance.
The Company may not be able to liquidate its life insurance policies, which could have a material adverse effect on the Company’s business.
In the ordinary course of its business, the Company engages in the purchase and sale of life insurance policies. The liquidation value of these life insurance policies is important where, for example, it becomes necessary to sell life insurance policies from the Company’s hold portfolio in order to meet the Company’s cash flow needs, including the payment of future premiums.
In many cases liquidation may not be a viable option to meet the Company’s liquidity needs because of, among other things: (i) the lack of an available market for such life insurance policies at the time; (ii) the uncertainties surrounding the liquidation value of an individual life insurance policy; (iii) the extensive amount of time and effort it might take to sell a life insurance policy; (iv) the effect excessive sales of life insurance policies may have on transactions and future cash flows; and (v) the tax consequences.
The Company bears the credit risk associated with life insurance companies and may not be able to realize the full value of insurance company payouts on life insurance policies we own when they mature, which could have a material adverse effect on the Company’s profits.
The Company will assume the credit risk associated with life insurance policies issued by various life insurance companies. The failure or bankruptcy of any such life insurance company could have a material adverse impact on the Company’s ability to achieve its investment objectives. A life insurance company’s business tends to track general economic and market conditions that are beyond its control, including economic recessions, interest rate changes, inflation, pandemics or public health emergencies, political instability and hostility, macroeconomic trends, or changes in investor perceptions regarding the strength of insurers generally and the life insurance policies or annuities they offer. Adverse economic factors and volatility in the financial markets may have a material adverse effect on a life insurance company’s business obligation to pay the face value of policies.
20
Table of Contents
The insolvency of any insurance company or a downgrade in the ratings of an insurance company could have a material adverse impact on the value of the life insurance policies issued by any such insurer, the collectability of the related face value, cash surrender value or other amounts agreed to be paid by such insurance company. In the event that a life insurance carrier becomes insolvent or is placed into receivership, most state guaranty associations place a $300,000 or lower cap on face value for policies per insured. In addition to the limitations on the amount of coverage, which vary by state, there are limitations on who may make claims under such coverage and the Company may not be eligible to make claims under U.S. state guarantee funds as most U.S. state guarantee fund laws were enacted with the stated goal of assisting policyholders residing in such states. Even if available to the Company, guarantee fund coverage limits are typically smaller than the face values of some of the life insurance policies that the Company will acquire. There can be no assurance that as more life settlement transactions are undertaken, legislators will not adopt additional restrictions on the availability of U.S. state guaranty funds.
The Company’s success depends on the services of its experienced management and talented employees. If the Company is unable to retain management and/or key employees, its ability to compete could be harmed.
The success of the Company depends on the talents and efforts of the highly skilled individuals employed by the Company and the Company’s ability to identify and willingness to provide acceptable compensation to attract, retain and motivate experienced management, talented investment professionals and other employees.
There can be no assurance that the Company’s management and professionals will continue to be associated with the Company, and the failure to attract or retain such professionals could have a material adverse effect on the Company’s ability to execute on its business plan. Competition in the financial services industry for qualified management and employees is intense and there is no guarantee that, if lost, the talents of the Company’s professionals could be replaced.
The Company’s intellectual property rights may not adequately protect the Company’s business.
To be successful, the Company must protect its technology, know-how and brand through means, such as trademarks, trade secrets, patents, copyrights, service marks, contractual restrictions, and other intellectual property rights and confidentiality procedures in the U.S. and outside of the U.S. Despite the Company’s efforts to implement these protections, it may be unable to adequately protect its business for a variety of reasons, including:
•an inability to successfully register or obtain patents and other intellectual property rights for important innovations that sufficiently protect the full scope of such innovations;
•an inability to maintain appropriate confidentiality and other protective measures to establish and maintain the Company’s trade secrets;
•uncertainty in, and evolution of, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights;
•potential invalidation of the Company’s intellectual property rights through administrative processes or litigation; and
•other practical, resource, or business limitations on the Company’s ability to detect and prevent infringement or misappropriation of our rights and to enforce our rights.
Litigation may be necessary to enforce the Company’s intellectual property or proprietary rights, protect the Company’s trade secrets, or determine the validity and scope of proprietary rights claimed by others. Any litigation, whether or not resolved in the Company’s favor, could result in significant expense to the Company, and divert the time and efforts of the Company’s technical and management personnel. If the Company is unable to prevent third parties from infringing upon, violating or misappropriating the Company’s intellectual
21
Table of Contents
property or is required to incur substantial expenses defending the Company’s intellectual property rights, the Company’s business, financial condition and results of operations may be materially adversely affected.
Outstanding and future indebtedness could adversely affect the Company’s financial and operational flexibility.
As of December 31, 2025, the Company had indebtedness outstanding of approximately $406 million, including $149 million of borrowings under its Senior Secured Credit Facility, and including approximately $115 million of indebtedness of consolidated variable interest entities. The Company expects to incur additional indebtedness in the future. The terms of the indenture under which the Notes are issued do not prohibit the Company or its subsidiaries from incurring additional indebtedness. The Company’s debt service obligations will require it to use a portion of its cash flow to pay interest and principal on debt instead of for other corporate purposes, including funding future expansion. If the Company’s cash flow and capital resources are insufficient to service debt obligations, it may be forced to seek extraordinary dividends from its subsidiaries, sell assets, seek additional equity or debt capital or restructure its debt. However, these measures might be unsuccessful or inadequate in permitting the Company to meet scheduled debt service obligations.
The Credit Agreement subjects the Company to restrictive covenants that could affect its financial and operational flexibility. Any breach or failure to comply with any of these covenants could result in a default under the credit agreement. In addition, the Senior Secured Credit Facility matures in 2030. The Company may not be able to refinance this debt on favorable terms or at all at maturity.
Failure to maintain adequate financial, information technology and management processes and controls could result in material weaknesses and lead to errors in our financial reporting, which could adversely affect our business as a public company.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Section 404 of Sarbanes-Oxley requires that the Company evaluate and determine the effectiveness of its internal control over financial reporting. Maintaining effective internal control over financial reporting is necessary for the Company to produce reliable financial reports and is important in helping to prevent financial fraud.
The Company’s current controls and any new controls that we develop may become inadequate because of poor design and changes in its business, including increased complexity resulting from any expansion. Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of assessments by the Company’s independent registered public accounting firm and their attestation reports.
If the Company is unable to certify the effectiveness of its internal controls, or if its internal controls have a material weakness, the Company may not detect errors in a timely fashion, its consolidated financial statements could be misstated, it could be subject to regulatory scrutiny and a loss of confidence by stakeholders, which could harm its business and adversely affect the market price of its common stock. Failure to comply with Section 404 of Sarbanes-Oxley could potentially subject the Company to sanctions or investigations by the SEC, FINRA or other regulatory authorities, as well as increase the risk of liability arising from litigation based on securities law.
The Company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. A failure to raise capital when needed could harm the Company’s business, operating results and financial condition. Debt issued to raise additional capital may reduce the cash flow available to make required payments with respect to the notes and affect our ability to execute our investment strategy or impact the value of the Company’s investments.
The Company has funded its operations since inception primarily through its origination, active management and holding of life settlement policies. The Company cannot be certain when or if its operations will generate sufficient cash to fund our ongoing operations or the growth of our business.
22
Table of Contents
The Company intends to continue to make investments to support its business and may require additional funds. Additional financing may not be available on favorable terms, if at all. If adequate funds are not available on acceptable terms, the Company may be unable to invest in future growth opportunities, which could harm its business, operating results and financial condition. If the Company incurs debt, the debt holders could have rights senior to holders of the notes to make claims on the Company’s assets.
The Company’s use of different estimates and assumptions in the application of its accounting policies could result in material changes to its reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact its reported results of operations.
Accounting policies are critical to the way the Company presents its results of operations and financial condition. Many of these policies, including policies relating to the recognition of revenue, are highly complex and involve many assumptions, estimates and judgments. The Company is required to review these assumptions, estimates and judgments regularly and revise them when necessary. The Company’s actual results of operations vary from period to period based on revisions to these estimates. See the “Critical Accounting Estimates” section of Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information. In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial Accounting Standards Board, periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements. Changes to these standards or their interpretation could significantly impact our reported results in future periods.
The Company’s international operations pose additional risks that may adversely impact our financial results and operations.
The Company derives a portion of its revenues from sources located outside of the U.S. and is subject to a number of risks due to our international operations, including:
•difficulties in staffing and managing foreign operations;
•coordinating our information and data processing systems, communications, policies and logistics across geographic distances, multiple time zones and in different languages;
•changes in tax regulations or practice, and rates in both U.S. and foreign countries;
•lost business or financial harm due to protectionism in the United States and in countries around the world, including adverse trade policies, price controls or economic sanctions,
•government actions affecting the flow of goods, services and currency,
•governmental restrictions on the transfer of funds to us and from our operations outside the United States;
•changes in the geopolitical environment, wars, conflicts, or trade barriers or blockades in Luxembourg and/or in the EU, which may adversely affect business activity and economic conditions globally and could contribute to instability in global financial and foreign exchange markets, as well as disrupt the free movement of goods, services, and people between countries;
•cash balances held in foreign banks and institutions where governments have not specifically enacted formal guarantee programs;
•differences in the availability and terms of financing;
•Luxembourg and EU regulatory reforms exposing the Company to increasing regulatory scrutiny as well as regulatory uncertainty; and
23
Table of Contents
•epidemics or pandemics on a regional or global level.
The Company must comply with differing labor practices and foreign laws, including data privacy requirements, licensing regulations, anti-money laundering, counter terrorist-financing, and anti-corruption rules and laws and regulations applicable to U.S. business operations abroad, any or all of which will impose administrative burdens on the Company. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, tariffs or duties, restrictions on our business conduct and on the Company’s ability to offer its services in one or more countries, and could also materially adversely affect its reputation, ability to attract and retain employees, international operations, and its business and operating results.
The EU General Data Protection Regulation (the “GDPR”) is a comprehensive regulation applying across all EU member states. All the Company’s business units (regardless of whether they are located in the EU) may be subject to the GDPR when personal data is processed in relation to the offer of goods and services to individuals within the EU. The GDPR is complex and compliance may be costly. Any failure to comply with GDPR and other countries’ privacy or data security-related laws, rules or regulations could result in significant penalties imposed by regulators which could have an adverse effect on its business financial condition and results of operations.
Carlisle is regulated by the Luxembourg supervisory authority (Commission de Surveillance du Secteur Financier or “CSSF”) and is subject to the Luxembourg’s and the European Union’s Alternative Investment Fund Managers (“AIFM”) Directive which regulates investment advisors domiciled in Luxembourg and in the European Union and investment advisors that manage investment funds domiciled or marketed in Luxembourg and in the European Union. The AIFM Directive imposes certain requirements and restrictions on such investment advisors, which differ based on the domicile of the applicable investment advisor and investment fund and the circumstances under which an investment fund is marketed in Luxembourg and in the European Union. Such requirements and restrictions may include disclosure and transparency obligations, capital adequacy, valuation and depositary requirements, leverage and investment restrictions, other conduct of business requirements and tax requirements. As a result of the AIFM Directive, an investment advisor may be restricted from marketing investment funds in Luxembourg and in the European Union, may incur potentially significant increased operating costs, may be unable to engage in certain activities that it otherwise would have and/or may be subject to other adverse consequences. Any of the foregoing could adversely affect the performance of the Company.
Because a portion of the Company’s business is conducted in currency other than U.S. dollar, the Company has foreign currency risk.
Our results of operations and financial condition are affected by fluctuations in exchange rates between the Euro, the functional currency of our Carlisle subsidiary, and the U.S. dollar. The exchange rates between the Euro against the U.S. dollar have fluctuated significantly in recent years and may fluctuate significantly in the future. In the future we may hedge a portion of our foreign currency exposure with the purchase of forward exchange contracts or through other hedging techniques. Hedge contracts only mitigate the impact of changes in foreign currency exchange rates that occur during the term of the related contract period and carry risks of counterparty failure. There can be no assurance that we will enter such hedges or that our hedges will have their intended effects.
Litigation and other claims and liabilities have arisen and may arise with respect to the acquisitions that we consummate or the businesses acquired, including our recently completed acquisitions, and could have a material adverse effect on our business and financial results.
We may face litigation or other claims because of the terms and conditions of our acquisition agreements, stock purchase agreements, tender offers and other agreements to purchase equity interests in target companies, such as earnout payments or closing net asset adjustments. Shareholder litigation may arise because of proposed acquisitions. Acquired businesses may have liabilities, pre-existing compliance issues or deficiencies, or be subject to claims, litigation, or investigations that we did not anticipate or which exceed our estimates at the time of the acquisition. These liabilities and claims will increase expenses, may cause a delay
24
Table of Contents
in completing an acquisition, and may disrupt our operations, which could have a material adverse effect on our business and financial results.
Businesses we have recently acquired, including Carlisle, have included litigation and claims by investors such as those relating to asset valuations, distributions and other matters. Such litigation and claims and any similar future claims may result in a loss of investors, reduced management fees, increased costs, damage to our reputation, and diversion of management’s time, and could have a material adverse effect on our business and financial results.
Events and circumstances outside of the Company’s control may disrupt the ability of the Company and its providers to originate life settlement policies, or to generate such policies on acceptable terms, which could have a material adverse impact on the Company’s financial position.
Events outside the Company’s control, particular events of national or international concern that effect national and international macroeconomic trends can have, and in the past have had, negative impacts on our business and results of operations. Over the past few years, global markets have seen extensive volatility owing to a variety of factors, including high inflation, trade policies and tariffs, volatility in the capital markets, the failure of financial institutions, volatility in the housing market, interest and currency rate fluctuations, labor availability, supply chain disruptions, global pandemics and public health crises and the responses thereto, weather catastrophes and geopolitical instability, including shutdowns and threats of shutdowns of the U.S. federal government, growing geopolitical tensions and conflicts, including the Russian invasion of Ukraine, the recent launch of the U.S. campaign against Iran, and acts of terrorism. These events have created, and may continue to create, significant disruption of the global economy and financial and labor markets. These events can disrupt or restrict the Company’s ability to source life settlement policies, or to source such settlements on financial terms that are acceptable to the Company. Such events can also disrupt the operations or activities of our third-party service providers. Adverse changes in the perceived or actual economic climate may shift the timing and volume of transactions, or the number of customers using our services.
Risks related to the Regulatory and Legal Environment
Life settlements in which we invest are not currently regulated under the federal securities laws, but if deemed to be securities would require further compliance with federal and state securities laws, which could result in significant additional regulatory burdens on the Company, and limit the Company’s investments, which would materially impact the Company’s ability to conduct its business.
The origination and trading in whole, non-variable life insurance policies has historically been understood to not involve transactions in securities. However, on February 22, 2019, the United States Court of Appeals for the Fifth Circuit in a case captioned In the Matter of Living Benefits Asset Management, LLC, vs. Kestrel Aircraft Company, Incorporated, concluded that whole, non-variable life insurance policies, when offered for sale to an investor, were securities for purposes of the Investment Company Act. If this same conclusion were to be reached in other circuits or at the Supreme Court and extended to the Securities Act, there would be significant changes to our industry and it would materially impact the Company’s ability to conduct its business.
In 2002, the Eleventh Circuit Court of Appeals reached a similar conclusion with respect to fractionalized death benefits payable under non-variable policies in SEC v. Mutual Benefits Corp., but the District of Columbia Circuit Court of Appeals reached a contrary result with respect to fractionalized death benefits in SEC v. Life Partners which was decided in 1996. The Company does not presently transact in fractionalized death benefits, i.e., buying or selling a part of, but not all of, a life settlement policy, nor does it currently plan to transact in fractionalized death benefits.
On July 22, 2010, the SEC released a staff report that recommended that Congress clearly define life settlements to be securities, so that the investors in life settlements transactions would be protected under the U.S. federal securities laws. To date, the SEC has not made another such recommendation to Congress nor
25
Table of Contents
has Congress acted on the SEC staff’s report. If the statutory definitions of “security” were to be amended to encompass life settlements involving non-variable life insurance policies, or if the Supreme Court or other Circuit Courts were to conclude that non-variable life insurance policies are securities for purposes of the Securities Act, the Company could become subject to additional extensive regulatory requirements under the federal securities laws. Those regulatory requirements would include the obligation to register the Company’s sales and offerings of life settlements with the SEC as public offerings under the Securities Act. Also, if the resale of non-variable life insurance policies were to be considered securities, the Company’s ownership of those policies as a percentage of its assets or source of income could be limited as it would likely manage its business to avoid being required to register as an “investment company” pursuant to the Investment Company Act. Those limitations could have an adverse effect on the Company’s business and results of operations. Any legislation or court or regulatory interpretations leading to that regulatory change or a change in the transactions that are characterized as life settlement transactions could lead to significantly increased compliance costs and increased liability risk to the Company and could adversely affect the Company’s ability to acquire or sell life insurance policies in the future. This could materially and adversely affect the Company’s business, financial condition and results of operations, which in turn could materially and adversely affect the performance of the Company.
The Company cannot assure you as to the ultimate content, timing, or effect of changes, nor is it possible at this time to estimate the impact of any such potential change in administration or new legislation on the Company’s business, financial condition, or results of operations and consequently, any potential material and adverse effect on the performance of the Company.
The Company may be subject to certain U.S. state securities laws, and failure to comply with applicable requirements may result in fines, sanctions and rescission of purchase or sale transactions.
Certain U.S. state laws specifically characterize life settlements as securities transactions. Thus, in some U.S. states, purchases and sales of life insurance policies by the Company may be subject to applicable U.S. state blue sky laws or other U.S. state securities laws. The Company intends to comply with all applicable federal and state securities laws. However, this will not necessarily exempt the Company from compliance with U.S. federal or state broker-dealer laws. The failure to comply with applicable securities laws in connection with the purchase or sale of life settlement policies could result in the Company being subject to fines, administrative and civil sanctions and rescission of life settlement policy purchase or sales transactions. Each of the foregoing factors could materially and adversely affect the performance of the Company.
The Company could in the future be required to register as an investment company under the Investment Company Act or could have to substantively change its business model to fit within an applicable exemption from such registration requirement.
The Company’s sales of life insurance policies and investment and financing programs of which the purchase or sale of a life insurance policy is a part are subject to an evolving regulatory landscape. Depending on the facts and circumstances attending such sales or programs, U.S. state and federal securities laws, including the Investment Company Act could be implicated, and it is possible that the Company could in the future be required to register as an investment company under the Investment Company Act. The Company would not be able to continue to operate its business as it does today if required to register as an investment company. In such event, the Company would have to substantively change its business model to avoid registration as an investment company under the Investment Company Act. If the Company were required to change its business model to fit within an exemption from registration, it would have a material adverse effect on the performance of the Company.
The Company is subject to U.S. privacy laws and regulations. Failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
Due to the type of information the Company collects, including personal, medical, and financial information on the underlying insureds and policyholders, and the nature of its services, the Company is subject to privacy
26
Table of Contents
laws. In the United States, federal, state and local governments have enacted numerous data privacy and security laws to address privacy, data protection and collection, and the processing and disclosure of certain types of information. Obligations related to these laws are quickly changing, becoming increasingly stringent and creating regulatory uncertainty. In addition, these obligations may be subject to differing applications and interpretations, which can result in inconsistency or conflict among jurisdictions. Among these laws, the Company is likely subject to the Telephone Consumer Protection Act (“TCPA”), the Gramm-Leach Bliley Act (“GLBA”), and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).
The Company may be considered a financial institution under the GLBA and is subject to the GLBA through the NPI it collects. The GLBA regulates, among other things, the use of certain information about individuals (NPI) in the context of the provision of financial services. The GLBA includes both a “Privacy Rule,” which imposes obligations on financial institutions relating to the use or disclosure of NPI, and a “Safeguards Rule,” which imposes obligations on financial institutions, and indirectly, their service providers, to implement and maintain physical, administrative and technological measures to protect the security of NPI.
The Company has certain business components that are subject to HIPAA. HIPAA imposes privacy, security and breach notification obligations on “covered entities” and “business associates.” Furthermore, HIPAA requires “covered entities” and “business associates” to develop and maintain policies with respect to the protection of PHI. If in violation of HIPAA, the Company may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations. HIPAA also authorizes state Attorneys General to file suits on behalf of their residents. Courts may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue the Company in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
Because of the complexity of the various data privacy laws the Company may be subject to, compliance can be costly. The Company has taken general steps to comply with data privacy and security laws. For example, the Company has implemented a number of policies, including policies regarding access controls, customer data privacy, secure data disposal, and incident response and risk assessments. Despite these efforts, the Company may at times fail in its efforts due to the complexity and evolving nature of these laws. Failure to comply with relevant data privacy laws could negatively impact the Company’s operations, including subject the Company to possible government enforcement actions which could result in investigations, fines, penalties, audits, inspection, litigation, additional reporting requirements and/or oversight.
There have been lawsuits in various states questioning whether a purchaser of a life insurance policy has the requisite “insurable interest” in the policy which would permit the purchaser to collect the insurance benefits and an adverse finding in any of these lawsuits could have a material adverse effect on the Company’s business.
All states require that the initial purchaser of a new life insurance policy insuring the life of another individual have an insurable interest in that individual’s life at the time of the original issuance of the policy. An “insurable interest” is an economic stake the continued life of an insured. A life insurance policy may only be initially purchased by a person or entity who has an insurable interest in the insured. For example, if a spouse purchases an insurance policy on his or her spouse or a company purchases a life insurance policy on an employee. In addition, some states may require that the Company have an insurable interest in the insured. Whether an insurable interest exists in the context of the purchase of a life insurance policy is critical because in the absence of a valid insurable interest, life insurance policies are unenforceable under the laws of most states. Where a life insurance policy has been issued to a policy holder without an insurable interest in the life of the insured, the life insurance company may not be required to pay the face value under the policy and may also be entitled to retain the premiums paid. Generally, there are two forms of insurable interest in the life of an individual, familial and financial. Additionally, an individual is deemed to have an insurable interest in his or her own life. Insurable interest is determined at the inception of the policy. Some cases have also been initiated by life insurance companies, challenging the legality of the original issuance of policies on insurable interest grounds and asserting that such policies constitute “Stranger-Originated Life Insurance” or “STOLI,”
27
Table of Contents
which is defined as a practice or plan to initiate a life insurance policy for a third-party investor who, at the time of policy origination, has no insurable interest in the insured. Some states (such as Utah and New York) permit the heirs and beneficiaries of an insured to recover the face value under such STOLI policies rather than the policy owner which lacked insurable interest.
While the Company does not believe it has invested in any STOLI polices and has policies and procedures in place designed to identify potential STOLI policies, there can be no guarantee that the Company will identify all STOLI policies. As such, the Company may acquire certain life insurance policies that may be deemed by an issuing insurance company to be STOLI policies, if the Company deems such life insurance policy to be an attractive investment even after taking into account the insurable interest risk, or inadvertently, where the true nature of such life insurance policy is not discovered prior to its acquisition by the Company. Should an issuing insurance company successfully challenge the validity of a life insurance policy acquired by the Company, the Company will lose its investment in such life insurance policy. Furthermore, the Company will also suffer losses if a family member of an insured is successful in asserting a claim that he or she, and not the Company, is entitled to the face value payable under a life insurance policy.
Changes in tax laws or regulations or their interpretation could negatively impact our cash flows and results of operations.
Changes in tax and other revenue raising laws, regulations and policies in the jurisdictions where we do business could impose new restrictions, costs or prohibitions on our practices and negatively impact our results of operations. In addition, interpretation of tax regulations requires us to exercise our judgment and taxing authorities or our independent registered public accounting firm may reach conclusions about the application of such regulations that differ from our conclusions. Changes to US tax laws, regulations, or interpretations could impact the tax treatment of our earnings and adversely affect our cash flows and financial results.
We are subject to audit in various jurisdictions, and these jurisdictions may assess additional taxes against us. Developments in an audit, litigation, or laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows. The outcome of tax audits, investigations, and any related litigation could be materially different from our historical tax provisions and accruals.
The Company’s business may be subject to additional or different government regulation in the future, which could have a material adverse impact on the Company’s business.
The Company is currently licensed and operating in 49 states. Increased regulation (whether promulgated under insurance laws or any other applicable law) and regulatory oversight of and changes in law applicable to life settlements may restrict the ability of the Company to carry on its business as currently conducted. This could also impose additional administrative burdens on the Company, including responding to examinations and other regulatory inquiries and implementing policies and procedures. Regulatory inquiries are often confidential in nature, may involve a review of an individual’s or a firm’s activities or may involve studies of the industry or industry practices, as well as the practices of a particular institution.
Risks Related to our Common Stock
Our stock repurchase program may not enhance long-term stockholder value and could increase the volatility of the market price of our common stock and diminish our cash.
Our stock repurchase program does not obligate us to repurchase any shares of our Common Stock. The timing and amount of any repurchases depend upon several factors, including market conditions, business conditions, statutory and contractual restrictions, the trading price of our Common Stock and the nature of other investment opportunities available to us. In addition, repurchases of our Common Stock could affect our stock price and increase its volatility. The existence of a stock repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock. Use of our
28
Table of Contents
funds to repurchase stock could diminish our cash reserves, which may impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities. Our stock repurchases may not enhance stockholder value because the market price of our Common Stock may decline below the prices at which we repurchased stock and short-term stock price fluctuations could reduce the program’s effectiveness.
Our Board has broad discretion to issue additional securities, and to raise sufficient funds to expand our operations, we may have to issue securities at prices which may result in substantial dilution to our stockholders.
We are entitled under the Second Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to issue up to 200,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 (“Preferred Stock”), although these amounts may change in the future subject to stockholder approval. Shares of our Preferred Stock provide our board of directors broad authority to determine voting, dividend, conversion and other rights. Any additional stock issuances could be made at a price that reflects a discount or premium to the then-current market price of our Common Stock. In addition, to raise capital, we may need to issue securities that are convertible into or exchangeable for a significant amount of our Common Stock. Our board of directors may generally issue those shares of Common Stock and Preferred Stock, or convertible securities to purchase those shares, without further approval by our stockholders. Any Preferred Stock we may issue could have such rights, preferences, privileges and restrictions as may be designated from time to time by our board of directors, including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions. We may also issue additional securities to our directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock incentive plans.
If we issue additional debt securities, our operations may be restricted, we will be exposed to additional risk and the market price of our Common Stock could be adversely affected.
If we decide to issue debt securities in the future, it is likely that such securities will be governed by an indenture or other instrument containing covenants that may restrict our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Common Stock. Holders of debt securities may also be granted specific rights, including, but not limited to, the right to hold a perfected security interest in certain of our assets, the right to accelerate payments due under the indenture, rights to restrict dividend payments and rights to approve the sale of assets. Upon liquidation, holders of our debt securities and shares of Preferred Stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our Common Stock.
If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our Common Stock or if our operating results do not meet their expectations, our stock price could decline.
The trading market for our Common Stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our Company downgrades our Common Stock or if our operating results do not meet their expectations, our stock price could decline.
The trading price of our Common Stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.
The market price of our Common Stock may be volatile because of numerous factors, including:
•our operating and financial performance and prospects;
29
Table of Contents
•quarterly variations in operating results;
•changes in financial estimates by us or securities analysts who may cover our stock or by our failure to meet the estimates made by securities analysts;
•conditions that impact demand for products and/or services;
•future announcements concerning our business, our clients’ business or our competitors’ businesses; market and industry perception of our success, or lack thereof, in pursuing our growth strategy;
•changes in market valuations of other similar companies;
•changes in laws or regulations applicable to our business;
•additions or departures of key personnel;
•changes in our capital structure, such as future issuances of debt, equity and equity-linked securities, including secured lending arrangements and securitizations;
•short sales, hedging and other derivative transactions involving our capital stock;
•our limited public float and the relatively thin trading market for our Common Stock;
•transactions in our Common Stock, by directors, officers, affiliates and other major investors;
•strategic actions by us or our competitors, such as acquisitions or restructurings;
•changes in laws or regulations which adversely affect our industry or us;
•adverse resolution of new or pending litigation against us; and
•changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from inflation, natural disasters, terrorist attacks, acts of war and responses to such events.
Furthermore, from time to time, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies.
These broad market and industry fluctuations, as well as general economic, political and market conditions, such as recessions or interest rate changes, may negatively impact the market price of our Common Stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Any future securities litigation against us could result in substantial costs and divert our management’s attention and resources, and harm our business, financial condition, and results of operations.
Investing in our Common Stock may involve a significant degree of risk.
The investments we make in accordance with our investment objectives, which focus on life insurance policies, may result in a higher amount of risk when compared to alternative investment options and volatility or loss of principal. Our investments may be highly speculative and aggressive, and therefore an investment in our Common Stock may not be suitable for someone with lower risk tolerance and investors in our Common Stock may experience losses and volatility.
Item 1B. Unresolved Staff Comments
None.
30
Table of Contents
Item 1C. Cybersecurity
Management is responsible for mitigating the Company’s risks, including cybersecurity.The Board of Directors has the oversight responsibility for the Company’s risk management and has delegated its responsibility over cybersecurity to the Audit Committee.
The Audit Committee periodically reviews the Company’s cybersecurity policy and programs established by management to mitigate cybersecurity and data risks. The periodic reviews take place on a quarterly basis and include reports from the Company’s cybersecurity team led by the Company’s Chief Information Security Officer (“CISO”) who has over 10 years of data security experience. The quarterly report provides an overview of cybersecurity threats, key measures in place to mitigate cybersecurity threats and vulnerabilities, provides a status of ongoing security projects to strengthen the Company’s cybersecurity posture, as well as plans and resource needs for addressing possible future cybersecurity threats and vulnerabilities. The Company’s cybersecurity policy is centered on mitigating risks related to cybersecurity, privacy, physical security, and information security risk management.
The Company’s cybersecurity risk management approach is reviewed for alignment with the Company’s overall risk tolerance. The Company has a dedicated cybersecurity team led by the CISO who is responsible for executing the risk strategy and policies developed in coordination with the Company’s Chief Executive Officer, Chief Financial Officer, Presidents, and the Vice Presidents of Finance and Capital Markets. The CISO periodically reports to the Audit Committee concerning its cybersecurity and cybersecurity risk management strategies.
The Company’s cybersecurity policy outlines every level of protection put in place to safeguard sensitive data as well as company technology assets, including threats and vulnerabilities posed from our interactions with suppliers and third-party service providers. These layers of protection include physical, local, and network layers as prescribed by standard information technology guidelines. The cybersecurity policy also contains procedures for responding to incidents that may threaten the security of Company systems and/or network, which include multiple layers of protections using current security measures and applications. The effectiveness of our security policy and procedures are tested frequently with periodic effectiveness reports shared with senior management and the Audit Committee to facilitate their risk oversight responsibilities.
No risks from cybersecurity threats or previous cybersecurity incidents have materially affected, or are likely to materially affect our business strategy, results of operations, or financial condition. However, there can be no assurance that our controls and procedures in place to monitor and mitigate the risks of cyber threats, including the remediation of critical information security and software vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the future. Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all insured losses or all types of claims that may arise.
Item 2. Properties
Our corporate headquarters is in Orlando, Florida. The office lease for our headquarters consists of approximately 19 thousand square feet of office space expiring in December 2029. We also lease office space in Luxembourg for our Asset Management business consisting of approximately 2 thousand square feet pursuant expiring in July 2033. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Item 3. Legal Proceedings
From time to time, the Company is involved in various civil actions as part of its normal course of business. In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state what the eventual outcome of these matters will be. However, the Company believes, based on current knowledge and
31
Table of Contents
after consultation with counsel, that the Company is not a party to any litigation that is material to ongoing operations as defined in Item 103 of Regulation S-K as of the end of the period to which this Report relates.
Item 4. Mine Safety Disclosures
Not applicable.
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock and fixed rate senior notes are currently listed on the New York Stock Exchange under the ticker symbol “ABX” and “ABXL”, respectively.
Holders
On March 10, 2026, there were 46 holders of record of our common stock. The actual number of holders of common stock is greater than these numbers of record holders and includes stockholders who are beneficial owners, but whose shares are held by brokers and nominees. The number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Dividends
On November 7, 2025, the Company announced an annual dividend of $0.20 that was paid to shareholders on December 17, 2025. The Company anticipates paying comparable annual dividends in the future. There are no restrictions in the Company’s charter on its ability to pay dividends. Any future determination to declare cash dividends on our common stock will be made at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, general business conditions, Delaware law, and other factors that our board of directors may deem relevant.
Unregistered Sales of Equity Securities
None.
Purchases of equity securities by the issuer
Refer to Note 15, Convertible Preferred Stock and Stockholders’ Equity to the consolidated financial statements for further discussion of our stock repurchase program.
Item 6. [Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides an analysis of the Company’s financial condition, cash flows and results of operations from management’s perspective and should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. Our objective is to provide discussion of events and uncertainties known to management that are reasonably likely to cause the reported financial information not to be indicative of future operating results or of future financial condition and to also offer information that provides an understanding of our financial condition, cash flows and results of operations. This section of this Form 10-K discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section27A of the Securities Act, and Section 21E of the
32
Table of Contents
Exchange Act 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. 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,” and “Company” are intended to mean the business and operations of Abacus Global Management, Inc.
Business Overview
We are a 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, we leverage proprietary data analytics and decades of industry expertise to deliver innovative solutions that optimize financial outcomes for individuals and institutions worldwide. We serve as the originator and market maker of the assets we purchase and manage, providing a distinct advantage for consumers seeking to monetize insurance policies and for investors seeking to deploy capital. In a highly regulated and difficult-to-access insurance marketplace, we provide consumers with the maximum opportunity for their insurance assets and we also provide investors with a high-quality class of assets. For a further overview of our business, please see the discussion under the heading, “Item 1. Business,” in this Annual Report on Form 10-K.
The Company is a vertically integrated alternative asset manager and market maker, specializing in longevity and actuarial technology. The Company operates in three reportable segments: Life Solutions, Asset Management and Technology Services. Refer to “Item 1. Business” in this Annual Report on Form 10-K for further information on our business and operations.
Life Solutions
The Company is a leading secondary-market buyer of life insurance policies in the United States and we directly acquire life insurance policies in transactions that mutually benefit both us and the underlying policyholders. We refer to our acquisition of life insurance policies, as our origination process, which is carried out according to our internally developed policies and guidelines. Through this origination process, the Company originate life insurance policy settlement contracts as a licensed life settlement provider on behalf of third-party institutional investors and directly for our balance sheet. We originate policies through three primary origination channels, (i) agents and brokers (ii) directly from life insurance policyholders, and (iii) third-party intermediaries. We generate fees on the policies we originate based on a percentage of the face value or death benefit of the acquired life insurance policies. Within this segment, we also generate revenues from portfolio management and portfolio servicing. The Company then screens these policies for eligibility by verifying that the policy is in force, obtaining consents and disclosures, and submitting cases for life expectancy estimates. This process is characterized as our origination services, which averages a fee of approximately 2% of the life insurance policy’s face value. With meaningful support from our proprietary risk rating heat map, we also continually evaluate policies to generate uncorrelated risk adjusted returns.
33
Table of Contents
Upon acquiring a policy, we have the option to either (i) trade that policy to a third-party institutional investor or (ii) hold that policy on our balance sheet until maturity. This process is predicated on driving the best economics for the Company. For those policies that we trade, our portfolio management activities generate revenues based on spreads for traded life insurance policies, and for those life insurance policies held to maturity, though the realized returns on such policies. Such activities represent our portfolio management process. Additionally, we generate revenues based on a range of third-party portfolio servicing activities for third-party owners of life settlement assets, which generates revenue based on a percentage of the total asset value serviced.
Asset Management
The Company’s Carlisle and FCF subsidiaries manage alternative investment funds and exchange-traded funds (“ETF”). The alternative investment funds primarily invest in insurance policy settlement contracts that cater to investors seeking risk-adjusted returns with low correlation to other asset classes. The ETFs primarily invest in equity securities using a suite of core and thematic free cash flow equity strategies and offers over 50 customizable free cash flow index strategies covering eight global equities allocation categories available in separately managed accounts. Asset Management fees are based on a percentage of total asset value under management. We also realize performance fees based on a percentage of returns over certain hurdle rates for the managed alternative investment funds.
Technology Services
The Company, through ABL Intel, uses its proprietary technology based on health and longevity data sets to provide services to pension funds, government agencies, insurance-related businesses, as well as other entities that benefit from real-time mortality verification, missing participant verification, and other services specific to the life insurance market. Technology Services fees are based on fixed annual contracts with clients including pension plans, life insurance companies, governmental agencies, and others.
Results of Operations for Years Ended December 31, 2025 and December 31, 2024
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:
Years Ended December 31,
REVENUES:
COST OF REVENUES (excluding depreciation and amortization stated below):
34
Table of Contents
Years Ended December 31,
OPERATING EXPENSES:
Unrealized loss on equity securities, at fair value — 238,012
Realized gain on equity securities, at fair value — (2,341,066)
OTHER INCOME (EXPENSE):
Loss on change in fair value of warrant liability (1,704,193) (2,702,040)
Revenue
Asset Management
Year Ended December 31,
Asset management revenue increased by $30,231,743, or 836.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase is mainly due to a full year of management fees of approximately $26.4 million, approximately $4.0 million, and approximately $1.2 million generated from the Carlisle Funds (related party), the ETF Funds, and the LP Funds (related party) respectively, compared to one month of management fees of approximately $2.4 million and approximately $0.4 million generated from the Carlisle Funds and the ETF Funds in 2024 due to the timing of the Carlisle Acquisition and FCF Acquisition (December 2, 2024). Refer to Note 3, Business Combinations and Note 19, Related-Party Transactions for additional information. The Company did not record significant performance fees during the year ended December 31, 2025. Refer to the Assets Under Management section below for the change in total assets managed and refer to the Key Business Metrics below for the average management fees charged.
35
Table of Contents
Life Solutions
Year Ended December 31,
Life solutions revenue increased by $92,398,550 or 85.3% for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase is mainly due to an increase of $127,743,398 in realized gains, partially offset by $(4,499,783) decrease in unrealized gains, $(20,088,905) in premiums paid, and $(13,881,208) 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. Refer to Note 13, Fair Value Measures for additional information on the composition of revenue from life insurance policies. Insurance commissions revenue is new in 2025 due the Company acquiring NIB and AccuQuote. Refer to Note 3, Business Combinations for additional information.