ABX

MKT CAP $939.8MP/E 35.6DIV YIELD —FCF YIELD 9.52%REV TTM $267.3M +65.3%NET INCOME $28.2MNET DEBT $307.2M52W 5.02 – 12.00NEXT EARNINGS Nov 5 EST.SEC XBRL · TTM TO Invalid Date

How ABX rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

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.
Nearly 80% of our employees are shareholders, reflecting an ownership mentality that drives company performance.
We have been issued federal registrations for our “Abacus Settlements,” “Abacus Life,” and “Abacus Global Management” trademarks.
Insurance Laws and Regulations We operate as a life settlement provider in 49 states.
We file an annual report with each state in which we operate and each state has the ability to request an audit at its 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.
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.
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 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.
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.
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 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.
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.
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.
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. • 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.

and 119 more.

Gone since FY2024

Our Employees As of December 31, 2024, we had 157 employees, none of whom are subject to any collective bargaining agreement or represented by a labor union. 25 of our employees are based outside of the United States.
We have been issued a federal registration for our “Abacus Settlements” and “Abacus Life” trademarks.
For example, California enacted the California Consumer Privacy Act (“CCPA”), which came into force in 2020.
The CCPA and related regulations give California residents expanded rights to access and request deletion of their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used and shared.
The CCPA allows for the California Attorney General to impose civil penalties for violations, as well as providing a private right of action for certain data breaches.
California voters also recently passed the California Privacy Rights Act (“CPRA”), which will take effect on January 1, 2023.
The CPRA significantly modifies the CCPA, including by imposing additional obligations on covered companies and expanding California consumers’ rights with respect to certain personal information.
The CCPA’s restrictions on “sales” of personal information may restrict our use of cookies and similar technologies for advertising purposes, as well as increasing our compliance costs and potential liability.
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.
The passage of the CCPA likely marked the beginning of a trend toward more stringent privacy legislation in the U.S., and multiple states have enacted or proposed similar laws.
For example, in 2020, Nevada enacted SB 220 which restricts the “selling” of personal information and, in 2021, Virginia passed the Consumer Data Protection Act which is set to take effect on January 1, 2023 and creates new privacy rights for Virginia residents.
There is also discussion in Congress of new comprehensive federal data protection and privacy law to which we likely would be subject if it is enacted.
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, or other relevant stakeholders.
Some of these laws, such as the CCPA, permit individual or class action claims for certain alleged violations, increasing the likelihood of such legal claims.
Insurance Laws and Regulations We operate as a life settlement producer in forty-nine (49) states.
We file an annual report with each state in which it operates and each state has the ability to request an audit at its discretion.
Currently, 42 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 disclosure requirements that we comply with in the ordinary course of its business.
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, respectively.
The Company may, in the future, purchase some amount of variable life insurance policies or interests in the death benefit of underlying life insurance policies.
The Company has recently acquired a limited purpose broker dealer, which the Company intends to license to engage in transactions for variable and fractionalized life insurance policies.
Abacus expects that any transactions in variable or fractionalized life insurance policies will represent less than 20% of the life insurance policies acquired by the Company at any time.
Available Information Our investor relations website address is https://ir.abacuslife.com/.
Risk Factors The following discussion of "Risk Factors" identifies factors that may adversely affect our business, operations, financial condition or future performance.
Risk Factors Summary Risks Related to the Business and Regulatory Matters • 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, resulting in 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 which could have a material adverse effect on the Company’s business. • The Company or third parties the Company relies upon 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 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. • 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 could have an adverse impact on the Company’s business and results of operations. • 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 could have an adverse impact on the Company’s business and results of operations. • 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 in order to fit within an applicable exemption from such registration requirement. • 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 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. • 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. • There is currently no direct legal authority regarding the proper federal tax treatment of life settlements and potential future rulings from the IRS may have significant tax consequences on the Company. • 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. • 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 originating life insurance company may increase the cost of insurance premiums, which would adversely affect the Company’s 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 assumes the credit risk associated with life insurance companies and may not be able to realize the full value of insurance company payouts which could have a material adverse effect on the Company’s profits. • The Company’s success is dependent upon 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. • The Company may become subject to intellectual property disputes, which are costly and may subject the Company to significant liability and increased costs of doing business. • Pandemics, along with rising interest rates and inflation, may disrupt the ability of the Company and its providers to originate life settlement policies which could have a material adverse impact on the Company’s financial position. • 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. • Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all.
Our failure to raise capital when needed could harm our 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 our investments. • Because a portion of our business is conducted in currency other than U.S. dollar, we have significant foreign currency risk. • We are an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make our securities less attractive to investors. • 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. • Changes in tax regulations or their interpretation could negatively impact our cash flows and results of operations. • Our use of different estimates and assumptions in the application of our accounting policies could result in material changes to our reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact our reported results of operations.
Risks Related to our Recent Acquisitions • The Company may not realize the anticipated benefits of the Carlisle Acquisition and the FCF Acquisition, which may adversely affect the Company’s business results and negatively impact the value of the Company’s Common Stock. • Our international operations pose additional risks that may adversely impact our financial results and operations. • Any disruption to Carlisle Management’s distribution channels may cause the Company’s AUM, revenue and earnings to decline. • Because a portion of our business is conducted in currency other than U.S. dollar, we have significant 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.
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. • Upon the expiration of the lockup agreements entered into by the Carlisle sellers, the Company, our directors, executive officers and holders of 5% or more of our Common Stock, as applicable, a substantial number of shares of Common Stock will be eligible for resale into the public market, a portion of which shares are being offered in this prospectus. • Our Board has broad discretion to issue additional securities, and in order 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. • Future sales of our Common Stock, or the perception that such future sales may occur, may cause our stock price to decline. • We have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable future.
Any return on your investment may be limited to increases in the market price of our Common Stock. • Investing in our Common Stock may involve a significant degree of risk.
Risks Related to our Debt Our outstanding and any future indebtedness could adversely affect our financial and operational flexibility.
Risks Related to the Business and Regulatory Matters 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 utilizes a multitude of inputs to determine the fair value of the policies it holds, which may include life expectancy reports generated by a company in which the Company holds a minority ownership interest.
There may also be changes to life expectancies generally, resulting in people living longer in the future, which could result in a lower return on the Company’s life settlement policies.
The returns of the Company’s hold portfolio is almost entirely dependent upon how accurate the actual longevity of an insured is as compared to the Company’s expectation for that insured.
Other factors, including, but not limited to, better access to health care, better adherence to treatment plans, improved nutritional habits, improved lifestyle, an improved economic environment and a higher standard of living could also lead to increases in the longevity of the insureds under the life insurance policies.
For example, a term life insurance policy in which the Company may invest have a stated expiration date on the date at which the underlying insured reaches a certain attained age and, beyond such date, the issuing insurance company may not be obligated to pay the face value, but rather only the cash surrender value which is usually maintained at a low value by investors, if any, in accordance with the terms of such life insurance policy.

and 189 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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