Good afternoon, everyone, and welcome to Sidoti's September Small Cap Conference. My name is Michael Matheson. I'm an analyst here with the firm. Before we get started with our presenter today, just a couple mechanical things about asking questions. We really encourage questions from the audience. It's how everybody gets the most out of this event. At the bottom of your screen, you'll see a white circle with three dots in it. Click that, and a Q&A box will pop up, and you can type in your question. We reserve five or ten minutes at the end, where I'll read those questions off to the presenters. We're fortunate to have with us today Abacus Life. From the company, we have Elena Plesco, Chief Capital Officer; David Jackson, Managing Director of Capital Markets; Rob Phillips, SVP of Investor Relations; and Jay Jackson, the CEO, who will be presenting. Take it away, Jay. Thank you, Michael, and thank you to everyone who has taken the valuable time out of their day to join us today. You know, what we wanted to do is I know we have a 45-minute slot. I don't anticipate speaking that long. I know we lose the attention of most folks after about 20 minutes, and so we'll try to tailor our comments a little more brief than that and leave plenty of time, hopefully, for Q&A. If not, there's some, you know, some questions that we typically receive regularly that we'll also just try to bring up and address, and that may actually spark some additional conversation. So what I wanted to do today, we just kind of start with an overall overview of who Abacus is. Next slide, please. I don't know if I have control of this. If not, yeah, they can, they can run it. You know, Abacus is a business. We'll kind of start from our beginnings. You know, we started over 20 years ago. Even though we're a new public company, meaning that we went public two years ago, and we've accomplished pretty, pretty amazing things in the last two years, I'm most proud of what we accomplished over the last 20, actually now 21 years. In fact, the founders that launched this business are still here today, work very hard today, and are major shareholders, including myself. And with a 20-year track record, I always like to point that, you know, we've been doing this strategy in this business for over 20 years, and so we have perfected a piece of this machine that is incredibly hard to replicate. And because of that, it's given us tremendous advantages. I think if you take away a couple of things from today's presentation, it's the things that you look most for in a small cap business. One, how are we getting to large cap, or really mid-cap, and then large cap? What are some of the growth and open areas of growth that we have? That's what everybody inevitably wants to hear about. But also, you know, this is a rich track record where we've had 20-plus consecutive years where we've never lost money. And I think that that's also important, right? Like, this isn't, oh, we've done well just the last two years. This is what we've been doing for a long time. You just may have recently started learning about it. So not only do we have a terrific growth trajectory, but, alongside of that, a very rich history of management. A large chunk of those assets have really come over the last three years. And it's one of the reasons why we went public was to continue to bring down our cost of capital. It was such a huge benefit to us, which then opened up the market on even a larger scale. We've got a little north now of 160 employees going to north of 200 employees very, very quickly. Two offices across three continents, and we're serving clients now in over 30 countries in this asset management. So when you think about the story we're going to tell you about the assets that we originate, right? We're the originator. We're the market maker. We're effectively representing those assets to over 30 different companies. This is truly a global strategy, which really led to when we rebranded to Abacus Asset Management, not just because we have offices there, but we have investors from all over the world. And we're also a technology-driven manager. And what I mean by that is that data and how we manage data in the future is one of, I think, the more exciting things you'll find and learn about our business, is that as data continues to evolve and what kind of data we have is incredibly valuable. A lot of this is based around lifespan, medical data, and even mortality-driven data that we're adding pension funds and other state agencies, and even insurance carriers that we're reselling that data to. So not only are we the originator and market maker, we're an asset manager that capitalizes and monetizes the data that we ultimately generate from the two other lines. Next slide, please. So as a company, there are some key statistics that I think everyone just likes to look for from a stock basis. And you know, our stock, I think, has been very strong over the last few years. And as people become more familiar with our story, you know, if you strip away the story itself and just look at the numbers, this is Q2 2024. Our year-over-year rev growth was 93% higher. Our year-over-year growth in capital deployment, so we're deploying more capital, was nearly 20 at 16%. Total inflows, this means total inflows of new capital for us to invest under our asset management vehicle, $142 million from the quarter. If you were to compare that to the prior year, it was, you know, marginal at, you know, $10-plus million. So we had a massive growth there. Our profitability on an ROE basis is 21%, ROIC 22%, and adjusted EBITDA margin greater than 50%. I challenge you, when you're doing a stock search on Bloomberg, today, if you would like, find not just a small cap company, find any company that's got year-over-year revenue growth, the top and bottom line greater than 90%. Oh, I know, but why don't you throw in an ROE greater than 20% or an EBITDA margin greater than 50%? You tell me how many companies you find that meet that criteria, incredibly profitable and growing at the rates that we're growing at. The last screen I ran, there was only one, and that was Abacus. And so I think it's important to not just understand that the fundamentals of the business have significant growth, but the underlying earnings and our growth and the underlying assets that we manage are also growing, but we're an incredibly profitable business. Next slide. If you think about where Abacus sits, we truly are capitalizing on technology, longevity, and asset management, and it's where all these things are converging into four distinct business lines. Next slide, please. Next slide. When we think about these four verticals, we have Abacus Life Solutions, Abacus Asset Management. We've touched on those briefly already. The Life Solutions division is our origination company and market maker. This is a highly regulated asset class with massive barriers to entry where we're licensed in nearly every single state. And that opportunity creates a significant moat around our business that's really hard to access. So we're originating unique insurance contracts, not through selling insurance policies, but in fact acquiring them as an investable asset from the policyholder. That's where we also are able to capitalize on our data. ABL Tech is a business where we started to, when we aggregated data from the underlying policyholders, i.e., their medical files, their longevity data, it became an interesting opportunity to better understand how we could capitalize on that data to different needs. Some of those needs were institutionally based, including some of the largest pension funds in the United States. One of the kind of hot topics you hear about are things like Social Security or even Medicare that have people on that payroll that have been passed away for some time. It was a hot-button political topic. Social Security tends to identify a mortality at about 30%-40% accuracy after about nine months. Partly it is because they're not aligned with the states, and there's a huge delay in that government process. ABL Tech, which is our data valuation business at Abacus, can actually identify that mortality in less than 48 hours with 99% accuracy. Incredible. And now we're able to relay that data to the pension funds, and we've saved pension funds millions of dollars by helping them audit those files. And then now we're having those conversations with those same pension funds and talking to them about our asset management or our Abacus Asset Group. So all of these businesses really start to work hand in hand. Under the Abacus Asset Group, we're utilizing the policies that we would originate for third parties or other funds, and we've raised our own funds, which is where that figure of $142 million came within Q2. We're continuing to grow out our asset management vertical. If you think about it, Abacus Life Solutions has historically been about more of a transactional business, a balance sheet-like, very transactional, type of business. As we expand into more non-transactional and more into things like fee-related earnings, such as asset management and the ABL Tech of selling data, which is like a three- and five-year SaaS contract, we're really diversifying our earnings into more consistent earnings, and we're going to continue to see that into each vertical. The last vertical I'll highlight mention is Abacus Wealth. Again, what we're trying to do is really just capture the entire life cycle of our underlying client. An example is this: we work with a potential client, let's say his name is Mr. Jones. He's 80 years old, and he looks at his life insurance policy. It's a million-dollar life insurance policy, probably paying $2,500 a month. He's saying to his family, "Hey, my kids are 50, 55 years old. They're grown up. Why am I continuing to pay this? What are Mr. Jones' financial options?" There are very few. One is he just stops making the payment and when he does that, ultimately what happens is that now Mr. Jones has just given away personal property. Hold on a minute. What do I mean by that? Some of you may not realize on this call that life insurance is actually personal property. It goes all the way back to a 1911 Supreme Court ruling that says, and it was Grigsby v. Russell, that life insurance is personal property. That's the key indication here. And the reason why it's personal property, and it's the only ruling here in the United States, is what it means is, is that it's an asset just like their home, but nobody knows it. Staggering statistic: $14 trillion of life insurance is in force. $14 trillion. That is two and a half times the United States' residential real estate market. Yet 90% of that $14 trillion will never pay a claim. I'll pause just so you can process that. 90%. That means people in Mr. Jones' case do what? They just stop making payments. But here's the real issue. Mr. Jones and others treat their life insurance policy like debt. They treat it like a credit card payment because it's not what they deem to be an asset that's going to be a part of their personal use today. What we really do is help Mr. Jones understands that this is a living benefit. You don't have to pass away to realize it. This, your life insurance policy is actually an investment with an actual ability to sell it at market price. So what do we do? We get permission from him to get a HIPAA, and we get his updated medical files. We have now his updated medical records, and we compare Mr. Jones with the entire population that has the same types of medical impairments: cardiovascular disease, kidney disease, family history, genetic profile, and location. When we do that, we're now able to tell Mr. Jones, on a very consistent, probabilistic basis, what the mortality curve has looked like for people just like him. So let's assume Mr. Jones has a seven-year lifespan. Now we can solve for net present value. That million-dollar contract on a seven-year lifespan at $2,500 a month, that's what, $210,000 in future premiums? Assume a 15% rate of return, which would be about $540,000. That means that the total cost, future cost of this contract, your opportunity cost of return plus your cost of the premiums equals $750,000. Mr. Jones' net present value is not zero. It's $250,000. Wow. That changes everything. That could have a huge financial impact. Now, why is an investor so interested in this contract? Think about it. It's issued by an A-rated carrier or better. So if this wasn't life insurance, this was just a credit, which is what it is effectively in the United States. Life insurance companies issue credit called the life insurance policy. It's A-rated. It's cash reserved, regulated cash reserved that appreciates in value regardless of market conditions. Mr. Jones is going to be 81, and he's that much closer to that ultimate maturation of the contract. So it's going to increase in value that you can pick up for low teen, unlevered. If you're a private credit fund, you're backing the truck up, and that is exactly what's happening. And so what I'm trying to tell you is, is that as we now look at this very valuable asset, Abacus sits at the forefront of it because we're the origination company. We're the market maker. And now you can maybe better understand when we acquire that asset for our own funds, right? Now we're able to extend the revenue on that fund, right? Now we can say we're going to collect management fees, servicing fees, et cetera, on that same contract, which is exactly what you want me to do as a business. So with that said, where does Abacus Wealth Advisors fall in? Let's take a step back. How much did I pay, Mr. Jones? $250,000. How is he going to allocate that $250,000? Wouldn't it be super helpful for Mr. Jones to know that his lifespan was seven years? What's the number one fear of any retiree right now? Running out of money. And the issue is, how can you help solve that? Well, you could start with, "Mr. Jones, how long are you going to be in retirement?" So by providing the lifespan data back to Mr. Jones and building customized retirement solutions around lifespan data, what we're able to provide and what we're able to do for Mr. Jones is give him an actual level of relief that probabilistically he has very little chance of running out of money. This is how much of that $250,000 he can use today or otherwise. So Abacus Wealth Advisors will be our distribution channel for not only our asset management products, but they will be financial advisors that will help our clients better understand how to utilize the most valuable asset they have, their lifespan. Utilizing your lifespan in the form of financial planning, those customized solutions is going to set Abacus apart. Pay attention. Those things are coming for us, and we're going to continue to evolve. So when you look at our verticals, some of these are growth-oriented over the next one to three years, and the others that we're already very profitable on, those are going to be the ones that have massive growth engines in front of them as well, with TAMs as high as, you know, in the hundreds of billions. Next slide. Next slide. So when we think about each division, the Abacus Life Solutions, and we've spent a little bit of time, and by the way, this entire deck is available to you online right now via our website because as a public company, as you know, we keep this deck available, and our premise was to make sure that we provided you with the easiest way to best understand how we generate revenue in our business. But in the Life Solutions, as we've highlighted, this is a business model where we aggregate and originate these contracts to our balance sheet, and then we take those tranches and resell them institutionally. The spread that we earn on those dollars is what the willing buyer wants to pay for that contract. So for example, we might buy a contract for $1, and then we take that tranche or that contract back out to an open market. That market bid might is $1.20. That's our spread. And we track and relay that spread to you now every quarter within our KPI model. Next slide. When we think about our policy sourcing and origination, how powerful is it? Just so that you're aware, we've reviewed over 3,000 policies just through Q2, right? So you know we are seeing a significant piece of the market. There is a secondary market and a tertiary market, and within those two markets, you can see the size and scale difference. But on the secondary market, we see that opportunity as high as $255 billion. To give you some perspective, Abacus deployed last year a little over $200 million. So we're just scratching the surface here with a massive growth and upside. Already in the market, tertiary does mean institutionally owned is nearly $30 billion. So there's a significant amount of opportunity here and lots of growth. Next slide. I think what's important for us is that we ultimately end up controlling the entire chain, right? The entire value chain. We have the origination, the management fees, the servicing fees, as well as performance fees. And this is what you would ask from some of the largest, investment, private and public investment managers globally. And that's what Abacus is building into. Next slide. As we build into our asset management division, we have a number of funds. We have, again, a 20-year combined track record, and we're raising capital. We have $2.2 billion in longevity assets, and that's growing every single month. Institutions in this type of market are very excited about this product. Why? Because post-Labor Day, two very interesting things happened for our business. One, with that volatility, policyholders were very interested in learning more about liquidity from their assets that potentially they weren't before. So when you see volatility around markets, that can be a positive experience for us in the origination. It allows for greater education. But secondly, investors who are seeking uncorrelated or less correlated yields were seeking out our product in major financial institutions. And so then we saw our transactions go up, and we saw that in Q2 where we had transacted nearly 50% of our balance sheet from Q1. It goes to speak on how we ultimately value our balance sheet. When we look at our balance sheet, we look at a historical trade spread and a current trade spread that we're seeing based upon policies that have actually transacted. They're not forecasts. This is what has actually happened, and we were able to realize that in a significant way in Q2. Next slide. We service now almost 3,000 policies. This is a fee-related earnings business, and what I mean by that is that this is charged on a monthly fee business. We do multiple funds even outside of our own. We do our mortality verification, and we've become one of the premier servicers of the asset. So another industry you might think of is, for example, the mortgage industry, which is one that you're all intimately familiar with, right? And what you want from that mortgage, you want to be able to originate it, service it, transact it, and maybe even have the funds and asset management fees capturing that fee across the entire value chain. That's what you're seeing at work here with Abacus. Next slide. One additional piece that we added this year was our ETFs. We are building into a longevity type of ETF. We were able to have the opportunity to acquire FCF Advisors. FCF is free cash flow businesses. And what we're doing with these ETFs over time is capitalizing on lifespan-based target date funds. So we'll have these ETFs within those portfolios. But in the meantime, free cash flow has become a very interesting sector for a lot of businesses. They are already at over $800 million in AUM and growing. It's on several platforms. But this has been a bit of a catalyst into using traditional equities into lifespan-based thematic target date investing. Next slide. As we highlighted, we think about the national coverage. We have 97% with only a 1% false positive rate. That puts us at the very best in the entire world in this type of tracking. We're working very closely with not just pension funds. We're consistently improving our conversations at the federal level. And we're also having conversations and working very closely with reinsurers and insurance companies, some of the largest in the world. Next slide. Next slide. We've talked briefly about how we see Abacus Wealth Advisors growing and expanding. One of the things I want to highlight is we continue to expand into this engine and why we want to capture it. We run origination commercials on several major networks. Part of that is actually driven by education. We have a calculator so that people can learn what the actual net present value of their policy is. That calculator generates between 8,000 and 12,000 leads monthly. We want to be able to capitalize on that through additional financial products. If you think about our business model, what we're saying here is that we want to be able to capture and monetize every piece of that model through these four verticals. Wealth Advisors is coming. We're looking at both acquisition as well as internal build-out, and we've made significant progress there. Next slide. Next slide. Effectively, in summary, our earnings framework is pretty straightforward. We have our Fee-Related Earnings, which is our asset management, our servicing fees, origination fees, and our technology and services fees. We have our principal invested earnings. That's our active management and our performance income. You add those two together, and you get our total operating earnings, which includes Abacus Life Solutions, Abacus Asset Group, Wealth Advisors, and ABL Tech. From there, of course, you remove your expenses and taxes, and that's how you get to your adjusted net income. What we're trying to basically make this really simple for you is that we're not all that different than an Apollo, right? Where we're the origination company, and we have fee-related earnings to diversify amongst that mix to take us to our adjusted net income. And all of them are contributing, and we're continuing to grow and expand our fee-related earnings. Next slide. We've addressed and spoken a little bit about our performance highlights. We're very excited, and if you were on our call last quarter, you heard that we raised our target. Next slide. We raised our target or our guidance for 2025 to $74-$80 million, which is a 59%-72% year-over-year increase. I guess I don't know how many businesses you're looking at that are growing at between 60% and 70% on a guidance basis, but I have to believe that we're one of them reminding you that we're sitting over a 50% EBITDA margin on this. Next slide. So as companies continue to think about, you know, what their KPIs are, how their revenue growth is, this is the kind of chart you want to see. We're raising our guidance. We've had consistent growth every single quarter and every single year, and we expect that to continue. Next slide. We added a few additional KPIs. Our turnover versus our target. Our traditional target is anywhere between 1.5-2. In Q2, that was over 2. What this really simply means is that on our balance sheet, sometimes we're more active trading than at other periods of time, but this is a balance sheet-like basis that realizes gains. Our overall hold period ranges between six and nine months. It just depends on the quarter, and we let those policies season over that time period. And then when you see the average realized gains, what we wanted to do was put out what we're realizing. And you can see in any given quarter that could range between 21%-26%. These are realized gains on the contracts. And so when you think about the business, we're not trying to sit back and make estimates related to say, "Hey, we know exactly when life expectancy is," because there's always dispersion to that mean. And rather than forecasting off that, we base this on actual realized gains. Next slide. So, if yeah, you can skip this part, please. So in summary, when you think about Abacus Asset Management, first, who are we? Abacus Asset Management has its roots as an origination company and market maker. We are a business that has a great deal of experience and success in going to work. We are licensed in nearly every state. We have deep, deep relationships with north of 30,000 financial advisors. We source direct-to-consumer business and a company that is growing exponentially, growing at 50%-70% per year, every year since we've been public. We're very profitable, and you have the same management team that has been here for nearly 20 years, and we continue to expand with some of the top talent out there. We've been able to add talent. Elena Plesco is on this call, joined us from KKR, where she was co-head of specialty finance. We're able to utilize the position of being a public company to recruit what I believe is some of the top talent in the United States, and we're growing. It's not just the very exciting growth rates that we have in our life solutions business. That is compelling enough, but the fact of the growth rates that we've seen in our non-transactional business, such as our Abacus Asset Group, where we're now over $3 billion in AUM. Pardon me, Jay. I'm sorry to interrupt, but we're almost out of time. Can we squeeze in just a couple of questions? Sure. Yeah, no problem. Just related to turning over the portfolio, some of those stats you gave that you acquire a policy and you might sell it again at a profit six-to-nine months later. Can you talk a little bit about the market structure that makes it possible to do that consistently and be profitable? Sure, and you know we have an excess demand for the product, so as outside third-party funds consistently raise money, particularly in private credit, private credit's one of the probably hottest asset classes out there. Private credit loves this asset because of its uncorrelated yield nature, and so there's been billions raised in that asset class, and they're consistently looking for other ways to access this type of yield with less correlation to any other product that they have, so we're a great supplement to private credit, family offices, and sovereign wealth funds. So from our perspective, we're originating and meeting the demand that we have from our third-party investment funds. With that said, we also have our own investment funds that we have launched very successfully. And so, you know, we feel as though we're in a terrific spot to try to utilize this capital to expand our origination because we have excess demand. And we expect that excess demand to continue. One thing I'll add is that as rates come down, that's very favorable for us. Spreads increase, right? Lower costs of capital. This all gives us an opportunity to potentially realize more gains. At that point of origination, are you in effect the only person bidding, or is there competition at the time? It certainly depends. You know, there can be multiple funds involved in that. There's only a handful of companies that have licenses in every state, and so for the most part, our relationships are one of the things that we do that is very unique. This isn't like selling a car, right? It's a math equation. It's an NPV. It's very simple. The only thing that moves price is your belief as to where you might think life expectancy may lie and the discount rate that you're willing to utilize to potentially acquire that policy, meaning is this the type of policy that I think has lower risk and I want to pay more for this contract? But it's less about, oh, I'm going to get into a bidding war about a contract. It's about this contract, Mr. Jones, for example; it prices at $250. It prices at $250 to me, and it prices at $250 to someone else. So this business is less about price sensitivity, and it's a lot more about service, service, education, and track record of getting these contracts across the finish line. Great presentation. Unfortunately, we are out of time. Thanks, everyone, for joining. I tried to get to as many questions as I could. If I didn't get to yours, I'm sorry. Please follow up with your Sidoti representative. We'll run down the answer and get back to you. Thanks very much to everyone who joined us for the seminar, and thanks to Abacus Life and Jay and his team. Really enjoyed the presentation. Thank you so much. Appreciate everybody. See you next week.