LM Funding America, Inc. Reports First Quarter 2022 Financial Results

News provided by

LM Funding America

May 16, 2022, 17:15 ET

TAMPA, Fla., May 16, 2022 /PRNewswire/ -- LM Funding America, Inc. (NASDAQ: LMFA) ("LM Funding" or the "Company"), a technology-based specialty finance company offering unique funding solutions to community associations that has expanded into the cryptocurrency mining business, today announced its financial results for the three months ended March 31, 2022.

Financial Highlights for the Three Month Period Ended March 31, 2022:·

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  • Paid an additional $7.1 million in first quarter to Bitmain for the 5,046 machines on order, of which 841 have been delivered, and anticipate shipments of 841 machines per month from June 2022 through October 2022.
  • Cash position of $24.5 million as of March 31, 2022.
  • The Company had $23.9 million in deposits on mining machines.
  • Net equity per share on March 31, 2022 was $4.48 (calculated as stockholders' equity divided by 13,091,955 shares outstanding as of March 31, 2022).
  • Revenues increased to $191,000 for the quarter ended March 31, 2022 as compared with $177,000 for the comparable quarter in 2021.
  • Net cash used by operating activities was approximately $528,000 for the first quarter 2022.
  • Net loss attributable to LM Funding for the first quarter of 2022 was $5.7 million, which includes $3.6 million of stock option/compensation expense and a realized loss on securities of $0.4 million, versus net income of $4.4 million for the first quarter of 2021, which included a $5.7 million realized gain on securities.

"We are excited to receive our first shipments of mining machines from Bitmain and look forward to generating our first Bitcoin anticipated in the third quarter of 2022," stated Mr. Bruce Rodgers, Chief Executive Officer and Chairman of LM Funding.  "We expect the recent downturn in Bitcoin pricing may provide us with pricing discounts on machines we currently have under contract as well as opportunities to purchase additional machines at lower prices."

On April 21, 2022, LMF Acquisition Opportunities, Inc. ("LMAO") entered into an Agreement and Plan of Merger with LMF Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of LMAO, and SeaStar Medical, Inc., a Delaware corporation.

About LM Funding America:

LM Funding America, Inc., together with its subsidiaries, is a technology-based specialty finance company that provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado and Illinois. The company offers funding to Associations by purchasing a certain portion of the associations' rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments. The company is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association's financial needs, including under the company's New Neighbor Guaranty™ program.  The company is also entering the cryptocurrency mining business through a new subsidiary, US Digital Mining and Hosting Co., LLC.  

Forward-Looking Statements: 

This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Important factors which could materially affect our results and our future performance include, without limitation, our ability to implement our plan to develop and grow a cryptocurrency mining business specializing in Bitcoin,our ability to purchase defaulted consumer receivables at appropriate prices, competition to acquire such receivables, our dependence upon third party law firms to service our accounts, our ability to obtain funds to purchase receivables, ability to manage growth or declines in the business, changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer receivables, the impact of class action suits and other litigation, our ability to keep our software systems updated to operate our business, our ability to employ and retain qualified employees, our ability to establish and maintain internal accounting controls, changes in the credit or capital markets, changes in interest rates, deterioration in economic conditions, and negative press regarding the debt collection industry which may have a negative impact on a debtor's willingness to pay the debt we acquire, as well as other factors set forth under "Risk Factors" in our most recent Annual Report on Form 10-K and our other filings with the SEC, which are available at www.sec.gov. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business, financial condition, and results of operations.

Company Contact:                                                    

Bruce M. Rodgers, Chairman and CEO                                  

LM Funding America, Inc.                                          

Tel (813) 222-8996                                                    

[email protected]


LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS 






For the Three Months

Ended March 31,



2022

2021

Revenues:








     Interest on delinquent association fees

$

101,268

$

77,444

     Administrative and late fees

16,708


15,071

     Recoveries in excess of cost - special product

17,365


29,473

     Underwriting and other revenues

16,791


22,703

     Rental revenue

38,872


31,917

          Total revenues

191,004


176,608











Operating Expenses:








     Staff costs and payroll

4,292,197


1,301,981

     Professional fees

774,820


482,943

     Settlement costs with associations

160


-

     Selling, general and administrative

114,920


99,769

     Recovery of cost from related party receivable

-


(10,000)

     Real estate management and disposal

31,481


18,290

     Depreciation and amortization

3,094


1,696

     Collection costs

(3,820)


2,048

     Other operating expenses

8,384


7,545

          Total operating expenses

5,221,236


1,904,272

Operating loss

(5,030,232)


(1,727,664)

     Realized gain (loss) on securities

(395,181)


5,671,464

     Unrealized gain on convertible debt security

288,320


-

     Unrealized gain on marketable securities

130


-

     Unrealized gain (loss) on investment and equity securities

(986,399)


595,392

     Digital assets other income

4,366


-

     Interest income

98,370


13,055

     Interest expense

-


(464)

     Dividend income

1,375


-











Income (loss) before income taxes

(6,019,251)


4,551,783

Income tax expense

-


(3,484)

Net income (loss)

(6,019,251)


4,548,299

Less: Net income (loss) attributable to non-controlling interest

291,200


(171,866)

Net income (loss) attributable to LM Funding America Inc.

$

(5,728,051)

$

4,376,433











Earnings/(loss) per share:








     Basic income (loss) per common share - net income (loss) - attributable to LM Funding

$

(0.44)

$

0.87

     Diluted income (loss) per common share - net income (loss) - attributable to LM Funding

$

(0.44)

$

0.80

Weighted average number of common shares outstanding:








     Basic

13,060,736


5,047,498

     Diluted

13,060,736


5,439,398

LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 




March 31, 2022

December 31,

2021


(Unaudited)




ASSETS







Cash

$

24,536,467

$

32,559,185

Finance receivables:







     Original product - net

20,543


13,993

Special product - New Neighbor Guaranty program, net of allowance for credit losses of

16,148


14,200

Short-term investments - convertible debt securities (Note 7)

845,424


539,351

Marketable securities (Note 7)

308,950


2,132,051

Short-term investments - debt security (Note 7)

2,106,082


2,000,000

Prepaid expenses and other assets

944,464


1,251,852

Income tax receivable (Note 4)

143,822


-

Note receivable from related party (Note 7)

310,000


-

Digital assets, net (Note 9)

504,366


-

          Current assets

29,736,266


38,510,632

Fixed assets, net

14,820


17,914

Real estate assets owned

80,057


80,057

Operating lease - right of use assets (Note 5)

337,413


59,969

Long-term investments - equity securities (Note 7)

949,754


1,973,413

Investments in unconsolidated affiliates (Note 7)

4,713,390


4,676,130

Deposit on mining equipment (Note 8)

23,893,672


16,775,100

Other assets

10,726


10,726

          Long-term assets

29,999,832


23,593,309

          Total assets

$

59,736,098

$

62,103,941









LIABILITIES AND STOCKHOLDERS' EQUITY







Accounts payable and accrued expenses

325,489


463,646

Note payable - short-term (Note 3)

57,344


114,688

Due to related party (Note 2)

373,800


121,220

Current portion of lease liability (Note 5)

90,072


68,002

Income tax payable (Note 4)

-


326,178

Other liabilities

1,725


-

Total current liabilities

848,430


1,093,734

Lease liability - long-term (Note 5)

248,475


-

Long-term liabilities

248,475


-

     Total liabilities

1,096,905


1,093,734









Stockholders' equity:







     Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued
      and outstanding as of March 31, 2022 and December 31, 2021, respectively

-


-

     Common stock, par value $0.001; 350,000,000 shares authorized; 13,091,883 and
      13,017,943 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

13,092


13,018

     Additional paid-in capital

78,173,269


74,525,106

     Accumulated deficit

(19,505,057)


(13,777,006)

          Total stockholders' equity

58,681,304


60,761,118

Non-controlling interest

(42,111)


249,089

          Total stockholders' equity

58,639,193


61,010,207

          Total liabilities and stockholders' equity

$

59,736,098

$

62,103,941

LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 


For the Three Months

Ended March 31,


2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:







Net income (loss)

$

(6,019,251)

$

4,548,299

Adjustments to reconcile net loss to cash used in operating activities







     Depreciation and amortization

3,094


1,696

     Right to use non cash lease expense

23,343


25,808

     Stock compensation

329,500


-

     Stock option expense

3,318,737


-

     Accrued investment income

(96,657)


(12,784)

     Digital assets other income

(4,366)




     Gain on deconsolidation of  affiliate

-


(43,623)

     Unrealized gain on convertible debt security

(288,320)


-

     Unrealized gain on marketable securities

(130)


(595,392)

     Unrealized loss on investment and equity securities

986,399


-

     Realized (gain) loss on securities

395,181


(5,671,464)

     Proceeds from securities

1,428,050


21,218,918

     Investment in convertible note receivable converted into marketable security

-


(15,547,454)

Change in assets and liabilities







     Prepaid expenses and other assets

280,208


710,163

     Digital assets, net

(500,000)


-

     Accounts payable and accrued expenses

(136,430)


157,514

     Advances (repayments) from related party

252,580


200,749

     Lease liability payments

(30,242)


(24,971)

     Income tax payable

(326,178)


3,484

     Income tax receivable

(143,822)


-

Net cash provided by (used in) operating activities

(528,304)


4,970,943









     CASH FLOWS FROM INVESTING ACTIVITIES:







     Net collections of finance receivables - original product

(6,550)


14,206

     Net collections of finance receivables - special product

(1,948)


(1,020)

     Payments for real estate assets owned

-


(62,432)

     Deposit for mining equipment

(7,118,572)


-

     Investment in convertible note receivable

-


(1,666,500)

     Loan to purchase securities

-


1,784,250

     Investment in note receivable - related party

(310,000)


-

     Repayment of loan to purchase securities

-


(1,784,250)

     Investment in unconsolidated affiliate

-


(5,738,000)

Net cash (used in) provided by investing activities

(7,437,070)


(7,453,746)









CASH FLOWS FROM FINANCING ACTIVITIES:







     Principal repayments

-


(343,687)

     Insurance financing repayments

(57,344)


(468,061)

     Exercise of warrants

-


9,544,623

Net cash provided by (used in) financing activities

(57,344)


8,732,875

NET INCREASE (DECREASE) IN CASH

(8,022,718)


6,250,072

CASH - BEGINNING OF YEAR

32,559,185


11,552,943

CASH - END OF YEAR

$

24,536,467

$

17,803,015









SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION







     ROU assets and operating lease obligation recognized

$

300,787

$

-

SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION







     Cash paid for taxes

$

470,000


-

SOURCE LM Funding America

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