LMFA LM Funding America Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 14, 2023

 

 

LM FUNDING AMERICA, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-37605	47-3844457
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1200 West Platt Street Suite 100
Tampa, Florida				33606
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 813 222-8996

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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 $0.001 per share		LMFA		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

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. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On August 14, 2023, LM Funding America, Inc. (the “Company”) issued a press release announcing its financial results for the Three and Six Months ended June 30, 2023.

The information furnished in this Item 2.02, including Exhibit 99.1, is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that Section. This information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number		Description
99.1		Financial Results Press Release dated August 14, 2023
104		Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			LM Funding America, Inc.
Date:	August 14, 2023	By:	/s/ Richard Russell
			Richard Russell, CFO

 

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LM Funding America, Inc. Achieves Over 1,260% Year-Over-Year Revenue Growth to $3.2 Million and Generates
Positive Core EBITDA for the Second Quarter of 2023

 

Mined 106.6 Bitcoins in the Second Quarter of 2023 at an Average Market Revenue Value of Approximately $27,900 per Bitcoin

 

Completed Acquisition of Symbiont.io Assets; Advancing Strategic Relationships to Leverage its Assembly™ Financial Services Blockchain Enterprise Platform

 

Reports Working Capital of Approximately $5.5 Million and LM Funding Stockholders’ Equity of

$39.9 Million ($2.72 per share) as of June 30, 2023

 

Conference Call to Be Held Today at 11:00 am ET

 

TAMPA, FL, August [14], 2023—LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or the “Company”), a cryptocurrency mining and technology-based specialty finance company, today provided a business update and reported financial results for the quarter ended June 30, 2023.

Operational Highlights

 

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “Once again, we made major strides in our transition towards Bitcoin mining as we mined 106.6 Bitcoin during the quarter ended June 30, 2023, a sequential increase of 16% compared to 91.7 Bitcoin mined in the first quarter of 2023. Our goal is to continue to acquire and energize more energy-efficient mining machines as we approach the next Bitcoin halving, anticipated to occur sometime in 2024. As we expand our mining capacity by adding more mining machines, we anticipate an increase in the number of Bitcoins that we will be able to mine. In addition, the Company has installed Braiins OS+ software on 360 of its mining machines, which is expected to increase mining machine hashrate by as much as 25%. Furthermore, machines operating Braiins OS+ software may mine with any pool or mine with Braiins pool and pay no pool fees to Braiins pool.”

 

"An important highlight of the recent quarter was our successful $2.6 million 'stalking horse' bid, through which we acquired the assets of Symbiont.io, Inc., including its flagship product, the Assembly™ financial services blockchain enterprise platform. This strategic acquisition has put us in position to leverage these assets with potential partners to

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deploy the Assembly™ platform within financial institutions for issuing, tracking, and managing financial instruments like data, loans, and securities. At the same time, we are pursuing other potential use cases for the Symbiont assets and the Assembly™ platform," Mr. Rodgers concluded.

 

Richard Russell, Chief Financial Officer of LM Funding, further noted, "Beyond our year-over-year quarterly revenue growth, we experienced strong sequential quarterly revenue growth of more than 38% compared to Q1 2023 and achieved approximately $1.0 million of Core EBITDA. We have also maintained a solid balance sheet. As of June 30, 2023, our cash reserves were approximately $1.8 million, along with roughly 79 Bitcoins, each valued at $25,300, bringing their total value to $2.0 million. Our working capital stood at $5.5 million as of June 30, 2023, and the equity of LM Funding shareholders was $39.9 million, or $2.72 per share. Given this financial position, we remain highly encouraged by the financial outlook for the business and look forward to working to drive returns for our shareholders.”

 

Financial Highlights

 

Investor Conference Call

 

LM Funding will host a conference call today, August 14, 2023, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the second quarter ended June 30, 2023, as well as the Company’s corporate progress and other developments.

 

The conference call will be available via telephone by dialing toll-free +1 877-545-0523 for U.S. callers or +1 973-528-0016 for international callers and entering access code 197252. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/48870 or on the investor relations section of the Company’s website, https://ir.lmfunding.com/.

 

A webcast replay will be available on the investor relations section of the Company’s website at https://www.lmfunding.com/investors/news-events/ir-calendar through August 14, 2024. A telephone replay of the call will be available approximately one hour following the call, through August 28, 2023, and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering access code 48870.

 

About LM Funding America

LM Funding America, Inc. (Nasdaq: LMFA), together with its subsidiaries, is a cryptocurrency mining business that commenced Bitcoin mining operations in September 2022. The Company also operates a technology-based specialty

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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, by funding a certain portion of the Associations' rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments.

 

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,” “believe,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guaranties of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the Company's most recent Annual Report on Form 10-K and its other filings with the SEC, which are available at www.sec.gov. These risks and uncertainties include, without limitation, uncertainty created by the the risks of entering into and operating in the cryptocurrency mining business, uncertainty in the cryptocurrency mining business in general, problems with hosting vendors in the mining business, the capacity of our Bitcoin mining machines and our related ability to purchase power at reasonable prices, the ability to finance our planned cryptocurrency mining operations, our ability to acquire new accounts in our specialty finance business at appropriate prices, the potential need for additional capital in the future, changes in governmental regulations that affect our ability to collected sufficient amounts on defaulted consumer receivables, changes in the credit or capital markets, changes in interest rates, negative press regarding the debt collection industry, and the risk of pandemics such as the COVID-10 pandemic. The occurrence of any of these risks and uncertainties could have a material adverse effect on our business, financial condition, and results of operations.

 

Contact:

Crescendo Communications, LLC

Tel: (212) 671-1020

Email: LMFA@crescendo-ir.com

 

(tables follow)

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LM Funding America, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited)

		June 30,		December 31,
		2023		2022
		(Unaudited)
Assets
Cash		$ 1,847,239		$ 4,238,006
Digital Assets (Note 2)		1,992,557		888,026
Finance receivables		14,097		26,802
Marketable securities (Note 5)		8,668		4,290
Notes receivable from Seastar Medical Holding Corporation (Note 5)		2,238,442		3,807,749
Prepaid expenses and other assets		1,425,585		1,233,322
Income tax receivable		293,466		293,466
Current assets		7,820,054		10,491,661
Fixed assets, net (Note 3)		27,208,981		27,192,317
Deposits on mining equipment (Note 4)		282,171		525,219
Hosting services deposits (Note 4)		2,357,658		2,200,452
Real estate assets owned		80,057		80,057
Long-term investments - debt security (Note 5)		-		2,402,542
Less: Allowance for losses on debt security (Note 5)		-		(1,052,542)
Long-term investments - debt security, net (Note 5)		-		1,350,000
Long-term investments - equity securities (Note 5)		188,493		464,778
Investment in Seastar Medical Holding Corporation (Note 5)		1,345,500		10,608,750
Symbiont intangible assets (Note 11)		2,804,902		-
Operating lease - right of use assets (Note 8)		239,671		265,658
Other assets		10,726		10,726
Long-term assets		34,518,159		42,697,957
Total assets		$ 42,338,213		$ 53,189,618
Liabilities and stockholders' equity
Accounts payable and accrued expenses		2,005,147		1,570,906
Note payable - short-term (Note 6)		119,353		475,775
Due to related parties (Note 7)		68,217		75,488
Current portion of lease liability (Note 8)		94,509		90,823
Total current liabilities		2,287,226		2,212,992
Lease liability - net of current portion (Note 8)		151,685		179,397
Long-term liabilities		151,685		179,397
Total liabilities		2,438,911		2,392,389
Stockholders' equity (Note 9)
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022		-		-

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Common stock, par value $.001; 350,000,000 shares authorized; 14,651,883 shares issued and outstanding as of June 30, 2023 and 13,091,883 as of December 31, 2022		14,652		13,092
Additional paid-in capital		94,100,806		92,195,341
Accumulated deficit		(52,952,718)		(43,017,207)
Total LM Funding America stockholders' equity		41,162,740		49,191,226
Non-controlling interest		(1,263,438)		1,606,003
Total stockholders' equity		39,899,302		50,797,229
Total liabilities and stockholders’ equity		$ 42,338,213		$ 53,189,618

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LM Funding America, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited)

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Revenues:
Digital mining revenues		$ 2,968,322		$ -		$ 5,059,173		$ -
Specialty finance revenue		190,173		193,953		373,009		346,085
Rental revenue		37,155		40,580		76,986		79,452
Total revenues		3,195,650		234,533		5,509,168		425,537
Operating costs and expenses:
Digital mining cost of revenues (exclusive of depreciation and amortization shown below)		2,361,825		-		4,029,498		-
Staff costs & payroll		2,463,440		4,296,695		3,396,275		8,588,892
Professional fees		236,974		1,031,431		809,330		1,806,251
Settlement costs with associations		10,000		-		10,000		160
Selling, general and administrative		242,559		122,271		482,023		237,191
Real estate management and disposal		69,355		22,414		101,158		53,895
Depreciation and amortization		1,169,120		2,007		1,970,993		5,101
Collection costs		(373)		(7,906)		9,435		(11,726)
Impairment loss on mined digital assets		239,599		-		439,153		-
Realized gain on sale of mined digital assets		(646,458)		-		(1,070,791)		-
Other operating costs		205,943		141,509		457,854		149,893
Total operating costs and expenses		6,351,984		5,608,421		10,634,928		10,829,657
Operating loss		(3,156,334)		(5,373,888)		(5,125,760)		(10,404,120)
Realized gain (loss) on securities		-		45,261		-		(349,920)
Realized gain on convertible debt securities		-		287,778		-		287,778
Unrealized loss on convertible debt security		-		(288,320)		-		-
Unrealized gain (loss) on marketable securities		(1,412)		(24,030)		4,378		(23,900)
Impairment loss on hosting deposits		-		-		(36,691)		-
Unrealized gain (loss) on investment and equity securities		(3,716,681)		12,215,401		(9,539,535)		11,229,002
Impairment loss on digital assets		-		(377,707)		-		(377,707)
Realized gain on sale of purchased digital assets		-		-		1,917		-
Digital assets other income		-		1,292		-		5,658
Other income - coupon sales		25,721		-		629,312		-
Gain on adjustment of note receivable allowance		1,052,543		-		1,052,543		-
Other income - finance revenue		37,660		-		37,660		-
Dividend income		-		1,375		-		2,750
Interest income		116,147		80,975		171,224		179,345
Income (loss) before income taxes		(5,642,356)		6,568,137		(12,804,952)		548,886
Income tax expense		-		-		-		-
Net income (loss)		$ (5,642,356)		$ 6,568,137		$ (12,804,952)		$ 548,886
Less: loss (income) attributable to non-controlling interest		1,093,177		(3,723,797)		2,869,441		(3,432,597)
Net income (loss) attributable to LM Funding America Inc.		$ (4,549,179)		$ 2,844,340		$ (9,935,511)		$ (2,883,711)
Basic income (loss) per common share		$ (0.35)		$ 0.22		$ (0.76)		$ (0.22)
Diluted income (loss) per common share		$ (0.35)		$ 0.22		$ (0.76)		$ (0.22)

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Weighted average number of common shares outstanding
Basic		13,182,162		13,091,882		13,153,038		13,076,359
Diluted		13,182,162		13,091,882		13,153,038		13,076,359

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LM Funding America, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited)

		Six Months ended June 30,
		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$ (12,804,952)		$ 548,886
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		1,970,993		5,101
Noncash lease expense		47,874		47,127
Stock compensation		564,930		658,999
Stock option expense		1,342,095		6,637,479
Accrued investment income		(91,864)		(176,438)
Impairment loss on digital assets		439,153		377,707
Impairment loss on hosting deposits		36,691		-
Unrealized loss (gain) on marketable securities		(4,378)		23,900
Unrealized loss (gain) on investment and equity securities		9,539,535		(11,229,002)
Realized loss (gain) on securities		-		349,920
Realized gain on convertible note receivable		-		(287,778)
Realized gain on sale of digital assets		(1,072,708)		-
Proceeds from securities		-		2,565,893
Convertible debt and interest converted into marketable securities		-		844,882
Investments in marketable securities		-		(844,882)
Reversal of allowance loss on debt security		(1,052,543)		-
Change in operating assets and liabilities:
Prepaid expenses and other assets		(85,713)		623,511
Hosting deposits		(193,897)		-
Advances (repayments) to related party		(7,271)		249,959
Accounts payable and accrued expenses		434,241		(27,168)
Mining of digital assets		(5,059,173)		-
Proceeds from sale of digital assets		4,579,676		-
Lease liability payments		(45,913)		(52,440)
Deferred taxes and taxes payable		-		(326,178)
Income taxes receivable		-		(143,822)
Net cash used in operating activities		(1,463,224)		(154,344)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product		(1,824)		11,473
Net collections of finance receivables - special product		14,529		(6,877)
Capital expenditures		(1,744,609)		(13,235)
Investment in note receivable		-		(910,000)
Collection of note receivable		1,661,171		-
Investment in digital assets		(35,157)		(786,586)
Proceeds from sale of purchased digital assets		43,678		-
Symbiont asset acquisition		(402,359)		-
Deposits for mining equipment		-		(13,538,333)
Net cash used in investing activities		(464,571)		(15,243,558)
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance financing repayments		(357,649)		(114,688)
Insurance financing		1,227		-
Issue costs from the issuance of common stock		(106,550)		-
Net cash used in financing activities		(462,972)		(114,688)
NET DECREASE IN CASH		(2,390,767)		(15,512,590)
CASH - BEGINNING OF YEAR		4,238,006		32,559,185
CASH - END OF YEAR		$ 1,847,239		$ 17,046,595
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

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ROU assets and operating lease obligation recognized		$ 21,887		$ 300,787
Reclassification of mining equipment deposit to fixed assets, net		$ 1,172,888		$ 15,058,872
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for interest		$ -		$ -
Cash paid for taxes		$ -		$ 470,000

 

 

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NON-GAAP FINANCIAL INFORMATION (unaudited)

Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We also disclose Earnings before Interest, Tax, Depreciation and Amortization ("EBITDA") and Core Earnings before Interest, Tax, Depreciation and Amortization ("Core EBITDA") which adjusts for unrealized loss on investment and equity securities, unrealized gain on convertible debt securities and stock compensation expense and option expense, both of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of Bitcoin miners.

The following tables reconcile net loss, which we believe is the most comparable GAAP measure, to EBITDA and Core EBITDA:

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Net income (loss)		$ (5,642,356)		$ 6,568,137		$ (12,804,952)		$ 548,886
Income tax expense		-		-		-		-
Interest expense		-		-		-		-
Depreciation and amortization		1,169,120		2,007		1,970,993		5,101
Income (loss) before interest, taxes & depreciation		$ (4,473,236)		$ 6,570,144		$ (10,833,959)		$ 553,987
Unrealized loss (gain) on investment and equity securities		3,716,681		(12,215,401)		9,539,535		(11,229,002)
Unrealized loss on convertible debt securities		-		288,320		-		-
Realized gain on convertible debt securities		-		(287,778)		-		(287,778)
Stock compensation and option expense		1,712,669		3,648,236		1,907,025		7,296,478
Core income (loss) before interest, taxes & depreciation		$ 956,114		$ (1,996,479)		$ 612,601		$ (3,666,315)

 

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v3.23.2

Document And Entity Information	Aug. 14, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 14, 2023
Entity Registrant Name	LM FUNDING AMERICA, INC.
Entity Central Index Key	0001640384
Entity Emerging Growth Company	false
Securities Act File Number	001-37605
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3844457
Entity Address, Address Line One	1200 West Platt Street
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Tampa
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33606
City Area Code	813
Local Phone Number	222-8996
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock par value $0.001 per share
Trading Symbol	LMFA
Security Exchange Name	NASDAQ

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