Form 8-K - Current report

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): November 15, 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:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 15, 2023, LM Funding America, Inc. (the “Company”) issued a press release announcing its financial results for the Three and Nine 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 November 15, 2023
104		Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL)

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:	November 15, 2023	By:	/s/ Richard Russell
			Richard Russell, CFO

LM Funding America, Inc. Achieves Over 1,720% Year-Over-Year Revenue Growth to $3.4 Million

Mined 117.1 Bitcoins in the Third Quarter of 2023 at an Average
Market Revenue Value of Approximately $28,000 per Bitcoin

Implementing 'Infrastructure Light' Approach to Bitcoin Mining Business; Focuses Capital Investment on Bitcoin and Bitcoin Mining Machines That Track the Value of Bitcoin

Reports Working Capital of Approximately $4.5 Million and LM Funding Stockholders’ Equity of

$35.9 Million ($2.45 per share) as of September 30, 2023

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

TAMPA, FL, November 15, 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 September 30, 2023.

Operational Highlights

· Approximately 5,549 Bitcoin mining machines in operation at hosting sites as of September 30, 2023.

· Mined 117.1 Bitcoin in Q3 2023, valued at approximately $3.3 million based on the $28,000 average price of Bitcoin during the quarter.

· Sequential quarterly revenue increased by 7.0% from the three months ended June 30, 2023.

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “This quarter marks yet another significant step forward in our transition into Bitcoin mining. In the third quarter of 2023, we mined 117.1 Bitcoin, a 10% sequential increase over the second quarter of 2023. LM Funding is actively implementing an 'Infratsructure Light' approach in our Bitcoin mining business that seeks to mitigate risk and volatility in the market by focusing our capital investments on Bitcoin and Bitcoin mining machines that track the value of Bitcoin. Overall, we are quite encouraged by the overall market and outlook for Bitcoin pricing, including the upcoming 2024 halving event.”

Richard Russell, Chief Financial Officer of LM Funding, further noted, "Beyond our year-over-year quarterly revenue growth, we experienced sequential quarterly revenue growth of 7% compared with Q2 2023. As of September 30, 2023, our cash plus BTC was approximately $2.7 million. Our working capital stood at $4.5 million as of September 30, 2023, and the equity of LM Funding shareholders was $36.6 million, or $2.50 per share. Given our financial position, we remain highly encouraged by the financial outlook for the business.”

Financial Highlights

· Total revenue for the quarter ended September 30, 2023, was approximately $3.4 million, an increase of $3.2 million, or more than 1,720%, from $0.2 million for the 2022 third quarter. The increase was primarily due to digital mining revenue of $3.3 million compared with $42 thousand of digital mining revenue in the same period last year as the Company commenced our Bitcoin mining operations in September 2022. The average BTC price for the quarter recognized as revenue was approximately $28,000.

· Net loss attributable to LM Funding shareholders for the third quarter ended September 30, 2023, was approximately $4.4 million, which included a $0.8 million non-cash, unrealized loss on investment and equity securities and a $0.8 million impairment on our Symbiont assets compared with net income of approximately $6.7 million for the third quarter of 2022, which included a $0.2 million unrealized loss on investment and equity securities.

· Core EBITDA loss for the quarter ended September 30, 2023, totaled approximately $0.6 million, compared with Core EBITDA loss of $1.5 million in the 2022 comparable quarter, primarily due to the existence of material Bitcoin mining operations in the current year quarter that didn’t exist in the prior year. Core EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss is set forth below in this press release.

· Cash of approximately $0.5 million, digital assets of $2.2 million, and working capital of $4.5 million as of September 30, 2023 based on 90.1 BTC at a price of approximately $25,000 as of September 30, 2023. The current BTC market price has averaged between $35,000 to $37,000 in recent weeks. In October 2023, the Company also received approximately $800 thousand from SeaStar Medical Holdings as a partial repayment of their outstanding note receivable.

· Total LM Funding stockholders’ equity of approximately $35.9 million, or $2.45 per share, as of September 30, 2023 (with the per-share amount calculated as LMFA stockholders’ equity divided by approximately 14,652,000 shares outstanding as of September 30, 2023).

Investor Conference Call

LM Funding will host a conference call today, November 15 , 2023, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the third quarter ended September 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 +1 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and entering access code 406670. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/49429 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 November 15, 2024. A telephone replay of the call will be available approximately one hour following the call, through November 29, 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 49429.

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 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)

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


	September 30,			December 31,
	2023			2022
	(Unaudited)
Assets
Cash	$	469,007		$	4,238,006
Digital Assets		2,256,500			888,026
Finance receivables		21,558			26,802
Marketable securities		198,094			4,290
Notes receivable from Seastar Medical Holding Corporation		2,277,012			3,807,749
Less: Allowance for credit loss reserve on notes receivable from Seastar Medical Holding Corporation		(22,344	)		-
Notes receivable from Seastar Medical Holding Corporation, net		2,254,668			3,807,749
Prepaid expenses and other assets		1,463,094			1,233,322
Income tax receivable		293,466			293,466
Current assets		6,956,387			10,491,661

Fixed assets, net		25,917,390			27,192,317
Deposits on mining equipment		282,233			525,219
Hosting services deposits		2,218,452			2,200,452
Real estate assets owned		80,057			80,057
Long-term investments - debt security		-			2,402,542
Less: Allowance for losses on debt security		-			(1,052,542	)
Long-term investments - debt security, net		-			1,350,000
Long-term investments - equity securities		72,815			464,778
Investment in Seastar Medical Holding Corporation		683,100			10,608,750
Symbiont intangible assets, net		2,000,000			-
Operating lease - right of use assets		214,574			265,658
Other assets		10,726			10,726
Long-term assets		31,479,347			42,697,957
Total assets	$	38,435,734		$	53,189,618

Liabilities and stockholders' equity
Accounts payable and accrued expenses		2,253,311			1,570,906
Note payable - short-term		63,208			475,775
Due to related parties		44,398			75,488
Current portion of lease liability		106,689			90,823
Total current liabilities		2,467,606			2,212,992

Lease liability - net of current portion		114,855			179,397
Long-term liabilities		114,855			179,397
Total liabilities		2,582,461			2,392,389

Stockholders' equity
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022		-			-
Common stock, par value $.001; 350,000,000 shares authorized; 14,651,883 shares issued and outstanding as of September 30, 2023 and 13,091,883 as of December 31, 2022		14,652			13,092
Additional paid-in capital		94,722,633			92,195,341
Accumulated deficit		(57,369,694	)		(43,017,207	)
Total LM Funding America stockholders' equity		37,367,591			49,191,226
Non-controlling interest		(1,514,318	)		1,606,003
Total stockholders' equity		35,853,273			50,797,229
Total liabilities and stockholders’ equity	$	38,435,734		$	53,189,618

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


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues:
Digital mining revenues	$	3,283,473		$	42,157		$	8,342,646		$	42,157
Specialty finance revenue		101,535			104,835			474,544			450,920
Rental revenue		34,500			40,788			111,486			120,240
Total revenues		3,419,508			187,780			8,928,676			613,317
Operating costs and expenses:
Digital mining cost of revenues (exclusive of depreciation and amortization shown below)		2,708,672			38,960			6,738,170			38,960
Staff costs & payroll		1,340,665			4,297,540			4,736,940			12,886,432
Professional fees		419,173			714,730			1,228,503			2,520,981
Settlement costs with associations		-			-			10,000			160
Selling, general and administrative		201,151			209,328			683,174			446,519
Real estate management and disposal		26,453			22,558			127,611			76,453
Depreciation and amortization		1,516,873			38,617			3,487,866			43,718
Collection costs		8,098			5,037			17,533			(6,689	)
Impairment loss on mined digital assets		383,497			870			822,650			870
Realized gain on sale of mined digital assets		(261,191	)		-			(1,331,982	)		-
Other operating costs		246,536			124,405			704,390			274,298
Total operating costs and expenses		6,589,927			5,452,045			17,224,855			16,281,702
Operating loss		(3,170,419	)		(5,264,265	)		(8,296,179	)		(15,668,385	)
Realized gain (loss) on securities		1,788			-			1,788			(349,920	)
Realized gain on convertible debt securities		-			-			-			287,778
Unrealized gain (loss) on marketable securities		2,058			(13,000	)		6,436			(36,900	)
Impairment loss on hosting deposits		-			-			(36,691	)		-
Impairment loss on Symbiont assets		(750,678	)		-			(750,678	)		-
Unrealized gain (loss) on investment and equity securities		(778,078	)		(194,174	)		(10,317,613	)		11,034,828
Impairment loss on digital assets		-			(25,764	)		-			(403,471	)
Realized gain on sale of purchased digital assets		-			-			1,917			-
Digital assets other income		-			-			-			5,658
Other income - coupon sales		10,160			-			639,472			-
Credit loss on Seastar Medical Holding Corporation notes receivable		(22,344	)		-			(22,344	)		-
Gain on adjustment of note receivable allowance		-			-			1,052,543			-
Other income - finance revenue		-			-			37,660			-
Dividend income		-			1,125			-			3,875
Interest income		39,657			85,602			210,881			264,947
Loss before income taxes		(4,667,856	)		(5,410,476	)		(17,472,808	)		(4,861,590	)
Income tax expense		-			(1,311,678	)		-			(1,311,678	)
Net Loss	$	(4,667,856	)	$	(6,722,154	)	$	(17,472,808	)	$	(6,173,268	)
Less: loss (income) attributable to non-controlling interest		250,880			59,298			3,120,321			(3,373,299	)
Net loss attributable to LM Funding America Inc.	$	(4,416,976	)	$	(6,662,856	)	$	(14,352,487	)	$	(9,546,567	)

Basic loss per common share	$	(0.33	)	$	(0.51	)	$	(1.08	)	$	(0.73	)
Diluted loss per common share	$	(0.33	)	$	(0.51	)	$	(1.08	)	$	(0.73	)

Weighted average number of common shares outstanding
Basic		13,480,470			13,091,883			13,237,121			13,081,591
Diluted		13,480,470			13,091,883			13,237,121			13,081,591

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


	Nine Months ended September 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,472,808	)	$	(6,173,268	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		3,487,866			43,718
Noncash lease expense		70,545			71,288
Stock compensation		917,057			988,498
Stock option expense		1,611,795			9,956,219
Accrued investment income		(130,990	)		(259,867	)
Impairment loss on digital assets		822,650			404,341
Impairment loss on hosting deposits		36,691			-
Impairment loss on Symbiont assets		750,678			-
Unrealized loss (gain) on marketable securities		(6,436	)		36,900
Unrealized loss (gain) on investment and equity securities		10,317,613			(11,034,828	)
Realized loss (gain) on securities		(1,788	)		349,920
Realized gain on convertible note receivable		-			(287,778	)
Realized gain on sale of digital assets		(1,333,899	)		-
Proceeds from securities		554,036			2,565,893
Convertible debt and interest converted into marketable securities		-			844,882
Investments in marketable securities		(739,616	)		(844,882	)
Credit loss on Seastar Medical Holding Corporation notes recievable		22,344			-
Reversal of allowance loss on debt security		(1,052,543	)		-
Change in operating assets and liabilities:
Prepaid expenses and other assets		(123,221	)		807,352
Hosting deposits		(54,691	)		-
Repayments to related party		(31,090	)		(45,605	)
Accounts payable and accrued expenses		682,405			172,723
Mining of digital assets		(8,352,805	)		(42,157	)
Proceeds from sale of digital assets		7,487,058			-
Lease liability payments		(70,563	)		(75,574	)
Deferred taxes and taxes payable		-			841,678
Net cash used in operating activities		(2,609,712	)		(1,680,547	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product		(8,765	)		19,049
Net collections of finance receivables - special product		14,009			(11,565	)
Capital expenditures		(1,913,303	)		(15,380	)
Investment in note receivable		(100,000	)		(350,000	)
Investment in note receivable - related party		-			(2,785,000	)
Collection of note receivable		1,761,727			-
Investment in digital assets		(35,157	)		(978,441	)
Proceeds from sale of purchased digital assets		43,678			-
Symbiont asset acquisition		(402,359	)		-
Deposits for mining equipment		-			(16,467,402	)
Net cash used in investing activities		(640,170	)		(20,588,739	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance financing repayments		(499,453	)		(114,688	)
Insurance financing		86,886			-
Issue costs from the issuance of common stock		(106,550	)		-
Net cash used in financing activities		(519,117	)		(114,688	)
NET DECREASE IN CASH		(3,768,999	)		(22,383,974	)
CASH - BEGINNING OF PERIOD		4,238,006			32,559,185
CASH - END OF PERIOD	$	469,007		$	10,175,211

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
ROU assets and operating lease obligation recognized	$	21,887		$	300,787
Reclassification of mining equipment deposit to fixed assets, net	$	1,177,226		$	21,986,382
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	470,000

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, impairment loss on mined digital assets, impairment of intangible long-lived assets, gain on adjustment of note receivable allowance and stock compensation expense and option expense, all 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 September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Net income (loss)	$	(4,667,856	)	$	(6,722,154	)	$	(17,472,808	)	$	(6,173,268	)
Income tax expense		-			1,311,678			-			1,311,678
Interest expense		-			-			-			-
Depreciation and amortization		1,516,873			38,617			3,487,866			43,718
Income (loss) before interest, taxes & depreciation	$	(3,150,983	)	$	(5,371,859	)	$	(13,984,942	)	$	(4,817,872	)
Unrealized loss (gain) on investment and equity securities		778,078			194,174			10,317,613			(11,034,828	)
Realized gain on convertible debt securities		-			-			-			(287,778	)
Impairment loss on mined digital assets		383,497			870			822,650			870
Impairment loss on Symbiont assets		750,678			-			750,678			-
Gain on adjustment of note receivable allowance		-			-			(1,052,543	)		-
Stock compensation and option expense		621,827			3,648,239			2,528,852			10,944,717
Core income (loss) before interest, taxes & depreciation	$	(616,903	)	$	(1,528,576	)	$	(617,692	)	$	(5,194,891	)

Document And Entity Information	Nov. 15, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 15, 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