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): May 16, 2024

 

 

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 May 16, 2024, LM Funding America, Inc. (the “Company”) issued a press release announcing its financial results for the Three Months ended March 31, 2024.

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 May 16, 2024
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:	May 16, 2024	By:	/s/ Richard Russell
			Richard Russell, CFO

 

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Exhibit 99.1

 

 

LM Funding America, Inc. Achieves Over 105% Year-Over-Year Revenue Growth to $4.7 Million and Generated $1.9 Million of Net Income for the First Quarter of 2024

 

Mined 86.4 Bitcoins in Q1 2024 Valued at Approximately $4.6 Million at an Average
Market Revenue Value of Approximately $53,000 per Bitcoin

 

Held 163.4 Bitcoin at March 31, 2024, Valued at Approximately $11.7 Million Based on Bitcoin Price of $71,300

 

Reports Working Capital of Approximately $12.7 Million and LM Funding Stockholders’ Equity of

$38.5 Million ($15.43 per share) as of March 31, 2024

 

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

 

TAMPA, FL, May 16, 2024—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 three months ended March 31, 2024.

Operational Highlights

 

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We continue to make tremendous strides in growing our Bitcoin mining operations in the first quarter of 2024, building on the progress we made in 2023, our first full year as a Bitcoin mining company. We are encouraged by our performance, having mined 86.4

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Bitcoins worth approximately $4.6 million, based on the average Bitcoin price of approximately $53,000 for the quarter. This success has resulted in a 105% increase in our revenue compared to the first quarter of 2023. As a result, I am pleased to report we achieved a record $1.9 million of net income and $4.4 million of Core EBITDA (defined below) for the first quarter of 2024.”

 

“The Company was well-positioned for the Bitcoin halving event in mid-April and as we move forward, we expect to enter into new hosting agreements reflecting the 2024 post-halving economic realities. To that end, we purchased 300 Bitmain S21 Antminer high efficiency, high hash rate machines, mining the SHA-256 algorithm which increased the Company’s mining capacity to 673 PH. These S21s are anticipated to boost long-term revenue, both in the lead-up to and following the next halving event, which is projected to occur in 2028. Moving forward, we anticipate entering into new hosting agreements that reflect the economic conditions post-2024 halving and will continue to assess further investments in Antminer equipment to fuel our growth. Considering current market conditions and the future outlook for Bitcoin, which reached a new all-time high of approximately $73,800 in the 2024 first quarter, we remain very optimistic about the future, as historically, halving events such as the April halving, have preceded new all-time high Bitcoin prices in the six months post-halving."

 

Richard Russell, Chief Financial Officer of LM Funding, further noted, "We ended the quarter with cash plus Bitcoin, valued as of March 31, 2024, of approximately $12.5 million. Including the Bitcoin that we mined through the end of April 2024, our reported Bitcoin holdings of 155.1 Bitcoin are valued at approximately $9.7 million based on the recent Bitcoin price of approximately $62,500. Our working capital stood at $12.7 million as of March 31, 2024, and the equity of LM Funding shareholders was $38.5 million, or $15.43 per share. During the quarter ended March 31, 2024, we sold just 18 Bitcoin to fund our operations and we remain highly encouraged and optimistic regarding the financial outlook for both Bitcoin and the business.”

 

Financial Highlights

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Investor Conference Call

 

LM Funding will host a conference call today, May 16, 2024, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the quarter ended March 31, 2024, 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 696741. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/50584 or on the investor relations section of the Company’s website, https://www.lmfunding.com/investors/news-events/ir-calendar.

 

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 May 16, 2025. A telephone replay of the call will be available approximately one hour following the call, through May 30, 2024, 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 50584.

 

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

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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 risks of 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 collect 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

 

		March 31,		December 31,
		2024 (Unaudited)		2023
Assets
Cash		$ 827,366		$ 2,401,831
Digital Assets (Note 2)		11,651,969		3,416,256
Finance receivables		27,459		19,221
Marketable securities (Note 5)		15,700		17,860
Receivable from sale of Symbiont assets (Note 5)		200,000		200,000
Prepaid expenses and other assets		2,483,368		4,067,212
Income tax receivable		31,187		31,187
Current assets		15,237,049		10,153,567
Fixed assets, net (Note 3)		20,897,314		24,519,610
Deposits on mining equipment (Note 4)		1,117,798		20,837
Notes receivable from Seastar Medical Holding Corporation (Note 5)		-		1,440,498
Long-term investments - equity securities (Note 5)		753,973		156,992
Investment in Seastar Medical Holding Corporation (Note 5)		1,899,484		1,145,486
Operating lease - right of use assets (Note 7)		162,966		189,009
Other assets		86,798		86,798
Long-term assets		24,918,333		27,559,230
Total assets		$ 40,155,382		$ 37,712,797
Liabilities and stockholders' equity
Accounts payable and accrued expenses		2,042,906		2,064,909
Note payable - short-term (Note 6)		325,669		567,586
Due to related parties (Note 10)		55,290		22,845
Current portion of lease liability (Note 7)		114,148		110,384
Total current liabilities		2,538,013		2,765,724
Lease liability - net of current portion (Note 7)		56,148		85,775
Long-term liabilities		56,148		85,775
Total liabilities		2,594,161		2,851,499
Stockholders' equity (Note 8)
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of March 31, 2024 and December 31, 2023		-		-
Common stock, par value $.001; 350,000,000 shares authorized; 2,492,964 shares issued and outstanding as of March 31, 2024 and 2,492,964 as of December 31, 2023		2,493		2,493
Additional paid-in capital		95,327,227		95,145,376
Accumulated deficit		(56,857,610)		(58,961,461)
Total LM Funding America stockholders' equity		38,472,110		36,186,408

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Non-controlling interest		(910,889)		(1,325,110)
Total stockholders' equity		37,561,221		34,861,298
Total liabilities and stockholders’ equity		$ 40,155,382		$ 37,712,797

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

 

		Three Months Ended March 31,
		2024		2023
Revenues:
Digital mining revenues		$ 4,597,908		$ 2,090,851
Specialty finance revenue		116,628		182,836
Rental revenue		33,068		39,831
Total revenues		4,747,604		2,313,518
Operating costs and expenses:
Digital mining cost of revenues (exclusive of depreciation and amortization shown below)		2,654,946		1,667,673
Staff costs and payroll		1,243,026		932,835
Depreciation and amortization		2,426,068		801,873
Gain on fair value of Bitcoin, net		(4,257,515)		-
Impairment loss on mining equipment		(1,188,058)		-
Impairment loss on mined digital assets		-		199,554
Realized gain on sale of mined digital assets		-		(424,333)
Professional fees		509,893		572,356
Selling, general and administrative		177,906		239,464
Real estate management and disposal		27,189		31,803
Collection costs		926		9,808
Other operating costs		214,505		251,911
Total operating costs and expenses		4,185,002		4,282,944
Operating income (loss)		562,602		(1,969,426)
Unrealized gain (loss) on marketable securities		(2,160)		5,790
Impairment loss on prepaid machine deposits		-		(36,691)
Unrealized gain (loss) on investment and equity securities		1,350,979		(5,822,854)
Gain on fair value of purchased Bitcoin, net		57,926		-
Realized gain on sale of purchased digital assets		-		1,917
Loss on disposal of assets		(8,170)		-
Other income - coupon sales		4,490		603,591
Interest expense		(70,826)		-
Interest income		9,125		55,077
Income (loss) before income taxes		1,903,966		(7,162,596)
Income tax expense		-		-
Net income (loss)		$ 1,903,966		$ (7,162,596)
Less: loss (income) attributable to non-controlling interest		(414,221)		1,776,264
Net income (loss) attributable to LM Funding America Inc.		$ 1,489,745		$ (5,386,332)
Basic income (loss) per common share		$ 0.61		$ (2.41)
Diluted income (loss) per common share		$ 0.61		$ (2.41)
Weighted average number of common shares outstanding
Basic		2,428,203		2,232,964
Diluted		2,428,203		2,232,964

 

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

		Three Months ended March 31,
		2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$ 1,903,966		$ (7,162,596)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		2,426,068		801,873
Noncash lease expense		26,043		23,224
Stock compensation		71,047		-
Stock option expense		110,804		194,356
Accrued investment income		(8,568)		(53,734)
Digital assets other income		(4,490)		-
Gain on fair value of Bitcoin, net		(4,315,441)		-
Impairment loss on mining machines		1,188,058		-
Impairment loss on digital assets		-		199,554
Impairment loss on hosting deposits		-		36,691
Unrealized loss (gain) on marketable securities		2,160		(5,790)
Unrealized loss (gain) on investment and equity securities		(1,350,979)		5,822,854
Loss on disposal of fixed assets		8,170		-
Realized gain on sale of digital assets		-		(426,250)
Change in operating assets and liabilities:
Prepaid expenses and other assets		1,583,843		36,473
Advances (repayments) to related party		32,445		(12,659)
Accounts payable and accrued expenses		(22,003)		111,486
Mining of digital assets		(4,597,908)		(2,090,851)
Proceeds from sale of digital assets		-		1,455,141
Lease liability payments		(25,863)		(22,243)
Net cash used in operating activities		(2,972,648)		(1,092,471)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product		(8,238)		-
Net collections of finance receivables - special product		-		4,695
Capital expenditures		-		(263,596)
Collection of notes receivable		1,449,066		1,644,834
Investment in digital assets		-		(35,157)
Proceeds from sale of digital assets		1,296,233		33,675
Deposits for mining equipment		(1,096,961)		(923,687)
Net cash from investing activities		1,640,100		460,764
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance financing repayments		(241,917)		(177,393)
Net cash used in financing activities		(241,917)		(177,393)
NET DECREASE IN CASH		(1,574,465)		(809,100)
CASH - BEGINNING OF PERIOD		2,401,831		4,238,006
CASH - END OF PERIOD		$ 827,366		$ 3,428,906
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
ROU assets and operating lease obligation recognized		$ -		$ 21,887
Reclassification of mining equipment deposit to fixed assets, net		$ -		$ 54,876
Change in accounting principle (see Note 1)		$ 614,106		$ -
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for taxes		$ -		$ -
Cash paid for interest		$ -		$ -

 

 

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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, impairment loss on mined digital assets, impairment of intangible long-lived assets, impairment of prepaid hosting deposits, impairment of mining machine deposits and 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 March 31,
		2024		2023
Net income (loss)		$ 1,903,966		$ (7,162,596)
Income tax expense		-		-
Interest expense		70,826		-
Depreciation and amortization		2,426,068		801,873
Income (loss) before interest, taxes & depreciation		$ 4,400,860		$ (6,360,723)
Unrealized loss (gain) on investment and equity securities		(1,350,979)		5,822,854
Impairment loss on prepaid hosting deposits		-		36,691
Impairment loss on mining equipment		1,188,058		-
Stock compensation and option expense		181,851		194,356
Core income (loss) before interest, taxes & depreciation		$ 4,419,790		$ (306,822)

 

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v3.24.1.1.u2

Document And Entity Information	May 16, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 16, 2024
Entity Registrant Name	LM FUNDING AMERICA, INC.
Entity Central Index Key	0001640384
Entity Emerging Growth Company	false
Entity 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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