TAMPA, Fla., March 31, 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 is
expanding into the cryptocurrency mining business, today announced
its financial results for the full year ended December 31, 2021.
reposition our company into mining Bitcoin while also improving our
capitalization structure and balance sheet
"In 2021, we took critical steps to reposition our company into
mining Bitcoin while also improving our capitalization structure
and balance sheet," said Bruce
Rodgers, LM Funding's Chief Executive Officer. "We were
successful in closing a $31.5 million
equity offering to fund our investment in Bitcoin mining machines
and infrastructure."
Full Year 2021 Highlights:
- Generated approximately $31.5
million in net proceeds from an equity offering that is
being used to fund our digital asset expansion for which we ordered
5,046 ASIC mining machines from Bitmain for approximately
$31.6 million and hosting equipment
from Bit5ive for approximately $3.1
million. We currently anticipate the ASIC mining machines to
be delivered sometime in the 2nd quarter of 2022 subject
to issues surrounding worldwide logistics impacted by COVID-19 and
the war in Ukraine.
- We also received approximately $10.2
million from warrant holders upon the exercise into common
shares.
- Operating revenues totaled approximately $0.9 million as compared to approximately
$1.26 million for prior year.
- Operating loss increased to approximately $8.4 million as compared to approximately
$4.1 million for the prior year due
mainly to a $3 million increase in
compensation, including stock compensation expense and bonuses, an
approximately $0.4 million increase
in professional fees and an approximately $0.2 million reduction in the recoupment of a
previous bad debt write-off associated with a related party.
- The Company engaged in several opportunistic specialty
financing solutions which contributed to net income from continuing
operations of approximately $5.0
million as compared to an approximately $4.1 million loss for the prior year. This
improvement in operations was due in part to:
-
- An innovative troubled financing solution that resulted in the
realized gain of approximately $13.8
million on the sale of securities.
- Realized gain of approximately $0.5
million from the sale of digital assets, which included
Bitcoin.
- Unrealized gain of approximately $0.9
million for investment in LMF Acquisition Opportunities Inc.
a special purpose acquisition corporation.
- Net income attributable to LM Funding America Inc was
approximately $4.8 million after
deducting $0.2 million for the net
income attributable to a non-controlling interest as compared to a
net loss of approximately $4.0
million for the prior year.
On October 19, 2021, the Company
closed an underwritten public offering that included the
underwriters' exercise of its option to purchase additional shares,
which resulted in the issuance of approximately 7.26 million shares
of its common stock and common warrants to up to approximately 7.48
million shares of the Company's common stock. At closing, LM
Funding received net proceeds from the offering of approximately
$31.5 million.
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. 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. 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 Rodgers,
Chairman and CEO
LM Funding America,
Inc.
Tel (813) 222-8996
investors@lmfunding.com
|
|
LM FUNDING
AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Years ended
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
Interest on delinquent
association fees
|
|
$
|
471,923
|
|
|
$
|
623,790
|
|
Administrative and
late fees
|
|
|
69,369
|
|
|
|
101,993
|
|
Recoveries in excess
of cost - special product
|
|
|
95,904
|
|
|
|
214,558
|
|
Underwriting fees and
other revenues
|
|
|
120,176
|
|
|
|
116,430
|
|
Rental
revenue
|
|
|
141,569
|
|
|
|
206,831
|
|
Total
revenues
|
|
|
898,941
|
|
|
|
1,263,602
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Staff costs &
payroll
|
|
|
6,477,042
|
|
|
|
3,366,034
|
|
Professional
fees
|
|
|
2,271,808
|
|
|
|
1,799,595
|
|
Settlement costs with
associations
|
|
|
2,000
|
|
|
|
31,885
|
|
Selling, general and
administrative
|
|
|
417,963
|
|
|
|
351,234
|
|
Real estate management
and disposal
|
|
|
132,283
|
|
|
|
211,288
|
|
Depreciation and
amortization
|
|
|
11,087
|
|
|
|
16,930
|
|
Collection
costs
|
|
|
4,459
|
|
|
|
(29,932)
|
|
Recovery of cost from
related party receivable
|
|
|
(200,000)
|
|
|
|
(500,000)
|
|
Provision for credit
losses
|
|
|
(10,000)
|
|
|
|
50,800
|
|
Other
operating
|
|
|
224,678
|
|
|
|
17,778
|
|
Total operating
expenses
|
|
|
9,331,320
|
|
|
|
5,315,612
|
|
|
|
|
|
|
|
|
|
|
Operating loss from
continuing operations
|
|
|
(8,432,379)
|
|
|
|
(4,052,010)
|
|
Realized gain on
securities
|
|
|
13,817,863
|
|
|
|
-
|
|
Unrealized loss on
convertible debt security
|
|
|
(407,992)
|
|
|
|
-
|
|
Unrealized loss on
marketable securities
|
|
|
(1,387,590)
|
|
|
|
-
|
|
Unrealized gain on
investment and equity securities
|
|
|
886,543
|
|
|
|
-
|
|
Realized gain on
digital assets
|
|
|
502,657
|
|
|
|
-
|
|
Impairment loss on
digital assets
|
|
|
(19,945)
|
|
|
|
-
|
|
Interest
income
|
|
|
211,427
|
|
|
|
-
|
|
Interest
expense
|
|
|
(653)
|
|
|
|
(7,189)
|
|
Dividend
income
|
|
|
2,113
|
|
|
|
-
|
|
Gain on forgiveness of
note payable
|
|
|
157,250
|
|
|
|
-
|
|
Income (loss) before
income taxes
|
|
$
|
5,329,294
|
|
|
$
|
(4,059,199)
|
|
Income tax
expense
|
|
|
(326,178)
|
|
|
|
-
|
|
Net income (loss) from
continuing operations
|
|
$
|
5,003,116
|
|
|
$
|
(4,059,199)
|
|
Gain from operations
of discontinued operations
|
|
|
-
|
|
|
|
16,428
|
|
Net income
(loss)
|
|
|
5,003,116
|
|
|
|
(4,042,771)
|
|
Less: Net income
(loss) attributable to non-controlling interest
|
|
|
(243,898)
|
|
|
|
1,309
|
|
Net income (loss)
attributable to LM Funding America Inc.
|
|
$
|
4,759,218
|
|
|
$
|
(4,041,462)
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per common share continuing operations
|
|
$
|
0.70
|
|
|
$
|
(2.50)
|
|
Basic earnings (loss)
per common share discontinuing operations
|
|
|
-
|
|
|
|
0.01
|
|
Basic income (loss)
per common share
|
|
$
|
0.70
|
|
|
$
|
(2.49)
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per common share continuing operations
|
|
$
|
0.60
|
|
|
$
|
(2.50)
|
|
Diluted earnings
(loss) per common share discontinuing operations
|
|
|
-
|
|
|
|
0.01
|
|
Diluted income (loss)
per common share
|
|
$
|
0.60
|
|
|
$
|
(2.49)
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
6,828,704
|
|
|
|
1,622,911
|
|
Diluted
|
|
|
7,927,255
|
|
|
|
1,622,911
|
|
LM FUNDING
AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
32,559,185
|
|
|
$
|
11,552,943
|
|
Finance
receivables:
|
|
|
|
|
|
|
|
|
Original product (Note
2)
|
|
|
13,993
|
|
|
|
116,017
|
|
Special product - New
Neighbor Guaranty program, net of allowance for credit losses of
(Note 3)
|
|
|
14,200
|
|
|
|
52,757
|
|
Short-term
investments - convertible debt securities (Note 5)
|
|
|
539,351
|
|
|
|
-
|
|
Marketable securities
(Note 5)
|
|
|
2,132,051
|
|
|
|
-
|
|
Short-term
investments - note receivable (Note 5)
|
|
|
2,000,000
|
|
|
|
-
|
|
Prepaid expenses and
other assets
|
|
|
1,251,852
|
|
|
|
399,124
|
|
Current
assets
|
|
|
38,510,632
|
|
|
|
12,120,841
|
|
|
|
|
|
|
|
|
|
|
Fixed assets,
net
|
|
|
17,914
|
|
|
|
6,171
|
|
Real estate assets
owned (Note 6)
|
|
|
80,057
|
|
|
|
18,767
|
|
Operating lease -
right of use assets (Note 9)
|
|
|
59,969
|
|
|
|
160,667
|
|
Long-term investments
- equity securities in affiliates (Note 5)
|
|
|
1,973,413
|
|
|
|
-
|
|
Investments in
unconsolidated affiliates (Note 5)
|
|
|
4,676,130
|
|
|
|
-
|
|
Deposit on mining
equipment (Note 7)
|
|
|
16,775,100
|
|
|
|
-
|
|
Other
assets
|
|
|
10,726
|
|
|
|
10,984
|
|
Long-term
assets
|
|
|
23,593,309
|
|
|
|
196,589
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
62,103,941
|
|
|
$
|
12,317,430
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Note payable (Note
8)
|
|
|
114,688
|
|
|
|
96,257
|
|
Accounts payable and
accrued expenses
|
|
|
463,646
|
|
|
|
237,033
|
|
Due to related party
payable (Note 12)
|
|
|
121,220
|
|
|
|
158,399
|
|
Income tax payable
(Note 10)
|
|
|
326,178
|
|
|
|
-
|
|
Current portion of
lease liability (Note 9)
|
|
|
68,002
|
|
|
|
103,646
|
|
Current
liabilities
|
|
|
1,093,734
|
|
|
|
595,335
|
|
|
|
|
|
|
|
|
|
|
Notes payable -
long-term (Note 8)
|
|
|
-
|
|
|
|
185,785
|
|
Lease liability -
long-term (Note 9)
|
|
|
-
|
|
|
|
68,002
|
|
Long-term
liabilities
|
|
|
-
|
|
|
|
253,787
|
|
Total
liabilities
|
|
|
1,093,734
|
|
|
|
849,122
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(Note 11)
|
|
|
|
|
|
|
|
|
Preferred stock, par
value $.001; 150,000,000 shares authorized; no shares issued and
outstanding as of December 31, 2021 and December 31, 2020,
respectively
|
|
|
-
|
|
|
|
-
|
|
Common stock, par
value $.001; 350,000,000 shares authorized; 13,017,943 and
3,083,760 shares issued and outstanding as of December 31, 2021 and
December 31, 2020, respectively.
|
|
|
13,018
|
|
|
|
3,083
|
|
Additional paid-in
capital
|
|
|
74,525,106
|
|
|
|
29,996,258
|
|
Accumulated
deficit
|
|
|
(13,777,006)
|
|
|
|
(18,536,224)
|
|
Total LM Funding
America stockholders' equity
|
|
|
60,761,118
|
|
|
|
11,463,117
|
|
Non-controlling
interest
|
|
|
249,089
|
|
|
|
5,191
|
|
Total stockholders'
equity
|
|
|
61,010,207
|
|
|
|
11,468,308
|
|
Total liabilities and
stockholders' equity
|
|
$
|
62,103,941
|
|
|
$
|
12,317,430
|
|
LM FUNDING
AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Years ended
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
5,003,116
|
|
|
|
(4,042,771)
|
|
Adjustments to
reconcile net income (loss) to cash provided by (used in) operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
|
1,383
|
|
|
$
|
11,143
|
|
Right to use asset
expense
|
|
|
100,698
|
|
|
|
99,593
|
|
Stock
compensation
|
|
|
219,667
|
|
|
|
125,450
|
|
Stock option
expense
|
|
|
2,323,118
|
|
|
|
14,939
|
|
Stock compensation -
employees
|
|
|
292,500
|
|
|
|
—
|
|
Accrued investment
income
|
|
|
(74,520)
|
|
|
|
—
|
|
Recovery of reserve
from related party receivable
|
|
|
—
|
|
|
|
(300,000)
|
|
Reserve for
units
|
|
|
—
|
|
|
|
30,000
|
|
Debt
forgiveness
|
|
|
(157,250)
|
|
|
|
—
|
|
Gain on
deconsolidation of affiliate
|
|
|
(43,623)
|
|
|
|
—
|
|
Impairment loss on
digital assets
|
|
|
19,945
|
|
|
|
—
|
|
Unrealized loss on
convertible debt security
|
|
|
407,992
|
|
|
|
—
|
|
Unrealized loss on
marketable securities
|
|
|
1,387,590
|
|
|
|
—
|
|
Unrealized gain on
investment and equity securities
|
|
|
(886,543)
|
|
|
|
—
|
|
Realized gain on
securities
|
|
|
(13,817,863)
|
|
|
|
—
|
|
Realized gain on sale
of digital assets
|
|
|
(502,657)
|
|
|
|
—
|
|
Proceeds from
securities
|
|
|
30,400,433
|
|
|
|
—
|
|
Investment in
convertible note receivable converted into marketable
security
|
|
|
(16,582,571)
|
|
|
|
—
|
|
Investment in
convertible note receivable
|
|
|
(5,000,000)
|
|
|
|
—
|
|
Convertible debt and
interest converted into marketable securities
|
|
|
4,231,758
|
|
|
|
—
|
|
Investments in
marketable security
|
|
|
(3,651,400)
|
|
|
|
—
|
|
Gain on sale of fixed
assets
|
|
|
—
|
|
|
|
(16,428)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses and
other assets
|
|
|
(845,853)
|
|
|
|
(61,303)
|
|
Advances (repayments)
to related party
|
|
|
89,235
|
|
|
|
583,444
|
|
Accounts payable and
accrued expenses
|
|
|
349,644
|
|
|
|
126,950
|
|
Lease liability
payments
|
|
|
(103,646)
|
|
|
|
(94,235)
|
|
Deferred taxes and
taxes payable
|
|
|
326,178
|
|
|
|
—
|
|
Net cash provided by
(used in) operating activities
|
|
|
3,487,331
|
|
|
|
(3,523,218)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net collections of
finance receivables - original product
|
|
|
102,024
|
|
|
|
127,694
|
|
Net collections of
finance receivables - special product
|
|
|
38,557
|
|
|
|
76,515
|
|
Cash paid to purchase
fixed assets
|
|
|
(14,411)
|
|
|
|
(1,286)
|
|
Net cash payment for
IIU disposal
|
|
|
—
|
|
|
|
(246,914)
|
|
Investment in note
receivable
|
|
|
(2,000,000)
|
|
|
|
—
|
|
Investment in digital
assets
|
|
|
(1,419,958)
|
|
|
|
—
|
|
Proceeds from sale of
digital assets
|
|
|
1,902,670
|
|
|
|
—
|
|
Loan to purchase
securities
|
|
|
1,784,250
|
|
|
|
—
|
|
Repayment of loan to
purchase securities
|
|
|
(1,784,250)
|
|
|
|
—
|
|
Deposit for mining
equipment
|
|
|
(16,775,100)
|
|
|
|
—
|
|
Investment in
unconsolidated affiliate
|
|
|
(5,738,000)
|
|
|
|
—
|
|
Proceeds from
investment in note receivable
|
|
|
—
|
|
|
|
1,500,000
|
|
(Payments)/proceeds
for real estate assets owned
|
|
|
(60,006)
|
|
|
|
(5,423)
|
|
Net cash provided by
(cash used) in investing activities
|
|
|
(23,964,224)
|
|
|
|
1,450,586
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from
borrowings
|
|
|
—
|
|
|
|
185,785
|
|
Loan principal and
insurance financing repayments
|
|
|
(220,363)
|
|
|
|
(165,798)
|
|
Exercise of
warrants
|
|
|
10,247,124
|
|
|
|
3,081,730
|
|
Proceeds from stock
subscription
|
|
|
31,456,374
|
|
|
|
9,447,535
|
|
Investment in
subsidiary
|
|
|
—
|
|
|
|
6,500
|
|
Net cash provided by
financing activities
|
|
|
41,483,135
|
|
|
|
12,555,752
|
|
NET INCREASE IN
CASH
|
|
|
21,006,242
|
|
|
|
10,483,120
|
|
CASH - BEGINNING OF
YEAR
|
|
|
11,552,943
|
|
|
|
1,069,823
|
|
CASH - END OF
YEAR
|
|
$
|
32,559,185
|
|
|
$
|
11,552,943
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASHFLOW INFORMATION
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
1,892
|
|
|
$
|
7,189
|
|
SUPPLEMENTAL
DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Insurance
financing
|
|
|
210,260
|
|
|
|
192,514
|
|
View original
content:https://www.prnewswire.com/news-releases/lm-funding-america-inc-reports-annual-2021-financial-results-301515346.html
SOURCE LM Funding America