In a release issued under the same headline earlier today
by LM Funding America, Inc. (NASDAQ:LMFA), please note
the Investor Conference Call date should read "November 18th,
2022" rather than "November 21, 2022" as originally
stated. The corrected release follows:
LM Funding America, Inc. Reports
Financial Results and Provides Business Update for the Third
Quarter of 2022
Expected to Have Approximately 2,700 Miners
Mining by Year’s End, Up From 848 Machines as of September 30,
2022
Reports working capital of $15.5 million and
stockholders’ equity of $62.2 million ($4.75 per share) as of
September 30, 2022
Conference Call to Be Held Today at 11:00 am
ET
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 September 30, 2022.
Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We
took another step forward on the execution of our Bitcoin mining
strategy, and began actively mining Bitcoin in September 2022. We
currently have 1,200 miners actively mining Bitcoin as of November
15, 2022, and currently believe that number will reach
approximately 2,700 by year’s end. Previously, we had anticipated
having more than 5,000 miners operational by the fourth quarter of
2022, but we have experienced issues with one of our third-party
hosting companies. We are now looking for alternative solutions to
host approximately 2,690 miners.”
“As of November 15, 2022, we have production capacity of
approximately 120 petahash. Production is expected to increase to
270 petahash by year’s end when we hope to have the approximately
2,700 miners energized. In addition, during the third quarter, we
opportunistically took advantage of lower pricing on mining
machines and purchased four hundred additional S19J Pros and two
hundred S19XP miners, which we expect to come online between now
and March 31, 2023. We will continue to identify and take advantage
of opportunities to purchase additional miners at favorable prices
in order to continue to maximize long-term shareholder value,”
concluded Mr. Rogers.
Richard Russell, Chief Financial Officer of LM Funding, added,
“Our balance sheet remains strong, and at September 30, 2022, we
had $10.2 million in cash, working capital of $15.5 million and
shareholders’ equity of $62.2 million. As sponsor and founding
stockholder of LMF Acquisition Opportunities, Inc. (“LMAO”), a
special purpose acquisition company (SPAC), we are pleased to
report that the merger with SeaStar Medical successfully was
consummated on October 28, 2022.”
Financial Highlights for the Three Months ended
September 30, 2022
- Cash of $10.2 million and working capital of $15.5 million as
of September 30, 2022
- Total stockholders’ equity of $62.2 million and net equity per
share of $4.75 as of September 30, 2022 (calculated as
stockholders’ equity divided by 13,091,883 shares outstanding as of
September 30, 2022)
- Revenues for the quarter ended September 30, 2022, were
approximately $188,000 as compared to $224,000 for the comparable
quarter in 2021, due to the shift in focus to Bitcoin mining, and
timing of Bitcoin mining late in the quarter, as well as the timing
of association fee payoffs.
Investor Conference Call
LM Funding will host a conference call today, November 18th,
2022, at 11:00 A.M. Eastern Time to discuss the Company’s financial
results for the third quarter ended September 30, 2022, 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 956556. A webcast of
the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2917/47146 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 company’s the website at
https://ir.lmfunding.com/news-events/ir-calendar through November
24, 2023. A telephone replay of the call will be available
approximately one hour following the call, through December 5,
2022, 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 47146.
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 StatementsThis 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 COVID-19 pandemic,
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, and negative press regarding the debt collection industry.
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, LLCTel: (212) 671-1021Email:
LMFA@crescendo-ir.com
LM Funding America, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
|
|
September 30,2022 |
|
|
December 31,2021 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Cash |
|
$ |
10,175,211 |
|
|
$ |
32,559,185 |
|
Finance
receivables |
|
|
20,709 |
|
|
|
28,193 |
|
Short-term investments - convertible debt securities |
|
|
- |
|
|
|
539,351 |
|
Marketable securities |
|
|
24,220 |
|
|
|
2,132,051 |
|
Short-term investments - debt securities |
|
|
2,619,292 |
|
|
|
2,000,000 |
|
Prepaid
expenses and other assets |
|
|
1,205,719 |
|
|
|
1,251,852 |
|
Note
receivable from related party |
|
|
2,785,000 |
|
|
|
- |
|
Digital
assets |
|
|
616,257 |
|
|
|
- |
|
Current assets |
|
|
17,446,408 |
|
|
|
38,510,632 |
|
Fixed
assets, net |
|
|
21,975,960 |
|
|
|
17,914 |
|
Real
estate assets owned |
|
|
80,057 |
|
|
|
80,057 |
|
Operating lease - right of use assets |
|
|
289,468 |
|
|
|
59,969 |
|
Long-term investments - equity securities |
|
|
322,246 |
|
|
|
1,973,413 |
|
Investments in unconsolidated affiliates |
|
|
17,362,125 |
|
|
|
4,676,130 |
|
Deposits
on mining equipment and hosting services |
|
|
10,467,721 |
|
|
|
16,775,100 |
|
Other
assets |
|
|
10,726 |
|
|
|
10,726 |
|
Long-term assets |
|
|
50,508,303 |
|
|
|
23,593,309 |
|
Total assets |
|
$ |
67,954,711 |
|
|
$ |
62,103,941 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
636,369 |
|
|
|
463,646 |
|
Note
payable - short-term |
|
|
- |
|
|
|
114,688 |
|
Due to
related parties |
|
|
75,615 |
|
|
|
121,220 |
|
Current
portion of lease liability |
|
|
90,004 |
|
|
|
68,002 |
|
Income
tax payable |
|
|
1,167,856 |
|
|
|
326,178 |
|
Total
current liabilities |
|
|
1,969,844 |
|
|
|
1,093,734 |
|
Lease
liability - long-term |
|
|
203,211 |
|
|
|
- |
|
Long-term liabilities |
|
|
203,211 |
|
|
|
- |
|
Total liabilities |
|
|
2,173,055 |
|
|
|
1,093,734 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, par value $.001; 150,000,000 shares authorized; no
shares issued and outstanding as of September 30, 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
September 30, 2022 and December 31, 2021, respectively |
|
|
13,092 |
|
|
|
13,018 |
|
Additional paid-in capital |
|
|
85,469,749 |
|
|
|
74,525,106 |
|
Accumulated deficit |
|
|
(23,323,573 |
) |
|
|
(13,777,006 |
) |
Total stockholders’ equity |
|
|
62,159,268 |
|
|
|
60,761,118 |
|
Non-controlling interest |
|
|
3,622,388 |
|
|
|
249,089 |
|
Total stockholders’ equity |
|
|
65,781,656 |
|
|
|
61,010,207 |
|
Total liabilities and stockholders’ equity |
|
$ |
67,954,711 |
|
|
$ |
62,103,941 |
|
LM Funding America, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
|
|
For the Three MonthsEnded September
30, |
|
|
For the Nine MonthsEnded September
30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on delinquent association fees |
|
$ |
57,585 |
|
|
$ |
129,439 |
|
|
$ |
270,993 |
|
|
$ |
269,556 |
|
Administrative and late fees |
|
|
14,717 |
|
|
|
14,642 |
|
|
|
51,123 |
|
|
|
46,574 |
|
Recoveries in excess of cost - special product |
|
|
20,171 |
|
|
|
14,000 |
|
|
|
73,526 |
|
|
|
61,052 |
|
Underwriting and other revenues |
|
|
12,362 |
|
|
|
28,784 |
|
|
|
55,278 |
|
|
|
86,981 |
|
Rental revenue |
|
|
40,788 |
|
|
|
36,759 |
|
|
|
120,240 |
|
|
|
103,264 |
|
Digital mining revenues, net |
|
|
42,157 |
|
|
|
- |
|
|
|
42,157 |
|
|
|
- |
|
Total revenues |
|
|
187,780 |
|
|
|
223,624 |
|
|
|
613,317 |
|
|
|
567,427 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Digital
mining cost of revenues (exclusive of depreciation and amortization
shown below) |
|
|
38,960 |
|
|
|
- |
|
|
|
38,960 |
|
|
|
- |
|
Staff costs and payroll |
|
|
4,297,540 |
|
|
|
1,874,798 |
|
|
|
12,886,432 |
|
|
|
3,422,819 |
|
Professional fees |
|
|
714,730 |
|
|
|
497,942 |
|
|
|
2,520,981 |
|
|
|
1,340,909 |
|
Settlement costs with associations |
|
|
- |
|
|
|
- |
|
|
|
160 |
|
|
|
- |
|
Selling, general and administrative |
|
|
209,328 |
|
|
|
106,895 |
|
|
|
446,519 |
|
|
|
302,679 |
|
Provision for credit losses |
|
|
- |
|
|
|
- |
|
|
|
500 |
|
|
|
(10,000 |
) |
Recovery of cost from related party receivable |
|
|
- |
|
|
|
(100,000 |
) |
|
|
- |
|
|
|
(200,000 |
) |
Real estate management and disposal |
|
|
22,558 |
|
|
|
29,878 |
|
|
|
76,453 |
|
|
|
77,646 |
|
Depreciation and amortization |
|
|
38,617 |
|
|
|
4,482 |
|
|
|
43,718 |
|
|
|
9,476 |
|
Collection costs |
|
|
5,037 |
|
|
|
(1,410 |
) |
|
|
(6,689 |
) |
|
|
3,339 |
|
Other operating expenses |
|
|
124,405 |
|
|
|
5,801 |
|
|
|
273,798 |
|
|
|
17,415 |
|
Total operating expenses |
|
|
5,451,175 |
|
|
|
2,418,386 |
|
|
|
16,280,832 |
|
|
|
4,964,283 |
|
Operating loss |
|
|
(5,263,395 |
) |
|
|
(2,194,762 |
) |
|
|
(15,667,515 |
) |
|
|
(4,396,856 |
) |
Realized gain (loss) on securities |
|
|
- |
|
|
|
(173,282 |
) |
|
|
(349,920 |
) |
|
|
13,951,752 |
|
Realized gain on convertible debt securities |
|
|
- |
|
|
|
- |
|
|
|
287,778 |
|
|
|
- |
|
Unrealized loss on convertible debt security |
|
|
- |
|
|
|
(2,588,916 |
) |
|
|
- |
|
|
|
(87,316 |
) |
Unrealized loss on marketable securities |
|
|
(13,000 |
) |
|
|
(478,448 |
) |
|
|
(36,900 |
) |
|
|
(478,448 |
) |
Impairment loss on digital assets |
|
|
(26,634 |
) |
|
|
(23,720 |
) |
|
|
(404,341 |
) |
|
|
(23,720 |
) |
Unrealized gain (loss) on investment and equity securities |
|
|
(194,174 |
) |
|
|
(123,172 |
) |
|
|
11,034,828 |
|
|
|
1,024,714 |
|
Digital assets other income |
|
|
- |
|
|
|
- |
|
|
|
5,658 |
|
|
|
- |
|
Interest income |
|
|
85,602 |
|
|
|
77,956 |
|
|
|
264,947 |
|
|
|
164,895 |
|
Interest expense |
|
|
- |
|
|
|
(3,939 |
) |
|
|
- |
|
|
|
(653 |
) |
Dividend income |
|
|
1,125 |
|
|
|
738 |
|
|
|
3,875 |
|
|
|
738 |
|
Gain on forgiveness of note payable |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
157,251 |
|
Income
(loss) before income taxes |
|
|
(5,410,476 |
) |
|
|
(5,507,545 |
) |
|
|
(4,861,590 |
) |
|
|
10,312,357 |
|
Income
tax expense |
|
|
(1,311,678 |
) |
|
|
(12,619 |
) |
|
|
(1,311,678 |
) |
|
|
(29,883 |
) |
Net
income (loss) |
|
|
(6,722,154 |
) |
|
|
(5,520,164 |
) |
|
|
(6,173,268 |
) |
|
|
10,282,474 |
|
Less:
Net (income) loss attributable to non-controlling interest |
|
|
59,298 |
|
|
|
33,953 |
|
|
|
(3,373,299 |
) |
|
|
(284,770 |
) |
Net
income (loss) attributable to LM Funding America Inc. |
|
$ |
(6,662,856 |
) |
|
$ |
(5,486,211 |
) |
|
$ |
(9,546,567 |
) |
|
$ |
9,997,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per common share - net income (loss) -
attributable to LM Funding |
|
$ |
(0.51 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.73 |
) |
|
$ |
1.89 |
|
Diluted income (loss) per common share - net income (loss) -
attributable to LM Funding |
|
$ |
(0.51 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.73 |
) |
|
$ |
1.88 |
|
Weighted
average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,091,883 |
|
|
|
5,414,296 |
|
|
|
13,081,591 |
|
|
|
5,293,375 |
|
Diluted |
|
|
13,091,883 |
|
|
|
5,421,606 |
|
|
|
13,081,591 |
|
|
|
5,305,418 |
|
LM Funding America, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash
Flows(unaudited)
|
|
For the Nine MonthsEnded September
30, |
|
|
|
2022 |
|
|
2021 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(6,173,268 |
) |
|
$ |
10,282,474 |
|
Adjustments to reconcile net
income (loss) to cash used in operating activities |
|
|
|
|
|
|
Depreciation and amortization |
|
|
43,718 |
|
|
|
9,476 |
|
Right to use asset non cash lease expense |
|
|
71,288 |
|
|
|
75,605 |
|
Stock compensation |
|
|
988,498 |
|
|
|
- |
|
Stock option expense |
|
|
9,956,219 |
|
|
|
- |
|
Debt forgiveness |
|
|
- |
|
|
|
(157,251 |
) |
Accrued investment income |
|
|
(259,867 |
) |
|
|
(160,954 |
) |
Gain on deconsolidation of affiliate |
|
|
- |
|
|
|
(43,623 |
) |
Unrealized loss on convertible debt security |
|
|
- |
|
|
|
87,316 |
|
Unrealized loss on marketable securities |
|
|
36,900 |
|
|
|
478,448 |
|
Impairment loss on digital assts |
|
|
404,341 |
|
|
|
23,720 |
|
Unrealized gain on investment and equity securities |
|
|
(11,034,828 |
) |
|
|
(1,024,714 |
) |
Realized (gain) loss on securities |
|
|
349,920 |
|
|
|
(13,951,752 |
) |
Realized gain on convertible note securities |
|
|
(287,778 |
) |
|
|
- |
|
Investment in securities |
|
|
- |
|
|
|
(16,118,533 |
) |
Proceeds from securities |
|
|
2,565,893 |
|
|
|
30,070,285 |
|
Investment in convertible note receivable |
|
|
- |
|
|
|
(5,000,000 |
) |
Convertible note receivable converted into marketable security |
|
|
844,882 |
|
|
|
4,231,760 |
|
Investment in marketable Securities |
|
|
(844,882 |
) |
|
|
(3,958,678 |
) |
Change in assets and
liabilities |
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
807,352 |
|
|
|
(8,326 |
) |
Accounts payable and accrued expenses |
|
|
172,723 |
|
|
|
382,204 |
|
Advances (repayments) to related party |
|
|
(45,605 |
) |
|
|
103,934 |
|
Mining of digital assets |
|
|
(42,157 |
) |
|
|
- |
|
Lease liability payments |
|
|
(75,574 |
) |
|
|
(76,656 |
) |
Deferred taxes and taxes payable |
|
|
841,678 |
|
|
|
29,883 |
|
Net cash provided by
(used in) operating activities |
|
|
(1,680,547 |
) |
|
|
5,274,618 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Net collections of finance receivables - original product |
|
|
19,049 |
|
|
|
37,549 |
|
Net collections of finance receivables - special product |
|
|
(11,565 |
) |
|
|
8,450 |
|
Payments for real estate assets owned |
|
|
- |
|
|
|
(68,568 |
) |
Capital expenditures |
|
|
(15,380 |
) |
|
|
(4,207 |
) |
Deposits for mining equipment and hosting |
|
|
(16,467,402 |
) |
|
|
(1,565,625 |
) |
Investments in digital assets |
|
|
(978,441 |
) |
|
|
(1,419,958 |
) |
Loan to purchase securities |
|
|
- |
|
|
|
1,784,250 |
|
Investment in note receivable - related party |
|
|
(2,785,000 |
) |
|
|
- |
|
Investment in note receivable |
|
|
(350,000 |
) |
|
|
- |
|
Repayment of loan to purchase securities |
|
|
- |
|
|
|
(1,784,250 |
) |
Investment in unconsolidated affiliate |
|
|
- |
|
|
|
(5,738,000 |
) |
Net cash used in
investing activities |
|
|
(20,588,739 |
) |
|
|
(8,750,359 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Principal repayments |
|
|
- |
|
|
|
(28,534 |
) |
Insurance financing repayments |
|
|
(114,688 |
) |
|
|
(134,485 |
) |
Exercise of warrants |
|
|
- |
|
|
|
9,544,623 |
|
Net cash provided by
(used in) financing activities |
|
|
(114,688 |
) |
|
|
9,381,604 |
|
NET INCREASE (DECREASE) IN
CASH |
|
|
(22,383,974 |
) |
|
|
5,905,863 |
|
CASH - BEGINNING OF YEAR |
|
|
32,559,185 |
|
|
|
11,552,943 |
|
CASH - END OF
YEAR |
|
$ |
10,175,211 |
|
|
$ |
17,458,806 |
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF NON-CASHFLOW INFORMATION |
|
|
|
|
|
|
Insurance financing |
|
$ |
- |
|
|
$ |
210,260 |
|
ROU assets and operating lease
obligation recognized |
|
$ |
300,787 |
|
|
$ |
- |
|
Reclassification of mining
equipment deposit to fixed assets, net |
|
$ |
21,986,382 |
|
|
$ |
- |
|
SUPPLEMENTAL
DISCLOSURES OF CASHFLOW INFORMATION |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
1,892 |
|
Cash paid for income
taxes |
|
$ |
470,000 |
|
|
$ |
- |
|
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