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Lm Funding America, Inc. (LMFA) SEC Filing 8-K Material Event for the period ending Monday, May 16, 2022

Lm Funding America, Inc.

CIK: 1640384 Ticker: LMFA

 

 

Exhibit 99.1

LM Funding America, Inc.

Reports First Quarter 2022 Financial Results

 

 

TAMPA, FL   May 16, 2022 – 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 has expanded into the cryptocurrency mining business, today announced its financial results for the three months ended March 31, 2022.

 

Financial Highlights for the Three Month Period Ended March 31, 2022:

 

 

Paid an additional $7.1 million in first quarter to Bitmain for the 5,046 machines on order, of which 841 have been delivered, and anticipate shipments of 841 machines per month from June 2022 through October 2022.

 

Cash position of $24.5 million as of March 31, 2022.

 

The Company had $23.9 million in deposits on mining machines.

 

Net equity per share on March 31, 2022 was $4.48 (calculated as stockholders’ equity divided by 13,091,955 shares outstanding as of March 31, 2022).

 

Revenues increased to $191,000 for the quarter ended March 31, 2022 as compared with $177,000 for the comparable quarter in 2021.

 

Net cash used by operating activities was approximately $528,000 for the first quarter 2022.

 

Net loss attributable to LM Funding for the first quarter of 2022 was $5.7 million, which includes $3.6 million of stock option/compensation expense and a realized loss on securities of $0.4 million, versus net income of $4.4 million for the first quarter of 2021, which included a $5.7 million realized gain on securities.

“We are excited to receive our first shipments of mining machines from Bitmain and look forward to generating our first Bitcoin anticipated in the third quarter of 2022,” stated Mr. Bruce Rodgers, Chief Executive Officer and Chairman of LM Funding.  “We expect the recent downturn in Bitcoin pricing may provide us with pricing discounts on machines we currently have under contract as well as opportunities to purchase additional machines at lower prices.”

On April 21, 2022, LMF Acquisition Opportunities, Inc. (“LMAO”) entered into an Agreement and Plan of Merger with LMF Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of LMAO, and SeaStar Medical, Inc., a Delaware corporation.

 

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. Important factors which could materially affect our results and our future performance include, without limitation, our ability to implement our plan to develop and grow a cryptocurrency mining business specializing in Bitcoin,our ability to purchase defaulted consumer receivables at appropriate prices, competition to acquire such receivables, our dependence upon third party law firms to service our accounts, our ability to obtain funds to purchase receivables, ability to manage growth or declines in the business, changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer receivables, the impact of class action suits and other litigation, our ability to keep our software systems

1

 


 

 

updated to operate our business, our ability to employ and retain qualified employees, our ability to establish and maintain internal accounting controls, changes in the credit or capital markets, changes in interest rates, deterioration in economic conditions, and negative press regarding the debt collection industry which may have a negative impact on a debtor’s willingness to pay the debt we acquire, as well as other factors set forth under “Risk Factors” in our most recent Annual Report on Form 10-K and our 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 M. Rodgers, Chairman and CEO

LM Funding America, Inc.

Tel (813) 222-8996

investors@lmfunding.com

 

 

 


2

 


 

 

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS 

 

 

For the Three Months

Ended March 31,

 

 

 

 

2022

 

 

2021

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Interest on delinquent association fees

 

$

101,268

 

 

$

77,444

 

 

Administrative and late fees

 

 

16,708

 

 

 

15,071

 

 

Recoveries in excess of cost - special product

 

 

17,365

 

 

 

29,473

 

 

Underwriting and other revenues

 

 

16,791

 

 

 

22,703

 

 

Rental revenue

 

 

38,872

 

 

 

31,917

 

 

Total revenues

 

 

191,004

 

 

 

176,608

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Staff costs and payroll

 

 

4,292,197

 

 

 

1,301,981

 

 

Professional fees

 

 

774,820

 

 

 

482,943

 

 

Settlement costs with associations

 

 

160

 

 

 

-

 

 

Selling, general and administrative

 

 

114,920

 

 

 

99,769

 

 

Recovery of cost from related party receivable

 

 

-

 

 

 

(10,000

)

 

Real estate management and disposal

 

 

31,481

 

 

 

18,290

 

 

Depreciation and amortization

 

 

3,094

 

 

 

1,696

 

 

Collection costs

 

 

(3,820

)

 

 

2,048

 

 

Other operating expenses

 

 

8,384

 

 

 

7,545

 

 

Total operating expenses

 

 

5,221,236

 

 

 

1,904,272

 

 

Operating loss

 

 

(5,030,232

)

 

 

(1,727,664

)

 

Realized gain (loss) on securities

 

 

(395,181

)

 

 

5,671,464

 

 

Unrealized gain on convertible debt security

 

 

288,320

 

 

 

-

 

 

Unrealized gain on marketable securities

 

 

130

 

 

 

-

 

 

Unrealized gain (loss) on investment and equity securities

 

 

(986,399

)

 

 

595,392

 

 

Digital assets other income

 

 

4,366

 

 

 

-

 

 

Interest income

 

 

98,370

 

 

 

13,055

 

 

Interest expense

 

 

-

 

 

 

(464

)

 

Dividend income

 

 

1,375

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(6,019,251

)

 

 

4,551,783

 

 

Income tax expense

 

 

-

 

 

 

(3,484

)

 

Net income (loss)

 

 

(6,019,251

)

 

 

4,548,299

 

 

Less: Net income (loss) attributable to non-controlling interest

 

 

291,200

 

 

 

(171,866

)

 

Net income (loss) attributable to LM Funding America Inc.

 

$

(5,728,051

)

 

$

4,376,433

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share:

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share - net income (loss) - attributable to LM Funding

 

$

(0.44

)

 

$

0.87

 

 

Diluted income (loss) per common share - net income (loss) - attributable to LM Funding

 

$

(0.44

)

 

$

0.80

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

 

13,060,736

 

 

 

5,047,498

 

 

Diluted

 

 

13,060,736

 

 

 

5,439,398

 

 

 


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LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 

 

 

March 31, 2022

 

 

December 31,

2021

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

24,536,467

 

 

$

32,559,185

 

Finance receivables:

 

 

 

 

 

 

 

 

Original product - net

 

 

20,543

 

 

 

13,993

 

Special product - New Neighbor Guaranty program, net of allowance for credit losses of

 

 

16,148

 

 

 

14,200

 

Short-term investments - convertible debt securities (Note 7)

 

 

845,424

 

 

 

539,351

 

Marketable securities (Note 7)

 

 

308,950

 

 

 

2,132,051

 

Short-term investments - debt security (Note 7)

 

 

2,106,082

 

 

 

2,000,000

 

Prepaid expenses and other assets

 

 

944,464

 

 

 

1,251,852

 

Income tax receivable (Note 4)

 

 

143,822

 

 

 

-

 

Note receivable from related party (Note 7)

 

 

310,000

 

 

 

-

 

Digital assets, net (Note 9)

 

 

504,366

 

 

 

-

 

Current assets

 

 

29,736,266

 

 

 

38,510,632

 

Fixed assets, net

 

 

14,820

 

 

 

17,914

 

Real estate assets owned

 

 

80,057

 

 

 

80,057

 

Operating lease - right of use assets (Note 5)

 

 

337,413

 

 

 

59,969

 

Long-term investments - equity securities (Note 7)

 

 

949,754

 

 

 

1,973,413

 

Investments in unconsolidated affiliates (Note 7)

 

 

4,713,390

 

 

 

4,676,130

 

Deposit on mining equipment (Note 8)

 

 

23,893,672

 

 

 

16,775,100

 

Other assets

 

 

10,726

 

 

 

10,726

 

Long-term assets

 

 

29,999,832

 

 

 

23,593,309

 

Total assets

 

$

59,736,098

 

 

$

62,103,941

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

325,489

 

 

 

463,646

 

Note payable - short-term (Note 3)

 

 

57,344

 

 

 

114,688

 

Due to related party (Note 2)

 

 

373,800

 

 

 

121,220

 

Current portion of lease liability (Note 5)

 

 

90,072

 

 

 

68,002

 

Income tax payable (Note 4)

 

 

-

 

 

 

326,178

 

Other liabilities

 

 

1,725

 

 

 

-

 

Total current liabilities

 

 

848,430

 

 

 

1,093,734

 

Lease liability - long-term (Note 5)

 

 

248,475

 

 

 

-

 

Long-term liabilities

 

 

248,475

 

 

 

-

 

Total liabilities

 

 

1,096,905

 

 

 

1,093,734

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of March 31, 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 March 31, 2022 and December 31, 2021, respectively

 

 

13,092

 

 

 

13,018

 

Additional paid-in capital

 

 

78,173,269

 

 

 

74,525,106

 

Accumulated deficit

 

 

(19,505,057

)

 

 

(13,777,006

)

Total stockholders’ equity

 

 

58,681,304

 

 

 

60,761,118

 

Non-controlling interest

 

 

(42,111

)

 

 

249,089

 

Total stockholders’ equity

 

 

58,639,193

 

 

 

61,010,207

 

Total liabilities and stockholders’ equity

 

$

59,736,098

 

 

$

62,103,941

 

 


4

 


 

 

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

 

 

For the Three Months

Ended March 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(6,019,251

)

 

$

4,548,299

 

Adjustments to reconcile net loss to cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,094

 

 

 

1,696

 

Right to use non cash lease expense

 

 

23,343

 

 

 

25,808

 

Stock compensation

 

 

329,500

 

 

 

-

 

Stock option expense

 

 

3,318,737

 

 

 

-

 

Accrued investment income

 

 

(96,657

)

 

 

(12,784

)

Digital assets other income

 

 

(4,366

)

 

 

 

 

Gain on deconsolidation of  affiliate

 

 

-

 

 

 

(43,623

)

Unrealized gain on convertible debt security

 

 

(288,320

)

 

 

-

 

Unrealized gain on marketable securities

 

 

(130

)

 

 

(595,392

)

Unrealized loss on investment and equity securities

 

 

986,399

 

 

 

-

 

Realized (gain) loss on securities

 

 

395,181

 

 

 

(5,671,464

)

Proceeds from securities

 

 

1,428,050

 

 

 

21,218,918

 

Investment in convertible note receivable converted into marketable security

 

 

-

 

 

 

(15,547,454

)

Change in assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

280,208

 

 

 

710,163

 

Digital assets, net

 

 

(500,000

)

 

 

-

 

Accounts payable and accrued expenses

 

 

(136,430

)

 

 

157,514

 

Advances (repayments) from related party

 

 

252,580

 

 

 

200,749

 

Lease liability payments

 

 

(30,242

)

 

 

(24,971

)

Income tax payable

 

 

(326,178

)

 

 

3,484

 

Income tax receivable

 

 

(143,822

)

 

 

-

 

Net cash provided by (used in) operating activities

 

 

(528,304

)

 

 

4,970,943

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Net collections of finance receivables - original product

 

 

(6,550

)

 

 

14,206

 

Net collections of finance receivables - special product

 

 

(1,948

)

 

 

(1,020

)

Payments for real estate assets owned

 

 

-

 

 

 

(62,432

)

Deposit for mining equipment

 

 

(7,118,572

)

 

 

-

 

Investment in convertible note receivable

 

 

-

 

 

 

(1,666,500

)

Loan to purchase securities

 

 

-

 

 

 

1,784,250

 

Investment in note receivable - related party

 

 

(310,000

)

 

 

-

 

Repayment of loan to purchase securities

 

 

-

 

 

 

(1,784,250

)

Investment in unconsolidated affiliate

 

 

-

 

 

 

(5,738,000

)

Net cash (used in) provided by investing activities

 

 

(7,437,070

)

 

 

(7,453,746

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Principal repayments

 

 

-

 

 

 

(343,687

)

Insurance financing repayments

 

 

(57,344

)

 

 

(468,061

)

Exercise of warrants

 

 

-

 

 

 

9,544,623

 

Net cash provided by (used in) financing activities

 

 

(57,344

)

 

 

8,732,875

 

NET INCREASE (DECREASE) IN CASH

 

 

(8,022,718

)

 

 

6,250,072

 

CASH - BEGINNING OF YEAR

 

 

32,559,185

 

 

 

11,552,943

 

CASH - END OF YEAR

 

$

24,536,467

 

 

$

17,803,015

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION

 

 

 

 

 

 

 

 

ROU assets and operating lease obligation recognized

 

$

300,787

 

 

$

-

 

SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$

470,000

 

 

 

-

 

 

 

 

 

5

 

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Ticker: LMFA
CIK: 1640384
Form Type: 8-K Corporate News
Accession Number: 0001564590-22-020445
Submitted to the SEC: Mon May 16 2022 5:14:28 PM EST
Accepted by the SEC: Mon May 16 2022
Period: Monday, May 16, 2022
Industry: Finance Services
Events:
  1. Earnings Release
  2. Financial Exhibit

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