TAMPA, Fla., Aug. 14, 2019 (GLOBE NEWSWIRE) -- LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or the “Company”), a technology-based specialty finance and travel insurance broker company, today announced its financial results for the second quarter ended June 30, 2019.

Bruce Rodgers, LM Funding’s Chief Executive Officer, commented, “In the second quarter, we benefited from IIU’s profitability and the stable operating performance of our specialty finance business which remains impaired by the continued strength of the Florida real estate market.  Our legacy expenses such as rent, and some continued litigation, as well as expenditures related to identifying acquisition prospects contributed to our losses.  We expect to realize substantial savings from downsizing our corporate headquarters lease and resolving litigation outcomes.  We believe the additional expenses incurred methodically identifying and developing acquisition prospects will ultimately lead to improved shareholder value.”

Second Quarter Financial Results:
For the quarter ended June 30, 2019, total operating revenues were $840,021, inclusive of $181,391 generated by IIU, compared to $877,986 in the second quarter of 2018, prior to the acquisition of IIU.  The revenue decline also reflects a decrease in rental revenue from $217,904 for the quarter ended June 30, 2018 to $72,285 for the second quarter of 2019.

Operating expenses for the second quarter of 2019 were $1.2 million, compared to $733,170 the year prior.  The prior year expenses were reduced by a one-time $200,000 insurance reimbursement for professional fees. Operating expenses for the current quarter were increased by (i) IIU acquisition expenses of approximately $46,000 which includes shareholder special meeting expenses; (ii) IIU operating expenses of about $100,000, (iii) increased rent expense of $25,000 arising from the loss of a sub tenant, and (iv) expenditures related to the pursuit of strategic business combinations of about $68,000.  In July, the Company downsized its corporate headquarters which we anticipate will reduce expenses by approximately $200,000 annually.

Net losses for the quarter ended June 30, 2019 were $450,503, compared to net income of $455,240 for the second quarter of 2018.  The profit-loss difference between the two periods is largely attributable to increased expenses and a one-time $405,000 increase to income in the second quarter of 2018 resulting from settlement of the Solaris class action.

On June 30, 2019, the Company had cash and cash equivalents of $3.1 million, compared with $3.5 million on December 31, 2018.

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 by funding a certain portion of the associations' rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments. The Company, through its IIU, Inc. subsidiary, also offers global medical insurance products for international travelers, specializing in policies covering high risk destination, emerging markets and foreign travelers coming to the United States.  All policies are fully underwritten with no claim risk remaining with the Company.

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 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
Investor Contacts:
Valter Pinto / Scott Eckstein
KCSA Strategic Communications
Tel (212) 896-1254 / (212) 896-1210
valter@kcsa.com / seckstein@kcsa.com


LM Funding America, Inc. and Subsidiaries Condensed Consolidated Balance Sheets

      
  June 30, 2019 December 31, 2018 
  (Unaudited)   
ASSETS     
Cash $  3,093,733  $  3,520,753  
Finance receivables:     
Original product - net (Note 3)    329,770     425,012  
Special product - New Neighbor Guaranty program, net of allowance for credit losses of (Note 4)    157,169     237,043  
Prepaid expenses and other assets    112,767     155,420  
Due from related party (Note 5)    -      25,507  
Fixed assets, net (Note 1)    30,328     33,818  
Real estate assets owned  (Note 1)    46,533     122,604  
Operating lease - right of use assets (Note 8)    21,833     -   
Other investments (Note 1)    -      1,507,375  
Goodwill (Note 2)    5,689,586     -   
Other Assets     42,036     32,036  
Total assets $  9,523,755  $  6,059,568  
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
Note payable $  660,793  $  42,875  
Related party convertible note payable    3,461,782    
Due from related party (Note 5)    6,888    
Operating lease liability (Note 8)    22,259     -   
Accounts payable and accrued expenses    359,160     188,354  
Tax liability    14,226     -   
Other liabilities and obligations    68,268     19,690  
Total liabilities    4,593,376     250,919  
Stockholders’ equity:     
Common stock, par value $.001; 30,000,000 shares authorized; 3,134,261  and 3,124,961 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively    3,134     3,125  
Additional paid-in capital    17,324,650     17,295,408  
Accumulated deficit    (12,397,405)    (11,489,884) 
Total stockholders’ equity    4,930,379     5,808,649  
Total liabilities and stockholders’ equity $  9,523,755  $  6,059,568  
     

 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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

     
  For the Three Months Ended June 30, For the Six Months Ended June 30,
   2019   2018   2019   2018 
Revenues:        
Interest on delinquent association fees $  463,738  $  564,593  $  878,013  $  1,115,455 
Administrative and late fees    43,314     50,301     82,807     118,629 
Recoveries in excess of cost - special product    4,502     (8,437)    26,272     59,100 
Underwriting and other revenues    74,791     53,625     115,515     108,186 
Net commission revenue    181,391     -     280,159     - 
Rental revenue    72,285     217,904     219,954     440,349 
Total revenues    840,021     877,986     1,602,720     1,841,719 
         
Operating Expenses:        
Staff costs and payroll    375,677     298,651     664,075     700,934 
Professional fees    547,823     121,577     1,150,535     456,684 
Settlement costs with associations    38,286     11,403     40,178     27,115 
Selling, general and administrative    126,362     79,667     237,633     152,215 
Provision for credit losses    (7,375)    -     (7,375)    581 
Real estate management and disposal    100,306     162,578     297,434     281,940 
Depreciation and amortization    20,782     22,156     39,902     44,311 
Collection costs    9,786     29,560     (13,301)    30,162 
Other operating expenses    16,191     7,578     30,687     11,879 
Total operating expenses    1,227,838     733,170     2,439,768     1,705,821 
Operating income (loss)    (387,817)    144,816     (837,048)    135,898 
Interest expense    62,686     94,576     70,473     94,576 
Gain on litigation    -     (405,000)    -     (405,000)
Income (loss) before income taxes    (450,503)    455,240     (907,521)    446,322 
Income tax benefit    -     -     -     - 
Net income (loss) $  (450,503) $  455,240  $  (907,521) $  446,322 
         
Income (loss) per share:        
Basic $  (0.14) $  0.73  $  (0.29) $  0.71 
Diluted    (0.14)    0.73     (0.29)    0.71 
Weighted average number of common shares outstanding:        
Basic    3,134,261     625,319     3,133,106     625,319 
Diluted    3,134,261     625,319     3,133,106     625,319 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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

  For the Six Months ended June 30,
   2019   2018 
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $   (907,521) $   446,322  
     
 Adjustments to reconcile net loss to cash used in operating activities     
 Depreciation and amortization     32,550     44,311 
 Right to use asset depreciation     4,852     -  
 Stock compensation     6,931     7,769 
 Amortization of debt discount     -      75,638 
 Amortization of debt issuance costs     -      5,705 
 Gain on litigation     -      (405,000)
     
 Change in assets and liabilities     
 Prepaid expenses and other assets     52,389     (51,901)
 Accounts payable and accrued expenses     89,329     (174,887)
Advances (repayments) to related party    32,395     71,289 
 Other liabilities     48,578     (22,277)
Lease liability payments    (4,426)    -  
 Deferred taxes     (14,200)    -  
Net cash used in operating activities    (659,123)    (3,031)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Net collections of finance receivables - original product    95,242     133,250 
Net collections of finance receivables - special product    79,874     70,635 
Net cash received from business acquisition    51,327     -  
Proceeds for real estate assets owned    64,101     32,544 
     
Net cash provided by investing activities    290,544      236,429  
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from borrowing    -      500,000 
Principal repayments    (80,761)    (39,028)
Exercise of warrants    22,320     -  
Debt issue costs    -      (82,382)
Net cash provided by (used in) financing activities    (58,441)    378,590  
     
NET INCREASE (DECREASE) IN CASH    (427,020)    611,988 
     
CASH - BEGINNING OF YEAR    3,520,753     590,394 
CASH - END OF YEAR $   3,093,733   $   1,202,382  
     
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION    
Cash paid for interest $  16,743  $  -  
SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION    
Non Cash - insurance financing    -      87,012 
Non Cash - debt discount - warrants    -      154,676 
ROU asset obligation recognized $  26,685  $  -  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.