CORRECTION -- LM Funding America, Inc. Reports Financial Results and Provides Business Update for the Third Quarter of 2022


TAMPA, Fla., Nov. 18, 2022 (GLOBE NEWSWIRE) -- 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 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 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, LLC
Tel: (212) 671-1021
Email: 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 Months
Ended September 30,
  For the Nine Months
Ended 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 Months
Ended 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  $-