UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
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(Address of principal executive offices) |
(Zip code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
Trading symbol |
Name of each exchange on which registered |
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The registrant had
LM FUNDING AMERICA, INC.
TABLE OF CONTENTS
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Page |
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PART I. |
3 |
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Item 1. |
3 |
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3 |
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4 |
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5 |
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6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
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Item 3. |
34 |
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Item 4. |
34 |
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PART II. |
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Item 1. |
36 |
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Item 1A. |
36 |
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Item 2. |
39 |
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Item 3. |
40 |
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Item 4 |
40 |
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Item 5. |
40 |
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Item 6. |
41 |
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42 |
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2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
LM Funding America, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
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September 30, 2022 |
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December 31, |
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(Unaudited) |
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ASSETS |
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Cash |
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$ |
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$ |
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Finance receivables |
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Short-term investments - convertible debt securities (Note 7) |
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- |
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Marketable securities (Note 7) |
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Short-term investments - debt securities (Note 7) |
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Prepaid expenses and other assets |
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Note receivable from related party (Note 7) |
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- |
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Digital assets (Note 10) |
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- |
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Current assets |
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Fixed assets, net (Note 9) |
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Real estate assets owned |
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Operating lease - right of use assets (Note 4) |
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Long-term investments - equity securities (Note 7) |
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Investments in unconsolidated affiliates (Note 7) |
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Deposits on mining equipment and hosting services (Note 8) |
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Other assets |
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Long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Accounts payable and accrued expenses |
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$ |
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Note payable - short-term (Note 3) |
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- |
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Due to related parties (Note 2) |
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Current portion of lease liability (Note 5) |
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Income tax payable (Note 4) |
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Total current liabilities |
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Lease liability - long-term (Note 5) |
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- |
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Long-term liabilities |
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- |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Non-controlling interest |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.
3
LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (unaudited)
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For the Three Months |
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For the Nine Months |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenues: |
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Interest on delinquent association fees |
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$ |
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$ |
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$ |
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$ |
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Administrative and late fees |
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Recoveries in excess of cost - special product |
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Underwriting and other revenues |
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Rental revenue |
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Digital mining revenues, net |
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- |
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- |
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Total revenues |
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Operating costs and expenses: |
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Digital mining cost of revenues (exclusive of depreciation |
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- |
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- |
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Staff costs and payroll |
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Professional fees |
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Settlement costs with associations |
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- |
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- |
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- |
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Selling, general and administrative |
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Provision for credit losses |
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- |
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- |
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( |
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Recovery of cost from related party receivable |
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- |
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( |
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- |
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( |
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Real estate management and disposal |
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Depreciation and amortization |
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Collection costs |
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( |
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Other operating expenses |
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Total operating expenses |
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Operating loss |
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( |
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( |
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( |
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( |
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Realized gain (loss) on securities |
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- |
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( |
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( |
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Realized gain on convertible debt securities |
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- |
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- |
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- |
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Unrealized loss on convertible debt security |
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- |
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( |
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- |
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( |
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Unrealized loss on marketable securities |
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( |
) |
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( |
) |
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( |
) |
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( |
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Impairment loss on digital assets |
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( |
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( |
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( |
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( |
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Unrealized gain (loss) on investment and equity securities |
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( |
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( |
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Digital assets other income |
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- |
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- |
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- |
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Interest income |
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Interest expense |
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- |
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( |
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- |
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( |
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Dividend income |
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738 |
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Gain on forgiveness of note payable |
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- |
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- |
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- |
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Income (loss) before income taxes |
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( |
) |
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( |
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( |
) |
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Income tax expense |
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( |
) |
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( |
) |
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( |
) |
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( |
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Net income (loss) |
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( | ) |
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( | ) |
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( | ) |
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Less: Net (income) loss attributable to non-controlling interest |
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( |
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( |
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Net income (loss) attributable to LM Funding America Inc. |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
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Earnings/(loss) per share: |
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Basic income (loss) per common share - net income (loss) - attributable to LM Funding |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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$ |
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Diluted income (loss) per common share - net income (loss) - attributable to LM Funding |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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$ |
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Weighted average number of common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.
4
LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows
(unaudited)
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For the Nine Months |
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2022 |
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2021 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
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$ |
( |
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$ |
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Adjustments to reconcile net income (loss) to cash used in operating activities |
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Depreciation and amortization |
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Right to use asset non cash lease expense |
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Stock compensation |
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- |
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Stock option expense |
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- |
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Debt forgiveness |
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- |
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( |
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Accrued investment income |
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( |
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( |
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Gain on deconsolidation of affiliate |
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- |
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( |
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Unrealized loss on convertible debt security |
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- |
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Unrealized loss on marketable securities |
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Impairment loss on digital assts |
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Unrealized gain on investment and equity securities |
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( |
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( |
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Realized (gain) loss on securities |
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( |
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Realized gain on convertible note securities |
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( |
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- |
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Investment in securities |
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- |
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( |
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Proceeds from securities |
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Investment in convertible note receivable |
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- |
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( |
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Convertible note receivable converted into marketable security |
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Investment in marketable Securities |
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( |
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( |
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Change in assets and liabilities |
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Prepaid expenses and other assets |
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( |
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Accounts payable and accrued expenses |
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Advances (repayments) to related party |
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( |
) |
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Mining of digital assets |
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( |
) |
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- |
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Lease liability payments |
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( |
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( |
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Deferred taxes and taxes payable |
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Net cash provided by (used in) operating activities |
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( |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Net collections of finance receivables - original product |
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Net collections of finance receivables - special product |
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( | ) |
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Payments for real estate assets owned |
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- |
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( |
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Capital expenditures |
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( |
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( |
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Deposits for mining equipment and hosting |
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( |
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( |
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Investments in digital assets |
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( |
) |
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( |
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Loan to purchase securities |
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- |
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Investment in note receivable - related party |
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( |
) |
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- |
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Investment in note receivable |
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( |
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- |
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Repayment of loan to purchase securities |
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- |
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( |
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Investment in unconsolidated affiliate |
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- |
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( |
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Net cash used in investing activities |
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( |
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( |
) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal repayments |
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- |
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( |
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Insurance financing repayments |
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( |
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( |
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Exercise of warrants |
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- |
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