img17863145_0.jpg 

 

Exhibit 99.1

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

 

TAMPA, FL, November 18, 2022-- 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 November 18, 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 athttps://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 (Note 7)

 

 

-

 

 

 

539,351

 

Marketable securities (Note 7)

 

 

24,220

 

 

 

2,132,051

 

Short-term investments - debt securities (Note 7)

 

 

2,619,292

 

 

 

2,000,000

 

Prepaid expenses and other assets

 

 

1,205,719

 

 

 

1,251,852

 

Note receivable from related party (Note 7)

 

 

2,785,000

 

 

 

-

 

Digital assets (Note 10)

 

 

616,257

 

 

 

-

 

Current assets

 

 

17,446,408

 

 

 

38,510,632

 

Fixed assets, net (Note 9)

 

 

21,975,960

 

 

 

17,914

 

Real estate assets owned

 

 

80,057

 

 

 

80,057

 

Operating lease - right of use assets (Note 4)

 

 

289,468

 

 

 

59,969

 

Long-term investments - equity securities (Note 7)

 

 

322,246

 

 

 

1,973,413

 

Investments in unconsolidated affiliates (Note 7)

 

 

17,362,125

 

 

 

4,676,130

 

Deposits on mining equipment and hosting services (Note 8)

 

 

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 (Note 3)

 

 

-

 

 

 

114,688

 

Due to related parties (Note 2)

 

 

75,615

 

 

 

121,220

 

Current portion of lease liability (Note 5)

 

 

90,004

 

 

 

68,002

 

Income tax payable (Note 4)

 

 

1,167,856

 

 

 

326,178

 

Total current liabilities

 

 

1,969,844

 

 

 

1,093,734

 

Lease liability - long-term (Note 5)

 

 

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

 

 

$

-