Exhibit 99.1

img17863145_0.jpg 

 

LM Funding America Achieves Over 648% Revenue Growth to $13.0 Million for 2023

 

Mined 423.4 Bitcoins in 2023 Valued at Approximately $12.3 Million at an Average
Market Revenue Value of Approximately $29,000 per Bitcoin

 

Held 153.6 Bitcoin at February 29, 2024, Valued at Approximately $10.8 Million Based on Recent Bitcoin Price of $70,000

 

Reports Working Capital of Approximately $7.4 Million and LM Funding Stockholders’ Equity of

$36.2 Million ($14.52 per share) as of December 31, 2023

 

Conference Call to Be Held Today at 11:00 am ET

 

TAMPA, FL, April 1, 2024—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 and full year ended December 31, 2023.

Operational Highlights

Approximately 5,900 Bitcoin mining machines in operation at hosting sites as of December 31, 2023
Mined 423.4 Bitcoin in 2023, which generated approximately $12.3 million in revenue based on the $29,000 average price of Bitcoin in 2023
As of December 31, 2023, held 95.1 Bitcoin valued at approximately $3.4 million
As of February 29, 2024, held 153.6 Bitcoin valued at approximately $10.8 million based on recent Bitcoin price of approximately $70,000
Revenue for the three and twelve months ended December 31, 2023, increased approximately 262% and 648%, respectively over the same periods last year
Net loss for the three months ended December 31, 2023, was $1.6 million as compared to $19.7 million for the 2022 comparable quarter.
Achieved positive Core EBITDA (defined below) of $345 thousand for the three months ended December 31, 2023, compared to a Core EBITDA loss of $1.7 million for the same period last year. Core EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss is set forth below in this press release.

 

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We made tremendous progress building our Bitcoin mining operations in 2023, our first full year as a Bitcoin mining company. We are extremely pleased with our results, as we mined 423.4 Bitcoins valued at approximately $12.3 million based on the average price

 


 

of Bitcoin during the year. This success drove an almost 648% increase in the Company’s revenue for the year as compared to 2022. In 2023, we adopted an 'Infrastructure Light' strategy, aiming to lessen market risks and fluctuations by concentrating our investments on Bitcoin and mining devices that closely track Bitcoin's value. Additionally, we continue to purchase state-of-the-art mining equipment in anticipation of the upcoming Bitcoin halving, expected to occur in late April or early May of this year. Considering current market conditions and the future outlook for Bitcoin, which recently reached a new all-time high of approximately $73,800, we remain extremely optimistic about the future, as halving events have historically preceded new all-time high Bitcoin prices in the six months post-halving."

 

Richard Russell, Chief Financial Officer of LM Funding, further noted, "We ended the year with cash plus Bitcoin, valued as of December 31, 2023, of approximately $5.8 million. Including the Bitcoin that we mined through the end of February 2024, our reported Bitcoin holdings of 153.6 Bitcoin are valued at approximately $10.8 million based on the recent Bitcoin price of approximately $70,000. Our working capital stood at $7.4 million as of December 31, 2023, and the equity of LM Funding shareholders was $36.2 million, or $14.52 per share. Given the strength of our balance sheet, we have not had the need to sell any of our Bitcoin holdings through February 2024 to fund our operations and we remain highly encouraged and optimistic regarding the financial outlook for both Bitcoin and the business.”

 

Financial Highlights

Total revenue for the fourth quarter ended December 31, 2023, was approximately $4.1 million, an increase of $2.9 million, or approximately 262%, compared to $1.1 million for the fourth quarter of 2022. Total revenue for the year ended December 31, 2023, was approximately $13.0 million, an increase of $11.3 million, or more than 648%, from $1.7 million in 2022. These increases were primarily due to digital mining revenue of $3.9 million and $12.3 million in the three months and year ended December 31, 2023, compared with $0.9 million of digital mining revenue for both comparable periods in 2022 as the Company commenced our Bitcoin mining operations in September 2022. The average BTC price for the three and twelve months ended December 31, 2023 used for purposes of recognizing as revenue was approximately $36,500 and $29,000, respectively.
Net loss attributable to LM Funding shareholders for the three months ended December 31, 2023, was approximately $1.6 million, which included a $0.5 million non-cash, unrealized gain on investment and equity securities, and a $0.8 million impairment on our previously owned Symbiont assets, compared to a net loss of approximately $19.7 million for the 2022 comparable quarter, which included a $6.6 million non-cash, unrealized loss on investment and equity securities and a $0.8 million impairment on our Symbiont assets. Net loss attributable to LM Funding shareholders for the year ended December 31, 2023, was approximately $15.9 million, which included a $9.8 million non-cash, unrealized loss on investment and equity securities, and a $1.1 million impairment on our previously owned Symbiont assets, compared to a net loss of approximately $29.2 million for the year ended December 31, 2022, which included a $4.4 million non-cash, unrealized gain on investment and equity securities, and a $1.1 million impairment on the Symbiont assets.
Positive Core EBITDA for the three months ended December 31, 2023, totaled approximately $0.3 million compared to a Core EBITDA loss of $1.7 million in the prior year's comparable quarter. Core EBITDA loss for the twelve months ended December 31, 2023, totaled approximately $0.2 million, compared with Core EBITDA loss of $6.5 million in 2022. The improvements in Core EBITDA for the three and twelve-month periods ended December 31, 2023, were primarily due to the existence of material Bitcoin mining operations in the current year that did not exist in the prior year. Core

 


 

EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss is set forth below in this press release.
Cash was approximately $2.4 million, with digital assets of $3.4 million, and working capital of $7.4 million as of December 31, 2023, based on 95.1 BTC at a price of approximately $36,000 as of December 31, 2023. The current BTC market price has fluctuated between $62,000 and $73,000 in recent weeks. In 2023, the Company also received approximately $2.7 million from SeaStar Medical Holdings as a partial repayment of their outstanding note receivable.
Total LM Funding stockholders’ equity was approximately $36.2 million, or $14.52 per share, as of December 31, 2023 (with the per-share amount calculated as LMFA stockholders’ equity divided by approximately 2,492,964 shares outstanding as of December 31, 2023).

 

Investor Conference Call

 

LM Funding will host a conference call today, April 1, 2024, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the fourth quarter ended December 31, 2023, 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 212125. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/50187 or on the investor relations section of the Company’s website, https://www.lmfunding.com/investors/news-events/ir-calendar.

 

A webcast replay will be available on the investor relations section of the Company’s website at https://www.lmfunding.com/investors/news-events/ir-calendar through April 1, 2025. A telephone replay of the call will be available approximately one hour following the call, through April 15, 2024, 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 50187.

 

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 risks of 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 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 collect sufficient amounts on defaulted consumer receivables, changes in the credit or capital markets, changes in interest rates, negative press regarding the debt collection industry, and the risk of pandemics such as the COVID-10 pandemic. 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) 671-1020

Email: LMFA@crescendo-ir.com

 

(tables follow)

 


 

LM Funding America, Inc. and Subsidiaries Consolidated Balance Sheets (Audited)

 

 

 

December 31,

 

December 31,

 

 

2023

 

2022

Assets

 

 

 

 

Cash

 

$ 2,401,831

 

$ 4,238,006

Digital Assets (Note 2)

 

3,416,256

 

888,026

Finance receivables

 

19,221

 

26,802

Marketable securities (Note 5)

 

17,860

 

4,290

Notes receivable from Seastar Medical Holding Corporation (Note 5)

 

-

 

3,807,749

Receivable from sale of Symbiont assets

 

200,000

 

-

Prepaid expenses and other assets

 

4,067,212

 

1,233,322

Income tax receivable

 

31,187

 

293,466

Current assets

 

10,153,567

 

10,491,661

 

 

 

 

 

Fixed assets, net (Note 3)

 

24,519,610

 

27,272,374

Deposits on mining equipment (Note 4)

 

20,837

 

525,219

Hosting services deposits (Note 4)

 

-

 

2,200,452

Notes receivable from Seastar Medical Holding Corporation (Note 5)

 

1,440,498

 

-

Long-term investments - debt security (Note 5)

 

-

 

2,402,542

Less: Allowance for losses on debt security (Note 5)

 

-

 

(1,052,542)

Long-term investments - debt security, net (Note 5)

 

-

 

1,350,000

Long-term investments - equity securities (Note 5)

 

156,992

 

464,778

Investment in Seastar Medical Holding Corporation (Note 5)

 

1,145,486

 

10,608,750

Operating lease - right of use assets (Note 7)

 

189,009

 

265,658

Other assets

 

86,798

 

10,726

Long-term assets

 

27,559,230

 

42,697,957

Total assets

 

$ 37,712,797

 

$ 53,189,618

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

Accounts payable and accrued expenses

 

2,064,909

 

1,570,906

Note payable - short-term

(Note 6)

 

567,586

 

475,775

Due to related parties (Note 9)

 

22,845

 

75,488

Current portion of lease liability (Note 7)

 

110,384

 

90,823

Total current liabilities

 

2,765,724

 

2,212,992

 

 

 

 

 

Lease liability - net of current portion (Note 7)

 

85,775

 

179,397

Long-term liabilities

 

85,775

 

179,397

Total liabilities

 

2,851,499

 

2,392,389

 

 

 

 

 

Stockholders' equity (Note 10)

 

 

 

 

Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of December 31, 2023 and December 31, 2022

 

-

 

-

Common stock, par value $.001; 350,000,000 shares authorized; 2,492,964 shares issued and outstanding as of December 31, 2023 and 2,232,964 as of December 31, 2022

 

2,493

 

2,233

Additional paid-in capital

 

95,145,376

 

92,206,200

Accumulated deficit

 

(58,961,461)

 

(43,017,207)

Total LM Funding America stockholders' equity

 

36,186,408

 

49,191,226

Non-controlling interest

 

(1,325,110)

 

1,606,003

Total stockholders' equity

 

34,861,298

 

50,797,229

Total liabilities and stockholders’ equity

 

$ 37,712,797

 

$ 53,189,618

 

 

 

 

 

 

 


 

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

 

 

Three Months Ended December 31,

 

Three Months Ended December 31

 

Years Ended December 31,

 

Years Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

 

Digital mining revenues

 

$ 3,946,485

 

$ 903,403

 

$ 12,289,131

 

$ 945,560

Specialty finance revenue

 

75,901

 

175,853

 

550,445

 

626,773

Rental revenue

 

33,028

 

41,378

 

144,514

 

161,618

Total revenues

 

4,055,414

 

1,120,634

 

12,984,090

 

1,733,951

Operating costs and expenses:

 

 

 

 

 

 

 

 

Digital mining cost of revenues (exclusive of depreciation and amortization shown below)

 

2,668,770

 

994,266

 

9,406,940

 

1,033,226

Staff costs and payroll

 

1,121,796

 

6,536,291

 

5,858,736

 

19,422,723

Professional fees

 

634,535

 

637,465

 

1,863,038

 

3,158,446

Settlement costs with associations

 

-

 

-

 

10,000

 

160

Selling, general and administrative

 

168,632

 

188,749

 

851,806

 

635,268

Real estate management and disposal

 

19,105

 

34,012

 

146,716

 

110,465

Depreciation and amortization

 

1,495,614

 

434,302

 

4,983,480

 

478,020

Collection costs

 

12,342

 

(5,524)

 

29,875

 

(12,213)

Impairment loss on mined digital assets

 

143,317

 

78,924

 

965,967

 

79,794

Realized gain on sale of mined digital assets

 

(738,526)

 

-

 

(2,070,508)

 

-

Other operating costs

 

295,569

 

1,229,749

 

999,959

 

1,504,047

Total operating costs and expenses

 

5,821,154

 

10,128,234

 

23,046,009

 

26,409,936

Operating loss

 

(1,765,740)

 

(9,007,600)

 

(10,061,919)

 

(24,675,985)

Realized gain (loss) on securities

 

2,632

 

-

 

4,420

 

(349,920)

Realized gain on convertible debt securities

 

-

 

-

 

-

 

287,778

Unrealized gain (loss) on marketable securities

 

7,134

 

(19,930)

 

13,570

 

(56,830)

Impairment loss on prepaid machine deposits

 

-

 

(3,150,000)

 

(36,691)

 

(3,150,000)

Impairment loss on prepaid hosting deposits

 

(184,236)

 

(1,790,712)

 

(184,236)

 

(1,790,712)

Impairment loss on Symbiont assets

 

-

 

(1,052,542)

 

(750,678)

 

(1,052,542)

Unrealized gain (loss) on investment and equity securities

 

546,563

 

(6,610,843)

 

(9,771,050)

 

4,423,985

Impairment loss on digital assets

 

-

 

(63,935)

 

-

 

(467,406)

Realized gain on sale of purchased digital assets

 

-

 

20,254

 

1,917

 

20,254

Loss on disposal of assets

 

(9,389)

 

(38,054)

 

(9,389)

 

(38,054)

Digital assets other income

 

 

 

-

 

-

 

5,658

Other income - coupon sales

 

-

 

-

 

639,472

 

-

Gain on adjustment of note receivable allowance

 

-

 

-

 

1,052,542

 

-

Other income - finance revenue

 

-

 

-

 

37,660

 

-

Dividend income

 

-

 

-

 

-

 

3,875

Interest income, net

 

38,705

 

129,731

 

249,586

 

394,678

Credit loss

 

22,344

 

-

 

-

 

-

Loss before income taxes

 

(1,341,987)

 

(21,583,631)

 

(18,814,796)

 

(26,445,221)

Income tax expense

 

(60,571)

 

(126,388)

 

(60,571)

 

(1,438,066)

Net Loss

 

$ (1,402,558)

 

$(21,710,019)

 

$(18,875,367)

 

$(27,883,287)

 


 

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

 

(189,208)

 

2,016,385

 

2,931,113

 

(1,356,914)

Net loss attributable to LM Funding America Inc.

 

$(1,591,766)

 

$(19,693,634)

 

$(15,944,254)

 

$(29,240,201)

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

$(0.67)

 

$(8.82)

 

$(6.98)

 

$(13.10)

Diluted loss per common share

 

$(0.67)

 

$(8.82)

 

$(6.98)

 

$(13.10)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

2,362,964

 

2,231,681

 

2,283,836

 

2,231,681

Diluted

 

2,362,964

 

2,231,681

 

2,283,836

 

2,231,681

 

 

 

 


 

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

 

 

Years ended December 31,

 

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$(18,875,367)

 

$(27,883,287)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

Depreciation and amortization

 

4,983,480

 

478,020

Noncash lease expense

 

98,536

 

95,098

Stock compensation

 

1,095,705

 

1,098,331

Stock option expense

 

1,843,731

 

16,571,978

Accrued investment income

 

(159,692)

 

(392,412)

Accrued recovery of legal fees

 

-

 

(55,364)

Impairment loss on digital assets

 

965,967

 

547,200

Impairment loss on mining machine deposits

 

36,691

 

3,150,000

Impairment loss on hosting deposits

 

184,236

 

1,790,712

Impairment loss on Symbiont assets

 

750,678

 

-

Unrealized loss (gain) on marketable securities

 

(13,570)

 

56,830

Unrealized loss (gain) on investment and equity securities

 

9,771,050

 

(4,423,985)

Loss on disposal of fixed assets

 

9,389

 

38,054

Realized loss (gain) on securities

 

(4,420)

 

349,920

Realized gain on convertible note receivable

 

-

 

(287,778)

Realized gain on sale of digital assets

 

(2,072,425)

 

(20,254)

Proceeds from securities

 

744,036

 

2,565,893

Convertible debt and interest converted into marketable securities

 

-

 

844,882

Investments in marketable securities

 

(739,616)

 

(844,882)

(Reversal of) allowance loss on debt security

 

(1,052,542)

 

1,052,542

Change in operating assets and liabilities:

 

 

 

 

Prepaid expenses and other assets

 

189,407

 

651,472

Hosting deposits

 

(36,691)

 

(3,202,764)

Repayments to related party

 

(52,643)

 

(45,732)

Accounts payable and accrued expenses

 

177,478

 

393,260

Mining of digital assets

 

(12,289,131)

 

(945,560)

Proceeds from sale of digital assets

 

10,874,701

 

-

Lease liability payments

 

(95,948)

 

(98,569)

Income tax receivable

 

262,279

 

(293,466)

Deferred taxes and taxes payable

 

-

 

(326,178)

Net cash used in operating activities

 

(3,404,681)

 

(9,136,039)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Net collections of finance receivables - original product

 

(6,428)

 

13,993

Net collections of finance receivables - special product

 

14,009

 

(12,602)

Capital expenditures

 

(1,625,284)

 

(15,382)

Investment in notes receivable - Seastar Medical Holding Corporation

 

(125,000)

 

(3,753,090)

Collection of notes receivable

 

2,651,943

 

-

Investment in digital assets

 

(35,157)

 

(988,343)

Proceeds from sale of purchased digital assets

 

27,815

 

518,931

Financing activities for Symbiont asset acquisition

 

(402,361)

 

-

Symbiont asset sale

 

1,800,000

 

-

Deposits for mining equipment

 

-

 

(14,649,614)

Net cash from (used in) investing activities

 

2,299,537

 

(18,886,107)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Loan principal and insurance financing repayments

 

(624,481)

 

(299,033)

Issue costs from the issuance of common stock

 

(106,550)

 

-

 


 

Net cash used in financing activities

 

(731,031)

 

(299,033)

NET DECREASE IN CASH

 

(1,836,175)

 

(28,321,179)

CASH - BEGINNING OF PERIOD

 

4,238,006

 

32,559,185

CASH - END OF PERIOD

 

$2,401,831

 

$4,238,006

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

Insurance financing

 

$716,292

 

$660,120

ROU assets and operating lease obligation recognized

 

$21,887

 

$300,787

Reclassification of mining equipment deposit to fixed assets, net

 

$1,177,226

 

$26,961,095

Capital expenditures in accrued liabilities

 

$1,035,374

 

$718,416

Reclassification of Reverse stock split

 

$10,859

 

$-

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

 

 

 

 

Cash paid for taxes

 

$-

 

$2,057,710

Cash paid for interest

 

$-

 

$-

 

 

 


 

NON-GAAP FINANCIAL INFORMATION (unaudited)

Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We also disclose Earnings before Interest, Tax, Depreciation and Amortization ("EBITDA") and Core Earnings before Interest, Tax, Depreciation and Amortization ("Core EBITDA") which adjusts for unrealized loss on investment and equity securities, unrealized gain on convertible debt securities, impairment loss on mined digital assets, impairment of intangible long-lived assets, impairment of prepaid hosting deposits, impairment of mining machine deposits and gain on adjustment of note receivable allowance and stock compensation expense and option expense, all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of Bitcoin miners.

The following tables reconcile net loss, which we believe is the most comparable GAAP measure, to EBITDA and Core EBITDA:

 

 

 

Years Ended December 31,

 

 

Three Months Ended December 31,

 

 

2023

 

2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$ (18,875,367)

 

$ (27,883,287)

 

 

$(1,402,558)

 

$ (21,710,019)

Income tax expense

 

60,571

 

1,438,066

 

 

60,571

 

126,388

Interest expense

 

-

 

4,416

 

 

-

 

4,416

Depreciation and amortization

 

4,983,480

 

478,020

 

 

1,495,614

 

434,302

Income (loss) before interest, taxes & depreciation

 

$ (13,831,316)

 

$ (25,962,785)

 

 

$153,627

 

$ (21,144,913)

Unrealized loss (gain) on investment and equity securities

 

9,771,050

 

(4,423,985)

 

 

(546,563)

 

6,610,843

Realized gain on convertible debt securities

 

-

 

(287,778)

 

 

-

 

-

Impairment loss on prepaid mining machine deposits

 

36,691

 

3,150,000

 

 

-

 

3,150,000

Impairment loss on mined digital assets

 

965,967

 

79,794

 

 

143,317

 

78,924

Impairment loss on digital assets

 

-

 

467,406

 

 

-

 

63,935

Impairment loss on Symbiont assets

 

750,678

 

1,052,542

 

 

-

 

1,052,542

Gain on adjustment of note receivable allowance

 

(1,052,542)

 

-

 

 

-

 

-

Impairment loss on prepaid hosting deposits

 

184,236

 

1,790,712

 

 

184,236

 

1,790,712

Stock compensation and option expense

 

2,939,436

 

17,670,309

 

 

410,584

 

6,725,592

Core income (loss) before interest, taxes & depreciation

 

$(235,800)

 

$(6,463,785)

 

 

$345,201

 

$(1,672,365)