false Q3 0001640384 --12-31 0.2 0.1 0.5 23720 23720 0.333 0.027 1 23720 23720 0.333 0.027 P1Y P1Y7M6D 0001640384 2021-01-01 2021-09-30 xbrli:shares 0001640384 2021-11-09 iso4217:USD 0001640384 2021-09-30 0001640384 2020-12-31 iso4217:USD xbrli:shares 0001640384 2021-07-01 2021-09-30 0001640384 2020-07-01 2020-09-30 0001640384 2020-01-01 2020-09-30 0001640384 us-gaap:ServiceMember 2021-07-01 2021-09-30 0001640384 us-gaap:ServiceMember 2020-07-01 2020-09-30 0001640384 us-gaap:ServiceMember 2021-01-01 2021-09-30 0001640384 us-gaap:ServiceMember 2020-01-01 2020-09-30 0001640384 lmfa:OriginalProductMember 2021-01-01 2021-09-30 0001640384 lmfa:OriginalProductMember 2020-01-01 2020-09-30 0001640384 lmfa:SpecialProductMember 2021-01-01 2021-09-30 0001640384 lmfa:SpecialProductMember 2020-01-01 2020-09-30 0001640384 2019-12-31 0001640384 2020-09-30 0001640384 us-gaap:CommonStockMember 2019-12-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001640384 us-gaap:RetainedEarningsMember 2019-12-31 0001640384 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001640384 2020-01-01 2020-03-31 0001640384 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001640384 us-gaap:CommonStockMember 2020-03-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001640384 us-gaap:RetainedEarningsMember 2020-03-31 0001640384 2020-03-31 0001640384 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001640384 2020-04-01 2020-06-30 0001640384 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001640384 us-gaap:CommonStockMember 2020-06-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001640384 us-gaap:RetainedEarningsMember 2020-06-30 0001640384 2020-06-30 0001640384 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001640384 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001640384 us-gaap:CommonStockMember 2020-09-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001640384 us-gaap:RetainedEarningsMember 2020-09-30 0001640384 us-gaap:CommonStockMember 2020-12-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001640384 us-gaap:RetainedEarningsMember 2020-12-31 0001640384 us-gaap:NoncontrollingInterestMember 2020-12-31 0001640384 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001640384 2021-01-01 2021-03-31 0001640384 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001640384 us-gaap:NoncontrollingInterestMember 2021-01-01 2021-03-31 0001640384 us-gaap:CommonStockMember 2021-03-31 0001640384 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001640384 us-gaap:RetainedEarningsMember 2021-03-31 0001640384 us-gaap:NoncontrollingInterestMember 2021-03-31 0001640384 2021-03-31 0001640384 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001640384 us-gaap:NoncontrollingInterestMember 2021-04-01 2021-06-30 0001640384 2021-04-01 2021-06-30 0001640384 us-gaap:CommonStockMember 2021-06-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001640384 us-gaap:RetainedEarningsMember 2021-06-30 0001640384 us-gaap:NoncontrollingInterestMember 2021-06-30 0001640384 2021-06-30 0001640384 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001640384 us-gaap:NoncontrollingInterestMember 2021-07-01 2021-09-30 0001640384 us-gaap:CommonStockMember 2021-09-30 0001640384 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001640384 us-gaap:RetainedEarningsMember 2021-09-30 0001640384 us-gaap:NoncontrollingInterestMember 2021-09-30 0001640384 lmfa:OriginalProductMember 2021-01-01 2021-09-30 0001640384 lmfa:SpecialProductMember 2021-01-01 2021-09-30 lmfa:Ownership 0001640384 srt:SubsidiariesMember 2021-01-01 2021-09-30 lmfa:Subsidiary xbrli:pure iso4217:USD lmfa:Assessment 0001640384 2021-04-21 2021-04-21 0001640384 2020-05-11 2020-05-11 0001640384 2021-05-07 2021-05-07 0001640384 2020-05-11 0001640384 srt:MaximumMember lmfa:REOManagementHoldingsLlcMember lmfa:SubsidiaryLimitedLiabilityMember 2021-01-01 2021-09-30 0001640384 lmfa:LMFASponsorLLCMember lmfa:SubsidiaryLimitedLiabilityMember 2021-01-01 2021-09-30 0001640384 srt:MaximumMember 2021-09-30 0001640384 srt:MinimumMember 2021-09-30 0001640384 lmfa:CommonShareConsolidationReverseStockSplitMember 2021-09-30 0001640384 lmfa:CommonShareConsolidationReverseStockSplitMember 2020-09-30 0001640384 us-gaap:EmployeeStockOptionMember 2021-01-01 2021-09-30 0001640384 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-09-30 0001640384 us-gaap:WarrantMember 2021-01-01 2021-09-30 0001640384 us-gaap:WarrantMember 2020-01-01 2020-09-30 0001640384 lmfa:OriginalProductMember lmfa:CurrentYearMember 2021-09-30 0001640384 lmfa:OriginalProductMember lmfa:CurrentYearMember 2020-12-31 0001640384 lmfa:OriginalProductMember lmfa:FundForNextOneToTwoYearsMember 2021-09-30 0001640384 lmfa:OriginalProductMember lmfa:FundForNextOneToTwoYearsMember 2020-12-31 0001640384 lmfa:OriginalProductMember lmfa:FundForNextTwoToThreeYearsMember 2021-09-30 0001640384 lmfa:OriginalProductMember lmfa:FundForNextTwoToThreeYearsMember 2020-12-31 0001640384 lmfa:OriginalProductMember lmfa:FundForNextThreeToFourYearsMember 2021-09-30 0001640384 lmfa:OriginalProductMember lmfa:FundForNextThreeToFourYearsMember 2020-12-31 0001640384 lmfa:OriginalProductMember lmfa:FundForGreaterThanFourYearsMember 2021-09-30 0001640384 lmfa:OriginalProductMember lmfa:FundForGreaterThanFourYearsMember 2020-12-31 0001640384 lmfa:OriginalProductMember 2021-09-30 0001640384 lmfa:OriginalProductMember 2020-12-31 0001640384 2020-01-01 2020-12-31 lmfa:Unit 0001640384 lmfa:NewNeighborGuarantyMember 2021-09-30 0001640384 lmfa:NewNeighborGuarantyMember 2020-12-31 0001640384 lmfa:BusinessLawGroupMember 2017-01-01 2017-01-01 iso4217:USD lmfa:Unit 0001640384 lmfa:BusinessLawGroupMember 2021-07-01 2021-09-30 0001640384 lmfa:BusinessLawGroupMember 2021-01-01 2021-09-30 0001640384 lmfa:BusinessLawGroupMember 2020-07-01 2020-09-30 0001640384 lmfa:BusinessLawGroupMember 2020-01-01 2020-09-30 0001640384 lmfa:BusinessLawGroupMember 2021-09-30 0001640384 lmfa:BusinessLawGroupMember 2020-12-31 0001640384 lmfa:BusinessLawGroupMember lmfa:OutOfPocketCollectionCostsMember 2021-01-01 2021-09-30 0001640384 lmfa:BusinessLawGroupMember lmfa:OutOfPocketCollectionCostsMember 2020-01-01 2020-09-30 0001640384 lmfa:BusinessLawGroupMember lmfa:OutOfPocketCollectionCostsMember 2021-07-01 2021-09-30 0001640384 lmfa:BusinessLawGroupMember lmfa:OutOfPocketCollectionCostsMember 2020-07-01 2020-09-30 0001640384 srt:SubsidiariesMember 2020-01-01 2020-09-30 0001640384 srt:SubsidiariesMember 2021-07-01 2021-09-30 0001640384 srt:SubsidiariesMember 2020-07-01 2020-09-30 0001640384 lmfa:BusinessLawGroupMember 2020-01-01 2020-12-31 0001640384 us-gaap:NotesPayableToBanksMember 2020-12-31 0001640384 lmfa:UnsecuredFinancingAgreementOneMember 2021-09-30 0001640384 lmfa:PromissoryNotePPPLoanMember 2020-12-31 0001640384 us-gaap:NotesPayableToBanksMember 2020-01-01 2020-12-31 0001640384 lmfa:UnsecuredFinancingAgreementOneMember 2021-01-01 2021-09-30 0001640384 lmfa:PromissoryNotePPPLoanMember 2021-01-01 2021-09-30 0001640384 lmfa:PromissoryNotePPPLoanMember 2021-09-30 0001640384 lmfa:USFederalGovernmentCoronavirusAidReliefAndEconomicSecurityActMember lmfa:SBAPaycheckProtectionProgramMember 2020-04-30 0001640384 lmfa:SBAPaycheckProtectionProgramMember 2021-09-30 0001640384 lmfa:SBAPaycheckProtectionProgramMember 2021-01-01 2021-09-30 0001640384 lmfa:SBAPaycheckProtectionProgramMember 2021-02-07 2021-05-06 0001640384 lmfa:SBAPaycheckProtectionProgramMember 2021-07-01 2021-09-30 0001640384 lmfa:CCorporationMember 2021-09-30 0001640384 lmfa:CCorporationMember 2020-12-31 0001640384 lmfa:NewOfficeLeaseMember 2021-01-01 2021-09-30 0001640384 lmfa:RightOfUseAssetMember 2021-09-30 0001640384 lmfa:RightOfUseAssetMember 2020-12-31 0001640384 lmfa:LeaseLiabilityMember 2021-09-30 0001640384 lmfa:LeaseLiabilityMember 2020-12-31 0001640384 lmfa:SecuritiesPurchaseAgreementMember lmfa:HanforCaymanLimitedMember 2020-03-23 0001640384 lmfa:SecuritiesPurchaseAgreementMember lmfa:HanforCaymanLimitedMember 2020-06-30 0001640384 lmfa:SecuritiesPurchaseAgreementMember lmfa:HanforCaymanLimitedMember 2020-03-23 2020-03-23 0001640384 lmfa:SecuritiesPurchaseAgreementMember lmfa:HanforCaymanLimitedMember 2021-01-11 2021-01-11 lmfa:BitcoinMachine 0001640384 lmfa:PurchaseAgreementsMember 2021-09-08 2021-09-08 0001640384 lmfa:PurchaseAgreementsMember lmfa:MiningMachineMember 2021-09-08 2021-09-08 0001640384 lmfa:PurchaseAgreementsMember 2021-01-01 2021-09-30 0001640384 us-gaap:WarrantMember 2021-01-01 2021-09-30 0001640384 us-gaap:WarrantMember 2021-01-29 2021-01-29 0001640384 us-gaap:WarrantMember 2021-09-30 0001640384 us-gaap:WarrantMember 2020-12-31 0001640384 lmfa:SeniorConvertiblePromissoryNotesMember 2021-09-30 0001640384 lmfa:SeniorConvertiblePromissoryNotesMember 2021-01-01 2021-09-30 0001640384 2021-06-01 2021-06-30 0001640384 us-gaap:ShortTermInvestmentsMember 2021-09-30 0001640384 us-gaap:ShortTermInvestmentsMember 2021-01-01 2021-09-30 0001640384 us-gaap:ShortTermInvestmentsMember 2021-07-01 2021-09-30 0001640384 us-gaap:ShortTermInvestmentsMember 2021-01-01 2021-09-30 0001640384 us-gaap:ShortTermInvestmentsMember 2021-09-30 0001640384 lmfa:BORQTechnologiesIncMember 2021-01-01 2021-09-30 0001640384 lmfa:BitcoinMember 2021-01-01 2021-09-30 0001640384 lmfa:EtherCryptocurrencyMember 2021-01-01 2021-09-30 0001640384 lmfa:LMFASponsorLLCMember 2021-01-01 2021-09-30 0001640384 us-gaap:CommonClassAMember lmfa:LMFASponsorLLCMember 2021-01-01 2021-09-30 0001640384 lmfa:LongTermInvestmentsMember 2021-01-01 2021-09-30 0001640384 lmfa:LongTermInvestmentsMember 2021-09-30 0001640384 lmfa:LMFundingAmericaIncMember lmfa:ClassBSharesAndWarrantsMember 2021-09-30 0001640384 lmfa:LMFundingAmericaIncMember lmfa:ClassBSharesAndWarrantsMember 2021-01-01 2021-09-30 0001640384 us-gaap:IPOMember us-gaap:CommonClassAMember lmfa:LMFundingAmericaIncMember 2021-01-28 0001640384 us-gaap:IPOMember us-gaap:CommonClassAMember lmfa:LMFundingAmericaIncMember 2021-01-28 2021-01-28 0001640384 us-gaap:PrivatePlacementMember lmfa:LMFundingAmericaIncMember us-gaap:WarrantMember 2021-01-28 0001640384 us-gaap:PrivatePlacementMember lmfa:LMFundingAmericaIncMember us-gaap:WarrantMember 2021-01-28 2021-01-28 0001640384 us-gaap:IPOMember 2021-01-28 2021-01-28 0001640384 us-gaap:IPOMember lmfa:ClassAAndClassBCommonSharesMember 2021-01-28 2021-01-28 0001640384 us-gaap:IPOMember us-gaap:WarrantMember 2021-01-28 2021-01-28 0001640384 us-gaap:IPOMember 2021-01-01 2021-09-30 0001640384 lmfa:LMFundingAndIIUIncMember 2021-01-01 2021-09-30 0001640384 lmfa:LMFundingAndIIUIncMember 2020-12-31 0001640384 lmfa:LMFundingAndIIUIncMember 2021-09-30 0001640384 lmfa:ClassBSharesAndWarrantsMember 2021-01-01 2021-09-30 0001640384 lmfa:ClassBSharesAndWarrantsMember 2021-07-01 2021-09-30 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember 2021-10-18 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember 2021-10-18 2021-10-18 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember lmfa:CommonWarrantsMember 2021-10-18 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember 2021-10-19 2021-10-19 0001640384 us-gaap:SubsequentEventMember us-gaap:OverAllotmentOptionMember 2021-10-19 0001640384 us-gaap:SubsequentEventMember us-gaap:OverAllotmentOptionMember lmfa:OptionWarrantsMember 2021-10-19 0001640384 us-gaap:SubsequentEventMember us-gaap:OverAllotmentOptionMember 2021-10-20 2021-10-20 0001640384 us-gaap:SubsequentEventMember lmfa:CommonWarrantsMember 2021-10-19 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember 2021-10-19 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember lmfa:RepresentativeSWarrantMember 2021-10-19 0001640384 us-gaap:SubsequentEventMember lmfa:UnderwrittenPublicOfferingMember lmfa:RepresentativeSWarrantMember 2021-10-19 2021-10-19 0001640384 lmfa:SecondBitmainPurchaseAgreementMember us-gaap:SubsequentEventMember 2021-10-06 2021-10-06 0001640384 lmfa:SecondBitmainPurchaseAgreementMember lmfa:MiningMachineMember us-gaap:SubsequentEventMember 2021-10-06 2021-10-06 0001640384 lmfa:SecondBitmainPurchaseAgreementMember lmfa:MiningMachineMember us-gaap:SubsequentEventMember 2021-10-06 0001640384 lmfa:SecondBitmainPurchaseAgreementMember lmfa:MiningMachineMember us-gaap:SubsequentEventMember 2021-10-15 2021-10-15 lmfa:Container 0001640384 lmfa:UptimePurchaseAgreementMember lmfa:Pod5iveContainersMember us-gaap:SubsequentEventMember 2021-10-06 2021-10-06 0001640384 lmfa:UptimePurchaseAgreementMember lmfa:Pod5iveContainersMember us-gaap:SubsequentEventMember 2021-10-06 0001640384 lmfa:UptimePurchaseAgreementMember lmfa:Pod5iveContainersMember us-gaap:SubsequentEventMember 2021-10-15 2021-10-15 0001640384 lmfa:HostingAgreementMember lmfa:Pod5iveContainersMember us-gaap:SubsequentEventMember 2021-10-06 2021-10-06 0001640384 lmfa:HostingAgreementMember us-gaap:SubsequentEventMember 2021-10-06 2021-10-06 0001640384 lmfa:StrategicAllianceAgreementsMember us-gaap:SubsequentEventMember lmfa:OTCMinersCorpMember 2021-11-04 2021-11-04 0001640384 lmfa:StrategicAllianceAgreementsMember us-gaap:SubsequentEventMember lmfa:SpartanCrestCapitalCorpMember 2021-11-04 2021-11-04 0001640384 lmfa:StrategicAllianceAgreementsMember us-gaap:SubsequentEventMember us-gaap:RestrictedStockMember lmfa:OTCMinersCorpMember 2021-11-04 0001640384 lmfa:StrategicAllianceAgreementsMember us-gaap:SubsequentEventMember us-gaap:RestrictedStockMember lmfa:SpartanCrestCapitalCorpMember 2021-11-04 0001640384 lmfa:StrategicAllianceAgreementsMember us-gaap:SubsequentEventMember lmfa:OTCMinersCorpMember 2021-11-04 0001640384 lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember us-gaap:SubsequentEventMember 2021-10-27 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefExecutiveOfficerMember 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefExecutiveOfficerMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefExecutiveOfficerMember 2021-10-27 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefFinancialOfficerMember 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefFinancialOfficerMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefFinancialOfficerMember 2021-10-27 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ExecutiveVicePresidentMember 2021-10-27 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ExecutiveVicePresidentMember 2021-10-27 2021-10-27 lmfa:Time 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefExecutiveOfficerMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-28 2021-10-28 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ChiefFinancialOfficerMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-28 2021-10-28 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember srt:ExecutiveVicePresidentMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-28 2021-10-28 0001640384 lmfa:ManagementEmploymentContractMember us-gaap:SubsequentEventMember lmfa:TwoThousandTwentyOneOmnibusIncentivePlanMember 2021-10-28 2021-10-28 lmfa:Day

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

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 001-37605

 

LM FUNDING AMERICA, INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

47-3844457

(State or other jurisdiction of

incorporation or organization)

(I.R.S. employer

identification no.)

 

 

1200 West Platt Street

Suite 100

Tampa, FL

33606

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: 813-222-8996

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

Trading symbol

Name of each exchange on which registered

Common Stock par value $0.001 per share

LMFA

The Nasdaq Stock Market LLC

 

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.    Yes      No  

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).    Yes      No  

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

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

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      No  

The registrant had 12,804,619 shares of Common Stock, par value $0.001 per share, outstanding as of November 9, 2021.

 

 

 

 


 

LM FUNDING AMERICA, INC.

TABLE OF CONTENTS

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

LM Funding America, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
September 30, 2021 (unaudited) and December 31, 2020

3

 

 

 

 

LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

4

 

 

 

 

LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2021 and 2020 (unaudited)

5

 

 

 

 

LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

 

 

 

Item 4.

Controls and Procedures

 

 

 

 

PART II.

OTHER INFORMATION

31

 

 

 

Item 1.

Legal Proceedings

31

 

 

 

Item 1A.

Risk Factors

31

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

 

 

 

Item 3.

Defaults Upon Senior Securities

35

 

 

 

Item 5.

Other Information

35

 

 

 

Item 6.

Exhibits

36

 

 

SIGNATURES

37

 

2


 

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

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

 

 

 

September 30, 2021

 

 

December 31,

2020

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

17,458,806

 

 

$

11,552,943

 

Finance receivables:

 

 

 

 

 

 

 

 

Original product - net (Note 2)

 

 

78,468

 

 

 

116,017

 

Special product - New Neighbor Guaranty program, net of allowance for credit losses of (Note 3)

 

 

44,307

 

 

 

52,757

 

Short-term investments - convertible debt securities (Note 9)

 

 

841,878

 

 

 

-

 

Marketable securities (Note 9)

 

 

3,480,230

 

 

 

-

 

Prepaid expenses and other assets

 

 

386,926

 

 

 

399,124

 

Digital assets, net (Note 9)

 

 

1,396,238

 

 

 

-

 

Current assets

 

 

23,686,853

 

 

 

12,120,841

 

Fixed assets, net

 

 

8,180

 

 

 

6,171

 

Real estate assets owned

 

 

80,057

 

 

 

18,767

 

Operating lease - right of use assets (Note 7)

 

 

85,062

 

 

 

160,667

 

Long-term investments - equity securities (Note 9)

 

 

2,111,584

 

 

 

-

 

Investments in unconsolidated affiliates (Note 9)

 

 

4,676,130

 

 

 

-

 

Deposit on mining equipment (Note 7)

 

 

1,565,625

 

 

 

-

 

Other assets

 

 

10,946

 

 

 

10,984

 

Long-term assets

 

 

8,537,584

 

 

 

196,589

 

Total assets

 

$

32,224,437

 

 

$

12,317,430

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

496,206

 

 

 

237,033

 

Due to related party (Note 4)

 

 

135,919

 

 

 

158,399

 

Current portion of lease liability (Note 7)

 

 

93,340

 

 

 

-

 

Note payable - short-term (Note 5)

 

 

172,032

 

 

 

96,257

 

Total current liabilities

 

 

897,497

 

 

 

491,689

 

 

 

 

 

 

 

 

 

 

Lease liability - long-term (Note 7)

 

 

1,652

 

 

 

171,648

 

Deferred taxes (Note 6)

 

 

29,883

 

 

 

-

 

Note payable - long-term (Note 5)

 

 

-

 

 

 

185,785

 

Long-term liabilities

 

 

31,535

 

 

 

357,433

 

Total liabilities

 

 

929,032

 

 

 

849,122

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, par value $0.001; 30,000,000 shares authorized; 5,414,296 and 3,083,760 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

5,414

 

 

 

3,084

 

Additional paid-in capital

 

 

39,538,550

 

 

 

29,996,257

 

Accumulated deficit

 

 

(8,538,520

)

 

 

(18,536,224

)

Total stockholders’ equity

 

 

31,005,444

 

 

 

11,463,117

 

Non-controlling interest

 

 

289,961

 

 

 

5,191

 

Total stockholders’ equity

 

 

31,295,405

 

 

 

11,468,308

 

Total liabilities and stockholders’ equity

 

$

32,224,437

 

 

$

12,317,430

 

 

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)

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on delinquent association fees

 

$

129,439

 

 

$

105,592

 

 

$

269,556

 

 

$

495,280

 

Administrative and late fees

 

 

14,642

 

 

 

19,929

 

 

 

46,574

 

 

 

78,397

 

Recoveries in excess of cost - special product

 

 

14,000

 

 

 

37,127

 

 

 

61,052

 

 

 

122,117

 

Underwriting and other revenues

 

 

28,784

 

 

 

27,651

 

 

 

86,981

 

 

 

96,815

 

Rental revenue

 

 

36,759

 

 

 

62,185

 

 

 

103,264

 

 

 

143,609

 

Total revenues

 

 

223,624

 

 

 

252,484

 

 

 

567,427

 

 

 

936,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staff costs and payroll

 

 

1,874,798

 

 

 

2,522,481

 

 

 

3,422,819

 

 

 

3,151,033

 

Professional fees

 

 

497,942

 

 

 

385,705

 

 

 

1,340,909

 

 

 

1,372,281

 

Settlement costs with associations

 

 

-

 

 

 

17,934

 

 

 

-

 

 

 

29,854

 

Selling, general and administrative

 

 

106,895

 

 

 

96,483

 

 

 

302,679

 

 

 

251,434

 

Recovery of cost from related party receivable

 

 

(100,000

)

 

 

(100,000

)

 

 

(200,000

)

 

 

(300,000

)

Provision for credit losses

 

 

-

 

 

 

30,000

 

 

 

(10,000

)

 

 

30,000

 

Real estate management and disposal

 

 

29,878

 

 

 

53,432

 

 

 

77,646

 

 

 

152,882

 

Depreciation and amortization

 

 

4,482

 

 

 

(3,383

)

 

 

9,476

 

 

 

10,383

 

Collection costs

 

 

(1,410

)

 

 

771

 

 

 

3,339

 

 

 

(28,484

)

Other operating expenses

 

 

5,801

 

 

 

3,120

 

 

 

17,415

 

 

 

13,758

 

Total operating expenses

 

 

2,418,386

 

 

 

3,006,543

 

 

 

4,964,283

 

 

 

4,683,141

 

Operating loss from continuing operations

 

 

(2,194,762

)

 

 

(2,754,059

)

 

 

(4,396,856

)

 

 

(3,746,923

)

Realized gain (loss) on securities

 

 

(173,282

)

 

 

-

 

 

 

13,951,752

 

 

 

-

 

Unrealized loss on convertible debt security

 

 

(2,588,916

)

 

 

-

 

 

 

(87,316

)

 

 

-

 

Unrealized loss on marketable securities

 

 

(478,448

)

 

 

-

 

 

 

(478,448

)

 

 

-

 

Unrealized gain (loss) on investment and equity securities

 

 

(123,172

)

 

 

-

 

 

 

1,024,714

 

 

 

-

 

Impairment loss on digital assets

 

 

(23,720

)

 

 

-

 

 

 

(23,720

)

 

 

-

 

Interest income

 

 

77,956

 

 

 

-

 

 

 

164,895

 

 

 

-

 

Interest expense

 

 

(3,939

)

 

 

2,300

 

 

 

(653

)

 

 

(10,326

)

Dividend income

 

 

738

 

 

 

-

 

 

 

738

 

 

 

-

 

Gain on forgiveness of note payable

 

 

-

 

 

 

-

 

 

 

157,251

 

 

 

-

 

Income (loss) from continuing operations before income taxes

 

 

(5,507,545

)

 

 

(2,751,759

)

 

 

10,312,357

 

 

 

(3,757,249

)

Income tax expense

 

 

(12,619

)

 

 

-

 

 

 

(29,883

)

 

 

-

 

Net income (loss) from continuing operations

 

 

(5,520,164

)

 

 

(2,751,759

)

 

 

10,282,474

 

 

 

(3,757,249

)

Gain from operations of discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16,428

 

Net gain from discontinued operations

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16,428

 

Net income (loss)

 

 

(5,520,164

)

 

 

(2,751,759

)

 

 

10,282,474

 

 

 

(3,740,821

)

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

 

 

33,953

 

 

 

-

 

 

 

(284,770

)

 

 

-

 

Net income (loss) attributable to LM Funding America Inc.

 

$

(5,486,211

)

 

$

(2,751,759

)

 

$

9,997,704

 

 

$

(3,740,821

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share - continuing operations

 

$

(1.01

)

 

$

(1.41

)

 

$

1.89

 

 

$

(3.32

)

Basic income/(loss) per common share - discontinued operations

 

$

-

 

 

$

-

 

 

$

-

 

 

$

0.02

 

Basic income (loss) per common share - net income (loss) - attributable to LM Funding

 

$

(1.01

)

 

$

(1.41

)

 

$

1.89

 

 

$

(3.30

)

Diluted income (loss) per common share - continuing operations

 

$

(1.01

)

 

$

(1.41

)

 

$

1.88

 

 

$

(3.32

)

Diluted earnings/(loss) per common share - discontinued operations

 

$

-

 

 

$

-

 

 

$

-

 

 

$

0.02

 

Diluted income (loss) per common share - net income (loss) - attributable to LM Funding

 

$

(1.01

)

 

$

(1.41

)

 

$

1.88

 

 

$

(3.30

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,414,296

 

 

 

1,958,107

 

 

 

5,293,375

 

 

 

1,132,407

 

Diluted

 

 

5,421,606

 

 

 

1,958,107

 

 

 

5,305,418

 

 

 

1,132,407

 

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)

 

 

 

For the Nine Months

Ended September 30,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

10,282,474

 

 

$

(3,740,821

)

Adjustments to reconcile net loss to cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

9,476

 

 

 

5,919

 

Right to use asset depreciation

 

 

75,605

 

 

 

74,890

 

Stock compensation

 

 

-

 

 

 

135,679

 

Gain on forgiveness of note payable

 

 

(157,251

)

 

 

-

 

Recovery of uncollectible related party receivables

 

 

-

 

 

 

(300,000

)

Accrued investment income

 

 

(160,954

)

 

 

-

 

Reserve for Accounts

 

 

 

 

 

 

30,000

 

Gain from operations of discontinued operations

 

 

-

 

 

 

(16,428

)

Loss on deconsolidation of  affiliate

 

 

(43,623

)

 

 

-

 

Impairment loss on digital assets

 

 

23,720

 

 

 

-

 

Unrealized loss on convertible debt security

 

 

87,316

 

 

 

-

 

Unrealized loss on marketable securities

 

 

478,448

 

 

 

-

 

Unrealized gain on investment and equity securities

 

 

(1,024,714

)

 

 

-

 

Realized gain on securities

 

 

(13,951,752

)

 

 

-

 

Proceeds from securities

 

 

30,070,285

 

 

 

-

 

Investment in convertible note receivable converted into marketable security

 

 

(16,118,533

)

 

 

-

 

Investment in convertible note receivable

 

 

(5,000,000

)

 

 

-

 

Convertible debt and interest converted into marketable securities

 

 

4,231,760

 

 

 

-

 

Investments in marketable security

 

 

(3,958,678

)

 

 

-

 

Change in assets and liabilities

 

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

(8,326

)

 

 

120,598

 

Accounts payable and accrued expenses

 

 

382,204

 

 

 

272,976

 

Advances (repayments) from related party

 

 

103,934

 

 

 

689,457

 

Lease liability payments

 

 

(76,656

)

 

 

(69,669

)

Deferred taxes

 

 

29,883

 

 

 

-

 

Net cash provided by (used in) operating activities

 

 

5,274,618

 

 

 

(2,797,399

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Net collections of finance receivables - original product

 

 

37,549

 

 

 

74,117

 

Net collections of finance receivables - special product

 

 

8,450

 

 

 

33,328

 

(Payments) for real estate assets owned

 

 

(68,568

)

 

 

(3,920

)

Capital expenditures

 

 

(4,207

)

 

 

(1,286

)

Deposit for mining equipment

 

 

(1,565,625

)

 

 

-

 

Net cash payment for IIU disposal

 

 

-

 

 

 

(246,914

)

Proceeds from investment in note receivable

 

 

-

 

 

 

1,500,000

 

Investment in digital assets

 

 

(1,419,958

)

 

 

-

 

Loan to purchase securities

 

 

1,784,250

 

 

 

-

 

Repayment of loan to purchase securities

 

 

(1,784,250

)

 

 

-

 

Investment in unconsolidated affiliate

 

 

(5,738,000

)

 

 

-

 

Net cash (used in) provided by investing activities

 

 

(8,750,359

)

 

 

1,355,325

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Borrowings

 

 

-

 

 

 

185,785

 

Principal repayments

 

 

(28,534

)

 

 

-

 

Insurance financing repayments

 

 

(134,485

)

 

 

(108,043

)

Exercise of warrants

 

 

9,544,623

 

 

 

3,081,480

 

Proceeds from stock subscription

 

 

-

 

 

 

9,447,535

 

Net cash provided by financing activities

 

 

9,381,604

 

 

 

12,606,757

 

NET INCREASE IN CASH

 

 

5,905,863

 

 

 

11,164,683

 

CASH - BEGINNING OF YEAR

 

 

11,552,943

 

 

 

1,069,823

 

CASH - END OF YEAR

 

$

17,458,806

 

 

$

12,234,506

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION

 

 

 

 

 

 

 

 

Insurance financing

 

$

210,260

 

 

$

192,514

 

SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

1,892

 

 

$

10,326

 

 

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

5


LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2021 and 2020

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional paid in capital

 

 

Accumulated Deficit

 

 

Non-Controlling Interest

 

 

Total Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2019

 

 

626,852

 

 

$

627

 

 

$

17,329,060

 

 

$

(14,494,762

)

 

$

-

 

 

$

2,834,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for services

 

 

37,200

 

 

 

37

 

 

 

128,810

 

 

 

-

 

 

 

-

 

 

 

128,847

 

 

Net loss

 

 

-

 

 

 

-