LM Funding America, Inc. Achieves Over 1,720% Year-Over-Year Revenue Growth to $3.4 Million

Rhea-AI Summary

LM Funding America, Inc. (NASDAQ: LMFA) Mined 117.1 Bitcoins in Q3 2023, Generating Approximately $3.3 Million in Revenue. The company focuses on Bitcoin mining machines that track the value of Bitcoin, reporting a working capital of $4.5 million and stockholders’ equity of $35.9 million. The average BTC price for the quarter recognized as revenue was approximately $28,000, with a sequential quarterly revenue increase of 7.0% from the three months ended June 30, 2023.

Mined 117.1 Bitcoins in the Third Quarter of 2023 at an Average Market Revenue Value of Approximately $28,000 per Bitcoin

Implementing 'Infrastructure Light' Approach to Bitcoin Mining Business; Focuses Capital Investment on Bitcoin and Bitcoin Mining Machines That Track the Value of Bitcoin

Reports Working Capital of Approximately $4.5 Million and LM Funding Stockholders’ Equity of $35.9 Million ($2.45 per share) as of September 30, 2023

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

TAMPA, Fla., Nov. 15, 2023 (GLOBE NEWSWIRE) -- 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 quarter ended September 30, 2023.

Operational Highlights

• Approximately 5,549 Bitcoin mining machines in operation at hosting sites as of September 30, 2023.
• Mined 117.1 Bitcoin in Q3 2023, valued at approximately $3.3 million based on the $28,000 average price of Bitcoin during the quarter.
• Sequential quarterly revenue increased by 7.0% from the three months ended June 30, 2023.
  

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “This quarter marks yet another significant step forward in our transition into Bitcoin mining. In the third quarter of 2023, we mined 117.1 Bitcoin, a 10% sequential increase over the second quarter of 2023. LM Funding is actively implementing an 'Infrastructure Light' approach in our Bitcoin mining business that seeks to mitigate risk and volatility in the market by focusing our capital investments on Bitcoin and Bitcoin mining machines that track the value of Bitcoin. Overall, we are quite encouraged by the overall market and outlook for Bitcoin pricing, including the upcoming 2024 halving event.”

Richard Russell, Chief Financial Officer of LM Funding, further noted, "Beyond our year-over-year quarterly revenue growth, we experienced sequential quarterly revenue growth of 7% compared with Q2 2023. As of September 30, 2023, our cash plus BTC was approximately $2.7 million. Our working capital stood at $4.5 million as of September 30, 2023, and the equity of LM Funding shareholders was $35.9 million, or $2.45 per share. Given our financial position, we remain highly encouraged by the financial outlook for the business.”

Financial Highlights

• Total revenue for the quarter ended September 30, 2023, was approximately $3.4 million, an increase of $3.2 million, or more than 1,720%, from $0.2 million for the 2022 third quarter. The increase was primarily due to digital mining revenue of $3.3 million compared with $42 thousand of digital mining revenue in the same period last year as the Company commenced our Bitcoin mining operations in September 2022. The average BTC price for the quarter recognized as revenue was approximately $28,000.
• Net loss attributable to LM Funding shareholders for the third quarter ended September 30, 2023, was approximately $4.4 million, which included a $0.8 million non-cash, unrealized loss on investment and equity securities and a $0.8 million impairment on our Symbiont assets compared with net income of approximately $6.7 million for the third quarter of 2022, which included a $0.2 million unrealized loss on investment and equity securities.
• Core EBITDA loss for the quarter ended September 30, 2023, totaled approximately $0.6 million, compared with Core EBITDA loss of $1.5 million in the 2022 comparable quarter, primarily due to the existence of material Bitcoin mining operations in the current year quarter that didn’t 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 of approximately $0.5 million, digital assets of $2.2 million, and working capital of $4.5 million as of September 30, 2023 based on 90.1 BTC at a price of approximately $25,000 as of September 30, 2023. The current BTC market price has averaged between $35,000 to $37,000 in recent weeks. In October 2023, the Company also received approximately $800 thousand from SeaStar Medical Holdings as a partial repayment of their outstanding note receivable.
• Total LM Funding stockholders’ equity of approximately $35.9 million, or $2.45 per share, as of September 30, 2023 (with the per-share amount calculated as LMFA stockholders’ equity divided by approximately 14,652,000 shares outstanding as of September 30, 2023).
  

Investor Conference Call

LM Funding will host a conference call today, November 15 , 2023, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the third quarter ended September 30, 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 406670. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/49429 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 the Company’s website at https://www.lmfunding.com/investors/news-events/ir-calendar through November 15, 2024. A telephone replay of the call will be available approximately one hour following the call, through November 29, 2023, 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 49429.

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 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, 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 (unaudited)
	September 30,				December 31,
	2023				2022
	(Unaudited)
Assets
Cash	$	469,007			$	4,238,006
Digital Assets		2,256,500				888,026
Finance receivables		21,558				26,802
Marketable securities		198,094				4,290
Notes receivable from Seastar Medical Holding Corporation		2,277,012				3,807,749
Less: Allowance for credit loss reserve on notes receivable from Seastar Medical Holding Corporation		(22,344	)			-
Notes receivable from Seastar Medical Holding Corporation, net		2,254,668				3,807,749
Prepaid expenses and other assets		1,463,094				1,233,322
Income tax receivable		293,466				293,466
Current assets		6,956,387				10,491,661
Fixed assets, net		25,917,390				27,192,317
Deposits on mining equipment		282,233				525,219
Hosting services deposits		2,218,452				2,200,452
Real estate assets owned		80,057				80,057
Long-term investments - debt security		-				2,402,542
Less: Allowance for losses on debt security		-				(1,052,542	)
Long-term investments - debt security, net		-				1,350,000
Long-term investments - equity securities		72,815				464,778
Investment in Seastar Medical Holding Corporation		683,100				10,608,750
Symbiont intangible assets, net		2,000,000				-
Operating lease - right of use assets		214,574				265,658
Other assets		10,726				10,726
Long-term assets		31,479,347				42,697,957
Total assets	$	38,435,734			$	53,189,618
Liabilities and stockholders' equity
Accounts payable and accrued expenses		2,253,311				1,570,906
Note payable - short-term		63,208				475,775
Due to related parties		44,398				75,488
Current portion of lease liability		106,689				90,823
Total current liabilities		2,467,606				2,212,992
Lease liability - net of current portion		114,855				179,397
Long-term liabilities		114,855				179,397
Total liabilities		2,582,461				2,392,389
Stockholders' equity
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022		-				-
Common stock, par value $.001; 350,000,000 shares authorized; 14,651,883 shares issued and outstanding as of September 30, 2023 and 13,091,883 as of December 31, 2022		14,652				13,092
Additional paid-in capital		94,722,633				92,195,341
Accumulated deficit		(57,369,694	)			(43,017,207	)
Total LM Funding America stockholders' equity		37,367,591				49,191,226
Non-controlling interest		(1,514,318	)			1,606,003
Total stockholders' equity		35,853,273				50,797,229
Total liabilities and stockholders’ equity	$	38,435,734			$	53,189,618

LM Funding America, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
Revenues:
Digital mining revenues	$	3,283,473			$	42,157			$	8,342,646			$	42,157
Specialty finance revenue		101,535				104,835				474,544				450,920
Rental revenue		34,500				40,788				111,486				120,240
Total revenues		3,419,508				187,780				8,928,676				613,317
Operating costs and expenses:
Digital mining cost of revenues (exclusive of depreciation and amortization shown below)		2,708,672				38,960				6,738,170				38,960
Staff costs & payroll		1,340,665				4,297,540				4,736,940				12,886,432
Professional fees		419,173				714,730				1,228,503				2,520,981
Settlement costs with associations		-				-				10,000				160
Selling, general and administrative		201,151				209,328				683,174				446,519
Real estate management and disposal		26,453				22,558				127,611				76,453
Depreciation and amortization		1,516,873				38,617				3,487,866				43,718
Collection costs		8,098				5,037				17,533				(6,689	)
Impairment loss on mined digital assets		383,497				870				822,650				870
Realized gain on sale of mined digital assets		(261,191	)			-				(1,331,982	)			-
Other operating costs		246,536				124,405				704,390				274,298
Total operating costs and expenses		6,589,927				5,452,045				17,224,855				16,281,702
Operating loss		(3,170,419	)			(5,264,265	)			(8,296,179	)			(15,668,385	)
Realized gain (loss) on securities		1,788				-				1,788				(349,920	)
Realized gain on convertible debt securities		-				-				-				287,778
Unrealized gain (loss) on marketable securities		2,058				(13,000	)			6,436				(36,900	)
Impairment loss on hosting deposits		-				-				(36,691	)			-
Impairment loss on Symbiont assets		(750,678	)			-				(750,678	)			-
Unrealized gain (loss) on investment and equity securities		(778,078	)			(194,174	)			(10,317,613	)			11,034,828
Impairment loss on digital assets		-				(25,764	)			-				(403,471	)
Realized gain on sale of purchased digital assets		-				-				1,917				-
Digital assets other income		-				-				-				5,658
Other income - coupon sales		10,160				-				639,472				-
Credit loss on Seastar Medical Holding Corporation notes receivable		(22,344	)			-				(22,344	)			-
Gain on adjustment of note receivable allowance		-				-				1,052,543				-
Other income - finance revenue		-				-				37,660				-
Dividend income		-				1,125				-				3,875
Interest income		39,657				85,602				210,881				264,947
Loss before income taxes		(4,667,856	)			(5,410,476	)			(17,472,808	)			(4,861,590	)
Income tax expense		-				(1,311,678	)			-				(1,311,678	)
Net Loss	$	(4,667,856	)		$	(6,722,154	)		$	(17,472,808	)		$	(6,173,268	)
Less: loss (income) attributable to non-controlling interest		250,880				59,298				3,120,321				(3,373,299	)
Net loss attributable to LM Funding America Inc.	$	(4,416,976	)		$	(6,662,856	)		$	(14,352,487	)		$	(9,546,567	)
Basic loss per common share	$	(0.33	)		$	(0.51	)		$	(1.08	)		$	(0.73	)
Diluted loss per common share	$	(0.33	)		$	(0.51	)		$	(1.08	)		$	(0.73	)
Weighted average number of common shares outstanding
Basic		13,480,470				13,091,883				13,237,121				13,081,591
Diluted		13,480,470				13,091,883				13,237,121				13,081,591

LM Funding America, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited)
	Nine Months ended September 30,
	2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,472,808	)		$	(6,173,268	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		3,487,866				43,718
Noncash lease expense		70,545				71,288
Stock compensation		917,057				988,498
Stock option expense		1,611,795				9,956,219
Accrued investment income		(130,990	)			(259,867	)
Impairment loss on digital assets		822,650				404,341
Impairment loss on hosting deposits		36,691				-
Impairment loss on Symbiont assets		750,678				-
Unrealized loss (gain) on marketable securities		(6,436	)			36,900
Unrealized loss (gain) on investment and equity securities		10,317,613				(11,034,828	)
Realized loss (gain) on securities		(1,788	)			349,920
Realized gain on convertible note receivable		-				(287,778	)
Realized gain on sale of digital assets		(1,333,899	)			-
Proceeds from securities		554,036				2,565,893
Convertible debt and interest converted into marketable securities		-				844,882
Investments in marketable securities		(739,616	)			(844,882	)
Credit loss on Seastar Medical Holding Corporation notes receivable		22,344				-
Reversal of allowance loss on debt security		(1,052,543	)			-
Change in operating assets and liabilities:
Prepaid expenses and other assets		(123,221	)			807,352
Hosting deposits		(54,691	)			-
Repayments to related party		(31,090	)			(45,605	)
Accounts payable and accrued expenses		682,405				172,723
Mining of digital assets		(8,352,805	)			(42,157	)
Proceeds from sale of digital assets		7,487,058				-
Lease liability payments		(70,563	)			(75,574	)
Deferred taxes and taxes payable		-				841,678
Net cash used in operating activities		(2,609,712	)			(1,680,547	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product		(8,765	)			19,049
Net collections of finance receivables - special product		14,009				(11,565	)
Capital expenditures		(1,913,303	)			(15,380	)
Investment in note receivable		(100,000	)			(350,000	)
Investment in note receivable - related party		-				(2,785,000	)
Collection of note receivable		1,761,727				-
Investment in digital assets		(35,157	)			(978,441	)
Proceeds from sale of purchased digital assets		43,678				-
Symbiont asset acquisition		(402,359	)			-
Deposits for mining equipment		-				(16,467,402	)
Net cash used in investing activities		(640,170	)			(20,588,739	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance financing repayments		(499,453	)			(114,688	)
Insurance financing		86,886				-
Issue costs from the issuance of common stock		(106,550	)			-
Net cash used in financing activities		(519,117	)			(114,688	)
NET DECREASE IN CASH		(3,768,999	)			(22,383,974	)
CASH - BEGINNING OF PERIOD		4,238,006				32,559,185
CASH - END OF PERIOD	$	469,007			$	10,175,211
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
ROU assets and operating lease obligation recognized	$	21,887			$	300,787
Reclassification of mining equipment deposit to fixed assets, net	$	1,177,226			$	21,986,382
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for interest	$	-			$	-
Cash paid for taxes	$	-			$	470,000

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, 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:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
Net income (loss)	$	(4,667,856	)		$	(6,722,154	)		$	(17,472,808	)		$	(6,173,268	)
Income tax expense		-				1,311,678				-				1,311,678
Interest expense		-				-				-				-
Depreciation and amortization		1,516,873				38,617				3,487,866				43,718
Income (loss) before interest, taxes & depreciation	$	(3,150,983	)		$	(5,371,859	)		$	(13,984,942	)		$	(4,817,872	)
Unrealized loss (gain) on investment and equity securities		778,078				194,174				10,317,613				(11,034,828	)
Realized gain on convertible debt securities		-				-				-				(287,778	)
Impairment loss on mined digital assets		383,497				870				822,650				870
Impairment loss on Symbiont assets		750,678				-				750,678				-
Gain on adjustment of note receivable allowance		-				-				(1,052,543	)			-
Stock compensation and option expense		621,827				3,648,239				2,528,852				10,944,717
Core income (loss) before interest, taxes & depreciation	$	(616,903	)		$	(1,528,576	)		$	(617,692	)		$	(5,194,891	)

FAQ

How many Bitcoins did LM Funding mine in Q3 2023?

LM Funding mined 117.1 Bitcoins in Q3 2023.

What was the average price of Bitcoin in Q3 2023?

The average price of Bitcoin in Q3 2023 was approximately $28,000.

What was the revenue generated from Bitcoin mining in Q3 2023?

The revenue generated from Bitcoin mining in Q3 2023 was approximately $3.3 million.

What was LM Funding's working capital as of September 30, 2023?

LM Funding's working capital was approximately $4.5 million as of September 30, 2023.

What was LM Funding's stockholders’ equity as of September 30, 2023?

LM Funding's stockholders’ equity was approximately $35.9 million, or $2.45 per share, as of September 30, 2023.