LM Funding America, Inc. Reports First Quarter 2022 Financial Results

Rhea-AI Summary

LM Funding America, Inc. (NASDAQ: LMFA) reported financial results for Q1 2022, revealing a net loss of $5.7 million, contrasting with a net income of $4.4 million in Q1 2021. Revenues rose to $191,000 from $177,000 year-over-year. As of March 31, 2022, cash holdings totaled $24.5 million, with significant investments in cryptocurrency mining. The company expects to receive monthly shipments of 841 mining machines from Bitmain starting June 2022, anticipating its first Bitcoin generation by Q3 2022.

Positive

• Revenue increased to $191,000 for Q1 2022, up from $177,000 in Q1 2021.
• Cash position of $24.5 million as of March 31, 2022.
• First shipments of cryptocurrency mining machines expected starting June 2022.

Negative

• Net loss of $5.7 million for Q1 2022 compared to a net income of $4.4 million in Q1 2021.
• Net cash used by operating activities was approximately $528,000.

TAMPA, Fla., May 16, 2022 /PRNewswire/ -- LM Funding America, Inc. (NASDAQ: LMFA) ("LM Funding" or the "Company"), a technology-based specialty finance company offering unique funding solutions to community associations that has expanded into the cryptocurrency mining business, today announced its financial results for the three months ended March 31, 2022.

We are excited to receive our first shipments of mining machines from Bitmain and look forward to generating our first Bitcoin anticipated in the third quarter of 2022

Financial Highlights for the Three Month Period Ended March 31, 2022:·

• Paid an additional $7.1 million in first quarter to Bitmain for the 5,046 machines on order, of which 841 have been delivered, and anticipate shipments of 841 machines per month from June 2022 through October 2022.
• Cash position of $24.5 million as of March 31, 2022.
• The Company had $23.9 million in deposits on mining machines.
• Net equity per share on March 31, 2022 was $4.48 (calculated as stockholders' equity divided by 13,091,955 shares outstanding as of March 31, 2022).
• Revenues increased to $191,000 for the quarter ended March 31, 2022 as compared with $177,000 for the comparable quarter in 2021.
• Net cash used by operating activities was approximately $528,000 for the first quarter 2022.
• Net loss attributable to LM Funding for the first quarter of 2022 was $5.7 million, which includes $3.6 million of stock option/compensation expense and a realized loss on securities of $0.4 million, versus net income of $4.4 million for the first quarter of 2021, which included a $5.7 million realized gain on securities.

"We are excited to receive our first shipments of mining machines from Bitmain and look forward to generating our first Bitcoin anticipated in the third quarter of 2022," stated Mr. Bruce Rodgers, Chief Executive Officer and Chairman of LM Funding.  "We expect the recent downturn in Bitcoin pricing may provide us with pricing discounts on machines we currently have under contract as well as opportunities to purchase additional machines at lower prices."

On April 21, 2022, LMF Acquisition Opportunities, Inc. ("LMAO") entered into an Agreement and Plan of Merger with LMF Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of LMAO, and SeaStar Medical, Inc., a Delaware corporation.

About LM Funding America:

LM Funding America, Inc., together with its subsidiaries, is 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. The company offers funding to Associations by purchasing a certain portion of the associations' rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments. The company is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association's financial needs, including under the company's New Neighbor Guaranty™ program.  The company is also entering the cryptocurrency mining business through a new subsidiary, US Digital Mining and Hosting Co., LLC.  

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," "estimate," "expect," "intend," "plan," and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Important factors which could materially affect our results and our future performance include, without limitation, our ability to implement our plan to develop and grow a cryptocurrency mining business specializing in Bitcoin,our ability to purchase defaulted consumer receivables at appropriate prices, competition to acquire such receivables, our dependence upon third party law firms to service our accounts, our ability to obtain funds to purchase receivables, ability to manage growth or declines in the business, changes in government regulations that affect our ability to collect sufficient amounts on our defaulted consumer receivables, the impact of class action suits and other litigation, our ability to keep our software systems updated to operate our business, our ability to employ and retain qualified employees, our ability to establish and maintain internal accounting controls, changes in the credit or capital markets, changes in interest rates, deterioration in economic conditions, and negative press regarding the debt collection industry which may have a negative impact on a debtor's willingness to pay the debt we acquire, as well as other factors set forth under "Risk Factors" in our most recent Annual Report on Form 10-K and our other filings with the SEC, which are available at www.sec.gov. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business, financial condition, and results of operations.

Company Contact:                                                     Bruce M. Rodgers, Chairman and CEO                                   LM Funding America, Inc.                                           Tel (813) 222-8996                                                     investors@lmfunding.com

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Three Months Ended March 31,
		2022				2021
Revenues:
Interest on delinquent association fees		$	101,268			$	77,444
Administrative and late fees			16,708				15,071
Recoveries in excess of cost - special product			17,365				29,473
Underwriting and other revenues			16,791				22,703
Rental revenue			38,872				31,917
Total revenues			191,004				176,608
Operating Expenses:
Staff costs and payroll			4,292,197				1,301,981
Professional fees			774,820				482,943
Settlement costs with associations			160				-
Selling, general and administrative			114,920				99,769
Recovery of cost from related party receivable			-				(10,000)
Real estate management and disposal			31,481				18,290
Depreciation and amortization			3,094				1,696
Collection costs			(3,820)				2,048
Other operating expenses			8,384				7,545
Total operating expenses			5,221,236				1,904,272
Operating loss			(5,030,232)				(1,727,664)
Realized gain (loss) on securities			(395,181)				5,671,464
Unrealized gain on convertible debt security			288,320				-
Unrealized gain on marketable securities			130				-
Unrealized gain (loss) on investment and equity securities			(986,399)				595,392
Digital assets other income			4,366				-
Interest income			98,370				13,055
Interest expense			-				(464)
Dividend income			1,375				-
Income (loss) before income taxes			(6,019,251)				4,551,783
Income tax expense			-				(3,484)
Net income (loss)			(6,019,251)				4,548,299
Less: Net income (loss) attributable to non-controlling interest			291,200				(171,866)
Net income (loss) attributable to LM Funding America Inc.		$	(5,728,051)			$	4,376,433
Earnings/(loss) per share:
Basic income (loss) per common share - net income (loss) - attributable to LM Funding		$	(0.44)			$	0.87
Diluted income (loss) per common share - net income (loss) - attributable to LM Funding		$	(0.44)			$	0.80
Weighted average number of common shares outstanding:
Basic			13,060,736				5,047,498
Diluted			13,060,736				5,439,398

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
		March 31, 2022				December 31, 2021
		(Unaudited)
ASSETS
Cash		$	24,536,467			$	32,559,185
Finance receivables:
Original product - net			20,543				13,993
Special product - New Neighbor Guaranty program, net of allowance for credit losses of			16,148				14,200
Short-term investments - convertible debt securities (Note 7)			845,424				539,351
Marketable securities (Note 7)			308,950				2,132,051
Short-term investments - debt security (Note 7)			2,106,082				2,000,000
Prepaid expenses and other assets			944,464				1,251,852
Income tax receivable (Note 4)			143,822				-
Note receivable from related party (Note 7)			310,000				-
Digital assets, net (Note 9)			504,366				-
Current assets			29,736,266				38,510,632
Fixed assets, net			14,820				17,914
Real estate assets owned			80,057				80,057
Operating lease - right of use assets (Note 5)			337,413				59,969
Long-term investments - equity securities (Note 7)			949,754				1,973,413
Investments in unconsolidated affiliates (Note 7)			4,713,390				4,676,130
Deposit on mining equipment (Note 8)			23,893,672				16,775,100
Other assets			10,726				10,726
Long-term assets			29,999,832				23,593,309
Total assets		$	59,736,098			$	62,103,941
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses			325,489				463,646
Note payable - short-term (Note 3)			57,344				114,688
Due to related party (Note 2)			373,800				121,220
Current portion of lease liability (Note 5)			90,072				68,002
Income tax payable (Note 4)			-				326,178
Other liabilities			1,725				-
Total current liabilities			848,430				1,093,734
Lease liability - long-term (Note 5)			248,475				-
Long-term liabilities			248,475				-
Total liabilities			1,096,905				1,093,734
Stockholders' equity:
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued       and outstanding as of March 31, 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 March 31, 2022 and December 31, 2021, respectively			13,092				13,018
Additional paid-in capital			78,173,269				74,525,106
Accumulated deficit			(19,505,057)				(13,777,006)
Total stockholders' equity			58,681,304				60,761,118
Non-controlling interest			(42,111)				249,089
Total stockholders' equity			58,639,193				61,010,207
Total liabilities and stockholders' equity		$	59,736,098			$	62,103,941

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Three Months Ended March 31,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(6,019,251)			$	4,548,299
Adjustments to reconcile net loss to cash used in operating activities
Depreciation and amortization			3,094				1,696
Right to use non cash lease expense			23,343				25,808
Stock compensation			329,500				-
Stock option expense			3,318,737				-
Accrued investment income			(96,657)				(12,784)
Digital assets other income			(4,366)
Gain on deconsolidation of  affiliate			-				(43,623)
Unrealized gain on convertible debt security			(288,320)				-
Unrealized gain on marketable securities			(130)				(595,392)
Unrealized loss on investment and equity securities			986,399				-
Realized (gain) loss on securities			395,181				(5,671,464)
Proceeds from securities			1,428,050				21,218,918
Investment in convertible note receivable converted into marketable security			-				(15,547,454)
Change in assets and liabilities
Prepaid expenses and other assets			280,208				710,163
Digital assets, net			(500,000)				-
Accounts payable and accrued expenses			(136,430)				157,514
Advances (repayments) from related party			252,580				200,749
Lease liability payments			(30,242)				(24,971)
Income tax payable			(326,178)				3,484
Income tax receivable			(143,822)				-
Net cash provided by (used in) operating activities			(528,304)				4,970,943
CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product			(6,550)				14,206
Net collections of finance receivables - special product			(1,948)				(1,020)
Payments for real estate assets owned			-				(62,432)
Deposit for mining equipment			(7,118,572)				-
Investment in convertible note receivable			-				(1,666,500)
Loan to purchase securities			-				1,784,250
Investment in note receivable - related party			(310,000)				-
Repayment of loan to purchase securities			-				(1,784,250)
Investment in unconsolidated affiliate			-				(5,738,000)
Net cash (used in) provided by investing activities			(7,437,070)				(7,453,746)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments			-				(343,687)
Insurance financing repayments			(57,344)				(468,061)
Exercise of warrants			-				9,544,623
Net cash provided by (used in) financing activities			(57,344)				8,732,875
NET INCREASE (DECREASE) IN CASH			(8,022,718)				6,250,072
CASH - BEGINNING OF YEAR			32,559,185				11,552,943
CASH - END OF YEAR		$	24,536,467			$	17,803,015
SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION
ROU assets and operating lease obligation recognized		$	300,787			$	-
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for taxes		$	470,000				-

 

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SOURCE LM Funding America

FAQ

What are the financial results for LMFA for Q1 2022?

LMFA reported a net loss of $5.7 million for Q1 2022, with revenues of $191,000.

When does LMFA expect to generate its first Bitcoin?

LMFA anticipates generating its first Bitcoin in the third quarter of 2022.

How much cash does LMFA have as of March 31, 2022?

LMFA has a cash position of $24.5 million as of March 31, 2022.

What were the key highlights from LMFA's Q1 2022 report?

Key highlights include a revenue increase, a significant net loss, and plans for ongoing cryptocurrency mining.