EX-99.1 2 lmfa-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

img17863145_0.jpg 

 

LM Funding America, Inc. Reports Financial Results and Provides Business Update for the Second Quarter of 2024

 

Mined 44.1 Bitcoins in Q2 2024 Valued at Approximately $2.9 Million at an Average
Market Revenue Value of Approximately $66,000 per Bitcoin

 

Held 160.4 Bitcoin at June 30, 2024, Valued at Approximately $10.0 Million Based on Bitcoin Price of $62,500

 

Reports Working Capital of Approximately $8.4 Million as of June 30, 2024

 

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

 

TAMPA, FL, August 14 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 and six months ended June 30, 2024.

Operational Highlights

•
Bitcoin Mining: Mined 44.1 Bitcoins in Q2 2024, generating approximately $2.9 million in revenue at an average Bitcoin price of $65,600.
•
Bitcoin Holdings: As of June 30, 2024, the Company held 160.4 Bitcoins valued at approximately $10.0 million.
•
Revenue Impact: Total revenue for the second quarter of 2024 was approximately $3.0 million, a decrease of $184 thousand from the same period last year, primarily due to the anticipated effects of the April 2024 Bitcoin halving event.
•
Net Loss: The net loss for the second quarter was $6.6 million compared to a net loss of $5.6 million for the comparable quarter in 2023.

Bruce Rodgers, Chairman and CEO of LM Funding, remarked, "The industry experienced a Bitcoin halving event in April, which resulted in a 50% reduction of the rewards that miners receive. Despite this transition, we successfully mined 44.1 Bitcoins valued at roughly $2.9 million. Fortunately, several unfavorable hosting contracts have now expired, and we are currently in the process of relocating our machines to cost effective mining sites including a potential 72 MW site in Texas that we have under LOI."

Strategic Developments

•
Hosting Facility Expansion: In collaboration with Arthur Mining Inc., LM Funding expanded a new 15 MW hosting facility near Oklahoma City, relocating about 3,000 Antminer S19j Pro machines. These machines are hosted at cost for ten months, significantly reducing operating expenses.

1

 

 

•
Future Growth with Texas Site: A Letter of Intent to acquire a hosting site in Texas with 12 MW of power and potential expansion of 60 MW to further optimize mining operations.
•
Expansion Funding: Completed a $5 million secured non-convertible loan facility, effective August 6, 2024. The proceeds from this facility will be dedicated to acquiring additional miners, further bolstering the Company's mining capabilities.

Richard Russell, CFO of LM Funding, stated, "We closed the quarter with approximately $10.2 million in cash and Bitcoin, and our working capital stood robust at $8.4 million. We are currently optimistic about the financial prospects of Bitcoin and our business outlook."

Financial Highlights

•
Revenue: Digital mining revenue decreased to $2.9 million in Q2 2024 from $3.0 million in Q2 2023, despite an increase in Bitcoin prices, due to reduced mined volume arising from the halving event and the repositioning of miners during the month of June.
•
Operating Expenses: Operating expenses rose to $7.8 million from $6.4 million year-on-year, due primarily to a $1.3 million loss in Bitcoin fair value and an increase in depreciation and amortization costs.
•
Net Loss: LM Funding reported a net loss attributable to shareholders of approximately $6.1 million, factoring in a $1.9 million unrealized loss on securities, compared to a $4.5 million loss in the prior year.
•
Core EBITDA: Core EBITDA loss widened to $2.2 million in Q2 2024 from $0.1 million in Q2 2023, although positive Core EBITDA for the first half of 2024 increased to $2.2 million due to expanded Bitcoin operations (Core EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss can be found below).

 

Investor Conference Call

 

LM Funding will host a conference call today, August 15, 2024, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the quarter ended June 30, 2024, as well as the Company’s corporate progress and other developments.

 

The conference call will be available via telephone by dialing toll-free +1 877-545-0523 for U.S. callers or +1 973-528-0016 for international callers and entering access code 747242. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/51031 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 August 15, 2025. A telephone replay of the call will be available approximately one hour following the call, through August 29, 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 51031.

 

About LM Funding America

2

 

 

LM Funding America, Inc., (Nasdaq: LMFA) and its subsidiaries are 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 guarantees 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 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 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)

3

 

 

LM Funding America, Inc. and Subsidiaries Consolidated Balance Sheets

 

 

 

June 30,

 

December 31,

 

 

2024 (Unaudited)

 

2023

Assets

 

 

 

 

Cash

 

 $ 145,648

 

 $ 2,401,831

Digital assets

 

            10,032,104

 

              3,416,256

Finance receivables

 

                  34,295

 

                  19,221

Marketable securities

 

                  22,140

 

                  17,860

Receivable from sale of Symbiont assets

 

                 200,000

 

                 200,000

Current portion of notes receivable from Tech Infrastructure JV I LLC

 

                 174,529

 

                         -

Prepaid expenses and other assets

 

                 848,423

 

              4,067,212

Income tax receivable

 

                  31,187

 

                  31,187

Current assets

 

            11,488,326

 

            10,153,567

Fixed assets, net

 

            19,671,511

 

            24,519,610

Deposits on mining equipment

 

                  20,847

 

                  20,837

Notes receivable from Seastar Medical Holding Corporation

 

                         -

 

              1,440,498

Notes receivable from Tech Infrastructure JV I LLC - net of current portion

 

              1,936,519

 

                         -

Long-term investments - equity securities

 

                  11,155

 

                 156,992

Investment in Seastar Medical Holding Corporation

 

                 785,565

 

              1,145,486

Operating lease - right of use assets

 

                 136,430

 

                 189,009

Other assets

 

                  86,798

 

                  86,798

Long-term assets

 

            22,648,825

 

            27,559,230

Total assets

 

 $ 34,137,151

 

 $ 37,712,797

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

Accounts payable and accrued expenses

 

              1,346,352

 

              2,064,909

Note payable - short-term

 

              1,583,753

 

                 567,586

Due to related parties

 

                  53,575

 

                  22,845

Current portion of lease liability

 

                 117,153

 

                 110,384

Total current liabilities

 

              3,100,833

 

              2,765,724

 

 

 

 

 

Lease liability - net of current portion

 

                  25,962

 

                  85,775

Long-term liabilities

 

                  25,962

 

                  85,775

Total liabilities

 

              3,126,795

 

              2,851,499

Stockholders' equity

 

 

 

 

Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of June 30, 2024 and December 31, 2023

                         -

 

                         -

Common stock, par value $.001; 350,000,000 shares authorized; 2,492,964 shares issued and outstanding as of June 30, 2024 and 2,492,964 as of December 31, 2023

                    2,493

 

                    2,493

Additional paid-in capital

 

            95,443,307

 

            95,145,376

Accumulated deficit

 

           (62,930,465)

 

           (58,961,461)

Total LM Funding America stockholders' equity

 

            32,515,335

 

            36,186,408

   Non-controlling interest

 

             (1,504,979)

 

             (1,325,110)

Total stockholders' equity

 

            31,010,356

 

            34,861,298

4

 

 

Total liabilities and stockholders’ equity

 

 $ 34,137,151

 

 $ 37,712,797

 

 

 

 

 

5

 

 

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

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

Digital mining revenues

 

 $ 2,893,073

 

 $ 2,968,322

 

 $ 7,490,981

 

 $ 5,059,173

Specialty finance revenue

 

                  89,036

 

                 190,173

 

                 205,664

 

                 373,009

Rental revenue

 

                  29,238

 

                   37,155

 

                  62,306

 

                  76,986

           Total revenues

 

              3,011,347

 

              3,195,650

 

              7,758,951

 

              5,509,168

Operating costs and expenses:

 

 

 

 

 

 

 

 

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

              2,357,111

 

              2,361,825

 

              5,012,057

 

              4,029,498

Staff costs and payroll

 

                 837,888

 

              2,463,440

 

              2,080,914

 

              3,396,275

Depreciation and amortization

 

              2,339,702

 

              1,169,120

 

              4,765,770

 

              1,970,993

Loss (gain) on fair value of Bitcoin, net

 

              1,265,485

 

                         -

 

             (2,992,030)

 

                         -

Impairment loss on mining equipment

 

                         -

 

                         -

 

              1,188,058

 

                         -

Impairment loss on mined digital assets

 

                         -

 

                 239,599

 

                         -

 

                 439,153

Realized gain on sale of mined digital assets

 

                         -

 

                (646,458)

 

                         -

 

             (1,070,791)

Professional fees

 

                 484,335

 

                 236,974

 

                 994,228

 

                 809,330

Selling, general and administrative

 

                 195,681

 

                 242,559

 

                 373,587

 

                 482,023

Real estate management and disposal

 

                  31,097

 

                   69,355

 

                  58,286

 

                 101,158

Collection costs

 

                  20,416

 

                      (373)

 

                  21,342

 

                    9,435

Settlement costs with associations

 

                         -

 

                   10,000

 

                         -

 

                  10,000

Other operating costs

 

                 223,112

 

                 205,943

 

                 437,617

 

                 457,854

Total operating costs and expenses

 

              7,754,827

 

              6,351,984

 

            11,939,829

 

            10,634,928

            Operating loss

 

             (4,743,480)

 

             (3,156,334)

 

             (4,180,878)

 

             (5,125,760)

Unrealized gain (loss) on marketable securities

 

                    6,440

 

                   (1,412)

 

                    4,280

 

                    4,378

Impairment loss on prepaid machine deposits

 

                         -

 

                         -

 

                         -

 

                 (36,691)

Unrealized loss on investment and equity securities

 

             (1,856,737)

 

             (3,716,681)

 

                (505,758)

 

             (9,539,535)

Gain on fair value of purchased Bitcoin, net

 

                         -

 

                         -

 

                  57,926

 

                         -

Realized gain on sale of purchased digital assets

 

                         -

 

                         -

 

                         -

 

                    1,917

Gain on adjustment of note receivable allowance

 

                         -

 

              1,052,543

 

                         -

 

              1,052,543

6

 

 

Loss on disposal of assets

 

                 (33,887)

 

                         -

 

                 (42,057)

 

                         -

Other income - coupon sales

 

                         -

 

                   25,721

 

                    4,490

 

                 629,312

Other income - financing revenue

 

                         -

 

                   37,660

 

                         -

 

                  37,660

Interest expense

 

                 (36,893)

 

                         -

 

                (107,719)

 

                         -

Interest income

 

                  17,228

 

                 116,147

 

                  26,353

 

                 171,224

Loss before income taxes

 

             (6,647,329)

 

             (5,642,356)

 

             (4,743,363)

 

           (12,804,952)

Income tax expense

 

                         -

 

                         -

 

                         -

 

                         -

Net loss

 

 $ (6,647,329)

 

 $ (5,642,356)

 

 $(4,743,363)

 

 $(12,804,952)

Less: loss attributable to non-controlling interest

 

                 574,474

 

              1,093,177

 

                 160,253

 

              2,869,441

Net loss attributable to LM Funding America Inc.

 

 $ (6,072,855)

 

 $ (4,549,179)

 

 $(4,583,110)

 

 $ (9,935,511)

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

 $ (2.44)

 

 $ (2.08)

 

 $ (1.87)

 

 $ (4.55)

Diluted loss per common share

 

 $ (2.44)

 

 $ (2.08)

 

 $ (1.87)

 

 $ (4.55)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

              2,485,822

 

              2,189,123

 

              2,457,012

 

              2,185,572

Diluted

 

              2,485,822

 

              2,189,123

 

              2,457,012

 

              2,185,572

7

 

 

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

 

 

 

Six Months ended June 30,

 

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

 $ (4,743,363)

 

 $ (12,804,952)

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

 

 

 

 

Depreciation and amortization

 

                          4,765,770

 

                             1,970,993

Noncash lease expense

 

                                52,579

 

                                   47,874

Stock compensation

 

                                76,322

 

                                564,930

Stock option expense

 

                             221,609

 

                             1,342,095

Accrued investment income

 

                              (25,265)

 

                                 (91,864)

Digital assets other income

 

                                (4,490)

 

                                             -

Gain on fair value of Bitcoin, net

 

                        (3,049,956)

 

                                             -

Impairment loss on mining machines

 

                          1,188,058

 

                                             -

Impairment loss on digital assets

 

                                          -

 

                                439,153

Impairment loss on hosting deposits

 

                                          -

 

                                   36,691

Unrealized gain on marketable securities

 

                                (4,280)

 

                                   (4,378)

Unrealized loss on investment and equity securities

 

                             505,758

 

                             9,539,535

Loss on disposal of fixed assets

 

                                42,057

 

                                             -

Realized gain on sale of digital assets

 

                                          -

 

                           (1,072,708)

Reversal of allowance loss on debt security

 

                                          -

 

                           (1,052,543)

Change in operating assets and liabilities:

 

 

 

 

Prepaid expenses and other assets

 

                          3,218,789

 

                                 (85,713)

Hosting deposits

 

                                          -

 

                              (193,897)

Advances (repayments) to related party

 

                                30,730

 

                                   (7,271)

Accounts payable and accrued expenses

 

                           (718,557)

 

                                434,241

Mining of digital assets

 

                        (7,490,981)

 

                           (5,059,173)

Proceeds from sale of digital assets

 

                                          -

 

                             4,579,676

Lease liability payments

 

                              (53,044)

 

                                 (45,913)

Net cash used in operating activities

 

                        (5,988,264)

 

                           (1,463,224)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Net collections of finance receivables - original product

 

                              (14,443)

 

                                   (1,824)

Net collections of finance receivables - special product

 

                                    (631)

 

                                   14,529

Capital expenditures

 

                        (1,226,602)

 

                           (1,744,609)

Proceeds from sale of fixed assets

 

                                78,806

 

                                             -

Investment in Tech Infrastructure JV I LLC note receivable

 

                        (2,094,351)

 

                                             -

Collection of notes receivable

 

                          1,449,066

 

                             1,661,171

Investment in digital assets

 

                                          -

 

                                 (35,157)

Proceeds from sale of digital assets

 

                          4,543,685

 

                                   43,678

Symbiont asset acquisition

 

                                          -

 

                              (402,359)

8

 

 

Distribution to members

 

                              (19,616)

 

                                             -

Net cash from (used in) investing activities

 

                          2,715,914

 

                              (464,571)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from borrowings

 

                          1,500,000

 

                                             -

Insurance financing repayments

 

                           (483,833)

 

                              (357,649)

Insurance financing

 

                                          -

 

                                     1,227

Issue costs from the issuance of common stock

 

                                          -

 

                              (106,550)

Net cash from (used in) financing activities

 

                          1,016,167

 

                              (462,972)

NET DECREASE IN CASH

 

                        (2,256,183)

 

                           (2,390,767)

CASH - BEGINNING OF PERIOD

 

                          2,401,831

 

                             4,238,006

CASH - END OF PERIOD

 

 $ 145,648

 

              $ 1,847,239

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES

 

 

 

 

 

 

 

 

 

ROU assets and operating lease obligation recognized

 

 $ -

 

 $ 21,887

Reclassification of mining equipment deposit to fixed assets, net

 

 $ -

 

 $ 1,172,888

Change in accounting principle (see Note 1)

 

 $ 614,106

 

 $ -

SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

 

 

 

 

Cash paid for taxes

 

 $ -

 

 $ -

Cash paid for interest

 

 $ 134,751

 

 $ -

 

 

9

 

 

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:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2024

 

2023

 

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

Net loss

 

 $ (6,647,329)

 

 $ (5,642,356)

 

 

 $ (4,743,363)

 

$(12,804,952)

Interest expense

 

           36,893

 

                  -

 

 

         107,719

 

                 -

Depreciation and amortization

 

      2,339,702

 

       1,169,120

 

 

      4,765,770

 

      1,970,993

Income (loss) before interest, taxes & depreciation

 

 $ (4,270,734)

 

 $ (4,473,236)

 

 

 $ 130,126

 

$(10,833,959)

Unrealized loss on investment and equity securities

 

      1,856,737

 

       3,716,681

 

 

         505,758

 

      9,539,535

Gain on adjustment of note receivable allowance

 

                 -

 

      (1,052,543)

 

 

                 -

 

     (1,052,543)

Impairment loss on prepaid hosting deposits

 

                 -

 

                  -

 

 

                 -

 

           36,691

Costs associated with At-the-Market Equity program

 

         119,050

 

                  -

 

 

         119,050

 

                 -

Impairment loss on mining equipment

 

                 -

 

                  -

 

 

      1,188,058

 

                 -

Stock compensation and option expense

 

         116,080

 

       1,712,669

 

 

         297,931

 

      1,907,025

Core income (loss) before interest, taxes & depreciation

 

 $ (2,178,867)

 

 $ (96,429)

 

 

 $ 2,240,923

 

 $ (403,251)

 

 

 

 

 

 

 

 

 

 

 

 

10