LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or
the “Company”), a cryptocurrency mining and
technology-based specialty finance company, today provided a
business update and reported financial results for the three months
ended March 31, 2024.
Operational Highlights
- Approximately 5,900 Bitcoin mining machines are in operation at
hosting sites as of March 31, 2024
- Mined 86.4 Bitcoin in Q1 2024, which generated approximately
$4.6 million in revenue based on the approximate $53,000 average
price of Bitcoin in Q1 2024
- As of March 31, 2024, held 163.4 Bitcoin valued at
approximately $11.7 million
- As of April 30, 2024, held 155.1 Bitcoin valued at
approximately $9.7 million based on a recent Bitcoin price of
approximately $62,500
- Revenue for the three months ended March 31, 2024, increased
approximately 105% over the same period last year
- Net income for the three months ended March 31, 2024, was $1.9
million as compared to a net loss of $7.2 million for the 2023
comparable quarter
- Achieved positive Core positive EBITDA (defined below) of $4.4
million for the three months ended March 31, 2024, compared to a
Core EBITDA loss of $307 thousand for the same period last year
(Core EBITDA is a non-GAAP financial measure, and a reconciliation
of Core EBITDA to net loss can be found below)
Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We
continued to make tremendous strides in growing our Bitcoin mining
operations in the first quarter of 2024, building on the progress
we made in 2023, our first full year as a Bitcoin mining company.
We are encouraged by our performance, having mined 86.4 Bitcoins
worth approximately $4.6 million, based on the average Bitcoin
price of approximately $53,000 for the quarter. This success has
resulted in a 105% increase in our revenue compared to the first
quarter of 2023. As a result, I am pleased to report we achieved a
record $1.9 million of net income and $4.4 million of Core EBITDA
(defined below) for the first quarter of 2024.”
“The Company was well-positioned for the Bitcoin halving event
in mid-April, and as we move forward, we expect to enter into new
hosting agreements reflecting the 2024 post-halving economic
realities. To that end, we purchased 300 Bitmain S21 Antminer
high-efficiency, high hash rate machines, mining the SHA-256
algorithm, which increased the Company’s mining capacity to 673 PH.
These S21s are anticipated to boost long-term revenue in the
lead-up to and following the next halving event, which is projected
to occur in 2028. Moving forward, we anticipate entering into new
hosting agreements that reflect the economic conditions post-2024
halving and will continue to assess further investments in Antminer
equipment to fuel our growth. Considering current market conditions
and the future outlook for Bitcoin, which reached a new all-time
high of approximately $73,800 in the 2024 first quarter, we remain
very optimistic about the future, as historically, halving events
such as the April halving have preceded new all-time high Bitcoin
prices in the six months post-halving."
Richard Russell, Chief Financial Officer of LM Funding, further
noted, "We ended the quarter with cash plus Bitcoin, valued as of
March 31, 2024, of approximately $12.5 million. Including the
Bitcoin that we mined through the end of April 2024, our reported
Bitcoin holdings of 155.1 Bitcoin are valued at approximately $9.7
million based on the recent Bitcoin price of approximately $62,500
as of May 8, 2024. Our working capital stood at $12.7 million as of
March 31, 2024, and the equity of LM Funding shareholders was $38.5
million, or $15.43 per share. During the quarter ended March 31,
2024, we sold just 18 Bitcoin to fund our operations and we remain
highly encouraged and optimistic regarding the financial outlook
for both Bitcoin and the business.”
Financial Highlights
- Total revenue for the quarter ended
March 31, 2024, was approximately $4.7 million, an increase of $2.4
million, or approximately 105%, compared to $2.3 million for the
2023 comparable quarter. This increase was primarily due to digital
mining revenue of $4.6 million for the quarter, compared to $2.1
million for the same quarter in 2023. The average Bitcoin price for
the three months ended March 31, 2024, and 2023, recognized as
revenue was approximately $53,200 and $22,800, respectively.
- Operating expenses totaled $4.2 million for the three months
ended March 31, 2024, compared to $4.3 million for the comparable
2023 period. The change is primarily attributable to the $4.3
million gain on the fair value of Bitcoin which was not present
during 2023 as we adopted the new Accounting Standards Update
(“ASU”) 2023-08 for Bitcoin effective January 1, 2024. This gain
was partially offset by a $1.0 million increase in digital mining
costs, a $1.6 million increase in depreciation expense, a $1.2
million impairment loss on mining equipment and a $0.3 million
increase in staff costs and payroll compared to the same quarter in
2023. Due to the discrepancy caused by the new ASU adoption in
2024, the comparable 2023 period reflects a $0.2 million impairment
loss on mined digital assets and a $0.4 million realized gain on
the sale of mined digital assets, which are not reflected in first
quarter 2024 results.
- Net income attributable to LM Funding shareholders for the
three months ended March 31, 2024, was approximately $1.5 million,
which included a $1.4 million non-cash, unrealized gain on
investment and equity securities, and a $1.2 million non-cash,
unrealized loss on the impairment of assets that were sold in April
2024 as part of an asset switch over. This compares to a net loss
of approximately $5.4 million for the 2023 comparable quarter,
which included a $5.8 million non-cash, unrealized loss on
investment and equity securities and $0.6 million of income from
the sale of coupons.
- Core positive EBITDA for the three months ended March 31, 2024,
totaled approximately $4.4 million compared to a Core EBITDA loss
of $0.3 million in the prior year's comparable quarter. The
improvement in Core EBITDA for the three months ended March 31,
2024, was primarily due to the full implementation of increased
Bitcoin mining operations in the current year that did not exist in
the prior year and higher Bitcoin prices.
- Cash was approximately $0.8 million, with digital assets of
$11.7 million, and working capital of $12.7 million as of March 31,
2024, based on 163.4 BTC at a price of approximately $71,300 as of
March 31, 2024. In the first quarter of 2024, the Company received
approximately $1.4 million from SeaStar Medical Holdings as a final
repayment of their outstanding note receivable.
- Total LM Funding stockholders’ equity was approximately $38.5
million, or $15.43 per share, as of March 31, 2024. (with the
per-share amount calculated as LMFA stockholders’ equity divided by
approximately 2,492,964 shares outstanding as of March 31,
2024).
Investor Conference Call
LM Funding will host a conference call today, May 16, 2024, at
11:00 A.M. Eastern Time to discuss the Company’s financial results
for the quarter ended March 31, 2024, as well as the Company’s
corporate progress and other developments.
The conference call will be available via telephone by dialing
toll-free +1 888-506-0062 for U.S. callers or +1 973-528-0011 for
international callers and entering access code 696741. A webcast of
the call may be accessed at
https://www.webcaster4.com/Webcast/Page/2917/50584 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
May 16, 2025. A telephone replay of the call will be available
approximately one hour following the call, through May 30, 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
50584.
About LM Funding America
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, LLCTel: (212) 671-1020Email:
LMFA@crescendo-ir.com
(tables follow)
LM Funding America, Inc. and Subsidiaries Consolidated
Balance Sheets |
|
|
March 31, |
|
|
December 31, |
|
|
|
2024 (Unaudited) |
|
|
2023 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash |
|
$ |
827,366 |
|
|
$ |
2,401,831 |
|
Digital Assets |
|
|
11,651,969 |
|
|
|
3,416,256 |
|
Finance receivables |
|
|
27,459 |
|
|
|
19,221 |
|
Marketable securities |
|
|
15,700 |
|
|
|
17,860 |
|
Receivable from sale of
Symbiont assets |
|
|
200,000 |
|
|
|
200,000 |
|
Prepaid expenses and other
assets |
|
|
2,483,368 |
|
|
|
4,067,212 |
|
Income tax receivable |
|
|
31,187 |
|
|
|
31,187 |
|
Current assets |
|
|
15,237,049 |
|
|
|
10,153,567 |
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
20,897,314 |
|
|
|
24,519,610 |
|
Deposits on mining
equipment |
|
|
1,117,798 |
|
|
|
20,837 |
|
Notes receivable from Seastar
Medical Holding Corporation |
|
|
- |
|
|
|
1,440,498 |
|
Long-term investments - equity
securities |
|
|
753,973 |
|
|
|
156,992 |
|
Investment in Seastar Medical
Holding Corporation |
|
|
1,899,484 |
|
|
|
1,145,486 |
|
Operating lease - right of use
assets |
|
|
162,966 |
|
|
|
189,009 |
|
Other assets |
|
|
86,798 |
|
|
|
86,798 |
|
Long-term assets |
|
|
24,918,333 |
|
|
|
27,559,230 |
|
Total assets |
|
$ |
40,155,382 |
|
|
$ |
37,712,797 |
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
|
Accounts payable and accrued
expenses |
|
|
2,042,906 |
|
|
|
2,064,909 |
|
Note payable -
short-term |
|
|
325,669 |
|
|
|
567,586 |
|
Due to related
parties |
|
|
55,290 |
|
|
|
22,845 |
|
Current portion of lease
liability |
|
|
114,148 |
|
|
|
110,384 |
|
Total current liabilities |
|
|
2,538,013 |
|
|
|
2,765,724 |
|
|
|
|
|
|
|
|
Lease liability - net of
current portion |
|
|
56,148 |
|
|
|
85,775 |
|
Long-term liabilities |
|
|
56,148 |
|
|
|
85,775 |
|
Total liabilities |
|
|
2,594,161 |
|
|
|
2,851,499 |
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
|
|
|
|
Preferred stock, par value $.001; 150,000,000 shares authorized; no
shares issued and outstanding as of March 31, 2024 and December 31,
2023 |
|
|
- |
|
|
|
- |
|
Common stock, par value $.001; 350,000,000 shares authorized;
2,492,964 shares issued and outstanding as of March 31, 2024 and
2,492,964 as of December 31, 2023 |
|
|
2,493 |
|
|
|
2,493 |
|
Additional paid-in capital |
|
|
95,327,227 |
|
|
|
95,145,376 |
|
Accumulated deficit |
|
|
(56,857,610 |
) |
|
|
(58,961,461 |
) |
Total LM Funding America stockholders' equity |
|
|
38,472,110 |
|
|
|
36,186,408 |
|
Non-controlling interest |
|
|
(910,889 |
) |
|
|
(1,325,110 |
) |
Total stockholders' equity |
|
|
37,561,221 |
|
|
|
34,861,298 |
|
Total liabilities and stockholders’ equity |
|
$ |
40,155,382 |
|
|
$ |
37,712,797 |
|
|
LM Funding
America, Inc. and Subsidiaries Consolidated Statements of
Operations (unaudited) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
Digital mining revenues |
|
$ |
4,597,908 |
|
|
$ |
2,090,851 |
|
Specialty finance revenue |
|
|
116,628 |
|
|
|
182,836 |
|
Rental revenue |
|
|
33,068 |
|
|
|
39,831 |
|
Total revenues |
|
|
4,747,604 |
|
|
|
2,313,518 |
|
Operating
costs and expenses: |
|
|
|
|
Digital mining cost of revenues (exclusive of depreciation and
amortization shown below) |
|
|
2,654,946 |
|
|
|
1,667,673 |
|
Staff costs and payroll |
|
|
1,243,026 |
|
|
|
932,835 |
|
Depreciation and amortization |
|
|
2,426,068 |
|
|
|
801,873 |
|
Gain on fair value of Bitcoin, net |
|
|
(4,257,515 |
) |
|
|
- |
|
Impairment loss on mining equipment |
|
|
1,188,058 |
|
|
|
- |
|
Impairment loss on mined digital assets |
|
|
- |
|
|
|
199,554 |
|
Realized gain on sale of mined digital assets |
|
|
- |
|
|
|
(424,333 |
) |
Professional fees |
|
|
509,893 |
|
|
|
572,356 |
|
Selling, general and administrative |
|
|
177,906 |
|
|
|
239,464 |
|
Real estate management and disposal |
|
|
27,189 |
|
|
|
31,803 |
|
Collection costs |
|
|
926 |
|
|
|
9,808 |
|
Other operating costs |
|
|
214,505 |
|
|
|
251,911 |
|
Total operating costs and expenses |
|
|
4,185,002 |
|
|
|
4,282,944 |
|
Operating income (loss) |
|
|
562,602 |
|
|
|
(1,969,426 |
) |
Unrealized gain (loss) on marketable securities |
|
|
(2,160 |
) |
|
|
5,790 |
|
Impairment loss on prepaid machine deposits |
|
|
- |
|
|
|
(36,691 |
) |
Unrealized gain (loss) on investment and equity securities |
|
|
1,350,979 |
|
|
|
(5,822,854 |
) |
Gain on fair value of purchased Bitcoin, net |
|
|
57,926 |
|
|
|
- |
|
Realized gain on sale of purchased digital assets |
|
|
- |
|
|
|
1,917 |
|
Loss on disposal of assets |
|
|
(8,170 |
) |
|
|
- |
|
Other income - coupon sales |
|
|
4,490 |
|
|
|
603,591 |
|
Interest expense |
|
|
(70,826 |
) |
|
|
- |
|
Interest income |
|
|
9,125 |
|
|
|
55,077 |
|
Income (loss) before income taxes |
|
|
1,903,966 |
|
|
|
(7,162,596 |
) |
Income tax
expense |
|
|
- |
|
|
|
- |
|
Net
income (loss) |
|
$ |
1,903,966 |
|
|
$ |
(7,162,596 |
) |
Less: loss
(income) attributable to non-controlling interest |
|
|
(414,221 |
) |
|
|
1,776,264 |
|
Net
income (loss) attributable to LM Funding America Inc. |
|
$ |
1,489,745 |
|
|
$ |
(5,386,332 |
) |
|
|
|
|
|
Basic income
(loss) per common share |
|
$ |
0.61 |
|
|
$ |
(2.41 |
) |
Diluted
income (loss) per common share |
|
$ |
0.61 |
|
|
$ |
(2.41 |
) |
|
|
|
|
|
Weighted
average number of common shares outstanding |
|
|
|
|
Basic |
|
|
2,428,203 |
|
|
|
2,232,964 |
|
Diluted |
|
|
2,428,203 |
|
|
|
2,232,964 |
|
|
|
|
|
|
LM Funding America, Inc. and Subsidiaries Consolidated
Statements of Cash Flows (Unaudited) |
|
|
Three Months ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income (loss) |
|
$ |
1,903,966 |
|
|
$ |
(7,162,596 |
) |
Adjustments to reconcile net income (loss) to net cash used
in operating activities |
|
|
|
|
Depreciation and amortization |
|
|
2,426,068 |
|
|
|
801,873 |
|
Noncash lease expense |
|
|
26,043 |
|
|
|
23,224 |
|
Stock compensation |
|
|
71,047 |
|
|
|
- |
|
Stock option expense |
|
|
110,804 |
|
|
|
194,356 |
|
Accrued investment income |
|
|
(8,568 |
) |
|
|
(53,734 |
) |
Digital assets other income |
|
|
(4,490 |
) |
|
|
- |
|
Gain on fair value of Bitcoin, net |
|
|
(4,315,441 |
) |
|
|
- |
|
Impairment loss on mining machines |
|
|
1,188,058 |
|
|
|
- |
|
Impairment loss on digital assets |
|
|
- |
|
|
|
199,554 |
|
Impairment loss on hosting deposits |
|
|
- |
|
|
|
36,691 |
|
Unrealized loss (gain) on marketable securities |
|
|
2,160 |
|
|
|
(5,790 |
) |
Unrealized loss (gain) on investment and equity securities |
|
|
(1,350,979 |
) |
|
|
5,822,854 |
|
Loss on disposal of fixed assets |
|
|
8,170 |
|
|
|
- |
|
Realized gain on sale of digital assets |
|
|
- |
|
|
|
(426,250 |
) |
Change in operating assets and liabilities: |
|
|
|
|
Prepaid expenses and other assets |
|
|
1,583,843 |
|
|
|
36,473 |
|
Advances (repayments) to related party |
|
|
32,445 |
|
|
|
(12,659 |
) |
Accounts payable and accrued expenses |
|
|
(22,003 |
) |
|
|
111,486 |
|
Mining of digital assets |
|
|
(4,597,908 |
) |
|
|
(2,090,851 |
) |
Proceeds from sale of digital assets |
|
|
- |
|
|
|
1,455,141 |
|
Lease liability payments |
|
|
(25,863 |
) |
|
|
(22,243 |
) |
Net cash used in operating activities |
|
|
(2,972,648 |
) |
|
|
(1,092,471 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Net collections of finance receivables - original product |
|
|
(8,238 |
) |
|
|
- |
|
Net collections of finance receivables - special product |
|
|
- |
|
|
|
4,695 |
|
Capital expenditures |
|
|
- |
|
|
|
(263,596 |
) |
Collection of notes receivable |
|
|
1,449,066 |
|
|
|
1,644,834 |
|
Investment in digital assets |
|
|
- |
|
|
|
(35,157 |
) |
Proceeds from sale of digital assets |
|
|
1,296,233 |
|
|
|
33,675 |
|
Deposits for mining equipment |
|
|
(1,096,961 |
) |
|
|
(923,687 |
) |
Net cash from investing activities |
|
|
1,640,100 |
|
|
|
460,764 |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Insurance financing repayments |
|
|
(241,917 |
) |
|
|
(177,393 |
) |
Net cash used in financing activities |
|
|
(241,917 |
) |
|
|
(177,393 |
) |
NET DECREASE IN CASH |
|
|
(1,574,465 |
) |
|
|
(809,100 |
) |
CASH - BEGINNING OF PERIOD |
|
|
2,401,831 |
|
|
|
4,238,006 |
|
CASH - END OF PERIOD |
|
$ |
827,366 |
|
|
$ |
3,428,906 |
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF NON-CASH
ACTIVITIES |
|
|
|
|
|
|
|
|
|
ROU assets and operating lease obligation recognized |
|
$ |
- |
|
|
$ |
21,887 |
|
Reclassification of mining equipment deposit to fixed assets,
net |
|
$ |
- |
|
|
$ |
54,876 |
|
Change in accounting principle |
|
$ |
614,106 |
|
|
$ |
- |
|
SUPPLEMENTAL DISCLOSURES OF CASHFLOW
INFORMATION |
|
|
|
|
Cash paid for taxes |
|
$ |
- |
|
|
$ |
- |
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
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|
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:
|
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|
Three Months Ended March 31, |
|
|
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2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1,903,966 |
|
|
$ |
(7,162,596 |
) |
Income tax expense |
|
|
- |
|
|
|
- |
|
Interest expense |
|
|
70,826 |
|
|
|
- |
|
Depreciation and amortization |
|
|
2,426,068 |
|
|
|
801,873 |
|
Income (loss) before interest,
taxes & depreciation |
|
$ |
4,400,860 |
|
|
$ |
(6,360,723 |
) |
Unrealized loss (gain) on investment and equity securities |
|
|
(1,350,979 |
) |
|
|
5,822,854 |
|
Impairment loss on prepaid hosting deposits |
|
|
- |
|
|
|
36,691 |
|
Impairment loss on mining equipment |
|
|
1,188,058 |
|
|
|
- |
|
Stock compensation and option expense |
|
|
181,851 |
|
|
|
194,356 |
|
Core income (loss) before
interest, taxes & depreciation |
|
$ |
4,419,790 |
|
|
$ |
(306,822 |
) |
LM Funding America (NASDAQ:LMFA)
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