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

About this update from Lm Funding America, Inc.

Conference Call to Be Held Today at 11:00 am ET TAMPA, Fla. , Nov. 13, 2024 (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 three and nine months ended September 30, 2024 . Financial highlights Held 142.3 Bitcoin on September 30, 2024 , Valued at Approximately $12.4 Million Based on Recent Bitcoin Price of $87,000 Digital mining cost of revenues (exclusive of depreciation and amortization) as a percentage of digital mining revenues showed substantial improvement versus the prior year quarter. CEO commentary Bruce Rodgers , Chairman and CEO of LM Funding, remarked, "Following the April halving event, we initiated a vertical integration strategy, focusing on locations with low-cost power and strong expansion potential. We are committed to identifying cost-effective sites that will enable the Company to drive growth and increase shareholder value. Additionally, we are excited to see Bitcoin recently reach an all-time high above $87 ,000—a milestone that reinforces our strategy of mining and holding Bitcoin as the price approaches the industry’s target of over $100,000 by 2025." Strategic Developments Vertical Integration Strategy: Following the halving event, the Company transitioned from an infrastructure-light approach to a vertical integration strategy. This shift, strategically coordinated with the expiration of hosting contracts, allowed the Company to secure lower-cost power sources ( $0.3 - 0.5 cents per MW) and relocate miners to more cost-effective operations and expansion opportunities. This resulted in substantial improvement in our digital mining cost of revenues (exclusive of depreciation and amortization) as a percentage of digital mining revenues as compared to the prior year quarter. Leadership Appointment: Ryan Duran has been named president of the Company’s US Digital Mining and Hosting Co LLC , a subsidiary. Duran will play a pivotal role in shaping the strategic direction and optimizing operational efficiency, positioning LM Funding at the forefront of the rapidly evolving cryptocurrency mining industry. Ryan Duran , President of USDM, stated, "I look forward to driving our vertical integration strategy as we acquire cost-effective sites to lower our operating costs." Quarterly Operational Highlights – Three Months ended September 30, 2024 Bitcoin Mining: Mined 18.5 Bitcoins in Q3 2024, generating approximately $1.1 million in revenue at an average Bitcoin price of $60,870 . Bitcoin Holdings : As of September 30, 2024 , the Company held 142.3 Bitcoins valued at approximately $12.4 million based on a price of $87,000 on November 11, 2024 . Revenue Impact: Total revenue for the third quarter of 2024 was approximately $1.3 million , a decrease of $2.1 million from the same period last year, primarily due to the anticipated effects of the April 2024 Bitcoin halving event and the transition of our mining machines to a new hosting site. Net Loss: The net loss for the third quarter was $4.8 million compared to a net loss of $4.7 million for the comparable quarter in 2023. Quarterly Financial Highlights - Three Months ended September 30, 2024 Revenue: Digital mining revenue decreased to $1.1 million in Q3 2024 from $3.3 million in Q3 2023, despite an increase in Bitcoin prices, due to reduced mined volume arising from the April halving event and the repositioning of miners during the quarter. Operating Expenses: Operating expenses decreased to $5.7 million from $6.6 million year-on-year, due primarily to a decrease in digital mining costs in Bitcoin fair value offset in part by an increase in depreciation and amortization costs. Digital mining cost of revenues (exclusive of depreciation and amortization) as a percentage of digital mining revenues showed substantial improvement versus the prior year quarter. Net Loss: LM Funding reported a net loss attributable to shareholders of approximately $6.4 million , factoring in $1.7 million of deemed dividends resulting from warrant repricing and a $0.3 million unrealized loss on securities, compared to a $4.4 million loss in the prior year. Core EBITDA: Core EBITDA loss was $1.6 million in Q3 2024 from $0.6 million in Q3 2023, although positive Core EBITDA for nine months of 2024 increased to $0.6 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). CFO commentary Richard Russell , CFO of LM Funding, stated, "We closed the quarter with approximately $14.9 million in cash and Bitcoin. With the recent rapid increase in BTC prices above $87,000 , we continue to be very optimistic about the financial prospects of Bitcoin and our business outlook." Investor Conference Call LM Funding will host a conference call today, November 13, 2024 , at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the quarter ended September 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 +1 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and entering access code 424451. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/51557 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 November 13, 2025 . A telephone replay of the call will be available approximately one hour following the call, through November 27, 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 51557. 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, t he 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) 671-1020Email: [email protected] (tables follow) LM Funding America, Inc. and Subsidiaries Consolidated Balance Sheets September 30 , December 31 , 2024 (Unaudited) 2023 Assets Cash $ 5,913,215 $ 2,401,831 Digital assets - current (Note 2) 3,308,428 3,416,256 Finance receivables 25,410 19,221 Marketable securities (Note 5) 18,844 17,860 Receivable from sale of Symbiont assets (Note 5) 200,000 200,000 Current portion of notes receivable from Tech Infrastructure JV I LLC (Note 5) 711,840 - Prepaid expenses and other assets 416,516 4,067,212 Income tax receivable 31,187 31,187 Current assets 10,625,440 10,153,567 Fixed assets, net (Note 3) 17,311,254 24,519,610 Deposits on mining equipment (Note 4) 20,847 20,837 Notes receivable from Seastar Medical Holding Corporation (Note 5) - 1,440,498 Notes receivable from Tech Infrastructure JV I LLC - net of current portion (Note 5) 2,269,863 - Long-term investments - equity securities (Note 5) 8,944 156,992 Investment in Seastar Medical Holding Corporation (Note 5) 440,910 1,145,486 Digital assets - long-term (Note 2) 5,675,372 - Operating lease - right of use assets (Note 7) 109,380 189,009 Other assets 73,857 86,798 Long-term assets 25,910,427 27,559,230 Total assets $ 36,535,867 $ 37,712,797 Liabilities and stockholders' equity Accounts payable and accrued expenses 1,400,228 2,064,909 Note payable - short-term (Note 6) 1,520,564 567,586 Due to related parties (Note 10) 64,386 22,845 Current portion of lease liability (Note 7) 109,931 110,384 Total current liabilities 3,095,109 2,765,724 Note payable - long-term (Note 6) 4,844,084 - Lease liability - net of current portion (Note 7) 4,924 85,775 Long-term liabilities 4,849,008 85,775 Total liabilities 7,944,117 2,851,499 Stockholders' equity (Note 8) Preferred stock, par value $.001 ; 150,000,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023 - - Common stock, par value $.001 ; 350,000,000 shares authorized; 2,956,042 shares issued and outstanding as of September 30, 2024 and 2,492,964 as of December 31, 2023 2,822 2,493 Additional paid-in capital 97,827,489 95,145,376 Accumulated deficit (67,628,539 ) (58,961,461 ) Total LM Funding America stockholders' equity 30,201,772 36,186,408 Non-controlling interest (1,610,022 ) (1,325,110 ) Total stockholders' equity 28,591,750 34,861,298 Total liabilities and stockholders’ equity $ 36,535,867 $ 37,712,797 LM Funding America, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) Three Months Ended September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 Revenues: Digital mining revenues $ 1,127,455 $ 3,283,473 $ 8,618,436 $ 8,342,646 Specialty finance revenue 97,558 101,535 303,222 474,544 Rental revenue 30,460 34,500 92,766 111,486 Total revenues 1,255,473 3,419,508 9,014,424 8,928,676 Operating costs and expenses: Digital mining cost of revenues (exclusive of depreciation and amortization shown below) 730,716 2,708,473 5,742,773 6,737,971 Staff costs and payroll 1,567,984 1,340,665 3,648,898 4,736,940 Depreciation and amortization 2,349,634 1,516,873 7,115,404 3,487,866 Gain on fair value of Bitcoin, net (104,744 ) - (3,096,774 ) - Impairment loss on mining equipment - - 1,188,058 - Impairment loss on mined digital assets - 383,497 - 822,650 Realized gain on sale of mined digital assets - (261,191 ) - (1,331,982 ) Professional fees 628,686 419,173 1,622,914 1,228,503 Selling, general and administrative 209,088 201,151 582,675 683,174 Real estate management and disposal 31,144 26,453 89,430 127,611 Collection costs 15,054 8,098 36,396 17,533 Specialty finance revenue Settlement costs with associations - - - 10,000 Loss on disposal of assets 12,449 - 54,506 Other operating costs 229,784 246,735 667,401 704,589 Total operating costs and expenses 5,669,795 6,589,927 17,651,681 17,224,855 Operating loss (4,414,322 ) (3,170,419 ) (8,637,257 ) (8,296,179 ) Unrealized gain (loss) on marketable securities (3,296 ) 2,058 984 6,436 Impairment loss on prepaid machine deposits (12,941 ) - (12,941 ) (36,691 ) Unrealized loss on investment and equity securities (346,866 ) (778,078 ) (852,624 ) (10,317,613 ) Impairment loss on Symbiont assets - (750,678 ) - (750,678 ) Gain on fair value of purchased Bitcoin, net - - 57,926 - Realized gain on securities 1,788 1,788 Realized gain on sale of purchased digital assets - - - 1,917 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 - coupon sales - 10,160 4,490 639,472 Other income - financing revenue - - - 37,660 Interest expense (124,035 ) - (231,754 ) - Interest income 98,343 39,657 124,696 210,881 Loss before income taxes (4,803,117 ) (4,667,856 ) (9,546,480 ) (17,472,808 ) Income tax expense - - - - Net loss $ (4,803,117 ) $ (4,667,856 ) $ (9,546,480 ) $ (17,472,808 ) Less: warrant repricing (Note 8) (1,704,305 ) - (1,704,305 ) - Less: loss attributable to non-controlling interest 105,043 250,880 265,296 3,120,321 Net loss attributable to LM Funding America Inc. $ (6,402,379 ) $ (4,416,976 ) $ (10,985,489 ) $ (14,352,487 ) Basic loss per common share (Note 1) $ (2.41 ) $ (1.97 ) $ (4.35 ) $ (6.51 ) Diluted loss per common share (Note 1) $ (2.41 ) $ (1.97 ) $ (4.35 ) $ (6.51 ) Weighted average number of common shares outstanding Basic 2,659,974 2,246,745 2,525,160 2,206,187 Diluted 2,659,974 2,246,745 2,525,160 2,206,187 LM Funding America, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30 , 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (9,546,480 ) $ (17,472,808 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 7,115,404 3,487,866 Noncash lease expense 79,629 70,545 Stock compensation 76,322 917,057 Stock option expense 332,415 1,611,795 Professional fees paid in common shares 100,001 - Accrued investment income (123,076 ) (130,990 ) Digital assets other income (4,490 ) - Gain on fair value of Bitcoin, net (3,154,700 ) - Impairment loss on mining machines 1,188,058 - Impairment loss on digital assets - 822,650 Impairment loss on hosting deposits 12,941 36,691 Impairment loss on Symbiont assets - 750,678 Unrealized gain on marketable securities (984 ) (6,436 ) Realized gain on securities - (1,788 ) Unrealized loss on investment and equity securities 852,624 10,317,613 Loss on disposal of fixed assets 54,506 - Proceeds from securities - 554,036 Realized gain on sale of digital assets - (1,333,899 ) Credit loss on Seastar Medical Holding Corporation notes receivable - 22,344 Reversal of allowance loss on debt security - (1,052,543 ) Investments in marketable securities - (739,616 ) Change in operating assets and liabilities: Prepaid expenses and other assets 3,650,696 (123,221 ) Hosting deposits - (54,691 ) Advances (repayments) to related party 41,541 (31,090 ) Accounts payable and accrued expenses (664,681 ) 682,405 Mining of digital assets (8,618,436 ) (8,352,805 ) Proceeds from sale of digital assets - 7,487,058 Lease liability payments (81,304 ) (70,563 ) Net cash used in operating activities (8,690,014 ) (2,609,712 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net collections of finance receivables - original product (4,618 ) (8,765 ) Net collections of finance receivables - special product (1,571 ) 14,009 Capital expenditures (1,228,428 ) (1,913,303 ) Proceeds from sale of fixed assets 78,806 - Investment in Tech Infrastructure JV I LLC note receivable (2,867,195 ) - Investment in note receivable - (100,000 ) Collection of notes receivable 1,449,066 1,761,727 Investment in digital assets - (35,157 ) Proceeds from sale of digital assets 6,821,185 43,678 Proceeds from the sale of tether 3,003 - Symbiont asset acquisition - (402,359 ) Distribution to members (19,616 ) - Net cash from (used in) investing activities 4,230,632 (640,170 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 6,344,084 - Insurance financing repayments (547,022 ) (499,453 ) Insurance financing - 86,886 Exercise of options 25,000 - Proceeds from equity offering 2,333,112 - Issue costs for equity offering (184,408 ) (106,550 ) Net cash from (used in) financing activities 7,970,766 (519,117 ) NET DECREASE IN CASH 3,511,384 (3,768,999 ) CASH - BEGINNING OF PERIOD 2,401,831 4,238,006 CASH - END OF PERIOD $ 5,913,215 469,007 SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES ROU assets and operating lease obligation recognized $ - $ 21,887 Reclassification of mining equipment deposit to fixed assets, net $ - $ 1,177,226 Change in accounting principle (see Note 1) $ 614,106 $ - SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION Cash paid for taxes $ - $ - Cash paid for interest $ 222,697 $ - 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, impairment loss on mined digital assets, impairment of long-lived assets, impairment of prepaid hosting deposits, contract termination costs 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 , 2024 2023 2024 2023 Net loss $ (4,803,117 ) $ (4,667,856 ) $ (9,546,480 ) $ (17,472,808 ) Interest expense 124,035 - 231,754 - Depreciation and amortization 2,349,634 1,516,873 7,115,404 3,487,866 Income (loss) before interest, taxes & depreciation $ (2,329,448 ) $ (3,150,983 ) $ (2,199,322 ) $ (13,984,942 ) Unrealized loss on investment and equity securities 346,866 778,078 852,624 10,317,613 Gain on adjustment of note receivable allowance - - - (1,052,543 ) Impairment loss on mined digital assets - 383,497 - 822,650 Impairment loss on prepaid hosting deposits - - - 36,691 Costs associated with At-the-Market Equity program - - 119,050 - Contract termination costs 250,001 - 250,001 - Impairment loss on Symbiont assets - 750,678 - 750,678 Impairment loss on mining equipment - - 1,188,058 - Stock compensation and option expense 110,806 621,827 408,737 2,528,852 Core income (loss) before interest, taxes & depreciation $ (1,621,775 ) $ (616,903 ) $ 619,148 $ (581,001 ) Source: LM Funding America, Inc.

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