LM Funding Reports Net Income of $11.1 Million or $2.05 Per Basic Common Share for the Second Quarter of 2021
TAMPA, Fla., Aug. 16, 2021 (GLOBE NEWSWIRE) -- LM Funding America, Inc. (NASDAQ:LMFA) ("LM Funding" or "LMFA"), a technology-based specialty finance company, today announced its financial results for the three and six months ended June 30, 2021.
Financial Highlights for the Three and Six Month Period Ended June 30, 2021:
- Net income attributable to LM Funding for the three and six-month periods ended June 30, 2021 totaled $11.1 million or $2.05 per basic and diluted share and $15.5 million or $2.96 per basic and $2.95 per diluted share, respectively.
- Cash increased to $22.2 million or approximately $4.09 per basic and diluted share on June 30, 2021 as compared to $11.6 million on December 31, 2020.
- Working capital as of June 30, 2021 was $29.7 million or $5.49 per basic and diluted share.
- As of August 6, 2021, there were 5,414,296 common shares outstanding.
“We continue to operate under the tagline 'We Buy Problems,'” Bruce M. Rodgers, Chairman and CEO of LM Funding said. “In the first two quarters, we originated, structured, and monetized our problem-buying business operations to generate $2.96 in net income per basic and diluted share. As our balance sheet has grown our opportunities to buy problems has increased. With a stronger balance sheet, we could also take larger participations in the deals we put together. Although we originated, structured, and executed the two BRQS transactions and recognized $14.1 million in gains this year, we only participated in less than one-third of the principal investment required in these deals and outsourced the balance to third parties. So we plan to continue to combine our team’s strengths and our balance sheet with $5.49 per share of working capital to buy problems and solve them profitably.”
Operational Highlights for the First Six Months of 2021 to Date:
- LMFA announced plans to develop accounting practices and controls for operating with digital assets and has announced plans to purchase up to $2 million in Bitcoin and Ether.
- LM Funding is developing a digital asset technology strategy to grow its community association receivables business both organically and through acquisitions.
- LM Funding sponsored a special acquisition company, or SPAC, and closed a $103.5 million upsized IPO (NASDAQ: LMAO). Net investment by LMFA in LMAO totals $6.4 million or approximately $1.17 per LMFA share.
- LMAO is targeting a business combination in the financial services or financial technology sectors
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, 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 COVID-19 pandemic, our ability to acquire new accounts in our specialty finance business at appropriate prices, the need for capital, our ability to hire and retain new employees, 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, and negative press regarding the debt collection industry. The occurrence of any of these risks and uncertainties could have a material adverse effect on our business, financial condition, and results of operations.
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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 Condensed Consolidated Balance Sheets
| June 30, 2021 |
December 31, 2020 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash | $ | 22,173,690 | $ | 11,552,943 | ||||
| Finance receivables: | ||||||||
| Original product - net (Note 2) | 85,186 | 116,017 | ||||||
| Special product - New Neighbor Guaranty program, net of allowance for credit losses of (Note 3) | 53,211 | 52,757 | ||||||
| Short-term investments - convertible debt securities (Note 9) | 7,588,538 | - | ||||||
| Marketable securities | 248,100 | - | ||||||
| Prepaid expenses and other assets | 157,195 | 399,124 | ||||||
| Current assets | 30,305,920 | 12,120,841 | ||||||
| Fixed assets, net | 7,929 | 6,171 | ||||||
| Real estate assets owned | 80,057 | 18,767 | ||||||
| Operating lease - right of use assets (Note 7) | 110,870 | 160,667 | ||||||
| Long-term investments - equity securities (Note 9) | 2,295,200 | - | ||||||
| Investments in unconsolidated affiliates (Note 9) | 4,615,583 | - | ||||||
| Other assets | 10,984 | 10,984 | ||||||
| Long-term assets | 7,120,623 | 196,589 | ||||||
| Total assets | $ | 37,426,543 | $ | 12,317,430 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Note payable (Note 5) | - | 96,257 | ||||||
| Accounts payable and accrued expenses | 298,239 | 237,033 | ||||||
| Due to related party (Note 4) | 174,176 | 158,399 | ||||||
| Current portion of lease liability (Note 7) | 108,611 | - | ||||||
| Total current liabilities | 581,026 | 491,689 | ||||||
| Lease liability - long-term (Note 7) | 12,684 | 171,648 | ||||||
| Deferred taxes (Note 6) | 17,264 | - | ||||||
| Note payable - long-term (Note 5) | - | 185,785 | ||||||
| Long-term liabilities | 29,948 | 357,433 | ||||||
| Total liabilities | 610,974 | 849,122 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock, par value $0.001; 30,000,000 shares authorized; 5,414,296 and 3,083,760 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 5,414 | 3,084 | ||||||
| Additional paid-in capital | 39,538,550 | 29,996,257 | ||||||
| Accumulated deficit | (3,052,309 | ) | (18,536,224 | ) | ||||
| Total stockholders’ equity | 36,491,655 | 11,463,117 | ||||||
| Non-controlling interest | 323,914 | 5,191 | ||||||
| Total stockholders’ equity | 36,815,569 | 11,468,308 | ||||||
| Total liabilities and stockholders’ equity | $ | 37,426,543 | $ | 12,317,430 | ||||
LM Funding America, Inc. and Subsidiaries Condensed Consolidated Income Statement
|
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues: | ||||||||||||||||
| Interest on delinquent association fees | $ | 62,673 | $ | 170,174 | $ | 140,117 | $ | 389,688 | ||||||||
| Administrative and late fees | 16,861 | 35,423 | 31,932 | 58,468 | ||||||||||||
| Recoveries in excess of cost - special product | 178,769 | 62,362 | 208,242 | 84,990 | ||||||||||||
| Underwriting and other revenues | 35,494 | 41,235 | 58,197 | 69,164 | ||||||||||||
| Rental revenue | 34,588 | 33,344 | 66,505 | 81,424 | ||||||||||||
| Total revenues | 328,385 | 342,538 | 504,993 | 683,734 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Staff costs and payroll | 246,040 | 312,493 | 1,548,021 | 628,552 | ||||||||||||
| Professional fees | 360,024 | 479,581 | 842,967 | 986,576 | ||||||||||||
| Settlement costs with associations | - | - | - | 11,920 | ||||||||||||
| Selling, general and administrative | 96,015 | 74,728 | 195,784 | 154,951 | ||||||||||||
| Recovery of cost from related party receivable | (100,000 | ) | (100,000 | ) | (100,000 | ) | (200,000 | ) | ||||||||
| Provision for credit losses | - | - | (10,000 | ) | - | |||||||||||
| Real estate management and disposal | 29,478 | 14,108 | 47,768 | 99,450 | ||||||||||||
| Depreciation and amortization | 3,298 | 7,954 | 4,994 | 13,766 | ||||||||||||
| Collection costs | 2,701 | (20,934 | ) | 4,749 | (29,255 | ) | ||||||||||
| Other operating expenses | 4,069 | 6,844 | 11,614 | 10,638 | ||||||||||||
| Total operating expenses | 641,625 | 774,774 | 2,545,897 | 1,676,598 | ||||||||||||
| Operating loss from continuing operations | (313,240 | ) | (432,236 | ) | (2,040,904 | ) | (992,864 | ) | ||||||||
| Realized gain on securities | 8,453,570 | - | 14,125,034 | - | ||||||||||||
| Unrealized gain on convertible debt security | 2,501,600 | - | 2,501,600 | - | ||||||||||||
| Unrealized gain on investment and equity securities | 552,494 | - | 1,147,886 | - | ||||||||||||
| Interest income | 73,884 | - | 86,939 | - | ||||||||||||
| Interest expense | (189 | ) | (5,732 | ) | (653 | ) | (12,626 | ) | ||||||||
| Income (loss) from continuing operations before income taxes | 11,268,119 | (437,968 | ) | 15,819,902 | (1,005,490 | ) | ||||||||||
| Income tax expense | (13,780 | ) | - | (17,264 | ) | - | ||||||||||
| Net income (loss) from continuing operations | 11,254,339 | (437,968 | ) | 15,802,638 | (1,005,490 | ) | ||||||||||
| Gain from operations of discontinued operations | - | - | - | 16,428 | ||||||||||||
| Net gain from discontinued operations | - | - | - | 16,428 | ||||||||||||
| Net income (loss) | 11,254,339 | (437,968 | ) | 15,802,638 | (989,062 | ) | ||||||||||
| Less: Net income attributable to non-controlling interest | (146,857 | ) | - | (318,723 | ) | - | ||||||||||
| Net income (loss) attributable to LM Funding America Inc. | $ | 11,107,482 | $ | (437,968 | ) | $ | 15,483,915 | $ | (989,062 | ) | ||||||
| Earnings/(loss) per share: | ||||||||||||||||
| Basic income (loss) per common share - continuing operations | $ | 2.05 | $ | (0.56 | ) | $ | 2.96 | $ | (1.41 | ) | ||||||
| Basic income/(loss) per common share - discontinued operations | $ | - | $ | - | $ | - | $ | 0.02 | ||||||||
| Basic income (loss) per common share - net income (loss) - attributable to LM Funding | $ | 2.05 | $ | (0.56 | ) | $ | 2.96 | $ | (1.38 | ) | ||||||
| Diluted income (loss) per common share - continuing operations | $ | 2.05 | $ | (0.56 | ) | $ | 2.95 | $ | (1.41 | ) | ||||||
| Diluted earnings/(loss) per common share - discontinued operations | $ | - | $ | - | $ | - | $ | 0.02 | ||||||||
| Diluted income (loss) per common share - net income (loss) - attributable to LM Funding | $ | 2.05 | $ | (0.56 | ) | $ | 2.95 | $ | (1.38 | ) | ||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 5,414,296 | 783,433 | 5,231,909 | 715,020 | ||||||||||||
| Diluted | 5,423,162 | 783,433 | 5,245,656 | 715,020 | ||||||||||||
LM Funding America, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows
(unaudited)
|
For the Six Months Ended June 30, |
||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 15,802,638 | $ | (989,062 | ) | |||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Depreciation and amortization | 4,994 | 11,727 | ||||||
| Right to use asset depreciation | 49,797 | 51,229 | ||||||
| Stock compensation | - | 132,244 | ||||||
| Debt forgiveness | (157,251 | ) | - | |||||
| Recovery of uncollectible related party receivables | - | (200,000 | ) | |||||
| Accrued investment income | (86,938 | ) | - | |||||
| Gain from operations of discontinued operations | - | (16,426 | ) | |||||
| Deconsolidation of affiliate | (43,623 | ) | - | |||||
| Unrealized gain on investment and equity securities | (1,147,886 | ) | - | |||||
| Unrealized gain on convertible debt security | (2,501,600 | ) | - | |||||
| Investment in convertible note receivable | (5,000,000 | ) | - | |||||
| Realized gain on securities | (14,125,034 | ) | - | |||||
| Investment in securities | (15,547,454 | ) | - | |||||
| Proceeds from securities | 29,672,488 | 49,828 | ||||||
| Investment in marketable securities | (247,997 | ) | - | |||||
| Change in assets and liabilities | ||||||||
| Prepaid expenses and other assets | 11,105 | 49,059 | ||||||
| Accounts payable and accrued expenses | 184,239 | 21,858 | ||||||
| Advances (repayments) from related party | 142,191 | 496,546 | ||||||
| Lease liability payments | (50,353 | ) | (45,742 | ) | ||||
| Deferred taxes | 17,264 | - | ||||||
| Net cash provided by (used in) operating activities | 6,976,580 | (438,739 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Net collections of finance receivables - original product | 30,831 | 61,590 | ||||||
| Net collections of finance receivables - special product | (454 | ) | 32,076 | |||||
| (Payments) for real estate assets owned | (64,857 | ) | (2,055 | ) | ||||
| Capital expenditures | (3,185 | ) | - | |||||
| Net cash payment for IIU disposal | - | (246,914 | ) | |||||
| Proceeds from investment in note receivable | - | 1,500,000 | ||||||
| Loan to purchase securities | 1,784,250 | - | ||||||
| Repayment of loan to purchase securities | (1,784,250 | ) | - | |||||
| Investment in unconsolidated affiliate | (5,738,000 | ) | - | |||||
| Net cash (used in) provided by investing activities | (5,775,665 | ) | 1,344,697 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Borrowings | - | 185,785 | ||||||
| Principal repayments | (28,534 | ) | - | |||||
| Insurance financing repayments | (96,257 | ) | (69,540 | ) | ||||
| Exercise of warrants | 9,544,623 | 2,946,480 | ||||||
| Proceeds from stock subscription | - | 1,250,000 | ||||||
| Net cash provided by financing activities | 9,419,832 | 4,312,725 | ||||||
| NET INCREASE IN CASH | 10,620,747 | 5,218,683 | ||||||
| CASH - BEGINNING OF YEAR | 11,552,943 | 1,069,823 | ||||||
| CASH - END OF YEAR | $ | 22,173,690 | $ | 6,288,506 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION | ||||||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Cash paid for interest | $ | 1,892 | $ | 12,626 | ||||
Released August 16, 2021