Exhibit 99.1

img17863145_0.jpg

 

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

 

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

 

TAMPA, FL, November 13, 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 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 market projection 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 gross mining margin improvements to 35% for the quarter as comparted to 18% in the prior year.
•
Leadership Appointment: Ryan Duran has been named president of 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 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."

 

1

 

Exhibit 99.1

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 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.
•
Net Loss: LM Funding reported a net loss attributable to shareholders of approximately $6.4 million, factoring in a $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 the 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 are extremely 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.

2

 

Exhibit 99.1

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, 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

 

Exhibit 99.1

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)

 

             3,983,800

 

             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

 

           11,300,812

 

           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)

 

5,000,000

 

-

Operating lease - right of use assets (Note 7)

 

                 109,380

 

                 189,009

Other assets

 

                 73,857

 

                 86,798

Long-term assets

 

          25,235,055

 

           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

 

                         -

 

                         -

4

 

Exhibit 99.1

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

 

 

 

 

 


 

 

5

 

Exhibit 99.1

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

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)

 

-

6

 

Exhibit 99.1

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

7

 

Exhibit 99.1

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)

8

 

Exhibit 99.1

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

 

 $ -

 

9

 

Exhibit 99.1

 

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)

 

 

 

 

 

 

 

 

 

 

 

10