lmfa-ex991

LM Funding America, Inc. Reports Financial Results and Provides Business Update for the Second Quarter of 2022

On track for over 5,000 miners to be operational by Q4 2022,
with total capacity of 504 petahash

Reports working capital of $21.2 million and stockholders’ equity of
$65.2 million ($4.98 per share) as of June 30, 2022

TAMPA, FL, August 17, 2022-- LM Funding America, Inc. (NASDAQ:LMFA) ("LM Funding" or the "Company"), a technology-based specialty finance company with a primary focus on expanding into the cryptocurrency mining business, today provided a business update and reported financial results for the three months ended June 30, 2022.

Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We are continuing to execute on our Bitcoin mining strategy, which began in late 2021. We have already placed 2,690 of the mining machines that we committed to purchase last year with Compute North and are currently on track for over 5,000 miners to be operational by the fourth quarter, which would provide us capacity of approximately 504 petahash. As a result of the variable pricing structure we negotiated with our mining machine supplier, pegged to the price of Bitcoin, we have secured over $2 million in rebate credits. As we move forward, we plan to maintain a disciplined approach of opportunistically purchasing and cost-effectively operating Bitcoin mining machines in order to maximize long-term value for shareholders.”

Richard Russell, Chief Financial Officer of LM Funding, added, “As sponsor and founding stockholder of LMF Acquisition Opportunities, Inc. (“LMAO”), a special purpose acquisition company (SPAC), we continue our focus on the proposed merger with SeaStar Medical. Based on the status of the pending merger, as of June 30, 2022, the Company recalculated the fair value of our interests in LMAO, which included a reassessment of the risk of forfeiture, and concluded the risk of forfeiture has decreased versus the first quarter and the value of our retained interest has accordingly increased. As a result, we recognized an unrealized gain on securities of $12.2 million for the three months ended June 30, 2022.”

LM Funding will host a conference call today at 11:00 A.M. Eastern Time today to discuss the Company’s financial results for the second quarter ended June 30, 2022, 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 847012. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/46396 or on the investor relations section of the company’s website, https://ir.lmfunding.com/.

A webcast replay will be available on the investor relations section of company’s the website at https://ediblegarden.com/pages/webcasts-presentations through August 17, 2023. A telephone replay of the call will be available approximately one hour following the call, through August 31, 2022, 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 46396.

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. LMFA has also entering the cryptocurrency mining business through its subsidiary, US Digital Mining and Hosting Co., LLC.

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, the risks of entering into and operating in the cryptocurrency mining business, the capacity of our bitcoin mining machines and our related ability to purchase power at reasonable prices, he ability to finance our planned cryptocurrency mining operations, 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.

	June 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Cash	$	17,046,595		$	32,559,185
Finance receivables:
Original product - net		2,520			13,993
Special product - New Neighbor Guaranty program, net of allowance for credit losses of		21,077			14,200
Short-term investments - convertible debt securities (Note 7)		-			539,351
Marketable securities (Note 7)		37,220			2,132,051
Short-term investments - debt security (Note 7)		2,185,863			2,000,000
Prepaid expenses and other assets		1,389,562			1,251,852
Income tax receivable (Note 4)		143,822			-
Note receivable from related party (Note 7)		910,000			-
Digital assets (Note 10)		408,879			-
Current assets		22,145,538			38,510,632
Fixed assets, net (Note 9)		15,084,921			17,914
Real estate assets owned		80,057			80,057
Operating lease - right of use assets (Note 5)		313,629			59,969
Long-term investments - equity securities (Note 7)		516,420			1,973,413
Investments in unconsolidated affiliates (Note 7)		17,362,125			4,676,130
Deposits on mining equipment and hosting (Note 8)		14,466,162			16,775,100
Other assets		10,726			10,726
Long-term assets		47,834,040			23,593,309
Total assets	$	69,979,578		$	62,103,941

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses	$	436,479			$ 463,646
Note payable - short-term (Note 3)		-			114,688
Due to related party (Note 2)		371,179			121,220
Current portion of lease liability (Note 5)		90,030			68,002
Income tax payable (Note 4)		-			326,178
Total current liabilities		897,688			1,093,734
Lease liability - long-term (Note 5)		226,319			-
Long-term liabilities		226,319			-
Total liabilities		1,124,007			1,093,734

Stockholders’ equity:
Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		-			-
Common stock, par value $0.001; 350,000,000 shares authorized; 13,091,883 and 13,017,943 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		13,092			13,018
Additional paid-in capital		81,821,510			74,525,106
Accumulated deficit		(16,660,717	)		(13,777,006	)
Total stockholders’ equity		65,173,885			60,761,118
Non-controlling interest		3,681,686			249,089
Total stockholders’ equity		68,855,571			61,010,207
Total liabilities and stockholders’ equity	$	69,979,578		$	62,103,941

The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021
Revenues:
Interest on delinquent association fees	$	112,140		$	62,673		$	213,408		$	140,117
Administrative and late fees		19,698			16,861			36,406			31,932
Recoveries in excess of cost - special product		35,990			178,769			53,355			208,242
Underwriting and other revenues		26,125			35,494			42,916			58,197
Rental revenue		40,580			34,588			79,452			66,505
Total revenues		234,533			328,385			425,537			504,993

Operating Expenses:
Staff costs and payroll		4,296,695			246,040			8,588,892			1,548,021
Professional fees		1,031,431			360,024			1,806,251			842,967
Settlement costs with associations		-			-			160			-
Selling, general and administrative		122,271			96,015			237,191			195,784
Recovery of cost from related party receivable		-			(100,000	)		-			(100,000	)
Provision for credit losses		500			-			500			(10,000	)
Real estate management and disposal		22,414			29,478			53,895			47,768
Depreciation and amortization		2,007			3,298			5,101			4,994
Collection costs		(7,906	)		2,701			(11,726	)		4,749
Other operating expenses		141,009			4,069			149,393			11,614
Total operating expenses		5,608,421			641,625			10,829,657			2,545,897
Operating loss		(5,373,888	)		(313,240	)		(10,404,120	)		(2,040,904	)
Realized gain (loss) on securities		45,261			8,453,570			(349,920	)		14,125,034
Realized gain on convertible debt securities		287,778			-			287,778			-
Unrealized gain (loss) on convertible debt security		(288,320	)		2,501,600			-			2,501,600
Unrealized loss on marketable securities		(24,030	)		-			(23,900	)		-
Impairment loss on digital assets		(377,707	)		-			(377,707	)		-
Unrealized gain on investment and equity securities		12,215,401			552,494			11,229,002			1,147,886
Digital assets other income		1,292			-			5,658			-
Interest income		80,975			73,884			179,345			86,939
Interest expense		-			(189	)		-			(653	)
Dividend income		1,375			-			2,750			-

Income before income taxes		6,568,137			11,268,119			548,886			15,819,902
Income tax expense		-			(13,780	)		-			(17,264	)
Net income		6,568,137			11,254,339			548,886			15,802,638
Less: Net income attributable to non-controlling interest		(3,723,797	)		(146,857	)		(3,432,597	)		(318,723	)
Net income (loss) attributable to LM Funding America Inc.	$	2,844,340		$	11,107,482		$	(2,883,711	)	$	15,483,915

Earnings/(loss) per share:
Basic income (loss) per common share - net income (loss) - attributable to LM Funding	$	0.22		$	2.05		$	(0.22	)	$	2.96
Diluted income (loss) per common share - net income (loss) - attributable to LM Funding	$	0.22		$	2.05		$	(0.22	)	$	2.95
Weighted average number of common shares outstanding:
Basic		13,091,882			5,414,296			13,076,359			5,231,909
Diluted		13,091,882			5,423,162			13,076,359			5,245,656

The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.

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

	For the Six Months Ended June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	548,886		$	15,802,638
Adjustments to reconcile net income to cash used in operating activities
Depreciation and amortization		5,101			4,994
Right to use asset non cash lease expense		47,127			49,797
Stock compensation		658,999			-
Stock option expense		6,637,479			-
Debt forgiveness		-			(157,251	)
Accrued investment income		(176,438	)		(86,938	)
Gain on deconsolidation of affiliate		-			(43,623	)
Unrealized gain on convertible debt security		-			(2,501,600	)
Unrealized loss on marketable securities		23,900			-
Impairment loss on digital assts		377,707			-
Unrealized gain on investment and equity securities		(11,229,002	)		(1,147,886	)
Realized (gain) loss on securities		349,920			(14,125,034	)
Realized gain on convertible note securities		(287,778	)		-
Investment in securities		-			(15,547,454	)
Proceeds from securities		2,565,893			29,672,488
Investment in convertible note receivable		-			(5,000,000	)
Convertible note receivable converted into marketable security		844,882
Investment in marketable Securities		(844,882	)		(247,997	)
Change in assets and liabilities
Prepaid expenses and other assets		623,511			11,105
Accounts payable and accrued expenses		(27,168	)		184,239
Advances from related party		249,959			142,191
Lease liability payments		(52,440	)		(50,353	)
Income tax payable		(326,178	)		-
Income tax receivable		(143,822	)		-
Deferred taxes		-			17,264
Net cash provided by (used in) operating activities		(154,344	)		6,976,580

CASH FLOWS FROM INVESTING ACTIVITIES:
Net collections of finance receivables - original product		11,473			30,831
Net collections of finance receivables - special product		(6,877	)		(454	)
Payments for real estate assets owned		-			(64,857	)
Capital expenditures		(13,235	)		(3,185	)
Deposits for mining equipment and hosting		(13,538,333	)		-
Investments in digital assets		(786,586	)		-
Loan to purchase securities		-			1,784,250
Investment in note receivable - related party		(910,000	)
Repayment of loan to purchase securities		-			(1,784,250	)
Investment in unconsolidated affiliate		-			(5,738,000	)
Net cash (used in) investing activities		(15,243,558	)		(5,775,665	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments		-			(28,534	)
Insurance financing repayments		(114,688	)		(96,257	)
Exercise of warrants		-			9,544,623
Net cash provided by (used in) financing activities		(114,688	)		9,419,832
NET INCREASE (DECREASE) IN CASH		(15,512,590	)		10,620,747
CASH - BEGINNING OF YEAR		32,559,185			11,552,943
CASH - END OF YEAR	$	17,046,595		$	22,173,690

SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION
ROU assets and operating lease obligation recognized	$	300,787		$	-
Reclassification of mining equipment deposit to fixed assets, net	$	15,058,872		$	-
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION
Cash paid for interest	$	-		$	1,892
Cash paid for income taxes	$	470,000		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.