LM Funding America Achieves Over 648% Revenue Growth to $13.0 Million for 2023
LM Funding America, Inc. (LMFA) reported mining 423.4 Bitcoins in 2023, valued at $12.3 million. The company held 153.6 Bitcoins at $10.8 million by February 2024, with revenue increasing by 262% and 648% for the three and twelve months ended December 31, 2023, respectively. Despite a net loss of $1.6 million in Q4 2023, LMFA achieved positive Core EBITDA of $345 thousand, a significant improvement over the previous year.
Positive
Significant increase in revenue and Bitcoin mining operations in 2023.
Successful adoption of an 'Infrastructure Light' strategy to mitigate market risks.
Positive Core EBITDA of $345 thousand for Q4 2023, showing operational improvement.
Continued investment in state-of-the-art mining equipment for future growth.
Optimistic outlook based on market conditions and Bitcoin's recent performance.
The reported financials from LM Funding America, Inc. indicate a substantial increase in revenue year-over-year, which is a positive sign for investors and analysts monitoring the company's performance. The 648% revenue growth is a significant figure, reflecting the company's successful expansion into Bitcoin mining operations. However, it is important to consider the volatility of cryptocurrency markets when evaluating these results. The price of Bitcoin has historically been prone to rapid and unpredictable changes, which can substantially affect the value of the company's holdings and, by extension, its financial stability.
Furthermore, the company's strategy to invest in mining equipment ahead of the Bitcoin halving event is noteworthy. The halving could potentially lead to an increase in Bitcoin prices due to reduced supply, but it may also increase competition and mining difficulty, which could affect profitability. The company's working capital and stockholders' equity provide a cushion against market fluctuations, but the net loss reported for the last quarter suggests that operational efficiency and cost management need to be closely monitored.
LM Funding's adoption of an 'Infrastructure Light' strategy is a tactical approach aimed at reducing exposure to market risks associated with Bitcoin price fluctuations. By aligning their investments with assets that closely track Bitcoin's value, they may be better positioned to capitalize on the cryptocurrency's price movements. However, this strategy also ties the company's financial health closely to the performance of Bitcoin, which could be a double-edged sword.
As the company prepares for the upcoming Bitcoin halving, it's important to understand the implications of such events on mining profitability. Historically, halvings have led to bullish market sentiment, but they also result in reduced mining rewards. This could necessitate further investment in more efficient mining equipment to maintain revenue streams. The recent all-time high in Bitcoin's price could indicate a growing market optimism, but investors should remain cautious due to the potential for sharp corrections in the cryptocurrency market.
Analyzing the broader impact of LM Funding's performance, it is evident that the company's growth in the cryptocurrency sector may have ripple effects on related industries, such as technology and finance. The demand for advanced mining equipment could incentivize manufacturers to innovate, potentially benefiting the tech industry. On the financial side, the company's success may attract more investors to the cryptocurrency mining space, influencing stock market dynamics.
It is also essential to consider the environmental aspect of cryptocurrency mining, as it becomes an increasing concern for investors. Companies that demonstrate a commitment to sustainable practices may have a competitive advantage. LM Funding's future plans and strategies should address these environmental considerations to align with investor values and regulatory trends.
04/01/2024 - 08:00 AM
Mined 423.4 Bitcoins in 2023 Valued at Approximately $12.3 Million at an Average
Market Revenue Value of Approximately $29,000 per Bitcoin
Held 153.6 Bitcoin at February 29, 2024, Valued at Approximately $10.8 Million Based on Recent Bitcoin Price of $70,000
Reports Working Capital of Approximately $7.4 Million and LM Funding Stockholders’ Equity of $36.2 Million ($14.52 per share) as of December 31, 2023
Conference Call to Be Held Today at 11:00 am ET
TAMPA, Fla., April 01, 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 months and full year ended December 31, 2023.
Operational Highlights
Approximately 5,900 Bitcoin mining machines in operation at hosting sites as of December 31, 2023 Mined 423.4 Bitcoin in 2023, which generated approximately $12.3 million in revenue based on the $29,000 average price of Bitcoin in 2023 As of December 31, 2023, held 95.1 Bitcoin valued at approximately $3.4 million As of February 29, 2024, held 153.6 Bitcoin valued at approximately $10.8 million based on recent Bitcoin price of approximately $70,000 Revenue for the three and twelve months ended December 31, 2023, increased approximately 262% and 648% , respectively over the same periods last year Net loss for the three months ended December 31, 2023, was $1.6 million as compared to $19.7 million for the 2022 comparable quarter. Achieved positive Core EBITDA (defined below) of $345 thousand for the three months ended December 31, 2023, compared to a Core EBITDA loss of $1.7 million for the same period last year. Core EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss is set forth below in this press release. Bruce Rodgers, Chairman and CEO of LM Funding, commented, “We made tremendous progress building our Bitcoin mining operations in 2023, our first full year as a Bitcoin mining company. We are extremely pleased with our results as we mined 423.4 Bitcoins valued at approximately $12.3 million based on the average price of Bitcoin during the year. This success drove an almost 648% increase in the Company’s revenue for the year as compared to 2022. In 2023, we adopted an 'Infrastructure Light' strategy, aiming to lessen market risks and fluctuations by concentrating our investments on Bitcoin and mining devices that closely track Bitcoin's value. Additionally, we continue to purchase state-of-the-art mining equipment in anticipation of the upcoming Bitcoin halving, expected to occur in late April or early May of this year. Considering current market conditions and the future outlook for Bitcoin, which recently reached a new all-time high of approximately $73,800 , we remain extremely optimistic about the future, as halving events have historically 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 year with cash plus Bitcoin, valued as of December 31, 2023, of approximately $5.8 million . Including the Bitcoin that we mined through the end of February 2024, our reported Bitcoin holdings of 153.6 Bitcoin are valued at approximately $10.8 million based on the recent Bitcoin price of approximately $70,000. Our working capital stood at $7.4 million as of December 31, 2023, and the equity of LM Funding shareholders was $36.2 million , or $14.52 per share. Given the strength of our balance sheet, we have not had the need to sell any of our Bitcoin holdings through February 2024 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 fourth quarter ended December 31, 2023, was approximately $4.1 million , an increase of $2.9 million , or approximately 262% , compared to $1.1 million for the fourth quarter of 2022. Total revenue for the year ended December 31, 2023, was approximately $13.0 million , an increase of $11.3 million , or more than 648% , from $1.7 million in 2022. These increases were primarily due to digital mining revenue of $3.9 million and $12.3 million in the three months and year ended December 31, 2023, compared with $0.9 million of digital mining revenue for both comparable periods in 2022 as the Company commenced our Bitcoin mining operations in September 2022. The average BTC price for the three and twelve months ended December 31, 2023 used for purposes of recognizing as revenue was approximately $36,500 and $29,000 , respectively. Net loss attributable to LM Funding shareholders for the three months ended December 31, 2023, was approximately $1.6 million , which included a $0.5 million non-cash, unrealized gain on investment and equity securities, and a $0.8 million impairment on our previously owned Symbiont assets, compared to a net loss of approximately $19.7 million for the 2022 comparable quarter, which included a $6.6 million non-cash, unrealized loss on investment and equity securities and a $1.1 million impairment on our Symbiont assets. Net loss attributable to LM Funding shareholders for the year ended December 31, 2023, was approximately $15.9 million , which included a $9.8 million non-cash, unrealized loss on investment and equity securities, and a $0.8 million impairment on our previously owned Symbiont assets, compared to a net loss of approximately $29.2 million for the year ended December 31, 2022, which included a $4.4 million non-cash, unrealized gain on investment and equity securities, and a $1.1 million impairment on the Symbiont assets. Positive Core EBITDA for the three months ended December 31, 2023, totaled approximately $0.3 million compared to a Core EBITDA loss of $1.7 million in the prior year's comparable quarter. Core EBITDA loss for the twelve months ended December 31, 2023, totaled approximately $0.2 million , compared with Core EBITDA loss of $6.5 million in 2022. The improvements in Core EBITDA for the three and twelve-month periods ended December 31, 2023, were primarily due to the existence of material Bitcoin mining operations in the current year that did not exist in the prior year. Core EBITDA is a non-GAAP financial measure, and a reconciliation of Core EBITDA to net loss is set forth below in this press release. Cash was approximately $2.4 million , with digital assets of $3.4 million , and working capital of $7.4 million as of December 31, 2023, based on 95.1 BTC at a price of approximately $36,000 as of December 31, 2023. The current BTC market price has fluctuated between $62,000 and $73,000 in recent weeks. In 2023, the Company also received approximately $2.7 million from SeaStar Medical Holdings as a partial repayment of their outstanding note receivable. Total LM Funding stockholders’ equity was approximately $36.2 million , or $14.52 per share, as of December 31, 2023 (with the per-share amount calculated as LMFA stockholders’ equity divided by approximately 2,492,964 shares outstanding as of December 31, 2023). Investor Conference Call
LM Funding will host a conference call today, April 1, 2024, at 11:00 A.M. Eastern Time to discuss the Company’s financial results for the fourth quarter ended December 31, 2023, 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 212125. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2917/50187 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 April 1, 2025. A telephone replay of the call will be available approximately one hour following the call, through April 15, 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 50187.
About LM Funding America
LM Funding America, Inc., (Nasdaq: LMFA) together with its subsidiaries, is 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 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 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 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:
(tables follow)
LM Funding America, Inc. and Subsidiaries Consolidated Balance Sheets (Audited) December 31, December 31, 2023 2022 Assets Cash $ 2,401,831 $ 4,238,006 Digital Assets (Note 2) 3,416,256 888,026 Finance receivables 19,221 26,802 Marketable securities (Note 5) 17,860 4,290 Notes receivable from Seastar Medical Holding Corporation (Note 5) - 3,807,749 Receivable from sale of Symbiont assets 200,000 - Prepaid expenses and other assets 4,067,212 1,233,322 Income tax receivable 31,187 293,466 Current assets 10,153,567 10,491,661 Fixed assets, net (Note 3) 24,519,610 27,272,374 Deposits on mining equipment (Note 4) 20,837 525,219 Hosting services deposits (Note 4) - 2,200,452 Notes receivable from Seastar Medical Holding Corporation (Note 5) 1,440,498 - Long-term investments - debt security (Note 5) - 2,402,542 Less: Allowance for losses on debt security (Note 5) - (1,052,542 ) Long-term investments - debt security, net (Note 5) - 1,350,000 Long-term investments - equity securities (Note 5) 156,992 464,778 Investment in Seastar Medical Holding Corporation (Note 5) 1,145,486 10,608,750 Operating lease - right of use assets (Note 7) 189,009 265,658 Other assets 86,798 10,726 Long-term assets 27,559,230 42,697,957 Total assets $ 37,712,797 $ 53,189,618 Liabilities and stockholders' equity Accounts payable and accrued expenses 2,064,909 1,570,906 Note payable - short-term (Note 6) 567,586 475,775 Due to related parties (Note 9) 22,845 75,488 Current portion of lease liability (Note 7) 110,384 90,823 Total current liabilities 2,765,724 2,212,992 Lease liability - net of current portion (Note 7) 85,775 179,397 Long-term liabilities 85,775 179,397 Total liabilities 2,851,499 2,392,389 Stockholders' equity (Note 10) Preferred stock, par value $.001; 150,000,000 shares authorized; no shares issued and outstanding as of December 31, 2023 and December 31, 2022 - - Common stock, par value $.001; 350,000,000 shares authorized; 2,492,964 shares issued and outstanding as of December 31, 2023 and 2,232,964 as of December 31, 2022 2,493 2,233 Additional paid-in capital 95,145,376 92,206,200 Accumulated deficit (58,961,461 ) (43,017,207 ) Total LM Funding America stockholders' equity 36,186,408 49,191,226 Non-controlling interest (1,325,110 ) 1,606,003 Total stockholders' equity 34,861,298 50,797,229 Total liabilities and stockholders' equity $ 37,712,797 $ 53,189,618
LM Funding America, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) Three Months Ended December 31, Years Ended December 31, 2023 2022 2023 2022 Revenues: Digital mining revenues $ 3,946,485 $ 903,403 $ 12,289,131 $ 945,560 Specialty finance revenue 75,901 175,853 550,445 626,773 Rental revenue 33,028 41,378 144,514 161,618 Total revenues 4,055,414 1,120,634 12,984,090 1,733,951 Operating costs and expenses: Digital mining cost of revenues (exclusive of depreciation and amortization shown below) 2,668,770 994,266 9,406,940 1,033,226 Staff costs and payroll 1,121,796 6,536,291 5,858,736 19,422,723 Professional fees 634,535 637,465 1,863,038 3,158,446 Settlement costs with associations - - 10,000 160 Selling, general and administrative 168,632 188,749 851,806 635,268 Real estate management and disposal 19,105 34,012 146,716 110,465 Depreciation and amortization 1,495,614 434,302 4,983,480 478,020 Collection costs 12,342 (5,524 ) 29,875 (12,213 ) Impairment loss on mined digital assets 143,317 78,924 965,967 79,794 Realized gain on sale of mined digital assets (738,526 ) - (2,070,508 ) - Other operating costs 295,569 1,229,749 999,959 1,504,047 Total operating costs and expenses 5,821,154 10,128,234 23,046,009 26,409,936 Operating loss (1,765,740 ) (9,007,600 ) (10,061,919 ) (24,675,985 ) Realized gain (loss) on securities 2,632 - 4,420 (349,920 ) Realized gain on convertible debt securities - - - 287,778 Unrealized gain (loss) on marketable securities 7,134 (19,930 ) 13,570 (56,830 ) Impairment loss on prepaid machine deposits - (3,150,000 ) (36,691 ) (3,150,000 ) Impairment loss on prepaid hosting deposits (184,236 ) (1,790,712 ) (184,236 ) (1,790,712 ) Impairment loss on Symbiont assets - (1,052,542 ) (750,678 ) (1,052,542 ) Unrealized gain (loss) on investment and equity securities 546,563 (6,610,843 ) (9,771,050 ) 4,423,985 Impairment loss on digital assets - (63,935 ) - (467,406 ) Realized gain on sale of purchased digital assets - 20,254 1,917 20,254 Loss on disposal of assets (9,389 ) (38,054 ) (9,389 ) (38,054 ) Digital assets other income - - 5,658 Other income - coupon sales - - 639,472 - Gain on adjustment of note receivable allowance - - 1,052,542 - Other income - finance revenue - - 37,660 - Dividend income - - - 3,875 Interest income, net 38,705 129,731 249,586 394,678 Credit loss 22,344 - - - Loss before income taxes (1,341,987 ) (21,583,631 ) (18,814,796 ) (26,445,221 ) Income tax expense (60,571 ) (126,388 ) (60,571 ) (1,438,066 ) Net Loss $ (1,402,558 ) $ (21,710,019 ) $ (18,875,367 ) $ (27,883,287 ) Less: loss (income) attributable to non-controlling interest (189,208 ) 2,016,385 2,931,113 (1,356,914 ) Net loss attributable to LM Funding America Inc. $ (1,591,766 ) $ (19,693,634 ) $ (15,944,254 ) $ (29,240,201 ) Basic loss per common share $ (0.67 ) $ (8.82 ) $ (6.98 ) $ (13.10 ) Diluted loss per common share $ (0.67 ) $ (8.82 ) $ (6.98 ) $ (13.10 ) Weighted average number of common shares outstanding Basic 2,362,964 2,231,681 2,283,836 2,231,681 Diluted 2,362,964 2,231,681 2,283,836 2,231,681
LM Funding America, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Audited) Years ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (18,875,367 ) $ (27,883,287 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 4,983,480 478,020 Noncash lease expense 98,536 95,098 Stock compensation 1,095,705 1,098,331 Stock option expense 1,843,731 16,571,978 Accrued investment income (159,692 ) (392,412 ) Accrued recovery of legal fees - (55,364 ) Impairment loss on digital assets 965,967 547,200 Impairment loss on mining machine deposits 36,691 3,150,000 Impairment loss on hosting deposits 184,236 1,790,712 Impairment loss on Symbiont assets 750,678 - Unrealized loss (gain) on marketable securities (13,570 ) 56,830 Unrealized loss (gain) on investment and equity securities 9,771,050 (4,423,985 ) Loss on disposal of fixed assets 9,389 38,054 Realized loss (gain) on securities (4,420 ) 349,920 Realized gain on convertible note receivable - (287,778 ) Realized gain on sale of digital assets (2,072,425 ) (20,254 ) Proceeds from securities 744,036 2,565,893 Convertible debt and interest converted into marketable securities - 844,882 Investments in marketable securities (739,616 ) (844,882 ) (Reversal of) allowance loss on debt security (1,052,542 ) 1,052,542 Change in operating assets and liabilities: Prepaid expenses and other assets 189,407 651,472 Hosting deposits (36,691 ) (3,202,764 ) Repayments to related party (52,643 ) (45,732 ) Accounts payable and accrued expenses 177,478 393,260 Mining of digital assets (12,289,131 ) (945,560 ) Proceeds from sale of digital assets 10,874,701 - Lease liability payments (95,948 ) (98,569 ) Income tax receivable 262,279 (293,466 ) Deferred taxes and taxes payable - (326,178 ) Net cash used in operating activities (3,404,681 ) (9,136,039 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net collections of finance receivables - original product (6,428 ) 13,993 Net collections of finance receivables - special product 14,009 (12,602 ) Capital expenditures (1,625,284 ) (15,382 ) Investment in notes receivable - Seastar Medical Holding Corporation (125,000 ) (3,753,090 ) Collection of notes receivable 2,651,943 - Investment in digital assets (35,157 ) (988,343 ) Proceeds from sale of purchased digital assets 27,815 518,931 Financing activities for Symbiont asset acquisition (402,361 ) - Symbiont asset sale 1,800,000 - Deposits for mining equipment - (14,649,614 ) Net cash from (used in) investing activities 2,299,537 (18,886,107 ) CASH FLOWS FROM FINANCING ACTIVITIES: Loan principal and insurance financing repayments (624,481 ) (299,033 ) Issue costs from the issuance of common stock (106,550 ) - Net cash used in financing activities (731,031 ) (299,033 ) NET DECREASE IN CASH (1,836,175 ) (28,321,179 ) CASH - BEGINNING OF PERIOD 4,238,006 32,559,185 CASH - END OF PERIOD $ 2,401,831 $ 4,238,006 SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES Insurance financing $ 716,292 $ 660,120 ROU assets and operating lease obligation recognized $ 21,887 $ 300,787 Reclassification of mining equipment deposit to fixed assets, net $ 1,177,226 $ 26,961,095 Capital expenditures in accrued liabilities $ 1,035,374 $ 718,416 Reclassification of Reverse stock split $ 10,859 $ - SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION Cash paid for taxes $ - $ 2,057,710 Cash paid for interest $ - $ -
NON-GAAP FINANCIAL INFORMATION (unaudited)
The following tables reconcile net loss, which we believe is the most comparable GAAP measure, to EBITDA and Core EBITDA:
Years Ended December 31, Three Months Ended December 31, 2023 2022 2023 2022 Net income (loss) $ (18,875,367 ) $ (27,883,287 ) $ (1,402,558 ) $ (21,710,019 ) Income tax expense 60,571 1,438,066 60,571 126,388 Interest expense - 4,416 - 4,416 Depreciation and amortization 4,983,480 478,020 1,495,614 434,302 Income (loss) before interest, taxes & depreciation $ (13,831,316 ) $ (25,962,785 ) $ 153,627 $ (21,144,913 ) Unrealized loss (gain) on investment and equity securities 9,771,050 (4,423,985 ) (546,563 ) 6,610,843 Realized gain on convertible debt securities - (287,778 ) - - Impairment loss on prepaid mining machine deposits 36,691 3,150,000 - 3,150,000 Impairment loss on mined digital assets 965,967 79,794 143,317 78,924 Impairment loss on digital assets - 467,406 - 63,935 Impairment loss on Symbiont assets 750,678 1,052,542 - 1,052,542 Gain on adjustment of note receivable allowance (1,052,542 ) - - - Impairment loss on prepaid hosting deposits 184,236 1,790,712 184,236 1,790,712 Stock compensation and option expense 2,939,436 17,670,309 410,584 6,725,592 Core income (loss) before interest, taxes & depreciation $ (235,800 ) $ (6,463,785 ) $ 345,201 $ (1,672,365 )
How many Bitcoins did LM Funding mine in 2023?
LM Funding mined 423.4 Bitcoins in 2023.
What was the value of the Bitcoins mined in 2023?
The Bitcoins mined in 2023 were valued at approximately $12.3 million.
How many Bitcoins did LM Funding hold as of February 29, 2024?
As of February 29, 2024, LM Funding held 153.6 Bitcoins.
What was the revenue increase for LM Funding in the three months ended December 31, 2023?
The revenue increase for LM Funding in the three months ended December 31, 2023, was approximately 262%.
What was the net loss for LM Funding in Q4 2023?
The net loss for LM Funding in Q4 2023 was $1.6 million.
What is Core EBITDA and how much did LM Funding achieve for Q4 2023?
Core EBITDA is a non-GAAP financial measure. LM Funding achieved a positive Core EBITDA of $345 thousand for Q4 2023.
What strategy did LM Funding adopt in 2023 to mitigate market risks?
LM Funding adopted an 'Infrastructure Light' strategy in 2023.
What is LM Funding's outlook based on recent market conditions and Bitcoin's performance?
LM Funding remains extremely optimistic based on current market conditions and Bitcoin's recent performance.
