LM Funding Sells Symbiont's Blockchain Technology to Platonic Holdings Inc.
LM Funding America, Inc. (NASDAQ: LMFA) has strengthened its balance sheet by selling Symbiont's blockchain technology for $2 million to Platonic Holdings Inc. This sale will provide additional resources to purchase new mining machines in preparation for the expected Bitcoin halving event in Q2 2024. The sale price includes $200,000 held in escrow until December 26, 2024. LM Funding acquired Symbiont.IO's assets as debtor in possession in its Chapter 11 bankruptcy case, recorded on the Company’s books for $2 million. The deal closed on December 27, 2023, and the Chairman and CEO, Bruce M. Rodgers, expressed optimism about the transaction's impact on the Company's growth and balance sheet strength.
The sale of Symbiont's blockchain technology by LM Funding America, Inc. for $2 million represents a strategic financial decision aimed at reallocating resources to bolster its cryptocurrency mining operations. This liquidity injection is timely, considering the anticipated Bitcoin halving event in Q2 2024, which historically has influenced Bitcoin's price and mining profitability. Holding $200,000 in escrow until December 26, 2024, serves as a risk mitigation measure, ensuring some level of transaction security.
From a financial perspective, this transaction indicates LM Funding's commitment to capitalizing on the cyclical nature of cryptocurrency markets. The additional working capital is expected to strengthen the company's balance sheet, potentially improving its creditworthiness and investment appeal. However, the reallocation of assets towards a highly volatile market such as cryptocurrency mining carries inherent risks, including price volatility and increased competition post-halving, which could affect the return on investment.
The divestiture of blockchain technology assets and the subsequent investment in mining infrastructure suggests a strategic pivot within LM Funding's business model. The focus on expanding bitcoin mining capabilities prior to the halving event aligns with industry patterns, where miners anticipate the reduction in block rewards by increasing computational power to maintain revenue streams. This move could position LM Funding favorably within the competitive landscape, provided that the company efficiently scales its operations and manages the associated costs.
It is crucial to monitor how this strategic shift is received by the market and stakeholders, as it reflects the company's responsiveness to industry trends. The success of such investments will largely depend on the future state of the cryptocurrency market and the company's ability to adapt to the post-halving environment. Stakeholders should consider the potential impact on the company's market share and the broader implications for the cryptocurrency mining sector.
The Bitcoin halving event, a pre-programmed reduction in the block reward for miners, has significant ramifications for the cryptocurrency ecosystem. Historically, halvings have led to increased public interest and speculative price surges in Bitcoin. By proactively investing in new mining machines, LM Funding is positioning itself to potentially benefit from increased network security and reduced inflation rate post-halving. However, the increased difficulty in mining that follows the halving event could pressure profit margins, especially for less efficient miners.
It is important to assess the strategic timing of the asset sale and the reinvestment plan. The company's ability to deploy the new mining machines effectively and the subsequent hash rate increase will be critical in determining their competitive edge. While the anticipation of the halving event can drive positive sentiment, the actual benefits to LM Funding will hinge on Bitcoin's market dynamics and the company's operational execution in a rapidly evolving industry.
12/28/2023 - 09:00 AM
Sale Price of $2 Million Strengthens Balance Sheet; Provides Additional Resources to Purchase New Mining Machines in Preparation for Expected Bitcoin Halving Event in Q2 2024
TAMPA, FL, Dec. 28, 2023 (GLOBE NEWSWIRE) -- LM Funding America, Inc. (NASDAQ: LMFA) (“LM Funding” or the “Company”), a cryptocurrency mining and technology-based specialty finance company, today announced that it has signed an agreement to sell Symbiont’s blockchain technology for $2 million to Platonic Holdings Inc. Two hundred thousand of the sale price will be held in escrow until December 26, 2024. LM Funding acquired the assets of Symbiont.IO as debtor in possession in its Chapter 11 bankruptcy case and they are recorded on the Company’s books for $2 million .
Bruce M. Rodgers, Chairman and CEO of LM Funding, commented, “We believe this transaction provides the Company with the necessary funds to grow our bitcoin mining business, including the acquisition of more mining equipment, in preparation for the anticipated Bitcoin halving event for the second quarter of 2024. Additionally, the transaction provides the Company with extra working capital to strengthen our balance sheet."
The Company closed the deal on December 27, 2023.
About LM Funding America
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, the risks of entering into and 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 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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What did LM Funding America, Inc. (NASDAQ: LMFA) sell for $2 million?
LM Funding America, Inc. (NASDAQ: LMFA) sold Symbiont's blockchain technology for $2 million to Platonic Holdings Inc.
What will the sale price be used for?
The sale price will provide additional resources to purchase new mining machines in preparation for the expected Bitcoin halving event in Q2 2024.
When did the deal close?
The deal closed on December 27, 2023.
Who is the Chairman and CEO of LM Funding America, Inc. (NASDAQ: LMFA)?
The Chairman and CEO of LM Funding America, Inc. (NASDAQ: LMFA) is Bruce M. Rodgers.
What did LM Funding acquire in its Chapter 11 bankruptcy case?
LM Funding acquired the assets of Symbiont.IO as debtor in possession in its Chapter 11 bankruptcy case, recorded on the Company’s books for $2 million.
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Industry
International Trade Financing
Sector
Finance and Insurance
Tags
Commercial Services, Miscellaneous Commercial Services, Finance and Insurance, International Trade Financing
Country
US
City
Tampa
About LMFA
formed in january 2008, lm funding is a financial services company that provides principal secured funding to condominium associations facing the ramifications of delinquent association dues. we are real estate and legal professionals with over 50 years and more than $1 billion of investment and transactional experience. we believe that condo associations and their owners shouldn’t have to take on the financial responsibility of delinquency and the hassle of collection. that’s why we “buy problems.” before lm funding, condo association owners would have to hire attorneys to collect bad debt. we’re changing that, with a unique business idea that turns debt into instant cash—freeing condo associations from the burden of collection and allowing them to continue to maintain their operations. lm funding’s accumulated delinquent assessment balance is now in excess of $90 million. that is a lot of problems that we’ve bought, and we want more!
