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LM Funding Reports Net Income of $4.4 Million or $0.87 Per Basic Common Share for the First Quarter of 2021

Nachrichtenquelle: globenewswire
14.05.2021, 15:00  |  134   |   |   

TAMPA, Fla., May 14, 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 months ended March 31, 2021.

Financial Highlights for the Three Month Period Ended March 31, 2021:

  • Revenues declined to $177 thousand in 2021 from $341 thousand in Q1 2020.
  • Operating loss was $1,728 thousand in 2021 compared to a loss of $561 thousand in Q1 2020.
  • Recognized a $5.7 million realized gain from a transaction with BORQS Technologies Inc. (‘Borqs’) initially projected to net $2 million.
  • Sponsor interest in LMF Acquisition Opportunities, Inc. (‘LMAO’) resulted in recognition of a net unrealized gain on securities of $0.6 million on the Company’s $5.7 million purchase of LMAO’s warrants and Class B common shares.
  • Net income during the quarter totaled $4.4 million, or $0.87 per basic common share.
  • Cash increased to $17.8 million on March 31, 2021 from $11.5 million on December 31, 2020.

“Thus far in 2021 we continue to expand our ‘We Buy Problems’ mission. In addition to $4.4 million in net income during the quarter, our cash position has increased to $17.8 million or $3.29 per basic common share as of March 31st,” said Bruce M. Rodgers, Chairman and CEO of LM Funding. “Revenues from our community association receivables business declined as we continue to develop a digital asset technology strategy to unlock the potential of this business. We expanded our core business of buying discounted debt and collecting it through court proceedings with the Borqs transaction. We entered the Borqs transaction projecting to net $2 million and we were pleased to realize a $5.7 million return. Going forward, we will continue to look for other technology enabled specialty finance business opportunities that can leverage our existing platform and expertise. We also expect our SPAC sponsorship and digital asset strategy to contribute to earnings in the foreseeable future as our core business navigates through the economy’s re-emergence from Covid restrictions.”

Operational Highlights for the First Quarter of 2021 to Date:

  • LM Funding is developing a digital asset technology strategy to grow its community association receivables business both organically and through acquisitions.
  • LMFA announced plans to purchase up to $2 million in digital assets including Bitcoin, Ether, and other digital assets.
  • LM Funding sponsored LMAO and its initial public offering, with LMAO closing a $103.5 million upsized IPO (NASDAQ: LMAOU). Net investment in LMAO totals $6.4 million or approximately $1.17 per share.
  • LMAO is targeting a business combination in the financial services or financial technology sectors.
  • LM Funding entered into a second transaction with Borqs with the purchase of a $5 million convertible debt and equity instrument and has funded $1.7 million as of March 31, 2021.

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.

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

    March 31,
2021
    December 31,
2020
 
    (Unaudited)          
ASSETS                
Cash   $ 17,803,015     $ 11,552,943  
Finance receivables:                
Original product - net (Note 2)     101,811       116,017  
Special product - New Neighbor Guaranty program, net of
allowance for credit losses of (Note 3)
    53,777       52,757  
Prepaid expenses and other assets     212,132       399,124  
Current assets     18,170,735       12,120,841  
Fixed assets, net     5,617       6,171  
Real estate assets owned     80,057       18,767  
Operating lease - right of use assets (Note 7)     134,859       160,667  
Long-term investments - debt securities (Note 9)     1,679,284       -  
Long-term investments - equity securities (Note 9)     1,789,338       -  
Investments in unconsolidated affiliates (Note 9)     4,569,054       -  
Other assets     10,984       10,984  
Long-term assets     8,269,193       196,589  
Total assets   $ 26,439,928     $ 12,317,430  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Note payable (Note 5)     38,053       96,257  
Accounts payable and accrued expenses     271,515       237,033  
Due to related party (Note 4)     232,734       158,399  
Current portion of lease liability (Note 7)     78,675       -  
Total current liabilities     620,977       491,689  
                 
Lease liability - long-term (Note 7)     68,002       171,648  
Deferred taxes (Note 6)     3,484       -  
Note payable - long-term (Note 5)     186,235       185,785  
Long-term liabilities     257,721       357,433  
Total liabilities     878,698       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 March 31, 2021 and December 31,
2020, respectively
    5,414       3,084  
Additional paid-in capital     39,538,550       29,996,257  
Accumulated deficit     (14,159,791 )     (18,536,224 )
Total stockholders’ equity     25,384,173       11,463,117  
Non-controlling interest     177,057       5,191  
Total stockholders’ equity     25,561,230       11,468,308  
Total liabilities and stockholders’ equity   $ 26,439,928     $ 12,317,430  


LM Funding America, Inc. and Subsidiaries Condensed Consolidated Income Statement

      For the Three Months
Ended March 31,
 
      2021     2020  
Revenues:                  
Interest on delinquent association fees     $ 77,444     $ 219,514  
Administrative and late fees       15,071       23,045  
Recoveries in excess of cost - special product       29,473       22,628  
Underwriting and other revenues       22,703       27,929  
Rental revenue       31,917       48,080  
Total revenues       176,608       341,196  
                   
Operating Expenses:                  
Staff costs and payroll       1,301,981       316,059  
Professional fees       482,943       506,995  
Settlement costs with associations       -       11,920  
Selling, general and administrative       99,769       80,223  
Recovery of cost from related party receivable       (10,000 )     (100,000 )
Real estate management and disposal       18,290       85,342  
Depreciation and amortization       1,696       5,812  
Collection costs       2,048       (8,321 )
Other operating expenses       7,545       3,794  
Total operating expenses       1,904,272       901,824  
Operating loss from continuing operations       (1,727,664 )     (560,628 )
Realized gain on securities       5,671,464       -  
Unrealized gain on securities       595,392       -  
Interest income       13,055       -  
Interest expense       (464 )     (6,894 )
Income (loss) from continuing operations before income taxes       4,551,783       (567,522 )
Income tax expense       (3,484 )     -  
Net income (loss) from continuing operations       4,548,299       (567,522 )
Gain from operations of discontinued operations       -       16,428  
Net gain from discontinued operations       -       16,428  
Net income (loss)       4,548,299       (551,094 )
Less: Net income attributable to non-controlling interest       (171,866 )        
Net income (loss) attributable to LM Funding America Inc.     $ 4,376,433     $ (551,094 )
                   
Earnings/(loss) per share:                  
Basic income (loss) per common share - continuing
operations
    $ 0.87     $ (0.88 )
Basic income/(loss) per common share - discontinued
operations
    $ -     $ 0.03  
Basic income (loss) per common share - net income (loss) -
attributable to LM Funding
    $ 0.87     $ (0.85 )
Diluted income (loss) per common share - continuing
operations
    $ 0.80     $ (0.88 )
Diluted earnings/(loss) per common share - discontinued
operations
    $ -     $ 0.03  
Diluted income (loss) per common share - net income (loss) -
attributable to LM Funding
    $ 0.80     $ (0.85 )
                   
Weighted average number of common shares outstanding:                  
Basic       5,047,498       646,606  
Diluted       5,439,398       646,606  


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

    For the Three Months Ended March 31,  
    2021     2020  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss)   $ 4,548,299     $ (551,094 )
                 
Adjustments to reconcile net loss to cash used in operating activities                
Depreciation and amortization     1,696       5,812  
Right to use asset depreciation     25,808       25,093  
Stock compensation     -       128,847  
Recovery of uncollectible related party receivables     -       (100,000 )
Accrued investment income     (12,784 )     -  
Gain on disposal of discontinued operations     -       (16,428 )
Deconsolidation of affiliate     (43,623 )     -  
Unrealized gain on securities     (595,392 )     -  
Realized gain on sale of securities     (5,671,464 )     -  
Change in assets and liabilities                
Prepaid expenses and other assets     710,163       20,436  
Accounts payable and accrued expenses     157,514       (8,102 )
Advances (repayments) from related party     200,749       197,024  
Lease liability payments     (24,971 )     (22,684 )
Deferred taxes     3,484       -  
Net cash provided (used in) operating activities     (700,521 )     (321,096 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Net collections of finance receivables - original product     14,206       28,035  
Net collections of finance receivables - special product     (1,020 )     29,839  
(Payments)/proceeds for real estate assets owned     (62,432 )     (3,026 )
Net cash payment for IIU disposal     -       (246,914 )
Investment in convertible note receivable     (1,666,500 )     -  
Investment in unconsolidated affiliate     (5,738,000 )     -  
Investment in securities     (15,547,454 )     -  
Proceeds from securities, net     21,218,918       -  
Loan to purchase securities     1,784,250       -  
Repayment of loan to purchase securities     (1,784,250 )     -  
Net cash used by investing activities     (1,782,282 )     (192,066 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Principal repayments     (343,687 )     (34,770 )
Insurance financing repayments     (468,061 )     -  
Exercise of warrants     9,544,623       -  
Proceeds from stock subscription     -       250,000  
                 
Net cash provided by financing activities     8,732,875       215,230  
                 
NET INCREASE (DECREASE) IN CASH     6,250,072       (297,932 )
                 
CASH - BEGINNING OF YEAR     11,552,943       1,069,823  
CASH - END OF YEAR   $ 17,803,015     $ 771,891  
                 
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION                
Cash paid for taxes   $ -     $ -  
Cash paid for interest   $ -     $ 6,894  
                 

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Disclaimer

LM Funding Reports Net Income of $4.4 Million or $0.87 Per Basic Common Share for the First Quarter of 2021 TAMPA, Fla., May 14, 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 months ended March 31, 2021. Financial …

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