GlobeNewswire Inc | May 14, 2021 09:00AM EDT

May 14, 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 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 Companys $5.7 million purchase of LMAOs 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 economys 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 CEOLM Funding America, Inc.Tel (813) 222-8996investors@lmfunding.com

LM Funding America, Inc. and Subsidiaries Condensed Consolidated Balance Sheets

March 31, December 31, 2021 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 Guarantyprogram, net of 53,777 52,757 allowance for credit losses of (Note 3)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 134,859 160,667 7)Long-term investments - debt securities 1,679,284 - (Note 9)Long-term investments - equity securities 1,789,338 - (Note 9)Investments in unconsolidated affiliates 4,569,054 - (Note 9)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; 30,000,000sharesauthorized; 5,414,296 and 3,083,760 sharesissued and 5,414 3,084 outstanding as of March 31, 2021 andDecember 31,2020, respectivelyAdditional 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 $ 77,444 $ 219,514 feesAdministrative and late fees 15,071 23,045 Recoveries in excess of cost - special 29,473 22,628 productUnderwriting 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 (10,000 ) (100,000 )receivableReal 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 (1,727,664 ) (560,628 )operationsRealized 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 4,551,783 (567,522 )operations before income taxesIncome tax expense (3,484 ) - Net income (loss) from continuing 4,548,299 (567,522 )operationsGain from operations of discontinued - 16,428 operationsNet gain from discontinued operations - 16,428 Net income (loss) 4,548,299 (551,094 )Less: Net income attributable to (171,866 ) non-controlling interestNet income (loss) attributable to LM $ 4,376,433 $ (551,094 )Funding America Inc. Earnings/(loss) per share: Basic income (loss) per common share -continuing $ 0.87 $ (0.88 )operationsBasic income/(loss) per common share -discontinued $ - $ 0.03 operationsBasic income (loss) per common share -net income (loss) - $ 0.87 $ (0.85 )attributable to LM FundingDiluted income (loss) per common share- continuing $ 0.80 $ (0.88 )operationsDiluted earnings/(loss) per commonshare - discontinued $ - $ 0.03 operationsDiluted income (loss) per common share- net income (loss) - $ 0.80 $ (0.85 )attributable to LM Funding 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 activitiesDepreciation and amortization 1,696 5,812 Right to use asset depreciation 25,808 25,093 Stock compensation - 128,847 Recovery of uncollectible related party - (100,000 )receivablesAccrued investment income (12,784 ) - Gain on disposal of discontinued - (16,428 )operationsDeconsolidation 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 200,749 197,024 partyLease liability payments (24,971 ) (22,684 )Deferred taxes 3,484 - Net cash provided (used in) operating (700,521 ) (321,096 )activities CASH FLOWS FROM INVESTING ACTIVITIES: Net collections of finance receivables 14,206 28,035 - original productNet collections of finance receivables (1,020 ) 29,839 - special product(Payments)/proceeds for real estate (62,432 ) (3,026 )assets ownedNet cash payment for IIU disposal - (246,914 )Investment in convertible note (1,666,500 ) - receivableInvestment 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 (1,784,250 ) - securitiesNet 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 8,732,875 215,230 activities 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 INFORMATIONCash paid for taxes $ - $ - Cash paid for interest $ - $ 6,894