GlobeNewswire Inc | Aug 16, 2021 04:10PM EDT

August 16, 2021

TAMPA, Fla., Aug. 16, 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 and six months ended June 30, 2021.

Financial Highlights for the Three and Six Month Period Ended June 30, 2021:

-- Net income attributable to LM Funding for the three and six-month periods ended June 30, 2021 totaled $11.1 million or $2.05 per basic and diluted share and $15.5 million or $2.96 per basic and $2.95 per diluted share, respectively. -- Cash increased to $22.2 million or approximately $4.09 per basic and diluted share on June 30, 2021 as compared to $11.6 million on December 31, 2020. -- Working capital as of June 30, 2021 was $29.7 million or $5.49 per basic and diluted share. -- As of August 6, 2021, there were 5,414,296 common shares outstanding.

We continue to operate under the tagline 'We Buy Problems,' Bruce M. Rodgers, Chairman and CEO of LM Funding said. In the first two quarters, we originated, structured, and monetized our problem-buying business operations to generate $2.96 in net income per basic and diluted share. As our balance sheet has grown our opportunities to buy problems has increased. With a stronger balance sheet, we could also take larger participations in the deals we put together. Although we originated, structured, and executed the two BRQS transactions and recognized $14.1 million in gains this year, we only participated in less than one-third of the principal investment required in these deals and outsourced the balance to third parties. So we plan to continue to combine our teams strengths and our balance sheet with $5.49 per share of working capital to buy problems and solve them profitably.

Operational Highlights for the First Six Months of 2021 to Date:

-- LMFA announced plans to develop accounting practices and controls for operating with digital assets and has announced plans to purchase up to $2 million in Bitcoin and Ether. -- LM Funding is developing a digital asset technology strategy to grow its community association receivables business both organically and through acquisitions. -- LM Funding sponsored a special acquisition company, or SPAC, and closed a $103.5 million upsized IPO (NASDAQ: LMAO). Net investment by LMFA in LMAO totals $6.4 million or approximately $1.17 per LMFA share. -- LMAO is targeting a business combination in the financial services or financial technology sectors

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

June 30, December 31, 2021 2020 (Unaudited) ASSETS Cash $ 22,173,690 $ 11,552,943 Finance receivables: Original product - net (Note 2) 85,186 116,017 Special product - New Neighbor Guarantyprogram, net of allowance for credit losses 53,211 52,757 of (Note 3)Short-term investments - convertible debt 7,588,538 - securities (Note 9)Marketable securities 248,100 - Prepaid expenses and other assets 157,195 399,124 Current assets 30,305,920 12,120,841 Fixed assets, net 7,929 6,171 Real estate assets owned 80,057 18,767 Operating lease - right of use assets (Note 110,870 160,667 7)Long-term investments - equity securities 2,295,200 - (Note 9)Investments in unconsolidated affiliates 4,615,583 - (Note 9)Other assets 10,984 10,984 Long-term assets 7,120,623 196,589 Total assets $ 37,426,543 $ 12,317,430 LIABILITIES AND STOCKHOLDERS' EQUITY Note payable (Note 5) - 96,257 Accounts payable and accrued expenses 298,239 237,033 Due to related party (Note 4) 174,176 158,399 Current portion of lease liability (Note 7) 108,611 - Total current liabilities 581,026 491,689 Lease liability - long-term (Note 7) 12,684 171,648 Deferred taxes (Note 6) 17,264 - Note payable - long-term (Note 5) - 185,785 Long-term liabilities 29,948 357,433 Total liabilities 610,974 849,122 Stockholders? equity: Common stock, par value $0.001; 30,000,000shares authorized; 5,414,296 and 3,083,760 5,414 3,084 shares issued and outstanding as of June 30,2021 and December 31, 2020, respectivelyAdditional paid-in capital 39,538,550 29,996,257 Accumulated deficit (3,052,309 ) (18,536,224 )Total stockholders? equity 36,491,655 11,463,117 Non-controlling interest 323,914 5,191 Total stockholders? equity 36,815,569 11,468,308 Total liabilities and stockholders? equity $ 37,426,543 $ 12,317,430

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

For the Three Months For the Six Months Ended June 30, Ended June 30, 2021 2020 2021 2020 Revenues: Interest ondelinquent $ 62,673 $ 170,174 $ 140,117 $ 389,688 associationfeesAdministrative 16,861 35,423 31,932 58,468 and late feesRecoveries inexcess of cost 178,769 62,362 208,242 84,990 - specialproductUnderwritingand other 35,494 41,235 58,197 69,164 revenuesRental revenue 34,588 33,344 66,505 81,424 Total revenues 328,385 342,538 504,993 683,734 Operating Expenses:Staff costs and 246,040 312,493 1,548,021 628,552 payrollProfessional 360,024 479,581 842,967 986,576 feesSettlementcosts with - - - 11,920 associationsSelling,general and 96,015 74,728 195,784 154,951 administrativeRecovery ofcost from (100,000 ) (100,000 ) (100,000 ) (200,000 )related partyreceivableProvision for - - (10,000 ) - credit lossesReal estatemanagement and 29,478 14,108 47,768 99,450 disposalDepreciationand 3,298 7,954 4,994 13,766 amortizationCollection 2,701 (20,934 ) 4,749 (29,255 )costsOther operating 4,069 6,844 11,614 10,638 expensesTotal operating 641,625 774,774 2,545,897 1,676,598 expensesOperating lossfrom continuing (313,240 ) (432,236 ) (2,040,904 ) (992,864 )operationsRealized gain 8,453,570 - 14,125,034 - on securitiesUnrealized gainon convertible 2,501,600 - 2,501,600 - debt securityUnrealized gainon investment 552,494 - 1,147,886 - and equitysecuritiesInterest income 73,884 - 86,939 - Interest (189 ) (5,732 ) (653 ) (12,626 )expenseIncome (loss)from continuingoperations 11,268,119 (437,968 ) 15,819,902 (1,005,490 )before incometaxesIncome tax (13,780 ) - (17,264 ) - expenseNet income(loss) from 11,254,339 (437,968 ) 15,802,638 (1,005,490 )continuingoperationsGain fromoperations of - - - 16,428 discontinuedoperationsNet gain fromdiscontinued - - - 16,428 operationsNet income 11,254,339 (437,968 ) 15,802,638 (989,062 )(loss)Less: Netincomeattributable to (146,857 ) - (318,723 ) - non-controllinginterestNet income(loss)attributable to $ 11,107,482 $ (437,968 ) $ 15,483,915 $ (989,062 )LM FundingAmerica Inc. Earnings/(loss) per share:Basic income(loss) percommon share - $ 2.05 $ (0.56 ) $ 2.96 $ (1.41 )continuingoperationsBasic income/(loss) percommon share - $ - $ - $ - $ 0.02 discontinuedoperationsBasic income(loss) percommon share -net income $ 2.05 $ (0.56 ) $ 2.96 $ (1.38 )(loss) -attributable toLM FundingDiluted income(loss) percommon share - $ 2.05 $ (0.56 ) $ 2.95 $ (1.41 )continuingoperationsDilutedearnings/(loss)per common $ - $ - $ - $ 0.02 share -discontinuedoperationsDiluted income(loss) percommon share -net income $ 2.05 $ (0.56 ) $ 2.95 $ (1.38 )(loss) -attributable toLM Funding Weightedaverage numberof common sharesoutstanding:Basic 5,414,296 783,433 5,231,909 715,020 Diluted 5,423,162 783,433 5,245,656 715,020

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

For the Six Months Ended June 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 15,802,638 $ (989,062 ) Adjustments to reconcile net loss to cash used in operating activitiesDepreciation and amortization 4,994 11,727 Right to use asset depreciation 49,797 51,229 Stock compensation - 132,244 Debt forgiveness (157,251 ) - Recovery of uncollectible related party - (200,000 )receivablesAccrued investment income (86,938 ) - Gain from operations of discontinued - (16,426 )operationsDeconsolidation of affiliate (43,623 ) - Unrealized gain on investment and (1,147,886 ) - equity securitiesUnrealized gain on convertible debt (2,501,600 ) - securityInvestment in convertible note (5,000,000 ) - receivableRealized gain on securities (14,125,034 ) - Investment in securities (15,547,454 ) - Proceeds from securities 29,672,488 49,828 Investment in marketable securities (247,997 ) - Change in assets and liabilities Prepaid expenses and other assets 11,105 49,059 Accounts payable and accrued expenses 184,239 21,858 Advances (repayments) from related 142,191 496,546 partyLease liability payments (50,353 ) (45,742 )Deferred taxes 17,264 - Net cash provided by (used in) 6,976,580 (438,739 )operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Net collections of finance receivables 30,831 61,590 - original productNet collections of finance receivables (454 ) 32,076 - special product(Payments) for real estate assets owned (64,857 ) (2,055 )Capital expenditures (3,185 ) - Net cash payment for IIU disposal - (246,914 )Proceeds from investment in note - 1,500,000 receivableLoan to purchase securities 1,784,250 - Repayment of loan to purchase (1,784,250 ) - securitiesInvestment in unconsolidated affiliate (5,738,000 ) - Net cash (used in) provided by (5,775,665 ) 1,344,697 investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings - 185,785 Principal repayments (28,534 ) - Insurance financing repayments (96,257 ) (69,540 )Exercise of warrants 9,544,623 2,946,480 Proceeds from stock subscription - 1,250,000 Net cash provided by financing 9,419,832 4,312,725 activitiesNET INCREASE IN CASH 10,620,747 5,218,683 CASH - BEGINNING OF YEAR 11,552,943 1,069,823 CASH - END OF YEAR $ 22,173,690 $ 6,288,506 SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATIONCash paid for taxes $ - $ - Cash paid for interest $ 1,892 $ 12,626