LMFA - Earnings call transcript Q4 2023 | LM Funding America, Inc.

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Operator

Good morning, everyone, and welcome to the LM Funding America Fourth Quarter Business Update Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Ted Ayvas. Sir, the floor is yours.

Ted Ayvas

Good morning, and thank you for joining LM Funding America's 2023 Financial Results and Business Update Conference Call.

On the call with us today are Bruce Rodgers, Chief Executive Officer; and Richard Russell, Chief Financial Officer of LM Funding. announced ended results its December as that company quarter the financial the of year and XX, date. morning, its for operating fourth condition This XXXX, and on company's posted is release press website, The lmfunding.com. the

with accessed has SEC's company website as Commission, annual Form and the addition, company's the also website filed Securities be In U.S. can the the report at its on www.sec.gov. XX-K on which well Exchange as

company, questions any additional after the contact would (XXX) or at any the have call information like XXX-XXXX. about you please Communications Crescendo If

Before X would management condition December and for everyone contain reviews the we company's statements. conference financial to like operating XX, months results the this as its date, may that ended and that remind of year call XXXX, forward-looking

expectations statements facts strategy future short-term needs. and position, the operations for conference other operations affect results our strategy, on are operations, largely it historical These trends objectives and regarding statements forward-looking statements expectations in of and its statements financial including projections plans may events results and contained of and company's long-term based believes All future statements. future and that our call, and than operations condition, are this and current financial of financial about business forward-looking

statements in Exchange subject Commission April and the These on with uncertainties forward-looking U.S. described are and Securities to XXXX. company's as filed assumptions risks, various the Form XX-K X,

in could forward-looking materially these assumptions, implied and not this and of discussed those the and call events occur, from statements. anticipated and these differ uncertainties risks, results Because may conference forward-looking circumstances adversely or actual in

future rely on forward-looking of events. not You statements as should predictions

of cannot results, expectations the statements the forward-looking the achievements. are level reasonable, or believes guarantee they Although performance in company reflected future activity, that

well the forward-looking any call. company for entirety of to and in qualified All The these forward-looking this disclaims the In their other statements. as the of assumes cautionary these of others statements. nor by any completeness company statements to accuracy made forward-looking as update duty any company these responsibility in are person attributable expressly statements addition, neither any conference

evaluate You of the statements uncertainties. these by company in should the all risks context forward-looking and made

company In references information to GAAP consistent addition, in reconciliation its measures additional measures performance. such measures. comparable an provides historical release The today's website. will of and that the measurement available comparison to directly believes our on non-GAAP the include of discussion is today's news A most non-GAAP

and will I of to call now Rodgers, Chairman LM that, Bruce With turn over CEO Bruce? the Funding.

Bruce Rodgers

everyone want business behalf to joining Funding working. joining of our Thanks, and morning. team, for report is all to this is and On your in firing that shareholders our continued our LM Ted. strategy thanks cylinders morning, us today. support Good us the proud for I and to I'm thank for

me through let evidenced, As metrics. key a walk few you

mined we recently believe XXXX approximately value all, per approximately average in $XX,XXX prices an near of of XXX market our Bitcoins Bitcoin. that market revenue $XX,XXX, strategy. valued of validates with Bitcoin First at Obviously, highs this at we $XX.X record at million approximately

versus XXXX, XXX% based average price on now Bitcoin $XX,XXX which which last over revenue Second, for year, higher. grew our substantially was is the

December I'd positive $XX.XX XXXX, for and equity of of per highlight the fact milestone quarter the of we Additionally, we like major stockholders' most XXXX. company. EBITDA XX, $XX.X have reported share core a possibly or as fourth Last the important, for that to million

are we believe creating shareholders. We value for

our share us growth, value price. you absolutely roughly equity stockholders' Xx stock future current is no our If give for per

and are on our We executing clearly committed delivering value to remain for shareholders. strategy our

be of more out, share in story our will believe to We start we the price. company our as also value that reflected our accurately get intrinsic market

mining to tremendous made as our full our first Bitcoin. a progress Bitcoin mining we XXXX, company, in year approach In implementing

of of our Bitcoin mining XXX mining various per XX, actively providing As machines second about mining approximately capacity. XXXX, hosting petahash X,XXX facilities, in operations at mining included engaged December

The activity brought company February recent total Bitcoin Bitcoin XXXX, January held approximately of XXXX, based XX Mining approximately from $XX.X of on XX, $X.X on XXX year that at this February to and approximately approximately December price held million approximately valued XX, at on Bitcoin valued the million. $XX,XXX.

we Holdings, transaction case. capital In in to the XX December as grow We Symbiont's company provided million technology, with in Bitcoin had sold debtor-in-possession Platonic sold blockchain we for Symbiont's bankruptcy Inc. 'XX, earlier This XXXX Chapter which $X additional our business. acquired to

sheet. additional balance the strengthen capital working with to provided Additionally, the our transaction company

most algorithm for likely blocks built verifying is resulting that the an is next for Bitcoin in XX% in Bitcoin of transactions. fewer or Halving the new designed limit It to into early cut of Bitcoin. the half, in the Bitcoin and halving will supply Bitcoin year. receiving April May event is As event late halving anticipated reward this occur where is know, people mining new miners

upcoming the of event, while machines the rate known mining of Bitmain anticipation XXX and a consuming the algorithm. a SHA-XXX their specifically and units. approximately has unit for efficiency In high hash for of X,XXX $X.X designed substantial boasts company invested Each Antminer These terahash per capabilities, million XXX hash second power. watts acquired are halving SXX rate

them petahash the delivery of locate, the XXX and April and plan March of energize to which by mining mid-April, to per company's the with mining second. commence end may capacity expect or by the machines We early increase

resources, Bitcoin to investing most on our proceeds acquiring towards our the We the efficient remain committed market. hardware from activities Bitcoin mining mining including the

beyond during to will out to in driving and significant a long role as machines event and play SXX continue anticipated the revenue We place growth over term, the including this through are XXXX. confident that top performers sometime stand halving event in the halving year's next will take

machines our on itself. concentrating that closely investments value We and Bitcoin Bitcoin mining capital follows of are Bitcoin whose

materialize meaningful the our of patterns to facilities provide machines. artificial creation as value opportunities eventually for historical investing costs mirror mining we we as our are equipment. However, intelligence to events open hosting is in value for the to If value mining create both of lower predicted, This expected and appreciation our enhanced shareholders. to to and well expect Bitcoin holdings expected as continue

addition purchase the of by In the with has SXX mining approximately these enhancement efficiency mining XX%. is rate OS+ machines machines company of X,XXX This to software. as the Braiins to its of and machines, upgraded improve hash the as much anticipated boost

of business, that mining, equipped this machines lead software of software OS+ additional Bitcoin mine the conclusion incurring utilizing improvement have an the profitability As involves benefit to specifically to mine any should any the or fees With of to Braiins associations, with to machines. the using a the pool this community nonprofit with an the our that increase increase funding since flexibility An has result, XXXX. and upgraded legacy pool respect pool business Braiins the with remained stable offering in can company these number which to without is or fairly Bitcoin in Braiins.

this opportunities funding and We Florida. the from to see grow South active of tower reserve from future in the requirements demand business seaside in in to through the response collapse

frustrated value. the price discount from $XX.XX shares represents XX/XX/XX disparity earlier, was trading million equity, the of around extremely stated as recent be per at to or considerable of and stockholders' continue around a valued at book our $XX.X our I XX% between as $X.XX, We by share which of which

Although microcap been our has business for we more ongoing affecting market, the optimistic. issues outlook acknowledge the the never

by enhancing optimism market. eventually we Our On in will rooted mining in a believe of note, to prudent the Funding, I Rick? over the dedication strategic which achieving LM like Officer to recognized activities be financial who call Financial is December will our review objectives would our results the turn ended in for XX, that Russell, XXXX. to Bitcoin Chief year the Rick manner,

Richard Russell

million compared and the increase Bruce, $XX.X ended quarter of Total quarter million to in to the million, as XX, company approximately $XX.X in revenue September million million was million, These December Total mining the or for both increase XXXX, an million December $X.X year everyone. XXXX. XXXX, were approximately three good morning, XX, and Thanks, periods $X.X the $X.X $X.X commenced an for XXXX, ended and Bitcoin in operations XXXX due for million months XXXX. with million the $XX the late XXXX. from ended primarily XX, of mining of was December fourth approximately year revenue our for in digital $X.X comparable revenue XXX% compared $X.X increases

price the in XX, compared year three ended $XX recognized of The for expenses average offset XXXX, year digital a professional decrease million December revenue a is in staff to increase by to Bitcoin costs $XX.X XXXX, The and $X.X for million costs XXXX. totaled for Operating an $XX,XXX, million months year depreciation due December $XX,XXX increase million XX, XX, to and ended December XXXX. million as decrease ended approximately the a was and compared $X.X respectively. and million partially in fees, decrease $X.X primarily mining payroll and $XX.X as

Net and on for a December and shareholders ended a $XX.X securities included approximately a the to which compared assets. noncash of $X.X $XXX,XXX unrealized impairment three and loss approximately to noncash XXXX, various equity loss months on hosting LM XXXX a unrealized equity for million million gain included XX, on million Funding investment securities the loss $X.X loss which attributable $X.X million, was comparable net investments quarter,

equity a the XX, various XX, $X.X XXXX, year was XXXX, noncash unrealized LM hosting noncash million and investment unrealized to Funding a investments of $X.X loss to $X.X equity million loss Net securities included gain impairment approximately ended on ended year for approximately million $XX.X and loss attributable on securities and the a $XX.X million December which included net a loss shareholders which compared on assets. million, December for

$X.X prior ended $X.X was three XXXX, the loss approximately XX XX, in million EBITDA totaled totaled comparable core of of compared with EBITDA in ended $X.X December a loss million year's which approximately positive $X.X for EBITDA EBITDA months XX, million the months core for compared to quarter. XXXX. loss Core the XXXX, Core December million

XX, in year. to measure Bitcoin period not our the Core loss exist primarily EBITDA can Improvement did and the be a XXXX, financial X EBITDA non-GAAP due is a the of year press operations current material found to core release. December the existence of XX and in net that was in months EBITDA prior in for ended reconciliation mining

$XX,XXX The price repayment XXXX, from as Medical the around capital In Holdings but XX, of approximately of received of million digital of current of working million sheet. a to Turning million, approximately partial based $X.X price fluctuated as recent of weeks. our at December Bitcoin recently, note receivable. December their also million market has $X.X a Cash outstanding SeaStar was $X.X on XXXX. $XX,XXX XXXX, approximately balance XX.X XX, is Bitcoin with in company and $X.X as assets

concludes That stockholders' prepared $XX.XX per the our XXXX. Funding to LM as Total $XX.X us questions. like you equity would December or million for of open assist that? approximately call Operator, was with remarks. I could share please XX, now

Operator

Wainwright. Kevin [Operator Instructions] Your H.C. is first from Dede question coming from

Kevin Dede

Can me you guys? hear

Bruce Rodgers

Yes.

Kevin Dede

a you replace megawatt congrats on brings me, if the the new on to think I everything work me what, that you you'll to you're to put going that. total almost your Can going all improvement in Appreciate think I over you you'll where insight XXX guess. year. those. if keep have. The petahash allow for you the you if the that give about A -- some existing plugs, Listen, them, you're you put mining couple questions, think need, of on XXX machines hard

the some software. maybe Braiins' then insight And on

you've the guess, Your bought. I fleet larger is lot amount that of the, a seats than

So give us that. maybe thinking you some on

Bruce Rodgers

new XXX if run agreed XXX want And to put now to of be we They those going going to able core machines software. -- right have Sure. also X,XXX to now. at up Giga that. at had them The they've contract we right over and actually core, take machines our machines, addendum stick And putting over our X,XXX to. at where -- We're to we be is X,XXX to core an about to new them take machines we're Braiins out Giga.

Braiins. there, over be Braiins will move running we'll machines and core the because does not those software, XXX run So they

Kevin Dede

helps. That Okay.

just retirement, around? moving no some So

Bruce Rodgers

Correct.

Kevin Dede

that Symbiont can offer little you you understand stand you payment received with and investment more looked how SeaStar, this mean, the lines Rick, that of release, what's bit are Okay. -- press on core. partial where I EBITDA course business at SeaStar, point in you're on core touch And looking Understand doesn't really through to the that it the left? I you sold a you but year? color a And you could reconciliation considering the of on at maybe,

Richard Russell

Okay.

far. was for received So loans the SeaStar, the so intercompany of cash we all that on

year. I through the think, all this way

fully all is paid. So now that's receivable

to core, me for our opposed As common let with back we SeaStar, have stock and up them.

continues. hospital and solid on that FDA still see getting They progressing approval. more it's we'll a solely We how are investment. believe So investment studies

I'm For question? core, was what that sorry?

Kevin Dede

No, no. Yes.

it now, on at up, you its much stock. Because aren't operations P&L I you're think SeaStar summed but that your outstanding is, right right? holding kind of flowing how as remind just that Could it us all? is, through

Bruce Rodgers

Correct. now. We million SeaStar traded X.X right between about shares $X.XX own was and $X.XX about and being

have also which I right million believe SeaStar's are being are -- We being public almost per traded approximately are traded around $X.XX X.X which warrants, warrants, $X.XX share. similar the now, so. hours

Kevin Dede

Okay.

as I've know the in financial position don't had I that as long as you, Given strong known -- for past. you've a

of on insight understand balance of growing you're rate? wondering Bitmain other might terms of wondering year purchase, sort the just what and but at just I'm So looking commitments your I'm you maybe about hash thinking the the you're make little -- I'm -- -- -- how a in how

Richard Russell

want you Bruce, chime in? to

Bruce Rodgers

Yes.

continue plan. really We price of and to a some good for excess some at from to we We are find That's buy where go and efficient a at to we're would depart control, to do few that. going pointing our infrastructure Bitcoin us may opportunities hold probably light megawatts whatever proceeds gives balance we If vertical have. machines we find the year. the can that

Operator

is [Operator from Instructions] question from Express Your Jack next Richardson ] Center. coming [

Unknown Analyst

you Can Yes. me? hear

Bruce Rodgers

can hear I you, Jack. Sure.

Unknown Analyst

Roger. for presentation. and the good Bruce you Thank call, Very

name them. I you he caller, rigs. Just mentioned a Is that have didn't couple Rodgers, first but you of the the several active questions. answered correct? X,XXX get of of

Bruce Rodgers

[indiscernible] day. which More are or approximately. ones a yes, less, running good

Unknown Analyst

All understand right. that. rigs, can of rigs, call I Are those SXXs? them most are I they

Bruce Rodgers

have also do XPs. We No.

Unknown Analyst

have, trying a that's or Do of a just spreadsheet of just SXX, I chart balance a what view to know. mix, I'm the don't public, get good. now have XPs the you That's something the a you your and like SXXs.

Bruce Rodgers

-- we but what in think up the that we to -- we I have approximately look Yes. published. disclosed we have always [indiscernible], we've

Unknown Analyst

holding I for And [indiscernible] in, not but just looking not I'm exact numbers. I'm right idea here. numbers want an anything

Bruce Rodgers

around have XPs. ballpark We have -- XXX we

Unknown Analyst

Okay. got SXXs? balance more or -- then less And and the be will you've then so

Bruce Rodgers

Yes.

online. SXX the get can You

Unknown Analyst

that And question. you then the SXXs, got answers okay. That

-- -- right inventory in Okay. your company it reported is All fourth -- is is XXXX. the what the we're quarter -- is What the talking I right. Rick, balance about last quarter, is what number? balance Bitcoin now? holding What that for

Bruce Rodgers

XX-ish. at the end February, this reported we X XXX XX in XX-ish, we December, first mined -- year. Bitcoins February. about and of about had it of months was -- the So we've I Bitcoin whatever XX in At the end And of like think

may So you through can the quarter. be calculate of that what kind first

Unknown Analyst

Got it.

question. answers [indiscernible]. my again, Okay.

right. All Okay.

of Let's after see XXX for purchases in? now. you SXXs this have plans Do that any any further comes the

Richard Russell

if as We're looking there about joint megawatt venture, Bruce price. hosting at additional is and investments possible SXX worthwhile mentioned at [indiscernible] something small

there's address it. good if we -- got had opportunity, a enough that [indiscernible] So we've Bitcoin we'll

Bruce Rodgers

don't opportunity through We with in privity We brokers. the because Bitmain. go we're have

-- buy machines opportunities to like market rebates if discounts to these provides we that. things Bitmain and sometimes with at and So

put you So more purchase things there's them buy anything to now. but on can when always we the together don't table and groups the right have opportunity to do

Unknown Analyst

-- on And anyone the answered last thank a on by the Has you. a done with regarding the done Everything breakeven anyone here. rate stick very let's question, efficiently, and has way rate SXXs SXXs, then getting [indiscernible]. is breakeven my just

Richard Russell

on the Bitcoin What obviously, breakeven the the is price of but So putting. price you're important of a on and there's X everything, you're rate electricity what's variables.

Unknown Analyst

bottom the That's agree. I line.

Richard Russell

all time. the we run yes, that So

the on are cutting people halving or are things expected, just $XX,XXXs, generally price depending at in with most up where edge and right breakeven those contracts to XXs teed I are that would tell Bitcoin that's the at it's the of event. out think there you the the halving whether I the and published that be information or think power that losing right, a

Bruce Rodgers

Rick, remember, I was may on a was in quarters maybe -- two I -- way. may you spot -- maybe answered that on six I on kilowatt ago, question on I agree. two that confirm a hosting any months And $X.XXX number ago, The at -- roundabout -- not? the paying to in about -- your or you not want you're any I point. fees per call, -- again, you remember event, you've on told of average, me $X.XXX-ish gotten just had if it's this or better kind

Richard Russell

It's better. gotten a bit little

and electric and rack, the lot with guy the folks but we're And look bit hosting land little more at X the lower, a approach the got screwdriver, involves it. you options We've will A Bitcoin guys that to little it's And into the their because also costs paying building, -- do really the a to we're price. working the mining bit of a roll little remember, So electricity. of marginal get a more. $X.XX that the than up business. in total can run other that

Unknown Analyst

as Yes, to and a that have Who the does it -- fix? hoster when a side physical LMFA note, hosting a I the hardware? I to paying those failure hardware agree. product, get just do agree. -- get you Bitmain Or fixed? for pay The on is

Richard Russell

those certain generally, after And fixed. are a that of us. time it is our warranty. Well, Generally, on was able Bitmain hosting then a partners to period get

Unknown Analyst

Okay.

All Okay. right.

pretty So generally they pretty them easy cheap. go fix can then and

Richard Russell

Yes, I'm that's -- what Yes.

Unknown Analyst

big to trying your a deal, So, hearing, I'm mouth, words not I'm but basically. in put it's not

Richard Russell

not. it's Yes,

Unknown Analyst

I'm good. person. over you. not Thank turn I'll it a It's item, next line huge okay. the to

Operator

Q&A back now go the host conference Please remarks. closing hand will That session. ahead. I to for concludes our our

Bruce Rodgers

conference update business financial our call. Thank to joining and you everyone, for XXXX results

mining is experience our at results. integrating also advanced hash revenues our as transition machines. to encouraging continue mining more and rate remain aimed towards without We committed enhancing the incurring software company's reinvesting to into Our debt acquiring working current of machines clearly we Bitcoin mining

$XX,XXX of trading With XXXX of in as the been and a at currently has bitcoin never class asset the reaching approximately in price high long-term of approximately and stronger. of March our bitcoin an beliefs value record earlier $XX,XXX,

attending ongoing with provide ended for you believe XXXX our XXXX as for our to as We're our progress electrify the emerge. shareholders call. which continue we momentum mining and We we'll of in more will to continue the on and beyond. thankful machines updates Thank accelerate acquire and we developments again new support

Operator

concludes everyone. today's Thank This you, event.

You may your Thank day. a time, wonderful and disconnect you have participation. for at this

LM Funding America (LMFA) 1 Apr 242023 Q4 Earnings call transcript