| Revisions to Previously Issued Financial Statements |
Note 2. Revisions to Previously Issued Financial Statements In connection with the preparation of the Company’s Consolidated Financial Statements as of and for the period ended December 31, 2024, the Company identified errors in relation to the accounting for the change in depreciation life for the Bitcoin miners when accelerating such life as of January 1, 2024 from 60 months to 48 months. The Company has a history of cash loses and as such believes most investors rely on EBITDA, Core EBITDA and cash used/provided by operations on the statement of cash flows as metrics for evaluating the performance of the Company. As such the overstatement of depreciation expense does not impact such metrics. The errors did have an impact on net property, plant and equipment and depreciation expense of approximately $449,800 as of and for the three months ended March 31, 2024, approximately $464,300 as of and for the three months ended June 30, 2024 and approximately $413,800 as of and for the three months ended September 30, 2024. The error did not impact revenues or net loss before income tax expense for any of the fiscal years ended December 31, 2025 or 2024 as the errors were corrected during the three months ended December 31, 2024. The Company assessed the materiality of the errors, including the presentation on prior periods consolidated financial statements, on a qualitative and quantitative basis in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108 on Quantifying Financial Statement Errors, codified in Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections. The Company concluded that these errors and the related impacts did not result in a material misstatement of our previously issued unaudited consolidated interim financial statements as of and for the periods ended March 31, 2024, June 30, 2024 and September 30, 2024. The Company corrected the relevant prior periods of our consolidated financial statements and adjusted the disclosures included within Note 5. A summary of the corrections to the impacted financial statement line items from our previously issued financial statements are presented below:
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Consolidated Balance Sheets (unaudited) |
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As of March 31, 2024 |
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As previously reported |
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As revised |
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Fixed assets, net (Note 5) |
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$ |
20,897,314 |
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$ |
21,347,186 |
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Long-term assets |
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$ |
24,918,333 |
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$ |
25,368,205 |
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Total assets |
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$ |
40,155,382 |
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$ |
40,605,254 |
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Accumulated deficit |
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$ |
(56,857,610 |
) |
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$ |
(56,407,738 |
) |
Total stockholders' equity |
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$ |
38,472,110 |
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$ |
38,921,982 |
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As of June 30, 2024 |
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As previously reported |
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As revised |
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Fixed assets, net (Note 5) |
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$ |
19,671,511 |
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$ |
20,585,726 |
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Long-term assets |
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$ |
22,648,825 |
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$ |
23,563,040 |
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Total assets |
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$ |
34,137,151 |
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$ |
35,051,366 |
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Accumulated deficit |
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$ |
(62,930,465 |
) |
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$ |
(62,016,250 |
) |
Total stockholders' equity |
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$ |
31,010,356 |
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$ |
30,096,141 |
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As of September 30, 2024 |
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As previously reported |
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As revised |
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Fixed assets, net (Note 5) |
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$ |
17,311,254 |
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$ |
18,639,268 |
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Long-term assets |
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$ |
25,235,055 |
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$ |
26,563,069 |
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Total assets |
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$ |
36,535,867 |
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$ |
37,863,881 |
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Accumulated deficit |
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$ |
(67,628,539 |
) |
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$ |
(66,300,525 |
) |
Total stockholders' equity |
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$ |
28,591,750 |
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$ |
29,919,764 |
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Consolidated Statements of Operations (unaudited) |
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For the Three Months Ended March 31, 2024 |
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As previously
reported |
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As revised |
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Depreciation and amortization |
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$ |
2,426,068 |
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$ |
1,976,196 |
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Total operating costs and expenses |
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$ |
4,185,002 |
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$ |
3,735,130 |
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Operating income |
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$ |
562,602 |
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$ |
1,012,474 |
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Income before income taxes |
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$ |
1,903,966 |
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$ |
2,353,838 |
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Net income |
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$ |
1,903,966 |
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$ |
2,353,838 |
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Net income attributable to LM Funding America Inc. |
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$ |
1,489,745 |
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$ |
1,939,617 |
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Net income attributable to common shareholders |
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$ |
1,489,745 |
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$ |
1,939,617 |
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For the Three Months Ended June 30, 2024 |
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For the Six Months Ended June 30, 2024 |
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As previously
reported |
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As revised |
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As previously
reported |
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As revised |
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Depreciation and amortization |
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$ |
2,339,702 |
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$ |
1,875,359 |
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$ |
4,765,770 |
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$ |
3,851,555 |
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Total operating costs and expenses |
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$ |
7,754,827 |
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$ |
7,290,484 |
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$ |
11,939,829 |
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$ |
11,025,614 |
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Operating loss |
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$ |
(4,743,480 |
) |
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$ |
(4,279,137 |
) |
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$ |
(4,180,878 |
) |
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$ |
(3,266,663 |
) |
Loss before income taxes |
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$ |
(6,647,329 |
) |
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$ |
(6,182,986 |
) |
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$ |
(4,743,363 |
) |
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$ |
(3,829,148 |
) |
Net loss |
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$ |
(6,647,329 |
) |
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$ |
(6,182,986 |
) |
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$ |
(4,743,363 |
) |
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$ |
(3,829,148 |
) |
Net loss attributable to LM Funding America Inc. |
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$ |
(6,072,855 |
) |
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$ |
(5,608,512 |
) |
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$ |
(4,583,110 |
) |
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$ |
(3,668,895 |
) |
Net loss attributable to common shareholders |
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$ |
(6,072,855 |
) |
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$ |
(5,608,512 |
) |
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$ |
(4,583,110 |
) |
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$ |
(3,668,895 |
) |
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For the Three Months Ended September 30, 2024 |
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For the Nine Months Ended September 30, 2024 |
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As previously
reported |
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As revised |
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As previously
reported |
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As revised |
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Depreciation and amortization |
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$ |
2,349,634 |
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$ |
1,935,835 |
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$ |
7,115,404 |
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$ |
5,787,390 |
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Total operating costs and expenses |
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$ |
5,669,795 |
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$ |
5,255,996 |
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$ |
17,651,681 |
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$ |
16,323,667 |
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Operating loss |
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$ |
(4,414,322 |
) |
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$ |
(4,000,523 |
) |
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$ |
(8,637,257 |
) |
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$ |
(7,309,243 |
) |
Loss before income taxes |
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$ |
(4,803,117 |
) |
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$ |
(4,389,318 |
) |
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$ |
(9,546,480 |
) |
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$ |
(8,218,466 |
) |
Net loss |
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$ |
(4,803,117 |
) |
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$ |
(4,389,318 |
) |
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$ |
(9,546,480 |
) |
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$ |
(8,218,466 |
) |
Net loss attributable to LM Funding America Inc. |
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$ |
(4,698,074 |
) |
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$ |
(4,284,275 |
) |
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$ |
(9,281,184 |
) |
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$ |
(7,953,170 |
) |
Net loss attributable to common shareholders |
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$ |
(6,402,379 |
) |
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$ |
(5,988,580 |
) |
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$ |
(10,985,489 |
) |
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$ |
(9,657,475 |
) |
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Consolidated Statements of Cash Flows (unaudited) |
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For the Three Months Ended March 31, 2024 |
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As previously
reported |
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As revised |
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Net income |
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$ |
1,903,966 |
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$ |
2,353,838 |
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Depreciation and amortization |
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$ |
2,426,068 |
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$ |
1,976,196 |
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For the Six Months Ended June 30, 2024 |
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As previously
reported |
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As revised |
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Net loss |
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$ |
(4,743,363 |
) |
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$ |
(3,829,148 |
) |
Depreciation and amortization |
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$ |
4,765,770 |
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$ |
3,851,555 |
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For the Nine Months Ended September 30, 2024 |
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As previously
reported |
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As revised |
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Net loss |
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$ |
(9,546,480 |
) |
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$ |
(8,218,466 |
) |
Depreciation and amortization |
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$ |
7,115,404 |
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$ |
5,787,390 |
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