LM Funding America announces $2.6 million securities sale By Investing.com

TAMPA, Fla. – LM Funding America, Inc. (NASDAQ: LMFA), a company engaged in cryptocurrency mining and specialty finance, disclosed today its agreement with an institutional investor for a registered direct offering and concurrent private placement estimated to raise approximately $2.6 million. The transaction involves the sale of 278,000 shares of common stock and 605,000 pre-funded warrants, along with Series A and B warrants to purchase up to 883,000 shares of common stock each.

The combined effective price for each share of common stock or pre-funded warrant and accompanying warrants is set at $2.93. Series A and B warrants will have the same exercise price, with Series A expiring five years and Series B two years from the date of stockholder approval. The closing of the offering is anticipated to occur around August 19, 2024, subject to customary conditions.

Maxim Group LLC is serving as the sole placement agent for the offering. The common stock and pre-funded warrants are being offered under an effective shelf registration statement, while the warrants in the private placement are exempt from registration under the Securities Act of 1933.

LM Funding America started its mining operations in September 2022 and also provides funding to nonprofit community associations. The company has cautioned that this press release may contain forward-looking statements subject to various risks and uncertainties, which could materially affect their business outcomes.

The gross proceeds from the sale, before deducting fees and other expenses, are intended to support the company’s operations and growth. The offering details and related prospectus supplement will be available on the SEC’s website and through Maxim Group LLC.

This announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities. The sale of these securities has not been registered under the Act or any state securities laws and may not be offered or sold in jurisdictions where such registration or qualification is required.

The information in this article is based on a press release statement from LM Funding America, Inc.

In other recent news, LM Funding America reported its Q2 2024 results, revealing a net loss of $6.1 million. The company’s total revenue decreased to $3 million, a year-over-year decline of $184,000, while operating expenses rose to $7.8 million. Despite these challenges, the firm successfully mined 44.1 Bitcoins and currently holds 160.4 Bitcoins, valued at approximately $10 million.

One of the company’s strategic initiatives includes the acquisition of a mining site in Texas and the establishment of a hosting facility near Oklahoma City. These moves are part of LM Funding America’s plans to enhance its Bitcoin mining operations in preparation for the next Bitcoin halving event in 2028. Additionally, the company has secured a $5 million non-convertible loan to acquire additional miners and for infrastructure expansion.

These are recent developments that highlight the company’s focus on strategic growth through acquisitions and enhancements in Bitcoin mining operations. Despite facing a challenging quarter, LM Funding America is navigating through with a clear focus on future growth and optimization of their Bitcoin mining operations.

InvestingPro Insights

As LM Funding America, Inc. (NASDAQ: LMFA) embarks on its latest capital-raising effort through a direct offering and private placement, investors may be evaluating the company’s financial health and market performance. According to InvestingPro data, LMFA currently has a market capitalization of approximately $7.38 million USD. This relatively small market cap reflects the niche position of the company within the cryptocurrency mining and specialty finance sectors.

InvestingPro Tips suggest that LMFA is trading at a low Price / Book multiple of 0.23, which could indicate that the company’s stock is undervalued compared to its book value. This might attract value investors seeking to capitalize on potential market corrections. However, the same tips highlight that LMFA has been quickly burning through cash and that the stock has experienced significant declines, with a one-month price total return of -43.76% and a one-week price total return of -13.06% as of the last recorded date. Additionally, analysts do not anticipate the company will be profitable this year, which could be a concern for investors looking for short-term gains.

Despite the challenges, LMFA’s revenue growth over the last twelve months was substantial at 125.0%, although it experienced a quarterly decline of -6.92%. This growth could be a sign of the company’s potential to scale its operations, especially in the dynamic field of cryptocurrency mining. With the gross proceeds from the sale intended to support the company’s operations and growth, investors may be keen to monitor how these funds will be utilized to navigate the financial headwinds and leverage the revenue growth momentum.

For those seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/LMFA, providing a comprehensive view of the company’s financial metrics and market performance.

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