LM Funding America, Inc.

Greetings. Welcome to the LM Funding America Inc. Third Quarter 2023 Business Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Avis, Investor Relations. Ted, you may begin.

Good morning, and thank you for joining LM Funding America's third quarter 2023 conference call. On the call with us today are Bruce Rogers, Chief Executive Officer, and Richard Russell, Chief Financial Officer of LM Funding. This morning, the company announced its operating results for the quarter ended September 30th, 2023, and its financial condition as of today. The press release is posted on the company's website, lmfunding.com. In addition, the company has filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before management reviews the company's operating results for the quarter ended September 30th, 2023, and its financial condition as of that date, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical fact contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to various risks, uncertainties, and assumptions as described in the company's Form 10-K, filed with the U.S. Securities and Exchange Commission on March 31, 2023. Because of these risks, uncertainties, and assumptions, the forward-looking event and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. In addition, today's discussion will include references to non-GAAP measures. The company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. Having said that, I would now like to turn the call over to Bruce Rogers. Bruce?

Thanks, Ted. Good morning, and thanks to everyone for joining us today. On behalf of the LM funding team, I want to thank our shareholders for your continued support despite the volatility and weakness in the market. Nevertheless, our company has made significant progress executing on our business model, including advancing our Bitcoin mining strategy and other key strategic activities. We believe the steps we are taking today will lead to considerable long-term value for our shareholders. As of September 30, 2023, our Bitcoin mining operations included about 5,900 mining machines actively engaged in mining at various hosting facilities, providing approximately 614 petahash per second of mining capacity. During the quarter ended September 30, 2023, the company mined 117.1 Bitcoins. marking a 10% sequential increase from the 106.6 Bitcoin mined in the second quarter of 2023 as an average market revenue value of approximately $28,000 per Bitcoin. The current Bitcoin price has been higher, fluctuating between $35,000 and $37,000 over the last several weeks. As most people likely know, Bitcoin halving is an event where the reward for mining new Bitcoin blocks is cut in half, resulting in miners receiving 50% fewer blocks for verifying transactions. Halving is built into the Bitcoin algorithm and designed to limit the supply of new Bitcoin. It is expected that the next halving will occur in the first half of 2024. Historically, Bitcoin prices have tended to increase as a halving event nears. often reaching record highs in the six months following the event. Likewise, the value of Bitcoin mining machines has typically peaked between halvings. LM Funding is actively implementing an infrastructure-light approach to our Bitcoin mining business that seeks to mitigate risk and volatility in the market by focusing our capital investments on Bitcoin and Bitcoin mining machines that track the value of Bitcoins. The success of our infrastructure light strategy depends upon deploying capital to acquire assets best correlated to the price of Bitcoin, which we believe will appreciate. If history repeats and the anticipated events unfold as expected, we expect to create meaningful value for shareholders, reflecting both the value of our Bitcoin holdings as well as the increased value of our mining equipment. Overall, we are quite encouraged by the recent performance of the Bitcoin market, as well as the outlook for Bitcoin pricing. The company installed Brains OS Plus software on approximately 1,000 of our mining machines. It is expected this will increase the hash rate of these machines by as much as 25%, which should lead to an increase in the number of Bitcoins the company can mine. A further advantage to mining Bitcoin with machines operating Brains OS Plus software is that machines equipped with this software may mine with any pool or mine with the brains pool without having to pay pool fees to the brains pool. We believe the best use of our capital is to increase hash rate production through the purchase of additional miners and enhancements to their hashing capabilities. With respect to our legacy business, which involves offering funding to nonprofit community associations, the business has remained fairly stable since the conclusion of 2022. We share our investors' frustration that there is such a significant gap between our stockholders' equity valued at $35.9 million, or $2.45 per share as of September 30, 2023, and the recent trading price of our shares at $0.40, representing an approximately 85% discount from