POWERCOMPUTE, INC.
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
PWCM$0.53+13.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0000950170-24-126458
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0000950170-25-072819
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 163 previous paragraphs and 119 current paragraphs.
60 unchanged; 30 reworded; 29 added; 67 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Specialty Finance Business
Current report
Bitcoin Mining Business
Current report
Factors Affecting Profitability
Current report
Market Price of Bitcoin
Current report
Our business is heavily dependent on the price of Bitcoin. The prices of digital assets, including Bitcoin, have historically experienced substantial volatility, and digital asset prices have in the past and may in the future be driven by speculation and incomplete information, subject to rapidly changing investor sentiment, and influenced by factors such as technology, macroeconomic conditions, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Further, the value of Bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of Bitcoin as a means of exchange by consumers and producers.
Current report
Bitcoin “Halving” Events
Current report
Bitcoin halving is a phenomenon that has historically occurred approximately every four years on the Bitcoin network. Halving is a key part of the Bitcoin protocol and serves to control the overall supply and reduce the risk of inflation in digital assets using a Proof-of-Work consensus algorithm. At a predetermined block, the mining reward is cut in half, hence the term “halving”. For example, the reward for adding a single block to the blockchain was initially set at 50 Bitcoin currency rewards. The Bitcoin blockchain has undergone halving four times since its inception as follows: (1) on November 28, 2012 at block height 210,000; (2) on July 9, 2016 at block height 420,000; (3) on May 11, 2020 at block height 630,000 (4) on April 20, 2024 at block height 840,000 when the reward was reduced to its current level of 3.125 per block. The next halving for the Bitcoin blockchain is anticipated to occur around April 2028 at block height 1,050,000. This process will recur until the total amount of Bitcoin currency rewards issued reaches 21.0 million, and the theoretical supply of new Bitcoin is exhausted, which is expected to occur around 2140. Many factors influence the price of Bitcoin, and potential increase or decrease in prices in advance of or following the future halving is unknown.
Current report
Halving is an important part of the Bitcoin ecosystem, and it is closely watched by miners, investors, and other participants in the digital asset market. Each halving event has historically been associated with significant price movements in the value of Bitcoin.
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Network Hash Rate and Difficulty
Current report
Generally, a Bitcoin mining rig’s chance of solving a block on the Bitcoin blockchain and earning a Bitcoin reward is a function of the mining rig’s hash rate, relative to the global network hash rate (i.e., the aggregate amount of computing power devoted to supporting the Bitcoin blockchain at a given time). As demand for Bitcoin increases, the global network hash rate rapidly increases, and as more adoption of Bitcoin occurs, we expect the demand for new Bitcoin will likewise increase as more mining companies are drawn into the industry by this increase in demand. Further, as more and increasingly powerful mining rigs are deployed, the network difficulty for Bitcoin increases. Network difficulty is a measure of how difficult it is to solve a block on the Bitcoin blockchain, which is adjusted every 2,016 blocks, or approximately every two weeks, so that the average time between each block is approximately ten minutes. A high difficulty means that it will take more computing power to solve a block and earn a new Bitcoin reward which, in turn, makes the
Current report
Bitcoin network more secure by limiting the possibility of one miner or mining pool gaining control of the network. Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning Bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry.
Current report
As of March 31, 2025 and December 31, 2024, we held approximately 160 and 150 Bitcoin, respectively. The carrying value of our Bitcoin as of March 31, 2025 and December 31, 2024 was approximately $13.2 million and $14.0 million, respectively, on our consolidated balance sheet.
Current report
As of March 31, 2025, we own approximately 5,600 machines with total hashing capacity of approximately 0.612 EH/s.
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Mining Site
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As of December 31, 2024, we own a 15 MW hosting site located in Oklahoma (the “Oklahoma site”) with 3,006 installed S19J Pro Antminer machines which have a total projected hashrate of 301 PH. As of March 31, 2025, we have 4,320 installed S19 J Pro Antminer machines at this location which have a total projected hashrate of 432 PH. We have another 496 mining machines in storage at the Oklahoma site. We have another 800 machines which have a total projected hashrate of 130 PH at a hosting facility which were relocated to our Oklahoma site in May 2025.
Current report
(2) Miner related depreciation includes depreciation and amortization related to intangible assets, buildings, equipment and mining machines used in the mining process.
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(3) Weighted average cost of mining one Bitcoin is calculated by dividing the sum of total hosting fee expense by the total Bitcoin mined during the respective periods.
Current report
Power prices are the most significant cost driver for our wholly owned locations. Energy prices can be highly volatile and global events (including the war in Ukraine and the resulting natural gas shortage) can cause power prices to increase. Our wholly owned and operated site in Oklahoma is currently subject to variable prices and market rate fluctuations with respect to wholesale power costs. Such prices are governed by power purchase agreements and said prices can change hour to hour. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. Energy prices are also highly sensitive to weather events, such as winter storms, polar vortices and hurricanes, which increase the demand for power regionally. When such events occur, we may curtail our operations to avoid using power at increased rates.
Current report
Our management team makes real-time determinations on the need and timing during which we should curtail our operations. We curtail when power prices exceed the value we would receive for the corresponding fixed Bitcoin reward. This means if Bitcoin’s value decreases or energy prices increase, our curtailment will increase; likewise, when Bitcoin’s value increases and energy prices decrease, our curtailment will decrease. Our management team manages this decision on an hour-by-hour basis for our owned site.
Current report
The Company records depreciation expense (a non-cash expense) on its miners on a straight-line basis over the miners' expected useful life. Such non-cash depreciation amounts are recorded within the consolidated statements of operations and comprehensive loss as “Depreciation and Amortization”. Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment since depreciation expense is not an avoidable operating cost, such as energy costs. The table above presents the non-cash miner depreciation expense on a “per Bitcoin” basis, calculated by dividing miner depreciation expense in our hosted facilities by the number of Bitcoin mined in the hosted facilities. On a “per Bitcoin” ratio, direct costs to mine including miner depreciation expense was approximately $139 thousand and $54 thousand for the three months ended March 31, 2025, and 2024, respectively.
Current report
The number of Bitcoin received by the Company as a result of its mining operations was reduced by approximately 50% effective April 19, 2024 when the Bitcoin algorithm halved the rewards from 6.25 per block to 3.125 per block.
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Fair Market Adjustment on mined digital assets
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The fair market adjustment on mined digital assets resulted in a loss of $1.8 million for the three months ended March 31, 2025 compared to a gain of $4.3 million for the three months ended March 31, 2024.
Current report
Bitcoin mining costs decreased by $1.3 million to $1.4 million for the three months ended March 31, 2025 from $2.7 million for the three months ended March 31, 2024 is primarily due to the lower overall operating costs at our Oklahoma facility as compared to third party hosting sites, and the idling of some mining machines during the 2025 quarter. Mining costs as a percentage of revenue increased to 61.5% from 57.7% due to the lower relative number of Bitcoin mined as compared to the prior year and the idling of mining machines.
Current report
Loss on disposal of mining equipment
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Loss on disposal of mining equipment was $0.2 million and $8 thousand for the three months ended March 31, 2025 and 2024, respectively.
Current report
During the three months ended March 31, 2025, net loss was $5.4 million as compared to net income of $1.9 million for the three months ended March 31, 2024.
Current report
During the three months ended March 31, 2025, net loss attributable to LM Funding America, Inc. was $5.4 million as compared to net income of $1.9 million for the three months ended March 31, 2024.
Current report
Net cash used in financing activities was $0.2 million for the three months ended March 31, 2025 and 2024 and primarily relates to the repayment of insurance financing.
Removed paragraphs (67)
Previous report
Corporate History
Previous report
The Company was originally organized in January 2008 as a Florida limited liability company under the name LM Funding, LLC. Prior to our initial public offering in 2015, all of our business was conducted through LM Funding, LLC and its subsidiaries. Immediately prior to our initial public offering in October 2015, the members of the LM Funding, LLC contributed all of their membership interests to LM Funding America, Inc., a Delaware corporation incorporated on April 20, 2015 (“LMFA”), in exchange for shares of the common stock of LMFA. Immediately after such contribution and exchange, the former members of LM Funding, LLC became the holders of 100% of the issued and outstanding common stock of LMFA, thereby making LM Funding, LLC a wholly-owned subsidiary of LMFA.
Previous report
The Company organized two new subsidiaries in 2020: LMFA Financing LLC, a Florida limited liability company, on November 21, 2020, and LMFAO Sponsor LLC, a Florida limited liability company, on October 29, 2020. LMFAO Sponsor LLC organized a subsidiary, LMF Acquisition Opportunities Inc., on October 29, 2020. LM Funding America Inc. organized a subsidiary, US Digital (and 100% subsidiaries), on September 10, 2021. US Digital has formed 100% owned subsidiaries to engage in business in various states in connection with its Bitcoin mining business. The Company also from time to time organizes other subsidiaries to serve a specific purpose or hold a specific asset. LMF Acquisition Opportunities Inc. was merged with Seastar Medical Holding Corporation on October 28, 2022.
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Cryptocurrency Mining Business
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Bitcoin was introduced in 2008 with the goal of serving as a digital means of exchanging and storing value. Bitcoin is a form of digital currency that depends upon a consensus-based network and a public ledger called a “blockchain”, which contains a record of every Bitcoin transaction ever processed. The Bitcoin network is the first decentralized peer-to-peer payment network, powered by users participating in the consensus protocol, with no central authority or middlemen, that has wide network participation. The authenticity of each Bitcoin transaction is protected through digital signatures that correspond with addresses of users that send and receive Bitcoin. Users have full control over remitting Bitcoin from their own sending addresses. All transactions on the Bitcoin blockchain are transparent, allowing those running the appropriate software to confirm the validity of each transaction. To be recorded on the blockchain, each Bitcoin transaction is validated through a proof-of-work consensus method, which entails solving complex mathematical problems to validate transactions and post them on the blockchain. This process is called mining. Miners are rewarded with Bitcoins, both in the form of newly-created Bitcoins and transaction fees in Bitcoin, for successfully solving the mathematical problems and providing computing power to the network.
Previous report
Factors such as access to computer processing capacity, interconnectivity, electricity cost, environmental factors (such as cooling capacity) and location play important roles in mining. In Bitcoin mining, “hashrate” is a measure of the computing and processing power and speed by which a mining computer mines and processes transactions on the Bitcoin network. A company’s computing power measured in hashrate is generally considered to be one of the most important metrics for evaluating Bitcoin mining companies.
Previous report
As of each of September 30, 2024 and 2023, the Company owned approximately 5,900 machines, which translated intoour operating mining units being capable of producing over 639 petahash and 615 petahash per second (“EH/s”) of computing power as of September 30, 2024 and 2023. There were approximately 3,700 and 5,900 miners online as of September 30, 2024 and 2023, respectively. We have an additional 2,200 miners in a third-party warehouse for redeployment. We expect to continue increasing our computing power through 2025 and beyond as we expand the number of active mining machines.
Previous report
The Company currently uses three companies to host its miners: Core Scientific Inc. ("Core"), Giga Energy Inc ("GIGA") and Tech Infrastructure JV I LLC ("Tech Infrastructure").
Previous report
On September 5, 2022, the Company, through its wholly-owned subsidiary US Digital, entered into a hosting agreement (the “Core Hosting Agreement”) with Core pursuant to which Core, under various additional orders, agreed to host approximately 3,000 of the Company's Bitcoin miner machines at a secure location and provide power, maintenance and other services specified in the contract with a term of one year, with automatic renewals unless either party notifies the other party in writing not less than ninety (90) calendar days before such renewal of its desire for the order not to renew unless terminated sooner pursuant to the terms of the Core Hosting Agreement. The Company entered into a number of amendments in 2023 and 2024 that resulted in Core hosting a total of approximately 4,870 miners. The amended Hosting Agreement results in the terms of the hosting arrangement expiring with respect to approximately 4,000 miners on May 31, 2024 while allowing the terms of the hosting arrangement to continue with respect to approximately 800 miners through December 31, 2024.
Previous report
As required under the Core Hosting Agreement, the Company paid a $2.2 million deposit as of December 31, 2023. Under the terms of the amended Hosting Agreement, the deposit related to the 4,000 miners that were removed was applied to our invoices. As of September 30, 2024 and December 31, 2023, the Company had nil and $2.1 million of the prepaid deposit remaining with Core, respectively. In December 2022, Core filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. Core's bankruptcy filing has not negatively impacted our mining ability at their sites as of the date of this filing.
Previous report
On May 5, 2023, the Company entered into a hosting agreement (the “GIGA Hosting Agreement”) with GIGA pursuant to which GIGA agreed to host 1,080 of the Company's Bitcoin Miner S19J Pro machines at a secure location and provide power, maintenance and other services specified in the contract with a term of one year. On April 12, 2024, the Company amended the contract to allow for an extension of the contract with a 60 day termination notice. As required under the GIGA Hosting Agreement, the Company paid $173 thousand as a pre-payment in May 2023 and paid a refundable deposit of $173 thousand in August 2023. As of September 30, 2024 and December 31, 2023, respectively, the Company had nil and $117 thousand of prepaid deposits remaining with GIGA, respectively. All of the machines hosted by Giga were moved to a third-party warehouse in July 2024 and are awaiting a new hosting site.
Previous report
On May 6, 2024, the Company entered into a hosting agreement (the “Arthur Hosting Agreement”) with Tech Infrastructure pursuant to which Tech Infrastructure agreed to host approximately 3,000 of the Company's Bitcoin Miner S19J Pro machines at a secure location and provide power, maintenance and other services specified in the contract with a term of nine months. On July 17, 2024, the Company amended the contract to allow for an extension of the contract of one month. This contract’s energy rate is approximately $0.04 per Kilowatt.
Previous report
Bitcoin mining costs decreased by $2.0 million to $0.7 million for the three months ended September 30, 2024 from $2.7 million for the three months ended September 30, 2023 due to the temporary idling of mining machines that were in transit and lower hosting costs per machine.
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Depreciation and amortization
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Depreciation and amortization increased by $0.8 million to $2.3 million from $1.5 million for the three months ended September 30, 2024 primarily due to the change in useful life of mining machines from 5 years to 4 years.
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Impairment loss on mined digital assets
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Impairment loss on mined digital assets was nil and $0.4 million for the three months ended September 30, 2024 and 2023, respectively with no impairment recognized in 2024 due to the implementation of ASC 350-60 effective January 1, 2024.
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Realized gain on sale of mined digital assets
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Realized gain on sale of mined digital assets for the three months ended September 30, 2024 and 2023 was nil and $0.3 million, respectively.
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Prior to adoption of ASC Topic 350-60 - Intangibles - Goodwill and Other - Crypto Assets, Bitcoin was classified as indefinite-lived intangible assets and were measured at cost less impairment. Additionally, in the previous guidance, subsequent increases in Bitcoin prices are not allowed to be recorded unrealized gains unless the Bitcoin is sold, at which point the gain is recognized. Accordingly, (gains) losses recognized on fair value of Bitcoin in fiscal year 2024 are not comparable to fiscal year 2023.
Previous report
The Company sold 37 Bitcoins during the three months ended September 30, 2024 and 107 Bitcoins during the three months ended September 30, 2023.
Previous report
The Company recognized $98 thousand of interest income for the three months ended September 30, 2024 as compared to $40 thousand of interest income for the three months ended September 30, 2023 due to the payoff of a note payable by Seastar Medical in January 2024 while issuing a new loan of $2.8 million to a different entity in 2024.
Previous report
During the three months ended September 30, 2024, net loss was $4.8 million as compared to net loss of $4.7 million for the three months ended September 30, 2023.
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During the three months ended September 30, 2024, net loss attributable to LM Funding America, Inc. was $4.7 million as compared to net loss of $4.4 million for the three months ended September 30, 2023.
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Net Loss Attributable to Common Shareholders
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During three months ended September 30, 2024, net loss attributable to common shareholders was increased by $1.7 million compared to net loss attributable to LM Funding America, Inc. due to deemed dividends related to warrant repricing. During the three months ended September 30, 2024, net loss attributable to common shareholders was $6.4 million as compared to $4.4 million for the three months ended September 30, 2023.
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The Nine Months Ended September 30, 2024 compared with the Nine Months Ended September 30, 2023
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Revenues
Previous report
During the nine months ended September 30, 2024, total revenues increased by $0.1 million, to $9.0 million from $8.9 million for the nine months ended September 30, 2023.
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Digital mining revenue increased in the nine months ended September 30, 2024 by $0.3 million to $8.6 million from $8.3 million for the nine months ended September 30, 2023.
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Specialty finance revenue decreased in the nine months ended September 30, 2024 by $190 thousand to $396 thousand from $586 thousand for the nine months ended September 30, 2023.
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Operating Expenses
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Digital mining cost of revenues
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Bitcoin mining costs decreased by $1.0 million to $5.8 million for the nine months ended September 30, 2024 from $6.7 million for the nine months ended September 30, 2023 due to the temporary idling of mining machines that were in transit and lower hosting costs per machine.
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Staff costs and payroll
Previous report
Compensation costs for nine months ended September 30, 2024 decreased by $1.1 million to $3.6 million from $4.7 million for the nine months ended September 30, 2023 primarily due to the reduction of stock based compensation associated with employee stock options offset in part by the award of executive bonuses based on 2023 results.
Previous report
Depreciation and amortization
Previous report
Depreciation and amortization increased by $3.6 million to $7.1 million for the nine months ended September 30, 2024 from $3.5 million for the nine months ended September 30, 2023 primarily due to the increased number of Bitcoin mining machines placed into service earning Bitcoins as well as the change in useful life of mining machines from 5 years to 4 years.
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Professional fees
Previous report
Professional fees increased by $0.4 million to $1.6 million for the nine months ended September 30, 2024 from $1.2 million for the nine months ended September 30, 2023 primarily due to $0.3 million of contract termination costs paid to a service provider.
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Reworded paragraphs (30)
Previous wording
This Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and Notes for the three and nine months ended September 30, 2024, and with the Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
This Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and Notes for the three months ended March 31, 2025, and with the Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” “believes,” or the negative thereof or any variation thereon or similar terminology or expressions.
Current wording
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues, projected costs, and plans and objectives of management for future operations, are forward-looking statements. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “forecast,” “anticipate,” “project,” “predict,” “plan,” “intend,” or “estimate,” “guidance,” and other similar expressions, or the negative of these expressions. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking.
Previous wording
the early stage of our cryptocurrency mining business and our lack of operating history in such business,
Current wording
the early stage of our Bitcoin mining business and our lack of operating history in such business,
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the uncertainty surrounding the cryptocurrency mining business in general,
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the uncertainty surrounding the Bitcoin mining business in general,
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The Company currently operates two lines of business: our cryptocurrency mining business and our specialty finance business.
Current wording
The Company currently has two lines of business: our Bitcoin mining business and our specialty finance business.
Previous wording
The Bitcoin mining operation deploys our computing power to mine Bitcoin on the Bitcoin network. We conduct this business through our wholly owned subsidiary, US Digital, a Florida limited liability company, which we formed in 2021 to develop and operate our cryptocurrency mining business.
Current wording
The Bitcoin mining business operation deploys our computing power to mine Bitcoin and validate transactions on the Bitcoin network. We believe that developments in Bitcoin mining have created an opportunity for us to deploy capital and conduct large-scale mining operations in the United States. We conduct this business through a wholly owned subsidiary, US Digital to develop and operate our Bitcoin mining business.
Previous wording
We obtain Bitcoin as a result of our mining operations, and we sell Bitcoin from time to time, to support our operations and strategic growth. We plan to convert our Bitcoin to U.S. dollars. We may engage in regular trading of Bitcoin or engage in hedging activities related to our holding of Bitcoin. However, our decisions to hold or sell Bitcoin at any given time may be impacted by the Bitcoin market, which has been historically characterized by significant volatility. Currently, we do not use a formula or specific methodology to determine whether or when we will sell Bitcoin that we hold, or the number of Bitcoins we will sell. Rather, decisions to hold or sell Bitcoins are currently determined by management by monitoring the market in real time.
Current wording
We obtain Bitcoin as a result of our mining operations, and we sell Bitcoin from time to time to support our operations and strategic growth. We do not currently plan to engage in regular trading of Bitcoin (other than as necessary to convert our Bitcoin into U.S. dollars) or to engage in hedging activities related to our holding of Bitcoin; however, our decision to hold or sell Bitcoin at any given time may be impacted by the Bitcoin market, which has been historically characterized by significant volatility. Currently, we do not use a formula or specific methodology to determine whether or when we will sell Bitcoin that we hold, or the number of Bitcoins we will sell. Rather, decisions to hold or sell Bitcoins are currently determined by management by monitoring the market in real time.
Previous wording
Effective January 1, 2024, we adopted ASC 350-60 which required Bitcoin to be measured at fair value. See Note 1 - Summary of Significant Accounting Policies for more details on impact of implementation to the financial statements. As a result, the carrying value of each Bitcoin we held at the end of September 30, 2024 and each subsequent reporting period reflects the price of one Bitcoin quoted on the active exchange at the end of the reporting period. Therefore, negative swings in the market price of Bitcoin could have a material impact on our earnings and on the carrying value of our Bitcoin.
Current wording
The value of Bitcoin has historically been subject to wide swings. The carrying value of each Bitcoin we hold reflects the price of one Bitcoin quoted on the active exchange at the end of the reporting period. Therefore, negative swings in the market price of Bitcoin could have a material impact on our earnings and on the carrying value of our Bitcoin. The following table provides a range of intraday low and intraday high Bitcoin prices between January 1, 2022 through March 31, 2025.
Previous wording
As of September 30, 2024 and December 31, 2023 approximately 79 Bitcoin (with an approximate fair value of $5.0 million) and nil Bitcoin were held in a custody account as collateral for the $5.0 million Liebel loan and were classified within "Digital assets - long-term" on the consolidated balance sheets.
Current wording
As of March 31, 2025 and December 31, 2024 approximately 61 Bitcoin and 54 Bitcoin, respectively (with an approximate fair value of $5.0 million) were held in a custody account as collateral for the $5.0 million Liebel loan and were classified within “Digital assets - long-term” on the consolidated balance sheets.
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The following is a summary of the average cost of revenues for mining each Bitcoin during the three and nine months ended September 30, 2024 and 2023:
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The following is a summary of the average cost of revenues for mining each Bitcoin during the three months ended March 31, 2025 and 2024:
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The Company's Bitcoin unit activity during the nine months ended September 30, 2024 and 2023 was as follows:
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The Company's Bitcoin unit activity during the three months ended March 31, 2025 and 2024 was as follows:
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During the three months ended September 30, 2024, total revenues decreased by $2.2 million, to $1.3 million from $3.4 million for the three months ended September 30, 2023.
Current wording
During the three months ended March 31, 2025, total revenues decreased by $2.3 million, to $2.4 million from $4.7 million for the three months ended March 31, 2024.
Previous wording
Digital mining revenue decreased in the three months ended September 30, 2024 by $2.2 million to $1.1 million from $3.3 million for the three months ended September 30, 2023.
Current wording
Digital mining revenue decreased in the three months ended March 31, 2025 by $2.3 million to $2.3 million from $4.6 million for the three months ended March 31, 2024.
Previous wording
Bitcoin mining revenues are determined by two main drivers: quantity of Bitcoin mined and the price of Bitcoin on the date the Bitcoin is mined. During the three months ended September 30, 2024, we mined 18.4 Bitcoin with an average Bitcoin price of approximately $61 thousand as compared to 117.1 Bitcoin with an average Bitcoin price of approximately $28 thousand during the three months ended September 30, 2023. The decrease in Bitcoin mining revenue for the three months ended September 30, 2024 was attributable to the reduction in the number of Bitcoins mined during the period due to the temporary idling of mining machines that were in transit as well as the increased difficulty rate, which reduced our share of the global hashrate, offset in part by the increase in Bitcoin prices.
Current wording
Bitcoin mining revenues are determined by two main drivers: quantity of Bitcoin mined and the price of Bitcoin on the date the Bitcoin is mined. During the three months ended March 31, 2025, we mined 24.3 Bitcoin with an average Bitcoin price of approximately $94 thousand as compared to 86.4 Bitcoin with an average Bitcoin price of approximately $53 thousand during the three months ended March 31, 2024. The decrease in Bitcoin mining revenue for the three months ended March 31, 2025 was attributable to the reduction in the number of Bitcoins mined during the period due to the halving event in April 2024, machines that were not being relocated from hosting sites, the increased difficulty rate, which reduced our share of the global hashrate, offset in part by the increase in Bitcoin prices.
Previous wording
During the three months ended September 30, 2024, operating expenses decreased $0.9 million to $5.7 million from $6.6 million for the three months ended September 30, 2023. The increase in operating expenses is primarily due to the following factors:
Current wording
During the three months ended March 31, 2025, operating expenses increased $3.8 million to $7.5 million from $3.7 million for the three months ended March 31, 2024. The increase in operating expenses is primarily due to the following factors:
Previous wording
Compensation costs for three months ended September 30, 2024 increased by $0.2 million to $1.6 million from $1.3 million for the three months ended September 30, 2023 primarily due to the award of executive bonuses based on 2023 results offset in part by the reduction of stock based compensation associated with employee stock options.
Current wording
Compensation costs for three months ended March 31, 2025 decreased by $0.1 million to $1.1 million from $1.2 million for the three months ended March 31, 2024 primarily due primarily to the $0.1 million reduction of stock based compensation associated with employee stock options and restricted stock.
Previous wording
The Company incurred a $1.2 million impairment and nil loss on mining equipment for the nine months ended September 30, 2024 and 2023, respectively, related to machines disposed of in April 2024.
Current wording
During the three months ended March 31, 2024 the Company incurred a $1.2 million impairment on mining equipment related to machines disposed in April 2024. There was no impairment loss for the three months ended March 31, 2025.
Previous wording
The Company recognized an unrealized loss on securities of $0.4 million for the three months ended September 30, 2024 as compared to an unrealized loss of $0.8 million for the three months ended September 30, 2023 from the revaluation of Seastar's common stock and private placement warrants.
Current wording
The Company recognized an unrealized loss on securities $26 thousand for the three months ended March 31, 2025 as compared to an unrealized gain of $1.4 million for the three months ended March 31, 2024 from the revaluation of Seastar Medical's common stock and private placement warrants.
Previous wording
The Company recognized $124 thousand of interest expense for the three months ended September 30, 2024 as compared to nil for the three months ended September 30, 2023 due to an increase in secured borrowings in 2024.
Current wording
The Company recognized $221 thousand of interest expense for the three months ended March 31, 2025 as compared to $71 thousand for the three months ended March 31, 2024 due to an increase in secured borrowings in 2024.
Previous wording
During the three months ended September 30, 2024, the Company generated a $4.8 million net loss before income taxes and the Company increased its income tax valuation allowance by $1.2 million, which offset the Company’s incurred net income tax benefit of $1.2 million which resulted in no income tax expense being recognized for the three months ended September 30, 2024. During the three months ended September 30, 2023, the Company generated a $4.7 million net loss before income taxes and the Company increased its income tax valuation allowance by $1.4 million, which offset the Company’s incurred net income tax expense of $1.4 million, resulting in no income tax expense being recognized during the period.
Current wording
During the three months ended March 31, 2025, the Company generated a $5.4 million net loss before income taxes and the Company increased its income tax valuation allowance by $1.4 million, which offset the Company’s incurred net income tax benefit of $1.4 million which resulted in no income tax expense being recognized for the three months ended March 31, 2025. During the three months ended March 31, 2024, the Company generated $2.4 million net income before income taxes and the Company increased its income tax valuation allowance by $0.6 million, which offset the Company’s incurred net income tax expense of $0.6 million, resulting in no income tax expense being recognized during the period.
Previous wording
The Company owns 69.5% of Sponsor. As such, there is a $0.1 million net loss for the three months ended September 30, 2024 attributable to the Non-Controlling Interest as compared to a $0.3 million net loss for the three months ended September 30, 2023.
Current wording
The Company owns 69.5% of the equity interests of Sponsor. As such, there is an $8 thousand net loss for the three months ended March 31, 2025 attributable to the Non-Controlling Interest as compared to a $0.4 million net gain for the three months ended March 31, 2024.
Previous wording
Our primary sources of liquidity are our cash and cash equivalents, Bitcoin generated from our digital mining operations, proceeds from borrowings and cash from our note receivables. At September 30, 2024, we had cash, cash equivalents and Bitcoin, excluding $5.0 million Bitcoin held as collateral, of $9.9 million compared to cash, cash equivalents and Bitcoin of $5.8 million at December 31, 2023. As of September 30, 2024 and December 31, 2023, $5.0 million and nil of Bitcoin was pledged as collateral against outstanding borrowings. As of September 30, 2024, we had working capital of $8.2 million reflecting an increase of $0.8 million since December 31, 2023. We have access to equity financing through equity and debt financing. Cash management continues to be a top priority. We expect to incur negative operating cash flows as we work to increase our digital mining revenue and maintain operational efficiencies.
Current wording
Our primary sources of liquidity are our cash and cash equivalents, Bitcoin generated from our digital mining operations, proceeds from borrowings and cash from our note receivables. At March 31, 2025 and December 31, 2024, we had cash, cash equivalents and Bitcoin, excluding $5.0 million of Bitcoin was pledged as collateral against outstanding borrowings, of $9.3 million and $12.4 million, respectively. As of March 31, 2025, we had working capital of $8.3 million reflecting a decrease of $3.7 million since December 31, 2024. We have access to equity financing through equity and debt financing. Cash management continues to be a top priority. We expect to incur negative operating cash flows as we work to increase our digital mining revenue and maintain operational efficiencies.
Previous wording
Our working capital needs may increase in the future as we continue to expand and enhance our operations. Our ability to raise additional funds for working capital through equity or debt financings or other sources may depend on the financial success of our then current business and successful implementation of our key strategic initiatives, financial, economic and market conditions and other factors, some of which are beyond our control. No assurance can be given that we will be successful in raising the required capital at a reasonable cost and at the required times, or at all. Further equity financings may have a dilutive effect on shareholders and any debt financing, if available, may require restrictions to be placed on our future financing and operating activities. If we require additional capital and are unsuccessful in raising that capital, we may not be able to continue our business operations in the cryptocurrency mining industry which could adversely impact our business, financial condition and results of operations.
Current wording
Our working capital needs may increase in the future as we continue to expand and enhance our operations. Our ability to raise additional funds for working capital through equity or debt financings or other sources may depend on the financial success of our then current business and successful implementation of our key strategic initiatives, financial, economic and market conditions and other factors, some of which are beyond our control. No assurance can be given that we will be successful in raising the required capital at a reasonable cost and at the required times, or at all. Further equity financings may have a dilutive effect on shareholders and any debt financing, if available, may require restrictions to be placed on our future financing and operating activities. If we require additional capital and are unsuccessful in raising that capital, we may not be able to continue our business operations in the Bitcoin mining industry which could adversely impact our business, financial condition and results of operations.
Previous wording
The Company's cash flow summary for the nine months ended September 30, 2024 and 2023 are as follows:
Current wording
The Company's cash flow summary for the three months ended March 31, 2025 and 2024 are as follows:
Previous wording
The Company has digital mining hosting contracts that expire between December 2024 and April 2025. These contracts currently require total monthly payments of approximately $200 thousand to $400 thousand monthly.
Current wording
The Company has digital mining hosting contracts that expired in April 2025.
Previous wording
Net cash used in operations was $8.7 million during the nine months ended September 30, 2024 compared with net cash used in operations of $2.6 million during the nine months ended September 30, 2023. This change in cash used in operating activities was primarily driven by the classification of $6.8 million in Bitcoin proceeds from mining (i.e. Bitcoin) as investing activities during the nine months ended September 30, 2024 due to the adoption of ASU 350-60 as compared to the classification of mining revenues as operating activities for the nine months ended September 30, 2023. The mining of Bitcoin is considered a non cash item for operating purposes which totaled $8.6 million and $8.4 million for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Net cash used in operations was $2.9 million during the three months ended March 31, 2025 compared with net cash used in operations of $3.0 million during the three months ended March 31, 2024. The mining of Bitcoin is considered a noncash item for operating purposes which totaled $2.3 million and $4.6 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
For the nine months ended September 30, 2024 net cash provided by investing activities was $4.2 million as compared to net cash used in investing activities of $0.6 million for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, the Company received net payments of approximately $1.4 million from SeaStar Medical related to the payment of outstanding notes receivable, and received proceeds of $6.8 million from the sale of digital assets while investing $1.2 million for capital expenditures including Bitcoin mining equipment which was offset in part by a $2.9 million investment in the Tech Infrastructure JV I LLC note receivable. For the nine months ended September 30, 2023 the Company received $1.8 million from SeaStar Medical related to the payment of outstanding notes receivable while investing $1.9 million for Bitcoin mining equipment and investing $0.4 million for the Symbiont Asset acquisition.
Current wording
For the three months ended March 31, 2025 net cash provided by investing activities was $0.7 million as compared to net cash provided by investing activities of $1.6 million for the three months ended March 31, 2024. The proceeds from the sale of Bitcoin is considered an investing activity which totaled $1.2 million and $1.3 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, the Company received net payments of approximately $0.2 million from the collection of Symbiont sale receivable while investing $0.2 million for capital expenditures and $0.5 million on deposits for Bitcoin mining equipment. For the three months ended March 31, 2024 the Company received net payments of approximately $1.4 million from SeaStar Medical related to the payment of outstanding notes receivable while investing $1.1 million for capital expenditures including Bitcoin mining equipment.
Previous wording
The Company had a cash infusion of $2.3 million and nil from equity financing transactions during the nine months ended September 30, 2024 and 2023, respectively, as described below.
Current wording
The Company had no cash infusions from equity financing transactions during the three months ended March 31, 2025 and 2024.
Previous wording
Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We also disclose Earnings before Interest, Tax, Depreciation and Amortization ("EBITDA") and Core Earnings before Interest, Tax, Depreciation and Amortization ("Core EBITDA") which adjusts for unrealized loss on investment and equity securities, impairment loss on mined digital assets, impairment of long-lived assets, impairment of prepaid hosting deposits, contract termination costs and stock compensation expense and option expense, all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of Bitcoin miners.
Current wording
Our reported results are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We also disclose Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”) and Core Earnings before Interest, Tax, Depreciation and Amortization (“Core EBITDA”) which adjusts which adjusts for unrealized loss (gain) on investment and equity securities, loss on disposal of mining equipment, impairment loss on mining equipment and stock compensation expense and option expense, all of which are non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of Bitcoin miners.
Previous wording
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of the consolidated financial statements in conformity with GAAP requires our management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure or inclusion of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. Our critical accounting policies include revenue recognition, digital assets, and policies related to long-lived assets. We consider our critical accounting estimates to be those related to long-lived asset impairment assessments.
Current wording
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of the consolidated financial statements in conformity with GAAP requires our management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure or inclusion of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. There are no critical accounting estimates for the three months ended March 31, 2025.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Bitcoin mining revenues are determined by two main drivers: quantity of Bitcoin mined and the price of Bitcoin on the date the Bitcoin is mined. During the nine months ended September 30, 2024, we mined 148.9 Bitcoin with an average Bitcoin price of approximately $58 thousand as compared to 315.4 Bitcoin with an average Bitcoin price of approximately $26 thousand during the nine months ended September 30, 2023. The increase in Bitcoin mining revenue for the nine months ended September 30, 2024 was attributable to the increase in Bitcoin prices offset in part by the temporary idling of mining machines that were in transit as well as the increased difficulty rate, which reduced our share of the global hashrate.
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024, operating expenses increased $0.5 million to $17.7 million from $17.2 million for the nine months ended September 30, 2023. The increase in operating expenses is primarily due to the following factors:
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024, the Company generated a $9.5 million net loss before income taxes and the Company increased its income tax valuation allowance by $2.4 million, which offset the Company’s incurred net income tax benefit of $2.4 million which resulted in no income tax expense being recognized during this period. This net activity resulted in no recognized income tax expense for the nine months ended September 30, 2024. During the nine months ended September 30, 2023, the Company generated a $17.5 million net loss before income taxes and the Company increased its income tax valuation allowance by $2.1 million, which offset the Company’s incurred net income tax expense of $2.1 million, resulting in no income tax expense being recognized during the period.
Previous report — wording carried elsewhere
Net Loss Attributable to Non-Controlling Interest
Previous report — wording carried elsewhere
The Company owns 69.5% of Sponsor. As such, there is a $0.3 million net loss for the nine months ended September 30, 2024 attributable to the Non-Controlling Interest as compared to a $3.1 million net loss for the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
Net Loss Attributable to LM Funding America, Inc.