Bay Street News

LifeWallet Announces First Quarter 2024 Financial Results

CORAL GABLES, Fla., May 15, 2024 (GLOBE NEWSWIRE) — MSP Recovery, Inc. d/b/a LifeWallet (NASDAQ: LIFW) (“LifeWallet,” or the “Company”), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology leader, today announced financial results for the quarter ended March 31, 2024.

LifeWallet will host a conference call and live webcast to review the Company’s first quarter 2024 results for investors and analysts at 8:30 a.m. Eastern Time on Thursday, May 16, 2024. To access this call, we encourage you to pre-register using this link: LifeWallet Q1 2024 Earnings Pre-Registration.

A live webcast of the conference call will be accessible from the Investors section of LifeWallet’s website here: LifeWallet Investors.

A replay of the webcast will be archived and accessible here: LifeWallet Investors.

First Quarter Highlights

Comprehensive Settlements

Utilizing First-Quarter Settlements to Identify Additional Recoveries

Developing Business Solutions for Medicare Advantage Subrogation and More

First Quarter Financial Highlights

Assigned Recovery Rights Claims Paid and Billed Value

The table below outlines the Company’s claims data for the most recent periods. The amounts represent data received from current and new assignors:

$ in billions Three Months Ended
March 31, 2024
  Year Ended
December 31, 2023
  Year Ended
December 31, 2022
 
Paid Amount $ 370.0   $ 369.8   $ 374.8  
Paid Value of Potentially Recoverable Claims(2)   86.6     88.9     89.6  
Billed Value of Potentially Recoverable Claims   363.8     373.5     377.8  
Recovery Multiple N/A(1)(3)   N/A(1)   N/A(1)  
Penetration Status of Portfolio   86.8 %   86.8 %   85.8 %
(1) During the three months ended March 31, 2024, the Company has received total recoveries of $6.1 million with a recovery multiple of 1.53x. However, the settlement amounts do not provide a large enough sample to be statistically significant, and are therefore not shown in the table.
(2) On August 10, 2022, the United States Court of Appeals, Eleventh Circuit held that a four-year statute of limitations period applies to certain claims brought under the Medicare Secondary Payer Act’s private cause of action, and that the limitations period begins to run on the date that the cause of action accrued. This opinion may render certain Claims held by the Company unrecoverable and may substantially reduce PVPRC and BVPRC as calculated. As our cases were filed at different times and in various jurisdictions, and prior to data matching with a defendant we are not able to accurately calculate the entirety of damages specific to a given defendant, we cannot calculate with certainty the impact of this ruling at this time. However, the Company has deployed several legal strategies (including but not limited to seeking to amend existing lawsuits in a manner that could allow claims to relate back to the filing date as well as asserting tolling arguments based on theories of fraudulent concealment) that would apply to tolling the applicable limitations period and minimizing any material effect on the overall collectability of its claim rights. In addition, the Eleventh Circuit decision applies only to district courts in the Eleventh Circuit. Many courts in other jurisdictions have applied other statutes of limitations to the private cause of action, including borrowing the three-year statute of limitations applicable to the government’s cause of action; and borrowing from the False Claims Act’s six-year period. The most recent decision on the issue from the District Court of Massachusetts, for example, applies the same statute of limitations as Eleventh Circuit, but expressly disagrees with the Eleventh Circuit’s application of the “accrual” rule and instead adopted the notice-based trigger that the company has always argued should apply. This would mean that the limitations period for unreported claims has not even begun to accrue. This is a complex legal issue that will continue to evolve in jurisdictions across the country. Nevertheless, if the application of the statute of limitations as determined by the Eleventh Circuit was applied to all Claims assigned to us, we estimate that the effect would be a reduction of PVPRC by approximately $8.3 billion. As set forth in our Risk Factors, PVPRC is based on a variety of factors. As such, this estimate is subject to change based on the variety of legal claims being litigated and statute of limitations tolling theories that apply.
(3) The Recovery Multiple for the three months ended March 31, 2024 cannot yet be accurately determined as, pursuant recent settlement agreements, in addition to cash payments, we were assigned additional claims to pursue recoveries, for which recovery efforts are ongoing.

Non-GAAP Financial Measures

Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.

About LifeWallet

Founded in 2014 as MSP Recovery, LifeWallet has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries from responsible parties. LifeWallet innovates technologies and provides comprehensive solutions for multiple industries including healthcare, legal, and sports NIL. For more information, visit: LIFEWALLET.COM

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan” and “will” or, in each case, their negative, or other variations or comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance or results and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by MSP Recovery, Inc. d/b/a LifeWallet (NASDAQ: LIFW) herein speaks only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for LIFW to predict or identify all such events or how they may affect it. LIFW has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, LIFW’s ability to capitalize on its assignment agreements and recover monies that were paid by the assignors; the inherent uncertainty surrounding settlement negotiations and/or litigation, including with respect to both the amount and timing of any such results; the validity of the assignments of claims to LIFW; the ability to successfully expand the scope of LIFW’s claims or obtain new data and claims from LIFW’s existing assignor base or otherwise; LIFW’s ability to innovate and develop new solutions, and whether those solutions will be adopted by LIFW’s existing and potential assignors; negative publicity concerning healthcare data analytics and payment accuracy; and those other factors included in LIFW’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by it with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

Contact

Media:
ICR, Inc.
LifeWallet@icrinc.com

Investors:
Investors@LifeWallet.com

MSP RECOVERY, INC. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
    March 31,     December 31,  
(In thousands except per share amounts)   2024     2023  
ASSETS            
Current assets:            
Cash   $ 11,973     $ 11,633  
Accounts receivable           217  
Affiliate receivable (1)     1,242       1,188  
Prepaid expenses and other current assets (1)     6,018       8,908  
Total current assets     19,233       21,946  
Property and equipment, net     4,886       4,911  
Intangible assets, net (2)     3,011,882       3,132,796  
Right-of-use assets     315       342  
Total assets   $ 3,036,316     $ 3,159,995  
             
LIABILITIES AND EQUITY            
Current liabilities:            
Accounts payable   $ 11,507     $ 6,244  
Affiliate payable (1)     19,822       19,822  
Commission payable     924       821  
Derivative liability     190       37  
Warrant liability (1)     33,316       268  
Other current liabilities (1)     17,008       19,314  
Total current liabilities     82,767       46,506  
Guaranty obligation (1)     984,450       941,301  
Claims financing obligation and notes payable (1)     575,021       548,276  
Lease liabilities     204       235  
Loan from related parties (1)     130,328       130,709  
Interest payable (1)     20,047       73,839  
Total liabilities   $ 1,792,817     $ 1,740,866  
             
Commitments and contingencies (Note 13)            
             
Stockholders’ Equity (Deficit):            
Class A common stock, $0.0001 par value; 5,500,000,000 shares authorized; 15,636,062 and 14,659,794 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively   $ 2     $ 1  
Class V common stock, $0.0001 par value; 3,250,000,000 shares authorized; 124,067,498 and 124,132,398 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively     12       12  
Additional paid-in capital     367,079       357,928  
Accumulated deficit     (104,433 )     (85,551 )
Total Stockholders’ Equity   $ 262,660     $ 272,390  
Non-controlling interest     980,839       1,146,739  
Total equity   $ 1,243,499     $ 1,419,129  
    Total liabilities and equity   $ 3,036,316     $ 3,159,995  
1. As of March 31, 2024 and December 31, 2023, the total affiliate receivable, prepaid expenses, affiliate payable, other current liabilities, warrant liability, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, claims financing obligation and notes payable, and interest payable includes balances with related parties. See Note 15,Related Party Transactions, for further details.
2. As of March 31, 2024 and December 31, 2023, intangible assets, net included $2.1 billion and $2.2 billion, respectively, related to a consolidated VIE. See Note 9,Variable Interest Entities, for further details.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


MSP RECOVERY, INC. and Subsidiaries

Condensed Consolidated Statements of Operations
(Unaudited)
    Three months ended March 31,  
(In thousands except per share amounts)   2024     2023  
Claims recovery income   $ 6,001     $ 3,497  
Claims recovery service income           498  
Total Claims Recovery   $ 6,001     $ 3,995  
             
Operating expenses            
Cost of claim recoveries     1,673       1,021  
Claims amortization expense     121,014       113,469  
General and administrative (1)     5,566       6,855  
Professional fees     4,420       9,728  
Professional fees – legal (2)     3,467       8,551  
Allowance for credit losses           5,000  
Depreciation and amortization     67       9  
Total operating expenses     136,207       144,633  
Operating Loss   $ (130,206 )   $ (140,638 )
             
Interest expense (3)     (97,953 )     (42,390 )
Other income (expense), net     252       6,627  
Change in fair value of warrant and derivative liabilities     51,307       2,255  
Net loss before provision for income taxes   $ (176,600 )   $ (174,146 )
             
Provision for income tax expense            
Net loss   $ (176,600 )   $ (174,146 )
             
Less: Net (income) loss attributable to non-controlling interests     157,718       169,230  
Net loss attributable to MSP Recovery, Inc.   $ (18,882 )   $ (4,916 )
             
Basic and diluted weighted average shares outstanding, Class A Common Stock     15,013,881       3,544,381  
Basic and diluted net income per share, Class A Common Stock   $ (1.26 )   $ (1.39 )
 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Non-GAAP Financial Measures

MSP RECOVERY, INC. and Subsidiaries
Non-GAAP Reconciliation
    Three Months Ended March 31,  
(In thousands)   2024     2023  
GAAP Operating Loss   $ (130,206 )   $ (140,638 )
Professional fees paid in stock     469       7,557  
Claims amortization expense     121,014       113,469  
Allowance for credit losses           5,000  
Adjusted Operating Loss   $ (8,723 )   $ (14,612 )
             
GAAP Net Loss   $ (176,600 )   $ (174,146 )
Professional fees paid in stock     469       7,557  
Claims amortization expense     121,014       113,469  
Allowance for credit losses           5,000  
Interest expense     97,953       42,390  
Change in fair value of warrant and derivative liabilities     (51,307 )     (2,255 )
Adjusted Net Loss   $ (8,471 )   $ (7,985 )
 

In addition to the financial measures prepared in accordance with GAAP, this press release also contains non-GAAP financial measures. We consider “adjusted net loss” and “adjusted operating loss” as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate our business’s ongoing operating performance on a consistent basis across reporting periods. We believe these measures provide useful information to investors. Adjusted net loss represents net loss adjusted for certain non-cash expenses set forth in the table above, and adjusted operating loss represents operating loss adjusted for certain non-cash expenses set forth in the table above.


Bay Street News