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Name | Symbol | Market | Type |
---|---|---|---|
MSP Recovery Inc | NASDAQ:LIFWW | NASDAQ | Equity Warrant |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0033 | 0.0022 | 0.0034 | 0 | 00:00:00 |
The Company is working expeditiously to file its Form 10-Q for the periods ending March 31, 2023 and June 30, 2023. Subsequently, the company looks forward to holding a conference call to discuss historical events, current status, and futuristic outlook.
As described in our Current Report on Form 8-K filed with the SEC on April 14, 2023, we identified errors in the accounting for the indemnification asset, various intangible assets and rights to cash flows, and consolidation of an entity in connection with our business combination. As a result of these errors, management and the audit committee of our board of directors concluded that our previously issued unaudited condensed consolidated financial statements for the periods ended June 30, 2022 and September 30, 2022 were materially misstated. Accordingly, our unaudited condensed consolidated financial statements for the foregoing periods require restatement and should no longer be relied upon. The financial information that was previously filed or otherwise reported as of and for the periods ended June 30, 2022 and September 30, 2022 is superseded by the information in the Annual Report on Form 10-K. See Note 18 to our consolidated financial statements in the Annual Report on Form 10-K for additional information on the restatement and the related financial information impacts.
In addition, on April 16, 2023, the board of directors of the Company established a special committee to review matters related to the preparation and filing of the Annual Report on Form 10-K, and to address any related issues. At that time, it was decided to postpone the filing of this Annual Report on Form 10-K pending the special committee’s review. On June 13, 2023, the special committee finalized its review. The findings and recommendations of the special committee are set forth in "Part II, Item 9A Controls and Procedures" of the Annual Report on Form 10-K.
Fiscal Year 2022 Major Highlights
Fiscal Year 2022 Financial Highlights
(1) 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.
Recent Updates:
Assigned Recovery Rights Claims Paid and Billed Value
The table below outlines the Company's growth in claims data received in the most recent periods. The amounts represent data received from current and new assignors:
Select Portfolio Metrics | ||||||||||||||||||
As of | Year Ended December 31 | Nine Months Ended September 30, | Six Months Ended June 30, | Three Months Ended March 31, | Year Ended December 31 | Year Ended December 31 | ||||||||||||
(in billions) | 2022 | 2022 | 2022 | 2022 | 2021 | 2020 | ||||||||||||
Total Paid Amount | $ | 374.8 | $ | 373.3 | $ | 370.2 | $ | 366.9 | $ | 364.4 | $ | 58.4 | ||||||
Paid Value of Potentially Recoverable Claims (PVPRC) | 89.6 | 89.2 | 88.3 | 87.3 | 86.6 | 14.7 | ||||||||||||
Billed Value of Potentially Recoverable Claims (BVPRC) | 377.8 | 376.1 | 371.3 | 367.8 | 363.2 | 52.3 |
Recoveries Being Sought by Category:
During 2022, LifeWallet announced a strategy whereby the Company is sending out individual demand letters on identified recoverable claims to responsible payers for prompt payment. The table below outlines specific dollar amounts identified by the Company, broken down by litigation and demand letter type, that it plans to pursue against different responsible parties:
Recoveries Being Sought By Category | |||||||
Paid Amount($ in millions) | Billed Amounts Sought($ in millions) | 2022 Recovery($ in millions) | Recovery Multiple | ||||
ACCIDENT RELATED: | |||||||
Data Matching(1) | $ | 5,046.5 | $ | 20,361.4 | $ | 1.9 | 2.1x |
Demand Letters(2) | |||||||
1stParty Demands | $ | 117.6 | $ | 682.3 | $ | 0.3 | 1.8x |
3rdParty Demands | $ | 227.4 | $ | 1,631.2 | $ | 0.1 | 4.4x |
Case and Lien Recoveries | $ | 18.7 | $ | 75.9 | $ | 2.2 | 1.9x |
FRAUD & MISCONDUCT CASES: | |||||||
Private Lien Resolution Program(3) | $ | 2.5 | $ | 12.9 | $ | 2.4 | Un-funneled Recovery |
Big Pharma/Product Liability(4) | $ | 6,219.8 | $ | 19,434.9 | $ | 0.5 | Un-funneled Recovery |
Group Health Plan Recovery(4) | $ | 2.1 | $ | 10.9 | $ | 1.2 | Un-funneled Recovery |
(1) Data Matching represents potential recovery opportunities the Company has identified via court orders or agreements with primary payers. These represent potential recoveries that LIFW could receive from our settlement discussions or data matching with auto insurance carriers that represent approximately 28% combined market share of the auto industry. (2) As previously announced June 13th and 27th 2022, MSP initiated billing amounts to primary payers (i.e., property and casualty insurers), giving these parties the opportunity to pay without the need for litigation or extended litigation. (3) PLRPs are established to resolve health care liens asserted by private health insurance providers in mass tort settlements. MSPR is actively working with various lien resolution administrators to recover on those owned claims for which manufacturers have already settled other lawsuits and established PLRPs. (4) Un-funnel recovery represents a recovery that was not identified in the PVPRC. The majority of the amount recovered in the Private Lien Resolution Program represents recoveries that are un-funneled recoveries.
Data Matching: Data Matching represents potential recovery opportunities the Company has identified via court orders or agreements with primary payers. These represent potential recoveries that LifeWallet could receive from a portion of our settlement discussions with approximately 28% of Auto Insurance industry or via demand letters.
Demand Letters: As previously announced June 13th and 27th 2022, LifeWallet initiated billing amounts to primary payers (i.e., property and casualty insurers) and big pharma, giving these parties the opportunity to pay without the need for litigation or extended litigation. For 2022, our recovery multiple on 1st party & 3rd party demand letters, was 1.8x and 4.4x, respectively.
Private Lien Resolution Programs (“PLRP”): PLRPs are established to resolve health care liens asserted by private health insurance providers in mass tort settlements. LifeWallet is actively working with various lien resolution administrators to recover on those owned claims for which manufacturers have already settled other lawsuits and established PLRPs.
Financial Outlook
Recoveries Guidance: The Company continues to make progress in its recovery efforts, and management continues to believe previously projected recoveries are ultimately collectible. Recoveries are dependent on the completion of litigation and the negotiation of settlements, which are inherently uncertain and are subject to risk of delay and litigation outcomes. As a result, the Company will not provide future guidance on recoveries that are dependent on litigation or subrogation process.
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.
Quarterly Conference Call
The Company will not host a conference call to review the fourth quarter results for investors and analysts. Instead, the Company will host a call after the Company reports its second quarter results, at which time the Company will review both the 2022 and 2023 first and second quarter results. The date and time will be provided at a later date.
About MSP Recovery
In January 2023 MSP Recovery announced its rebranding to its nationally recognized brand, LifeWallet. The Company will not change its core strategy, and its core business remains the same–-secondary payer reimbursement recoveries. Utilizing the name LifeWallet reflects the diverse recovery opportunities presented by the company’s growing technological innovations and consolidates the Company’s lines of business under the same name, while positioning itself to generate additional revenues that were not predicted at the time of its business combination.
Founded in 2014, 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 against responsible parties. The Company provides the healthcare industry with comprehensive compliance solutions, while innovating technologies to help save lives. For more information, visit:
www.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. These forward-looking statements include all matters that are not historical facts, including for example guidance for 2022 portfolio recovery and total gross recoverables. 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 herein speaks only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for MSPR to predict or identify all such events or how they may affect it. MSPR 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, MSPR’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 MSPR; the ability to successfully expand the scope of MSPR’s claims or obtain new data and claims from MSPR’s existing assignor base or otherwise; MSPR’s ability to innovate and develop new solutions, and whether those solutions will be adopted by MSPR’s existing and potential assignors; negative publicity concerning healthcare data analytics and payment accuracy; and those other factors included in MSPR’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.
MSP RECOVERY, INC. and SubsidiariesConsolidated Balance Sheets
December 31, | December 31, | |||||||
(In thousands except per share amounts) | 2022 | 2021 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,661 | $ | 1,664 | ||||
Restricted cash | 11,420 | - | ||||||
Accounts receivable | 6,195 | - | ||||||
Affiliate receivable (1) | 2,425 | 4,070 | ||||||
Prepaid expenses and other current assets (1) | 27,656 | 13,304 | ||||||
Total current assets | 51,357 | 19,038 | ||||||
Property, plant and equipment, net | 3,432 | 750 | ||||||
Intangible assets, net (2) | 3,363,156 | 84,218 | ||||||
Total assets | $ | 3,417,945 | $ | 104,006 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 8,422 | $ | 4,609 | ||||
Affiliate payable (1) | 19,822 | 45,252 | ||||||
Commission payable | 545 | 465 | ||||||
Deferred service fee income | - | 249 | ||||||
Derivative liability | 9,613 | - | ||||||
Warrant liability | 5,311 | - | ||||||
Other current liabilities | 72,002 | 3,489 | ||||||
Total current liabilities | 115,715 | 54,064 | ||||||
Guaranty obligation | 787,945 | - | ||||||
Claims financing obligation and notes payable (1) | 198,489 | 106,805 | ||||||
Loan from related parties (1) | 125,759 | - | ||||||
Interest payable (1) | 2,765 | 94,545 | ||||||
Total liabilities | $ | 1,230,673 | $ | 255,414 | ||||
Commitments and contingencies (Note 13) | ||||||||
Class A common stock subject to possible redemption, 1,129,589 shares at redemption value as of December 31, 2022. | 1,807 | - | ||||||
Stockholders' Equity (Deficit): | ||||||||
Class A common stock, $0.0001 par value; 5,500,000,000 shares authorized; 74,605,284 issued and outstanding as of December 31, 2022 | $ | 7 | $ | - | ||||
Class V common stock, $0.0001 par value; 3,250,000,000 shares authorized; 3,147,979,494 issued and outstanding as of December 31, 2022 | 315 | - | ||||||
Additional paid-in capital | 136,760 | - | ||||||
Members' equity | - | (155,756 | ) | |||||
Accumulated deficit | (29,203 | ) | - | |||||
Total Stockholders' Equity (Deficit) | $ | 107,879 | $ | (155,756 | ) | |||
Non-controlling interest | 2,077,586 | 4,348 | ||||||
Total equity | $ | 2,185,465 | $ | (151,408 | ) | |||
Total liabilities and equity | $ | 3,417,945 | $ | 104,006 |
The accompanying notes are an integral part of these consolidated financial statements.
MSP RECOVERY, INC. and SubsidiariesConsolidated Statements of Operations
Year ended December 31, | ||||||||||||
(In thousands except per share amounts) | 2022 | 2021 | 2020 | |||||||||
Claims recovery income | $ | 4,878 | $ | 126 | $ | 255 | ||||||
Claims recovery service income (1) | 18,542 | 14,500 | 13,632 | |||||||||
Total Claims Recovery | $ | 23,420 | $ | 14,626 | $ | 13,887 | ||||||
Operating expenses | ||||||||||||
Cost of claim recoveries (2) | 2,054 | 26 | 47 | |||||||||
Claims amortization expense | 266,929 | 164 | 125 | |||||||||
General and administrative (3) | 23,959 | 12,633 | 14,130 | |||||||||
Professional fees | 18,497 | 8,502 | 2,211 | |||||||||
Professional fees - legal (4) | 43,035 | 128 | 468 | |||||||||
Depreciation and amortization | 424 | 343 | 235 | |||||||||
Total operating expenses | 354,898 | 21,796 | 17,216 | |||||||||
Operating Loss | $ | (331,478 | ) | $ | (7,170 | ) | $ | (3,329 | ) | |||
Interest expense | (121,011 | ) | (27,046 | ) | (20,886 | ) | ||||||
Other income (expense), net | 63,067 | 1,139 | (51 | ) | ||||||||
Change in fair value of warrant and derivative liabilities | (12,483 | ) | — | — | ||||||||
Net loss before provision for income taxes | $ | (401,905 | ) | $ | (33,077 | ) | $ | (24,266 | ) | |||
Provision for income tax expense | — | — | — | |||||||||
Net loss | $ | (401,905 | ) | $ | (33,077 | ) | $ | (24,266 | ) | |||
Less: Net (income) loss attributable to non-controlling members | 394,488 | (16 | ) | 18 | ||||||||
Net loss attributable to controlling members | $ | (7,417 | ) | $ | (33,093 | ) | $ | (24,248 | ) | |||
Basic and diluted weighted average shares outstanding, Class A Common Stock (5) | 61,825,105 | N/A | N/A | |||||||||
Basic and diluted net income per share, Class A Common Stock (5) | $ | (0.12 | ) | N/A | N/A |
The accompanying notes are an integral part of these consolidated financial statements.
Non-GAAP Financial Measures
MSP RECOVERY, INC. and SubsidiariesNon-GAAP Reconciliation
(In thousands) | December 31, 2022 | ||
GAAP Operating Loss | $ | (331,478 | ) |
Share based compensation | 20,055 | ||
Claims amortization expense | 266,929 | ||
Adjusted operating loss | $ | (44,494 | ) |
GAAP Net Loss | $ | (401,905 | ) |
Share based compensation | 20,055 | ||
Claims amortization expense | 266,929 | ||
Gain on debt extinguishment | (63,367 | ) | |
Paid-in-kind Interest | 121,011 | ||
Change in fair value of warrant and derivative liabilities | 12,483 | ||
Adjusted net loss | $ | (44,794 | ) |
In addition to the financial measures prepared in accordance with GAAP, this press release also contains Non-GAAP financial measures. We consider "Net loss excluding non-cash and one-time expenses" and "Operating loss excluding non-cash or one-time items" 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. Net loss excluding non-cash and one-time expenses represents Net loss adjusted for certain non-cash and non-recurring expenses, and Operating loss excluding non-cash or one-time items represents Operating loss adjusted for certain non-cash and non-recurring expenses. These measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures will be included in Management's Discussion and Analysis in the Form 10-K.
For Investors:ICR, Inc.Marc GriffinMarc.Griffin@icrinc.com
For Media:ICR, Inc.MSP@icrinc.com
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