CORAL GABLES, Fla., April 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, announced financial results for the fiscal year and fourth quarter ended December 31, 2023. Highlights The Company announced a comprehensive settlement with 28 affiliated property and casualty insurers ("P&C Insurers") that, in addition to settling existing claims, establishes a going-forward process to collaboratively and timely resolve future claims. The Company furthered its litigation and data-matching strategies during 2023, continuing to advance its recovery efforts. Recoveries are dependent on the completion of litigation and the negotiation of settlements, the timing of which can be subject to the risk of delays associated with the litigation and settlement process. However, we continue to make progress in the data matching process associated with those settlement negotiations, whereby primary payer insurers reconcile what they owe as a result of detailed data exchanges. On November 14, 2023, the Company entered into a $250 million standby equity purchase agreement with Yorkville ("Yorkville SEPA"), which replaced the existing Yorkville committed equity facility and which included pre-paid advances in the amount of $15 million, subject to a 5% original issue discount, resulting in net funding of $14.23 million to the Company. The Paid Value of Potentially Recoverable Claims ("PVPRC") decreased by about $700 million or 0.8% for a total of $88.9 billion as of December 31, 2023. The Company strategically reduced its operating costs during 2023. These cost reductions did not impact the systems the Company has already created to support recovery efforts of the claims owned by the Company or other resources available to third parties. 2023 Financial Highlights Revenue: Total revenue for the year ended December 31, 2023 was $7.7 million compared to $23.4 million for the year ended December 31, 2022, out of which $18.5 million pertained to claim recovery service income, which was terminated at the beginning of 2023. Operating loss: Operating loss for the year ended December 31, 2023 was $559.9 million, compared with $331.5 million during the year ended December 31, 2022. Adjusted operating loss for the year ended December 31, 2023 was $82.5 million, excluding non-cash claims amortization expense of $476.5 million and shared-based compensation of $830 thousand.¹ Net loss: Net loss for the year ended December 31, 2023 was $835.1 million and $56.3 million to controlling members, or net loss per share of $6.32 per share, based on 8,914,761 million weighted average shares outstanding. Adjusted net loss for the year ended December 31, 2023 was $73.3 million, excluding the non-cash item noted above, change in fair value of warrant and derivative liabilities of $4.6 million, and $289.2 million of non-cash expenses related to paid in kind interest.¹ Liquidity: As of December 31, 2023, cash and cash equivalents were $11.6 million. We announced on March 29, 2023, the Company entered into the Working Capital Credit Agreement consisting of a commitment to fund up to $48 million in proceeds, which has been used throughout the year to fund operations. The Company has potential additional capital resources, which include the Yorkville SEPA. In addition, the Company still has in effect the Investment Capacity Agreement, by and among MSP Recovery and Virage Capital Management, LP., and up to an additional $250 million from the Prudent Sale, however, its uncertain if or when the Company would transact on the agreements.   (1) Additional information regarding 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.       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:     As of and for the Year Ended December 31,   $ in billions     2023     2022     2021     2020   Paid Amount   $ 369.8     $ 374.8     $ 364.4     $ 58.4   Paid Value of Potentially Recoverable Claims     88.9       89.6       86.6       14.7   Billed Value of Potentially Recoverable Claims     373.5       377.8       363.2       52.3   Recovery Multiple     N/A(1)     N/A(1)     N/A(1)     N/A(1)   Penetration Status of Portfolio     86.8 %     85.8 %     75.6 %   N/A                                   During the year ended December 31, 2023, the Company has received total recoveries of $7.2 million. However, the settlement amounts do not provide a large enough sample to be statistically significant, and are therefore not shown in the table. 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 $7.02 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. Total Paid Amount of owned claims has decreased to $369.8 billion, as of December 31, 2023, down $5 billion or 1.3% from $374.8 billion as of December 31, 2022. This figure represents the amounts our clients/assignors have paid for in medical bills (including capitation payments). Paid Value of Potential Recoverable Claims decreased to $88.9 billion, as of December 31, 2023, down $0.7 billion or 0.8% from $89.6 billion as of December 31, 2022. This figure represents the amounts LifeWallet estimates are potentially recoverable as identified by LifeWallet algorithms. Financial Outlook Recoveries Guidance: The Company continues to make progress in its recovery efforts, and management continues to believe such 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. 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. 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 Subsidiaries Consolidated Balance Sheets       December 31,   (In thousands except per share amounts)   2023     2022   ASSETS             Current assets:             Cash   $ 11,633     $ 3,661   Restricted cash     —       11,420   Accounts receivable     217       6,195   Affiliate receivable (1)     1,188