• Community Association Funding: Provides financial capital to nonprofit community associations by purchasing their rights to delinquent accounts arising from unpaid assessments, often tailored to specific needs including through programs like the New Neighbor Guaranty.

The key risks to PowerCompute (symbol: PWCM), formerly LM Funding America, Inc., stem primarily from its strategic shift into capital-intensive new technologies and the continued operation of its legacy finance business.

1. Risks associated with the strategic shift into high-performance computing (HPC) and AI infrastructure, and the inherent volatility of its Bitcoin mining and treasury operations. This encompasses challenges in successfully entering and competing in the HPC and AI market, securing necessary GPU and infrastructure equipment at reasonable costs, and managing the significant capital and operational expenses associated with both HPC/AI expansion and Bitcoin mining. The profitability of its Bitcoin operations is heavily influenced by the volatile price of Bitcoin and the broader economics of cryptocurrency mining.
2. Liquidity and financing risks. A full buildout of the company's HPC and AI infrastructure, as well as ongoing requirements for miner purchases and upgrades in its Bitcoin mining operations, will necessitate additional debt or equity funding. If operational cash flow proves insufficient to cover expansion or unforeseen expenses, the company may face liquidity issues, potentially leading to shareholder dilution or the acquisition of expensive debt.
3. Regulatory and market risks within its specialty finance business. This segment of the business faces challenges related to its ability to acquire new accounts at appropriate prices, potential changes in governmental regulations that could affect the collection of delinquent community association assessments, and the risk of negative public perception and press concerning the debt collection industry.

Potential emerging threats for LM Funding America, Inc. (trading under the symbol PWCM):

• Regulatory Restrictions on Lien Enforcement and Purchasing: State legislatures, particularly in Florida, Washington, Colorado, and Illinois where the company primarily operates, could enact new laws. These laws might limit the ability of third parties to purchase delinquent association liens, cap interest rates or fees that can be charged, or introduce stricter homeowner protection clauses regarding foreclosures based on association liens. Such regulatory changes could directly impact LM Funding's core business model, profitability, and operational scope.

• Disruptive Fintech Platforms for HOA/Condo Collections: The emergence of new financial technology (fintech) platforms or services specifically targeting community associations represents a clear threat. These platforms could offer associations highly automated, lower-cost, or more efficient tools for managing and collecting delinquent assessments directly. They might also enable associations to securitize or sell delinquent accounts to a wider pool of investors, potentially bypassing traditional specialty finance companies like LM Funding and disintermediating their services.

Here are 3-5 expected drivers of future revenue growth for PowerCompute (symbol: PWCM) over the next 2-3 years:

1. Expansion into High-Performance Computing (HPC) and AI Infrastructure: PowerCompute is strategically transitioning from a pure Bitcoin mining model to owning and operating high-performance computing (HPC) and artificial intelligence (AI) infrastructure. The company has already built 26 megawatts (MW) of wholly-owned power infrastructure, with approximately 22 MW immediately convertible for HPC deployment. PowerCompute is also actively discussing a potential 10-50 MW capacity expansion in Oklahoma. A full HPC buildout of the current 26 MW capacity is estimated to support annual revenues between $20 million and $50 million, based on industry benchmarks. The company is also running a proof-of-concept deployment of professional-grade GPUs at its Oklahoma facility to generate early revenue and operational knowledge.
2. Growth in Bitcoin Mining Operations: While diversifying its focus, PowerCompute continues to engage in Bitcoin mining activities. The company reported its highest energized hashrate of approximately 790 petahash per second (PH/s) in March 2026 and achieved a record production of 26.1 Bitcoin in the first quarter of 2026. Continued expansion of mining capacity and optimization of its mining fleet are anticipated to drive increased Bitcoin production, contributing to revenue growth.
3. Recovery in Bitcoin Prices: The revenue generated from PowerCompute's Bitcoin mining segment is highly sensitive to fluctuations in Bitcoin prices. A decline in Bitcoin prices was cited as the primary reason for an 11% year-over-year revenue drop in Q1 2026, despite an increase in Bitcoin production. Therefore, a recovery in Bitcoin prices in the future is expected to significantly enhance the company's revenue and overall financial performance.
4. Enhanced Operational Efficiency and Lower Power Costs in Bitcoin Mining: Improvements in operational efficiency, including software upgrades, reductions in power costs, and fleet optimization—such as the adoption of immersion cooling technology—are projected to boost mining margins and decrease per-unit costs. These efficiencies contribute to the profitability and sustainability of the mining operations, thereby indirectly supporting revenue growth by making the mining segment more resilient and scalable. The company has also demonstrated its ability to generate revenue through curtailment and energy sales, further supporting its mining margins.
5. Continued Performance of the Specialty Finance Business: PowerCompute (formerly LM Funding America) also operates a legacy technology-enabled specialty finance business. This segment provides funding to nonprofit community associations, primarily in Florida and other states, by purchasing delinquent assessment accounts, including through its New Neighbor Guaranty program. This established business segment continues to serve as a component of the company's overall revenue stream.

Share Repurchases

• On November 3, 2025, LM Funding America, Inc. authorized a share repurchase program for up to $1.5 million of its common stock, set to expire on September 30, 2026.
• Prior to this authorization, on October 30, 2025, the company executed a private repurchase of 3,308,575 shares of common stock and associated warrants from institutional investors for approximately $8.0 million.

Share Issuance

• A 1-for-25 reverse stock split of its common stock became effective on July 13, 2026, aimed at maintaining compliance with Nasdaq's minimum bid price requirement. The total number of authorized shares remained unchanged.
• In December 2025, the company completed a registered direct offering that resulted in the issuance of 1,822,535 shares of common stock, pre-funded warrants to purchase 7,332,395 shares, and common warrants to purchase 9,154,930 shares, generating $5.9 million in net proceeds.
• Approximately $21.3 million in net proceeds were raised from capital raises in August 2025.

Inbound Investments

• The $8.0 million private repurchase of shares and warrants in October 2025 was financed through an $11 million loan facility provided by Galaxy Digital, secured by the company's Bitcoin holdings.

Outbound Investments

• LM Funding America acquired its Oklahoma facility in December 2024.
• In September 2025, the company acquired an underutilized facility from Greenidge Generation in Columbus, Mississippi, for $3.9 million.
• The company used substantially all of the $21.3 million in net proceeds from August 2025 capital raises to purchase 164 Bitcoins, and an additional 47 Bitcoins were purchased with the $5.9 million in net proceeds from December 2025 capital raises.

Capital Expenditures

• Capital expenditures were approximately -$207,869 for the first quarter of 2026 and -$170,073 for the first quarter of 2025.
• For the fiscal year ended December 31, 2024, capital expenditures were -$2 million, following -$2 million in 2023.
• The company has built 26 megawatts of wholly-owned power infrastructure over about fifteen months, primarily for Bitcoin mining operations, and is now expanding this infrastructure to support high-performance computing (HPC) and artificial intelligence (AI) infrastructure. A full AI buildout at its current 26-megawatt capacity is estimated to cost $10 million to $12 million per megawatt.