Results of Operations and Financial Condition - Form 8-K

For Investors:

ICR, Inc.

Marc Griffin

[email protected]

For Media:

ICR, Inc.

[email protected]

MSP Recovery Announces Fiscal Second Quarter 2022 Financial Results
Completed Business Combination Between Lionheart Acquisition Corporation II and MSP Recovery

Paid Value of Potentially Recoverable Claims Grew to $88.3 Billion During Quarter

Acquired Claim Recovery Rights and Rights to Cash Flows Increasing Balance Sheet Assets from $104 Million at December 31, 2021 to $6.6 Billion at June 30, 2022.
Executed Agreements which could provide approximately $1.5 Billion of Capital

Coral Gables, Florida, - August 11, 2022 - MSP Recovery, Inc. (NASDAQ: MSPR)("MSPR," "MSP Recovery," or the "Company"), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology leader, today announced financial results for the second quarter ended June 30, 2022.

MSPR has seen substantial growth of assets from $104 million at December 31, 2021 to $6.6 billion at June 30, 2022. The company's significant asset growth paves the way for future revenue generation and reflects increased demand from health plans, providers, and self-insured entities for MSPR's services, expertise, and portfolio of revenue streams. With 27% of the U.S. automobile insurance market in data matching or settlement discussions, new contracts, and the deployment of new strategic alliances and strategies, company leadership believes the company is primed for future success.

"We are off to a strong start in 2022," said MSP Recovery Founder and CEO, John H. Ruiz. "Our continued asset growth sets us up for significant future revenue generation. I truly believe that nobody has a better combined understanding of (1) healthcare, (2) healthcare data, and (3) the law; enabling MSP to recover improperly paid claims while also deploying revolutionary technology that we believe will correct the major flaws in the U.S. healthcare system - making our business unique and difficult to replicate."

"We have already exceeded projections for many of the Company's key performance indicators following the business combination thanks to the strength of our expanding claims portfolio," said MSP Recovery Co-Founder and CLO, Frank C. Quesada. "We believe we will continue to see increased recoveries as our litigation process continues against multiple parties. The recent completion of our business combination was an important milestone for our company. It further increases the market's awareness of MSP Recovery and provides additional resources to execute our growth strategy."

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"Cash flows from operations is one of MSPR's main priorities and we continue to be focused on closing out pending cases as well as starting a general business practice of billing claims at large scale," said Ruiz. "MSPR has established, through court decisions, the rights of Medicare Part C entities as well as downstream providers to collect from those parties that are primarily responsible. Those rights were solidified by two recent decisions rendered by the Eleventh Circuit Court of Appeals in MSP v. ACE and MSP v. Metropolitan. As per our press release on June 13, 2022, we have commenced billing over $1.5 billion to payers. Coupled with the agreements with Prudent and Virage where MSPR can monetize its claims, the claims billed for which MSPR has begun collecting, and ongoing settlement discussions, I believe MSPR has a clear line of approach to meet our recovery projections.1"

Second Quarter 2022 Financial Highlights

1 The guidance provided is an estimate based on management's knowledge. The nature of the Company's business and the timing and amount of recoveries, can, depending on various factors, be unpredictable and the Company cannot provide assurances in that regard.

2 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.

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Second Quarter 2022 Key Metrics

Since announcing the business combination with Lionheart Acquisition Corporation II, our portfolio has continued to grow. Below is detail on the increase in our portfolio since the announcement:

As of June 30, 2022, MSPR has the following developments:

Portfolio Growth:

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MSPR seeks assignment of recovery rights from secondary payers by acquiring the recovery rights to claims from secondary payers via Claims Cost Recovery Agreements ("CCRA"). Prior to executing a CCRA, the Company utilizes its proprietary internal data analytics platform to review the set of claims and identify claims with probable recovery paths. MSPR's assets are these irrevocable assignments of health claims recovery rights that are automatic, all-encompassing and superior to other interests supported by Federal and State laws and regulations. The table below outlines the Company's growth in these assignments:

Demand Letters:

MSPR recently announced a strategy whereby the Company is sending out individual demand letters on identified recoverable claims to responsible payers for prompt payment. We expect this strategy to result in more predictable and visible revenues. 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:

Financial Outlook

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MSP Recovery is providing guidance for its full year 2022 as follows:

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.

2 Total Gross Recoveries is the cash received or to be received by MSPR for recoveries that may be through consolidated or non-consolidated entities.

Quarterly Conference Call

MSP Recovery will host a conference call today at 8:30 a.m. Eastern Time to review the Company's financial results for the second quarter ended June 30, 2022. To access this call, dial (866) 652-5200 for the U.S. or Canada, or (412) 317-6060 for callers outside the U.S. or Canada. A live webcast of the conference call will be accessible from the Investors section of MSP Recovery's website at https://www.msprecovery.com/, and a recording will be archived and accessible at https://investors.msprecovery.com/. An audio replay of this conference call will also be available through November 11, 2022, by dialing (877) 344-7529for the U.S. or Canada, or (412) 317-0088 for callers outside the U.S. or Canada, and entering 5611243.

About MSP Recovery

Founded in 2014, MSP Recovery 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. MSP Recovery provides the healthcare industry with comprehensive compliance solutions, while innovating technologies to help save lives. For more information, visit: www.msprecovery.com.

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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; litigation 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 S-1 Registration Statement dated July 7, 2022, 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.

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MSP RECOVERY, INC. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

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MSP RECOVERY, INC. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

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Non-GAAP Financial Measures

MSP RECOVERY, INC. and Subsidiaries

Non-GAAP Reconciliation

(Unaudited)

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-Q.

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